Members Present: Mr. Hunziker,
Mr. Jibben, Mr. Utz, Mr. Landwehr, Ms. Parker
Absent: None
Board President Landwehr called
the meeting to order at
1. Mr. Utz moved
to approve the minutes of the
2. Mr. Utz moved
to approve the accounts payable report, seconded by Mr. Jibben. Ms. Parker noted her relationship with the
County in her review of the summary payables report, and stated that she would
abstain from voting on County expenditures that came before the Utility Board. All voting “AYE”
3. Mr.
Landwehr opened the meeting for comments from the
public. No one wished to be heard.
4a. The various insurance quotations received for all risk
property insurance and general liability and automotive insurance for 2004 were
discussed. Mr. Darwin Olson from the C.
O. Brown Agency appeared before the Board to discuss the coverage and premiums
for 2004. Mr. Jibben
moved to approve en bloc the resolutions for property and liability insurance
for 2004, seconded by Ms. Parker. All
voting “AYE”
BE IT RESOLVED by the
Public Utility Board of the City of Rochester, Minnesota, that the Common
Council of the said City is requested to approve an insurance agreement with
Starr Technical Risks Agency, Inc. (Hartford Steam) for furnishing the
following insurance coverage: ALL RISK
PROPERTY INSURANCE
The
insurance agreement to be for a twelve month policy period commencing
The
amount of the twelve month premium effective
BE IT RESOLVED by the
Public Utility Board of the City of Rochester, Minnesota, that the Common
Council of the said City is requested to approve an insurance agreement with
the League of Minnesota Cities Insurance Trust for:
COMMERCIAL AUTOMOBILE AND GENERAL LIABILITY INSURANCE
The
insurance agreement to be for a twelve month policy period commencing
The
amount of the twelve month premium effective
BE IT RESOLVED by the
Public Utility Board of the City of Rochester, Minnesota, that the Common
Council of the said City is requested to approve an insurance agreement with
the Associated Electric and Gas Insurance Services, Ltd. (AEGIS) for furnishing
the following insurance coverage: EXCESS
GENERAL LIABILITY INSURANCE
The
insurance agreement to be for a twelve month policy period commencing
The
amount of the twelve month premium effective
4b. Mr.
Hunziker moved to approve a resolution authorizing
the depositories for Utility monies, seconded by Ms. Parker. All voting “AYE”
BE IT RESOLVED by the Public Utility
Board of the City of Rochester, Minnesota, that the following banks, authorized
to do business in Minnesota, are the designated depositories for demand deposit
accounts and temporary investment of funds of Rochester Public Utilities, City
of Rochester, Minnesota, within the limits established by the City of
Rochester, for the term commencing January 1, 2004 through the 31st
day of December, 2004.
US
Bank
Wells
The above depositories,
and any added during the term by the City Finance Director, shall pay interest
at such rate or rates, per annum, as may be mutually agreed upon by the
Rochester Public Utilities and the respective depository at the time such
deposits and investments are made.
The depository shall
pay on demand all deposits subject to payment on demand, with accrued interest,
and pay on demand all time deposits with accrued interest, at or after
maturity.
4c. Mr.
Utz moved to approve the advertisement of sealed bids
for contract tree trimming services for 2004, seconded by Mr. Jibben. All voting
“AYE”
5. Mr.
Lorber, Director of Operations, discussed IBM’s request for standby electric
service from RPU. The critical nature of
certain IBM’s operations requires a level of service reliability that can be
met only with on-site standby generators.
Two gensets are targeted for commissioning
approximately July 1. An agreement for
standby service has been drafted for the first genset. The exact charge to IBM for standby service
will not be determined until bids have been received, but is projected to be in
the range of $50,000 to $75,000 annually per genset. The purchase cost of the two gensets is estimated to be approximately $1 million to $2
million, depending on whether new or used units are purchased. The 2004 budget contains $2.5 million for the
project. Mr. Lorber also said staff
anticipated coming back to the Board in February for consideration of genset bids. The
City Attorney has reviewed the proposed contract.
Mr.
Jibben moved to approve the Agreement for Standby
Electric Service for IBM, seconded by Mr. Hunziker. All voting “AYE”
BE
IT RESOLVED by the Public Utility Board of the City of Rochester, Minnesota,
that the Common Council of the said Cit is requested to approve a contract
agreement with IBM and that the Common Council authorize the Mayor and the City
Clerk to execute the agreement for Agreement for Standby Electric Service for
B020/EG#1
Initial
pricing for the included services shall be finalized by the Designated
Representatives prior to initiating service.
6. The
2004 water and electric capital and operating budgets were discussed. The budgets were presented to the Board at
the November meeting. Mr. Koshire,
General Manager said that the budgets reflect the strong growth of the
community plus the various highway projects.
Mr. Landwehr stated that the basic assumptions
in the budget are a 2% increase in electric revenue and a 4% increase in water
revenue. Mr. Koshire also stated that
the real driver in the budget is the wholesale power costs of over 60%. No additional staff is requested for
2004. Ms. Parker moved to approve the
budgets, seconded by Mr. Utz. All voting “AYE”
BE
IT RESOLVED by the Public Utility Board of the City of Rochester, Minnesota,
that the Common Council of the said City is requested to approve the 2004
electric and water capital and operating budgets.
7. The
proposed electric revenue adjustments for 2004 were discussed with the
Board. Mr. Kraft, Director of Administration,
pointed out that while the budget document reflects a 2% increase, a 3%
increase would offset the swings which bring RPU below its minimum reserve
levels. Mr. Jibben
asked what an appropriate cash reserve would be for the electric utility. Mr. Koshire stated that a target of $14
million to $15 million would be appropriate for a utility of this size. Mr. Jibben said
that the Fitch Rating Agency report recommended that RPU have 2 months of
operating expenses. Mr. Koshire said
that this would be approximately $16 million.
Mr.
Hunziker said he understood the rationale for the
increase, but expressed concerned about the timing of the increase in view of
the other charges that homeowners would be experiencing in two to three weeks. Mr. Jibben said
that he didn’t want to see multiple increases done and that there were no
additional staff being requested. Mr. Koshire
stated that in comparing RPU’s customer base to the
number of its employees, in 1995 there were 337 customers served per employee
and in 2004, that number is projected to be 413 customers per employee. He also
mentioned that electric rates are 6% lower today than they were in 1994, and
that he felt RPU has a good argument to make for being fiscally responsible.
Ms.
Parker moved to approve a 3% increase in electric rates to all customer classes
effective
BE IT
RESOLVED by the Public Utility Board of the City of Rochester, Minnesota, that
the Common Council of the said City is requested to approve a 3.0% increase
electric rates effective
Residential Service (RES) Large
Industrial Service (LIS)
Residential Service-Dual Fuel (RES-DF) Interruptible Service (INTR)
Residential-High Efficiency HVAC (RES-HEF)
General Service (GS) Traffic
Signals (TS)
General Service Time-Of-Use (GS-TOU) Highway
Lighting (HL)
Medium General Service (MGS) Security
Lighting (SL)
Medium General Service Time-Of-Use (MGS-TOU) Civil Defense Sirens (CDS)
Large General Service (LGS)
Mr.
Utz moved to approve changes to the electric rate
schedules affected by the increase, seconded by Ms. Parker. All voting “AYE”
BE IT
RESOLVED by the Public Utility Board of the City of Rochester, Minnesota, to
approve the following rate schedules effective
Residential Service (RES) Large
Industrial Service (LIS)
Residential Service-Dual Fuel (RES-DF) Interruptible Service (INTR)
Residential-High Efficiency HVAC (RES-HEF)
General Service (GS) Traffic
Signals (TS)
General Service Time-Of-Use (GS-TOU) Highway
Lighting (HL)
Medium General Service (MGS) Security
Lighting (SL)
Medium General Service Time-Of-Use (MGS-TOU) Civil Defense Sirens (CDS)
Large General Service (LGS)
8. The
proposed water revenue adjustment was discussed. Mr. Kraft stated that RPU had less control on
water utility expenditures due to City projects, and that staff was
recommending a 4% increase. He also
pointed out that only the Water Service (WTR) would
be changing and not the Fire Hydrant Facilities Charge (FHFC). Mr. Utz noted that
the average water residential customer would see an additional 42˘ charge on
their monthly bill if the water rates were increased by 4%. Mr. Utz moved to
approve en bloc resolutions for a 4% increase to the water service rates and
appropriate changes in the rate tariff effective
BE IT
RESOLVED by the Public Utility Board of the City of Rochester, Minnesota, that
the Common Council of the said City is requested to approve a 4.0% increase
water rates effective
Water Service (WTR)
BE IT
RESOLVED by the Public Utility Board of the City of Rochester, Minnesota, to
approve the following rate schedules effective
Water Service (WTR)
9. The
General Manager provided the following report to the Board:
a. Ms. Mary
Tompkins, Manager of Customer Services, gave a presentation on the status of
the automated meter reading (AMR) project at RPU. Currently there are 21 billing cycles with 5
meter reader routes. Formerly there were
six meter readers with six routes. AMR
is being implemented under a seven year plan.
All new homes have AMR, but no commercial customers as yet. Close to 50% of residential customers now
have AMR. The
Board directed staff to continue the project.
10. The
management/financial reports were discussed.
RPU’s contract with the Minnesota Municipal Power Agency (MMPA) was discussed.
Some of the Board members expressed concern about the continuing
disputes over contract administration being generated by MMPA,
the need for further mediation sessions, and the amount of RPU staff time and
financial resources it was taking to resolve them.
11. Mr. Utz moved
to adjourn the meeting, seconded by Ms. Parker. All voting “AYE” The meeting was adjourned at
Approved by
the Board: