RPU BOARD MEETING MINUTES
Members Present: Mr. Toulouse, Mr. Landwehr, Mr. Bourgeois and *Mr. Utz
Absent: Mr. Hunziker
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. Bourgeois moved to approve the accounts payable report, seconded by Mr. Toulouse. All voting "AYE"
3. The bids received for the Silver Lake Plant Unit 3 turbine generator overhaul were discussed. Mr. Schlink, Manager of Power Production, explained that best guess estimates were used because the extent of the overhaul will not be known until the engine is opened. He also informed the Board that Mr. Adkins, City Attorney, had some concerns about the terms and conditions of the proposed contract. Mr. Toulouse moved to approve a purchase agreement with Power Generation Services, Inc. contingent upon the City Attorney's review and approval of the contract terms and conditions. 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 purchase order agreement with Power Generation Services, Inc. for
Services and Parts for the SLP Unit 3 Turbine Generator Overhaul
As defined in Proposal #2701 dated
The amount of the agreement to be a firm price for Workscope I of the proposal, and time and material for Workscope II items as determined by staff. The total amount of the agreement not to exceed TWO HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($250,000.00), of which $20,015.00 is identified as a contingency, and Power Generation Services, Inc. being lowest evaluated bidder.
4. The Board discussed the scope of the asset management project with staff. The project is being undertaken due to GASB 34 reporting requirements and the need for better asset records. Mr. Noga, Manager of Finance and Accounting, described the benefits of the project to RPU.
* Mr. Utz entered the meeting at this time.
Mr. Bourgeois said that GASB 34 required RPU to report financials similar to what corporations do and that some firms are hiring additional permanent staff rather than a consultant to accomplish the process. Mr. Bourgeois moved to approve a purchase order agreement with R. W. Beck for consulting services for the asset management project, seconded by Mr. Toulouse. 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 purchase order agreement with R. W. Beck, Inc. for
Consulting Services for the Management of Assets and
Policies/Procedures Associated with GASB 34 Compliance
The amount of the agreement to be ONE HUNDRED EIGHTY-THREE THOUSAND ONE HUNDRED AND 00/100 DOLLARS ($183,100.00).
5. Mr. Koshire, General Manager, provided the following report:
b. RPU's wholesale supplier, the Southern Minnesota Municipal Power Agency (SMMPA), approved the sale of $369 million in bonds to refund existing Agency debt. The bond closing is scheduled for
Mr. Utz asked if SMMPA would pass the debt savings to members. Mr. Koshire said that RPU planned to actively lobby the SMMPA Board for rate relief. Mr. Utz asked the RPU Board if they wished to give Mr. Koshire a recommendation to take to the SMMPA Board. Various recommendations were considered including making a motion to approve the bond sale contingent upon the use of 50% of the savings for rate reduction. Mr. Toulouse suggested that the savings could also be used for debt reduction rather than rate reduction. Mr. Koshire informed the Board that SMMPA has a debt reduction program in place. He was also told by SMMPA staff that the purpose of the current refunding is to reduce the debt service and not for additional monies for future expenditures. Mr. Bourgeois stated that a bond sale may make sense under these circumstances. The annual allocation of member equity payments (profits from the sales of excess capacity) by the SMMPA Board was also discussed. Mr. Koshire informed the Board that he would make a strong recommendation to the SMMPA Board from the RPU Board for rate relief because the Agency's rates are still high. The Board took no action on this item.
6. The management/financial reports were discussed. Mr. Lorber, Director of Operations, informed the Board that the cost impact of the Highway 52 project could be significant. Mr. Adkins stated that the Minnesota Department of Transportation keeps expanding the project.
7. Other Business:
Mr. Utz said he recently attended a very helpful seminar sponsored by the American Public Power Association (APPA) on governance.
8. Mr. Utz moved to adjourn the meeting, seconded by Mr. Toulouse. All voting "AYE" The meeting was adjourned at
Approved by the Board: