4.2. ERMUSR 12-16-2014 - Laserfiche WebLink

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Elk River Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: Elk River Municipal Utilities Commission Troy Adams, P.E. —General Manager John Dietz—Chair Al Nadeau—Vice Chair Daryl Thompson—Trustee MEETING DATE: AGENDA ITEM NUMBER: December 16, 2014 4.2 SUBJECT: 2015 Budget BACKGROUND: In November the preliminary 2015 budget and rates were presented to the Commission. Based on feedback and minor changes due to finalizing of projects and expense, the proposed 2015 budget is as follows. DISCUSSION: Electric Department Expense Budget Wholesale power costs account for 70% of operating expenses for 2015. The rates set by Great River Energy(GRE)have an enormous impact on ERMU's rates. The 2015 wholesale power rate increase from GRE results in a 3% impact to ERMU. The proposed 2015 budget and rates result in an electric fund revenue of$32,612,080 which includes a projected 1.46%margin and a projected$153,032 net to reserves. The Wage and Benefits Committee had presented to the Commission in November an analysis of the market and a preliminary cost of living adjustment(COLA). Future analysis has not changed the November Wage and Benefits Committee preliminary numbers. The proposed 2015 budget reflect the Wage and Benefits Committee preliminary COLA recommendation of 2.75% for all four pay plan groups. This would be considered and approved by the Commission through the adoption of the proposed 2015 budget. Notable items in the electric budget for 2015 are: • 2.75% COLA for all four pay plan groups; • Continued high production and low maintenance for the LFG plant; • An estimate of 1% growth in usage; • 100th year anniversary expenses; • NISC software and implementation costs; • Technical Service Superintendent retirement with planned overlap for successor; POWERED BY Page 1 of 4 NATURE Reliable Public Power Provider P O W E R E D T O S E R V E 58