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06-14-2005 ERMU MIN ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION June 14,2005 Members Present: Jerry Takle,President;John Dietz,Vice Chair Members Absent: James Tralle,Trustee Staff Present: Bryan Adams,General Manager; Glenn Sundeen,Line Superintendent; David Berg, Water Superintendent;Theresa Slominski,Office Manager Others Present: Lori Johnson,City of Elk River Finance Director 1. Call meeting to order June 14,2005 President Jerry Takle called the June 14,2005,meeting to order at 4:00 p.m. 2. Consider Utilities Agenda John Dietz moved to approve the June 14,2005,Utilities Agenda. Jerry Takle seconded the motion. Motion carried 2-0. 3. Consider Consent Agenda John Dietz moved to approve the Consent Agenda as follows: May Check Register May 10,2005,Minutes Financials Jerry Takle seconded the motion. Motion carried 2-0. 5.1 Staff Up-dates Bryan Adams informed the Commissioners of a situation with the termination of an Apprentice Lineman. Staff is in the process of hiring a replacement for the Apprentice Lineman position. There have been some IRS issues with employment taxes not being paid in a timely fashion that needs to be resolved. The Auditors will be in the office next week to meet with staff. Bryan feels that it would be good to have a third party look into the matter and also to help with the possibility of forgiveness of some of the penalties that have accrued. We have received some thank you's from customers regarding the AC Tree program and the moisture meters. A new business is looking into the possibility of building by Waco and Co Rd 30. This would require us to construct two electric feeders to supply their electric requirements. The City of Buffalo and Wright-Hennepin Cooperative are in a territory dispute. The PUC has sided with Wright-Hennepin Cooperative in this matter,whereas the City of Buffalo would have to pay approximately 10 times the cost of acquiring territory than what we are now paying to Connexus. MMUA will be appealing the ruling. Glenn Sundeen reported there were 48 new services in May,along with 131 customers from the Connexus acquisition. John Dietz asked if there was anything we would need to move for the Jackson Square building. Glenn responded that there is a manhole that would need to be moved,discussion followed. The flag pole might possibly be moved to the School District office,Glenn asked if it could be set near the parking lot to allow our truck to get close enough for when we raise and lower the flag. Page 2 Regular meeting of the Elk River Municipal Utilities Commission June 14,2005 David Berg reported on the Hillside tower project being completed. Last year they were pumping 1,900,000 gallons/day versus this year 1,500,000 gallons/day,this decrease being due to the rain and water conservation. Staff is still flushing hydrants. There were four security systems sold last month. At this time John Dietz questioned the overtime cost. Staff responded due to the workload in the summer,operational staff is working nine hour days. John questioned if there was a need for another person and staff replied the need is only in the summer and not in the winter months. Theresa Slominski informed the Commissioners of the CD's that need to be renewed and the CDARS plan(Certificate of Deposit Account Registry Service) she would like to utilize. This consists of a group of banks that collectively insure the$100,000 FDIC insurance. Theresa also reported on the budgeted amount for the moisture meters being $20,000 and only approximately$15,000 was spent. 5.2 Review Monthly P&L Projections At the May 2005 Commission meeting John Dietz asked questions regarding our electric profit/loss statements. Staff has compiled the information to better explain the month end cash flow. The cash flow projections were compiled from information of prior years history and the budgets. Theresa Slominski reviewed the cash flow expenditures for the electric department. The main expenditures are purchased power,administration expense, and depreciation. The fluctuations on the balance reflect the purchased power paid out one month,yet it is not collected from the customer until the following month. The inventory and capital asset purchases are high in the beginning of the year to prepare for the construction season. The depreciation is accrued monthly instead of yearly and this is based on the life span of the material which is recommended by the auditors and GASB (General Accounting Standards Board). John Dietz questioned whether the water and electric were being allocated by the 25%/75% split, staff responded it is. The water department cash flow was discussed and John Dietz questioned the higher cash in the water department, staff responded it was due to the large bond issuances,and there is some sharing of funds for when the electric department cash flow is lower through the summer months. 5.3 Review Sherburne County Security Contract—verbal Sherburne County Social Services department is seeking approval from their board for the use of our emergency response security system. This consists of a base unit that has an emergency button for the customer to push to get help and a pendant is also available that they can carry with them. Bryan Adams showed the unit and the pendant to the Commissioners. If approved, Sherburne County would determine the need and have us install the system,we would then bill Sherburne County for the monthly monitoring service. No action taken. 5.4 Review Otsego Substation At the May Commission meeting we initially discussed the electrical growth potential in Otsego. We are currently exploring two options,one being to build a feeder from Station 14 paralleling Hwy 169 and Hwy 101 to County Road 39,and the second option is to utilize the Otsego substation. Staff feels upgrading the Otsego Substation is more economical and an easier process. Staff is arranging a meeting with MNDOT to discuss the options,and working with the City of Otsego to determine what requirements and permits are needed to Page 3 Regular meeting of the Elk River Municipal Utilities Commission June 14,2005 allow the expansion of this substation. John Dietz asked if staff has discussed the possibility of sharing Otsego substation with Wright-Hennepin Cooperative,staff responded that they were in favor of it. Motion by John Dietz to continue the CUP process with the City of Otsego. Jerry Takle seconded the motion. Motion carried 2-0. 6.1 Review& Consider Public Expenditure Policy The City is looking at adopting a Public Purpose Expenditure Policy. This proposed policy addresses proper expenditures of public funds for employee training and development programs,and volunteer recognition. Staff recommends adopting this policy after the City adopts their policy so we can include any changes they make. Lori Johnson handed out the revised policy to be adopted. Discussion followed regarding what is not allowed with the new policy,a few of the policies that effect us are flowers for memorials,and employee years of service anniversary gifts. Lori Johnson recommends we adopt the same policy as the City. John Dietz suggests we adopt the City policy. Jerry Takle feels we should have our own policy identical to the City. Commissioners would like the Public Expenditure Policy changed to reflect the City policy and it will be reviewed at the next Commission meeting. 6.2 Review Proposed Energy City Commission The City of Elk River applied to the Minnesota Environmental Initiative(MEI)in 1996 to be a program of Energy Alley(organization under MEI). The City was then chosen to become an Energy City to promote energy efficiency and renewable energy industry through demonstrations and consumer education. Recently the City was informed by MEI that Energy Alley may not exist in the near future. The Action Committee for Energy(ACE)is the local committee that runs Energy City. Because of the positive results of this committee,ACE is recommending Energy City become a city commission. Bryan Adams discussed the need and expectations of the committee. He also discussed what the criteria was of who would be on the Energy City Commission. John Dietz voiced his concern over this being a City Committee yet not following standard City Committee make-up. Jerry Takle commented the current focus is just electricity and recycling,why not other areas like transportation. John Dietz asked if there were any public interest in the Energy houses. Bryan Adams said there is an interest out there. No action taken. 6.3 Review GRE Generation&Transmission Capacity Staff has had several discussions recently with Connexus and GRE concerning electric generation resource planning. Bryan Adams discussed the generation capacity requirements versus the actual capacity on hand. Concern over the need for additional capacity is an issue. John Dietz questioned how big an area could we supply if there was a blackout. Glenn Sundeen responded that we could only support 1/4 of the town but we would rotate that power if the need arose. No action taken. Page 4 Regular meeting of the Elk River Municipal Utilities Commission June 14,2005 6.4 Review and Consider Position Change Bryan Adams recently attended a"Hay Group"seminar on establishing points for particular jobs using Hay Group methodology. Minnesota Comparable Worth Legislation requires all governmental jobs be evaluated on a point system. A statistical analysis must be done on the position points and pay to determine if we are in compliance. After reviewing all of the utility positions and verifying the points assigned,a particular position stands out that needs further consideration. There is one individual that is classified as a utility worker. His position entails being a half time water operator,and half time power plant operator and plant mechanic. Staff is proposing to create a new position of Plant Mechanic/Water Operator which will increase his current point standing. Motion by John Dietz to approve the new position title of Plant Mechanic/Water Operator with the added point level and compensation per staff recommendation. Jerry Takle seconded the motion. Motion carried 2-0. Other Business There was no other business. The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be Tuesday,July 12,2005. President Jerry Takle adjourned the regular meeting of the Elk River Municipal Utilities Commission at 5:35 p.m. -s.ectfully su• k\ ki41 Judy McSp dden Recording Clerk