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06-10-2008 ERMU MIN~'~2EV ~04~3' M !~tluT~S ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM June 10, 2008 Members Present: Jerry Takle, President; John Dietz, Vice Chair; Jerry Gumphrey, 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 Others present: Lori Johnson, City Administrator 1. Call meeting to order June 10, 2008 President Jerry Takle called the June 10, 2008, meeting to order. 2. Consider Utilities Agenda John Dietz added an item to discuss under Other Business. John Dietz moved to approve the June 10, 2008, Utilities Agenda. Jerry Gumphrey seconded the motion. Motion carried 3-0. 3. Consider Consent Agenda John Dietz had questions on the financials and check register, staffresponded. Jerry Gumphrey asked if the utilities were budgeting enough for gas and diesel fuel. Bryan responded "probably not" but it is being watched and that would cover us if we fall short. Jerry Gumphrey moved to approve the Consent Agenda as follows: May Check Register May 13, 2008, Minutes Financial Reports John Dietz seconded the motion. Motion carried 3-0. 5.1 Staff Updates Bryan Adams informed the Commission that with the cold and wet weather the past month, the electric and water usage is down. There are a couple of data centers showing interest in the Elk River area. Two governmental agencies would like to place antennas on the Gary Street Water Tower. They are Sherburne County for the 800 MHz radio system they are implementing, and Metro Transit for the North Star Commuter Rail. Discussion followed as to the need for invoicing for this service. Lori Johnson stated that the City would pay for any Page 2 Regular meeting of the Elk River Municipal Utilities Commission June 10, 2008 lease fees associated with Sherburne County's use of the tower as the police department utilizes this system, and the County has done a lot for the City for which they are grateful. Glenn Sundeen discussed the electrical system improvements in progress. Currently poles are being moved on School Street and Jackson Avenue for the addition of a turn lane. Brentwood rebuild is still in progress and is proving very difficult for the subcontractor. Staff is currently working on rebuilding the three phase line along County Road 30 and adding a third phase along County Road 39 in Otsego. A three phase service for GRE's new gas turbine is also on the schedule. One of the line crews are currently going through the map books to pin point areas in need of maintenance. Theresa Slominski said the activity increases in the summer months for the office staff due to turn-offs and customers moving. This year apart-time summer help is being utilized to ease the higher volume of work for the office staff. The ACH mailer incentive that was discussed last month will be mailed out with the August bills. Staff is currently working on a fixed asset system to better identify capital assets and the depreciation associated with them. The depreciation calculation will be current each month instead of adjusting at year end. Lori Johnson wanted to thank the Commission for letting Sherburne County utilize the tower for the antenna service. This will be advantageous for the Elk River Police and Sherrill s department. Troy Adams reported 10 security sales for the month of May. Underground electrical locates are still increasing with the Brentwood rebuild taking up a lot of the locators time. The URGE test was recently performed on the engines and staff is still dealing with some issues previously discovered with the relays. They are being inspected and repaired. Staff continues meter change-outs in the recently acquired Area 18. With the help from the lineman, mapping issues are being corrected. David Berg said staff continues with hydrant maintenance and bringing the hydrants up to code. Contractors are making good progress on Well #9. The 4~' Street water main project is almost complete. The first bacteria test passed, and waiting for results of one more test. The restoration will start Wednesday. Staff continues flushing hydrants and hanging tags to notify customers that have old meters in their homes to contact us to install the new radio read water meter. 5.2 Review Comparable Worth Requirements At the April 2008 Elk River Municipal Utilities Commission meeting, John Dietz requested a presentation on State of Minnesota Comparable Worth legislation. Bryan Adams gave a short presentation on how the comparable worth software program works and how it is interpreted. Wages for City job classes versus the Utilities job classes were compared and found to be fairly close but some job classes for the office staff were found to be lower and should be raised. John Dietz commented that benefits should also be taken in to consideration when comparing wages to other entities. Lori Johnson briefed the commission on the City's procedure. John Dietz voiced his concern of staying in compliance and if the procedure being Page 3 Regular meeting of the Elk River Municipal Utilities Commission June 10, 2008 utilized now is best for the Utility. He would like an unbiased perspective from an outside entity. Jerry Gumphrey suggested the company the City used. Lori Johnson stated she would get the information for the company used to Theresa. Consultant Vance Zehringer has been doing a wonderfiil job and is due for a wage increase. Also, McBrady Meter Reading is in the progress of negotiating a new contract and is not finalized for approval. John Dietz would like a formal request for these changes at the next scheduled Elk River Municipal Utilities Commission meeting. 5.3 Review Purchasing and Payment Limits At a previous Elk River Municipal Utilities meeting, John Dietz asked that this commission review policies that relate to purchasing and payment of items before the commission approves the check register. Discussion followed regarding the purchase order policy, payment policy and the competitive bid policy. John Dietz voiced his concern regarding the payment policy and why the commission does not approve the checks prior to them going out. Staff responded that the date when the invoices are due does not fit in the time frame of the commission meetings, thus not allowing them to be paid within the 30 days or in some cases receive a discount if paid within 10 days. Jerry Takle and Jerry Gumphrey said they did not have a problem with the current policy. Effective August 1, 2008, the competitive bid threshold will require formal bidding for purchases over $100,000 versus the current level of $50,000. The previous purchasing policy stated that anything over $100 needed apre-approved purchase order. Staff is asking to have that raised to $250. Jerry Takle moved to approve raising the purchasing policy pre-approval requirement to $250. Jerry Gumphrey seconded the motion. Motion carried 3-0. 5.4 Review Contributions to City Policy At the May 2008 Elk River Municipal Utilities Commission meeting, the contributions to the City of Elk River were discussed. It was reaffirmed that parks should be included in the donated portion of the contribution. Staff was directed to draft a policy reflecting actual contributions. The proposed City Contribution policy was reviewed. Included in the policy is the portion allotment for the MMUA safety program. John Dietz requested the wording in the contribution policy to be changed to being "reviewed every five years" instead of "time to time". John Dietz moved to approve the Contribution Policy to City of Elk River with noted change. Jerry Gumphrey seconded the motion. Motion carried 3-0. Page 4 Regular meeting of the Elk River Municipal Utilities Commission June 10, 2008 A few issues that need to be addressed are the Hwy 10 corridor street light replacement, along with the street lighting and installation of a trunk water main for 193rd Avenue road extension. At the August 25, 2004, joint meeting with Elk River Municipal Utilities and City Council, the City accepted responsibility for the Hwy 10 street light replacement. Staff has been working with City Engineer, Terry Maurer on the best approach to getting these lights replaced. The anchor bolts and foundations were found to be in good condition which immensely simplifies the project. City staff is suggesting utilities stay involved to help change out the lights. Discussion followed regarding the cost associated with the project and time constraints. Staff was directed to provide an estimate for this. The 193rd Avenue road extension is in the design phases and nearing the bidding stages. No street lighting is included in the design as is normally the case. The city is asking Elk River Municipal Utilities to provide and install the lighting for this project. The Street light payment policy was reviewed. The policy clearly states, the City pays for the new developments, and Elk River Municipal Utilities pays for rehabilitation projects. Staffwas directed to provide City Council with an estimate for this service. A trunk water main needs to be installed along this road extension to adequately support the continued growth in eastern Elk River. City and Utility have known for years that a trunk water main would be added with this road construction. The City typically pays for trunk water lines with the $6000 per acre assessment (for sewer and water) on properties in the urban service district. The City is not installing a sewer main in this road extension and feels the Utility should pay for the trunk water line. Discussion followed regarding the past practices and procedures. Lori Johnson said it is not in the City funds to pay for this project. Bryan Adams noted that a portion of the funds collected by the City are for the trunk water lines and feels that this is the City's responsibility. Lori Johnson replied that it has not been approved by the City Council but will be on a future agenda. She also suggested a policy be drafted to clarify both parties' responsibilities related to the trunk mains. 6.1 Review Line Truck Typically line trucks are traded in every 10 years or 10,000 hours. Staff is requesting authorization to prepare plans and specifications for a new line truck to replace a 1999 Freightliner FL70 with a 55' aerial material handling boom. John Dietz asked if the 1999 Freightliner was going to be kept for a spare truck. Staff responded that it would not be cost effective. The truck would need costly repairs along with testing fees, licensing, insurance, and to outfit the rig properly would take an additional estimated $50,000. John Dietz moved to secure bids for a new electric line truck with and without trade-in. Jerry Gumphrey seconded the motion. Motion carved 3-0. Page 5 Regular meeting of the Elk River Municipal Utilities Commission June 10, 2008 6.2 Review Job Description -Electrical Superintendent Staff has been making preparations for the upcoming retirement of the electric superintendent. Because a job description was not previously done, a job description was drafted and reviewed. Job qualifications were discussed and some verbiage was changed. Commission expressed a desire to interview the potential candidates for this position when the replacement process starts. 6.3 Water Shut-off Policy The mortgage crisis and the number of foreclosed and vacant homes continue to be very troublesome. The issue staff has is, should we or should we not be turning the water off at the curb stop if we know the house is vacant or if we are asked by the mortgage holder to turn off the water. When the electric is disconnected, the water pipes will freeze in the winter and damage will occur. If staff turns the water off it provides good customer service, however, this can be a time consuming matter to try and turn off the water at the curb stop. Some curb stops are bent or completely gone and it would be time consuming and costly to fix. Discussion followed regarding the time and percentage of services that these problems occur. John Dietz recommends requiring an up front fee and having a legal document signed prior to the utilities fuming the water oil: Staffwas directed to come up with an amount for this service and have the attorney approve a legal document and return to the commission for approval. 6.4 Review Annual URGE Test Results Elk River Municipal Utilities operates and maintains four diesel generation units at the power plant by Orono dam. These units are contracted by Great River Energy through a Power Transaction Agreement which is based upon the proven capacity from the annual URGE test. The URGE test results have steadily increased the past few years due to more maintenance and better training. Staff is commended for a great job of upkeep on the engines. The capacity results from this test will result in $349,800 in annual payments from Great River Energy. Other Business John Dietz read a prepared statement regarding complaints he has received of suspected fraud within the Elk River Municipal Utilities. Jerry Gumphrey commented he was also contacted by someone. John Dietz said he will be in contact with the auditor, Steve McDonald, of Abdo Eick & Meyers to investigate this matter. John Dietz moved to retain Abdo Eick & Meyers at a cost not exceed $5000. Jerry Gumphrey seconded the morion. Motion carried 3-0. Page 6 Regular meeting of the Elk River Municipal Utilities Commission June 10, 2008 The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be Tuesday, July 15, 2008. President Jerry Takle adjourned the regular meeting of the Elk River Municipal Utilities Commission at 6:30 p.m. uns tanager