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HomeMy WebLinkAbout2020-06-11 BOWC MINBOARD OF WATER ■ COMMISSIONERS MEETING MINUTES THURSDAY, JUNE 112020 (VIA ZOOM - DUE TO COVID-19) 204 Third Street N Stillwater, MN 55082 651-439-6231 President Speedling called the meeting to order at 8:00 a.m. Present: Commissioners Vania, Jensen, and President Speedling Councilmember Polehna (arrived at 8:05 a.m.) Absent: Supervisor of Distribution Tibbetts Staff Present: Board Manager Benson MIS Specialist Rich Bornt APPROVAL OF AGENDA Commissioner Vania requested that the following be added to the agenda: • Smart Controller Letter Status • Well #8 Commissioner Jensen requested that the following be added to the agenda • New Development by Manning Avenue - Stillwater Commons - Better Irrigation Systems Motion by President Speedling, seconded by Commissioner Vania to approve the agenda with additions. All in favor. APPROVAL OF BOARD MEETING MINUTES Motion by President Speedling, seconded by Commissioner Jensen to approve the May 14, 2020 minutes. All in favor. APPROVAL RESOLUTION NO. 1544, DIRECTING PAYMENT OF BILLS Commissioner Vania inquired about the two laptops. Mr. Benson responded that these were the laptops purchased in case he or Tracy needed to work from home. Commissioner Vania asked if these will be available to the utility staff. Mr. Benson responded that the laptops are not set up for BeeHive and their use at this time but may happen in the future. - MIS Specialist Rich Bornt explained the use of iPad and BeeHive versus laptops and BeeHive. He is hoping that within the next month IT will have the office setup to begin experimenting with the BeeHive program. Commissioner Vania asked if there would be additional costs. Mr. Bornt stated that he did not feel there would be any extra licensing costs going from an IPAD to a laptop. Board of Water Commissioners May 14, 2020 Motion by President Speedling, seconded by Commissioner Vania to adopt Resolution 1544, directing payment of bills. All in favor. 2019 AUDIT - CHRIS KNOPIK, CLIFTONLARSONALLEN (CLA) Mr. Chris Knopik, CliftonLarsonAllen (CLA), provided a presentation to the Water Board on the 2019 Audit of the Board of Water Commissioners. Mr. Knopik explained that Their Primary responsibility is to provide their opinion on the fairness of presentation of the financial statements, reviewing internal accounting controls, risk -based audit approach, and based on internal controls, determined scopes and tests of transactions. He explained that the planned scope and timing of the audit was done during the audit preliminary work and field work. He continued by stating that the significant accounting policies were outlined in the report and no unusual transactions were noted and that the management judgments and accounting estimates included useful life of capital assets, allowance for doubtful accounts, compensated absences, other postemployment benefits and net pension obligation. He also addressed the reasonable/supported, corrected and uncorrected misstatements aspects which includes audit adjustments such as inventory to actual, record deprecation, record prepaid assets and record payables and that the disclosures are adequate, clear, and complete. He reviewed the other information in documents containing audited financial statements which included supplementary information in relation to opinion, inquiries and evaluated that content. He stated there were no disagreements with management. He reassured the Board that there were no consultations with other independent accountants, and that no issues, other than normal planning issues, were discussed prior to the retention of CLA as the Board's auditors. He complimented the Water Board management as they were very cooperative and helpful and all personnel and records were made available Mr. Knopik stated that the Commission's audit results included an unmodified or clean audit opinion on the basic financial statement which is the best that can be done, however there were three (3) weaknesses related to internal controls which involved: auditor drafts financial statements and notes, lack of segregation of duties and adjusting journal entries. He also addressed Minnesota Legal Compliance and there were no legal compliance issues were noted. President Speedling conveyed his approval of Mr. Benson's management. Commissioner Jensen asked Mr. Knopik about the segregation of duties asked if there is anything in the office that can be done. Mr. Knopik responded that usually, three people are needed to be involved which means someone from the back office (utility personnel) or a board member would have to be become more involved in daily operations. It is difficult to resolve the segregation of duties issues with only two people doing the administrative work. Mr. Knopik reviewed the financial results with the Board. He addressed Commissioner Vania's question on the reduction of operating revenue for 2019, a $200,000 decrease most of which is from the consumption side of water and rates have been flat for a couple of years. Commissioner Vania asked if Mr. Knopik could take some time at the July meeting to show an updated graph for 2019 Operations as well as the rate information as the Board needs to decide when to implement the next increase and the impacts. Page 2 of 6 Board of Water Commissioners May 14, 2020 Commissioner Jensen asked if he or Mr. Benson could show 2020's consumption to date with more people being at home etc. Commissioner Vania responded that the usage is at 47% right now and normally it is 42%, so therefore more water is being used and most likely the usage will be at 50% by the next meeting. He noted that this would be charged at the regular rate, not the increased rate. Mr. Benson reminded the Board that the meter readings are currently being done for the July billing which will show what the actual usage is compare to last year. Mr. Knopik reviewed the Board's cash, cash flow, and accounts receivable He also reviewed other financial information on the continued principal payments to the City during 2019 that rates were flat for 2019, the special assessments receivable increased $14,000 during 2019 for projects billed to residents, depreciation increased slightly to $8,000 from 2018 and the net pension liability has decreased $45,000. Mr. Knopik provided the following summary: • Financial stability Cash flows from operations were positive for 2019. Continue to monitor operation revenues and discuss future of rate analysis. Not covering any depreciation during 2019 • Net Position Net position needs to be re -assessed on a yearly basis to determine reasonableness and any adjustments that need to be made, if any. Commissioner Vania asked Councilmember Polehna if the City had raised their sanitary sewer rates. Councilmember Polehna responded that the City has because they were falling behind year after year and the Met Council kept raising their rates. Mr. Benson informed the Board the City raised their rates prior to the COVID. He stated that usually before sending the notice the Board would provide this information to the City Council. President Speedling felt that because of timing a notice would not be put in the July billing. Mr. Benson stated in the budget he only included the increase in 2 billing cycles therefore that is the revenue loss for 6 months. He felt that the notice should be placed in the October billing with the rate increase taking place in the January 2021 billing. Commissioner Vania suggested a special meeting to discuss the rates and the operations study at the same time. It was the consensus of the board to hold a special meeting on July 2 to discuss the rates and the information for the operations study prior to the City Council meeting on July 7. Mr. Benson stated that the billing will be held until the rate is determined on July 2 and he will work with Mr. Knopik on wording for a draft insert based on Option 2 that was previously discussed. Page 3 of 6 Board of Water Commissioners May 14, 2020 Commissioner Vania suggested that the Board go before Council informing them of the rate increase on July 7 at 7:00 p.m. Mr. Knopik stated that he will have the notice prepared for the July 2 meeting and slides for the City Council meeting 7:00 p.m. SUPERVISOR OF DISTRIBUTION REPORT In absence of Supervisor of Distribution Tibbetts, Mr. Benson stated that they are working on street reconstruction information and general maintenance. COMMUNITY EDUCATION (INFOGRAPHIC) AND WEBSITE COMMISSIONER JENSEN Commissioner Jensen stated that she will bring the information to the next meeting as she must leave at 9:30. PAY EQUITY REPORT Mr. Benson stated that as discussed last meeting the Pay Equity Report which is reviewed every three years to determine that the pay scale is still coordinated with positions of the same class (men/women). He stated that the department complies and requested approval. Motion by President Speedling, seconded by Commissioner Jensen to approve the Pay Equity Report. All in favor. STILLWATER LAKES - BRIDGEWATER WAY 4" WATER SERVICES UPDATE Mr. Benson provided a letter regarding the services that was sent to Mr. Jason McMillian of Wells Construction. He stated that he has been contacted by the general contractor and they will be capping the services at the "T" of the watermain. BEEHIVE UPDATE Mr. Benson stated he did not receive the memo from Commissioner Vania, therefore Commissioner Vania requested that this be placed on the August agenda. Mr. Benson informed the Board that they have done some updates and they will send to Boulton & Mink for the GIS portion. Commissioner Vania stated that he wants Bolton & Menk to check that BeeHive is making those changes. Mr. Benson stated staff is updating in the field. Commissioner Vania wants GIS data to be clean. He suggested that the GIS representative from Boulton & Mink be at the next meeting to explain the process. WILKINS STREET PRESSURE REDUCING VALVE UPDATE - MATT ELLINGSON T.K.D.A Mr. Matt Ellingson, T.K.D.A., reviewed three quotes for the Wilkins Street Pressure Reducing Valve Project that were received. He recommended that the quote from Miller Excavating, Inc. in the amount of $115,265.40 be approved to perform the work. He stated that the engineer's estimate was $150,000. Mr. Ellingson stated that after discussion with Mr. Benson, it was determined that to isolate the work area so that work could be completed without having to shut off any services to residents they should install two 8" insertion gate valves. They received five quotes with the low quote being New Ulm Public Utilities in the amount of $10,120 however their quote does Page 4 of 6 Board of Water Commissioners May 14, 2020 not include freight but is estimated to be a few hundred dollars and recommended approving the quote for the gate valves. Mr. Benson added that $134,000 has been budgeted and both quotes are less than what was budgeted. Motion by President Speedling, seconded by Commissioner Vania approving the quote from Miller Excavating, Inc. in the amount of $115,265.40. All in favor. Motion by Commissioner Vania seconded by Present Speedling to accept the quote from New Ulm Public Utilities for the two 8" insertion gate valves and including freight with the total amount not to exceed $11,000. All in favor Mr. Ellingson reminded the Board that the bid opening for the Well #9 Generator project will be June 23 and opening at the Water Board office. Bid information will be at the July 9, 2020 meeting. POLLINATOR PARK AT LAUREL STREET Mr. Benson explained that he received an email from Commissioner Vania regarding an issue at Pollinator Park which a bar owner was using their bee lawn for outdoor seating. Mr. Benson asked Councilmember Polehna to update the Board on the issue. Councilmember Polehna explained the bar owner was suppose to meet with the pollinator people but he did not and put his fence where he wanted to. He stated that the fence is gone and it is nonissue. He felt that should this type of an arrangement need to take place in the future that an agreement should be done. UTILITY REPAIRS QUOTE FORM Mr. Benson reviewed the quote form addressed at the May meeting. Commissioner Vania stated that the form should be sent out to Miller Excavating and various contractors and mention emergency service on main breaks with cover letter. Add to form "Contractor must be able to respond to all emergency repair requests with proper staff and equipment within two hours." Mr. Benson will include "Emergency" in the title of the form. Commissioner Vania suggested that it be stated that the quote/submittal is valid for a period of one year upon approval by the Board. SMART CONTROLLER LETTER STATUS Mr. Benson stated that the letter will be going out and he did communicate that the letter should come from both entities with each logo, but has not heard anything back. He informed the Board that the letter will only be going to the residents with irrigation systems. Next meeting, he will provide a status on the letter from Rick Ellis, Safe Water Commission. WELL #8 Mr. Benson stated that the work is on hold for Well #8 until the vulnerability plan was done which has not been completed. Page 5 of 6 Board of Water Commissioners May 14, 2020 NEW DEVELOPMENT BY MANNING AVENUE - STILLWATER COMMONS - BETTER IRRIGATION SYSTEMS Commissioner Jensen asked how can they communicate with the Planning Department on what type of irrigation systems should be used in new developments to ensure water conservation. President Speedling felt that the Board should not be spearheading the type of equipment. He felt that Safe Water Commission/Rick Ellis should be contacting the developers. He inquired if the Board should put standards together for the Planning Department would be beneficial. Mr. Benson stated that he would talk to Mr. Turnblad, however felt that the newer irrigation systems have water conservation systems in place. Commissioner Vania felt that this type of installation/specification should be put in the specifications or development agreement. Commissioner Polehna will check with Mr. Turnblad and the developer and respond back to Mr. Benson, but it is something that Mr. Turnblad should address. NEXT MEETING DATE Next special meeting is Thursday, July 2, 2020 at 8:00 a.m. to discuss organization study and discuss and set rate increase. Special meeting with Council at 4:30, Tuesday, July 7, 2020 on the organizational study. Next regular meeting is Thursday, July 9, 2020 at 8:00 a.m. ADJOURNMENT Motion by President Speedling, seconded by Commissioner Vania to adjourn at 10:03 a.m. All in favor. ATTEST: Robert G. Benson, Board Manager Steve Speedling, Pr ident Page 6 of 6