Marshall Municipal Utilities

Board Meeting Minutes

November 12, 2008

The Board of Public Works convened the regular session at 8:30 a.m. at the Marshall Municipal Utilities Business Office. Present were Spencer Fricke, President; Charles Hird, Vice President; Mike Mills, Secretary; and Jim Heinzler, member.

The agenda was approved as presented. On a motion by Mr. Heinzler, seconded by Mr. Mills, the minutes of the previous meeting were approved as printed.

Administrative Services Director Ken Gieringer reported all the electric meters have been received for the automated meter reading project. As personnel are available, these meters will be installed.

Director Gieringer reported that based on a three-year average, the BOD and TSS surcharges for industries discharging wastewater that has a BOD or TSS higher than 350 ppm should be lowered for 2009. On a motion by Mr. Hird, seconded by Mr. Heinzler, the Board approved setting the BOD surcharge at $0.42/pound and the TSS surcharge at $0.33/pound effective for billing after January 1, 2009.

The Water Department has operated with near zero or negative income for the past three years and the construction of the disinfection facility at the Water Treatment Plant, in order to meet the terms of an agreement with EPA, will deplete most of the Water Department reserves. On a motion by Mr. Heinzler, seconded by Mr. Mills, the Board approved the water rates as listed below effective for billing after January 1, 2009.

		Customer charge by meter size:

			Monthly 
			Charge
One inch or less	$ 9.50
2 inch			$10.50
3 or 4 inch		$16.00
Greater than four inch	$21.00

			Plus 
			Volume Charge
First 20,000 Gallons	at	$0.278	per 100  gallons
Next 230,000 Gallons	at	$0.215	per 100  gallons
Next 4,750,000 Gallons	at	$0.177	per 100  gallons
Over 5 Million Gallons	at	$0.152	per 100  gallons

			Resale
Volume Charge		$ 2.15 	per 1,000 gallons
Meter Charge		$11.00

Current funds available for operating the Wastewater Department are below three months’ expenditures (a six-month reserve is desirable). The current wastewater budget (and rates) has no provision to address inflow and infiltration. On a motion by Mr. Mills, seconded by Mr. Heinzler, the Board approved the wastewater rates as listed below effective with billing after January 1, 2009. Base Charge $24.00 Volume Charge $ 0.18 per 100 gallons

A monthly transfer of $5.00 per customer from the above charges to an “inflow & infiltration” account will be initiated. Mr. Mills asked that this $5.00 transfer be noted on customer bills as a separate line item.

To better match costs incurred with the work that results from a customer’s request, MMU needs to establish a fee for the opening of a new account or the transferring of an account to a different customer. On a motion by Mr. Hird, seconded by Mr. Heinzler, the Board approved establishing a $10 fee per service (water and electric) for accounts being opened as a new customer or an account being transferred to a different customer, effective January 1, 2009. A customer closing an account would not be affected.

Director Gieringer reported with the margin of markup in today’s electric rates, MMU can no longer install new or provide the upgrading of services at a zero cost to the customer. Mr. Gieringer recommended that a $250 impact fee per meter be charged to new single-phase services, and requests for three-phase service would be charged the greater of the estimated costs of construction (or the upgrading of an existing service, including any line extension requirements) or the $250 fee for a single-phase service. Mr. Mills expressed his opinion that the fee for industries should be evaluated on an individual basis. On a motion by Mr. Hird, seconded by Mr. Mills, the Board postponed a decision on this matter until the next meeting in order to allow management to revise the above recommendation to take into consideration the impact it would have on industries.

For the past three fiscal years, the Electric Department has operated at a loss (using approximately $3,000,000 in reserves in the process). The current year’s budget (2008/09) projects a $2.25 million operating loss. Reduction in reserves is projected at $3 million. On a motion by Mr. Mills, seconded by Mr. Heinzler, the Board approved increasing all energy rates by $.015 per kWh effective for billing after January 1, 2009.

Electric Distribution Director Jeff Bergstrom reported proposals for arc flash clothing were received October 20, 2008, from the following vendors.

Aramark, Fulton, MO
Cintas, Columbia, MO
Clean The Uniform Company, Columbia, MO
Diversified Electric, North Little Rock, AR
Orr, Kansas City, MO
Tyndale, Pipersvile, PA
Unico Corporation, Houston, TX
Workrite Uniform, O’Fallon, MO

Three of those provided rental and lease options for daily wear (shirts and pants) in addition to direct purchase options – Aramark, Cintas, and Clean. Comparison of the proposals indicated direct purchasing the clothing would be more economical than renting or leasing. It is anticipated that an annual allowance per employee would need to be made for the purchase of replacement clothing. On a motion by Mr. Mills, seconded by Mr. Hird, the Board accepted the proposal from Unico to provide flame resistant clothing for approximately $31,000 with the understanding that a program is being developed that will provide an annual allowance for 17 employees and 3 supervisory employees to provide for future clothing replacement needs.

Director Bergstrom reported the contract tree trimming bid requests have been resent. A couple of contractors have indicated that they would submit a bid this time. Crews are replacing pole mount transformers with dual voltage units for the 4.16 kV voltage conversion project. There are less than 50 transformers left to replace.

Employee Relations Manager Megan Baldridge reported the initial renewal offer from United Healthcare (UHC) for the 2009 employee health benefits was a 6% increase. UHC has now reduced their renewal offer to a “rate hold” which means no increase in rates to renew MMU’s policy with them as-is. Several other companies have submitted proposals for MMU’s 2009 employee health benefits. The proposal of most value was received from Mercy Health Plans. They have provided a firm rate that is below MMU’s current rate and provides what appears to be similar coverage. MMU’s annual savings would be over $23,000 with Mercy’s plan. On a motion by Mr. Mills, seconded by Mr. Hird, the Board accepted the proposal from Mercy Health Plans.

Ms. Baldridge indicated Mercy Health Plans also offers a wellness program for no increase in the premium. This program would involve employee commitment to complete the requirements of the program. Ideas for an incentive for participating in the wellness program were discussed. Management will develop an incentive plan to present to the Board at the next meeting.

Electric Production Director Jim Johnson reported the bid requests have been sent out for the forklift for the recycling operation. The bids are due November 21, 2008.

Environmental Services Director Ginny Ismay reported the brine and solution tanks have been set at the Water Treatment Plant.

Director Ismay reported DNR has requested to be allowed to install some monitoring equipment in one of the monitoring wells at the Water Treatment Plant. There would be no cost to MMU. The data collected would be available via the Internet and would eliminate the need for the operators to collect the water level measurements once a month for that well. It was the consensus of the Board to allow DNR to install their equipment in a monitoring well.

General Manager Kyle Gibbs has been talking to a company that would recondition the CO2 tank at the Water Treatment Plant, but the material used to make this tank is no longer used to make CO2 tanks. It has been noted in the past that this material might crack in a cryogenic application. Other options for the tank are to buy a new or reconditioned tank. On a motion by Mr. Hird, seconded by Mr. Mills, the Board approved requesting proposals for a new or a reconditioned tank.

Director Ismay reported the effluent irrigation system for the golf course has been shut down for the season.

Underground Facilities Director Monty Chase reported that at a recent seminar he learned that generally it is estimated that 70% of the inflow and infiltration in a sewer system comes from private lines. Director Chase indicated a plan needs to be developed to address this issue.

General Manager Gibbs reported the Mutual Aid Program Agreement with MPUA needs to be revised to include MMU’s policy for paying rest time when employees work outside Marshall providing mutual aid assistance. This agreement requires Mayor Latimer’s signature. On a motion by Mr. Hird, seconded by Mr. Heinzler, the Board approved a request to the City Council to authorize Mayor Latimer to sign the revised Mutual Aid Program Agreement with MPUA.

General Manager Gibbs reported that the prices for recycling products have been very good in the past few years, but prices for paper, cardboard, metal, copper, and plastic are all down going into the 2008/09 fiscal year. MMU’s short-term plans are to store as much product as possible and turn most of the paper into pellets.

On a motion by Mr. Hird, seconded by Mr. Mills, accounts payable were approved and warrants ordered issued from the following funds:

	WATER OPERATING FUND			$	  104,036.68
	ELECTRIC OPERATING FUND			$	1,010,232.69
	SEWER REVENUE FUND			$	   80,760.56
	INTERNET OPERATING FUND			$	    6,986.11
	NATURAL GAS OPERATING FUND		$	      144.34
	ELECTRIC CONSUMERS DEPOSIT FUND		$	          --
	WATER TREATMENT PLANT IMPROVEMENT RES.	$	   16,095.52

On a motion by Mr. Hird, seconded by Mr. Heinzler, the Board voted unanimously to adjourn the regular meeting at 10:45 a.m.