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3.0 ERMUSR 11-14-2006 ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION October 10,2006 Members Present: Jerry Takle,President;John Dietz,Vice Chair;James Tralle,Trustee Staff Present: Bryan Adams,General Manager; Glenn Sundeen,Line Superintendent; David Berg,Water Superintendent; Theresa Slominski,Finance Director/Office Manager; Troy Adams,Engineering Manager; Judy McSpadden,Recording Clerk 1. Call meeting to order October 10,2006 President Jerry Talde called the October 10,2006,meeting to order. 2. Consider Utilities Agenda Bryan Adams added two items for discussion under other business. James Tralle moved to approve the October 10,2006,Utilities Agenda as amended. John Dietz seconded the motion. Motion carried 3-0. 3. Consider Consent Agenda John Dietz questioned the overtime hours. Glenn Sundeen responded that the crews just finished summer hours which were nine hour days. John Dietz had questions on the financials, staff responded. James Tralle moved to approve the Consent Agenda as follows: September Check Register September 20,2006,Minutes Financials John Dietz seconded the motion. Motion carried 3-0. 5.1 Staff Up-dates Bryan Adams apprised the Commission on the status of comments regarding multiple junction boxes and or transformers in yards. There will be a future meeting with other utilities such as telephone and cable TV to discuss options on aesthetics. Elk River Municipal Utilities has received State approval on the comparable worth program and the American Dental Association sent a certificate of appreciation for 50 years of water fluoridation. Glenn Sundeen updated the current electrical projects and rebuilds. The 14 Station is complete and Bank 2 is ready to be energized. Recently there was an unexpected outage on County Road 13 that had over 100 customers without power. A cross-arm broke on the feeder line and for safety reasons Glenn made the call to disrupt power. Troy Adams said the locator that has been on medical leave is now back full time. Troy stated the new oil filled switches that were purchased will be an asset. David Berg reported 24 new inquiries which resulted in 12 sales of security systems. John Dietz asked if the Utilities have been advertising their monitoring fees,staff responded that it is on the Security advertisement staffers that are sent with the bills. The water pressure on Main Street&Jackson was lowered to accommodate new construction,and has since been returned to normal pressure. Staff has been busy with well and valve maintenance. Page 2 Regular meeting of the Elk River Municipal Utilities Commission October 10,2006 Theresa Slominski gave an update on the IRS issue. The recent Power Managers User Group(PMUG)conference was very informative. She gave a"heads up"that some new procedures and programs will be implemented to allow collection of social security numbers. A customer privacy policy and internal policy will be presented at the next meeting. James Tralle asked about the security measures that would be in place for the sensitive information. Staff responded it would be locked up and only available to employees that would be assigned to work with this new issue. Jerry Takle asked how the website is going and Theresa replied that she hopes it will be ready in a few weeks. 5.2 Update New Data Center Facility The discussions with United Health Group continue to move forward. The plan is to close on the property in January of 2007 and start construction in March of 2007 with completion planned for June of 2008. They will start taking power for testing in January 2008. The initial service agreement was reviewed along with the drawing and location of the new proposed feeder. Estimated cost of the new feeder is$950,000 and substation is estimated to cost $2,130,000. We are soliciting bids for the 69kv transformers needed for the new substation on Waco. 5.3 Review GRE Wholesale Electric Rate The recently completed electric retail rate study by R.W. Beck assumed a wholesale rate increase of 6.9%. In recent discussion with Connexus and GRE,the rate increase is more in the 4.9%range. Although the details of the increase are still unknown,this 2%difference in initial versus projected wholesale rate is approximately a$220,000 swing. In 2008 GRE is projected to simplify the rate structure by going back to one rate instead of a base and growth rate but will be using a Critical Peak pricing scheme. Discussion followed regarding the 2008 GRE proposed rate structure. 5.4 Review Proposed 2007 Health Insurance Costs Staff has met with Jodi Berge,our account executive with David Martin Agency,regarding Elk River Municipal Utilities 2007 health insurance rates. The renewal is a 7.4%increase for 2007. The insurance task group that met last year will meet again to review the insurance plans and discuss alternative plans for the future. 5.5 Review 2007 Expense Budget Our Conservation Improvement Program(CIP)is required to spend 1.5%of gross electric revenues or$232,500 for 2007. The proposed 2007 C1P budget totaling$451,760 of which GRE is contributing$351,750 and we are contributing$100,010 was reviewed. The proposed 2007 electric and water expense budgets were also reviewed. James Tralle questioned if neighboring communities were raising their rates like us. Bryan Adams replied that the Elk River's hikes may be slightly higher due to the growth of the community. 6.1 Review&Consider Bid Tabulation for Water Main Installation On October 9,2006,bids were received for the Guardian Angels Water Main Project. A drawing reflecting the scope of this project was reviewed. Guardian Angels will be reimbursing the Elk River Municipal Utilities for their portion of the costs. Staff recommends Page 3 Regular meeting of the Elk River Municipal Utilities Commission October 10,2006 awarding the Guardian Angels Water Main project to EBI Drilling Inc.,the lowest responsive bidder for the base bid,and the alternate bid if Guardian Angels elects to utilize this alternate. James Tralle moved to approve EBI Drilling Inc.be awarded the Guardian Angels Watermain project. John Dietz seconded the motion. Motion carried 3-0. Other Business A petition requesting a mid block street light be installed on Smith Street has been signed by residents. James Tralle moved to approve installation of a mid block street light on Smith Street. John Dietz seconded the motion. Motion carried 3-0. A notice was sent to property owners for unpaid water bills. Only three accounts are still unpaid. A list was presented to the commission for their approval to have the unpaid water charges assessed on their property taxes,and if approved,this will be taken to the City Council for their approval. It was questioned if this was all of them and staff responded that the assessments were for delinquent accounts that had a current property owner. For delinquent account holders who have moved we have no recourse through assessment. James Tralle asked staff to check if there is any recourse we can take against the owner of the rental property. James Tralle moved to approve the proposed unpaid water list for tax assessment. John Dietz seconded the motion. Motion carried 3-0. Jerry Takle commented on how important the schooling and training is for employees. This gives them a chance to communicate with other people and hear their experiences. The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be Tuesday,November 14,2006. President Jerry Takle adjourned the regular meeting of the Elk River Municipal Utilities Commission at 5:15 p.m. espectfull Judy McSpadden Recording Clerk