3.1.B. MINUTES 10-11-2011ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
September 13, 2011
Members Present: John Dietz, Chair; Daryl Thompson, Vice Chair; Al Nadeau, Trustee
ERMU Staff Present: Troy Adams, Utilities Director;
Theresa Slominski, Finance Director/Office Manager;
Mark Fuchs, Line Superintendent; David Berg, Water Superintendent;
Wade Lovelette, Technical Services Superintendent;
Judy McSpadden, Recording Clerk;
Tom Sagstetter, Conservation & Key Accounts Manager
Others Present: Peter Beck, Attorney from Gray Plant Mooty Law Firm;
Vance Zehringer of Zehringer Consulting
1.1 Call meeting to order September 13, 2011
John Dietz called the September 13, 2011 meeting to order at 3:30 p.m.
2.1 Consider Utilities Agenda
Troy Adams said he had two items for discussion under other business but would like to address
one item first.
Daryl Thompson moved to approve the September 13, 2011 Utilities Agenda with changes. Al
Nadeau seconded the motion. Motion carried 3-0.
Troy Adams introduced Tom Sagstetter, the newly hired ERMU Employee. This is a new position
that will be taking over the Conservation and Key Accounts that Vance Zehringer has been doing.
Troy Adams discussed the duties of this position and Tom Sagstetter gave a brief history of his
background. John Dietz welcomed Tom Sagstetter.
3.1 Consider Consent Agenda
John Dietz questioned the power cost adjustment (PCA) in July. Theresa Slominski responded
ERMU has absorbed the fees for the last two years. Last year ERMU absorbed approximately
$250,000 in PCA's. This year looks like it could be over $500,000, so it was deemed necessary to
pass on some of the PCA to the customer. John Dietz questioned the difference in maintenance fees
to date compared to last year. Mark Fuchs responded. The shortfall in the water department was
discussed.
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Regular meeting of the Elk River Municipal Utilities Commission
September 13, 2011
Daryl Thompson moved to approve the Consent Agenda as follows:
a. August Check Register
b. August 9, 2011 Regular Meeting Minutes
c. Financial Reports
d. Revision to the CAPX2020 Brookings — Twin Cities Development Project
Agreement Attachment A
Al Nadeau seconded the motion. Motion carried 3-0.
Troy Adams said David Berg will be late due to a water issue and asked to hold off addressing 4.1
until he arrives.
4.2 Update on Homeowner Water Service Insurance Proeram
Last month the Commission reviewed information and discussed a proposed homeowner water
service insurance program. The proposed insurance program would be non -mandatory and would
cover the costs of repair for a damaged or failing water service. The Commission directed ERMU
legal counsel to further research the options of assessment prior to staff investing additional time on
the proposed insurance program. Attorney Peter Beck discussed the procedure for the assessment of
the repair of private lines on taxes. The homeowner hires a private contractor to repair their service
and then the customer would have to ask for the tax assessment. Discussion followed. Consensus
was to provide a list of licensed contractors for the customer to choose from. Troy Adams added he
would like to make this available for the sewer issues also. Peter Beck will draft a policy on the
assessment of the water and sewer repairs and then meet with Troy Adams and the City for approval.
4.3 Update on Power Supply Options / Resource Planning
In September 2008, Connexus Energy terminated the 10-year rolling "all requirements" power
contract with ERMU. In April 2010, the ERMU Commission authorized entering into "Phase 1" of a
resource planning study with a coalition which includes Central Minnesota Municipal Power Agency
(CMMPA) as a participant. In September 2010, the ERMU Commission authorized entering into
"Phase 2" of a resource planning study which included the November 15, 2010, Request for Proposal
(RFP). In May 2011, the ERMU Commission authorized entering into "Phase 2b" of the resource
planning study which will include the risk assessment of the proposals.
Troy Adams discussed the numerous power supply options available to ERMU. Al Nadeau and
Wade Lovelette recently attended a preliminary presentation of bid results at the CMMPA office in
Blue Earth, Minnesota. Al Nadeau and Wade Lovelette gave their feedback on the presentation.
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Regular meeting of the Elk River Municipal Utilities Commission
September 13, 2011
David Berg arrived during the 4.3 discussion.
4.1 Review and Consider Water Rate Analysis
David Berg reviewed the programs and rebates available for conservation and incentive ideas.
He also asked for direction on the programs. Discussion followed. Commissioners thought the
choices provided were good. Staff was directed to put together a more detailed conservation and
incentive program policy to revisit at a future meeting.
5.1 Review 10-Year Capital Proiections and 2012 Capital Projects and Eauipment Purchases
Troy Adams reviewed the 2012 Capital Projects and Equipment Budgets. The new construction
projects along with the recurring ones were discussed. In the Capital Equipment needs is the
implementation of the 800MHz radio system. The City of Elk River and Sherburne County have
already switched over. Discussion followed regarding the process staff used for determining vehicle
replacement. After consideration it was recommended that two pick-ups and one bucket truck need
replacement. Another piece of equipment staff recommends is a mini excavator which will enable the
crew to get to the back lot lines without having to tear up their yard. A SCADA system for the electric
department would enable the crews to locate an outage or location of an outage via the computer
without them having to drive around and look for a problem. The water department has had a
SCADA system for the last 5 years and it has worked very well for them.
Troy Adams asked the Commission if the wage survey could be reviewed at the October
meeting instead of November for budgeting purposes. Al Nadeau responded yes, he would like to see
the survey. John Dietz asked staff if there was enough time to conduct the wage survey prior to the
October meeting. Troy Adams responded there would be enough time.
5.2 Review and Consider Proposed Employee Handbook Revisions
In 2008 through 2009, the ERMU Employee Handbook went through a thorough revision
process. Staff and legal counsel now perform an annual review to ensure that it is consistent policy
and legally compliant. Troy Adams reviewed the proposed revisions.
Daryl Thompson moved to approve the Employee Handbook revisions as noted. Al Nadeau
seconded the motion. Motion carried 3-0.
6.1 Staff Updates
John Dietz said next month he would like to talk about the hours associated with the consultant
position handling the conservation and key accounts now that ERMU has hired a full time employee.
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Regular meeting of the Elk River Municipal Utilities Commission
September 13, 2011
Troy Adams talked about the branding update and asked for Commission support to work with
whatever direction the branding committee decides. Consensus was to support this.
Al Nadeau asked Attorney Peter Beck if a closed meeting could be called when presented with
numbers from different bidders on power supply. Peter Beck will check into this and get an answer.
6.2 Set Date for Next Meeting
The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be
Tuesday, October 11, 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 5:55 p.m. Daryl Thompson seconded the motion. Motion carried 3-0.
Minutes prepared by Judy McSpadden.
John J. Dietz
Chair, ERMU Commission
Tina Allard
City Clerk