02-10-1998 ERMU MIN ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
ELK RIVER UTILITIES COMMISSION
HELD AT THE ELK RIVER MUNICIPAL UTILITIES OFFICE
FEBRUARY 10, 1998
Members Present: President, George Zabee; Trustee, John Dietz
Members Absent: Vice Chairman, James Tralle
Staff Present: Bryan Adams, General Manager; Glenn Sundeen,Line
Superintendent; Robert McCartney, Water Superintendent; Patricia Hemza, Office
Manager
Others Present: Pat Klaers, City Administrator; Lori Johnson, Assistant City
Administrator; Terry Maurer, City Engineer
1. Call meeting to order at 4:00 P.M.,February 10, 1998
2. Consider Utilities Agenda
John Dietz moved to approve the February 10, 1998 Utilities Agenda as presented.
George Zabee seconded the motion. Motion carried 2-0.
3. *Consider Consent Agenda
John Dietz moved to approve the Consent Agenda as follows:
01-13-98 Minutes
Check Register
Financials
5.1 Review Donation to Ice Arena
Information regarding the Special Rate Donation to the Ice Arena was discussed,
including usage,the history behind the donation, and whether or not a commitment
was made, in 1994.
John Dietz moved to donate $6,000.00 annually for a period of five years, and to
review usage annually. George Zabee seconded the motion. Motion carried 2-0.
5.2 Review Industrial/Commercial Electric Rate Classification
Staff reported on the research regarding industrial/commercial electric rate
classification requested by the Commission at the January, 1998 meeting. The
terms of commercial or industrial is not an accurate distinction. The rate is a
demand/non-demand rate structure. No action required.
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Regular meeting of the Elk River Utilities Commission
February 10, 1998
5.3 Review Eastern Area Development Proposals
Pat Klaers, Terry Maurer and Lori Johnson took part in the discussion with the
Utilities Commission regarding the Eastern Area Expansion. The city has
suggested the Utilities finance the trunk water system for the development. Among
points discussed were, up-front costs, assessable costs, shortfalls,time frames, and
possible TIF financing may be available for the water and electric utility installation.
George Zabee commented that this arrangement should be considered, but to proceed
carefully. No formal action initiated,but Staff was directed to pursue options.
Bryan Adams pointed out that the development will have a significant impact on the
Electric side of the Utilities. Estimated project costs for the electric trunk system is in
the $2,676,000.00 range. The Springstead Study indicated the water utility may be
able to finance the water production facilities for the expansion. Possible alternatives
of financing were presented and reviewed.
As a related issue, Bryan Adams advised the Commission of the City of Otsego's
intention of installing sewer and water on Parrish Avenue, which will effect the
development of area within our service territory, and also have financial ramifications
that need to be addressed.
5.4 Review and consider Springstead Final Report
The Springstead report encompasses current and projected rates, charges, and debt
capacity for the Water Utility. The analysis includes projections for repaying existing
and future debt service for planned capital improvements. The Commission and Staff
discussed aspects of the report, especially regarding the financing of the future growth
of our service areas. It was the concensus of the Commission that rates be raised
gradually, on an annual basis, rather than having a disproportionate raise in one future
year.
George Zabee moved to receive and file the Springstead report. John Dietz seconded
the motion . Motion carried 2-0.
5.5 Review Senior Citizen Water Rate
The current Senior Citizen Water Rate is applicable for anyone over the age
of 62, who applies. Bryan Adams questioned the Utilities obligation for advertising
and administering the rate. Staff is directed to include information on the rate in the
Current,the Connect, and with future bill stuffers.
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Regular meeting of the Elk River Municipal Utilities Commission
February 10, 1998
5.6 Review and consider ERMU purchasing policy
George Zabee moved to adopt the Purchasing Policy for the Elk River Municipal
Utilities as follows: Elk River Municipal Utilities Staff shall have the authority to
purchase the necessary equipment and materials to ensure an efficient running
organization without prior commission approval, except for the following:
a. Purchases that require a formal billing process (currently any purchase
greater than$25,000.00).
b. Any non-budgeted item in excess of$10,000.00.
c. Any new vehicle purchase.
Competitive prices,where possible, shall be secured for all purchases, with at least
two quotes for items over$5,000.00.
John Dietz seconded the motion. Motion carried 2-0.
5.7 Wind Power& Methane Gas Generation Up-date
Bryan Adams advised the Commission that the letter of intent between ERMU and
Power Strategies for methane gas generation at the landfill has been executed and the
final power purchase agreement is currently being negotiated. This final agreement
will need approval from AEC,UPA, and this Commission. Northern Alternative
Energy has made a proposal to ERMU,AEC, and UPA concerning wind powered
generation at the landfill. UPA and AEC are currently studying this proposal. UPA
and AEC must act on this proposal before bringing it to this Commission.
5.8 Water Well Maintenance
Robert McCartney reported to the Commission on the success of the inspection and
repairs of Well#2. The pump was repaired,the line shaft and column pipe replaced
and the motor refurbished. Sand was removed to restore the well closer to its original
depth. As part of the Water Distribution Maintenance Program, and due to the
problems encountered in Well#2, Well#3 will be inspected next, and necessary
repairs done.
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Regular meeting of the Elk River Utilities Commission
February 10, 1998
6.1 Otsego Sewer and Water Expansion
Bryan Adams advised the Commission that the City of Otsego is proposing Sewer
and Water for a portion of Otsego. The area is in our service territory and their
preliminary plans require the ERMU to move electric distribution lines along
CSAH 42. The following observations were offered: the line would be very
difficult and expensive to move, we have permits and who would pay for the
relocation if it becomes necessary. Staff was directed to continue to monitor this
proposal and to follow up on the legal issues.
6.2 Osage Metal Site& PCB Contamination
The Commission has been advised that the United States Environmental Protection
Agency has notified the ERMU of a general liability at the Osage Metals Site.
Several years ago,the Utilities shipped used transformers to the site through
AmerEco,who is no longer in business. These circumstances make the ERMU
responsible for the liability.
6.3 Review and consider 1998 Territory Acquisition
The 1998 budget for the ERMU contains a line item for territory acquisition,
which is already committed for a deferred payment due in 1998 and for the
payment for loss of revenue to AEC. It is recommended to the Commission to
purchase Area 12 in 1998 for approximately $17,371..
John Dietz moved to purchase Area 12 in 1998. George Zabee seconded the motion.
Motion carried 2-0.
6.4 Review Annual Report
Bryan Adams presented to the Commission the Annual Report that will be
submitted to the City Council. The report was presented in three areas: Statistics,
1997 Accomplishments and 1998 Goals. No action necessary.
6.5 1998 Water Sprinkling Restrictions
The success of the Sprinkling Ban in 1997 was discussed, as well as the reasons for
the ban. Staff recommends extending the Sprinkling Ban.
George Zabee moved to approve the Sprinkling Ban indefinitely. John Dietz
seconded the motion. Motion carried 2-0.
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Regular meeting of the Elk River Utilities Commission
February 10, 1998
6.6 Safety Day Camp
Glenn Sundeen apprised the Commission of the Safety Day Camp to be held on
June 9 & 10, 1998 at the Lions Park in Elk River. We would cooperate with
Community Education in the camp by demonstrations.
George Zabee moved that the Utilities take part in the Safety Camp. John Dietz
seconded the motion. Motion carried 2-0.
John Dietz moved to adjourn the February 10, 1998 meeting of the Elk River Utilities
Commission. George Zabee seconded the motion. Motion carried 2-0.
The February 10, 1998 meeting of the Elk River Utilities Commission adjourned at
6:06 PM.
The next scheduled meeting of the Elk River Utilities Commission will be on
March 10, 1998.
Respectfully submitted,
Pele761q)
Patricia Hemza
Office Manager