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01-10-2023 ERMU MIN SPECIALELK RIVER MUNICIPAL UTILITIES SPECIAL MEETING OF THE UTILITIES COMMISSION HELD AT THE ERMU FIELD SERVICES TRAINING ROOM January 10, 2023 Members Present: Chair John Dietz, Vice Chair Al Nadeau, Mary Stewart, and Matt Westgaard Present via Zoom: Commissioner Paul Bell participated in the meeting via interactive television as he was out of the state at the time of the meeting. ERMU Staff Present: Mark Hanson, General Manager Sara Youngs, Administrations Director Melissa Karpinski, Finance Manager Tom Sagstetter, Conservation & Key Accounts Manager Tony Mauren, Executive Administrative Manager Tom Geiser, Operations Director Chris Sumstad, Electric Superintendent Mike Tietz, Technical Services Superintendent Dave Ninow, Water Superintendent Chris Kerzman, Engineering Manager Jenny Foss, Communications & Administrative Coordinator Parker Theisen, IT/OTTechnician Others Present: Jared Shepherd, Attorney 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 Nadeau to approve the January 10, 2023, agenda. Motion carried 5-0 Elk River Municipal Utilities Commission Meeting Minutes January 10, 2023 Page 1 1.4 Policv Review — Bylaws Mr. Mauren presented a new initiative to the Commission in which at least one policy from the Commissioner Policy Manual would be reviewed each month. He stated two benefits for this monthly review would be to keep the policies fresh in the minds of the commissioners while also creating an opportunity to ask questions or make changes to the policies as needed. This month commissioners reviewed G.1a — Bylaws. There were no comments or recommendations. 2.0 CONSENT AGENDA (Approved By One Motion) Moved by Commissioner Stewart and seconded by Commissioner Nadeau to approve the Consent Agenda as follows: 2.1 Check Register— December 2022 2.2 Regular Meeting Minutes— December 13, 2022 2.3 Cogeneration and Small Power Production Tariff — Schedules 1 and 4 Motion carried 5-0. 3.0 OPEN FORUM No one appeared for open forum. 4.0 POLICY & COMPLIANCE 4.1 Annual Review of Committee Charters Mr. Hanson presented the memo on the Annual Review of Committee Charters, explaining that it allows for changes or updates to be made. This review is done in January prior to any new committee members being appointed. Commissioner Stewart noted that some titles have changed for certain staff committee members and those changes were not included in the charters. Staff responded that they would make those changes. Chair Dietz asked if the Dispute Resolution Committee had been employed and what their role is with customers. Staff responded that this committee was created a year ago and has not been activated yet. It was explained that when a customer has a dispute that staff is unable to resolve, the Committee mediates the issue. The Committee will then make recommendations for commission approval. Elk River Municipal Utilities Commission Meeting Minutes January 10, 2023 Page 2 5.0 BUSINESS ACTION 5.1 Financial Report — November 2022 Ms. Karpinski presented the November 2022 Financial Report. Electric usage was down 1% for the month, and down 2% YTD. Water usage is up 2% for the month but YTD water is down 8%. Overall, both electric and water had a good month. The electric budget was positive for the month, though it isn't meeting budget or YTD levels. Water is doing better than prior year and better than budget. Water had another large connection fee in November for Hillside Heights/Twin Lakes Road which calls for 52.11 units, approximately $209,000. Commissioner Bell sent a question prior to the meeting on the Other Operating Expense being 165% over budget YTD. Ms. Karpinski explained that this was due to the mutual aid ERMU had participated in to assist a utility with service challenges after a major storm. She explained that this is offset by funds received from the utility that had been supported and is reflected in the Miscellaneous Revenue line. Chair Dietz asked Mr. Ninow if the water department anticipates connection fees to be as high in 2023 as they were in 2022. Mr. Ninow replied that there are a couple projects that will contribute to the total. Chair Dietz noted the disparity between budget and actual revenue and asked staff how that would be reconciled. Staff replied there would be a reduced amount placed in reserves but added that ERMU will still be meeting bond covenants and that the combination of water and electric funds will still be meeting budget. Moved by Commissioner Nadeau and seconded by Commissioner Stewart receive the November 2022 Financial Report. Motion carried 5-0. 5.2 Field Services Facility Expansion Project Update Mr. Kerzman noted there would be a field services facility tour given after the joint meeting with the Elk River City Council, which was to follow the commission meeting. Mr. Kerzman stated RJM Construction had their deposition with the initial steel contractor who did not do work on the project. Mr. Kerzman stated he is not aware of the timeline for resolution. There was discussion. Chair Dietz asked for the amount of the judgement. Staff replied it was $483,000. Elk River Municipal Utilities Commission Meeting Minutes January 10, 2023 Page 3 Chair Dietz asked how the punch list was progressing. Staff said there were quite a few minor items on the list, but most major items had been addressed. Staff added RJM was looking to do a portion of the concrete repairs the week of January 23. Mr. Kerzman noted there was a change order for grading changes and fence movement along the east side of the site to help with the wetlands. There is a credit of $19,343.73. Moved by Commissioner Nadeau and seconded by Commissioner Westgaard to approve Change Order #6. Motion carried 5-0. 5.3 Waite & Benefit Committee Update Mr. Hanson presented the update from the Wage & Benefits Committee (WBC). He also provided background from the previous commission meeting where a wage adjustment for all staff, based on the metro average for lineworkers, of up to 3.25% had been approved. Mr. Hanson explained that since that time, a comparison utility reported non- union staff approved a 3.25% wage adjustment and union staff are still in negotiations. Additionally, a co-op from the seven metro average pool had reported a 1% increase to their previously locked in rate. This brings the current overall metro average to 3.4% with the union workers still unknown. Mr. Hanson explained that it was the recommendation of the WBC to approve a wage adjustment increase from 3.25% to 3.4%, backdated to January 1, 2023. Chair Dietz asked if there would be another change when the union workers come to an agreement. Mr. Hanson asked the Commission to move forward with a 3.4% adjustment and explained that if the final numbers increase the average the additional amount would be back paid in 2024. Moved by Commissioner Bell and seconded by Commissioner Nadeau to approve a 3.40% wage adjustment for all staff, backdated to January 1, 2023. Motion carried 5-0. 6.0 BUSINESS DISCUSSION 6.1 Staff Updates Mr. Hanson highlighted the second page of his staff update which provided background information to prepare the Commission for the joint session with City Council that was to follow the meeting. Commissioner Bell asked if the proposed northwest expansion to the Urban Services District will allow developers to hook up to city sewer while using privately owned wells even though it is his understanding that common practice is to install water services before sewer. Mr. Hanson replied that this is one of the topics of the joint meeting later that day. Mr. Hanson Elk River Municipal Utilities Commission Meeting Minutes January 10, 2023 Page 4 elaborated that it is common to move forward with both or neither service. He added that when it is a situation of coming in with one or the other it depends on the circumstances driven by specifics of the development. In reference to her staff update item on customer disconnects, Chair Dietz asked Ms. Youngs if customers need to make a payment arrangement to avoid disconnection even during the Cold Weather Rule (CWR). Ms. Youngs replied that was correct. There was discussion about CWR practices for other utilities. Ms. Youngs clarified that staff makes every effort to make a payment arrangement with customers to provide assistance while also trying to educate them that it is best to not keep increasing their past due amounts until the end of the CWR. Mr. Mauren thanked Mr. Kerzman, Mr. Theisen, and Mr. Tietz for their help in getting the field services building's training room ready to host the commission meeting and subsequent joint session. Chair Dietz asked Mr. Geiser if there are meetings for the County Road 44 project and if it was a 2023 or 2024 project. Mr. Geiser stated there are monthly meetings, and it is a 2024 project. Chair Dietz asked if the County Road 44 project would have a trail on the north side of the road. Mr. Geiser confirmed it would. Chair Dietz inquired about the progress of the Highway 169 Redefine project. Mr. Geiser stated it was going well and that staff is prepared to deal with the little tasks that come up like with any project. 6.2 City Council Update Mr. Westgaard provided the city council update. Topics were mostly regarding year-end items, the recognition of Councilmember Garrett Christianson, and the retirement of Finance Director Lori Ziemer. 6.3 Future Planning Chair Dietz announced the following: a. Regular Commission Meeting— February 14, 2023 b. 2023 Governance Agenda 6.5 Other Business There was no other business. Elk River Municipal Utilities Commission Meeting Minutes January 10, 2023 Page 5 7.0 ADJOURN SPECIAL MEETING The special meeting of the Elk River Municipal Utilities Commission adjourned at 3:53 p.m. Minutes prepared by Jenny Foss. i Joh Jj Died, ER Commission Chair Tina Allard, City Clerk Elk River Municipal Utilities Commission Meeting Minutes January 10, 2023 Page 6