4.2. ERMUSR 12-12-2012 - Laserfiche WebLink

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We also would like to look more closely at monthly connection fees to bring the fees in line with the General and Administrative Overhead expenses so they are on parity, and to gradually eliminate the Senior Rate. This way usage rates are covering annual operating expenses, and monthly connection fees are covering the overhead (as they should) without any class subsidizing another(as they shouldn't.) Working with the direction of a 2.5% increase, we applied the 2.5% to the base revenue calculation to arrive at the target revenue increase of$2,041,234. Then focusing on the first tier usage rates and the monthly connection fees, it is a 4% increase needed to reach the target revenue. Additionally, with the next four years having capital projects of over $1 million each year, a preliminary 3 year rate projection of 4% each year would be necessary to keep target reserves in place. The assumptions used for this analysis and graph pictorial are included to help understand the budget needs. Proposed 2013 water rates are as attached on the water rate worksheet. Notable items in the water budget for 2013 are(again): • Zone water pressure improvement project $40,000 is included in the expense, and an offsetting reimbursement from the trunk fund is included in the income • Water Tower Lease income is increased $23,000 for 2013 for additional equipment on one tower • Maintenance of Structures includes roof repairs for well houses • Pumping and Distribution expenses are increased for additional staff and related work that was under-budgeted in 2012 • Customer Service expenses increased to include CRC after hours call services, online billing through online payment portal, increased credit card usage • Proposed staff addition for Executive Assistant • Ipads for commission meetings • Approximate$7,000 per year increase in LMC insurance costs due to recent land use claim for the City of Elk River **new since November meeting** ACTION REQUESTED: Staff recommends approval of the 2013 budget and rates. ATTACHMENTS: • Proposed Summary of 2013 Budgets • Proposed 2013 Electric Revenue and Expense Budget • Proposed 2013 Water Revenue and Expense Budget • ERMU Water Rate Worksheet • ERMU Water Utilities Cash Reserves Graph • Proposed 2013 Electric Capital Budget • Proposed 2013 Administration and Technical Services Capital Budgets • Proposed 2013 Water Capital Budgets • Proposed 2013 Training and Travel Budget • Proposed 2013 Conservation Improvement Program Budget vorteto or SRS M1 Page 3 of 3 INATUR Reliable Public Power Provider POWERED To SERVE