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INFORMATION #3 05-07-2007 ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION AprillO, 2007 Members Present: Jerry Takle, President; Jerry Gumphrey, Vice Chair; James Tralle, Trustee Staff Present: Bryan Adams, General Manager; Glenn Sundeen, Line Superintendent; David Berg, Water Superintendent; Theresa Slominski, Finance Director/Office Manager; Troy Adams, Engineering Manager; Judy McSpadden, Recording Clerk Other Present: Steve McDonald, Abdo Eick & Meyers, LLP; Wade Lovelette, Line Foreman; Chris Sumstad, Journeyman Lineman; Richard Wagner, Utilities Worker I. Call meeting to order Aprill O. 2007 President Jerry Takle called the April 10, 2007, meeting to order. 2. Consider Utilities Agenda Jerry Takle requested 6.2 and 6.3 be moved up to acconnnodate the employees, and 6.1 to be addressed when Steve McDonald of Abdo Eick & Meyers, LLP arrives. James Tralle moved to approve the altered April 1 0, 2007, Utilities Agenda. Jerry Gumphrey seconded the motion. Motion carried 3-0. 3. Consider Consent Agenda James Tralle moved to approve the Consent Agenda as follows: March Check Register March 20,2007, Minutes Financial Reports Jerry Gumphrey seconded the motion. Motion carried 3-0. 6.2 Review Compensation ReQuest from ERMU Emplovees (under separate cover) Bryan Adams briefed the connnission on the wage survey that was performed on the surrounding connnunities. The fair wage increase for 2007 that the employees are asking for is 3.2%. Also requested was an increase in bonus pay. (In cases where the lead lineman is unavailable the journeyman lineman is appointed lead lineman for the day.) Staff is asking for the bonus pay to be calculated at 3% above the journeyman lineman wage for the hours they are lead lineman. Also, Vance Zehringer, part time consultant, has not had a wage increase since 2004, and an increase is appropriate. James Tralle moved to approve a 3.2% wage increase for employees, 3% bonus pay for journeyman lineman acting as lead lineman, and a $4 per hour increase to $39 per hour for Vance Zehringer. Jerry Gurnphrey seconded the motion. Motion carried 3-0. Page 2 Regular meeting of the Elk River Mnnicipal Utilities Commission April 10, 2007 6.3 Review Health Care Savinl!s Plan for Emplovees A few years ago, ERMU employees were researching a Health Care Savings Plan (HCSP) administered by the Minnesota State Retirement System. At that time it was a new program with little history and all employees needed to participate. Unanimous consensus was not achieved so the research stopped. There is again a large interest by ERMU employees to ntilize the state administered HCSP program that allows tax free wages to be set aside in a savings plan to be used to pay health insurance and out of pocket medical bills after retirement. The issue remains that all employees must participate in this plan. An employee vote was conducted and 85% of the employees were interested. Discussion followed regarding the policy and the percentage of interest. Jerry Gumphrey feels there are other programs out there that do not mandate all employees to participate. Staff was directed to investigate other programs and return with findings. This issue was tabled and will be revisited at a future meeting. 6.1 Review & Consider 2006 Audit Steve McDonald reviewed the 2006 audit. The audit went well with recommendation of having more documentation on journal entries. Jerry Gumphrey asked if there are any other items or concerns and Steve McDonald responded no. Jerry Gumphrey commended staff on a good job. Jerry Takle asked if the IRS reporting was checked against W -2's. Steve McDonald assured the commission that had been done. Because of future changes in auditing requirements, it is recommended to continue refining internal policies and procedures. James Tralle moved to receive and file the 2006 Audit. Jerry Gumphrey seconded the motion. Motion carried 3-0. 5.1 Staff Up-dates Bryan Adams discussed the importance of the CO2 emission legislation. A proposed Resolution was presented to the commission. Staff recommends adopting this Resolution, so it can be forwarded to State Legislators. Jerry Gumphrey moved to adopt the "Resolution in Support of Balanced Climate Change Legislation", and send to everyone involved. James Tralle seconded the motion. Motion carried 3-0. Bryan Adams along with the supervisors gave a presentation to the City staff about Elk River Mnnicipal Utilities. Glenn Sundeen updated the current projects and some wire theft. David Berg said staff continues to upgrade meters. Maintenance on Well #5 will soon be complete. Page 3 Regular meeting of the Elk River Municipal Utilities Commission April I 0, 2007 Troy Adams commented on the Waco Substation project, and the fuse coordination study is nearing completion. 14 security systems were sold in March, and utility locates are starting to pick up. Theresa Slominski said the $2.8 million bond money has been received. We currently have one company that supplies our dental insurance, life insurance, and long term disability. Recently another firm contacted the Utilities and would like to bid on supplying the aforementioned insurance. Bids will be received and brought to the commission for review. In the past an employee has gone to the post office daily to pick up mail. This was picked up at the front counter. On busy days the employee would have to stand in line and wait. It was suggested that the Utilities get a P.O. Box, thus alleviating the wait. A P.O. Box will be utilized for future use. The cost is $184.00 for 6 months. Theresa brought up that an employee questioned if the Tobacco Cessation policy included the spouse. James Tralle moved to include spouses that are currently insured through the Elk River Municipal Utilities health insurance policy to be eligible for the Tobacco Cessation policy. Jerry Gumphrey seconded the motion. Motion carried 3-0. 5.2 Review Irvin!! Water Main Proiect The Irving Avenue area water main project is being done in conjunction with the street rehabilitation project. The original thought was to just replace the 4" water main on 6th & 7th Street, and the Gates Avenue loop, but due to many old fire hydrants, the project was expanded to replace seven additional hydrants. Considering St. Andrews Catholic Church facility expansion, replacing the main on Irving Avenue between 4th & 5th Street was bid as an alternative. The costs associated with this project were discussed. St. Andrews was contacted regarding a possible contribution to the water fund. This project will cost approximately $225,963, of which $100,000 was budgeted. Ifproject is approved, additional funds will come from reserves. James Tralle moved to proceed with the Irving Water Main project. Jerry Gumphrey seconded the motion. Motion carried 3-0. 5.3 Review Well #9 Location Due to the increased demand for water, we need another production facility by the sununer of 2008. Water quality tests have been conducted at three sites and Twin Lakes Estates outlot K (which was deeded to us for a potential well site when Twin Lakes Estates was platted) is the one to utilize without a treatment facility. Jerry Gumphrey moved to proceed with the Twin Lakes location for municipal Well #9. James Tralle seconded the motion. Motion carried 3-0. Page 4 Regular meeting of the Elk River Municipal Utilities Commission April I 0, 2007 6.4 Review & Consider Write-OCCs First quarter write-offs were presented. Write-offs are written off our system but then sent to Advantage Collection Agency to further pursue. Staff recommends approving the write-off list for the first quarter totaling $12,812.47. Outstanding debt from LandCor was discussed. James Tralle moved to approve the write-off list for the first quarter as presented. James Gumphrey seconded the motion. Motion carried 3-0. 6.5 Review & Consider Black Dirt Ordinance With summer approaching, water consumption will increase due to lawn sprinkling. The northwest area of the Twin Cities including Elk River, have very sandy soil making moisture retention for lawns very difficult. Many cities, at the urging of the DNR, are requiring 4" of black dirt under lawns as a strategy to increase moisture retention and thereby conserving water. Staff surveyed the surrounding communities and discovered the majority of them have the 4" black dirt ordinance. Cities that have this ordinance indicate an approximate 10% savings in water usage. Staff recommended the following ordinance be sent to the planning commission and City Council for approval. "Topsoil- Prior to seeding or sodding, all single-family, townhouses, and condominium lots must have a minimum of 4" black dirt as topsoil, covering all areas that are to be sodded, seeded or areas that will be landscaped. Black soil retains water better and reduces the need for excessive irrigation. " Discussion followed as to who would enforce the ordinance, and when it would be required to be done. The City of Big Lake allows three months to complete, whereas the City of Hanover requires an escrow fund. Staffwas directed to meet with the building department to discuss options. This will be revisited at a future meeting. 6.6 Review Boiler & Machine Insurance The Elk River Municipal Utilities has maintained boiler and machine insurance to cover equipment repair or replacement in case of failure. The equipment covered is the engine/generators at our power plant and landfill gas facility along with our station transformers. Unfortunately, the cost of this insurance continues to rise as well as the deductible. The deductible has gotten so high, it is questionable ifit is worth carrying the insurance for the diesel plant facility. The policy was renewed for this year but a decision will have to be made for the next year. It was the consensus to look into this for the next year. Page 5 Regular meeting of the Elk River Municipal Utilities Commission April 10, 2007 Other Business Glenn Sundeen suggested to the Commission a new street light should be installed at the intersection of County Road 33 & County Road 77. By consensus the Commission authorized this light to be installed. The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be Thursday, May 10, 2007 at 3:30 p.m. President Jerry Takle adjourned the regular meeting of the Elk River Municipal Utilities Commission at 5:05 p.m. Respectfully submitted, Judy McSpadden Recording Clerk ELK RIVER MUNICIPAL UTILITIES RESOLUTION IN SUPPORT OF BALANCED CLIMATE CHANGE LEGISLATION WHEREAS the Minnesota State Legislature recently passed Renewable Energy Standard (RES) legislation requiring 25% of utility companies generation portfolio to be produced by renewable generation by the year 2025, and WHEREAS the RES legislation would reduce the amount of additional CO2 being emitted into the environment by Minnesota utilities, and WHEREAS the legislature is now considering major climate change legislation that could have significant impacts on achieving the recently adopted RES as well as on the ability of Minnesota utilities to meet the growing needs of the citizens of the State of Minnesota as well as neighboring states, and WHEREAS legislators are urged to consider the result of significantly more expensive power due to climate change legislation and the impact that would have on economic development throughout rural Minnesota, and WHEREAS any climate change legislation adopted by the State of Minnesota needs to consider the proper balance between reducing CO2 emissions and meeting the growing energy needs ofthe citizens of the State of Minnesota to ensure the continued health and vitality of the Minnesota economy, and WHEREAS the currently proposed legislation only targets the utility sector and ignores the more significant CO2 emissions from other sectors of the economy, NOW, THEREFORE, BE IT RESOLVED that Elk River Municipal Utilities urges the Minnesota Legislature to develop climate change legislation that will broadly consider the CO2 emissions of all segments of the economy rather than only select segments of the economy, and BE IT FURTHER RESOLVED that the legislature is urged to consider the technological feasibility oflegislation being considered as well as the ability to meet the growing energy needs of the citizens of Minnesota under any climate change legislation being considered, and BE IT FURTHER RESOLVED that Elk River Municipal Utilities supports a deliberative approach to the passage of climate change legislation by the State of Minnesota involving an in depth study of the economic, technological and environmental elements to be considered in any such legislation, and BE IT FURTHER RESOLVED that such a study be carried out in an environment that recognized the adopted goals of the Minnesota RES but does not prohibit the electric utility segment from meeting the needs of the growing Minnesota economy. Passed by the Elk River Municipal Utilities Commission by a unanimous vote on April 10,2007. Bryan Adams, P.E. General Manager Elk River Municipal Utilities