A REGULAR MEETING OF THE PUBLIC UTILITIES COMMISSION OF THE CITY OF VIRGINIA, MINNESOTA, WAS HELD AT THE OFFICE OF THE DEPARTM

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, OCTOBER 9, 2006 AT 4:30 P.M.

Commissioner Sipola called the meeting to order at 4:30 p.m.

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

Absent: None.

Also Present: Terry Leoni - General Manager; Bill Hafdahl - Director-Finance & Administration; Sue Lalli - Supervisor-Public Relations / Customer Service; Don Rindfuss - Director, Operations Distribution (Electric & Gas); Dennis Lindberg, City Councilor; Scott Weappa and Gordy Smith, International Brotherhood of Electrical Workers Representatives.

Councilor Lindberg suggested the Commission look at the possibility of having one Commission meeting each month in place of the current two meetings a month. Management will obtain information from the VRMC Commission to determine how approval of bills is handled when the Commission meets only one time each month. The Commission will discuss the issue at the next Committee Meeting of the whole. This item will be placed on the agenda for the November 13, 2006 Utility Commission meeting.

Moved by Park and supported by Raukar that financial Resolution No. 5089 authorizing the payroll dated September 28, 2006 in the amount of $95,981.15, checks #44458 through #44483, and direct deposits #9757 through #9810; and bills dated September 26, 2006 through October 9, 2006 in the amount of $455,848.24, checks #74603 through #74731, and wire and electronic transfers in the amount of $69,390.18 and the minutes of the regular Commission Meeting held on September 25, 2006 be approved as presented. Motion carried.

The minutes of the August 24, 2006 Safety Committee were received and filed.

The September 2006 Monthly Injury Summary Report was presented and reviewed.

Management recommended the Commission consider allowing Management to extend the current Gas Circuit Rider Program Contract with MMUA as the Utility does not have a fully qualified individual on staff to meet with the Office of Pipeline Safety and provide emergency training to outside distribution crews and Weekend Duty personnel. MMUA also provides the Operator Qualification training to the Virginia Public Utility Gas Crew employees. The current budget has allowed for this contract expense. Moved by Bloomquist and supported by Raukar that Management be authorized to extend the current Gas Circuit Rider Program Contract with MMUA. Motion carried.

Mr. Leoni reported the Biomass Project is still on schedule and on budget. Hydro of the new boiler will take place on October 12, 2006 with the first fire set for the week of November 20, 2006. Training for both Hibbing and Virginia personnel took place in Hibbing the week of October 2, 2006. All Plant Operators and some Maintenance personnel obtained training. The training sessions were taped and a copy will be kept for future reference. Training on the ash system, precipitator, and vibrating stoker grate also took place during the week of October 2, 2006. A Commissioning representative from Foster Wheeler will be on site in Virginia until the end of the project. Delivery of wood has begun at the Mt. Iron wood yard. The scale has yet to be installed and some of the blacktop is in place.

At their August 29, 2006 meeting the Virginia City Council requested the Public Utility Commission consider utilizing a project labor agreement for projects over $50,000. The Hospital Commission approved utilizing a project labor agreement for projects over $150,000. Management recommended the Utility utilize a project labor agreement for projects over $150,000. Scott Weappa and Gordy Smith from the International Brotherhood of Electrical Workers were present to answer any questions the Commission might have on project labor agreements. After discussion it was moved by Bloomquist and supported by Park that the Utility notify the Virginia City Council that the Department of Public Utilities is in agreement with utilizing a project labor agreement for projects over $150,000. Motion carried.

After a brief discussion, it was moved by Park and supported my Muskovitz that Management be authorized to set a date for the auction of surplus equipment. Motion carried.

Carried forward

City of Virginia Page 2

Public Utilities Commission

Meeting Minutes

October 9, 2006

Brought forward

Moved by Bloomquist and supported by Raukar to amend the Natural Gas Service Policy as presented and discussed at the Utility Commission meeting held on September 25, 2006 to provide uniform installation polices for customers requesting installation of natural gas. Motion carried.

Moved by Park and supported by Raukar to waive the second reading of this amended Natural Gas Customer Service Policy change. Motion carried.

Mr. Leoni reported the Accounting Supervisor, Tracy Peterson, along with Mr. Hafdahl completed a list of accounts that has been sent to the Virginia City Clerk so that special assessments can be placed on the property tax for properties that have seriously delinquent utility billings.

Mr. Leoni reviewed the status of a claim that has been filed against the Coates Hotel – Hyde Hospitality and the Department resulting from an injury on a steam grate last year.

There being no further business to come before the Commission, Commission President Sipola declared the meeting adjourned at 5:13 p.m.

ATTEST: APPROVED:

_______________________________ _______________________________

Matt Raukar, Secretary Dr. Don Sipola, President