2.2 ERMUSR 07-12-2022ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE UTILITIES COMMISSION
HELD AT THE UPPERTOWN CONFERENCE ROOM
lune 14, 2022
Members Present: ChairJohn Dietz, Vice ChairAl 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
Tom Geiser, Operations Director
Chris Sumstad, Electric Superintendent
Mike Tietz, Technical Services Superintendent
Dave Ninow, Water Superintendent
Chris Kerzman, Engineering Manager
Tony Mauren, Executive Administrative Manager
Jenny Foss, Communications & Administrative Coordinator
1.0 GOVERNANCE
1.1 Call Meetin� to Order
The regular meeting of the Utilities Commission was called to order at 3:30 p.m. by Chair Dietz.
1.2 Pled�e of Alle�iance
The Pledge of Allegiance was recited.
1.3 Consider the A�enda
There were no additions or corrections to the agenda.
Moved by Commissioner Nadeau and seconded by Commissioner Stewart to approve the
lune 14, 2022, agenda. Motion carried 5-0
1.4 Reco�nition of Emplovee Lon�evitv — Russell Stuhr, 8 vears
Ms. Slominski presented Russell Stuhr as the first recipient of the approved Longevity Bonus
Pay, a program approved by the Commission in September 2021, taking effect in January 2022.
At 8 years Mr. Stuhr qualified for a payment of $1,550. Ms. Slominski thanked Mr. Stuhr for his
service and Chair Dietz presented him with his check and thanked him for his service.
Mr. Stuhr shared his appreciation with the Commission.
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June 14, 2022
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1.5 Reco�nition of ERMU and MMUA Tom Bovitz Memorial Scholarship Award Winner
Mr. Mauren provided background on the Tom Bovitz Memorial Scholarship program and
informed the Commission that ERMU's local scholarship winner had placed fourth in the
statewide competition with Minnesota Municipal Utilities Association, earning another $500
towards his post-secondary education.
Originally staff had planned to have the winnerjoin the meeting via teleconference, but he was
unable to attend.
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 Check Register — May 2022
2.2 Special Meeting Minutes — May 10, 2022
2.3 Regular Meeting Minutes — May 10, 2022
2.4 Special Meeting Minutes — May 20, 2022
2.5 2022 Streetlight Installation and Maintenance Agreement Between ERMU and The City
of Elk River, Minnesota
2.6 Employee Handbook Annual Updates
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 — April 2022
Ms. Karpinski presented her memo on the April 2022 financials. She noted that for the
month electric usage was up and water usage was down. She added that year to date
electric usage is down less than 1% while water usage is down around 4%. Ms. Karpinski
stated that electric is operating below budget due to increases in Purchased Power and
the Energy Adjustment Clause (EAC) passed on from the power provider which is then
passed through to customers as a Power Cost Adjustment (PCA).
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June 14, 2022
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Chair Dietz asked how much of the $1.3 million variance in Purchased Power is due to the
EAC. Ms. Karpinski explained the EAC accounted for $1.2 million of the variance. She
added that ERMU will absorb $500,000 while the rest will be recovered through PCAs.
Ms. Karpinski informed the Commission that in May of this year ERMU had completed
billing for the accrued PCA from 2021, meaning all PCAs billed going forward will apply to
2022 EAC. She added that ERMU began billing PCAs at 6 mills at the start of the year,
moved to 8 mills in May, and will go to 10 mills in July and hopefully hold there through
the summer. She added that with power providers estimating continued high costs it
could be necessary to move up to 16 mills for the fourth quarter. Ms. Karpinski explained
that even at the 16-mill level ERMU will likely have a PCA accrual of $1.5 million at the end
of yea r.
Ms. Slominski informed the Commission that ERMU's power provider, Minnesota
Municipal Power Agency (MMPA) has purchased a hedge for the months of June-
September to try and cap the costs of power.
Chair Dietz asked if staff is getting a lot of questions about the PCA on their bill. Ms.
Slominski responded that they hadn't yet. There was discussion.
Commissioner Stewart asked if it would be possible to do a mid-year rate adjustment if
needed. Ms. Slominski shared her opinion that it would be better to offset some of the
increased costs through the PCA but put the question to the Commission. There was
discussion.
Chair Dietz asked if Interest Expenses were higher due to bonds. Ms. Karpinski confirmed
that was correct.
Chair Dietz asked why Water Production Expenses were down 73%. Ms. Karpinski
explained that this was the result of providing the City with $90,000 as part of the transfer
in ownership of the Jackson Street Water Tower.
Moved by Commissioner Stewart and seconded by Commissioner Westgaard to receive
the April 2022 Financial Report. Motion carried 5-0.
5.2 Field Services Facilitv Expansion Proiect Update
Mr. Kerzman informed the Commission that the garage door company does not have
materials to install the doors and will need to reschedule installation. Mr. Kerzman added
that RJM Construction is investigating the delay and that notices are ready to be sent out
that week to inform the company that this significantly impacts the schedule.
Mr. Kerzman stated the concrete contractor will be mobilizing next week to complete all
outstanding work.
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June 14, 2022
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There was discussion about the landscape work to be down around the buildings on site.
Commissioner Bell noted big changes with grading on site. There was discussion.
Mr. Kerzman added that RJM Construction had a mediation session with the initial
structural steel provider who did not fulfill their bid. He added that a pretrial is scheduled
for June.
5.3 General Mana�er Search Committee Update
Ms. Slominski presented the employment agreement for the new general manager, Mark
Hanson, noting his start date of July 18, 2022. There was discussion
Moved by Commissioner Nadeau and seconded by Commissioner Bell to approve the
ERMU General Manager Employment Agreement. Motion carried 5-0.
6.0 BUSINESS DISCUSSION
6.1 Staff Updates
Ms. Slominski noted that the Commissioners had received their invite from MMPA for its
annual meeting in July. She encouraged commissioners to attend so they could learn about
ERMU's power provider as well as a proposed contract extension to aid in bonding.
Chair Dietz noted property insurance was increasing. Ms. Slominski explained that it was due
to an additional cyber security amount that wasn't included in the past.
Mr. Sagstetter reminded the Commission that the Sherburne County Fair Parade was taking
place on July 16 and invited those commissioners who wanted to participate in the parade
with ERMU to let staff know. Commissioners Dietz and Westgaard said they would plan to be
there.
Mr. Mauren informed the Commission that he would be providing the link for the commission
self-evaluation survey after the meeting with results to be presented at the July meeting.
Chair Dietz had questions about the trail lights being installed along Highway 10. Staff
responded.
Mr. Sumstad informed the Commission that the Inventory & Procurement Assistant is no
longer employed at ERMU, and that staff will look to post the opening.
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June 14, 2022
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Commissioner Stewart had a question about the afterhours outage response system and
timely notification of power restoration. Staff said they would research the matter and provide
theirfindings.
Mr. Kerzman informed the Commission that the Information Security Committee was
scheduled to meet on July 12. Commissioner Stewart recommended holding the meeting after
the new General Manager is on board. Staff said they would plan on a date after July 18.
6.2 Citv Council Update
Commissioner Westgaard provided an update on May 16 and June 6 City Council Meetings.
Topics included staff retirement recognitions, commission appointments, an expansion request
at ERX Motor Park, Lake Orono easements, and the comprehensive financial report.
6.3 Future Plannin�
Chair Dietz announced the following:
a. Regular Commission Meeting—July 12, 2022
b. 2022 Governance Agenda
6.4 Other Business
Chair Dietz had questions about the work on Highway 169. Staff responded.
The Commission recessed the regular meeting at 4:05 p.m. and went into the closed
meeting.
6.5 Closin� of Meetin�: Meetin� closed pursuant to MN Statute 13D.05, Subd. 3(a) for the
performance evaluation of Theresa Slominski, General Mana�er
The Commission reconvened the regular meeting at 4:30 p.m.
7.0 ADJOURN REGULAR MEETING
Moved by Commissioner Nadeau and seconded by Commissioner Stewart to adjourn the
regular meeting of the Elk River Municipal Utilities Commission at 4:30 p.m. Motion carried
5-0.
Minutes prepared byTony Mauren.
John J. Dietz, ERMU Commission Chair
Tina Allard, City Clerk
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June 14, 2022
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