6.1a ERMUSR 01-10-2023�i
Elk River --�-
Municipal Utilities UTILITIES COMMISSION MEETING
TO:
FROM:
ERMU Commission
Mark Hanson — General Manager
MEETING DATE:
AGENDA ITEM NUMBER:
January 10, 2023
6.1a
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
On December 16, Technical Services Superintendent Mike Tietz hosted a winter/ice storm disaster
recovery tabletop exercise based on American Public Power Association guidance. All ERMU
managers participated alongside Public Works Director Justin Femrite, Fire Chief Mark Dickinson,
and Deputy Fire Chief Mark Wandersee. It was a great opportunity to test response procedures,
learn one another's role, identify available resources, and discuss improvement areas. All
participants found the exercise valuable and worth repeating.
• Our Wellhead Protection Plan continues to remain on schedule. The plan has identified several
opportunities for outreach within and beyond our community. These opportunities range from
providing water education in the schools to forming a county -wide aquifer awareness/protection
group. We will work to categorize and prioritize the various opportunities to make sure we make the
best use of available resources.
The Board of Directors of the Minnesota Municipal Power Agency (MMPA) met on December 20,
2022, at Chaska City Hall in Chaska, Minnesota. Commissioner Stewart and I were in attendance. The
public summary of the meeting is below.
o The Board of Directors of the Minnesota Municipal Power Agency (MMPA) met on
December 20, 2022, at Chaska City Hall in Chaska, Minnesota and via videoconference.
o The Board reviewed the Agency's financial / operating performance for November 2022.
o The Board discussed the current business environment.
o The Board approved rates for 2023, which are 2.1% lower than 2022 rates.
o The Board discussed the status of renewable projects the Agency is pursuing.
o Customer penetration for the residential Clean Energy Choice program increased to 4.3%.
There was an increase of 74 customers participating in the residential Clean Energy Choice
program from October to November.
o The following officers were elected for 2023: Matt Podhradsky — Chairman, Keith Mykleseth
— Vice Chairman, Greg Drent — Treasurer, Brian Frandle — Secretary.
I've included a background paper (cheat sheet) on the following page to provide reference
information for the anticipated NE/NW urban services expansion discussions at the ERMU
Commission/City Council combined meeting.
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Thoughts for the NE/NW urban services expansion discussion at the combined meeting
ERMU's focus should be on supporting the NE expansion area.
o Consulting services to review infrastructure needs is included in our 2023 budget.
o The city has already identified multiple development projects that are adjacent to the
existing urban services area.
o Building out from adjacent developments provides more direct cost -sharing of trunk lines by
having developers pay to extend existing trunk lines to their developments.
o In addition to roughly eight miles of trunk main, the NE expansion area will require a new
well, treatment plant, and water tower, likely within five years.
o Project costs for the NE area alone are estimated at $32M and will require bonding.
• The NW expansion is cost prohibitive at this time, especially given the $32M needed to proceed with
the NE expansion area.
o Proceeding with the NW expansion simultaneously with the NE expansion would add
approximately $44M in project costs, the majority of which would require bonding.
o Only one development project has been identified in the NW area and it's located at the
farthest point from existing trunk mains. No adjacent development projects have been
identified at this time.
o Connecting to this development project would require adding roughly five miles of trunk
main to support a single, 500-unit development. This could lead to water quality concerns
related to stagnant water in large trunk lines over long distances, especially in the winter,
when water use is at its lowest.
• Financial prudence would advise waiting 10-15 years before tackling the NW expansion area
o Waiting to move forward with the NW area provides time to pay down, and possibly pay off,
bonds incurred to support the NE expansion area
o Waiting provides time for interest to grow in developments adjacent to existing
infrastructure, maximizing cost sharing opportunities and minimizing stagnation concerns.
• If we do wait on the NW area:
o Commission and Council will need to decide whether to maintain the current urban services
policy which requires:
■ New developments within the urban services area are required to hook up to both
municipal water and sanitary services.
■ New developments outside of the current urban services area are not provided with
either water or sanitary services.
o Public works has determined the city has the capacity to provide sanitary services to support
the development in the far corner of the NW expansion area (if the current urban services
policy were to be updated).
Should the urban services policy be updated to allow the developer to hook up to
city -provided sanitary service but use privately -owned wells for water?
Should the development be postponed until additional, future development efforts
enable ERMU to incrementally build out to the far corner of the NW expansion
area?
Mark P. Hanson, P.E.
General Manager
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