01-09-2018 ERMU MIN ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
January 9,2018
Members Present: Chair John Dietz;Vice Chair Daryl Thompson;Commissioners Al Nadeau and
Mary Stewart
Members Absent: Matt Westgaard
ERMU Staff Present: Troy Adams,General Manager;
Theresa Slominski,Finance and Office Manager;
Mark Fuchs,Electric Superintendent;
Mike Tietz,Technical Services Superintendent;
Eric Volk,Water Superintendent;
Tom Sagstetter, Conservation&Key Accounts Manager;
Michelle Canterbury,Executive Administrative Assistant;
Jennie Nelson,Customer Service Manager;
Mike Langer,Lead Water Operator
Others Present: Cal Portner,City Administrator
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 Nadeau and seconded by Commissioner Stewart to approve the
January 9,2018,agenda. Motion carried 4-0.
1.4 Water Fluoridation Quality Award
Mr.Volk announced that the U.S.Department of Health and Human Services for Disease Control
has recognized Elk River for achieving excellence in community water fluoridation by maintaining
a consistent level of fluoride in the drinking water throughout 2016.He shared that the achievement
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Regular Meeting of the Elk River Municipal Utilities Commission
January 9,2018
of receiving this award is a testament of the attention to detail the water operators demonstrate on a
daily basis. There was discussion on how long Elk River has been adding fluoride to their water.
The Commission congratulated the water department on their achievement.
2.0 CONSENT AGENDA(Approved By One Motion)
On page 24 of the check register, Commissioner Stewart asked for further clarification on what
check number 74213 issued to the Minnesota Department of Commerce was for. Staff responded.
Commissioner Stewart also had a question on whether that expense was for 2017 or 2018. Staff
stated they would need to verify that and get back to her.
Moved by Commissioner Nadeau and seconded by Commissioner Thomson to approve the
Consent Agenda as follows:
2.1 December Check Register
2.2 December 12,2017 Regular Meeting Minutes
2.3 December 12,2017 Closed Meeting Minutes
2.4 Summary of General Manager Performance Evaluation
2.5 Customer Deposit Policy
2.6 2018 Pay Equity Report Filing
2.7 Notice to Connexus Energy of Electric Service Territory Area 5&6 Transfer Date
Motion carried 4-0.
3.0 OPEN FORUM
No one appeared for open forum.
4.0 POLICY&COMPLIANCE
4.1 Integrity Testing Policy
Mr. Sagstetter presented the revised Integrity Testing Policy and explained that the proposed
changes will allow for all customers in the demand electric service customer class to utilize this
policy. Prior to the revisions,the policy only applied to customers with demand greater than
1,000 kW. Mr. Sagstetter explained that other changes in the policy are proposed to better
document the integrity testing request, and provide a communication mechanism that the
customer, field services, and billing staff can use to ensure the integrity testing date and time
are communicated to affected departments, and meet policy criteria. There was discussion.
Moved by Commissioner Thompson and seconded by Commissioner Nadeau to approve
the revised Integrity Testing Policy. Motion carried 4-0.
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Regular Meeting of the Elk River Municipal Utilities Commission
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4.2 Conservation Improvement Programs Policy
Mr. Sagstetter presented the Conservation Improvement Programs Policy which had been
revised to reflect the programs that are currently being offered in 2018. Mr. Sagstetter went
over notable changes to the programs as highlighted in his memo. The 2018 electric efficiency
spending requirements and energy savings goals were also presented.
Moved by Commissioner Stewart and seconded by Commissioner Nadeau to approve the
revised Conservation Improvement Programs Policy. Motion carried 4-0.
5.0 BUSINESS ACTION
5.1 Financial Report—November 2017
Ms. Slominski presented the November 2017 financial report. Commissioner Stewart inquired
as to where we were at year-to-date with the power cost adjustments(PCAs). As staff was not
certain of the exact amount, Ms. Slominski stated she would provide the details in next
month's staff update.
Moved by Commissioner Thompson and seconded by Commissioner Nadeau to receive
and file the November 2017 Financial Report. Motion carried 4-0.
6.0 BUSINESS DISCUSSION
6.1 Staff Updates
Mr.Adams announced that the Minnesota Municipal Power Agency(MMPA)Solar Project located
in Buffalo,MN just went live. Mr.Adams also shared that he and ERMU staff met with Connexus
representatives today regarding Areas 5 &6. At that meeting,there was also discussion on
Connexus transferring over the Highway 10 street lights to ERMU and canceling the city
maintenance and energy contract with Connexus;more to come on this later.
Ms. Slominski provided a verbal update to the Commission regarding the preliminary audit work
the auditors performed yesterday. She stated things had gone very well.
Ms.Nelson provided an update on the multi-billing cycle transition,and shared that staff has
received quite a few calls.Ms.Nelson also spoke to some of the negative comments that were being
posted on social media and how she has reached out to those customers voicing their concerns.
As presented in his staff report,Mr.Tietz stated that the locating department had a total of 99 locate
tickets in December;a 62%decrease over the previous month. Chair Dietz inquired as to what the
locators are doing when we have such a decrease of locates during the winter months.Mr.Tietz
shared that they have been filling in with gathering GPS points for all of our systems assets which
will be entered into our new ESRI ArcView GIS mapping system.
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Regular Meeting of the Elk River Municipal Utilities Commission
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Mr. Sagstetter noted that the FleetCarma study results he had referenced in his staff report would be
formally presented at next month's Commission meeting.Mr. Sagstetter also provided an update on
the success of the DC fast charger at the Coborn's location.
The Commission revisited the topic of the annual Holiday Lighting Contest,and talked about ways
to increase participation including changing up the judging criteria. Commissioner Stewart
suggested taking the word"contest"out of the name and promoting it as part of a tour of lights,and
Chair Dietz suggested using Minnesota Municipal Utilities Association(MMUA)as a resource to
poll other utilities that have lighting contests to see what they are using for criteria.Chair Dietz
requested staff further evaluate this and report back in a couple of months.
Mr. Sagstetter's staff report stated that staff has been working with MMUA and MMPA on
standardizing the contracts,requirements,and processes that govern the interconnection of
cogeneration and small power production in Minnesota.The initiative is to gain compliance with
Minnesota State Statute based on the recent decisions of the Minnesota Public Utilities Commission
(MPUC)pertaining to a few cooperative utilities.Mr. Sagstettter shared that although ERMU has
not been in total compliance with the Statutes,they have been clear and fair with the small power
producers so there have not been many challenges with the current policies. Commissioner Stewart
asked staff to elaborate on the compliance issue and whether it was subject to a monetary fine for
non-compliance.Mr. Sagstetter provided further explanation,including that most utilities were not
in total compliance as they have been waiting for the resolution of proceedings at the MPUC before
finalizing the interconnection of cogeneration and small power production tariff.There was
discussion. Staff will continue to work on the requirements and indicated they should have
something for Commission consideration within the next few months.
6.2 Bonding Discussion
Mr.Adams provided some background on the MMPA membership.He shared that in 2016,ERMU
made an advance payment towards the buy-in of approximately$10 million and that a true-up of the
balance of the buy-in will be due prior to October 2018 when we begin receiving our wholesale
power from MMPA. In preparation for the true-up payment to MMPA,staff is reviewing bonding
options with our bonding consultants at Springsted. Two handouts containing graphs of the
estimated bonds cost and MMPA savings for a 20 year scenario,and a 30 year scenario were
provided at the time of the meeting.
Mr.Adams shared that the purpose of this discussion is to talk through the true-up and bonding
options so that the Commissioners can gain a better understanding should they get questions from
members of the community.
Staff had identified four topics relevant to the investment and provided an overview on the
following: return on investment(ROI)and long term strategic analysis of the decision to join
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Regular Meeting of the Elk River Municipal Utilities Commission
January 9,2018
MMPA;cash flow and short term financial strategic analysis of the buy-in;other value add related
to the membership;and other factors which could affect the ROI and short term cash flow.
After the overview,Mr.Adams opened it up for discussion and asked for feedback from the
Commission regarding their preference on scenario 1 with the 20 year bond option,or scenario 2
with the 30 year bond option.After discussion,Commission consensus was scenario 2 with the 30
year bond option. Staff will continue to work with Springsted on the bonding and anticipated
bringing something back to the Commission sometime in July.
6.3 Future Planning
Chair Dietz announced the following:
a. Regular Commission Meeting—February 13, 2018
b. Quorum—Employee Recognition Luncheon—January 22, 2018, 12:00— 1:00 p.m.
6.4 Other Business
There was no other business.
7.0 ADJOURN REGULAR MEETING
Moved by Commissioner Nadeau and seconded by Commissioner Stewart to adjourn the
regular meeting of the Elk River Municipal Utilities Commission at 4:46 p.m. Motion carried
4-0.
Minutes prepared by Michelle Canterbury.
N • i
J. !►ietz,Ems' ,_ ission Chair
Tina Allard,City C erk
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Regular Meeting of the Elk River Municipal Utilities Commission
January 9,2018