04-09-2002 ERMU MIN ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
April 9, 2002
Members Present: James Tralle, President; John Dietz, Vice Chair; George Zabee, Trustee
Staff Present: Bryan Adams, General Manager; Glenn Sundeen, Line Superintendent; Patricia Hemza,
Office Manager
Other Employees Present: Michael Thiry; Wade Lovelette; Mark Fuchs; Richard Wagner
Others Present: Pat Klaers, City Administrator; Steven McDonald, Abdo, Abdo, Eick& Meyers
1. Call meeting to order April 9, 2002
2. Consider Utilities Agenda
George Zabee moved to approve the Utilities Agenda for April 9, 2002, with Item 6.1, to be
discussed first. John Dietz seconded the motion. Motion carried 3-0.
John Dietz moved to approve the Consent Agenda as follows:
March, 2002 Check Register
March 12, 2002 Minutes
Sales Reports
George Zabee seconded the motion. Motion carried 3-0.
6.1 Review& Consider 2002 Audit
Steven McDonald, Abdo, Abdo, Eick& Meyers, appeared to present and discuss the 2001 Audit. The
Management letter, containing no qualifications, was reviewed, with explanations of procedures. Operating
margins,Utility growth, Debt Service, and rates were discussed. Steven McDonald, replied positively to
questions from the Commission regarding the Audit.
George Zabee moved to receive and file the Audit for 2001. John Dietz seconded the motion.
Motion carried 3-0.
5.1 Review& Consider Bid Tabulation for Booster Station Relocation
Staff presented a Bid Tabulation for Booster Station Relocation, which was included in the 2002
Budget. It was noted that only one bid was received. Research was conducted by Howard R. Green
Company for the reason for lack of plan holders not bidding. It was concluded that the single bid is
competitive and rebidding the project would not guarantee a better bid. A lengthy discussion between Staff
and Commission on whether or not to include the modification of another booster station to Tyler and 175th
Avenue in Eastern Elk River followed.
John Dietz moved to award the entire project to Friedges Construction. George Zabee seconded the
motion. Motion carried 3-0.
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Regular meeting of the Elk River Municipal Utilities Commission
April 9, 2002
Staff was directed to include, as an alternate, water main installation on 175`h Avenue when the road,
storm, and waste water plans and specifications are prepared and bid.
6.2 Review& Consider Bid Tabulation for Plant Garage & Office
Bids received on April 2, 2002 for the 2002 budgeted garage/office building at the power plant
location were reviewed. Staff noted that the bids were higher than anticipated. Value engineering with the
lowest responsive bidder has begun, to determine which areas may be re-valued for possible savings.
George Zabee asked about the price per square foot, and Staff replied, approximately $93.00 per
square foot. Other concerns and considerations were discussed.
James Tralle moved to accept the lowest bid from Riverside Construction for the garage/office
building to be constructed at the power plant site. John Dietz seconded the motion.
Discussion continued regarding the financing of the increase, and ways to save on costs of
construction. The question of postponing further territory acquisition was considered.
Motion carried 3-0.
6.3 Update LFG Project
Bryan Adams apprised the Commission on the agreement of all LFG Contracts between parties. The
Executed Gas Purchase Contract, Service Agreement, Grant of Easement, Power Purchase Agreement, and
the Security Agreement&Promissory Note were presented for information.
John Dietz moved to authorize award of bids to Waste Management for the large items, and
Wenninger Company for the construction and installation. George Zabee seconded the motion. Motion
carried 3-0.
James Tralle noted that he would like to see positive coverage of the project in the newspaper, news
letters, or brochures. Bryan Adams replied that an article is in progress at this time for the Current.
6.4 Review APPA& MMUA Electric Rate Survey
Bryan Adams reviewed survey data regarding the standing of Elk River's electric rates in comparison to
other Utilities. It is noted that the current rate structure appears to be very comparable to our surrounding
utilities. The calculation of data is difficult to compare because of the way the fuel cost adjustment is
considered by various utilities.
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Regular meeting of the Elk River Municipal Utilities Commission
Appril 9, 2002
6.5 Review Water& Electric Financial Projections
Bryan Adams presented to the Commission,updated financial projection analysis reflecting significant
expenditures by the ERMU. Cash reserves, and rates were reviewed on both the Electric and Water
Departments. It appears that the Electric Department is holding constant. The Water Department has more
options to consider. Curtailing of sprinkling is an on-going issue, and was discussed at length. Increasing
WAC fees will be considered at budget time, with a possible increase going into effect at the beginning of
2003.
6.6 Wage Request from ERMU Employees
The request for annual salary and benefit adjustment from the operational employees was received, and
considered. Bryan Adams reviewed the salary and benefit surveys, as well as the request for an increase of
re-connect pay, and an employer matched contribution to an additional retirement plan. The Commission
discussed the information, but chose to continue the matter to the next Commission meeting.
6.7 Review & Consider Distribution Interconnect Agreement
The Distribution Interconnection Agreement, reflecting the terms and conditions of a Connexus tie into
our Substation North facility for standby or future permanent services was reviewed. Staff recommends
approval of the Agreement.
George Zabee moved to execute the Distribution Interconnect Agreement with Connexus Energy. John
Dietz seconded the motion. Motion carried 3-0.
6.8 Review& Consider Irrigation Off Peak Rate
After a detailed review of the rate, including the history, it was the consensus of the Commission to not
offer the Irrigation Off Peak Rate.
Other Business
There was no Other Business to discuss.
The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be May
14, 2002.
President Tralle adjourned the meeting of the Elk River Municipal Utilities Commission at 6:00 PM.
Respectfully submitted,
Patricia Hemza
Office Manager