3.0 ERMUSR 09-20-2006 - Laserfiche WebLink

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Page 4 Regular meeting of the Elk River Municipal Utilities Commission August 22, 2006 6.4 Review & Consider Policy for Return -Unpaid Items The Elk River Municipal Utilities has an NSF policy in place that was passed December 15, 1998. The policy is outdated and needs to be revised. Staff recommends the Commission adopt the following: "Any items given in payment for services that are returned by the bank marked unpaid shall be imposed a $20.00 charge, plus assessed the penalty of 10% if not paid by the 15~' of the month." Motion by James Tralle to approve the revised NSF policy. John Dietz seconded the motion. Motion carried 3-0. 6.5 Review Investment Committee Proposals The investment committee (Bryan Adams, General Manager; John Dietz, Commissioner; and Theresa Slominski, Finance Director/Office Manager) discussed options and recommendations for Commission approval. Three changes were addressed. 1. Having the reserve categories of Bond Reserves, Emergency Reserves, and Unrestricted Reserves, instead of Emergency Reserves and Construction Reserves. 2. Having the desired reserve balances be whatever the mandated bond covenant requirements are for Bond Reserves (currently $445,900). Having $3,100,000 for Electric Emergency Reserves, and $1,500,000 for Water Emergency Reserves. The Electric Emergency Reserves amounts were arrived at by allowing $1,100,000 plus three months operational expenses, excluding purchased power costs for electric, and $1,000,000 plus three months operating expenses for water. The amount for Unrestricted Reserves would be $432,919.27 for electric and $10,000 for water. 3. The Reserves monthly contribution of $20,000 would be split 75/25 to electric and Water, respectively, instead of 50/50 as has been. These contributions would be to the Emergency Reserves balances. The line of credit is not an option and so can be disregarded. Since short term borrowing is not an option, the need to contribute to and build the reserves is even greater. Motion by James Tralle to approve the changes presented to the Commission. John Dietz seconded the motion. Motion carried 3-0. 6.6 Review Proposed Water Main Proiects The 2006 water budget contained two water main projects. One is a loop dead end water main at Guardian Angels for $12,000 and the second is a loop water main at 175' Avenue to improve Johnson Street water tower for $75,000. The water main loop for 175' Avenue was replaced with the Highland Road water main project due to the rebuild of Highland Road.