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, march 14, 2005, AT 4:30 P.M.

 

Commissioner Sipola called the meeting to order at 4:33 p.m.

 

Present:  Commissioners Marks, Raukar, Park, Bloomquist, and Sipola.   

Absent    None.

 

Also Present:    Terry Leoni, General Manager; Lynn Rosebush, Director-Finance & Administration; Sue Lalli, Supervisor-Public Relations; Douglas Ganoe, Director-Operations; Jeff Marwick, Manager-Electric Generation; Lorraine Ilminen, Supervisor-Administration; City Councilor                     Rob Raplinger.

 

The following reports were presented to the Commission for their information:

LIST OF INVESTMENTS

 

Moved by Park and supported by Raukar that financial Resolution #5050 authorizing the second half of February 2005 payroll in the amount of $89,469.78, checks #43413 through #43435 and direct deposits, and bills dated March 10, 2005, in the amount of $934,374.84 checks #71043 through #1134, and the first half of March 2005 wire and electronic transfers; and the minutes of the regular meeting held on February 07, 2005, and special meeting held on March 01, 2005, are approved as presented.  Motion carried. 

 

Management presented the February 2005 injury summary report.  There were no accidents reported. 

 

Mr. Leoni reported the signed Power Purchase Agreement (PPA) with NSP/Xcel has yet to be filed with the Minnesota Public Utilities Commission (MPUC).  Testimonies before Legislation will take place to expand the definition of closed-loop biomass.  The closed-loop biomass would include: Brush, trees and other biomass harvested from designated designate utility, railroad and road right-of-ways; Upland and lowland brush harvested from lands managed in accordance with the Department of Natural Resources’ “Best Management Practices for Managing Brush Lands”; Slash and timber harvest residuals harvested in compliance with Minnesota Forest Council guidelines; Trees and brush harvested for fire prevention, disease, insect control or timber stands for improvement purposes in compliance with Minnesota Forest Council guidelines.  Supporter and author of the bill is Senator John Marty who is Chair of the Committee on Environmental and Natural Resources.   On March 15, 2005 at  7:00 p.m., Mr. Leoni and Mr. Kochevar will give testimony to a House Committee in the State Office Building.  On March 16, 2005, they will be meeting with Springsted on the Bonding Underwriter financing the Biomass Project and give testimony to another House Committee.  The Sierra Club is opposing legislative changes to the closed loop biomass definition, but they are not bearing any weight at this time.  It is possible the Sierra Club could oppose during the permitting process by challenging the environmental assessment worksheet (EAW).  Challenging the permitting process could delay the project for one year.  The biomass project has a boiler contract timeframe to be met and if there is a hold up, it could probably end our relationship with the boiler manufacture.  Bid solicitation for new boilers would then need to go out again and the cost could increase because the boiler manufacture now realize this is a real project.

 

Mr. Ganoe reported in February 2005, as part of our 2005 capital budget, the Virginia Public Utilities in conjunction with Virginia Public Works solicited quotes for a new water service truck, two utility service truck bodies, a trailer mounted air compressor with jackhammer and an Allied Hole Hog in line with the State of Minnesota bid pricing. The 2005 capital budget had $72,000 for the total expense.  The total expense to date is $65,774.97 without a hydraulic quick coupler for the backhoe, leaving a balance of $6,225.03.  Moved by Marks and supported by Park to approve purchasing a water service truck chassis from Iron Trail Motors at a cost of $21,790.67, a seven-foot utility body for the water service truck from Crysteel Truck Equipment at a cost of  $10,387.41, a trailer mounted air compressor with jackhammer from Trenchers Plus at a cost of $11,987.64, an Allied Hole Hog Model 1000C for the gas crew from Trenchers Plus at a cost of $4,792.50, and a utility body for steam truck No. 63, one-ton GMC with mobile crane from United Truck Body at a cost of $16,816.75.  Motion carried.

 

carried forward

 

Public Utilities Commission

Meeting Minutes

March 14, 2005

Page 2

brought forward

 

Mr. Ganoe reported the Virginia Public Utilities has provided AutoCAD training for two of the three Engineering Technicians.  Management is requesting authorization for Engineering Technician Ron Cackoski to attend the Taylor Technologies AutoCAD training to be held on April 19-21, 2005 in St. Louis Park, Minnesota at a cost of approximately $1,042.50 to include registration, lodging, and meals.  The training session for   March 21-23, 2005, is full but they have enough students carried over to support another training session.  Moved by Park and supported by Raukar to authorize Ron Cackoski to attend the AutoCAD training on            April 19-21, 2005 in St. Louis Park, Minnesota.  Motion carried.

 

Management requested authorization for Doug Ganoe and Don Rindfuss to attend the Minnesota Office of Pipeline Safety’s annual conference to be held on April 17-20, 2005, at Breezy Point, Minnesota for an estimated cost of $670 to include registration and lodging (meals are included).  Mr. Ganoe mentioned the agenda would cover pipeline safety, regulatory update, maintenance issues, operator qualification training as well as other general topics for all conference attendees.  He believes the attendance is valuable to the Utility customers and Virginia Public Utilities because both Mr. Rindfuss and he handle all the department issues regarding natural gas distribution.  No personnel will need to be replaced at a cost to the Utility because Engineering Technician Don Glumac has agreed to provide coverage in their absences.   Moved by Marks and supported by Raukar to authorize Doug Ganoe and Don Rindfuss to attend the Minnesota Office of Pipeline Safety’s annual conference to be held on April 17-20, 2005, at Breezy Point, Minnesota.  Motion carried.

 

Mr. Leoni reported at the February 07, 2005 meeting, the Commission reviewed a letter sent to them from the Virginia Public Utilities Management Association.  The Commission scheduled a Finance Committee-of-the-Whole meeting for today to discuss contract strategy.  Based on new information received, they cannot enter into contract strategy discussion until after September 01, 2005 (120 days before the contract expires). 

 

Discussion was held on Management staffing.  With the retirement of the Warehouseman, Mr. Leoni asked Lynn Rosebush, Dori Bergman, and Connie Larson to review our needs for the warehouse.  Instead of filling a Warehouseman position at pay grade 15, they proposed using an existing position in the AFSCME Local 729 contract by filling the vacant Material/Clerk Handler position at pay grade 4 and creating a Supervisor-Materials Management position.  The new supervisory position would be responsible for overseeing ordering, storage of all parts, tools, and supplies, maintain security of warehouse and all storage areas, receive inventory and issue to proper department or person, and assist with implementation of Project Management Program.  The Utility purchased Caselle's Project Management Program two years ago but we need the program implemented.  The program tasks tie into both the warehousing and finance system.  In addition, as we move forward with the new positions, there will be room to resolve the inventory control problem in the power plant.  Moved by Park and supported by Marks to approve creating the position of Supervisor-Materials Management.  Motion carried.        Mr. Leoni extended his appreciation to Jim Muskovitz for his input and to Connie Larson, Lynn Rosebush, and Dori Bergman for resolving the warehousing and inventory control issue.  Mr. Leoni apprised the Commission of the other seasonal and temporary AFSCME Local 729 position postings. 

 

Mr. Leoni requested authorization to hire an additional 6/10’s Management position.  The Virginia Public Utilities is currently paying 4/10’s salary to the City of Virginia for a Human Resources / Safety Director’s position.   He requested the Virginia Public Utilities have a full-time Human Resources/Safety management position.  Moved by Marks and supported by Raukar to move forward with filling the 6/10’s Human Resources/Safety position for a full-time management position.  Motion carried.

 

carried forward

 


Public Utilities Commission

Meeting Minutes

March 14, 2005

Page 3                                                              brought forward

 

On March 08, 2005, a joint Finance Committee-of-the-Whole meeting was held with the Hibbing Public Utilities Commission, Virginia Public Utilities Commission, and the Virginia City Council to discuss financing options for the Laurentian Energy Authority (LEA) Biomass Project.  David MacGillivray, Principal and Owner of Springsted, Inc., presented the financial information.   Both the Virginia City Council and the Hibbing Public Utilities Commission held their regular scheduled meetings that evening and both formally accepted Springsted’s recommendation to select RBC Dain Rauscher as Senior Managing Underwriter for the placement of the Taxable Utility Revenue Bond for the Laurentian Energy Authority joint venture biomass project.  Moved by Park and supported by Marks to select RBC Dain Rauscher as Senior Managing Underwriter for approximately $50,800,000 in Taxable Utility Revenue Bonds for the Laurentian Energy Authority biomass project.  Motion carried.

 

As requested at the February 07, 2005 meeting, Management provided the Commission the total annual water gallons not billed on the old water by-pass policy.  Water gallons not billed reduced by 75% by no longer allowing water bypasses before the meter. 

 

Mr. Leoni mentioned the current Water Freeze Prevention Policy has customers responsible for controlling the device used to prevent freeze-up on their service from December 1 through the end of March.  Usage prior to and after this period will be billed.  Because of the cold winter and possible deep frost line, Management requested to extend the Water Freeze Prevention Policy turn-off through the end of April.  After brief discussion, it was the consensus of the Commission to extend the Water Freeze Prevention Policy turn-off for the 2004-2005 season to May 01, 2005.

 

Mr. Marwick updated the Commission on the No. 1 Turbine overhaul project.  Because of poor readings, No. 1 turbine’s exciter and generator rotor were sent to Mielke Electric in Duluth for cleaning and testing.  After some minor cleaning, the readings were improved.  The insulation on the rotor is still viable so it does not need rewinding and they found no deposits on the steam turbine blades.  It is their hope to have No. 1 turbine operating through the summer for a total of six months.

 

The Commission and Management discussed the January 2005 fuel adjustments.   Fuel adjustments are based on cost increases for purchased power as well as diesel fuel adjustments, coal and manpower.  The fuel adjustment for electric was eight tenths of a cent, steam was seven and a half cents, and natural gas was fifteen cents or a total 19% fuel adjustment. 

 

Management and the Commission expressed concerns on an individual, who is an unlicensed plumber, doing steam system work for commercial and residential customers.  This individual has been redesigning the steam heat systems so that condensate is not running through the steam meter but back into the steam service lines and mains.  Personnel are addressing this issue in the Revenue Recovery Program.  Concern is how to bill these customers for un-metered steam heat.  The Commission requested Management relay to the Virginia Public Utilities customers by letter, public access television, newspaper ad and/or customer newsletter identifying this problem and that the Virginia Public Utilities is aware of it.  In addition, it was suggested that those customers who come forward to bring their steam systems into compliance have a reduced penalty.  Commissioner Sipola requested Utility personnel be instructed and trained on identifying this problem.

 

The Commission requested at the March 28, 2005 meeting, Management provide an option as to how the Virginia Credit Bureau may be used (i.e. their services can be used for small collections).

 

There being no further business to come before this meeting, Commissioner Sipola declared the meeting adjourned.   Adjournment at 6.03 p.m.

 

ATTEST:                                                                                              APPROVED:

___________________________                                                                    ______________________________

Jerry Marks, Secretary                                                                          Dr. Don Sipola, President