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3.0 ERMU MINUTES 09-09-2008ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM August 12, 2008 Members Present: Jerry Takle, President; John Dietz, Vice Chair; Jerry Gumphrey, Trustee 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 Others present: Lori Johnson, City Administrator; Roger Stradal, DNR; Laural Reeves, DNR St. Paul Water Appropriations Manager; Dennis Aleckson, Concerned Citizen; Bruce LeGare, Concerned Citizen 1. Call meeting to order August 12 2008 President Jerry Takle called the August 12, 2008, meeting to order. Jerry Takle requested 5.3 be moved up. 5.3 Review Water Rates At the July 2008 Elk River Municipal Utilities Commission meeting, John Dietz indicated he received a call from a concerned citizen regarding what he felt were too high water rates. At the August 4, 2008, Elk River City Council meeting, this citizen along with another citizen again expressed that they felt our rates were too high especially for those who sprinkle their yards. Dennis Aleckson, a resident in Mississippi Oaks, expressed his concern for the water rate structure. Upon surveying surrounding communities he discovered some other communities are not as aggressive on the rate for the higher users. Bryan Adams discussed the need for the rate structure as incentive for conservation thus curtailing the depletion of the Mt. Simon aquifer. Dennis Aleckson said other communities are on this aquifer, not using this conservation and is the aggressive higher tier water rate necessary? He has also talked with residents that have stopped watering their lawns. The answers he received were that it was too expensive to continue to water. Bryan Adams said if Elk River used a single tier rate the rate would be approximately $2.25 per 1000 gallons, howevei it would be unfair to charge the lower users this rate. The average consumer uses 5000 to 6000 gallons of water a month in the winter months. The step program allowed for 9000 gallons for the 1" tier rate. The remaining tiers are for higher users. Laural Reeves, Water Appropriations Manager from St. Paul DNR, expressed conservation of the Mt. Simon aquifer is of great importance. Some communities get their water from the river which in tum would deplete surface waters such as streams, lakes, and ponds. Page 2 Regular meeting of the Elk River Municipal Utilities Commission August 12, 2008 Roger Stradal, DNR representative, said Elk River is very pro -active on water conservation which is necessary in a growing community such as Elk River. Denny Aleckson asked for suggestions on attempting to keep lawns healthy. Roger Stradal replied that the Elk River area is on the Anoka sand plain which causes a lot of water to infiltrate very quickly and suggested trying different grasses which are more draught tolerant. Bryan Adams said a proposal will be brought to the City Council to adopt a black dirt policy for future developments. Bryan Adams advised of the daily and monthly pumpage for Elk River showing a large disparity between summer and winter. Of the eight wells and four water towers, five wells and one tower are taken off line in the winter because they are only needed to support the sprinkling requirements. This represents approximately $6.5 million of infrastructure investments being utilized only 5 to 6 months of the year. John Dietz said Elk River is one of the newest communities with large growth. Due to the slowed economy, the WAC fee funding is not supporting the water department anymore. Lori Johnson, City Administrator, expressed concern over a flat rate for water. Senior citizens water bills would almost double. The infrastructure was necessary because of the higher water users. The two issues involved are promoting conservation and the costs involved, either the infrastructure is funded by customers who use the water or by the tax payers who possibly do not. Jerry Takle said if the top tier water rate was lowered, the other rates would have to be raised to support the financial burden. At this time Jerry Takle thanked Dennis Aleckson for voicing his concern and the commission would take it under advisement. Jerry Takle then requested 6.3 be moved up to accommodate Bruce LeGare. 6.3 Review UHG Electric Load Bruce LeGare, a resident west of the United Health Group (UHG) facility, voiced his concern of the noise level when their generators are running. Bruce LeGare was informed that the generators are for backup in case of an outage however they would be testing them monthly but not all at once. With the cost of fuel it would not be feasible for UHG to run their engines anymore than necessary. Discussion followed regarding the uninterruptible load program and the zoning of this facility. John Dietz asked if UHG was asked to run their engines, Bryan Adams affirmed. Jerry Gumphrey asked what time of day this was. Bryan Adams responded from 4:00 p.m. to 10:00 p.m. to offset the peak usage, which in tum saved Elk River Municipal Utilities and the rate payers approximately $150,000. Lori Johnson said it is becoming a sound issue, and UHG's schedule is to run engines every other Saturday with testing once a month. John Dietz suggests Bryan Adams meet with UHG to solve the noise issue and to report back to Bruce LeGare. Page 3 Regular meeting of the Elk River Municipal Utilities Commission August 12, 2008 2. Consider Utilities Agenda John Dietz added items to discuss under Other Business. Jerry Gumphrey moved to approve the August 12, 2008, Utilities Agenda. John Dietz seconded the motion. Motion carried 3-0. 3. Consider Consent Agenda John Dietz requested explanation of a check on the check register along with additional questions on the financials, staff responded. John Dietz asked if there were any upcoming water projects, staff responded only if the City plans improvement projects it would necessitate possible water main replacement. Jerry Gumphrey moved to approve the Consent Agenda as follows: July Check Register July 15, 2008, Minutes Financial Reports John Dietz seconded the motion. Motion carried 3-0. 5.1 Staff Updates Bryan Adams informed the commission that Jerry Takle has been nominated to be on the board of directors for MMUA. The Black Dirt policy will be presented to the next City Council meeting for their review. John Dietz asked if surrounding communities have such a policy, Bryan confirmed but is concerned on the enforcement issue. Bryan notified of the upcoming retirement of Line Superintendent, Glenn Sundeen. He will be leaving in a few months and the replacement process has begun. Commission wishes to interview candidates. Troy Adams reported 13 Security Sales for the month of July. There have been a few calls to cancel monitoring due to slowing economy and financial hardship. 200 electric meters have been changed out to upgrade areas to the radio read system. Staff continues verifying three phase metering along with maintenance issues. David Berg said with this being the last week for summer help, they have been busy cleaning out valves, replacing hydrants flags, and seeding at Well #9. Staff continues upgrading the water meters. John Dietz asked the status of the Jackson Street water tower and was informed that the City Council and Heritage Committee will meet to discuss the tower in the near future. Theresa Slominski reported a circumstance that happened last week with a disgruntled customer making threats toward the meter reader and staff. A test was scheduled and performed on the panic buttons to assure they were working. The ACH bill incentive will be mailed out with the bills at the end of the month along with the cold weather rule. The tax rebate from 2007 for over $148,000 was received. Page 4 Regular meeting of the Elk River Municipal Utilities Commission August 12, 2008 Glenn Sundeen updated Commission on the status of the County Road 39 project along with County Road 1. In Brentwood Addition the contractor is finished installing the cable, but the lineman still have some finish work to do. Staff continues with the change out of old cutouts, and the fuse coordination study. 5.2 Review Salary Structure Study At the July Elk River Municipal Utilities Commission meeting, staff was directed to obtain a proposal from the City's consultant Riley, Dettmann & Kelsey, to complete a salary structure study. The proposals for Riley, Dettmann & Kelsey, and Hay Group were reviewed. Riley, Dettmann & Kelsey use a different point system than the one currently used by Hay Group. It could be an added complication but they are more familiar with MN Dept of Employee Relations (DOER) which is an added benefit and they are less expensive than Hay Group. John Dietz moved to authorize Riley, Dettmann & Kelsey LLC to perform a salary structure study utilizing the option #2 in their proposal to include employee meetings. Jerry Gumphrey seconded the motion. Motion carried 3-0. 5.4 Review 193rd Water Main The proposed extension of 193rd Avenue by the City of Elk River apTears to be moving forward. The City has agreed to pay for the trunk water main under 193' Avenue. Elk River Municipal Utilities will be required to spend approximately $120,000 more for 1200'of 12" water line to tie this trunk line into the water system to the east. Staff recommends authorization is given to proceed with our phase of the work. John Dietz moved to proceed with the 193rd Avenue water main project. Jerry Gumphrey seconded the motion. Motion carried 3-0. 5.5 Update Water Service Policy At the July 2008 Elk River Municipal Utilities Commission meeting, a Water Shut-off Request policy was adopted. A situation that arose recently may necessitate a revision to this policy. A water customer had a water pipe failure in her house before the meter and main shut off valve. This required the curb stop in the yard to be shut off. The resident called 911 in a panic and felt someone should do something. The on-call person for the water department informed the customer of the $600 up front fee, the customer refused to pay and became more inflamed. Within the hour the supervisor David Berg responded, went to the residence, loaned them the valve key, and they shut off their own water. Loaning residents curb stop keys so Page 5 Regular meeting of the Elk River Municipal Utilities Commission August 12, 2008 they can turn their own water off has been done in the past and appears to be a good resolution to this type of situation. Another situation that was not included in the policy was regarding failed service lines and what to do when they remain unrepaired resulting in a public nuisance or hazard. Lori Johnson stated if it is an abatement issue and considered an emergency, Elk River Municipal Utilities has the right to shut off the water at the service line and asses the property. Staff recommends adding the two following paragraphs to the Water Shut-off Request. #9. In emergencies where a water service line has failed before the main shut-off valve, the Elk River Municipal Utilities will loan the property owner or their agent a curb box key so they can operate the curb box. #10. In emergencies where a failed service line remains unrepaired and resulting running water creates a public nuisance or public hazard, Elk River Municipal Utilities has the right to shut off the water at the service line and assess the property for the cost incurred. John Dietz moved to approve adding paragraph 9 and 10 above, to the current Water Shut-off Request. Jerry Gumphrey seconded the motion. Motion carried 3-0. 6.1 Review Bid Tabulation for Deerfield Cable Replacement The 2008 electric budget contains a $90,000 item to replace cable in annexation area 18, Deerfield 1" and 2nd Addition (south of County Road 33 and west of Hwy 169). Bids were received on August 5, 2008. Staff recommends awarding to the lowest responsive bidder, Midwest Diversified. Jerry Gumphrey asked if they did a good job as he felt that Michels Pipeline did a great job on the Brentwood project. Glenn responded that Midwest Diversified has been doing work for us for a while and has also done a good job. John Dietz moved to award the area 18 Deerfield I" and 2"d cable installation to Midwest Diversified Utilities, the lowest responsive bidder. Jerry Gumphrey seconded the motion. Motion carried 3-0. 6.2 Review 2009 Budget Schedule Staff has started the process of assembling the 2009 budget. The proposed travel and training budget were reviewed along with the personnel projections and CIP budgeting. No action needed at this time. Page 6 Regular meeting of the Elk River Municipal Utilities Commission August 12, 2008 6.4 Review and Consider Shared Substation Agreement The Otsego substation was constructed in 2006. This location is shared with Wright - Hennepin Cooperative who also has a substation at this location. Due to operational and maintenance issues, these substation transformers and other 69kv equipment are on occasion taken out of service. In order to continue to serve the load we either must have distribution feeder ties to another substation or have a shared substation agreement for emergency use. The cost to build another feeder to Otsego would be approximately $350,000. Staff recommends authorization to execute the Shared Emergency Substation Agreement between Elk River Municipal Utilities and Wright -Hennepin Cooperative. Jerry Takle moved to approve authorization to execute the Shared Emergency Substation Agreement with Wright -Hennepin Cooperative. Jerry Gumphrey seconded the motion. Motion carried 3-0. Other Business John Dietz reported on the findings from Abdo Eick and Meyers on the fraud investigation. Although no criminal fraud was found, policies addressing the following should be drafted and brought back to the Elk River Municipal Utilities Commission for approval no later than December 31, 2008. They are as follows: Sales and Trades of Elk River Municipal Utilities (ERMU) Vehicles and equipment Employee Theft Use of ERMU Supplies and Equipment Work Order System Inventory and Internal Control Systems Segregation of Duties Performance Reviews Job Posting Procedures Cell Phone and Internet Use Until such policy is drafted and approved by the Commission, no employee or electric official may purchase any ERMU equipment, vehicles, or supplies under any circumstances or be allowed to purchase supplies through any vendor using ERMU's account; employees shall reimburse ERMU for all personal use of ERMU's cell phones and long distance service. Personal use of internet service during work hours is prohibited. No employee may take or use any ERMU equipment or vehicles for personal use. Violation of any of these will be grounds for immediate termination. Abdo Eick and Meyers could assist in drafting the above policies. Jerry Gumphrey moved to approve Abdo Eick and Meyers to assist in drafting the aforementioned policies. John Dietz seconded the motion. Motion carried 3-0. Page 7 Regular meeting of the Elk River Municipal Utilities Commission August 12, 2008 John Dietz also reported receiving calls from ERMU employees claiming harassment by other ERMU employees. The City attorney Peter Beck was contacted and he advised that the commission has an obligation to discuss the situation to see if an investigation is warranted. John Dietz moved to call a special closed meeting of the Elk River Municipal Utilities Commission on Monday, August 25, 2008, at City Hall immediately following the interviews for the Electric Line Superintendent. This meeting is being closed for preliminary consideration of whether an investigation is warranted into certain allegations against several ERMU employees, under Minnesota Statute 13D.05, subdivision 2(b). The subject of the meeting is to determine whether an investigation should be conducted into these allegations. If the Commission determines that the allegations are specific and serious enough to wan -ant an investigation, the names of those employees against whom the allegations or complaints have been made will become public as part of the information available about the existence and status of the complaints. Jerry Gumphrey seconded the motion. Motion carried 3-0. The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be Tuesday, September 9, 2008 at 4:30 p.m. President Jerry Takle adjourned the regular meeting of the Elk River Municipal Utilities Commission at 6:00 p.m. `ling Cl A s il Manager ELK RIVER MUNICIPAL UTILITIES SPECIAL MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM August 25, 2008 Members Present: Jerry Takle, President; John Dietz, Vice Chair; Jerry Gumphrey, Trustee Staff Present: Bryan Adams, General Manager; David Berg, Water Superintendent; Theresa Slominski, Finance Director/Office Manager; Troy Adams, Engineering Manager; 1. Call meeting to order August 25, 2008 President Jerry Takle called the August 25, 2008, meeting to order at 4:45 p.m. 2. Interview Electric Superintendent Candidates The Commission discussed the procedure and selection process in interviewing the two candidates to fill the upcoming vacancy of Electric Superintendent. The consensus of the Commission was they will decide who is awarded the position with staff input. Interviews were conducted with the two current employees who expressed interest in this position, Wade Lovelette, Electric Line Foreman, and Mark Fuchs, Lead Lineman. After much discussion, the commission decided to award the position to Mark Fuchs by a 2 to 1 vote. The remainder of this meeting is being closed for preliminary consideration of whether an investigation is warranted into certain allegations against several ERMU employees, under Minnesota Statute 13D.05, subdivision 2(b). The subject of the meeting is to determine whether an investigation should be conducted into these allegations. If the Commission determines that the allegations are specific and serious enough to wan -ant an investigation, the names of those employees against whom the allegations or complaints have been made will become public as part of the information available about the existence and status of the complaints. �tfiilly s tt ,f i Adams ral Manager J