10-11-2011 ERMU MIN - Laserfiche WebLink

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Page 3 Regular meeting of the Elk River Municipal Urilities Commission October 11, 2011 In 2010 and 2011, ERMU utilized a new process in evaluating wage increases. This new process for handling wage increase proposals was handled over two separate commission meetings. During the first meeting, management provides industry comparisons, economic trends, and financial impact to ERMU. Included was the metro average survey of the seven predetern~ined peer utilities that have been used in the past, the Consumer Price Index (CPI), and benefit survey. The employees have been provided the opportunity to bring suggestions and requests to management. This information was reviewed and considered by management and then included in the presentation to the commission. At the discretion of the commission, employees were afforded the opportunity to address the commission during the first of the two meeting process. The topic would then be tabled until the following utility commission meeting at which the commission would make their decision. Troy Adams discovered during the surveying process that Shakopee Public Utilities has developed a very successful method of addressing wages and benefits. They formed a committee assembled of management and commissioners to assess wages and benefits. Discussion followed. Daryl Thompson recommended John Dietz to be on the committee. John Dietz asked how many meetings, staff responded bi-annual. Daryl Thompson felt it was owed to the employees to be able to voice their opinion. Al Nadeau agreed. Troy Adams said the first meeting would be for staff input and the second would be for going over the information and surveys to present to the commission for their decision. Daryl Thompson moved to create a Wage and Benefits Committee consisting of Theresa Slominski, Troy Adams, Mark Fuchs, and John Dietz, with Judy McSpadden as Recording Secretary. AI Nadeau seconded the mofion. Motion carried 3-0. 5.3 Review 2012 Expense and Conservation Improvement Program Budgets Year to date, wholesale power costs make up approximately 74% of operating revenue. Ultimately, the wholesale rates set by Great River Energy (GRE) have an enormous impact on ERMU's rates. GRE is still in the process of finalizing their 2012 wholesale power rate. Through recent discussions, the preliminary numbers indicate a wholesale power cost increase to ERMU of 14%. John Dietz asked if this all has to be passed onto the customer, Troy Adanrs responded not all. John Dietz asked if the data centers are still ramping up on their power consumption. Troy Adams said they continue to add electric load. Discussion followed regazding rates and peak loads. The Tazget Data Center is on an Interruptible Load Program and it would save GRE and ERMU approximately $1 million in the next year if United Health Group (UHG) was also on the program. Consensus was to pursue getting UHG on the Interruptible Load Program. John Dietz stated he wants to keep rates as minimal as possible and try to stay cost neutral. The water rate analysis conducted in the spring of 2010 established a cash flow plan that resulted in the rates remaining unchanged thru 2012. The 2012 forecast for water sales is slightly down and the water connections aze slightly up. There is also the continued revenue from the water