10-13-2009 ERMU MINELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE
UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
October 13, 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; Michael Price, Adam Freiberg, Art Gatchell,
Scott Thoreson, Chris Sumstad, Lex Anderson, Shane Defeyter, Grant Orrock
Others present: Lori Johnson, City Administrator; Terry Maurer, City Public Works Director;
Peter K. Beck, Attorney from Gray Plant Mooty Law Firm
1. Call meeting to order October 13, 2009
John Dietz called the October 13, 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.
Daryl Thompson moved to approve the October 13, 2009 Utilities Agenda. Jerry Gumphrey
seconded the motion. Motion carried 3-0.
3. Consider Consent Agenda
John Dietz questioned the reason a substantial refund was given to a local business. Troy Adams
responded it was due to a billing switch of tenants years ago. The problem has since been corrected
and the tenant has been notified of the demand billing they will be charged. Troy Adams informed the
Commission on the Peak Demand charges for some small businesses. There are approximately 12 to
20 small businesses being charged a demand because of a piece of equipment that could be used
during the non-peaking time of day. John Dietz asked if the business that owes the back billed
demand charges for the past year has been notified of the fees due. Staff responded yes, Vance
Zehringer has been working with them. John Dietz asked if they were able to come up with the funds,
Troy Adams responded they would like to set up a payment plan. Discussion followed regarding a
discount if paid right away.
Jerry Gumphrey moved to offer a 20% discount on the back billed charges to 3~d Dimension if
fees are paid within 30 days. Daryl Thompson seconded the motion. Motion carried 3-0.
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Regular meeting of the Elk River Municipal Utilities Commission
October 13, 2009
Troy Adams asked Commission for approval to do a study on a low load factor rate for customers.
John Dietz approved and directed Troy to bring back to Commission for discussion.
Additional questions were asked regarding the Conservation Improvement Program (CIP)
reimbursements and the CAPX2020 contributions. John Dietz directed Theresa Slominski to do an
analysis of 2008 and 2009 CIl' monthly expenses and reimbursement along with CAPX2020.
John Dietz voiced his concern regarding the net profit to date being below 1 %. He is concerned that
not enough of the rate increase was passed onto the customers.
Daryl Thompson moved to approve the Consent Agenda as follows:
September Check Register
September 8, 2009, Regular Meeting Minutes
Financial Reports
Jerry Gumphrey seconded the motion. Motion carried 3-0.
4.1 Review and Consider Revised Emulovee Handbook
At the September 8, 2009 ERMU Commission meeting, staff was directed to have Mark
Mathison from Gray Plant Mooty continue with the review of the ERMU Handbook. There were a
number of policies that required additional research or information. These included the Weapons
Prohibited, Electric Reconnect Stipends and Lead Pay Differential, Paychecks, and Voting Leave
Policy. Discussion followed and the results are as follows:
*Section 9 titled Weapons Prohibited, should be further clarified to specifically identify the exceptions
of MMUA's Underground School in the spring and the Overhead School in the fall. Any other events
will need to be approved by the Commission.
*Section 25 titled Electric Reconnect Stipend will need to be rewritten due to the Fair Labor Standards
Act (FLSA) requirement. The current reconnect policy and fees involved were discussed. Discussion
followed as to the need of reconnecting customers after hours. John Dietz stated the customer is
turned off after they have received several notices and have not made payment arrangements; the
customer should take care of their accounts during working hours. John Dietz directed Troy Adams to
survey area utilities. Jerry Gumphrey stated he did not have a problem with turning customers on
after hours but they should have to pay a premium. Daryl Thompson stated he would like to
discontinue reconnects after hours completely. John Dietz asked how many customers were turned
off for non-payment this month. Theresa Slominski responded there were approximately 80 shut-offs.
Troy Adams said he will survey area utilities and bring back to the commission to revisit. This section
could be eliminated with no stipend paid if there was a reconnect to do and regular after hours
compensation policies followed.
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Regular meeting of the Elk River Municipal Utilities Commission
October 13, 2009
* Section 28 titled Paychecks, is in regards to the change of pay period dates. Effective the pay period
for the end of October, the pay period will change from 'T'hursday through Wednesday, to Tuesday
through Monday. The On-Call switch will take place Tuesday Morning. No changes proposed.
*Section 52 titled Voting Leave, is required by Minnesota Statutes. Further discussion followed and
management commented this has not been an issue. No changes proposed.
John Dietz asked Attorney Peter Beck if the handbook could be approved being there were changes.
Peter Beck stated as long as the changes were stated, and the Section 25, Electric Reconnect Stipend
was removed, the handbook could be approved.
Daryl Thompson moved to approve the ERMU Employee Handbook with the added change to
Section 9, Weapons Prohibited with the exception of MMUA's Spring and Fall schooling, and
the omission of Section 25, Electric Reconnect Stipend. Jerry Gumphrey seconded the motion.
Motion carried 3-0.
4.2 Review and Consider Pav Request or 2009
At the April 14, 2009, ERMU meeting the commission voted fora 0% pay increase but to revisit
in 6 months. Troy Adams reviewed the past process for comparing and calculating pay requests for
employees.
Art Gatchell addressed the commission giving a brief description of his work history, the praise of
ERMU and his co-workers, and the importance of keeping exceptional employees by following the
metro average.
Due to attorney recommendations, this is tabled and will be voted on at the November ERMU
Commission meeting.
Daryl Thompson moved to table this discussion until the November ERMU Commission
Meeting. Jerry Gumphrey seconded the motion. Motion carried 3-0.
4.3 Review Reauest by Developer for One Year Deferral of WAC (verbal)
At the September 8, 2009 ERMU Commission meeting, Commission was asked if they would
defer the WAC fees for the new proposed 53 unit building in Elk River Station. Commission voted to
go along with the decision the City of Elk River made regarding the deferral of fees. If the City of Elk
River deferred fees then ERMU would defer the WAC fees. Lori Johnson updated commission that
the City of Elk River denied the deferral of fees for the new building at Elk River Station.
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Regular meeting of the Elk River Municipal Utilities Commission
October 13, 2009
5.1 Review and Consider MMUA Safety Management Program
ERMU utilizes MMUA to provide the safety management program. Discussion followed
regarding the program. Troy Adams asked for authorization to execute the agreement with MMUA.
Jerry Gumphrey moved to approve the contract with MMUA Safety Management Program.
Daryl Thompson seconded the motion. Motion carried 3-0.
5.2 Review and Consider 2010 Expense Budget
Troy Adams reviewed the 2010 Expense Budget. Terry Maurer spoke of the need to address the
short fall in the water department budget. Discussion followed on ways to increase funds. John Dietz
directed Theresa Slominski to check on the 75/25 account split for electric and water shared fees to
make sure they are being properly split and to report back to the Commission with her findings.
Terry Maurer said he would like to analyze water services, rates, and fees. Peter Beck agreed with a
need for a WAC fee increase. Daryl Thompson questioned the rate comparison with surrounding
Cities. David Berg responded. Lori Johnson informed Commission the Economic Development
Department is doing a survey of SAC and WAC fees and should have the results in a week. John
Dietz directed staffto investigate and bring back to the Commission.
5.3 Review and Consider 2010 Conservation Improvement Program (CIP) Budget
The State of Minnesota has mandated a change in CIP spending in 2010 that now requires there
to be 1.5% energy reduction instead of spendmg 1.5% of revenue on energy reduction. Discussion
followed regarding the steps being taken to achieve this requirement. This was informative only, no
action was taken.
6.1 Staff Updates
Troy Adams informed the Commission of a recent quote request for underground frost trenching
during the winter months and Midwest Diversified Utilities was awarded the bid. Sherburne County
is now included in the counties that can join in the State bid for fuel. The City of Elk River has asked
ERMU if they would like to join in with them. The savings is substantial and would be very
beneficial to ERMU. Terry Maurer said the City is buying in for 75% of their yearly use and
recommends ERMU do the same. Consensus of Commission was to buy in with the City of Elk
River on the state bid for fuel.
David Berg reported on a hydrant recall that involves about 400 of ERMU's hydrants. The
problem is with the grease used in the hydrants in 1998. Waterous is going to pay $40 per hydrant to
fix the problem. ERMU staff is going to repair 50 hydrants, then will check on the cost to see if it is
beneficial to repair in house or contract out and have Waterous pay them directly.
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Regular meeting of the Elk River Municipal Utilities Commission
October 13, 2009
Wade Lovelette reviewed a couple quotes received for the paving project at the Power Plant. The
necessity for the work to be done was discussed.
Daryl Thompson moved to go ahead with the paving project at the Power Plant and to award it
to the lowest bidder. Jerry Gumphrey seconded the motion. Motion carried 3-0.
Terry Maurer addressed the Commission regarding the Power Plant project and he is taking care
of the permitting applications.
Mark Fuchs updated the Commission on the assistance to Grand Marais at the end of September.
Two crews were sent to help restore power to azea residents. John Dietz asked who would pay for
this. Troy Adams responded that Grand Marais would.
John Dietz commented he has made it his personal mission to put a photo of every Commissioner
on the conference room wall and asked for up to $250 to acquire flames, matting for the photos, and
name plates with years served. Fellow Commissioners approve of this project. John Dietz
commented on an article in the paper regazding street light fees and having neighborhoods pay for the
lights in their area. John Dietz directed staff to survey areas and the number of customers per light
and to bring back for discussion at a future meeting.
6.2 Set Date for Next Meeting
The next regulazly scheduled meeting of the Elk River Municipal Utilities Commission will be
Tuesday, November 17, 2009, at 4:00 p.m.
6.3 Adiourn Regular Meeting
President John Dietz adjourned the regular meeting of the Elk River Municipal Utilities
Commission at 6:10 p.m.
6.4 CLOSED SESSION -Performance Review, MN Statute 13D O5, Subd 3
Under separate cover.
Minutes prepazed by Judy McSpadden.
J Die
P esident, Co ion
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Tina Allazd
City Clerk