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��i <br />Elk River <br />Municipal Utilities UTILITIES COMMISSION MEETING <br />TO: <br />FROM: <br />ERMU Commission <br />Melissa Karpinski — Finance Manager <br />MEETING DATE: <br />AGENDA ITEM NUMBER: <br />December 13, 2022 <br />5.3 <br />SUBJECT: <br />2023 Annual Business Plan (Budget, Schedule of Rates & Fees) <br />ACTION REQUESTED: <br />Adopt the 2023 Annual Business Plan <br />BACKGROUND: <br />In November, the preliminary 2023 Annual Business Plan was presented to the Commission. <br />There have been some changes due to finalizing of projects and expenses. The final highlights <br />are discussed below. <br />DISCUSSION: <br />Electric Budget and Rates <br />As discussed in November, we are proposing a 5% rate increase for 2023. <br />Notable items in the electric budget for 2023 are: <br />• Up to a 3.25% wage adjustment for all pay plan groups. <br />• Conservative estimate for usage and growth. <br />• 21% purchase power expense increase. <br />• No landfill gas plant related expenses due to decommissioning in 2022. <br />• Contracting of tree trimming for $140k. <br />• Increased depreciation expense due to the new field services building. <br />• Increased Customer Accounts expense due to increased number of customer <br />satisfaction surveys. <br />• Administrative expenses for having an administrations director for the full year, UPMIC <br />distribution's change in percentage, expenses for potential bonding for AMI project*, <br />and Travel and Training includes some additional expenses for the new general <br />manager. <br />• Replacement of Bucket Truck #4. <br />• Replacement of Vactron #50. <br />• Replacement of Truck #20. <br />• Shared cost in the replacement for Vehicle #1 for administration and Pickup Trucks #2 <br />and #32 for technical services. <br />• Highway 169 Redefine project from reserves. <br />• Otsego transformer replacement from reserves. <br />Page 1 of 2 <br />100 <br />