3.1.B ERMU MINUTES 11-16-2010ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
October 12, 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
City Staff Present: Lori Johnson, City Administrator; Rebecca Haug, Environmental Administrator
Others Present: Peter Beck, Attorney from Gray Plant Mooty Law Firm
1.1 Call meeting to order October 12, 2010
John Dietz called the October 12, 2010 meeting to order at 3:30 p.m.
2.1 Consider Utilities Agenda
Daryl Thompson moved to approve the October 12, 2010 Utilities Agenda. John Dietz
seconded the motion. Motion carried 2-0.
3.1 Consider Consent Agenda
John Dietz added an item to discuss under other business. John Dietz had questions on the check
register and financials, staff responded.
Jerry Gumphrey arrived during this time.
Daryl Thompson moved to approve the Consent Agenda as follows:
a. September Check Register
b. September 15, 2010 Minutes
c. Financial Reports
Jerry Gumphrey seconded the motion. Motion carried 3-0.
4.1 Jackson Street Water Tower Grant Update (Verbal)
Rebecca Haug, the Environmental Administrator for the City of Elk River updated the
Commission on the status of the Jackson Street water tower. The paperwork and inspections will be
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Regular meeting of the Elk River Municipal Utilities Commission
October 12, 2010
started in the near future by an independent parry to get the Jackson Street water tower on the National
Register. The grant money of $2650 has been received from the state to pay for this. No action taken.
4.2 Power Supply Options / Resource Planning Update
Connexus terminated the 10 year rolling "all requirements" power contract with ERMU in
September of 2008. In April 2010, The Utilities Commission authorized entering into Phase 1 of a
resource planning study with a coalition which includes Central Minnesota Municipal Power Agency
(CMMPA) as a participant. In September 2010, the Utilities Commission authorized entering onto
Phase 2 of a resource planning study which includes the release of a Request for Proposal.
On September 28, one of the participants announced they would not be participating in Phase 2
of the resource planning study. A reallocation of costs was done and the cost for ERMU changes
from $19,444.44 to $25,000. ERMU's future cost for Phase 2b changed from $8,334 to $10,714.
This change has delayed the process because many of the participants need to obtain approval from
their governing bodies. ERMU staff has informed the Resource Planning Coalition that they will
participate in Phase 2 at the $25,000 contingent upon all other remaining participants also agreeing to
participate in Phase 2. Troy Adams said there would be a conference call on Friday and he would find
out more information. John Dietz voiced his concern and asked Troy Adams to contact the
Commissioners to let them know the status. Jerry Gumphrey commented he did not have any
concerns moving forward as long as no one else pulled out of the study. Peter Beck suggested Troy
Adams send an e-mail to the Commissioners on Friday after the conference call to give them an
update rather than calling each Commissioner individually. If at that time there needs to be further
discussion, a special meeting could be called.
5.1 Review 2011 Expense and CIT Budget
Troy Adams reviewed the 2011 expense and CIP budgets. Great River Energy (GRE) is still in
the process of finalizing their 2011 wholesale power rates. GRE is going through an extensive
process of budget cuts to be able to achieve a 4% wholesale power cost increase. Due to GRE's
budget cuts it is assumed that there will be no reimbursement from them for some of the conservation
improvement programs (CIP). Discussion followed regarding the recommended electric rate structure
and changes to the rebate program ERMU currently offers. The water department is recommending
the water usage rates stay the same but to raise the water connection charge from $2,500 to $3,000 per
unit and hire an employee to replace the one that left in 2009. Further discussion followed regarding
the Reserves.
5.2 Review and Consider 3'a Ouarter Write -Offs
Staff is recommending approval of the third quarter write-offs totaling $9,100.82. Over $2,000
of this will be sent to a collection agency, and over $6,800 of it will be assessed this fall.
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Regular meeting of the Elk River Municipal Utilities Commission
October 12, 2010
Jerry Gumphrey moved to approve the 3 I quarter write-offs as presented. Daryl Thompson
seconded the motion. Motion carried 3-0.
5.3 Review Security Advertisine
At the September 15, 2010, ERMU Commission meeting, staff was directed to compile a report
on the Security department's advertising expenditures. Lorrie Franz gathered the information and
provided an analysis report and data source list for Commissioners to review. Discussion followed.
Consensus was for staff to keep track of what ads are working for ERMU. No action taken.
5.4 Review Directional Bore RiE Purchase Analysis
At the September, ERMU Commission meeting, the purchase of a Bore Rig was discussed as a
way to bring work in-house and save money. The commission directed staff to perform a cost
analysis. The cost analysis and payback of utilizing a Bore Rig was discussed.
Jerry Gumphrey moved to go ahead with the bidding process for a Bore Rig and bring back to
the Commission at the November meeting for purchase in 2011. Daryl Thompson seconded the
motion. Motion carried 3-0.
5.5 Review and Consider 2011 Fee Schedule
The ERMU proposed fees for 2011 were reviewed. Per legal counsel, ERMU's ability to
collect on fees would be strengthened by having them adopted into City ordinance after being
approved by the Commission. Staff recommends approving the 2011 Fee Schedule for adoption into
ordinance by the City Council.
Daryl Thompson moved to approve the 2011 Fee Schedule as presented to be adopted into
ordinance by City Council. Jerry Gumphrey seconded the motion. Motion carried 3-0.
6.1 Staff Updates
Troy Adams discussed the Visioning and Goals policy. Lori Johnson added the policy would be
brought to the City Council for adoption and then will be brought to the Utilities Commission. Troy
Adams commented he appreciated the opportunity to work with all the City department heads.
At the September 2010 ERMU Commission meeting, staff was directed to look into the cost to
ERMU if the credit card fees were absorbed. Discussion followed.
Jerry Gumphrey moved to absorb the credit card fee, monitor the charges, and revisit in six
months. Daryl Thompson seconded the motion. Motion carried 3-0.
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Regular meeting of the Elk River Municipal Utilities Commission
October 12, 2010
Theresa Slominski stated this would not be effective until the credit card company (Paymentus)
was notified and their processing fees were changed.
Theresa Slominski commented that after meeting with the insurance broker, it was recommended that
ERMU move the processing of the Flexible Spending Accounts (FSA's) internally to an outside third
party processor. The cost is minimal.
Jerry Gumphrey moved to authorize hiring a third party to administer the Flexible Spending
Accounts at an approximate cost of $65 per month. Daryl Thompson seconded the motion.
Motion carried 3-0.
David Berg discussed the water restriction ordinance that was being proposed for City Council
approval. Since the September 15, 2010 ERMU Commission meeting, further research into
mandating water restrictions has brought question as to whether or not private well usage can be
mandated. David Berg said the Minnesota League of Cities was going to send out a template of an
ordinance on prohibiting private well drilling so all Cities can follow the same rules. Jerry Gumphrey
asked Peter Beck his thoughts on the water restriction. Peter Beck responded he would like to look
into the watering restrictions further. Daryl Thompson suggested putting a moratorium on all future
well drilling. Peter Beck said he would give an update at the City Council meeting regarding the
water restrictions and the well drilling.
Jerry Gumphrey moved to request Elk River City Council to prepare an ordinance that would
prohibit the drilling of new private wells in the City of Elk River water district. Daryl
Thompson seconded the motion. Motion carried 3-0.
John Dietz discussed the future plans regarding the City shop expansion and wanted the City of
Elk River to keep ERMU in mind if they are going to be vacating the existing city shop building.
Jerry Gumphrey and Lori Johnson gave their views on the future City shop expansion plans.
6.2 Set Date for Next Meeting
The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be
Tuesday, November 16, 2010 at 3:30 p.m.
6.3 Adiourn Reeular Meetine
Jerry Gumphrey moved to adjourn the regular meeting of the Elk River Municipal
Utilities Commission meeting at 5:15 p.m. Daryl Thompson seconded the motion. Motion
carried 3-0.
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Regular meeting of the Elk River Municipal Utilities Commission
October 12, 2010
Minutes prepared by Judy McSpadden.
John Dietz
President, ERMU Commission
Tina Allard
City Clerk