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08-11-2009 ERMU MINELK RIVER MUNICIPAL UTILTIIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM August 11, 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; Richard Wagner, Tom Geiser, Scott Thoreson, Chris Sumstad, Shane Defeyter, Grant Orrock, Art Gatchell, Tricia Pope, Michelle Martindale Others present: Lori Johnson, City Administrator; Terry Maurer, City Public Works Director; Peter K. Beck, Attorney from Gray Plant Mooty Law Firm; Lauren Wipper, I-IlZ Representative 1. Call meeting to order August 11, 2009 John Dietz called the August 11, 2009 meeting to order at 4:00 p.m. 2. Consider Utilities Agenda John Dietz added a couple of items for discussion under other business. Jerry Gumphrey moved to approve the August 11, 2009 Utilities Agenda. Daryl Thompson 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: July Check Register July 14, 2009, Regular Meeting Minutes Financial Reports Daryl Thompson seconded the motion. Motion carried 3-0. Page 2 Regular meeting of the Elk River Municipal Utilities Commission August 11, 2009 4.1 Review and Consider Salary Structure Study At the August 12, 2008, Elk River Municipal Utilities Commission meeting, the Commission authorized Riley, Dettmann & Kelsey, LLC, to perform a salary structure study similar to the study they had performed for the City of Elk River. The purpose of this study was to ensure internal equity within ERMU's pay structure between the different positions and pay grades, and also meet the pay equity requirements. ERMU employees filled out Job Description Questionnaires (JDQ's). From these JDQ's, Rod Kelsey established points for each position and point ranges that were based on Riley, Dettmann & Kelsey, LLC's job evaluation system. Under the direction of the ERMU Commissioner John Dietz, the City of Elk River staff has generated proposed salary ranges for ERMU employees based on the proposed Job Evaluation Summary. John Dietz reviewed the Job Evaluation Summary outlining the proposed positions, point ranges, and future step changes. Troy Adams and Wade Lovelette's new positions were evaluated and will receive retroactive pay back to April 1, 2009. John Dietz stated that if the Commission approves the salary range study, they would also need to determine what step in the pay scale to place Troy Adams and Wade Lovelette. John Dietz also commented that some of the positions' pay ranges increased while others are currently higher than the top of the ranges proposed in the new pay plan. He proposed that to even out the pay structure and adjust the wages for those currently being paid more than the top of the new pay range, that those particular individuals be given 2/3 of any future pay increase until their pay matches the top of their pay grade. Based on current projections it will take four to seven years for those individuals to come back into compliance with the top of their pay class. John Dietz also addressed the step plan process for employees moving between steps stating that no pay adjustments would be made now. Instead, employees would be placed in their appropriate pay range by slotting in their current pay where ever it fell in the pay plan. More employees would fall in between two steps. At the employee's anniversary date of employment, the employee would move up the equivalent of one step. For instance, if an employee's current pay was $500 above Step A, on his or her anniversary date he or she would move up to Step B plus $500. Lori Johnson explained the process used to develop the pay plan. She stated it was developed based on the top pay, which was determined after discussion between Riley, Dettmann & Kelsey, LLC, and Commission President John Dietz. The bottom pay was taken from the current ERMU pay plan. The other pay grades were placed in between the previously determined top and bottom pay. The direction given was to set the top of the pay grades so they matched existing pay as closely as possible. The main intent of the plan is to maintain internal equity within ERMU's positions and pay grades. The proposed pay plan as presented meets the State's pay equity requirement and passes the pay equity test. Troy Adams commented that since his position is new and with changes in the industry he would like his position and salary range to be re-evaluated in two to three years. Daryl Thompson asked what would happen if Troy's position was raised to a higher pay grade. Lori Johnson stated the point structure would still be in place so if he received more points the Page 3 Regular meeting of the Elk River Municipal Utilities Commission August 11, 2009 existing pay plan could be adjusted by adding another top step. This would maintain symmetry and even out the scale to keep the point system in line. Jerry Gumphrey moved to re-evaluate the Director of Operations on April 1, 2012. Daryl Thompson seconded the motion. Motion carried 3-0. Discussion followed regarding Wade Lovelette's position and at what step to place him on the pay scale. Jerry Gumphrey moved to place Wade Lovelette at Step 4 on the pay scale for Grade Leve113, retroactive to April 1, 2009. Daryl Thompson seconded the motion. Motion carried 3-0. Discussion followed regarding the placement on the pay plan and the step to place the Director of Operations, Troy Adams, on the pay scale. Jerry Gumphrey moved to start Troy Adams, Director of Operations, at Step 3 on the pay scale for Grade Leve116 retroactive to April 1, 2009. Daryl Thompson seconded the motion. Motion carried 3-0. John Dietz recommended the employees currently on the step plan for their pay grade level that have not reached the top of the pay scale will follow the newly adopted pay structure for future pay steps on their anniversary dates. This will become effective as of the next pay period which is August 20, 2009. Jerry Gumphrey moved to adopt the new pay structure as of August 20, 2009. Daryl Thompson seconded the motion. Motion carried 3-0. 5.1 Review and Consider Water Treatment Chemical Bids Quotes were recently acquired for water treatment chemicals for the remainder of 2009 thru all of 2010. Staff recommends awarding the contract to DPC, Industries, Inc, the lowest responsive bidder. Daryl Thompson moved to award the contract for Water Treatment Chemicals thru 2010 to DPC Industries, Inc, the lowest responsive bidder. Jerry Gumphrey seconded the motion. Motion carried 3-0. 5.2 Review and Consider Electric Cable Bids On August 11, 2009, bids were opened for electric cable required for the capital projects approved at the July 14, 2009, Elk River Municipal Utilities Commission meeting. Staff recommends awarding the electric cable bid to Resco, the lowest responsive bidder. Page 4 Regular meeting of the Elk River Municipal Utilities Commission August 11, 2009 Jerry Gumphrey moved to award the wire contract to Resco, the lowest responsive bidder. Daryl Thompson seconded the motion. Motion carried 3-0. 5.3 Review and Consider Education Reimbursement Policy Revisions In a rapidly evolving industry with practices and technology becoming ever more complicated, encouraging continuing education through a program such as Elk River Municipal Utilities' Education Assistance Policy is mutually beneficial to the employee and employer. This policy allows for employees to continue growing with technology providing the necessary skills useful to the Utilities to provide safe and reliable services at competitive costs. The current policy is 100% reimbursement capped at $2,000 annually. The employee gets reimbursed after the class providing they receive a satisfactory passing grade. Staff is asking for the cap to be raised to $3000. Jerry Gumphrey said he thought this would be a good incentive. Jerry Gumphrey moved to change the Education Assistance Policy to 100% reimbursement capped at $3000. Daryl Thompson seconded the motion. Motion carried 3-0. 5.4 Review and Consider 2010 Budget Schedule Staff started the process of assembling the year 2010 budgeting process. Travel & Training and 10 Year Personnel projections were reviewed. Consensus of the Commissioners was approval of the budgeting process to date. This will be presented with the remaining budget for final approval at a later date. 6.1 Staff Updates Troy Adams reported electric sales are up from last year to date. Due to the publicity involved with the Bid Stone II project, power suppliers have contacted ERMU showing interest in supplying future power. MN Power has asked for a letter of interest for future power supply discussions. Jerry Gumphrey said it is a good idea to start talking with other power suppliers now. Theresa Slominski informed the Commission of the PCA that was absorbed in 2008 totaling $184,000 and the PCA absorbed this year to date is $209,000. John Dietz asked at what point does ERMU pass the PCA on to the customers. Troy Adams stated he would like to hold off one more month to see how the revenue stream comes in. John Dietz agreed but stated ERMU could not keep absorbing fees like these and not pass them on to the customer. John Dietz directed staff to check on the percentages of the PCA versus sales. Jerry Gumphrey asked if the customers have to be notified of the PCA prior to charging them. Troy Adams responded he was not aware of any notification needed. Theresa Slominski replied that of PCAs passed onto customers in the past, some have been credits accumulated over Page 5 Regular meeting of the Elk River Municipal Utilities Commission August 11, 2009 several months which were passed on in the summer months as negative PCAs. Consensus of the Commission was to wait one more month and check on the percentage of sales versus PCA. Theresa Slominski added staff is asking if the ACH incentive program could be offered again. Jerry Gumphrey moved to approve the offering of the ACH incentive program with a one time $10 credit for a one month period. Daryl Thompson seconded the motion. Motion carried 3-0. Troy Adams informed the Commission of some erosion issues at the plant that need to be addressed. Discussion followed. Jerry Gumphrey directed staff to get bids on the repairs needed and also asked Terry Maurer if engineering plans were needed. Terry Maurer didn't think it would be necessary but he would take a look at it. David Berg said the Water Tower Rental contract is not complete. Peter Beck said he would like another month to look at the policy and contracts. John Dietz asked if the Northstar Corridor antenna's are working out ok. David Berg responded yes, there haven't been any problems, they call ahead and schedule. Peter Beck asked for direction from Commission on equipment protection. David Berg prefers the equipment to be inside the towers with no out buildings. Peter Beck recommends it be stated as a preference but yet set design standards for out buildings. David Berg also reported that the well house for the Jackson Street tower has been removed. The City of Elk River will assist in removing the cement slab. Another item for discussion was the Smart System Irrigation Field Day. John Dietz commented he was at the event and heard a lot of good things about David Berg, what a top notch guy he was, and he comes out and takes care of problems. David Berg said he would like a change implemented on the previous Resolution #09-03 to make the Smart Systems exempt from the water ban. Jerry Gumphrey moved to adopt the new Resolution #09-04 regarding the watering ban with the exemption of the Smart System. Daryl Thompson seconded the motion. Motion carried 3-0. David Berg asked if irrigation systems could be inspected and an "as-built" required. There is confusion as to how it was installed, where the lines are, and how the zones were set up. John Dietz directed staff to survey other Cities to see what their procedure is and bring back to the Commission as an Agenda item at a later date. Mark Fuchs notified the Commission that the line crew will be trying out a pneumatic piercing tool for the Area 23 taps project so we will be able to do the boring ourselves. Other Business John Dietz asked if ERMU has been involved in National Night Out. Mark Fuchs responded yes. Wade Lovelette and Mike Thiry received a list from Police Chief Jeff Beahen and they were able to make it to four out of the five places on the list. They brought out a bucket truck Page 6 Regular meeting of the Elk River Municipal Utilities Commission August 11, 2009 and did an electrical safety demonstration. Rich Schaust was also out in the neighborhoods talking about security concerns. John Dietz said Mark Fuchs first anniversary of being the Electric Line Superintendent is coming up. Troy Adams was directed to give Mark Fuchs his performance review. Consensus of the Commission was to meet with Mark Fuchs in a closed meeting to discuss his first year as Electric Superintendent per MN Statute 13D.05, subd. 3. 6.2 Set Date for Next Meeting The next regularly scheduled meeting of the Elk River Municipal Utilities Commission will be Tuesday, September 8, 2009, at 4:00 p.m. President John Dietz adjourned the regular meeting of the Elk River Municipal Utilities Commission at 5:20 p.m. Minutes prepared by Judy McSpadden. ~" L-_ Tina Allard City Clerk