07-14-1998 ERMU MIN ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
ELK RIVER UTILITIES COMMISSION
HELD AT THE ELK RIVER MUNICIPAL UTILITIES OFFICE
July 14, 1998
Members Present: President, George Zabee; Vice Chair, James Tralle; Trustee, John
Dietz
Staff Present: Bryan Adams, General Manager; Glenn Sundeen, Line Superintendent;
Robert McCartney, Water Superintendent; Patricia Hemza, Office Manager
1. Call meeting to order at 4:00 P.M..July 14. 1998
2. Consider Utilities Agenda
Bryan Adams offered two additions to the 7-14-98 Agenda,to be discussed under
other business.
James Tralle moved to approve the Utilities Agenda, with the two additions under
Other Business. John Dietz seconded the motion. Motion carried 3-0.
3. Consider Consent Agenda
The Financials were discussed, with emphasis on the Purchased Power costs.
John Dietz moved to approve the Consent Agenda as follows:
6-9-98 Minutes
June Check Register
Financials
5.1 Up-date Electric Deregulation Issues
Bryan Adams presented his perception of the electric industry,particularly Elk
River's role in the changing industry, the MMUA draft on retail competition, and
an update on the League of Minnesota Cities Electric Deregulation Task Force.
Questions by the Commission were responded to by Staff and discussion
continued. George Zabee had specific comments about restructuring, and the
problem of whether or not the Utilities will become a wire service only, or if
commodities and meter reading will continue. Power generation as an option
was offered. The fact that building and maintaining lines by the Utility is a strong
point was noted, and marketing is secondary. James Tralle questioned whether
the ERMU needs to be at the fore-front, or if we can observe what others are
doing,before making decisions. Stressed was the strong point of our local profile
and responsiveness to customers.
George Zabee suggested that one topic or option concerning de-regulation per
future meeting be discussed. The other Commissioners agreed and Staff was
directed to implement the suggestion.
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Regular meeting of the Elk River Municipal Utilities Commission
July 14, 1998
5.2 Review and award contract for Specifications and Inspections Services for
Freeport Water Tower Painting Project
Proposals were presented for structural repairs, blasting and painting the Freeport
Water tower, with evaluations.
James Tralle moved to accept the bid from KLM Engineering, Inc. along with the
option for a two year Inspection Warranty. John Dietz seconded the motion.
Motion carried 3-0.
5.3 Up-date Power Quality Program
Three brochures that will be utilized to market our surge protection program
were presented, and the program discussed. Commission was advised that the
Minnesota Board of Electricity has given permission for the Utilities to install
the devices.
5.4 Up-date Landfill Generation Project
Comments by AEC were addressed and responded to regarding the proposed
contract for the Landfill Generation Project. The contract has been approved by
AEC's Board of Directors, and AEC is presently amending our power purchase
contract at FERC to allow commencement of the project.
5.5 Up-date progress of Well#6 Facility
The progress of Well#6 was reviewed, along with the information that perhaps
the filtering will be moved from#5 to#6. An evaluation from Howard Green Co.
regarding the disinfection system was presented, with their recommendation that
the Utilities should start utilizing disinfection, using gaseous chlorine. An active
discussion of the issue followed. Bryan Adams was directed to return to the
Commission with the number of cities in Minnesota who are not using the
disinfection program, and how many boiling bans are in progress. Staff and
the Commission appear to agree that when water service to the Eastern area
occurs, disinfection at that time will be imperative.
6.1 Review Proposal for Plant Transformer Up-grade
Staff reviewed the capacity of the engines/generators at our Power Plant, as well
as the contract with UPA for generation. It was stressed that we must fulfill our
obligation to UPA and our customers to provide back-up generation as agreed.
The Generating/plans substation capabilities must be up-graded to follow up. It
was originally scheduled for 1999,but it would be advantageous to begin in 1998.
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Regular meeting of the Elk River Municipal Utilities Commission
July 14, 1998
Bryan Adams was directed by the Commission to begin looking for equipment
costs and options immediately, and to return to the Commission with the results.
6.2 Review and award contract for Electric Line Truck
The bid tabulation for the Electric Line Truck, with trade-in options was
presented to the Commission, and discussed.
James Tralle moved to accept the bid of Altec, with the trade in. John Dietz
seconded the motion. Motion carried 3-0.
6.3 Review Water Access Charge for Hotel/Motel facilities
SAC/WAC calculations were discussed in regard to hotels/motels. The City
Ordinance currently calculates that one SAC and one WAC is to be paid per
unit. Changing the calculation would deviate from the Met Council guideline.
James Tralle moved to agree with the City's Ordinance revision in units charged
to hotel/motels. John Dietz seconded the motion.
Discussion continued regarding the issue of units,with comments and questions
by George Zabee.
Motion carried 3-0.
6.4 Review Proposed 1999 Territory Acquisition
Bryan Adams reiterated the territory acquisition plan we have with Anoka
Electric Cooperative. Recommendation of the acquisition of Area 9 is
recommended, in order to clean up the hanging areas and simplify the
territory boundaries in the areas of Ridgewood and Proctor, along with AME
Ready Mix on Hwy 169 and County Road 33.
James Tralle moved to acquire Area 9 in 1999. John Dietz seconded the motion.
Motion carried 3-0
6.5 Review issues for UPA/AEC Power Supply Contract
The ERMU Power Purchase Contract was re-negotiated in the fall of 1996, and
gives us the right to re-negotiate every two years. The issues involved in the
re-negotiation were discussed. Bryan Adams was directed by the Commission to
return to the Commission with options and costs of the related issue of adding
generation to our system.
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Regular meeting of the Elk River Municipal Utilities Commission
July 14, 1998
6.6 Up-date King and Main Development
Bryan Adams reported that Midwest Construction is considering building an
office building on the corner of King and Main. Midwest Construction and the
City of Elk River has approached the Utilities with the possibility of leasing
office space in the proposed building at approximately $9.50 per sq. ft. It is the
concensus of the Utilities Commission that the proposal is not of interest at this
time.
Other Business
Bryan Adams advised the Commission that he has met with Jerry Hicks of Elk River
Bituminous regarding his electrical usage cost. Mr. Hick's concern is the high demand
cost and poor load factor, resulting in a high unit cost of power. No action necessary.
Bryan Adams presented a request from Joseph Pallansch, our Contracting Engineer, for
an increase in the dollar amount he receives per hour, and his reasons for asking.
Discussion followed.
James Tralle moved to increase the amount paid per hour to Joseph Pallansch, as
a contractor to $18.65 per hour. John Dietz seconded the motion. Motion passed
2-1. George Zabee expressed his decision for voting nae was because he thought
the increase was not enough.
With no other business to discuss, James Tralle moved to adjourn the July 14, 1998
meeting of the Elk River Utilities Commission. George Zabee seconded the motion.
Motion carried 3-0. The July 14, 1998 regular meeting of the Elk River Utilities
Commission adjourned at 5:35 P.M.
The next scheduled meeting of the Elk River Municipal Utilities Commission will be
August 11, 1998 at 4:00 P.M. in the Utilities Office.
Respectfully submitted,
X6-T3ai
Patricia Hemza
Office Manager