RPU BOARD MEETING MINUTES December 23, 2002

Members Present: Mr. Toulouse, Mr. Landwehr, Mr. Utz, Mr. Bourgeois and Mr. Hunziker

Absent: None

Also Present: Mr. Adkins, City Attorney

 

Board President Landwehr called the meeting to order at 4:00 p.m.

 

1. Mr. Utz moved to approve the minutes of the November 26, 2002 meeting, seconded by Mr. Hunziker. All voting "AYE"

 

2. Mr. Toulouse moved to approve the accounts payable report, seconded by Mr. Utz. All voting "AYE"

 

3. Mr. David Berg, R. W. Beck, appeared before the Board to discuss new residential underground customer connection fees. Mr. Koshire said that most utilities use connection fees to help support development. RPU staff is currently reviewing its costs for installing electric facilities to serve new subdivisions and the appropriate method to pay for those costs. As the City continues to grow and the costs for installing facilities in new subdivisions have continued to increase, this continues to put upward pressure on rates. At one time, RPU had a per lot charge for new development, but it was dropped in 1989. The R. W. Beck data presented was calculated on a per customer basis. R. W. Beck recommended that RPU implement a one-time residential underground service connect fee to be paid by developers for new residential underground electrical services in the amount of $300. Mr. Hunziker asked if RPU could use an approach similar to what the City currently does for water towers on an area-wide basis. Mr. Adkins stated that this process is known as assessment which we can do by law. The Board directed staff to survey other Minnesota cities with respect to electric connection fees and gather any other pertinent information on this topic for presentation at a future Board meeting. Mr. Adkins said he would review the assessment process and provide the results to staff. The Board took no further action on this item.

 

4. Mr. Hunziker moved to approve a resolution designating those employees of RPU authorized to conduct financial business for the Utility, seconded by Mr. Utz. All voting "AYE"

 

BE IT RESOLVED by the Public Utility Board of the City of Rochester, Minnesota, that the following person or persons are hereby authorized for and in behalf of the City of Rochester, D/B/A Rochester Public Utilities, to endorse or cause to be endorsed such documents regarding deposits, checks, drafts, investments or any other matter necessary for or pertaining to the financial operation of the Rochester Public Utilities.

 

Larry J. Koshire

Tina Livingston

Curtis Kraft

Douglas Noga

 

5. Mr. Toulouse moved to approve a resolution authorizing the depositories for Utility monies, seconded by Mr. Bourgeois. 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, 2003 through the 31st day of December, 2003.

 

US Bank

Wells Fargo

 

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.

 

6. Mr. Lyle Papenfuss and Mr. Darwin Olson from the C.O. Brown Agency appeared before the Board to discuss all risk property insurance and general liability and automotive insurance quotations for 2003. A major increase in property insurance of 35% has occurred due to market conditions and the increase in RPU's total property values with the addition of the new combustion turbine at the Cascade Creek Plant. Staff recommended that the current deductibles be continued. Information on Terrorism coverage for an additional premium of $36,500.00 was distributed and discussed during the meeting. Mr. Olson informed the Board that the League of Minnesota Cities Insurance Trust is also looking at coverage for terrorism. Mr. Hunziker said that this might be a city-wide issue. The Board concurred with staff's recommendation to reject the Terrorism coverage at this time.

 

Mr. Toulouse moved to approve en bloc three resolutions for insurance coverage for 2003, seconded by Mr. Bourgeois. 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 December 31, 2002 and expiring December 31, 2003.

 

The amount of the twelve month premium effective December 31, 2002 to be FIVE HUNDRED NINE THOUSAND TWO HUNDRED TWENTY-SEVEN AND NO/100 DOLLARS ($509,227.00).

 

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 December 31, 2002 and expiring December 31, 2003.

 

The amount of the twelve month premium effective December 31, 2002 to be ONE HUNDRED ONE THOUSAND TWO HUNDRED FIFTY-FOUR AND NO/100 DOLLARS ($101,254.00).

 

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 December 31, 2002 and expiring December 31, 2003.

 

The amount of the twelve month premium effective December 31, 2002 to be SIXTY-FOUR THOUSAND ONE HUNDRED THIRTY-FOUR AND NO/100 DOLLARS ($64,134.00).

 

7. Mr. Woodworth, Manager of Engineering, discussed the 2001 Electric Engineering & Operations Report with the Board, which identified electric system reliability statistics.

 

8. Mr. Utz moved to approve a memorandum of agreement with IBEW Local #949 "Office and Clerical Employees" which reflects the City of Rochester's revision to its vacation accrual policy for all employees effective January 1, 2003, seconded by Mr. Toulouse. All voting "AYE"

 

BE IT RESOLVED by the Public Utility Board of the City of Rochester, Minnesota, to approve a Memorandum of Agreement with the International Brotherhood of Electrical Workers (IBEW) Inside Bargaining Unit Employees and the City of Rochester Public Utility Board and that the Board requests the Mayor and the City Clerk to execute the document entitled:

 

Memorandum of Agreement – Vacation Accrual

IBEW Local #949 Office and Clerical Union

 

9. A revised resolution for RPU's 2003 budgets was introduced during the meeting which reflected the necessary Board and Council approvals. Mr. Landwehr stated that the rate adjustment shown was an assumption only and that the Board was only approving the budgets at this time. Mr. Koshire stated that this is the second year that RPU's budgets have gone to the Council for approval and that the process has worked very well. Mr. Toulouse moved to approve the 2003 electric and water capital and operating budgets, seconded by Mr. Bourgeois. 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 2003 electric and water capital and operating budgets.

 

10. Mr. Koshire, General Manager, provided the following report:

a. The lawsuit filed by the Minnesota Municipal Power Agency (MMPA) under the Data Practices Act has been settled without payment of money or admission of any wrongdoing by RPU.

b. Staff continues to work with the Minnesota Pollution Control Agency and environmental groups on the steam supply project. Mr. Koshire said we are nearing the end of the modeling phase.

 

11. The management/financial reports were discussed.

 

12. Other Business:

 

Board President Landwehr recognized Mr. Toulouse's 25 years of service on the Board and thanked him for acting as a mentor to others on the Board by reading the following proclamation:

 

WHEREAS, Roger K. Toulouse has diligently served on the Utility Board since 1977 specializing in the operations and administration of the board, and serving as its President for twelve years, and

 

WHEREAS, Mr. Toulouse has been a valuable asset and has contributed substantially to the well-being of Rochester Public Utilities and the local citizens by his leadership and efforts in such areas as energy efficiency, customer service, environmental protection, economic development, service territory disputes, and internal transitions within the Utility, and

WHEREAS, Rochester has benefited from the steady leadership of people like Mr. Toulouse who believe in municipal ownership, and

 

NOW, THEREFORE BE IT RESOLVED, that the Rochester Public Utility Board wishes to recognize and thank Mr. Toulouse for his leadership, many talents, commitment to excellence and service to the Board and community.

 

13. Mr. Bourgeois moved to adjourn the meeting, seconded by Mr. Utz. All voting "AYE" The meeting was adjourned at 5:55 p.m.

 

Approved by the Board: January 28, 2003