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, JuLY 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; Dori Bergman – Supervisor-Accounting; Bill Hafdahl, Director – Finance & Administration; City Councilors, Rob Raplinger and Steve Peterson.

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

LIST OF INVESTMENTS

Commissioner Sipola welcomed the new Director of Finance and Administration, William Hafdahl. Mr. Hafdahl began with the Department on July 11, 2005.

Moved by Park and supported by Raukar that financial resolution No. 5059 authorizing the authorizing the second half of June 2005 payroll in the amount of $88,038.73 checks #43606 through #43631 and direct deposits and bills dated July 10, 2005 in the amount of $537,340.65, checks #71772 through #71885, and the first half of July 2005 wire and electronic transfers be approved as presented. Motion carried.

The June 2005 Monthly Injury Summary report was reviewed and it was noted there were no lost time injuries reported.

Management reported the date of the State of Minnesota Public Utilities Commission’s hearing on the approval of the Purchase Power agreement between Northern States Power Company d/b/a/ Xcel Energy and NGPP Minnesota Biomass, LLC has been set for Thursday, July 21, 2005 at 9:30 a.m. Mr. Leoni along with the Hibbing General Manager, Jim Kochevar, will be attending. It is expected that legislators from the Range area will also attend to show support for the Biomass Project. In addition, the Governor’s liaison on energy issues will attend to show support.

Management has been negotiating with the owner of 629 3^rd Street South, Virginia, Minnesota and requests authorization to purchase this property for $72,000, the assessed valuation. Purchase of this property will assist with the Department’s long-term goals to purchase property surrounding the current office building in an effort to improve the facility and meet needed space requirements. Demolition of any unwanted structures on the property would be handled in conjunction with the current Facility Plan. Moved by Marks and supported by Park to authorize management to purchase the property located at 629 3^rd St South, Virginia, Minnesota for the assessed valuation of $72,000 and to take steps necessary to ensure any unwanted structures on the property are demolished in conjunction with the current Facility Plan. Motion carried.

One bid was received from Doug Ganoe, employee of the Utilities for the purchase of the garage personal property the Department acquired at 621 3^rd St South, Virginia. Moved by Marks and supported by Raukar to accept the bid received from Doug Ganoe to purchase the garage personal property acquired by the Department at 621 3^rd St. South, Virginia for $100 and that all garage personal property be removed so as to allow any demolition to take place in conjunction with the current Facility Plan. Motion carried.

carried forward

Public Utilities Commission

Meeting Minutes

July 11, 2005

Page 2

brought forward

Rob Raplinger, currently working with the Virginia Teen Center, addressed the Commission regarding the possibility of the Utilities setting up a utility billing payment program where customers’ could opt to have their billings rounded up to the nearest dollar. The difference received from the rounding-up to be contributed to a local organization on behalf of the customer. After discussion, it was moved by Marks and supported by Raukar that Management be authorized to look into a program such as this, checking with the City Attorney and the Utilities’ Auditor. Motion carried.

Management conveyed that until the IRRRB Loan is approved for the Biomass project, the Department’s reserves are being reviewed. The General Manager would report back to the Commission once an analysis of investments has been done.

Management updated the Commission on the Automated Meter Reading Project. On July 1, 2005 the first readings were taken with the new AMR equipment. As the project to date is under budget, three additional areas are being considered in conjunction with the Midway area. Automated Meter Reading equipment will be installed in Pine Mill Court, the College Park area, and the Cedars Condominiums with use of the remaining funds budgeted. A five-year AMR budget will be prepared. A list of hard-to-read locations will be established and looked at for inclusion in the project.

A travel expense reimbursement request was presented by the General Manager for a trip taken on July 6, 2005. After discussion it was moved by Marks and supported by Raukar to pay the amount requested. Further discussion followed. Moved by Raukar and supported by Park to table the question to vote to the next regular Commission meeting so that additional information could be obtained from the Utility’s auditor regarding the appropriateness of this expense. Motion carried.

The General Manager reported that the New Director of Finance and Administration, William Hafdahl, began today. Interviews have been held for the open position of EDP in the business office. It is expected that the recommendation to award this position will be presented to the Commission at the next regular meeting.

There being no further business to come before this meeting, it was moved by Marks and supported by Raukar that the meeting be adjourned. Motion carried. Adjournment at 5:35 p.m.

ATTEST: APPROVED:

_________________________________________ ____________________________________

Jerry Marks, Secretary Dr. Don Sipola, President