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3.0 ERMU MINUTES 11-13-2008ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM October 14, 2008 Members Present: Jerry Takle, President; John Dietz, Vice Chair; Jerry Gumphrey, Trustee Staff Present: Theresa Slominski, Finance Director/Office Manager, Troy Adams, Engineering Manager; Mark Fuchs, Line Superintendent; David Berg, Water Superintendent; Judy McSpadden, Recording Clerk; Mike Thiry, Wade Lovelette, Jeff Henning, Troy Seter, Lloyd Lorenzen, Steve Zeimer, Chris Sumstad, Tom Geiser, Michael Price, Lorrie Franz, Lex Anderson, Art Gatchell, Chad Grande, Shane Defeyter, Kim Sandstrom, Peggy Ferguson, Dolores Andreasen, Tricia Pope Staff Absent: Bryan Adams, General Manager Others present: Lori Johnson, City Administrator; Sam Diehl, Attorney for Gray Plant Mooty 1. Call meeting to order October 14, 2008 President Jerry Takle called the October 14, 2008, meeting to order at 5:04p.m. 2. Consider Utilities Agenda John Dietz added Sam Diehl, attorney for Gray Plant Mooty with another item to be discussed before Staff Updates. Jerry Gumphrey moved to approve the October 14, 2008, Utilities Agenda. John Dietz seconded the motion. Motion carried 3-0. Lineman Art Gatchell, asked to be added to the Agenda. John Dietz moved to amend the previously approved agenda to include the lineman. Jerry Gumphrey seconded the motion. Motion carried 3-0. 3. Consider Consent Agenda John Dietz wanted to verify the financials that were showing the water department falling short and the electric department perhaps exceeding expectations for the year, staff affirmed. Jerry Gumphrey questioned some checks issued to some contractors, staff responded it was for ongoing projects. Jerry Takle asked why there were so many refund checks, staff responded it was to clear out credit balances on accounts. Page 2 Regular meeting of the Elk River Municipal Utilities Commission October 14, 2008 John Dietz moved to approve the Consent Agenda as follows: September Check Register September 9, 2008, Minutes Financial Reports Jerry Gumphrey seconded the motion. Motion carried 3-0. Sam Diehl, attorney for Gray Plant Mooty was recognized at this time Sam Diehl discussed the need for additional work related to Gray Plant Mooty's workplace investigation. He suggested that a review of the Utility's personnel policy handbook and the job posting and other policies already requested by the Commission, as well as recommendations related to the Human Resources function and communication issues at the Utility may be necessary and are beyond the scope of the investigation's original tasks. Jerry Gumphrey asked if there would be additional fees. Sam responded there would be additional fees to complete this investigation and documentation. John Dietz moved to approved Gray Plant Mooty extend the scope of the responsibilities at a cost not to exceed $10,000. Jerry Gumphrey seconded the motion. Motion carried 3-0. Lineman Art Gatchell was recognized at this time. Art Gatchell voiced his concerns regarding the current ongoing investigation. The entire organization is dealing with a lot of changes which make it hard to focus on the job at hand and concerns about safety issues as this type of work can be hazardous. As for the status, changes have been made but no explanation has been given to employees as to why. Discussion followed regarding the workplace environment and safety. Attorney Sam Diehl requested information discussed during the interviewing process should be kept confidential. Further discussion followed. At this time Attorney Sam Diehl requested a brief recess. Jerry Takle approved a 5 minute recess. When the meeting reconvened John Dietz read a statement. John Dietz reported, at the September 30, 2008 closed meeting, disciplinary action was taken against Glenn Sundeen. At the October 14, 2008 closed meeting, Bryan Adams was placed on paid administrative leave as of Tuesday, October 14, 2008 at 5:00 p.m. Lori Johnson stated there is a privacy issue and it is important for all to follow the data privacy practice laws. John Dietz commented that if there are questions or issues, staff could call the commissioners individually. Art Gatchell said that would be appreciated. Page 3 Regular meeting of the Elk River Municipal Utilities Commission October 14, 2008 Jerry Takle said Lori Johnson has offered to meet with staff at the Elk River power plant to answer questions at 7:00 am. Wednesday, October 15, 2008. Jerry Gumphrey remarked that the investigation will rectify problems, if any, and they'll do what's best for the organization. Lome Franz voiced her concerns regarding problems being brought directly to the commission instead of through management, saying it gives a picture of the commission undermining management. Jerry Takle wanted to reinforce work safety, and to follow safety rules. "We want everyone to go home every night." We will work through this and get input if needed. Lome Franz asked about the status of the investigation. Sam Diehl responded the status of the investigation is ongoing and the laws restrict what information can be shared. Theresa Slominski questioned if Bryan is unavailable, who is responsible in the interim. John Dietz responded the department heads should meet and take care of things and can also consult with Lori Johnson if necessary. Art Gatchell asked if there was a possible date of conclusion. Jerry Gumphrey responded they will do whatever is necessary to finish this in a timely manner however, it is important to make sure all the is are dotted and the is are crossed. 5.1 Staff Updates Theresa Slominski reminded the Commission of the Cold Weather Rule going in to effect starting October 15s'. The inserts going out with the October bills will be heat share assistance forms. The ACH mailing was positively received and produced approximately 340 sign-ups. Given the economic times Theresa wanted the commission to know the investment funds for Elk River Municipal Utilities remain sound. David Berg said a student from St. Cloud Tech will be training with a water operator and observing the day to day workings. This is a learning experience for the student with no pay involved. Staff continues removing irrigation meters along with updating map books. There was sufficient water pressure for the apartment fire on School Street, a total of one million gallons of water was used. Mark Fuchs reported the three phase line along County Road 39 in Otsego is complete. The Deerfield I" and 2"d rebuild project is still in progress with hopes of finishing it before frost. Other projects trying to get finished before the frost sets are the Hwy 169 road bore for Station 14, the Waterfront East project in Otsego along with moving some power poles to satisfy the temporary easement. Troy Adams reported 11 Security Sales for September. There were over 40 letters sent out to customers that utilize another security system company for monitoring. This has brought several new accounts to us. Staff continues working on the map book updates. Underground locates are slowing down. The meter shop continues with the meter upgrades along with taking oil samples to send for testing. Page 4 Regular meeting of the Elk River Municipal Utilities Commission October 14, 2008 Lori Johnson informed the commission of the rate increase of 6.5% for insurance of property and vehicles for 2009. If the deductible was changed to $10,000 there would be approximately a $28,750 savings. This will be addressed at the next City Council meeting scheduled for October 200i. John Dietz moved to approve raising the insurance deductible to $10,000. Jerry Gumphrey seconded the motion. Motion carried 3-0. 5.2 Review & Consider Bid Tabulation for Plant Roof As discussed at the previous Elk River Municipal Utilities Commission meeting, the roof at the power plant is leaking and in need of repair. Staff has prepared plans, specifications, and secured quotations. Staff recommends the project be awarded to the lowest responsive bidder, McDowall Company. Jerry Gumphrey moved to award the re -roofing of the power plant to McDowall Company. John Dietz seconded the motion. Motion carried 3-0. 5.3 Review Red Fla¢ Policy By November 1, 2008, the Federal Trade Commission (FTC) "Red Flag" regulations are requiring all banks and other "creditors" to design and approve their own tailored plans for preventing their customers' information from being stolen or used illegally. Under these regulations, the term "creditor" encompasses all utilities, including municipal utilities, because they provide service ahead of payment. "Red Flag" is the term used in the regulations to refer to warning signs that a customer's personal information has been compromised. Theresa Slominski remarked that a lot of the requirements in this red flag policy are already in place. A proposed policy which was reviewed by the attorney was presented for adoption. John Dietz moved to adopt the Red Flag/Identity theft Protection Policy as of November 1, 2008, as presented. Jerry Gumphrey seconded the motion. Motion carried 3-0. 5.4 Review All Requirements Contract Since 1990, Elk River Municipal Utilities and Anoka Electric Cooperative, now Connexus Energy, has had an all requirements contract where Connexus Energy, through Great River Energy, supplies all of our power and energy needs. This agreement included a termination clause allowing either party to give a 120 month (10 year) notice to terminate this agreement. Page 5 Regular meeting of the Elk River Municipal Utilities Commission October 14, 2008 Connexus Energy has elected to terminate this agreement to be effective September 30, 2018. This is purely a financial decision on Great River Energy and Connexus' part. They have indicated they can make more money selling power and energy on the open market than selling it to us. Several options for fixture power and energy were discussed. John Dietz asked if something needed to be done now or if it would be better to wait. Jerry Takle replied that the existing contract will remain in effect for 10 years. John Dietz asked if it would be better to go through GRE directly. Jerry Takle said we are a big customer and could possibly deal directly with GRE. Further discussion followed. Troy Adams remarked no matter what the future decision is it will cost more money. 5.5 Review Staff Restructurine At the last Elk River Municipal Utilities Commission meeting, a proposed workload redistribution within the electric department was discussed. The reason for this restructuring is to balance the workload, due to the lack of new developments staff is doing substantially more maintenance. Staff has discussed the proposed shifting of duties with the affected employees and staff has started the cross training process. John Dietz voiced his confusion as to why the restructuring process was started prior to the meeting, and why it was needed. Previously when Glenn's retirement was discussed it was stated that a new lineman would not be hired and would not be necessary because of the slowdown in workload with little construction happening. John also stated that he had heard there was a potential of layoffs and that had never been discussed at the commission level. At the September Elk River Municipal Utilities Commission meeting staff was directed to return to this months meeting with employees involved in this restructuring. John Dietz asked Mark Fuchs why this was already underway. Mark Fuchs stated he felt like he was caught in the middle and that as he moved into his position there was some work to be done. Staff responded it was due to the lack of projects involving subcontractors, and the need for additional lineman to complete some projects prior to frost. At this time Commissioners asked for Mike Thiry to speak. Mike Thiry provided the Comrnissioners with a listing of duties he performs along with a letter. Mike Thiry said the discussion he had with staff was that lay-offs would happen if this restructuring was not done. John Dietz asked if any other employees involved in this restructuring were present? Line Foreman, Wade Lovelette informed the Commission he has started working on the MSDS sheets that Mike Thiry was previously doing, (which is very time consuming), basically everything that is used needs to have an MSDS sheet and some are very hard to find. He said Mike also took care of the permits required for the State and County road projects. Another part of his job was to direct the tree trimming crews to the areas that are in need of this and to notify affected homeowners. Michael Price said he has been assigned the job of taking oil samples from the transformers for PCB analysis. This is very time consuming and he has enough to do in the metering department already, but when asked if he could do this he felt obligated to say yes. Page 6 Regular meeting of the Elk River Municipal Utilities Commission October 14, 2008 Steve Ziemer said he is now responsible for the safety checks and tool repairs that were previously done by Mike Thiry. The slings, ropes, tools, etc. used by the line crew need to be inspected regularly and repairs made if needed. This is time consuming to take on along with his current duties. Steve said he has had to tum down the water department because he did not have time to help them. Michael Price said part of the extra time spent on the new job duties is learning them, but that Mike Thiry did an excellent job. John Dietz asked Mike Thiry if he was kept busy. Mike Thiry responded some job duties or projects were put aside for the slower times, there was always something going on. John Dietz voiced his opinion that staff should go back to resuming their regular duties. Lori Franz addressed the Commission that this should be a case for management to work through. John Dietz stated that staff brought this to the commission the commission directed staff to bring this back to this meeting but their wishes were not followed. Jerry Gumphrey directed Mark Fuchs to revisit this matter. John Dietz announced that if there were troubled times, there may be a cut back in hours for all staff, but no lay-offs of individuals. Consensus of the Commission was that no lay-offs would happen. Mike Thiry asked if the commission could please respond to his questions in the letter. Jerry Gumphrey moved to have the attorney respond to Mike Thiry's letter dated October 13, 2008. John Dietz seconded the motion. Motion carried 3-0. Jerry Takle's copy of the letter was given to Judy McSpadden to send to the attorneys. 5.6 Review Policy Amendments At the August 12, 2008 Elk River Municipal Utilities Commission meeting, staff was directed to draft a number of personnel policies. The policies reviewed at last month's meeting along with the remaining policies were reviewed. John Dietz commented on the policy for Inventory Counts, he would like to see a better description to identify the term "significant items" to be counted quarterly. John Dietz also wanted some of the terminology changed in the Performance Review policy. John Dietz and Jerry Gumphrey said staff did a good job on these proposed policies. The policies have been sent to the attorneys for review. 6.1 Review & Consider MMUA Safety Compliance Contract The Elk River Municipal Utilities and the City of Elk River utilize MMUA to provide our safety management program. Elk River Municipal Utilities pays the entire fixed cost, and the variable cost on employee numbers is split between the Utility's and the City. A spread sheet reflecting the program costs and a service agreement with MMUA was reviewed. Lori Johnson said the City of Elk River is looking into other options for their safety training that would be geared more for their working environment. The MMUA program is a good fit Page 7 Regular meeting of the Elk River Municipal Utilities Commission October 14, 2008 for the utility but not necessarily for the City. John Dietz asked if the insurance rates are lower because of this safety program. Lori Johnson affirmed. John Dietz moved to approve the MMUA Safety Management Program contingent that the City of Elk River could cancel out. Jerry Gumphrey seconded the motion. Motion carried 3-0. 6.2 Review Proiected 2009 Power Costs Connexus Energy has informed Elk River Municipal Utilities that GRE is in the process of looking at power and energy costs for 2009. Their preliminary numbers reflect a 15% wholesale rate increase. John Dietz asked when there would be a firm number. Jerry Takle has a meeting with Connexus on October 24, 2008 to discuss the rate increase. The wholesale rate increase would not be in effect until January 1, 2009. This issue was tabled until more information was available. 6.3 Review Proposed 2009 Expense Bud¢et The proposed 2009 electric and water expense budgets were reviewed. The proposed water rates reflect raising the 1" tier water rate by a dime. John Dietz asked if the fixed rate could be changed instead. David Berg responded that a lot of communities have a higher fixed rate than we do. John Dietz directed staff to look into changing the fixed rate and revisit this issue at the next meeting. Discussion followed regarding the water projects slated for 2009. One of the projects entails leaving the existing 4" water main pipe instead of upgrading to the 6" pipe as is usually done. David Berg informed the Commission that the water is good and is not corroding the water main. The pipe in questions has been inspected and is in good condition. 6.4 Review Otseeo Line Extension A commercial customer in Otsego is proposing to build a new facility on County Road 39 at the west end of Elk River Municipal Utilities electric system. The location of this facility is currently served with single phase power while the new location will require three phase power. Providing three phase power to this facility would require burying approximately 2,500 feet of conductor. The cost involved with installing three phase electric to this facility would be $53,000 and single phase would only be $8,000. Discussion followed. Jerry Gumphrey moved to charge $53,000 for three phase power, or $8,000 for single phase. John Dietz seconded the motion. Page 8 Regular meeting of the Elk River Municipal Utilities Commission October 14, 2008 6.5 Review & Consider Water Assessments A listing of proposed water assessments for customers with outstanding balances was reviewed. Letters were sent out giving notice that payment would need to be made by September 30, 2008, or amounts would be assessed to individual property taxes in accordance with Minnesota Statute 444.075.3e, and be assessed a finance charge. Staff recommends approving the proposed listing to take to the City Council for approval to be assessed on property taxes. Jerry Gumphrey moved to approve the proposed water assessment listing as presented to be assessed on property taxes. John Dietz seconded the motion. Motion carried 3-0. Other Business John Dietz said he has been contacted by a resident in the Islandview Drive area asking if street lights could be installed. John Dietz asked if there currently was a street light committee and what was the process to get street lights on an existing street? Discussion followed as to who would receive the request. John Dietz will have the resident send in the request and staff will address the Commission at a future meeting. John Dietz moved to recess the October 14, 2008, Elk River Municipal Utilities Commission meeting until Friday, October 24, 2008, at 5:00 p.m. Jerry Takle seconded the motion. Motion carried 3-0. President Jerry Takle recessed the regular meeting of the Elk River Municipal Utilities Commission at 7:05 p.m. The October 24,2008; 5:00 p.m, meeting has been cancelled, effective October 23, 2008 Respectfully submitted, Judy cSp Recording Clerk Ther�mmski Finance Director Elk River Municipal Utilities Closed Meeting of the Utilities Commission Held at Elk River City Hall September 30, 2008 Members present: Jerry Takle, President; John Dietz, Vice -Chair; Jerry Gumphrey, Trustee. Others present: Mark Mathison, attorney, Grey Plant Mooty; Sam Diehl, attorney, Grey Plant Mooty. Call meeting to order September 30 2008 President Jerry Takle called the September 30, 2008 meeting to order at 4 p.m. Results of.August 25, 2008 Closed Meeting The results of the August 25, 2008 closed meeting of the Elk River Utilities Commission was that the Commission voted to engage the Gray Plant Mooty law firm to conduct an investigation into the workplace environment at ERMU at a cost not to exceed $12,500. Additional workplace environment investigation expenditure. Jerry Gumphrey, John Dietz seconded a motion authorizing up to an additional $10,000 to be spent with Gray Plant Mooty on the workplace investigation. Motion passed 3-0. Closed session The Commission recessed into closed session at 4:12 p.m. to go over partial results of the workplace investigation. The closed session is to be limited to the allegations against Glenn Sundeen. John Dietz motioned, Jerry Gumphrey seconded to recess into closed session. Motion passed 3-0. The regular meeting was back in session at 5:50 p.m. Based on the closed meeting concerning the workplace environment, the Commission has chosen to take disciplinary action against Glenn Sundeen. The regular meeting was adjourned at 5:58 p.m Respectfully submitted John J. Dietz Vice Chair Elk River Municipal Utilities Closed Meeting of the Utilities Commission Held at Elk River City Hall October 14, 2008 Members present. Jerry Takle, President; John Dietz, Vice -Chair; Jerry Gumphrey, Trustee. Others present: Mark Mathison, attorney, Grey Plant Monty; Sam Diehl, attorney, Grey Plant Monty. Call meeting to order October 14 2008 President Jerry Takle called the October 14, 2008 meeting to order at 2:30 p.m. Purpose of meeting The purpose of today's meeting is to recess into executive session to discuss partial results of the investigation into workplace environment. Closed session. Jerry Gumphrey motioned, John Dietz seconded to recess into closed session at 2:35 p.m. to discuss partial results of the workplace investigation. Motion passed 3-0. The regular meeting was back in session at 4:45 p.m Jerry Gumphrey motioned, John Dietz seconded to put General Manager Bryan Adams on paid administrative leave immediately and authorize attorneys Mark Mathison and Sam Diehl to speak with Bryan Adams about possible outcomes of the investigation. Motion passed 2-1. Jerry Takle opposed. Additional expenses for investigation Attorney Mark Mathison requested the Commission authorize additional funds for attorneys' fees because of the expanded nature of the workplace investigation. Commissioner Jerry Gumphrey stated a willingness to authorize additional funds but did not want it to be a case of an open checkbook. The issue will be brought up for further discussion at the regular Commission meeting October 14, 2008 at 5 p.m. John Dietz motioned, Jerry Gumphrey seconded to adjourn the meeting at 4:55 p.m. Motion passed 3-0. Respectfully submitted John Dietz Vice -Chair