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SPECIAL MEETING OF THE ELK RIVER CITY COUNCIL <br /> AND ELK RIVER MUNICIPAL UTILITIES <br /> HELD AT ELK RIVER CITY HALL <br /> MONDAY, JUNE 29, 2009 <br /> Members Present: Mayor Klinzing,Councilmembers Zerwas,Motin,Westgaard, and <br /> Gumphrey,ERMU Commissioners Thompson and Dietz <br /> Members Absent None <br /> Staff Present: City Administrator Lori Johnson and City Clerk Tina Allard <br /> ERMU Staff: Director of Operations Troy Adams,Office Manager/Finance Director <br /> Theresa Slominski,and Special Projects Consultant Vance Zehringer <br /> 1. Call Meeting To Order <br /> Pursuant to due call and notice thereof, the joint meeting was called to order at 5:32 p.m.by <br /> the Council and by Elk River Municipal Utilities (ERMU). <br /> 2. Electric Utility Long-Range Planning <br /> Mr.Adams presented his staff report which outlined various power supply options for the <br /> city to consider along with the pros and cons of each option.He further discussed the <br /> benefits of a municipally owned utility. <br /> The following general discussion took place: <br /> Scenario#2(participation in Big Stone II with ownership in otherpeakingplant) <br /> Item#7: <br /> Mr.Adams stated approximately 2.7¢of the rate to customers,beginning in 2018,would be <br /> fixed in order to pay down the bond debt over a 30 year period.He stated the other 50%of <br /> the rate would cover fuel,operation and maintenance,and transmission costs which would <br /> fluctuate depending on market conditions. <br /> Mr. Zehringer stated the city is currently paying over 6¢a kilowatt hour on a wholesale basis <br /> and Big Stone II is projecting a 5.30 kilowatt hour in 2018.He stated half the rate would be <br /> fixed. <br /> Mayor Klinzing questioned what the$2.6 million is to be used for and who would by paying <br /> this amount at the financial close. <br /> Mr.Adams stated the$2.6 million would be the city's share of the cost for all the studies and <br /> permitting that must be completed for the Big Stone II project. He stated Elk River <br /> Municipal Utilities would be making payments of about$51,000 per month and then would <br /> have the option to roll the loan into construction bonding. He stated more research would <br /> be needed to determine the best option for obtaining funding for this loan. <br /> Ms.Johnson stated$51,000 per month would need to be paid for 10 months until the <br /> financial close.She stated there would be$8,000 in accumulated interest on the $2.6 million <br /> loan and$41,000 that the city will not get back because it would be for ongoing legal and <br /> development expenses. She stated Elk River Municipal Utilities staff was considering <br />