• • Lakefield Standard

UTILITIES COMMISSION
February 23, 2009

A meeting of the City of Jackson Utilities Commission was held in City Hall at 4:00 P.M. on February 23, 2009, with the following persons present: Gayl Berkner, Jim Lutz, Mike Schwartz, Kevin Siepker, Lee Lapic, City Administrator Dean Albrecht, and Council Secretary Steve Walker. Also present were Cable TV Department Manager, Curt Egeland, Water Department Manager, Steve Beckel, and Electric Department Manager, Garret Simon. (A quorum of the Commission was present.)


The February meeting of the Utilities Commission was called to order by Chairperson Berkner. Consideration was first given to the minutes from the January 26 meeting. There being no objections nor corrections to these minutes, they were declared approved as mailed.

Water Line Repairs – Request from John Heser to Waive Repair Charges

John (Buck) Heser, first appeared to explain the recent water leak to his residential service line at 129 Thomas Hill Road. Mr. Heser explained that the water leak was about half way from the main to the shutoff on his property, and the pipe at that point had literally fallen apart. Water Department Manager, Steve Beckel, reminded of the written city policy which provides that the owner, at his/her expense, shall repair or replace a damaged or defective water service from the main to the owner’s premises, with the City, at its expense, being responsible to remove and replace the road surface, including curb if any.

(Jerome Haskins present.)

Mr. Heser then produced the two inch water service line which had been dug out of the ground and replaced. Heser noted that a band clamp had been placed around the pipe to stop the pipe from leaking, at a point about three feet beyond this line. He added that this band clamp indicates to him that obviously the line was bad when the previous repairs had been made. Heser questioned why the City did not replace his line at the time the clamp was installed which would have avoided this most recent repair.

The Commission was advised that Buck’s brother, Jeff, owns this house on Thomas Hill Road. Buck Heser remarked that if the service lines along Thomas Hill road are in as bad a shape as his was, and if the homeowner is responsible to the main in the street for its repair, future repairs such as this will be a financial burden for others in the area. He remarked that the City would have been upset with him if he would have instead put up barricades in the street and took a pick and shovel and started digging, since he could not afford to hire Svoboda Excavating to dig up and fix the water line. Mr. Heser requested that the City waive the charges his brother Jeff will receive for the $1,500 bill which the City assessed to fix this service line.

Steve Beckel explained past procedures, that Svoboda bills the homeowner directly for that portion of the digging done behind the curb and for any materials which they may supply; and the City bills directly for materials and labor it supplies for the project. He added that Svoboda then bills the City for their expense in digging up the line in the street. Including the $700 cost for leak detection, Mr. Beckel speculated that the City’s expense for repairing Buck Heser’s water line will be in the neighborhood of $10,000.

In reply to a question from Lee Lapic, Mr. Beckel informed that Heser’s water line has been in the ground about 60 to 80 years. He added that if his department finds in the course of their repairs a two-inch line such as Heser had in this case, they will remove and replace the line since they are all rotting away. It was reported that the majority of lines on Thomas Hill are copper and some are of this two inch variety. Many of these two-inch lines, Beckel noted, have been replaced in the last 20 years.

Buck Heser next remarked that he understands at least a portion of his line may have consisted of lead and should have been removed a long time ago. Steve Beckel replied that there is no lead mains or pipes in town, but about 80% of the lines contain lead joints. He explained that the City used lead joints up to the 1950s, and that the old, thinner two-inch lines do have leaded joints. It was advised that the City has tested for evidence of lead in the water, with test results revealing that there was no contamination. The Commission was advised that most water lines in town consist of copper or cast iron.

In reply to questions posed by Jim Lutz, Mr. Beckel informed that the City paid for the digging in the street on this project, removal of the surface and subsurface materials, replacing the fill and resurfacing of the street. The City will also pay for any needed repair of the curb which will be done this spring. Beckel advised that the actual hooking up of a new service line for the house, materials and labor and any excavation work behind the curb is all to be paid by the homeowner. Mr. Lutz suggested that the $1,500 amount assessed to the homeowner in this case is quite fair, considering the City is picking up $10,000 for its share. Buck Heser remarked that he doesn’t think this $1,500 charge is fair since the guy who came with the equipment in the first place to find the leak was way off the mark. Mr. Beckel explained that the reason he was off was because he did not consider this to be a two-inch line and therefore his computer did not plot out the correct location; and therefore the exact site of the leak was off by about 20 feet.

Lee Lapic questioned why the City follows no maintenance schedule to remove the two-inch lines in town which are obviously in bad condition and in immediate need of replacement. He questioned why the City is waiting to rebuild the system until the point where everything is shot and the lines leak. Mr. Beckel replied that most of the time no one has any idea where these lines are. He pointed out that his department would have to go literally dig up every shut off to find them, since they are usually found where two or three shutoffs are located side by side; and the only definite way to find them is when the street must be dug up to repair a water leak. Beckel also pointed to the large expense in repairing these underground water lines for which there are no grants available. Many of these lines are 80 to 100 years old. Mr. Lapic stressed that the City is looking at some big problems in the near future relative to maintaining and replacing our old and deteriorating water lines.

(Fred Bern present.)

In reply to questions from Jerome Haskins and Buck Heser, Water Department Manager Beckel next pointed out that the two-inch copper lines were removed when mains were replaced as part of the recent North Highway project, and no property owners were assessed for the new stubs back to their shutoffs. He added that not assessing property owners in cases such as this has been the past practice of the City.

In reply to another inquiry from Jim Lutz, Steve Beckel remarked that the $1,500 charge being assessed by the City and Svoboda Excavating for repairing this water line break on the Heser property is usual and customary under the circumstances.

It was noted that the payment of the City’s portion of the bill to Heser can be stretched out over a series of months; but the City has no control over Svoboda’s bill. It was pointed out that the City hires leak detection to come to Jackson twice a year now. Leak detection finds these leaks, and then the City informs the property owners that they have to fix them. Mr. Albrecht stressed that the City is not treating Buck Heser any differently than we treat other residents in town.

The City Administrator referenced a suggestion brought up by Junior Council member Hummel at the last City Council meeting. He explained that Mr. Hummel questioned why the City is not replacing the mains in some of the older streets in town first. Steve Beckel explained that one of the biggest difficulties dealing with replacing streets as Mr. Hummel refers is that where George Tauer is having problems with the street is not usually the same street where the Water Department is having problems with the mains. The Commission was advised that because of the hilly terrain of Jackson and the existence of more rocks, black dirt, hotter soils, and added erosion, city crews experience more problems with our streets and underground mains than do many other communities.

It was noted that presently the City is trying to build up its fund reserves to replace mains in town, but that this plan will take some time to accomplish. Mr. Beckel explained that per a recent engineer’s estimate, it will cost $825,000 to replace water, sanitary and storm sewer and the street for one block on State Street, from Emily to Lawrence.

Following some further comments and consideration of the matter, BERN/LUTZ moved to recommend that the City not change its Water Department Rules and Regulations and therefore deny John (Buck) Heser’s request to waive the City’s water repair bill for work done at 129 Thomas Hill Road. All voted in favor of the motion, with Lee Lapic and Mike Schwartz voting “nay”. Motion carried.

(Buck Heser, Jerome Haskins and Garret Simon left the meeting.)

Steve Beckel next inquired of the Commission whether they feel the written Water Department Rules as established should remain as is. Lee Lapic expressed that in today’s economy, there will likely be some citizens who will not be able to afford even a $500 charge to dig up and repair their service line. He suggested that the City provide customers with the option of extending the time period in which to pay their repair bill. Jim Lutz questioned whether it would serve the City’s interest in purchase a backhoe and do the service repair work ourselves, with some savings to be passed on to our customers. Steve Beckel questioned whether he or anyone else from the City could find the time to operate such equipment. He added that in his opinion, the City is better off hiring out the excavation work.

Consider Exploring a Fiber Optic System for TV & Internet Service

The Commission next discussed whether or not the City should consider working with Windom to extend their fiber optic system for the purpose of offering our citizens an upgraded TV and internet service. It was reported that sometime ago, Cable TV Department Manager Egeland had attended a meeting in Lakefield regarding this matter. It was noted that Lakefield has plans to bring Windom’s fiber optic system to their residents. When Mr. Egeland attended the meeting, Lakefield’s cost was estimated at about $3 million for this upgrade. Now, it has been learned that Lakefield will expend about $1.5 million for this fiber optic service. It has been speculated that it will cost the City of Jackson more than $4 million to extend a fiber optic system here since we are further away than Lakefield and the line will have to be bored under the river at some point.

Commission members expressed concerns that a fiber optic system will likely result in having to at least double our TV rates for customers, many of whom have complained recently to the $2.00 per month increase. It was pointed out that as of a year ago, Windom charged its customers $61.50 for its equivalent to our Tier I and Tier II programming. This figure does not include any HDTV channels.

Following additional remarks, LUTZ/SIEPKER moved and it was unanimously carried to not explore a fiber optic system for Jackson at the present time.

Steve Walker next referenced some questions that the Mayor has asked the Commission to consider and discuss, since he could not attend this meeting. It was noted that the Mayor wants this Commission to look into extending fiber optics to just the Industrial Park area, if not the entire community. It was explained that the Mayor feels Jackson may lose a competitive edge for attracting new businesses and industries to our Industrial Park if it cannot provide internet service via fiber optics. Kevin Siepker informed that the Industrial Park is already supplied with T-1 service which has a speed of 1.44 Mbps. Via Qwest high speed internet, Siepker noted that residences in town can now receive up to 7 Mbps. of service; but this same speed may not be available in the Industrial Park. Mr. Siepker expressed that the Industrial Park area, however, should be able to receive 3 to 5 Mbps. service, however. Curt Egeland noted that in order to extend a fiber optic service to the Industrial Park, there needs to be a place to hook into which involves switch costs which are very expensive. Also, the cost to extend fiber optics will never pay for itself considering there are only about 15 services out in the Parkway area. Mr. Siepker remarked that he does not know if or when it will ever extend down to Jackson, but Qwest is presently installing fiber optic networks in the Twin Cities and they are receiving 15 to 20 Mbps. service. He added that he will contact Qwest to find out if they plan to come down to the Jackson area with their fiber optic network. It was pointed out that a fiber optic system has being installed between the college and the secondary school buildings in town.

In reply to the Mayor’s inquiry regarding the $250,000 as contained in the Five-Year Capital Improvement Plan for cable TV, Curt Egeland reported that these monies will be used to switch our system over to digital and also to provide set-top boxes for customers in town who do not have a digital TV. It was noted that channel 13 was off the air for a time this past weekend which was due to them switching their broadcast signal over to digital.

The Commission was advised that the City does not have to use the budgeted $250,000 this year since we have another three years before being required to switch our system from analog to digital. Mr. Egeland reported that equipment costs keep decreasing, and perhaps it would be much less costly for the City to make this transition to digital when it has in another three years rather than in 2009. He added that things are changing so fast in the industry that now there is talk HDTV may be on the way out and everything will eventually be broadcast in a 3-D format. The Commission was reminded that when the City goes to digital, our cable system will have room to add several more channels.

Curt Egeland next explained that if the City was to add internet and phone service, it would have to rebuild the current system. To rebuild our system is less costly than fiber optics, but still a major expense. Egeland pointed out that that the City could choose to spend this $250,000 now to switch over to digital, but the possibility exists that digital may not even be around in a year or so and that everything may be high definition. He asked: “Does the City upgrade then?”

Since our system is functioning properly, and also to take advantage of falling equipment prices, LAPIC/LUTZ moved to recommend that that the City not switch the cable TV system to the digital format for at least another.

It was pointed out that Mayor Jasper wants the Commission to be reminded that no capital improvement expenditures relating to utilities should be made until or unless they are first reviewed and approved by this group. Jim Lutz pointed to the importance of continuing to maintain our utilities, such as cable TV. He expressed that if the Cable TV Manager, for example, finds a piece of equipment which is needed to maintain our system and the equipment is reasonably price, he should be allowed to purchase it without having to seek Commission approval. Particularly in these tough economic times, Fred Bern explained that the City Council wants department heads to spend their funds wisely and that there is justification for their decisions in purchasing equipment and materials. He explained that bringing at least big ticket item requests before this group for approval coincides with the attempt of the City Council to publicly demonstrate that they are doing what they can to be fiscally responsible. Fred Bern remarked that in his personal opinion, any requested capital purchases costing more than $5,000 should first be approved by the Commission and City Council. The motion as previously made was then put to a vote and unanimously carried.

(Curt Egeland left the meeting.)

Water & Sewer Surcharge

Reference was made to another suggestion by Junior Council member Hummel to consider assessing a $3.00 monthly surcharge to every customer’s water bill in order to build reserves to pay for replacing the deteriorating sewer and water mains in town. It was pointed out that at $3.00 a month, only about $50,000 per year will be generated. Mr. Albrecht remarked that this amount will not go very far in replacing our bad mains, and at the same time will likely raise some negative comments by our customers. He reminded that water and sewer rates have been recently increased, so hopefully the added funds will build up funded reserves and avoid having to bond for replacing our mains. Chairperson Berkner remarked that she feels customers will not be pleased if they see an added surcharge on their monthly utility bill.

Following some further discussion, it was recommended to wait one year to see the extent to which the increased rates increase the bottom line balances in the water and sewer funds, as opposed to adding a surcharge on the bill which will be listed as an additional assessment and likely stir some discontent among our customers.

Per a suggestion by Lee Lapic, brief discussion was had as to the past practices and issues associated with assessing affected property owners relative to repair and replacement of municipal water and sewer mains. Steve Beckel remarked that it makes more sense to raise the rates to generate additional funds than to add a surcharge since the larger users pay their fair share. He added that through a surcharge, a larger proportionate burden is placed on the individual water users to fund replacement costs. It was reminded that in 2013, the City will need to come into compliance with a water conservation plan which will require larger users to pay their fair share of water being used. There is an allocation from the state as to the amount of water the City can pump out of the ground; and if it exceeds that amount, a fine is assessed.

Well No. 6 Problems/Funding for Replacement of Deteriorating Water and Sewer Mains

Steve Beckel reported that Well No. 6 had to be taken out of service again. He explained that the new pump burned out due to the screens being three-fourths plugged with fine sand. It was informed that present 60 hp pump does not have a soft start switch which has caused problems. It was reminded that city policy requires a soft start for motors which are in excess of 40 hp. The estimated cost to clean this well is $15,000. Mr. Beckel noted that the throttling valves at the plant wore out since we have been pumping with a larger pump which had to be throttled down. Thein Well, the company who services our wells, recommends the City purchase a $7,000 frequency drive in order to slow down the speed of our pumps. This drive will need to be housed in a small shed which will also accommodate all the controls. The Commission was informed that without a frequency drive, every time the 60 hp motor kicks on, the suctioning force of the pump pulls some sand out of the aquifer. This situation can be avoided if the motor started up more slowly which it would with a frequency drive. Thein Well is attempting to obtain warranty coverage for the City for the new pump that burned out.

In reply to a question from Fred Bern, the City Administrator reported that he has not received the latest reports which are done for the Midwest, but the City of Jackson is still probably right in the mix with the majority of cities relative to the water rates it charges. It was suggested that instead of a surcharge or bonding, the City should consider further raising its water and sewer rates. Mr. Beckel speculated that if the City increases its water fees from $.50 to $1.00 per 1,000 gallons used, sufficient funds should be raised to replace mains at the rate of one block per year. Mr. Lapic suggested that staff investigate the extent of funds which could be generated if our water rates were increased by $.50 per month.

Following additional discussion, it was the consensus of the Commission to approve the purchase of a frequency drive for Well No. 6 and to construct a building in which this drive and controls will be housed. The City Administrator suggested that Steve Beckel obtain three estimates for this equipment, and that he will then bring the purchase request to council for approval at a later meeting.

Classification of Water Services as Being Essential

City Administrator Albrecht reported that the City considers electric power to our customers as an essential utility. As the result, the electric crew will fix an electrical outage no mater what time of the day or night. Reference was made to the recent issues and concerns expressed by Katie Stai at a Commission meeting relative to being without water for a 20-hour period of time as the result of a main break on State Street. As the result, the City Administrator inquired whether the City should also consider water as an essential service. It was pointed out that if water is considered to be essential, a main break must be fixed no matter what time of day it is.

Mr. Beckel expressed that it would be very difficult to require a main break to be fixed at night. He explained that if a break occurs after 8:00 P.M., for example, it can get to be quite late by the time the needed crew arrives, the lights are set up, and the length of time it takes to find the break and get everything marked. Beckel added that the excavation equipment operator sometimes does not even show up so no work can be done until the following morning. If that is the case, the City then has employees sitting around, getting paid overtime, and not being able to do anything. It was explained that for a large break, water is shut off immediately; but for a small leak, the Water Department may choose not to shut off the line and customers in the area will still have water. When water is shut off to fix a break, the LEC is informed so they can apprise those who call in as to the reason why they have no water.

In reply to comments from Jim Lutz, Chairperson Berkner remarked that she does not feel it necessary to go door-to-door to apprise customers that their water is shut off. She added that she would prefer to be informed, however, if the City knew in advance they were going to shut off water which affects her residence or business and that it would be off for a day or longer. Steve Beckel informed that when one considers fixing a water main break at night, there is the danger of cave-ins which are more difficult to observe; and it’s the coldest time of the day and the working conditions are much tougher.

Following some additional consideration, it was the consensus of the Commission not to consider water as an essential utility.

Survey – American Public Power Association

Reference was then made to the survey from the APPA, copies of which had been previously distributed to the Commission. Per this survey, it was noted that the City of Jackson is quite competitive regarding the electric rate it charges, and in fact is lower than many cities in Minnesota.

Customer Option to Purchase Wind Energy

In reply to questions from Fred Bern, the City Administrator that the City has advertised several times through utility bills that customers have the option of purchasing wind generated power through MRES’s Riverwinds program, which amounts to one dollar more per month. Presently there are no more than 10 customers in Jackson who have enrolled in this green energy program. Per the terms of our contract with MRES, the City cannot go out on the open market and purchase nor produce power on its own. The City’s contract with MRES expires in 2040.

There being no further business, LAPIC/SCHWARTZ moved and it was unanimously carried that this meeting be adjourned.

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Steven L. Walker, Recording Secretary