Pierz Council holds off on paying $62,000 to Minnesota Power

Contract details sent to city attorney for review

By Terry Lehrke, News Editor
[email protected]

Under advice from its city attorney, the Pierz City Council decided Monday not to begin paying the $62,000 Minnesota Power says the city owes.

Pierz City Attorney Tom Jovanovich with Rajkowski Hansmeier in St. Cloud, sent a letter to Minnesota Power. The attorney is questioning the language in the contract with the city, as it relates to a current transformer (CT) that was damaged at some point, gave faulty readings which resulted in the company not billing the city for the entire amount of electricity used.

Also in question are the calculations Minnesota Power used to determine the amount to be back billed.

Minnesota Power maintains that it has the right, per its contract with the city, to back bill for a 12-month period and estimated that figure to be $62,000.

Since the exact date of the CT malfunction is in question, Minnesota Power may only have the right to back bill the city for six months.

Since the city billed its residents for the power they used, and because there is a discrepancy, Pierz resident Jim Tolbert questioned where the extra money went.

The Council assured him it went into the city’s electric fund.

City Administrator Anna Gruber, said the city uses the electric fund for system maintenance and upkeep and preparation in the event that there would be a catastrophic failure/event that would lead to the city needing to repair the entire system.

The fund is also used for funding future projects, just as with the Highway 25 project. This helps the city lower assessments for residents because the city is able to “front” more of the money, she said.

Gruber said the city has been advised by its financial adviser that the fund should have a balance equal to six months of bills (roughly $650,000).

As of Dec. 31, 2011, the city had $1.084 million in the fund.

Tolbert felt the Council should not pay the $62,000.

“We have no intention of arbitrarily sending them a $60,000-plus check,” said Mayor Toby Egan.

“We won’t go back to the residents (for the money), they’ve already paid,” he said.

Council Member Mike Menden said the city may owe Minnesota Power a little money.

“Why?” asked resident Tony Sauer. “If their truck breaks down, they’ve got to pay for it.” He felt if the CT belongs to Minnesota Power, it is their responsibility to ensure it is working properly and to take care of it.

As for paying Minnesota Power back, Tolbert, who is retired after 32 1/2 years with Minnesota Power, pointed out that he knew of residents in other cities who waited for two years to have their meter checked and paid more for electricity than they should have.

These residents were not reimbursed for that overbilling on electricity once their meters were repaired or replaced, he said.

“The thing that got me on it was that the city informed them (Minnesota Power) that, ‘Hey there’s an issue here,’” said Tolbert.

Minnesota Power checked the meters electronically and found no problems, Dan Gunderson, meter supervisor with Minnesota Power, told the Council at its June 11 meeting.

Tolbert said that the CT feeds down to the meter and that each phase has a CT on it. Minnesota Power reads the meters electronically. “But as far as calibration of the meter itself, that meter has to be pulled and calibrated in the lab,” said Tolbert.

“It’s the same as a house meter. If you’re having issues with your house meter, they’ve got to pull that meter and check the calibration,” said Tolbert.

Despite raising rates 1/2-cent per kilowatt in spring 2011, to offset an increase from Minnesota Power, it is not known whether now that the CT has been replaced, if the city will take it in what it needs for electricity to keep the electric fund healthy.

Jovanovich will report to the Council once he receives a response from Minnesota Power.

Pierz City Council Briefs

In other business at Monday’s meeting, the Pierz City Council:

• Learned members of the Army reserve will visit with City Council members Monday, July 23, at 3 p.m. at City Hall. The reservists will take what they learn from the Council, business people and others in the community, with them to help with their work in communities overseas;

• Were informed the 2012 election filing period for anyone interested in running for any open council seats can file for office by stopping at City Hall and completing an affidavit for candidacy and paying the $2 filing fee. The filing period is July 31 – Aug. 14, and the Election is Nov. 6. Those whose terms are expiring include Mayor Toby Egan, Clerk Mary Korf and Council Member Adrian Welle;

• Decided that the best route to sell the city’s lot on Peter Avenue would be to put it up for bids; and

• Learned from Scott Hedlund with Short Elliott Hendrickson (SEH) that the project memoranda on the Robert Avenue and Park Avenue projects, put on hold until the Safe Routes to School project was under way, was in the hands of the Minnesota Department of Transportation.

The next meeting for the Pierz City Council will be held Monday, July 9, at 7 p.m.