09-12-2017 ERMU MIN ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
September 12,2017
Members Present: Chair John Dietz;Vice Chair Daryl Thompson; Commissioners Al Nadeau,
Mary Stewart,and Matt Westgaard
ERMU Staff Present: Troy Adams,General Manager;
Theresa Slominski,Finance and Office Manager;
Mark Fuchs,Electric Superintendent;
Mike Tietz,Technical Services Superintendent;
Tom Sagstetter, Conservation&Key Accounts Manager;
Michelle Canterbury,Executive Administrative Assistant;
Jennie Nelson,Customer Service Manager;
Tom Geiser,Assistant Electric Superintendent
Others Present: Peter Beck,Attorney;and Zack Carlton,City Planning Manager
1.0 GOVERNANCE
1.1 Call Meeting to Order
The regular meeting of the Utilities Commission was called to order at 3:30 p.m.by Chair Dietz.
1.2 Pledge of Allegiance
The Pledge of Allegiance was recited.
1.3 Consider the Agenda
There were no additions or corrections to the agenda.
Moved by Commissioner Stewart and seconded by Commissioner Westgaard to approve the
September 12,2017,agenda. Motion carried 5-0.
1.4 Resolution Recognizing 2017 Public Power Week
Chair Dietz read the resolution recognizing 2017 Public Power Week.
Moved by Commissioner Nadeau and seconded by Commissioner Thompson to adopt
Resolution 17-7 Recognizing 2017 Public Power Week. Motion carried 5-0.
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Regular Meeting of the Elk River Municipal Utilities Commission
September 12,2017
1.5 Resolution Recognizing 2017 Customer Service Week
Chair Dietz read the resolution recognizing 2017 Customer Service Week and thanked all the
Customer Service Representatives for doing an excellent job.
Moved by Commissioner Thompson and seconded by Commissioner Stewart to adopt
Resolution 17-8 Recognizing 2017 Customer Service Week. Motion carried 5-0.
1.6 Recognition of Awards
Chair Dietz stated that Elk River Municipal Utilities figured prominently in awards given
recently by the Minnesota Municipal Utilities Association(MMUA). State Representative
Nick Zerwas was recognized with the MMUA Public Service Award which is given to a local,
state or federal elected or appointed official who has been a strong supporter of MMUA and its
members; General Manager Troy Adams was given MMUA's Distinguished Service Award
which is given to individuals who perform outstanding service in support of the association and
its goals; and the ERMU Water Department received MMUA's System Innovation Award,
which is given to a utility that has demonstrated leadership and innovation in customer
service, energy efficiency or renewables,technology and other areas.
1.7 Detroit Lakes Mutual Aid
Mr. Adams spoke to the letter we received from Detroit Lakes Public Utilities thanking ERMU
and its staff for providing mutual aid assistance following their July wind storm. Mr.Adams
noted that mutual aid is one of the things that sets public power apart from others; when
somebody calls for help we are always there to help each other.
2.0 CONSENT AGENDA(Approved By One Motion)
Moved by Commissioner Thompson and seconded by Commissioner Nadeau to approve the
Consent Agenda as follows:
2.1 August Check Register
2.2 August 8,2017 Regular Meeting Minutes
2.3 Resolution Accepting an Invitation to Attend the Plant Tour of Superior Essex
2.4 2017-2018 Minnesota Municipal Utilities Association Safety Management Program
Contract
Motion carried 5-0.
3.0 OPEN FORUM
No one appeared for open forum.
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Regular Meeting of the Elk River Municipal Utilities Commission
September 12,2017
4.0 POLICY& COMPLIANCE
4.1 Delegation to Management Policies
Mr. Adams presented for consideration the next four delegation to management policies that
consultant John Miner had developed: G.4k MMPA Relationship, Representation, and
Governance; G.41 Protection of Assets; G.4m Corporate Risk Management; and G.4n Legal
and Regulatory Compliance. Mr. Adams pointed out that most of the governance policies that
have been adopted up to this point either document existing processes or define overarching
policy consistent with existing policy. He noted that for the proposed Protection of Assets and
the Corporate Risk Management policies,there are requirements in the policies which have not
been developed yet and that additional time would be needed to develop and implement those
requirements. Mr. Adams reached out to the Commission to see if they had any questions.
Commissioner Westgaard asked Attorney Beck if adopting these policies prior to having the
additional policies that would stem from them put into place would put us at risk. Attorney
Beck shared that he had this discussion with Mr.Adams and as these are obligations to the
General Manager, Mr. Adams and Attorney Beck were comfortable with proceeding forward
as suggested today. Attorney Beck added that he did not see any risk to the commission or
utilities in adopting the proposed policies. Commissioner Stewart inquired as to the estimated
timeline in completing and implementing the additional requirements. Mr. Adams indicated
that it should take about two years.
Moved by Commissioner Westgaard and seconded by Commissioner Thompson to adopt
the Delegation to Management Policies as presented. Motion carried 5-0.
5.0 BUSINESS ACTION
5.1 Jackson Street Water Tower Rehabilitation Update
Mr. Carlton, Planning Manager with the City of Elk River, was present and provided an update
on the restoration status of the Jackson Street Water Tower. For the sake of the new
Commissioners,Mr. Carlton provided some background information on the water tower and
the steps that had been taken up to this point in the restoration and grant application process.
He shared that based on some challenges with getting the architectural drawings required for
the grant application, and the state not allocating any funds in 2017 for the intended grant,we
are realistically looking at a May 2018 grant application deadline for the Minnesota Historical
Grant which would cover 100%of the project.
In moving forward,the city has consulted with Kodet Architectural Group who has done work
for ERMU and came recommended by Water Superintendent Volk. Based on preliminary
conversations,the consultant with the firm has indicated that the initial estimate of$85,000 to
restore the structure is not realistic. Mr. Carlton explained that the water tower contains lead
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Regular Meeting of the Elk River Municipal Utilities Commission
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based paint, and that the $85,000 estimate the city received in 2016 would have only covered
the cost to paint over and contain the existing paint;this process would most likely have to be
repeated every five years. After discussions with Kodet Architectural, a more realistic number
to correctly restore the water tower would be $150,000 to $200,000. Mr. Carlton shared that in
moving forward with Kodet Architectural in getting the laser scan and additional architectural
drawings required for the grant application,we're looking at roughly$8,000. He should have
more firm numbers within the next few weeks. There was discussion. Mr. Carlton stated that
he would provide an update once he received the written estimate back from Kodet
Architectural.
5.2 Financial Report—July 2017
Ms. Slominski presented the July 2017 financial report. The water department other operating
revenue was up significantly from the prior year, and also ahead of YTD budget by 305%; it
was noted that the main drivers of this were Water Connection (WAC) Fees and Developer
Contributions. Chair Dietz asked for further clarification on the commercial businesses and
residential development that were contributing to the increase. Staff responded.
Commissioner Stewart had a question on the electric department auditing fees. She noted that
line item was already over budget for the year, and inquired as to if we were anticipating any
additional payments that would need to be made before the end of the year. Ms. Slominski
explained the timing of the billing and payment process with the auditors. She indicated that a
small payment would be made towards the end of the year for preliminary audit work.
Chair Dietz had a few questions on the electric distribution expense. Staff responded.
Moved by Commissioner Westgaard and seconded by Commissioner Nadeau to receive
and file the July 2017 Financial Report. Motion carried 5-0.
5.3 2018 Business Plan/Budget: 10 Year Capital Projections; Capital Projects and
Equipment Purchases; and Conservation Improvement Program
Ms. Slominski presented the preliminary 2018 Capital Improvement Projections; Capital
Projects and Equipment Purchases; and Capital Project Time Schedules.
Notable items for the Electric Department were Territory Acquisition costs, replacing bucket
truck#21, a new trailer, and construction/renovation prep for the field services facilities. Chair
Dietz asked what the budgeted amount for the field services building would be used for. Staff
responded that in addition to some of the design costs,there will be substantial costs associated
with site prep in 2018. There was discussion on the replacement of the bucket truck. The
Electric Department Capital Projects Time Schedule was presented. Commissioner Stewart
asked for further clarification on some of the acronyms and the color coding. Staff responded.
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Regular Meeting of the Elk River Municipal Utilities Commission
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