5.2 ERMUSR 11-10-2020 - Laserfiche WebLink

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UTILITIES COMMISSION MEETING TO:FROM: ERMU Commission Melissa Karpinski –Finance Manager MEETING DATE: AGENDA ITEM NUMBER: November 10, 2020 5.2 SUBJECT: 2021 Annual Business Plan: Rates and Review, Stakeholder Communication Plan ACTION REQUESTED: None DISCUSSION: In preparation for budget approval in December, staff continues to work through the 2021 budget process. Based on the 0% wholesale power rate increase and projected expense increases and capital expenditures, a preliminary balanced budget and rates have been drafted. Attached is the following information for your review. Additional budget detail is available upon request. Please contact staff for additional information. 1.Electric Department Expense Budget – The 2021 forecast for electric expenses are a .6% increase over the current year budget. Wholesale power costs make up 67% of the operating budget. Most notable increases are for administrative expense due to the addition of an HR person, and expenses related to bonding for the new field services building. The budgeted Payment in Lieu of Taxes (PILOT) amount for 2021 is $1.6 million. The PILOT is comprised of $1.37 million with the 4% of Elk River City’s sales calculation, and $230,000in donated utilities and labor. At this time there is a 0%rate increaseproposed. 2.Water Department Expense Budget – The 2021 forecast for water expenses are a .3% reductionover the current year budget. Most notable increases are for administrative expense due tothe wellhead protection plan amendment, the addition of an HR person, and expenses related to bonding for the new field services building. At this time there is a 0% rate increase proposed. Staff would like to discuss with the commission the communication plan to customers for the 2021 rates, etc. ______________________________________________________________________________ Page 1 of 2 59