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2.2 ERMUSR 09-08-2020 ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT THE ELK RIVER FIRE STATION EOC CONFERENCE ROOM August 11, 2020 Members Present: Chair John Dietz, Vice Chair Al Nadeau, Commissioners Paul Bell, Mary Stewart, and Matt Westgaard ERMU Staff Present: Theresa Slominski, Interim General Manager Melissa Karpinski, Finance Manager Jennie Nelson, Customer Service Manager Michelle Canterbury, Executive Administrative Manager Mark Fuchs, Operations Director Tom Geiser, Electric Superintendent Mike Tietz, Technical Services Superintendent Dave Ninow, Water Superintendent Chris Kerzman, Engineering Manager Tony Mauren, Communications & Administrative Coordinator Others Present: None 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 recited. 1.3 Consider the Agenda There were no additions or corrections to the agenda. Moved by CommissionerNadeau and seconded by Commissioner Stewart to approve the August 11, 2020, agenda. Motion carried 5-0. 2.0 CONSENT AGENDA (Approved by One Motion) Moved by CommissionerWestgaard and seconded by Commissioner Bell to approve the Consent Agenda as follows: Elk River Municipal Utilities Commission Meeting Minutes August 11, 2020 Page 1 32 2.1 July 2020 Check Register 2.2 July 14, 2020 Regular Meeting Minutes 2.3 July 30, 3030 Special Meeting Minutes 2.4 2020 Second Quarter Utilities Performance Metrics Score Card Statistics Motion carried 5-0. 3.0 OPEN FORUM No one appeared for open forum. 4.0 POLICY & COMPLIANCE 4.1 Deposit Policy At the April commission meeting the Commission requested a review of the ERMUCustomer Deposits Policy, specifically on how deposit refunds are processed. Currently ERMU refunds deposits for residential and commercial accounts after the account is closed. Ms. Nelson presented her review of the Customer Deposits Policy. Ms. Nelson’s research was supported by a survey conducted by Minnesota Municipal Utilities Association which received 31 responses and showed that a third of respondents had a similar policy pertaining to the timing on when deposits are returned. Two neighboring utilities were also surveyed by staff. Because this type of policy is somewhat common and because the deposits are accessed often, helping to protect ERMU and its customers from debt write offs that can impact rates, staff recommended keeping the policy as it is. There was discussion. Commissioner Nadeau asked if the deposits were interest bearing. Ms. Nelson responded that they do bear interest. Chair Dietz inquired as to the percentage of interest and Ms. Nelson responded that it is set by the state annually. The Commission had consensus to leave the policy as is. 5.0 BUSINESS ACTION 5.1 Financial Report – June2020 Ms. Karpinski presented the June 2020financial report as outlined in her memo. Staff confirmed Chair Dietz’s observation that the Administrative Expense increase was due to the COVID-19 impacts discussed the previous month. Chair Dietz had questions Elk River Municipal Utilities Commission Meeting Minutes August 11, 2020 Page 2 33 about the increase in Maintenance Expense from the previous year. Staff responded that the difference is due to tree trimming and maintenance of overhead and underground primary lines. There was discussion. Moved by CommissionerNadeauand seconded by Commissioner Stewartto receive the June2020Financial Report. Motion carried 5-0. 5.2 2020 Second Quarter Delinquent Items Ms. Karpinski presented the delinquent items for the secondquarter, including $5,016.46 sent to Revenue Recapture. The report also showed $7,621.65 in write-offs, most of which had reached the six-year limit mandated by the state. There was discussion. Moved by CommissionerStewart and seconded by Commissioner Westgaard to approve the 2020 Second Quarter Delinquent Items. Motion carried 5-0. 5.3 2021 Annual Business Plan: Schedule; Travel & Training; Dues & Subscriptions - Fees Budget Ms. Karpinski presented the Travel & Training budget which reflects a 64% increase over the prior year. Ms. Karpinski noted that the increase is mainly due to adding in labor expense which was not included in past budget presentations. If this were removed there would only be a 10% increase from the prior year. The Dues & Subscriptions - Fees budget reflects an 81% increase over the prior year. Staff explained that the increase is mainly due to bonding expenses that will be incurred with bonding for the new field services building. Chair Dietz asked for further clarification on the $90,000 increase to the Travel & Training budget due to adding in labor expense. Ms. Karpinski explained that while ERMU budgets for labor in its financial statements, 2020 is the first year it appears in the Travel & Training budget presentation. There was discussion. Ms. Karpinski added that this new presentation will be a better tool for analyzing accounts. Commissioner Stewart thanked Ms. Karpinski for the changes to the budget presentation which improved consistency and trackability. 5.4 Field Services Facility Expansion Project Mr. Kerzman presented his update for the Field Services Facility Expansion Project.Mr. Kerzman explained that he is working with the City’s environmental coordinator to acquire the additional wetland credits needed for the site development. Mr. Kerzman noted that ERMU had received the signatures from the property owners of 1433 Elk River Municipal Utilities Commission Meeting Minutes August 11, 2020 Page 3 34 th Main Street needed to vacate the portion of the right of wayfor 4 (Depot) Street that intersects ERMU’s project site. Chair Dietz asked for clarification on the process. Mr. Kerzman explained that it is a public right of way, so ERMU will be requesting that the vacated portion be assigned to the neighboring properties. Since the part of the right of way in question is within the plat that ERMU owns, that section would revert to the utilities’ ownership. However, because the property at 1433 Main Street abuts the right of way, vacation requires the property owner’s signature. ERMU did agree that the portion that serves as the 1433 Main Street property’s driveway will remain right of way. There was further discussion. Chair Dietz mentioned that members of the neighboring community have been asking about the development plans for the site. Mr. Kerzman presented a sketch of the proposed site sign which includes a picture of the future development and contact information. Commissioners Nadeau and Bell expressed their appreciation for the visual appeal of the building. Commissioner Nadeau recommended posting the signs as soon as possible to communicate the plan with the neighborhood. Commissioner Stewart asked if the sign on the front of the building would identify the facility as the field services building. Mr. Kerzman said he believed that it would. Moved by Commissioner Nadeau and seconded by Commissioner Stewart to authorize th Ms. Slominski to sign and submit the petition for vacating 4 Street, the conditional use permit, and plat applications to the city. Motion carried 5-0. 5.5 Leadership Transition – Search Committee Update TheCommission held a special meeting on July 30, 2020 to conduct interviews with the final candidates for the General Manager (GM) position, and after lengthy deliberation it was decided to not extend an offer to either applicant. The Search Committeeand consultant have since met toevaluate and discussother options. Based on the discussions, the Search Committee had consensus to recommend Ms. Slominski be promoted to the GM position until her expected retirement date of December 31, 2022; Ms. Slominski’s wage would be within the GM pay range previously approved by the Commission, along with her existing compensation benefits. Chair Dietz explained in promoting her to GM, other positions could be filled to alleviate the workload so that she is not havingto do both jobs.TheHuman Resources (HR) position has been identified as the most immediate position to filled. In addition to that position, Ms. Slominski will be working with the leadership team to determine the other positions to backfill. Chair Dietz asked the Commission for their vote of support on the Search Committee recommendation to promote Ms. Slominski to the General Manager. There was brief discussion. The Search Committee noted that an employment agreement will need to be executed with Ms. Slominski. Elk River Municipal Utilities Commission Meeting Minutes August 11, 2020 Page 4 35 Moved by CommissionerNadeau and seconded by Commissioner Bellto offer the General Manager position to Theresa Slominski, and authorizing the Search Committee comprised of Chair Dietz and Commissioner Stewart to negotiate an employment agreement with Ms. Slominski to serve as the Elk River Municipal Utilities General Manager. Motion carried 5-0. 6.0 BUSINESS DISCUSSION 6.1 Staff Updates Ms. Slominskistated there is a virtual meeting scheduled for the following weekto receive information on thehealth insurance renewal; preliminary rates reflect a 4.8% increase. She added that we have also requested quotes to offer a second plan with a higher deductible and lower premiums to allow for staff to choose between two plans. Ms. Karpinski added that the date of the scheduled Webex meeting with NISC had been changed to the following day. She also offered physical copies of financial audit report to the Commission. Ms. Nelson updated the Commission on the recent progress by the City of Otsego towards developing an ordinance that allows ERMU to bill franchise fees on the City’s behalf. This is planned to begin in January 2021. Ms. Nelson added that the project will need to be coordinated within NISC’s schedule. Chair Dietz asked Mr. Fuchs if there was any work that needed to be done for the County State Aid Highway 12 project. Mr. Fuchs responded that crews have been working on moving the infrastructure that needs to be cleared for the project. Chair Dietz asked about the progress of plans for the Highway 169 project. Mr. Fuchs shared that he hoped to see the final preliminary plans from MNDOT by the end of the year so ERMU can budget funds to start moving some of the infrastructure beginning in 2021. Mr. Ninow provided an update and commended the teamwork that was demonstrated across all departments during the water main break that occurred on August 3. Mr. Ninow passed around the damaged section of the water main for the Commission to view. The locating challenge that resulted in the puncture and break was discussed. Mr. Fuchs stated that the locators do a tremendous job and this event was out of the ordinary. Mr. Ninow added that this project has required hundreds of similar drillings, all without incident. The financial impacts of the incident were discussed. Chair Dietz commended staff on resolving the issue. 6.2 Future Planning Chair Dietz announced the following: a. Regular Commission Meeting – September 8, 2020 @ ER Fire Station EOC Conference Room b. 2020 Governance Agenda Elk River Municipal Utilities Commission Meeting Minutes August 11, 2020 Page 5 36 6.3 Other Business There was no other business. 7.0 ADJOURN REGULAR MEETING Moved by CommissionerWestgaard and seconded by Commissioner Stewart to adjourn the regular meeting of the Elk River Municipal Utilities Commission at 4:11 p.m. Motion carried 5-0. Minutes prepared by Tony Mauren. ___________________________________ John J. Dietz, ERMU Commission Chair ___________________________________ Tina Allard, City Clerk Elk River Municipal Utilities Commission Meeting Minutes August 11, 2020 Page 6 37