3.2. ERMUSR 07-14-2009ELK RIVER MiTNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
June 9, 2009
Members Present: John Dietz, President; Jerry Gumphrey, Vice Chair;
Daryl Thompson, Trustee
Staff Present: Troy Adams, Director of Operations;
Theresa Slominski, Finance Director/Office Manager;
Mark Fuchs, Line Superintendent; David Berg, Water Superintendent;
Wade Lovelette, Technical Services Superintendent;
Judy McSpadden, Recording Clerk; Lorrie Franz, Richard Wagner
Others present: Lori Johnson, City Administrator;
Peter K. Beck, City Attorney from Gray, Plant, Mooty, Mooty & Bennett
1. Call meeting to order June 9, 2009
John Dietz called the June 9, 2009 meeting to order at 4:00 p.m.
2. Consider Utilities Agenda
Daryl Thompson moved to approve the June 9, 2009 Utilities Agenda. Jerry
Gumphrey seconded the motion. Motion carried 3-0.
3. Consider Consent Agenda
Staff answered questions from the Commissioners.
Jerry Gumphrey moved to approve the Consent Agenda as follows:
May Check Register
May 12, 2009, Minutes
Financial Reports
Daryl Thompson seconded the motion. Motion carried 3-0.
4.1 Review and Consider On-Call Policy flake-Home Vehicle Practice Follow-up)
At the May 12, 2009, Elk River Municipal Utilities Commission meeting, staffwas
directed to revise the ERMU On-Call Policy. The revised version was reviewed. John Dietz
asked Attorney Peter Beck his opinion. Attorney Peter Beck responded that it looked okay but
would like to present it to Attorney Mark Mathison for review. Consensus was to delay motion
until Attorney Mark Mathison can review the new ERMU On-Call Policy as presented.
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Regular meeting of the Elk River Municipal Utilities Commission
June 9, 2009
4.2 Review and Consider Dollar Savings and PCAs
At the May 12, 2009, Elk River Municipal Utilities Commission meeting, John Dietz
directed staff to calculate employee related cost savings. The calculation was to include cost
savings from staff restructuring, non replacement of employees, and the delay/denial of
budgeted wage actions. John Dietz stated he would like to see the employee related cost
savings used to directly offset any PCAs that could be charged to the customer. Staff presented
the information to the Commissioners and reminded them that there has not been a PCA
charged to customers in 2009. Discussion followed. John Dietz asked Commissioners if they
would like to put the savings towazd next years rate increase. Jerry Gumphrey said it would be
a wise idea, Daryl Thompson concurred. Consensus was to save the funds for next years
budget.
4.3 Review and Consider Wholesale Power Sunnly Outions
Currently Central Minnesota Municipal Power Agency (CMMPA), with the assistance of
R.W. Beck, is conducting a study of ERMU's power supply needs as related to the Big Stone II
Power Plant project. This study is covered under the CMMPA Associate Membership ERMU
has entered into per the Commissioners direction on May 12, 2009. This study will be
completed in time for presentation to the City Council on June 15, 2009. Lori Johnson said the
agenda for the June 15~' City Council meeting is long. She suggested a Special Meeting with
City Council at 5:30. Troy Adams said he will check with R.W. Beck to see if this would work
for them.
Jerry Gumphrey moved to call for a Special Meeting with Elk River City Council at 5:30
Monday, June 15, 2009. Daryl Thompson seconded the motion. Motion carried 3-0.
4.4 Follow-up Review of City Sewer Connection Ordinance and Policy (Verbal)
Lori Johnson briefed the Commission on the recent City Council work session regarding
the City Sewer Connection Ordinance. The consensus was to not enforce unless it became a
health issue. The Commission agreed to follow their lead and not enforce water connections as
well.
5.1 Review Annual URGE Test
ERMU operates and maintains four diesel generation units at the power plant located on
Main Street by Orono Lake dam. These units are contracted to Great River Energy (GRE)
through a Power Transaction agreement at the current price of $2.75/kw/month based upon the
proven capacity from the annual URGE test. The current contract that expired October 31,
2005, is extended on an "evergreen" basis which allows the contract to extend the termination
date on a one year incremental basis unless notice is given by either ERMU or GRE by April 1St
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Regular meeting of the Elk River Municipal Utilities Commission
June 9, 2009
of that year. The results of the URGE test were reviewed. Due to the great work of Steve
Ziemer, Michael Price, and Adam Freiberg, the URGE tests have steadily increased. The
capacity results from this test will result in $351,648 in annual payments from GRE.
5.2 Review and Consider Bids for 191'/: Avenue Rebuild Proiect
On June 4, 2009, bids were opened for the cable replacement project on 1911/2 Avenue.
Staffrecommends awarding this project to Midwest Diversified Utilities, LLC, the lowest
responsive bidder.
Jerry Gumphrey moved to award the 1911/2 Avenue rebuild project to Midwest
Diversified Utilities, LLC, the lowest responsive bidder. Daryl Thompson seconded the
motion. Motion carried 3-0.
6.1 Staff Updates
David Berg reviewed the SMART System irrigation rebate form. Troy Adams informed
Commissioners that he recently checked with the Data Center that was looking into relocating
in Elk River and they are still undecided. Mark Fuchs asked for Commission approval to
purchase a switchgear cabinet to have as a spare because the two we have in stock are needed to
replace two units in poor condition. The cost of this cabinet is approximately $25,000. John
asked if this was a budgeted item. Staff responded they would have to check to see if this was
included in the projected cost of the improvement project. Troy Adams added that some of the
projects budgeted for this year will not be happening so there should be funds available for this
purchase.
Jerry Gumphrey moved to approve the purchase of one Mode19 Padmount Switchgear
with the cost not to exceed $25,000. Daryl Thompson seconded the motion with the
condition that staff bring back the quote for formal approval at next months ERMU
Commission meeting. Motion carried 3-0.
Jerry Gumphrey asked if a fund has been started to replace the generators if or when they fail
and parts cannot be found to repair them. Troy Adams responded no. This could be looked into
further after the resource study has been done.
6.2 Set Date for Next Meeting
The next regularly scheduled meeting of the Elk River Municipal Utilities Commission
will be Tuesday, July 14, 2009, at 4:00 p.m.
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Regular meeting of the Elk River Municipal Utilities Commission
June 9, 2009
President John Dietz adjourned the regular meeting of the Elk River Municipal Utilities
Commission at 4:45 p.m.
Minutes prepared by Judy McSpadden.
John Dietz
President, ERMU Commission
Tina Allard
City Clerk