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2.2 ERMUSR 04-14-2020ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM March 10, 2020 Members Present: Chair John Dietz, Vice Chair Al Nadeau, Commissioners Paul Bell, Mary Stewart, and Matt Westgaard ERMU Staff Present: Troy Adams, General Manager Theresa Slominski, Administrations Director Mark Fuchs, Operations Director Mike Tietz, Technical Services Superintendent Dave Ninow, Water Superintendent Tom Sagstetter, Conservation & Key Accounts Manager Michelle Canterbury, Executive Administrative Manager Jennie Nelson, Customer Service Manager Tom Geiser, Electric Superintendent Melissa Karpinski, Finance Manager Chris Kerzman, Engineering Manager Tony Mauren, Communications & Administrative Coordinator Others Present: Peter Beck, Attorney 1.0 GOVERNANCE 1.1 Call Meeting to Order The regular meeting of the Utilities Commission was called to order at 3:30 p.m. by Chair Dietz. 1.2 Pledge of Allegiance The Pledge of Allegiance was not recited, as it had been recited just prior at the special commission meeting for the annual commissioner orientation. 1.3 Consider the Agenda There were no additions or corrections to the agenda. Moved by Commissioner Westgaard and seconded by Commissioner Nadeau to approve the March 10, 2020, agenda. Motion carried 5-0. Elk River Municipal Utilities Commission Meeting Minutes March 10, 2020 Page 1 36 1.4 2020 Election of Officers Per ERMU policy, the offices of the ERMU Commission include a Chair, Vice-Chair, and a Secretary. The Commission elects the Chair and Vice-Chair to one-year terms each year during its regular meeting in the month of March. Moved by Commissioner Nadeau and seconded by Commissioner Westgaard to reappoint John Dietz as Chair. Motion carried 5-0. Moved by Commissioner Bell and seconded by Westgaard to reappoint Al Nadeau as the Vice- Chair. Motion carried 5-0. 1.5 2020 Committee Appointments Per ERMU policy, the Commission shall appoint Committee members annually following the Commission election of officers during the March Commission meeting. The Commission also appoints Committee Chairs at that time. All appointments are for a one-year term. ERMU currently has three committees: the Wage and Benefits Committee, the Financial Reserves and Investment Committee, and the Information Security Committee. After discussion the following appointments were made. Moved by Commissioner Westgaard and seconded by Commissioner Nadeau to reappoint John Dietz and Mary Stewart to the Wage and Benefits Committee. Motion carried 5-0. Moved by Commissioner Bell and seconded by Commissioner Westgaard to reappoint John Dietz as Committee Chair. Motion carried 5-0. Moved by Chair Dietz and seconded by Commissioner Nadeau to reappoint Matt Westgaard and Al Nadeau to the Financial Reserves and Investment Committee, with Matt Westgaard designated as Committee Chair. Motion carried 5-0. Moved by Commissioner Nadeau and seconded by Commissioner Bell to reappoint Mary Stewart to the Information Security Committee. Motion carried 5-0. Staff indicated that they were also looking for two volunteers from the Commission to be part of a Field Services Facility Expansion Project Workgroup that will be involved in the design process for the project. Moved by Commissioner Westgaard and seconded by Commissioner Stewart to reappoint Al Nadeau and Paul Bell to the Field Services Facility Expansion Project Workgroup. Motion carried 5-0. Elk River Municipal Utilities Commission Meeting Minutes March 10, 2020 Page 2 37 1.6 Introduction of New Employee Mr. Fuchs introduced Alex Bernier as new Lineworker. The Commission welcomed the new employee. 2.0 CONSENT AGENDA (Approved by One Motion) For the check register, Chair Dietz had a few questions on the loss of revenue payment to Connexus Energy. Staff responded. Moved by Commissioner Stewart and seconded by Commissioner Nadeau to approve the Consent Agenda as follows: 2.1 February 2020 Check Register 2.2 February 11, 2020 Regular Meeting Minutes Motion carried 5-0. 3.0 OPEN FORUM No one appeared for open forum. 4.0 POLICY & COMPLIANCE There was nothing presented for policy & compliance. 5.0 BUSINESS ACTION 5.1 Financial Report January 2020 Ms. Karpinski presented the January 2020 financial report. Based on the electric departments net profit of $304,501, which is substantially more than the budgeted net profit of $69,319, Chair Dietz asked if staff thought it was feasible to add some of the items that had been cut from the budget back in, should this trend continue. There was discussion. As the numbers reflect just one month into the year, staff recommended waiting and further evaluating this later. There was also discussion on how the amount of days in the billing cycle impacts prior year comparisons. Moved by Commissioner Bell and seconded by Commissioner Westgaard to receive and file the January 2020 Financial Report. Motion carried 5-0. Elk River Municipal Utilities Commission Meeting Minutes March 10, 2020 Page 3 38 5.2 2019 Annual Report Ms. Canterbury provided some background on how staff had traditionally produced and distributed the annual report. She also went over the changes that staff had implemented to allow for us to now distribute the report to all our customers in a timelier way. Ms. Canterbury presented the 2019 Annual Report and recognized Mr. Mauren for leading the project from start to finish and producing such a nice report. Mr. Mauren shared the , how our values have shaped the services we provide, and the ways we connect with our community. Also highlighted in the report is how 5% rate reduction put $1.78 million back into the pockets of our customers. Chair Dietz complimented staff on the report and suggested we share a copy of the report with the City Council. Moved by Commissioner Stewart and seconded by Commissioner Nadeau to receive and file the 2019 Annual Report. Motion carried 5-0. 5.3 7.5 MVA GSU Transformer Bids To prepare for the construction of the new Field Services Building, the existing power plant substation will need to be relocated; the costs associated with the relocation were approved with the 2020 budget/business plan. As the transformer component needed for the relocation was estimated to exceed the threshold dollar amount, and be subject to competitive bidding law, it was noticed for formal bids. The bid opening was March 9, 2020; two bids were received. Mr. Kerzman went over the 7.5 MVA GSU transformer bid tabulation which was distributed at the time of the meeting. He noted that our engineering consultant is working with WEG, and the bidder Dakota Supply Group, to get clarification on the technical specifications of their proposal. Staff recommended awarding the contract for the WEG transformer to the lowest responsible bidder, Dakota Supply Group, for the bid amount of $130,500.00, contingent upon meeting the technical specifications. The commission had a few questions. Staff responded. Attorney Beck stressed the importance of verifying conforms to our specifications, and that the motion to award the contract include that contingency. He also recommended the commission address in their motion what would Moved by Commissioner Nadeau and seconded by Commissioner Westgaard to award the contract for the 7.5 MVA GSU Transformer, contingent upon verification that it complies with the bid package specifications, to Dakota Supply Group, Inc. for the WEG transformer, for the bid amount of $130,500.00; and in the event it does not conform to the bid package specifications, the commission rejects all bids submitted. Motion carried 5-0. Elk River Municipal Utilities Commission Meeting Minutes March 10, 2020 Page 4 39 5.4 Workplace Culture At the December 17, 2019 special commission meeting, Chair Dietz voiced his concern about there being some issues with employee morale and workplace culture. The commission directed the leadership team to further discuss the issue and follow up with the commission with some analysis and possible solutions that could be implemented to improve workplace culture. Mr. Adams reported that the leadership team held initial discussions with staff immediately following the December commission meeting, and then evaluated that initial feedback and analyzed those comments. The leadership team also considered the feedback received during the 2019 organizational effectiveness survey. Mr. Adams provided an overview of the analysis as outlined in his memo. Staff concluded that we have invested a lot of time training our training it will help to build better workplace culture and develop future leaders. As the amount budgeted to address specific soft skills training in 2020 was $5,000, and only takes into consideration mid-organization leaders receiving this training, the budget scope is too narrow to include all employees. Mr. Adams recommended the commission consider reallocating the $5,000 budgeted for commission contingency toward employee soft skill training and improving workplace culture. After discussion, the commission had consensus to reallocate $5,000 of the commission budget. Moved by Commissioner Stewart and seconded by Commissioner Nadeau to approve the reallocation of $5,000 commission budget toward organization wide training. Motion carried 5-0. 5.5 Auburn Street Water Tower Reconditioning Project Update Mr. Adams provided some background on the Auburn Street Water Tower Reconditioning Project. He shared that due to the contractor being unable to complete the project by the October 11, 2019 deadline and meet the contractual obligations, our project manager had communicated with Classic Protective Coatings that ERMU would exercise the liquidated damages provisions in the contract. d Attorney Beck provided an update on the communications that have taken place thus far with the contractor and their attorney. Attorney Beck provided details on the liquidated damages assessment and the actual costs incurred by ERMU as a result of the project not being completed on time. and a dollar amount that the client would be willing to pay towards our costs. After discussion, there was commission consensus for Attorney Beck to move forward with negotiations to recover our actual substantiated costs. Elk River Municipal Utilities Commission Meeting Minutes March 10, 2020 Page 5 40 6.0 BUSINESS DISCUSSION 6.1 Staff Updates Mr. Adams announced that a meeting has been scheduled for March 16 at 10:30 a.m. with the architects to go over the plans for the Field Services Facility Expansion Project. As Commissioner Bell and Nadeau are part of that workgroup, he encouraged them to attend if it worked with their schedules. Mr. Adams shared that Commissioner Bell and Nadeau had expressed an interest in possibly attending the American Public Power Association Lineworker Rodeo. He noted that this would be tied in with a personal vacation so most of the travel expenses would be covered by the individuals. The only expense incurred by ERMU would be for the day of the rodeo for the stipend, meals and banquet ticket. The commission was in support of the two commissioners attending the event. Mr. Fuchs announced that Lead Lineworker Zac Johnson gave notice; his last day of employment will be March 20. There was discussion. Mr. Ninow provided an update on the water pressure issues his department had been working on in the Deerfield development. He explained that after flushing the fire hydrants in the affected areas to purge air within the water mains, it appears the problem has been resolved. Mr. Ninow shared that an offer has been extended to the individual they interviewed on March 6 for the vacant Water Operator position. That offer has been accepted and the start date has yet to be determined. There was discussion. Mr. Ninow had one additional item, and shared that the Elk River High School is looking at refurbishing their parking lot this summer and considering the age and condition of our watermain that runs under it, we should strongly consider upgrading it at that time. He noted that although r our upgrade would be around $69,000.00. As we learn more, this will be brought back to the commission for formal consideration. 6.2 American Public Power Association Legislative Rally Update Mr. Adams presented his update as outlined in his memo. He noted that due to some scheduling challenges on the House side and the Senate being gone on a retreat, they were not able to meet with as many officials as usual; Representative Stauber and Representative Hagedorn were the only two congressional members to meet with their group in person. Commissioner Bell, who attended the rally for the first time, shared his observations. He also relayed that staffers had commented that the public power agencies represent one of largest delegations they see. Elk River Municipal Utilities Commission Meeting Minutes March 10, 2020 Page 6 41 6.3 Future Planning Chair Dietz announced the following: a. Regular Commission Meeting April 14, 2020 b. 2020 Governance Agenda The commission discussed getting a date scheduled for the commission sponsored luncheon for ERMU employees. Consensus was to schedule something this spring to be held at the Lake Orono Park. Staff indicated that a mid-week time frame would work best. An announcement will be made once a definite date is determined. Commissioner Westgaard announced he may not be at the August commission meeting. 6.4 Other Business There was no other business. 7.0 ADJOURN REGULAR MEETING Moved by Commissioner Bell and seconded by Commissioner Nadeau to adjourn the regular meeting of the Elk River Municipal Utilities Commission at 4:48. p.m. Motion carried 5-0. Minutes prepared by Michelle Canterbury. ___________________________________ John J. Dietz, ERMU Commission Chair ___________________________________ Tina Allard, City Clerk Elk River Municipal Utilities Commission Meeting Minutes March 10, 2020 Page 7 42