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11-12-2003 ERMU MIN ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION November 12, 2003 Members Present: John Dietz, President; Jerry Takle, Vice Chair; James Tralle, Trustee Staff Present: Bryan Adams, General Manager; David Berg, Water Superintendent; Patricia Hemza, Office Manager 1. Call meeting to order November 12, 2003 President John Dietz called the November 12, 2003 meeting to order. 2. Consider Utilities Agenda James Tralle moved to approve the Agenda for November 12, 2003. Jerry Takle seconded the motion. Motion carried 3-0. 3. Consider Consent Agenda Jerry Takle moved to approve the Consent Agenda as follows: October Check Register October 15, 2003 Minutes Financials James Tralle seconded the motion. Motion carried 3-0. 5.1 Staff Up-dates David Berg reported to the Commission that Well #8 is still undergoing reconstruction, and that electric, and water meters are being installed at the same intensive pace as previous months. Bryan Adams reported that there have been four tours of the LFG Plant, and that the tours and talks he has given, have been productive, and positive. Bryan asked the Commission if they would be interested in funding, and owning a proposed new turbine being installed by Great River Energy. Conversation continued regarding the new project, and it was the consensus of the Commission, that they would be interested in further information. Bryan Adams advised the Commission that the new bucket truck, purchased in February, 2003, is continuing to be a problem. On the evening of November 7, 2003, linemen were dispatched to correct an outage. At the site, the truck failed to function, and a lineman was in the air. Co-workers were able to get him down, but it did put a lineman in peril. The controls appear to be the problem, and despite many trips to have things corrected,problems continue. It may be necessary to trade in the truck, if the truck can not be properly fixed. Page 2 Regular meeting of the Elk River Municipal Utilities Commission November 12, 2003 5.2 Review Financial Projections Bryan Adams reviewed the electric and water income statement projections, using the 2004 budget assumptions. The electric income statement projections included one with a $750,000 bond, and one without. Discussion centered on cash reserves, bonding, and the best ways to keep costs down, and still maintain competitive rates. The water side was discussed in the same manner, assuming relatively constant growth in WAC units, and sales. Discussion continued between Commission and Staff. No action necessary. 5.3 Review Proposed Water Service Line Change Bryan Adams addressed the issue of qualified water utility personnel repairing water valves in customer service lines before the meter. The second item discussed was the insurance policy, which would pay for customer water services that have failed. It was concurred, after review, that the insurance policy would not be necessary. Jerry Takle moved to add Utility staff, at owners authorization, may replace water valves before water meter. James Tralle seconded the motion. Motion carried 3-0. Commission was advised by Staff, that in January, 2004, water personnel would begin stand-by duty. 5.4 Review Finalized Great River Energy Wholesale Rate Bryan Adams reviewed changes to the wholesale electric rate that was given to the Commission at the October 15, 2003 meeting. GRE has adopted two rate structures at their November meeting. They have submitted their adopted rates to RUS. Upon RUS approval, Connexus, and ERMU must submit the approved rate to FERC. Robert McDermot will again be representing ERMU in this matter. Commission and Staff continued discussing rates, as well as production. 5.5 Review& Adopt 2004 Electric and Water Budget The finalized 2004 Electric and Water Budget was presented to the Commission for discussion. James Tralle moved to approve the 2004 Electric and Water Budget. Jerry Takle asked about the actual figures for previous years, and Staff responded that there is a mistake in those history columns. John Dietz, and James Tralle asked about the possibility of a bond issue in 2004 for the electric utility, since rates are low at this time. Discussion of the issue followed. Commission, and Staff agreed that the process used for budgeting has been successfully completed for 2004, and that the same system be used for future years. James Tralle withdrew his original motion. Page 3 Regular meeting of the Elk River Municipal Utilities Commission November 12, 2003 James Tralle moved to approve the 2004 Electric and Water Budget, with the amended history corrections. Jerry Takle seconded the motion. Motion carried 3-0. 5.7 Up-date Well #8 Bryan Adams reviewed the need to relocate Well #8, within the City Park to accommodate the concerns of the park and recreation commission. To satisfy the Minnesota Department of Health requirement and avoid filling wetlands, we need to purchase approximately 0.2 acres of land from Grace Assembly of God Church. The payment schedule was discussed, appearing to be reasonable. John Dietz inquired about the restoration, and that he wants the final costs of the restoration of the park land. Jerry Takle noted that he had visited the site, and believes the restoration has been done very well, and in his opinion, looks better than it did originally. Jerry Takle moved to authorize the purchase of the 0.2 acre from Grace Assembly of God Church. James Tralle seconded the motion. Motion carried 3-0. 6.1 Review AC, Tree, and Wellhead Brochures The 2004 Conservation Improvement Program(CIP) included the addition of an AC Tree program. There will be 150 baled and burlap trees available to customers to be planted on the west or east side of a residential home to conserve energy used from air conditioning, which resulted in the name "AC Tree". The brochure for AC Tree, and the required wellhead protection plan brochure that advises customers how to keep their drinking water safe were reviewed. The consensus was that the brochures were well designed, and that they will be well received. 6.2 Review & Approve Great River Energy Capacity Purchase Agreement The Elk River Municipal Utilities has contracted to Great River Energy, 10 MW diesel generation at the power plant. The contract expired October 31, 2003, and a revised contract from GRE for the ERMU diesel generation was reviewed with Commission. Discussion of the deteriorating status of one of the 1948 engines was discussed, and it was agreed that it would probably not be cost effective to make further repairs on it. Discussion continued regarding the positive side of the black start engines, URGE tests, and the annual revenue to the ERMU from GRE. Jerry Takle moved to approve the revised 10 NW diesel generation agreement with Great River Energy. James Tralle seconded the motion. Motion carried 3-0. Other Business No other business. Page 4 Regular meeting of the Elk River Municipal Utilities Commission November 12, 2003 The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be held December 9, 2003. President John Dietz adjourned the regular meeting of the Elk River Municipal Utilities Commission at 5:20 pm. Respectfully submitted, ey Patricia Hemza Office Manager