A
REGULAR MEETING OF THE PUBLIC UTILITIES COMMISSION OF THE CITY OF VIRGINIA,
MINNESOTA, WAS HELD AT THE OFFICE OF THE DEPARTMENT OF PUBLIC UTILITIES ON
MONDAY, JANUARY 24, 2005, AT 4:30 P.M.
Commissioner Sipola called the meeting to order at
4:31 p.m.
Present:
Commissioners Marks, Raukar, Park, and Sipola.
Absent:
Commissioner Bloomquist (out-of-town).
Also Present: Terry Leoni, Public Utilities General
Manager; Jeff Marwick, Manager-Electric Generation; Lynn Rosebush,
Director-Finance & Administration; Sue Lalli, Supervisor-Public Relations;
Douglas Ganoe, Director-Operations; Lorraine Ilminen,
Supervisor-Administration; City Councilors Rob Raplinger and Steve Peterson;
AFSCME Staff Representative Steve Giorgi; Employees David N. Olson, Jim Sereno,
Ray Pesavento, Larry Krogstad, and Mike Niemi.
The following reports were
presented to the Commission for their information:
FINANCIAL OPERATING
STATEMENTS
Moved by Park and supported by Raukar that financial Resolution #5046 authorizing the first half of January
2005 payroll and sick leave bonus in the amount of $100,244.83, checks #43292
through #43343 and direct deposits, and bills dated January 25, 2005, in the
amount of $2,458,826.75 checks #70681 through #70692, and #70774 through
#70850; and the second half of January 2005 wire and electronic transfers; and the minutes of the regular meeting held
on January 10, 2005 is approved as presented.
Motion carried.
Management presented Jim Muskovitz’s (Warehouseman) written notice of intent to retire effective April 01, 2005, with his last day of work being March 31, 2005, and request for all retirement benefits in accordance to the 2004 AFSCME Local 729 contract. Moved by Marks and supported by Park to accept Jim Muskovitz’s retirement effective April 01, 2005 with all retirement benefits in accordance with AFSCME Local 729 contract. Motion carried.
At
4:35 p.m., Commissioner Raukar took his chair.
Management
requested the ability to obtain a short-term loan from Queen City Federal Bank
in the amount of $550,000 for three months.
Large capital expenditures have created a cash flow difficulty during
2004. The City Turnback projects cost
$635,274.93, the Biomass Project to date is $548,433.22, and the No. 5 Turbine
incident cost is $228,329.50 out-of-pocket.
The Utility would use CD’s invested with Queen City Federal Bank as
collateral for the loan and Queen City Federal would loan the money at 1% over
the CD rate, or about 3%. The line of
credit will have a 3% interest rate and may be paid back anytime during the
three-month period. Moved by Park and
supported by Marks to authorize the finance department to enter into a
short-term loan with Queen City Federal Bank in the amount of $550,000 with the
intention of re-paying the loan as CD’s mature during the next three an a half
months. Motion carried.
Pursuant
to the contract between AFSCME Local 729 and the Virginia Public Utilities
Commission, the Union filed two grievances to Step III. The Union presented information on Grievance
#041116. After presentation, it was
moved by Park and supported by Raukar to take Step III Grievance #041116 under
advisement in a closed session within the time allowed in the AFSCME Local 729
contract. Motion carried. The Union presented information on
Grievance #040819. After presentation,
it was moved by Park and supported by Marks to take Step III Grievance #040819
under advisement in a closed session within the time allowed in the AFSCME
Local 729 contract. Motion carried.
Mr.
Leoni reported the negotiations on the Power Purchase Agreement (PPA) are
complete. It passed the review of Xcel’s
internal Transaction Review Committee on Friday, January 21. NSP/Xcel will sign the PPA this week and
forward it to the two Utilities’ for signature.
The transaction still needs the ultimate approval of the Minnesota
Public Utilities Commission (MPUC). The
timeline for this would be as follows:
NSP/Xcel and Virginia/Hibbing execute the PPA; NSP/Xcel files the PPA
with the MPUC by January 31, 2005;
carried forward
Public Utilities Commission
Meeting
Minutes
January
24, 2005
Page
2
brought forward
MPUC
staff receives and prepares the PPA for public comment (30 days) and rebuttal
comments (15 days) before it is on a MPUC agenda. Based on our previous appearance/testimony to
the MPUC on November 23, 2004, we are anticipating a favorable ruling from the
MPUC before April 2005. Moved by Raukar
and supported by Marks authorization is given to execute the Power Purchase
Agreement with NSP/Xcel. Motion
carried. Moved by Raukar and supported
by Marks authorization is given to execute the Consent Agreement with
NSP/Xcel. Motion carried. Moved by Raukar and supported by Marks
authorization is given to execute the Consent and Agreement with NSP/Xcel. Motion carried. Moved by Raukar and supported by Marks, that
if required, then authorization is given to execute documents required by the
Minnesota Public Utilities Commission.
Motion carried. Moved by Raukar
and supported by Marks authorization is given to execute the NGP Purchase
Agreement with NGP. Motion carried. Moved by Raukar and supported by Marks
authorization is given to execute the Consent Agreement with EPS/Beck. Motion carried.
Moved
by Marks and supported by Park to recommend the Virginia City Council move
forward and pass a resolution authorizing approval for an Iron Range Resources
(IRR) $4,000,000 loan for the Joint Biomass Project with the Hibbing Public
Utilities Commission. Motion carried.
Moved by Raukar and supported by Marks to adopt Resolution
#5047 of the City of Virginia Department of Public Utilities to request the
Iron Range Resources (IRR) a $4,000,000 loan for the Joint Biomass project with
the Hibbing Public Utilities Commission.
WHEREAS, the City of Virginia Department of Public
Utilities (hereafter “Applicant”), is a City owned Municipal Utility operating
under the laws of the State of Minnesota; and
WHEREAS, the Applicant has a need for a loan from
Iron Range Resources (hereafter “IRR”) for the Virginia Public Utilities Joint
Biomass Project (hereafter “Project”); and
WHEREAS, the Applicant is the Owner of the site the
Project will be undertaken; and
WHEREAS, the Applicant has determined that it will
need a loan from the IRR for $4,000,000.00 in order to do the Project; and
WHEREAS, the Applicant has submitted a loan
application and received approval from the IRR Board at a regular meeting of
the IRR Board on September 23, 2004, requesting a loan to do said Project; and
WHEREAS, the Applicant understands and agrees that
the IRR will not provide funds to reimburse the Applicant for any costs
incurred to the Project prior to the date on which this Project has its Power
Purchase Agreement (PPA) with NSP approved by the Minnesota Public Utilities
Commission (MPUC); and
NOW, THEREFORE, BE IT RESOLVED, that the Applicant
organization hereby authorizes and approves accepting a loan in the amount of
$4,000,000 from the IRR for funds to do the Project.
BE IT FURTHER RESOLVED that the Applicant’s Mayor
and City Clerk/Finance Director are hereby authorized and directed to execute
all applicable contracts, documents and agreements associated with the loan.
BE IT FURTHER RESOLVED that the Applicant agrees and
commits that, following completion of the Project, it will maintain the Project
site and any equipment installed in connection with the Project in good
operating condition, appearance, and repair and protect the same from
deterioration, reasonable wear and tear resulting from ordinary use of the
property and equipment excepted, for as long as the Applicant retains ownership
of the Project site. Motion carried.
carried forward
Public Utilities Commission
Meeting
Minutes
January
24, 2005
Page
3
brought forward
Management presented steam rate scenarios by
eliminating rate tiers over a period of time.
It is anticipated the Virginia Public Utilities would recover revenue,
by eliminating the three tiers over a three-year period, for an estimated total
of $117,631.95. Commissioner Sipola
requested Management present at a future meeting for the Commission to consider
eliminating steam rate tier 4 to be effective July 01, 2005.
Discussion
was held on distribution of Commission meeting agenda/packets. It was the consensus of the Commission that
meeting agenda/packets be available by the first and third Thursday each month
for pick up in the afternoon or be mailed that day if not picked up.
Mr.
Leoni presented, in concurrence with City Attorney Tom Butorac who was absent
from the meeting, a proposed settlement agreement offered to the new Park Inn
owners. The offer is that the $49,000
in arrears for utilities is attached as a lien on the property. Payment on that will be deferred one year and
the new owners (investment group SBGI Corp. of Denver, Colorado) will pay
$10,000 per year for five years as part of their taxes. The $26,000 deposit with the Public Utilities
will remain on deposit. The former owner
(the Heyde Hospitality Corporation of Chippewa Falls, Wisconsin) has agreed to
pay the other outstanding utility bills of $27,000. It was the consensus of the Commission that
the proposed settlement agreement is fair and offers the new owner time during
the first year to become acclimated to the business expenditures.
Commissioner Raukar reported he did some inquiries as to why the Virginia
Public Utilities is using the Hibbing Credit Bureau in lieu of the Virginia
Credit Bureau for collections. He realizes the Virginia Credit Bureau can not
offer the computerized benefits as Hibbing Credit Bureau, but requested
Management provide an option to the Commission at the February 14, 2005,
meeting as to how the Virginia Credit Bureau may be used (i.e. their services
can be used for small collections).
A
closed Personnel Committee of the whole meeting was scheduled for Tuesday,
February 01, 2005, at 4:30 p.m. to take Step III
Grievance #041116 and #040819 under advisement.
There
being no further business to come before this meeting, President Sipola
declared this meeting is adjourned.
Adjournment
at 6:26 p.m.
ATTEST: APPROVED:
___________________________ ______________________________
Jerry
Marks, Secretary Dr.
Don Sipola, President