3.1.B. MINUTES 09-13-2011ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
August 9, 2011
Members Present: John Dietz, Chair; Daryl Thompson, Vice Chair; A] Nadeau, Trustee
ERMU Staff Present: Troy Adams, Utilities Director;
Theresa Slominski, Finance Director/Office Manager;
Mark Fuchs, Line Superintendent; David Berg, Water Superintendent;
Judy McSpadden, Recording Clerk
ERMU Staff Absent: Wade Lovelette, Technical Services Superintendent
City Staff Present: Bob Thistle, Interim City Administrator; Tim Simon, City Finance Director
Others Present: Peter Beck, Attorney from Gray Plant Mooty Law Firm
1.1 Call meeting to order August 9, 2011
John Dietz called the August 9, 2011 meeting to order at 3:30 p.m.
2.1 Consider Utilities Agenda
Al Nadeau said he would like to make an addition of 5.4 to the agenda.
Daryl Thompson moved to approve the revised August 9, 2011 Utilities Agenda. Al Nadeau
seconded the motion. Motion carried 3-0.
3.1 Consider Consent Agenda
John Dietz had questions on the water revenue, staff responded.
Daryl Thompson moved to approve the Consent Agenda as follows:
a. July Check Register
b. July 12, 2011 Regular Meeting Minutes
c. Financial Reports
d. Resolution 11-05
Al Nadeau seconded the motion. Motion carried 3-0.
4.1 Review and Consider Water Rate Analysis
At the July 12, 2011 Elk River Municipal Utilities (ERMU) Commission meeting, information
was presented regarding the financial impact if the third tier water rate was removed. Staff was
directed to look at the scenarios specific to the commercial users. Theresa Slominski reviewed some
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Regular meeting of the Elk River Municipal Utilities Commission
August 9, 2011
of the options and the financial impact. Discussion followed regarding conservation efforts such as
the SMART Irrigation system, rain gardens, and project conserve. Consensus was to implement an
incentive program for the commercial customers only. Peter Beck was asked if this was possible, he
affirmed. One example discussed was the requirement for future irrigation services to have the
SMART Irrigation system and existing irrigation services could stay out of the third tier if they
installed the SMART Irrigation system. John Dietz directed staff to come back with a proposal and
requirements.
5.1 Review and Consider Homeowner Water Service Insurance Proeram
The water line from the water main to the building is currently the responsibility of the property
owner. If there is a problem or leak, the average cost of repair for a residential service ranges
anywhere from $900 to $4000. There have been occasions where the customer has known about the
leak but has not fixed it due to the cost and it is before their water meter so they are not being charged
for the excess water leaking. The hesitation in repair puts the water system, the customer, and their
neighbors in danger of cross contamination, structural damage, waterline bacteria and sediment
intrusion.
Rochester Public Utilities has a Water Service Insurance Policy in place for repairs that may
arise. John Dietz asked if this would be required of all customers or customer's choice, David Berg
responded it would be the customer's choice. Discussion followed. Peter Beck commented about a
recent decision from the State Court of Appeals that would give ERMU more authority regarding
abatement assessments. Consensus was to check on the abatement possibility before moving forward
with any water service insurance policy.
5.2 Review Study of NESHAP-RICE Reeulations and Their Impact on the
ERMU Power Plant
Under the current administration, the Environmental Protection Agency (EPA) has imposed
National Emissions Standards for Hazardous Air Pollutants for Reciprocating hitemal Combustion
Engines (NESHAP-RICE) which will impact ERMU and the operation of our diesel Power Plant.
Currently these new regulations would require ERMU to install emission upgrades by 5/3/2013 to our
four diesel engines to continue to operate under our current contract with Great River Energy (GRE).
These regulations are designed to reduce pollutants related to the generation of electricity from
reciprocating internal combustion engines. The ERMU Power Plant is for all practical purposes an
"emergency backup" facility for GRE. The engines are maintained and exercised, but only run a few
hours a year. There is an exemption in the rules for emergency facilities, but ERMU would not
qualify because of the compensation received from the Power Transaction agreement with GRE.
Troy Adams commented that there has been much outcry from Midwest utilities dealing with similar
concerns of these rules, so they are currently being reconsidered by the EPA. A study was conducted
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Regular meeting of the Elk River Municipal Utilities Commission
August 9, 2011
to detemvne ERMU's options. The ERMU 2011 budget included $100,000 to begin retrofitting the
engines. Troy Adams said he would bring back this topic and give an update at a future meeting.
5.3 Review the 2011 Budget Schedule. Travel and Training Budget, and
Dues/Subscriutions/Fees Budget
Troy Adams reviewed the Travel and Training Budget and the Dues/Subscription/Fees
projected for 2012. Troy Adams also talked about MMPA and the similarities ERMU has with the
members. More information will be provided at a future meeting.
5.4 Al Nadeau said he has talked with staff and is very concerned over the loss of a couple of
linemen because of the pay rates. He talked about the substantial cost associated with the training of
the lineman. Losing good quality people on a program where ERMU is falling behind on salary rates
needs to be looked at. He said he understands the economy but thinks it is important make a plan to
get back on track with the competitive wages so ERMU can keep quality people. John Dietz and
Daryl Thompson had no comments at this time.
6.1 Staff Updates
Troy Adams said ERMU has received letters of thanks from Princeton and Connexus for mutual
aid after the recent storms. Troy Adams also discussed the recent outage ERMU had due to the
storms, the communication with outside staff and office staff helped to define the outage areas to
make the repairs go smoothly. The meter shop recently discovered an issue at the Otsego substation,
the problem was caught before a major outage occurred.
6.2 Set Date for Neat Meeting
The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be
Tuesday, September 13, 2011, at 3:30 p.m.
6.3 Adiourn Regular Meeting
John Dietz moved to adjourn the regular meeting of the Elk River Municipal Utilities
Commission meeting at 4:55 p.m. Daryl Thompson seconded the motion. Motion carried 3-0.
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Regular meeting of the Elk River Municipal Utilities Commission
August 9, 2011
Minutes prepared by Judy McSpadden.
John J. Dietz
Chair, ERMU Commission
Tina Allard
City Clerk