ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM. January 10, 2017

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1 ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM Members Present: John Dietz, Chair; and Al Nadeau, Vice Chair Members Absent: Daryl Thompson, Trustee ERMU Staff Present: Troy Adams, General Manager; Theresa Slominski, Finance and Office Manager; Mark Fuchs, Electric Superintendent; Eric Volk, Water Superintendent; Mike O Neill, Technical Services Superintendent; Tom Sagstetter, Conservation & Key Accounts Manager; Michelle Canterbury, Executive Administrative Assistant Others Present: Peter Beck, Attorney; Matt Westgaard, City Councilmember; Stewart Wilson; and Mike Trunnell 1.0 CALL MEETING TO ORDER John Dietz called the meeting to order at 3:30 p.m. 1.1 Pledge of Allegiance The Pledge of Allegiance was recited. 1.2 Consider Utilities Agenda There were no additions or corrections to the agenda. Al Nadeau moved to approve the Utilities agenda. John Dietz seconded the motion. Motion carried Recognition of Employee Achievement Tom Sagstetter introduced Jolene Fenn-Jansen and announced that she received her Business Generalist Certificate from Anoka-Ramsey Community College. Tom shared that Jolene is utilizing the ERMU Educational Assistance Policy. The policy allows eligible employees to be reimbursed costs after successfully completing course work that are related to their jobs. Jolene shared a little bit about the program and the courses she has taken. Jolene expressed her gratitude to the Commission for having an educational assistance policy that offers tuition reimbursement. The Commission congratulated Jolene on her achievement. Page 1

2 2.0 CONSENT AGENDA (Approved By One Motion) John Dietz had a few questions on the financials, staff responded. Al Nadeau moved to approve the Consent Agenda as follows: 2.1 December Check Register 2.2 December 13, 2016 Regular Meeting Minutes 2.3 Financial Statements Tariffs 2.5 Notice to Connexus Energy of Electric Service Territory Area 3 & 4 Transfer Date 2.6 ChargePoint Master Services and Subscription Agreement John Dietz seconded the motion. Motion carried OPEN FORUM No one appeared for open forum. 4.0 OLD BUSINESS 4.1 Governance Manual Based on Commissioner and staff input through surveys and discussion, our consultant John Miner has developed drafts of the second two Governance Manual policies. Provided for review were the following policies: G-1.4 Agenda Planning, and G-1.8 Commission Committees. For the G-1.4 Agenda Planning policy, there was discussion on the purpose and summary section. Troy Adams suggested it be changed to reflect a two year rolling window for routine governance functions. The Commission was open to that suggestion. John Dietz commented that Section 1.1, relating to the election of Commission officers, would need to be changed from the first meeting of the new fiscal year to March after the appointment of Commissioners by the City Council. After discussion of Section 5, relating to Commission involvement in agenda preparation, distribution and the timing of that process, Commission consensus was to make some changes to that section of the draft policy to reflect the way we are currently operating. The G-1.8 Commission Committees policy provided a high level overview of Commission Committees and the way they operate. Troy shared that he would be going over this policy with John Miner to fine tune it based on the Committees we currently have; the Wage and Benefits Committee and the Finance and Reserves Committee. Page 2

3 5.0 NEW BUSINESS Conservation Improvement Programs and Water Sense Rebates In 2017 Elk River Municipal Utilities (ERMU) will offer dozens of incentives to residential and commercial customers. Rebates will be provided to customers purchasing efficient electric and water equipment. Staff presented the updated ERMU Policy T.2 Conservation Improvement Programs that had been revised to reflect the programs currently being offered. Tom Sagstetter shared that in 2017 ERMU is required to spend a minimum of $386,000 on electric conservation programs with a total equivalent energy savings goal of over 3.8 million kwh. Tom stated that approximately 2.5 million kwh of that savings goal should be achieved from the customer side of the meter, with the remaining 1.3 million coming from the ERMU distribution side. Tom clarified that of the $386,000 that ERMU is required to spend, $192,000 is funded by Great River Energy (GRE) and the remaining amount by ERMU. As Minnesota Municipal Power Agency (MMPA) doesn t have a similar program, there was discussion on the pros and cons and how this would impact us once we migrate over to them as our wholesale power provider. The most significant changes occurred in the water utility with the addition of rebates for toilets, dishwashers, and water faucets. In 2017 the water conservation programs will have a separate rebate form for water savings equipment. Staff presented the new WaterSense rebate application and stated that it would be included as an insert with the February billing. Tom noted that with the elimination of the third step irrigation water conservation program, the new water conservation program is geared towards benefiting more customers, and will be much easier to administer. The water utility budgeted $5,000 for water efficiency rebates. On the electric side there were no new programs added. Tom noted that the Electric Vehicle Charging Program (EV) had been changed from a load control program to a time of use rate design program. Tom shared that as we move towards MMPA as our wholesale power provider, we will be looking at transitioning some of our other load control programs as well. Tom indicated that we will also be scaling back on the marketing of the potentially affected programs. John Dietz had a question on the electric vehicle charging rebate. Staff responded. Al Nadeau made a motion to approve the revised ERMU Policy T.2 Conservation Improvement Programs. John Dietz seconded the motion. Motion carried Vehicle Purchases and Retirements Approved in the 2017 budget was the purchase of three F250 pickup trucks; two in the Water Department and one in the Electric Department. Staff provided the mechanics vehicle evaluation forms for the trucks that had been deemed ready for retirement; two of the three units had accumulated enough points for replacement. Eric Volk shared that Page 3

4 although the third unit was two points short of the replacement level, staff was recommending that unit be replaced as well due to extensive repair issues that would need to be addressed. John Dietz inquired as to what we do with the old vehicles that are retired. Staff shared that those vehicles go to auction; in 2016 the sale of vehicles generated $29,450. There was discussion. For 2017, Midway Ford was the vendor awarded the State Bid for Ford. Eric Volk presented quotes from Midway Ford and Cornerstone Automotive. The quote from Cornerstone Automotive came in at approximately $400 more per vehicle than Midway Ford. Based on the small difference in price, staff recommended keeping the purchase of the vehicles local with Cornerstone Automotive. Al Nadeau made a motion to approve the purchase of the three F250 pickup trucks from Cornerstone Automotive. John Dietz seconded the motion. Motion carried Highway 10 Water Main Project The Minnesota Department of Transportation (MNDOT) has planned to rebuild Highway 10 from Waco Street to Proctor beginning in As they will be widening the highway and replacing the bridge over the Elk River, it has been determined that ERMU will need to relocate 900 feet of water main and reline 1,050 feet of water main in the project area. Eric Volk shared that we will be incurring some costs in 2017 that were unbudgeted. As the 2017 budget has $80,000 set aside for facility maintenance, we will be utilizing some of that money in 2017 to relocate the 900 feet of water main. As the relining project will occur in 2018, staff will have the opportunity to budget for that next year. John Dietz asked if this project would qualify for the use of city trunk funds. Staff responded that it would not. There was discussion. Mark Fuchs shared that there is also electric wire that will need to be moved for the project. Mark explained what needed to take place in 2017 and stated that the unbudgeted cost would come from displacing a project. Eric informed the Commission that we would be saving a large amount of money as we re doing a majority of the work ourselves. 6.0 OTHER BUSINESS 6.1 Staff Updates As previously communicated, ERMU and Connexus Energy representatives have identified an area of dispute regarding Loss of Revenue (LOR) calculations outlined in the Electric Service Territory Agreement. The dispute is in regards to the definition of Municipal Development. On January 4, 2017, Connexus and ERMU leadership met per the agreement s alternative dispute resolution procedure. Troy Adams provided an update on the discussions that took place and shared that both parties were able to come to a mutually agreed upon verbal agreement. Troy also provided an overview on the financial impact of the proposed changes Page 4

ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM. December 13, 2016

ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM Members Present: John Dietz, Chair; Al Nadeau, Vice Chair; and Daryl Thompson, Trustee ERMU Staff