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month. If not,the Committee will bring back the proposed COLA to the December <br /> Commission meeting for approval in the 2015 budget. <br /> 5.3 2015 Budget: Rates and Review <br /> Troy Adams presented the 2015 electric and water rates. The 2015 wholesale power rates <br /> have been approved by the GRE board which results in a projected 3% impact to ERMU. <br /> This increase in wholesale power costs are passed through in ERMU's retail rates. The <br /> proposed ERMU budget reflects a projected 3%rate increase in electric. There are still a <br /> number of variables to be analyzed prior to the budget being approved in December. Staff <br /> will be working to get accurate growth projections from our larger commercial customers <br /> as well as new residential growth. An analysis of the proposed rate increase will be done <br /> for a number of usage patterns within the different rate classes and will be provided to the <br /> Commission in December with the proposed budget. Troy also went over some of the <br /> noteworthy items in the electric budget including the delayed vehicle purchase. There was <br /> further discussion. <br /> The water increase is part of a three year plan that was implemented in 2013. The plan <br /> included slowly increasing the first tier and the base rate by 4%while phasing out the <br /> senior citizen rate. The plan was also designed to make the difference between the tiers <br /> less significant and to build up reserves to pay for capital improvement projects. The 2015 <br /> budget is based on implementing the 3rd year of the three year plan. John Dietz had a few <br /> questions. Staff responded. A more detailed analysis of the proposed rate increase will be <br /> provided to the Commission in December with the proposed budget. John Dietz had a <br /> question on how we arrived at our anticipated water revenue for next year. Staff responded. <br /> EricVolk shared that some of the numbers in his 2015 expense budget may look a little <br /> different than this year's numbers. Eric went over a few examples. Eric explained that <br /> some of the accounts have been condensed which results in either a higher dollar amount or <br /> a zero dollar amount being reflected. Eric Volk had one other item; commercial irrigation <br /> rates. Currently we have a commercial irrigation rate that covers irrigation meters when <br /> they're in service. This rate was established for commercial customers that turn their <br /> irrigation meters into us each fall. As we have a few customers that keep their meters year <br /> round versus turning them in,we want to add a new annual irrigation rate that would be <br /> used for those customers. There was further discussion. The new rate will be added to the <br /> 2015 tariff sheet and brought to the Commission for approval in January. <br /> Theresa Slominski commented on the $76,000 line item in the administration capital <br /> budget for the new company-wide software. She explained that we had budgeted$100,000 <br /> last year for the purchase of the software and based on the implementation timeline, it has <br /> been broken up in different quantities than we expected. The ABS portion that was <br /> implemented in 2014 was a significantly smaller portion of the $100,000 that was <br /> budgeted, and the Customer Care &Billing(CC&B) is three quarters of the expense which <br /> Page 3 <br /> Special meeting of the Elk River Municipal Utilities Commission <br /> November 18,2014 <br /> 23 <br />