RPU BOARD MEETING MINUTES
Members Present: Mr. Toulouse, Mr. Landwehr, Mr. Hunziker, and *Mr. Utz
Absent: Mr. Bourgeois
Also Present: Mr. Adkins, City Attorney
Board President Landwehr called the meeting to order at
1. Mr. Toulouse moved to approve the minutes of the
2. Mr. Hunziker moved to approve the accounts payable report, seconded by Mr. Toulouse. All voting "AYE"
* Mr. Utz entered the meeting at this time.
3. Mr. Wente, Smith Schafer & Associates, presented the results of RPU's 2001 annual audit to the Board. There were no new significant accounting policies during the year or disagreements with management. Much of the information presented during the meeting will be contained in RPU's annual report.
4. The proposed relocation of RPU's transmission line at
Mr. Toulouse moved that the Board recommend Option 1 to the City Council as presented by Ulteig Engineering for the rerouting of the
Mr. Utz moved to amend Mr. Toulouse's motion to recommend to the City Council Options 1 and 3 (with the statement that Option 3 may be in the City's greater long-term interest) and noting the Utility Board's willingness to pay for one-half of the relocation costs up to a maximum of $300,000, seconded by Mr. Hunziker. All voting "AYE"
Mr. Toulouse moved to approve the amended motion, seconded by Hunziker. All voting "AYE"
5. The proposed System Performance Agreement with Novaspect, Inc. for the boiler controls at the Silver Lake Plant was discussed. City Attorney Adkins objected to some of the provisions in the agreement. Mr. Toulouse recommended that the City Attorney review the agreement before the Board considers it further. Mr. Utz moved to table the System Performance Agreement with Novaspect, Inc. until the May Board meeting subject to approval of final form by the City Attorney, seconded by Mr. Toulouse. All voting "AYE"
6. A service territory settlement agreement with RPU and People's Cooperative Services for the City's acquisition of electric service rights to certain calendar year 2000 annexations was discussed. An exception in the agreement to the areas annexed in 2000 is the plat for Celestica. RPU and People's were unable to agree on acquisition terms for this specific area, and RPU has petitioned the Minnesota Public Utilities Commission to determine appropriate compensation for Celestica. Mr. Toulouse moved to approve the settlement agreement, 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 a contract agreement with People's Cooperative Services and that the Common Council authorize the Mayor and the City Clerk to execute the agreement for
Certain Calendar Year 2000 Annexations
The compensation for acquisition of electric service rights to the subject annexed areas will be 8.5 mills per kilowatt-hour ($0.0085/kwh) on future energy sales in the areas during the specified time period.
7. Mr. Hunziker moved to approve changes to the Highway Lighting (HL) and Load Management Credits (LMC) Rate Schedules previously discussed at the March meeting, seconded by Mr. Utz. The public was notified of the proposed changes in accordance with Board policy. 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 adjustments to the following rate classes effective
Highway Lighting (HL)
Load Management Credits (LMC)
8. The topics of electric revenue adjustment and bonding were discussed. Community growth and the Utility's investment in infrastructure and production facilities are projected to deplete the Utility reserves below the Board policy limits. Mr. Hunziker and Mr. Landwehr stated that they would prefer a short bonding term since the markets can change. Additional scenarios for a proposed revenue adjustment and bonding were discussed. Mr. Koshire stated that the City's financial advisor, Springsted and Associates, was reviewing the proposed financing model and bond sale. The Board was requested to direct staff to give public notice of a rate change in accordance with policy with a recommendation to be brought to the May board meeting for final action and recommendation to the Common Council.
Mr. Toulouse moved to direct staff to advertise a 3% electric rate increase for approval by the Board at its May 28 meeting and by the Council at its June 3, 2002 meeting, and that RPU issue $10 million of bonds with the maturity to be determined at the shortest possible timeframe, seconded by Mr. Hunziker. All voting "AYE"
9. Mr. Koshire, General Manager, provided the following report:
a. The Board was invited to RPU's annual Pancake Breakfast sponsored by the Employees Association.
b. There will be a dedication ceremony for the new Cascade Creek combustion turbine on May 23. Mr. Koshire thanked all the employees involved with this major project.
c. A transmission line upgrade from the Silver Lake Plant to the Chester Substation was successfully completed and staff was congratulated for their efforts.
d. The May 28 Board meeting will be at the Silver Lake Plant.
f. RPU is determining the infrastructure changes required in the electric utility and water utility to support the Highway 52 widening project. RPU could be looking at significant charges for the electric utility which has budgeted $1.15 million for the project.
g. The Government Accounting Standards Board (GASB) 34 rule will have an impact on RPU with respect to how we track and value assets. This topic will be discussed in greater detail at a future Board meeting.
10. The management/financial reports were discussed.
11. Mr. Utz moved to adjourn the meeting, seconded by Mr. Hunziker. All voting "AYE"
The meeting was adjourned at
Approved by the Board: