2.2 ERMUSR 11-8-2022 - Laserfiche WebLink

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Chair Dietz had a clarifying question on the percentage recommended by staff. Ms. Slominski offered context that the electric bond convenance at 110% is $2 million with water at 105% being $107,000. Chair Dietz asked what would happen if ERMU does not reach the margin as it appeared to him that ERMU may not reach a $2 million margin in 2022. Ms. Karpinski explained that the calculation does not include depreciation and interest expenses so ERMU should reach the margin. Chair Dietz had a question about the timeline for ERMU's bonds. Staff responded anc explained that for future bonds finance agencies will be looking for 125% margins for electric bonds and 105% for water bonds. Moved by Commissioner Stewart and seconded by Commissioner Nadeau to approve proposed ERMU Commission Policy G.5a Margins. Motion carried 5-0. 5.0 BUSINESS ACTION 5.1 Financial Report —August 2022 Ms. Karpinski presented her memo on the August 2022 financials also noting the handouts she had provided to the Commission. Ms. Karpinski explained the staff is doing a good job keeping expenses in check. She then highlighted the Energy Adjustment Clause (EAC) from the power provider which currently shows a $2.97 million variance. This variance must be passed on to customers in the form of a Power Cost Adjustment (PCA) less the $500,000 that ERMU absorbs for rate stabilization. Referencing her handout on Electric Sales for August 2022, Ms. Karpinski explained though sales look good the high EAC makes the PCA necessary. Ms. Karpinski presented her second handout with projections for the rest of 2022, which show a $1.1 million positive position for the year. Ms. Karpinski added that to minimize costs ERMU is waiting to hire an administrations director until 2023 instead of 2022 and contracting one month of tree trimming so projects can still move forward, but not the two months that were planned. Ms. Karpinski shared that YTD usage for August is 3% less than prior year and while water is doing great overall due to connection fees, usage is 12% less. Elk River Municipal Utilities Commission Meeting Minutes October 11, 2022 Page 3 35