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2.2 ERMUSR 09-14-2021ELK RIVER MUNICIPAL UTILITIES SPECIAL MEETING OF THE UTILITIES COMMISSION HELD AT THE UPPERTOWN CONFERENCE ROOM August 10, 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 Chris Kerzman, Engineering Manager Tony Mauren, Communications & Administrative Coordinator Others Present: Peter Beck, Attorney; Justin Rice, Senior Project Manager at RJM Construction; Cal Fortner, City Administrator 1.0 GOVERNANCE 1.1 Call Meeting to Order The special 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 Westgaard and seconded by Commissioner Bell to approve the August 10, 2021, agenda. Motion carried 5-0 2.0 CONSENT AGENDA (Approved By One Motion) Chair Dietz had a clarifying question for item 2.5. Mr. Kerzman explained that RJM Construction would be crediting $59,229.88 towards the guaranteed maximum price for the Elk River Municipal Utilities Commission Meeting Minutes August 10, 2021 Page 1 34 Field Services Facility Expansion project because they carry a Subcontractor Default Insurance that already covers the performance bond that subcontractors provided during the bidding process. There was discussion. Moved by Commissioner Nadeau and seconded by Commissioner Stewart to approve the Consent Agenda as follows: 2.1 Check Register —July 2021 2.2 Special Meeting Minutes —July 13, 2021 2.3 2021 Second Quarter Utilities Performance Metrics Score Card Statistics 2.4 Water Use Restrictions Policy 2.5 Field Services Facility Expansion Project — Change Order for Subcontractor Performance Bond Credit Motion carried 5-0. 3.0 OPEN FORUM No one appeared for open forum. 4.0 POLICY & COMPLIANCE 4.1 Customer Deposits Policy Ms. Canterbury provided background information and presented her memo on the revision to the Customer Deposits Policy. There was discussion. Moved by Commissioner Stewart and seconded by Commissioner Bell to Approve the revised G.4j3 Customer Deposits Policy. Motion carried 5-0. 4.2 Inventory Policy Ms. Canterbury provided background and presented her memo on the Inventory Policy. She shared that after a discussion with Attorney Beck, staff recommended moving the Inventory Policy from the Commission Policy Manual to the Management Policy Manual as it addresses implementation of commission policy by management. In addition, staff recommended strengthening the language in section three of the Commission's Protection of Assets Policy to include Inventory Management. There was discussion. Moved by Commissioner Nadeau and seconded by Commissioner Westgaard to approve the delegation of authority to management and move the Inventory Policy from the Commission Policy Manual to the Management Policy Manual, and to approve the revised G.41 Protection of Assets Policy. Motion carried 5-0. Elk River Municipal Utilities Commission Meeting Minutes August 10, 2021 Page 2 35 5.0 BUSINESS ACTION 5.1 Financial Report —June 2021 Ms. Karpinski presented the June 2021 Financial Report. She noted a negative expense in Other Operating Expenses due to the change in ERMU's health insurance plan for 2021, moving from a group -based medical premium to an age -based medical premium, which affects the company's required liabilities. The negative expense is listed in June per the auditor's recommendation. Chair Dietz had questions on the increase in the water department's production expense. Ms. Karpinski explained that this is a recognition of the transfer of ownership for the Jackson Street Water Tower to the City. There was discussion. Moved by Commissioner Westgaard and seconded by Commissioner Bell to receive the June 2021 Financial Report. Motion carried 5-0. 5.2 Second Quarter Delinquent Items Ms. Karpinski presented her memo on the second quarter delinquent items. Chair Dietz had a question on the reinstitution of shut offs for delinquent accounts. Staff responded. Commissioner Stewart asked if financial assistance programs covered delinquent balances in water service as well as electric. Ms. Nelson explained that generally most of the assistance that is provided is absorbed up by the balance from electric service. Mr. Sagstetter noted that there is a financial assistance program specifically for water service costs in development. Chair Dietz shared that there has been discussion on the City Council about potentially allocating some of the funds provided by the American Rescue Plan Act of 2021 to assist customers in paying past due utility bills. There was discussion. Moved by Commissioner Bell and seconded by Commissioner Nadeau to approve the 2021 second quarter delinquent items submitted. Motion carried 5-0. 5.3 2022 Annual Business Plan: Travel and Training; Dues. Subscriptions, and Fees Budget Ms. Karpinski presented her memo on a portion of the 2022 Annual Business Plan. Chair Dietz had a question about an increase to the Travel and Training budget during the previous year. Ms. Karpinski explained that the Travel and Training item now incorporates the cost of labor involved in travel and training. There was discussion. Elk River Municipal Utilities Commission Meeting Minutes August 10, 2021 Page 3 36 5.4 Field Services Facility Expansion Project —Award and Assign Construction Contract Mr. Kerzman distributed the bid tabulation, letter of recommendation, and resolution number 21-15 at the time of the meeting. Mr. Kerzman introduced Justin Rice, Senior Project Manager for RJM Construction who presented the results from the 5A2 structural steel and miscellaneous metals bid opening for the balance of the construction steel necessitated by the original contractor's default. Mr. Rice shared that despite interest by several subcontractors in rebidding this portion of the project, only one bid was received from Briese Iron Works, Inc. for $421,150.00. Mr. Rice reminded the commission that this is the same company that was awarded the contract for quote category 5A1 steel material in July, and expressed the benefits in having one point of contact for steel construction. Mr. Rice also shared his opinion that the approximate $40,000 increase from Briese's original bid in March is a good result given the volatility of the market. Chair Dietz inquired about the difference between the new bid and the original. Mr. Rice said there was an increase of $510,000. There was discussion on how litigation against the original contractor pursued by RJM construction could cover some or all of the difference. Chair Dietz asked Mr. Kerzman if the difference would be covered from the project's contingency fund. Mr. Kerzman confirmed that it would pending the result of legal action. There was discussion. Commissioner Westgaard asked for an update on the project's schedule. Mr. Rice shared that awarding this bid should allow the project to maintain its steel work schedule. He also shared that RJM has seen major strains in the roofing manufacturing market, so the goal is the timely completion of steel work to ensure the site is ready to begin installing insulation. There was discussion. Moved by Commissioner Stewart and seconded by Commissioner Nadeau to adopt resolution 21-15, Awarding and Approving the Assignment of Construction Contract to RJM Construction. Motion carried 5-0. 5.4 Utilities Commission Meeting Location Ms. Canterbury requested feedback from the Commission on the current meeting set up in the City's Uppertown Conference Room. The Commission had a positive impression, pending some table configuration changes. Moved by Commissioner Bell and seconded by Commissioner Nadeau to approve changing our regular commission meeting location for the remainder of 2021 from the ER Fire Department EOC Conference Room to the Uppertown Conference Room at City Hall. Motion carried 5-0. Elk River Municipal Utilities Commission Meeting Minutes August 10, 2021 Page 4 37 6.0 BUSINESS DISCUSSION 6.1 Staff Updates Chair Dietz requested comments from the Commission on Ms. Slominski's update item about stay interviews. Commissioner Stewart shared that she thought it was a good idea. 6.2 Future Planning Chair Dietz announced the following: a. Regular Commission Meeting— September 14, 2021 b. Quorum — MMUA Summer Conference —August 16-18, 2021 c. 2021 Governance Agenda 6.3 Other Business There was no other business. 7.0 ADJOURN REGULAR MEETING Moved by Commissioner Westgaard and seconded by Commissioner Nadeau to adjourn the regular meeting of the Elk River Municipal Utilities Commission at 4:06 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 10, 2021 Page S