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07-13-2021 ERMU MIN ELK RIVER MUNICIPAL UTILITIES SPECIAL MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM July 13,2021 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 Jennie Nelson, Customer Service 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 Chris Kerzman, Engineering Manager Tony Mauren, Communications&Administrative Coordinator Others Present: Peter Beck,Attorney; Cal Portner, City Administrator;Jim Strommen, Kennedy&Graven Chartered 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 Mr. Kerzman requested that item 5.3 Field Services Facility Expansion Project—Award and Assign Construction Contract be moved to immediately follow Open Forum. Moved by Commissioner Stewart and seconded by Commissioner Nadeau to approve the amended July 13,2021,agenda. Motion carried 5-0 2.0 CONSENT AGENDA(Approved By One Motion) Elk River Municipal Utilities Commission Meeting Minutes July 13, 2021 Page 1 Moved by Commissioner Westgaard and seconded by Commissioner Bell to approve the Consent Agenda as follows: 2.1 June 2021 Check Register 2.2 June 8,2021 Regular Meeting Minutes 2.3 June 8,2021 Closed Meeting Minutes 2.4 Summary of General Manager Performance Review Motion carried 5-0. 3.0 OPEN FORUM No one appeared for open forum. 5.3 Field Services Facility Expansion Project—Award and Assign Construction Contract Mr. Kerzman provided the Commission and staff with handouts, including the bid tabulation, letter of recommendation, and resolution needed by RJM Construction to enter a contract with Briese Iron Works as the 5A1 Steel Material contractor for a total of$172,730. Mr. Kerzman informed the Commission that while this bid process, which is a result of the default of the original contractor, has caused higher material costs, it will not raise the guaranteed maximum price provided by RJM Construction; the proposed contract would draw money from contingency funds. There was discussion. Mr. Kerzman then introduced Jim Strommen from Kennedy & Graven Chartered in attendance to provide counsel on the construction contract. Mr. Strommen provided an update for the Commission on the discussion around what portion of the price difference should be taken out of contingency funds. There was discussion. Commissioner Westgaard noted that a plan to fund a portion of the difference in steel work with contingency money could create challenges in the future by depleting the fund early in project. Commissioner Westgaard requested that the Commission discuss the prospect of covering the difference from another fund at the next commission meeting. There was agreement. Mr. Kerzman provided an update on the progress of the construction. There was discussion. Moved by Commissioner Stewart and seconded by Commissioner Nadeau to adopt Resolution No. 21-14 Awarding and Approving the Assignment of Construction Contract to RJM Construction for Quote Category 5A1. Motion carried 5-0. 4.0 POLICY&COMPLIANCE Elk River Municipal Utilities Commission Meeting Minutes July 13, 2021 Page 2 4.1 Annual Commission Performance Self-Evaluation Per Governance Policy G.2c Agenda Planning,and consistent with the 2021 Governance Agenda adopted by the Commission in 2020,the Commission is to conduct a self-evaluation of their own performance in the third quarter of each fiscal year. Following the evaluation,the Commission, with support from the general manager, will arrange for governance education for the next fiscal year, including education related to the determination of desired results. Prior to the Commission meeting,the Commissioners had completed an online survey regarding their performance. Ms.Slominski presented the survey results and facilitated discussion on each of the points the Commission evaluated themselves on.The survey included 15 multiple choice and five open- ended questions regarding the Commission's performance and what, if anything,they should be doing to be more effective.A few key areas that were identified were: continuing to adhere to the "One Voice" policy and continuing to apply the chain of command created by the "One Employee" policy. Overall,the Commission had a positive assessment of their performance. 4.2 Annual Strategic Plan Review Ms. Slominski presented highlights from the 2021 strategic plan initiatives, and newly identified go/no-go initiatives for 2022. Ms. Slominski explained that staff is looking for Commission discussion on the high-level strategic themes and initiatives that have been identified, and consensus on the themes leading into the budgeting process. Each manager spoke to the initiatives that they were the project lead for.There was discussion. Ms. Slominski noted staff is making progress on a request for comparative balance sheets from the previous strategic plan review. Commissioner Stewart asked how ERMU would work with the City on the pending update to their comprehensive plan.There was discussion. It was recognized by the Commission that there are many projects in progress to absorb labor resources and that the additional initiatives seem aggressive, so prioritization is important. Staff agreed. The Commission had consensus to support the high-level strategic themes that were presented. The Commission recessed at 4:58 and reconvened at 5:02.At that time Commissioner Nadeau excused himself for the remainder of the meeting. 4.3 Water Use Restrictions Policy Elk River Municipal Utilities Commission Meeting Minutes July 13, 2021 Page 3 Ms. Canterbury provided background on the Water Use Restriction Policy and presented her memo which explains that in the event of a water shortage the general manager does not currently have the authority to institute a watering ban. Ms. Canterbury presented two options to update the policy which would clarify exemptions to the restrictions and formalize the general manager's authority to temporarily ban watering. Commissioner Stewart asked who would be enforcing these restrictions. Ms. Canterbury responded that city code names ERMU and the City as responsible for enforcement. Mr. Portner confirmed that it would come to the code enforcement department. Chair Dietz and Commissioner Stewart had questions about how the utilities would communicate a ban. There was discussion. Commissioner Bell recommended some format changes and clarifying language to the policy. Ms. Canterbury stated she would make the changes and bring the policy back for approval the following month. Ms. Canterbury asked the Commission to adopt the resolution at this time so ERMU would be prepared should additional temporary water use restrictions need to be implemented before the next meeting. Moved by Commissioner Stewart and seconded by Commissioner Bell to adopt Resolution No. 21-13 Imposing Water Use Restrictions Within the City of Elk River and Designating the General Manager Authority to Impose Additional Temporary Water Use Restrictions Option 2. Motion carried 4-0 4.4 Purchase Order Policy Ms. Canterbury provided background on the Purchase Order Policy, explaining why it was being recommended to be moved from Commission Policy Manual as it pertains to the implementation of policy by the management. Moved by Commissioner Westgaard and seconded by Commissioner Stewart to approve the delegation of authority to management and move the Purchase Order Policy from the Commission Policy Manual to the Management Policy Manual. Motion carried 4-0 5.0 BUSINESS ACTION 5.1 Financial Report— May 2021 Ms. Karpinski presented the May 2021 Financial Report. There was discussion. Moved by Commissioner Bell and seconded by Commissioner Stewart to receive the May 2021 Financial Report. Motion carried 4-0. 5.2 Wage & Benefits Committee Update Elk River Municipal Utilities Commission Meeting Minutes July 13, 2021 Page 4 Ms. Slominski presented the update from the Wage & Benefit Committee (W&BC) proposing the institution of longevity pay and changes to the vacation accrual based on a request from an employee group. Ms. Slominski also handed out a statement from the employee group in response to the proposed changes to the longevity pay program, asking for fixed rates rather than a percentage of salary, retroactive longevity pay for employees who previously passed milestones in the program, and beginning longevity pay at six years rather than the eight years recommended by the W&BC. The Commission did not reach consensus on the requested changes from the employee group, opting instead to wait until after the open W&BC meeting occurring the following month where employees can address the Committee. Commissioner Westgaard had questions about lines of communication between W&BC and the employee group since their requested changes came shortly after the proposed updates from the W&BC. Ms. Slominski explained that the committee took the employee input in developing these changes but did not present it to employees for another round of comments. There was Commission consensus to wait until after the open meeting to review further. 5.4 Utilities Commission Meeting Location Ms. Canterbury facilitated discussion on the commission meeting location and meeting room setup options. She requested commission input on the best configuration of the room or thoughts on different locations.There was discussion. There was consensus to hold the August commission meeting in the Upper Town conference room at City Hall to determine if that would be a better option. All meetings will be posted as special meetings until the Commission approves changing its regular meeting location for the remainder of 2021. 6.0 BUSINESS DISCUSSION 6.1 Staff Updates Ms. Nelson asked for commission feedback on the bullet point from her update regarding the proposal to restart penalties for delinquent accounts in January 2022.There was discussion Mr. Geiser noted the increase in overtime due to the large number of projects in the service area. Commissioner Stewart commended the electric department on handling the outage on July 2. Elk River Municipal Utilities Commission Meeting Minutes July 13, 2021 Page 5 6.2 Future Planning Chair Dietz announced the following: a. Regular Commission Meeting—August 10, 2021 b. Quorum—Sherburne County Parade—July 17, 2021 c. 2021 Governance Agenda Chair Dietz mentioned that the Sherburne County Parade would be held the following Saturday, and shared plans for the day. 6.3 Other Business Commissioner Stewart added that she meant to comment on item 2.4 Summary of General Manager Performance Review that it would help if the review asked for examples to make the answers easier to interpret. 7.0 ADJOURN REGULAR MEETING Moved by Commissioner Westgaard and seconded by Commissioner Bell to adjourn the regular meeting of the Elk River Municipal Utilities Commission at 5:55 p.m. Motion carried 4-0. Minutes prepared by Tony Mauren. J J. D. , mmission Chair Tina Allard, City Clerk Elk River Municipal Utilities Commission Meeting Minutes July 13, 2021 Page 6