3. Previous Minutes 10-11-2005 1,
116 ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
September 13, 2005
' Members Present: Jerry yTakle, President; John Dietz, Vice Chair; James Tralle, Trustee
' Staff Present: Bryan Adams, General Manager; Glenn Sundeen, Line Superintendent:
Dave Berg, Water Superintendent: Theresa Slominski, Office Manager
Others Present: Anthony Hedlof, MCMU; Lori Johnson, City Financial Director
' 1. Call meeting to order September 13,2005
President Jerry Takle called the September 13, 2005 meeting to order at 4:00 p.m.
2. Consider Utilities Agenda
Jim Tralle moved to approve the September 13, 2005 Utilities Agenda with
t additional items for discussion under Other Business. John Dietz seconded the motion.
Motion carried 3-0. John Dietz added two items to other business.
' 3. Consider Consent Agenda
Jim Tralles moved to approve the Consent Agenda as follows:
August Check Register
August 16, 2005 Minutes
Financials
John Dietz seconded the motion. Motion carried 3-0.
' 5.1 Staff Up-dates
Bryan Adams shared that the graphs previously discussed showed an increase in electric
and water consumption. Electrical outages were the result of cars hitting poles. Crews are
' preparing for projects before the on slot of winter.
Glenn Sundeen affirmed that recent outages were more the result of vehicles than
' anything else. The outage in Otsego on Sunday morning was from a car hitting a natural gas
facility causing a pole fire and burning down wires. Recent thunderstorms resulted in small
outages with lightning strikes, tree limbs falling,wind, and a transformer flooding.
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Regular meeting of the Elk River Municipal Utilities Commission
September 13, 2005 '
Dave Berg responded that summer help is finished. Next year we \\ill need 4 people to flush
hydrants in a shorter period of time. They are starting to modif} well 48 to increase operating
efficiencies. 12 security systems were sold with 26 contacts being made.
Theresa Slominski reported that the Power Manager Users Group seminar Nkas this week.
Budgets are in full swing. The new front clerk starts 9/19/05 and Judy will he out due to
medical leave until 9/22/05.
5.2 69KV Transformer Bid
Bids were received for one 69KV Transformer for the West Substation Upgrade, and an
option to purchase a second identical Transformer for the substation 14 Upgrade Project to
service the proposed Target facility. Two bids were received and staff recommended the
Waukesha Transformer bid with a resistance LTC at a cost of$403,350
Jim Tralle motioned to accept Waukesha Transformer bid and John Dietz seconded.
Motion carried 3-0
5 3 Target Date Center Facility
4111
Providing that ERMU receives the go ahead for the Target Data Center on September 1.5
2005, the following items were proposed to proceed:
I) Award contract to purchase another 15MVA substation transformer
2) Award engineering contract to USG for S20,000 to design substation
expansion for Station 14. The physical expansion costs are in the 5300.000
range.
3) Award engineering contract to USG for approximately 515.000 for drafting
service to produce construction drawings for the two required feeders.
4) Secure bids and award contract for 120,000 LF of 1000 KCMIL aluminum
URD conductor. Approximate cost is $720,000. Specifications are completed
and ready for advertising. This will be awarded at the October commission
meeting.
John Dietz motioned and Jim Tralle seconded directing staff to proceed upon
notification from Target/Ryan. Discussions were held concerning possible cancellation
charges of material ordered if Target backs out of project.
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Regular meeting of the Elk River Municipal Utilities Commission
' September 13, 2005
Proposed Tariff for a Large Demand Electric Customer was discussed with possible
rate study being conducted in spring of 2006.
' 5.4 2006 Proposed Capital Budget
The second piece of the 2006 budgeting process was presented. The 2006 Capital Budget
for electric, water, and administration departments were presented as follows:
' 1) Administration Proposed Capital Budget $53,000
2) Electric Proposed Capital Budget
Equipment $288,000
Distribution Construction, Substations&Feeders $4,060,000
Other $915.500
4`h Engine at Landfill to be funded Sherburne County $650,000
' 3) Water Proposed Capital Budget
Water Dept $422,000
' Electronic Technologies Dept $97,500
Details of the capital budget were discussed and will be included in final budget
presented in November.
Jerry Takle moved, Jim Tralle seconded to offer up to $100,000 to purchase 3 acres of
' land at Waco and County Road 35 for possible future substation. Motion carried 3-0.
5.5 Review Antennas on Water Towers
' Previous requests for installing communication antennas on utility water towers have been
denied due to cost, safety, space, and maintenance issues. Elk River City council has
requested the utilities to reconsider due to zoning issues. At the July 25, 2005 City Council
meeting, it was the consensus of the council that we enter into negotiations with the
telecommunications companies to allow antennas on our water towers instead of building
telecommunication towers. Bryan Adams recently met with Nextel and discussed the options
' available. Nextel was going to look into the height and location requirements and get back to
us. The concern Elk River Municipal Utilities has is the security issues,the manpower stress
it\ould put on the water department and what would Nextel be willing to pay for rental. Staff
' \ as directed to present to the commission at a later date conditions of which antennas could
be placed on water towers.
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Regular meeting of the Elk River Municipal Utilities Commission
September 13, 2005
5.6 Purchase Digger Derrick Line Truck ,
The proposed 2006 budget contains a$180.000 item for trade-in on existing and purchase
of a new Digger Derrick Line Truck. Staff is proposing to trade-in a 1996 GNIC Digger
Derrick Truck, the last gasoline fueled heavy truck in the fleet. Bids are currently being
solicited and bid results will be presented at the October meeting.
5.7 Joint Boards/Commission /Council Meeting
On October 10, 2005 at 6.30 pm at the Lions Park Center, a joint meeting between Elk
River's Board/Commissions and City Council \\ill be held. John Dietz updated the group as
to the council's expectations.
6.1 Proposed Electric Bond Issue
The electric bond issue that will be necessary for 2006 infrastructure projects was
revisited. The two options discussed were conventional bonding or MMUA's Midwest
Consortium of Municipal Utilities (MCMU) bond pool. Anthony Hedlof of MCMU made a
presentation. The benefits of utilizing MCMU are the lover costs. Questions arose
concerning comparing conventional bonding to MCMU bonding from a cost perspective, and
\e hat are the consequences of not drawing down the entire bond issue. Anthony Hedlof will
respond.
6.2 Review 2006 Health Plan Renewal
The Health Insurance Renewal for 2006 with Blue Cross Blue Shield reflects an increase
of 20.6% Jodi Berge from the David Martin Agency addressed the commission via a letter
stating the increase and providing some information regarding our history with rate increases.
As discussed at earlier meetings,the utilities will be forming a work task group of employees
to look at implementing changes to absorb the increase. The commission discussed that they '
would like to look at different options within the BCBS menu of plans, ultimately v ith a
reduced cost to the utilities. Staff needs to research the necessity to hid the health insurance.
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Regular meeting of the Elk River Municipal Utilities Commission
September 13, 2005
' 6.3 Investment Policy
An investment policy was proposed as there is currently none in place. At the audit, the
suggestion was made that we explore other conservative investments that may offer a
' marginally better return. The city's policy was acquired and modified for the utilities' name,
and to include an investment committee instead of sole responsibility with the Finance
Director. John Dietz motioned to adopt the Investment Policy as presented and Jim Tralle
' seconded. Motion passed 3-0.
6.4 Electronic Bill Payment Processing Vendor
' Due to the continued growth of customers utilizing bill payment services through their
respective banks, and the processing time currently associated with it, an electronic bill
payment processing vendor was proposed. This would be approximately 1/3 of the current
' cost of staff time utilized to process these payments and it could be done much faster. This
would allow staff to have more time to focus on other aspects of customer service. Theresa
Slominski made a presentation on the bill payment process. Questions were asked concerning
' the terms of the agreement. Jim Tralle motioned to adopt the electronic bill payment
processing vendor and John Dietz seconded. Motion carried 3-0.
111111 Other Business
John Dietz questioned if CIP funds could be used for Energy City activities. Bryan
' Adams responded they could if they were measurably energy saving, for instance, energy
saving equipment for Energy House III.
' John Dietz presented a letter from a former employee which was discussed and a
response will be forthcoming.
The next regularly scheduled meeting of the Elk River Municipal Utilities
Commission will be Tuesday, October 11, 2005 at 4:00pm.
' President Jerry Takle adjourned the regular meeting of the Elk River Municipal
Utilities Commission at 6:45p.m.
' Respectfully submitted,
Theresa Slominski
Office Manager