Loading...
2.2 ERMUSR 11-13-2018ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM October 9, 2018 Members Present: Chair John Dietz; Vice Chair Al Nadeau; Commissioners Paul Bell, Mary Stewart, and Matt Westgaard ERMU Staff Present: Troy Adams, General Manager; Theresa Slominski, Finance and Office Manager; Mark Fuchs, Electric Superintendent; Mike Tietz, Technical Services Superintendent; Eric Volk, Water Superintendent; Tom Sagstetter, Conservation & Key Accounts Manager; Michelle Canterbury, Executive Administrative Manager; Jennie Nelson, Customer Service Manager Others Present: Cal Portner, City Administrator; and Peter Beck, Attorney 1.0 GOVERNANCE 1.1 Call Meeting to Order The regular meeting of the Utilities Commission was called to order at 3:30 p.m. by Chair Dietz. 1.2 Pledge of Allegiance The Pledge of Allegiance was recited. 1.3 Consider the Agenda There were no additions or corrections to the agenda. Moved by Commissioner Nadeau and seconded by Commissioner Stewart to approve the October 9, 2018 agenda. Motion carried 5-0. 1.4 Recognition of Employee Achievement Mr. Adams announced that Mr. Volk was recently recognized for his succession to Section Chair of the Minnesota American Water Works Association (MN AW WA) at their annual Conference held September 18-21 in Duluth, Minnesota. Mr. Adams commented that it really goes to show his level of leadership within the water utility community in Minnesota, and his peers' respect to vote him into this position. The Commission congratulated him on his achievement. Page 1 Regular Meeting of the Elk River Municipal Utilities Commission October 9, 2018 P 1.5 Recognition of Transition to Minnesota Municipal Power Agency On October 1, 2018, ERMU began receiving power from Minnesota Municipal Power Agency (MMPA). Operationally, the transition to MMPA was seamless and without interruption of power to the community. Mr. Adams stated that he wanted to take a moment to recognize all the hard work and many hours that were put in leading up to the transfer. And as outlined in his memo, he shared that all signs point to a very favorable future with MMPA. Staff noted that an article on this monumental moment in ERMU's history was featured on the front page of the October 6, 2018 edition of the Star News. 2.0 CONSENT AGENDA (Approved By One Motion) On page 20 of the check register, Commissioner Stewart asked for further clarification on what check number 75802 issued to Sherburne County Zoning in the amount of $16,521 was for. Ms. Slominski responded that it was our monthly payment for an interest free loan we received from Sherburne County for the Landfill Gas Plant. Moved by Commissioner Westgaard and seconded by Commissioner Bell to approve the Consent Agenda as follows: 2.1 September Check Register 2.2 September 11, 2018 Regular Meeting Minutes Motion carried 5-0. 3.0 OPEN FORUM No one appeared for open forum. 4.0 POLICY & COMPLIANCE There was nothing presented for policy & compliance. 5.0 BUSINESS ACTION 5.1 Financial Report— August 2018 Ms. Slominski presented the August 2018 financial report. Moved by Commissioner Nadeau and seconded by Commissioner Stewart to receive and file the August 2018 Financial Report. Motion carried 5-0. Page 2 Regular Meeting of the Elk River Municipal Utilities Commission October 9, 2018 27 5.2 2019 Business Plan/Budget— Water and Electric Expenses, and Conservation Improvement Program Ms. Slominski presented the first cut of the 2019 Water and Electric Expense Budget. She noted that items are subject to change as the complete 2019 budget is assembled and the finalized wholesale power costs and revenues are reflected. Revenue and rates for 2019 will be presented in November. Electric Department Expense Budget — The 2019 forecast for electric expenses reflected a 2.77% increase over the current year budget. The wholesale power costs, which make up between 70-75% of the operating budget, were estimated using MMPA's rate structure. Ms. Slominski noted that it is a decrease in spite of an increase in kwh growth of 6% over the prior year. Commissioner Stewart inquired if staff had factored in an amount for PCA costs. Staff responded that they had done so and had used a projected average. Ms. Slominski pointed out that Depreciation and Amortization are increased largely due to the amortization of MMPA's intangible asset. Currently, staff is estimating a 0% rate increase. The Commission had a few questions on the electric department expense budget. Staff responded. Water Department Expense Budget - The 2019 forecast for water expenses reflected a less than 1% increase over the current year budget. Most notable increases were on the administrative side for increases in health insurance and benefits. Currently, staff is estimating a 2% increase to the monthly charge and tier 1 rate. Conservation Improvement Program Budget — Mr. Sagstetter presented the Conservation Improvement Program (CIP) Budget which included detailed information about the cost of the specific programs as well as the historic participation numbers; also included was a CIP summary sheet for reference. Mr. Sagstetter noted that the 2019 forecast for CIP includes approximately $242,000 for rebates. He explained that in the past these cost have been partially funded by Great River Energy (GRE), however MMPA doesn't have a similar funding mechanism, and so these costs will need to be funded by ERMU. There was discussion on state legislative developments and possible changes to the existing CIP. Commissioner Westgaard asked for further clarification on whether the proposed budget reflected the rebates ERMU would be funding. Staff responded that it did. 5.3 2019 Utilities Fee Schedule Annually ERMU staff reviews its fees for the upcoming year to make sure they are fair, reasonable, and proportionate to the actual cost of the service for which the fee is imposed. The addition of any new fees is also considered at this time. Staff is considering the addition of two new fees; an opt -out fee, and a residential application fee. Mr. Volk shared that ERMU had recently been approached by a customer that would like to opt -out of the automated meter reading (AMI) process we currently offer. As ERMU does not presently offer an opt -out program, there are a few different options we can consider. Mr. Volk Page 3 Regular Meeting of the Elk River Municipal Utilities Commission October 9, 2018 presented four different options and talked through the pros and cons of each of them. The Commission questioned why someone would want to opt out of AMI. Staff and Attorney Beck responded. There was discussion. Staff suggested offering an option that socializes the costs associated with the meter change out where the customer covers 50% of the cost, and ERMU covers the other 50%; there would also be a monthly manual meter reading fee that would be passed along in its entirety to the customer. After further discussion, the Commission supported the idea of an opt -out program and directed staff to do some further research and bring back some dollar amounts on the cost to offer the program for both water and electric. Ms. Nelson shared that staff is considering implementation of a residential application fee to cover the costs associated with credit checks, meter reading, and account setup. She stated that this is a standard practice amongst utilities. Ms. Nelson presented what three other utilities charge for residential application fees; the fees ranged from $15.00 to $21.00. Ms. Nelson also spoke to the residential application process and how it is currently handled. She shared that in moving forward we are looking at utilizing an online application process that is being rolled out by NISC, and that may be an opportune time to implement the fee. The Commission had a few questions. Staff responded. The Commission was open to the idea of a $15.00 application fee. Mr. Adams recommended waiting to see how the new online application software operates before staff formulates a policy and implements the fee. The Commission concurred. Mr. Adams noted that in 2019 staff will be going through and verifying our philosophy of allocation of cost, and aid to construction for water and electric fees, and analyzing that for consideration in the 2020 fee schedule. 5.4 Landfill to Gas Electric Generation Facility Mr. Sagstetter stated that as part of the ongoing evaluation of the Elk River Landfill Gas Plant (LFGP) generating facility, staff has been evaluating several different scenarios for operating the facility. For each scenario, other than closing the facility in 2018, the decisions on future operations significantly impact the decisions to spend considerable funds on engine replacements. ERMU met with Waste Management on October 5 to discuss the operation of the plant after the current purchased power agreement, gas purchase agreement, and operation and maintenance contracts expire on October 31, 2022. Mr. Sagstetter provided an overview on the key questions that were addressed. He stated that based on the discussions, and Waste Management verbally agreeing to offer ERMU right of first refusal when the contract expires, staff has moved forward with ordering replacement engine 41. There was discussion. Attorney Beck stated that we need to get something in writing about the right to first refusal. Staff indicated that they were already working with Waste Management on that. 6.0 6.1 Staff Updates Page 4 Regular Meeting of the Elk River Municipal Utilities Commission October 9, 2018 29 Mr. Adams had nothing additional to add to his staff update. Commissioner Westgaard commented that the new bi-monthly Commission update Mr. Adams has been providing has been very helpful. Mr. Tietz had one change to his staff report in regards to the System Engineer. The start date for the new employee has moved from October 22 to October 29. Mr. Volk highlighted from his staff report that Water Operator Dave Ninow was sought after, and selected, to hold a position on the St. Cloud Technical & Community College's Water Environmental Technologies (WETT) Program advisory committee. Also noted on Mr. Volk's staff report was that the Harley Davidson HOG Chapter recently painted 69 hydrants for ERMU. He shared that they are also on board for shoveling out hydrants this winter should the need arise. Chair Dietz had a question on how we would recognize them for their efforts. Staff responded. 6.2 Electric Service Territory Transfer Update Mr. Adams provided an overview of the areas 5&6 electric service territory transfer that began on September 13 and completed on September 18. This process was longer than past transfers primarily because in this transfer Connexus retained ownership of the overhead electric distribution feeder. He shared that the implementation was well planned, coordinated and executed perfectly. The department heads that worked on the project shared a little bit about the process and touched on the highlights and some of the challenges that were associated with the transfer. There was discussion. Mr. Adams complimented staff on what an excellent job they did, especially with the coordination between departments. 6.3 Future Planning Chair Dietz announced the following: b. Regular Commission Meeting —November 13, 2018 6.4 Other Business There was no other business. 7.0 ADJOURN REGULAR MEETING Moved by Commissioner Westgaard and seconded by Commissioner Bell to adjourn the regular meeting of the Elk River Municipal Utilities Commission at 4:46 p.m. Page 5 Regular Meeting of the Elk River Municipal Utilities Commission October 9, 2018 30 Minutes prepared by Michelle Canterbury. John J. Dietz, ERMU Commission Chair Tina Allard, City Clerk Page 6 Regular Meeting of the Elk River Municipal Utilities Commission October 9, 2018 31