3.1.B ERMU MINUTES 06-08-2010ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
May 11, 2010
Members Present: John Dietz, President; Jerry Gumphrey, Vice Chair;
Daryl Thompson, Trustee
ERMU Staff Present: Troy Adams, Director of Operations;
Theresa Slominski, Finance Director/Office Manager;
Mark Fuchs, Line Superintendent;
David Berg, Water Superintendent;
Wade Lovelette, Technical Services Superintendent;
Judy McSpadden, Recording Clerk; Richard Wagner
City Staff Present: Lori Johnson, City Administrator; Tim Simon, Finance Director
Others Present: Peter Beck, Attorney from Gray Plant Mooty Law Firm
1.1 Call meeting to order May 11. 2010
John Dietz called the May 11, 2010 meeting to order at 4:00 p.m.
John Dietz said he was going to do some switching of the Utilities Agenda because Jerry Gumphrey
had to leave at 5:15 and wants to address the essential items before he leaves.
2.1 Consider Utilities Agenda
David Berg added an item for discussion under Other Business.
Daryl Thompson moved to approve the May 11, 2010 Utilities Agenda. Jerry Gumphrey
seconded the motion. Motion carried 3-0.
4.1 Review and Consider the Investment Policy and Reserves Policv
Prior to the March 9, 2010, ERMU Commission meeting, the Investment Committee met to
review ERMU's current investment policy. The Investment Committee provided an update of the
meeting with recommendations. Recommended changes were the need of a standalone policy to set
criteria for the financial reserves, and updating the policy to establish formal delegation of authority
and reporting requirements. Staff recommends adopting the revised Investment Policy and the
proposed Financial Reserves Policy. Discussion followed.
Jerry Gumphrey moved to approve the Reserves Policy and Investment Policy as presented.
Daryl Thompson seconded the motion. Motion carried 3-0.
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Regular meeting of the Elk River Municipal Utilities Commission
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4.2 Review and Consider Water Rate Analysis
At the March 9, 2010, ERMU Commission meeting, the 10 year cash flow analysis and capital
improvement plan was reviewed. At that time, based on the current reserve policy and 2009 budget
numbers, a 3% tiered rate increase was projected. Based on the new reserve policy and the 2009
audited numbers a zero percent tiered rate change is being proposed for 2010. Tim Simon reviewed
the analysis and answered questions. John Dietz thanked Tim Simon for all his help in compiling the
information needed for this analysis. Commission agreed to accept and file with the water rate
analysis with no change in water rates for 2010.
4.3 Review and Consider Water On -Call
The Water On-call Policy was reviewed. Troy Adams handed out a revised On -Call policy that
had a recommended change from David Berg and reviewed by the Attorney. Discussion followed.
Jerry Gumphrey moved to approve the Water On -Call Policy as presented. Daryl Thompson
seconded the motion. Motion carried 3-0.
5.2 Review and Consider Dental Insurance Renewal
At the April 13, 2010, ERMU Commission meeting, Commission was informed of an insurance
renewal increase from Assurant, which currently provides Dental, Life & Accidental Death &
Dismemberment (AD&D), and Long Term Disability (LTD) insurances. A 7% increase was
budgeted for however, the renewal increase was 15%. David Martin Agency, ERMU's insurance
broker, sent out request for proposals and provided a summary of the information received.
Discussion followed regarding the options. Consensus of the Commission was to remain with
Assurant but choose their alternative option which has an increase in the deduction and a small
increase in premiums for Assurant's renewal alternative option #4.
Jerry Gumphrey moved to renew ERMU's dental plan with Assurant's renewal alternative
option #4, effective June 1, 2010 thru January 1, 2012. Daryl Thompson seconded the motion.
Motion carried 3-0.
4.4 Review and Consider Tower Attachment Lease Aereement
Peter Beck discussed the progress of the Tower Attachment Lease Agreement. The Agreement
is not finalized yet and there were some items Peter Beck brought to the Commission for discussion.
It will be a five year agreement with 5 renewal terms starting at $23,000 per year with an increase of
5% per year. Their equipment shall be placed in the pedestal of the tower. Only three antenna's per
tower are allowed, there will be additional changes to the lease if more than three antennas. No access
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Regular meeting of the Elk River Municipal Utilities Commission
May 11, 2010
to tower allowed without an ERMU employee present. Legal fees should be paid by each side, not
losing party pays as Sprint suggested. A Debt Service Bond provision review is necessary.
Daryl Thompson moved to approve the Tower Attachment Lease Agreement with revisions as
outlined by Peter Beck. Jerry Gumphrey seconded the motion. Motion carried 3-0.
4.5 Review Customer Deposit Policy (Follow-up)
At the February 9, 2010, ERMU Commission meeting, staff was directed to review the
Customer Deposit Policy and related practices. At the March 9, 2010, ERMU Commission meeting,
the Commission approved a revised Customer Deposit Policy. In conjunction with the revised policy,
staff has been working on a commercial application/receipt. The proposed form was reviewed. Daryl
Thompson asked if a personal guarantee could be required on top of a deposit for commercial
accounts. John Dietz asked Peter Beck to check into the legality and revisit the issue at a future
meeting.
Jerry Gumphrey moved to approve the Service Agreement and Deposit Receipt. Daryl
Thompson seconded the motion. Motion carried 3-0.
5.3 Request for Reconnect Methods of Payment Change
In April, ERMU shut off electric services to 144 customers for non-payment of their utility bills.
The cold weather rule protection expired on April 15s' and the shut -offs were done on April 20" and
21". Of those 144 shut -offs, 14 still remain shut-off due to foreclosure or abandonment situations. Of
those turned back on, 15 customers payments came back from the bank as NSF April 26h through
April 28h. These customers were then disconnected again and required to make payment with cash or
money order only, before being turned back on. With the implementation of credit cards, staff
recommends changing the payment requirement to be cash, money order, or credit card only. The
Consensus of the Commission was this was a good idea.
Daryl Thompson moved to change the policy for reconnect payments to be cash, money order
or credit card only. Jerry Gumphrey seconded the motion. Motion carried 3-0.
4.6 Review and Consider Power Supply Options
At the April 13, 2010, ERMU Commission meeting, the Commission authorized staff to enter
into a resource planning study in a Power Coalition which includes Central Minnesota Municipal
Power Agency (CMMPA) as a participant. On April 29, 2010, staff participated in a conference call
with CMMPA and other potential Power Coalition participants. A consensus was reached by the
participants regarding a Participation Agreement, direction for a Confidentiality Agreement, scope of
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Regular meeting of the Elk River Municipal Utilities Commission
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Phase 1, cost allocations, and Power Coalition of "off ramps". The costs associated with Phase 1 for
ERMU will be less than $10K. The Commission will need to designate a representative and an
alternate for the Power Coalition Committee. On May 21, 2010, during the Power Coalition
conference call, a committee chair will be elected.
Daryl Thompson moved to appoint Troy Adams to be the representative for the Power
Coalition and have Jerry Gumphrey as the alternate. John Dietz seconded the motion. Motion
carried 3-0.
Other Business
David Berg voiced his concern regarding the large associations that are considering plans to drill their
own wells for irrigation. Discussion followed. Peter Beck said it would be ultimately up to the DNR.
John Dietz commented the water department would suffer a considerable loss if this would happen.
Peter Beck recommended getting a consultant to look into this and to approach the DNR on ERMU's
behalf.
Jerry Gumphrey moved to authorize Peter Beck to acquire a consultant to look into the issue of
associations drilling new wells in ERMU's water service area at a cost not to exceed $20,000 and
for John Dietz to oversee the process. Daryl Thompson seconded the motion.
Motion carried 3-0.
6.2 Set Date for Next Meeting
The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be
Tuesday, June 8, 2010, at 3:30 p.m.
At this time Jerry Gumphrey left the meeting and John Dietz called for a brief two minute recess at
5:15 p.m.
5.1 Review Water Quality Report
The proof of the 2010 Water Quality Report was reviewed. This will be mailed to the water
customers in June and also displayed on ERMU's website.
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Regular meeting of the Elk River Municipal Utilities Commission
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3.1 Consider Consent Agenda
John Dietz had questions on the check register and financials, staff responded.
Daryl Thompson moved to approve the Consent Agenda as follows:
a. April Check Register
b. April 13, 2010 Minutes
c. Financial Reports
John Dietz seconded the motion. Motion carried 2-0.
6.1 Staff Updates
Troy Adams reminded Commission that the Taste of Elk River is May 13'x. Discussion
followed regarding the electricity being donated at the site and if future provision of electric for profit
versus non-profit usage should be billed. Consensus was to have the City notify ERMU if the site will
be used and to record the usage. Troy Adams added that on Friday he would be going to a meeting at
GRE with Connexus and would be introduced to the CEO of GRE.
John Dietz asked Theresa Slominski about the Elk River Police department having an officer on
site for shut -offs. Theresa Slominski responded it worked out well. John Dietz asked Theresa
Slominski to monitor any complaints with the service fee associated with the credit card payment
system.
Mark Fuchs discussed the recent acquisition of territory from Connexus. Staff will be working
on switching over the customers in the next few days.
Daryl Thompson said the ERMU staff did a great job on Watson Street.
6.3 Adjourn Regular Meeting
Daryl Thompson moved to adjourn the regular meeting of the Elk River Municipal
Utilities Commission meeting at 5:40 p.m. John Dietz seconded the motion. Motion carried 2-0.
Minutes prepared by Judy McSpadden.
John Dietz
President, ERMU Commission
Tina Allard
City Clerk