3.1. SR 07-11-2011 - Laserfiche WebLink

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REQUEST FOR ACTION TO ITEM NUMBER Ci Council 3.1. AGENDA SECTION MEETING DATE PREPARED BY Consent ul 11, 2011 Tro Adams, P.E. - Utilities Director ITEM DESCRIPTION REVIEWED By Transfer Agreement for the Delano Municipal Utilities' Tim Simon, Finance Director CAPX2020 Brookings-Twin Cities Transmission Project Share REVIEWED BY ACTION REQUESTED Per legal counsel recommendation, Elk River Municipal Utilities requests the City Council to approve the execution of a Transfer Agreement for the Delano Municipal Utilities' CAPX2020 Brookings-Twin Cities Transmission Project share. BACKGROUND/DISCUSSION In May 2006, the Utilities Commission authorized joining Midwest Municipal Transmission Group (MMTG) to explore the potential to obtain ownership in the transmission system. In February 2007, ERMU entered into an agreement to participate through Central Minnesota Municipal Power Agency (CMMPA) in the CAPX2020 Brookings-Twin Cities Transmission Project. In March 2011, the Commission and Council both approved Resolutions authorizing the Utilities participating in the Brookings Project through CMMPA for an amount not to exceed $7,140,953 without further action. This maximum investment amount was based on CMMPA being awarded an increased project share from 2.2% to 5%. In May it was finalized that CMMPA would be awarded an increase project share from 2.2% to 3.6%. This results in ERMU share increasing from $1,993,134 to approximately $4,961,495. Delano Municipal Utilities (Delano), a participant in the CAPX2020 Brookings project through CMMPA, has recently requested to be released from the project contract. Although Delano is bound by contract, it is not in the best interest of the participants to force an unwilling participant to remain in the project. Six of the participants investing in this project through CMMPA, including ERMU, have expressed interest in acquiring Delano's share. Fox ERMU, acquiring a share of Delano's ownership would not cause ERMU to exceed the maximum investment amount of $7,140,953 approved by the Commission and Council. If the same allocation method used for the project investment share is applied to Delano's share, ERMU would acquire approximately $687,679 of Delano's available $1,581,822. This would bring ERMU's share to approximately $5,649,174 which is well under the maximum approved $7,140,953. The method for the allocation of Delano's share has not officially been voted on by the six participants yet. In June 2011, the Utilities Commission approved execution of the Delano transfer agreement contingent upon ERMU legal counsel review.