2026-1 - ERMU - Regular Commission Meeting
REGULAR MEETING OF THE
UTILITIES COMMISSION
January 13, 2026, 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 – December 2025
2.2 Regular Meeting Minutes – December 9, 2025
2.3 Special Meeting Minutes – December 18, 2025
2.4 Electric and Water Cost of Service and Rate Design Studies
2.5 Cogeneration and Small Power Production Tariff – Schedule 1 and 2
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.4f – Employee Interests
4.2 Annual Review of Committee Charters
5.0 BUSINESS ACTION (Current business action requests and performance monitoring reports.)
5.1 Financial Report – November 2025
5.2 American Public Power Association CR7 Subaward Agreement
6.0 BUSINESS DISCUSSION (Future business planning, general updates, and informational reports.)
6.1 Staff Update
6.2 City Council Update
6.3 Future Planning (Announce the next regular meeting, special meeting, or planned quorum.)
a. Regular Commission Meeting – February 10, 2026
b. 2026 Governance Agenda
6.4 Other Business (Items added during agenda approval.)
7.0 ADJOURN REGULAR MEETING
1
CHECK REGISTER
December 2025
APPROVED BY:
John Dietz
Jill Larson-Vito
Mary Stewart
Matt Westgaard
Nick Zerwas
2
Payroll/Labor
Check Register Totals
Page: 101/05/2026 3:05:54 pm
Elk River Municipal Utilities
12/05/2025 To 12/05/2025
Rev: 202303050330
Pays Job Amount Hours
Gross Pay
145,941.97 2,657.502Reg Hours
0.00 0.0020Reg Salary
1,119.37 15.253Overtime
1,356.57 11.254Double Time
3,227.30 54.005On-Call/Stand-by
84.34 0.0024FLSA
23.90 0.5025Rest Time
0.00 0.0010Bonus Pay
600.00 0.0018Commissioner Reimb - Electric
60.00 0.00104Commission Stipend
0.00 0.00105Perf. Metr. Distr.
8,410.35 134.07VACVacation Pay
3,518.29 67.00SICKSick Pay
39,747.79 720.00HOLHoliday Pay
0.00 0.0078Retro Earnings
801.30 8.505-2 On-Call/Stand-by/OT
150.00 0.0018ACommissioner Reimb. - Water
15.00 0.00104ACommission Stipend - Water
0.00 0.00VACVacation Pay - Manager
0.00 0.00PTOYPersonal Day - Year
0.00 0.003COvertime-Comp Time
0.00 0.004CDouble Time-Comp Time
0.00 0.00CM3COvertime-Comp Time Adjusted
0.00 0.00CM4CDouble Time-Comp Time Adjusted
1,096.57 20.93COMPComp Time Taken
0.00 0.00106Longevity Pay
0.00 0.00MILMilitary Pay - Calendar Year
0.00 0.0010WBonus Pay
Gross Pay Total:206,152.75 3,689.00
Total Pays:206,152.75 3,689.00
/pro/rpttemplate/acct/2.64.1/pl/PL_CHK_REG_TOTALS.xml.rpt KGreenberg25252033
Payroll/Labor
Check Register Totals
Page: 101/05/2026 3:06:43 pm
Elk River Municipal Utilities
12/19/2025 To 12/19/2025
Rev: 202303050330
Pays Job Amount Hours
Gross Pay
180,757.56 3,247.002Reg Hours
0.00 0.0020Reg Salary
1,523.58 17.753Overtime
474.16 4.004Double Time
3,105.32 56.005On-Call/Stand-by
82.02 0.0024FLSA
71.77 1.0025Rest Time
0.00 0.0010Bonus Pay
0.00 0.00105Perf. Metr. Distr.
6,711.63 127.75VACVacation Pay
8,840.19 179.50SICKSick Pay
0.00 0.00HOLHoliday Pay
0.00 0.0078Retro Earnings
764.77 8.255-2 On-Call/Stand-by/OT
6,860.32 80.00VACVacation Pay - Manager
919.98 18.00PTOYPersonal Day - Year
0.00 0.003COvertime-Comp Time
0.00 0.004CDouble Time-Comp Time
0.00 0.00CM3COvertime-Comp Time Adjusted
0.00 0.00CM4CDouble Time-Comp Time Adjusted
8,094.84 143.53COMPComp Time Taken
0.00 0.00106Longevity Pay
0.00 0.00MILMilitary Pay - Calendar Year
0.00 0.0010WBonus Pay
Gross Pay Total:218,206.14 3,882.78
Total Pays:218,206.14 3,882.78
/pro/rpttemplate/acct/2.64.1/pl/PL_CHK_REG_TOTALS.xml.rpt KGreenberg25252034
Page 101/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 1 - GENERAL FUND
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
WIRE238612/4/25 FISERV5655 CC FEES - NOV 2025 2,698.67
CC FEES - NOV 2025 674.67
CC FEES - NOV 2025 547.10
CC FEES - NOV 2025 136.78
CC FEES - NOV 2025 1,004.28
CC FEES - NOV 2025 251.07
CC FEES - NOV 2025 67.44
CC FEES - NOV 2025 16.86
CC FEES - NOV 2025 800.80
CC FEES - NOV 2025 200.20
CC FEES - NOV 2025 3,048.08
CC FEES - NOV 2025 762.02
Total for Check/Tran - 2386:10,207.97
Total for Bank Account - 1 :(1)10,207.97
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt252035
Page 201/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
WIRE503112/9/25 VOYA INSTITUTIONAL TRUST COMPAN160HCSP EMPLOYEE CONTRIBUTIONS 2,486.45
HCSP EMPLOYEE CONTRIBUTIONS 452.75
Total for Check/Tran - 5031:2,939.20
WIRE503212/9/25 VOYA INSTITUTIONAL TRUST COMPAN161MNDCP EE MANAGER CONTRIBUTIONS 356.46
MNDCP EMPLOYEE CONTRIBUTIONS 5,441.21
MNDCP EMPLOYER CONTRIBUTION 1,009.80
MNDCP EMPLOYER MGR CONTRIBUTION 599.52
MNDCP EE ROTH CONTRIBUTIONS 1,824.51
MNDCP EE ROTH MGR CONTRIBUTIONS 243.06
MNDCP EE MANAGER CONTRIBUTIONS 50.08
MNDCP EMPLOYEE CONTRIBUTIONS 822.06
MNDCP EMPLOYER CONTRIBUTION 102.91
MNDCP EMPLOYER MGR CONTRIBUTION 82.76
MNDCP EE ROTH CONTRIBUTIONS 393.43
MNDCP EE ROTH MGR CONTRIBUTIONS 32.68
Total for Check/Tran - 5032:10,958.48
WIRE503312/9/25 JOHN HANCOCK285 W&A EMPLOYER CONTRIBUTION 80.00
W&A MANAGER CONTRIBUTION 418.00
WENZEL EMPLOYEE CONTRIBUTIONS 1,005.53
WENZEL MANAGER CONTRIBUTIONS 127.25
DEF COMP ROTH CONTRIBUTIONS W&A 795.00
WENZEL EE ROTH MGR CONTRIBUTIONS 290.75
W&A EMPLOYER CONTRIBUTION 120.00
W&A MANAGER CONTRIBUTION 64.12
WENZEL EMPLOYEE CONTRIBUTIONS 183.90
WENZEL MANAGER CONTRIBUTIONS 31.81
DEF COMP ROTH CONTRIBUTIONS W&A 150.00
WENZEL EE ROTH MGR CONTRIBUTIONS 32.31
Total for Check/Tran - 5033:3,298.67
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt252036
Page 301/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
WIRE503412/9/25 MINNESOTA CHILD SUPPORT PAYMEN598 CHILD SUPPORT 589.75
WIRE503512/9/25 HEALTHEQUITY, INC738 HSA EMPLOYEE CONTRIBUTION 2,648.73
HSA EMPLOYEE CONTRIBUTION 477.11
Total for Check/Tran - 5035:3,125.84
WIRE503612/8/25 HEALTHEQUITY, INC738 ADMINISTRATIVE FEE INVOICE - DEC 2025 129.00
ADMINISTRATIVE FEE INVOICE - DEC 2025 25.50
Total for Check/Tran - 5036:154.50
WIRE503712/8/25 ONLINE UTILITY EXCHANGE (ELECTR166 UTILITY EXCHANGE REPORT 309.12
UTILITY EXCHANGE REPORT 77.28
Total for Check/Tran - 5037:386.40
WIRE503812/9/25 PERA (ELECTRONIC)153 PERA EMPLOYEE CONTRIBUTION 10,956.12
PERA CONTRIBUTIONS 12,641.74
PERA EMPLOYEE CONTRIBUTION 2,390.14
PERA CONTRIBUTIONS 2,757.86
Total for Check/Tran - 5038:28,745.86
WIRE503912/10/25 IRS - USA TAX PMT (ELECTRONIC)152 PAYROLL TAXES - FEDERAL & FICA 18,539.02
PAYROLL TAXES - FEDERAL & FICA 23,023.91
PAYROLL TAXES - FEDERAL & FICA 3,595.74
PAYROLL TAXES - FEDERAL & FICA 5,133.63
Total for Check/Tran - 5039:50,292.30
WIRE504012/11/25 MINNESOTA REVENUE (ELECTRONIC)154 PAYROLL TAXES - STATE 7,779.10
PAYROLL TAXES - STATE 1,608.86
Total for Check/Tran - 5040:9,387.96
WIRE504312/12/25 CHARTER COMMUNICATIONS549 CABLE & TELEPHONE 193.38
CABLE & TELEPHONE 48.35
Total for Check/Tran - 5043:241.73
WIRE504412/10/25 HEALTHEQUITY, INC738 FSA CLAIM REIMBURSEMENTS - 164 153.85
FSA CLAIM REIMBURSEMENTS - 164 38.46
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt252037
Page 401/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
Total for Check/Tran - 5044:192.31
WIRE504512/15/25 HEALTHEQUITY, INC738 FSA CLAIM REIMBURSEMENTS - 147 215.89
FSA CLAIM REIMBURSEMENTS - 147 53.97
Total for Check/Tran - 5045:269.86
WIRE504612/15/25 MUTUAL OF OMAHA633 EE ELEC LIFE INSURANCE - DEC 2025 216.81
LIFE,STD & LTD INSURANCE - DEC 2025 2,415.79
EE ELEC LIFE INSURANCE - DEC 2025 202.94
LIFE,STD & LTD INSURANCE - DEC 2025 612.39
Total for Check/Tran - 5046:3,447.93
WIRE504712/12/25 CARDMEMBER SERVICE9654 FIRST NATIONAL BANK VISA 4,070.53
FIRST NATIONAL BANK VISA 819.65
Total for Check/Tran - 5047:4,890.18
WIRE505212/24/25 IRS - USA TAX PMT (ELECTRONIC)152 PAYROLL TAXES - FEDERAL & FICA 1,509.27
PAYROLL TAXES - FEDERAL & FICA 599.54
PAYROLL TAXES - FEDERAL & FICA 19,201.40
PAYROLL TAXES - FEDERAL & FICA 23,098.63
PAYROLL TAXES - FEDERAL & FICA 4,153.03
PAYROLL TAXES - FEDERAL & FICA 5,500.50
Total for Check/Tran - 5052:54,062.37
WIRE505312/26/25 MINNESOTA REVENUE (ELECTRONIC)154 PAYROLL TAXES - STATE 428.77
PAYROLL TAXES - STATE 7,985.65
PAYROLL TAXES - STATE 1,769.46
Total for Check/Tran - 5053:10,183.88
WIRE505412/24/25 VOYA INSTITUTIONAL TRUST COMPAN161MNDCP EE MANAGER CONTRIBUTIONS 356.46
MNDCP EMPLOYEE CONTRIBUTIONS 5,450.45
MNDCP EMPLOYER CONTRIBUTION 412.58
MNDCP EMPLOYER MGR CONTRIBUTION 599.52
MNDCP EE ROTH CONTRIBUTIONS 1,824.52
MNDCP EE ROTH MGR CONTRIBUTIONS 243.06
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt252038
Page 501/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
MNDCP EE MANAGER CONTRIBUTIONS 50.08
MNDCP EMPLOYEE CONTRIBUTIONS 812.82
MNDCP EMPLOYER CONTRIBUTION 36.81
MNDCP EMPLOYER MGR CONTRIBUTION 82.76
MNDCP EE ROTH CONTRIBUTIONS 393.42
MNDCP EE ROTH MGR CONTRIBUTIONS 32.68
Total for Check/Tran - 5054:10,295.16
WIRE505512/24/25 JOHN HANCOCK285 W&A MANAGER CONTRIBUTION 418.00
WENZEL EMPLOYEE CONTRIBUTIONS 1,005.48
WENZEL MANAGER CONTRIBUTIONS 127.25
DEF COMP ROTH CONTRIBUTIONS W&A 795.00
WENZEL EE ROTH MGR CONTRIBUTIONS 290.75
W&A MANAGER CONTRIBUTION 64.12
WENZEL EMPLOYEE CONTRIBUTIONS 183.95
WENZEL MANAGER CONTRIBUTIONS 31.81
DEF COMP ROTH CONTRIBUTIONS W&A 150.00
WENZEL EE ROTH MGR CONTRIBUTIONS 32.31
Total for Check/Tran - 5055:3,098.67
WIRE505612/23/25 MINNESOTA CHILD SUPPORT PAYMEN598 CHILD SUPPORT 589.75
WIRE505712/24/25 HEALTHEQUITY, INC738 HSA EMPLOYEE CONTRIBUTION 2,660.62
HSA EMPLOYEE CONTRIBUTION 462.74
Total for Check/Tran - 5057:3,123.36
WIRE505812/29/25 VOYA INSTITUTIONAL TRUST COMPAN160HCSP EMPLOYEE CONTRIBUTIONS 2,562.16
HCSP EMPLOYEE CONTRIBUTIONS 505.79
Total for Check/Tran - 5058:3,067.95
WIRE506112/30/25 PERA (ELECTRONIC)153 PERA EMPLOYEE CONTRIBUTION 11,179.35
PERA CONTRIBUTIONS 12,899.31
PERA EMPLOYEE CONTRIBUTION 2,558.13
PERA CONTRIBUTIONS 2,951.67
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt252039
Page 601/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
Total for Check/Tran - 5061:29,588.46
WIRE506212/26/25 HEALTHEQUITY, INC738 2026 FSA CLAIM PREFUNDING - 147 172 3,320.00
2026 FSA CLAIM PREFUNDING - 147 172 830.00
Total for Check/Tran - 5062:4,150.00
WIRE506312/24/25 HEALTHEQUITY, INC738 FSA CLAIM REIMBURSEMENTS - 164 153.85
FSA CLAIM REIMBURSEMENTS - 164 38.46
Total for Check/Tran - 5063:192.31
WIRE506412/23/25 MINNESOTA REVENUE SALES TX (ELE174 SALES AND USE TAX - NOV 2025 227,673.96
SALES AND USE TAX - NOV 2025 0.50
SALES AND USE TAX - NOV 2025 930.54
Total for Check/Tran - 5064:228,605.00
DD2288612/4/25 CITY OF ELK RIVER11 PARTS & LABOR FOR UNIT #6 -1.24
PARTS & LABOR FOR UNIT #6 78.75
PARTS & LABOR FOR UNIT #6 -0.06
PARTS & LABOR FOR UNIT #6 4.13
PARTS & LABOR FOR UNIT #33 & 11 -20.36
PARTS & LABOR FOR UNIT #11 486.34
PARTS & LABOR FOR UNIT #33 112.59
PARTS & LABOR FOR UNIT #33 & 11 -0.07
PARTS & LABOR FOR UNIT #33 5.91
PARTS & LABOR FOR UNIT #18 -0.94
PARTS & LABOR FOR UNIT #18 64.92
PARTS & LABOR FOR UNIT #18 -0.23
PARTS & LABOR FOR UNIT #18 16.22
PARTS & LABOR FOR UNIT #12 -10.71
PARTS & LABOR FOR UNIT #12 276.74
PARTS & LABOR FOR UNIT #37 52.00
PARTS & LABOR FOR UNIT #37 13.00
PARTS & LABOR FOR UNIT #1 -1.81
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520310
Page 701/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
PARTS & LABOR FOR UNIT #1 89.97
PARTS & LABOR FOR UNIT #1 -0.46
PARTS & LABOR FOR UNIT #1 22.50
PARTS & LABOR FOR UNIT #31 -3.97
PARTS & LABOR FOR UNIT #31 119.43
PARTS & LABOR FOR UNIT #26 -1.30
PARTS & LABOR FOR UNIT #26 82.88
PARTS & LABOR FOR UNIT #29 -43.45
PARTS & LABOR FOR UNIT #29 1,115.11
FUEL USAGE - OCT 2025 2,627.45
FUEL USAGE - OCT 2025 928.76
Total for Check/Tran - 22886:6,012.10
DD2288712/4/25 AE2S790 SCADA ASSESSMENT - OCT 2025 1,870.50
DD2288812/4/25 ARCHER PLUMBING LLC728 WATER METER SERVICE 196.88
WATER METER SERVICE 28.12
Total for Check/Tran - 22888:225.00
DD2288912/4/25 ELK RIVER MUNICIPAL UTILITIES23 CYCLE 2 - ACCT 41038 - OCT 2025 99.24
CYCLE 2 - ACCT 41038 - OCT 2025 5.22
CYCLE 2 - INV GRP 413 - OCT 2025 100.00
CYCLE 2 - INV GRP 413 - OCT 2025 550.29
CYCLE 2 - INV GRP 436 - OCT 2025 1,684.42
Total for Check/Tran - 22889:2,439.17
DD2289012/4/25 FASTENAL COMPANY671 Red Locate Paint 1,722.07
DD2289112/4/25 HAWKINS, INC.809 CHLORINE CYCLINDER RENTAL 150.00
Water Chemicals 804.99
Water Chemicals 2,721.00
Total for Check/Tran - 22891:3,675.99
DD2289212/4/25 INNOVATIVE OFFICE SOLUTIONS LLC6836 OFFICE SUPPLIES 74.83
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520311
Page 801/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
OFFICE SUPPLIES 18.71
OFFICE SUPPLIES 42.70
OFFICE SUPPLIES 10.68
Total for Check/Tran - 22892:146.92
DD2289312/4/25 INSIGHT PUBLIC SECTOR5381 Subscription 5,967.18
Subscription 1,491.80
Total for Check/Tran - 22893:7,458.98
DD2289412/4/25 JT SERVICES OF MINNESOTA8083 Lighting 752.97
6'ARM 2,023.74
SWITCHGEAR 55,418.00
Total for Check/Tran - 22894:58,194.71
DD2289512/4/25 DEREK S PALMER460 Mileage 56.70
DD2289612/4/25 PLAISTED COMPANIES, INC.5056 DISPOSE OF CONCRETE BOLLARDS 52.95
DD2289712/4/25 WRIGHT HENNEPIN COOPERATIVE ELE610SECURITY - 1436 & 1705 MAIN ST 54.55
SECURITY - 1436 & 1705 MAIN ST 7.79
Total for Check/Tran - 22897:62.34
DD2289812/12/25 STUART C. IRBY CO.6107 FUSES 2,404.20
FUSES -2,404.20
Total for Check/Tran - 22898:0.00
DD2289912/12/25 CARR'S TREE SERVICE, INC5013 TREE TRIMMING - 11/8/25 7,698.71
TREE TRIMMING - 11/15/25 8,362.79
Total for Check/Tran - 22899:16,061.50
DD2290012/12/25 CITY OF ELK RIVER11 FRANCHISE FEE CREDIT - OCT 2025 -725.00
TRASH BILLED - NOV 2025 167,633.44
TRASH BILLED ASSESSMENTS - NOV 2025 -3,331.72
Total for Check/Tran - 22900:163,576.72
DD2290112/12/25 ELK RIVER MUNICIPAL UTILITIES23 CYCLE 3 - INV GRP 414 - OCT 2025 125.00
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520312
Page 901/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CYCLE 3 - INV GRP 414 - OCT 2025 669.70
CYCLE 3 - INV GRP 395 - OCT 2025 9,690.29
Total for Check/Tran - 22901:10,484.99
DD2290212/12/25 FRONTIER ENERGY, INC664 PROFESSIONAL SERVICES - OCT 2025 10,000.00
DD2290312/12/25 HAWKINS, INC.809 Water Chemicals 734.50
DD2290412/12/25 METRO SALES, INC330 COPIER MTC CONTRACT - 10/21 to 11/20/25 174.65
COPIER MTC CONTRACT - 10/21 to 11/20/25 43.67
Total for Check/Tran - 22904:218.32
DD2290512/12/25 MINNESOTA MUNICIPAL POWER AGEN1001 PURCHASED POWER - NOV 2025 1,549,067.03
PURCHASED POWER - NOV 2025 417,618.03
Total for Check/Tran - 22905:1,966,685.06
DD2290612/12/25 QUALITROL CORP.553 Temp Gauge 3,324.11
DD2290712/12/25 RESCO130 Transformer 17,125.00
Discount -8.56
Total for Check/Tran - 22907:17,116.44
DD2290812/12/25 VESSCO, INC5077 Relief Valve 681.14
DD2290912/12/25 WATER LABORATORIES INC135 WATER SAMPLING - NOV 2025 405.00
DD2295712/19/25 FAIRCHILD EQUIPMENT9424 INVOICE IS NOT OURS - CREDIT TO FOLLOW 259.08
CREDIT FOR INVOICE NOT OURS -259.08
Total for Check/Tran - 22957:0.00
DD2295812/19/25 AMERICAN PAYMENT CENTERS191 DROP BOX RENTAL CHARGES - 2026 1ST QTR 224.38
DROP BOX RENTAL CHARGES - 2026 1ST QTR 56.10
Total for Check/Tran - 22958:280.48
DD2295912/19/25 BEAUDRY OIL COMPANY6 DIESEL 2,564.34
DD2296012/19/25 BORDER STATES ELECTRIC SUPPLY9 Tool 97.56
Mtce of URD Primary 1,387.09
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520313
Page 1001/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
Conduit 804.35
ROCK ANCHOR 865.92
TUBULAR SPLICE COVER 1,502.40
MISC PARTS & SUPPLIES -14.53
MISC PARTS & SUPPLIES 199.13
Total for Check/Tran - 22960:4,841.92
DD2296112/19/25 CAMPBELL KNUTSON8843 LEGAL SERVICES - NOV 2025 2,095.78
LEGAL SERVICES - NOV 2025 523.95
Total for Check/Tran - 22961:2,619.73
DD2296212/19/25 CARR'S TREE SERVICE, INC5013 TREE TRIMMING - 11/17/25 9,247.85
TREE TRIMMING - 11/24/25 6,011.10
Total for Check/Tran - 22962:15,258.95
DD2296312/19/25 CITY OF ELK RIVER11 REVENUE TRANSFER - NOV 2025 120,850.13
SEWER BILLED - NOV 2025 253,523.72
SEWER BILLED ASSESSMENTS - NOV 2025 -4,798.57
Total for Check/Tran - 22963:369,575.28
DD2296412/19/25 CRC7448 CUSTOMER SERVICE AFTER HOURS 2,664.84
CUSTOMER SERVICE AFTER HOURS 666.21
Total for Check/Tran - 22964:3,331.05
DD2296512/19/25 ELK RIVER GAS, INC493 KEROSENE 69.73
DD2296612/19/25 ELK RIVER MUNICIPAL UTILITIES23 CYCLE 4 - INV GRP 415 - NOV 2025 175.00
CYCLE 4 - INV GRP 415 - NOV 2025 1,510.23
CYCLE 4 - INV GRP 396 - NOV 2025 219.22
CYCLE 1 - INV GRP 421 - NOV 2025 5,299.27
CYCLE 1 - ACCT 183 - NOV 2025 1,121.71
CYCLE 1 - INV GRP 101 - NOV 2025 3,068.62
CYCLE 1 - INV GRP 101 - NOV 2025 21.21
CYCLE 1 - INV GRP 101 - NOV 2025 624.26
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520314
Page 1101/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CYCLE 1 - INV GRP 101 - NOV 2025 488.25
CYCLE 1 - INV GRP 101 - NOV 2025 156.07
CYCLE 1 - INV GRP 325 - NOV 2025 325.00
CYCLE 1 - INV GRP 325 - NOV 2025 16,513.00
CYCLE 4 - ACCT 51086 - NOV 2025 61.50
Total for Check/Tran - 22966:29,583.34
DD2296712/19/25 GOPHER STATE ONE-CALL91 LOCATES FOR - NOV 2025 403.99
LOCATES FOR - NOV 2025 21.26
Total for Check/Tran - 22967:425.25
DD2296812/19/25 INNOVATIVE OFFICE SOLUTIONS LLC6836 OFFICE SUPPLIES 85.39
OFFICE SUPPLIES 21.35
OFFICE SUPPLIES 47.20
OFFICE SUPPLIES 27.84
Total for Check/Tran - 22968:181.78
DD2296912/19/25 LOCATORS & SUPPLIES INC.417 Red Locate Flags 2,632.85
DD2297012/19/25 NCPERS MINNESOTA573 EXTRA LIFE INSURANCE -JAN 2026 284.80
EXTRA LIFE INSURANCE -JAN 2026 35.20
Total for Check/Tran - 22970:320.00
DD2297112/19/25 NISC9300 PRINT SERVICES - NOV 2025 7,848.83
PRINT SERVICES - NOV 2025 2,034.79
MISC INVOICE - NOV 2025 683.12
MISC INVOICE - NOV 2025 176.75
AGREEMENTS INVOICE - NOV 2025 53.92
AGREEMENTS INVOICE - NOV 2025 787.57
AGREEMENTS INVOICE - NOV 2025 11,457.20
AGREEMENTS INVOICE - NOV 2025 260.00
AGREEMENTS INVOICE - NOV 2025 337.53
AGREEMENTS INVOICE - NOV 2025 2,575.96
AGREEMENTS INVOICE - NOV 2025 70.09
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520315
Page 1201/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
Total for Check/Tran - 22971:26,285.76
DD2297212/19/25 ROYAL SUPPLY INC603 SHOP SUPPLIES 205.93
DD2297312/30/25 CITY OF ELK RIVER11 PARTS & LABOR FOR UNIT #4 -5.19
PARTS & LABOR FOR UNIT #4 266.08
PARTS & LABOR FOR UNIT #5 -19.49
PARTS & LABOR FOR UNIT #5 591.92
PARTS & LABOR FOR UNIT #8 -5.05
PARTS & LABOR FOR UNIT #8 264.18
PARTS & LABOR FOR UNIT #78 -1.43
PARTS & LABOR FOR UNIT #78 84.62
PARTS & LABOR FOR UNIT #66 -18.61
PARTS & LABOR FOR UNIT #66 482.47
PARTS & LABOR FOR UNIT #16 -1.30
PARTS & LABOR FOR UNIT #16 82.88
FUEL USAGE - NOV 2025 2,130.68
FUEL USAGE - NOV 2025 1,623.20
Total for Check/Tran - 22973:5,474.96
DD2297412/30/25 WILLIAM COURTRIGHT496 Dues & Subscriptions - Water 38.00
DD2297512/30/25 ELK RIVER MUNICIPAL UTILITIES23 CYCLE 2 - INV GRP 436 - NOV 2025 1,550.09
CYCLE 2 - ACCT 41038 - NOV 2025 126.75
CYCLE 2 - ACCT 41038 - NOV 2025 6.67
CYCLE 2 - INV GRP 413 - NOV 2025 100.00
CYCLE 2 - INV GRP 413 - NOV 2025 523.38
Total for Check/Tran - 22975:2,306.89
DD2297612/30/25 HAWKINS, INC.809 CHLORINE 201.99
MISC PARTS & SUPPLIES 385.36
Total for Check/Tran - 22976:587.35
DD2297712/30/25 INSIGHT PUBLIC SECTOR5381 Adobe 76.09
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520316
Page 1301/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
Adpbe 19.02
Total for Check/Tran - 22977:95.11
DD2297812/30/25 MELISSA KARPINSKI353 Customer Service Week Thank You Cards 6.05
Customer Service Week Thank You Cards 1.51
Total for Check/Tran - 22978:7.56
DD2297912/30/25 LOCATORS & SUPPLIES INC.417 SAFETY VESTS 99.87
CHK9017112/4/25 AT & T MOBILITY4531 CELL PHONES & iPAD BILLING 40.37
CELL PHONES & iPAD BILLING 2,541.82
CELL PHONES & iPAD BILLING 17.30
CELL PHONES & iPAD BILLING 644.08
Total for Check/Tran - 90171:3,243.57
CHK9017212/4/25 RICHARD BICKMAN9997 INACTIVE REFUND 23.42
CHK9017312/4/25 SARAH BITZAN9997 INACTIVE REFUND 170.71
CHK9017412/4/25 JAMES BOURGOYNE9997 INACTIVE REFUND 112.03
CHK9017512/4/25 BUDDERFLY INC9997 Credit Balance Refund 1,624.02
CHK9017612/4/25 CINTAS28 MATS & TOWELS 529.75
MATS & TOWELS 75.67
MATS & TOWELS 529.75
MATS & TOWELS 75.67
Total for Check/Tran - 90176:1,210.84
CHK9017712/4/25 CORNERSTONE AUTO RESOURCE2404 LABOR FOR UNIT #29 139.95
CHK9017812/4/25 DGR ENGINEERING656 E SYSTEM COORDINATION STUDY - OCT 2025 1,500.00
ELEC SYSTEM STUDY - OCT 2025 1,000.00
Total for Check/Tran - 90178:2,500.00
CHK9017912/4/25 DRIVER & VEHICLE SERVICES5249 CRASH REPORT 5.00
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520317
Page 1401/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK9018012/4/25 ANNA M FRANK9997 INACTIVE REFUND 255.34
CHK9018112/4/25 HP MINNESOTA I, LLC9997 Credit Balance Refund 180.51
CHK9018212/4/25 HPA US1 LLC9997 Credit Balance Refund 304.23
CHK9018312/4/25 DEBRA JACKSON-SINGLETON9997 INACTIVE REFUND 29.27
CHK9018412/4/25 ANTHONY KRALJIC9997 INACTIVE REFUND 103.70
CHK9018512/4/25 ERNEST KUKOWSKI9997 INACTIVE REFUND 474.80
CHK9018612/4/25 LEWIS CUSTOM HOMES, INC9997 Credit Balance Refund 196.29
CHK9018712/4/25 MARCO TECHNOLOGIES, LLC8605 OFFICE 365 - 10/24 to 11/23/25 1,314.12
OFFICE 365 - 10/24 to 11/23/25 305.34
ACR PROGRAM - 10-29 to 11/28/25 1,404.54
ACR PROGRAM - 10-29 to 11/28/25 351.14
Total for Check/Tran - 90187:3,375.14
CHK9018812/4/25 MARTIES INC9997 INACTIVE REFUND 305.06
CHK9018912/4/25 MARTIES INC9997 INACTIVE REFUND 311.00
CHK9019012/4/25 MENARDS145 MISC PARTS & SUPPLIES 82.74
CHK9019112/4/25 DAN MONTAGUE9997 INACTIVE REFUND 90.59
CHK9019212/4/25 PERFORMANCE POOL AND SPA475 CHLORINE 906.12
CHK9019312/4/25 SHELDON PERLMAN9997 INACTIVE REFUND 90.94
CHK9019412/4/25 PRIME ADVERTISING & DESIGN, INC.811 Marketing 1,500.00
CHK9019512/4/25 RDO EQUIPMENT CO.3218 COMPACT EXCAVATOR RENTAL-10/27 to 11/23 2,317.50
PARTS FOR UNIT #61 -554.26
Total for Check/Tran - 90195:1,763.24
CHK9019612/4/25 AUTUMN RUTHERFORD9997 INACTIVE REFUND 18.73
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520318
Page 1501/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK9019712/4/25 JENNIFER SCHROEDER9997 INACTIVE REFUND 183.31
CHK9019812/4/25 STUART C. IRBY CO.6107 Tape 979.51
Tape 125.14
Total for Check/Tran - 90198:1,104.65
CHK9019912/4/25 TAYLOR WENTLAND9997 INACTIVE REFUND 320.69
CHK9020012/4/25 WESCO RECEIVABLES CORP.55 INTERRUPTER 34,750.00
TRANSFORMER BOX PAD 18,388.80
Total for Check/Tran - 90200:53,138.80
CHK9020112/4/25 KATHY WILABY9997 INACTIVE REFUND 240.49
CHK9020212/4/25 MAI YANG9997 INACTIVE REFUND 926.80
CHK9020312/12/25 AMARIL UNIFORM COMPANY2512 EMPLOYEE CLOTHING - BALACLAVA 318.97
EMPLOYEE CLOTHING - BALACLAVA 79.74
Total for Check/Tran - 90203:398.71
CHK9020412/12/25 BLUE CROSS BLUE SHIELD OF MINNES5224 VISION INSURANCE - JAN 2026 277.87
VISION INSURANCE - JAN 2026 84.33
Total for Check/Tran - 90204:362.20
CHK9020512/12/25 BURNDY LLC7003 MISC PARTS & SUPPLIES 353.47
CHK9020612/12/25 CAPSTONE HOMES9997 Credit Balance Refund 130.18
CHK9020712/12/25 DEM-CON COMPANIES, LLC723 DUMPSTER 570.00
CHK9020812/12/25 ELK RIVER YOUTH HOCKEY ASSOCIAT9999 Hydrant Rental Deposit Refund 1,242.17
CHK9020912/12/25 FANNIE MAE9997 INACTIVE REFUND 245.29
CHK9021012/12/25 FORCE FLOW453 ULTRASONIC SENSOR -208.99
Level Sensor 2,862.85
Total for Check/Tran - 90210:2,653.86
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520319
Page 1601/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK9021112/12/25 MELISSA HANSON9997 Credit Balance Refund 393.24
CHK9021212/12/25 HD ELECTRONICS INC469 CLAMP REPAIR 169.43
CHK9021312/12/25 HUBBARD ELECTRIC5341 REPLACE EXISTING METER - 13919 223RD 480.63
REPLACE EXISTING METER - 13919 223RD -2.23
Total for Check/Tran - 90213:478.40
CHK9021412/12/25 KODIAK POWER SYSTEMS, INC5377 GENERATOR INSTALL - WELL #3 -44,780.90
Generator 67,484.21
Total for Check/Tran - 90214:22,703.31
CHK9021512/12/25 MATTSON CONSTRUCTION LLC9997 INACTIVE REFUND 131.94
CHK9021612/12/25 PAT MCLEAN9997 INACTIVE REFUND 474.25
CHK9021712/12/25 MINNESOTA COMPUTER SYSTEMS INC119 COPIER MTC CONTRACT - 11/12 to 12/11/25 101.85
COPIER MTC CONTRACT - 11/12 to 12/11/25 25.47
Total for Check/Tran - 90217:127.32
CHK9021812/12/25 MOBOTREX TRAFFIC PRODUCTS, INC14 LED LIGHTS 530.75
LED LIGHTS -38.75
Total for Check/Tran - 90218:492.00
CHK9021912/12/25 LINDSAY NORTHRUP9997 INACTIVE REFUND 69.62
CHK9022012/12/25 PRIME ADVERTISING & DESIGN, INC.811 MONTHLY HOSTING OF WEBSITE 60.00
MONTHLY HOSTING OF WEBSITE 60.00
MONTHLY HOSTING OF WEBSITE 30.00
Total for Check/Tran - 90220:150.00
CHK9022112/12/25 R L LARSON EXCAVATING INC9999 Hydrant Rental Deposit Refund 1,345.47
CHK9022212/12/25 SDB CENTRAL PARTNERS LLC9997 Credit Balance Refund 865.16
CHK9022312/12/25 SDB CENTRAL PARTNERS LLC9997 Credit Balance Refund 411.27
CHK9022412/12/25 STAR ENERGY SERVICES LLC674 PROFESSIONAL SERVICES - NOV 2025 188.00
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520320
Page 1701/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK9022512/12/25 DESIREE STUMO9997 INACTIVE REFUND 17.42
CHK9022612/12/25 JILL WALCH9997 INACTIVE REFUND 89.46
CHK9022712/12/25 WILLIAM ZACHARDA9997 INACTIVE REFUND 39.53
CHK9022812/19/25 MARYANNE ANYANWU9997 INACTIVE REFUND 277.24
CHK9022912/19/25 BENEFIT EXTRAS, INC662 COBRA ADMINISTRATION - NOV 2025 15.00
CHK9023012/19/25 BLAINE LOCK & SAFE, INC.376 Lock 309.07
CHK9023112/19/25 BARBARA CAMPBELL9997 INACTIVE REFUND 16.90
CHK9023212/19/25 CENTERPOINT ENERGY3982 NATURAL GAS & IRON REMOVAL 2,659.89
NATURAL GAS & IRON REMOVAL 691.00
Total for Check/Tran - 90232:3,350.89
CHK9023312/19/25 CORNERSTONE CUSTOM BUILDS9997 Credit Balance Refund 55.51
CHK9023412/19/25 DAVE BERG CONSULTING, LLC223 COST OF SERVICE STUDY 8,000.00
COST OF SERVICE STUDY 2,000.00
Total for Check/Tran - 90234:10,000.00
CHK9023512/19/25 ELK RIVER CUB FOODS9192 COOKIES FOR MEETINGS 29.98
CHK9023612/19/25 ELK RIVER PRINTING & VENTURE PRO24 WHO OWNS WHAT - WATER FLYER 540.83
CHK9023712/19/25 ELK RIVER WINLECTRIC122 CONDUIT 89.90
CONDUIT -8.73
Mtce of OH Primary 119.71
METER SOCKET UPGRADE PART-1161 225TH 26.98
METER SOCKET UPGRADE PART-1161 225TH -1.98
CONDUIT 679.06
Mtce of OH Primary 65.60
CONDUIT -7.12
Mtce of OH Primary 97.54
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520321
Page 1801/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CONDUIT 19.40
CONDUIT -1.42
MISC PARTS & SUPPLIES 233.96
PIPE HANGER 15.96
MISC PARTS & SUPPLIES 99.88
Misc Distribution Exp 81.47
Misc Distribution Exp 87.26
CONDUIT 97.28
CONDUIT -9.86
Mtce of OH Primary 134.94
BULB - WATER TREATMENT PLANT -13.32
Misc Distribution Exp 182.34
WATER TREATMENT PLANT PARTS -377.64
CONDUIT 171.22
CONDUIT -3.94
WATER METER POWER SUPPLY 19.74
WATER METER POWER SUPPLY -1.44
WIRE 783.60
CONDUIT 97.28
CONDUIT -9.86
Mtce of OH Primary 134.94
Mtce of OH Primary 24.73
Total for Check/Tran - 90237:2,827.48
CHK9023812/19/25 PATRICK FISCHER9997 INACTIVE REFUND 43.34
CHK9023912/19/25 FS3 INC.8949 PARTS FOR UNIT #56 2,013.38
CHK9024012/19/25 GRAINGER80 COMPRESSION CONNECTION 36.78
CHK9024112/19/25 GREATAMERICA FINANCIAL SERVICES730LEASE FOR COPIER AT PLANT 105.01
LEASE FOR COPIER AT PLANT 26.26
Total for Check/Tran - 90241:131.27
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520322
Page 1901/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK9024212/19/25 HASSAN SAND & GRAVEL308 RECYCLED CLASS 5 1,191.44
Discount -16.64
Total for Check/Tran - 90242:1,174.80
CHK9024312/19/25 HEALTHPARTNERS631 DENTAL EE INSURANCE - JAN 2026 1,076.29
DENTAL ER INSURANCE - JAN 2026 2,910.67
MEDICAL EE INSURANCE - DEC 2025 143.00
MEDICAL ER INSURANCE - DEC 2025 376.30
DENTAL EE INSURANCE - JAN 2026 182.09
DENTAL ER INSURANCE - JAN 2026 864.45
Total for Check/Tran - 90243:5,552.80
CHK9024412/19/25 HOME DEPOT CREDIT SERVICES824 HOME DEPOT -174.80
HOME DEPOT 219.49
Total for Check/Tran - 90244:44.69
CHK9024512/19/25 HPA US1 LLC9997 Credit Balance Refund 163.69
CHK9024612/19/25 HRDIRECT169 EMPLOYMENT POSTERS 84.53
EMPLOYMENT POSTERS 21.13
EMPLOYMENT POSTERS 84.53
EMPLOYMENT POSTERS 21.13
Total for Check/Tran - 90246:211.32
CHK9024712/19/25 AMBER JAMES9997 INACTIVE REFUND 83.34
CHK9024812/19/25 LES KIFFE9997 INACTIVE REFUND 137.92
CHK9024912/19/25 HANNAH LOUISELLE9997 INACTIVE REFUND 527.00
CHK9025012/19/25 MARCO TECHNOLOGIES, LLC8605 PRINTER MTC CONTRACT - 12/1 to 1/1/26 196.66
PRINTER MTC CONTRACT - 12/1 to 1/1/26 49.16
Total for Check/Tran - 90250:245.82
CHK9025112/19/25 MENARDS145 MISC PARTS & SUPPLIES - UNIT #4 13.44
MISC PARTS & SUPPLIES - WELL #3 10.88
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520323
Page 2001/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
MISC PARTS & SUPPLIES - WELL #3 30.73
EXTRA COARSE SALT 101.75
WATER SOFTENER PELLETS 346.87
WATER SOFTENER PELLETS 86.72
REBATE -10.38
REBATE -29.22
REBATE -1.71
MISC PARTS & SUPPLIES 29.12
MISC PARTS & SUPPLIES 59.21
MISC PARTS & SUPPLIES 101.45
MISC PARTS & SUPPLIES -21.49
Total for Check/Tran - 90251:717.37
CHK9025212/19/25 MICHELS UTILITY SERVICES, INC520 TRENCHING - VILLAS AT FILLMORE 1,862.87
CHK9025312/19/25 MINNESOTA DEPT OF COMMERCE7293 2026 QTR 3 INDIRECT ASSESSMENT 7,711.51
CHK9025412/19/25 MINNESOTA DEPT OF HEALTH16 2025 QTR 4 WATER CONNECTION SERVICE FEE 14,230.00
CHK9025512/19/25 MOTION AUTOMATION INTELLIGENCE716 Switch for Fiber 3,782.95
CHK9025612/19/25 NPL CONSTRUCTION9999 Hydrant Rental Deposit Refund 1,376.74
CHK9025712/19/25 O'REILLY AUTOMOTIVE STORES, INC3769 BATTERY - UNIT #68 85.70
BATTERY - UNIT #68 21.42
Total for Check/Tran - 90257:107.12
CHK9025812/19/25 PDQ.COM765 PDQ CONNECT - 12/25 to 11/26 2,016.00
PDQ CONNECT - 12/25 to 11/26 504.00
Total for Check/Tran - 90258:2,520.00
CHK9025912/19/25 PERFORMANCE POOL AND SPA475 WATER CHEMICALS 604.08
CHK9026012/19/25 PRO-TEC DESIGN, INC3796 INTRUSION UPDATE - CHANGE NAMES 106.75
INTRUSION UPDATE - CHANGE NAMES 15.25
Total for Check/Tran - 90260:122.00
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520324
Page 2101/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK9026112/19/25 QUADIENT FINANCE USA, INC8606 POSTAGE 800.00
POSTAGE 200.00
Total for Check/Tran - 90261:1,000.00
CHK9026212/19/25 QUESTLINE5225 CIP NEWSLETTERS 9,850.94
CHK9026312/19/25 RDO EQUIPMENT CO.3218 PARTS FOR UNIT #61 38.84
CHK9026412/19/25 REPUBLIC SERVICES, INC574 TRASH & RECYCLING SERVICE - NOV 2025 409.55
TRASH & RECYCLING SERVICE - NOV 2025 72.87
TRASH & RECYCLING SERVICE - NOV 2025 10.41
Total for Check/Tran - 90264:492.83
CHK9026512/19/25 ROI ENERGY INVESTMENTS, LLC823 CIP REBATE 453.93
CHK9026612/19/25 JACQUELYN ROSENOW9997 INACTIVE REFUND 211.63
CHK9026712/19/25 KARL SCHIEBEL9997 INACTIVE REFUND 280.28
CHK9026812/19/25 SHORT ELLIOTT HENDRICKSON INC159 WTP FEASIBILITY STUDY 13,877.76
CHK9026912/19/25 SPORTECH309 CIP REBATE 295.86
CHK9027012/19/25 STUART C. IRBY CO.6107 Mtce of OH Primary 699.50
CHK9027112/19/25 UC LABORATORY222 SAMPLING - PHOSPHOROUS 32.34
CHK9027212/19/25 UNION CONGREGATIONAL CHURCH8376 CIP REBATE 498.02
CHK9027312/19/25 UNITED HEALTHCARE SERVICES, INC.5744 CIP REBATE 12,324.15
CHK9027412/19/25 VICTORY CLEANING SERVICES783 MONTHLY CLEANING FOR THE PLANT-NOV 2025 2,675.98
MONTHLY CLEANING FOR THE PLANT-NOV 2025 382.28
Total for Check/Tran - 90274:3,058.26
CHK9027512/19/25 WRUCK SEWER AND PORTABLE RENT5451 PORT-A-POTTY - 11/21 to 12/1/25 44.30
CHK9027612/22/25 COUNTRY SIDE SERVICES OF MINNESO213PARTS FOR UNIT #29 -6.30
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520325
Page 2201/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
12/01/2025 To 12/31/2025
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
PARTS FOR UNIT #29 83.93
Total for Check/Tran - 90276:77.63
CHK9027712/22/25 MIKE JOHNSON825 REIMBURSE FOR MATERIALS 4,900.00
REIMBURSE FOR MATERIALS 822.45
REIMBURSE FOR MATERIALS 2,114.54
Total for Check/Tran - 90277:7,836.99
CHK9027812/22/25 MUTUAL OF OMAHA633 ELEC LIFE INSURANCE - JAN 2026 256.69
LIFE & LTD INSURANCE - JAN 2026 1,760.82
ELEC LIFE INSURANCE - JAN 2026 211.76
LIFE & LTD INSURANCE - JAN 2026 443.82
Total for Check/Tran - 90278:2,673.09
CHK9027912/22/25 QUADIENT FINANCE USA, INC8606 DOC FOLDER MTC CONTRACT-1/26 to 12/26 1,234.73
DOC FOLDER MTC CONTRACT-1/26 to 12/26 308.68
Total for Check/Tran - 90279:1,543.41
CHK9028012/22/25 RDO EQUIPMENT CO.3218 PARTS FOR UNIT #70 -12.49
PARTS FOR UNIT #70 159.01
Total for Check/Tran - 90280:146.52
CHK9028112/22/25 REPUBLIC SERVICES, INC574 TRASH & RECYCLING SERVICE - NOV 2025 2,127.67
TRASH & RECYCLING SERVICE - NOV 2025 303.95
Total for Check/Tran - 90281:2,431.62
CHK9028212/22/25 STUART C. IRBY CO.6107 Switch 39,900.00
Total for Bank Account - 5 :(185)3,471,494.49
Grand Total :3,481,702.46(186)
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520326
Page 2301/05/2026 3:04:49 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
PARAMETERS ENTERED:
Check Date:12/01/2025 To 12/31/2025
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.rpt2520327
Elk River Municipal Utilities Commission Meeting Minutes
December 9, 2025
Page 1
ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
December 9, 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
Tony Mauren, Governance & Communications Manager
Tom Geiser, Operations Director
Mike Tietz, Technical Services Superintendent
Dave Ninow, Water Superintendent
Jenny Foss, Communications & Administrative Coordinator
Megan Zachman, HR Generalist
Others Present: Richard Hansen, Attorney; Dave Berg, Dave Berg Consulting, LLC
1.0 GOVERNANCE
1.1 Call Meeting to Order
The regular meeting of the Utilities Commission was called to order at 3:30 p.m. by Chair Dietz.
1.2 Pledge of Allegiance
The Pledge of Allegiance was recited.
1.3 Consider the Agenda
Moved by Commissioner Westgaard and seconded by Commissioner Larson-Vito to approve
the December 9, 2025, agenda. Motion carried 5-0
2.0 CONSENT AGENDA (Approved By One Motion)
Moved by Commissioner Stewart and seconded by Commissioner Zerwas to approve the
Consent Agenda as follows:
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
28
Elk River Municipal Utilities Commission Meeting Minutes
December 9, 2025
Page 2
Motion carried 5-0.
3.0 OPEN FORUM
No one appeared for open forum.
4.0 POLICY & COMPLIANCE
4.1 Commission Policy Review – G.4e3 – Water Services
Mr. Mauren presented a review of the Water Services policy, which outlines expectations
for providing water service to customers. A recommendation was made to update
section 1.d of the policy, giving it more general language and directing readers to the
City's engineering design standards for specific details.
Moved by Commissioner Zerwas and seconded by Commissioner Westgaard to approve the
staff-recommended changes to policy G.4e3 – Water Services. Motion carried 5-0.
4.2 2026 Governance Agenda
Mr. Mauren presented the 2026 Governance Agenda. It was noted to be similar to the
2025 agenda, with one recommended change, moving the Review and Update of the
Strategic Plan item from August to October. This change allows for a more comprehensive
review of the year's progress later in the calendar year without overloading the November
and December meetings. The Commission agreed with this change.
Moved by Commissioner Larson-Vito and seconded by Commissioner Stewart to adopt the
2026 Governance Agenda. Motion carried 5-0
4.3 2026 Performance Metrics and Incentive Compensation Policy
Mr. Hanson presented his memo on the 2026 Utilities Performance Metrics and Incentive
Compensation (UPMIC) policy. No changes were proposed for the 2026 policy.
Commissioner Westgaard noted that the scorecard did not carry the correct year. Staff
stated they would correct the document to read “2026” not “2025.”
Moved by Commissioner Westgaard and seconded by Commissioner Stewart to approve the
Performance Metrics and Incentive Compensation Policy and Scorecard for 2026. Motion
carried 5-0
29
Elk River Municipal Utilities Commission Meeting Minutes
December 9, 2025
Page 3
5.0 BUSINESS ACTION
5.1 Electric and Water Cost of Service and Rate Design Study
Dave Berg, ERMU’s rate consultant, presented the findings of the Cost of Service and Rate
Design Study for both electric and water utilities, incorporating feedback from the
November meeting. He explained there had been updated numbers in capital
improvements provided by staff since that meeting.
Electric Rates Key Points:
• Financial Projections: With existing rates, the utility's net position and cash reserves
are projected to decline, largely due to $8 million in planned capital improvements.
• Rate Recommendation: A 2% revenue increase is recommended for 2026–2029.
• Power Cost Adjustment (PCA) Change: A new formula was proposed for calculating
the PCA, factoring the total wholesale power cost per retail kilowatt-hour sold. This
change is designed to better protect the utility from all fluctuations in wholesale
power costs, not just fluctuations in the power supplier’s energy adjustment clause.
• Solar Grid Access Charge: The charge for customers with distributed energy projects
has been recalculated and is expected to decrease based on evolving industry
practices.
• Reserve Funds: The proposed 2% revenue increase is projected to gradually increase
the electric utility’s reserve fund balance from approximately 75% to 80% of its
target over the next few years.
Water Rates Key Points:
• Rate Increase: A 4% increase in water rates was recommended.
• Rate Structure: The consultant recommended reviewing the tiered rate structure for
lowering the consumption thresholds to better promote conservation.
Commissioner Stewart directed Mr. Berg’s attention to page 4 of his presentation
packet where the definition of other operating expenses discussed landfill gas
generation. Mr. Berg stated that sentence should be removed as it no longer applies to
ERMU, having ceased its landfill gas generation operation since the last study.
Mr. Hanson invited the Commission to provide its perspective on the potential rate
increases and the timeline for meeting reserve goals, explaining that the Commission
has the authority to differ from the studies’ proposals should it want to achieve its
desired reserve fund balances more quickly.
Commissioner Zerwas stated he was comfortable meeting the reserve goals over 4-5
years, and that he would favor larger increases for Tier 3 water usage as those are the
larger users. Mr. Berg explained that not as much water is sold at that level and that a
more effective approach would be to reduce ERMU’s fairly high tier thresholds.
30
Elk River Municipal Utilities Commission Meeting Minutes
December 9, 2025
Page 4
In response to a question, Mr. Berg explained that a 4% water increase will result in an
increase of less than $2 per month for an average residential customer.
There was discussion about the potential rate increases from the power provider. At
that time staff estimated it could be an increase of approximately 2.9-3%.
In discussing best practices for reserve levels, Mr. Berg explained that ERMU’s reserve
goal is approaching 50% of operating revenue, which is appropriate for a utility its size.
The Commission directed staff to bring back a presentation of Mr. Berg’s
recommendation of a 2% electric revenue increase and a 4% water rates increase for
approval at the special meeting. Per Commission request, staff stated they would
research the water rate tier structures of comparable utilities and provide a
recommendation to the Commission as well.
5.2 Financial Report – October 2025
Ms. Karpinski presented her report which showed the Utilities had a profitable month
with a net profit position of $3.9 million or 8.67%. This performance is favorable
compared to both the budget and the prior year.
There was discussion about Verizon water tower attachment lease negotiations. Mr.
Hanson explained there has been ongoing discussion with the vendor since the November
meeting when the Commission directed staff to take no action on adapting the leases in
either manor proposed by the vendor. He explained that after the recent conversations,
staff still does not recommend the full buyout option while renegotiated terms on leases
warrant some future discussions.
A majority of the Commission, excepting Commissioner Zerwas, directed staff to prepare
a financial analysis showing the revenue impact of the different lease options. During staff
updates, Commissioner Zerwas shared that he would be recusing himself from discussions
and votes on the issue due to his professional relationship with the vendor.
Moved by Commissioner Westgaard and seconded by Commissioner Larson-Vito to
receive the October 2025 Financial Report. Motion carried 5-0.
5.3 Management Policy – A.10 – Financial Reserves
Mr. Hanson presented an updated draft of the Financial Reserve policy, incorporating
feedback from the November meeting. The Commission expressed consensus that the
updates accurately reflected their previous discussion.
No formal motion was required as this is a management policy presented for transparency
and due to the policy’s impact to rate setting and budgeting.
31
Elk River Municipal Utilities Commission Meeting Minutes
December 9, 2025
Page 5
5.4 Wage & Benefits Committee - Proposed 2026 Adjustments
Mr. Hanson shared that he had received the final wage adjustment data from a peer
municipal utility that was unavailable when his memo was published. After factoring in the
final adjustment, which was at the lower end of its expected range, the overall average is on
the lower end of the range presented in November; thus, staff requested a 3.34% wage
adjustment for all staff in 2026.
Moved by Commissioner Stewart and seconded by Commissioner Zerwas to approve
the 2026 Wage Adjustment of 3.34% for all staff, effective January 1, 2026. Motion
carried 5-0.
6.0 BUSINESS DISCUSSION
6.1 Staff Updates
Mr. Hanson reported on an ongoing issue with a commercial property owner, with a history of
non-payment, who has non-functional water curb stops. The vacant building has no heat
source as gas service has also been turned off and it is unable to receive electricity due to code
violations. Staff has been monitoring the temperatures of the lines but to mitigate the risk of
pipes freezing, ERMU is hiring a contractor to repair the curb stops so the water can be shut
off. The property owner will be assessed for the work. Mr. Hanson added that legal staff
approves of this approach.
Mr. Mauren reminded the Commission of the special meeting scheduled for December 18. The
meeting was scheduled largely to approve the finalized budget and rates now that staff has
received guidance from the Commission on the rate study earlier in the meeting.
Mr. Ninow informed the Commission that the Utilities, with assistance from a consultant and
the Minnesota Department of Health, have updated the service line material inventory list. As
required, notification letters were sent to all properties with service lines listed as
"unidentified" and to approximately 30 properties with galvanized service lines that require
replacement.
6.2 City Council Update
Chair Dietz provided a city council update.
6.3 Future Planning
Chair Dietz announced the following:
a. Special Commission Meeting – December 18, 2025, 3:30 p.m., Utilities Conference
Room
b. Regular Commission Meeting – January 13, 2026
32
Elk River Municipal Utilities Commission Meeting Minutes
December 9, 2025
Page 6
c. 202 Governance Agenda
6.5 Other Business
There was no other business.
7.0 ADJOURN REGULAR MEETING
Moved by Commissioner Westgaard and seconded by Commissioner Zerwas to adjourn the
regular meeting of the Elk River Municipal Utilities Commission at 5:03 p.m. Motion carried
5-0.
Minutes prepared by Tony Mauren
___________________________________
John J. Dietz, ERMU Commission Chair
___________________________________
Jolene Richter, Deputy City Clerk
33
Elk River Municipal Utilities Commission Meeting Minutes
December 18, 2025
Page 1
ELK RIVER MUNICIPAL UTILITIES
SPECIAL MEETING OF THE UTILITIES COMMISSION
HELD AT THE UTILITIES CONFERENCE ROOM
December 18, 2025
Members Present: Chair John Dietz, Vice Chair Mary Stewart, Commissioners Jill Larson-Vito, and
Matt Westgaard
Present via Zoom: Commissioner Nick Zerwas participated in the meeting via interactive
television as he was out of town at the time of the meeting
ERMU Staff Present: Mark Hanson, General Manager
Sara Youngs, Administrations Director
Melissa Karpinski, Finance Manager
Tony Mauren, Governance & Communications Manager
Tom Geiser, Operations Director
Jenny Foss, Communications & Administrative Coordinator
Others Present: Jared Shepherd, Attorney
1.0 GOVERNANCE
1.1 Call Meeting to Order
The special meeting of the Utilities Commission was called to order at 3:30 p.m. by Chair Dietz.
1.2 Pledge of Allegiance
The Pledge of Allegiance was recited.
1.3 Consider the Agenda
There were no recommended changes to the agenda.
Moved by Commissioner Westgaard and seconded by Commissioner Larson-Vito to approve
the December 18, 2025, agenda. Motion carried 5-0.
2.0 CONSENT AGENDA (Approved By One Motion)
Due to questions about the one item on the agenda, a recommendation was made by
Commissioner Larson-Vito to remove this item from Consent for further discussion.
Moved by Commissioner Stewart and seconded by Commissioner Larson-Vito to remove
Receive Final Electric and Water Cost of Service and Rate Design Studies from the Consent
Agenda for further discussion. Motion carried 5-0.
34
Elk River Municipal Utilities Commission Meeting Minutes
December 18, 2025
Page 2
3.0 BUSINESS ACTION
2.1 Receive Final Electric and Water Cost of Service and Rate Design Studies
Commissioner Stewart had questions regarding the classification of specific line items within
the final Cost of Service and Rate Design Studies prepared by the ERMU’s consultant, Dave
Berg.
Commissioner Stewart stated that the amortization of the Minnesota Municipal Power Agency
(MMPA) membership buy-in cost, valued at approximately $668,000 annually, was classified
under Plant in Service but suggested it would be more appropriately categorized under Power
Supply. It was noted that this reclassification, while not affecting the overall 2% revenue goal,
could impact how costs are allocated across different customer classes.
A second point concerned the description of Other Operating Expense, which referenced the
local power peaking plant. Since the plant is no longer operational for power generation, its
associated costs, including labor for caretaking, may need to be re-categorized from Power
Generation to a more appropriate account, such as Distribution or General Campus
Maintenance.
Staff stated they will work with the consultant to review the classification of the MMPA
amortization and the former peaking plant expenses. An updated report will be brought back
to the Commission in January for final review and filing. No formal action was taken to receive
the report at the time.
3.1 Verizon Water Tower Lease Agreements
Commissioner Zerwas formally recused himself from discussion and voting, due to a
professional relationship with Verizon.
Having received guidance from the Commission in November 2025 to not proceed with
any changes, staff provided an update on the latest unsolicited offers from Verizon to
amend its water tower lease agreements. Verizon is requesting reductions ranging from
26.5% to 32.8% across different towers, citing financial challenges and its analysis of
redundant tower coverage, the potential consequence of which being removal of the
equipment and a loss of revenue for ERMU.
Staff noted that Verizon's actions, such as proposed longer lease durations and recently
upgrading equipment on a tower, seem to contradict their claim that the towers are less
valuable.
Mr. Hanson corrected his memo which was published as stating, “Further reductions
beyond 5% would require reducing the annual payments as needed to achieve the desired
goal,” as it should actually state 10% as that threshold.
35
Elk River Municipal Utilities Commission Meeting Minutes
December 18, 2025
Page 3
Mr. Hanson invited the Commission’s feedback on whether they were interested in
approving a reduction and what percentage reduction they were comfortable with
accepting.
Commissioners emphasized the importance of maintaining consistency across all lease
agreements with all three carriers (Verizon, AT&T, T-Mobile). It was noted that staff has
worked diligently to standardize terms, such as the 4% annual escalator, and that altering
terms for one carrier could set a difficult precedent.
The Commission felt that the company’s claimed financial burden should not be shifted to
the Utilities’ consumer-owners, noting the company has publicly reported its intention to
distribute dividends to shareholders.
Mr. Hanson explained that Verizon is able to terminate its contracts at the end of every
five-year renewal cycle without penalty. He added that the next periods start in 2028 and
2029 for the respective tower agreements.
The consensus of the Commission was to maintain the agreement terms and not
renegotiate the existing lease agreements with Verizon. No formal action was requested
or taken. Staff will proceed based on this direction.
3.2 2026 Annual Business Plan – Budget and Schedule of Rates & Fees
Ms. Karpinski presented the final 2026 Annual Business Plan for adoption. The plan
incorporates recommendations from the cost of service studies, proposing a 2% total
revenue increase for electric (a 7.06% margin), and a 4% rate increase for water (3.38%
margin).
Based on discussion at the December regular meeting, Commissioner Stewart asked if
staff had considered adjusting the water rate tiers. Staff responded that after reviewing
neighboring utilities, ERMU’s tiers are on the lower end, particularly the threshold
between Tier 2 and Tier 3. Mr. Hanson proposed to hold off on tier adjustments for 2026
to avoid compounding the rate increase.
In response to a question, Ms. Youngs explained that most high-water-bill inquiries come
from new homeowners unfamiliar with their irrigation systems. She added that the
ERMU’s new Advanced Metering Infrastructure helps proactively notify customers of
continuous water flow issues to help reduce unnecessary usage.
Moved by Commissioner Larson-Vito and seconded by Commissioner Stewart to adopt
Resolution 25-10 adopting the 2026 Annual Business Plan. Motion carried 5-0
36
Elk River Municipal Utilities Commission Meeting Minutes
December 18, 2025
Page 4
4.0 ADJOURN REGULAR MEETING
Moved by Commissioner Westgaard and seconded by Commissioner Larson-Vito to adjourn
the special meeting of the Elk River Municipal Utilities Commission at 4:00 p.m. Motion
carried 5-0.
Minutes prepared by Tony Mauren.
___________________________________
John J. Dietz, ERMU Commission Chair
___________________________________
Jolene Richter, Deputy City Clerk
37
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Mark Hanson - General Manager
MEETING DATE:
January 13, 2026
AGENDA ITEM NUMBER:
2.4
SUBJECT:
Electric and Water Cost of Service and Rate Design Studies
ACTION REQUESTED:
Receive Final Cost of Service and Rate Design Studies
BACKGROUND:
At the December 18, 2025, special meeting, staff requested the Commission to receive and file
the final copy of the electric and water cost of service and rate design study. Commissioner
Stewart raised questions regarding the classification of specific line items in the final Cost of
Service and Rate Design Studies prepared by ERMU’s consultant, Dave Berg.
Commissioner Stewart stated that the amortization of the Minnesota Municipal Power Agency
(MMPA) membership buy-in cost, valued at approximately $668,000 annually, was classified
under Plant and Service but recommended this expense would be more appropriately
categorized under Power Supply. It was noted that this reclassification, while not affecting the
overall 2% revenue goal, could impact how costs are allocated across the different customer
classes.
A second point concerned the description of Other Operating Expense, which referenced the
local power peaking plant. Since the plant is no longer operational for power generation, its
associated costs, including labor for caretaking, may need to be reclassified from Power
Generation to a more appropriate account, such as Distribution or General Campus
Maintenance.
DISCUSSION:
Staff has worked with Mr. Berg to address and clarify the concerns raised by Commissioner
Stewart. The MMPA buy-in cost was recategorized under Power Supply, and the costs
associated with the former power plant were recategorized as General Maintenance.
Staff request the commission receive and file the Cost of Service and Rate Studies.
ATTACHMENTS:
•Elk River Final Electric Report, December 22
•Elk River Final Water Report, December 10
38
ELECTRIC COST OF SERVICE AND
RATE DESIGN STUDY
Final Report
December 22, 2025
39
REPORT OUTLINE
Cover Letter
Section 1 - Introduction
Section 2 – Projected Operating Results – Existing Rates
Section 3 – Cost of Service
Section 4 – Proposed Rates
40
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 22, 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
41
- 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.
42
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.
43
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
44
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.
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.
45
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
46
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
47
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 $18,924,065
Reserves as % of Goal 75% 63% 65% 57% 56%
(1) 2025 EOY reserve balance estimated by ERMU staff based on 2025 YTD actual results
48
Exhibit 2-A
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
OPERATING REVENUES
Charges for services 36,573,483$ 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
49
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.
50
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 $29,743,263
Distribution 8,234,743
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.
51
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.
52
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.
53
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 $16,207,641 $16,583,227
Commercial Non-demand 4,165,967 4,401,535
Demand 14,290,322 13,875,362
Industrial 7,484,222 7,288,029
Total $42,148,152 $42,148,152
The revenue requirements and revenues as allocated to each class and
summarized above are shown on a total dollars basis. Table 3-3 below makes the
comparison based on percentages of total cost to serve and total revenues. The
charts following Table 3-3 show a graphical comparison between allocated cost to
serve and revenues as a percentage of the totals. The percentage
increase/(decrease) in each class’ revenue shown in Table 3-3 is the adjustment
necessary to produce revenues from each class in accordance with the allocated
cost to serve. The percentage adjustments do not represent the recommended
change in each class’ rates. The cost-of-service results are one item for
consideration in rate design. It is important to note also that the adjustments shown
in the table below would not change the total revenue received by the utility and
are not indicative of overall revenue needs of the utility going forward.
Recommendations regarding rate design are included in Section 4 of this report.
54
Cost-of-Service
- 13 -
Table 3-3
Electric Cost of Service Results
Comparison of % Cost and Revenues
2024 Test Year
Customer
Classification
Allocated
Cost to Serve Revenues Increase/
(Decrease)
Residential 38.5% 39.3% -2.3%
Commercial Non-demand 9.9% 10.4% -5.4%
Demand 33.9% 32.9% 3.0%
Industrial 17.8% 17.3% 2.7%
Total 100.0% 100.0% 0.0%
55
Section 3
- 14 -
As indicated above, ERMU’s existing class revenues do not exactly match the
allocated cost to serve each class. Cost based rates are one of several goals in
establishing rates. The relationship between allocated costs and revenues for
each class should be considered, in addition to other rate related goals, in
developing recommended rates.
56
Exhibit 3-A
2024 Power
REVENUE REQUIREMENT Test Year Supply Distribution Customer Revenue Classification Basis
Elk River Municipal Utilities
Functionalization of 2024 Test Year Revenue Requirements
Purchased Power 28,590,698$ 28,590,698$ -$ -$ -$ 100% power supply
Production
OPERATING SUPERVISION 137,835 - 137,835 - - 100% distribution
DIESEL OIL FUEL 159 - 159 - - 100% distribution
NATURAL GAS 21,926 - 21,926 - - 100% distribution
ELECTRIC & WATER CONSUMPTION 58,033 - 58,033 - - 100% distribution
OTHER EXP/PLANT SUPPLIES-ETC 9,756 - 9,756 - - 100% distribution
MISC OTHER PWR GENERATION EXP 640 - 640 - - 100% distribution
MAINTENANCE OF STRUCTURE/PLANT 13,914 - 13,914 - - 100% distribution
MTCE OF ENGINES/GENERATORS-PL 4,177 - 4,177 - - 100% distribution
MTCE OF PLANT/LAND IMPROVEMENT 20,339 - 20,339 - - 100% distribution
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 - 2,649,693 - - plant in service
AMORTIZATION 668,135 668,135 - - - 100% power supply
Total Depreciation & Amortization 3,317,828$ 668,135$ 2,649,693$ -$ -$
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
CUST BLGS NOT PD/SENT FOR COLL 15,202 - - 15,202 - 100% customer
Page 1 of 2
57
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
Total Customer Accounts 430,394$ -$ -$ 430,394$ -$
General & Administrative
SALARIES/OFFICE & COMMISSION 885,000 89,847 632,838 133,564 28,751 non PP operating expenses
TEMPORARY STAFFING - - - - - NA
OFFICE SUPPLIES & EXPENSE 95,725 9,718 68,450 14,447 3,110 non PP operating expenses
LT & WATER CONSUMPTION/OFFICE 24,245 2,461 17,337 3,659 788 non PP operating expenses
BANK CHARGES 2,845 289 2,034 429 92 non PP operating expenses
LEGAL FEES 35,361 3,590 25,286 5,337 1,149 non PP operating expenses
AUDITING FEES 18,880 1,917 13,501 2,849 613 non PP operating expenses
INSURANCE 183,582 18,638 131,274 27,706 5,964 non PP operating expenses
UTILITY SHARE DEF COMP 111,229 11,292 79,537 16,787 3,613 non PP operating expenses
UTIL SH OF MEDICAL/DENTAL 829,167 84,179 592,914 125,138 26,937 non PP operating expenses
UTILITY SHARE OF PERA 308,017 31,270 220,254 46,486 10,006 non PP operating expenses
UTILITY SHARE OF FICA 300,170 30,474 214,643 45,302 9,751 non PP operating expenses
EMPLOYEES SICK PAY 496,745 50,430 355,208 74,969 16,138 non PP operating expenses
EMP HOLIDAY PAY 179,076 18,180 128,052 27,026 5,818 non PP operating expenses
EMPLOYEE VACATION & PTO 331,860 33,691 237,304 50,084 10,781 non PP operating expenses
UPMIC DISTRIBUTION 112,540 11,425 80,474 16,985 3,656 non PP operating expenses
LONGEVITY PAY 6,963 707 4,979 1,051 226 non PP operating expenses
CONSULTING FEES 40,307 4,092 28,822 6,083 1,309 non PP operating expenses
TELEPHONE 30,987 3,146 22,158 4,677 1,007 non PP operating expenses
ADVERTISING 14,071 1,429 10,062 2,124 457 non PP operating expenses
DUES & SUBSCRIPTIONS - FEES 123,647 12,553 88,416 18,661 4,017 non PP operating expenses
TRAVEL EXPENSE - - - - - NA
SCHOOLS & MEETINGS 199,541 20,258 142,686 30,115 6,482 non PP operating expenses
MTCE OF GENERAL PLANT & OFFICE 10,072 1,023 7,202 1,520 327 non PP operating expenses
Total General & Administrative 4,340,030$ 440,608$ 3,103,432$ 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$ 29,748,063$ 8,151,929$ 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) - (773,748) - - plant in service
Gain (Loss) on sale of capital assets (16,154) - - - (16,154) 100% revenue
TOTAL NON-OPERATING INCOME (EXPENSES)474,055$ -$ (773,748)$ -$ 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$ 29,743,263$ 8,234,743$ 1,720,514$ 2,449,632$
100%71%20%4%6%
Page 2 of 2
58
Exhibit 3-B
2024
REVENUE REQUIREMENT Test Year Demand Energy Classification Basis
Elk River Municipal Utilities
2024 Test Year Power Supply Classification
Purchased Power 28,590,698$ 7,343,889$ 21,246,809$ per power supply
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 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 - - - NA
AMORTIZATION 668,135 668,135 - 100% demand
Total Depreciation & Amortization 668,135$ 668,135$ -$
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 page 1 of 2
59
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 89,847 24,701 65,146 total revenue requirement
TEMPORARY STAFFING - - - NA
OFFICE SUPPLIES & EXPENSE 9,718 2,672 7,046 total revenue requirement
LT & WATER CONSUMPTION/OFFICE 2,461 677 1,785 total revenue requirement
BANK CHARGES 289 79 209 total revenue requirement
LEGAL FEES 3,590 987 2,603 total revenue requirement
AUDITING FEES 1,917 527 1,390 total revenue requirement
INSURANCE 18,638 5,124 13,514 total revenue requirement
UTILITY SHARE DEF COMP 11,292 3,104 8,188 total revenue requirement
UTIL SH OF MEDICAL/DENTAL 84,179 23,142 61,036 total revenue requirement
UTILITY SHARE OF PERA 31,270 8,597 22,674 total revenue requirement
UTILITY SHARE OF FICA 30,474 8,378 22,096 total revenue requirement
EMPLOYEES SICK PAY 50,430 13,864 36,566 total revenue requirement
EMP HOLIDAY PAY 18,180 4,998 13,182 total revenue requirement
EMPLOYEE VACATION & PTO 33,691 9,262 24,429 total revenue requirement
UPMIC DISTRIBUTION 11,425 3,141 8,284 total revenue requirement
LONGEVITY PAY 707 194 513 total revenue requirement
CONSULTING FEES 4,092 1,125 2,967 total revenue requirement
TELEPHONE 3,146 865 2,281 total revenue requirement
ADVERTISING 1,429 393 1,036 total revenue requirement
DUES & SUBSCRIPTIONS - FEES 12,553 3,451 9,102 total revenue requirement
TRAVEL EXPENSE - - - NA
SCHOOLS & MEETINGS 20,258 5,569 14,689 total revenue requirement
MTCE OF GENERAL PLANT & OFFICE 1,023 281 741 total revenue requirement
Total General & Administrative 440,608$ 121,131$ 319,476$
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 29,748,063$ 8,181,777$ 21,566,285$
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 - - - total revenue requirement
Gain (Loss) on sale of capital assets - - - NA
TOTAL NON-OPERATING INCOME (EXPENSES)-$ -$ -$
TRANSFER TO CITY -$ -$ -$ NA
MARGIN -$ -$ -$ NA
TOTAL REVENUE REQUIREMENT 29,743,263$ 8,176,977$ 21,566,285$
page 2 of 2
60
Exhibit 3-C
2024 Customer
REVENUE REQUIREMENT Test Year Demand Facilities Classification Basis
OPERATING EXPENSES
Purchased Power -$ -$ -$ NA
Production
OPERATING SUPERVISION 137,835 137,835 - 100% Dist demand
DIESEL OIL FUEL 159 159 - 100% Dist demand
NATURAL GAS 21,926 21,926 - 100% Dist demand
ELECTRIC & WATER CONSUMPTION 58,033 58,033 - 100% Dist demand
OTHER EXP/PLANT SUPPLIES-ETC 9,756 9,756 - 100% Dist demand
MISC OTHER PWR GENERATION EXP 640 640 - 100% Dist demand
MAINTENANCE OF STRUCTURE/PLANT 13,914 13,914 - 100% Dist demand
MTCE OF ENGINES/GENERATORS-PL 4,177 4,177 - 100% Dist demand
MTCE OF PLANT/LAND IMPROVEMENT 20,339 20,339 - 100% Dist demand
Total Production 266,779$ 266,779$ -$
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 2,649,693 1,909,257 740,436 Dist/Cust split
AMORTIZATION - - - NA
Total Depreciation & Amortization 2,649,693$ 1,909,257$ 740,436$
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
61
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 632,838 421,566 211,273 total revenue requirement
TEMPORARY STAFFING - - - NA
OFFICE SUPPLIES & EXPENSE 68,450 45,598 22,852 total revenue requirement
LT & WATER CONSUMPTION/OFFICE 17,337 11,549 5,788 total revenue requirement
BANK CHARGES 2,034 1,355 679 total revenue requirement
LEGAL FEES 25,286 16,844 8,442 total revenue requirement
AUDITING FEES 13,501 8,993 4,507 total revenue requirement
INSURANCE 131,274 87,448 43,826 total revenue requirement
UTILITY SHARE DEF COMP 79,537 52,983 26,553 total revenue requirement
UTIL SH OF MEDICAL/DENTAL 592,914 394,970 197,944 total revenue requirement
UTILITY SHARE OF PERA 220,254 146,722 73,532 total revenue requirement
UTILITY SHARE OF FICA 214,643 142,985 71,658 total revenue requirement
EMPLOYEES SICK PAY 355,208 236,622 118,586 total revenue requirement
EMP HOLIDAY PAY 128,052 85,302 42,750 total revenue requirement
EMPLOYEE VACATION & PTO 237,304 158,080 79,224 total revenue requirement
UPMIC DISTRIBUTION 80,474 53,608 26,866 total revenue requirement
LONGEVITY PAY 4,979 3,317 1,662 total revenue requirement
CONSULTING FEES 28,822 19,200 9,622 total revenue requirement
TELEPHONE 22,158 14,761 7,397 total revenue requirement
ADVERTISING 10,062 6,703 3,359 total revenue requirement
DUES & SUBSCRIPTIONS - FEES 88,416 58,899 29,518 total revenue requirement
TRAVEL EXPENSE - - - NA
SCHOOLS & MEETINGS 142,686 95,050 47,636 total revenue requirement
MTCE OF GENERAL PLANT & OFFICE 7,202 4,798 2,404 total revenue requirement
Total General & Administrative 3,103,432$ 2,067,353$ 1,036,078$
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 8,151,929$ 5,618,984$ 2,532,945$
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 (773,748) (557,530) (216,218) Dist/Cust split
Gain (Loss) on sale of capital assets - - - NA
TOTAL NON-OPERATING INCOME (EXPENSES)(773,748)$ (557,530)$ (216,218)$
TRANSFER TO CITY -$ -$ -$ NA
MARGIN -$ -$ -$ NA
TOTAL REVENUE REQUIREMENT 8,234,743$ 5,485,580$ 2,749,162$
page 2 of 2
62
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
63
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
64
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$ 15,265,660$ 3,923,843$ 13,459,775$ 7,049,242$
R 100.0%38.5%9.9%33.9%17.8%
Elk River Municipal Utilities
2024 Test Year Allocation Factors
page 1 of 1
65
Exhibit 3-F
Commercial Commercial Allocation
Total Residential Non-demand Demand Industrial Factor
Power Supply
Demand 8,176,977 3,000,104 822,475 2,997,254 1,357,145 12 CP
Energy 21,566,285 7,127,964 2,012,216 7,662,360 4,763,746 RE
Total Power Supply 29,743,263$ 10,128,067$ 2,834,690$ 10,659,614$ 6,120,891$
Distribution
Demand 5,485,580 2,373,664 574,906 1,857,015 679,995 1 NCP
Customer Facilities 2,749,162 1,424,860 265,104 815,424 243,774 CF
Total Distribution 8,234,743$ 3,798,524$ 840,010$ 2,672,440$ 923,769$
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$ 142,415 36,606 125,568 65,763 R
Other Operating Income (873,214) (335,786) (86,309) (296,063) (155,056) R
Non-Operating Income (1,247,803) (479,830) (123,334) (423,067) (221,572) R
Transfer to City 1,527,629 587,434 150,992 517,942 271,260 R
Margin 2,672,669 1,027,748 264,169 906,168 474,584 R
Total Revenue 2,449,632$ 941,981$ 242,124$ 830,547$ 434,980$
Total Revenue Requirements 42,148,152$ 16,207,641$ 4,165,967$ 14,290,322$ 7,484,222$
Total Revenues 42,148,152$ 16,583,227$ 4,401,535$ 13,875,362$ 7,288,029$
Percent Revenue Requirements 100.0%38.5%9.9%33.9%17.8%
Percent Revenues 100.0%39.3%10.4%32.9%17.3%
Percent Change 0.0%-2.3%-5.4%3.0%2.7%
Revenue Req/kWh 0.132 0.153 0.140 0.126 0.106
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
66
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
67
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) = $.01663/kWh
The calculation shown above is shown on an annual basis, but the calculation would
actually be done monthly to calculate the appropriate PCA based on monthly wholesale
power costs. Based on billing cycles, the PCA charge would lag the monthly wholesale
bill by two months.
It is important to recognize that the proposed rates in this report are designed to work
with this PCA approach. If a different PCA approach is adopted, the rate
recommendations would need to change to match the altered PCA. The PCA formula
68
Proposed Rates
- 17 -
base amount, the projected wholesale power costs per retail kWh and the resulting
projected PCA charges for the Study Period are shown in Table 4-1.
Table 4-1
PCA Projections
($/kWh)
Year
Projected Wholesale $ per
Retail kWh
Less PCA Formula
Base
Resulting Retail PCA
2026 0.09559 0.07896 0.01663
2027 0.09667 0.07896 0.01771
2028 0.09777 0.07896 0.01881
2029 0.09889 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.
69
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.
70
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.
71
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
72
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 - $5,137,593
($3,798,524 plus $1,339,069) (Exhibit 3-F)
Allocated Residential Revenue cost - $941,981 (Exhibit 3-F)
Residential Revenue adjustment - $941,981/$5,137,593 = 17.3%
Allocated Residential Distribution Demand cost - $2,373,664 (Exhibit 3-F)
Adjusted Resid. Distribution Demand cost - $2,373,664 x 1.173 = $2,784,308
Residential Sum of Maximum Demands – 574,671 kW (Exhibit 3-E)
Residential Distribution Demand Cost/kW - $2,784,308/574,671 = $4.85/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 $4.85/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 $5.56/kW charge in effect for ERMU.
73
Exhibit 4-A
Current Proposed Proposed Proposed Proposed
Class Rate 2026 2027 2028 2029
Residential ER012/ERA13
Customer (per month)15.00$ 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)0.05010$ 0.05343$ 0.05500$ 0.05617$ 0.05647$
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)32.00$ 33.00$ 34.00$ 36.00$ 38.00$
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$
Security Lights (per month)
Standard Low Output w/ Wood Pole 10.00$ 10.20$ 10.40$ 10.61$ 10.82$
Standard Low Output 12.00$ 12.24$ 12.48$ 12.73$ 12.99$
Standard Medium Output 17.00$ 17.34$ 17.69$ 18.04$ 18.40$
Standard High Output 22.00$ 22.44$ 22.89$ 23.35$ 23.81$
Standard Low Ouput w/ Decorative Pole 24.00$ 24.48$ 24.97$ 25.47$ 25.98$
Decorative Med Ouput w/ Decorative Pole 33.00$ 33.66$ 34.33$ 35.02$ 35.72$
Elk River Municipal Utilities
Existing and Proposed Electric Rates
page 1 of 1
74
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
75
WATER COST OF SERVICE AND RATE
DESIGN STUDY
Final Report
December 10, 2025
76
REPORT OUTLINE
Cover Letter
Section 1 - Introduction
Section 2 – Projected Operating Results – Existing Rates
Section 3 – Cost of Service
Section 4 – Proposed Rates
77
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 10, 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
78
- 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.
79
- 2 -
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
80
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.
81
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
82
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
83
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 $12,984,951
Reserves as % of ERMU
Goal 86% 57% 55% 57% 52%
(2) 2025 EOY reserve balance estimated by ERMU staff based on 2025 YTD actual results
84
Exhibit 2-A
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
OPERATING REVENUES
Charges for services 2,613,812$ 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
85
- 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.
86
Section 3
- 8 -
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.
87
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
88
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
89
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%
90
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.
91
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
92
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
93
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
94
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
95
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
96
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
97
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
98
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
99
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
100
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
101
- 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.
102
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.
103
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.
104
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 $73.37
105
Exhibit 4-A
2026 2027 2028 2029
Current Proposed Proposed Proposed Proposed
Class Rate Rate Rate Rate Rate
Residential
Customer (per month)10.23$ 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
106
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
107
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Sara Youngs – Administrations Director
MEETING DATE:
January 13, 2026
AGENDA ITEM NUMBER:
2.5
SUBJECT:
Cogeneration and Small Power Production Tariff - Schedules 1 and 2
ACTION REQUESTED:
Adopt Resolution 26-1 - ERMU Cogeneration and Small Power Production Tariff – Schedules 1
and 2
BACKGROUND:
Every municipal electric utility should have a policy reflecting the expectations and obligations
of the utility and customers who seek to interconnect their own electric generation facilities
with the distribution system. For ERMU these facilities consist of wind or solar photovoltaic
systems that are less than 40kW.
To allow for consistency over all municipals in the state, ERMU staff continues to use models
established by the Minnesota Public Utilities Commission and modified by the Minnesota
Municipal Utilities Association (MMUA) and Minnesota Municipal Power Agency (MMPA). The
policies were adopted by the Commission at the February 13, 2018, commission meeting, and
revised policies were adopted at the May 14, 2019, commission meeting.
DISCUSSION:
The policies and rules outline that, at least annually, the Commission will review and adopt
Schedules 1 and 2 of the Cogeneration and Small Power Production Tariff. The two schedules
reflect the average retail rates for the applicable class of customer and the method of
reimbursement selected by the customer owning the distributed generation facility. Attached
as exhibits to the resolution are the updated schedules for 2026.
ATTACHMENTS:
• Resolution No. 26-1 - ERMU Cogeneration and Small Power Production Tariff –
Schedules 1 and 2
108
RESOLUTION NO. 26-1
BOARD OF COMMISSIONERS
ELK RIVER MUNICIPAL UTILITIES
A RESOLUTION APPROVING THE UPDATED COGENERATION AND SMALL POWER
PRODUCTION TARIFF FOR ELK RIVER MUNICIPAL UTILITIES
WHEREAS, the Rules Governing the Interconnection of Cogeneration and Small Power
Production Facilities (“Rules”) with Elk River Municipal Utilities(“ERMU”) and Minnesota
Statutes Section 216B.164 (“Statute”) require ERMU to file a Cogeneration and Small Power
Production Tariff with ERMU Commission annually; and
WHEREAS, the statute and the Rules require the information contained in schedules 1, 2 and 3
described in Exhibit A to this Resolution; and
WHERAS, these filings shall be maintained at ERMU offices and shall be made available for
public inspection during normal business hours.
THEREFORE, BE IT RESOLVED that the Elk River Municipal Utilities Commission approves the
Cogeneration and Small Power Production Tariff attached as Exhibit A to this Resolution for
transactions following the date of adoption stated below.
This Resolution Passed and Adopted this 13th day of January 2026.
John Dietz, Chair
Mark Hanson, General Manager
109
EXHIBIT A
COGENERATION AND SMALL POWER PRODUCTION TARIFF
TARIFF
Pursuant to its Rules Governing the Interconnection of Cogeneration and Small Power Production
Facilities, Elk River Municipal Utilities (“Utility”) establishes and/or updates its Cogeneration and
Small Power Production Tariff (“Tariff”) for billing and sales transactions following the date of Tariff
approval as follows.
The Tariff shall consist of the following three schedules.
SCHEDULE 1.
Calculation of average retail utility energy rates for each utility customer class.
SCHEDULE 2.
Rates at which Utility purchases energy and capacity from the wholesale supplier from which
purchases may first be avoided.
SCHEDULE 3.
Utility's adopted interconnection process, or “distributed generation tariff” adopted in compliance
with Minnesota Statutes Section 216B.1611, subd. 3(2), including standard contract forms to be
used with customers interconnecting qualifying facilities as well as general technical
interconnection and interoperability requirements.
110
SCHEDULE 1 - AVERAGE RETAIL UTILITY ENERGY RATE
Average Retail Utility Energy Rate: Available to any Qualifying Facility of less than 40 kW capacity
that does not select either Roll Over Credits, Simultaneous Purchase and Sale Billing or Time of Day
rates.
Utility shall bill Qualifying Facilities for any excess of energy supplied by Utility above energy
supplied by the Qualifying Facility during each billing period according to Utility’s applicable rate
schedule. Utility shall pay the customer for the energy generated by the Qualifying Facility that
exceeds that supplied by Utility during a billing period at the “average retail utility energy rate.”
"Average retail utility energy rate" means, for any class of utility customer, the quotient of the total
annual class revenue from sales of electricity minus the annual revenue resulting from fixed
charges, divided by the annual class kilowatt-hour sales. Data from the most recent 12-month
period available shall be used in the computation.
“Average retail utility energy rates” are as follows:
Starting January 2024, a monthly Grid Access Fee will be applied to all interconnection
applications. Please refer to the Elk River Municipal Utilities Fee Schedule for the approved
amounts.
Customer Class 2025 Average Retail
Utility Energy Rate
Residential $0.1397 / kWh
Commercial Non-Demand $0.1273 / kWh
Commercial Demand $0.0824 / kWh
Large Industrial Demand $0.0813 / kWh
111
SCHEDULE 2 – WHOLESALE SUPPLY RATES
Wholesale Supply Rates: A “non-generating utility” must list the rates at which it purchases energy
and capacity. If the utility has more than one wholesale supplier, the rates listed are of that supplier
from which purchases may first be avoided.
Energy ($/kWh) Capacity ($/kWh) REC ($/kWh)
Summer Months (June-Sept) 0.0614 0 0
On Peak 0.0338 0 0
Off Peak 0.0469 0 0
All Hours 0 0
Winter Months (Oct-May) 0 0
On Peak 0.0482 0 0
Off Peak 0.0342 0 0
All Hours 0.0407 0 0
0 0
Annual (January-December) 0.0428 0 0
112
SCHEDULE 3 – INTERCONNECTION PROCESS
Interconnection Process: In order to provide for coordinated interconnection of customer-owned
distributed energy resources and comply with Minnesota Statutes Section 216B.1611, subd. 3(2),
Utility has adopted the “Minnesota Municipal Interconnection Process (M-MIP) 2022” as recognized
by the Minnesota Municipal Utilities Association Board of Directors at its February 9, 2022, meeting
and made publicly available at mmua.org.
General technical requirements may be found in the Minnesota Technical Interconnection and
Interoperability Requirements (TIIR) as adopted by the Minnesota Public Utilities Commission on
January 22, 2020 as part of DOCKET NO. E-999/CI-16-521.
For utility-specific safety standards, required operating procedures for interconnected operations,
and the functions to be performed by any control and protective apparatus, please contact Utility
for its Technical Specifications Manual (TSM).
113
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Tony Mauren – Governance & Communications Manager
MEETING DATE:
January 13, 2026
AGENDA ITEM NUMBER:
4.1
SUBJECT:
Commission Policy Review – G.4f – Employee Interests
ACTION REQUESTED:
None
BACKGROUND/DISCUSSION:
This month commissioners are reviewing policy G.4f – Employee Interests to make comments,
ask questions, or recommend updates.
With policy G.4f, the Commission sets forth its expectations for the General Manager
concerning the employment, termination of employment, management, compensation, and
treatment of employees.
Staff is not recommending any updates to the policy.
ATTACHMENTS:
• ERMU Policy – G.4f – Employee Interests
114
______________________________________________________________________________
Page 1 of 2
COMMISSION POLICY
Section: Category:
Governance Delegation to Management Policies
Policy Reference: Policy Title:
G.4f Employee Interests
PURPOSE:
With this policy, the Commission sets forth its expectations for the General Manager concerning
the employment, termination of employment, management, compensation and treatment of
employees.
POLICY:
In all ERMU interactions with and among the employees of ERMU, the General Manager
shall not intentionally allow situations, processes, actions, behaviors or attitudes that are
unsafe, illegal, undignified, inattentive or unresponsive to employee needs or requests, or
otherwise in conflict with the organizational values advocated by the Commission. (See
Organizational Values Policy).
Consistent with this general statement:
1. The General Manager shall not allow ERMU management or the Commission to be
inadequately informed about, or fail to exercise reasonable judgment and discretion regarding
appropriate and timely action on, any issue of material significance concerning employee
safety and health, performance, satisfaction and morale, or employment policies and
processes.
2. The General Manager shall not operate without an Employee Safety Manual.
3. The General Manager shall not operate without proactive management support for a safety
culture that includes expected compliance with the Safety Manual, participation in
ongoing safety training, consistent use of safe work practices and personal protective
equipment, reporting of unsafe conditions and safety incidents/near misses, and
accountabilities for safety at the organizational, work group, and individual level.
115
ERMU Commission Policy – G.4f Employee Interests
______________________________________________________________________________
______________________________________________________________________________
Page 2 of 2
4. The General Manager shall not operate without documented employment policies,
processes, and practices that have been adopted by the Commission and communicated to
employees in the form of an ERMU Employee Handbook.
5. The General Manager shall exercise reasonable judgment and discretion to avoid operating
ERMU in material contravention of the Commission-approved employment policies,
processes, and practices or any applicable employment law or regulation.
6. The General Manager shall adopt a reasonable process for notifying employees of material
changes to the ERMU Employee Handbook and other applicable employee policies.
7. The General Manager shall adopt a reasonable process for conducting and documenting
annual employee performance planning and evaluation in a manner consistent with the
nature of each employee’s duties.
8. Within the financial limitations of the budget approved by the Commission, the General
Manager shall provide employees with safe working conditions, adequate facilities and
equipment, and other support needed to enable high levels of employee performance, job
satisfaction, and career development.
9. The General Manager shall not use methods of collecting, reviewing, transmitting, or
storing employee information that fail to protect the information against improper access
and use, damage or loss, or unauthorized destruction.
POLICY HISTORY:
Adopted August 8, 2017
116
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Tony Mauren – Governance & Communications Manager
MEETING DATE:
January 13, 2026
AGENDA ITEM NUMBER:
4.2
SUBJECT:
Annual Review of Committee Charters
ACTION REQUESTED:
None
BACKGROUND:
ERMU Commission Policy G.2g - Commission Committees, which is attached, states that “The
Commission will review the committee charter and performance of any standing committee at
least annually to determine if changes are required or if the committee is still required.”
DISCUSSION:
The annual review of the committee charters is an opportunity for the Commission to review
the purpose for the committees and whether they are still needed. This is also an opportunity
for the Commission to give direction to the committees. The schedule of this annual review is
intentionally prior to March when the Commission appoints committee members.
There are currently four commission-created committees: Wage & Benefits Committee,
Financial Reserves & Investment Committee, Information Security Committee, and Dispute
Resolution Committee. Their respective charters are attached.
There were no changes to these policies in 2025.
ATTACHMENT:
• ERMU Policy - G.2g - Commission Committees
• ERMU Policy - G.2g1 - Wage & Benefits Committee Charter
• ERMU Policy - G.2g2 - Financial Reserves & Investment Committee Charter
• ERMU Policy - G.2g3 - Information Security Committee Charter
• ERMU Policy - G.2g4 - Dispute Resolution Committee Charter
117
______________________________________________________________________________
Page 1 of 2
COMMISSION POLICY
Section: Category:
Governance Governance Policies
Policy Reference: Policy Title:
G.2g Commission Committees
PURPOSE:
With this policy, the Commission establishes and communicates its purposes and the means by
which it creates and empowers committees to assist the Commission in its work. This policy
applies to any group formed by Commission action, whether or not it is called a committee and
whether or not the group includes Commission members. It does not apply to committees formed
under the authority of the General Manager.
POLICY:
Commission committees, when created, will be used to reinforce the wholeness of the
Commission and never to interfere with the delegation of authority from the Commission to the
General Manager or to any officer of the Commission. Commission committees will not have
direct involvement with current management and staff employee functions.
Consistent with this general statement:
1. The Commission will use committees sparingly and only for as long as required to
accomplish its purposes. Committees may be appropriate in circumstances where the
Commission recognizes the need for more in-depth review of information and issues, and
where a committee is the best way to make effective and efficient use of available
Commission member expertise and time. Committees may also be appropriate where it is
necessary or desirable for the Commission to visibly demonstrate regulatory compliance or
accountability to its stakeholders (e.g. Financial Reserves and Investments Committee).
2. Committees ordinarily will assist the Commission in the following specific ways by:
a. Monitoring organization performance metrics and related information;
b. Preparing policy alternatives and their implications for Commission deliberation and
action;
118
ERMU Commission Policy – G.2g Commission Committees
______________________________________________________________________________
______________________________________________________________________________
Page 2 of 2
c. Determining the level of compliance with existing Commission policies and evaluating
the results of policy compliance or non-compliance.
3. When the Commission creates a committee, it will develop and approve by resolution a
written committee charter that sets forth the purposes, duration, expected outcomes,
leadership, membership, delegated authority, available resources, and other information
needed for the committee to function successfully. The General Manager will designate
management/staff committee members if so requested. The Commission, by majority vote,
will appoint Commission members to committees and remove or replace them, as
appropriate. The Commission, by majority vote, will also appoint, remove, and replace a
Committee Chair, Vice-Chair and any other positions of leadership that the Commission
determines appropriate.
4. The Commission recognizes that appointments to a Committee provide opportunities for
learning and Governance development. Accordingly, the Commission endeavors to appoint
Commission members to committee leadership positions who do not already hold a
Commission office.
5. The Commission will review the committee charter and performance of any standing
committee at least annually to determine if changes are required or if the committee is still
required.
6. Commission committees may not convene a meeting that includes a quorum of the
Commission.
7. Commission committees may not speak or act for the Commission except when formally
given such authority for specific and time-limited purposes. Expectations and authorities will
be carefully stated in order not to conflict with authority delegated to the General Manager or
Commission Chair.
8. Commission committees may not exercise authority over management and staff employees.
The General Manager is accountable to the whole Commission and is not required to obtain
approval of any Commission committee before taking an executive action.
9. Commission committees will avoid relating to or identifying with discrete parts of the
organization rather than the whole. A Commission committee that has helped the
Commission create policy on a particular subject will not be used to monitor organizational
performance on that same subject, except with specific Commission approval.
POLICY HISTORY:
Adopted May 9, 2017
119
______________________________________________________________________________
Page 1 of 2
COMMISSION POLICY
Section: Category:
Governance Governance Policies
Policy Reference: Policy Title:
G.2g1 Wage & Benefits Committee Charter
PURPOSE:
The Wage and Benefits Committee exists to help the Commission develop and maintain a pay
plan structure and benefits package that are market competitive, help promote employee
retention, and to help the Commission make informed decisions which provide value to the
customers through fair labor expenses. This Committee also exists to help the Commission with
succession planning and review pay equity compliance.
MEMBERSHIP:
The Committee shall be comprised of two Commissioners, the General Manager, the
Administrations Director, and the Operations Director. At no time shall there be a quorum of the
Commission on the Committee.
The Commission shall appoint Committee members annually following the Commission election
of officers during the March Regular Commission meeting. The Commission shall also appoint
the Committee Chair at that time.
ROLE OF THE COMMITTEE CHAIR:
The primary role of the Committee Chair is to run the Committee meetings. The Committee will
adhere to the Current edition of Robert’s Rules of Order Newly Revised for all situations to
which they are applicable and are not inconsistent with ERMU’s bylaws, policies, and any
special rules of order that the Commission may adopt. Committee meetings may be open or
closed in accordance with Open Meeting Law.
AUTHORITY:
Except as established in this Committee Charter, the authority of the Committee is limited to the
purpose of research and recommendation to the Commission. The Committee, at the discretion
and through formal action of the Commission, may be empowered beyond the role of research
120
ERMU Commission Policy – G.2g1 Wage & Benefits Committee Charter
______________________________________________________________________________
______________________________________________________________________________
Page 2 of 2
and recommendation such that it is consistent with the Organizational Core Purpose policies
and the Commission Committees policy.
SPECIFIC DUTIES:
1. At the request of the Commission, research and analyze topics related to employee
compensation and benefits.
2. Annually perform market benchmarking and evaluate wages. The Committee shall present
options and make recommendations regarding cost of living adjustments and pay plan
structure modifications to the Commission for their consideration.
3. Review insurance policies and evaluate policy renewals related to employee benefit
insurances. The Committee shall present options and make recommendations regarding these
insurance policies to the Commission for their consideration.
4. Evaluate wage and benefit requests from employees. Present and make recommendations to
the Commission as appropriate.
5. Review submittal information pertaining to pay equity compliance requirements and present
options and make recommendations to the Commission as appropriate.
6. Record minutes of Committee meetings. Committee meeting minutes shall be subject to
applicable data retention law and policies.
SCHEDULE:
At a minimum, the Committee shall meet on a quarterly basis.
TERMINATION:
The Committee shall exist until at such time formal action of the Commission is taken to
dissolve the Committee.
POLICY HISTORY:
Adopted May 9, 2017
Revised February 14, 2023
Revised January 9, 2024
121
______________________________________________________________________________
Page 1 of 2
COMMISSION POLICY
Section: Category:
Governance Governance Policies
Policy Reference: Policy Title:
G.2g2 Financial Reserves & Investment
Committee Charter
PURPOSE:
The Financial Reserves & Investment Committee exists to help the Commission develop and
maintain industry appropriate financial reserves and investment policies.
MEMBERSHIP:
The Committee shall be comprised of two Commissioners, the General Manager, and the
Finance Manager. At no time shall there be a quorum of the Commission on the Committee.
The Commission shall appoint Committee members annually following the Commission election
of officers during the March Regular Commission meeting. The Commission shall also appoint
the Committee Chair at that time.
ROLE OF THE COMMITTEE CHAIR:
The primary role of the Committee Chair is to run the Committee meetings. The Committee will
adhere to the Current edition of Robert’s Rules of Order Newly Revised for all situations to
which they are applicable and are not inconsistent with ERMU’s bylaws, policies, and any
special rules of order that the Commission may adopt. Committee meetings may be open or
closed in accordance with Open Meeting Law.
AUTHORITY:
Except as established in this Committee Charter, the authority of the Committee is limited to the
purpose of research and recommendation to the Commission. The Committee, at the discretion
and through formal action of the Commission, may be empowered beyond the role of research
and recommendation such that it is consistent with the Organizational Core Purpose policies
and the Commission Committees policy.
SPECIFIC DUTIES:
122
ERMU Commission Policy – G.2g2 Financial Reserves & Investment Committee Charter
______________________________________________________________________________
______________________________________________________________________________
Page 2 of 2
1. At the request of the Commission, research and analyze topics related to financial reserves
and investments.
2. On a periodic basis, the Committee will review the Investment Policies, investment balances,
and the various investment instruments for return, liquidity, and diversification. The
Committee may present options and make recommendations to the Commission for their
consideration.
3. Annually, when the Commission designates the official depository for the year, it should
provide for the Finance Manager to recommend that additional depositories be designated for
the purpose of investing funds.
4. On behalf of the Commission and Committee, new investments will be authorized by the
Finance Manager, with the funds actually being transferred via a check produced by the A/P
Specialist, and recorded in the check register detail presented at the regular Commission
meetings. Investments that mature shall be reinvested by the Finance Manager. All investing
will be transacted working with the investment firm(s) or bank(s) for the best rate of return
within the constraints of the Management Investment Policy. In the event that the Finance
Manager is unable to conduct the above investment responsibilities, the General Manager has
the authority to act in his/her absence.
5. On a periodic basis, the Committee will review the Financial Reserves Policies and reserve
balances. The Committee may present options and make recommendations to the
Commission for their consideration.
SCHEDULE:
At a minimum, the Committee shall meet on an annual basis.
TERMINATION:
The Committee shall exist until at such time formal action of the Commission is taken to
dissolve the Committee.
POLICY HISTORY:
Adopted May 9, 2017
Revised July 14, 2020
Revised January 9, 2024
123
______________________________________________________________________________
Page 1 of 3
COMMISSION POLICY
Section: Category:
Governance Governance Policies
Policy Reference: Policy Title:
G.2g3 Information Security Committee Charter
PURPOSE:
Information security is managing risks to the confidentiality, integrity, and availability of
information using administrative, physical, and technical controls.
The Information Security Committee exists to help develop and maintain industry appropriate
information security policies and oversight. Because of shared hardware and resources, there
exists an overlap and shared risk for ERMU and the City of Elk River (City) operations.
Although governed autonomously, this shall be an advisory Committee to both the ERMU and
the City.
MEMBERSHIP:
This Committee shall be comprised of equal representation from ERMU and the City. From
ERMU this committee shall include a Commissioner and the General Manager. The General
Manager will appoint three additional members, at least one of whom will be a manager and at
least one will be an information technology employee. From the City this committee shall
include a Councilmember and the City Administrator. The City Administrator will appoint three
additional members, at least one of whom will be a manager and at least one will be an
information technology employee. At no time shall there be a quorum of the Commission or the
Council on the Committee.
The Commission shall appoint ERMU’s Committee member representatives annually following
the Commission election of officers during the March Regular Commission meeting. The
Council shall appoint its member annually. The Committee shall elect a chair annually. The
General Manager and the City Administrator shall serve as the authorized reporting
representatives for their respective governing bodies.
ROLE OF THE COMMITTEE CHAIR:
The primary role of the Committee Chair is to run the Committee meetings and act as committee
secretary. The Committee will adhere to the Current edition of Robert’s Rules of Order Newly
124
ERMU Commission Policy – G.2g3 Information Security Committee Charter
______________________________________________________________________________
______________________________________________________________________________
Page 2 of 3
Revised for all situations to which they are applicable and are not inconsistent with ERMU’s
bylaws, policies, and any special rules of order that the Commission may adopt; and similarly,
the Committee action shall not be inconsistent with applicable laws and policies which regulate
the City of Elk River. Committee meetings may be open or closed in accordance with Open
Meeting Law.
AUTHORITY:
Except as established in this Committee Charter, the authority of the Committee is limited to the
purpose of research and recommendation to ERMU and the City.
SPECIFIC DUTIES:
1. Policies and Procedures: Assist ERMU and the City in the development of information
security related policies. Review effectiveness of information security policy
implementations. Identify and recommend how to handle non-compliance. Assist with the
development of information security related procedures, standards, guidelines, and baselines
to the ERMU and the City. At least annually, provide timely reports including
recommendations regarding effectiveness of polices and procedures to ERMU and City
leadership teams.
2. Risk Assessment: Review industry appropriate information security trends to maintain an up-
to-date perspective on related risks and industry’s best practice risk mitigation methods.
Identify significant threats and vulnerabilities. Assess the adequacy and coordination of the
implementation of information security controls. Recommend methodologies and processes
for information security. Evaluate ongoing related legal and regulatory compliance changes.
Review incident information and recommend follow-up actions. At least annually, provide
timely reports including recommendation regarding risks assessment to ERMU and City
leadership teams.
3. Budget Development: Develop data needed for thorough evaluation of proposed information
security initiatives for budget preparation and consideration. Information shall include
options, risk evaluation, resource requirements, implementation timelines, and costs. At least
annually and coordinating with their respective budgeting process schedules, provide timely
reports regarding information security initiatives proposed for consideration to ERMU and
City leadership teams.
4. Education and Awareness: Function as an information security program champion providing
clear direction and unity in ERMU and City leadership teams’ support for approved security
initiatives and policies. Develop and implement plans and programs to maintain information
security awareness. Promote information security education, training, and awareness
throughout ERMU and the City.
SCHEDULE:
At a minimum, the Committee shall meet on an annual basis.
125
ERMU Commission Policy – G.2g3 Information Security Committee Charter
______________________________________________________________________________
______________________________________________________________________________
Page 3 of 3
TERMINATION:
The Committee shall exist as a joint effort between ERMU and the City until at such time either
the Commission or Council dissolve the joint nature of the Committee.
POLICY HISTORY:
Established August 8, 2017
Revised November 12, 2019
Revised February 14, 2023
Revised January 9, 2024
126
Page 1 of 3
COMMISSION POLICY
Section: Category:
Governance Governance Policies
Policy Reference: Policy Title:
G.2g4 Dispute Resolution Committee Charter
PURPOSE:
The Dispute Resolution Committee exists to provide customers an alternative dispute resolution
option for circumstances which: require action beyond the authority assigned through the
Delegation to Management Policies; require policy creation, revision, or exception; have
exhausted the established utilities procedures and/or protocol; and involves customer protected
data for which the customer prefers addressing the issue through a meeting closed to the public.
For qualifying customer disputes, the Committee will provide: an informal hearing in
accordance with Open Meeting Law allowing the customers to communicate the concern; recess
and reconvene as needed to conduct appropriate research and/or deliberate; make a
determination within parameters established through the Commission Policies and within the
authorities delegated through this policy; and report and/or make recommendations to the
Commission as required.
MEMBERSHIP:
The Committee shall be comprised of five members, three appointed annually and two which vary
with each dispute. The three members appointed annually shall include two Commissioners and
the General Manager. At no time shall there be a quorum of the Commission on the Committee.
The Committee shall also include the director and the manager most directly involved in the
dispute.
The Commission shall appoint Committee members annually following the Commission election
of officers during the March Regular Commission meeting. The Commission shall also appoint
the Committee Chair at that time.
ROLE OF THE COMMITTEE CHAIR:
The primary role of the Committee Chair is to run the Committee meetings. The Committee will
adhere to the Current edition of Robert’s Rules of Order Newly Revised for all situations to
which they are applicable and are not inconsistent with ERMU’s bylaws, policies, and any
127
Page 2 of 3
ERMU Commission Policy – G.2g4 Dispute Resolution Committee Charter
special rules of order that the Commission may adopt.
AUTHORITY:
Except as established in this Committee Charter, the authority of the Committee is limited to the
purpose of dispute resolution within the authorities delegated to management through the
Commission Policies, research related to customer disputes or complaints, and recommendations to
the Commission. The Committee, at the discretion and through formal action of the Commission,
may be empowered beyond the role as outlined in this policy such that it is consistent with the
Organizational Core Purpose policies and the Commission Committees policy.
SPECIFIC DUTIES:
1. After a formal request is submitted for a qualifying customer dispute, the
Committee will schedule a hearing, either in person or virtual, within a reasonable
amount of time.
2. Through the hearing, the Committee will allow the customer to communicate
relevant information and request dispute resolution which may require policy
creation, revision, or exemption.
3. The Committee is required to verify all information and data; and the Committee will
review the Customer’s account history and other relevant information.
4. And as needed, the Committee shall research industry best practices related to the dispute.
5. The Committee is authorized to engage legal counsel for legal review and
recommendations.
6. The Committee will make a determination whether resolution can be provided within the
authorities assigned through this policy; and if so, the Committee will provide written
summary of the dispute and the authorized resolution for implementation by management.
7. When no action is taken by the Committee toward resolution, the Committee will determine
whether the request warrants further consideration by the Commission, in which case the
Committee will present a summary of the dispute to the Commission and a make
recommendation. In the event that no action is taken by the Committee, and the Committee
has determined that the dispute does not warrant further consideration or advancement to
the Commission, the Committee shall summarize their finding in a report to be provide to
the customer and placed on file.
8. The Committee shall record minutes of all Committee meetings. Committee meeting
minutes shall be subject to applicable data retention law and policies.
SCHEDULE:
The Committee shall meet on an as-needed basis.
128
Page 3 of 3
ERMU Commission Policy – G.2g4 Dispute Resolution Committee Charter
TERMINATION:
The Committee shall exist until at such time formal action of the Commission is taken to
dissolve the Committee.
POLICY HISTORY:
Adopted January 12, 2021
Revised February 14, 2023
Revised February 13, 2024
129
______________________________________________________________________________
Page 1 of 2
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Melissa Karpinski – Finance Manager
MEETING DATE:
January 13, 2026
AGENDA ITEM NUMBER:
5.1
SUBJECT:
Financial Report – November 2025
ACTION REQUESTED:
Receive the November 2025 Financial Report
DISCUSSION:
Please note that these are the preliminary unaudited financial statements.
Electric
November year to date (YTD) electric kWh sales are up 5% from the prior year. For further
breakdown:
• Residential usage is up 6%
• Small Commercial usage is up 2%
• Large Commercial usage is up 4%
For November 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
November YTD gallons of water sold are up 6% from the prior year. For further breakdown:
• Residential use is up 6%
• Commercial use is up 7%
For November 2025, the Water Department overall is ahead 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:
• Combined 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
• Detailed Electric Statement of Revenues, Expenses and Changes in Net Position
130
______________________________________________________________________________
Page 2 of 2
• Detailed Water Statement of Revenues, Expenses and Changes in Net Position
• Financial Presentation
131
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
COMBINED BALANCE SHEET
FOR PERIOD ENDING NOVEMBER 2025
ELECTRIC WATER
ASSETS
CURRENT ASSETS
CASH 6,745,3243,894,903
ACCOUNTS RECEIVABLE 5,152,8003,106,344
INVENTORIES 45,9582,147,191
PREPAID ITEMS 60,521250,195
CONSTRUCTION IN PROGRESS 401,7612,732,887
TOTAL CURRENT ASSETS 12,406,36312,131,521
RESTRICTED ASSETS
BOND RESERVE FUND 01,779,016
EMERGENCY RESERVE FUND 4,306,8407,713,598
UNRESTRICTED RESERVE FUND 00
TOTAL RESTRICTED ASSETS 4,306,8409,492,613
FIXED ASSETS
PRODUCTION 17,217,448795,920
LFG PROJECT 00
TRANSMISSION 02,305,024
DISTRIBUTION 30,869,56156,003,797
GENERAL 1,632,20326,019,883
FIXED ASSETS (COST)49,719,21285,124,623
LESS ACCUMULATED DEPRECIATION (25,179,427)(39,264,416)
TOTAL FIXED ASSETS, NET 24,539,78545,860,207
INTANGIBLE ASSETS
POWER AGENCY MEMBERSHIP BUY-IN 021,546,212
LOSS OF REVENUE INTANGIBLE 07,169,412
LESS ACCUMULATED AMORTIZATION 0(4,787,152)
TOTAL INTANGIBLE ASSETS, NET 023,928,472
OTHER ASSETS AND DEFERRED OUTFLOWS 61,420322,181
TOTAL ASSETS 41,314,40891,734,995
LIABILITIES AND FUND EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE 331,2504,212,883
SALARIES AND BENEFITS PAYABLE 191,9511,239,177
DUE TO CITY 3,508770,620
DUE TO OTHER FUNDS 00
NOTES PAYABLE-CURRENT PORTION 00
BONDS PAYABLE-CURRENT PORTION 00
UNEARNED REVENUE 523,5651,610
TOTAL CURRENT LIABILITIES 1,050,2746,224,290
LONG TERM LIABILITIES
OPEB LIABILITY 00
LFG PROJECT 00
DUE TO COUNTY 00
DUE TO CITY 00
BONDS PAYABLE, LESS CURRENT PORTION 1,484,19827,155,526
PENSION LIABILITIES 328,9841,708,036
TOTAL LONG TERM LIABILITIES 1,813,18228,863,562
TOTAL LIABILITIES 2,863,45635,087,852
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)310,1094,037,379
TOTAL FUND EQUITY 33,761,86755,440,168
TOTAL LIABILITIES & FUND EQUITY 41,314,40891,734,995
132
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
ELECTRIC BALANCE SHEET
Current Month
Change from
Prior MonthNovember 30, 2025 October 31, 2025
ASSETS
CURRENT ASSETS
CASH 3,894,903 4,089,175 (194,272)
ACCOUNTS RECEIVABLE 3,106,344 3,808,610 (702,266)
INVENTORIES 2,147,191 2,164,260 (17,069)
PREPAID ITEMS 250,195 260,216 (10,021)
CONSTRUCTION IN PROGRESS 2,732,887 2,481,735 251,152
TOTAL CURRENT ASSETS 12,131,521 12,803,996 (672,475)
RESTRICTED ASSETS
BOND RESERVE FUND 1,779,016 1,779,016 0
EMERGENCY RESERVE FUND 7,713,598 7,687,418 26,180
TOTAL RESTRICTED ASSETS 9,492,613 9,466,434 26,180
FIXED ASSETS
PRODUCTION 795,920 795,920 0
TRANSMISSION 2,305,024 2,305,024 0
DISTRIBUTION 56,003,797 55,919,591 84,205
GENERAL 26,019,883 25,985,736 34,147
FIXED ASSETS (COST)85,124,623 85,006,271 118,352
LESS ACCUMULATED DEPRECIATION (39,264,416)(39,030,918)(233,497)
TOTAL FIXED ASSETS, NET 45,860,207 45,975,352 (115,145)
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 (4,787,152)(4,731,474)(55,678)
TOTAL INTANGIBLE ASSETS, NET 23,928,472 23,984,150 (55,678)
OTHER ASSETS AND DEFERRED OUTFLOWS 322,181 322,181 0
TOTAL ASSETS 91,734,995 92,552,113 (817,118)
LIABILITIES AND FUND EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE 4,212,883 5,271,246 (1,058,363)
SALARIES AND BENEFITS PAYABLE 1,239,177 1,232,389 6,788
DUE TO CITY 770,620 991,563 (220,943)
UNEARNED REVENUE 1,610 3,220 (1,610)
TOTAL CURRENT LIABILITIES 6,224,290 7,498,418 (1,274,128)
LONG TERM LIABILITIES
BONDS PAYABLE, LESS CURRENT PORTION 27,155,526 27,160,514 (4,989)
PENSION LIABILITIES 1,708,036 1,708,036 0
TOTAL LONG TERM LIABILITIES 28,863,562 28,868,550 (4,989)
TOTAL LIABILITIES 35,087,852 36,366,969 (1,279,117)
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)4,037,379 3,575,381 461,998
TOTAL FUND EQUITY 55,440,168 54,978,169 461,998
TOTAL LIABILITIES & FUND EQUITY 91,734,995 92,552,113 (817,118)
133
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
WATER BALANCE SHEET
Current Month
Change from
Prior MonthNovember 30, 2025 October 31, 2025
ASSETS
CURRENT ASSETS
CASH 6,745,324 6,619,158 126,166
ACCOUNTS RECEIVABLE 5,152,800 5,268,177 (115,377)
INVENTORIES 45,958 49,448 (3,490)
PREPAID ITEMS 60,521 61,170 (650)
CONSTRUCTION IN PROGRESS 401,761 354,966 46,796
TOTAL CURRENT ASSETS 12,406,363 12,352,919 53,445
RESTRICTED ASSETS
EMERGENCY RESERVE FUND 4,306,840 4,300,295 6,545
TOTAL RESTRICTED ASSETS 4,306,840 4,300,295 6,545
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 (25,179,427)(25,064,437)(114,990)
TOTAL FIXED ASSETS, NET 24,539,785 24,654,775 (114,990)
INTANGIBLE ASSETS
OTHER ASSETS AND DEFERRED OUTFLOWS 61,420 61,420 0
TOTAL ASSETS 41,314,408 41,369,409 (55,000)
LIABILITIES AND FUND EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE 331,250 331,683 (432)
SALARIES AND BENEFITS PAYABLE 191,951 187,901 4,050
DUE TO CITY 3,508 3,539 (31)
UNEARNED REVENUE 523,565 523,565 0
TOTAL CURRENT LIABILITIES 1,050,274 1,046,688 3,586
LONG TERM LIABILITIES
BONDS PAYABLE, LESS CURRENT PORTION 1,484,198 1,484,752 (554)
PENSION LIABILITIES 328,984 328,984 0
TOTAL LONG TERM LIABILITIES 1,813,182 1,813,736 (554)
TOTAL LIABILITIES 2,863,456 2,860,424 3,032
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)310,109 368,141 (58,032)
TOTAL FUND EQUITY 33,761,867 33,819,899 (58,032)
TOTAL LIABILITIES & FUND EQUITY 41,314,408 41,369,409 (55,000)
134
202520252025 YTD 202520242024 YTDVariance YTD Budget ANNUALYTD VARIANCEItemElectricBUDGET VarianceBUDGET3,002,550 38,240,955 38,090,152 150,803 0 41,085,728 3,048,280 35,438,974 2,801,981 8276,116 3,974,002 3,791,144 182,858 5 4,073,730 311,280 3,592,794 381,208 1113,654 204,664 211,914 (7,251) (3) 231,863 15,587 189,347 15,317 817,079 262,811 260,610 2,200 1 281,987 19,242 235,511 27,299 1223,887 260,769 239,250 21,519 9 261,000 21,789 239,006 21,763 9400 4,400 4,4000 0 4,800400 4,4000 03,333,687 42,947,600 42,597,471 350,130 1 45,939,108 3,416,578 39,700,032 3,247,568 839,260 422,146 320,833 101,312 32 350,000 44,805 312,314 109,832 35 (1)11,587 265,218 261,250 3,968 2 285,000 29,019 270,391 (5,173) (2)63,575 370,246 137,500 232,746 169 150,000 18,870 297,927 72,319 24 (2)79,316 1,411,918 891,875 520,043 58 972,500 131,563 1,503,575 (91,657) (6) (3)193,738 2,469,528 1,611,458 858,070 53 1,757,500 224,258 2,384,207 85,321 43,527,425 45,417,128 44,208,929 1,208,199 3 47,696,608 3,640,835 42,084,239 3,332,889 81,966,685 28,338,235 28,581,752 (243,516) (1) 30,599,628 1,854,888 26,623,063 1,715,172 620,795 261,046 301,583 (40,538) (13) 341,000 21,674 238,976 22,070 92,485 33,093 69,667 (36,574) (52) 76,000 2,498 45,929 (12,837) (28) (4)25,772 441,026 478,042 (37,015) (8) 521,500 24,737 392,573 48,453 12115,267 1,659,692 1,940,792 (281,100) (14) 2,144,500 106,623 1,662,888 (3,196) (0)289,175 3,174,897 3,061,256 113,642 4 3,339,552 275,268 3,029,422 145,475 559,983 675,086 675,0860 0 735,069 63,258 710,490 (35,404) (5)4,785 86,268 218,117 (131,849) (60) 482,400 5,804 117,676 (31,409) (27) (5)32,830 379,943 430,833 (50,890) (12) 470,000 33,864 398,383 (18,440) (5)366,956 4,027,119 4,373,943 (346,824) (8) 4,783,849 323,385 3,683,984 343,135 940,240 546,469 586,483 (40,014) (7) 639,800 33,831 529,117 17,352 32,924,972 39,622,873 40,717,553 (1,094,680) (3) 44,133,298 2,745,830 37,432,502 2,190,372 6120,850 1,537,825 1,523,606 14,219 1 1,643,429 122,634 1,425,274 112,550 819,605 219,051 242,917 (23,865) (10) 265,000 20,889 210,579 8,472 4140,455 1,756,876 1,766,523 (9,647) (1) 1,908,429 143,523 1,635,853 121,023 7461,998 4,037,379 1,724,854 2,312,526 134 1,654,881 751,482 3,015,884 1,021,495 34Item 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 agreements in September, November and June. PYTD variance is mainly due to large connection in September 2025.(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 OtsegoNOVEMBER YTDNOVEMBERELK RIVER MUNICIPAL UTILITIESELK RIVER, MINNESOTASTATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONFOR PERIOD ENDING NOVEMBER 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 Revenue135
202520252025 YTD 202520242024 YTDVariance YTD Budget ANNUALVARIANCEItemWaterBUDGET VarianceBUDGET201,181 2,861,717 2,980,938 (119,221) (4) 3,143,314 237,998 2,654,327 207,390 8201,181 2,861,717 2,980,938 (119,221) (4) 3,143,314 237,998 2,654,327 207,390 811,423 118,772 138,417 (19,645) (14) 151,000 12,708 96,698 22,073 23(1)1,172 31,092 25,667 5,425 21 28,000 2,400 26,174 4,917 1941,858 742,260 291,958 450,302 154 318,500 52,991 502,713 239,548 48(2)15,987 135,384 22,300 113,084 507 426,100995 12,364 123,020 995(3)70,439 1,027,507 478,342 549,166 115 923,600 69,093 637,949 389,558 61271,621 3,889,224 3,459,280 429,945 12 4,066,914 307,091 3,292,276 596,948 186,980 114,467 123,750 (9,283) (8) 135,000 4,273 108,768 5,699 564,106 597,290 616,138 (18,847) (3) 672,150 65,153 565,127 32,164 626,570 425,051 424,025 1,026 0 459,660 25,828 334,350 90,701 27(4)114,990 1,268,719 1,215,377 53,342 4 1,325,866 100,186 1,107,338 161,382 152,496 28,970 28,9700 0 31,466 2,712 31,237 (2,267) (7)52 (15,313) 16,688 (32,000) (192) 60,75059 1,349 (16,662) (1,235)(5)8,393 94,266 96,479 (2,213) (2) 105,250 8,038 88,933 5,333 6105,762 1,062,213 1,104,926 (42,714) (4) 1,199,700 88,694 903,714 158,499 18(6)208 2,708 11,229 (8,521) (76) 12,250163 2,715(7) (0)329,556 3,578,373 3,637,582 (59,209) (2) 4,002,092 295,106 3,143,531 434,842 1497742 1,833 (1,091) (60) 2,00000742 097742 1,833 (1,091) (60) 2,00000742 0(58,032) 310,109 (180,135) 490,244 272 62,822 11,985 148,745 161,364 108ItemVariance 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 NOVEMBER 20252025 YTD Bud Var%2024 v. 2025 Actual Var%NOVEMBER YTD NOVEMBER 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 Transfer136
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
137
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
138
-
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
139
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
140
$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 $
141
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING NOVEMBER 2025
2025
NOVEMBER
2024
NOVEMBER
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 1,008,697 12,248,511913,470 12,947,68712,943,154 0 614,008,158 694,643
ELECT SALES - ELK RIVER NON-D 258,622 3,128,332240,816 3,295,4593,200,053 (3)23,561,584 71,721
ELECT SALES - ELK RIVER DEMA 1,471,205 16,784,8481,471,860 17,334,08717,429,054 1 418,661,634 644,205
PCA SALES REVENUE - ELK RIVE 91,081 1,025,603103,004 1,406,0471,482,051 5 451,522,421 456,448
PCA SALES REVENUE - ELK RIVE 25,909 281,65430,294 390,227385,672 (1)37423,421 104,018
PCA SALES REVENUE - ELK RIVE 192,763 1,970,023243,103 2,716,6412,800,967 3 422,908,507 830,943
3,002,550 38,240,954 38,090,151 3,048,280 35,438,9740 8Total For Elk River:41,085,728 2,801,980
Otsego
ELECT SALES - OTSEGO RESIDEN 115,537 1,401,77998,738 1,438,2991,481,371 3 61,546,756 79,592
ELECT SALES - OTSEGO NON-DEM 40,379 469,06031,787 465,995499,571 7 7499,327 30,511
ELECT SALES - OTSEGO DEMAND 124,220 1,400,666112,615 1,476,0841,519,252 3 81,587,577 118,586
PCA SALES REVENUE - OTSEGO R 10,314 115,20510,792 157,940168,533 7 46168,103 53,328
PCA SALES REVENUE - OTSEGO N 4,208 42,5304,095 43,90463,225 44 4946,753 20,694
PCA SALES REVENUE - OTSEGO D 16,618 163,55018,087 208,919242,046 16 48225,212 78,495
276,116 3,974,002 3,791,144 311,279 3,592,7935 11Total For Otsego:4,073,730 381,208
Rural Big Lake
ELECT SALES - BIG LAKE RESIDE 14,060 170,64012,041 184,360179,833 (2)5199,359 9,193
ELECT SALES - BIG LAKE NON-DE 224 4,0912244,6253,751 (19)(8)4,810 (340)
PCA SALES REVENUE - BIG LAKE 1,287 14,3171,369 19,62820,685 5 4421,666 6,368
PCA SALES REVENUE - BIG LAKE 15 297193,300392 (88)326,026 95
13,654 204,663 211,914 15,586 189,347(3)8Total For Rural Big Lake:231,863 15,316
Dayton
ELECT SALES - DAYTON RESIDEN 14,809 182,90312,968 197,151199,042 1 9212,063 16,138
ELECT SALES - DAYTON NON-DE 2,861 34,8532,429 37,44337,192 (1)740,465 2,339
PCA SALES REVENUE - DAYTON R 1,314 14,9641,418 20,51522,425 9 5023,047 7,461
PCA SALES REVENUE - DAYTON 256 2,7892625,5004,149 (25)496,410 1,360
17,079 262,810 260,610 19,241 235,5111 12Total For Dayton:281,986 27,299
Public St & Hwy Lighting
ELECT SALES - SEC LTS 21,788 239,00523,887 239,250260,769 9 9261,000 21,763
23,887 260,769 239,250 21,788 239,0059 9Total For Public St & Hwy Lighting:261,000 21,763
Other Electric Sales
SUB-STATION CREDIT 400 4,4004004,4004,400 0 04,800 0
142
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING NOVEMBER 2025
2025
NOVEMBER
2024
NOVEMBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETElectric
400 4,400 4,400 400 4,4000 0Total For Other Electric Sales:4,800 0
Total Operating Revenue
3,416,577 39,700,0323,333,687 42,597,47042,947,600 1 845,939,108 3,247,568
Other Operating Revenue
Interest/Dividend Income
INTEREST & DIVIDEND INCOME 44,805 312,31439,260 320,833422,145 32 35350,000 109,831
39,260 422,145 320,833 44,805 312,31432 35Total For Interest/Dividend Income:350,000 109,831
Customer Penalties
CUSTOMER DELINQUENT PENALT 29,019 270,39011,587 261,250265,217 2 (2)285,000 (5,173)
11,587 265,217 261,250 29,019 270,3902 (2)Total For Customer Penalties:285,000 (5,173)
Connection Fees
DISCONNECT & RECONNECT CHA 18,870 297,92763,575 137,500370,246 169 24150,000 72,319
63,575 370,246 137,500 18,870 297,927169 24Total For Connection Fees:150,000 72,319
Misc Revenue
MISC ELEC REVENUE - TEMP CHG 440 2,8302202,2913,080 34 92,500 250
STREET LIGHT 0 23,40013,000 7,50063,000 740 16910,000 39,600
TRANSMISSION INVESTMENTS 46,756 569,57247,623 550,000634,333 15 11600,000 64,761
MISC NON-UTILITY 66,325 208,23812,877 100,833128,271 27 (38)110,000 (79,967)
GAIN ON DISPOSITION OF PROPER 0 8,600025,00022,755 (9)16525,000 14,155
CONTRIBUTIONS FROM CUSTOME 18,041 690,9335,595 206,250560,477 172 (19)225,000 (130,456)
79,315 1,411,918 891,875 131,563 1,503,57458 (6)Total For Misc Revenue:972,500 (91,656)
Total Other Revenue
224,257 2,384,207193,738 1,611,4582,469,528 53 41,757,500 85,320
193,738 2,469,528 1,611,458 224,257 2,384,20753 4Total For Total Other Revenue:1,757,500 85,320
3,640,835 42,084,2393,527,425 44,208,929 Total Revenue 45,417,128 3 847,696,608 3,332,889
Expenses
Purchased Power
PURCHASED POWER 1,497,023 20,476,5071,549,067 21,810,77321,385,590 (2)423,315,290 909,083
ENERGY ADJUSTMENT CLAUSE 357,864 6,146,555417,618 6,770,9786,952,644 3 137,284,337 806,088
1,966,685 28,338,235 28,581,751 1,854,888 26,623,063(1)6Total For Purchased Power:30,599,628 1,715,172
Operating & Mtce Expense
OPERATING SUPERVISION 11,334 127,85611,630 137,500146,884 7 15150,000 19,027
DIESEL OIL FUEL 0 1590000 (100)0 (159)
NATURAL GAS 2,501 16,1152,659 24,00020,182 (16)2530,000 4,066
143
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING NOVEMBER 2025
2025
NOVEMBER
2024
NOVEMBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETElectric
ELECTRIC & WATER CONSUMPTI 4,878 51,1624,190 57,50051,806 (10)165,000 643
PLANT SUPPLIES & OTHER EXPEN 1,533 8,7906413,7508,160 (41)(7)15,000 (629)
MISC POWER GENERATION EXPE 16 640329169726 521,000 331
MAINTENANCE OF STRUCTURE -939 13,41523218,33310,718 (42)(20)20,000 (2,696)
MTCE OF PLANT ENGINES/GENER 115 4,1771964,583952 (79)(77)5,000 (3,224)
MTCE OF PLANT/LAND IMPROVE 354 16,6581,789 45,00021,368 (53)2855,000 4,710
20,795 261,045 301,583 21,673 238,975(13)9Total For Operating & Mtce Expense:341,000 22,070
Transmission Expense
TRANSMISSION MTCE AND EXPE 2,497 45,9292,484 69,66633,092 (52)(28)76,000 (12,836)
2,484 33,092 69,666 2,497 45,929(52)(28)Total For Transmission Expense:76,000 (12,836)
Distribution Expense
REMOVE EXISTING SERVICE & M 0 35201,833936 (49)1652,000 583
SCADA EXPENSE 2,825 42,1813,359 55,00055,428 1 3160,000 13,247
TRANSFORMER EXPENSE OH & U 1,530 15,9691,068 22,91615,309 (33)(4)25,000 (659)
MTCE OF SIGNAL SYSTEMS 308 1,93002,7503,971 44 1063,000 2,041
METER EXPENSE - REMOVE & RE 0 46601,3751,110 (19)1381,500 644
TEMP SERVICE - INSTALL & REM 103 44209,1662,161 (76)38810,000 1,719
MISC DISTRIBUTION EXPENSE 19,969 331,23021,344 385,000362,107 (6)9420,000 30,877
25,771 441,026 478,041 24,737 392,573(8)12Total For Distribution Expense:521,500 48,453
Maintenance Expense
MTCE OF STRUCTURES 4,053 78,0727,240 84,33383,629 (1)792,000 5,556
MTCE OF SUBSTATIONS 5,224 18,1181,987 41,25017,534 (57)(3)45,000 (584)
MTCE OF SUBSTATION EQUIPME (2,476)80,0203,881 137,50041,641 (70)(48)150,000 (38,378)
MTCE OF OH LINES/TREE TRIM 724 215,26933,445 250,000200,491 (20)(7)300,000 (14,777)
MTCE OF OH LINES/STANDBY 3,403 39,6732,791 45,83339,805 (13)050,000 131
MTCE OF OH PRIMARY 7,159 157,952(1,616)174,166150,114 (14)(5)190,000 (7,837)
MTCE OF URD PRIMARY 16,011 270,64315,285 275,000305,290 11 13300,000 34,647
LOCATE ELECTRIC LINES 8,850 95,57716,620 114,583118,174 3 24125,000 22,597
LOCATE FIBER LINES 219 2,9621002,2913,886 70 312,500 923
MTCE OF LINE TRANSFORMERS 16,733 60,48688268,75090,423 32 4975,000 29,936
MTCE OF STREET LIGHTING 4,875 65,6427,354 63,25061,668 (3)(6)69,000 (3,974)
MTCE OF SECURITY LIGHTING 800 21,08155622,91613,822 (40)(34)25,000 (7,258)
MTCE OF METERS 1,479 56,5633,865 73,33335,074 (52)(38)80,000 (21,489)
VOLTAGE COMPLAINTS 883 6,41325311,0003,167 (71)(51)12,000 (3,245)
SALARIES TRANSMISSION & DIST 2,540 28,5712,446 33,00032,120 (3)1236,000 3,549144
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING NOVEMBER 2025
2025
NOVEMBER
2024
NOVEMBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETElectric
ELECTRIC MAPPING 6,845 119,9287,365 142,083133,188 (6)11155,000 13,260
FIBER MAPPING 0 0013,7500 (100)015,000 0
MTCE OF OH SECONDARY 1,543 20,1125,421 21,08329,907 42 4923,000 9,795
MTCE OF URD SECONDARY 5,953 53,6042,721 68,75074,603 9 3975,000 20,999
TRANSPORTATION EXPENSE 21,797 272,1924,662 297,916225,145 (24)(17)325,000 (47,047)
115,266 1,659,691 1,940,791 106,623 1,662,887(14)0Total For Maintenance Expense:2,144,500 (3,196)
Depreciation & Amortization
DEPRECIATION 219,589 2,416,964233,497 2,448,7972,562,440 5 62,671,415 145,475
AMORTIZATION 55,677 612,45755,677 612,458612,457 0 0668,136 0
289,175 3,174,897 3,061,255 275,267 3,029,4224 5Total For Depreciation & Amortization:3,339,551 145,475
Interest Expense
INTEREST EXPENSE - BONDS 68,246 765,36464,971 729,959729,959 0 (5)794,932 (35,404)
AMORTIZATION OF DEBT DISCOU (4,988)(54,873)(4,988)(54,873)(54,873)0 0(59,863)0
59,982 675,086 675,086 63,257 710,4900 (5)Total For Interest Expense:735,069 (35,404)
Other Operating Expense
EV CHARGING EXPENSE 197 2,451801,2831,567 22 (36)1,400 (883)
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 04411,833658 (64)02,000 658
MUTUAL AID 719 54,540007,012 0 (87)0 (47,527)
PENSION EXPENSE 0 00000 0259,000 0
INTEREST EXPENSE - METER DEP 4,886 52,6924,262 55,00045,832 (17)(13)60,000 (6,860)
4,785 86,267 218,116 5,803 117,676(60)(27)Total For Other Operating Expense:482,400 (31,408)
Customer Accounts Expense
METER READING EXPENSE 4,183 44,3412,895 32,08330,046 (6)(32)35,000 (14,294)
DISCONNECT/RECONNECT EXPEN 0 11,84409,166658 (93)(94)10,000 (11,185)
MISC CUSTOMER ACCOUNTS EXP 29,058 327,31329,695 366,666341,343 (7)4400,000 14,029
BAD DEBT EXPENSE & RECOVER 621 14,88323822,9167,893 (66)(47)25,000 (6,989)
32,829 379,942 430,833 33,864 398,383(12)(5)Total For Customer Accounts Expense:470,000 (18,440)
Administrative Expense
SALARIES OFFICE & COMMISSION 68,506 818,81972,469 994,583899,931 (10)101,085,000 81,111
TEMPORARY STAFFING 0 003,6660 (100)04,000 0
OFFICE SUPPLIES 9,766 92,0988,087 123,750108,503 (12)18135,000 16,405
ELECTRIC & WATER CONSUMPTI 1,870 25,0601,695 29,33322,570 (23)(10)32,000 (2,489)
BANK FEES 352 2,6311942,7502,480 (10)(6)3,000 (151)
145
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING NOVEMBER 2025
2025
NOVEMBER
2024
NOVEMBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETElectric
LEGAL FEES 3,322 32,6282,271 27,50015,892 (42)(51)30,000 (16,735)
AUDITING FEES 1,640 17,2401,720 18,92018,920 0 1020,640 1,680
INSURANCE 14,904 175,39810,087 178,750141,089 (21)(20)195,000 (34,308)
UTILITY SHARE - DEFERRED COM 4,783 107,7484,488 117,791107,969 (8)0128,500 220
UTILITY SHARE - MEDICAL/DENT 56,965 773,07963,345 873,474828,733 (5)7942,322 55,653
UTILITY SHARE - PERA 24,693 282,05625,333 294,708301,954 2 7321,500 19,898
UTILITY SHARE - FICA 23,251 274,41623,312 289,208296,033 2 8315,500 21,616
EMPLOYEE SICK PAY 11,185 147,82615,061 187,000243,031 30 64204,000 95,205
EMPLOYEE HOLIDAY PAY 45,207 148,97148,818 161,750159,374 (1)7194,100 10,403
EMPLOYEE VACATION & PTO PA 24,913 308,30026,469 300,636336,331 12 9325,000 28,031
UPMIC DISTRIBUTION 0 75,435064,50059,534 (8)(21)86,000 (15,900)
LONGEVITY PAY 2,018 6,96309,9459,945 0 439,945 2,981
CONSULTING FEES 0 40,30733,260 219,083111,821 (49)177239,000 71,513
TELEPHONE 2,929 28,7372,845 34,83331,143 (11)838,000 2,406
ADVERTISING 1,620 12,03622018,33311,775 (36)(2)20,000 (260)
DUES & SUBSCRIPTIONS - FEES 9,766 112,47111,968 139,341129,496 (7)15152,009 17,025
SCHOOLS & MEETINGS 14,840 192,46314,440 274,000181,069 (34)(6)292,333 (11,393)
MTCE OF GENERAL PLANT & OFFI 845 9,29586510,0839,515 (6)211,000 220
366,956 4,027,118 4,373,942 323,384 3,683,983(8)9Total For Administrative Expense:4,783,849 343,135
General Expense
CIP REBATES - RESIDENTIAL 11,740 85,13910,932 83,19497,111 17 1490,758 11,971
CIP REBATES - COMMERCIAL 395 98,6670102,66699,486 (3)1112,000 819
CIP - ADMINISTRATION 10,214 163,47717,612 167,717170,902 2 5182,965 7,424
CIP - MARKETING 1,074 45,89485646,96541,953 (11)(9)51,235 (3,941)
CIP - LABOR 7,514 90,9437,250 122,67096,145 (22)6133,822 5,201
CIP REBATES - LOW INCOME 0 3,468017,1601,578 (91)(54)18,720 (1,889)
CIP - LOW INCOME LABOR 741 8,5397129,1669,115 (1)710,000 575
ENVIRONMENTAL COMPLIANCE 2,023 29,4262,912 32,08330,074 (6)235,000 648
MISC GENERAL EXPENSE 125 3,560(37)4,858101 (98)(97)5,300 (3,458)
40,239 546,469 586,483 33,830 529,117(7)3Total For General Expense:639,800 17,351
Total Expenses(before Operating Transfers)
2,745,829 37,432,5012,924,972 40,717,55239,622,873 (3)644,133,298 2,190,371
Operating Transfer
Operating Transfer/Other Funds
TRANSFER TO CITY ELK RIVER R 122,634 1,425,274120,850 1,523,6061,537,824 1 81,643,429 112,550146
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING NOVEMBER 2025
2025
NOVEMBER
2024
NOVEMBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETElectric
120,850 1,537,824 1,523,606 122,634 1,425,2741 8Total For Operating Transfer/Other Funds:1,643,429 112,550
Utilities & Labor Donated
UTILITIES & LABOR DONATED TO 20,888 210,57919,604 242,916219,051 (10)4265,000 8,472
19,604 219,051 242,916 20,888 210,579(10)4Total For Utilities & Labor Donated:265,000 8,472
Total Operating Transfer
140,454 1,756,875 1,766,522 143,523 1,635,853(1)7Total For Total Operating Transfer:1,908,429 121,022
751,482 3,015,884461,998 1,724,853 Net Income Profit(Loss)4,037,379 134 341,654,880 1,021,495
147
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING NOVEMBER 2025
2025
NOVEMBER
2024
NOVEMBER
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 128,232 1,466,070104,015 1,669,2051,574,544 (6)71,768,457 108,473
WATER SALES COMMERCIAL 87,452 913,21678,818 963,431977,260 1 71,024,735 64,043
WATER SALES IRRIGATION 22,312 275,04018,347 348,300309,912 (11)13350,120 34,872
201,181 2,861,716 2,980,938 237,997 2,654,326(4)8Total For Water Sales:3,143,313 207,390
Total Operating Revenue
237,997 2,654,326201,181 2,980,9382,861,716 (4)83,143,313 207,390
201,181 2,861,716 2,980,938 237,997 2,654,326(4)8Total For Total Operating Revenue:3,143,313 207,390
Other Operating Revenue
Interest/Dividend Income
INTEREST & DIVIDEND INCOME 12,707 96,13911,422 137,500118,204 (14)23150,000 22,064
OTHER INTEREST/MISC REVENUE 0 5580916566(38)11,000 8
11,422 118,771 138,416 12,707 96,698(14)23Total For Interest/Dividend Income:151,000 22,073
Customer Penalties
CUSTOMER PENALTIES 2,399 26,1741,171 25,66631,091 21 1928,000 4,917
1,171 31,091 25,666 2,399 26,17421 19Total For Customer Penalties:28,000 4,917
Connection Fees
WATER/ACCESS/CONNECTION FE 43,200 439,94136,390 233,750629,402 169 43255,000 189,460
CUSTOMER CONNECTION FEES 5,237 37,7444,605 29,79158,227 95 5432,500 20,483
BULK WATER SALES/HYDRANT R 4,552 25,02786228,41654,630 92 11831,000 29,603
41,857 742,260 291,958 52,990 502,712154 48Total For Connection Fees:318,500 239,547
Misc Revenue
MISC NON-UTILITY 20 95091340271 255100244
GAIN ON DISPOSITION OF PROPER 0 008,0000 (100)08,000 0
MISCELLANEOUS REVENUE 0 71615,011 45879,728 17,308 11,02050079,011
HYDRANT MAINTENANCE PROGR 975 11,55097513,75010,725 (22)(7)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
15,986 135,383 22,300 995 12,363507 995Total For Misc Revenue:426,100 123,020
Total Other Revenue
69,093 637,94970,439 478,3411,027,507 115 61923,600 389,558
70,439 1,027,507 478,341 69,093 637,949115 61Total For Total Other Revenue:923,600 389,558
148
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING NOVEMBER 2025
2025
NOVEMBER
2024
NOVEMBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETWater
307,091 3,292,276271,620 3,459,279 Total Revenue 3,889,224 12 184,066,913 596,948
Expenses
Production Expense
MTCE OF STRUCTURES 4,272 108,7686,979 123,750114,467 (8)5135,000 5,698
6,979 114,467 123,750 4,272 108,768(8)5Total For Production Expense:135,000 5,698
Pumping Expense
SUPERVISION 4,290 64,5756,047 69,66673,211 5 1376,000 8,635
ELECTRIC & GAS UTILITIES 17,421 233,32618,542 284,166255,612 (10)10310,000 22,286
SAMPLING 1,120 20,1271,977 22,13723,269 5 1624,150 3,142
CHEMICAL FEED 2,760 37,1617,115 45,83345,815 0 2350,000 8,654
MTCE OF WELLS 39,230 199,23730,189 183,333191,509 4 (4)200,000 (7,728)
SCADA - PUMPING 328 10,69823311,0007,871 (28)(26)12,000 (2,827)
64,105 597,290 616,137 65,152 565,126(3)6Total For Pumping Expense:672,150 32,163
Distribution Expense
MTCE OF WATER MAINS 4,663 94,94710,648 160,416170,194 6 79175,000 75,246
LOCATE WATER LINES 1,100 13,1621,750 18,33325,533 39 9420,000 12,371
MTCE OF WATER SERVICES 0 004580(100)05000
WATER METER SERVICE 10,820 71,9825,182 64,16671,455 11 (1)70,000 (526)
BACKFLOW DEVICE INSPECTION 1,261 18,0911,229 21,65020,018 (8)1123,160 1,926
MTCE OF CUSTOMERS SERVICE 3,066 30,6033,067 32,08331,342 (2)235,000 738
WATER MAPPING 1,562 17,6957315,58321,986 41 2417,000 4,290
FIBER MAPPING 0 0013,7500 (100)015,000 0
MTCE OF WATER HYDRANTS - PU 1,409 21,95581620,16617,679 (12)(19)22,000 (4,275)
MTCE OF WATER HYDRANTS - PR 0 4,9906165,5004,817 (12)(3)6,000 (172)
WATER CLOTHING/PPE 76 9,528713,75011,638 (15)2215,000 2,109
WAGES WATER 628 7,1486889,1668,341 (9)1710,000 1,193
TRANSPORTATION EXPENSE 1,240 17,9882,489 22,00021,660 (2)2024,000 3,672
WATER PERMIT 0 26,255027,00020,382 (25)(22)27,000 (5,873)
26,569 425,051 424,025 25,828 334,3500 27Total For Distribution Expense:459,660 90,701
Depreciation & Amortization
DEPRECIATION 100,185 1,107,337114,990 1,215,3761,268,719 4 151,325,865 161,381
114,990 1,268,719 1,215,376 100,185 1,107,3374 15Total For Depreciation & Amortization:1,325,865 161,381
Interest Expense
INTEREST EXPENSE - BONDS 3,266 37,3333,050 35,06635,066 0 (6)38,117 (2,266)
149
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING NOVEMBER 2025
2025
NOVEMBER
2024
NOVEMBER
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)(6,096)(554)(6,096)(6,096)0 0(6,651)0
2,495 28,970 28,969 2,712 31,2360 (7)Total For Interest Expense:31,466 (2,266)
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 0 444003880 (13)0 (55)
PENSION EXPENSE 0 00000 044,000 0
INTEREST EXPENSE - METER DEP 58 90451687570(17)(37)750 (333)
51 (15,312)16,687 58 1,349(192)(1,235)Total For Other Operating Expense:60,750 (16,661)
Customer Accounts Expense
METER READING EXPENSE 607 4,9755266,4165,637 (12)137,000 661
MISC CUSTOMER ACCOUNTS EXP 7,430 83,9387,866 89,83388,629 (1)698,000 4,691
BAD DEBT EXPENSE & RECOVER 0 1902290(100)(100)250 (19)
8,393 94,266 96,479 8,037 88,933(2)6Total For Customer Accounts Expense:105,250 5,333
Administrative Expense
SALARIES OFFICE & COMMISSION 20,269 239,19921,090 264,000267,611 1 12288,000 28,411
TEMPORARY STAFFING 0 009160(100)01,000 0
OFFICE SUPPLIES 2,203 22,6342,538 27,50028,488 4 2630,000 5,854
ELECTRIC & WATER CONSUMPTI 467 6,2674246,4165,645 (12)(10)7,000 (622)
BANK FEES 88 67348641631(2)(6)700 (42)
LEGAL FEES 748 5,4554,105 4,58324,615 437 3515,000 19,160
AUDITING FEES 410 4,8564306,1415,276 (14)96,700 419
INSURANCE 3,664 38,6563,534 40,33338,480 (5)044,000 (176)
UTILITY SHARE - DEFERRED COM 854 18,06781222,09118,568 (16)324,100 501
UTILITY SHARE - MEDICAL/DENT 14,905 187,86517,459 249,342213,802 (14)14269,977 25,936
UTILITY SHARE - PERA 4,846 54,2755,488 62,79162,665 0 1568,500 8,390
UTILITY SHARE - FICA 4,442 53,1005,084 60,50061,436 2 1666,000 8,335
EMPLOYEE SICK PAY 4,115 29,5433,291 32,08344,284 38 5035,000 14,740
EMPLOYEE HOLIDAY PAY 9,288 28,38410,803 34,60433,957 (2)2041,525 5,573
EMPLOYEE VACATION & PTO PA 4,385 55,9055,572 61,09064,519 6 1566,000 8,613
UPMIC DISTRIBUTION 0 16,027013,87512,941 (7)(19)18,500 (3,085)
WELLHEAD PROTECTION 0 001,8700 (100)02,000 0
LONGEVITY PAY 106 83602,1302,130 0 1552,130 1,293
CONSULTING FEES 0 11,3914,151 52,61654,808 4 38157,400 43,417
TELEPHONE 651 6,5467196,8757,649 11 177,500 1,103150
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING NOVEMBER 2025
2025
NOVEMBER
2024
NOVEMBER
2025
YTD
2024
YTD
2025
YTD
BUDGET
2025 YTD
Bud Var%
2024 v. 2025
Actual Var%
YTD
VARIANCE
2025
ANNUAL
BUDGETWater
ADVERTISING 405 3,124554,5836,959 52 1235,000 3,835
DUES & SUBSCRIPTIONS - FEES 15,288 76,44515,872 88,46175,276 (15)(2)89,961 (1,168)
SCHOOLS & MEETINGS 1,342 42,1364,063 58,95630,088 (49)(29)60,956 (12,047)
MTCE OF GENERAL PLANT & OFFI 211 2,3212162,5202,376 (6)22,750 55
105,761 1,062,212 1,104,926 88,694 903,713(4)18Total For Administrative Expense:1,199,699 158,499
General Expense
CIP REBATES - RESIDENTIAL 125 9701504,583771 (83)(21)5,000 (198)
CIP REBATES - COMMERCIAL 0 004580(100)05000
CIP - MARKETING 0 1,11701,8330 (100)(100)2,000 (1,117)
CIP - LABOR 0 002,2910 (100)02,500 0
ENVIRONMENTAL COMPLIANCE 37 628581,8331,936 6 2082,000 1,308
MISC GENERAL EXPENSE 0 002290(100)02500
208 2,708 11,229 162 2,715(76)0Total For General Expense:12,250 (7)
Total Expenses(before Operating Transfers)
295,105 3,143,530329,556 3,637,5813,578,373 (2)144,002,091 434,842
Operating Transfer
Utilities & Labor Donated
WATER & LABOR DONATED TO CI 0 0961,833742 (60)02,000 742
Total Operating Transfer
96 742 1,833 0 0(60)0Total For Total Operating Transfer:2,000 742
11,985 148,745(58,032)(180,135) Net Income Profit(Loss)310,108 272 10862,821 161,363
151
November 2025 Financials
Report Highlights
12/9/2025
PRESENTED AT MEETING - NOVEMBER 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 $4.3M
•Resulting in a profit margin of 8.8%
Profit & Profit Margins %
January 2025 – November 2025
$4,347,488
8.82%
Revenue Expense
$49,306,353 $44,958,865
PRESENTED AT MEETING - NOVEMBER 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 - NOVEMBER 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 - NOVEMBER 2025 FINANCIAL PRESENTATION
5
Accounts Receivable-Utility Aging 11/30/2025
Purpose: an overview of
outstanding payments from
customers and how long
they are past due.
•City services make up
$458k of total A/R balances
of $3.105M
•Over 90 days is only 2% of
total A/R compared to 89%
being current
GREEN
IS
GOOD!
PRESENTED AT MEETING - NOVEMBER 2025 FINANCIAL PRESENTATION
6
Accounts Receivable-Utility Aging 11/30/2025
Note: Electric and water accounts receivable
can be reviewed separately on the “Combined
Balance Sheet” provided in the packet.
PRESENTED AT MEETING - NOVEMBER 2025 FINANCIAL PRESENTATION
7
Electric Department – Purchased Power
Purpose: To illustrate 5-year
comparison in purchased power
costs.
•Purchased power 2025 YTD is
approximately 68% of total
expenses.
•2025 YTD purchased power is
unfavorable to budget 1%.
•2025 expense is 6% higher than
2024. YTD 2025 is $1.715M more
than 2024. 4% higher kWh
purchased which also results in
higher EAC charges.
PRESENTED AT MEETING - NOVEMBER 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 4% higher in
2025 as compared to 2024.
•***Through December 2025***
PRESENTED AT MEETING - NOVEMBER 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 December 2025***
PRESENTED AT MEETING - NOVEMBER 2025 FINANCIAL PRESENTATION
Thank You!
Melissa Karpinski, CPA - Finance Manager
mkarpinski@ermumn.com
PRESENTED AT MEETING - NOVEMBER 2025 FINANCIAL PRESENTATION
______________________________________________________________________________
Page 1 of 2
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Parker Thiesen – IT/OT Technician
Sara Youngs – Administrations Director
MEETING DATE:
January 13, 2026
AGENDA ITEM NUMBER:
5.2
SUBJECT:
American Public Power Association CR7 Subaward Agreement
ACTION REQUESTED:
Approve American Public Power Association CR7 Subaward Agreement, pending legal review.
BACKGROUND:
American Public Power Association (APPA) received a grant through the Department of Energy
(DOE), providing $6 million to support the development and deployment of operational
technology (OT) cybersecurity solutions for public power utilities. The program specifically
targets utilities that require additional support to enhance defenses against cybersecurity
threats, primarily small and medium-sized public power utilities serving 50,000 or fewer
customers. These utilities often operate OT networks but lack the internal resources needed to
implement comprehensive OT cybersecurity programs on their own. The project is guided by
the Cybersecurity Defense Community, a working group composed of member utility
representatives. This group provides ongoing technical input, validation, and strategic oversight
to ensure the solutions developed align with sector needs and best practices.
DISCUSSION:
Staff are pursuing the APPA grant opportunity to strengthen our OT network capabilities. This
funding would provide ERMU with the hardware and software necessary to implement a
comprehensive OT cybersecurity program. Staff requests commission approval to approve the
agreement, pending final legal review, as well as provision of authorization to the General
Manager and ERMU’s attorney to approve any subsequent changes that are not material.
FINANCIAL IMPACT:
There will be no financial impact during the first two years of the pilot program. All costs will be
handled as a pass-through expense, as we have been awarded participation in the program.
APPA will cover all hardware, software, and implementation costs, totaling approximately
$60,000.
Once the pilot program is complete, staff will evaluate whether the products meet our daily
business needs and determine if continuing with program supports ERMU’s goals.
152
______________________________________________________________________________
Page 2 of 2
ATTACHMENTS:
• The DOE’s agreement document is classified “Confidential” and responses from ERMU’s
submission contain information the disclosure of which could compromise public safety
and the electronic security of financial data. Electronic access to the agreement will be
provided directly to commissioners for review.
153
______________________________________________________________________________
Page 1 of 2
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Mark Hanson – General Manager
MEETING DATE:
January 13, 2026
AGENDA ITEM NUMBER:
6.1a
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• I have been working with City Administrator Cal Portner to define a path forward for
ERMU’s labor, equipment, and material expenses associated with the banners, flags,
and wreaths attached to streetlights. We recommend the following breakdown of
responsibilities:
o ERMU will continue donating the labor/equipment for putting up/taking down
the flags for as long as the City/the American Legion is willing to provide the
flags/brackets.
o ERMU will continue donating the labor/equipment for putting up/taking down
the wreaths for as long as the City’s Economic Development
Authority/Downtown Elk River Business Association is willing to provide the
wreaths/brackets.
o ERMU will continue providing the labor/equipment to maintain the banners but
the associated labor, materials, and equipment expenses will be invoiced to the
City.
• With the revised Payment in Lieu of Taxes agreement, I’ve been working with Mr.
Portner and key ERMU staff to revise the streetlight installation and maintenance
agreement. The current plan is to present the revised agreement for approval at the
February commission meeting.
• Verizon has submitted another proposed amendment to the water tower attachment
agreement for our Johnson Tower. Their proposed terms are very similar to their last
offer (a 25.7% reduction instead of a 26.5%) so I will politely decline.
• The Minnesota Municipal Power Agency Board of Directors met on December 23, 2025,
at Chaska City Hall in Chaska, Minnesota, and via videoconference. Commissioner
Stewart and I attended. The public summary is as follows:
o The Board reviewed the Agency’s financial and operating performance for
November 2025.
154
______________________________________________________________________________
Page 2 of 2
o Participation in the residential Clean Energy Choice program increased by 39
customers. Customer penetration for the program is 6.8% of residential
customers.
o The Board reviewed the Agency’s annual budget for 2026 and approved a 2.7%
rate increase.
o The Board discussed the status of renewable projects the Agency is pursuing.
155
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Sara Youngs – Administrations Director
MEETING DATE:
January 13, 2026
AGENDA ITEM NUMBER:
6.1b
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• Office walk-in traffic for December consisted of 131 customers, averaging 32 customers
per week over the four-week period.
• The office served 1,743 walk-in customers in 2025, 36 fewer than in 2024.
• ERMU disconnections for December: The Cold Weather Rule was in effect, preventing
customer disconnections until 30 days after a disconnection notice was issued.
Additionally, due to the holidays, customers in Cycles 3 and 4 were not disconnected for
past-due balances.
o Cycle 1 – 8 disconnections
o Cycle 2 – 3 disconnections
• During the month of December 2025, the customer service team entered 63 payment
arrangements with customers. During December 2024 there were 47 payment
arrangements.
• Currently there are eight active residential solar photovoltaic projects planned or under
construction in the ERMU service territory.
• Staff completed year-end processing in the National Information Solutions Cooperative’s
Enterprise Resource Planning system. Trash rates have been updated to reflect the 2026
rates, and all other City and utility rates will be updated for the February billing which
captures activity from January.
156
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Melissa Karpinski – Finance Manager
MEETING DATE:
January 13, 2026
AGENDA ITEM NUMBER:
6.1c
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• Audit fieldwork for 2025 is scheduled for February 18–20. Preparation of the required
documentation and work papers for the annual audit is ongoing.
• Entry of 2026 payroll data into the iVUE Payroll/Labor module has been completed,
while payroll staff continue finalizing 2025 year-end activities.
• Entry of the 2026 budget into the iVUE Budget module is currently in progress.
• Received the final PFAS Phase 1 3M Settlement payment, totaling approximately $30k
net of fees.
157
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Tony Mauren – Governance & Communications Manager
MEETING DATE:
January 13, 2026
AGENDA ITEM NUMBER:
6.1d
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• In January, all customers will receive an informational flyer about SmartHub’s Auto Pay
Program.
• In addition to the bill insert topic, January social media will cover holiday office closures,
garbage/recycling service schedule notices, holiday/new year greetings, information
about tree trimming occurring in the service territory, a commission meeting reminder,
Squirrel Appreciation Day, and water conservation tips.
• As part of the Management Policy Manual item on the ERMU Strategic Initiatives
Dashboard, ERMU’s Electric and Water Department Rules have been reviewed by staff
and published on our website in the POLICIES accordion on the Commission Page.
• On December 17, Jenny F. successfully completed the Federal Aviation Administration's
required ALC-677: Part 107 Small UAS Recurrent training and exam. Completion of this
course satisfies the 24-month recency of aeronautical knowledge requirement for a part
107 remote (drone) pilot with a sUAS rating.
• Staff will be participating in its annual review of the website and updating information
for 2026 as needed.
• Communications and customer service staff continue working with the administrations
director to enhance the SmartHub user experience through improved branding, updated
language, and other refinements.
ATTACHMENTS:
• Bill Insert – SmartHub’s Auto Pay Program
158
SmartHub is a web and mobile app that allows you to take control of all
aspects of your utility account. Pay your bill, set up automatic payments,
manage your use, and contact ERMU with service issues quickly and easily
online or on your mobile device.
WHAT IS SMARTHUB?
ERMUMN.COM | 763.441.2020 | 13069 ORONO PARKWAY | PO BOX 430 | ELK RIVER, MN 55330-0430
SMARTHUB’S
AUTO PAY PROGRAM
New signups to SmartHub’s Auto Pay Program will receive a one-time $5.00 bill credit!
SmartHub’s Auto Pay Program helps you save time, avoid service interruptions, and eliminate late fees by allowing
you to set up automatic payments using your preferred method (credit, debit, checking, or savings) while still
letting you view your itemized bill.
WHAT IS SMARTHUB’S AUTO PAY PROGRAM?
CHOOSE YOUR
PAYMENT METHOD
SAVE TIME &
REDUCE STRESS
EASY PROGRAM
SIGN UP
1
2
3
With SmartHub’s Auto Pay
Program, you will still be able to
view an itemized bill each month,
but you won’t need to take time
to schedule a payment. Rest
assured, your bill will be taken
care of on its due date.
Set up your preferred secure
payment method and let account
management do the rest.
•Credit
•Debit
•Checking
•Savings
Existing SmartHub users
can simply go to their account,
select the Auto Pay Program
option, and follow the prompts,
while new users can create a
SmartHub account using the QR
code, then follow the prompts.
159
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Thomas Geiser – Operations Director
MEETING DATE:
January 13, 2026
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.
• Still working through the lack of communication and action regarding the reclosers that
were recalled. We continue to wait for our 30 units to be repaired.
• ERMU has started its copper switchgear replacement plan. We have replaced two so far.
• Staff and I attended the Minnesota Municipal Utilities Association’s (MMUA) Technical
& Operations Conference, December 9-11, in St. Cloud.
• ERMU’s Water Operations Foreperson, Katy O., and GIS/Mapping Technician, Angela H.,
served on a panel at the MMUA Technical & Operations Conference. They discussed the
personal and professional benefits of participating in industry competitions like
lineworker rodeos and Hydrant Hysteria. Katy and Angela competed in the Hydrant
Hysteria National Competition in Anaheim, CA, in June 2024, where teams compete to
assemble a fire hydrant in the least amount of time.
• I attended the MMUA Job Training & Safety meeting at Brainard Public Utilities on
January 5-6 to plan the Underground School.
• Worked on finalizing 2026 budget items.
• We are still waiting for the delivery of Bucket Truck #5 that was supposed to arrive at
the end of December 2025. It is scheduled to be done mid-January.
• Carr’s Tree Service has completed work for the 2025 tree trimming season. ERMU staff
will continue trimming into the 2026 season.
• Working with Minnesota Municipal Power Agency and DGR Engineering on the solar and
gas project slated for the 2026 construction season.
• Working with Sherburne County on the future County Road 44 realignment and addition
of a walking path project.
160
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Chris Sumstad – Electric Superintendent
MEETING DATE:
January 13, 2026
AGENDA ITEM NUMBER:
6.1f
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• Installed 13 new residential services, which involves the connection of a secondary line
once the customer requests service.
• Joe Schmidt, safety instructor from Minnesota Municipal Utilities Association (MMUA),
was here December 29 and December 30, and held trainings for all staff to review the
safety topics covered in 2025.
• Crews set the transformer and finished the underground primary work that runs to the
injection site for Minnesota Municipal Power Agency’s renewable natural gas project.
We will be bringing power to the plant site in spring 2026.
• Carr’s finished tree trimming for us on December 29. ERMU crews will start trimming
shortly.
• Two lineworkers attended MMUA’s Transformer School in Marshall, December 15-18.
• Jake Kunz, safety instructor from MMUA, was here on December 11, and held training
on chainsaw operations and maintenance as well as trimming and felling techniques.
• Crews installed primary underground north along Jarvis Street to feed two new homes
in the northeast corner of our service territory.
• Crews continue the Feeder 65 overhead line rebuild along Highway 169, working
towards the Elk River Landfill.
• A new switchgear was installed at County Road 33 and Joplin Street, which will feed into
the new Meadowsweet Bend development.
• I attended MMUA’s Technical & Operations conference held in St. Cloud, December 9-
11.
• Looking at material needs for 2026 projects.
161
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Mike Tietz – Technical Services Superintendent
MEETING DATE:
January 13, 2026
AGENDA ITEM NUMBER:
6.1g
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• In December, the locators processed 119 locate tickets. These consisted of 69 normal
tickets, 4 emergency tickets, 30 updated tickets, 4 meetings, 4 planning, and 8
cancellations. This resulted in a 63.3% decrease in tickets from the previous month and
a 5.3% increase from the prior December. The ticket count for 2025 is up by 4.1% from
2024’s numbers. I am expecting these numbers to increase again in 2026 with more
Fiber to the Home companies installing their facilities throughout ERMU’s service area.
Also, due to new state requirements our locators will now be using sub-centimeter GPS
locators to record our underground facilities into our ESRI mapping system.
• In December, the electrical technicians completed 307 service order tasks, updated the
power bill, addressed customer meter issues and any off-peak concerns.
• The electrical technicians have been replacing three phase meters and testing current
transformers of our polyphase Advanced Metering Infrastructure (AMI) meters. Staff
must test, program, and verify the programming of each of these meters as we work
through the exchange process for all the commercial meters. The AMI project is at an
overall completion rate of 97%.
• Staff is working on the installation logistics for the replacement Otsego substation
transformer, which is expected to be delivered in June. This will require a fair amount of
coordination with Great River Energy and Wright Hennepin Cooperative to facilitate this
installation as this is a shared substation. It will require special rigging to move the
transformer into place on the existing pad.
• Staff continues to work at the East substation, wiring the relay panel and other
equipment inside of the control building. We will be installing fiber in the conduits to
the recloser control boxes as weather permits. Steel structures are expected to arrive in
March. Commissioning of the substation is still on schedule for September 1, 2026.
• Our monthly peak was 47.45 MW on December 8, at 5:21pm.
162
______________________________________________________________________________
Page 1 of 2
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Dave Ninow – Water Superintendent
MEETING DATE:
January 13, 2026
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 one new water service.
• 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 21 routine fluoride samples
o All samples met MDH standards
o Submitted MDH Fluoride Report
• Submitted Discharge Monitoring Report for the Diesel Generation Plant to the
Minnesota Pollution Control Agency.
• The pump, motor, and pipes that were removed from Well #6 for preventive
maintenance and inspection have been reinstalled. The existing sections of pipe were
deteriorated due to electrolysis and needed to be replaced with new pipes. We are
investigating the cause of the electrolysis to be able to prevent future corrosion issues.
• Staff continue working on switching the water SCADA system from radio communication
to fiber optic communication utilizing our fiber ring. The controls for Well #6, Freeport
Water Tower are now switched over to fiber communications.
• Staff have been working with Short Elliott Hendrickson and Elfering & Associates to plan
rerouting raw water from Well #8 to the existing treatment plant for Wells #7 and 9.
Well #8 is currently the only well that does not go through any filtration to remove iron
and manganese.
• Verizon Wireless’ contractor has finished work on upgrades to their telecommunications
equipment at Auburn Street Water Tower.
• Joe Hale, the City’s environmental services and projects specialist, and I met with
members of the Orono Lake Improvement District (OLID) and DNR staff to discuss the
lake drawdown process for the annual inspection of the dam, usually occurring the first
week of October. OLID members asked for the City to modify the drawdown process to
create a longer, slower drawdown of the lake. The DNR will need to approve any
163
______________________________________________________________________________
Page 2 of 2
proposed changes. OLID members also asked about doing an extended or additional
drawdown to kill off zebra mussels.
• The water operators continue to perform preventive maintenance on the water
treatment plants, including repairing or upgrading any items requiring attention.
ATTACHMENTS:
• December 2025 Pumping by Well
164
Values Are Displayed in Millions of Gallons (Well #, Gallons Pumped, Percentage of Pumping)
Well #2, 5.497, 10%
Well #3, 0.852, 2%
Well #4, 19.162, 37%
Well #5, 5.043, 10%
Well #6, 2.885, 5%
Well #7, 4.647, 9%
Well #8, 5.825, 11%
Well #9, 8.282, 16%
December 2025 Monthly Pumping By Well
165
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
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
166