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2.2 ERMUSR 12-08-2020ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT THE ELK RIVER FIRE STATION EOC CONFERENCE ROOM November 10, 2020 Members Present: Chair John Dietz, Vice Chair Al Nadeau, Commissioners Paul Bell, Mary Stewart, and Matt Westgaard ERMU Staff Present: Theresa Slominski, General Manager Melissa Karpinski, Finance Manager Tom Sagstetter, Conservation & Key Accounts Manager Michelle Canterbury, Executive Administrative Manager Tom Geiser, Operations Director Chris Sumstad, Electric Superintendent Mike Tietz, Technical Services Superintendent Dave Ninow, Water Superintendent Tony Mauren, Communications & Administrative Coordinator Megan Zachman, Human Resources Generalist Others Present: Peter Beck, Attorney - present via teleconference 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 Commissioner Nadeau and seconded by Commissioner Stewart to approve the November 10, 2020, agenda. Motion carried 5-0. 1.4 Introduction of New Employee Ms. Slominski introduced Megan Zachman as the new Human Resources Generalist. Ms. Zachman shared her professional experience and personal background. The Commission welcomed her to the company. Elk River Municipal Utilities Commission Meeting Minutes November 10, 2020 Page 1 29 1.5 Recognition of Employee Promotions Ms. Slominski announced thatTom Geiser had been internally been promoted to the Operations Director position. Ms. Slominski added that Line Crew Foreperson Chris Sumstad had been promoted to Electric Superintendent. Chair Dietz had a question about backfilling the openings created by these promotions. Ms. Slominskiresponded. The Commission congratulated staff. 2.0 CONSENT AGENDA (Approved By One Motion) Moved by Commissioner Westgaard and seconded by Commissioner Bell to approve the Consent Agenda as follows: 2.1 October 2020 Check Register 2.2 October 13, 2020Regular Meeting Minutes Motion carried 5-0. 3.0 OPEN FORUM No one appeared for open forum. 4.0 POLICY & COMPLIANCE Nothing was presented for policy & compliance. 5.0 BUSINESS ACTION 5.1 Financial Report September 2020 Ms. Karpinski presented the September 2020 financial report as outlined in her memo. Chair Dietz had a few questions.Staff responded. Moved by Commissioner Nadeau and seconded by Commissioner Stewart to receive the September2020 Financial Report. Motion carried 5-0. 5.2 2021 Annual Business Plan: Rates and Review, and Stakeholder Communication Plan Ms. Karpinski presented the preliminary balanced budget and rates. Elk River Municipal Utilities Commission Meeting Minutes November 10, 2020 Page 2 30 For the Electric Department Expense Budget the 2021 forecast for electric expenses is a .6% increase over the current year budget. Most notable increases are for administrative expense due to the addition of an HR person, and expenses related to bonding for the new field services building. At this time there is a 0% rate increase proposed. For the Water Department Expense Budget the 2021 forecast for water expenses is a .3% reduction over the current year budget. Most notable increases are for administrative expense due to the wellhead protection plan amendment, the addition of an HR person, and expenses related to bonding for the new field services building. At this time there is a 0% rate increase proposed. Ms. Karpinski noted that staff had consulted with Dave Berg, who completed a rate study for ERMU earlier in the year, and his opinion was that a 0% rate increase would be possible. Chair Dietz had questions about how competitors were handling rates in 2021. There was discussion. Chair Dietz acknowledged that the fee schedule to be presented later in the meeting reflected a 6% increase for the Water Access Charge (WAC). He expressed concerns about that large of an increase, as ERMU has implemented a 3% annual increase from 2015 - 2019, and a 0% increase in 2020. Chair Dietz proposed spreading the increase across the next two years. Ms. Slominski commented that with no rate increase the previous year, the proposed increase would be in line with trends. Commissioner Stewart added that the rate study completed by Dave Berg suggested raising the WAC fee so it would better represent the true cost of accessing the water system and to avoid forcing other customers to absorb the cost. Commissioner Bell shared his concern about the practice of making up ground with a larger rate increase following a 0% increase. Commissioner Nadeau expressed his belief that 6% would be a challenging increase. Chair Dietz provided background that the City is projecting a 3.5% increase for the Sewer Access Charge in 2021. Commissioner Stewart asked the Commission if they would consider a 4-4.5% increase to make up part of the difference. There was discussion. Chair Dietz stated that 4% would be the maximum increase he would vote for. As part of the governance agenda requirements, Ms. Slominski asked the Commission to provide topics they would like to communicate to stakeholders regarding the 2021 rates once they areapproved. Recommended topics included: the importance of providing low rates to customers during a challenging year, how effective accounting and budget management were key elements, that a rate reduction in 2019 and a 0% increase in 2020 means ERMU is holding its reduced rate in 2021, and provider to Minnesota Municipal Power Agency helped make it possible. Elk River Municipal Utilities Commission Meeting Minutes November 10, 2020 Page 3 31 Chair Dietz had a question on the bonding timeline for the field services facility expansion. Staff responded. 5.3 2021 Utilities Fee Schedule Ms. Canterbury presented the 2021 Fee Schedule which included a proposed 6% increase to the Water Access Charge and the addition of a hydrant wrench fee. Based on theWater Access Charge discussion during the previous agenda item, the Commission had consensus to approve the 2021 Fee Schedule with a 4% increase to the Water Access Charge. Moved by Commissioner Stewart and seconded by Commissioner Nadeau to approve the 2021 Utilities Fee Schedule with a 4% increase to the Water Access Charge. Motion carried 5-0. 5.4 2020 Third Quarter Delinquent Items Ms. Karpinski presented the delinquent items for the third quarter. She also complimented the customer service staff whose efforts have standards. Moved by Commissioner Westgaard and seconded by Commissioner Bell to approve the 2020 Third Quarter Delinquent Items. Motion carried 5-0. 5.5 2020 Assessments Ms. Slominski presented a listing of proposed assessments totaling $11,324.36, for customers with outstanding balances that remain unpaid for water, sewer, stormwater, trash, and qualifying electric and franchise fee services. In addition, she presented a special assessment totaling $11,714.00 for Petition & Waiver Agreement for payment of the cost of repairs to a private water service line connecting a property to the ERMU water utility. Chair Dietz had a question about the precedent for allowing customers to assess the cost of connecting to utility service. Ms. Slominski responded that for instances where repairs were needed or a well had failed there is precedent. There was discussion. Ms. Slominski noted that the City Council would need to approve the list of assessments at their November 16 meeting. Moved by Commissioner Stewart and seconded by Commission Nadeau to approve the 2020 Assessments Listing totaling $11,324.36, and Special Assessment totaling $11,714.00 to take to the City Council for assessment on property taxes. Motion carried 5-0. Elk River Municipal Utilities Commission Meeting Minutes November 10, 2020 Page 4 32 5.6 2020 Third Quarter Utilities Performance Metrics Scorecard Statistics Ms. Karpinski presented the third quarter utilities performance metrics (UPMIC) scorecard statistics. She noted that the metrics for 2021 will be the same unless the Commission wishes to change them. Per the policy, the metrics for measurement need to be determined before the start of the designated year to allow for timely communication before the performance measurement begins. Staff reached out to the Commission to see if there were any changes to be made, and if so the revised 2021 UPMIC scorecard will be presented to the commission for approval in December. There was discussion. Chair Dietz stated he was not convinced that the employee turnover metric is a standard that employees have control over, therefore it should not be used to judge their performance. Commissioner Stewart responded that employees have control over the work environment which could be a cause of employee turnover. She suggested the Commission could increase the percentage of allowable turnover to meet the goal. There was discussion. Commissioner Bell advised that the goals should be challenging and shared that we would not prefer to change the numbers. Commissioner Westgaard expressed his preference to leave the numbers as they are, acknowledging some years are more favorable than others, and that they can be a learning opportunity. Ms. Slominski supported the idea that the categories are intended to represent the health of the organization and unmet goals could warrant action. The Commission agreed to keep the scoring metrics the same for 2021. 5.7 Wage & Benefits Committee Update On October 13, the Wage & Benefits Committee (W&BC) held an open meeting for employees to submit wage and benefit suggestions for consideration by the Committee. The Committee met on October 28 to review and research topics from the open meeting. The ay group and the 3% cost- of-living adjustment (COLA) included in the budget. Chair Dietz presented the W&BC update as outlined in the memo, along with the proposed recommendations. Chair Dietz highlighted an element of one request that called for an ongoing commitment from the Commission to award the metro average cost-of-living adjustment (COLA) for lineworkers. Chair Dietz stated that the goal of the Commission is to award the metro average on an annual basis but there was discussion about the practice of committing future commissions to that adjustment rate. Mr. Beck, who was attending via teleconference, contributed that that he had concerns about committing a future commission to an annual policy decision. There was further discussion. Elk River Municipal Utilities Commission Meeting Minutes November 10, 2020 Page 5 33 Ms. Slominski provided some history on ERMU matching the metro average. Ms. Slominski added that the statement that it is the goal to always meet the metro average would be appreciated by staff. Mr. Geiser asked, if an employee were to quit, would the owed comp time still be paid out. Ms. Slominski stated that those details will be outlined in the comp time policy. Moved by Commissioner Nadeau and seconded by Commissioner Stewart to approve the 3% COLA for the Office, Field and Management pay groups, effective January 1, 2021. Motion carried 5-0. Moved by Commissioner Stewart and seconded by Commissioner Westgaard to approve the 3.6% adjustment (COLA plus market adjustment) for the Lineworkerpay group, effective January 1, 2021. Motion carried 5-0. Moved by Commissioner Bell and seconded by Commissioner Nadeau to increase the On-Call pay from 12 to 14 hours, effective January 1, 2021. Motion carried 5-0. Moved by Commissioner Westgaard and seconded by Commissioner Bell to approve the ability to obtain up to 40 hours each year through worked overtime towards comp time, effective January 1, 2021. Motion carried 5-0. Moved by Commissioner Stewart and seconded by Commissioner Bell to approve changing the vacation accrual to award 22 days at 16-18 years of service, effective January 1, 2021. Motion carried 5-0. Moved by Commissioner Nadeau and seconded by Commissioner Stewart to approve researching Longevity Pay and additional vacation accruals beyond 25 days. Motion carried 5-0. 6.0 BUSINESS DISCUSSION 6.1 Staff Updates Chair Dietz recommended to Ms. Slominski that Mr. Fuchs return for the January commission meeting to be recognized for his retirement. There was discussion. Chair Dietz asked Mr. Sagstetter for his recommendations on reducing the electric costs for the Furniture and Things Community Event Center. There was discussion. Mr. Geiser introduced Chris Sumstad as the new Electric Superintendent, having been . The Commission congratulated Mr. Sumstad. Elk River Municipal Utilities Commission Meeting Minutes November 10, 2020 Page 6 34 Chair Dietz asked Mr. Tietz about the projects that locators work on during the winter months. Mr. Tietz responded that they work on locating equipment that still needs to be added to the GIS maps. Commissioner Stewart offered her compliments to Ms. Canterbury and Mr. Mauren on the results of the website update. Ms. Canterbury noted that staff will be presenting an overview of the new website at the December commission meeting. 6.3 Future Planning Chair Dietz announced the following: a.Regular Commission Meeting December 8, 2020 @ EOC Fire Station Conference Room b.2021 Governance Agenda 7.0 ADJOURN REGULAR MEETING Moved by Commissioner Nadeau and seconded by Commissioner Bell to adjourn the regular meeting of the Elk River Municipal Utilities Commission at 4:34 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 November 10, 2020 Page 7 35