2025-12-09 - ERMU - Regular Commission Meeting
REGULAR MEETING OF THE
UTILITIES COMMISSION
December 9, 2025, 3:30 P.M.
Utilities Conference Room
______________________________________________________________________________
Page 1 of 1
AGENDA
1.0 GOVERNANCE
1.1 Call Meeting to Order
1.2 Pledge of Allegiance
1.3 Consider the Agenda
2.0 CONSENT (Routine items. No discussion. Approved by one motion.)
2.1 Check Register – November 2025
2.2 Regular Meeting Minutes – November 12, 2025
2.3 Designate 2026 Official Depository and Delegate Authority for Electronic Funds Transfer
2.4 Designate 2026 Official Newspaper
2.5 2026 Utilities Commission Meeting Schedule
3.0 OPEN FORUM (Non-agenda items for discussion. No action. Presenters must adhere to a time limit of 3
minutes.)
4.0 POLICY & COMPLIANCE (Policy review, policy development, and compliance monitoring.)
4.1 Commission Policy Review – G.4e3 – Water Services
4.2 2026 Governance Agenda
4.3 2026 Performance Metrics and Incentive Compensation Policy
5.0 BUSINESS ACTION (Current business action requests and performance monitoring reports.)
5.1 Electric and Water cost of Service and Rate Design
5.2 Financial Report – October 2025
5.3 Management Policy – A.10 - Financial Reserve
5.4 Wage and Benefit Committee - Proposed 2026 Adjustments
6.0 BUSINESS DISCUSSION (Future business planning, general updates, and informational reports.)
6.1 Staff Updates
6.2 City Council Update
6.3 Future Planning (Announce the next regular meeting, special meeting, or planned quorum.)
a. Special Meeting – December 18, 2025, 3:30 p.m., Utilities Conference Room
b. Regular Commission Meeting – January 13, 2026
c. 2025 Governance Agenda
6.4 Other Business (Items added during agenda approval.)
7.0 ADJOURN REGULAR MEETING
1
CHECK REGISTER
November 2025
APPROVED BY:
John Dietz
Jill Larson-Vito
Mary Stewart
Matt Westgaard
Nick Zerwas
2
Payroll/Labor
Check Register Totals
Page: 112/02/2025 10:56:42 am
Elk River Municipal Utilities
11/07/2025 To 11/07/2025
Rev: 202303050330
Pays Job Amount Hours
Gross Pay
188,622.52 3,458.002Reg Hours
0.00 0.0020Reg Salary
3,462.19 46.753Overtime
0.00 0.004Double Time
3,039.78 56.005On-Call/Stand-by
100.52 0.0024FLSA
0.00 0.0025Rest Time
0.00 0.0010Bonus Pay
600.00 0.0018Commissioner Reimb - Electric
60.00 0.00104Commission Stipend
0.00 0.00105Perf. Metr. Distr.
8,203.61 134.36VACVacation Pay
3,480.22 69.06SICKSick Pay
0.00 0.00HOLHoliday Pay
0.00 0.0078Retro Earnings
990.56 10.255-2 On-Call/Stand-by/OT
150.00 0.0018ACommissioner Reimb. - Water
15.00 0.00104ACommission Stipend - Water
0.00 0.00VACVacation Pay - Manager
264.42 6.00PTOYPersonal Day - Year
0.00 0.00UNPDTime Off without Pay
165.26 2.503COvertime-Comp Time
0.00 0.004CDouble Time-Comp Time
-165.26 -2.50CM3COvertime-Comp Time Adjusted
0.00 0.00CM4CDouble Time-Comp Time Adjusted
74.10 1.39COMPComp Time Taken
0.00 0.00106Longevity Pay
0.00 0.00MILMilitary Pay - Calendar Year
0.00 0.0010WBonus Pay
313.94 8.62ESSTEarned Safe & Sick Time
Gross Pay Total:209,376.86 3,790.43
Total Pays:209,376.86 3,790.43
/pro/rpttemplate/acct/2.64.1/pl/PL_CHK_REG_TOTALS.xml.rpt KGreenberg25252033
Payroll/Labor
Check Register Totals
Page: 112/02/2025 10:57:26 am
Elk River Municipal Utilities
11/21/2025 To 11/21/2025
Rev: 202303050330
Pays Job Amount Hours
Gross Pay
152,422.30 2,759.752Reg Hours
0.00 0.0020Reg Salary
1,967.70 29.753Overtime
0.00 0.004Double Time
3,239.04 56.005On-Call/Stand-by
24.55 0.0024FLSA
0.00 0.0025Rest Time
0.00 0.0010Bonus Pay
0.00 0.00105Perf. Metr. Distr.
20,504.85 369.75VACVacation Pay
1,242.13 30.75SICKSick Pay
19,873.89 360.00HOLHoliday Pay
0.00 0.0078Retro Earnings
222.21 2.255-2 On-Call/Stand-by/OT
0.00 0.00VACVacation Pay - Manager
309.36 8.00PTOYPersonal Day - Year
0.00 0.00UNPDTime Off without Pay
356.81 4.003COvertime-Comp Time
263.36 2.004CDouble Time-Comp Time
-356.81 -4.00CM3COvertime-Comp Time Adjusted
-263.36 -2.00CM4CDouble Time-Comp Time Adjusted
4,419.38 72.50COMPComp Time Taken
0.00 0.00106Longevity Pay
0.00 0.00MILMilitary Pay - Calendar Year
0.00 0.0010WBonus Pay
141.31 3.88ESSTEarned Safe & Sick Time
Gross Pay Total:204,366.72 3,692.63
Total Pays:204,366.72 3,692.63
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Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 1 - GENERAL FUND
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
WIRE238511/4/25 FISERV5655 CC FEES - OCT 2025 2,565.16
CC FEES - OCT 2025 641.29
CC FEES - OCT 2025 592.47
CC FEES - OCT 2025 148.12
CC FEES - OCT 2025 5,009.57
CC FEES - OCT 2025 1,252.39
CC FEES - OCT 2025 111.53
CC FEES - OCT 2025 27.88
CC FEES - OCT 2025 803.50
CC FEES - OCT 2025 200.88
CC FEES - OCT 2025 1,765.30
CC FEES - OCT 2025 441.33
Total for Check/Tran - 2385:13,559.42
Total for Bank Account - 1 :(1)13,559.42
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Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
WIRE499511/3/25 HOME DEPOT CREDIT SERVICES824 HOME DEPOT 69.90
WIRE499911/6/25 ONLINE UTILITY EXCHANGE (ELECTR166 UTILITY EXCHANGE REPORT - OCT 2025 345.84
UTILITY EXCHANGE REPORT - OCT 2025 86.46
Total for Check/Tran - 4999:432.30
WIRE500011/10/25 HEALTHEQUITY, INC738 ADMINISTRATIVE FEE INVOICE - NOV 2025 129.00
ADMINISTRATIVE FEE INVOICE - NOV 2025 25.50
Total for Check/Tran - 5000:154.50
WIRE500111/12/25 IRS - USA TAX PMT (ELECTRONIC)152 PAYROLL TAXES - FEDERAL & FICA 18,703.97
PAYROLL TAXES - FEDERAL & FICA 24,037.69
PAYROLL TAXES - FEDERAL & FICA 3,628.78
PAYROLL TAXES - FEDERAL & FICA 5,102.47
Total for Check/Tran - 5001:51,472.91
WIRE500211/12/25 PERA (ELECTRONIC)153 PERA EMPLOYEE CONTRIBUTION 10,953.66
PERA CONTRIBUTIONS 12,638.86
PERA EMPLOYEE CONTRIBUTION 2,380.54
PERA CONTRIBUTIONS 2,746.79
Total for Check/Tran - 5002:28,719.85
WIRE500311/12/25 VOYA INSTITUTIONAL TRUST COMPAN160HCSP EMPLOYEE CONTRIBUTIONS 2,501.01
HCSP EMPLOYEE CONTRIBUTIONS 446.43
Total for Check/Tran - 5003:2,947.44
WIRE500411/12/25 VOYA INSTITUTIONAL TRUST COMPAN161MNDCP EE MANAGER CONTRIBUTIONS 356.46
MNDCP EMPLOYEE CONTRIBUTIONS 5,646.84
MNDCP EMPLOYER CONTRIBUTION 1,263.59
MNDCP EMPLOYER MGR CONTRIBUTION 599.52
MNDCP EE ROTH CONTRIBUTIONS 1,824.96
MNDCP EE ROTH MGR CONTRIBUTIONS 243.06
MNDCP EE MANAGER CONTRIBUTIONS 50.08
MNDCP EMPLOYEE CONTRIBUTIONS 816.43
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Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
MNDCP EMPLOYER CONTRIBUTION 172.62
MNDCP EMPLOYER MGR CONTRIBUTION 82.76
MNDCP EE ROTH CONTRIBUTIONS 392.98
MNDCP EE ROTH MGR CONTRIBUTIONS 32.68
Total for Check/Tran - 5004:11,481.98
WIRE500511/12/25 JOHN HANCOCK285 W&A EMPLOYER CONTRIBUTION 80.00
W&A MANAGER CONTRIBUTION 418.00
WENZEL EMPLOYEE CONTRIBUTIONS 1,019.38
WENZEL MANAGER CONTRIBUTIONS 127.25
DEF COMP ROTH CONTRIBUTIONS W&A 796.22
WENZEL EE ROTH MGR CONTRIBUTIONS 290.75
W&A EMPLOYER CONTRIBUTION 120.00
W&A MANAGER CONTRIBUTION 64.12
WENZEL EMPLOYEE CONTRIBUTIONS 183.97
WENZEL MANAGER CONTRIBUTIONS 31.81
DEF COMP ROTH CONTRIBUTIONS W&A 148.78
WENZEL EE ROTH MGR CONTRIBUTIONS 32.31
Total for Check/Tran - 5005:3,312.59
WIRE500811/13/25 MINNESOTA REVENUE (ELECTRONIC)154 PAYROLL TAXES - STATE 7,909.35
PAYROLL TAXES - STATE 1,600.77
Total for Check/Tran - 5008:9,510.12
WIRE500911/13/25 HEALTHEQUITY, INC738 FSA CLAIM REIMBURSEMENTS - 164 153.85
FSA CLAIM REIMBURSEMENTS - 164 38.46
Total for Check/Tran - 5009:192.31
WIRE501011/12/25 HEALTHEQUITY, INC738 HSA EMPLOYEE CONTRIBUTION 2,662.96
HSA EMPLOYEE CONTRIBUTION 462.88
Total for Check/Tran - 5010:3,125.84
WIRE501111/13/25 CHARTER COMMUNICATIONS549 OFFICE TELEPHONE 197.38
OFFICE TELEPHONE 49.35
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Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
Total for Check/Tran - 5011:246.73
WIRE501211/12/25 MINNESOTA CHILD SUPPORT PAYMEN598 CHILD SUPPORT 589.75
WIRE501511/24/25 PERA (ELECTRONIC)153 PERA EMPLOYEE CONTRIBUTION 10,914.88
PERA CONTRIBUTIONS 12,594.15
PERA EMPLOYEE CONTRIBUTION 2,359.73
PERA CONTRIBUTIONS 2,722.76
Total for Check/Tran - 5015:28,591.52
WIRE501611/24/25 VOYA INSTITUTIONAL TRUST COMPAN160HCSP EMPLOYEE CONTRIBUTIONS 2,496.16
HCSP EMPLOYEE CONTRIBUTIONS 441.42
Total for Check/Tran - 5016:2,937.58
WIRE501711/24/25 VOYA INSTITUTIONAL TRUST COMPAN161MNDCP EE MANAGER CONTRIBUTIONS 356.46
MNDCP EMPLOYEE CONTRIBUTIONS 5,450.80
MNDCP EMPLOYER CONTRIBUTION 1,029.83
MNDCP EMPLOYER MGR CONTRIBUTION 599.54
MNDCP EE ROTH CONTRIBUTIONS 1,827.69
MNDCP EE ROTH MGR CONTRIBUTIONS 243.08
MNDCP EE MANAGER CONTRIBUTIONS 50.08
MNDCP EMPLOYEE CONTRIBUTIONS 812.47
MNDCP EMPLOYER CONTRIBUTION 106.38
MNDCP EMPLOYER MGR CONTRIBUTION 82.74
MNDCP EE ROTH CONTRIBUTIONS 390.25
MNDCP EE ROTH MGR CONTRIBUTIONS 32.66
Total for Check/Tran - 5017:10,981.98
WIRE501811/24/25 JOHN HANCOCK285 W&A EMPLOYER CONTRIBUTION 80.00
W&A MANAGER CONTRIBUTION 418.00
WENZEL EMPLOYEE CONTRIBUTIONS 1,005.46
WENZEL MANAGER CONTRIBUTIONS 127.25
DEF COMP ROTH CONTRIBUTIONS W&A 795.02
WENZEL EE ROTH MGR CONTRIBUTIONS 290.75
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Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
W&A EMPLOYER CONTRIBUTION 120.00
W&A MANAGER CONTRIBUTION 64.12
WENZEL EMPLOYEE CONTRIBUTIONS 183.97
WENZEL MANAGER CONTRIBUTIONS 31.81
DEF COMP ROTH CONTRIBUTIONS W&A 149.98
WENZEL EE ROTH MGR CONTRIBUTIONS 32.31
Total for Check/Tran - 5018:3,298.67
WIRE501911/24/25 MINNESOTA CHILD SUPPORT PAYMEN598 CHILD SUPPORT 589.75
WIRE502011/24/25 HEALTHEQUITY, INC738 HSA EMPLOYEE CONTRIBUTION 2,665.85
HSA EMPLOYEE CONTRIBUTION 459.99
Total for Check/Tran - 5020:3,125.84
WIRE502111/21/25 MINNESOTA REVENUE SALES TX (ELE174 SALES AND USE TAX 298,666.64
SALES AND USE TAX 0.19
SALES AND USE TAX 12,057.17
Total for Check/Tran - 5021:310,724.00
WIRE502311/26/25 IRS - USA TAX PMT (ELECTRONIC)152 PAYROLL TAXES - FEDERAL & FICA 18,320.51
PAYROLL TAXES - FEDERAL & FICA 23,399.12
PAYROLL TAXES - FEDERAL & FICA 3,615.72
PAYROLL TAXES - FEDERAL & FICA 5,051.82
Total for Check/Tran - 5023:50,387.17
WIRE502411/28/25 MINNESOTA REVENUE (ELECTRONIC)154 PAYROLL TAXES - STATE 7,717.95
PAYROLL TAXES - STATE 1,588.68
Total for Check/Tran - 5024:9,306.63
WIRE502511/28/25 HEALTHEQUITY, INC738 FSA CLAIM REIMBURSEMENTS - 147 707.20
FSA CLAIM REIMBURSEMENTS - 147 176.80
Total for Check/Tran - 5025:884.00
WIRE502611/25/25 HEALTHEQUITY, INC738 FSA CLAIM REIMBURSEMENTS - 164 153.85
FSA CLAIM REIMBURSEMENTS - 164 38.46
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Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
Total for Check/Tran - 5026:192.31
WIRE502711/17/25 CARDMEMBER SERVICE9654 FIRST NATIONAL BANK VISA 8,660.11
FIRST NATIONAL BANK VISA 3,663.23
Total for Check/Tran - 5027:12,323.34
DD2274111/6/25 CITY OF ELK RIVER11 FRANCHISE FEE CREDIT - SEPT 2025 -725.00
2025 3rd QTR METERED 2,175.00
2025 3rd QTR FRANCHISE FEE 250,698.35
2025 3rd QTR WRITE-OFFS -154.21
Total for Check/Tran - 22741:251,994.14
DD2274211/6/25 CDW GOVERNMENT663 Fiber 1,892.14
DD2274311/6/25 CITY OF ELK RIVER11 SIGNS -0.17
SIGNS 2.37
SIGNS - LABOR 97.50
PARTS & LABOR FOR UNIT #31 -1.28
PARTS & LABOR FOR UNIT #31 82.51
PARTS & LABOR FOR UNIT #19 -11.54
PARTS & LABOR FOR UNIT #19 418.19
PARTS & LABOR FOR UNIT #23 -4.94
PARTS & LABOR FOR UNIT #23 230.22
PARTS & LABOR FOR UNIT #32 -1.12
PARTS & LABOR FOR UNIT #32 77.09
PARTS & LABOR FOR UNIT #32 -0.05
PARTS & LABOR FOR UNIT #32 4.05
PARTS & LABOR FOR UNIT #30 -1.30
PARTS & LABOR FOR UNIT #30 115.38
PARTS & LABOR FOR UNIT #3 -9.41
PARTS & LABOR FOR UNIT #3 193.86
SIGNS - EAST SUBSTATION -2.40
SIGNS - EAST SUBSTATION 32.93
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Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
SIGNS - EAST SUBSTATION LABOR 65.00
SIGNS -1.65
SIGNS - SANDWICH BOARDS 22.41
SIGNS - SANDWICH BOARDS LABOR 56.89
SIGNS -0.22
SIGNS - CONE DECALS 3.18
SIGNS - CONE DECALS LABOR 8.11
CONTINUE DISCLOSURE REPORT - 2025 1,320.00
CONTINUE DISCLOSURE REPORT - 2025 440.00
FUEL USAGE - SEPT 2025 2,022.71
FUEL USAGE - SEPT 2025 1,055.79
MS-ISAC MEMBERSHIP 398.00
MS-ISAC MEMBERSHIP 99.50
Total for Check/Tran - 22743:6,711.61
DD2274411/6/25 ELK RIVER MUNICIPAL UTILITIES23 CYCLE 2 - ACCT 41038 - SEPT 2025 113.11
CYCLE 2 - ACCT 41038 - SEPT 2025 5.95
CYCLE 2 - INV GRP 436 - SEPT 2025 3,736.69
CYCLE 2 - INV GRP 413 - SEPT 2025 100.00
CYCLE 2 - INV GRP 413 - SEPT 2025 670.41
Total for Check/Tran - 22744:4,626.16
DD2274511/6/25 FRONTIER ENERGY, INC664 PROFESSIONAL SERVICES - SEPT 2025 10,000.00
CIP PROFESSIONAL SERVICES 7,926.91
Total for Check/Tran - 22745:17,926.91
DD2274611/6/25 HACH COMPANY846 SAMPLING SUPPLIES 1,497.09
DD2274711/6/25 HAWKINS, INC.809 Water Chemicals 1,533.65
CHLORINE CYLINDER RENTAL 110.00
Total for Check/Tran - 22747:1,643.65
DD2274811/6/25 HYDROCORP5686 BACKFLOW DEVICE INSPECTION - OCT 2025 1,229.33
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Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
DD2274911/6/25 MMUA39 DRUG SCREENING - 202 40.00
DRUG SCREENING - 202 10.00
Total for Check/Tran - 22749:50.00
DD2275011/6/25 RESCO130 Transformer 19,445.00
Discount -9.72
Total for Check/Tran - 22750:19,435.28
DD2275111/6/25 WRIGHT HENNEPIN COOPERATIVE ELE610SECURITY - 1435 & 1705 MAIN ST 54.55
SECURITY - 1435 & 1705 MAIN ST 7.79
Total for Check/Tran - 22751:62.34
DD2275211/6/25 MEGAN ZACHMAN509 CAREER EXPLORATION 384.65
CAREER EXPLORATION 96.16
Total for Check/Tran - 22752:480.81
DD2275311/12/25 NORTHWESTERN POWER EQUIP CO IN583 Repair 727.00
Repair -727.00
Total for Check/Tran - 22753:0.00
DD2275411/12/25 ARCHER PLUMBING LLC728 WATER METER REPAIRS 300.00
WATER METER INSTALL 124.07
WATER METER INSTALL -9.07
Total for Check/Tran - 22754:415.00
DD2275511/12/25 CARR'S TREE SERVICE, INC5013 TREE TRIMMING - 10/4/25 6,124.09
TREE TRIMMING - 10/11/25 753.27
Total for Check/Tran - 22755:6,877.36
DD2275611/12/25 CITY OF ELK RIVER11 TRASH BILLED - OCT 2025 167,964.93
DD2275711/12/25 ELK RIVER MUNICIPAL UTILITIES23 CYCLE 3 - INV GRP 414 - SEPT 2025 125.00
CYCLE 3 - INV GRP 414 - SEPT 2025 813.56
CYCLE 3 - INV GRP 395 - SEPT 2025 13,683.10
Total for Check/Tran - 22757:14,621.66
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Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
DD2275811/12/25 JENNY FOSS626 Mileage 51.52
Schools and Meetings 93.76
Mileage 12.88
Schools and Meetings 23.44
Total for Check/Tran - 22758:181.60
DD2275911/12/25 INNOVATIVE OFFICE SOLUTIONS LLC6836 2026 CALENDARS 311.41
2026 CALENDARS 72.54
Total for Check/Tran - 22759:383.95
DD2276011/12/25 METRO SALES, INC330 COPIER MTC CONTRACT - 9/21 to 10/20/25 198.56
COPIER MTC CONTRACT - 9/21 to 10/20/25 49.64
Total for Check/Tran - 22760:248.20
DD2276111/12/25 MINNESOTA MUNICIPAL POWER AGEN1001 PURCHASED POWER - OCT 2025 1,774,917.92
PURCHASED POWER - OCT 2025 611,256.85
Total for Check/Tran - 22761:2,386,174.77
DD2276211/12/25 MMUA39 TRANSFORMER PRE-WORKSHOP - 169 171 300.00
TRANSFORMER SCHOOL - 169 171 12.25 1,520.00
T&O CONF - 9 32 152 159 186 187 12.2025 2,544.00
Total for Check/Tran - 22762:4,364.00
DD2276311/12/25 JEFF MURRAY3376 2025 REACH TRAVEL EXP - 59 199.91
2025 REACH TRAVEL EXP - 59 85.68
Total for Check/Tran - 22763:285.59
DD2276411/12/25 NCPERS MINNESOTA573 EXTRA LIFE INSURANCE - DEC 2025 284.80
EXTRA LIFE INSURANCE - DEC 2025 35.20
Total for Check/Tran - 22764:320.00
DD2276511/12/25 NISC9300 2025 MIC - 139 147 159 172 181 184 5,724.05
2025 MIC - 139 147 159 172 181 184 1,206.95
Total for Check/Tran - 22765:6,931.00
DD2276611/12/25 STELLA-JONES CORPORATION812 Rodeo Poles 6,048.42
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Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
DD2281311/21/25 AMERICAN PUBLIC POWER ASSOCIATI1 2026 MEMBERSHIP DUES 18,704.54
2026 DEED MEMBERSHIP 3,927.95
Total for Check/Tran - 22813:22,632.49
DD2281411/21/25 BEAUDRY OIL COMPANY6 DIESEL 2,631.93
DD2281511/21/25 BORDER STATES ELECTRIC SUPPLY9 Mtce of URD Primary 403.80
Guy Adapter 181.80
East Sub 11,386.31
COVER & MOUNTING BRACKET 184.00
Mtce of URD Primary 517.48
East Sub 79.55
East Sub 321.15
SPLICE 1,184.10
PADDLE 511.01
Tool 91.75
Mtce of URD Primary 627.68
East Sub 593.05
Mtce of URD Primary 721.46
Conduit 89.38
COLD SHRINK SPLICE 629.66
Mtce of URD Primary 988.31
Mtce of URD Primary 1,392.87
Total for Check/Tran - 22815:19,903.36
DD2281611/21/25 CAMPBELL KNUTSON8843 LEGAL SERVICES - OCT 2025 932.40
LEGAL SERVICES - OCT 2025 233.10
Total for Check/Tran - 22816:1,165.50
DD2281711/21/25 CITY OF ELK RIVER11 REVENUE TRANSFER - OCT 2025 162,213.41
SEWER BILLED - OCT 2025 252,450.37
STORMWATER BILLED - OCT 2025 57,195.86
Total for Check/Tran - 22817:471,859.64
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Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
DD2281811/21/25 CRC7448 CUSTOMER SERVICE AFTER HOURS 2,758.22
CUSTOMER SERVICE AFTER HOURS 689.56
Total for Check/Tran - 22818:3,447.78
DD2281911/21/25 ELFERING & ASSOCIATES3667 PROFESSIONAL SERVICES - CTY 44 OCT 2025 8,100.00
PROFESSIONAL SERVICES - OCT 2025 450.00
PROFESSIONAL SERVICES - OCT 2025 525.00
PROFESSIONAL SERVICES - OCT 2025 1,200.00
PROFESSIONAL SERVICES - OCT 2025 750.00
Total for Check/Tran - 22819:11,025.00
DD2282011/21/25 ELK RIVER MUNICIPAL UTILITIES23 CYCLE 4 - INV GRP 396 - OCT 2025 268.88
CYCLE 4 - INV GRP 415 - OCT 2025 175.00
CYCLE 4 - INV GRP 415 - OCT 2025 1,604.68
Total for Check/Tran - 22820:2,048.56
DD2282111/21/25 FASTENAL COMPANY671 NYLON WASHERS 16.00
DD2282211/21/25 GOPHER STATE ONE-CALL91 LOCATES FOR - OCT 2025 550.19
LOCATES FOR - OCT 2025 28.96
Total for Check/Tran - 22822:579.15
DD2282311/21/25 JT SERVICES OF MINNESOTA8083 BULBS 161.82
Mtce of Street Lighting 158.58
Pole Wrap 1,289.46
Total for Check/Tran - 22823:1,609.86
DD2282411/21/25 KORTERRA, INC.8889 LOCATE MANAGEMENT - 10/25 to 10/26 2,997.25
LOCATE MANAGEMENT - 10/25 to 10/26 157.75
Total for Check/Tran - 22824:3,155.00
DD2282511/21/25 NISC9300 PRINT SERVICES - OCT 2025 6,716.59
PRINT SERVICES - OCT 2025 1,679.14
MISC INVOICE - OCT 2025 750.45
MISC INVOICE - OCT 2025 187.61
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Page 1212/02/2025 10:55:50 AM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
AGREEMENTS INVOICE - OCT 2025 53.93
AGREEMENTS INVOICE - OCT 2025 787.57
AGREEMENTS INVOICE - OCT 2025 11,461.35
AGREEMENTS INVOICE - OCT 2025 260.00
AGREEMENTS INVOICE - OCT 2025 337.53
AGREEMENTS INVOICE - OCT 2025 2,576.89
AGREEMENTS INVOICE - OCT 2025 65.00
Total for Check/Tran - 22825:24,876.06
DD2282611/21/25 RALPHIE'S MINNOCO8897 RALPHIE'S MINNOCO 82.09
DD2282711/21/25 WATER LABORATORIES INC135 WATER TESTING - OCT 2025 360.00
DD2282811/26/25 ARCHER PLUMBING LLC728 WATER METER INSTALL 1,445.53
WATER METER INSTALL -105.53
Total for Check/Tran - 22828:1,340.00
DD2282911/26/25 CENTRAL MUNICIPAL POWER AGENCY43442ND CIRCUIT 137,459.25
DD2283011/26/25 ELK RIVER MUNICIPAL UTILITIES23 CYCLE 1 - INV GRP 421 - OCT 2025 5,966.80
CYCLE 1 - ACCT 183 - OCT 2025 772.11
CYCLE 1 - INV GRP 101 - OCT 2025 2,716.53
CYCLE 1 - INV GRP 101 - OCT 2025 44.52
CYCLE 1 - INV GRP 101 - OCT 2025 664.06
CYCLE 1 - INV GRP 101 - OCT 2025 424.32
CYCLE 1 - INV GRP 101 - OCT 2025 166.02
CYCLE 1 - INV GRP 325 - OCT 2025 325.00
CYCLE 1 - INV GRP 325 - OCT 2025 16,497.98
CYCLE 4 - ACCT 51086 - OCT 2025 79.93
Total for Check/Tran - 22830:27,657.27
DD2283111/26/25 FASTENAL COMPANY671 MISC PARTS & SUPPLIES 25.44
DD2283211/26/25 HAWKINS, INC.809 Water Chemicals 2,705.02
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520316
Page 1312/02/2025 10:55:50 AM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
DD2283311/26/25 HYDROCORP5686 BACKFLOW DEVICE INSPECTION - NOV 2025 1,229.33
DD2283411/26/25 MMUA39 UTILITY RESILIENCE WORKSHOP - 172 320.00
UTILITY RESILIENCE WORKSHOP - 172 80.00
Total for Check/Tran - 22834:400.00
DD2283511/26/25 RESCO130 Transfomer 17,125.00
Discount -8.56
Total for Check/Tran - 22835:17,116.44
CHK9004211/6/25 ALTEC INDUSTRIES, INC398 PARTS & LABOR FOR UNIT #4 1,777.73
CHK9004311/6/25 AT & T MOBILITY4531 CELL PHONES & iPAD BILLING 29.18
CELL PHONES & iPAD BILLING 2,527.42
CELL PHONES & iPAD BILLING 12.50
CELL PHONES & iPAD BILLING 643.32
Total for Check/Tran - 90043:3,212.42
CHK9004411/6/25 B & R EXCAVATING LLC815 Fiber Work 2,483.90
Fiber Work 7,173.10
Fiber Work 3,279.38
Fiber Work 9,234.02
Fiber 23,135.20
Total for Check/Tran - 90044:45,305.60
CHK9004511/6/25 BLUE CROSS BLUE SHIELD OF MINNES5224 VISION INSURANCE - DEC 2025 290.19
VISION INSURANCE - DEC 2025 84.33
Total for Check/Tran - 90045:374.52
CHK9004611/6/25 RYAN BOTTEN9997 INACTIVE REFUND 114.91
CHK9004811/6/25 CINTAS28 MATS & TOWELS 529.75
MATS & TOWELS 75.67
Total for Check/Tran - 90048:605.42
CHK9004911/6/25 CORE & MAIN LP54 Water Meter AMI 6,929.52
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520317
Page 1412/02/2025 10:55:50 AM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
WATER METER -505.87
Total for Check/Tran - 90049:6,423.65
CHK9005011/6/25 MICHAEL CROHN9997 INACTIVE REFUND 21.69
CHK9005111/6/25 DGR ENGINEERING656 ARC FLASH ASSESSMENT - SEPT 2025 3,132.50
EAST SUBSTATION - SEPT 2025 9,592.00
ELEC SYSTEM COORDINATION STUDY - SEPT 25 1,500.00
Total for Check/Tran - 90051:14,224.50
CHK9005211/6/25 SVETLANA GUNDERSON9997 INACTIVE REFUND 60.92
CHK9005311/6/25 BRIAN HARVALA9997 INACTIVE REFUND 23.56
CHK9005411/6/25 ITRON INC33 SOFTWARE MTC - 11/25 to 10/31/26 8,027.88
SOFTWARE MTC - 11/25 to 10/31/26 2,006.98
Total for Check/Tran - 90054:10,034.86
CHK9005511/6/25 ROBERT KETCHAM9997 INACTIVE REFUND 81.81
CHK9005611/6/25 KLM ENGINEERING, INC.736 Tower 3,500.00
CHK9005711/6/25 LEWIS CUSTOM HOMES, INC9997 Credit Balance Refund 202.56
CHK9005811/6/25 MARCO TECHNOLOGIES, LLC8605 ACE PROGRAM - 9/29 to 10/28/25 1,404.54
ACE PROGRAM - 9/29 to 10/28/25 351.14
Camera 4,461.49
Camera 688.32
Total for Check/Tran - 90058:6,905.49
CHK9005911/6/25 LIANE MCCULLOUGH9997 INACTIVE REFUND 193.41
CHK9006011/6/25 MENARDS145 MISC PARTS & SUPPLIES 37.72
MISC PARTS & SUPPLIES 41.97
Total for Check/Tran - 90060:79.69
CHK9006111/6/25 MASON MILLER9997 INACTIVE REFUND 103.33
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520318
Page 1512/02/2025 10:55:50 AM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK9006211/6/25 MINNESOTA DEPT OF LABOR & INDUS8454 PRESSURE VESSEL - WELL #4 25.00
PRESSURE VESSEL - WELL #6 25.00
PRESSURE VESSEL - WELL #7 25.00
Total for Check/Tran - 90062:75.00
CHK9006311/6/25 MOTION AUTOMATION INTELLIGENCE716 Switch for Fiber 301.41
Switch for Fiber 187.93
Total for Check/Tran - 90063:489.34
CHK9006411/6/25 EDWIN NYAKUNDI9997 INACTIVE REFUND 62.18
CHK9006511/6/25 DAVID OLSON9997 INACTIVE REFUND 68.05
CHK9006611/6/25 HANNAH PHIPPS9997 INACTIVE REFUND 31.34
CHK9006711/6/25 PRIME ADVERTISING & DESIGN, INC.811 MONTHLY HOSTING OF WEBSITE 60.00
MONTHLY HOSTING OF WEBSITE 60.00
MONTHLY HOSTING OF WEBSITE 30.00
Marketing 1,500.00
Total for Check/Tran - 90067:1,650.00
CHK9006811/6/25 RAFFS RENTALS LLC9997 INACTIVE REFUND 197.37
CHK9006911/6/25 NATHEN SANNY9997 INACTIVE REFUND 77.96
CHK9007011/6/25 ADAM SCHNELL9997 INACTIVE REFUND 185.91
CHK9007111/6/25 ERIC SLOCUM9997 INACTIVE REFUND 742.11
CHK9007211/6/25 SPEEDCUTTERS OUTDOOR MAINTENA8141 SHRUB PRUNING 259.59
SHRUB PRUNING 37.08
Total for Check/Tran - 90072:296.67
CHK9007311/6/25 STUART C. IRBY CO.6107 GLOVES & TESTING -43.50
GLOVES & TESTING 1,627.72
Total for Check/Tran - 90073:1,584.22
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520319
Page 1612/02/2025 10:55:50 AM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK9007411/6/25 THE UPS STORE 50933360 SHIPPING - LOCATOR CABLE REPAIR 15.10
CHK9007511/6/25 USABLUEBOOK543 RETRACTABLE INJ QUILL 636.63
CHK9007611/6/25 JONATHAN VOLLAN9997 INACTIVE REFUND 229.30
CHK9007711/6/25 NATHANIEL WONG9997 INACTIVE REFUND 50.98
CHK9007811/12/25 ALTERNATIVE TECHNOLOGIES, INC522 OIL SAMPLES 1,815.00
CHK9007911/12/25 AMARIL UNIFORM COMPANY2512 Employee Clothing - 157 144.10
Employee Clothing - 196 126.00
Total for Check/Tran - 90079:270.10
CHK9008011/12/25 BATTERIES PLUS BULBS2920 LITHIUM BATTERY 88.35
CHK9008111/12/25 CAROL BURLET9997 INACTIVE REFUND 144.96
CHK9008211/12/25 CAPSTONE HOMES9997 Credit Balance Refund 136.26
CHK9008311/12/25 CAPSTONE HOMES9997 Credit Balance Refund 150.43
CHK9008411/12/25 CAPSTONE HOMES9997 Credit Balance Refund 80.97
CHK9008511/12/25 CAPSTONE HOMES9997 Credit Balance Refund 95.73
CHK9008611/12/25 CAPSTONE HOMES9997 Credit Balance Refund 138.67
CHK9008711/12/25 CENTERPOINT ENERGY3982 NATURAL GAS & IRON REMOVAL 370.45
NATURAL GAS & IRON REMOVAL 81.94
Total for Check/Tran - 90087:452.39
CHK9008811/12/25 CORE & MAIN LP54 Meter Wire 927.03
REMOTE WIRE -67.68
Electric Meters 2,696.88
ELEC METER -196.88
Total for Check/Tran - 90088:3,359.35
CHK9008911/12/25 DRIVER & VEHICLE SERVICES5249 SALES TAX & TITLE FEE - UNIT #9 24,625.90
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520320
Page 1712/02/2025 10:55:50 AM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK9009011/12/25 E.H. RENNER & SONS, INC2789 MOTOR BALANCING - WELL #3 784.00
CHK9009111/12/25 EPIC FENCE CO5489 Fencing 6,500.00
CHK9009211/12/25 FAIRVIEW HEALTH SERVICES8709 Drug Screening - 9 167 90.00
CHK9009311/12/25 HEALTHPARTNERS631 DENTAL EE INSURANCE - DEC 2025 841.50
DENTAL ER INSURANCE - DEC 2025 2,278.77
MEDICAL EE INSURANCE - DEC 2025 11,118.25
MEDICAL ER INSURANCE - DEC 2025 57,721.51
MEDICAL COBRA INSURANCE - DEC 2025 1,320.06
DENTAL EE INSURANCE - DEC 2025 140.04
DENTAL ER INSURANCE - DEC 2025 665.82
MEDICAL EE INSURANCE - DEC 2025 2,752.75
MEDICAL ER INSURANCE - DEC 2025 15,425.66
Total for Check/Tran - 90093:92,264.36
CHK9009411/12/25 HP MINNESOTA I, LLC9997 Credit Balance Refund 222.90
CHK9009511/12/25 HPA US1 LLC9997 Credit Balance Refund 123.50
CHK9009611/12/25 MARCO TECHNOLOGIES, LLC8605 Camera 2,055.90
5 yr license/support meraki switch 112.29
Total for Check/Tran - 90096:2,168.19
CHK9009711/12/25 MENARDS145 FSB HEATER - 186 34.51
FSB HEATER - 186 8.63
FILTER 56.61
FILTER 8.09
WD-40 52.95
REBATE -2.00
REBATE -29.28
REBATE -17.76
Total for Check/Tran - 90097:111.75
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520321
Page 1812/02/2025 10:55:50 AM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK9009811/12/25 MINNESOTA COMPUTER SYSTEMS INC119 COPIER MTC CONTRACT - 10/12 to 11/11/25 111.58
COPIER MTC CONTRACT - 10/12 to 11/11/25 27.90
Total for Check/Tran - 90098:139.48
CHK9009911/12/25 MINNESOTA DEPT OF LABOR & INDUS4135 BACKFLOW PREVENTION TESTER RENEW - 174 38.00
CHK9010011/12/25 MINNESOTA DEPT OF LABOR & INDUS8454 PRESSURE VESSEL - ENGINES 125.00
CHK9010211/12/25 O'REILLY AUTOMOTIVE STORES, INC3769 PARTS FOR UNIT #56 142.90
CHK9010311/12/25 REPUBLIC SERVICES, INC574 TRASH & RECYCLING SERVICE - OCT 2025 139.82
TRASH & RECYCLING SERVICE - OCT 2025 1,942.37
TRASH & RECYCLING SERVICE - OCT 2025 59.91
TRASH & RECYCLING SERVICE - OCT 2025 277.48
TRASH & RECYCLING SERVICE - OCT 2025 407.12
TRASH & RECYCLING SERVICE - OCT 2025 72.87
TRASH & RECYCLING SERVICE - OCT 2025 10.41
Total for Check/Tran - 90103:2,909.98
CHK9010411/12/25 SHORT ELLIOTT HENDRICKSON INC159 FEASIBILITY STUDY 8,559.87
CHK9010511/12/25 STAR ENERGY SERVICES LLC674 ENGINEERING SERVICES - OCT 2025 562.50
CHK9010611/12/25 US SITEWORK, INC528 Foundation 189,767.25
CHK9010711/12/25 VIKING ELECTRIC375 DEMOLITION DRIVER 135.83
CHK9010811/12/25 WESCO RECEIVABLES CORP.55 CABINET 6,018.30
BASEMENT & INSERT FEED THRU 2,009.32
Total for Check/Tran - 90108:8,027.62
CHK9010911/21/25 ALTEC INDUSTRIES, INC398 Digger Truck 355,104.01
CHK9011011/21/25 BENEFIT EXTRAS, INC662 COBRA ADMINISTRATION - OCT 2025 15.00
CHK9011111/21/25 BRAUN INTERTEC CORPORATION9266 East Sub 2,039.95
CHK9011211/21/25 BURNDY LLC7003 PARTS FOR CRIMPING TOOLS 205.21
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520322
Page 1912/02/2025 10:55:50 AM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK9011311/21/25 KRISTEE BYSTROM9997 INACTIVE REFUND 93.37
CHK9011411/21/25 CENTERPOINT ENERGY3982 NATURAL GAS & IRON REMOVAL 568.81
NATURAL GAS & IRON REMOVAL 165.07
Total for Check/Tran - 90114:733.88
CHK9011511/21/25 GARY COCCHIARELLA9997 INACTIVE REFUND 200.00
CHK9011611/21/25 DANE ALLEN HOMES9997 INACTIVE REFUND 114.97
CHK9011711/21/25 DAVE BERG CONSULTING, LLC223 RATE STUDY - ELECTRIC & WATER 15,200.00
RATE STUDY - ELECTRIC & WATER 3,800.00
Total for Check/Tran - 90117:19,000.00
CHK9011811/21/25 ELK RIVER CROSSING LLC9997 Credit Balance Refund 258.28
CHK9011911/21/25 ELK RIVER CROSSING LLC9997 Credit Balance Refund 258.28
CHK9012011/21/25 ELK RIVER WINLECTRIC122 WIRE 11,086.08
NORTH SUB SECURITY CAMERA PARTS 23.71
NORTH SUB SECURITY CAMERA PARTS -1.73
END BELL 13.89
MISC PARTS & SUPPLIES -9.97
MISC PARTS & SUPPLIES 136.73
90 DEG PVC ELL 398.24
Total for Check/Tran - 90120:11,646.95
CHK9012111/21/25 RICHARD ENRICO9997 INACTIVE REFUND 26.50
CHK9012211/21/25 DIANE ERICKSON9997 INACTIVE REFUND 202.65
CHK9012311/21/25 GENERATOR POWER SYSTEMS807 REPLACE VOLTAGE REGULATOR -120.10
Generator 2,365.10
Total for Check/Tran - 90123:2,245.00
CHK9012411/21/25 GREATAMERICA FINANCIAL SERVICES730LEASE FOR COPIER AT PLANT 105.01
LEASE FOR COPIER AT PLANT 26.26
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520323
Page 2012/02/2025 10:55:50 AM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
Total for Check/Tran - 90124:131.27
CHK9012511/21/25 ZACHARIAH HAUGEN9997 INACTIVE REFUND 85.56
CHK9012611/21/25 HAVEN HOMES LLC9997 INACTIVE REFUND 181.12
CHK9012711/21/25 HOME DEPOT CREDIT SERVICES824 HOME DEPOT 511.07
HOME DEPOT 278.32
Total for Check/Tran - 90127:789.39
CHK9012811/21/25 HPA BORROWER 2016 LLC9997 INACTIVE REFUND 206.72
CHK9012911/21/25 HPA BORROWER 2016-2 LLC9997 INACTIVE REFUND 195.99
CHK9013011/21/25 LEAGUE OF MN CITIES INS TRUST48 LIABILITY INSURANCE INSTALLMENT 18,100.35
LIABILITY INSURANCE INSTALLMENT 6,991.65
Total for Check/Tran - 90130:25,092.00
CHK9013111/21/25 KAYLA LINDENFELSER9997 INACTIVE REFUND 117.03
CHK9013211/21/25 MARCO TECHNOLOGIES, LLC8605 PRINTER MTC CONTRACT - 11/1 to 12/1/25 196.66
PRINTER MTC CONTRACT - 11/1 to 12/1/25 49.16
Total for Check/Tran - 90132:245.82
CHK9013311/21/25 MAX STEININGER INC9999 Hydrant Rental Deposit Refund 569.97
CHK9013411/21/25 MENARDS145 PARTS - UNIT 4,5,8,11,21 219.04
HOSE ADAPTOR 4.70
MISC PARTS & SUPPLIES 10.76
MISC PARTS & SUPPLIES 60.35
MISC PARTS & SUPPLIES 119.47
CABLE TIES FOR HYDRANT BAGS 21.52
Total for Check/Tran - 90134:435.84
CHK9013511/21/25 MIDFIRST BANK9997 INACTIVE REFUND 319.86
CHK9013611/21/25 REBECCA MILLESS9997 INACTIVE REFUND 16.83
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520324
Page 2112/02/2025 10:55:50 AM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK9013711/21/25 MINNESOTA POLLUTION CONTROL AG147 1 DAY WW TREATMENT CONF - 174 220.00
CHK9013811/21/25 DAN MISFELDT9997 INACTIVE REFUND 137.04
CHK9013911/21/25 REANNA MOLSTAD9997 INACTIVE REFUND 23.43
CHK9014011/21/25 MOTION AUTOMATION INTELLIGENCE716 Switch for Fiber 3,016.63
CHK9014111/21/25 O'REILLY AUTOMOTIVE STORES, INC3769 PARTS FOR UNIT #61 11.86
CHK9014211/21/25 MIKE ROELL9997 INACTIVE REFUND 147.81
CHK9014311/21/25 SHERBURNE COUNTY PUBLIC WORKS848 UTILITY PERMIT 100.00
CHK9014411/21/25 ST CLOUD REFRIGERATION INC804 CORAYVAC HEATER REPAIR 281.75
CORAYVAC HEATER REPAIR 40.25
MINI SPLIT REPAIR -12.57
MINI SPLIT REPAIR 1,877.71
MINI SPLIT REPAIR -1.79
MINI SPLIT REPAIR 268.24
Total for Check/Tran - 90144:2,453.59
CHK9014511/21/25 STUART C. IRBY CO.6107 ARRESTER BRACKET 300.00
GLOVES & TESTING - 196 -5.58
GLOVES & TESTING - 196 93.45
100 AMP FUSE 2,003.50
Total for Check/Tran - 90145:2,391.37
CHK9014611/21/25 TRANSUNION331 SKIP TRACING - OCT 2025 80.00
SKIP TRACING - OCT 2025 20.00
SKIP TRACING - SEPT 2025 60.00
SKIP TRACING - SEPT 2025 15.00
Total for Check/Tran - 90146:175.00
CHK9014711/21/25 KATIE VAN HORN9997 INACTIVE REFUND 119.70
CHK9014811/21/25 VICTORY CLEANING SERVICES783 MONTHLY CLEANING FOR THE PLANT-OCT 2025 3,114.90
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520325
Page 2212/02/2025 10:55:50 AM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
MONTHLY CLEANING FOR THE PLANT-OCT 2025 444.98
Total for Check/Tran - 90148:3,559.88
CHK9014911/21/25 VIKING ELECTRIC375 DEMOLITION DRIVER 27.07
ALL WEATHER CEMENT 355.45
WALL SWITCH 132.56
Total for Check/Tran - 90149:515.08
CHK9015011/21/25 WESCO RECEIVABLES CORP.55 Mtce of OH Primary 486.50
METER SOCKETS 2,469.90
Total for Check/Tran - 90150:2,956.40
CHK9015111/26/25 A&B WELDING & CONSTRUCTION, INC5207 Crane 1,715.00
CHK9015211/26/25 ACE HARDWARE766 DRILL BITS - UNIT #5 86.95
CHK9015311/26/25 ALTEC INDUSTRIES, INC398 GASKET - UNIT #8 26.49
CHK9015411/26/25 NICOLE CONNOR9997 Credit Balance Refund 86.56
CHK9015511/26/25 CORE & MAIN LP54 METER COUPLING 749.00
Connector 847.65
Touch Screen Meter 1,909.85
Total for Check/Tran - 90155:3,506.50
CHK9015611/26/25 EVERGREEN TOWNHOMES, LLC9997 Credit Balance Refund 162.69
CHK9015711/26/25 DIANE KRUEGER9997 Credit Balance Refund 42.62
CHK9015811/26/25 LENNAR HOMES9997 Credit Balance Refund 224.03
CHK9015911/26/25 LENNAR HOMES9997 Credit Balance Refund 37.52
CHK9016011/26/25 LENNAR HOMES9997 Credit Balance Refund 199.17
CHK9016111/26/25 MENARDS145 BOLTS 5.28
MISC PARTS & SUPPLIES - UNIT #13 81.21
COLD GALVANIZING SPRAY 10.66
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520326
Page 2312/02/2025 10:55:50 AM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
11/01/2025 To 11/30/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
Total for Check/Tran - 90161:97.15
CHK9016211/26/25 MARIA NORTON9997 Credit Balance Refund 23.25
CHK9016311/26/25 JACOB PARKER9997 Credit Balance Refund 11.74
CHK9016411/26/25 QUALITY POWER SOLUTIONS699 Emergency Lighting 700.00
Emergency Lighting 100.00
Total for Check/Tran - 90164:800.00
CHK9016511/26/25 RDO EQUIPMENT CO.3218 PARTS & LABOR FOR UNIT #50 -126.12
PARTS & LABOR FOR UNIT #50 3,268.82
PARTS & LABOR FOR UNIT #50 -1,000.00
Total for Check/Tran - 90165:2,142.70
CHK9016611/26/25 SHERBURNE COUNTY PUBLIC WORKS848 UTILITY PERMIT 100.00
CHK9016711/26/25 THERMO BOND BUILDINGS, LLC770 East Substation 112,275.00
East Substation 685.00
Total for Check/Tran - 90167:112,960.00
CHK9016811/26/25 USABLUEBOOK543 CHLORINE ANALYZERS 796.14
CHK9016911/26/25 AMANDA WHEELAN9997 Credit Balance Refund 81.12
CHK9017011/26/25 WRUCK SEWER AND PORTABLE RENT5451 PORTA-POTTY - 10/24 to 11/20/25 112.73
Total for Bank Account - 5 :(201)5,204,531.19
Grand Total :5,218,090.61(202)
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520327
Page 2412/02/2025 10:55:50 AM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
PARAMETERS ENTERED:
Check Date:11/01/2025 To 11/30/2025
Bank:All
Vendor:All
Check:
Journal:All
Format:All GL References/Amounts
Extended Reference:No
Check/TransactionSort By:
Voids:None
AllPayment Type:
NoGroup By Payment Type:
Minimum Amount:0.00
Authorization Listing:No
Credit Card Charges:No
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520328
Elk River Municipal Utilities Commission Meeting Minutes
November 12, 2025
Page 1
ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
November 12, 2025
Members Present: Chair John Dietz, Vice Chair Mary Stewart, Commissioners Jill Larson-Vito,
Matt Westgaard, and Nick Zerwas
ERMU Staff Present: Mark Hanson, General Manager
Sara Youngs, Administrations Director
Melissa Karpinski, Finance Manager
Tom Geiser, Operations Director
Chris Sumstad, Electric Superintendent
Megan Zachman, Human Resources Generalist
Jenny Foss, Communications & Administrative Coordinator
Others Present: Jared Shepherd, Attorney; Cal Portner, City Administrator; Dave Berg, Dave
Berg Consulting, LLC
1.00 GOVERNANCE
1.01 Call Meeting to Order
The regular meeting of the Utilities Commission was called to order at 3:30 p.m. by Chair Dietz.
1.02 Pledge of Allegiance
The Pledge of Allegiance was recited.
1.03 Consider the Agenda
Ms. Youngs updated the Commission on item 2.05 – 2025 Assessments, noting that the
total should be revised from $32,397.42 to $34,257.42. She clarified that the City received
the correct information, and the assessment notices sent to customers were accurate.
Moved by Commissioner Zerwas and seconded by Commissioner Westgaard to approve the
November 12, 2025, agenda. Motion carried 5-0.
2.00 CONSENT AGENDA (Approved By One Motion)
Moved by Commissioner Larson-Vito and seconded by Commissioner Stewart to approve
the Consent Agenda, including the update made to item 2.05 – 2025 Assessments, as
follows:
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Elk River Municipal Utilities Commission Meeting Minutes
November 12, 2025
Page 2
2.01 Check Register – October 2025
2.02 Regular Meeting Minutes – October 14, 2025
2.03 2025 Third Quarter Utilities Performance Metrics Scorecard Statistics
2.04 2025 Third Quarter Delinquent Items
2.05 2025 Assessments
2.06 2026 Wire Bid
2.07 Summary of Information Security Committee Closed Session
Motion carried 5-0.
3.00 OPEN FORUM
No one appeared for open forum.
4.00 POLICY & COMPLIANCE
4.01 Commission Policy Review – G.4e2 – Electric Services
Ms. Youngs presented Commission Policy Review G.4e2 – Electric Services for review
noting that there were no recommended changes to this policy.
Commissioners did not have any comments, questions, or changes.
5.00 BUSINESS ACTION
5.01 Financial Report – September 2025
Ms. Karpinski presented the September financials, showing the combined electric and
water revenues exceeding expenses by $2.7 million year to date, resulting in a 6.64%
profit margin.
Ms. Karpinski noted that as of September 30, total receivables were approximately $2.97
million, with 89% of accounts current, and commended the customer service team for
their efforts.
Department highlights included:
• Electric Department: Kilowatt-hour (kWh) sales are 6% higher than the previous
year. Purchase power costs are 1% unfavorable to budget due to higher usage.
• Water Department: Year-to-date water usage is up over 9% compared to the prior
year, and revenue is up 10%.
Moved by Commissioner Stewart and seconded by Commissioner Westgaard to receive
the September 2025 Financial Report. Motion carried 5-0.
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Elk River Municipal Utilities Commission Meeting Minutes
November 12, 2025
Page 3
5.02 Electric and Water Cost of Service and Rate Design Study
Mr. Hanson introduced Dave Berg and distributed a handout to the Commission outlining the
preliminary findings from Mr. Berg’s rate study analysis. His review replaced the Governance
agenda item, Annual Business Plan – Review Proposed 2026 Rates and Other Revenue.
Mr. Berg provided the Commission with a comprehensive overview of the electric and water
rate structures ahead of the final reports.
Highlights from the electric utility analysis included:
• Projections assumed no rate changes but a full pass-through of the Minnesota Municipal
Power Agency’s (MMPA) wholesale energy adjustment clause (EAC) as a power cost
adjustment (PCA) to customers.
• The current rate structure was found to be logical and well aligned with MMPA
wholesale costs.
• A key discussion point was the need to increase reserve funds.
• The final report will include a four-year rate plan that incorporates anticipated
wholesale rate increases from MMPA.
Mr. Hanson clarified for the Commission that staff is proposing a 50% pass-through of the EAC
to reduce the PCA and to modify the published rate as needed for the remaining 50% of the
EAC.
Highlights from the water utility analysis include:
• The water utility is in a strong financial position; however, discussions regarding reserve
funds may impact rates.
• The preliminary analysis did not include growth in water.
• The existing tiered rate structure for residential customers was affirmed as effective for
encouraging conservation and reflecting the high fixed costs of infrastructure.
A final recommendation for both electric and water rates will be presented to the
Commission in December.
5.03 Payment in Lieu of Taxes to City of Elk River
Mr. Hanson provided a detailed review of his memo outlining the adjustments made to
the Payment in Lieu of Taxes to the City of Elk River (PILOT) policy following feedback
from the October commission meeting.
He distributed a revised, redlined PILOT policy to the Commission, which incorporated
Commissioner Stewart’s request for additional clarifying language related to a
catastrophic event.
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Elk River Municipal Utilities Commission Meeting Minutes
November 12, 2025
Page 4
Mr. Hanson also clarified that the $8,000 in labor charges had been counted twice in his
memo; therefore, the $272,000 in electric charges should be $264,000.
There was discussion to ensure that management will work with city staff to determine
which services are practical to bill for, ensuring administrative costs do not outweigh the
revenue.
Mr. Berg clarified that the approved PILOT rate changes have been incorporated into the
2026 budget projections.
Moved by Commissioner Larson-Vito and seconded by Commissioner Zerwas to approve
the amended Commission Policy G.2a1 Payment in Lieu of Taxes and Other Donations to
the City of Elk River. Motion carried 5-0.
5.04 Financial Reserves & Investment Committee Update - Verbal
Commissioner Westgaard provided an update from the Financial Reserves & Investment
Committee meeting held just prior to the November commission meeting.
Investment Portfolio (as of September 2025):
The total portfolio value is approximately $11.6 million, consisting of just over $5 million
in cash and nearly $6.6 million in fixed investments. Committee members noted a recent
drop in market rates, which will continue to be monitored.
Reserve Balances (as of end of year audited cash balances):
Electric:
• $9.9 million in unrestricted designated reserves
• $1.7 million in restricted debt services
• $3 million in unrestricted for capital projects
Water:
• $1.4 million in unrestricted designated reserves
• No restricted reserves for debt service
• $8.5 million in unrestricted for capital projects
5.05 Management Policy – A.10 – Financial Reserves
Mr. Hanson presented recommended updates to Management Policy A.10 – Financial
Reserves, based on discussions at the October 27, 2025, Financial Reserves & Investments
Committee meeting. After comparing ERMU’s financial reserve policy with those of similar
municipal utilities, the Committee had recommended several updates.
32
Elk River Municipal Utilities Commission Meeting Minutes
November 12, 2025
Page 5
He requested commission feedback on the proposed changes outlined in his memo,
noting that commission approval is not required because A.10 is a management policy;
however, the updates will influence future rate setting.
Commissioner Zerwas noted that ERMU’s reserves are well below those of its peer utilities
and expressed appreciation for the increased transparency the changes provide. He
recommended adopting a multi-year approach to increasing reserve balances.
Chair Dietz asked a clarifying question regarding the different layers of the current
financial reserves policy, prompting further discussion.
Commissioner Westgaard agreed with Commissioner Zerwas on a multi-year approach,
suggesting a timeline of no more than five years.
Commissioners supported the new structure for its transparency and agreed that reaching
higher reserve targets should occur gradually over multiple years, with a formal review in
four years.
Mr. Hanson will present redlined policy revisions in December, and Mr. Berg will
incorporate the commission’s feedback into his final rate study.
5.06 Commission Policy – 5.A – Margins Policy
Mr. Hanson noted that the updates to the Management Policy - A.10 - Financial Reserves
policy will also require revisions to Commission Policy – 5.A – Margins Policy. He explained
that staff is recommending the use of a cap, or maximum margin, as outlined in the
memo, rather than the range used in the current policy.
Moved by Commissioner Stewart and seconded by Commissioner Larson-Vito to
approve Commission Policy G.5a – Margins revisions. Motion carried 5-0.
5.07 2026 Utilities Fee Schedule
Ms. Youngs presented the proposed 2026 Utilities Fee Schedule for approval.
Commissioner Larson-Vito asked for clarification on why certain fees show larger
increases than others.
Mr. Hanson explained that while the fee schedule is updated annually, some fees require
a significant in-depth review to calculate the costs and therefore are not updated as
frequently. He noted that staff recognizes the need for more regular updates and staff is
working to address this.
33
Elk River Municipal Utilities Commission Meeting Minutes
November 12, 2025
Page 6
Commissioner Stewart asked for clarification on which rate applies when a project begins
in one year but concludes in the next.
Ms. Youngs explained that the applicable rate depends on when payment is made.
Payments made in 2025 would follow the 2025 rates, while payments made in the new
year would follow the 2026 rates.
Moved by Commissioner Westgaard and seconded by Commissioner Stewart to approve
the 2026 Utilities Fee Schedule for Adoption into Ordinance by the City Council. Motion
carried 5-0.
5.08 Health Insurance Update
Mr. Hanson presented the Health Insurance Update noting that staff is recommending
changing from the current carrier to Medica while maintaining the company’s 85%
contribution to the insurance premium and the 85% contribution to health savings
accounts.
Moved by Commissioner Zerwas and seconded by Commissioner Westgaard to approve
the 2026 ERMU health insurance plan with Medica as well as 85% premium and health
savings account contribution amounts from the employer. Motion carried 5-0.
5.09 Wage & Benefits Committee Proposed 2026 Adjustments
Mr. Hanson provided an update from the October 27 Wage & Benefits Committee
meeting, as reflected in the proposed 2026 adjustments outlined in his memo.
Staff requested commission approval of a wage adjustment range of 3.34% to 3.41%. If
the metro average falls outside this range after the remaining utility reports, staff will
return to the Commission with a revised recommendation.
With only six of the seven metro utilities reporting, the Commission was not ready to
approve the cost-of-living wage adjustment and asked to revisit the item in December.
Mr. Hanson noted that he will add this to the December agenda and, in the meantime,
will use the midpoint of the range for budgeting purposes.
5.10 Advanced Metering Infrastructure Update
Mr. Hanson provided an AMI update and shared that 100% of active residential water
meters have been installed. He commended the water, customer service, and
communications departments for their outstanding efforts.
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Elk River Municipal Utilities Commission Meeting Minutes
November 12, 2025
Page 7
He also noted that residential repairs associated with the project stayed within budget,
with only one commercial instance requiring commission approval for project-related
repair costs.
Ms. Youngs provided an update on the remaining electric meters awaiting replacement
due to meter shortages, noting that it will take approximately six months to complete
replacements once the meters are received.
5.11 Verizon Water Tower Lease Agreements
Mr. Hanson informed the Commission of an offer from Verizon to either buy out the
current lease agreements for a lump-sum payment or renegotiate the lease terms to
reduce both the annual rent and the annual escalator. The lump-sum offer is contingent
on granting a perpetual easement on the property.
Staff presented Verizon’s offers, as outlined in the memo, to maintain transparency with
the Commission and customers, but recommended against accepting them.
The Commission agreed to follow staff’s recommendation.
6.0 BUSINESS DISCUSSION
6.1 Staff Updates
There were no additional updates.
6.2 City Council Update
Chair Dietz presented a City Council update.
6.3 Future Planning
Chair Dietz announced the following:
a. Regular Commission Meeting – December 9, 2025
b. 2025 Governance Agenda
6.4 Other Business
There was no other business.
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Elk River Municipal Utilities Commission Meeting Minutes
November 12, 2025
Page 8
7.0 ADJOURN REGULAR MEETING
Moved by Commissioner Westgaard and seconded by Commissioner Larson-Vito to adjourn
the regular meeting of the Elk River Municipal Utilities Commission 5:35 p.m. Motion
carried 5-0.
Minutes prepared by Jenny Foss.
___________________________________
John J. Dietz, ERMU Commission Chair
___________________________________
Jolene Richter, Deputy Clerk
36
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Tony Mauren – Governance & Communications Manager
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
2.3
SUBJECT:
Designate 2026 Official Depository and Delegate Authority for Electronic Funds Transfers
ACTION REQUESTED:
Adopt Resolution No. 25-9 Designating Official Depository of ERMU Funds and Delegating
Authority for Electronic Funds Transfers
BACKGROUND/DISCUSSION:
Minnesota Statutes Section 118A.02 sets forth the procedures for the deposit of public funds
and it is necessary for the Utilities Commission to annually designate a bank (or banks) as the
official depository for utility funds and delegate authority to make electronic funds transfers.
Staff recommends designating First Bank of Elk River as the Utilities’ official depository for the
funds of ERMU for 2026, and authorizing the finance manager to designate additional
depositories for the purpose of investing funds per our brokers’ recommendation and our
investment policy guidelines. Staff also recommends delegating authority to the finance
manager for electronic funds transfers.
FINANCIAL IMPACT:
N/A
ATTACHMENT:
• Resolution No. 25-9 Designating Official Depository of ERMU Funds and Delegating
Authority for Electronic Funds Transfers
37
RESOLUTION NO. 25-9
BOARD OF COMMISSIONERS
ELK RIVER MUNICIPAL UTILITIES
A RESOLUTION OF THE BOARD OF COMMISSIONERS OF ELK RIVER MUNICIPAL UTILITIES
DESIGNATING DEPOSITORY OF ELK RIVER MUNICIPAL UTILITIES FUNDS AND DELEGATING
AUTHORITY FOR ELECTRONIC FUNDS TRANSFERS
WHEREAS, Minnesota Statutes Section 118A.02 sets forth the procedures for the deposit of
public funds and;
WHEREAS, it is necessary for the Utilities Commission or the utilities finance manager to
annually designate a bank (or banks) as the official depository for utility funds and manage
collateral pledged to such funds; and
WHEREAS, the Utilities Commission shall annually delegate the authority to make electronic
funds transfers to the utilities finance manager.
NOW, THEREFORE, BE IT RESOLVED that the Board of Commissioners of Elk River Municipal
Utilities designates First Bank of Elk River as the utilities’ official depository for the funds of Elk
River Municipal Utilities for 2026.
BE IT FURTHER RESOLVED the utilities finance manager may designate additional depositories
for the purpose of investing funds per our brokers’ recommendation and our investment policy
guidelines and be delegated authority for electronic funds transfers.
This Resolution Passed and Adopted this 9th day of December 2025.
John Dietz, Chair
Mark Hanson, General Manager
38
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Tony Mauren – Governance & Communications Manager
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
2.4
SUBJECT:
Designate 2026 Official Newspaper
ACTION REQUESTED:
Designate Elk River Star News as the official newspaper for 2026.
BACKGROUND/DISCUSSION:
Minnesota Statutes Section 331A.04 requires the utility to annually designate a qualified
newspaper for the publication of legal notices. The newspaper must meet specific rules and
must be chosen based on their location.
The Elk River Star News meets those qualifications and is in the city so it must be chosen as the
utilities’ official newspaper.
In January 2024, ERMU initiated the process to establish its website as an alternative
dissemination method for bids, requests for proposals, request for information, etc. per state
statute 331A.03, subd. 3(a)-(b). After a six-month transition period, ERMU has officially satisfied
the requirements to also establish the website as an acceptable publishing platform should that
be more advantageous to the Utilities than posting notices in the newspaper.
39
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Tony Mauren – Governance & Communications Manager
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
2.5
SUBJECT:
2026 Utilities Commission Meeting Schedule
ACTION REQUESTED:
Approve the 2026 Utilities Commission Meeting Schedule
BACKGROUND/DISCUSSION:
Per state law, a schedule of the regular meetings of the Utilities Commission must be kept on
file with the city clerk’s office and posted on the City’s bulletin board.
As there are no conflicts with holiday closures or conferences in 2026, all regular commission
meetings are scheduled for the second Tuesday of each month at 3:30 p.m. and will be held in
the ERMU Offices Conference Room, 13069 Orono Parkway, Elk River, MN 55330.
ATTACHMENTS:
• 2026 Utilities Commission Meeting Schedule
40
Utilities Commission Meeting Schedule2026
S M T W T F S S M T W T F S S M T W T F S S M T W T F S
1 2 3 1 2 3 4 1 2 3 4 1 2 3
4 5 6 7 8 9 10 5 6 7 8 9 10 11 5 6 7 8 9 10 11 4 5 6 7 8 9 10
11 12 13 14 15 16 17 12 13 14 15 16 17 18 12 13 14 15 16 17 18 11 12 13 14 15 16 17
18 19 20 21 22 23 24 19 20 21 22 23 24 25 19 20 21 22 23 24 25 18 19 20 21 22 23 24
25 26 27 28 29 30 31 26 27 28 29 30 26 27 28 29 30 31 25 26 27 28 29 30 31
S M T W T F S S M T W T F S S M T W T F S S M T W T F S
1 2 3 4 5 6 7 1 2 1 1 2 3 4 5 6 7
8 9 10 11 12 13 14 3 4 5 6 7 8 9 2 3 4 5 6 7 8 8 9 10 11 12 13 14
15 16 17 18 19 20 21 10 11 12 13 14 15 16 9 10 11 12 13 14 15 15 16 17 18 19 20 21
22 23 24 25 26 27 28 17 18 19 20 21 22 23 16 17 18 19 20 21 22 22 23 24 25 26 27 28
24 25 26 27 28 29 30 23 24 25 26 27 28 29 29 30
31 30 31
S M T W T F S S M T W T F S S M T W T F S S M T W T F S
1 2 3 4 5 6 7 1 2 3 4 5 6 1 2 3 4 5 1 2 3 4 5
8 9 10 11 12 13 14 7 8 9 10 11 12 13 6 7 8 9 10 11 12 6 7 8 9 10 11 12
15 16 17 18 19 20 21 14 15 16 17 18 19 20 13 14 15 16 17 18 19 13 14 15 16 17 18 19
22 23 24 25 26 27 28 21 22 23 24 25 26 27 20 21 22 23 24 25 26 20 21 22 23 24 25 26
29 30 31 28 29 30 27 28 29 30 27 28 29 30 31
Holidays
Jan 1 - New Year's Day Sept 7 - Labor Day
Jan 19 - Martin Luther King Jr. Day Nov 11 - Veterans Day
Feb 16 - Presidents' Day Nov 26 - Thanksgiving
May 25 - Memorial Day Nov 27 - Day after Thanksgiving
June 19 - Juneteenth Dec 24 - Christmas Eve
July 3 - Independence Day (Saturday)Dec 25 - Christmas Day
January April July October
February May August November
Commission meetings are held at the ERMU Office, 13069 Orono Parkway, Elk River, MN, unless otherwise posted.
March June September December
NOTE: ALL DATES ARE SUBJECT TO CHANGE
Commission meetings are held the second Tuesday of each month and begin at 3:30 p.m.
41
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Tony Mauren – Governance & Communications Manager
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
4.1
SUBJECT:
Commission Policy Review – G.4e3 – Water Services
ACTION REQUESTED:
None
BACKGROUND/DISCUSSION:
This month commissioners are reviewing policy G.4e3 – Water Services to make comments, ask
questions, or recommend updates.
With policy G.4e3, the Commission sets forth its expectations for the General Manager
concerning the provision of water services with practical safeguarding of persons, buildings and
their contents from hazards arising from the use of water service.
Staff is recommending one update to section 1.d, intending to broaden the language of the
policy and direct the public to the City of Elk River’s Engineering Design Standards.
ATTACHMENTS:
• ERMU Policy – G.4e3 – Water Services
42
______________________________________________________________________________
Page 1 of 2
COMMISSION POLICY
Section: Category:
Governance Delegation to Management Policies
Policy Reference: Policy Title:
G.4e3 Water Services
PURPOSE:
With this policy, the Commission sets forth its expectations for the General Manager concerning
the provision of water services with practical safeguarding of persons, buildings and their
contents from hazards arising from the use of water service.
POLICY:
Consistent with the Core Customer Services Policy, the ERMU Commission expects the
General Manager to ensure that customers receive safe, reliable, cost effective and quality
long term water utility service that directly support ERMU’s core purpose and mission as
stated in the Organizational Core Purpose Policy and Mission Statement Policy.
The ERMU Commission expects the General Manager to establish processes, procedures, and
management policy which clearly define the terms for providing water service.
Consistent with this general statement, the General Manager shall:
1. Establish policy and procedures for the provision of water services which are compliant with
applicable rules, regulations, standards, code, and law including but not limited to the
following:
a. ERMU shall operate in compliance with drinking water quality standards established by
the Environmental Protection Agency (EPA) that are authorized through the Safe
Drinking Water Act (SDWA). Additionally, ERMU shall operate in compliance with
these drinking water quality standards consistent with their interpretation and
enforcement by the Minnesota Department of Health (MDH).
b. ERMU shall design and maintain the water production and distribution system consistent
with American Water Works Association (AWWA) standards.
c. All connected water services shall be required to comply with the Minnesota Building
Code and the Minnesota Plumbing Code as adopted into ordinance by the council.
43
ERMU Commission Policy – G.4e3 Water Services
______________________________________________________________________________
______________________________________________________________________________
Page 2 of 2
d. ERMU shall require all new development construction to meet City of Elk River
Engineering Design Standards. design to have looped water mains; consistent with city
ordinance, side lot easements shall be required as needed.
2. Establish metering policy and procedures which address, but are not limited to the following:
a. Customers shall be allowed one service entrance and one meter to measure water usage,
unless otherwise approved by the General Manager.
b. All equipment and materials required for metering shall be owned and maintained by
ERMU. The customer shall be subject to all metering equipment costs as identified in the
Commission adopted Fee Schedule.
c. The customer shall own and be responsible for the entire water service line. The service
line shall include the piping extending from the water main in the street, including the
corporation cock, to the meter within the building. The service line shall meet ERMU
standards.
3. Establish policy regarding the redistribution of water consistent with the following:
a. All water sold by ERMU is to be used by the customer for the purposes designated or
implied in the Rate Schedule applicable to their installation. Water so sold may not be
resold or redistributed to other metered users unless specifically approved by the General
Manager.
4. Establish policy and procedures for customer disputes:
a. Consistent with the Dispute Resolution Committee Charter Policy, provide an option for
a customer appeal process through the Dispute Resolution Committee for customer issues
where resolution requires action not authorized or delegated to management.
POLICY HISTORY:
Adopted May 12, 2020
44
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Tony Mauren – Governance & Communications Manager
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
4.2
SUBJECT:
2026 Governance Agenda
ACTION REQUESTED:
Adopt the 2026 Governance Agenda
BACKGROUND/DISCUSSION:
In May 2017, the Commission adopted a comprehensive manual of governance policies based
on the Carver Model of governance. Included in those policies is Governance Policy G.2c
Agenda Planning which establishes expectations for a proactive governance process using a
forward-looking agenda of recurring governance functions. The intention of this agenda is to
create transparency for the occurrence of the most critical responsibilities of the Commission.
Attached for discussion and commission approval is a proposed 2026 Governance Agenda.
This schedule has one recommended update for 2026, moving Review and Update Strategic
Plan from August to October, bringing that item closer to the end of the year when it is
beneficial to review strategic initiatives, without overloading November and December.
ATTACHMENTS:
• 2026 ERMU Governance Agenda
45
Tuesday, January 13:
• Annual Review of Committee Charters
Tuesday, February 10:
• Review Strategic Plan and 2025 Annual Business
Plan Results
Tuesday, March 10:
• Oath of Office
• Election of Officers
• Annual Commissioner Orientation and Review
Governance Responsibilities and Role
Tuesday, April 14:
• Audit of 2025 Financial Report
• Financial Reserves Allocations
• Review 2025 Performance Metrics
Tuesday, May 12:
• Annual General Manager Performance
Evaluation and Goal Setting
Tuesday, June 6:
• Annual Commission Performance Evaluation
Tuesday, July 14:
Tuesday, August 11:
• Annual Business Plan – Review Proposed 2027
Travel, Training, Dues, Subscriptions, and Fees
Budget
Tuesday, September 8:
• Annual Business Plan – Review Proposed 2027
Capital Projects Budget
Tuesday, October 13:
• Annual Business Plan – Review Proposed 2027
Expenses Budget
• Review and Update Strategic Plan [Moved from
August]
Wednesday, November 10:
• Annual Business Plan - Review Proposed 2027
Rates and Other Revenue
• Adopt 2027 Fee Schedule
• 2027 Stakeholder Communication Plan
Tuesday, December 8:
• Adopt 2027 Official Depository and Delegate
Authority for Electronic Funds Transfers
• Designate Official 2027 Newspaper
• Approve 2027 Regular Meeting Schedule
• Adopt 2027 Governance Agenda
• Adopt 2027 Annual Business Plan
2026 GOVERNANCE AGENDA
46
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Mark Hanson – General Manager
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
4.3
SUBJECT:
2026 Performance Metrics and Incentive Compensation Policy
ACTION REQUESTED:
Approve the Performance Metrics and Incentive Compensation Policy and Scorecard for 2026
BACKGROUND:
The Commission adopted the Utilities Performance Metrics and Incentive Compensation
(UPMIC) Policy in December 2012 with multiple subsequent revisions. This is a company-wide
performance-based program designed to incentivize employee commitment towards the
company’s success.
DISCUSSION:
Per policy, the metrics for measurement of the designated year need to be determined before
the start of the designated year. This allows for timely communication of any changes before
performance measurement begins. No recommended policy changes are proposed for 2026.
The proposed UPMIC scorecard for the 2026 measurement year is attached for approval.
FINANCIAL IMPACT:
There is no additional financial impact for the 2026 budget year. The potential 2.0% distribution
is budgeted for and accrued throughout the year for audit purposes. Any necessary
adjustments are made at year end. The actual distribution will be awarded after the 2025 audit
is approved in 2026.
ATTACHMENTS:
• ERMU Policy – G.4g1 – Performance Metrics and Incentive Compensation Policy
• ERMU Policy – G.4g1a – 2026 Performance Metrics & Incentive Compensation Scorecard
47
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COMMISSION POLICY
Section: Category:
Governance Delegation to Management Policies
Policy Reference: Policy Title:
G.4g1 Performance Metrics and Incentive
Compensation
1.0 PURPOSE AND SUMMARY
The successful performance of the ERMU is measured in terms of the Utilities’ ability to meet
our strategic goals and mission. By improving our efficiency and level of performance in
meeting our strategic goals and mission we can improve the delivery of value to our customers.
To create incentives for employees to take personal responsibility for accomplishment of the
Utilities’ strategic goals and mission, the Utilities has established a Utilities Performance
Metrics-based Incentive Compensation system (“UPMIC”). Through UPMIC the employees of
ERMU will have an opportunity, as a group, to earn annual incentive compensation for each
qualifying employee by contributing individually to the overall success of ERMU on a daily
basis.
Under UPMIC, either all qualifying employees will earn an incentive compensation distribution
in a given year, or none will. And not only will incentive compensation under UPMIC in that
sense be an all or nothing proposition each year, but there will be an equal percentage share basis
for all on which the incentive compensation will be paid out if earned. This appropriately reflects
the reality that we all succeed, or fall short, together as a team.
To administer the UPMIC and measure objectively the level of performance that must be
achieved for qualifying employees to earn incentive compensation, the attached UMPIC
Performance Metrics Policy Scorecard (“Scorecard”) has been created. The Scorecard will be
subject to revision annually based on the performance metrics adopted by the Commission
annually for the coming year (“Performance Metrics”). By tracking and measuring the
Performance Metrics and creating incentive for employees to achieve the goals the Metrics
embody, the Utilities believes it will be better able to focus efforts and resources on becoming
more efficient and successful in meeting our strategic goals and mission and delivering improved
value to our customers.
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ERMU Commission Policy – G.4g1 Performance Metrics and Incentive Compensation
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2.0 UTILITIES PERFORMANCE METRICS SCORECARD
As reflected on the Scorecard, the Performance Metrics are divided into the following five
categories: Safety, Reliability and Quality of Utility Services; Workforce Development;
Financial Goals; Communications/Customer Service; and Strategic Plan. These categories are
used to characterize the overall strategic goals and mission of ERMU.
Under the Performance Metrics, these five main categories are then divided into various
weighted factors, or sub-categories. These sub-categories, their percentage weight, and the goal
or target for each, shall be established by the Utilities Commission annually. The Performance
Metrics as adopted are reflected in the attached Scorecard. As discussed above, the Performance
Metrics and thus the Scorecard are subject to modification and adoption by the Commission
annually, which will normally occur during the Utilities’ budgeting process.
3.0 UTILITIES PERFORMANCE INCENTIVE COMPENSATION DISTRIBUTION
CRITERIA
Under the UPMIC a Performance-Based Compensation Incentive, if earned, will be distributed
to Qualifying Employees annually. The total amount available to be earned by Utilities
employees as a Performance Based Compensation Incentive each year will be an amount up to
2% of the Utilities’ total gross wages paid to Qualifying Employees during the Measurement
Period.
The measuring period used to calculate how much, if any, of the Performance-Based
Compensation Incentive the Utilities employees have earned will be the calendar year (the
“Measurement Period”). After the Measurement Period is complete and the Commission has
received its audit in the spring of the year following the Measurement Period, the Performance
Metrics will be applied to determine whether the Performance-Based Compensation Incentive
has been earned for the Measurement Period. In doing so, the performance of the Utilities in each
sub-category will be reviewed. If the sub-category performance meets or exceeds the established
goal, the sub-category will be scored with the designated percentage that will contribute to a total
Performance Metrics Multiplier to be used as a factor in calculating the distribution earned, if
any, as shown in the Scorecard (“Multiplier”). The Multiplier has a maximum factoring effect of
100%. The Multiplier is used to determine how much, if any, of the amount established by the
Commission for the UPMIC Performance-Based Compensation Incentive has been earned in the
Measurement Period. (For example, if the Multiplier equals 100%, the distribution would equal
2%. If the Multiplier equals 75%, the distribution would equal 1.5%.) In other words, the
amount established by the Commission may be earned on an annual basis by the group of
Qualifying Employees (as defined below in Section 4.0) in whole, in part, or not at all.
After the Multiplier is calculated on the Scorecard, the Performance Based Compensation
Incentive earned, if any, will be distributed to Qualifying Employees. The total amount to be
distributed as the Performance Based Compensation Incentive will be the product of: a) the
Multiplier; and b) 2% of the Utilities’ total gross wages paid to Qualifying Employees during the
Measurement Period.
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ERMU Commission Policy – G.4g1 Performance Metrics and Incentive Compensation
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The percentage of the Performance Based Compensation Incentive awarded to each Qualifying
Employee will be based on the gross wages of each Qualifying Employee during the
Measurement Period. To each Qualifying Employee, the distribution would be allocated in a
lump sum equal to the product of: a) the Multiplier; and b) 2% of that employee’s gross wages
paid during the Measurement Period. For example, if a Qualifying Employee’s gross wages
earned during the Measurement Period were equal to $50,000 and the Multiplier was equal to
100%, the total distribution to that employee would be equal to: $50,000 x 2% x 100% = $1000.
If the Utilities’ margins are negative due to sudden and unforeseen material changes to the
industry or customer base, the Commission reserves the right to withhold distribution of the
Performance Based Compensation Incentive in any given year.
4.0 EMPLOYEE QUALIFICATIONS AND DISTRIBUTION OF THE INCENTIVE
COMPENSATION
An employee of the Utilities will be eligible for participation in the Performance Metrics
Incentive Compensation distribution if the employee meets the following eligibility requirements
and is therefore a “Qualifying Employee” for purposes of this policy.
a. The employee is in good standing with the Utilities. An employee would not be eligible
while on disciplinary probation or a performance improvement action plan.
b. The employee was a Full Time or Part Time employee during the Measurement Period.
Seasonal, and Temporary employees are not eligible.
The UPMIC Performance Based Compensation Incentive distribution will be made to Qualifying
Employees within thirty days of the date on which the Commission formally receives its annual
auditor’s report in an open meeting.
POLICY HISTORY:
Adopted December 12, 2012
Revised January 14, 2020
Revised December 13, 2022, effective January 1, 2023
Revised December 12, 2023, effective January 1, 2024
Revised December 10, 2024, effective January 1, 2025
Revised May 13, 2025
50
Elk River Municipal Utilities
G.4g1a - Performance Metrics and Incentive Compensation Policy Scorecard - 2025
Category Percent Sub-Category
Sub-
Percent Goal Score
Awarded
Multiplier
Percent
Water Quality Standards 5 Meet
Requirements
Lead and Copper quality 5 90th percentile
Bacteria Detection 5 0 positive
samples
CAIDI 5 <120 Min
SAIDI 5 <60 Min
SAIFI 5 <0.4
Line Loss 5 <5%
Water Loss 5 <12%
Employee Turnover 10 < 7.5%
Participation in Recommended
and Mandatory Trainings 10 95%
Margins/Net Profit 15 > Budget
Inventory Accuracy 5 >98%
Clean Energy Choice Program
Participation 5 +30 net
Conservation Improvement
Program 5
Strategic Plan 10 Dashboard Progress (Average)10 >50%
Adopted December 12, 2012
Revised October 11, 2016
Revised December 17, 2019
Revised December 14, 2021
Revised December 13, 2022
Revised December 12, 2023
Revised December 10, 2024
40
Safety, Reliability
and Quality of
Utility Services
Total Multiplier:
Workforce
Development 20
Financial Goals 20
Communications/
Customer Service 10
>95%
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Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Mark Hanson - General Manager
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
5.1
SUBJECT:
Electric and Water Cost of Service and Rate Design Study
ACTION REQUESTED:
None
BACKGROUND:
ERMU staff have been working with Dave Berg Consulting, LLC to complete electric and water
Cost of Service and Rate Design studies. The purpose of this work is to evaluate potential
updates to ERMU’s electric and water retail rates, as well as applicable utility fees. Staff
evaluated changes in operating conditions, including but not limited to monthly fixed costs,
additional service fees, potential changes to the financial reserve policy, and new data from the
Advance Metering Infrastructure project related to electric and water usage.
DISCUSSION:
At the November 2025 meeting, the Commission instructed Mr. Berg to return in December
with electric and water rate projections that account for higher reserve balances, increased
Payment in Lieu of Tax payments to the City, and an expected 3% increase in purchased power
costs. Mr. Berg will also review the findings and recommendations of the final cost of service
reports for electric and water.
Staff request feedback on Mr. Berg’s presentation in order to prepare the 2026 Annual Business
Plan for final approval at the special meeting occurring at 3:30 p.m. on December 18 in the
Utilities office.
ATTACHMENTS:
• Elk River Draft Final Electric Report
• Elk River Draft Final Water Report
52
ELECTRIC COST OF SERVICE AND
RATE DESIGN STUDY
Draft Final Report
December 9, 2025
53
REPORT OUTLINE
Cover Letter
Section 1 - Introduction
Section 2 – Projected Operating Results – Existing Rates
Section 3 – Cost of Service
Section 4 – Proposed Rates
54
Dedicated to providing personal service to consumer-owned utilities
Dave Berg Consulting, LLC | 15213 Danbury Ave W, Rosemount, MN 55068 | 612-850-2305
www.davebergconsulting.com
December 9, 2025
Elk River Municipal Utilities Commission
13069 Orono Parkway
PO Box 430
Elk River, MN 55330
Subject: Electric Rate Study
Commission Members:
Dave Berg Consulting, LLC has undertaken a study of the retail rates Elk River Municipal Utilities (ERMU)
charges its customers for electric service. This report summarizes the analyses undertaken and the
resulting recommendations for changes to the existing rates.
Average annual increases of 2% in electric rates for the period 2026-2029 are recommended.
Additionally, a new approach to calculation of the retail Purchased Cost Adjustment (PCA) has been
made. These adjustments are necessary to make progress in meeting ERMU’s new reserve level goals.
Specific rate adjustments for each year are provided for each rate class.
Thank you for the opportunity to be of service to ERMU through the conduct of this study. I wish to
express my appreciation for the valuable assistance I received from ERMU staff relative to the execution
of this study.
Sincerely,
Dave Berg Consulting, LLC
David A. Berg, PE
Principal
55
- 1 -
Section 1
Introduction
The City of Elk River, MN owns a municipal utility providing service to
approximately 13,700 retail electric customers. The electric utility is operated by
Elk River Municipal Utilities (ERMU) and is under the direction of the Elk River
Municipal Utilities Commission. This report has been prepared by Dave Berg
Consulting, LLC to examine the rates and charges for electric service in Elk River.
The study includes an examination of the allocated cost of service based on actual
2024 utility operations (Test Year). It also includes projected operating results for
2025-2029 (Study Period). As a result of the analyses undertaken and reported
on herein, electric rate recommendations have been developed for consideration
by ERMU.
56
Section 2
Projected Operating Results
Existing Rates
The rates charged for electric service by ERMU, combined with other operating and non-
operating revenues, must be sufficient to meet the cost of providing services to ERMU’s
retail customers. This is necessary in order to ensure the long-term financial health of
ERMU. The cost of providing electric service consists of normal operating expenses such
as production and purchased power, transmission and distribution functions, customer
and administrative functions, system depreciation expenses, capital improvements,
payments on outstanding debt and contributions to the City of Elk River and other non-
operating expenses.
An analysis of the operating results for ERMU during the 2025-2029 Study Period has
been performed assuming the current retail rates and charges remain in effect for the
electric utility through the Study Period. This analysis has been done to determine the
overall need, if any, for additional revenue through rates to meet projected revenue
requirements. The analyses and assumptions utilized in these projections are explained
below.
Estimated Revenues – Existing Rates
Retail Sales
ERMU sells retail power and energy to residential, commercial and industrial customers.
ERMU has recently been experiencing growth in total retail sales to its electric customers,
primarily associated with the acquisition of additional electric service territory. During the
Study Period, ERMU does not anticipate acquiring any additional new service territory
areas. Based on a conservative assumption regarding sales growth, limited growth in
residential sales during the Study Period (1% per year) beyond the 2025 actual sales has
been included in this analysis. No growth in non-residential sales has been assumed.
57
Projected Operating Results – Existing Rates
- 3 -
Exhibit 2-A is a summarized listing of ERMU’s historical and projected electric operating
results at existing rates. The existing ERMU retail rates went into effect Jan. 1, 2025.
The historical and projected revenues from retail sales of power and energy to different
groups of customers are included as Charges for Services at the beginning of the exhibit
under Operating Revenues.
Other Operating Revenues
ERMU also receives revenue from other normal operating procedures. These revenues
are shown in Exhibit 2-A below the charges for services. Utility Revenues combined with
Other Operating Revenues results in ERMU’s Total Operating Revenues.
Revenue Requirements
Generation and Purchased Power
ERMU currently meets its wholesale power requirements through purchases from the
Minnesota Municipal Power Agency (MMPA). Projections of wholesale power expenses
are based on anticipated MMPA rate increases during the Study Period.
ERMU’s actual retail sales and wholesale requirements for the 2024 Test Year are shown
in Table 2-1.
Table 2-1
Retail Sales
And Wholesale Requirements
Item 2024
Metered Retail Sales 320,012,952 kWh
Distribution Losses 2.7 %
Wholesale Energy 328,891,814 kWh
Wholesale Peak 70,907 kW
58
Section 2
- 4 -
Power Cost Adjustment (PCA)
ERMU includes a Power Cost Adjustment (PCA) on its retail bills to customers. In the
current projections under existing rates, the assumed PCA is based on the Energy
Adjustment Clause (EAC) that MMPA includes as part of its wholesale bill to ERMU. The
wholesale PCA changes every month. The average assumed MMPA EAC and assumed
ERMU PCA for each year are shown in Table 2-2 below. As currently assumed, ERMU
will increase its retail PCA to match the wholesale EAC by 2027. Further discussion and
recommendations regarding the retail PCA are included in Section 4 of this report.
Table 2-2
Assumed Wholesale EAC and Retail PCA
($/kWh)
Item 2025 2026 2027 2028 2029
Wholesale EAC 0.02365 0.02263 0.02263 0.02263 0.02263
Retail PCA 0.01640 0.01927 0.02263 0.02263 0.02263
Other Operating Expenses
ERMU incurs other operating expenses associated with local electric system operations.
Transmission and distribution operating and maintenance expenses are related to the
substations, overhead and underground lines and customer facilities located in ERMU.
Operating expenses also include production related expenses for the landfill gas
generation project and the local peaking power plant. ERMU also has customer account
expenses related to serving retail electric customers. Administrative and general
expenses are required for utility management, employee benefits, training and other
administrative costs. Non-wholesale power related expenses are based on 2024 values,
the 2025 and 2026 budgets and are generally estimated to increase by 3% per year after
2026.
59
Projected Operating Results – Existing Rates
- 5 -
Depreciation
ERMU has annual depreciation costs based on its system investments. Depreciation
during the Study Period is based on budgeted ERMU amounts and future capital
improvements. Depreciation is a funded non-cash expense that generates monies
available for annual capital improvements and reserves.
Non-operating Revenue (Expenses)
ERMU’s non-operating revenue is primarily associated with investment income and
miscellaneous revenues. Non-operating expenses are related to interest expense for
existing debt.
City Transfer
ERMU makes an annual operational transfer to the City’s general fund. The transfer is
assumed to be 5% of electric retail sales revenue for sales in Elk River only.
Capital Improvements
ERMU makes annual normal capital investments in its electric system. Annual electric
capital improvements for the Study Period, as budgeted by ERMU, are shown in Table 2-
3 below.
Table 2-3
Capital Improvements
Capital Item 2025 2026 2027 2028 2029
Electric Capital $7,455,754 $8,047,103 $4,628,954 $4,542,896 $4,381,166
60
Section 2
- 6 -
Debt Service
ERMU currently has outstanding electric debt pursuant to bonds issued in 2016, 2018
and 2021. No additional bond issues assumed for the electric utility through the Study
Period.
Interfund Borrowing
It is assumed that the water utility will make a $1.4 million loan to the electric department
in 2026 which will be repaid in 2028.
Projected Operating Results – Existing Rates
Based on the assumptions outlined above, the resulting projected operating results
assuming continued application of the existing retail rates are summarized in Table 2-4
for the electric utility. A summary presentation of the operating results is shown in Exhibit
2-A. The results below are provided as an indication of revenue needs in the future.
Table 2-4
Projected Operating Results
Existing Rates
Year 2025 2026 2027 2028 2029
Operating Revenues $47,893,140 $49,217,147 $49,432,238 $49,649,040
Less Operating
Expenses (44,210,400) (45,215,511) (46,121,914) (47,047,707)
Plus Non -Operating
Revenues (Expenses) 468,457 489,744 496,394 536,394
Plus Fees and Transfers (1,756,111) (1,815,029) (1,824,601) (1,834,249)
Change in Net Position(1) $3,800,000 2,395,085 2,676,350 1,982,117 1,303,478
Net Position as Percent
of Revenues 5.0% 5.4% 4.0% 2.6%
(1) 2025 EOY change in net position estimated by ERMU staff based on 2025 YTD actual results
61
Projected Operating Results – Existing Rates
- 7 -
Cash Reserves
A summary of the impact of the projected operating results on ERMU’s cash reserves for
the Study Period is shown at the end of Exhibit 2-A and in Table 2-5 below.
As shown below, under existing retail rates and estimated revenue requirements over the
Study Period, the cash reserves for the electric utility are projected to decrease from
approximately $13.8 million at the end of 2025 to approximately $10.5 million by the end
of 2029. ERMU has a newly revised reserve policy that sets a minimum target for
reserves equal to 2 months operating expenses plus $3.5 million catastrophic reserve
plus a capital reserve equal to average annual capital expenses plus the next year’s
principal and interest expense. Based on this revised policy, the reserves decrease from
75% of reserve goal to 56% of reserve goal by the end of the Study Period.
Table 2-5
Projected Cash Reserves
Existing Rates
Year 2025 2026 2027 2028 2029
Beginning Balance $13,800,000 $11,573,843 $12,030,728 $10,722,575
Plus Change in Net Position 2,395,085 2,676,350 1,982,117 1,303,478
Plus Depreciation 3,533,136 3,801,373 3,955,671 4,107,101
Plus Interfund Borrowing 1,400,000 - (1,400,000) -
Less Capital Improvements (8,047,103) (4,628,954) (4,542,896) (4,381,166)
Less Loss of Revenue Pmts (472,275) (316,884) (198,046) (100,816)
Less Debt Principal (1,035,000) (1,075,000) (1,105,000) (1,140,000)
Ending Balance(1) $13,800,000 $11,573,843 $12,030,728 $10,722,575 $10,511,172
Reserve Goal $18,392,897 $18,432,831 $18,623,699 $18,769,766 $18,924,065
Reserves as % of Goal 75% 63% 65% 57% 56%
(1) 2025 EOY reserve balance estimated by ERMU staff based on 2025 YTD actual results
62
Exhibit 2-A
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
OPERATING REVENUES
Charges for services 36,573,483$ 39,473,717$ 42,355,712$ 43,986,269$ 42,557,925$ 46,622,070 47,328,340$ 48,652,347$ 48,867,438$ 49,084,240$
LFG project 1,141,482 1,019,097 935,004 - - - - - - -
Generation credit 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800
Connection maintenance 160,186 263,330 243,088 151,296 317,234 150,000 255,000 255,000 255,000 255,000
Customer penalties 42,556 - 284,452 308,374 295,143 285,000 305,000 305,000 305,000 305,000
Total Operating Revenues 37,922,507$ 40,760,944$ 43,823,056$ 44,450,739$ 43,175,102$ 47,061,870$ 47,893,140$ 49,217,147$ 49,432,238$ 49,649,040$
OPERATING EXPENSES
Purchased Power 24,240,440$ 28,169,146$ 31,544,604$ 31,232,788$ 28,590,698$ 31,019,478$ 31,596,071$ 32,060,510$ 32,532,005$ 33,017,341$
Production 963,858 1,002,631 793,299 315,057 266,783 341,000 321,993 331,653 341,602 351,850
Transmission and Distribution 1,494,841 1,583,165 2,015,665 2,224,113 2,437,569 2,742,000 2,605,000 2,683,150 2,763,645 2,846,554
Services to City 229,086 224,814 231,861 253,564 229,359 265,000 - - - -
Depreciation 2,896,839 2,957,685 3,062,751 3,177,120 3,317,829 3,339,552 3,533,136 3,801,373 3,955,671 4,107,101
Customer accounts 346,090 337,760 391,238 433,553 430,396 470,000 435,000 448,050 461,492 475,336
General and administrative 3,787,850 3,350,641 4,372,187 4,421,557 4,718,264 5,906,049 5,719,200 5,890,776 6,067,499 6,249,524
Total Operating Expenses 33,959,004$ 37,625,842$ 42,411,605$ 42,057,752$ 39,990,898$ 44,083,079$ 44,210,400$ 45,215,511$ 46,121,914$ 47,047,707$
OPERATING INCOME 3,963,503$ 3,135,102$ 1,411,451$ 2,392,987$ 3,184,204$ 2,978,791$ 3,682,739$ 4,001,636$ 3,310,324$ 2,601,333$
NON-OPERATING REVENUE (EXPENSE)
Interest income 134,468$ 52,514$ (159,502)$ 158,310$ 338,157$ 350,000$ 350,000 350,000 350,000 350,000
Miscellaneous revenue 547,009 635,764 906,323 928,553 925,800 712,500 793,000 793,000 793,000 793,000
Interest expense and other (606,313) (836,474) (851,199) (811,210) (773,748) (735,069) (699,543) (678,256) (671,606) (631,606)
Gain (Loss) on sale of capital assets 23,263 (45,214) 41,938 59,556 (16,154) 25,000 25,000 25,000 25,000 25,000
Total Non-Operating Revenues (Expenses)98,427$ (193,410)$ (62,440)$ 335,209$ 474,055$ 352,431$ 468,457$ 489,744$ 496,394$ 536,394$
Income before Contributions and Transfers 4,061,930$ 2,941,692$ 1,349,011$ 2,728,196$ 3,658,259$ 3,331,222$ 4,151,196$ 4,491,379$ 3,806,718$ 3,137,727$
Contributions from Customers 174,557$ 385,316$ 298,935$ 489,452$ 690,934$ 225,000$ 350,000$ 350,000 350,000 350,000
Transfers to Other City Funds (1,340,218) (1,407,734) (1,531,633) (1,620,378) (1,527,629) (1,908,429)$ (2,106,111)$ (2,165,029)$ (2,174,601)$ (2,184,249)$
Special Item - - - - -
CHANGE IN NET POSITION 2,896,269$ 1,919,274$ 116,313$ 1,597,270$ 2,821,564$ 1,647,793$ 2,395,085$ 2,676,350$ 1,982,117$ 1,303,478$
As Percent of Revenues 7.6%4.7%0.3%3.6%6.5%3.5%5.0%5.4%4.0%2.6%
CASH RESERVES
Beginning of Year 13,014,941$ 13,800,000$ 11,573,843$ 12,030,728$ 10,722,575$
Plus Change in Net Position 1,647,793 2,395,085 2,676,350 1,982,117 1,303,478
Plus Depreciation 3,339,552 3,533,136 3,801,373 3,955,671 4,107,101
Plus Interfund Borrowing - 1,400,000 - (1,400,000) -
Less Capital Improvements (7,455,754) (8,047,103) (4,628,954) (4,542,896) (4,381,166)
Less Loss of Revenue Payments (935,000) (472,275) (316,884) (198,046) (100,816)
Less Debt Principal (990,000) (1,035,000) (1,075,000) (1,105,000) (1,140,000)
End of Year(1)13,014,941$ 13,800,000$ 11,573,843$ 12,030,728$ 10,722,575$ 10,511,172$
Existing Reserve goal 18,392,897$ 18,432,831$ 18,623,699$ 18,769,766$ 18,924,065$
Percent of goal 75%63%65%57%56%
(1) 2025 EOY reserve balance estimated by ERMU staff based on 2025 YTD actual results.
Projected
Elk River Municipal Utilities
Electric Operating Results at Existing Rates
Historical
page 1 of 1
63
Section 3
Cost-of-Service
A cost-of-service analysis was performed to determine the allocated cost to serve
each of ERMU’s customer groups within the electric utility. Customer classes
exist, in part, because the cost to serve various kinds of customers varies. The
cost-of-service analysis has been performed on a 2024 ‘Test Year’ based on actual
2024 financials, operations and sales. The results of the cost-of-service study give
an indication of the degree of revenue recovery warranted for each class of
customers. A comparison of the allocated cost to serve a group of customers and
the actual revenues received from those customers is taken into consideration
during rate design.
Functionalization of Costs
ERMU’s Test Year electric revenue requirements have been divided into four
functional categories. These categories are described below.
Power Supply – the power supply function is related to the cost of ERMU
purchases of wholesale power through MMPA and costs related to local generating
units.
Distribution – the distribution expenses are related to the ERMU system for
delivering power and energy to ERMU customers. They include substation and
distribution system costs. It also includes the fixed costs associated with the
service facilities utilized to deliver electric power and energy directly to customers.
Customer – these include items such as meter reading, billing, collections and
dealing with customers by customer service representatives.
Revenue – revenue related costs include certain non-operating revenues and
utility margin.
64
Cost-of-Service
- 9 -
Table 3-1 below summarizes the functional electric costs for the 2024 Test Year.
The detailed cost functions are shown in Exhibit 3-A.
Table 3-1
Functional Electric Costs
2024 Test Year
Component
Revenue
Requirement
Power Supply $29,098,388
Distribution 8,879,618
Customer 1,720,514
Revenue 2,449,632
Total $42,148,152
Classification of Costs
Within each function, the revenue requirements have been divided into distinct cost
classifications. These cost classifications are described below.
Demand Related – demand related costs are fixed costs that do not vary with
hourly consumption. Demand related costs are required to meet the overall
demand of the system as expressed in kW.
Energy Related – energy related costs vary based on hourly consumption in kWh.
Customer Related – costs related to serving, metering and billing of individual
customers.
Revenue Related – revenue related costs vary by the amount of revenue received
by the utility.
Exhibits 3-B through 3-D show the detailed classification of revenue requirements
within the power supply, distribution and customer functions.
65
Section 3
- 10 -
Allocation of Costs
Based on an analysis of customer class service characteristics, the classified costs
summarized above were allocated to the major ERMU customer classes.
Allocation of costs was performed on a fully-distributed, embedded cost allocation
basis. Specific allocation factors were utilized in each of the cost classification
categories as described below. Exhibit 3-E contains a summary of the
development of the various allocation factors.
Demand Allocations
Customer class demands on a system can be reflected in various ways. Two
primary demand allocation types were utilized in this analysis. Coincident peaks
(‘CP’) represent a class’ share of the overall system peak. A 12 CP method,
reflecting each class’ estimated contribution to each month’s system peak, was
employed for allocating the power supply demand portion of the wholesale
purchased power and production expenses. Non-coincident peaks reflect a class
maximum demand regardless of when it occurs. The non-coincident peak is an
indication of the amount of fixed local system required to serve individual groups
of customers. A 1 NCP method, an estimate of each class’ maximum annual
demand on the system, was utilized for allocating local system demand related
costs.
Energy Allocations
Each class’ share of energy requirements was used to allocate energy related
costs. The predominant energy related costs are the energy portions of the
purchased power and local generation expenses.
66
Cost-of-Service
- 11 -
Customer Allocations
Two separate customer allocators were utilized. The customer facilities allocator
was used to allocate costs associated with the physical facilities required to serve
individual customers such as service transformers, service drops and meters. The
customer service allocator is for allocation of costs associated with customer
service – meter reading, billing, collections and customer inquiries. For both the
customer facilities and customer service allocators, a weighted customer allocation
factor is developed. Weighting factors are developed to represent the difference
in service configurations between customer classifications. For instance, a larger
customer facility is required for a single large power customer than for a single
residential customer, or a single large power customer requires more customer
service than a single residential customer.
Revenue Allocations
Revenue related costs were allocated based on each class’ share of total demand,
energy, customer facility, customer service and direct costs.
Cost of Service Results
Based on the classifications and allocations described above, the estimated cost
to serve each major class of customers for the 2024 Test Year was determined.
Exhibit 3-F presents this analysis in detail. Table 3-2 below summarizes the total
allocated electric costs for each class compared to the total electric revenues
received from the class during 2024.
67
Section 3
- 12 -
Table 3-2
Electric Cost of Service Results
Comparison of Cost and Revenues
2024 Test Year
Customer
Classification
Allocated
Cost to Serve Revenues
Residential $16,283,647 $16,583,227
Commercial Non-demand 4,166,924 4,401,535
Demand 14,258,918 13,875,362
Industrial 7,438,663 7,288,029
Total $42,148,152 $42,148,152
The revenue requirements and revenues as allocated to each class and
summarized above are shown on a total dollars basis. Table 3-3 below makes the
comparison based on percentages of total cost to serve and total revenues. The
charts following Table 3-3 show a graphical comparison between allocated cost to
serve and revenues as a percentage of the totals. The percentage
increase/(decrease) in each class’ revenue shown in Table 3-3 is the adjustment
necessary to produce revenues from each class in accordance with the allocated
cost to serve. The percentage adjustments do not represent the recommended
change in each class’ rates. The cost-of-service results are one item for
consideration in rate design. It is important to note also that the adjustments shown
in the table below would not change the total revenue received by the utility and
are not indicative of overall revenue needs of the utility going forward.
Recommendations regarding rate design are included in Section 4 of this report.
68
Cost-of-Service
- 13 -
Table 3-3
Electric Cost of Service Results
Comparison of % Cost and Revenues
2024 Test Year
Customer
Classification
Allocated
Cost to Serve Revenues Increase/
(Decrease)
Residential 38.6% 39.3% -1.8%
Commercial Non-demand 9.9% 10.4% -5.3%
Demand 33.8% 32.9% 2.8%
Industrial 17.6% 17.3% 2.1%
Total 100.0% 100.0% 0.0%
69
Section 3
- 14 -
As indicated above, ERMU’s existing class revenues do not exactly match the
allocated cost to serve each class. Cost based rates are one of several goals in
establishing rates. The relationship between allocated costs and revenues for
each class should be considered, in addition to other rate related goals, in
developing recommended rates.
70
Exhibit 3-A
2024 Power
REVENUE REQUIREMENT Test Year Supply Distribution Customer Revenue Classification Basis
OPERATING EXPENSES
Purchased Power 28,590,698$ 28,590,698$ -$ -$ -$ 100% power supply
Production
OPERATING SUPERVISION 137,835 137,835 - - - 100% power supply
DIESEL OIL FUEL 159 159 - - - 100% power supply
NATURAL GAS 21,926 21,926 - - - 100% power supply
ELECTRIC & WATER CONSUMPTION 58,033 58,033 - - - 100% power supply
OTHER EXP/PLANT SUPPLIES-ETC 9,756 9,756 - - - 100% power supply
MISC OTHER PWR GENERATION EXP 640 640 - - - 100% power supply
MAINTENANCE OF STRUCTURE/PLANT 13,914 13,914 - - - 100% power supply
MTCE OF ENGINES/GENERATORS-PL 4,177 4,177 - - - 100% power supply
MTCE OF PLANT/LAND IMPROVEMENT 20,339 20,339 - - - 100% power supply
Total Production 266,779$ 266,779$ -$ -$ -$
Transmission 48,622$ 48,622$ -$ -$ -$ 100% power supply
Distribution
REMOVE EXISTING SERV & METERS 352 - 352 - - 100% distribution
SCADA EXPENSES 51,049 - 51,049 - - 100% distribution
TRANSFORMER EX/OVERHD & UNDERG 17,031 - 17,031 - - 100% distribution
MTCE OF SIGNAL SYSTEMS 2,223 - 2,223 - - 100% distribution
METER EXP - REMOVE & RESET 466 - 466 - - 100% distribution
TEMP SERVICE-INSTALL & REMOVE 650 - 650 - - 100% distribution
MISC DISTRIBUTION EXPENSE 353,049 - 353,049 - - 100% distribution
INTERCONNECTION CARRYING CHARGE 2,416 - 2,416 - - 100% distribution
MTCE OF STRUCTURES 90,596 - 90,596 - - 100% distribution
MTCE OF SUBSTATIONS 26,504 - 26,504 - - 100% distribution
MTCE OF SUBSTATION EQUIPMENT 88,541 - 88,541 - - 100% distribution
MTCE OF OVERHD LINES/TREE TRIM 245,908 - 245,908 - - 100% distribution
MTCE OF OVERHD LINES/STANDBY 43,616 - 43,616 - - 100% distribution
MTCE OF OVERHEAD 174,965 - 174,965 - - 100% distribution
MTCE OF UNDERGROUND/DISTRIB 284,922 - 284,922 - - 100% distribution
LOCATE ELECTRIC LINES 100,233 - 100,233 - - 100% distribution
LOCATE FIBER LINES 3,182 - 3,182 - - 100% distribution
MTCE OF LINE TRANSFORMERS 65,534 - 65,534 - - 100% distribution
MTCE OF STREET LIGHTING 83,909 - 83,909 - - 100% distribution
MTCE OF SECURITY LIGHTING 24,067 - 24,067 - - 100% distribution
MTCE OF METERS 57,807 - 57,807 - - 100% distribution
VOLTAGE COMPLAINTS 6,937 - 6,937 - - 100% distribution
SALARIES/TRANS & DISTRIBUTION 31,044 - 31,044 - - 100% distribution
ELECTRIC MAPPING 134,998 - 134,998 - - 100% distribution
MTCE OF OVERHEAD SERVICE/2NDRY 21,933 - 21,933 - - 100% distribution
MTCE OF UNDERGROUND ELEC SERV 58,324 - 58,324 - - 100% distribution
LOCATE UNDERGROUND SECONDARY - - - - - 100% distribution
TRANSPORTATION EXPENSE 303,891 - 303,891 - - 100% distribution
Total Distribution 2,274,147$ -$ 2,274,147$ -$ -$
Utilities & Labor Donated
UTILITIES & LABOR DONATED TO CITY 229,359 - - - 229,359 100% revenue
Total Utilities & Labor Donated 229,359 - - - 229,359
Depreciation & Amortization
DEPRECIATION 2,649,693 1,385 2,648,308 - - plant in service
AMORTIZATION 668,135 349 667,786 - - plant in service
Total Depreciation & Amortization 3,317,828$ 1,734$ 3,316,094$ -$ -$
Other Operating Expenses
EV CHARGING EXPENSE 2,661 - - 2,661 - 100% customer
LOSS ON DISPOSITION OF PROPERTY - - - - - NA
OTHER DONATIONS - - - - - NA
MUTUAL AID 54,540 - 54,540 - - 100% distribution
INTEREST PD ON METER DEPOSIT 57,582 - - 57,582 - 100% customer
RENTAL PROPERTY EXPENSE - - - - - NA
PENSION EXPENSE (196,662) - (196,662) - - 100% distribution
Total Other Operating Expenses (81,879)$ -$ (142,122)$ 60,243$ -$
Customer Accounts
METER READING EXPENSE 47,697 - - 47,697 - 100% customer
COLLECTING EXP DISC/RECONNECT 11,844 - - 11,844 - 100% customer
MISC CUSTOMER ACCTS EXP-COMP 355,651 - - 355,651 - 100% customer
Elk River Municipal Utilities
Functionalization of 2024 Test Year Revenue Requirements
Page 1 of 2
71
Exhibit 3-A
2024 Power
REVENUE REQUIREMENT Test Year Supply Distribution Customer Revenue Classification Basis
Elk River Municipal Utilities
Functionalization of 2024 Test Year Revenue Requirements
CUST BLGS NOT PD/SENT FOR COLL 15,202 - - 15,202 - 100% customer
Total Customer Accounts 430,394$ -$ -$ 430,394$ -$
General & Administrative
SALARIES/OFFICE & COMMISSION 885,000 39,753 682,932 133,564 28,751 non PP operating expenses
TEMPORARY STAFFING - - - - - NA
OFFICE SUPPLIES & EXPENSE 95,725 4,300 73,869 14,447 3,110 non PP operating expenses
LT & WATER CONSUMPTION/OFFICE 24,245 1,089 18,709 3,659 788 non PP operating expenses
BANK CHARGES 2,845 128 2,195 429 92 non PP operating expenses
LEGAL FEES 35,361 1,588 27,287 5,337 1,149 non PP operating expenses
AUDITING FEES 18,880 848 14,569 2,849 613 non PP operating expenses
INSURANCE 183,582 8,246 141,665 27,706 5,964 non PP operating expenses
UTILITY SHARE DEF COMP 111,229 4,996 85,833 16,787 3,613 non PP operating expenses
UTIL SH OF MEDICAL/DENTAL 829,167 37,245 639,847 125,138 26,937 non PP operating expenses
UTILITY SHARE OF PERA 308,017 13,836 237,689 46,486 10,006 non PP operating expenses
UTILITY SHARE OF FICA 300,170 13,483 231,633 45,302 9,751 non PP operating expenses
EMPLOYEES SICK PAY 496,745 22,313 383,325 74,969 16,138 non PP operating expenses
EMP HOLIDAY PAY 179,076 8,044 138,188 27,026 5,818 non PP operating expenses
EMPLOYEE VACATION & PTO 331,860 14,907 256,088 50,084 10,781 non PP operating expenses
UPMIC DISTRIBUTION 112,540 5,055 86,844 16,985 3,656 non PP operating expenses
LONGEVITY PAY 6,963 313 5,373 1,051 226 non PP operating expenses
CONSULTING FEES 40,307 1,811 31,104 6,083 1,309 non PP operating expenses
TELEPHONE 30,987 1,392 23,912 4,677 1,007 non PP operating expenses
ADVERTISING 14,071 632 10,858 2,124 457 non PP operating expenses
DUES & SUBSCRIPTIONS - FEES 123,647 5,554 95,415 18,661 4,017 non PP operating expenses
TRAVEL EXPENSE - - - - - NA
SCHOOLS & MEETINGS 199,541 8,963 153,981 30,115 6,482 non PP operating expenses
MTCE OF GENERAL PLANT & OFFICE 10,072 452 7,772 1,520 327 non PP operating expenses
Total General & Administrative 4,340,030$ 194,950$ 3,349,089$ 654,998$ 140,992$
General Expense
CIP REBATES - RESIDENTIAL 92,938 - - 92,938 - 100% customer
CIP REBATES - COMMERCIAL 111,001 - - 111,001 - 100% customer
CIP - ADMINISTRATION 180,070 - - 180,070 - 100% customer
CIP - MARKETING 44,739 - - 44,739 - 100% customer
CIP - LABOR 98,214 - - 98,214 - 100% customer
CIP REBATES - LOW INCOME 3,762 - - 3,762 - 100% customer
CIP - LOW INCOME LABOR 9,264 - - 9,264 - 100% customer
ENVIRONMENTAL COMPLIANCE 31,460 - - 31,460 - 100% customer
MISC GENERAL EXPENSE 3,431 - - 3,431 - 100% customer
Total General Expense 574,879$ -$ -$ 574,879$ -$
TOTAL OPERATING EXPENSES 39,990,857$ 29,102,783$ 8,797,208$ 1,720,514$ 370,351$
OTHER OPERATING REVENUES
LFG PROJECT - - - - - NA
DISPERSED GENERATION CREDIT 4,800 4,800 - - - 100% power supply
CONNECTION MAINTENANCE 317,234 - - - 317,234 100% revenue
CUSTOMER PENALTIES 295,143 - - - 295,143 100% revenue
SECURITY LIGHTS 260,837 - - - 260,837 100% revenue
CONTRIBUTIONS FROM CUSTOMERS 690,934 - 690,934 - - 100% distribution
TOTAL OTHER OPERATING REVENUES 1,568,948$ 4,800$ 690,934$ -$ 873,214$
NON-OPERATING INCOME (EXPENSES)
Interest income 338,157 - - - 338,157 100% revenue
Miscellaneous revenue 925,800 - - - 925,800 100% revenue
Interest expense and other (773,748) (404) (773,344) - - plant in service
Gain (Loss) on sale of capital assets (16,154) - - - (16,154) 100% revenue
TOTAL NON-OPERATING INCOME (EXPENSES)474,055$ (404)$ (773,344)$ -$ 1,247,803$
TRANSFER TO CITY 1,527,629$ -$ -$ -$ 1,527,629$ 100% revenue
MARGIN 2,672,669$ -$ -$ -$ 2,672,669$ 100% revenue
TOTAL REVENUE REQUIREMENT 42,148,152$ 29,098,388$ 8,879,618$ 1,720,514$ 2,449,632$
100%69%21%4%6%
Page 2 of 2
72
Exhibit 3-B
2024
REVENUE REQUIREMENT Test Year Demand Energy Classification Basis
OPERATING EXPENSES
Purchased Power 28,590,698$ 7,343,889$ 21,246,809$ per power supply
Production
OPERATING SUPERVISION 137,835 137,835 - 100% demand
DIESEL OIL FUEL 159 - 159 100% energy
NATURAL GAS 21,926 - 21,926 100% energy
ELECTRIC & WATER CONSUMPTION 58,033 - 58,033 100% energy
OTHER EXP/PLANT SUPPLIES-ETC 9,756 9,756 - 100% demand
MISC OTHER PWR GENERATION EXP 640 640 - 100% demand
MAINTENANCE OF STRUCTURE/PLANT 13,914 13,914 - 100% demand
MTCE OF ENGINES/GENERATORS-PL 4,177 4,177 - 100% demand
MTCE OF PLANT/LAND IMPROVEMENT 20,339 20,339 - 100% demand
Total Production 266,779$ 186,661$ 80,118$
Transmission 48,622$ 48,622$ -$ 100% demand
Distribution
REMOVE EXISTING SERV & METERS - - - NA
SCADA EXPENSES - - - NA
TRANSFORMER EX/OVERHD & UNDERG - - - NA
MTCE OF SIGNAL SYSTEMS - - - NA
METER EXP - REMOVE & RESET - - - NA
TEMP SERVICE-INSTALL & REMOVE - - - NA
MISC DISTRIBUTION EXPENSE - - - NA
INTERCONNECTION CARRYING CHARGE - - - NA
MTCE OF STRUCTURES - - - NA
MTCE OF SUBSTATIONS - - - NA
MTCE OF SUBSTATION EQUIPMENT - - - NA
MTCE OF OVERHD LINES/TREE TRIM - - - NA
MTCE OF OVERHD LINES/STANDBY - - - NA
MTCE OF OVERHEAD - - - NA
MTCE OF UNDERGROUND/DISTRIB - - - NA
LOCATE ELECTRIC LINES - - - NA
LOCATE FIBER LINES - - - NA
MTCE OF LINE TRANSFORMERS - - - NA
MTCE OF STREET LIGHTING - - - NA
MTCE OF SECURITY LIGHTING - - - NA
MTCE OF METERS - - - NA
VOLTAGE COMPLAINTS - - - NA
SALARIES/TRANS & DISTRIBUTION - - - NA
ELECTRIC MAPPING - - - NA
MTCE OF OVERHEAD SERVICE/2NDRY - - - NA
MTCE OF UNDERGROUND ELEC SERV - - - NA
LOCATE UNDERGROUND SECONDARY - - - NA
TRANSPORTATION EXPENSE - - - NA
Total Distribution -$ -$ -$
Utilities & Labor Donated
UTILITIES & LABOR DONATED TO CITY - - - NA
Total Utilities & Labor Donated - - -
Depreciation & Amortization
DEPRECIATION 1,385 1,385 - 100% demand
AMORTIZATION 349 349 - 100% demand
Total Depreciation & Amortization 1,734$ 1,734$ -$
Other Operating Expenses
EV CHARGING EXPENSE - - - NA
LOSS ON DISPOSITION OF PROPERTY - - - NA
OTHER DONATIONS - - - NA
MUTUAL AID - - - NA
INTEREST PD ON METER DEPOSIT - - - NA
RENTAL PROPERTY EXPENSE - - - NA
PENSION EXPENSE - - - NA
Total Other Operating Expenses -$ -$ -$
Customer Accounts
METER READING EXPENSE - - - NA
Elk River Municipal Utilities
2024 Test Year Power Supply Classification
page 1 of 2
73
Exhibit 3-B
2024
REVENUE REQUIREMENT Test Year Demand Energy Classification Basis
Elk River Municipal Utilities
2024 Test Year Power Supply Classification
COLLECTING EXP DISC/RECONNECT - - - NA
MISC CUSTOMER ACCTS EXP-COMP - - - NA
CUST BLGS NOT PD/SENT FOR COLL - - - NA
Total Customer Accounts -$ -$ -$
General & Administrative
SALARIES/OFFICE & COMMISSION 39,753 10,420 29,333 total revenue requirement
TEMPORARY STAFFING - - - NA
OFFICE SUPPLIES & EXPENSE 4,300 1,127 3,173 total revenue requirement
LT & WATER CONSUMPTION/OFFICE 1,089 285 804 total revenue requirement
BANK CHARGES 128 33 94 total revenue requirement
LEGAL FEES 1,588 416 1,172 total revenue requirement
AUDITING FEES 848 222 626 total revenue requirement
INSURANCE 8,246 2,162 6,085 total revenue requirement
UTILITY SHARE DEF COMP 4,996 1,310 3,687 total revenue requirement
UTIL SH OF MEDICAL/DENTAL 37,245 9,763 27,483 total revenue requirement
UTILITY SHARE OF PERA 13,836 3,627 10,209 total revenue requirement
UTILITY SHARE OF FICA 13,483 3,534 9,949 total revenue requirement
EMPLOYEES SICK PAY 22,313 5,849 16,465 total revenue requirement
EMP HOLIDAY PAY 8,044 2,108 5,935 total revenue requirement
EMPLOYEE VACATION & PTO 14,907 3,907 10,999 total revenue requirement
UPMIC DISTRIBUTION 5,055 1,325 3,730 total revenue requirement
LONGEVITY PAY 313 82 231 total revenue requirement
CONSULTING FEES 1,811 475 1,336 total revenue requirement
TELEPHONE 1,392 365 1,027 total revenue requirement
ADVERTISING 632 166 466 total revenue requirement
DUES & SUBSCRIPTIONS - FEES 5,554 1,456 4,098 total revenue requirement
TRAVEL EXPENSE - - - NA
SCHOOLS & MEETINGS 8,963 2,349 6,614 total revenue requirement
MTCE OF GENERAL PLANT & OFFICE 452 119 334 total revenue requirement
Total General & Administrative 194,950$ 51,101$ 143,850$
General Expense
CIP REBATES - RESIDENTIAL - - - NA
CIP REBATES - COMMERCIAL - - - NA
CIP - ADMINISTRATION - - - NA
CIP - MARKETING - - - NA
CIP - LABOR - - - NA
CIP REBATES - LOW INCOME - - - NA
CIP - LOW INCOME LABOR - - - NA
ENVIRONMENTAL COMPLIANCE - - - NA
MISC GENERAL EXPENSE - - - NA
Total General Expense -$ -$ -$
TOTAL OPERATING EXPENSES 29,102,783$ 7,632,007$ 21,470,777$
OTHER OPERATING REVENUES
LFG PROJECT - - - NA
DISPERSED GENERATION CREDIT 4,800 4,800 - 100% demand
CONNECTION MAINTENANCE - - - NA
CUSTOMER PENALTIES - - - NA
SECURITY LIGHTS - - - NA
CONTRIBUTIONS FROM CUSTOMERS - - - NA
TOTAL OTHER OPERATING REVENUES 4,800$ 4,800$ -$
NON-OPERATING INCOME (EXPENSES)
Interest income - - - NA
Miscellaneous revenue - - - NA
Interest expense and other (404) (106) (298) total revenue requirement
Gain (Loss) on sale of capital assets - - - NA
TOTAL NON-OPERATING INCOME (EXPENSES)(404)$ (106)$ (298)$
TRANSFER TO CITY -$ -$ -$ NA
MARGIN -$ -$ -$ NA
TOTAL REVENUE REQUIREMENT 29,098,388$ 7,627,313$ 21,471,075$
page 2 of 2
74
Exhibit 3-C
2024 Customer
REVENUE REQUIREMENT Test Year Demand Facilities Classification Basis
OPERATING EXPENSES
Purchased Power -$ -$ -$ NA
Production
OPERATING SUPERVISION - - - NA
DIESEL OIL FUEL - - - NA
NATURAL GAS - - - NA
ELECTRIC & WATER CONSUMPTION - - - NA
OTHER EXP/PLANT SUPPLIES-ETC - - - NA
MISC OTHER PWR GENERATION EXP - - - NA
MAINTENANCE OF STRUCTURE/PLANT - - - NA
MTCE OF ENGINES/GENERATORS-PL - - - NA
MTCE OF PLANT/LAND IMPROVEMENT - - - NA
Total Production -$ -$ -$
Transmission -$ -$ -$ NA
Distribution
REMOVE EXISTING SERV & METERS 352 - 352 100% Cust facilities
SCADA EXPENSES 51,049 36,784 14,265 Dist/Cust split
TRANSFORMER EX/OVERHD & UNDERG 17,031 - 17,031 100% Cust facilities
MTCE OF SIGNAL SYSTEMS 2,223 - 2,223 100% Cust facilities
METER EXP - REMOVE & RESET 466 - 466 100% Cust facilities
TEMP SERVICE-INSTALL & REMOVE 650 - 650 100% Cust facilities
MISC DISTRIBUTION EXPENSE 353,049 254,392 98,657 Dist/Cust split
INTERCONNECTION CARRYING CHARGE 2,416 2,416 - 100% Dist demand
MTCE OF STRUCTURES 90,596 90,596 - 100% Dist demand
MTCE OF SUBSTATIONS 26,504 26,504 - 100% Dist demand
MTCE OF SUBSTATION EQUIPMENT 88,541 88,541 - 100% Dist demand
MTCE OF OVERHD LINES/TREE TRIM 245,908 177,191 68,717 Dist/Cust split
MTCE OF OVERHD LINES/STANDBY 43,616 31,428 12,188 Dist/Cust split
MTCE OF OVERHEAD 174,965 126,072 48,893 Dist/Cust split
MTCE OF UNDERGROUND/DISTRIB 284,922 205,303 79,619 Dist/Cust split
LOCATE ELECTRIC LINES 100,233 - 100,233 100% Cust facilities
LOCATE FIBER LINES 3,182 - 3,182 100% Cust facilities
MTCE OF LINE TRANSFORMERS 65,534 - 65,534 100% Cust facilities
MTCE OF STREET LIGHTING 83,909 - 83,909 100% Cust facilities
MTCE OF SECURITY LIGHTING 24,067 - 24,067 100% Cust facilities
MTCE OF METERS 57,807 - 57,807 100% Cust facilities
VOLTAGE COMPLAINTS 6,937 - 6,937 100% Cust facilities
SALARIES/TRANS & DISTRIBUTION 31,044 22,369 8,675 Dist/Cust split
ELECTRIC MAPPING 134,998 97,274 37,724 Dist/Cust split
MTCE OF OVERHEAD SERVICE/2NDRY 21,933 - 21,933 100% Cust facilities
MTCE OF UNDERGROUND ELEC SERV 58,324 - 58,324 100% Cust facilities
LOCATE UNDERGROUND SECONDARY - - - NA
TRANSPORTATION EXPENSE 303,891 303,891 - 100% Dist demand
Total Distribution 2,274,147$ 1,462,761$ 811,386$
Utilities & Labor Donated
UTILITIES & LABOR DONATED TO CITY - - - NA
Total Utilities & Labor Donated - - -
Depreciation & Amortization
DEPRECIATION 2,648,308 1,908,259 740,049 Dist/Cust split
AMORTIZATION 667,786 481,178 186,607 Dist/Cust split
Total Depreciation & Amortization 3,316,094$ 2,389,438$ 926,656$
Other Operating Expenses
EV CHARGING EXPENSE - - - NA
LOSS ON DISPOSITION OF PROPERTY - - - NA
OTHER DONATIONS - - - NA
MUTUAL AID 54,540 54,540 - 100% Dist demand
INTEREST PD ON METER DEPOSIT - - - NA
RENTAL PROPERTY EXPENSE - - - NA
PENSION EXPENSE (196,662) (141,706) (54,956) Dist/Cust split
Total Other Operating Expenses (142,122)$ (87,166)$ (54,956)$
Customer Accounts
Elk River Municipal Utilities
2024 Test Year Distribution Classification
page 1 of 2
75
Exhibit 3-C
2024 Customer
REVENUE REQUIREMENT Test Year Demand Facilities Classification Basis
Elk River Municipal Utilities
2024 Test Year Distribution Classification
METER READING EXPENSE - - - NA
COLLECTING EXP DISC/RECONNECT - - - NA
MISC CUSTOMER ACCTS EXP-COMP - - - NA
CUST BLGS NOT PD/SENT FOR COLL - - - NA
Total Customer Accounts -$ -$ -$
General & Administrative
SALARIES/OFFICE & COMMISSION 682,932 448,412 234,520 total revenue requirement
TEMPORARY STAFFING - - - NA
OFFICE SUPPLIES & EXPENSE 73,869 48,502 25,367 total revenue requirement
LT & WATER CONSUMPTION/OFFICE 18,709 12,284 6,425 total revenue requirement
BANK CHARGES 2,195 1,442 754 total revenue requirement
LEGAL FEES 27,287 17,917 9,370 total revenue requirement
AUDITING FEES 14,569 9,566 5,003 total revenue requirement
INSURANCE 141,665 93,017 48,648 total revenue requirement
UTILITY SHARE DEF COMP 85,833 56,358 29,475 total revenue requirement
UTIL SH OF MEDICAL/DENTAL 639,847 420,122 219,724 total revenue requirement
UTILITY SHARE OF PERA 237,689 156,066 81,623 total revenue requirement
UTILITY SHARE OF FICA 231,633 152,090 79,543 total revenue requirement
EMPLOYEES SICK PAY 383,325 251,691 131,634 total revenue requirement
EMP HOLIDAY PAY 138,188 90,734 47,454 total revenue requirement
EMPLOYEE VACATION & PTO 256,088 168,147 87,941 total revenue requirement
UPMIC DISTRIBUTION 86,844 57,022 29,822 total revenue requirement
LONGEVITY PAY 5,373 3,528 1,845 total revenue requirement
CONSULTING FEES 31,104 20,423 10,681 total revenue requirement
TELEPHONE 23,912 15,700 8,211 total revenue requirement
ADVERTISING 10,858 7,129 3,729 total revenue requirement
DUES & SUBSCRIPTIONS - FEES 95,415 62,649 32,766 total revenue requirement
TRAVEL EXPENSE - - - NA
SCHOOLS & MEETINGS 153,981 101,103 52,877 total revenue requirement
MTCE OF GENERAL PLANT & OFFICE 7,772 5,103 2,669 total revenue requirement
Total General & Administrative 3,349,089$ 2,199,007$ 1,150,082$
General Expense
CIP REBATES - RESIDENTIAL - - - NA
CIP REBATES - COMMERCIAL - - - NA
CIP - ADMINISTRATION - - - NA
CIP - MARKETING - - - NA
CIP - LABOR - - - NA
CIP REBATES - LOW INCOME - - - NA
CIP - LOW INCOME LABOR - - - NA
ENVIRONMENTAL COMPLIANCE - - - NA
MISC GENERAL EXPENSE - - - NA
Total General Expense -$ -$ -$
TOTAL OPERATING EXPENSES 8,797,208$ 5,964,039$ 2,833,169$
OTHER OPERATING REVENUES
LFG PROJECT - - - NA
DISPERSED GENERATION CREDIT - - - NA
CONNECTION MAINTENANCE - - - NA
CUSTOMER PENALTIES - - - NA
SECURITY LIGHTS - - - NA
CONTRIBUTIONS FROM CUSTOMERS 690,934 690,934 - 100% Dist demand
TOTAL OTHER OPERATING REVENUES 690,934$ 690,934$ -$
NON-OPERATING INCOME (EXPENSES)
Interest income - - - NA
Miscellaneous revenue - - - NA
Interest expense and other (773,344) (557,239) (216,105) Dist/Cust split
Gain (Loss) on sale of capital assets - - - NA
TOTAL NON-OPERATING INCOME (EXPENSES)(773,344)$ (557,239)$ (216,105)$
TRANSFER TO CITY -$ -$ -$ NA
MARGIN -$ -$ -$ NA
TOTAL REVENUE REQUIREMENT 8,879,618$ 5,830,344$ 3,049,274$
page 2 of 2
76
Exhibit 3-D
2024
REVENUE REQUIREMENT Test Year Customer Classification Basis
OPERATING EXPENSES
Purchased Power -$ -$ NA
Production
OPERATING SUPERVISION - - NA
DIESEL OIL FUEL - - NA
NATURAL GAS - - NA
ELECTRIC & WATER CONSUMPTION - - NA
OTHER EXP/PLANT SUPPLIES-ETC - - NA
MISC OTHER PWR GENERATION EXP - - NA
MAINTENANCE OF STRUCTURE/PLANT - - NA
MTCE OF ENGINES/GENERATORS-PL - - NA
MTCE OF PLANT/LAND IMPROVEMENT - - NA
Total Production -$ -$
Transmission -$ -$ NA
Distribution
REMOVE EXISTING SERV & METERS - - NA
SCADA EXPENSES - - NA
TRANSFORMER EX/OVERHD & UNDERG - - NA
MTCE OF SIGNAL SYSTEMS - - NA
METER EXP - REMOVE & RESET - - NA
TEMP SERVICE-INSTALL & REMOVE - - NA
MISC DISTRIBUTION EXPENSE - - NA
INTERCONNECTION CARRYING CHARGE - - NA
MTCE OF STRUCTURES - - NA
MTCE OF SUBSTATIONS - - NA
MTCE OF SUBSTATION EQUIPMENT - - NA
MTCE OF OVERHD LINES/TREE TRIM - - NA
MTCE OF OVERHD LINES/STANDBY - - NA
MTCE OF OVERHEAD - - NA
MTCE OF UNDERGROUND/DISTRIB - - NA
LOCATE ELECTRIC LINES - - NA
LOCATE FIBER LINES - - NA
MTCE OF LINE TRANSFORMERS - - NA
MTCE OF STREET LIGHTING - - NA
MTCE OF SECURITY LIGHTING - - NA
MTCE OF METERS - - NA
VOLTAGE COMPLAINTS - - NA
SALARIES/TRANS & DISTRIBUTION - - NA
ELECTRIC MAPPING - - NA
MTCE OF OVERHEAD SERVICE/2NDRY - - NA
MTCE OF UNDERGROUND ELEC SERV - - NA
LOCATE UNDERGROUND SECONDARY - - NA
TRANSPORTATION EXPENSE - - NA
Total Distribution -$ -$
Utilities & Labor Donated
UTILITIES & LABOR DONATED TO CITY - - NA
Total Utilities & Labor Donated - -
Depreciation & Amortization
DEPRECIATION - - NA
AMORTIZATION - - NA
Total Depreciation & Amortization -$ -$
Other Operating Expenses
EV CHARGING EXPENSE 2,661 2,661 100% Customer
LOSS ON DISPOSITION OF PROPERTY - - NA
OTHER DONATIONS - - NA
MUTUAL AID - - NA
INTEREST PD ON METER DEPOSIT 57,582 57,582 100% Customer
RENTAL PROPERTY EXPENSE - - NA
PENSION EXPENSE - - NA
Total Other Operating Expenses 60,243$ 60,243$
Customer Accounts -
Elk River Municipal Utilities
2024 Test Year Customer Classification
page 1 of 2
77
Exhibit 3-D
2024
REVENUE REQUIREMENT Test Year Customer Classification Basis
Elk River Municipal Utilities
2024 Test Year Customer Classification
METER READING EXPENSE 47,697 47,697 100% Customer
COLLECTING EXP DISC/RECONNECT 11,844 11,844 100% Customer
MISC CUSTOMER ACCTS EXP-COMP 355,651 355,651 100% Customer
CUST BLGS NOT PD/SENT FOR COLL 15,202 15,202 100% Customer
Total Customer Accounts 430,394$ 430,394$
General & Administrative
SALARIES/OFFICE & COMMISSION 133,564 133,564 100% Customer
TEMPORARY STAFFING - - NA
OFFICE SUPPLIES & EXPENSE 14,447 14,447 100% Customer
LT & WATER CONSUMPTION/OFFICE 3,659 3,659 100% Customer
BANK CHARGES 429 429 100% Customer
LEGAL FEES 5,337 5,337 100% Customer
AUDITING FEES 2,849 2,849 100% Customer
INSURANCE 27,706 27,706 100% Customer
UTILITY SHARE DEF COMP 16,787 16,787 100% Customer
UTIL SH OF MEDICAL/DENTAL 125,138 125,138 100% Customer
UTILITY SHARE OF PERA 46,486 46,486 100% Customer
UTILITY SHARE OF FICA 45,302 45,302 100% Customer
EMPLOYEES SICK PAY 74,969 74,969 100% Customer
EMP HOLIDAY PAY 27,026 27,026 100% Customer
EMPLOYEE VACATION & PTO 50,084 50,084 100% Customer
UPMIC DISTRIBUTION 16,985 16,985 100% Customer
LONGEVITY PAY 1,051 1,051 100% Customer
CONSULTING FEES 6,083 6,083 100% Customer
TELEPHONE 4,677 4,677 100% Customer
ADVERTISING 2,124 2,124 100% Customer
DUES & SUBSCRIPTIONS - FEES 18,661 18,661 100% Customer
TRAVEL EXPENSE - - NA
SCHOOLS & MEETINGS 30,115 30,115 100% Customer
MTCE OF GENERAL PLANT & OFFICE 1,520 1,520 100% Customer
Total General & Administrative 654,998$ 654,998$
General Expense
CIP REBATES - RESIDENTIAL 92,938 92,938 100% Customer
CIP REBATES - COMMERCIAL 111,001 111,001 100% Customer
CIP - ADMINISTRATION 180,070 180,070 100% Customer
CIP - MARKETING 44,739 44,739 100% Customer
CIP - LABOR 98,214 98,214 100% Customer
CIP REBATES - LOW INCOME 3,762 3,762 100% Customer
CIP - LOW INCOME LABOR 9,264 9,264 100% Customer
ENVIRONMENTAL COMPLIANCE 31,460 31,460 100% Customer
MISC GENERAL EXPENSE 3,431 3,431 100% Customer
Total General Expense 574,879$ 574,879$
TOTAL OPERATING EXPENSES 1,720,514$ 1,720,514$
OTHER OPERATING REVENUES
LFG PROJECT - - NA
DISPERSED GENERATION CREDIT - - NA
CONNECTION MAINTENANCE - - NA
CUSTOMER PENALTIES - - NA
SECURITY LIGHTS - - NA
CONTRIBUTIONS FROM CUSTOMERS - - NA
TOTAL OTHER OPERATING REVENUES -$ -$
NON-OPERATING INCOME (EXPENSES)
Interest income - - NA
Miscellaneous revenue - - NA
Interest expense and other - - NA
Gain (Loss) on sale of capital assets - - NA
TOTAL NON-OPERATING INCOME (EXPENSES)-$ -$
TRANSFER TO CITY -$ -$ NA
MARGIN -$ -$ NA
TOTAL REVENUE REQUIREMENT 1,720,514$ 1,720,514$
page 2 of 2
78
Exhibit 3-E
Commercial Commercial
Total Residential Non-demand Demand Industrial
Demand Allocation Factors
12 Coincident Peak (kW)620,577 227,688 62,420 227,471 102,998
12 CP 100.0%36.7%10.1%36.7%16.6%
1 Coincident Peak (kW)70,882 32,483 6,457 22,861 9,080
1 CP 100.0%45.8%9.1%32.3%12.8%
1 Non-coincident Peak (kW)85,306 36,913 8,940 28,878 10,575
1 NCP 100.0%43.3%10.5%33.9%12.4%
Sum of Max Demands (kW)1,170,110 574,671 146,492 331,325 117,621
SMD 100.0%49.1%12.5%28.3%10.1%
Energy Allocation Factors
Retail Energy Req. (kWh)320,012,952 105,768,831 29,858,418 113,698,503 70,687,200
RE 100.0%33.1%9.3%35.5%22.1%
Customers
Number of Customers 13,365 11,690 1,450 223 2
C 100.0%87.5%10.8%1.7%0.0%
Customer Facilities Allocation Factor
Weighted Number of Cust 22,555 11,690 2,175 6,690 2,000
CF 100.0%51.8%9.6%29.7%8.9%
Customer Service Allocation Factor
Weighted Number of Cust 15,020 11,690 2,175 1,115 40
CS 100.0%77.8%14.5%7.4%0.3%
Revenue Allocator
Sum Other Rev Reqs 39,698,520$ 15,337,248$ 3,924,744$ 13,430,196$ 7,006,331$
R 100.0%38.6%9.9%33.8%17.6%
Elk River Municipal Utilities
2024 Test Year Allocation Factors
page 1 of 1
79
Exhibit 3-F
Commercial Commercial Allocation
Total Residential Non-demand Demand Industrial Factor
Power Supply
Demand 7,627,313 2,798,434 767,187 2,795,776 1,265,917 12 CP
Energy 21,471,075 7,096,496 2,003,332 7,628,532 4,742,715 RE
Total Power Supply 29,098,388$ 9,894,929$ 2,770,519$ 10,424,308$ 6,008,632$
Distribution
Demand 5,830,344 2,522,847 611,038 1,973,727 722,732 1 NCP
Customer Facilities 3,049,274 1,580,404 294,044 904,440 270,386 CF
Total Distribution 8,879,618$ 4,103,250$ 905,082$ 2,878,167$ 993,118$
Customer
Customer Service 1,720,514 1,339,069 249,142 127,721 4,582 CS
Total Customer Service 1,720,514$ 1,339,069$ 249,142$ 127,721$ 4,582$
Revenue Component
Operating Expenses 370,351$ 143,083 36,614 125,292 65,363 R
Other Operating Income (873,214) (337,360) (86,329) (295,412) (154,112) R
Non-Operating Income (1,247,803) (482,080) (123,362) (422,138) (220,223) R
Transfer to City 1,527,629 590,189 151,027 516,804 269,609 R
Margin 2,672,669 1,032,567 264,230 904,176 471,695 R
Total Revenue 2,449,632$ 946,399$ 242,180$ 828,722$ 432,332$
Total Revenue Requirements 42,148,152$ 16,283,647$ 4,166,924$ 14,258,918$ 7,438,663$
Total Revenues 42,148,152$ 16,583,227$ 4,401,535$ 13,875,362$ 7,288,029$
Percent Revenue Requirements 100.0%38.6%9.9%33.8%17.6%
Percent Revenues 100.0%39.3%10.4%32.9%17.3%
Percent Change 0.0%-1.8%-5.3%2.8%2.1%
Revenue Req/kWh 0.132 0.154 0.140 0.125 0.105
Revenue/kWh 0.132 0.157 0.147 0.122 0.103
Elk River Municipal Utilities
2024 Test Year Allocation of Revenue Requirements
page 1 of 1
80
Section 4
Proposed Rates
Changes to rates are generally based on the overall need for revenues and results of
the cost-of-service analyses. The projected operating results at existing rates as
presented in Section 2 of this report outlines the overall revenue needs of the electric
utility. Section 3 summarizes the cost-of-service results. These factors have been
considered in developing the proposed rates summarized in this section of the report.
Proposed Rates
Revenue Needs
In Section 2, it shows that ERMU’s projected cash reserves at current rates decline from
$13.8 million to $10.5 million over the Study Period. The analysis shows ERMU’s
reserve levels staying below the new reserve policy level through the Study Period. In
order to strengthen ERMU’s financial position, it is recommended that a series of rate
increases be implemented in the years 2026-2029. The combination of the rate levels
recommended combined with the new PCA approach described below result in average
overall increases of 2% per year.
Rate Design Adjustments
Specific rate recommendations for each class to become effective each year from 2026-
2029 are shown in Exhibit 4-A. Also shown on Exhibit 4-A are the rates currently in
effect for 2025.
Power Cost Adjustment (PCA) Formula
ERMU utilizes its Power Cost Adjustment (PCA) to adjust retail power bills to reflect
certain aspects of the wholesale power costs from MMPA. Historically, the PCA has
81
Section 4
- 16 -
been tied to the wholesale Energy Adjustment Clause (EAC) included on MMPA’s
wholesale power bill. Linking the retail PCA and the wholesale EAC only adjusts retail
bills for a portion of changes in the wholesale bill. Other wholesale changes, such as
wholesale rate changes need to be addressed through published retail rate changes. It
is recommended that ERMU move to a retail PCA that adjusts retail bills for all
components of the wholesale bill. Shown below is a proposed formula for monthly
calculation of a new PCA to include on ERMU retail bills.
Proposed formula:
PCA = ( 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊 𝑥𝑥 0.9711 - 0.07896)
Where:
• PCA is the power cost adjustment per kWh.
• WPC is the wholesale power cost in dollars.
• WE is the wholesale energy in kWh.
• 0.9711 is a loss adjustment
• 0.07896 is the new base dollars per kWh.
An example calculation for estimated costs in 2026 is as follows:
PCA = ( $31,596,071 340,372,265𝑥𝑥 0.9711 - 0.07896) = $.01663/kWh
The calculation shown above is shown on an annual basis, but the calculation would
actually be done monthly to calculate the appropriate PCA based on monthly wholesale
power costs. Based on billing cycles, the PCA charge would lag the monthly wholesale
bill by two months.
It is important to recognize that the proposed rates in this report are designed to work
with this PCA approach. If a different PCA approach is adopted, the rate
recommendations would need to change to match the altered PCA. The PCA formula
82
Proposed Rates
- 17 -
base amount, the projected wholesale power costs per retail kWh and the resulting
projected PCA charges for the Study Period are shown in Table 4-1.
Table 4-1
PCA Projections
($/kWh)
Year
Projected Wholesale $ per
Retail kWh
Less PCA Formula
Base
Resulting Retail PCA
2026 0.09559 0.07896 0.01663
2027 .09667 0.07896 0.01771
2028 .09777 0.07896 0.01881
2029 .09889 0.07896 0.01993
Projected Operating Results – Proposed Rates
Based on the assumptions outlined above, the resulting projected operating results with
the proposed rates are summarized in Table 4-2. Exhibit 4-B contains a more detailed
presentation of these results.
83
Section 4
- 18 -
Table 4-2
Projected Operating Results
Proposed Rates
Year 2025 2026 2027 2028 2029
Operating Revenues $48,369,482 $49,833,918 $50,961,806 $51,824,827
Less Operating
Expenses (44,210,400) (45,215,511) (46,121,914) (47,047,707)
Plus Non -Operating
Revenues (Expenses) 468,457 489,744 496,394 536,394
Plus Fees and Transfers (1,777,308) (1,842,476) (1,892,667) (1,931,071)
Change in Net Position(1) $3,800,000 2,850,230 3,265,675 3,443,620 3,382,442
Net Position as Percent
of Revenues 5.9% 6.6% 6.8% 6.5%
(1) 2025 EOY change in net position estimated by ERMU staff based on 2025 YTD actual results
Cash Reserves – Proposed Rates
A summary of the impact of the projected operating results on ERMU’s cash reserves
assuming the proposed rate adjustments is shown at the end of Exhibit 4-B and in Table
4-3 below. Assuming the recommended rate adjustments going forward, the projected
cash balance at the end of the Study Period increases by approximately $4.6 million as
compared to the projections at existing rates as contained in Section 2 of this report.
The total reserves reach a level of 80% of the ERMU reserve goal.
84
Proposed Rates
- 19 -
Table 4-3
Projected Cash Reserves
Proposed Rates
Year 2025 2026 2027 2028 2029
Beginning Balance $13,800,000 $12,028,988 $13,075,198 $13,228,547
Plus Change in Net Position 2,850,230 3,265,675 3,443,620 3,382,442
Plus Depreciation 3,533,136 3,801,373 3,955,671 4,107,101
Plus Interfund Borrowing 1,400,000 - (1,400,000) -
Less Capital Improvements (8,047,103) (4,628,954) (4,542,896) (4,381,166)
Less Loss of Revenue Pmts (472,275) (316,884) (198,046) (100,816)
Less Debt Principal (1,035,000) (1,075,000) (1,105,000) (1,140,000)
Ending Balance(1) $13,800,000 $12,028,988 $13,075,198 $13,228,547 $15,096,108
Reserve Goal $18,392,897 $18,432,831 $18,623,699 $18,769,766 $18,924,065
Reserves as % of Goal 75% 65% 70% 70% 80%
(1) 2025 EOY reserve balance estimated by ERMU staff based on 2025 YTD actual results
Competitive Analysis
ERMU is interested in how its rates compare to neighboring utilities. Table 4-4 below
shows monthly electric bills for various typical customers in the residential and
commercial classes. Bills are shown based on existing ERMU rates, proposed ERMU
rates in 2026 and the rates for Buffalo, Shakopee, Wright Hennepin Cooperative and
Xcel Energy. Buffalo and Shakopee’s rates are based on their new 2026 rates. An
important consideration in this table is what may happen to Wright Hennepin and Xcel
rates in the future. There is no information available regarding Wright Hennepin rate
plans. The Xcel Energy charges include Xcel’s 7.14% interim rate increase but the final
determination on Xcel’s last rate case has not been determined by the MPUC yet.
85
Section 4
- 20 -
Table 4-4
Monthly Bill Comparisons
Customer Type and Usage ERMU
Present
2026 ERMU
Proposed
Wright Hennepin
Coop
City of
Buffalo
City of
Shakopee
Xcel
Energy
Residential
300 kWh $59.42 $61.10 $61.83 $62.46 $56.45 $59.02
Residential
700 kWh 118.66 121.89 117.73 122.42 117.52 125.41
Residential
1200 kWh 192.70 197.89 187.60 197.36 193.84 208.41
Commercial
1000 kWh 167.18 171.89 159.65 174.78 161.39 162.32
Commercial
2000 kWh 302.35 310.79 299.40 327.06 308.56 312.42
Commercial
5000 kWh 707.88 727.47 718.65 783.91 750.09 762.72
Solar Grid Access Charge
Minnesota State Statute 216B.64 Subdivision 3 provides that relative to net metering
and distributed generation: “A cooperative electric association or municipal utility may
charge an additional fee to recover the fixed costs not already paid for by the customer
through the customer's existing billing arrangement. Any additional charge by the utility
must be reasonable and appropriate for that class of customer based on the most
recent cost of service study”.
This additional charge is often referred to as a Solar Grid Access Charge for the solar
array customer. Based on the size of the solar generation installation, a separate
distribution access fee is charged to a customer. This charge is levied on a $/kW basis
to reflect the fixed expense of the distribution system. The charge is generally
assessed on the total generation size less the average demand of a typical residential
customer. For ERMU, the average residential customer is estimated to have an
average monthly peak demand of 4 kW. As an example, a solar customer with a 10-kW
system, they would be charged for 6 kW (10 kW generator capacity less the 4 kW
average customer demand). This option is self-regulating from a size of generator
86
Proposed Rates
- 21 -
perspective. Larger solar installations pay more for utilizing the benefits of the fixed
distribution system. Customers still receive retail credit for energy generated. This
option also does not require any additional metering requirements. Customers are
billed a fixed amount every month based on the installed capacity. The calculation of
this charge for BMU based on this cost-of-service study is shown below. The values in
this analysis are taken from Exhibits 3-E and 3-F in this report.
Allocated Residential Distribution and Customer costs - $5,442,319
($4,103,250 plus $1,339,069) (Exhibit 3-F)
Allocated Residential Revenue cost - $729,199 (Exhibit 3-F)
Residential Revenue adjustment - $729,199/$5,442,319 = 13.4%
Allocated Residential Distribution Demand cost - $2,522,847 (Exhibit 3-F)
Adjusted Resid. Distribution Demand cost - $2,522,847 x 1.134 = $2,860,908
Residential Sum of Maximum Demands – 574,671 kW (Exhibit 3-E)
Residential Distribution Demand Cost/kW - $2,860,908/574,671 = $4.98/kW
The revenue adjustment shown in the calculation above is calculated to adjust local
operating costs to account for revenue-allocated cost items. This adjustment is utilized
to adjust the allocated distribution system demand cost. The adjusted distribution
demand cost is divided by the total estimated sum of maximum demands for the
Residential class. The rate calculated above is $4.98/kW based on 2024 costs. This
rate has been rounded up to $5.20/kW to adjust for future costs beginning in 2026. This
represents a decrease from the current $5.55/kW charge in effect for ERMU.
87
Exhibit 4-A
Current
Class Rate 2026 2027 2028 2029
Residential ER012/ERA13
Customer (per month)15.00$ 15.50$ 16.00$ 16.50$ 17.00$
Summer Energy (per kWh)0.13734$ 0.14106$ 0.14456$ 0.14467$ 0.14505$
Non-summer Energy (per kWh)0.12548$ 0.12911$ 0.13251$ 0.13262$ 0.13277$
Off Peak Storage ERSW1
Energy (per kWH)0.05010$ 0.05343$ 0.05500$ 0.05617$ 0.05647$
Off Peak Dual Fuel Space Heating ERDF1
Energy (per kWh)0.06510$ 0.06858$ 0.07055$ 0.07164$ 0.07170$
Ground Heat Pump EGSH
Energy (per kWh)0.09830$ 0.10212$ 0.10576$ 0.10587$ 0.10605$
Dual Fuel/ETS ERDSW
Energy (per kWh)0.05810$ 0.06151$ 0.06297$ 0.06442$ 0.06448$
Cycled AC/RAC24
Energy (per kWh)0.04630$ 0.04960$ 0.05155$ 0.05190$ 0.05225$
Electric Vehicle Charging EEVOF/EEVON
Summer On -Peak (per kWh)0.13733$ 0.14106$ 0.14456$ 0.14472$ 0.14505$
Non-summer On-Peak (per kWh)0.12548$ 0.12911$ 0.13251$ 0.13256$ 0.13277$
Off -Peak (per kWh)0.06510$ 0.06858$ 0.07055$ 0.07164$ 0.07170$
Commercial Non-Demand ECN16/ECNAE
Customer (per month)32.00$ 33.00$ 34.00$ 36.00$ 38.00$
Summer Energy (per kWh)0.13304$ 0.13673$ 0.13826$ 0.13979$ 0.14002$
Non-summer Energy (per kWh)0.11141$ 0.11494$ 0.11636$ 0.11777$ 0.11801$
Commercial Non-Demand Heat Pump ECGSH
Customer (per month)30.50$ 31.50$ 32.50$ 34.50$ 36.50$
Energy (per kWh)0.09830$ 0.10212$ 0.10576$ 0.10587$ 0.10603$
Commercial Demand ECD15/EDG38
Customer (per month)77.00$ 80.00$ 83.00$ 86.00$ 89.00$
Energy (per kWh)0.07035$ 0.07353$ 0.07476$ 0.07599$ 0.07650$
Summer Demand (per kW)16.75$ 17.00$ 17.25$ 17.50$ 17.75$
Non-summer Demand (per kW)11.75$ 12.00$ 12.25$ 12.50$ 12.75$
Commercial Demand On/Off Peak ECOP1/ECOP2
Customer (per month)77.00$ 80.00$ 83.00$ 86.00$ 89.00$
Energy (per kWh)0.07350$ 0.07643$ 0.07744$ 0.07845$ 0.07900$
Summer Demand (per kW)16.75$ 17.00$ 17.25$ 17.50$ 17.70$
Non-summer Demand (per kW)11.75$ 12.00$ 12.25$ 12.50$ 12.70$
Off-peak Demand (per kW)6.30$ 6.50$ 6.70$ 6.90$ 7.00$
Large Industrial (Target/United Health)
Customer (per month)115.00$ 125.00$ 135.00$ 145.00$ 155.00$
Energy (per kWh)0.06962$ 0.07293$ 0.07429$ 0.07565$ 0.07632$
Summer Demand (per kW)16.25$ 16.50$ 16.75$ 17.00$ 17.20$
Non-summer Demand (per kW)11.25$ 11.50$ 11.75$ 12.00$ 12.20$
PCA Formula Base Amount/kWh n/a 0.07896$ 0.07896$ 0.07896$ 0.07896$
Estimated PCA/kWh 0.01640$ 0.01663$ 0.01771$ 0.01881$ 0.01993$
Elk River Municipal Utilities
Existing and Proposed Electric Rates
page 1 of 1
88
Exhibit 4-B
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
OPERATING REVENUES
Charges for services 36,573,483$ 39,473,717$ 42,355,712$ 43,986,269$ 42,557,925$ 46,622,070 47,804,682$ 49,269,118$ 50,397,006$ 51,260,027$
LFG project 1,141,482 1,019,097 935,004 - - - - - - -
Generation credit 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800
Connection maintenance 160,186 263,330 243,088 151,296 317,234 150,000 255,000 255,000 255,000 255,000
Customer penalties 42,556 - 284,452 308,374 295,143 285,000 305,000 305,000 305,000 305,000
Total Operating Revenues 37,922,507$ 40,760,944$ 43,823,056$ 44,450,739$ 43,175,102$ 47,061,870$ 48,369,482$ 49,833,918$ 50,961,806$ 51,824,827$
OPERATING EXPENSES
Purchased Power 24,240,440$ 28,169,146$ 31,544,604$ 31,232,788$ 28,590,698$ 31,019,478$ 31,596,071$ 32,060,510$ 32,532,005$ 33,017,341$
Production 963,858 1,002,631 793,299 315,057 266,783 341,000 321,993 331,653 341,602 351,850
Transmission and Distribution 1,494,841 1,583,165 2,015,665 2,224,113 2,437,569 2,742,000 2,605,000 2,683,150 2,763,645 2,846,554
Services to City 229,086 224,814 231,861 253,564 229,359 265,000 - - - -
Depreciation 2,896,839 2,957,685 3,062,751 3,177,120 3,317,829 3,339,552 3,533,136 3,801,373 3,955,671 4,107,101
Customer accounts 346,090 337,760 391,238 433,553 430,396 470,000 435,000 448,050 461,492 475,336
General and administrative 3,787,850 3,350,641 4,372,187 4,421,557 4,718,264 5,906,049 5,719,200 5,890,776 6,067,499 6,249,524
Total Operating Expenses 33,959,004$ 37,625,842$ 42,411,605$ 42,057,752$ 39,990,898$ 44,083,079$ 44,210,400$ 45,215,511$ 46,121,914$ 47,047,707$
OPERATING INCOME 3,963,503$ 3,135,102$ 1,411,451$ 2,392,987$ 3,184,204$ 2,978,791$ 4,159,082$ 4,618,407$ 4,839,893$ 4,777,120$
NON-OPERATING REVENUE (EXPENSE)
Interest income 134,468$ 52,514$ (159,502)$ 158,310$ 338,157$ 350,000$ 350,000 350,000 350,000 350,000
Miscellaneous revenue 547,009 635,764 906,323 928,553 925,800 712,500 793,000 793,000 793,000 793,000
Interest expense and other (606,313) (836,474) (851,199) (811,210) (773,748) (735,069) (699,543) (678,256) (671,606) (631,606)
Gain (Loss) on sale of capital assets 23,263 (45,214) 41,938 59,556 (16,154) 25,000 25,000 25,000 25,000 25,000
Total Non-Operating Revenues (Expenses)98,427$ (193,410)$ (62,440)$ 335,209$ 474,055$ 352,431$ 468,457$ 489,744$ 496,394$ 536,394$
Income before Contributions and Transfers 4,061,930$ 2,941,692$ 1,349,011$ 2,728,196$ 3,658,259$ 3,331,222$ 4,627,539$ 5,108,151$ 5,336,286$ 5,313,513$
Contributions from Customers 174,557$ 385,316$ 298,935$ 489,452$ 690,934$ 225,000$ 350,000$ 350,000 350,000 350,000
Transfers to Other City Funds (1,340,218) (1,407,734) (1,531,633) (1,620,378) (1,527,629) (1,908,429)$ (2,127,308)$ (2,192,476)$ (2,242,667)$ (2,281,071)$
Special Item - - - - -
CHANGE IN NET POSITION 2,896,269$ 1,919,274$ 116,313$ 1,597,270$ 2,821,564$ 1,647,793$ 2,850,230$ 3,265,675$ 3,443,620$ 3,382,442$
As Percent of Revenues 7.6%4.7%0.3%3.6%6.5%3.5%5.9%6.6%6.8%6.5%
CASH RESERVES
Beginning of Year 13,014,941$ 13,800,000$ 12,028,988$ 13,075,198$ 13,228,547$
Plus Change in Net Position 1,647,793 2,850,230 3,265,675 3,443,620 3,382,442
Plus Depreciation 3,339,552 3,533,136 3,801,373 3,955,671 4,107,101
Plus Interfund Borrowing - 1,400,000 - (1,400,000) -
Less Capital Improvements (7,455,754) (8,047,103) (4,628,954) (4,542,896) (4,381,166)
Less Loss of Revenue Payments (935,000) (472,275) (316,884) (198,046) (100,816)
Less Debt Principal (990,000) (1,035,000) (1,075,000) (1,105,000) (1,140,000)
End of Year(1)13,014,941$ 13,800,000$ 12,028,988$ 13,075,198$ 13,228,547$ 15,096,108$
Existing Reserve goal 18,392,897$ 18,432,831$ 18,623,699$ 18,769,766$ 18,924,065$
Percent of goal 75%65%70%70%80%
(1) 2025 EOY reserve balance estimated by ERMU staff based on 2025 YTD actual results.
Projected
Elk River Municipal Utilities
Electric Operating Results at Proposed Rates
Historical
page 1 of 1
89
WATER COST OF SERVICE AND RATE
DESIGN STUDY
Draft Final Report
December 9, 2025
90
REPORT OUTLINE
Cover Letter
Section 1 - Introduction
Section 2 – Projected Operating Results – Existing Rates
Section 3 – Cost of Service
Section 4 – Proposed Rates
91
Dedicated to providing personal service to consumer-owned utilities
Dave Berg Consulting, LLC | 15213 Danbury Ave W, Rosemount, MN 55068 | 612-850-2305
www.davebergconsulting.com
December 9, 2025
Elk River Municipal Utilities Commission
13069 Orono Parkway
PO Box 430
Elk River, MN 55330
Subject: Water Rate Study
Commission Members:
Dave Berg Consulting, LLC has undertaken a study of the retail rates Elk River Municipal Utilities (ERMU)
charges its customers for water service. This report summarizes the analyses undertaken and the
resulting recommendations for changes to the existing rates.
Annual overall rate increases of 4% per year for 2026-2029 are recommended. These increases are
recommended to enhance the level of cash reserves for the water utility.
Thank you for the opportunity to be of service to ERMU through the conduct of this study. I wish to
express my appreciation for the valuable assistance I received from ERMU staff relative to the execution
of this study.
Sincerely,
Dave Berg Consulting, LLC
David A. Berg, PE
Principal
92
- 1 -
Section 1
Introduction
The City of Elk River, MN owns a municipal utility providing service to
approximately 5,700 retail water customers. The water utility is operated by Elk
River Municipal Utilities (ERMU) and is under the direction of the Elk River
Municipal Utilities Commission. This report has been prepared by Dave Berg
Consulting, LLC to examine the rates and charges for water service in Elk River.
The study includes an examination of the allocated cost of service based on actual
2024 utility operations (Test Year). It also includes projected operating results for
2025-2029 (Study Period). As a result of the analyses undertaken and reported
on herein, water rate recommendations have been developed for implementation
by ERMU.
93
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Section 2
Projected Operating Results
Existing Rates
The rates charged for water service by ERMU, combined with other operating and non-
operating revenues, must be sufficient to meet the cost of providing services to ERMU’s
retail water customers. This is necessary to ensure the long-term financial health of the
ERMU water utility. The cost of providing utility service consists of normal operating
expenses such as production, pumping, distribution, customer and A&G functions,
system depreciation expenses, capital improvements and other non-operating expenses.
An analysis of the operating results for the ERMU water utility during the 2020-2024 Study
Period has been performed assuming the current retail rates and charges remain in effect
through the Study Period. This analysis has been done to determine the overall need, if
any, for additional revenue through rates to meet projected revenue requirements. The
analyses and assumptions utilized in these projections are explained below.
Estimated Revenues – Existing Rates
Operating Revenues
ERMU sells water to residential, commercial and industrial customers. Total sales to
ERMU retail customers for the Study Period are based on ERMU’s actual 2024, YTD
2025 water sales and discussions with ERMU staff. For this analysis, sales are estimated
to remain flat during the Study Period.
Exhibit 2-A is a summarized listing of ERMU’s historical and projected water operating
results at existing rates. The historical and projected revenues from retail sales of water
94
Projected Operating Results – Existing Rates
- 3 -
are included as Charges for Services under Operating Revenues. The existing rates
utilized in this analysis are those implemented January 1, 2025 by ERMU.
Other Operating Revenues
ERMU also receives other miscellaneous operating revenue from other normal operating
procedures. These other operating revenues include net revenues from connection
maintenance and penalties. Charges for services combined with other operating
revenues results in ERMU’s Total Operating Revenues.
Revenue Requirements
Operating Expenses
Operating expenses for the water utility are shown in Exhibit 2-A. A more detailed listing
of operating expenses is included in Exhibit 3-A following section 3 of this report. The
operating expenses are associated with production, pumping, distribution, customer-
related, administrative and general expenses. Projected operating expenses have been
based on ERMU projections and are assumed to increase an average of 3% per year.
Depreciation
ERMU has annual depreciation costs associated with water system investments.
Depreciation during the Study Period is based on budgeted ERMU amounts and future
capital improvements. Depreciation is a funded non-cash expense that generates monies
available for annual capital improvements, debt principal payments and reserves.
Non-operating Income (Expenses)
ERMU’s non-operating income and expenses are primarily associated with investment
income, interest payments on outstanding debt and miscellaneous revenue. ERMU also
has income from developer and connection fees.
95
Section 2
- 4 -
Capital Improvements
ERMU makes annual normal capital investments in its water system. Annual water
capital improvements for the Study Period, as budgeted by ERMU, are shown in Table 2-
1 below.
Table 2-1
Capital Improvements- Water Utility
Fiscal Year 2025 2026 2027 2028 2029
Water capital $1,442,789 $3,399,500 $1,435,330 $9,938,650 $1,062,650
Debt Service
ERMU currently has outstanding water debt pursuant to a 2021 water general obligation
bond issue. This bond issue matures in 2041. It is assumed the water utilities will issue
an additional $8.3 million bond issue in 2028 to provide $8 million for ongoing capital
improvements.
Interfund Borrowing
It is assumed that the water utility will make a $1.4 million loan to the electric department
in 2026 which will be repaid in 2028.
Transfer to City
It is assumed that ERMU will begin making an annual transfer to the City of Elk River in
2026 based on 2% of operating revenue for the water utility.
Projected Operating Results – Existing Rates
Based on the assumptions outlined above, the resulting projected operating results
assuming continued application of the existing retail rates are summarized below in Table
96
Projected Operating Results – Existing Rates
- 5 -
2-2. A summary presentation of the historical and projected operating results is also
shown in Exhibit 2-A.
Table 2-2
Projected Operating Results-Water
Existing Rates
Fiscal Year 2025 2026 2027 2028 2029
Operating Revenues $3,153,746 $3,153,746 $3,153,746 $3,153,746
Less Operating
Expenses (4,127,970) (4,322,616) (4,454,230) (4,871,800)
Plus Non -Operating
Revenue 574,568 567,013 412,725 239,366
Plus Fees and Transfers 304,925 438,925 438,925 438,925
Change in Net Position(1) $500,000 $(94,732) $(162,932) $(448,833) $(1,039,762)
Net Position as Percent
of Revenues -3.0% -5.2% -14.2% -33.0%
(1) 2025 EOY change in net position estimated by ERMU staff based on 2025 YTD actual results
Cash Reserves
A summary of the impact of the projected operating results on ERMU’s cash reserves for
the Study Period is shown at the end of Exhibit 2-A and in Table 2-3 below. The 2025
end of year reserve balance is as estimated by ERMU staff based on 2025 YTD results.
As shown below, under existing retail rates and estimated revenue requirements over the
Study Period, the unrestricted cash reserves for the water utility are projected to decrease
from $10.5 million to $6.8 million by the end of the Study Period. ERMU has a newly
revised reserve policy that sets a minimum target for reserves equal to 2 months operating
expenses plus $8 million catastrophic reserve plus a capital reserve equal to average
annual capital expenses plus the next year’s principal and interest expense. Based on
97
Section 2
- 6 -
this revised policy, the reserves decrease from 86% of the goal amount to 52% of the
goal by the end of the Study Period.
Table 2-3
Projected Cash Reserves-Water
Existing Rates
Fiscal Year 2025 2026 2027 2028 2029
Beginning Balance $10,500,000 $6,950,768 $6,810,823 $7,324,501
Plus Change in Net Position (94,732) (162,932) (448,833) (1,039,762)
Plus Depreciation 1,415,000 1,528,317 1,576,161 1,907,449
Interfund Borrowing (1,400,000) 1,400,000
Plus Debt Proceeds - - 8,000,000 -
Less Debt Principal (70,000) (70,000) (75,000) (75,000)
Less New Debt Principal - - - (279,400)
Less Capital Improvements (3,399,500) (1,435,330) (9,938,650) (1,062,650)
Ending Balance(1) $10,500,000 $6,950,768 $6,810,823 $7,324,501 $6,775,137
Reserve Goal $12,216,671 $12,247,579 $12,448,620 $12,913,356 $12,984,951
Reserves as % of ERMU
Goal 86% 57% 55% 57% 52%
(2) 2025 EOY reserve balance estimated by ERMU staff based on 2025 YTD actual results
98
Exhibit 2-A
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
OPERATING REVENUES
Charges for services 2,613,812$ 3,049,140$ 2,887,276$ 3,305,148$ 2,803,602$ 3,053,746$ 3,053,746$ 3,053,746$ 3,053,746$ 3,053,746$
Connection maintenance 56,931 71,520 75,365 55,733 72,409 63,500 65,000 65,000 65,000 65,000
Customer penalties 3,801 - 26,194 23,118 31,102 28,000 35,000 35,000 35,000 35,000
Total Operating Revenues 2,674,544$ 3,120,660$ 2,988,835$ 3,383,999$ 2,907,113$ 3,145,246$ 3,153,746$ 3,153,746$ 3,153,746$ 3,153,746$
OPERATING EXPENSES
Production 502,748$ 674,815$ 681,079$ 667,881$ 780,844$ 807,150$ 793,000$ 816,790$ 841,294$ 866,533$
Distribution 251,259 412,534 307,192 321,566 462,083 520,410 498,125 513,069 528,461 544,315
Services to City 463 1,259 540 - - 2,000 2,000 2,000 2,000 2,000
Depreciation 1,133,179 1,139,802 1,117,357 1,174,752 1,223,033 1,325,866 1,415,000 1,528,317 1,576,161 1,907,449
Customer accounts 66,509 72,213 81,285 88,640 96,615 105,250 104,250 107,378 110,599 113,917
General and administrative 719,527 844,475 980,528 943,138 1,006,969 1,211,950 1,315,595 1,355,063 1,395,715 1,437,587
Total Operating Expenses 2,673,685$ 3,145,098$ 3,167,981$ 3,195,977$ 3,569,544$ 3,972,626$ 4,127,970$ 4,322,616$ 4,454,230$ 4,871,800$
OPERATING INCOME 859$ (24,438)$ (179,146)$ 188,022$ (662,431)$ (827,380)$ (974,224)$ (1,168,870)$ (1,300,483)$ (1,718,054)$
NON-OPERATING REVENUE (EXPENSE)
Interest income 33,454$ 24,677$ (30,592)$ 57,360$ 104,286$ 151,000$ 126,000$ 123,463$ 132,775$ 122,816$
Miscellaneous revenue 262,311 292,330 424,994 418,451 429,016 418,100 473,350 473,350 473,350 473,350
Interest expense and other (23,516) (65,296) (40,948) (36,444) (33,949) (31,466) (28,782) (33,800) (31,000) (28,000)
New debt interest - - - (166,400) (332,800)
Gain (Loss) on sale of capital assets 3,507 (662) (9,150) 2,940 (5,090) 8,000 4,000 4,000 4,000 4,000
Total Non-Operating Revenues (Expenses)275,756$ 251,049$ 344,304$ 442,307$ 494,263$ 545,634$ 574,568$ 567,013$ 412,725$ 239,366$
Income before Contributions and Transfers 276,615$ 226,611$ 165,158$ 630,329$ (168,168)$ (281,746)$ (399,657)$ (601,857)$ (887,759)$ (1,478,688)$
Connection Fees 595,482$ 548,948$ 1,547,930$ 253,341$ 477,998$ 255,000$ 366,000$ 500,000$ 500,000$ 500,000$
Contributions from Developers 477,194 552,920 940,306 - -
Contributions from Customers - - - - 21,910 - - - - -
Transfers from/(to) Other City Funds - 195,245 - 1,348,943 - - (61,075) (61,075) (61,075) (61,075)
Grants - 3,288 - - - - - - - -
CHANGE IN NET POSITION 1,349,291$ 1,527,012$ 2,653,394$ 2,232,613$ 331,740$ (26,746)$ (94,732)$ (162,932)$ (448,833)$ (1,039,762)$
As Percent of Revenues 50.4%48.9%88.8%66.0%11.4%-0.9%-3.0%-5.2%-14.2%-33.0%
UNRESTRICTED CASH RESERVES
Beginning of Year 10,500,000$ 6,950,768$ 6,810,823$ 7,324,501$
Plus Change in Net Position (94,732) (162,932) (448,833) (1,039,762)
Plus Depreciation 1,415,000 1,528,317 1,576,161 1,907,449
Interfund Borrowing (1,400,000) 1,400,000
Plus Debt Proceeds - - 8,000,000 -
Less Debt Principal (70,000) (70,000) (75,000) (75,000)
Less New Debt Principal - - - (279,400)
Less Capital Improvements (3,399,500) (1,435,330) (9,938,650) (1,062,650)
End of Year(1)9,961,189$ 10,500,000$ 6,950,768$ 6,810,823$ 7,324,501$ 6,775,137$
Reserve goal 12,719,919$ 12,750,828$ 12,951,869$ 13,416,604$ 13,488,199$
Percent of goal 83%55%53%55%50%
(1) 2025 EOY reserve balance estimated by ERMU staff based on 2025 YTD actual results.
Projected
Elk River Municipal Utilities
Water Operating Results at Existing Rates
Historical
page 1 of 1
99
- 7 -
Section 3
Cost-of-Service
A cost-of-service analysis was performed to determine the allocated cost to serve
ERMU’s customer classes within the water utility. Customer classes exist, in part,
because the cost to serve different kinds of customers varies. The cost-of-service
analysis has been performed on a 2024 Test Year’ based on actual 2024
financials, operations and sales. The results of the cost-of-service study give an
indication of the degree of revenue recovery warranted for each class of
customers. A comparison of the allocated cost to serve a class of customers and
the actual revenues received from that class is taken into consideration during rate
design.
Functionalization of Costs
ERMU’s Test Year water revenue requirements have been divided into four
functional categories. These categories are described below.
Plant – costs associated with ERMU’s source of supply and pumping.
Distribution – distribution expenses are related to the ERMU system for delivering
water to ERMU customers over the local pipeline system.
Customer – these costs are fixed costs associated with the service facilities
utilized to deliver water directly to customers. They also include items such as
meter reading, billing, collections and dealing with customers by customer service
representatives.
Revenue – revenue related costs include certain non-operating revenues and
utility margin.
100
Section 3
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Table 3-1 below summarizes the functional water costs for the 2024 Test Year.
The detailed cost functions are shown in Exhibit 3-A.
Table 3-1
Functional Water Costs
2024 Test Year
Component
Revenue
Requirement
Plant $1,374,402
Distribution 1,594,954
Customer 139,845
Revenue (298,198)
Total $2,811,004
Classification of Costs
ERMU’s Test Year revenue requirements have been divided into distinct cost
classifications. The water cost classifications are described below.
Demand Related – demand related costs are costs required to meet the overall
maximum demand on the system. Demand related costs are predominately
associated with facility fixed costs.
Commodity Related – commodity costs tend to vary with the annual quantity of
water produced.
Customer Related – costs related to serving, metering and billing of individual
customers.
Revenue Related – revenue related costs vary by the amount of revenue received
by the utility or are associated with other operating and non-operating revenues.
Exhibits 3-B through 3-D show the detailed classification of revenue requirements
within the plant, distribution and customer functions.
101
Cost-of-Service
- 9 -
Allocation of Costs
Based on an analysis of customer class service characteristics, the classified costs
summarized above were allocated to the major ERMU customer classes.
Allocation of costs was performed on a fully-distributed, embedded cost allocation
basis. Specific allocation factors were utilized in each of the cost classification
categories as described below. Exhibit 3-E contains a summary of the
development of the various allocation factors.
Demand Allocations
Customer class demands are based on each class’ estimated contribution to the
utility’s system peak day usage.
Commodity Allocations
Each class’ share of test year commodity requirements was used to allocate
commodity related costs.
Customer Facilities Allocations
The customer facilities allocator was used to allocate costs associated with the
physical facilities required to serve individual customers. For the customer facility
allocators, a weighted customer allocation factor is developed. Weighting factors
are developed to represent the difference in service configurations between
customer classifications. For instance, a larger customer facility is required for a
single industrial demand customer than for a single residential customer.
Customer Service Allocations
The customer service allocator is for allocation of costs associated with customer
service – meter reading, billing, collections and customer inquiries. As with the
customer facilities allocators, weighted customer service allocators are developed
102
Section 3
- 10 -
to represent the different levels of customer service required by different size
customers.
Revenue Allocations
Revenue related costs were allocated based on each class’ share of total demand,
commodity, customer facility and customer service costs.
Cost of Service Results
Based on the classifications and allocations described above, the estimated cost
to serve each major class of customers for the 2019 Test Year was determined.
Exhibit 3-F presents this analysis in detail. Table 3-2 below summarizes the total
allocated costs for each class compared to the total adjusted revenues received
from the class during 2019.
Table 3-2
Water Cost of Service Results
Comparison of Cost and Revenues
2024 Test Year
Customer
Classification
Allocated
Cost to Serve Revenues
Residential $1,507,470 $1,564,571
Commercial/Industrial $1,303,534 $1,246,433
Total $2,811,004 $2,811,004
The revenue requirements and revenues as allocated to each class and
summarized above are shown on a total dollar basis. Table 3-3 below makes the
comparison based on percentages of total cost to serve and total revenues. The
charts following Table 3-3 show a graphical comparison between allocated cost to
serve and revenues as a percentage of the totals. The percentage
increase/(decrease) in each class’ revenue shown below is the adjustment
103
Cost-of-Service
- 11 -
necessary to produce revenues from each class in accordance with the allocated
cost to serve. The percentage adjustments do not represent the recommended
change in each class’ rates. The cost-of-service results are one item for
consideration in rate design. It is important to note also that the adjustments shown
in the table below would not change the total revenue received by the utility and
are not indicative of overall revenue needs of the utility going forward.
Recommendations regarding rate design are included in Section 4 of this report.
Table 3-3
Water Cost of Service Results
Comparison of % Cost and Revenues
2024 Test Year
Customer
Classification
Allocated
Cost to Serve Revenues Increase/
(Decrease)
Residential 53.6% 55.7% -3.6%
Commercial/Industrial 46.4% 44.3% 4.6%
Total 100.0% 100.0% 0.0%
104
Section 3
- 12 -
As indicated above, ERMU’s existing class revenues do not exactly match the
allocated cost to serve each class. Cost based rates are one of several goals in
establishing rates. The relationship between allocated costs and revenues for
each class should be considered, in addition to other rate related goals, in
developing recommended rates.
105
Exhibit 3-A
2024
REVENUE REQUIREMENT TEST YEAR Plant Distribution Customer Revenue Functionalization Basis
OPERATING EXPENSES
PRODUCTION EXPENSE
Maintenance of Structures 118,774 118,774 - - - 100% plant
TOTAL PRODUCTION EXPENSE 118,774 118,774 - - -
PUMPING EXPENSE
Supervision 69,969 69,969 - - - 100% plant
Electric & Gas Utilities 256,685 256,685 - - - 100% plant
Sampling 21,964 21,964 - - - 100% plant
Chemical Feed 38,920 38,920 - - - 100% plant
Maintenance of Electric Pumping - - - - - NA
Maintenance of Wells 260,692 260,692 - - - 100% plant
SCADA - Pumping 13,837 13,837 - - - 100% plant
TOTAL PUMPING EXPENSE 662,067 662,067 - - -
DISTRIBUTION EXPENSE
Maintenance of Water Mains 161,765 - 161,765 - - 100% distribution
Locate Water Lines 13,728 - 13,728 - - 100% distribution
Locate Water Main - - - - - NA
Water Meter Service 100,494 - 100,494 - - 100% distribution
Backflow Device Inspection 19,532 - 19,532 - - 100% distribution
Maintenance of Customers Service 33,583 - 33,583 - - 100% distribution
Water Mapping 25,858 - 25,858 - - 100% distribution
Maintenance of Water Hydrants - PU 22,736 - 22,736 - - 100% distribution
Maintenance of Water Hydrants - PR 4,990 - 4,990 - - 100% distribution
Water Clothing/PPE 9,528 - 9,528 - - 100% distribution
Wages/Water 7,617 - 7,617 - - 100% distribution
Transportation Expense 18,310 - 18,310 - - 100% distribution
General Expense/Water Permit 26,255 - 26,255 - - 100% distribution
TOTAL DISTRIBUTION EXPENSE 444,396 - 444,396 - -
DEPRECIATION & AMORTIZATION
Depreciation 1,223,033 208,365 1,014,668 - - fixed assets
TOTAL DEPRECIATION 1,223,033 208,365 1,014,668 - -
OTHER OPERATING EXPENSE
Dam Maintenance Expense 444 444 - - - 100% plant
Pension Expense (13,068) (13,068) - - - 100% plant
OPEB Expense - - - - - NA
Interest Paid on Meter Deposit 967 - - 967 - 100% customer
Rental Property Expense - - - - - total operating expenses
TOTAL OTHER OPERATING EXPENSE (11,657) (12,624) - 967 -
CONSUMER ACCOUNTS EXPENSE
Meter Reading Expense 5,549 - - 5,549 - 100% customer
Miscellaneous Customer Accounts Expense 91,045 - - 91,045 - 100% customer
Cust Billings Not Paid 19 - - 19 - 100% customer
TOTAL CONSUMER ACCOUNTS EXPENSE 96,613 - - 96,613 -
ADMINISTRATIVE EXPENSE
Salaries Office & Commission 258,534 99,580 148,778 10,175 - total operating expenses
Temporary Staffing - - - - - total operating expenses
Office Supplies & Expense 23,419 9,020 13,477 922 - total operating expenses
Electric & Water Consumption 6,061 2,335 3,488 239 - total operating expenses
Bank Charges 726 280 418 29 - total operating expenses
Legal Fees 5,708 2,199 3,285 225 - total operating expenses
Auditing Fees 5,266 2,028 3,030 207 - total operating expenses
Insurance 40,122 15,454 23,089 1,579 - total operating expenses
Deferred Comp 18,628 7,175 10,720 733 - total operating expenses
Elk River Municipal Utilities
Functionalization of 2024 Test Year Water Revenue Requirements
page 1 of 2
106
Exhibit 3-A
2024
REVENUE REQUIREMENT TEST YEAR Plant Distribution Customer Revenue Functionalization Basis
Elk River Municipal Utilities
Functionalization of 2024 Test Year Water Revenue Requirements
Medical/Dental 202,666 78,062 116,628 7,976 - total operating expenses
PERA 59,326 22,851 34,140 2,335 - total operating expenses
FICA 58,185 22,411 33,484 2,290 - total operating expenses
Sick Pay 69,538 26,784 40,017 2,737 - total operating expenses
Holiday Pay 34,537 13,303 19,875 1,359 - total operating expenses
Vacation & PTO 59,901 23,072 34,471 2,358 - total operating expenses
UPMIC Distribution 23,571 9,079 13,564 928 - total operating expenses
Miscellaneous - Wellhead - - - - - NA
Longevity Pay 836 322 481 33 - total operating expenses
Consulting Fees 16,316 6,284 9,389 642 - total operating expenses
Telephone 7,024 2,705 4,042 276 - total operating expenses
Advertising 3,632 1,399 2,090 143 - total operating expenses
Dues & Subscriptions 78,200 30,121 45,002 3,078 - total operating expenses
Travel Expense - - - - - NA
Schools & Meetings 42,421 16,339 24,412 1,670 - total operating expenses
Maintenance of General Plant & Office 2,518 970 1,449 99 - total operating expenses
TOTAL ADMINISTRATIVE EXPENSE 1,017,135 391,774 585,330 40,031 -
GENERAL EXPENSE
CIP Rebates - Residential 1,090 - - 1,090 - 100% customer
CIP Rebates - Commercial - - - - - NA
CIP - Administration - - - - - NA
CIP - Marketing 1,117 - - 1,117 - 100% customer
CIP - Labor - - - - - 100% customer
Environmental Compliance 683 263 393 27 - total operating expenses
Misc General Expense - - - - - total operating expenses
TOTAL GENERAL EXPENSE 2,890 263 393 2,234 -
TOTAL OPERATING EXPENSE 3,553,251 - 1,368,619 2,044,787 139,845 -
NON-OPERATING REVENUES (EXPENSES)
Interest income 104,286 - - - 104,286 100% revenue
Miscellaneous revenue 429,016 - - - 429,016 100% revenue
Interest expense and other (33,949) (5,784) (28,165) - - fixed assets
Gain (Loss) on sale of capital assets (5,090) - - - (5,090) 100% revenue
TOTAL NON-OPERATING REV (EXP)494,263 (5,784) (28,165) - 528,212
OTHER OPERATING REVENUE
Connection maintenance 72,409 - - - 72,409 100% revenue
Customer penalties 31,102 - - - 31,102 100% revenue
TOTAL OTHER OPERATING REVENUE 103,511 - - - 103,511
Developer and Connection Fees 477,998 - 477,998 - - 100% distribution
MARGIN 333,525 - - - 333,525 100% revenue
TOTAL REVENUE REQUIREMENT 2,811,004 1,374,402 1,594,954 139,845 (298,198)
page 2 of 2
107
Exhibit 3-B
FY 2024
REVENUE REQUIREMENT TEST YEAR Demand Commodity Classification Basis
OPERATING EXPENSES
PRODUCTION EXPENSE
Maintenance of Structures 118,774 118,774 - 100% demand
TOTAL PRODUCTION EXPENSE 118,774 118,774 -
PUMPING EXPENSE
Supervision 69,969 44,400 25,569 operating expenses
Electric & Gas Utilities 256,685 - 256,685 100% commodity
Sampling 21,964 - 21,964 100% commodity
Chemical Feed 38,920 - 38,920 100% commodity
Maintenance of Electric Pumping - - - NA
Maintenance of Wells 260,692 260,692 - 100% demand
SCADA - Pumping 13,837 - 13,837 100% commodity
TOTAL PUMPING EXPENSE 662,067 305,092 356,975
DISTRIBUTION EXPENSE
Maintenance of Water Mains - - - NA
Locate Water Lines - - - NA
Locate Water Main - - - NA
Water Meter Service - - - NA
Backflow Device Inspection - - - NA
Maintenance of Customers Service - - - NA
Water Mapping - - - NA
Maintenance of Water Hydrants - PU - - - NA
Maintenance of Water Hydrants - PR - - - NA
Water Clothing/PPE - - - NA
Wages/Water - - - NA
Transportation Expense - - - NA
General Expense/Water Permit - - - NA
TOTAL DISTRIBUTION EXPENSE - - -
DEPRECIATION & AMORTIZATION
Depreciation 208,365 208,365 - 100% demand
TOTAL DEPRECIATION 208,365 208,365 -
OTHER OPERATING EXPENSE
Dam Maintenance Expense 444 444 - 100% demand
Pension Expense (13,068) (13,068) - 100% demand
OPEB Expense - - - NA
Interest Paid on Meter Deposit - - - NA
Rental Property Expense - - - 100% demand
TOTAL OTHER OPERATING EXPENSE (12,624) (12,624) -
CONSUMER ACCOUNTS EXPENSE
Meter Reading Expense - - - NA
Miscellaneous Customer Accounts Expense - - - NA
Cust Billings Not Paid - - - NA
TOTAL CONSUMER ACCOUNTS EXPENSE - - -
ADMINISTRATIVE EXPENSE
Salaries Office & Commission 99,580 63,190 36,390 operating expenses
Temporary Staffing - - - NA
Office Supplies & Expense 9,020 5,724 3,296 operating expenses
Elk River Municipal Utilities
2024 Test Year Water Plant Classification
page 1 of 2
108
Exhibit 3-B
FY 2024
REVENUE REQUIREMENT TEST YEAR Demand Commodity Classification Basis
Elk River Municipal Utilities
2024 Test Year Water Plant Classification
LT & Water Consumption 2,335 1,481 853 operating expenses
Bank Charges 280 177 102 operating expenses
Legal Fees 2,199 1,395 803 operating expenses
Auditing Fees 2,028 1,287 741 operating expenses
Insurance 15,454 9,806 5,647 operating expenses
Deferred Comp 7,175 4,553 2,622 operating expenses
Medical/Dental 78,062 49,535 28,527 operating expenses
PERA 22,851 14,500 8,351 operating expenses
FICA 22,411 14,221 8,190 operating expenses
Sick Pay 26,784 16,996 9,788 operating expenses
Holiday Pay 13,303 8,441 4,861 operating expenses
Vacation & PTO 23,072 14,641 8,431 operating expenses
UPMIC Distribution 9,079 5,761 3,318 operating expenses
Miscellaneous - Wellhead - - - NA
Longevity Pay 322 204 118 operating expenses
Consulting Fees 6,284 3,988 2,297 operating expenses
Telephone 2,705 1,717 989 operating expenses
Advertising 1,399 888 511 operating expenses
Dues & Subscriptions 30,121 19,113 11,007 operating expenses
Travel Expense - - - NA
Schools & Meetings 16,339 10,368 5,971 operating expenses
Maintenance of General Plant & Office 970 615 354 operating expenses
TOTAL ADMINISTRATIVE EXPENSE 391,774 248,605 143,169
GENERAL EXPENSE
CIP Rebates - Residential - - - NA
CIP Rebates - Commercial - - - NA
CIP - Administration - - - NA
CIP - Marketing - - - NA
CIP - Labor - - - NA
Environmental Compliance 263 263 - 100% demand
Misc General Expense - - - 100% demand
TOTAL GENERAL EXPENSE 263 263 -
TOTAL OPERATING EXPENSE 1,368,619 868,475 500,144
NON-OPERATING REVENUES (EXPENSES)
Interest income - - - NA
Miscellaneous revenue - - - NA
Interest expense and other (5,784) (5,784) - 100% demand
Gain (Loss) on sale of capital assets - - - NA
TOTAL NON-OPERATING REV (EXP)(5,784) (5,784) -
OTHER OPERATING REVENUE
Connection maintenance - - - NA
Customer penalties - - - NA
TOTAL OTHER OPERATING REVENUE - - -
Developer and Connection Fees - - - NA
MARGIN - - - NA
TOTAL REVENUE REQUIREMENT 1,374,402 874,259 500,144
page 2 of 2
109
Exhibit 3-C
FY 2024 Distribution Customer
REVENUE REQUIREMENT TEST YEAR Demand Facilities Classification Basis
OPERATING EXPENSES
PRODUCTION EXPENSE
Maintenance of Structures - - - NA
TOTAL PRODUCTION EXPENSE - - -
PUMPING EXPENSE
Supervision - - - NA
Electric & Gas Utilities - - - NA
Sampling - - - NA
Chemical Feed - - - NA
Maintenance of Electric Pumping - - - NA
Maintenance of Wells - - - NA
SCADA - Pumping - - - NA
TOTAL PUMPING EXPENSE - - -
DISTRIBUTION EXPENSE
Maintenance of Water Mains 161,765 161,765 - 100% Dist demand
Locate Water Lines 13,728 13,728 - 100% Dist demand
Locate Water Main - - - NA
Water Meter Service 100,494 - 100,494 100% Cust facilities
Backflow Device Inspection 19,532 - 19,532 100% Cust facilities
Maintenance of Customers Service 33,583 - 33,583 100% Cust facilities
Water Mapping 25,858 - 25,858 100% Cust facilities
Maintenance of Water Hydrants - PU 22,736 - 22,736 100% Cust facilities
Maintenance of Water Hydrants - PR 4,990 - 4,990 100% Cust facilities
Water Clothing/PPE 9,528 5,396 4,132 Operating Expense
Wages/Water 7,617 4,314 3,303 Operating Expense
Transportation Expense 18,310 10,369 7,941 Operating Expense
General Expense/Water Permit 26,255 14,868 11,387 Operating Expense
TOTAL DISTRIBUTION EXPENSE 444,396 210,440 233,956
DEPRECIATION & AMORTIZATION
Depreciation 1,014,668 615,835 398,833 plant
TOTAL DEPRECIATION 1,014,668 615,835 398,833
OTHER OPERATING EXPENSE
Dam Maintenance Expense - - - NA
Pension Expense - - - NA
OPEB Expense - - - NA
Interest Paid on Meter Deposit - - - NA
Rental Property Expense - - - Operating Expense
TOTAL OTHER OPERATING EXPENSE - - -
CONSUMER ACCOUNTS EXPENSE
Meter Reading Expense - - - NA
Miscellaneous Customer Accounts Expense - - - NA
Cust Billings Not Paid - - - NA
TOTAL CONSUMER ACCOUNTS EXPENSE - - -
ADMINISTRATIVE EXPENSE
Salaries Office & Commission 148,778 84,254 64,525 Operating Expense
Temporary Staffing - - - NA
Office Supplies & Expense 13,477 7,632 5,845 Operating Expense
LT & Water Consumption 3,488 1,975 1,513 Operating Expense
Elk River Municipal Utilities
2024 Test Year Water Distribution Classification
page 1 of 2
110
Exhibit 3-C
FY 2024 Distribution Customer
REVENUE REQUIREMENT TEST YEAR Demand Facilities Classification Basis
Elk River Municipal Utilities
2024 Test Year Water Distribution Classification
Bank Charges 418 237 181 Operating Expense
Legal Fees 3,285 1,860 1,425 Operating Expense
Auditing Fees 3,030 1,716 1,314 Operating Expense
Insurance 23,089 13,075 10,014 Operating Expense
Deferred Comp 10,720 6,071 4,649 Operating Expense
Medical/Dental 116,628 66,047 50,581 Operating Expense
PERA 34,140 19,334 14,806 Operating Expense
FICA 33,484 18,962 14,522 Operating Expense
Sick Pay 40,017 22,662 17,355 Operating Expense
Holiday Pay 19,875 11,255 8,620 Operating Expense
Vacation & PTO 34,471 19,521 14,950 Operating Expense
UPMIC Distribution 13,564 7,682 5,883 Operating Expense
Miscellaneous - Wellhead - - - NA
Longevity Pay 481 272 209 Operating Expense
Consulting Fees 9,389 5,317 4,072 Operating Expense
Telephone 4,042 2,289 1,753 Operating Expense
Advertising 2,090 1,184 906 Operating Expense
Dues & Subscriptions 45,002 25,485 19,517 Operating Expense
Travel Expense - - - NA
Schools & Meetings 24,412 13,825 10,587 Operating Expense
Maintenance of General Plant & Office 1,449 821 628 Operating Expense
TOTAL ADMINISTRATIVE EXPENSE 585,330 331,475 253,855
GENERAL EXPENSE
CIP Rebates - Residential - - - NA
CIP Rebates - Commercial - - - NA
CIP - Administration - - - NA
CIP - Marketing - - - NA
CIP - Labor - - - NA
Environmental Compliance 393 223 170 Operating Expense
Misc General Expense - - - Operating Expense
TOTAL GENERAL EXPENSE 393 223 170
TOTAL OPERATING EXPENSE 2,044,787 1,157,972 886,815
NON-OPERATING REVENUES (EXPENSES)
Interest income - - - NA
Miscellaneous revenue - - - NA
Interest expense and other (28,165) (17,094) (11,071) plant
Gain (Loss) on sale of capital assets - - - NA
TOTAL NON-OPERATING REV (EXP)(28,165) (17,094) (11,071)
OTHER OPERATING REVENUE
Connection maintenance - - - NA
Customer penalties - - - NA
TOTAL OTHER OPERATING REVENUE - - -
Developer and Connection Fees 477,998 290,112 187,886 plant
MARGIN - - - NA
TOTAL REVENUE REQUIREMENT 1,594,954 884,954 710,000
page 2 of 2
111
Exhibit 3-D
FY 2024
REVENUE REQUIREMENT TEST YEAR Customer Classification Basis
OPERATING EXPENSES
PRODUCTION EXPENSE
Maintenance of Structures - - NA
TOTAL PRODUCTION EXPENSE -
PUMPING EXPENSE
Supervision - - NA
Electric & Gas Utilities - - NA
Sampling - - NA
Chemical Feed - - NA
Maintenance of Electric Pumping - - NA
Maintenance of Wells - - NA
SCADA - Pumping - - NA
TOTAL PUMPING EXPENSE - -
DISTRIBUTION EXPENSE
Maintenance of Water Mains - - NA
Locate Water Lines - - NA
Locate Water Main - - NA
Water Meter Service - - NA
Backflow Device Inspection - - NA
Maintenance of Customers Service - - NA
Water Mapping - - NA
Maintenance of Water Hydrants - PU - - NA
Maintenance of Water Hydrants - PR - - NA
Water Clothing/PPE - - NA
Wages/Water - - NA
Transportation Expense - - NA
General Expense/Water Permit - - NA
TOTAL DISTRIBUTION EXPENSE - -
DEPRECIATION & AMORTIZATION
Depreciation - - NA
TOTAL DEPRECIATION - -
OTHER OPERATING EXPENSE
Dam Maintenance Expense - - NA
Pension Expense - - NA
OPEB Expense - - NA
Interest Paid on Meter Deposit 967 967 100% Customer
Rental Property Expense - - NA
TOTAL OTHER OPERATING EXPENSE 967 967
CONSUMER ACCOUNTS EXPENSE
Meter Reading Expense 5,549 5,549 100% Customer
Miscellaneous Customer Accounts Expense 91,045 91,045 100% Customer
Cust Billings Not Paid 19 19 100% Customer
TOTAL CONSUMER ACCOUNTS EXPENSE 96,613 96,613
ADMINISTRATIVE EXPENSE
Salaries Office & Commission 10,175 10,175 100% Customer
Temporary Staffing - - NA
Office Supplies & Expense 922 922 100% Customer
LT & Water Consumption 239 239 100% Customer
Elk River Municipal Utilities
2024 Test Year Water Customer Classification
page 1 of 2
112
Exhibit 3-D
FY 2024
REVENUE REQUIREMENT TEST YEAR Customer Classification Basis
Elk River Municipal Utilities
2024 Test Year Water Customer Classification
Bank Charges 29 29 100% Customer
Legal Fees 225 225 100% Customer
Auditing Fees 207 207 100% Customer
Insurance 1,579 1,579 100% Customer
Deferred Comp 733 733 100% Customer
Medical/Dental 7,976 7,976 100% Customer
PERA 2,335 2,335 100% Customer
FICA 2,290 2,290 100% Customer
Sick Pay 2,737 2,737 100% Customer
Holiday Pay 1,359 1,359 100% Customer
Vacation & PTO 2,358 2,358 100% Customer
UPMIC Distribution 928 928 100% Customer
Miscellaneous - Wellhead - - NA
Longevity Pay 33 33 100% Customer
Consulting Fees 642 642 100% Customer
Telephone 276 276 100% Customer
Advertising 143 143 100% Customer
Dues & Subscriptions 3,078 3,078 100% Customer
Travel Expense - - NA
Schools & Meetings 1,670 1,670 100% Customer
Maintenance of General Plant & Office 99 99 100% Customer
TOTAL ADMINISTRATIVE EXPENSE 40,031 40,031
GENERAL EXPENSE
CIP Rebates - Residential 1,090 1,090 100% Customer
CIP Rebates - Commercial - - NA
CIP - Administration - - NA
CIP - Marketing 1,117 1,117 100% Customer
CIP - Labor - - NA
Environmental Compliance 27 27 100% Customer
Misc General Expense - - NA
TOTAL GENERAL EXPENSE 2,234 2,234
TOTAL OPERATING EXPENSE 139,845 139,845
NON-OPERATING REVENUES (EXPENSES)
Interest income - - NA
Miscellaneous revenue - - NA
Interest expense and other - - NA
Gain (Loss) on sale of capital assets - - NA
TOTAL NON-OPERATING REV (EXP)- -
OTHER OPERATING REVENUE
Connection maintenance - - NA
Customer penalties - - NA
TOTAL OTHER OPERATING REVENUE - -
Developer and Connection Fees - - NA
MARGIN - - NA
TOTAL REVENUE REQUIREMENT 139,845 139,845
page 2 of 2
113
Exhibit 3-E
Commercial/
Total Residential Industrial
Demand Allocation Factors
Peak Day - 1000 gallons 4,107 2,121 1,986
Peak Day 100.0%51.6%48.4%
Commodity Allocation Factors
Commodity Sales - 1000 gallons 766,124 376,299 389,825
Commodity 100.0%49.1%50.9%
Customers
Number of Customers 5,705 5,087 618
C 100.0%89.2%10.8%
Customer Facilities Allocation Factor
Customer Facilities Weight 1 6
Weighted Number of Cust 8,795 5,087 3,708
CF 100.0%57.8%42.2%
Customer Service Allocation Factor
Customer Service Weight 1 3
Weighted Number of Cust 6,941 5,087 1,854
CS 100.0%73.3%26.7%
Revenue Allocator
Sum Other Rev Reqs 3,109,202$ 1,667,386$ 1,441,816$
R 100.0%53.6%46.4%
Elk River Municipal Utilities
2024 Test Year Allocation Factors
page 1 of 1
114
Exhibit 3-F
Commercial/Allocation
Total Residential Industrial Factor
Plant
Demand 874,259 451,526 422,732 Peak Day
Commodity 500,144 245,657 254,487 Commodity
Total Plant 1,374,402$ 697,183$ 677,219$
Distribution
Distribution Demand 884,954 457,050 427,904 Peak Day
Customer Facilities 710,000 410,662 299,338 CF
Total Distribution 1,594,954$ 867,712$ 727,242$
Customer
Customer Service 139,845 102,491 37,354 CS
Total Customer Service 139,845$ 102,491$ 37,354$
Revenue Component
Other Revenue (631,723) (338,777) (292,946) R
Margin 333,525 178,861 154,664 R
Total Revenue (298,198)$ (159,916)$ (138,282)$
Total Revenue Requirements 2,811,004$ 1,507,470$ 1,303,534$
Total Revenues 2,811,004$ 1,564,571$ 1,246,433$
Percent Revenue Requirements 100.0%53.6%46.4%
Percent Revenues 100.0%55.7%44.3%
Percent Change 0.0%-3.6%4.6%
Revenue Req/1000 gallons 3.669 4.006 3.344
Revenue/1000 gallons 3.669 4.158 3.197
Elk River Municipal Utilities
2024 Test Year Allocation of Revenue Requirements
page 1 of 1
115
- 1 -
Section 4
Proposed Rates
Changes to rates are generally based on the overall need for revenues and results of the
cost-of-service analyses. The projected operating results at existing rates as presented
in Section 2 of this report outline the overall revenue needs of the water utility. Section 3
summarizes the cost-of-service results for the water utility. These factors have been
considered in developing the proposed rates summarized in this section of the report.
Proposed Rates
Revenue Needs
In Section 2, it shows that ERMU’s projected annual change in water net position,
assuming continuation of the existing retail rates drops from 86% of the reserve goal to
52% of the reserve goal by 2029. ERMU’s projected cash reserves decline from $10.5
million to $6.8 million by the end of the Study Period. This is a decrease in reserves of
35%.
Recommended Rates
Exhibit 4-A shows the existing and recommended rates for water for each year from 2026-
2029.
Based on discussions with ERMU management, a goal was set to increase overall
reserve levels by $1.3 million dollars at the end of the Study Period as compared to the
projections at current rates. To meet this goal, annual rate increases of 4% each year
are recommended through 2029.
116
Section 4
- 2 -
Projected Operating Results – Proposed Rates
Based on the proposed rates outlined above, the resulting projected operating results are
summarized below in Table 4-1. A summary presentation of the operating results is
shown in Exhibit 4-B.
Table 4-1
Projected Operating Results-Water
Proposed Rates
Year 2025 2026 2027 2028 2029
Operating Revenues $3,145,246 $3,276,063 $3,399,836 $3,532,811 $3,668,850
Less Operating
Expenses (3,972,626) (4,127,970) (4,322,616) (4,454,230) (4,871,800)
Plus Non-Operating
Income 545,634 574,568 571,433 423,804 259,977
Plus Fees and
Transfers 255,000 302,479 434,003 431,344 428,623
Change in Net Position $(26,746) $25,139 $82,656 $(66,271) $(514,350)
Net Position as
Percent of Revenues -0.9% 0.8% 2.4% -1.9% -14.0%
Cash Reserves
A summary of the impact of the projected operating results at proposed rates on ERMU’s
cash reserves is shown at the end of Exhibit 4-B and in Tables 4-2 below.
As mentioned above, a goal of increasing overall reserve levels by $1.3 million through
rate adjustments was set in discussions with ERMU management. The 2029 end of year
unrestricted reserve level shown below is $8.0 million. This represents an increase of
$1.3 million over the $6.8 million projection under existing rates as shown in Section 2 of
this report.
117
Proposed Rates
- 3 -
Table 4-2
Projected Cash Reserves-Water
Proposed Rates
Year 2025 2026 2027 2028 2029
Beginning Balance $10,500,000 $7,070,639 $7,176,282 $8,072,522
Plus Change in Net Position 25,139 82,656 (66,271) (514,350)
Plus Depreciation 1,415,000 1,528,317 1,576,161 1,907,449
Interfund Borrowing (1,400,000) 1,400,000
Plus Debt Proceeds - - 8,000,000 -
Less Debt Principal (70,000) (70,000) (75,000) (75,000)
Less New Debt Principal - - - (279,400)
Less Capital Improvements (3,399,500) (1,435,330) (9,938,650) (1,062,650)
Ending Balance(1) $10,500,000 $7,070,639 $7,176,282 $8,072,522 $8,048,571
Reserve Goal $12,216,671 $12,750,828 $12,951,869 $13,416,604 $13,488,199
Reserves as % of ERMU Goal 86% 55% 55% 60% 60%
(1) 2025 EOY reserve balance estimated by ERMU staff based on 2025 YTD actual results
Competitive Analysis
ERMU is interested in how its rates compare to neighboring utilities. Table 4-3 below
shows monthly water bills for a typical customer in the residential class with 4,000; 10,000;
and 16,000 gallons of consumption. Bills are shown based on existing ERMU rates,
proposed ERMU rates in 2026 and 2027 and the proposed 2026 rates for Buffalo and
Shakopee.
118
Section 4
- 4 -
Table 4-3
Monthly Water Bill Comparisons
Residential Monthly Usage
Utility 4,000
Gallons
10,000
Gallons
16,000
Gallons
ERMU current $18.39 $32.23 $54.63
ERMU prop 2026 $19.12 $33.51 $56.83
ERMU prop 2027 $19.87 $34.81 $59.05
Buffalo 2026 $44.25 $92.45 $158.45
Shakopee 2026 $20.54 $43.12 $73.37
119
Exhibit 4-A
2026 2027 2028 2029
Current Proposed Proposed Proposed Proposed
Class Rate Rate Rate Rate Rate
Residential
Customer (per month)10.23$ 10.64$ 11.07$ 11.51$ 11.97$
Usage
Tier 1 ($/1000 gallons) 0-9000 gallons 2.04$ 2.12$ 2.20$ 2.29$ 2.38$
Tier 2 ($/1000 gallons) 9000-15,000 gallons 3.64$ 3.79$ 3.94$ 4.10$ 4.26$
Tier 3 ($/1000 gallons) over 15,000 gallons 4.20$ 4.37$ 4.54$ 4.72$ 4.91$
Commercial
Customer (per month)
3/4 inch 12.27$ 12.76$ 13.27$ 13.80$ 14.35$
1 inch 13.65$ 14.20$ 14.77$ 15.36$ 15.97$
1 1/4 inch 15.02$ 15.62$ 16.24$ 16.89$ 17.57$
1 1/2 inch 16.38$ 17.04$ 17.72$ 18.43$ 19.17$
2 inch 21.83$ 22.70$ 23.61$ 24.55$ 25.53$
3 inch 47.75$ 49.66$ 51.65$ 53.72$ 55.87$
4 inch 65.48$ 68.10$ 70.82$ 73.65$ 76.60$
6 inch 95.49$ 99.31$ 103.28$ 107.41$ 111.71$
8 inch 129.60$ 134.78$ 140.17$ 145.78$ 151.61$
Irrigation 21.83$ 22.70$ 23.61$ 24.55$ 25.53$
Usage
Tier 1 ($/1000 gallons)2.04$ 2.12$ 2.20$ 2.29$ 2.38$
Tier 2 ($/1000 gallons)3.64$ 3.79$ 3.94$ 4.10$ 4.26$
Tier 3 ($/1000 gallons)4.20$ 4.37$ 4.54$ 4.72$ 4.91$
Tiers adjust based on winter usage
Elk River Municipal Utilities
Existing and Proposed Water Rates
120
Exhibit 4-B
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
OPERATING REVENUES
Charges for services 2,613,812$ 3,049,140$ 2,887,276$ 3,305,148$ 2,803,602$ 3,053,746$ 3,176,063$ 3,299,836$ 3,432,811$ 3,568,850$
Connection maintenance 56,931 71,520 75,365 55,733 72,409 63,500 65,000 65,000 65,000 65,000
Customer penalties 3,801 - 26,194 23,118 31,102 28,000 35,000 35,000 35,000 35,000
Total Operating Revenues 2,674,544$ 3,120,660$ 2,988,835$ 3,383,999$ 2,907,113$ 3,145,246$ 3,276,063$ 3,399,836$ 3,532,811$ 3,668,850$
OPERATING EXPENSES
Production 502,748$ 674,815$ 681,079$ 667,881$ 780,844$ 807,150$ 793,000$ 816,790$ 841,294$ 866,533$
Distribution 251,259 412,534 307,192 321,566 462,083 520,410 498,125 513,069 528,461 544,315
Services to City 463 1,259 540 - - 2,000 2,000 2,000 2,000 2,000
Depreciation 1,133,179 1,139,802 1,117,357 1,174,752 1,223,033 1,325,866 1,415,000 1,528,317 1,576,161 1,907,449
Customer accounts 66,509 72,213 81,285 88,640 96,615 105,250 104,250 107,378 110,599 113,917
General and administrative 719,527 844,475 980,528 943,138 1,006,969 1,211,950 1,315,595 1,355,063 1,395,715 1,437,587
Total Operating Expenses 2,673,685$ 3,145,098$ 3,167,981$ 3,195,977$ 3,569,544$ 3,972,626$ 4,127,970$ 4,322,616$ 4,454,230$ 4,871,800$
OPERATING INCOME 859$ (24,438)$ (179,146)$ 188,022$ (662,431)$ (827,380)$ (851,907)$ (922,780)$ (921,419)$ (1,202,950)$
NON-OPERATING REVENUE (EXPENSE)
Interest income 33,454$ 24,677$ (30,592)$ 57,360$ 104,286$ 151,000$ 126,000$ 127,883$ 143,854$ 143,427$
Miscellaneous revenue 262,311 292,330 424,994 418,451 429,016 418,100 473,350 473,350 473,350 473,350
Interest expense and other (23,516) (65,296) (40,948) (36,444) (33,949) (31,466) (28,782) (33,800) (31,000) (28,000)
New debt interest - - - (166,400) (332,800)
Gain (Loss) on sale of capital assets 3,507 (662) (9,150) 2,940 (5,090) 8,000 4,000 4,000 4,000 4,000
Total Non-Operating Revenues (Expenses)275,756$ 251,049$ 344,304$ 442,307$ 494,263$ 545,634$ 574,568$ 571,433$ 423,804$ 259,977$
Income before Contributions and Transfers 276,615$ 226,611$ 165,158$ 630,329$ (168,168)$ (281,746)$ (277,340)$ (351,347)$ (497,615)$ (942,973)$
Connection Fees 595,482$ 548,948$ 1,547,930$ 253,341$ 477,998$ 255,000$ 366,000$ 500,000$ 500,000$ 500,000$
Contributions from Developers 477,194 552,920 940,306 - -
Contributions from Customers - - - - 21,910 - - - - -
Transfers from/(to) Other City Funds - 195,245 - 1,348,943 - - (63,521) (65,997) (68,656) (71,377)
Grants - 3,288 - - - - - - - -
CHANGE IN NET POSITION 1,349,291$ 1,527,012$ 2,653,394$ 2,232,613$ 331,740$ (26,746)$ 25,139$ 82,656$ (66,271)$ (514,350)$
As Percent of Revenues 50.4%48.9%88.8%66.0%11.4%-0.9%0.8%2.4%-1.9%-14.0%
UNRESTRICTED CASH RESERVES
Beginning of Year 10,500,000$ 7,070,639$ 7,176,282$ 8,072,522$
Plus Change in Net Position 25,139 82,656 (66,271) (514,350)
Plus Depreciation 1,415,000 1,528,317 1,576,161 1,907,449
Interfund Borrowing (1,400,000) 1,400,000
Plus Debt Proceeds - - 8,000,000 -
Less Debt Principal (70,000) (70,000) (75,000) (75,000)
Less New Debt Principal - - - (279,400)
Less Capital Improvements (3,399,500) (1,435,330) (9,938,650) (1,062,650)
End of Year(1)9,961,189$ 10,500,000$ 7,070,639$ 7,176,282$ 8,072,522$ 8,048,571$
Reserve goal 12,719,919$ 12,750,828$ 12,951,869$ 13,416,604$ 13,488,199$
Percent of goal 83%55%55%60%60%
(1) 2025 EOY reserve balance estimated by ERMU staff based on 2025 YTD actual results.
Projected
Elk River Municipal Utilities
Water Operating Results at Proposed Rates
Historical
page 1 of 1
121
Electric and Water Rates
Final Report Presentation
Elk River Utilities Commission meeting
David A. Berg, PE
Principal –Dave Berg Consulting
December 9, 2025
PRESENTED AT MEETING - FINAL RATE PRESENTATION
Electric Rates
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 2025
Capital Improvements
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 20254
Projected Operating Results at Existing Rates
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 20255
Projected Cash Reserves at Existing Rates
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 20256
Cost of Service
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 2025
•Annual rate increases average 2% each year 2026-2029
•New PCA calculation
•Solar grid access charge revision
7
Electric Rate Recommendations
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 20258
Electric PCA
•Current formula based on MMPA wholesale EAC
•Revised formula based on total monthly wholesale power costs
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 20259
Proposed Electric Rates
Current Proposed Proposed Proposed Proposed
Class Rate 2026 2027 2028 2029
Residential ER012/ERA13
Customer (per month)15.00$ 15.50$ 16.00$ 16.50$ 17.00$
Summer Energy (per kWh)0.13734$ 0.14106$ 0.14456$ 0.14467$ 0.14505$
Non-summer Energy (per kWh)0.12548$ 0.12911$ 0.13251$ 0.13262$ 0.13277$
Off Peak Storage ERSW1
Energy (per kWH)0.05010$ 0.05343$ 0.05500$ 0.05617$ 0.05647$
Off Peak Dual Fuel Space Heating ERDF1
Energy (per kWh)0.06510$ 0.06858$ 0.07055$ 0.07164$ 0.07170$
Ground Heat Pump EGSH
Energy (per kWh)0.09830$ 0.10212$ 0.10576$ 0.10587$ 0.10605$
Dual Fuel/ETS ERDSW
Energy (per kWh)0.05810$ 0.06151$ 0.06297$ 0.06442$ 0.06448$
Cycled AC/RAC24
Energy (per kWh)0.04630$ 0.04960$ 0.05155$ 0.05190$ 0.05225$
Electric Vehicle Charging EEVOF/EEVON
Summer On -Peak (per kWh)0.13733$ 0.14106$ 0.14456$ 0.14472$ 0.14505$
Non-summer On-Peak (per kWh)0.12548$ 0.12911$ 0.13251$ 0.13256$ 0.13277$
Off -Peak (per kWh)0.06510$ 0.06858$ 0.07055$ 0.07164$ 0.07170$
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 202510
Proposed Electric Rates
Current Proposed Proposed Proposed Proposed
Class Rate 2026 2027 2028 2029
Commercial Non-Demand ECN16/ECNAE
Customer (per month)32.00$ 33.00$ 34.00$ 36.00$ 38.00$
Summer Energy (per kWh)0.13304$ 0.13673$ 0.13826$ 0.13979$ 0.14002$
Non-summer Energy (per kWh)0.11141$ 0.11494$ 0.11636$ 0.11777$ 0.11801$
Commercial Non-Demand Heat Pump ECGSH
Customer (per month)30.50$ 31.50$ 32.50$ 34.50$ 36.50$
Energy (per kWh)0.09830$ 0.10212$ 0.10576$ 0.10587$ 0.10603$
Commercial Demand ECD15/EDG38
Customer (per month)77.00$ 80.00$ 83.00$ 86.00$ 89.00$
Energy (per kWh)0.07035$ 0.07353$ 0.07476$ 0.07599$ 0.07650$
Summer Demand (per kW)16.75$ 17.00$ 17.25$ 17.50$ 17.75$
Non-summer Demand (per kW)11.75$ 12.00$ 12.25$ 12.50$ 12.75$
Commercial Demand On/Off Peak ECOP1/ECOP2
Customer (per month)77.00$ 80.00$ 83.00$ 86.00$ 89.00$
Energy (per kWh)0.07350$ 0.07643$ 0.07744$ 0.07845$ 0.07900$
Summer Demand (per kW)16.75$ 17.00$ 17.25$ 17.50$ 17.70$
Non-summer Demand (per kW)11.75$ 12.00$ 12.25$ 12.50$ 12.70$
Off-peak Demand (per kW)6.30$ 6.50$ 6.70$ 6.90$ 7.00$
Large Industrial (Target/United Health)
Customer (per month)115.00$ 125.00$ 135.00$ 145.00$ 155.00$
Energy (per kWh)0.06962$ 0.07293$ 0.07429$ 0.07565$ 0.07632$
Summer Demand (per kW)16.25$ 16.50$ 16.75$ 17.00$ 17.20$
Non-summer Demand (per kW)11.25$ 11.50$ 11.75$ 12.00$ 12.20$
PCA Formula Base Amount/kWh n/a 0.07896$ 0.07896$ 0.07896$ 0.07896$
Estimated PCA/kWh 0.01640$ 0.01663$ 0.01771$ 0.01881$ 0.01993$
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 202511
Projected Operating Results at Proposed Rates
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 202512
Projected Cash Reserves at Proposed Rates
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 202513
Electric Rate Competitiveness
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 2025
•MN Statutes allow charging customers an additional monthly fee based on size of
solar array.
•Charge represents allocated distribution for residential customers.
•Existing rate does not charge the fee for demand up to average customer
demand (4 kW).
•Cost based charge = $5.20/kW/month
•Decrease from current charge of $5.55/kW/month
•Example calculation:
–Customer with 10 kW solar array
–Monthly charge = (10 kW array size minus 4 kW avg customer) times $5.20/kW = $31.20 per
month
14
Solar Grid Access Charge
PRESENTED AT MEETING - FINAL RATE PRESENTATION
Water Rates
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 2025
Capital Improvements
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 202517
Projected Operating Results at Existing Rates
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 202518
Projected Cash Reserves at Existing Rates
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 202519
Cost of Service
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 2025
•Overall increases of 4% per year
20
Water Rate Recommendations
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 202521
Proposed Water Rates
2026 2027 2028 2029
Current Proposed Proposed Proposed Proposed
Class Rate Rate Rate Rate Rate
Residential
Customer (per month)10.23$ 10.64$ 11.07$ 11.51$ 11.97$
Usage
Tier 1 ($/1000 gallons) 0-9000 gallons 2.04$ 2.12$ 2.20$ 2.29$ 2.38$
Tier 2 ($/1000 gallons) 9000-15,000 gallons 3.64$ 3.79$ 3.94$ 4.10$ 4.26$
Tier 3 ($/1000 gallons) over 15,000 gallons 4.20$ 4.37$ 4.54$ 4.72$ 4.91$
Commercial
Customer (per month)
3/4 inch 12.27$ 12.76$ 13.27$ 13.80$ 14.35$
1 inch 13.65$ 14.20$ 14.77$ 15.36$ 15.97$
1 1/4 inch 15.02$ 15.62$ 16.24$ 16.89$ 17.57$
1 1/2 inch 16.38$ 17.04$ 17.72$ 18.43$ 19.17$
2 inch 21.83$ 22.70$ 23.61$ 24.55$ 25.53$
3 inch 47.75$ 49.66$ 51.65$ 53.72$ 55.87$
4 inch 65.48$ 68.10$ 70.82$ 73.65$ 76.60$
6 inch 95.49$ 99.31$ 103.28$ 107.41$ 111.71$
8 inch 129.60$ 134.78$ 140.17$ 145.78$ 151.61$
Irrigation 21.83$ 22.70$ 23.61$ 24.55$ 25.53$
Usage
Tier 1 ($/1000 gallons)2.04$ 2.12$ 2.20$ 2.29$ 2.38$
Tier 2 ($/1000 gallons)3.64$ 3.79$ 3.94$ 4.10$ 4.26$
Tier 3 ($/1000 gallons)4.20$ 4.37$ 4.54$ 4.72$ 4.91$
Tiers adjust based on winter usage
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 202522
Projected Operating Results at Proposed Rates
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 202523
Water Financial Results
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 202524
Water Rate Competitiveness
PRESENTED AT MEETING - FINAL RATE PRESENTATION
davebergconsulting.com
Elk River Utilities Commission Mtg
December 9, 2025
Questions/Discussion
25
PRESENTED AT MEETING - FINAL RATE PRESENTATION
______________________________________________________________________________
Page 1 of 2
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Melissa Karpinski – Finance Manager
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
5.2
SUBJECT:
Financial Report – October 2025
ACTION REQUESTED:
Receive the October 2025 Financial Report
DISCUSSION:
Please note that these are the preliminary unaudited financial statements.
Electric
October year to date (YTD) electric kWh sales are up 6% from the prior year. For further
breakdown:
• Residential usage is up 8%
• Small Commercial usage is up 3%
• Large Commercial usage is up 5%
For October 2025, the Electric Department overall is ahead of prior YTD and favorable to
budget YTD. Additional variance analysis can be found on the Summary Electric Statement of
Revenues, Expenses and Changes in Net Position attachment.
Water
October YTD gallons of water sold are up 9% from the prior year. For further breakdown:
• Residential use is up 9%
• Commercial use is up 8%
For October 2025, the Water Department overall is ahead of prior YTD and favorable to budget
YTD. Additional variance analysis can be found on the Summary Water Statement of Revenues,
Expenses and Changes in Net Position attachment.
ATTACHMENTS:
• Balance Sheet
• Electric Balance Sheet
• Water Balance Sheet
• Summary Electric Statement of Revenues, Expenses and Changes in Net Position
• Summary Water Statement of Revenues, Expenses and Changes in Net Position
• Graphs Prior Year and YTD 2025
122
______________________________________________________________________________
Page 2 of 2
• Detailed Electric Statement of Revenues, Expenses and Changes in Net Position
• Detailed Water Statement of Revenues, Expenses and Changes in Net Position
• Financial Presentation
123
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
COMBINED BALANCE SHEET
FOR PERIOD ENDING OCTOBER 2025
ELECTRIC WATER
ASSETS
CURRENT ASSETS
CASH 6,619,1584,089,175
ACCOUNTS RECEIVABLE 5,268,1773,808,610
INVENTORIES 49,4482,164,260
PREPAID ITEMS 61,170260,216
CONSTRUCTION IN PROGRESS 354,9662,481,735
TOTAL CURRENT ASSETS 12,352,91912,803,996
RESTRICTED ASSETS
BOND RESERVE FUND 01,779,016
EMERGENCY RESERVE FUND 4,300,2957,687,418
UNRESTRICTED RESERVE FUND 00
TOTAL RESTRICTED ASSETS 4,300,2959,466,434
FIXED ASSETS
PRODUCTION 17,217,448795,920
LFG PROJECT 00
TRANSMISSION 02,305,024
DISTRIBUTION 30,869,56155,919,591
GENERAL 1,632,20325,985,736
FIXED ASSETS (COST)49,719,21285,006,271
LESS ACCUMULATED DEPRECIATION (25,064,437)(39,030,918)
TOTAL FIXED ASSETS, NET 24,654,77545,975,352
INTANGIBLE ASSETS
POWER AGENCY MEMBERSHIP BUY-IN 021,546,212
LOSS OF REVENUE INTANGIBLE 07,169,412
LESS ACCUMULATED AMORTIZATION 0(4,731,474)
TOTAL INTANGIBLE ASSETS, NET 023,984,150
OTHER ASSETS AND DEFERRED OUTFLOWS 61,420322,181
TOTAL ASSETS 41,369,40992,552,113
LIABILITIES AND FUND EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE 331,6835,271,246
SALARIES AND BENEFITS PAYABLE 187,9011,232,389
DUE TO CITY 3,539991,563
DUE TO OTHER FUNDS 00
NOTES PAYABLE-CURRENT PORTION 00
BONDS PAYABLE-CURRENT PORTION 00
UNEARNED REVENUE 523,5653,220
TOTAL CURRENT LIABILITIES 1,046,6887,498,418
LONG TERM LIABILITIES
OPEB LIABILITY 00
LFG PROJECT 00
DUE TO COUNTY 00
DUE TO CITY 00
BONDS PAYABLE, LESS CURRENT PORTION 1,484,75227,160,514
PENSION LIABILITIES 328,9841,708,036
TOTAL LONG TERM LIABILITIES 1,813,73628,868,550
TOTAL LIABILITIES 2,860,42436,366,969
DEFERRED INFLOWS OF RESOURCES 4,689,0861,206,975
FUND EQUITY
CAPITAL ACCOUNT CONST COST 01,779,016
CONTRIBUTED CAPITAL 00
RETAINED EARNINGS 33,451,75849,623,773
NET INCOME (LOSS) (THROUGH PREVIOUS MONTH)368,1413,575,381
TOTAL FUND EQUITY 33,819,89954,978,169
TOTAL LIABILITIES & FUND EQUITY 41,369,40992,552,113
124
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
ELECTRIC BALANCE SHEET
Current Month
Change from
Prior MonthOctober 31, 2025 September 30, 2025
ASSETS
CURRENT ASSETS
CASH 4,089,175 4,808,882 (719,707)
ACCOUNTS RECEIVABLE 3,808,610 2,793,498 1,015,112
INVENTORIES 2,164,260 2,294,289 (130,029)
PREPAID ITEMS 260,216 244,419 15,797
CONSTRUCTION IN PROGRESS 2,481,735 2,052,982 428,753
TOTAL CURRENT ASSETS 12,803,996 12,194,070 609,926
RESTRICTED ASSETS
BOND RESERVE FUND 1,779,016 1,779,016 0
EMERGENCY RESERVE FUND 7,687,418 7,656,601 30,817
TOTAL RESTRICTED ASSETS 9,466,434 9,435,617 30,817
FIXED ASSETS
PRODUCTION 795,920 795,920 0
TRANSMISSION 2,305,024 2,305,024 0
DISTRIBUTION 55,919,591 55,672,322 247,270
GENERAL 25,985,736 25,630,632 355,104
FIXED ASSETS (COST)85,006,271 84,403,897 602,374
LESS ACCUMULATED DEPRECIATION (39,030,918)(38,794,731)(236,187)
TOTAL FIXED ASSETS, NET 45,975,352 45,609,166 366,187
INTANGIBLE ASSETS
POWER AGENCY MEMBERSHIP BUY-IN 21,546,212 21,546,212 0
LOSS OF REVENUE INTANGIBLE 7,169,412 7,169,412 0
LESS ACCUMULATED AMORTIZATION (4,731,474)(4,675,796)(55,678)
TOTAL INTANGIBLE ASSETS, NET 23,984,150 24,039,828 (55,678)
OTHER ASSETS AND DEFERRED OUTFLOWS 322,181 322,181 0
TOTAL ASSETS 92,552,113 91,600,862 951,251
LIABILITIES AND FUND EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE 5,271,246 5,596,446 (325,200)
SALARIES AND BENEFITS PAYABLE 1,232,389 1,161,041 71,348
DUE TO CITY 991,563 910,978 80,585
UNEARNED REVENUE 3,220 4,830 (1,610)
TOTAL CURRENT LIABILITIES 7,498,418 7,673,296 (174,878)
LONG TERM LIABILITIES
BONDS PAYABLE, LESS CURRENT PORTION 27,160,514 27,165,503 (4,989)
PENSION LIABILITIES 1,708,036 1,708,036 0
TOTAL LONG TERM LIABILITIES 28,868,550 28,873,539 (4,989)
TOTAL LIABILITIES 36,366,969 36,546,835 (179,866)
DEFERRED INFLOWS OF RESOURCES 1,206,975 1,206,975 0
FUND EQUITY
CAPITAL ACCOUNT CONST COST 1,779,016 1,779,016 0
RETAINED EARNINGS 49,623,773 49,623,773 0
NET INCOME (LOSS) (THROUGH PREVIOUS MONTH)3,575,381 2,444,264 1,131,117
TOTAL FUND EQUITY 54,978,169 53,847,052 1,131,117
TOTAL LIABILITIES & FUND EQUITY 92,552,113 91,600,862 951,251
125
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
WATER BALANCE SHEET
Current Month
Change from
Prior MonthOctober 31, 2025 September 30, 2025
ASSETS
CURRENT ASSETS
CASH 6,619,158 6,411,869 207,289
ACCOUNTS RECEIVABLE 5,268,177 5,293,924 (25,746)
INVENTORIES 49,448 58,808 (9,360)
PREPAID ITEMS 61,170 66,257 (5,087)
CONSTRUCTION IN PROGRESS 354,966 309,307 45,658
TOTAL CURRENT ASSETS 12,352,919 12,140,164 212,754
RESTRICTED ASSETS
EMERGENCY RESERVE FUND 4,300,295 4,292,591 7,704
TOTAL RESTRICTED ASSETS 4,300,295 4,292,591 7,704
FIXED ASSETS
PRODUCTION 17,217,448 17,217,448 0
DISTRIBUTION 30,869,561 30,869,561 0
GENERAL 1,632,203 1,632,203 0
FIXED ASSETS (COST)49,719,212 49,719,212 0
LESS ACCUMULATED DEPRECIATION (25,064,437)(24,949,263)(115,174)
TOTAL FIXED ASSETS, NET 24,654,775 24,769,949 (115,174)
INTANGIBLE ASSETS
OTHER ASSETS AND DEFERRED OUTFLOWS 61,420 61,420 0
TOTAL ASSETS 41,369,409 41,264,124 105,284
LIABILITIES AND FUND EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE 331,683 403,098 (71,415)
SALARIES AND BENEFITS PAYABLE 187,901 172,776 15,125
DUE TO CITY 3,539 5,489 (1,950)
UNEARNED REVENUE 523,565 490,443 33,122
TOTAL CURRENT LIABILITIES 1,046,688 1,071,806 (25,118)
LONG TERM LIABILITIES
BONDS PAYABLE, LESS CURRENT PORTION 1,484,752 1,485,306 (554)
PENSION LIABILITIES 328,984 328,984 0
TOTAL LONG TERM LIABILITIES 1,813,736 1,814,290 (554)
TOTAL LIABILITIES 2,860,424 2,886,096 (25,672)
DEFERRED INFLOWS OF RESOURCES 4,689,086 4,689,086 0
FUND EQUITY
RETAINED EARNINGS 33,451,758 33,451,758 0
NET INCOME (LOSS) (THROUGH PREVIOUS MONTH)368,141 237,184 130,957
TOTAL FUND EQUITY 33,819,899 33,688,942 130,957
TOTAL LIABILITIES & FUND EQUITY 41,369,409 41,264,124 105,284
126
202520252025 YTD 202520242024 YTDVariance YTD Budget ANNUALYTD VARIANCEItemElectricBUDGET VarianceBUDGET4,036,631 35,238,405 34,809,128 429,276 1 41,085,728 3,470,154 32,390,694 2,847,711 9434,557 3,697,886 3,466,004 231,882 7 4,073,730 340,820 3,281,514 416,372 1320,745 191,010 194,477 (3,468) (2) 231,863 15,726 173,760 17,249 1027,450 245,731 239,304 6,427 3 281,987 20,954 216,269 29,462 1423,892 236,882 217,500 19,382 9 261,000 21,720 217,217 19,665 9400 4,000 4,0000 0 4,800400 4,0000 04,543,674 39,613,913 38,930,414 683,500 2 45,939,108 3,869,774 36,283,454 3,330,459 933,653 382,885 291,667 91,219 31 350,000 (9,476) 267,509 115,376 43 (1)28,938 253,631 237,500 16,131 7 285,000 32,928 241,372 12,259 512,550 306,671 125,000 181,671 145 150,000 15,650 279,057 27,614 10 (2)72,503 1,332,603 813,750 518,853 64 972,500 57,698 1,372,011 (39,409) (3) (3)147,644 2,275,790 1,467,917 807,873 55 1,757,500 96,800 2,159,949 115,840 54,691,319 41,889,703 40,398,330 1,491,373 4 47,696,608 3,966,574 38,443,404 3,446,299 92,386,175 26,371,550 26,206,773 164,777 1 30,599,628 2,192,019 24,768,175 1,603,375 623,092 240,250 273,067 (32,816) (12) 341,000 22,247 217,302 22,949 113,123 30,608 63,333 (32,726) (52) 76,000 2,574 43,432 (12,824) (30) (4)35,224 415,254 434,583 (19,329) (4) 521,500 26,094 367,836 47,419 13145,846 1,544,425 1,763,083 (218,659) (12) 2,144,500 167,172 1,556,264 (11,839) (1)291,865 2,885,722 2,782,960 102,762 4 3,339,552 277,614 2,754,154 131,568 559,983 615,103 615,1030 0 735,069 63,258 647,233 (32,129) (5)4,356 81,482 212,833 (131,351) (62) 482,400 31,470 111,873 (30,390) (27) (5)34,014 347,113 391,667 (44,554) (11) 470,000 40,051 364,519 (17,406) (5)326,879 3,660,163 3,966,694 (306,531) (8) 4,783,849 319,383 3,360,599 299,564 967,276 506,230 533,167 (26,937) (5) 639,800 36,304 495,286 10,943 23,377,832 36,697,901 37,243,263 (545,362) (1) 44,133,298 3,178,187 34,686,672 2,011,229 6162,213 1,416,975 1,392,365 24,609 2 1,643,429 139,507 1,302,640 114,335 920,156 199,446 220,833 (21,387) (10) 265,000 20,203 189,690 9,756 5182,369 1,616,421 1,613,198 3,223 0 1,908,429 159,710 1,492,330 124,091 81,131,117 3,575,381 1,541,869 2,033,512 132 1,654,881 628,677 2,264,402 1,310,979 58Item Variance of +/- $25,000 and +/- 15%(1)YTD budget variance is due to a conservative budget amount. PYTD variance is mainly due to more funds being invested with UBS and change in Fair Market Value.(2)YTD budget variance is due to a large agreement in September and June. (3)(4)(5) YTD budget variance is due to loss on disposition of property (disposal of assets) due to timing. PTYD variance is due to more mutual aid in 2024.YTD budget variance is mainly due to Contributions from Customers having large SOWs for additional service and/or upgrade and transmission investments. Utilities & Labor Donated Total Operating Transfer Net Income Profit(Loss)YTD budget variance is due to labor expense for transmission mtce (engineer position not filled yet). Depreciation & Amortization Interest Expense Operating Transfer/Other Funds Other Operating Expense Customer Accounts Expense Administrative Expense General Expense Total Expenses(before Operating Transfers)Operating TransferExpenses Operating & Mtce Expense Transmission Expense Distribution Expense Maintenance Expense2024 v. 2025 Actual Var%RevenueOperating Revenue Elk River OtsegoOCTOBER YTDOCTOBERELK RIVER MUNICIPAL UTILITIESELK RIVER, MINNESOTASTATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONFOR PERIOD ENDING OCTOBER 20252025 YTD Bud Var% Interest/Dividend Income Rural Big Lake Dayton Public St & Hwy Lighting Other Electric Sales Total Operating RevenueOther Operating Revenue Purchased Power Customer Penalties Connection Fees Misc Revenue Total Other Revenue Total Revenue127
202520252025 YTD 202520242024 YTDVariance YTD Budget ANNUALVARIANCEItemWaterBUDGET VarianceBUDGET367,491 2,660,536 2,800,154 (139,618) (5) 3,143,314 339,713 2,416,329 244,207 10367,491 2,660,536 2,800,154 (139,618) (5) 3,143,314 339,713 2,416,329 244,207 109,755 107,349 125,833 (18,484) (15) 151,000(588) 83,991 23,358 28(1)4,055 29,920 23,333 6,587 28 28,000 5,545 23,774 6,145 2664,119 700,403 265,417 434,986 164 318,500 44,140 449,722 250,680 56(2)3,191 119,397 21,000 98,397 469 426,100975 11,369 108,028 950(3)81,119 957,068 435,583 521,485 120 923,600 50,072 568,856 388,212 68448,611 3,617,604 3,235,737 381,867 12 4,066,914 389,785 2,985,185 632,419 2113,317 107,488 112,500 (5,012) (4) 135,000 8,981 104,496 2,992 352,685 533,184 560,125 (26,941) (5) 672,150 44,807 499,974 33,211 732,437 398,482 388,550 9,932 3 459,660 38,697 308,522 89,960 29(4)115,174 1,153,729 1,104,888 48,841 4 1,325,866 99,953 1,007,152 146,577 152,496 26,474 26,4740 0 31,466 2,712 28,524 (2,050) (7)52 (15,364) 16,625 (31,989) (192) 60,750327 1,290 (16,654) (1,291)(5)8,733 85,873 87,708 (1,835) (2) 105,250 9,183 80,895 4,978 692,084 956,451 991,596 (35,145) (4) 1,199,700 78,420 815,020 141,432 17(6)79 2,500 10,208 (7,708) (76) 12,25098 2,553(53) (2)317,057 3,248,817 3,298,675 (49,858) (2) 4,002,092 283,178 2,848,425 400,392 14597646 1,667 (1,021) (61) 2,00000646 0597646 1,667 (1,021) (61) 2,00000646 0130,957 368,141 (64,605) 432,746 670 62,822 106,607 136,760 231,381 169ItemVariance of +/- $15,000 and +/- 15%(1) PYTD variance is mainly due to more funds being invested with UBS and change in Fair Market Value.(2) YTD budget variance is due to connection fees being budgeted conservatively and PYTD variance is due to more WAC fees in 2025.(3) YTD budget variance and PYTD variance is due to AFFF settlement and Contributions from Developers.(4)PYTD variance is mainly due to one large watermain repair in 2025 and water locates.(5) YTD budget variance and PYTD variance is due AMI (timing).(6)PYTD variance is mainly due to consulting (Cty Rd 44, Power Plant, Scada, Service Line Inventory), Salaries (Comp Study change and COLA), Medical Insurance, Sick Pay (change in accrual), and Legal Fees (AFFF).ELK RIVER MUNICIPAL UTILITIESELK RIVER, MINNESOTASTATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONFOR PERIOD ENDING OCTOBER 20252025 YTD Bud Var%2024 v. 2025 Actual Var%OCTOBER YTD OCTOBER YTDOther Operating Revenue Interest/Dividend Income Customer Penalties Connection FeesRevenueOperating Revenue Water Sales Total Operating RevenueExpenses Production Expense Pumping Expense Distribution Expense Misc Revenue Total Other Revenue Total Revenue Customer Accounts Expense Administrative Expense General Expense Depreciation & Amortization Interest Expense Other Operating Expense Net Income Profit(Loss) Total Expenses(before Operating Transfers)Operating Transfer Utilities & Labor Donated Total Operating Transfer128
35.0
40.0
45.0
50.0
55.0
60.0
65.0
70.0
75.0
80.0
Demand in MWMonth
Elk River Municipal Utilities Monthly Electrical Demand
2024 2025
15,000
20,000
25,000
30,000
35,000
40,000
Energy Purchases in MWHMonth
Elk River Municipal Utilities Monthly Energy Purchases
2024 2025
129
15,000
20,000
25,000
30,000
35,000
40,000
Electric Load in MWHMonth
Elk River Municipal Utilities Monthly Total Electric Load
2024 2025
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
$5,500,000
Sales in DollarsMonth
Elk River Municipal Utilities Monthly Electric Sales
2024 2025
130
-
5,000
10,000
15,000
20,000
25,000
Loads in MWHMonth
Elk River Municipal Utilities Monthly Residential, Commercial & Industrial
Loads
2024 Residential 2025 Residential 2024 Commercial
2025 Commercial 2024 Industrial 2025 Industrial
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
Sales in DollarsMonth
Elk River Municipal Utilities Monthly Residential, Commercial & Industrial
Sales
2024 Residential 2025 Residential 2024 Commercial
2025 Commercial 2024 Industrial 2025 Industrial
131
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
Pumpage in Million Gal.Month
Elk River Municipal Utilities Monthly Water Pumpage
2024 2025
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Peak Day in Million Gal.Month
Elk River Municipal Utilities Peak Day Pumpage
2024 2025
132
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
0
20
40
60
80
100
120
140
160
180
Sales In DollarsSales in Million Gal.Month
Elk River Municipal Utilities Monthly Water Sales
2024 MG 2025 MG 2024 $2025 $
133
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING OCTOBER 2025
2025
OCTOBER
2024
OCTOBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETElectric
Revenue
Operating Revenue
Elk River
ELECT SALES - ELK RIVER RESID 1,105,444 11,239,8141,324,544 11,881,41112,029,684 1 714,008,158 789,869
ELECT SALES - ELK RIVER NON-D 293,030 2,869,710326,533 3,023,0202,959,237 (2)33,561,584 89,527
ELECT SALES - ELK RIVER DEMA 1,885,356 15,313,6431,927,445 15,814,74015,957,193 1 418,661,634 643,550
PCA SALES REVENUE - ELK RIVE 49,258 934,521142,563 1,284,7761,379,047 7 481,522,421 444,525
PCA SALES REVENUE - ELK RIVE 13,445 255,74435,741 354,556355,378 0 39423,421 99,633
PCA SALES REVENUE - ELK RIVE 123,619 1,777,259279,801 2,450,6222,557,863 4 442,908,507 780,603
4,036,630 35,238,404 34,809,128 3,470,154 32,390,6941 9Total For Elk River:41,085,728 2,847,710
Otsego
ELECT SALES - OTSEGO RESIDEN 136,253 1,286,241161,795 1,319,7511,382,633 5 71,546,756 96,391
ELECT SALES - OTSEGO NON-DEM 49,105 428,68056,390 425,879467,784 10 9499,327 39,103
ELECT SALES - OTSEGO DEMAND 138,765 1,276,446167,557 1,345,1761,406,637 5 101,587,577 130,190
PCA SALES REVENUE - OTSEGO R 6,084 104,89017,331 144,318157,741 9 50168,103 52,850
PCA SALES REVENUE - OTSEGO N 2,334 38,3226,414 40,66859,130 45 5446,753 20,807
PCA SALES REVENUE - OTSEGO D 8,275 146,93225,067 190,209223,958 18 52225,212 77,026
434,556 3,697,885 3,466,003 340,819 3,281,5137 13Total For Otsego:4,073,730 416,371
Rural Big Lake
ELECT SALES - BIG LAKE RESIDE 14,535 156,58018,375 169,169167,792 (1)7199,359 11,212
ELECT SALES - BIG LAKE NON-DE 516 3,8673384,3713,526 (19)(9)4,810 (340)
PCA SALES REVENUE - BIG LAKE 651 13,0302,001 17,93519,316 8 4821,666 6,286
PCA SALES REVENUE - BIG LAKE 21 282293,000373 (88)336,026 91
20,744 191,009 194,477 15,726 173,760(2)10Total For Rural Big Lake:231,863 17,249
Dayton
ELECT SALES - DAYTON RESIDEN 16,747 168,09420,832 181,188186,073 3 11212,063 17,978
ELECT SALES - DAYTON NON-DE 3,326 31,9923,983 34,36934,763 1 940,465 2,771
PCA SALES REVENUE - DAYTON R 741 13,6492,225 18,74521,006 12 5423,047 7,357
PCA SALES REVENUE - DAYTON 138 2,5324085,0003,887 (22)536,410 1,354
27,449 245,731 239,304 20,954 216,2693 14Total For Dayton:281,986 29,462
Public St & Hwy Lighting
ELECT SALES - SEC LTS 21,720 217,21723,892 217,500236,882 9 9261,000 19,665
23,892 236,882 217,500 21,720 217,2179 9Total For Public St & Hwy Lighting:261,000 19,665
Other Electric Sales
SUB-STATION CREDIT 400 4,0004004,0004,000 0 04,800 0
134
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING OCTOBER 2025
2025
OCTOBER
2024
OCTOBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETElectric
400 4,000 4,000 400 4,0000 0Total For Other Electric Sales:4,800 0
Total Operating Revenue
3,869,774 36,283,4544,543,674 38,930,41339,613,913 2 945,939,108 3,330,458
Other Operating Revenue
Interest/Dividend Income
INTEREST & DIVIDEND INCOME (9,475)267,50833,652 291,666382,885 31 43350,000 115,376
33,652 382,885 291,666 (9,475)267,50831 43Total For Interest/Dividend Income:350,000 115,376
Customer Penalties
CUSTOMER DELINQUENT PENALT 32,927 241,37128,938 237,500253,630 7 5285,000 12,258
28,938 253,630 237,500 32,927 241,3717 5Total For Customer Penalties:285,000 12,258
Connection Fees
DISCONNECT & RECONNECT CHA 15,650 279,05712,550 125,000306,671 145 10150,000 27,614
12,550 306,671 125,000 15,650 279,057145 10Total For Connection Fees:150,000 27,614
Misc Revenue
MISC ELEC REVENUE - TEMP CHG 220 2,3902202,0832,860 37 202,500 470
STREET LIGHT 0 23,40007,50050,000 567 11410,000 26,600
TRANSMISSION INVESTMENTS 41,393 522,81557,136 500,000586,710 17 12600,000 63,895
MISC NON-UTILITY 9,305 141,91312,879 91,666115,393 26 (19)110,000 (26,519)
GAIN ON DISPOSITION OF PROPER 0 8,600025,00022,755 (9)16525,000 14,155
CONTRIBUTIONS FROM CUSTOME 6,778 672,8922,267 187,500554,882 196 (18)225,000 (118,009)
72,503 1,332,602 813,750 57,698 1,372,01164 (3)Total For Misc Revenue:972,500 (39,408)
Total Other Revenue
96,800 2,159,949147,644 1,467,9162,275,789 55 51,757,500 115,840
147,644 2,275,789 1,467,916 96,800 2,159,94955 5Total For Total Other Revenue:1,757,500 115,840
3,966,574 38,443,4034,691,318 40,398,330 Total Revenue 41,889,703 4 947,696,608 3,446,299
Expenses
Purchased Power
PURCHASED POWER 1,575,277 18,979,4831,774,917 20,066,32319,836,523 (1)523,315,290 857,039
ENERGY ADJUSTMENT CLAUSE 616,741 5,788,691611,256 6,140,4496,535,026 6 137,284,337 746,335
2,386,174 26,371,550 26,206,772 2,192,019 24,768,1741 6Total For Purchased Power:30,599,628 1,603,375
Operating & Mtce Expense
OPERATING SUPERVISION 13,420 116,52115,149 125,000135,254 8 16150,000 18,732
DIESEL OIL FUEL 0 1590000 (100)0 (159)
NATURAL GAS 661 13,61356821,40017,522 (18)2930,000 3,908
135
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING OCTOBER 2025
2025
OCTOBER
2024
OCTOBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETElectric
ELECTRIC & WATER CONSUMPTI 4,768 46,2843,488 52,50047,615 (9)365,000 1,331
PLANT SUPPLIES & OTHER EXPEN 41 7,2561,477 12,5008,096 (35)1215,000 839
MISC POWER GENERATION EXPE 123 62412583393913 511,000 315
MAINTENANCE OF STRUCTURE -2,809 12,4751,280 16,66610,486 (37)(16)20,000 (1,989)
MTCE OF PLANT ENGINES/GENER 0 4,061264,166755 (82)(81)5,000 (3,305)
MTCE OF PLANT/LAND IMPROVE 421 16,30497440,00019,579 (51)2055,000 3,275
23,092 240,250 273,066 22,247 217,301(12)11Total For Operating & Mtce Expense:341,000 22,948
Transmission Expense
TRANSMISSION MTCE AND EXPE 2,574 43,4313,122 63,33330,607 (52)(30)76,000 (12,823)
3,122 30,607 63,333 2,574 43,431(52)(30)Total For Transmission Expense:76,000 (12,823)
Distribution Expense
REMOVE EXISTING SERVICE & M 251 35201,666936 (44)1652,000 583
SCADA EXPENSE 2,505 39,3564,637 50,00052,069 4 3260,000 12,712
TRANSFORMER EXPENSE OH & U 1,720 14,4381,543 20,83314,241 (32)(1)25,000 (197)
MTCE OF SIGNAL SYSTEMS 611 1,6216952,5003,971 59 1453,000 2,349
METER EXPENSE - REMOVE & RE 0 46601,2501,110 (11)1381,500 644
TEMP SERVICE - INSTALL & REM 0 33808,3332,161 (74)53810,000 1,822
MISC DISTRIBUTION EXPENSE 21,005 311,26028,347 350,000340,763 (3)9420,000 29,502
35,224 415,254 434,583 26,093 367,835(4)13Total For Distribution Expense:521,500 47,418
Maintenance Expense
MTCE OF STRUCTURES 9,838 74,0195,832 76,66676,388 0 392,000 2,369
MTCE OF SUBSTATIONS 4,788 12,8944,867 37,50015,546 (59)2145,000 2,651
MTCE OF SUBSTATION EQUIPME 1,571 82,4971,815 125,00037,760 (70)(54)150,000 (44,737)
MTCE OF OH LINES/TREE TRIM 318 214,5448,018 226,000167,046 (26)(22)300,000 (47,498)
MTCE OF OH LINES/STANDBY 3,324 36,2703,714 41,66637,013 (11)250,000 743
MTCE OF OH PRIMARY 15,024 150,79210,938 158,333151,731 (4)1190,000 938
MTCE OF URD PRIMARY 52,532 254,63130,900 250,000290,005 16 14300,000 35,374
LOCATE ELECTRIC LINES 9,264 86,72613,448 104,166101,554 (3)17125,000 14,827
LOCATE FIBER LINES 585 2,7424622,0833,785 82 382,500 1,042
MTCE OF LINE TRANSFORMERS 5,724 43,7532,451 62,50089,541 43 10575,000 45,788
MTCE OF STREET LIGHTING 2,016 60,7677,140 57,50054,313 (6)(11)69,000 (6,453)
MTCE OF SECURITY LIGHTING 2,338 20,28041620,83313,266 (36)(35)25,000 (7,014)
MTCE OF METERS 3,025 55,08413,081 66,66631,208 (53)(43)80,000 (23,875)
VOLTAGE COMPLAINTS 917 5,529010,0002,913 (71)(47)12,000 (2,615)
SALARIES TRANSMISSION & DIST 3,091 26,0313,233 30,00029,674 (1)1436,000 3,643136
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING OCTOBER 2025
2025
OCTOBER
2024
OCTOBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETElectric
ELECTRIC MAPPING 5,492 113,08212,102 129,166125,822 (3)11155,000 12,739
FIBER MAPPING 0 0012,5000 (100)015,000 0
MTCE OF OH SECONDARY 2,918 18,5681,392 19,16624,486 28 3223,000 5,918
MTCE OF URD SECONDARY 4,216 47,6506,439 62,50071,882 15 5175,000 24,231
TRANSPORTATION EXPENSE 40,183 250,39419,589 270,833220,482 (19)(12)325,000 (29,912)
145,846 1,544,424 1,763,083 167,172 1,556,264(12)(1)Total For Maintenance Expense:2,144,500 (11,839)
Depreciation & Amortization
DEPRECIATION 221,935 2,197,374236,186 2,226,1792,328,942 5 62,671,415 131,567
AMORTIZATION 55,677 556,77955,677 556,780556,779 0 0668,136 0
291,864 2,885,721 2,782,959 277,613 2,754,1544 5Total For Depreciation & Amortization:3,339,551 131,567
Interest Expense
INTEREST EXPENSE - BONDS 68,246 697,11764,971 664,988664,988 0 (5)794,932 (32,129)
AMORTIZATION OF DEBT DISCOU (4,988)(49,885)(4,988)(49,885)(49,885)0 0(59,863)0
59,982 615,103 615,103 63,257 647,2320 (5)Total For Interest Expense:735,069 (32,129)
Other Operating Expense
EV CHARGING EXPENSE 318 2,2531091,1661,487 27 (34)1,400 (766)
LOSS ON DISPOSITION OF PROP (C 0 7,9920160,00015,758 (90)97160,000 7,766
LOSS ON DISPOSITION OF PROP (N 0 00015,437 0 0015,437
OTHER DONATIONS 0 001,666217 (87)02,000 217
MUTUAL AID 26,301 53,820007,012 0 (87)0 (46,807)
PENSION EXPENSE 0 00000 0259,000 0
INTEREST EXPENSE - METER DEP 4,849 47,8054,246 50,00041,569 (17)(13)60,000 (6,236)
4,355 81,482 212,833 31,469 111,872(62)(27)Total For Other Operating Expense:482,400 (30,390)
Customer Accounts Expense
METER READING EXPENSE 4,924 40,1582,257 29,16627,151 (7)(32)35,000 (13,006)
DISCONNECT/RECONNECT EXPEN 100 11,84408,333658 (92)(94)10,000 (11,185)
MISC CUSTOMER ACCOUNTS EXP 33,502 298,25531,549 333,333311,647 (7)4400,000 13,392
BAD DEBT EXPENSE & RECOVER 1,524 14,26120720,8337,654 (63)(46)25,000 (6,606)
34,014 347,113 391,666 40,051 364,518(11)(5)Total For Customer Accounts Expense:470,000 (17,405)
Administrative Expense
SALARIES OFFICE & COMMISSION 84,179 750,31292,716 904,166827,461 (8)101,085,000 77,148
TEMPORARY STAFFING 0 003,3330 (100)04,000 0
OFFICE SUPPLIES 15,826 82,33112,202 112,500100,416 (11)22135,000 18,084
ELECTRIC & WATER CONSUMPTI 2,192 23,1891,735 26,66620,875 (22)(10)32,000 (2,313)
BANK FEES 250 2,2782162,5002,285 (9)03,000 6
137
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING OCTOBER 2025
2025
OCTOBER
2024
OCTOBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETElectric
LEGAL FEES 9,456 29,30593225,00013,621 (46)(54)30,000 (15,684)
AUDITING FEES 1,640 15,6001,720 17,20017,200 0 1020,640 1,600
INSURANCE 21,533 160,49310,087 162,500131,001 (19)(18)195,000 (29,491)
UTILITY SHARE - DEFERRED COM 5,009 102,9654,699 107,083103,480 (3)1128,500 515
UTILITY SHARE - MEDICAL/DENT 48,302 716,11362,539 804,627765,387 (5)7942,322 49,274
UTILITY SHARE - PERA 28,534 257,36328,534 267,916276,621 3 7321,500 19,257
UTILITY SHARE - FICA 27,470 251,16427,525 262,916272,721 4 9315,500 21,556
EMPLOYEE SICK PAY 13,717 136,64018,556 170,000227,969 34 67204,000 91,329
EMPLOYEE HOLIDAY PAY 0 103,7640113,225110,556 (2)7194,100 6,791
EMPLOYEE VACATION & PTO PA 22,901 283,38726,328 276,272309,862 12 9325,000 26,474
UPMIC DISTRIBUTION 0 75,435064,50059,534 (8)(21)86,000 (15,900)
LONGEVITY PAY 2,025 4,94509,9459,945 0 1019,945 5,000
CONSULTING FEES 0 40,3073,904 199,16678,560 (61)95239,000 38,253
TELEPHONE 2,929 25,8072,834 31,66628,298 (11)1038,000 2,490
ADVERTISING 775 10,41587516,66611,555 (31)1120,000 1,140
DUES & SUBSCRIPTIONS - FEES 9,822 102,70411,216 126,674117,527 (7)14152,009 14,823
SCHOOLS & MEETINGS 21,970 177,62219,388 253,000166,628 (34)(6)292,333 (10,993)
MTCE OF GENERAL PLANT & OFFI 845 8,4508659,1668,650 (6)211,000 200
326,878 3,660,162 3,966,694 319,382 3,360,599(8)9Total For Administrative Expense:4,783,849 299,563
General Expense
CIP REBATES - RESIDENTIAL 7,574 73,39811,640 75,63186,178 14 1790,758 12,780
CIP REBATES - COMMERCIAL 0 98,27119,724 93,33399,486 7 1112,000 1,214
CIP - ADMINISTRATION 10,177 153,26318,669 152,470153,290 1 0182,965 27
CIP - MARKETING 5,840 44,8202,148 42,69541,096 (4)(8)51,235 (3,723)
CIP - LABOR 9,136 83,4289,733 111,51888,894 (20)7133,822 5,465
CIP REBATES - LOW INCOME 0 3,4681,578 15,6001,578 (90)(54)18,720 (1,889)
CIP - LOW INCOME LABOR 817 7,7979468,3338,402 1 810,000 604
ENVIRONMENTAL COMPLIANCE 2,044 27,4032,924 29,16627,162 (7)(1)35,000 (241)
MISC GENERAL EXPENSE 714 3,434(90)4,416139 (97)(96)5,300 (3,294)
67,275 506,229 533,166 36,303 495,286(5)2Total For General Expense:639,800 10,943
Total Expenses(before Operating Transfers)
3,178,186 34,686,6713,377,832 37,243,26336,697,900 (1)644,133,298 2,011,229
Operating Transfer
Operating Transfer/Other Funds
TRANSFER TO CITY ELK RIVER R 139,507 1,302,639162,213 1,392,3651,416,974 2 91,643,429 114,334138
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING OCTOBER 2025
2025
OCTOBER
2024
OCTOBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETElectric
162,213 1,416,974 1,392,365 139,507 1,302,6392 9Total For Operating Transfer/Other Funds:1,643,429 114,334
Utilities & Labor Donated
UTILITIES & LABOR DONATED TO 20,203 189,69020,155 220,833199,446 (10)5265,000 9,756
20,155 199,446 220,833 20,203 189,690(10)5Total For Utilities & Labor Donated:265,000 9,756
Total Operating Transfer
182,369 1,616,421 1,613,198 159,710 1,492,3300 8Total For Total Operating Transfer:1,908,429 124,090
628,677 2,264,4011,131,117 1,541,868 Net Income Profit(Loss)3,575,380 132 581,654,880 1,310,979
139
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING OCTOBER 2025
2025
OCTOBER
2024
OCTOBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETWater
Revenue
Operating Revenue
Water Sales
WATER SALES RESIDENTIAL 187,504 1,337,837182,689 1,570,2801,470,528 (6)101,768,457 132,691
WATER SALES COMMERCIAL 109,047 825,763134,019 895,611898,441 0 91,024,735 72,677
WATER SALES IRRIGATION 43,161 252,72750,783 334,261291,565 (13)15350,120 38,837
367,491 2,660,535 2,800,153 339,713 2,416,329(5)10Total For Water Sales:3,143,313 244,206
Total Operating Revenue
339,713 2,416,329367,491 2,800,1532,660,535 (5)103,143,313 244,206
367,491 2,660,535 2,800,153 339,713 2,416,329(5)10Total For Total Operating Revenue:3,143,313 244,206
Other Operating Revenue
Interest/Dividend Income
INTEREST & DIVIDEND INCOME (588)83,4319,754 125,000106,782 (15)28150,000 23,350
OTHER INTEREST/MISC REVENUE 0 5580833566(32)11,000 8
9,754 107,348 125,833 (588)83,990(15)28Total For Interest/Dividend Income:151,000 23,358
Customer Penalties
CUSTOMER PENALTIES 5,545 23,7744,054 23,33329,919 28 2628,000 6,145
4,054 29,919 23,333 5,545 23,77428 26Total For Customer Penalties:28,000 6,145
Connection Fees
WATER/ACCESS/CONNECTION FE 33,477 396,74121,600 212,500593,012 179 49255,000 196,270
CUSTOMER CONNECTION FEES 6,899 32,5062,763 27,08353,621 98 6532,500 21,115
BULK WATER SALES/HYDRANT R 3,763 20,47439,755 25,83353,768 108 16331,000 33,293
64,118 700,402 265,416 44,140 449,722164 56Total For Connection Fees:318,500 250,680
Misc Revenue
MISC NON-UTILITY 0 75083340311 349100264
GAIN ON DISPOSITION OF PROPER 0 008,0000 (100)08,000 0
MISCELLANEOUS REVENUE 0 7162,216 41664,716 15,419 8,92650063,999
HYDRANT MAINTENANCE PROGR 975 10,57597512,5009,750 (22)(8)15,000 (825)
CONTRIBUTIONS FROM DEVELOP 0 00044,590 0 0044,590
WATER TOWER LEASE 0 00000 0327,500 0
LEASE INTEREST REVENUE 0 00000 075,000 0
3,191 119,396 21,000 975 11,368469 950Total For Misc Revenue:426,100 108,028
Total Other Revenue
50,072 568,85581,119 435,583957,067 120 68923,600 388,212
81,119 957,067 435,583 50,072 568,855120 68Total For Total Other Revenue:923,600 388,212
140
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING OCTOBER 2025
2025
OCTOBER
2024
OCTOBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETWater
389,785 2,985,184448,610 3,235,736 Total Revenue 3,617,603 12 214,066,913 632,418
Expenses
Production Expense
MTCE OF STRUCTURES 8,981 104,49513,317 112,500107,487 (4)3135,000 2,992
13,317 107,487 112,500 8,981 104,495(4)3Total For Production Expense:135,000 2,992
Pumping Expense
SUPERVISION 7,259 60,2848,100 63,33367,164 6 1176,000 6,879
ELECTRIC & GAS UTILITIES 19,888 215,90418,223 258,333237,069 (8)10310,000 21,165
SAMPLING 945 19,0062,846 20,12521,292 6 1224,150 2,285
CHEMICAL FEED 4,398 34,4001,643 41,66638,699 (7)1250,000 4,299
MTCE OF WELLS 11,951 160,00721,555 166,666161,320 (3)1200,000 1,312
SCADA - PUMPING 363 10,36931610,0007,637 (24)(26)12,000 (2,731)
52,685 533,184 560,125 44,806 499,973(5)7Total For Pumping Expense:672,150 33,210
Distribution Expense
MTCE OF WATER MAINS 16,332 90,28419,960 145,833159,546 9 77175,000 69,261
LOCATE WATER LINES 1,311 12,0621,701 16,66623,783 43 9720,000 11,721
MTCE OF WATER SERVICES 0 004160(100)05000
WATER METER SERVICE 12,305 61,161(217)58,33366,273 14 870,000 5,112
BACKFLOW DEVICE INSPECTION 1,261 16,8301,229 20,30018,788 (7)1223,160 1,957
MTCE OF CUSTOMERS SERVICE 2,882 27,5372,859 29,16628,274 (3)335,000 737
WATER MAPPING 894 16,13312814,16621,913 55 3617,000 5,779
FIBER MAPPING 0 0012,5000 (100)015,000 0
MTCE OF WATER HYDRANTS - PU 1,099 20,5462,972 18,33316,863 (8)(18)22,000 (3,682)
MTCE OF WATER HYDRANTS - PR 797 4,9901,076 5,0004,200 (16)(16)6,000 (789)
WATER CLOTHING/PPE 0 9,45137612,50011,631 (7)2315,000 2,179
WAGES WATER 722 6,5198918,3337,653 (8)1710,000 1,133
TRANSPORTATION EXPENSE 1,090 16,7481,459 20,00019,171 (4)1424,000 2,423
WATER PERMIT 0 26,255027,00020,382 (25)(22)27,000 (5,873)
32,437 398,481 388,550 38,697 308,5213 29Total For Distribution Expense:459,660 89,959
Depreciation & Amortization
DEPRECIATION 99,952 1,007,152115,173 1,104,8881,153,729 4 151,325,865 146,577
115,173 1,153,729 1,104,888 99,952 1,007,1524 15Total For Depreciation & Amortization:1,325,865 146,577
Interest Expense
INTEREST EXPENSE - BONDS 3,266 34,0663,050 32,01632,016 0 (6)38,117 (2,050)
141
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING OCTOBER 2025
2025
OCTOBER
2024
OCTOBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETWater
AMORTIZATION OF DEBT DISCOU (554)(5,542)(554)(5,542)(5,542)0 0(6,651)0
2,495 26,474 26,474 2,712 28,5240 (7)Total For Interest Expense:31,466 (2,050)
Other Operating Expense
LOSS ON DISPOSITION OF PROP (C 0 0016,0000 (100)016,000 0
LOSS ON DISPOSITION OF PROP (N 0 000(16,271)0 00(16,271)
DAM MAINTENANCE EXPENSE 267 444003880 (13)0 (55)
PENSION EXPENSE 0 00000 044,000 0
INTEREST EXPENSE - METER DEP 60 84551625519(17)(39)750 (326)
51 (15,364)16,625 327 1,290(192)(1,291)Total For Other Operating Expense:60,750 (16,654)
Customer Accounts Expense
METER READING EXPENSE 622 4,3685075,8335,110 (12)177,000 742
MISC CUSTOMER ACCOUNTS EXP 8,560 76,5078,224 81,66680,762 (1)698,000 4,254
BAD DEBT EXPENSE & RECOVER 0 1902080(100)(100)250 (19)
8,732 85,873 87,708 9,182 80,895(2)6Total For Customer Accounts Expense:105,250 4,977
Administrative Expense
SALARIES OFFICE & COMMISSION 24,329 218,93027,099 240,000246,521 3 13288,000 27,590
TEMPORARY STAFFING 0 008330(100)01,000 0
OFFICE SUPPLIES 5,622 20,4302,439 25,00025,950 4 2730,000 5,520
ELECTRIC & WATER CONSUMPTI 548 5,7994345,8335,221 (10)(10)7,000 (578)
BANK FEES 62 585545835820 (1)700 (2)
LEGAL FEES 829 4,7072334,16620,510 392 3365,000 15,803
AUDITING FEES 410 4,4464305,5834,846 (13)96,700 399
INSURANCE 3,485 34,9923,534 36,66634,945 (5)044,000 (47)
UTILITY SHARE - DEFERRED COM 872 17,21285120,08317,755 (12)324,100 543
UTILITY SHARE - MEDICAL/DENT 14,156 172,96017,258 228,708196,342 (14)14269,977 23,382
UTILITY SHARE - PERA 5,356 49,4296,396 57,08357,177 0 1668,500 7,748
UTILITY SHARE - FICA 5,087 48,6585,970 55,00056,351 2 1666,000 7,693
EMPLOYEE SICK PAY 2,724 25,4283,314 29,16640,992 41 6135,000 15,563
EMPLOYEE HOLIDAY PAY 0 19,096024,22223,154 (4)2141,525 4,058
EMPLOYEE VACATION & PTO PA 4,025 51,5194,752 56,18158,946 5 1466,000 7,426
UPMIC DISTRIBUTION 0 16,027013,87512,941 (7)(19)18,500 (3,085)
WELLHEAD PROTECTION 0 001,7000 (100)02,000 0
LONGEVITY PAY 0 73002,1302,130 0 1922,130 1,400
CONSULTING FEES 870 11,39111,521 47,83350,657 6 34557,400 39,266
TELEPHONE 651 5,8947196,2506,929 11 187,500 1,035142
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING OCTOBER 2025
2025
OCTOBER
2024
OCTOBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETWater
ADVERTISING 193 2,7182184,1666,904 66 1545,000 4,185
DUES & SUBSCRIPTIONS - FEES 1,214 61,1561,488 70,46159,403 (16)(3)89,961 (1,753)
SCHOOLS & MEETINGS 7,767 40,7935,150 53,77526,024 (52)(36)60,956 (14,769)
MTCE OF GENERAL PLANT & OFFI 211 2,1102162,2912,160 (6)22,750 50
92,083 956,451 991,595 78,419 815,019(4)17Total For Administrative Expense:1,199,699 141,431
General Expense
CIP REBATES - RESIDENTIAL 25 84504,166621 (85)(27)5,000 (223)
CIP REBATES - COMMERCIAL 0 004160(100)05000
CIP - MARKETING 0 1,11701,6660 (100)(100)2,000 (1,117)
CIP - LABOR 0 002,0830 (100)02,500 0
ENVIRONMENTAL COMPLIANCE 72 590781,6661,878 13 2182,000 1,288
MISC GENERAL EXPENSE 0 002080(100)02500
78 2,499 10,208 97 2,552(76)(2)Total For General Expense:12,250 (52)
Total Expenses(before Operating Transfers)
283,178 2,848,425317,056 3,298,6743,248,816 (2)144,002,091 400,391
Operating Transfer
Utilities & Labor Donated
WATER & LABOR DONATED TO CI 0 05971,666645 (61)02,000 645
Total Operating Transfer
597 645 1,666 0 0(61)0Total For Total Operating Transfer:2,000 645
106,607 136,759130,956 (64,604) Net Income Profit(Loss)368,141 670 16962,821 231,381
143
October 2025 Financials
Report Highlights
12/9/2025
PRESENTED AT MEETING - OCTOBER 2025 FINANCIAL PRESENTATION
2
YTD Profit & Profit Margin %
Purpose: To show the overall health of the organization.
•YTD ERMU’s revenue is exceeding expenses by $3.9M
•Resulting in a profit margin of 8.7%
Profit & Profit Margins %
January 2025 – October 2025
$3,943,522
8.67%
Revenue Expense
$45,507,307 $41,563,785
PRESENTED AT MEETING - OCTOBER 2025 FINANCIAL PRESENTATION
3
Revenue vs Expense (YTD)
Purpose: To compare
revenue vs expense by
utility service.
•Green illustrates
electric and blue
illustrates water.
•Overall, revenue is
greater than expense.
REVENUE EXPENSE
PRESENTED AT MEETING - OCTOBER 2025 FINANCIAL PRESENTATION
4
YTD Actuals to Budget Comparison
Purpose: To illustrate the
combined net position
actuals versus budgeted
amounts.
•Overall, ERMU is
favorable to budget YTD
PRESENTED AT MEETING - OCTOBER 2025 FINANCIAL PRESENTATION
5
Accounts Receivable-Utility Aging 10/31/2025
Purpose: an overview of
outstanding payments from
customers and how long
they are past due.
•City services make up
$448k of total A/R balances
of $4.017M
•Over 90 days is only 2% of
total A/R compared to 92%
being current
GREEN
IS
GOOD!
PRESENTED AT MEETING - OCTOBER 2025 FINANCIAL PRESENTATION
6
Accounts Receivable-Utility Aging 10/31/2025
Note: Electric and water accounts receivable
can be reviewed separately on the “Combined
Balance Sheet” provided in the packet.
PRESENTED AT MEETING - OCTOBER 2025 FINANCIAL PRESENTATION
7
Electric Department – Purchased Power
Purpose: To illustrate 5-year
comparison in purchased power
costs.
•Purchased power 2025 YTD is
approximately 69% of total
expenses.
•2025 YTD purchased power is
unfavorable to budget 1%.
•2025 expense is 6% higher than
2024. YTD 2025 is $1.603M more
than 2024. 4% higher kWh
purchased which also results in
higher EAC charges.
PRESENTED AT MEETING - OCTOBER 2025 FINANCIAL PRESENTATION
8
Electric Department – Electric Usage Sales
Purpose: To illustrate a 5-year
comparison in electric usage sales.
•Usage can vary greatly from year to
year with weather being a primary
factor.
•Electric kWh usage is 5% higher in
2025 as compared to 2024.
•***Through November 2025***
PRESENTED AT MEETING - OCTOBER 2025 FINANCIAL PRESENTATION
9
Water Department – Water Usage Sales
Purpose: To illustrate trends and
view comparisons in water usage
sales.
•Usage can vary greatly from year
to year based on a variety of
factors such as weather.
•The water sales graph highlights
both usage and revenue dollars.
•Water usage is up YTD 6% over
prior year.
•Revenue is up YTD 8% over prior
year due to increased usage and
rates.
•***Through November 2025***
PRESENTED AT MEETING - OCTOBER 2025 FINANCIAL PRESENTATION
Thank You!
Melissa Karpinski, CPA - Finance Manager
mkarpinski@ermumn.com
PRESENTED AT MEETING - OCTOBER 2025 FINANCIAL PRESENTATION
______________________________________________________________________________
Page 1 of 2
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Mark Hanson - General Manager
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
5.3
SUBJECT:
Management Policy – A.10 – Financial Reserves
ACTION REQUESTED:
None
BACKGROUND:
For ERMU there are two utility funds, the Electric Utility and the Water Utility. These funds have
separate reserves. Their reserve balances are classified as either restricted for debt service or
unrestricted designated reserve.
At the November meeting, the Commission reviewed the attached Management Policy – A.10 –
Financial Reserves. The Commission directed staff to revise the policy to include the following
reserve layers and target levels:
Restricted Layers: Target Level:
Debt Service Specified by bond covenants
Trunk/Capacity (Water Only) Water Access Charges and Trunk Funds received will be
restricted to Trunk/Capacity capital projects
Unrestricted Designated Layers: Target Level:
Annual Debt Service Reserve Current year's principal and interest payment due on
outstanding debt
Operating Reserve Two months of budgeted operating expenses, including
purchased power for electric
Capital Reserve Average of the next five-year capital plan
Catastrophic Reserve Estimated replacement cost of a substation (electric
reserves) or water treatment plant (water reserves)
DISCUSSION:
The attached policy includes the requested revisions as outlined above. Staff also included two
additional revisions not discussed at the November commission meeting. The first is a
statement clarifying that the Financial Reserve policy is intended to serve as a guide. The
144
______________________________________________________________________________
Page 2 of 2
second revision is a statement clarifying reserve balances may be used for interfund transfers
(loans) in lieu of external borrowing.
The attached redlined policy contains minor verbiage edits and the specific revisions described
above. For the sake of clarity, only the additions are shown in red.
Commission action is not required as A.10 - Financial Reserves is a management policy. Staff is
providing the policy because of its importance to sound financial management and to maintain
transparency with the Commission and our customers.
ATTACHMENTS:
• ERMU Policy - A.10 - Financial Reserves
145
______________________________________________________________________________
Page 1 of 3
MANAGEMENT POLICY
Section: Category:
Management Administration Policies
Policy Reference: Policy Title:
A.10 Financial Reserves Policy
1.0 Purpose and Summary
In order to maintain stable rates and provide reliable services, Elk River Municipal Utilities
(ERMU) requires financial buffers in the form of reserves to mitigate changes in costs or
operational performance. For ERMU there are two utility funds, the Electric Utility and the
Water Utility. These funds shall have separate reserves. Their reserve balances shall be
classified as either Restricted or Unrestricted Designated. This policy, and the target levels and
criteria herein, are intended for use as a guide only.
The target levels for these reserves shall be determined by the criteria herein. These target
levels and associated criteria will be reviewed annually, modified by Utilities Commission to
support the long-term goals of ERMU, and adopted with the annual budget. Unless otherwise
specified by bond covenants, these reserve balances shall be invested consistent with ERMU’s
Management Investment Policy.
2.0 Electric Utility Reserve Classifications
Restricted for Debt Service: This reserve is established to maintain compliance with bond
covenants.
The target level for this reserve shall be set at the level specified by bond covenants.
Unrestricted Designated Reserve: This reserve is established to address the short-term financial
variability inherent in operating an Electric Utility. Potential sources of this variability include
but are not limited to: failure to achieve budgeted levels of net income, reduction in overall
customer or system usage, changes in cost of purchased power, general operational exposures,
and risks associated with natural disasters.
The target levels for the unrestricted, designated reserve shall be set as follows:
146
ERMU Management Policy – A.10 Financial Reserves Policy
______________________________________________________________________________
______________________________________________________________________________
Page 2 of 3
Annual Debt Service Reserve Current year's principal and interest payment due on
outstanding debt
Operating Reserve Two months of budgeted operating expenses (including
purchased power)
Capital Reserve Average of the next five-year capital plan in the budget
Catastrophic Reserve Estimated current replacement cost of a substation
3.0 Water Utility Reserve Classifications
Restricted for Debt Service: This reserve is established to maintain compliance with bond
covenants.
The target level for this reserve shall be set at the level specified by bond covenants.
Restricted for Trunk/Capacity: This reserve is established to ensure water access charges and
trunk funds received are restricted to trunk/capacity related capital projects.
There is no target level for this reserve. Funds accumulate until needed for trunk/capacity
expansion projects.
Unrestricted Designated Reserve: This reserve is established to address the short-term financial
variability inherent in operating a Water Utility. Potential sources of this variability include but
are not limited to: failure to achieve budgeted levels of net income, reduction in overall
customer or system usage, general operational exposures, and risks associated with natural
disasters.
The target levels for the unrestricted, designated reserve shall be set as follows:
Annual Debt Service Reserve Current year's principal and interest payment due on
outstanding debt
Operating Reserve Two months of budgeted operating expenses
Capital Reserve Average of the next five-year capital plan in annual budget
Catastrophic Reserve Estimated replacement cost of a water treatment plant
4.0 Year-end Reserve Balances
If the year-end reserve balances are above their target levels after the completion of the year-
end audit, these balances shall be unrestricted with a defaulting designation as working capital.
The Utilities Commission shall then consider optimal uses of these unrestricted reserves
through any of the following but not limited to: working capital, designated for power costs
(electric fund only), debt reduction, retention for reserve fund growth for future needs, or use
for rate stabilization or reduction.
147
ERMU Management Policy – A.10 Financial Reserves Policy
______________________________________________________________________________
______________________________________________________________________________
Page 3 of 3
If the year-end reserve balances are below their target levels after the completion of the year-
end audit, the Utilities Commission shall consider the balances and plan for their replenishment
to target levels in a timely manner.
5.0 Inter-Utility Adjustments
If the year-end reserve balances are sufficient to sustain the transfer, the Utilities Commission
may opt to use inter-utility adjustments for loans between electric and water utilities in lieu of
external borrowing.
POLICY HISTORY:
Adopted May 11, 2010
Revised May 10, 2011
*Moved November 12, 2019
Revised July 14, 2020
Revised December 9, 2025
*As part of the Policy Manual Initiative, authority of this Financial Reserves Policy was
delegated to management on November 12, 2019, and the policy was moved to the
Management Policy Manual.
148
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Mark Hanson - General Manager
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
5.4
SUBJECT:
Wage & Benefits Committee - Proposed 2026 Adjustments
ACTION REQUESTED:
Approve the 2026 Wage Adjustment, effective January 1, 2026.
BACKGROUND:
At the November commission meeting, staff presented the proposed 2026 adjustments. At the
time, only six of the seven metro average utilities had confirmed their 2026 wage adjustments,
so the commission deferred approval. Based on the information received, the anticipated range
was 3.34% to 3.41%.
DISCUSSION:
As of this report, the seventh utility has not confirmed its 2026 adjustment, so the anticipated
range remains 3.34% to 3.41%. Although the seventh utility is in active negotiations with its
lineworker union, settlement is not expected before January 1, 2026.
Staff recommend proceeding with one of the following two options:
Option 1: Conditional Approval
• 1a) If the final utility settles before January 1, 2026, set the 2026 wage adjustment equal
to the final metro average wage adjustment.
• 1b) If the final utility does not settle January 1, 2026, approve 3.375%, (the midpoint of
the current range) as the 2026 wage adjustment to avoid the administrative expense of
processing backpay.
Option 2: Delay Approval
• 2) Wait until the final utility settles, then apply the complete metro adjustment effective
January 1, 2026, with backpay.
REQUESTED ACTION:
Staff request the commission approve a 2026 wage adjustment effective January 1, 2026.
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Mark Hanson – General Manager
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
6.1a
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• Thanks to the outstanding efforts of ERMU’s HR generalist and accounts payable/payroll
specialist, open enrollment for our 2026 benefits program is complete.
• ERMU’s finance manager, administrations director and I continue to meet with our
consultant to provide necessary support for the on-going Cost of Service and Rate
Design study.
• We received the preliminary results from the ongoing feasibility study for the new water
well/treatment plant project. We anticipate the following schedule:
o 2026: Modify our existing Well 8 so it can be treated/filtered at our existing
Water Treatment Plant 7.
o 2027: Drill the test well for the new Well 10. If successful, the full production
well will be drilled and tested for treatment needs.
o 2028: Design and construct Water Treatment Plant 10 so Well 10 can be
pumped, treated, and pushed into the water distribution system.
• The Minnesota Municipal Power Agency Board of Directors met on November 25, 2025,
at Chaska City Hall in Chaska, Minnesota, and via videoconference. Commissioner
Stewart and I attended. The public summary follows:
o The Board reviewed the Agency’s financial and operating performance for
October 2025.
o Participation in the residential Clean Energy Choice program increased by 58
customers. Customer penetration for the program is 6.8%.
o The Board discussed the status of renewable projects the Agency is pursuing.
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Sara Youngs – Administrations Director
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
6.1b
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• The Cold Weather Rule (CWR) is in effect from October 1, 2025, through April 30, 2026.
During this time, all electric service disconnections will follow state regulations. We
encourage customers experiencing financial hardship to explore energy assistance
programs or set up a payment arrangement to avoid service interruptions. Please note
that funding for the federal Low-Income Home Energy Assistance Program (LIHEAP) has
been backlogged due to the recently ended federal government shutdown.
• ERMU disconnections for November:
o Cycle 1 – 14 disconnections.
o Cycle 2 – no disconnections.
o Cycle 3 – 2 disconnections.
o Cycle 4 – no disconnections due to the Thanksgiving holiday.
• During the month of November 2025, the customer service team entered 51 payment
arrangements with customers. During November 2024 there were 49 payment
arrangements.
• Office walk-in traffic for November consisted of 118 customers, averaging 30 per week
over the four-week period.
• Currently there are 11 active residential solar photovoltaic projects planned or under
construction in the ERMU service territory.
• Our IT team continues to collaborate with vendors on security enhancements. They are
also continuing work on OT networks.
• The administrations director has started the year-end training with our software
provider, National Information Solutions Cooperative.
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Melissa Karpinski – Finance Manager
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
6.1c
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• The auditors from Abdo are performing preliminary audit work in December. Typically,
preliminary audit work involves inventory observations, accounts payable testing, utility
billing testing, and review of the current year’s meeting minutes. The 2025 audit field
work is scheduled for February 18-20.
• 2025 open enrollment went smoothly for payroll, HR, and employees.
• The final 2026 Annual Business Plan will be presented at a special commission meeting
on December 18.
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Tony Mauren – Governance & Communications Manager
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
6.1d
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• In December, all customers will receive the winter edition of The Current newsletter
which includes information about the progress of the East substation construction,
General Manager Mark Hanson’s appointment to the Minnesota Municipal Utilities
Associations Board of Directors, tree trimming, and more.
• In addition to the bill insert topics, December social media will cover commercial
rebates and energy audits, City of Elk River Holiday Lights Tour, garbage and recycling
schedules, and a commission meeting reminder.
• On November 20, ERMU staff welcomed a Rogers High School junior for a Job Shadow
Day in the Communications Department. He spent the day learning about
communications, and together we created a social media post highlighting his
experience at the Utility.
• Communications and customer service staff are working with the administrations
director to enhance the SmartHub user experience through improved branding, updated
language, and other refinements.
• As part of the Minnesota Department of Health’s Lead Service Line Replacement
program, on December 1, multiple ERMU departments collaborated to mail notification
letters to approximately 900 customers, meeting the December 5 delivery deadline.
While there are no identified lead service lines in ERMU’s distribution system,
customers receiving the notifications either had unknown service line materials or had
galvanized metal in their service lines that requires replacement due to the metal’s
tendency to absorb lead. These letters provide strategies for identifying service line
materials, lead exposure mitigation, and information about potential for replacement
programs through the public water system. For more information: Lead Service Line
Replacement Program Facts , Minnesota Lead Inventory Tracking Tool .
• Staff participated in the Records Retention Task Force meeting on December 3 to
finalize recommended updates to the General Records Retention Schedule for
Minnesota Cities. The schedule provides data practices support to municipalities by
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Page 2 of 2
listing the retention period and privacy classification for records. The last update was in
2021.
ATTACHMENTS:
• Bill Insert – The Current – Winter 2025
154
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Tree Trimming for Safety
Each year, ERMU field staff and contractors trim tree
branches to minimize the risk of interference with power
lines, reducing outages and ensuring safety. This work is
typically scheduled for winter, after leaves have fallen,
allowing for better visibility of branch structure and more
precise cuts. Additionally, colder temperatures help protect
trees from diseases and parasites entering freshly cut limbs.
If you see tree trimming crews in your area, be sure to give
plenty of space while they perform their work.
Regular maintenance of the electric system, including tree trimming, supports ERMU’s
commitment to reliable service and prioritizes safety for employees, customers, and
the community.
If you see a branch close to a power line, please avoid trimming it yourself. Instead, contact
ERMU for a safe, professional assessment and guidance on next steps, including any
customer responsibilities.
New Substation to Support Growth
The eastern area of Elk River is growing quickly with new
residential, commercial, and industrial developments. While
the current electrical system meets today’s needs, data
shows a new substation is essential to prevent overloads
and support future demand.
ERMU is building a new substation in the center of this
growth to strengthen voltage support, increase capacity, and
reduce energy losses while providing more efficient, reliable
power for customers. The new substation will also feature modern safety designs, advanced
equipment for improved reliability, and lower long-term maintenance costs. Together, these
upgrades will ensure Elk River’s power system is ready to serve the community for many years
to come.
ERMU GM Joins MMUA Board of Directors
Elk River Municipal Utilities General Manager Mark Hanson has been
elected to a one-year term on the Minnesota Municipal Utilities
Association (MMUA) Board of Directors.
MMUA, a nonprofit founded in 1931, serves 120 hometown utility
communities across Minnesota by advocating for their needs,
strengthening their operations, and empowering their leaders to ensure
reliable, affordable, and sustainable utility services for ratepayers.
“I look forward to supporting MMUA’s mission and advocating for
municipal utilities across Minnesota,” - Mark Hanson, P.E.
155
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Elk River’s Recycle Coach app
today. Visit elkrivermn.gov/156/
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Stay connected on utility news
and information, community
events, and important
announcements by following
ERMU on social media.
FOLLOW US ON
SOCIAL MEDIA
@ermu_mn
@elkrivermunicipalutilities
Elk River Municipal Utilities
@ERMU_MN
WINTER 2025
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WE WELCOME YOUR QUESTIONS AND COMMENTS: ERMUMN.COM | 763.441.2020
Will Closing Air Vents Actually Save Money?
Heating and cooling costs can take up a lot of space
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It sounds like a good idea, but does it really work? The
short answer is no, closing your house vents in unused
rooms does not save energy. Read on to learn why and
what you can do instead.
Balancing Act
It’s a common misconception that closing off vents in some rooms will reduce the amount of
space you need to heat or cool, thus lowering your energy costs. In reality, closing vents in
unused rooms can actually increase your energy use.
HVAC systems are designed for balance, so that the amount of air returned to the air handling
unit is roughly equal to the volume delivered through the supply vents in each room. When
vents are closed, air pressure in other rooms increases. The extra pressure pushes air out
through any openings in walls or windows which may even waste more energy than operating
your system as usual.
The air that escapes from the room must be replaced, increasing the amount of air being
drawn and the load on your heating and cooling system. Also, the increased duct pressure
results in lower air flow and incresed strain on the blower motor.
Better Ways to Save on Energy
While closing central heating air vents in unused rooms won’t save money on energy bills,
there are plenty of other smarter, safer strategies to consider:
Use a programmable thermostat: Maximize heating and cooling only when you need it.
Seal air leaks: Weather-strip doors and windows to keep conditioned air inside.
Add insulation: A well-insulated attic and walls help regulate temperature.
Replace air filters regularly: Clean filters mean smoother airflow and less strain on
your system.
Schedule HVAC maintainence: Annual tune-ups keep your HVAC system
running efficiently.
Use ceiling fans: Improve air circulation so your system doesn’t have to work as hard.
Consider an ENERGY STAR® upgrade. ENERGY STAR® -certified systems are
independently tested to use less energy than standard models while still providing
the level of comfort you expect.
Closing vents to save on energy costs might sound like a quick fix, but it is a costly myth.
Keep airflow balanced, maintain your system, and utilize better strategies to stay comfortable
and save money this winter. Find rebate savings on ENERGY STAR®-certified products and
programmable thermostats at ERMUMN.COM.
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Thomas Geiser – Operations Director
Meeting Date:
December 9, 2025
AGENDA ITEM NUMBER:
6.1e
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• Staff is working through the second round of maps for the new GIS mapping system that
we plan to move forward with in the future. Maps 1 through 72 are complete.
• I am still working with the vendor to get our thirty recalled reclosers repaired.
• ERMU has begun copper switchgear replacements. We have replaced two so far.
• Working with Minnesota Municipal Power Agency on solar and gas plant projects.
• Working through Lumen’s pole attachment request.
• Working through three different new development plans currently.
• The new double tandem digger truck #15 scheduled for 2026 has been pushed back to
first quarter of 2027.
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Chris Sumstad – Electric Superintendent
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
6.1f
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• Installed 11 new residential services, which involves the connection of a secondary line
once the customer requests service.
• Joe Schmidt, Safety Instructor from MMUA, was here November 20 and held safety
meetings for all staff on winter driving, cold stress, and impairment.
• The bore crew crossed County Road 33, west of County Road 1, with two and four inch
conduits that will feed the new Meadowsweet Bend housing development. This looks to
be the end of the scheduled boring work for the season. With the frost setting in this
past week. The trencher will be used for most of the installation of wire over the winter.
• We switched some feeders and deenergized a couple of sections of overhead line this
past week so Xcel Energy can complete their transmission project work along County
Road 33 near the Martin Marietta gravel pit.
• The snow event over Thanksgiving weekend was a likely factor in a vehicle striking a
power pole along Highway 169 and another striking a padmount transformer along
Meadowvale Road. Both have been replaced.
• Crews terminated the wire at the Villas of Fillmore 3rd edition. This is six lots, three of
which already have power to the house.
• With asphalt installed in both Bradford 2nd addition and Meadowsweet Bend just before
freeze up, winter wire install looks likely.
• Crews finished up the ground work at East substation the third week of November. A
two man line crew worked with the substation tech for approximately three weeks,
which provided them the opportunity to learn and apply new skills.
• Crews are close to wrapping up the underground open concentric replacement job
along 223rd Avenue NW in Elk River.
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Mike Tietz – Technical Services Superintendent
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
6.1g
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• In November, the locators processed 324 locate tickets. These consisted of 247 normal
tickets, 7 emergency tickets, 43 updated tickets, 7 meetings, 7 planning, 4 boundary
surveys, 1 correction, and 8 cancellations. This resulted in a 27.2% decrease in tickets
from the previous month and a 1.6% increase from the prior November.
• In November, the electrical technicians completed 38 service order tasks, updated the
power bill, addressed customer meter issues and any off-peak concerns.
• The electrical technicians have continued testing of current transformers while waiting
for the arrival of our polyphase meters. On December 1, we received 352 of these
commercial meters from Sensus. Staff will test, program and verify the programming of
these meters as we begin the exchange process of these. The Advanced Metering
Infrastructure project still remains at an overall completion rate of 96%.
• The East substation work continued with staff installing all the feeder exit conduits and
communication/electrical conduits and ground grid throughout the site. The control
building was energized so that heat could be provided over the winter, enabling staff to
work on wiring the relay panel and other equipment. Assembly of the steel structures is
expected to begin in March. Commissioning of the substation is still expected to be
completed by September 1, 2026.
• Our monthly peak was 43.92 MW on November 26, at 12:50pm.
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Dave Ninow – Water Superintendent
MEETING DATE:
December 9, 2025
AGENDA ITEM NUMBER:
6.1h
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• Delivered a water meter, installed a Smart Point radio transceiver module, and took
curb stop ties for 11 new water services.
• Completed 20 BACTI/Total Chlorine Residual Samples
o All confirmed negative for Coliform Bacteria
o Bacteriological/Disinfectant Residual Monthly Report submitted to the MDH
• Completed 18 routine fluoride samples
o All samples met MDH standards
o Submitted MDH Fluoride Report
• Submitted Discharge Monitoring Report (DMR) for the Diesel Generation Plant to the
Minnesota Pollution Control Agency.
• The MDH has approved the revision of our service line material inventory of all service
connections in the water distribution system. As required, notifications have been sent
to owners of water service lines that have been identified as galvanized or material
listed as unknown at this time.
• Verizon Wireless’ contractor has begun work on upgrades to their telecommunications
equipment at Auburn Street Water Tower.
• Work continues switching the water Supervisory Control and Data Acquisition (SCADA)
system from radio communication to fiber optic communication utilizing our fiber ring.
The controls for Freeport Street Water Tower and well six are in the process of being
switched over to fiber communications.
• The water operators have started annual maintenance of the water treatment plants.
This process includes inspecting and recharging the iron and manganese removal
pressure filters.
• Once again, we have placed protective plastic bags on fire hydrants along high traffic
roads to protect them from corrosion from road salt.
ATTACHMENTS:
• November 2025 Pumping by Well
160
Values Are Displayed in Millions of Gallons (Well #, Gallons Pumped, Percentage of Pumping)
Well #2, 8.51, 21%Well #3, 0, 0%
Well #4, 11.945, 30%
Well #5, 5.368, 13%
Well #6, 0, 0%
Well #7, 4.735, 12%
Well #8, 4.523, 11%
Well #9, 5.417, 13%
November 2025 Monthly Pumping By Well
161
Tuesday, January 14:
•Annual Review of Committee Charters
Tuesday, February 11:
•Review Strategic Plan and 2024 Annual Business
Plan Results
Tuesday, March 11:
•Oath of Office
•Election of Officers
•Annual Commissioner Orientation and Review
Governance Responsibilities and Role
Tuesday, April 8:
•Audit of 2024 Financial Report
•Financial Reserves Allocations
•Review 2024 Performance Metrics
Tuesday, May 13:
•Annual General Manager Performance
Evaluation and Goal Setting
Tuesday, June 3:
•Annual Commission Performance Evaluation
Tuesday, July 8: Tuesday, August 12:
•Annual Business Plan – Review Proposed 2026
Travel, Training, Dues, Subscriptions, and Fees
Budget
•Review and Update Strategic Plan
Tuesday, September 9:
•Annual Business Plan – Review Proposed 2026
Capital Projects Budget
Tuesday, October 14:
•Annual Business Plan – Review Proposed 2026
Expenses Budget
Wednesday, November 12:
•Annual Business Plan - Review Proposed 2026
Rates and Other Revenue
•Adopt 2026 Fee Schedule
•2026 Stakeholder Communication Plan
Tuesday, December 9:
•Adopt 2026 Official Depository and Delegate
Authority for Electronic Funds Transfers
•Designate Official 2026 Newspaper
•Approve 2026 Regular Meeting Schedule
•Adopt 2026 Governance Agenda
•Adopt 2026 Annual Business Plan
2025 GOVERNANCE AGENDA
162