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3.0 OPEN FORUM <br />No one appearedfor open forum. <br /> <br />4.0 POLICY & COMPLIANCE <br />Nothing was presented for policy & compliance. <br />4.1 2021 Financial Audit <br />Mr.Berg presented the 2021 FinancialAudit.He stated that the auditors issued an <br />unmodifiedopinion on the financials, including legal compliance, for a completely clean <br />audit. <br /> <br />To Mr. Berg’s comment about an increase in Purchased Power expenses, Chair Dietz <br />asked if that increase was due to higher costs for power or because of greater usage. Staff <br />reported there was a 3.4% increase in kWh from 2020. <br /> <br />Chair Dietz asked why water production and distribution increased in 2021. Mr. Ninow <br />responded the drought which occurred the previous summer affected those numbers. <br /> <br />Chair Dietz asked if there were opportunities to pay bonds early. Mr. Berg responded that <br />it would depend on the prepayment date of the bond. <br /> <br />Chair Dietz asked Mr. Berg for an overall opinion on the utilities’ finances, noting he was <br />concerned that margins were getting cut close due to rising costs. Mr. Berg responded <br />that ERMU having cash balance above target reserves provides a cushion. Mr. Berg added <br />that overall finances are in good shape, but that ERMU should continue to monitor its <br />annual budget process and rates. There was discussion. <br /> <br />Moved by Commissioner Nadeau and seconded by Commissioner Stewart to receive <br />and file the 2021 Annual Financial Report. Motion carried 5-0. <br /> <br />1 Year End Reserve Balances <br />4.2 202 <br />Ms. Karpinski presented her memo on the 2021 Year End ReserveBalances. <br /> <br />Chair Dietz asked if there were any large water tower painting projects scheduled in the <br />next few years. Mr. Ninow responded that the Johnson Street Water Tower is scheduled <br />to be painted but is budgeted for 2025. <br /> <br />Chair Dietz asked if ERMU budgets for the electric service territory transfer costs. Staff <br />responded that it does. <br /> <br />Elk River Municipal Utilities Commission Meeting Minutes <br />April 12, 2022 <br />Page 3 <br /> <br />38 <br />