8.1. SR 08-06-2012 - Laserfiche WebLink

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REQUEST FOR ACTION TO ITEM NUMBER Mayor and City Council 8.1 AGENDA SECTION MEETING DATE PREPARED BY General Business August 6, 2012 Troy Adams, P.E. — ERMU General Manager ITEM DESCRIPTION REVIEWED By Resolution Supporting Elk River Municipal Utilities' Electric Cal Portner, City Administrator REVIEWED BY Service Territory Acquisition ACTION REQUESTED Adopt resolution supporting electric service territory acquisition. BACKGROUND Elk River Municipal Utilities (ERMU), and more specifically the Utilities Commission, are celebrating their 651h anniversary of being a municipal electric and water utility. Officially, the Elk Diver Public Utilities was first created on July 11, 1947, when the Village of Elk River adopted a resolution creating a Water, Light, Power and Building Commission and appointed its first three members: V.B. Skellinger, Otis Nickerson, and C.F. Meyers. Electric power was supplied to the community for some 30 years prior by a private company, the Elk River Power and Light Company, established in 1915. In 1942, the Anoka County Cooperative, now known as Connexus Energy, made an offer to purchase the Elk River Power and Light Company. The Village of Elk River initiated a lawsuit to block the sale. Through a special referendum to authorize the issuance of bonds, the Village of Elk River acquired the electric utilities in 1945. Because of the vision of the Village of Elk River, ERMU exists today, as our company mission states "To provide our customers safe, reliable, cost effective and quality long term electric and water utility services." In 1974, Minnesota passed legislation that established a municipal utility's right to grow with their city by acquiring electrical service territory as their city annexed additional area. This historic legislation was supported by both the municipal utilities as well as the cooperative electric utilities. In 1977, the city and township of Elk River consolidated to form what we now know as the City of Elk River. At that time, ERMU did not grow with the new city. In 1991, ERMU entered into a 20 -year orderly electric service territory acquisition plan with Connexus Energy for a portion of what was previously the Township of Elk River. The vision of past ERMU governance and staff to invest in territory acquisition helped to build the foundation for a reliably robust and fiscally sound utility. DISCUSSION There are many reasons why a municipality benefits from ownership of utilities and from their right for their utilities to grow. The ability to grow with your city allows for increased economies of scale as city services expand. The increased economies of scale positively impact the value of labor and materials costs. Growing with the city also creates an increase in the system load. The larger system load increases POWERED By A IR