4.1. ERMUSR 12-17-2013 - Laserfiche WebLink

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Elk River Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: Elk River Municipal Utilities Commission Troy Adams, P.E. —General Manager John Dietz—Chair Al Nadeau— Vice Chair Daryl Thompson—Trustee MEETING DATE: AGENDA ITEM NUMBER: December 17, 2013 4.1 SUBJECT: 2014 Budget: Review BACKGROUND: In November the preliminary 2014 budget and rates were presented to the Commission. Based on feedback and minor changes due to finalizing of projects and expense, the proposed 2014 budget is as follows. DISCUSSION: Electric Department Expense Budget Wholesale power costs account for 72% of operating expenses for 2014. The rates set by Great River Energy(GRE)have an enormous impact on ERMU's rates. The 2014 wholesale power rates were designed to provide a 0% increase in GRE revenue from wholesale power sales but actually have a 0.5% impact to ERMU. Early in the budget process the remaining operating expenses for 2014 were budgeted for a 3% inflationary increase. As expense numbers are solidified through the budget process this number changes. The blended increase in electric revenue for 2014 is budged at 1.8% for a budget total of $32,204,342. Notable items in the electric budget for 2014 are: • Reflects the approved 2.7% COLA for the lineworkers' pay plan group and a 2.1% COLA for the other pay plan groups; • Premium increase and cost sharing changes for health insurance; • Continued current efficiency with the LFG plant in terms of higher production and lower maintenance; • An estimate of 1% growth in usage; • Includes $20,000 for consultants, material, and labor for ERMU History Book update and marketing material design in anticipation of upcoming 100th year anniversary in 2015; • Mapping included $30,000 to include outside help for specialized areas; POWERED IT 3; Page 1 of 3 NATURE Reliable Public P O W E R E D T o SERVE Power Provider 50