05-13-2008 ERMU MIN - Laserfiche WebLink

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Page 3 Regular meeting of the Elk River Municipal Utilities Commission May 13,2008 the back of the monthly bills of which approximately 30 new applications are received per month. As of last month there were 2,019 ACH customers out of approximately 9,400 total customers. The other procedure being used is an electronic payment submission with a company called VANCO. They work with the various bank bill pay systems sending those payments electronically instead of by check. There were 777 customers last month on this program versus the 675 we had at the beginning of the year. Staff recommends continuing with the procedures now being utilized. John Dietz asked if a one time offer for 30 days with incentive could be done. Jerry Gumphrey asked if a time limit should be placed on the period of time the customer should remain on this program,staff replied it would be hard to track. Further discussion followed. John Dietz moved to offer a one-time 30 day ACH incentive with a$10 credit to be applied to their bill. Jerry Takle seconded the motion. Motion carried 3-0. 6.1 Review Contributions to City On an annual basis APPA conducts a survey addressing municipal utilities payments,and contributions to state and local governments. The 2007 survey,which reflects a median contribution of 5%electric operation revenues,was reviewed. The age of the current policy on file for donations,transfers,and contributions was addressed. John Dietz would like a current policy drafted for the contributions and donations. Discussion followed as to the proper distribution for usage at City parks. In the future all City of Elk River's non-revenue operating accounts will be donated. Lori Johnson stated the City was satisfied with the current financial contribution and understands the contributions should be for non-revenue generating accounts only. John Dietz indicated he contacted the county assessor to verify how much tax the Elk River Municipal Utilities would pay if it was a private company. The tax assessor indicated it would pay slightly more,$920,000±versus the$841,000 contributed in 2007. John Dietz questioned if accelerated depreciation was used to make the contributions to the City look more favorable. Staff assured him that accelerated depreciation is not used. Jerry Gumphrey moved to authorize the donated electricity verbiage to include non-revenue generating City accounts,and to draft a current policy for approval at the next regularly scheduled Elk River Municipal Utilities meeting. John Dietz seconded the motion. Motion carried 3-0. 6.2 Review Cash Flow Projections At the April 2008 Elk River Municipal Utilities Commission meeting,the auditors presented the results of their annual utility audit. One of their comments was that staff continues the cash flow studies which project future revenues and expenses to ensure adequate financial resources are available to carry on business. The Springstad cash flow studies for both the electric and water departments were reviewed. These studies are updated twice annually,once after the audit and again during the budgeting process. The updated studies are consistent with past studies and are on track to achieve the desired cash reserves.