PUC

sets

budget

$1 million trimmed from October proposal

By RON LARSEN

Journal Staff Writer

NEW ULM--The New Ulm Public Utilities Commission approved, with little comment, the Utilities Department's $29,660,744 budget for 2002. It represents about $1 million less in revenue and spending than the preliminary budget offered in October.

Virtually the entire reduction resulted from a revised estimate of the price of purchased power.

"We felt we were overly conservative on what we would need to pay for electricity, and the change filtered into other divisions," Utilities Director Robert Stevenson told the commissioners.

The new budget envisions expenses totaling $28,143,726, resulting in a net income of $1,433,050 with unrestricted cash totaling $503,313.

An addition of $300,000 in capital costs associated with the Hutchinson Pipeline Project was made, Stevenson said, because "in the fall of 2002 we will start seeing some real expenses."

Stevenson reminded the commissioners that "we won't have to commit to that project until summer. It's still hard to say what it's going to cost us because the price seems to keep creeping up. At first we thought the Hutchinson pipeline would be going nearly up to our city limits; now it appears our pipe will be now almost five miles long."

Stevenson added that it's his impression that Hutchinson officials believe they can build their pipeline for $25 million.

Stevenson reported the department has received two citations with fines totaling $3,000 from Occupational Safety and Health Administration (OSHA) as a result of the electrical accident involving Larry Botten, a first-class lineman.

The first citation resulted from the employee's action which violated specified clearance requirements allowing unprotected contact with a high-voltage source. The other involved the use of non-rated tools that in contact with high-voltage elements could cause arc flash burns.

"Why were we cited for the employee's action?" Commissioner William O'Connor asked.

"Just because is the only answer I can give you," replied Stevenson. "But that's what OSHA does, even if the employee was at fault. I think it's just to cover the expense of having an inspector on site."

The commission approved an across-the-board 5 percent wastewater treatment rate increase to be effective with the February 2002 billing. The increase will amount to a 15.3 percent hike in residential rates, 10.8 percent in commercial, 6.44 percent in industrial and 5 percent municipal.

According to the department's figures, the average homeowner will pay $1.96 extra per bill while commercial customers will pay $7.13.

"Industrial are all over the board so I couldn't figure an average increase for them," Stevenson said.

The last change in wastewater treatment rates was in January 1999 when rates were raised about 5 percent.

While three vendors requested bid specifications for replacing the department's No. 2 Cooling Tower, only one submitted a bid. Although Ceramic Cooling Tower Corporation's bid of $375,800 was $75,800 over budget, the commission approved the staff's recommendation because "the Utility may lose capacity allocation if the project does not proceed."

However, staff acknowledged that the other potential bidders couldn't meet the completion date of May 2002 listed in the specifications. Several commissioners questioned the urgency of the early completion date but approved the awarding of the bid.

The commission also approved Crescent Electric Supply's bid of $193,662 for a 15-kV cable. While two of the four firms bidding were lower than Crescent's bid, their bids were disqualified because staff said they did not meet specifications.

Assistant City Attorney Susan Nierengarten suggested for future bids that staff provide the commission with a detailed report on why bids were disqualified.

Because it was the final meeting for Commission President Rick Jensen and Vice President Phil Liesch, the commission passed a resolution commending the two for their years of service to the commission. The commission will re-organize with their replacements at the January meeting.