ERMU Previous Minutes 12-13-2005 ELK RIVER MUNICIPAL UTILITIES
111. REGULAR MEETING OF THE
UTILITIES COMMISSION
' November 9,2005
' Members Present: Jerry Talde, President;John Dietz, Vice Chair;James Tralle,Trustee
Staff Present: Bryan Adams, General Manager; David Berg, Water Superintendent;
Theresa Slominski,Office Manager; Richard Wagner,Locator/CAD Operator;
' Judy McSpadden, Recording Clerk
Others Present: Lori Johnson, City of Elk River Finance and Administrative Services
Director;Anthony Hedlof,MCMU; Eric Thorson, Okonite Cable
1. Call meeting to order November 9,2005
' President Jerry Takle called the November 9,2005, meeting to order at 4:00 p.m.
' 2. Consider Utilities Agenda
James Tralle moved to approve the October 11, 2005,Utilities Agenda with the
substitution of 5.6 from 2006 proposed electric&water rates to 2006 bond proposal. John
' Dietz seconded the motion.
Motion carried 3-0.
3. Consider Consent Agenda
' James Tralle moved to approve the Consent Agenda as follows:
October Check Register
' October 11, 2005, Minutes
Financials
111 John Dietz seconded the motion. Motion carried 3-0.
' 5.1 Staff Up-dates
Theresa Slominski relayed to the Commission that staff was interested in having an
alternative deferred compensation plan besides the current one with Minnesota Deferred
Compensation. The alternative plan is one where staff would have a personal investment
advisor to assist them, at the employees cost. Theresa also updated the Commission on the
possibility of a tobacco settlement through Blue Cross and Blue Shield sometime in
' December. The tax abatement issue with the State of Minnesota is still in process. The
auditors are scheduled for the preliminary audit work on December 5th
.
David Berg said the security sales were up in the month of October due to the advertising
on the bill stuffers. The water towers have been drained for the winter season and staff will
start maintenance of the wells.
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Regular meeting of the Elk River Municipal Utilities Commission
November 9,2005 41011
5.2 Review & Consider Health Insurance Costs
A task group of staff consisting of two linemen,one water operator,one office employee,
Bryan Adams and Theresa Slominski reviewed the health insurance costs for 2006 and
prepared a proposal. In developing this proposal, items taken into consideration were the
presentation Jodi Berg from the David Martin Agency gave and the feedback from employees
resulting from this presentation. Past insurance coverage included single or family plans.
Staff has asked if there could be a single+one coverage option added. Consensus of
employees is to keep the Aware Gold plan and pay more out of pocket and also pay a portion
of the Principal Dental coverage. Previously the employees paid 23%of the health insurance
cost,the new proposal is for the employee to pay 25%with the added option of single+one
coverage. This proposal results in an insurance premium cost increase from previous year of
approximately 28.4%to the employee and 15%to the employer.
Motion by James Tralle to accept the current Aware Gold insurance plan with the employee
paying 25%employee on health and dental insurance coverage. Jerry Takle seconded the
motion. John Dietz abstained. Motion carried 2-1.
5.3 Review Cash Flow Projections
Twice annually electric and water financial projections are updated to ensure the
necessary financial resources for the future. The updates are done at year end during the
budgeting process and after the audit. The electric and water projections reflecting the 2006
budget assumptions were reviewed. Bryan also presented some figures stating that although '
we have significant reserves,they are still not as high as they should be and we need to look at
increasing reserves in the future. James Tralle questioned if there would be significant power
cost changes. Bryan responded that power costs will continue to rise along with fuel cost
adjustments which usually increase in the summer months.
5.4 Review & Consider 2006 Budget
2006 proposed budget was reviewed. Discussion followed regarding the increase in
WAC fees,water and electric rates, department needs and projects. Electric and water rate
increases will be considered at the December 2005 commission meeting.
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5.5 Review & Consider Electrical Cable Bids
On October 18, 2005,bids were received for 1000 KCMIL aluminum EPR electrical
conductor for the Target Data Center project. The initial Bid request was for 120,000 LF
however Target Data Center's recent decision to require only one feeder has changed the
amount needed to 70,000 LF instead. Staff recommends accepting the lowest responsive bid
from Burmeister Electric Company.
Motion by James Tralle to accept the lowest responsive bidder Burmeister Electric Company
for 70,000 LF of 1000 KCMIL EPR electrical cable. John Dietz seconded the motion.
Motion carried 3-0.
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Regular meeting of the Elk River Municipal Utilities Commission
November 9, 2005
' 5.6 2006 Bond Proposal
At previous commission meetings the options of bonds were discussed. The Stand-Alone
Bond Issue versus the MCMU Bond Pool was discussed. Staff recommends utilizing MCMV
' bond pool with 72% fixed rate and 28%variable rate.
Motion by James Tralle to authorize$3,500,000 bond through MCMU with 72%fixed rate
' and 28%variable rate. Jerry Takle seconded the motion. John Dietz voting nae adding he
will be recommending to not approve when taken to the City Council as the City is ultimately
responsible and he feels there is a risk involved with this. Motion carried 2-1.
6.1 Review Outsourcing Bill Stuffing& Mailing
' Theresa Slominski discussed the benefits associated with outsourcing the bill printing. At
a recent Power Managers User Group(PMUG)meeting there was a presentation on BillFlash.
BillFlash is a business that prints and mails bills for organizations. PMUG has formed a
' partnership with BiliFlash which entails customizing the software to create a print file that
could be sent to BillFlash for the actual printing and mailing function. This would allow an
added person to review and analyze the bills prior to printing for more accurate billing and
fewer adjustments. The machine we currently have will need to be upgraded due to volume
and age at a cost of approximately$20,000. Comparisons of the BillFlash cost versus utilities
cost was reviewed. James Tralle was concerned about the security issues, and John Dietz
' questioned how the cost comparison was arrived at, staff responded. Jerry Takle asked if there
was a contract involved or if we could cancel, staff replied we were not bound by any contract
and could cancel at any time.
Motion by James Tralle to utilize BillFlash for mailing out the customers monthly bills. John
Dietz seconded the motion. Motion carried 3-0.
Other Business
' There was no other business.
The next regularly scheduled meeting of the Elk River Municipal Utilities Commission
' will be Tuesday,December 13, 2005.
President Jerry Takle adjourned the regular meeting of the Elk River Municipal Utilities
Commission at 4:55 p.m.
-ctfullysubmitt-d,
•
Judy McSpa!'-n
r
Recording Clerk