3. ERMU MINUTES 02-12-2008ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
January 15,2008
Members Present: Jerry Takle, President; James Tralle, Trustee
Member Absent: Jerry Gumphrey, Vice Chair
Staff Present: Bryan Adams, General Manager; Glenn Sundeen, Line Superintendent;
David Berg, Water Superintendent;
Theresa Slominski, Finance Director/Office Manager;
Troy Adams, Engineering Manager; Judy McSpadden, Recording Clerk
1. Call meeting to order January 15, 2008
President Jerry Takle called the January 15, 2008, meeting to order.
2. Consider Utilities Agenda
Bryan Adams added Sportech water issue to discuss under Other Business. James Tralle
moved to approve the January 15, 2008, Utilities Agenda Jerry Takle seconded the motion.
Motion carried 2-0.
3. Consider Consent Agenda
James Tralle moved to approve the Consent Agenda as follows:
Designate First National Bank official depository for 2008
Designate Elk River Star News official newspaper for 2008
December Check Register
December 11, 2007, Minutes
Financial Reports
Jerry Takle seconded the motion. Motion carried 2-0.
5.1 Staff Up -dates
Bryan Adams and Glenn Sundeen attended the Otsego City Council meeting on Monday and
asked them to waive the underground requirement for upgrading the distribution line west on
County Road 39. If and when County Road 39 is upgraded it would necessitate relocating a
newly installed underground system and this would be very costly to the rate payers. The Otsego
City Council granted the request. This line may be modified overhead but must be buried when
County Road 39 is upgraded or 10 years, whichever is less. Bryan Adams demonstrated a new
LED street light and recommends purchasing a few to test on the system or possibly doing a joint
venture with Connexus thus saving initial cost.
Glenn Sundeen shared an updated territory map of the Elk River area. There are two areas
left to take-over under the current agreement. There were three accidents with vehicles hitting
poles in December. Two are being billed to the appropriate insurance company and the third pole
hit was a fiberglass pole with no one at the scene when crews arrived. One feeder was energized
for United Health Group on January 15, 2008.
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Regular meeting of the Elk River Municipal Utilities Commission
January 15, 2008
Troy Adams reported 10 security sales for December. Staff is in the process of implementing
the fuse coordination on the electric distribution system.
David Berg discussed the maintenance being performed on the well filters. Two different
water meters were displayed to discuss their differences and how they operate. The irrigation
meters that have been removed for the season are being tested for accuracy. The test well at the
new Well #9 site off Twin Lakes Road has been sealed. The contractor has drilled down 454' and
has been dynamiting a cavem. The sand is currently being moved off site. Well #7 has been
cleaned and a camera will be utilized to document the condition of the well.
Theresa Slominski said the ad for the .5 FTE accountant has been filed, and applications will
be accepted through January 28a'. James Tralle asked if the MN Job Center was also contacted,
staff responded they will contact them with the ad also. The auditors just finished a preliminary
audit and are scheduled to return March 5`" — 7"'. Payment by credit card is being investigated,
and a recommendation will be made at a future meeting. A bar code is being implemented on the
bills for efficiency and faster entry.
5.2 Review Alternate 3 Tier Water Rate Structure
At the December 2007 Elk River Municipal Utilities commission meeting, the water rate
increase was discussed. There is currently a 2 -tier water rate structure in place with the second
step much higher to discourage excessive lawn watering and also promote water conservation.
Jerry Gumphrey suggested a 3 -tier rate structure to further promote conservation. Staff
recommends the 3 -tier rate as follows:
Residential:
First Step Rate of $1.50 per 1000 gallons = 0 - 9,000 gallons per month.
Second Step Rate of $3.50 per 1000 gallons = 9,000 —15,000 gallons per month.
Third Step Rate of $4.00 per 1000 gallons — Above 15,000 gallons per month.
Commercial:
First Step Rate of $1.50 per 1000 gallons = 0 —1.1 X pervious year's average winter
period monthly consumption.
Second Step Rate of $3.50 per 1000 gallons = Between 1.1 X previous year's average
winter period monthly consumption to 1.1 X previous year's average winter monthly consumption
+ 40,000 gallons.
Third Step Rate of $4.00 per 1000 gallons = Above 1.1 X pervious year's average winter
period monthly consumption + 40,000 gallons.
James Tralle moved to approve the 3 -tier water rate as presented. Jerry Takle seconded the
motion. Motion carried 2-0.
5.3 Review Elk River United Methodist Church Water Service Abandonment Agreement
At the December 11, 2007, Elk River Municipal Utilities commission meeting, we discussed
the abandonment of water services by Elk River United Methodist Church. Staff drafted a
proposed agreement which was reviewed by the utilities attorney, Ron Black. The agreement
only pertains to the three lots the church currently owns.
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Regular meeting of the Elk River Municipal Utilities Commission
January 15, 2008
James Tralle moved to approve the proposed Water Service Abandonment Agreement with Elk
River United Methodist Church for the three lots. Jerry Takle seconded the motion. Motion
carried 2-0.
5.4 Review Climate Change Material
There is a lot of discussion on climate change and renewable energy in the news media and
within our electric industry. Whatever legislation has passed and implemented will have a huge
impact on our industry. The included material was reviewed and discussed.
6.1 Review Annual Report to City Council
On an annual basis, all departments of the City of Elk River provide annual reports to the city
council. These reports are also completed in digital format and placed on the Cities website so the
general public can view these reports. Bryan Adams reviewed the past years progress and the
future goals.
6.2 Review Annual Electrical Outage Report
The Minnesota Energy, Security and Reliability Act enacted in 2001, contains a distribution
reliability section. One section of this legislation requires, on an annual basis, an outage report be
submitted to their governing bodies, which in our case, is the Elk River Municipal Utilities
Commission. In 2007 there were only 47 outages. The major causes of this year's outages were
animals (squirrels), fuse failures, 3`d party dig -ins, trees, and vehicles hitting poles. The fuse
failures are caused by a manufacturing material issue on the cutouts. Staff is in the process of
acquiring quotes to replace the porcelain cutouts with polymer cutouts.
6.3 Review APPA Electric Rate Study
On an annual basis APPA completes an electric rate comparison. The information is derived
from US Department of Energy form EIA -861, that all utilities file on an annual basis. Elk River
Municipal Utilities rates as in previous years are still competitive for the residential and
commercial rate, but the demand customer rate remains 8% -10% higher.
6.4 Energy Expo Request
The Energy Expo will be held at the City Fire department complex on Orono Road on April
19'h. Mayor Stefanie Klinzing is asking the Utilities to donate funds for this Energy Expo. Bryan
Adams was informed that Connexus was donating $1000.
Jerry Takle moved to approve a $1000 contribution to the Energy Expo. James Tralle seconded
the motion. Motion carried 2-0.
6.5 Review Proposed Flexible Benefit Plan Policy
Since 1988, Elk River Municipal Utilities has offered a Flexible Benefits Plan to its
employees to be able to exclude from tax the medical and dental premiums, and also participate in
dependant care, and medical expense reimbursement plans that offer tax savings. These plans fall
under the IRS regulations for Section 125 Cafeteria Plans. In August of 2007 the IRS released a
comprehensive set of proposed regulations that apply to Section 125 Cafeteria Plans. These new
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Regular meeting of the Elk River Municipal Utilities Commission
January 15, 2008
regulations replace and consolidate prior guidance released since the 1980's. Implementing these
regulations requires, in our case, a new plan document.
Theresa Slominski discussed the documentation and the process for reimbursement. James
Tralle asked if this was time consuming for the HR department and if outsourcing is needed.
Theresa replied it is becoming more time intensive each year but is manageable and the
employees appreciate it being in house.
James Tralle moved to approve the Elk River Municipal Utilities Flexible Benefits Plan
Document as presented. Jerry Takle seconded the motion. Motion carried 2-0.
Other Business
Sportech will be holding snowmobile races at the fairgrounds in February. In the past they have
been billed for the water used during their snow making process. This year they are asking the
Utilities to donate the water used for this event. Discussion followed. By consensus it was
decided that being a for profit organization, they should be billed for the water usage as in the past.
James Tralle moved to deny the request to Sportech for donated water. Jerry Takle seconded the
motion. Motion carried 2-0.
The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be
Tuesday, February 12, 2008.
President Jerry Takle adjourned the regular meeting of the Elk River Municipal Utilities
Commission at 5:30 p.m.
Bucy ding Clerk
ll en
rk
Rec rding Clerk
ryan Adams
General Manager