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2.2 ERMUSR 10-11-2022ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT THE UPPERTOWN CONFERENCE ROOM September 13, 2022 Members Present: Chair John Dietz, Vice Chair Al Nadeau, Mary Stewart, and Paul Bell Present via Zoom: Commissioner Matt Westgaard participated in the meeting via interactive television as he was out of the state at the time of the meeting. ERMU Staff Present: Theresa Slominski, General Manager Mark Hanson, Deputy General Manager Melissa Karpinski, Finance Manager Tom Sagstetter, Conservation & Key Accounts Manager Tom Geiser, Operations Director Mike Tietz, Technical Services Superintendent Dave Ninow, Water Superintendent Chris Kerzman, Engineering Manager Tony Mauren, Executive Administrative Manager Jenny Foss, Communications & Administrative Coordinator Michelle Venema, Billing Specialist Michelle Martindale, Credit & Collections Specialist Jenny Biorn, Accountant Christy Schallock, Customer Service Representative Megan Zachman, Human Resources Generalist Parker Theisen, IT/OT Technician Rachelle Carlson-Oien, Customer Service Representative Others Present: Cal Portner, City Administrator; Peter Beck, Attorney; Jared Shepherd, Attorney with Campbell Knutson 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 There were no additions or corrections to the agenda. Elk River Municipal Utilities Commission Meeting Minutes September 13, 2022 Page 1 30 Moved by Commissioner Bell and seconded by Commissioner Nadeau to approve the September 13, 2022, agenda. Motion carried 5-0 1.4 Resolution Recognizing 2022 Public Power Week Mr. Geiser presented the resolution recognizing 2022 Public Power Week, occurring October 2-8. Moved by Commissioner Nadeauand seconded by Commissioner Stewartto adopt Resolution 22-10 Recognizing Public Power Week, October 2-8, 2022. Motion carried 5-0 1.5 Resolution Recognizing 2022 Customer Service Week Ms. Youngsprovided background on National Customer Service Week and askedthe Commission to adopt the resolution recognizing 2022 Customer Service Week. Moved by Commissioner Stewartand seconded by Commissioner Bell to adopt Resolution 22-11 Recognizing Customer Service Week, October 3-7, 2022. Motion carried 5-0 2.0 CONSENT AGENDA (Approved By One Motion) Moved by Commissioner Nadeau and seconded by Commissioner Bell to approve the Consent Agenda as follows: 2.1 Check Register – August 2022 2.2 Special Meeting Minutes – August 9, 2022 Motion carried 5-0. 3.0 OPEN FORUM No one appearedfor open forum. 4.0 POLICY & COMPLIANCE 4.1 Remote Work Discussion Chair Dietz presented his memo, statinghis opinion that the remote work option provided in the employee handbook updates approved by the Commission in June,should no longer be offered. Chair Dietz explained that ERMU had been conscious of staff’s safety during the pandemic, allowing them to work remotely and compensating employees without work in the initial two weeks of the shelter-in-place order. Chair Dietz stated that the pandemic is over, and it is unfair to offer the remote work option to some employees Elk River Municipal Utilities Commission Meeting Minutes September 13, 2022 Page 2 31 while others such as field staff cannot work from home or must use time off to care for sick children. Chair Dietz pointed out that the request from staff at the Wage & Benefit Committee meeting in August for additional sick daysfor non-remote employees is in response to the remote work option and there are real costs to providing those extra sick days. Chair Dietz concluded that he doesn’t see a reason to continue to offer the option, noting that the City no longer does. He then opened it up for discussion. Commissioner Stewart presented notes she had prepared, sharing her background in the utilities field and the implementation of paperless processes which improved the functionality of remote work for her employer. Commissioner Stewart noted there arewell-defined expectations in ERMU’s remote work policy and agreements can be changed or adapted by management as needed. Commissioner Stewart shared her belief that there must be a level of trust in staff, equating the circumstances of someone on field staff being out on work sites without direct supervision. Commissioner Stewart added that customer service phone calls are answered in the same manor whether staff is in the office or not, creating a seamless experience for customers. Commissioner Stewart stated her opinion that the remote work option is not just to care for sick children. In instances of significant illness where direct care is needed a sick day will be necessary but in cases where the child is on bed rest the interference with the workday could be minimal. Commissioner Stewart addressed an issue raised in the memo submitted for discussion about the purchase of technology such as computers, keyboards, etc. She clarified that ERMU is only buying one set of equipment that will be used in the office and remotely. Commissioner Stewart highlighted recent changes to CDC guidelines which would minimize quarantine time and thereby some need for time off. Commissioner Stewart shared her opinion that the City not offering a remote work option is not a good reason to end the program. She noted the City offers summer hours to its staff which create a shorter workday on Fridays, whereas ERMU decided this schedule would not suit operations. Commissioner Stewart noted that it was the management that created this option and are the ones who understand how to implement it. She restated that the terms can be Elk River Municipal Utilities Commission Meeting Minutes September 13, 2022 Page 3 32 changed at any timeand that the option is a retention and recruitment tool, adding there is cost in losing employees and training new ones. Commissioner Bell notedagain that only certain employees receive the benefit and provided background from his professional experience about the disparity in one employee group having work location flexibility while another did not. Commissioner Bell also noted there are limitations with staff being out of the office and unable to support colleagues. He added if there was a strict schedule for staff to follow he would be more likely to approve the option. Ms. Youngs was recognized to provide comments. She offered context on the scheduling of remote work for staff, sharing that the schedule is set a month in advance. In the event of becoming short on staff in the office, the representative working remotely knows they will need to come in. Ms. Youngs added that customer service staff can use technology to communicate with one another and that there are a lot of projects staff can work on remotely. Ms. Youngs advocated for the continuation of the program for retention. There was discussion. Ms. Karpinski was recognized to provide comments. Ms. Karpinski explained the accounting department’s remote work schedule, sharing that there is always at least one staff member from the department in office. Ms. Karpinski added that in the accounting world there is a lot of hybrid-model remote work positions offered. Commissioner Nadeau stated his agreement with Chair Dietz that staff should return to the office. Commissioner Stewart highlighted statistics from Ms. Youngs staff report which demonstrates there are less than 20 walk-in customers a week, adding her opinion that that was a manageable amount for the staff scheduled to be in office under the remote work option. Mr. Hanson was recognized to provide comments. Mr. Hanson shared the remote work policy from his previous municipal government employer. Commissioner Westgaard asked if the request is stemming from an extension of the protocols around COVID-19 or a change in corporate policy. Commissioner Westgaard stated if it is a change in policy it should be vetted for validity. Commissioner Westgaard added his opinion that collaboration becomes more difficult with members of staff working remotely. He added that ERMU must maintain the level of service that customers expect as well as monitor staff productivity. Elk River Municipal Utilities Commission Meeting Minutes September 13, 2022 Page 4 33 Commissioner Westgaard stated that this program seemed to have been born from the COVID-19 protocols which have largely passed. Ms. Slominski was recognized to provide comments. Ms. Slominski supplied background on the development of the remote work policy that preceded COVID-19, stating that ERMU did not have the means or the technology to offer it to most staff. Ms. Slominski explained that with technology purchased to abide by COVID-19 protocols, ERMU leadership realized they could now serve customers and be a flexible employer. Ms. Slominski added that the four page remote work policy is centered around the customers and maintaining a high level of quality service. Commissioner Bell asked staff’s opinion as to why there is now a request from field services staff for additional sick time. Ms. Slominski shared her opinion that there is a member of the field staff who is able to work from home and has needed to due to sick children. Seeing that has made thisissue stand out to the field staff. Ms. Slominski added that it is getting harder to retain employees and that she is not sure all employees would choose to remain at ERMU if the program is removed. There was discussion. Commissioner Stewart noted the inherent differences between roles in the field and in the office and therefore what benefits can be offered. She reminded the Commission that the request for additional sick time for field staff is currently just a request and not part of the discussion. She went on to state that the remote work option has been approvedand there is no evidence of failure and recommended the Commission continue to let it work. Commissioner Stewart explained that the Commission sets parameters at a high level and should not tell management how to operate within those parameters. She added her opinion that terminating the option is “micromanaging” the management group. Chair Dietz called the motion for a vote. Mr. Hanson requested the opportunity to share his thoughts. Commissioner Nadeau communicated that he would like to hear Mr. Hanson’s thoughts. Chair Dietz recognized Mr. Hanson. Mr. Hanson provided his opinion that ERMU has a strong staff and should want to keep it. He added that he was surprised at how well remote work has worked, and that it appears to be a seamless operation. Mr. Hanson cautioned against changing what is working based on anecdotes from other locations. Elk River Municipal Utilities Commission Meeting Minutes September 13, 2022 Page 5 34 Mr. Hanson stated that he trusts the staff, that productivity is being tracked, and that he was open to the challenge of keeping the remote work option. He requested the opportunity to provide benefits that keep and attract future staff. Commissioner Bell shared that his concerns over the scheduling issues were resolved through Ms. Slominski’s explanation of the program. Chair Dietz called the motion for a vote. Motion to terminate remote work option as of January 1, 2023, fails due to lack of a second. 5.0 BUSINESS ACTION 5.1 Legal Services Agreement Ms. Slominski presented the Legal Services Agreement to the Commission which names Attorney Shepherd as ERMU’s legal counsel following the retirement of Attorney Beck at the end of the year. Attorney Beck presented Attorney Shepherd to the Commission sharing that his recommendation was for the City and ERMU to name him as legal counsel, adding the City had already done so. Attorney Beck discussed the schedule for providing necessary information to Attorney Shepherd prior to his retirement. Attorney Beck added that he will not be renewing his license to practice lawin 2023 and will no longer be able to provide legal advice at that point. Mr. Shepherd introduced himself to the Commission. The Commission welcomed Mr. Sheperd. Moved by Commissioner Stewart and seconded by Commissioner Nadeau to approve the Legal Services Agreement for Jared Shepherd to serve as principal legal counsel effective January 1, 2023, and coordination with Peter Beck effective October 1, 2022. Motion carried 5-0. 5.2 Financial Report – July 2022 Ms. Karpinski presentedtheJuly 2022 Financial Report. She noted that year to date electric use is down less than half a percent while water use is down 14%. Elk River Municipal Utilities Commission Meeting Minutes September 13, 2022 Page 6 35 Ms. Karpinski explained that the Power Cost Adjustment will be billed at 14 millsin September, 18 mills in October, and20 mills for November and December. Ms. Karpinski estimated there will be a $1.2 million accrual that will need to be passed on by the end of the year, adding that at 20 mills that balance can be made up in the first couple months if the Energy Adjustment Clause comes down. Ms. Karpinski noted water is having a favorable year. Commissioner Bell asked staff when they expect to see favorable budget numbers. Ms. Karpinski explained she could not guarantee when the financials would become favorable but there was no need to panic. There was discussion. Commissioner Westgaard requested in coming months that staff provide a plan to mitigate challenges. There was discussion. Moved by Commissioner Nadeau and seconded by Commissioner Stewart to receive the July 2022 Financial Report. Motion carried 5-0. 5.3 2023 Annual Business Plan: Capital Projects & Equipment Purchases, and 20-Year Capital Projections Ms. Karpinski presented the annual business plan highlighting major projects such as Advanced Metering Infrastructure (AMI) implementation, the Highway 169 Redefine project, vehicle purchases, and transformer cost increases. Ms. Karpinski noted one item that will change is the fiber loop to Auburn Water Tower. This item is expected to cost closer to $90,000 rather than the $38,000 listed in the budget but added that the City could also be contributing. Commissioner Stewart had questions about the streetlight line item. Staff responded. Commissioner Stewart asked about the depreciation life for AMI. Ms. Karpinski responded that it is believed to be on a 15-year schedule. Chair Dietz had a question on the source of funding for electric and water projects. Staff explained that half of the funding would come from reserves the other from the annual margin. Ms. Slominski explained that the amounts for 2023 are comparable to previous years. Commissioner Stewart asked what “VFD” stood for in the Well #7 VFD line item. Mr. Ninow responded that it stood for variable frequency drive which allows the user to select the well motor’s speed. Commissioner Stewart recommended adding that acronym to the glossary of acronyms provided to the commissioners annually. Elk River Municipal Utilities Commission Meeting Minutes September 13, 2022 Page 7 36 5.4 Field Services Facility Expansion Project Update Mr. Kerzman highlighted major items such as the beginning oftree planting and the completion of the steps that needed to be redone, adding theywere to be inspected the following day. Mr. Kerzman stated that estimates show the lower level workshop and garages, as well as the elevator should be completed by the end of the week. He added that a Certificate of Occupancy is expected in the next few weeks but stated ERMU would not have the full building certificate by Friday as projected by RJM Construction. Commissioner Bell asked if a full Certificate of Occupancy is necessary before the furniture can be delivered. Mr. Kerzman responded that it is not, and that delivery was starting the next Monday. 5.5 Wage & Benefit Committee Update Ms. Slominski provided an update to the Commission on items submitted by staff at the open Wage & Benefit Committee meeting the previous month. Ms. Slominski noted that requests were aimed at retention and that the group was not necessarily asking the Committee to approveevery request. Central Municipal Power Agency Services Transmission Opportunity 5.6 Ms. Slominski provided background on the investment opportunities made possible by ERMU’s participation in the joint transmission program in cooperation with Central Minnesota Municipal Power Agency. Ms. Slominski requested feedback from the Commission. Commissioner Bell sought to confirm that it was staff’s recommendation to enter into this agreement. Staff responded that it was. There was consensus among the Commission to enter into the agreement. BUSINESS DISCUSSION 6.0 6.1 Staff Updates Mr. Geiser corrected an item from his staff update explaining that the vendor repairing 12 faulty pad mounted transformers currently has eight of them and will take the other four when those are done, not the other way around. Elk River Municipal Utilities Commission Meeting Minutes September 13, 2022 Page 8 37 Mr. Geiser also requested permission to move forward with the order of a Vac-Tron excavation vacuum budgeted for 2023 to reducedelivery time and costs, noting the costs would still appear in 2023. The Commission approved moving forward with the order. Mr. Geiser offered details on assistance providedto a data center that needed a new metering cabinetdue to theirs shorting out the previous Saturday. Crews were able to restore service later that day. Mr. Geiser commended staff for their efforts. 6.2 City Council Update Commissioner Westgaard provided a City Council update covering topics such ascity budget items, the preliminary levy, EDA/HRA budgets, easement vacation,and aTHC ordinance. 6.3 Minnesota Municipal Utilities Association Summer Conference Discussion Ms. Slominskiprovided the opportunity to share information from the conference for Commissioner Westgaard who couldn’tattend.Commissioner Bellprovided details fromthe discussions he had on electric vehicles. Commissioner Stewartshared the information she received in a presentation about Midcontinent Independent System Operator. 6.4 Future Planning Chair Dietz announced the following: a. Regular Commission Meeting – October 11, 2022 b. 2022 Governance Agenda Other Business 6.5 There was no other business. DJOURN REGULAR MEETING 7.0 A The regular meeting of the Elk River Municipal Utilities Commission adjourned at 4:59 p.m. Minutes prepared by Tony Mauren. ___________________________________ John J. Dietz, ERMU Commission Chair ___________________________________ Tina Allard, City Clerk Elk River Municipal Utilities Commission Meeting Minutes September 13, 2022 Page 9 38