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Mr. Ninow explained that with the urban services expansion ERMU will soon be looking to <br />drill new wells, construct treatment plants, and a new water tower, as well as planning to <br />paint the Johnson Street water tower. <br />Moved by Commissioner Stewart and seconded by Commissioner Zerwas to designate <br />unrestricted reserve balances above target levels for Electric and Water funds. Motion <br />carried 5-0. <br />4.3 2023 Utilities Performance Incentive Compensation Distribution <br />Ms. Karpinski presented the memo which called for a 2.5% distribution to qualifying <br />employees per the terms of the policy and based upon staff achieving all stated goals. <br />The Commission congratulated staff on a successful year. <br />Moved by Commissioner Zerwas and seconded by Commissioner Stewart to award the <br />Performance Metrics and Compensation Distribution of 2.5% to qualifying employees <br />per the terms of the policy. Motion carried 5-0. <br />4.4 Utility Line Extensions in Urban Services Area <br />Mr. Hanson presented his memo, noting that it is long-standing city practice, not policy, to <br />provide both water and sewer service to new housing developments. He continued that <br />the City has received a proposal for a development that requests connection to the sewer <br />system while providing water through individual wells. In preparation for a council work <br />session on the item, city staff had asked for the Utilities commission's opinion on the <br />developer's proposal. <br />Mr. Hanson explained that there are currently two developments in Elk River that have or <br />will have sewer but not water access. He went on to explain one instance was due to the <br />independent sewer system failing, while the other development is being designed due to <br />a failure. <br />The Commission discussed comparisons to a previous proposal which was presented at a <br />joint meeting of the City Council and Utilities Commission in January of 2023. Key <br />differences were that the initial proposal consisted of around 500 lots rather than the <br />current proposal of 105 lots. Due to the number of lots, the 2023 plan required access to <br />municipal water. The Utilities could not recommend providing water service to the <br />development due to the cost of bringing the water main to the property as well as quality <br />concerns caused by a significant extension of the system. <br />Mr. Schmidt, the president of Twin Cities Land Development addressed the Commission, <br />explaining that the project is viable without sewer access. However, the request to <br />Elk River Municipal Utilities Commission Meeting Minutes <br />May 14, 2024 <br />Page 5 <br />39 <br />