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HomeMy WebLinkAbout20130408 UC MinutesUTILITY COMMISSION MINUTES April 8, 2013 ANNUAL MEETING la. Issuance of Oath — David Speich Commissioner Speich waived the formal issuance of his oath. 1 b. Election of New President MOTION by Mulhern to elect Harmsen as President of the Utility Commission meeting. Second by Speich. Ayes: 3. Nays: 0. Motion approved. CALL TO ORDER Pursuant to due call and notice thereof the regular Utility Commission meeting of the City of Rosemount was called to order on April 8, 2013 at 5:30 p.m. in the Conference Room of the City Hall, 2875 145"' Street West, Rosemount. President Harmsen called the meeting to order with Commissioners Mulhern and Speich, Rosemount Mayor Droste, City Administrator Johnson, Executive Director Brotzler, and Recording Secretary Kladar attending. ADDITIONS OR CORRECTIONS TO AGENDA None AUDIENCE INPUT None APPROVAL OF MINUTES MOTION by Harmsen to approve the minutes of the March 11, 2013 regular Utility Commission meeting. Second by Speich. Ayes: 3. Nays: 0. Motion approved. OLD BUSINESS 6a. Groundwater Update Executive Director Brotzler provided an update on the groundwater issue discussed at the March 11 meeting. In March the City hosted a meeting which included representatives from Lakeville, Eagan, Empire Township, Inver Grove Heights, Apple Valley and Farmington. The discussion focused around how the cities could work as a group moving forward to address the issue. Lakeville is currently a member of the Southwest Metro Groundwater Work Group. The group was formed about 10 years ago when Lakeville was having well issues. It was the consensus at the March meeting that expansion of the existing group should be pursued to become the South Metropolitan Area Groundwater Group. Currently all members sign a Memorandum of Understanding when joining the group. UTILITY COMMISSION MINUTES April 8, 2013 Brotzler advised that he and Council member DeMuth attended the Met Council advisory meeting in March where they were able to meet with Met Council staff including Ali Alhassan who is involved with the Southwest Metro Groundwater Work Group. Mr. Alhassan plans to attend the next multi -city meeting planned for April 26. At the Met Council meeting, there was discussion that there are various ways that groundwater issues may be addressed and the Met Council acknowledged that there are numerous hurdles to overcome regarding the use of surface water. The information presented by Met Council showed a future 80% reduction in future groundwater demand with the majority of the metro area moving into that 10 to 20 foot draw down in aquifer level. However the projections showed Rosemount still in the red zone. There is a lot of industry in the Rosemount area including the refinery and agriculture. Brotzler advised that in 2011 Flint Hills pumped 2135 million gallons of water from private wells whereas Rosemount pumped about 975 million. Brotzler has shared that information with Don Kern at Flint Hills and believes that Flint Hills needs to be part of the discussion and long term solution. Brotzler also noted that Myron Napper presented a petition at a recent Planning Commission meeting to prohibit Flint Hills from using surface water. Flint Hills has talked about doing this in the past but has no current plans to do so. Flint Hills is connected to the City's system and is purchasing water from Rosemount and possibly Inver Grove Heights also. There was a consensus to view this as a regional issue and that the cities need to keep current and identify when to participate. Striving to maintain the equality aspect between communities is important. If one city is able to use more surface water which benefits the other cities could there be cost sharing? There are clearly challenges with the drought and decreased Mississippi river levels. What is the right balance to achieve the needs and goals of the infrastructure system? The southern metro area has different challenges than the north as they have sandier soil and the shallower aquifers. The City should continue to be proactive with this issue and educate residents about conservation, re -use and storm water. There was discussion about increasing water rates to reduce consumption. However, Brotzler noted that water would most likely have to be $4 to $6 per 1000 gallons to impact residents. There was discussion about the recent UMore ball field construction and the possibility of putting in a tank for treated effluent water to use for irrigation. However, this option had been deemed to be cost prohibitive versus drilling a well. Brotzler will continue to keep the Utility Commission updated on the groundwater topic including the potential expansion of the Southwest Metro Groundwater Work Group. 6b. Generator Upgrades As discussed in the March 11 meeting, City staff has been researching impacts of the new EPA rule for Reciprocating Internal Combustion Engines National Emission Standards for Hazardous Air Pollutants. This new rule requires implementation of new maintenance and reporting practices for certain non - emergency stationary engines. 2 UTILITY COMMISSION MINUTES April 8, 2013 The City currently has three generators used for Wells 7, 9 and 12 enrolled in Xcel Energy Electric Rate Savings Program where the City switches to standby during peak periods to save money. This provides an annual savings of approximately $13,000 to $14,000 for the three generators. The staff presented two options for the generators. Option 1 would upgrade the generators to meet compliance at a cost of about $120,000. In addition, there would be a maintenance cost of about $15,000 every three years to maintain compliance along with some other ongoing costs. Staff estimates the cost to maintain compliance and remain on the Xcel plan would be $165,000 to $185,000 over the next 10 years. Option 2 would be to withdraw from the Xcel program with a six -month written cancellation notice. Withdrawal from the program would result in increased electrical charges of $14,000 per year or $140,000 over 10 years. The generators would not be subject to the new regulations as they would be considered strictly emergency engines. The City could incur a penalty from Xcel Energy if any of the three generators exceeds 50 hours of use before the termination date. Given historical usage it is unlikely that this would occur. There is a grace period if the City doesn't run the generators in non - emergency situation over 50 hours then the City would have until May 2014 to bring them into compliance. Well 14 has a standby generator at and would fall under Dakota Electric and is already in compliance. City Administrator Johnson said with no increase in electricity rates the breakeven is 13 years. Executive Director Brotzler recommends consideration be given to Option 1 - upgrading the generators as the City will continue to realize at least $14,000 in savings and possibly more if electricity rates increase. It was noted that the generators are all less than 10 years old. The Mayor inquired whether there was any resale potential for them. The existing generators could be sold and new ones purchased. Harmsen inquired when new water treatment plant is needed and Brotzler advised that the first one is scheduled for 2016. Harmsen advised that Apple Valley has a new plant from which they run the garage and four wells from a generator. City may want to look into an upgrade or redesign of water treatment plant similar to Apple Valley. There was a discussion about the potential of dropping out of the Xcel program now and getting back in it at a later time. The Commissioners also discussed the possibility of working out something with Xcel to use generators as emergency standby. The Commissioners would like more information before making a decision on the generators. Commission requests that staff research the following issues: • What is the resale value and potential market for the existing generators? • When is the deadline for providing Xcel with the 6 month notice of withdrawal from the Energy Savings Program? MOTION by Harmsen to table this topic pending further information. Second by Speich. Ayes: 3. Nays: 0. Motion approved. 6c. Well Sealing Requirements Update Executive Director Brotzler gave an update regarding several of the City's former wells. Staff has thoroughly researched old files and were able to develop a timeline of events to support the belief that the wells have in fact been sealed. Specifically, Wells 1 and 2 (located in the Old City Hall location) were likely UTILITY COMMISSION MINUTES April 8, 2013 capped in May or June of 1977 and no sealing records exist. It is believed that Wells 4 and 5 were sealed by Keys Well Drilling in 1982. Staff is awaiting a response from Keys Well Drilling regarding the existence of any records. Commissioner Mulhern recommends using the former wells as monitoring wells. Wells 4 and 5 are on public property so that is a possibility. However, wells 1 and 2 are most likely on private property. Brotzler advised that while he isn't aware of any mandate requiring action on the City's part, there is grant money available on an annual basis that may help with the cost of further investigating the status of these wells. The City of Eagan is currently sealing 2 wells at a cost of approximately $60,000 and has received $30,000 in grant money. Brotzler recommends that the City monitor and apply for such grants. If grant money becomes available, further discussion and direction from the Commission will be requested. NEW BUSINESS None PRESIDENT'S REPORT President Harmsen did not have anything new to report. EXECUTIVE DIRECTOR'S REPORT 8a. City Projects Update Executive Director Brotzler referred to the project update that was included in the packet. 8b. Informational Attachments March 2013 Interim Financial Report The Commissioners determined they only need to be provided with the financial report once per year rather than at each meeting. 2013 Well Pumping Report It was noted that pumping was up a bit for last quarter which could correlate to some recent growth. 8c. Set Next Meeting Agenda for May 13, 2013 • Additional information regarding the potential upgrade of the generators. ADJOURNMENT MOTION by Speich to adjourn. Second by Harmsen. Meeting adjourned at 6:25 p.m. Respectfully submitted, 1 _ Karin Kladar Recording Secretary 4