ELK RIVER MUNICIPAL UTILITIES REGULAR MEETING OF THE UTILITIES COMMISSION HELD AT UTILITIES CONFERENCE ROOM Members Present: Chair John Dietz; Vice Chair Al Nadeau; Commissioners Paul Bell, Mary Stewart, and Matt Westgaard ERMU Staff Present: Theresa Slominski, Finance and Office Manager; Mark Fuchs, Electric Superintendent; Mike Tietz, Technical Services Superintendent; Tom Sagstetter, Conservation & Key Accounts Manager; Michelle Canterbury, Executive Administrative Assistant; Jennie Nelson, Customer Service Manager Others Present: Cal Portner, City Administrator; Peter Beck, Attorney; and Amanda Bednar, City Environmental Coordinator 1.0 GOVERNANCE 1.1 Call Meeting to Order The regular meeting of the Utilities Commission was called to order at 3:30 p.m. by Chair Dietz. 1.2 Pledge of Allegiance The Pledge of Allegiance was recited. 1.3 Consider the Agenda Chair Dietz requested that the topic of Solar Picnic Table be added as agenda item 3.1 following Open Forum. Moved by Commissioner Bell and seconded by Commissioner Nadeau to approve the amended, agenda. Motion carried 5-0. 1.4 Recognition of Employee Promotion Mr. Fuchs introduced Russ Stuhr and announced he had been promoted to the Field Crew Foreperson position. Russ formerly held the Lead Bore Rig Operator Position. The plan is for Russ to train with the current Foreperson who will be retiring at the end of 2018. The Commission congratulated Russ on his promotion. Page 1
2.0 CONSENT AGENDA (Approved By One Motion) Moved by Commissioner Stewart and seconded by Commissioner Nadeau to approve the Consent Agenda as follows: 2.1 July Check Register 2.2 July 10, 2018 Regular Meeting Minutes 2.3 July 10, 2018 Closed Meeting Minutes 2.4 Summary of General Manager Performance Review 2.5 2018 Second Quarter Utilities Performance Metrics Score Card Statistics 2.6 Wage & Benefits Committee Update Motion carried 5-0. 3.0 OPEN FORUM No one appeared for open forum. 3.1 Solar Picnic Table Commissioner Westgaard provided a quick introduction and shared that Ms. Bednar had presented her budget to the City Council last night. Part of her budget included a capital outlay of $15,000 for construction and installation of a solar powered picnic table. Commissioner Westgaard shared that there was some dialog amongst the City Council on whether the Utilities would be interested in sponsoring a portion of the project. Ms. Bednar provided some background on the solar picnic table project. She shared that the solar panels, battery and design were completed via a partnership with Energy City and the University of St. Thomas. Elk River owns all the panels, batteries, design details and technical drawings. Ms. Bednar stated that what they need now is the physical structure. The picnic table requires cement footings strong enough to hold the added weight of the panels. They also need the physical table, panel installation and electrical connection for the solar panels. Commissioner Bell asked for further clarification on what the $15,000 included. Ms. Bednar responded. Ms. Bednar distributed a handout which outlined the project and showed a model of what the physical structure would look like. There was discussion. Chair Dietz reached out to the Commission to see if they would be interested in sponsoring half of the project, to be capped at $7,500. There was discussion on where this expense would be funded from. As this project wouldn t be taking place until 2019, Ms. Slominski suggested bringing this back next month for further discussion and consideration. Chair Dietz indicated that he would like to be able to let the city know in the interim whether the Commission supports sponsoring the $7,500, for their budgeting purposes. There was consensus from the Committee to do so provided staff Page 2
could work this into the 2019 budget. Staff will add this topic to next month s meeting agenda, at which time it can be considered for formal approval. 4.0 POLICY & COMPLIANCE 4.1 Energy Management Programs At the July 10 Commission meeting, the Commission and staff discussed the option of maintaining the current energy management programs (Dual Fuel, Electric Thermal Storage (ETS) Water, and ETS Space Heating) for existing customers with a sunset date of 3 to 5 years. During the sunset period, the rates would be increased to reach parity with the standard general service rate. Based on the substantial capital investments customers may have in their existing systems, the Commission and staff had consensus that the 5 year sunset period would be best. Mr. Sagstetter presented his memo, and shared that to communicate the end of the programs, staff will provide an annual notification to customers participating in the Dual Fuel, and ETS Water and Space Heating programs to remind them of the end date of December 31, 2023, and the need to evaluate other options for space and/or water heating needs. Any rate increases would also be included in this annual notification. He noted that the sunset period will be offered to any person purchasing or renting a property that is participating in an affected Energy Management program until the end date of December 31, 2023. Attorney Beck stated that the notification letter should clearly state that the current participants will be responsible for disclosing that this program will be ending to any potential buyers, should they sell their home. He also made the suggestion that the initial letter be sent out certified mail. There was discussion. Mr. Sagstetter shared that staff will continue to research new programs during the sunset period that will provide benefit to the participating customers and ERMU. Any replacement Energy Management programs created will be marketed, communicated and made available to all ERMU residential customers. Moved by Commissioner Nadeau and seconded by Commissioner Stewart to approve a sunset date of December 31, 2023 for the Dual Fuel, Electric Thermal Storage Water, and Electric Thermal Storage Space Heating Programs. Motion carried 5-0. 5.0 BUSINESS ACTION 5.1 Financial Report June 2018 Ms. Slominski presented the June 2018 financial report. For the Maintenance Expense line item in the Summary Electric Statement, she noted that the significant increase of $44,000 from June this year to last year was the result of an inventory adjustment that was made. Ms. Slominski shared that last year staff began to identify some of our smaller in size and value Page 3
inventory items that we would be removing from our balance sheet. She explained that in doing so, it shows up as an expense on your income statement. This is something that staff planned and budgeted for. It was also noted that although the dollars are no longer part of the inventory, the quantities are. Chair Dietz had a question on what might be contributing to the lower administration expenses this year. Staff responded. There was discussion. Moved by Commissioner Stewart and seconded by Commissioner Westgaard to receive and file the June 2018 Financial Report. Motion carried 5-0. 5.2 2018 Second Quarter Delinquent Items Ms. Slominski presented the delinquent items for the second quarter which included a delinquent amounts listing report totaling $6,946.51 for all services. She also presented the delinquent items comparisons for 2017/2018, identifying the categories and running totals. Ms. Slominski shared that our totals for the year for collections and write-offs are well below the national average, at.01%. The Commission had a few questions. Staff responded. Moved by Commissioner Nadeau and seconded by Commissioner Bell to approve the Second Quarter Delinquent Amounts Listing. Motion carried 5-0. 5.3 2019 Business Plan/Budget: Schedule; Travel and Training; Dues, Subscriptions, and Fees Ms. Slominski gave an overview of the budgeting process schedule and presented the Travel and Training budget which reflected a 0.6% decrease over the prior year. For the American Public Power Association (APPA) Legislative Round-up line item, Commissioner Stewart questioned if the budgeted amount was for two staff members as noted, or for one staff member and one commissioner. Staff responded that it was for the latter, and that they would make that correction. There was some discussion on which trainings were optional for employees and which ones were mandatory. Staff noted that a rotation schedule is used so that all of our employees can have the opportunity for ongoing training. The Dues, Subscriptions, and Fees budget had a 7.9% increase, reflecting various known and projected increases for 2019. This is an increase from the prior year s 1.3% increase, largely due to our SCADA OSI fee increases. Ms. Slominski provided some background information and further explanation for the increase to this line item. She also provided the details on the new line items that had been added for 2019. 6.0 BUSINESS DISCUSSION 6.1 Staff Updates Ms. Slominski shared the results of the estimated final buy-in amount provided by Minnesota Municipal Utilities Association (MMPA). We had originally anticipated it would be around $20 Page 4
million, and the final estimate has come in at $21,325,733. She noted that we wouldn t know the final amount until we begin taking power on October 1, 2018. Ms. Slominski provided a breakdown of the payment we had already made, the credit for interest, and the estimated amount we would get for the current bonding; based on those figures we re looking at approximately $2.2 million that would need to be funded from reserves. There was discussion. Mr. Tietz informed the Commission that we had recently had a situation come up with a customer who had some concerns with an ERMU employee who was performing locates on their property; mainly that the locator had not notified the homeowners that he was there to do the locate by knocking at their front door to tell them. As the meter base was located in a unique area of this property, seven feet from the transformer versus directly on the home, the locator was doing his due diligence by walking around all of the structures on the property to ensure the locate was done properly. This was another cause for concern for the homeowner because he didn t know who was walking around on his property. Mr. Tietz shared that after speaking with the homeowner about their concerns, they still weren t satisfied with how the situation was handled. Staff explained that everything was done according to our standard procedures, and that the locator who was performing his job was clearly identifiable by his company uniform and truck with the ERMU logo. There was discussion. Mr. Sagstetter highlighted from his staff report that CAER was very appreciative of the $14,000 rebate check they received to offset some of the costs of upgrading to a more efficient centralized HVAC system. He stated that this rebate is part of the conservation improvement programs ERMU offers that target low-income individuals or organizations. Mr. Sagstetter also shared a little bit about the Minnesota Municipal Power Agency (MMPA) Clean Energy Choice Program that we ll be transitioning our existing residential wind customers over to. The focus will be rolling out the residential program first, and then moving onto the business program in 2019 as that program is much more involved. It was noted that the city and ERMU are exploring the option of having all of their energy come from 100% renewables; this would be part of the Business Clean Energy Choice Program. There was discussion on our switch over to MMPA on October 1, and how we were going to communicate that to customers. 6.2 Future Planning Chair Dietz announced the following: a. Special Commission Meeting August 29, 2018 at 3:00 p.m. b. Regular Commission Meeting September 11, 2018 c. Quorum MMUA Summer Conference August 20-22, 2018 6.3 Other Business There was no other business. 7.0 ADJOURN REGULAR MEETING Page 5