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04-10-2001 ERMU MIN ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION APRIL 10, 2001 Members Present: George Zabee, President; James Tralle, Vice Chairman; John Dietz, Trustee Staff Present: Bryan Adams, General Manager; Glenn Sundeen, Line Superintendent; David Berg, Water Superintendent; Patricia Hemza, Office Manager ERMU employees present: Wade Lovelette, Mark Fuchs, Art Gatchell, Michael Price Others Present: Steven McDonald, Abdo, Abdo, Eick and Meyers; Patrick Klaers, City Administrator; Bob Muhatga 1. Call meeting to order at 4:00 P.M.April 10. 2001 2. Consider Utilities Agenda James Tralle moved to approve the Utilities Agenda for April 10, 2001, with several additions from John Dietz, to be discussed under Other Business, and to change the order of Agenda Items. John Dietz seconded the motion. Motion carried 3-0. 3. Consider Consent Agenda James Tralle moved to approve the Consent Agenda as follows: March Check Register Financials March 13, 2001 Minutes, with corrections under 2, and 2A, Motion carried 2-0, rather than 2-1. 6.1 Review and Consider 2000 Audit Steven McDonald, Abdo, Abdo, Eick and Meyers appeared to present the 2000 Audit of the Elk River Municipal Utilities. The Management letter was reviewed, the results of the Electric and Water Funds discussed. Percentages of changes were further discussed. James Tralle asked about the state of the PERA, and John Dietz asked if there were any reportable conditions. Steven McDonald replied that as of this time PERA has not made any decision regarding increases in contributions, and that there were indeed no reportable conditions with the 2000 Audit. James Tralle moved to receive and file the 2000 Audit of the Elk River Municipal Utilities. John Dietz seconded the motion. Motion carried 3-0. Page 2 Regular meeting of the Elk River Municipal Utilities Commission April 10, 2001 5.1 Update Mechanics Position Bryan Adams reviewed the issue of an equipment and vehicle mechanic. The issue of contracting with the City, when they re-organize the City Garage to add additional bays, and hire another mechanic was discussed. Bryan Adams and Glenn Sundeen presented their viewpoints, adding the reasons that they feel a Utility mechanic position, with an equipment repair bay added to the proposed Utility Garage would be advantageous. Michael Price responded with comments about the need for maintenance and repair of the Plant Engines. John Dietz is concerned that adding a Utility mechanic would be duplicating expenses. Glenn Sundeen was asked if he could prepare a maintenance schedule to coordinate with the City. The amount of work that would have to be done outside the City or Utility was discussed. James Tralle agreed with John Dietz that sharing the task should be tested for a period of time. Staff again mentioned the critical need for plant engine maintenance and operation. George Zabee moved to use the City Operation for maintenance and repair, at the time they re-organize their garage and hire a new mechanic, for a period of nine months to a year. James Tralle seconded the motion. Motion carried 3-0. 6.2 Review Wage Request from ERMU Employees Art Gatchell, Mark Fuchs, Wade Lovelette, and Michael Price appeared on behalf of the operational employees, with a request for a 4.44%wage increase, to keep up with metro average pay scale. It was noted that the 4.44% increase average was for linemen only. Bryan Adams asked the Commission to be aware of the competition for lineman among electric utilities, difficulty of hiring good employees, and the need to keep trained qualified people in the organization. James Tralle agreed that point is important. George Zabee noted he would prefer to use a median, rather than the mean average, but will not do that for this year. Mr. Zabee further observed that a select group is used for comparisons. Bryan Adams noted that the groups used are comparables of the Utilities and is ERMU competition for employees. Michael Price advised that because of the increase in costs to the employees for certain benefits, some employees have not recognized a pay increase. James Tralle moved to increase the pay of the Operations people 4.44%. George Zabee seconded the motion. Motion was further discussed before voting. Motion failed 1-2, George Zabee and John Dietz voting nae. George Zabee moved to increase the pay of the Linemen 4.44%. James Tralle seconded. Motion carried 2-1. John Dietz voting nae. Page 3 Regular meeting of the Elk River Municipal Utilities April 10, 2001 John Dietz and George Zabee concurred that discussion of the remaining employees be continued at the May 8, 2001 meeting. Bryan Adams is directed to return with comments, recommendations and Comparable Pay Equity graphs. 5.2 Review and Consider Bid Tabulation for Construction of Well#7 Bids for the construction of Well#7 were received on April 4, 2001, and a bid tabulation was presented. Staff recommends acceptance of the low bid from Traut Wells with the screened well additional items. Discussion of the additional items followed. James Tralle moved to accept the bid from Traut Wells for construction of Well#7, with the additional items. John Dietz seconded the motion. Motion carried 3-0. 5.3 Review Location for Proposed Water Tower Staff and Commission discussed and reviewed the location for the proposed Water Tower, with the help of a Water Tower Site Evaluation. Bryan Adams noted that the Evaluation spread sheet has been changed to reflect updated land prices. Bryan further notes that he believes the best options appear to be the Gold Nugget or Foster properties, but that in his view, the Park site is still the best site technically and financially. James Tralle notes that though the Park site may be the most desirable, it is not politically acceptable. Bryan Adams asks the Commission, after further discussion, for direction. James Tralle moved to direct Bryan Adams to enter into negotiations with Foster for the SE corner of his property, including soil borings. John Dietz seconded the motion. Motion carried 2-1. George Zabee voting nae. 5.4 Review and Consider Bid Tabulation for Perkins Area Water Main Bid tabulations for the Perkins Area Water Main Project were reviewed with recommendations from Staff for awarding the bid of Penn Contracting, Inc., the lowest responsive bidder. A brief discussion of the project ensued. James Tralle moved to approve the bid for the Perkins Area Water Main Project to the lowest responsive bidder, Penn Contracting, Inc. John Dietz seconded the motion. Motion carried 3-0. 5.5 Review and Consider Bid Tabulation for Downtown Electrical Conversions Bid tabulations received on March 27, 2001 for the Downtown Electrical Conversion project were presented and discussed with Staff recommendations. Commission questioned the dollar span between bids. Staff responded and discussed the bids, noting changes in the original plan. Page 4 Regular meeting of the Elk River Municipal Utilities Commission April 10, 2001 John Dietz moved to award the bid for the Downtown Electrical Conversions to the lowest responsive bidder, Christensen Utilities. James Tralle seconded the motion. Motion carried 3-0. 5.6 Review and Consider Policy for Water Utility Hook-up A report was presented to Commission, with recommendations for adopting certain sections of the city code into the Water Rules, and to add references to the connection to Municipal Water System. After further discussion of the report, additional concerns were considered. Staff was directed to further proof the changes for consistent wording. James Tralle moved to approve the changes and additions to the ERMU Water Rules, with minor word changes. George Zabee seconded the motion. Motion carried 3-0. 5.7 Update LFG Generation Project Bryan Adams reported that progress for the LFG Generation Project has been slower than originally anticipated. The flow chart reflecting the necessary steps for completion was reviewed. James Tralle asked Bryan Adams what he believes are the chances of completing the project and Bryan responded that he thinks there is a 50-50 chance, and that the go or no go point will occur in the July time frame. James Tralle moved to have the City Council adopt a Resolution approving the exercise of powers under Minnesota Statues, Chapter 453, appointing WM as Agent for ERMU. John Dietz seconded the motion. Motion carried 3-0. 6.3 Update Legislative Issues A letter to Senator Mark Ourada, dated 3-29-01 from Bryan Adams, two MMUA newsletters addressing legislation, a League of MN Cities report on property tax relief for IOU generation facilities, and an MMUA proposal for Iron Range Energy Park were reviewed and discussed with direction and explanations from Bryan Adams. 6.4 ERMU Contractor-Customer Claims Damage to a customer's trees by a contractor for the Utilities was done in the late fall of 2000. The Utilities has attempted to mediate between the contractor and the customer. John Dietz advises that he has been contacted by the customer. Glenn Sundeen advised the Commission that there have been attempts for agreeable settlement of the claim,but that the customer is not the owner of the property on which the damaged trees stand. John Dietz asked about time-frame payments to contractors, and that he feels all jobs should be checked thoroughly before payment is issued. Page 5 Regular meeting of the Elk River Municipal Utilities April 10, 2001 John Dietz moved to direct Staff to return with a formal policy for payment of contractors charges, allowing for the approval of the project. James Tralle seconded the motion. Motion carried 3-0. Other Business John Dietz feels that after reviewing the legal charges to the ERMU from Mr. Ron Black, that the Utility is paying more than the City Attorney, Peter Beck, is paid. Staff responded, and John Dietz advised that he wants the Utility Staff to be aware that he is looking at the issue. John Dietz advises that since City Hall is in the process of making plans for enlarging their facility, that the ERMU needs to strongly consider moving offices to that site. Staff is directed to do an accounting of customers presently coming into the downtown office location of the ERMU to pay their bills. John Dietz asked Staff if magnetic or permanent signs are used on Utility vehicles. Staff responded with the information that some of each are used, but most of the signs are magnetic. Staff was asked to return to the Commission with cost differences between the signs. The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be Tuesday, May 8, 2001 at 4:00 P.M. in the Utilities Offices. Adjournment President Zabee adjourned the meeting of the Elk River Municipal Utilities at 6:30 P.M. Respectfully submitted, Patricia Hemza Office Manager