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3.0 OPEN MIC <br />No one appeared for open mic. <br />4.0 OLD BUSINESS <br />There is no old business. <br />5.0 NEW BUSINESS <br />5.1 2013 Financial Audit <br />Andrew Berg was present from the auditing company, Abdo, Eick & Meyers, to present <br />the 2013 financial audit and management letter. The auditors issued a clean opinion on the <br />utilities. There were no findings to be reported. The commissioners had a few questions for <br />Andrew Berg and management, staff responded. Discussion followed. <br />Al Nadeau made a motion to accept the 2013 Financial Audit. Daryl Thompson seconded <br />the motion. Motion carried 3-0. <br />5.2 2013 Year -End Reserve Balances <br />The purpose for reserves to a public utility is to meet bond covenants and provide a <br />financial buffer to mitigate unforeseen or volatile operational costs. In 2010, the commission <br />adopted a financial reserves policy that defined the structure and formula on how financial <br />reserves will be calculated for the Electric Utility and Water Utility funds. <br />As defined by policy, the year-end reserve balances are to be reviewed after the <br />completion of the audit. These balances, if above their target levels, shall be unrestricted with a <br />defaulting designation as working capital. The commission shall then consider optimal use of <br />these unrestricted reserves. <br />Staff presented the year-end reserve balances and recommended that the balances above <br />target levels shall be unrestricted and designated as working capital. John Dietz had a few <br />questions, staff responded. <br />Daryl Thompson made a motion to approve the balances as unrestricted for the 2013 <br />audited amounts for 2014. Al Nadeau seconded the motion. Motion carried 3-0. <br />5.3 First Quarter Delinquent Items <br />Theresa Slominski presented the delinquent items for the first quarter. The year to date <br />balance for collections is about $7,000 and only about $350 is being written off. The American <br />Public Power Association's national statistics show that the industry standard is between .1 and <br />.241 percent Uncollectible Accounts per Revenue Dollar. ERMU is well below the standard at <br />.026 percent. John Dietz asked a few questions. Staff responded. <br />Page 2 <br />Regular meeting of the Elk River Municipal Utilities Commission <br />April 8, 2014 <br />15 <br />