Minutes of the regular meeting of the Water, Light, Power and Building Commission of the City of East Grand Forks, Minnesota held January 16, 2007 at 7:00 P.M.
Present: Gregoire, Quirk, Ogden, Vetter
Absent: None
It was moved by Commissioner Quirk second by Commissioner Ogden that the minutes of the previous meeting of January 2, 2007 be approved as read.
Voting Aye: Gregoire, Quirk, Ogden, Vetter
Voting Nay: None
The following bills and payroll were recommended for approval:
|
VENDOR |
DESCRIPTION |
AMOUNT |
|
|
29235 |
Acme Electric |
Supplies |
92.84 |
|
29236 |
Ameripride Linen/Apparel |
Contracted services |
282.81 |
|
29237 |
APPA |
Dues/Training & school |
4,688.88 |
|
29238 |
Apco Willamette |
Parts & supplies |
584.18 |
|
29239 |
AutomationDirect.com |
Supplies |
196.21 |
|
29240 |
Batteries Plus |
Supplies |
60.34 |
|
29241 |
Border States Electric |
Inventory; supplies |
1,577.83 |
|
29242 |
Dan Boyce |
Expenses |
874.97 |
|
29243 |
Brady Martz & Assoc |
Professional fees |
667.00 |
|
29244 |
Business Essentials |
Supplies |
110.14 |
|
29245 |
City of EGF |
Transfer; CIP program |
301,759.30 |
|
29246 |
Coalition of Greater MN Cities |
Assessment |
2,107.20 |
|
29247 |
Commissioner of Revenue |
Sales; use; grbg surchrg |
35,365.00 |
|
29248 |
Dell Marketing LP |
Supplies |
1,283.94 |
|
29249 |
East Grand Floral |
Miscellaneous |
58.20 |
|
29250 |
East Grand Station |
E-85 fuel |
55.70 |
|
29251 |
Exponent |
Advertising; publishing |
1,025.88 |
|
29252 |
Fed Ex |
Freight |
16.54 |
|
29253 |
Gaffaney’s |
Supplies |
360.58 |
|
29254 |
Galstad Jensen & McCann |
Dec legal fees |
520.00 |
|
29255 |
Gopher State One Call |
Dec locates |
27.55 |
|
29256 |
GF Utility Billing |
Water tests |
250.00 |
|
29257 |
Hardware Hank |
Supplies |
499.25 |
|
29258 |
Hawkins Inc |
Supplies |
7,183.87 |
|
29259 |
Hugo’s #5 |
Supplies |
12.32 |
|
29260 |
Gary Hultberg |
Safety glasses |
100.00 |
|
29261 |
IBM Corp |
Qtrly maint contract |
846.00 |
|
29262 |
Interstate Power Systems |
Maintenance & repairs |
2,595.26 |
|
29263 |
Integra Telecom |
Communications |
9.75 |
|
29264 |
Leighton Broadcasting |
Advertising |
680.00 |
|
29265 |
M & W Services Inc |
Jan 2-11 meter reads |
1,477.30 |
|
29266 |
MeritCare Medical Group |
Drug testing |
48.50 |
|
29267 |
Merchant JT&S |
Training & school |
500.00 |
|
29268 |
Midcontinent Comm Adv Sales |
Advertising |
672.00 |
|
29269 |
MMPA |
Energy/demand |
463,841.80 |
|
29270 |
MMUA |
Training; dues; safety compliance |
18,006.50 |
|
29271 |
Monarch Travel & Tour |
Training & school |
757.60 |
|
29272 |
PKM Electric Co-op |
Permits & fees |
136,141.21 |
|
29273 |
Pamida |
Supplies |
40.21 |
|
29274 |
Pest Detectives |
Contracted services |
218.36 |
|
29275 |
Praxair Distribution |
Supplies |
106.50 |
|
29276 |
Qwest |
Communications |
1,555.13 |
|
29277 |
Qwest |
Communications |
35.85 |
|
29278 |
Radix Corporation |
Maintenance |
136.50 |
|
29279 |
Rydells |
Maintenance |
28.24 |
|
29280 |
Service Bureau |
Dec collection fees |
106.44 |
|
29281 |
TKE Corp |
Contracted services |
330.78 |
|
29282 |
Tony Dorn Inc |
Service agreements |
121.59 |
|
29283 |
Tri-Valley |
CIP billing |
9,102.73 |
|
29284 |
US Foodservice |
Supplies |
123.60 |
|
29285 |
Verizon Wireless |
Communications |
202.10 |
|
29286 |
Vision Companies |
Professional fees |
6,212.50 |
|
29287 |
Basin Electric Coop |
Current |
129,073.93 |
|
29288 |
Water & Light |
Utilities |
10,097.62 |
|
29289 |
X-cel Energy |
Facilities/distribution |
5,192.94 |
|
|
|
Payroll |
51,643.86 |
|
|
TOTAL |
|
$1,148,021.47 |
It was moved by Commissioner Ogden second by Commissioner Vetter that the bills and payroll be allowed as recommended and the Secretary issue checks for the same.
Voting Aye: Gregoire, Quirk, Ogden, Vetter
Voting Nay: None
It was moved by Commissioner Ogden second by Commissioner Quirk that the Secretary now present the 2007 Insulated Power Cable bids.
Voting Aye: Gregoire, Quirk, Ogden, Vetter
Voting Nay: None
The Secretary presented the bids as they were by item and tabulated by the consulting engineers, KBM, Inc.; KBM recommended them for award by the following resolutions:
Commissioner Ogden, supported by Commissioner Quirk, introduced the following resolution and moved its adoption:
BE IT RESOLVED by the Water, Light, Power and Building Commission of the City of East Grand Forks, Minnesota, that the bid of Dakota Supply Group as filed with the Secretary of said Commission for the furnishing of the following item numbers of the cable bids opened January 9, 2007;
ITEM NUMBERS: 1, 2, and 3 for electrical equipment and materials as set forth in the Advertisement for Bids published in the official newspaper, THE EXPONENT, on December 13 and 20, 2006 and as fully set forth in the plans and specifications for the total bid price of Two Hundred Forty-Two Thousand Seventeen and 50/100 dollars ($ 242,017.50) be and hereby is accepted.
Voting Aye: Gregoire, Quirk, Ogden, Vetter
Voting Nay: None
The President declared the resolution passed.
Commissioner Ogden, supported by Commissioner Quirk, introduced the following resolution and moved its adoption:
BE IT RESOLVED by the Water, Light, Power and Building Commission of the City of East Grand Forks, Minnesota, that the bid of Burmeister Electric Company as filed with the Secretary of said Commission for the furnishing of the following item number of the cable bids opened January 9, 2007;
ITEM NUMBER: 4 for electrical equipment and materials as set forth in the Advertisement for Bids published in the official newspaper, THE EXPONENT, on December 13 and 20, 2006 and as fully set forth in the plans and specifications for the total bid price of Ten Thousand Six Hundred Eighty and No/100 dollars ($10,680.00) be and hereby is accepted.
Voting Aye: Gregoire, Quirk, Ogden, Vetter
Voting Nay: None
The President declared the resolution passed.
Commissioner Ogden, supported by Commissioner Quirk, introduced the following resolution and moved its adoption:
BE IT RESOLVED by the Water, Light, Power and Building Commission of the City of East Grand Forks, Minnesota, that the bid of Border States Electric Supply Company as filed with the Secretary of said Commission for the furnishing of the following item numbers of the cable bids opened January 9, 2007;
ITEM NUMBERS: 5 & 6 for electrical equipment and materials as set forth in the Advertisement for Bids published in the official newspaper, THE EXPONENT, on December 13 and 20, 2006 and as fully set forth in the plans and specifications for the total bid price of Three Thousand Seven Hundred Ten and No/100 dollars ($ 3,710.00) be and hereby is accepted.
Voting Aye: Gregoire, Quirk, Ogden, Vetter
Voting Nay: None
The President declared the resolution passed.
It was moved by Commissioner Ogden second by Commissioner Quirk to authorize the purchase of a ½ ton pickup for the Distribution System Foreman.
Voting Aye: Gregoire, Quirk, Ogden, Vetter
Voting Nay: None
It was moved by Commissioner Vetter second by Commissioner Ogden to adopt the updated job descriptions for the Technician II, Technician I and Information Systems Technician positions and authorize the Civil Service to advertise for the position of Technician II with the salary dependent on experience.
Voting Aye: Gregoire, Quirk, Ogden, Vetter
Voting Nay: None
Commissioner Quirk, supported by Commissioner Vetter, introduced the following resolution and moved its adoption:
WHEREAS the Water, Light, Power and Building Commission of the City of East Grand Forks, Minnesota, desires to establish a written policy for practices and procedures for establishing and maintaining electric and water rates for the East Grand Forks Water and Light Department,
NOW, THEREFORE, BE IT RESOLVED by the Water, Light, Power and Building Commission of the City of East Grand Forks, Minnesota, that the attached document entitled General Policy Statement on Electric and Water Rates as currently set forth and as revised or amended from time to time is hereby adopted by reference.
Voting Aye: Gregoire, Quirk, Ogden, Vetter
Voting Nay: None
The President declared the resolution passed.
Water, Light, Power and Building Commission of East Grand Forks, Minnesota
General Policy Statement on Electric and Water Rates
Long Term Rate Setting Objectives, Practices and Procedures
The following are the proposed long-term rate setting objectives of the East Grand Forks Water and Light Department. The proposed objectives reaffirm the rate setting policies and practices currently in effect. The objectives are intended to provide a general policy framework that can be consistently applied to future electric and water rate reviews. Because some policy objectives may unavoidably conflict with others, they should be considered in their entirety to strike an appropriate balance among them when developing, reviewing and prescribing electric and water rates for the customers of the East Grand Forks Water and Light Department.
Revenue Requirement - Electric and water utility rates should be sufficient to meet the Water and Light Department’s revenue requirements, while charging the lowest possible cost to the ratepayer over the long run.
Customer Payments of Cost of Service - Rates should be based on the costs of service to the customer. Rates should reflect changes in the costs of service over time.
Equity - Rates should reflect a fair apportionment of the different costs of providing service among groups of customers.
Efficiency - Rates should provide incentives for cost-effective conservation of electricity and water and the efficient use of electric power and drinking water resources.
Rate Stability - Rate levels and rate structures should be changed in an orderly manner over time.
Financial Stability - Revenue recovery from rates should promote financial stability, consistent with financial policies of the East Grand Forks Water and Light Department and those of the City of East Grand Forks.
Public Involvement - Citizens should be ensured clear and understandable information and opportunities for meaningful citizen participation in the Department’s rate decision process.
Budget and Rate Review Process
The budget and rate review process is generally comprised of three steps as described below. While the documentation of each of the steps is done separately, the documents are the basis of a single completed rate proposal made by the General Manager and reviewed and acted upon by the Water, Light, Power and Building Commission. The documents and discussions are open to public review and comment.
Budget Analysis and Revenue Requirements
The initial step in the process is analysis and preparation of the annual operation and maintenance budget including an update of the projected capital improvement program projects and their costs. This process documents the Water and Light Department’s estimates of all relevant financial information for the period to be covered by the rates. This analysis includes an estimate of electricity and water sales and projected revenue from those sales based on existing rates.
Cost of Service and Cost Allocations
In the second step of the process, the cost of serving each rate group is analyzed. The water system cost of service is done periodically as needed. The electric cost of service study is normally updated annually and serves as the basis for cost allocations of demand, energy, facility and customer related costs by customer groups. For the electric division, this study is prepared by Water and Light Department management staff and supplemented by the Department’s electrical engineering consultant. This study forecasts the share of the total revenue requirement, by category, that should be collected from each customer group.
The Water, Light, Power and Building Commission retains the right to implement new or adjusted rates to respond to extraordinary events without preparation of a new cost of service study.
Cost of Service and Cost Allocation Policies
The cost allocation methodology used by the East Grand Forks Water and Light Department shall allocate the Department’s energy, demand, facility and customer costs among rate groups in a manner that is equitable and consistent with the Commission’s long range objectives. The allocation of costs among rate groups is determined by a cost of service study.
Rate Design
In the final step of the rate review process, rate schedules are designed to recover revenues from each rate group, as determined by the cost allocation process. In designing the rates for each group, the structure, components and the relationship of the components of each rate are determined. A rate recommendation document is prepared by the Department Management with assistance from the engineering consultant. This document includes the rate components and levels recommended for each rate group. The Water, Light, Power and Building Commission adopts rate resolutions for each customer class which specifies the components and the rate levels, along with the requirements and qualifications explaining to whom the rate applies and when it is effective.
Rate Setting Guidelines
It is the policy of the Water, Light Power and Building Commission to set electric and water rates at levels which will ensure that the net revenue available to fund capital requirements in each calendar will be positive with a probability of at least 95%, taking into account the variability of cash flows resulting from the uncertainty of weather conditions, market prices and system loads. For purposes of this financial policy, net revenue available to fund capital requirements is defined as the amount of revenue remaining after payment of wholesale purchased power costs, all other operating and maintenance costs, principal and interest on outstanding debt, taxes, electric franchise fees, all other current obligations and deposits to the Department’s Reserve Accounts.
Adopted: January 16, 2007
Commissioner Ogden, supported by Commissioner Vetter, introduced the following resolution and moved its adoption:
WHEREAS the Water, Light, Power and Building Commission of the City of East Grand Forks, Minnesota, desires to establish a written policy for procedures and methods for establishing and maintaining ongoing fund reserves for the East Grand Forks Water and Light Department, and
WHEREAS the Commission desires this policy to coordinate with its policies, practices and procedures for establishing and maintaining electric and water rates,
NOW THEREFORE BE IT RESOLVED by the Water, Light, Power and Building Commission of the City of East Grand Forks, Minnesota, that the following fund reserves and methods be adopted:
1. An Operating Cash Reserve of a minimum of two months times the monthly peak operating expenses including wholesale power costs.
2. A Capital Contingency Reserve of 50 % of net self insured electric distribution assets and 25% of net water system plant and distribution assets.
3. A Capital construction Reserve of 37 % of planned average annual capital expenditures for electric system extensions and replacements and 50% of planned average annual capital expenditures for water system replacements and improvements.
4. A Bond Payment Reserve in the amount of the annual budgeted and scheduled principal and interest for any outstanding electric and water bonds payable by the Department.
5. A Dedicated Benefit Reserve in the amount of Water and Light Department employee benefits accrued and payable as booked by the Finance Department and reported in the Department’s annual and quarterly financial statements.
6. A Revenue Stabilization and Rate Stabilization Reserve in the amount of 2.5% of the budgeted annual estimated revenue for both the electric and water division.
BE IT FURTHER RESOLVED that the Commission and its staff will conduct at least an annual review and computation of desired fund balances in conjunction with development and approval of the annual Water and Light Department budget.
Voting Aye: Gregoire, Quirk, Ogden, Vetter
Voting Nay: None
The President declared the resolution passed.
It was moved by Commissioner Ogden second by Commissioner Vetter to accept the 2007 charge-offs as presented.
Voting Aye: Gregoire, Quirk, Ogden, Vetter
Voting Nay: None
It was moved by Commissioner Ogden second by Commissioner Quirk that the meeting be adjourned to February 6, 2007 at 7:00 P.M.
Voting Aye: Gregoire, Quirk, Ogden, Vetter
Voting Nay: None
Bonnie Abel
Sec'y