3.0 ERMUSR 10-10-2006 ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
September 20,2006
Members Present: Jerry Takle,President;John Dietz,Vice Chair;James Tralle,Trustee
Staff Present: Bryan Adams, General Manager; Glenn Sundeen,Line Superintendent;
Theresa Slominski,Finance Director/Office Manager;
Troy Adams,Engineering Manager;Judy McSpadden,Recording Clerk
Others Present: Lori Johnson,City Administrator;Theresa Kervin,R.W.Beck
1. Call meeting to order September 20,2006
President Jerry Takle called the September 20,2006,meeting to order.
2. Consider Utilities Agenda
John Dietz has an item to discuss under other business. Jerry Takle requested 5.4 be moved
up to accommodate Theresa Kervin of R.W. Beck.
John Dietz moved to approve the September 20,2006,Utilities Agenda. James Tralle seconded
the motion. Motion carried 3-0.
3. Consider Consent Agenda
John Dietz required some clarification on the electric financials, staff responded.
James Tralle moved to approve the Consent Agenda as follows:
August Check Register
August 22,2006,Minutes
Financials
John Dietz seconded the motion. Motion carried 3-0.
5.4 Review&Consider Electric Rate Study
The last electric rate study was completed in 2000. With the addition of two large data
centers,it was time to formally review our rates. R.W. Beck was contracted to complete the rate
study. Theresa Kervin reviewed the new rate study with a 5 year projection with consideration of
Elk River's fast growth and GRE's pending large wholesale rate increases. R.W. Beck
recommends a 6%overall rate increase with annual reviews.
James Tralle moved to receive and file the 2006 rate study from R.W. Beck. John Dietz
seconded the motion. Motion carried 3-0.
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Regular meeting of the Elk River Municipal Utilities Commission
September 20,2006
5.1 Staff Up-dates
Bryan Adams informed the Commission that David Berg was at water school. The Security
department has acquired 19 new security accounts this last month. The Med-Alert security
system has been very successful. The Foster Water Tower is being emptied for the winter,and
hydrant/valve repairs are being done. APPA did a study on average contributions paid to the
cities by their municipal electric utility. The overall national average is 5.3%and in 2005 the Elk
River Municipal Utilities contributed$720,571 or 5.56%to the City of Elk River. Bryan also
briefed the Commission on the open house at the landfill for the addition of the 4th LFG engine.
Bryan also informed the Commission of the poor condition the Hwy 10 street lights are in. The
City or MN DOT needs to address this issue.
Glenn Sundeen reported on the status of the three road projects that are currently underway.
Work continues on the feeders and substations. The numerous projects can cause scheduling
conflicts at times causing a crew to be pulled off one job to go to another.
Theresa Slominski informed the Commission that she received the abatement check for
$15,270(penalty and interest)from the 2004 sales tax issue. Also received were the two capital
equipment sales tax refunds of approximately$95,000. Theresa gave an update on the IRS issue.
There is a software Power Manager user group meeting that some of the staff are attending. This
will be very informative as there will be other users there and also the programmers.
Troy Adams displayed a map he has been working on that delineates the numerous feeders on
the electrical distribution system. Troy has been working with the GPS information for current
mapping.
5.2 Review Utility Web Page
For the last couple of months staff has been working with M.R. Danielson Advertising to
develop a web site for the Elk River Municipal Utilities. Theresa Slominski demonstrated the
web site and the future choices that will be available. Greg Scherber and Michelle Martindale
from the utility staff have been spearheading this project and have been doing a great job keeping
it moving forward.
5.3 Update on MIN Department of Revenue
A letter from Steve McDonald of Abdo,Eick&Meyers,LLP,regarding their review of the
MN Sales Tax and Use Audit was discussed. The sales tax collection versus remittance issue
was resolved along with the verification of the connection fee issue. It seems that several other
municipal utilities have been recently audited and have had similar results. John Dietz mentioned
he would like the auditors to help the utility out with the changing tax laws for the future. The
final amount has been agreed upon with the State,$140,887.95 tax and$13,938.96 interest for a
total of$154,826.91,and is due by November 21 St
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Regular meeting of the Elk River Municipal Utilities Commission
September 20,2006
5.5 Review Proposed 2007 Capital Project Budget
Staff presented the first cut of the capital project budget for 2007. Bryan Adams reviewed
the upcoming projects and needs for the utility. We continue to have more financial needs than
sales revenues can support. There is a concern regarding the street rebuild projects and the
requirement for mid block street lighting. In the old developed areas there are wood poles at the
corners but not mid block. Bryan will talk with Lori Johnson regarding the possibility of the City
helping fund the mid block lighting.
5.6 Review New Data Center Facility
It has been confirmed that there will be a new data center facility locating in Elk River.
Engineering is just starting,land purchase will occur in the January 2007 time frame.
Construction is planned for spring of 2007 with a completion date of mid year 2008. We are still
waiting for electric and water capacity requirements.
6.1 Review Conservation &Emergency Management Plan
At the August 22,2006,Elk River Municipal Utilities Commission meeting,the issue of
ISD#728 utilizing existing,or drilling new wells for lawn irrigation was discussed. The question
is,can a property owner construct and use a well when a Municipal Water System is available to
the property and where local ordinances prohibit such activity? The state plumbing code requires
all buildings that have municipal water available to connect for domestic use. The plumbing code
does not address irrigation wells. Minnesota Statutes 2005, 103I.111,allow construction of wells
and takes precedence over local ordinances prohibiting well construction. In the case for
irrigation use,the MDH issues the construction permit and the DNR issues the ground water
withdraw appropriation if greater than 1,000,000 gallons per year. After numerous conversations
with MDH and DNR personnel,it became obvious that not many of them were aware of the
statutes and how it complicates the required Wellhead Protection Plan and Conservation&
Emergency Management Plan. Discussion continues with the DNR and ISD#728.
On another related issue,the DNR is requiring us to amend our Water Emergency and
Conservation Plan because we have requested an increase in withdraw appropriation from 875
million gallons per year to 1400 million gallons per year. Elk River started its plan in 1996 and
amended it in 2001. This plan verifies that the water suppliers are doing the necessary operation
and maintenance,future planning both capacity and fmancial concerns,implements emergency
planning and response procedures,and carry on conservation and education programs. The
revised plan was reviewed.
James Tralle moved to adopt the Conservation and Emergency Management Plan as presented.
John Dietz seconded the motion. Motion carried 3-0.
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Regular meeting of the Elk River Municipal Utilities Commission
September 20,2006
6.2 Review&Consider Mid Year Write-offs
A list of write-offs totaling$18,745.47 were presented for approval.
Motion by James Tralle to approve the May thru August 2006 write-offs totaling$18,745.47.
John Dietz seconded the motion. Motion carried 3-0.
Other Business
John Dietz said he received some complaints from the downtown businesses regarding the street
lights on Main Street not working over Labor Day weekend. Staff was short handed,it was
thought that the electrician was going to be able to fix the problem but did not. John Dietz stated
he would like situations like this to be monitored more closely and taken care of in a timely
manner.
The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be
Tuesday,October 10,2006 at 4:00 p.m.
President Jerry Takle adjourned the regular meeting of the Elk River Municipal Utilities
Commission at 6:05 p.m.
R spectfully s 'tte
Judy McSpadden
Recording Clerk