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3.2. ERMU MINUTES 03-20-2012ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM February 14, 2012 Members Present: John Dietz, Chair; Daryl Thompson, Vice Chair, Al Nadeau, Trustee ERMU Staff Present: Troy Adams, Utilities Director; Theresa Siominski, Finance Director/Office Manager; Mark Fuchs, Line Superintendent; David Berg, Water Superintendent; Wade Lovelette, Technical Services Superintendent; Tom Sagstetter, Conservation & Key Accounts Manager; Judy McSpadden, Recording Clerk Others Present: Cal Portner, City Administrator; Rebecca Haug, Environmental Administrator, Peter Beck, Attorney from Gray Plant Mooty Law Firm 1.1 Call meeting to order February 14, 2012 John Dietz called the February 14, 2012 meeting to order at 3:30 p.m. 2.1 Consider Utilities Agenda John Dietz added a couple items under Other Business. Troy Adams added 4.3 Jackson Street Water Tower Update and Utilities Commissioner reappointment update under Other Business. AI Nadeau moved to approve the February 14, 2012 Utilities Agenda with changes. Daryl Thompson seconded the motion. Motion carried 3-0. CONSENT AGENDA (Approved By One Motion) John Dietz had questions on the financials, staff responded. Daryl Thompson moved to approve the Consent Agenda as follows: 3.1 January Check Register 3.2 January 10, 2012 Regular Meeting Minutes 3.3 Financial Reports 3.4 2012 Regular Utilities Commission Meeting Schedule Al Nadeau seconded the motion. Motion carried 3-0. Page 2 Regular meeting of the Elk River Municipal Utilities Commission February 14, 2012 OPEN MIC No one appeared for open mic. Troy Adams requested 4.3 Jackson Street Water Tower Update be moved up. 4.3 Jackson Street Water Tower Update Rebecca Haug, Environmental Administrator for the City of Elk River, gave an update on the progress of getting the Jackson Street water tower placed on the National Register. Legacy funds are available for restoration if the tower is placed on the National Register. Discussion followed. 4.1 Update on Power Supply Options / Resource Planning In September 2008, Connexus Energy terminated the 10 -year rolling "all requirements" power contract with Elk River Municipal Utilities (ERMU). ERMU Commission authorized entering into "Phase 1" of a resource planning study in April of 2010, with a coalition which includes Central Minnesota Municipal Power Agency (CMMPA) as a participant. In September 2010, ERMU Commission authorized entering into "Phase 2" of a resource planning study which includes the release of a Request For Proposal (RFP). The RFP was issued on November 15, 2010. In May 2011, the ERMU Commission authorized entering into "Phase 2b" of the resource planning study which will include risk assessment of the proposals. In addition to working with the Resource Planning Coalition, staff continues to explore other power supply options. Troy Adams updated the Commissioners on the discussions and information acquired in the last month. 4.2 Update on Water Conservation Program At the January 10, 2012 ERMU Commission meeting, staff was directed to modify the Water Conservation Program to apply only to commercial irrigation customers. This program will establish incentives for implementing water conservation measures for commercial irrigation customers in 2012. Commercial customers will be eligible for an exemption from the P step rate provided they enroll and annually participate in the Commercial Irrigation Water Conservation Program. Tom Sagstetter reviewed the revised Commercial Irrigation Water Conservation Rebate Application form. John Dietz requested the application form to be included with the minutes. Al Nadeau moved to approve the Water Conservation Program. Daryl Thompson seconded the motion. Motion carried 3-0. Page 3 Regular meeting of the Elk River Municipal Utilities Commission Febmary 14, 2012 5.1 Review 2011 Annual Safety Report Minnesota Rules Chapter 7826 of the Public Utilities Commission Electric Utility Standards covers safety, reliability, service, and reporting requirements. Per 7826.0100(A), municipal utilities are exempt from these requirements. However, the ERMU Utilities Commission adopted parts of this chapter as a Distribution Reliability Standard policy, which includes an Annual Safety Report requirement. The policy requires ERMU to "file an annual safety performance report with its local governing body. The report will include summaries of all reports filed with OSHA and the Occupational Safety and Health Division of the Minnesota Department of Labor and Industry during the calendar year." Troy Adams reviewed the report and comparisons from the previous year. There were no missed days of work due to an injury in 2011. Commissioners thought it was a great report. 5.2 Review 2011 Annual Electric Reliability Report Minnesota Rules Chapter 7826 of the Public Utilities Commission Electric Utility Standards covers safety, reliability, service, and reporting requirements. Per 7826.0100(A), municipal utilities are exempt from these requirements. However, the ERMU Utilities Commission adopted a number of parts of this chapter as a Distribution Reliability Standard policy, requiring annual reporting on system reliability. Even with the weather issues in 2011, the Reliability index numbers for ERMU are excellent. The Average Service Availability Index (ASAI) for 2011 was 99.994% availability. Discussion followed. John Dietz said some of these numbers should be included in the annual report to the City Council. Consensus was this was an excellent report and to keep up the good work. 5.3 Review Deposit Policy Revision At the January 10, 2012 ERMU Commission meeting, there was some discussion during the fourth quarter write-offs that prompted a further look into the deposit amounts required for apartments. When the policy was first written, the deposit amount was to be two times the average month's usage. Rather than calculate that amount for every customer, averages were determined that could be applied across the board to all residential customers classes. The new deposit recommendation is $100 for apartments, $100 for water and sewer services, $150 for all -electric heat services, and $250 for all three services (electric, water, and sewer). The amount required to be deposited for commercial services shall be equal to two times ERMU's estimate of the customer's highest monthly bill. Discussion followed. Troy Adams said staff recommended there should be a minimum amount for the commercial accounts. Consensus was to have a minimum of $250 for commercial accounts. Additional discussion brought up the Revenue Recapture program implemented in 2011. Theresa Slominski updated the Commission the amount ERMU has been able to collect since October 2011 was $4017. Page 4 Regular meeting of the Elk River Municipal Utilities Commission February 14, 2012 Daryl Thompson moved to approve the Customer Deposit Policy with the change on the commercial deposit. Al Nadeau seconded the motion. Motion carried 3-0. 5.4 Review Pay Equity Report Local Government Pay Equity Act, M.S. 471.991-471.999 and Minnesota Rules, Chapter 3920 requires local jurisdictions to submit a pay equity report to the State of Minnesota every three years. The basis of the reporting requirement is to ensure that male and female employees are fairly compensated for comparable work. To determine this pay equity, jobs are assigned a point value that is compared to the gender and wage of the employee(s) and a statistical analysis is performed. 2009 was the last time ERMU filed and at that time was in compliance. Now the statistical tests show ERMU out of compliance. Theresa Slominski reviewed the Pay Equity Compliance Report. Discussion followed. Al Nadeau moved to approve the pay equity report filing for 2012, and send the compliance issue to the Wage and Benefits Committee to bring back to the Commission with a recommendation. Daryl Thompson seconded the motion. Motion carried 3-0. 6.1 Staff Updates Troy Adams displayed designs of signs for the power plant buildings along with quotes. Discussion followed. Daryl Thompson moved to purchase the signs from the lowest bidder. AI Nadeau seconded the motion. Motion carried 3-0. Troy Adams updated the Commissioners on the Legislative Rally he recently attended. Topics included net metering, redundant reporting to government agencies, and wastewater treatment upgrades. David Berg reviewed maps of the wells in the Elk River area. Discussion followed regarding the amount of customers that have not hooked up to the water system and the vulnerability of unsealed wells. Discussion followed. John Dietz asked Wade Lovelette what the locators have been doing during this slow time. Wade Lovelette responded they have been doing mapping and infrared imaging to locate hot spots on the electric system that need attention. John Dietz and Troy Adams informed the Commission of a $25,000 savings for the City's budget. They were going to purchase a lift truck, but instead will be utilizing ERMU's bucket trucks when needed. Al Nadeau gave an update on the status of the washer and dryer at the plant. Page 5 Regular meeting of the Elk River Municipal Utilities Commission February 14, 2012 John Dietz said Daryl Thompson was reappointed as an ERMU Commissioner for another three years. John Dietz also read an e-mail commendation from Annie Deckert, the Director of Economic Development for the City of Elk River, regarding Troy Adams. John Dietz asked ERMU commissioners if they would be interested in sponsoring a holiday lighting contest. This would be a good way to promote LED lights through the CIP program. Al Nadeau said he was for it, that it would be a good community thing, and people love to go out and look at lights. John Dietz said he has received a positive response from others in the community. Discussion followed regarding cost, awards, and implementation of this contest. Consensus was to move forward with the planning and bring back next month with recommendations for this contest. 6.2 Set Date for Next Meetin¢ Due to a schedule conflict, the next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be Tuesday, March 20, 2012, at 3:30 p.m. 6.3 Adiourn Regular Meeting Daryl Thompson moved to adjourn the regular meeting of the Elk River Municipal Utilities Commission at 4:45 p.m. AI Nadeau seconded the motion. Motion carried 3-0. Minutes prepared by Judy McSpadden. John J. Dietz Chair, ERMU Commission Tina Allard City Clerk