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11-13-2007 ERMU MINELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM November 13, 2007 Members Present: Jerry Trkle, 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; Judy McSpadden, Recording Clerk Staff Absent: Troy Adams, Engineering Manager 1. Call meeting to order November 13, 2007 President Jerry Takle called the November 13, 2007, meeting to order. 2. Consider Utilities Agenda James Tralle moved to approve the November 13, 2007, Utilities Agenda. Jerry Gumphrey seconded the motion. Motion carved 3-0. 3. Consider Consent Agenda Jerry Takle inquired on the difference of the power bill from last year versus this year. Staff responded PCA was a factor, but would look into and respond back. Jerry Gumphrey moved to approve the Consent Agenda as follows: October Check Register October 9, 2007, Minutes Financial Reports James Tralle seconded the motion. Motion carried 3-0. 5.1 Staff Updates Bryan Adams informed the commissioners that MMUA is coordinating the APPA rally in February of 2008, and they are recommending attendees sign up now. The transformer for the Waco substation is in route however was held up due to transportation pernuts. The transformer should be energized next week. The construction of the PCB building at the West substation is ongoing. In December supervisors will be conducting employee reviews. Bryan Adams shared with the commission photos from a tour of the Coal Creek Plant. Glenn Sundeen gave an update of the electrical projects. County Road 40 is near completion and County Road 1 rebuild (that was awarded last month) is underway. There were a few minor outages. David Berg reported the water tower inspections are finished and cathodic protection has been installed in the Hillside water tower. Staff is in the process of repairing backwash valves, and some of the valve boxes were lowered so the plows wouldn't hit them. Page 2 Regular meeting of the Elk River Municipal Utilities Commission November 13, 2007 Theresa Slominski informed the commission of there being possible overtime in the next pay period for payments and processing bills due to the holidays (Veterans Day and Thanksgiving). Jodi Berge, our account executive with David Martin Agency, will be meeting with staff to update them on changes in the law affecting the insurance program. Ehlers and Associates are working with the City on funding the YMCA project. It was suggested that the Elk River Municipal Utilities refund their bonds at a lower rate, thus saving approximately $88,000. This will be revisited in December. 5.2 Review 2008 Wholesale Power Costs Great River Energy's proposed demand and energy rates for 2008 were reviewed. Because Elk River Municipal Utilities has different demand/energy ratios and different on- peak/off--peak ratios our percent increase is different. Typically we have passed on the electric wholesale rate to our customers. Late last week Elk River Municipal Utilities received confirmation that Great River Energy's rate would only increase by 8.5% instead of the earlier projection of 9.5%. Based on this information, our percent increase and dollar increase would be 10.68% or $1,375,698. This is also our 2008 budget assumption. 5.3 Review 2008 Cash Flow Proiections Twice annually we update our electric and water fmancial projections to ensure we have the necessary fmancial resources in the future. These times are at year's end during the budgeting process and after the audit. The electric and water projections reflecting the 2008 budget assumptions were reviewed. The cash flow projection reflects similar results as previous years, with generally total cash balance increasing over time. 5.4 Review & Consider Completed 2008 Budget The proposed 2008 Ells River Municipal Utilities budget was reviewed. As previously discussed, the budget contains a .5 full time equivalent accountant to assist the accounting area. James Tralle asked what the status is regarding the Jackson Street water tower. Staff will look into the preservation or destruction of this tower, but it was a political topic last time it was discussed. Jerry Gumphrey moved to approve the proposed 2008 budget as presented. James Tralle seconded the motion. Motion carried 3-0. 5.5 Review LFG Proiect & Maintenance Costs The last couple of commission meetings the LFG electric generation facility expansion was discussed. Waste Management has decided to allow Elk River Municipal Utilities to do the expansion with the contraction arrangements similar to the existing agreements. Elk River Landfill is now in the process of securing the necessary permits to expand the landfill to the south. The preliminary timeline has a completion date of February 2010. Page 3 Regular meeting of the Elk River Municipal Utilities Commission November 13, 2007 On another LFG issue, engine head maintenance continues to be a problem due to high hydrogen sulfide (H2S) levels in the landfill gas from four to six wells. The heads are now being changed out at approximately four month intervals instead of 12 month intervals at a cost of approximately $40,000 per change. A major overhaul on the three older engines is slated for February 2008. To solve the H2S issue, we are looking at re-piping the four to six wells to the existing flair thus bypassing the LFG generating facility. The estimated cost is $486,000. Discussion followed regarding the funding of this project. Also discussed was looking into H2S removal options. 6.1 Review & Consider Bid Tabulation for #9 Well Buildin The 2007 and 2008 budget contains items to complete construction of the Well #9 water production facility. The last major item was the 12' x 25' water treatment building. Bids were received on November 8, 2007. Staff recommends awarding to EnComm Midwest, Inc., the lowest responsive qualified bidder. James Tralle moved to award construction of the water treatment building for Well #9 to EnComm Midwest, Inc., the lowest responsive qualified bidder. Jerry Gumphrey seconded the motion. Motion carried 3-0. 6.2 Review & Consider Bid Tabulation for 4`h Street Water Main The 2008 water capital budget contains a $230,000 item to construct a 12" water line from Jackson Street to 4'r' Street under the railroad and Hwy 10. This project completes the eight year project to construct a large water main tie between Gary Street and Freeport Avenue water towers. This project will improve the hydraulics to western Elk River. Staff recommends awarding the 4`'' Street water main project to Kober Excavating, Inc., the lowest responsive bidder. Jerry Gumphrey moved to award the 4~' Street water main project to Kober Excavating, Inc., the lowest responsive bidder. Jerry Takle seconded the motion. Motion carried 3-0. 6.3 Review & Consider Street Light Request -Hillside Park Two requests were made for additional lighting in Deerfield Hill Park and the parking lot on the north side of Hwy 10 east of the Waconia Farm Store. At the Deerfield Hill Park, there has been some vandalism and other unsavory activities. The addition of two lights, one by the parking area, and one by the sliding and volleyball area will hopefully minimize part of the problem. The City is in discussion about downtown parking. Apparently, more parking emphasis will be placed on the parking area between Hwy 10 and the railroad east of the Waconia Farm Store. For safety concerns, City staff will be asking for us to install lighting in this area. Staff recommends both areas by utilizing wood poles with cobra head fixtures. James Tralle questioned the status of the Hwy 10 median lighting. Staff responded this is a City of Elk River project and is planned for replacement in 2008. Page 4 Regular meeting of the Elk River Municipal Utilities Commission November 13, 2007 James Tralle moved to approve the additional lighting at Deerfield Hill Park and on the north side of Hwy 10 east of the Waconia Farm Store. Jerry Gumphrey seconded the motion. Motion carried 3-0. 6.4 Review Proposed Water Supply Study Future water supply continues to be a concern. Elk River and the surrounding communities are beginning to experience accelerated growth that will continue as development follows the proposed North Star rail line. As groundwater use (both public and private) increase, water supply conditions may change. Barr Engineering is currently working with the Metropolitan Council conducting a water supply study for the seven county metro area. The major task in this study is the development of amulti-aquifer computer model of groundwater flow in the area. This model is scheduled to be completed in the first quarter of 2008. At that time, the model can be used with modifications, to evaluate a wide variety of groundwater supply alternatives and to forecast the adequacy of supplies. A proposal from Barr Engineering to evaluate water supply alternatives was reviewed. Jerry Takle moved to approve Barr Engineering Company to evaluate water supply alternatives. James Tralle seconded the motion. Motion carried 3-0. Other Business James Tralle questioned the status of the Black Dirt Policy. Bryan Adams replied he would be attending the City Council meeting that evening to present the policy. The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be Tuesday, December 11, 2007. President Jerry Takle adjourned the regular meeting of the Elk River Municipal Utilities Commission at 5:25 p.m.