2.2 ERMUSR 08-09-2022 - Laserfiche WebLink

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Elk River Municipal Utilities Commission Meeting Minutes July 12, 2022 Page 5 Chair Dietz expressed his concern that there would be a continuing trend of a negative Net Income Profit. Staff responded that a majority of other expenses are at or below budget. There was discussion Chair Dietz asked if staff is receiving questions from customers on the billed PCA. Ms. Youngs responded that questions were very rare except from large customers. Chair Dietz asked if neighboring utilities are also passing on PCAs. There was discussion. Moved by Commissioner Westgaard and seconded by Commissioner Nadeau to receive the May 2022 Financial Report. Motion carried 5-0. 5.2 Field Services Facility Expansion Project Mr. Kerzman presented a memo on the Field Services Facility Expansion Project, sharing that the motion for summary judgement had been filed on July 7 with a hearing scheduled for August 5 to resolve disputed issues with the project’s original structural steel contractor. Mr. Kerzman explained that RJM Construction informed him that it typically takes 90 days from the hearing for judgement to be reached. There was discussion. Chair Dietz asked if staff believed they would be able to move into the building by September 1. Mr. Kerzman shared his opinion that they could be moving inventory in by that date, but staff would have to move in after September 1. Mr. Kerzman explained that delays were related to challenges with concrete contractor’s inconsistent presence on site and work that needs to be redone. There was discussion. Mr. Kerzman estimated that the project was six weeks behind the contractual date for substantial completion of the project. Chair Dietz asked if there was a penalty for missing the deadline. Mr. Kerzman expressed his belief that issue stemmed from failures in the scheduling of subcontractors and holding them to the schedule, but they could argue that COVID-19 and supply chain issues created the delay. Mr. Kerzman stated that ERMU’s legal advisors told him delays beyond the contractual date would be considered damages solely for costs that would not have otherwise been incurred. Mr. Kerzman sought direction from the Commission on if and how to bring that issue forward. There was discussion. Commissioner Westgaard said staff should start the conversation with RJM Construction to protect ERMU’s interests and to avoid a prolonged delay. Staff sought commission consensus on how to proceed. The Commission agreed to begin discussions on penalties. Chair Dietz had questions on the timeline for landscaping. Staff responded. 39