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Page 3 <br />Regular meeting of the Elk River Municipal Utilities Commission <br />March 9, 2010 <br />4.3 Review and Consider Phone System Recording Options <br />At the February 9, 2010, ERMU Commission meeting, per Commissioners request, staff <br />provided information on options to implement a phone recording system. One option was to utilize <br />the current phone system with its integral recording abilities. The Commission directed staff to bring <br />back further analysis of this option and associated costs for further discussion at the regularly <br />scheduled ERMU Commission meeting in March. <br />The Inter -Tel phone system currently being used has the ability to manually record a phone <br />conversation at anytime, be saved as a voicemail, and converted to an email and stored electronically. <br />This process is limited by some licensed software. ERMU has one license to do this conversion now. <br />The recording capability and conversion process has been tested on the phone system at the office <br />and plant location. This option works well for our current needs without any additional cost. Staff <br />recommends using the current system and re -addressing the issue at some future date if ERMU <br />outgrows the capabilities of this system. Commission agreed. <br />5.1 Review and Consider Customer Deposit Policy Practice <br />At the February 9, 2010, ERMU Commission meeting, staff was directed to review the <br />Customer Deposit Policy and related practices and bring an analysis back to the Commission for <br />review. The customer Deposit Policy adopted in July of 2007 was reviewed. In addition to the <br />requirements of this policy, ERMU has also utilized legal counsel to minimize the risk of bad debts <br />from commercial and Industrial customers. Based on this, ERMU requires a copy of the lease when a <br />new commercial customer calls to set up a new account at an existing service where the existing <br />account is delinquent. ERMU has also required court documentation in the case of a court ordered <br />receiver. These examples reflect ERMU's efforts to minimize preventable write-offs. <br />In the process of reviewing this policy and related practices, staff worked with Minnesota <br />Municipal Utilities Association (MMUA) to gather information to use as a local industry reference <br />point on this subject. MMUA conducted a 10 question survey on electric commercial customer <br />deposits. There were 38 Minnesota municipal utilities that participated in the survey, including <br />ERMU. <br />Based on the information collected through MMUA's survey, ERMU's policy is in line with <br />other Minnesota municipal utilities. The legal efforts made by ERMU that extend beyond the policy <br />are also being made by other utilities. Because each situation is often unique, many times these issues <br />are handled case by case with legal counsel. To strengthen the policy and help define the intentions of <br />ERMU, additional language should be added to clearly state ERMU will make every effort to collect <br />on past due accounts. Recent trends have shown that the current policy timeline for returning deposits <br />doesn't always protect our ratepayers from customers who default on their accounts. Staff <br />recommends holding their deposit until their account is closed and in good standing. Also, staff <br />recommends the amount of the deposit for commercial and industrial customers have some flexibility. <br />There is a difference in risk between a commercial customer renting space and a commercial customer <br />