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, april 11, 2005, AT 4:30 P.M.
Commissioner Sipola called the meeting to order at
4:30 p.m.
Present:
Commissioners Marks, Raukar, Park, Bloomquist, and Sipola.
Absent None.
Also Present: Terry Leoni, General Manager; Sue Lalli,
Supervisor-Public Relations; Douglas Ganoe, Director-Operations; Jeff
Marwick, Manager-Electric Generation; Lorraine Ilminen,
Supervisor-Administration; City Councilor Steve Peterson.
The following reports were
presented to the Commission for their information:
LIST OF INVESTMENTS
At
the May 24, 2004 meeting, the Commission received a letter from the City
Clerk/Finance Director requesting participation in an economic development
project at the Virginia Regional Medical Center by providing infrastructure for
utilities at an estimated cost of up to $30,000.00 for the new buildings of the
Iron Range Rehabilitation Center and St. Mary’s/Duluth Clinic. At that meeting, the Commission tabled the
City Council and Hospital Commission’s request for Utility participation in the
economic development project and the Commission requested Management
investigate the costs further. Mr.
Leoni reported the Utilities’ engineering department put together numbers for
extending natural gas, water, and electric services (to include a transformer)
to the new buildings of the Iron Range Rehabilitation Center and St.
Mary’s/Duluth Clinic and costs will be close to $47,000. Management is anticipating receiving a letter
from the City requesting we participate in an economic development project at
the Virginia Regional Medical Center by providing infrastructure for utilities
at $45,000 opposed to the $30,000.
Moved by Park and supported by Bloomquist that financial Resolution #5052 authorizing the second half of March 2005
payroll in the amount of $83,276.68 checks #43459 through #43481 and direct
deposits, and bills dated April 10, 2005, in the amount of $446,392.80 checks
#71203 through #71284, and the first half of April 2005 wire and electronic
transfers; and the minutes of the
regular meeting held on March 28, 2005, is approved as presented. Motion carried.
At
the February 23, 2004 meeting, the Commission approved JayEn’s quote of $13,819
for a DVR security camera system with VCRs added to each of the DVR
recorders. Mrs. Lalli reported since
that time, technology has changed and presented a revised quote for additional
equipment. The major changes on this
quote are: 1) The Utility
requested one more recording system set up in the Chemical building located in
the South power plant parking lot; 2) recording time on two single camera set
ups (the water filtration plant and North power plant parking lot) only archive
15 days before write over begins. These
two single camera units cost $800 less than the multi-camera units did. Moved by Marks and supported by Park to
approve the revised security camera quote from JayEn with the requested
revisions as of March 30, 2005, for a total of $16,035. Motion carried.
At
4:45 p.m., Commissioner Marks the meeting.
Management
identified two areas of the steam system that customers are close to 80% off
steam heat. Management requested a meeting
of the Commission to establish a policy or course of action in determining at
what point do we begin looking at abandoning the steam system in these areas
identified.
Management
presented the March 2005 injury summary report.
There were three accidents reported (overstretched Achilles tendon,
twisted knee, and strained upper back).
Only one accident had some lost time and the employee is back to work
with no restrictions.
carried forward
Public
Utilities Commission
Meeting
Minutes
April
11, 2005
Page
2
brought forward
Mr. Leoni reported all the legislative bills for the biomass project (sales tax exemption, redefining the closed versus open loop biomass, and funding) have passed the House and Senate Committees with favorable responses. As a requirement of the Virginia/Hibbing Joint Biomass Project (Laurentian Energy Authority) permitting process, the Minnesota Pollution Control Agency (MPCA) is holding a public informational meeting at the Virginia City Hall on May 11, 2005, and a public informational meeting in Hibbing on May 12, 2005. An organizational meeting of the Laurentian Energy Authority will be scheduled the week of April 18, 2005. It is hopeful the full Virginia and Hibbing Public Utilities Commissions will be present, but most importantly the Commission Presidents and Vice Presidents, along with both the Hibbing and Virginia General Manager’s. At 4:55 p.m., Commissioner Raukar joined the meeting. Mr.
Ganoe reported in March, as part of our 2005 capital budget, the Virginia Public
Utilities received a quote for a new Engineering truck through the State of
Minnesota bidding process. Management
then checked with three local vendors to see if they could match the State bid
and Lundgren Motors was able to match it.
The 2005 capital budget had $19,000 for the total expense. The total equipment expense to date is
$85,067.78, leaving a balance of $5,932.22 under budget of the total
$91,000. Moved by Park and supported by
Raukar to approve purchasing a new engineering truck from Lundgren Motor’s at a
cost of $17,813.25 plus sales tax for a total $18,971.11. Motion carried.
Mr.
Ganoe reported during final design of the 2005 water projects, the Virginia
Public Utilities evaluated a different method of installation and piping against
the current installation practices.
Analysis demonstrated that installing a P.E. water main using
directional boring, as an option was extremely cost effective to installing
ductile iron pipe. The excavation,
backfill and restoration costs are significantly lower. The initial budget for water projects as
approved by the Commission is $78,236 and included 3 small jobs. Under the different method of installation,
the Utility could do two large projects in addition to the three small projects
for an additional expense of $17,355.
Using ductile Iron for all five projects would cost $224,577 including
restoration costs. The Engineering
Department’s recommendation is that all five projects shown on the Water
Project Cost Sheet be completed using the new installation method at a cost of
$95,771 to install the main only and the services will be installed by the
Utilities’ Service Crew. The Utilities
can use Quality Underground Services (who was awarded the 2005 natural gas
projects) to reduce mobilization costs.
In addition, the Utilities can use the same equipment used for splicing
and connection on the PE water lines as we currently use on the PE gas lines,
therefore the Utilities is equipped to do future repairs if any arise. Moved by Park and supported by Raukar to
authorize the revised 2005 water project budget for installing water mains at a
cost of $95,771. Motion carried.
A
Commission Finance Committee-of-the-Whole meeting with Walker, Giroux &
Hahne was held earlier today to review the 2004 audit report. Commissioner Sipola mentioned this is the
first time in three years that water paid for its self. In accordance to the auditors, the Utility
cannot authorize items like the employee appreciation certificates, the All
City Christmas party donation, etc. The
Commission suggested the auditor’s letter be included in the next employee
newsletter. Moved by Park and supported
by Bloomquist to accept the 2004 annual audit report as presented. Motion carried.
The
Water Freeze Prevention / Water By-Pass report for December 2004 through March
2005 was presented and reviewed. The
total number of water gallons not billed in the 2004 to 2005 season is 265,500
gallons less in comparison to the 2003 to 2004 season.
carried forward
Public Utilities Commission
Meeting
Minutes
April
11, 2005
Page
3
brought forward
Discussion was held on staffing. The two seasonal Fuelhandler/Utilityman positions were awarded to Daniel Meados and Jason Lamppa. Letters will be going out to Jim Sereno awarding the Material/Clerk Handler position and Lorraine Ilminen awarding the Supervisor-Materials Management position. Filling the 6/10’s Human Resources/Safety position for a full-time management position is on hold until after the April 12, 2005 City Council meeting.
Mr.
Marwick updated the Commission on the No. 1 Turbine overhaul project. This week the turbine’s exciter and generator
rotor will be installed. Power Plant
Services will be cleaning the turbine bladings.
The project is proceeding but slowly.
It is still Management’s goal to have the No. 1 turbine on line by the
first week of May 2005 and in operation through the summer for a total of six
months to realize a savings in coal costs.
Discussion
continued on the two areas of the steam system that customers are close to 80%
off steam heat. There is a huge repair
area on Southside from 11th Street South to the South end of the
City that needs to take place with only six homes on the steam system. The area on North side is 60% off the steam
system and only a couple more homeowner’s off the steam could bring it to
80%. It was the consensus of the
Commission a Finance Committee-of-the-Whole meeting be scheduled at 4:00 p.m.
on Monday, April 25, 2005, to discuss the steam system. Commission Raukar mentioned the age of homes
should be another consideration as there is a possibility some of those homes
may not be there in a few years. The
Commission will consider three items as criteria for steam repair or abandonment: 1) the payback period; 2) if the density is
low; 3) a threshold on losses.
At the Commission’s request, Management provided a review on how we use
collection services at RCB in Hibbing and the Credit Bureau in Virginia. RCB has been chosen over the Virginia Credit
Bureau primarily for the services offered (the commission rate is 25% lower,
method of submission can be electronic file/format versus handwritten coupons,
legal services, etc.).
There
being no further business to come before this meeting, Commissioner Sipola
declared the meeting adjourned.
Adjournment
at 5:58 p.m.
ATTEST: APPROVED:
___________________________ ______________________________
Jerry
Marks, Secretary Dr.
Don Sipola, President