INFORMATION #2 06-05-2006
ELK RI''ER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COlVIlVllSSION
May 16,2006
:Nlel11bers Present: Jell)' Talde, Presidellt; JOIUl Dietz, Vice CIlair; JaIl1eS Tralle, Tnlstee
StaffPresellt: Bryall Adall1s, Gelleral MaJJager; GleI1ll Stllldeel1, Li1le SllperlllteIldellt;
David Berg, vVateI' Supelilltelldellt; TIleresa SI011ll11Slci, Office MaIlager;
Troy Adal11s, E11gi11eerlllg Mallager; Jlldy McSpaddell, Recordillg Clerk
Otller Ell1ployees Presellt: Wade Lovelette, MarIc F1ICI1S, RicIlard Wagtler, Tre\Tor G\viazdoll
1. Call meetil12 to order l\/Iav 16~ 2006
Presidellt Jell)' Talde called tIle May 16, 2006, l1leetillg to order.
2. Consider Utilities A2enda
Jall1es Tralle 1110ved to appro\'e tIle May 16,2006, Utilities Agel1da as al11ellded. JOIUl
Dietz secollded tIle l110tioIl. Motiol1 Call1ed 3-0.
3. Consider COllsent ...A2enda
J OlUl Dietz aslced for verificatiol1 of a clleclc, staff respollded. J 01Ul Dietz also Iloted l1e
v./as glad to see the oveliulle payroll dO\V1l. GleIul Sluldeell replied t11at tIle cre\vs are ll0\V
staliillg nine 110ur days to lceep up \vi t11 proj ects so tllere \vilI be l110re overtill1e as 11eeded.
Jllil1es Tralle l110ved to appro\Te tIle COllsellt Agenda as follo\vs:
Aplil Clleclc Register
Aplilll, 2006, Mllll1tes
Flllancials
J OlUl Dietz secoIlded tile 1110tiol1. Motio1l call1ed 3-0.
5.1 Staff Up-dates
BrY31l Adallls relayed to tIle COll111llssioll tl1at a 20% rene\vab1e energy reqllirell1eIlt
passed tile State Se11ate but so far t1lere is 110 HOllse COlllpanioll bill. Represelltative Jlll1
Oberstar is pllrsulllg tIle captive rail shippers isslle. Recelltly 11e attel1ded all APP A c01uerellce
ill MiIuleapolis 011 trallS1lllSsio1l111arlcets.
GlelUl Slllldeell lllfoll11ed tIle COllUlussioll that tile Higll\Vay 101 alld COllllty Road 42
road bOli11g SIlould be dOlle by Jlllle 5th. TIlere \vill be a sc11edllled olltage for tIle City of
DaytoIl to proceed \vitll s\vitchlllg to tIle l1e\V cable for tl1at service extensiol1. Tile lle\V feeder
for tIle data cel1ter is gOlllg \vell as is tIle feeder project III Otsego.
David Berg reported tIlere \vere 11l1e\V security aCCollllts ill April. ClUTe1ltly secluity is
beil1g installed at tIle \vells so tIley CaIl be lllolutored \ria tile SCADA syste111. Water lllalll
Illallltellllilce is beulg dOlle ill tile areas \Vllere tlley are doillg tIle road overlays.
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Regular l11eetil1g of the Elle River Municipal Utilities COllUlussioll
May 16, 2006
TIleresa SlOll1ll1Sla reported being at a coruerellce last weelc that vvas very lllfol1native.
TIle tax abatenlel1t reqllest is still ill tile processing stage aIld nllI restiultioll \vas received fraill
tIle COl111ty regardulg the Svvllldle issue.
5.2 Revie\v 2006 Wa2e ReQuest
BryaJ.l AdalllS stated tIlere were five iSSlles III tIle \vage llegotiatioll process tIllS year. TIle
five isslles are as foIlovvs:
A. CDL PoliC)7
BrYllil Adanls explailled tile proposed CDL policy atld asked tIle Conul1issioll for
COI1Ullellts. JOIUl Dietz vVOllld lilce to see illore investigatiolllllto tIle \VOrdlllg of tIle CDL
policy. J oIu1 asleed BrYaI1 to cIlecle vVitIl :MN League of Cities, City Attoll1ey, and LOli
J 01mSOl1. This isslle vvas tabled to be revisited at a UIuu"e Ineetlllg.
B. Living Distance for On Call Employees
TIle ClUTeIlt living dist3.l1Ce required for 011 call ell1ployees is 10 radills Illiles. Staff
reconUl1ends tllat be cIl311ged to 12 radills Illiles.
Motion by J atl1es Tralle to Cllallge tIle li\Tlllg radius of 011 call eIl1ployees to 12 Illiles.
Secol1ded by JOl111 Dietz. Motiol1 canied 3-0.
c. Sick Leave Policy
Staff \V01.1ld lilce to add "Sick leave l11ay be llsed for IIp to fi\'e (5) days III a calelldar
111011tl1 for tile lllstances of selious ilhless or sllrgery offarluly l1lenlbers \Vl10 l11ay not live \vitIl
tile ell1ployee," to tIle el11ployee l1aIldbook, Sectioll 16. J aIlleS Tralle felt this vvas a reasoIlable
reqllest J 01U1 Dietz \vaIlted to kI10\V if this \vas vvIlat tIle City Ilad ill tlleir l1alldbool( alld staff
respol1ded yes.
Motiol1 by J aIlleS Tralle to accept al1d add to tIle el11ployee Illlildbool(, Sectiol1 16, "Sicle lea\Te
l11ay be llsed for IIp to five (5) days III a caleIldar 111011t11 for tlle il1stallCeS of seIious ilhless or
slrrgery of filll1ily l11elubers vVl10 l11ay 110t live \vitIl tile el11ployee." J e11Y Talde secoIlded tile
11l0tioll. JOl111 Dietz voted Ilae. Motiol1 cal1ied 2-1.
D. Funeral Leave Policy
Staff\vollld lilee to add to Sectio1120 oftlle eIl1ployee Ilalldboole titled "Leaves of
Absellce" to i11cIllde step-parel1ts, step-sibliIlgs, llild step-childrell.
MotioIl by Jilll1es Tralle to add to Section 20 "Leaves of Absellce" III tile elnployee Ilillldbook,
step-parellts, step-sibluJgs, aIld step-cllildren. J OIUl Dietz secollded tile 1110tioll. Motioll carries
3-0.
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Regular illeetil1g of tIle Elle River Mlullcipal Utilities COll111ussio11
May 16, 2006
E. \Vages
Staffis proposil1g a 3.57% \vage lllcrease across tIle board. Tins is COl1sidered a illetro
average based 011 tIle pre\TiOllS \vage SlU\Tey ta1<el1 fiol1111eigllborulg lltilities 3l1d cooperatives.
Motio11 by Jalnes Tralle to approve tile 3.570/0 \vage increase for all elllplo)!ees. JOml Dietz
seconded tIle 1110tio11. Motion carried 3-0.
5.3 Revie\v Co Rd 40 Rebuild Proiect
At tile MarcIl 2006 Elk River Mlullcipal Utilities 11leetillg, \ve \vere applised of tile
llpCOl11i11g COUllty Road 40 road project. Sherblmle COlUlty received federal fUl1ds to rebllild
COllnty Road 40 aIld it appears tIns project \vill start late this year alld be cOlllpleted ll12007.
Tlus road project \vill reqllire us to relocate and llpgrade tile overhead electric line. To avoid
tearillg up tins l1ew road ill a year or 1\YO, a hl111l( \vater lille SI10l1ld also be illstal1ed \vitll tlns
road project. Tile q1lestiol1 no"y is \Vl10 is gOlllg to umd tIns project. This disCllssiol1 \vas
tabled lUltil LOli JOl111S011, City Adn1inistrator could be presellt.
6.1 Re\rie\v l\/IIVITG Opportunity
As a ll11ullcipal electric utility, GlU" goal is to keep Ollr electric rates as cOIllpetitive as
possible. OIle oftlle 011tfa11s of electric illdustly restructurillg is tIle segregatioll of distriblltion,
tratlSIlllssioll alld geIleratioll pOrtiOllS of OlU" llldllShy. Tralls1llissioll costs are a COlleenl. WitIl
tIle forll1atioll of t:r311S1mSsioll as profit cellters for gelleratioll atld tra1lsllllSsioll COll1paJ.nes
alollg "vitIl MISO operatlllg tIle transllllssion alld gel1eratioll infi:astruchlre, and tile pelldillg $3
billion oftraIls1nission cOllStrllctioll due to CAPX 2020, trillls1111Ssio1l costs at"e gOlllg to lise.
Ho"v can Elk River protect itself fi"0111 these risulg tratlS11llssioll costs?
FERC l1as establislled all apprOXlll1ate 12.4% rehu11 011 eqllity for COlllp31UeS O\Vlllllg
h8811S11llSsio11S as a \vay to ellcourage O\V11ership investnlellt. ERlvIU's trallSl11ission taliffto
GRE \vill lllclllde tlus 12.4%. Becal1se ERMU is 110t all equity l11ell1ber of GRE, \ve are III
danger Ofll0t receivlllg bellefit ofpaylllg lugl1er transnnssio11 rates to Co\'er tile 12.40/0 renInl.
If GRE reuuTIs tile 12.4% to its ll1embers III tile fOlTIl of equity paynlellts as Ilas been dOlle III
tile past, ERMU \villl10t receive bellefit fioln paylllg higller tl8atlsnussioll rates to cover tIle
rehml. If GRE 11ses tIle 12.40/0 reM11 to redllce rates, ERMU ,viII tllen receive tIle bellefit of
tIle higller rate. FERC guidelines requu"e tIle retrn1l 011 equity llll1st be used to reduce rates
however, GRE is 110t lUlder FERC jurisdictiol1.
Prese11tly tIlere are l11aI1Y UnknO\VllS about traI1S11llSsion llild Il0\V it "viII affect ERlvIU.
ERMU's ClUTent aITIll1al trans11llssion costs are approXllllately $1,600,000. StaffreC01111ne11ds
jOirU11g Midvvest Municipal TrallS11llSsion Grollp (MMTG) as a "vay to l<eep OlU. Opti011S opell
lUltil \ve k110\V nl0re. TIns grollp \VOllld illvest in tratlS11lissiol1S and receive a 12.4% rehU1.l.
TIle dlles \vould be apprOXlll1ately $12,500 for tile year.
Motioll by JaIl1eS Tralle to apply for 11lell1berslup "vitil NIMTG. Jel1.Y Takle seconded the
11l0tiol1. JOI111 Dietz voted 11ae. Motioll caIned 2-1.
Page 4
Regular Ineeti11g of the Elk River Mlullcipal Utilities COll111ussio11
May 16, 2006
6.2 Revie\" ~L\nnual URGE Test Results
Elk River Mlullcipal Utilities operates 311d 111allltaills f01U" diesel gelleratioll lllUts at 0111"
po\ver plant. TIlese lulits are cOlltracted to Great River Ellergy throllgll a Povver TrallSaction
Agreell1el1t at tIle Clm"ellt price of $2. 75!k\v/I11011tll based llpOll tIle prove11 capacity fro111 the
amlllal URGE test. TIle clU1"el1t COlltact expires October 31, 2006, a11d is exte11ded on all
"evergree1l" basis. Discussi011 follovved regardlllg tlus years URGE tests. The capacity results
fioll1 tlus test will result III $346,104 in al1l111al pa)'111ellts frolll Great River E1lergy.
6.3 Revie,v 2005 "Vater Confidence Report
TIle 1996 alllel1ml1ellt to tIle safe dlinlmlg \vater act requires all COll11ll111llty \vater
systell1S to deliver all11iUl11al \vater qllality report to tlleir Cllstol11ers. The 2005 \vater qllality
report \vas re\,ie\ved a1ld \viII be lllclllded \vitIl tIle May lltility bill to all vvater Cllsto111ers.
6.4 Revie,v l\ilcBradv Meter Readin2 Cost Proposal
McBrady Meter Reading has beell dOlllg OllI" l11eter readlllg for approxllnately 18 years.
Staff has 111et \vitIl Pat McBrady 811d l1as negotiated a fair contract proposal. Discussiol1
follo\ved I"egardillg tIle proposed lllcrease.
Matiol1 by JoInl Dietz to approve tIle contract for McBrady Meter Readil1g. Jall1es Tralle
seconded tIle 1110tioll. Matioll Call1ed 3-0.
6.5 Revie\v Substation 14 A2reement
C01111eXlIs Ellergy aJ.ld Elle River Mlullcipal Utilities Ilave a substatiol1jolllt llse
agree1l1el1t for Sllbstatio11 NortIl. COlll1exlls Energy desires to utilize om"llevV Statiol1 14 Bank
#2 Substatiol1 for a feeder to feed tIle Nortl1 Star Busllless Park alld otller loads alol1g Higll\vay
10. Tile costs associated \vith tIle joint llse are clUTel1tly beulg calclllated.
Mati011 by J al1leS Tralle to appro\'e tile agreell1el1t \vitI1 C0111leXUS Ellergy for jaillt llse of
Statioll 14 Ban1( 2. Jolm Dietz secollded tIle Il1otion. Motioll caI1ied 3-0.
6.6 Re\rie\v & Consider Healtll Plan HIP AA Security Policy
Snlall bllsillesses \vere reqllired to be in cOll1pliance vvitll secluity of elech40rucally
protected healt11 iruonnatiol1 (ePHI) as of April 20, 2006. Tllere vvere 18 starldards t11at
lleeded to be addressed and ll11plemellted. Elk River Mlullcipal Utilities l1a5 cOlllpleted all
llltemal revie\v atld 11as tIle Ilecessary procedures ill place.
Moti011 by J 8l11eS Tralle to adopt tile HIP AA security policy. J OIUl Dietz secollded tIle illotion.
Motio11 caJ.11ed 3-0.
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Regular l1leeting of tIle Elk River Mluucipal Utilities COllmussion
May 16, 2006
Other Business
Tllere \vas no otller busllless.
TIle 11ext regularly sclledllled llleetil1g of the Elk River Mluucipal Utilities COI111lllssioIl
"viII be Tllesday, June 6, 2006.
PresideIlt Je11)' Ta1cle adjolIDled tIle regular l11eetiIlg of tIle Elk River Mlullcipal Utilities
COll111llssioIl at 5: 15 p .111.
Respectfully sllblnitted,
Jlldy McSpaddell
Recordillg Clerk