2026-4 - ERMU - Regular Commission Meeting
REGULAR MEETING OF THE
UTILITIES COMMISSION
April 14, 2026, 3:30 P.M.
ERMU Conference Room
______________________________________________________________________________
Page 1 of 2
AGENDA
1.0 GOVERNANCE
1.1 Call Meeting to Order
1.2 Pledge of Allegiance
1.3 Consider the Agenda
1.4 Resolution Recognizing 2026 Drinking Water Week
1.5 Resolution Recognizing 2026 Lineworker Appreciation Day
1.6 Recognition of American Public Power Association Certificate of Excellence in Reliability
1.7 Recognition of American Public Power Association Safety Award of Excellence
1.8 Recognition of American Public Power Association Reliable Public Power Provider
Designation
2.0 CONSENT (Routine items. No discussion. Approved by one motion.)
2.1 Check Register – March 2026
2.2 Regular Meeting Minutes – March 10, 2026
2.3 Resolution Electing Not to Waive Statutory Tort Limits for Liability Insurance
2.4 Summary of Information Security Committee Closed Session
2.5 Mission, Vision, Values Policy Updates
2.6 2026 Schedule of Rate and Fees Update
3.0 OPEN FORUM (Non-agenda items for discussion. No action.)
4.0 POLICY & COMPLIANCE (Policy review, policy development, and compliance monitoring.)
4.1 2025 Financial Audit
4.2 2025 Year End Reserve Balances
4.3 2025 Utilities Performance Incentive Compensation Distribution
5.0 BUSINESS ACTION (Current business action requests and performance monitoring reports.)
5.1 Financial Report – February 2026
5.2 2025 Annual Reliability Report
5.3 Information Technologies Services Memorandum of Understanding with the City of Elk
River
5.4 Letter of Intent for Large Industrial Electric Load
6.0 BUSINESS DISCUSSION (Future business planning, general updates, and informational reports.)
6.1 Staff Updates
6.2 City Council Update
6.3 Future Planning (Announce the next regular meeting, special meeting, or planned quorum.)
a. Regular Commission Meeting – May 12, 2026
1
ERMU Regular Commission Meeting Agenda April 8, 2025
______________________________________________________________________________
Page 2 of 2
1. Closed Meeting: General Manager Performance Review
b. 2026 Governance Agenda
6.4 Other Business (Items added during agenda approval.)
7.0 ADJOURN REGULAR MEETING
2
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Dave Ninow – Water Superintendent
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
1.4
SUBJECT:
Resolution Recognizing 2026 Drinking Water Week
ACTION REQUESTED:
Adopt Resolution 26-3 Recognizing Drinking Water Week, May 3-9, 2026
BACKGROUND:
Drinking Water Week is an annual celebration organized by the American Water Works
Association and its members. It is intended to raise awareness of the critical role that safe,
sustainable, and affordable drinking water plays in our daily lives. Drinking Water Week is a
chance for everyone to appreciate water as a finite resource that requires dedicated
individuals, running well-maintained systems, to make it safe and easily available. This year’s
celebration will be May 3-9, 2026.
DISCUSSION:
Elk River Municipal Utilities is committed to maintaining its water system and providing safe
and reliable water to our customers. A domestic water system and other urban services like
wastewater and electricity are the foundation of social and economic development. Our water
system is an important part of why our community is what it is today.
ATTACHMENT:
• Resolution No. 26-3 – Recognizing Drinking Water Week 2026
3
RESOLUTION NO. 26-3
BOARD OF COMMISSIONERS
ELK RIVER MUNICIPAL UTILITIES
A RESOLUTION OF THE BOARD OF COMMISSIONERS OF ELK RIVER MUNICIPAL
UTILITIES RECOGNIZING DRINKING WATER WEEK, MAY 3-9, 2026
WHEREAS, water is our most valuable natural resource; and
WHEREAS, only tap water delivers public health protection, fire protection, support for
our economy and the quality of life we enjoy; and
WHEREAS, any measure of a successful society – low mortality rates, economic growth
and diversity, productivity, and public safety – are in some way related to access to safe
water; and
WHEREAS, we are all stewards of the water infrastructure upon which future
generations depend; and
WHEREAS, each citizen of our community is called upon to help protect our source
waters from pollution, to practice water conservation, and to get involved in local water
issue; and
WHEREAS, the hard work and dedication towards providing safe and reliable drinking
water by our water system professionals is truly appreciated by our community; and
WHEREAS, May 3-9, 2026, is set aside as time to enhance public awareness of the value
of water and to encourage the public to continue using water wisely;
NOW, THEREFORE, BE IT RESOLVED THAT THE WEEK OF MAY 3, 2026, BE DESIGNATED
AS DRINKING WATER WEEK.
This Resolution Passed and Adopted this 14th day of April 2026.
John J. Dietz, Chair
Mark Hanson, General Manager
4
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Chris Sumstad – Electric Superintendent
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
1.5
SUBJECT:
Resolution Recognizing 2026 Lineworker Appreciation Day
ACTION REQUESTED:
Adopt Resolution 26-4 Recognizing Lineworkers and Designating April 18, 2026, as Lineworker
Appreciation Day.
BACKGROUND:
On April 10, 2013, the U.S. Senate recognized a National Linemen Appreciation Day through
resolution S Res 95. The resolution acknowledged the contributions of the brave men and
women who protect public safety, and designated April 18, 2013, as National Lineman
Appreciation Day. This is now an official holiday in the United States and is now commonly
referred to as National Lineworker Appreciation Day.
DISCUSSION:
Our community would not be what it is today without electricity and other urban services like
water and wastewater. Our community-owned electric utility has played a significant role in the
growth and prosperity of the immediate area. At the heart of that growth has been our
lineworkers. These are the individuals, like other emergency service professionals, who run
towards the storm so that our customers have continued services. Our lineworkers have done
such an excellent job “keeping the lights on” that electric services start to feel like a basic
human right or entitlement, taking all their hard work for granted. But the truth is, the work
that these professionals do is greatly appreciated.
ATTACHMENTS:
• Resolution No. 26-4 – Recognizing Lineworkers and Designating Lineworker Appreciation
Day 2026
5
RESOLUTION NO. 26-4
BOARD OF COMMISSIONERS
ELK RIVER MUNICIPAL UTILITIES
A RESOLUTION OF THE BOARD OF COMMISSIONERS OF ELK RIVER MUNICIPAL
UTILITIES RECOGNIZING LINEWORKERS AND DESIGNATING APRIL 18, 2026, AS
LINEWORKER APPRECIATION DAY
WHEREAS, the profession of lineworker is steeped in personal, family, and professional
tradition;
WHEREAS, lineworkers are often first responders during storms and other catastrophic
events, working to make the scene safe for other public safety heroes;
WHEREAS, lineworkers work with thousands of volts of electricity high atop power lines
24 hours a day, 365 days a year, to keep electricity flowing;
WHEREAS, lineworkers must often work under dangerous conditions far from their
families to construct and maintain the energy infrastructure of the United States;
WHEREAS, lineworkers put their lives on the line every day with little recognition from
the community regarding the danger of their work; and
WHEREAS, the Board of Commissioners of Elk River Municipal Utilities recognizes the
efforts of lineworkers in keeping the power on and protecting public safety.
NOW, THEREFORE, BE IT RESOLVED THAT APRIL 18, 2026, BE DESIGNATED LINEWORKER
APPRECIATION DAY.
This Resolution Passed and Adopted this 14th day of April, 2026.
John J. Dietz, Chair
Mark Hanson, General Manager
6
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Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Mike Tietz – Technical Services Superintendent
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
1.6
SUBJECT:
Recognition of American Public Power Association Certificate of Excellence in Reliability
ACTION REQUESTED:
None
BACKGROUND/DISCUSSION:
The American Public Power Association (APPA) recently honored 255 public power utilities with
a Certificate of Excellence in Reliability for reliable performance. These utilities have
significantly outperformed the electric industry nationwide averages as gathered by the Energy
Information Administration. APPA collected data from public power utilities that subscribe to
APPA’s eReliability Tracker software to track their reliability data. Of those utilities, 312 were
considered to have sound data that was included in the 2025 Annual Benchmarking Report.
The tracker performs calculations for System Average Interruption Duration Index (SAIDI) which
measures the average outage time per customer on the system, System Average Interruption
Frequency Index (SAIFI) which measures how often a customer on our system could expect to
experience an outage, and Customer Average Interruption Duration Index (CAIDI) which
measures averaged outage duration of all customers that actually experienced an outage.
The report also includes calculations for Momentary Average Interruption Frequency Index
(MAIFI) and Average Service Availability Index (ASAI) which helps utilities to compare, collect,
categorize, and analyze their outage information.
For 2025, ERMU’s SAIDI was only 11.84 minutes (excluding major events) and 18.95 minutes
(including major events), compared to the industry average of 169 minutes (excluding major
events). In simple terms, that means that averaged out over our nearly 14,000 electric
customers in 2025, each customer could expect to have a total outage time of about 19
minutes; that is 150 minutes shorter than the national average for outages among all utilities
within the United States.
I would like to recognize the ERMU team for their continuous devotion to providing reliable
electric service to all of our customers throughout 2025. This national recognition from APPA is
a testament to staff’s consistent commitment to ERMU’s Mission - Serving Our Community:
Every Home, Every Business, Every Day.
7
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Megan Zachman – Human Resources Generalist
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
1.7
SUBJECT:
Recognition of American Public Power Association Safety Award of Excellence
ACTION REQUESTED:
None
BACKGROUND/DISCUSSION:
The American Public Power Association (APPA) recently honored Elk River Municipal Utilities
with a Diamond-level Safety Award of Excellence for safe operating practices among our
electric utility employees and the staff who support them in 2025. ERMU received this
prestigious award at APPA’s annual Engineering & Operations Conference and Safety Summit,
held March 29 - April 1, 2026, in Huntsville, Alabama.
The Diamond designation represents the highest level of recognition in APPA’s annual Safety
Awards program. In 2025, 240 utilities nationwide were recognized with a Safety Award of
Excellence. Utilities receiving these awards have proven that safety is of the utmost importance
in the operation of their companies and are recognized for the hard work that goes into
keeping every team member safe. APPA has conducted these safety awards annually for more
than 68 years.
Entrants are evaluated based on their incident-free safety records and the overall strength of
their safety programs and culture, as measured by OSHA standards. ERMU’s electric utility
employees and their supporting staff demonstrated an outstanding safety record in 2025,
earning us the Diamond designation - the highest level achievable in the program.
This achievement is made possible through the culture of safety that is part of every
employee’s work ethic. As stated in ERMU’s Organizational Values, “We prioritize the safety of
our team and the community we serve.”
8
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Page 1 of 2
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Mike Tietz – Technical Services Superintendent
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
1.8
SUBJECT:
Recognition of American Public Power Association Reliable Public Power Provider Designation
ACTION REQUESTED:
None
BACKGROUND/DISCUSSION:
I am excited to announce that Elk River Municipal Utilities (ERMU) has once again received
national recognition from the American Public Power Association (APPA) for being a Reliable
Public Power Provider (RP3). The RP3 designation recognizes public power utilities that
demonstrate proficiency in four key areas: reliability, safety, workforce development, and
system improvement. Criteria within each category are based on sound business practices and
represent a utility-wide commitment to providing safe and reliable electricity.
Currently, 261 of the nation's more than 2,000 public power utilities hold an RP3 designation,
and ERMU is just one of 118 utilities to earn an RP3 designation in 2026. There are three
designation levels based on scoring: Gold (score of 80-89 pts.), Platinum (score of 90-97 pts.),
and Diamond (score of 98-100 pts.). Thanks to the efforts of the whole team, ERMU was able to
achieve the Diamond level designation for the first time with a score of 98 pts. and is one of
only 61 municipal utilities in the nation to receive this designation in 2026. This three-year
designation will begin on May 1, 2026, and last until April 30, 2029.
Receiving an RP3 designation is a sign of a utility's dedication to efficiently operating a safe and
reliable electric distribution system. Being recognized by the RP3 program demonstrates to
community leaders, governing board members, suppliers, and service providers the utilities’
commitment to its employees, customers, and community. This designation means that our
customers receive some of the best possible services in the country.
It also shows that we are committed to keeping costs low, improving best practices, and raising
the bar for other electric service providers. It means that we hire the best people, who are
dedicated to doing an exceptional job for ERMU and our community.
ERMU is proud of our reliability performance. In 2025, the average ERMU customer would have
experienced only 19 minutes without power, while the average electric customer within our
region would have experienced 67 minutes. ERMU conducts annual reviews of our system to
identify areas that may need improvement and performs ongoing vegetation management to
9
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Page 2 of 2
ensure that trees do not interfere with overhead lines. In September of 2025, ERMU finalized
the utilities Emergency Operations Plan which provides the framework for different types of
emergency responses, while maximizing the safety of staff and customers. Tabletop exercises
are performed with staff as well as key city/county personnel to assess our preparedness for an
emergency response. These exercises help identify areas for improvement and encourage staff
to find innovative ways to continually provide a safe and efficient response to emergencies
within our community. We remain diligent in safeguarding the utilities by implementing cyber
security best practices and preparing to be ready for any potential threats.
ERMU takes safety very seriously. Over the three-year review period, employees maintained a
consistent record of safe operation. During our monthly training courses, daily tailgate
meetings, and on-site job briefings, working safely is on every employee’s mind. All new
employees are required to go through our initial safety training as part of their on-boarding
process. All incidents and near misses are discussed to make everyone aware of the hazard and
to determine steps to prevent a similar incident in the future. Our safety-minded culture is
shown on a national level with our recent Diamond level Safety Award of Excellence received
from APPA. The safety of our team and everyone we serve is of the highest importance.
ERMU is committed to workforce development. Employees are encouraged to expand their
knowledge by attending seminars, conferences, job-related training, etc., so they can keep up
to date on standards and best practices within the industry as well as network with their peers.
Leadership training is provided for all employees to help with the development of those skills,
regardless of their position. This type of development contributes to why ERMU has such
outstanding employees. We could not have received this award without our employees being
so dedicated to providing service excellence to our community every day.
ERMU is dedicated to continuous system improvement. We continually focus on making
improvements to our facilities through constant inspections, maintenance of key equipment,
and replacing aging infrastructure. ERMU continuously reviews and evaluates system
performance to help determine which future projects are given priority. ERMU maintains a
comprehensive long-term capital project plan to identify our needs well into the future. Budget
planning for these projects is conducted annually and presented to the Commission for their
approval. We perform cost of service studies about every five years to preserve the financial
health of the utilities along with maintaining adequate financial reserves to mitigate any risk.
The staff at ERMU is proud to serve its community and keep it powered up every day. We are
always looking for ways to improve and achieve the best possible results for our customers by
providing reliable service at competitive rates, and seeking to live up to our Vision statement –
Leading the Way to a Stronger Community.
10
CHECK REGISTER
March 2026
APPROVED BY:
John Dietz
Jill Larson-Vito
Mary Stewart
Matt Westgaard
Nick Zerwas
11
Payroll/Labor
Check Register Totals
Page: 104/01/2026 1:56:54 pm
Elk River Municipal Utilities
03/13/2026 To 03/13/2026
Rev: 202303050330
Pays Job Amount Hours
Gross Pay
177,194.18 3,098.252Reg Hours
189.15 2.003Overtime
0.00 0.004Double Time
2,959.46 56.005On-Call/Stand-by
0.00 0.0024FLSA
0.00 0.0025Rest Time
0.00 0.0010Bonus Pay
600.00 0.0018Commissioner Reimb - Electric
0.00 0.00104Commission Stipend
17,291.31 284.23VACVacation Pay
5,348.01 100.52SICKSick Pay
0.00 0.00HOLHoliday Pay
0.00 0.005-2 On-Call/Stand-by/OT
150.00 0.0018ACommissioner Reimb. - Water
0.00 0.0010-3 Bonus Pay Overtime
0.00 0.00104ACommission Stipend - Water
1,203.04 16.00PTOYPersonal Day - Year
392.80 4.503COvertime-Comp Time
0.00 0.004CDouble Time-Comp Time
-392.80 -4.50CM3COvertime-Comp Time Adjusted
0.00 0.00CM4CDouble Time-Comp Time Adjusted
0.00 0.00COMPComp Time Taken
0.00 0.00106Longevity Pay
0.00 0.00MILMilitary Pay - Calendar Year
Gross Pay Total:204,935.15 3,557.00
Total Pays:204,935.15 3,557.00
/pro/rpttemplate/acct/2.64.1/pl/PL_CHK_REG_TOTALS.xml.rpt KGreenberg252520312
Payroll/Labor
Check Register Totals
Page: 104/01/2026 1:57:32 pm
Elk River Municipal Utilities
03/27/2026 To 03/27/2026
Rev: 202303050330
Pays Job Amount Hours
Gross Pay
184,929.86 3,219.002Reg Hours
1,395.37 14.843Overtime
0.00 0.004Double Time
3,144.26 56.005On-Call/Stand-by
98.87 0.0024FLSA
376.63 6.5025Rest Time
0.00 0.0010Bonus Pay
9,404.40 147.00VACVacation Pay
5,454.04 108.50SICKSick Pay
0.00 0.00HOLHoliday Pay
5.46 0.0078Retro Earnings
584.09 5.255-2 On-Call/Stand-by/OT
0.00 0.0010-3 Bonus Pay Overtime
796.52 12.00PTOYPersonal Day - Year
2,461.25 28.913COvertime-Comp Time
0.00 0.004CDouble Time-Comp Time
-2,461.25 -28.91CM3COvertime-Comp Time Adjusted
0.00 0.00CM4CDouble Time-Comp Time Adjusted
0.00 0.00COMPComp Time Taken
0.00 0.00106Longevity Pay
0.00 0.00MILMilitary Pay - Calendar Year
Gross Pay Total:206,189.50 3,569.09
Total Pays:206,189.50 3,569.09
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Page 104/01/2026 1:56:01 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 1 - GENERAL FUND
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
WIRE23893/4/26 FISERV5655 ACH FEES - FEB 2026 2,609.34
ACH FEES - FEB 2026 652.33
ACH FEES - FEB 2026 511.18
ACH FEES - FEB 2026 127.79
ACH FEES - FEB 2026 2,511.55
ACH FEES - FEB 2026 627.89
ACH FEES - FEB 2026 92.82
ACH FEES - FEB 2026 23.20
ACH FEES - FEB 2026 788.92
ACH FEES - FEB 2026 197.23
ACH FEES - FEB 2026 2,477.27
ACH FEES - FEB 2026 619.32
Total for Check/Tran - 2389:11,238.84
Total for Bank Account - 1 :(1)11,238.84
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Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
WIRE51423/2/26 PERA (ELECTRONIC)153 PERA EMPLOYEE CONTRIBUTION 10,877.20
PERA CONTRIBUTIONS 12,550.66
PERA EMPLOYEE CONTRIBUTION 2,528.06
PERA CONTRIBUTIONS 2,916.98
Total for Check/Tran - 5142:28,872.90
WIRE51433/2/26 MINNESOTA CHILD SUPPORT PAYMEN598 CHILD SUPPORT 304.10
WIRE51443/3/26 VOYA INSTITUTIONAL TRUST COMPAN160HCSP EMPLOYEE CONTRIBUTIONS 2,500.29
HCSP EMPLOYEE CONTRIBUTIONS 509.77
Total for Check/Tran - 5144:3,010.06
WIRE51453/3/26 VOYA INSTITUTIONAL TRUST COMPAN161MNDCP EE MANAGER CONTRIBUTIONS 368.37
MNDCP EMPLOYEE CONTRIBUTIONS 3,736.34
MNDCP EMPLOYER CONTRIBUTION 4,688.05
MNDCP EMPLOYER MGR CONTRIBUTION 619.54
MNDCP EE ROTH CONTRIBUTIONS 1,824.49
MNDCP EE ROTH MGR CONTRIBUTIONS 251.17
MNDCP EE MANAGER CONTRIBUTIONS 51.74
MNDCP EMPLOYEE CONTRIBUTIONS 427.93
MNDCP EMPLOYER CONTRIBUTION 619.16
MNDCP EMPLOYER MGR CONTRIBUTION 85.52
MNDCP EE ROTH CONTRIBUTIONS 393.45
MNDCP EE ROTH MGR CONTRIBUTIONS 33.78
Total for Check/Tran - 5145:13,099.54
WIRE51463/3/26 JOHN HANCOCK285 W&A EMPLOYER CONTRIBUTION 1,935.49
W&A MANAGER CONTRIBUTION 436.97
WENZEL EMPLOYEE CONTRIBUTIONS 1,924.50
WENZEL MANAGER CONTRIBUTIONS 136.51
DEF COMP ROTH CONTRIBUTIONS W&A 900.00
WENZEL EE ROTH MGR CONTRIBUTIONS 300.46
W&A EMPLOYER CONTRIBUTION 539.11
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Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
W&A MANAGER CONTRIBUTION 67.41
WENZEL EMPLOYEE CONTRIBUTIONS 191.33
WENZEL MANAGER CONTRIBUTIONS 34.03
DEF COMP ROTH CONTRIBUTIONS W&A 347.78
WENZEL EE ROTH MGR CONTRIBUTIONS 33.38
Total for Check/Tran - 5146:6,846.97
WIRE51473/3/26 HEALTHEQUITY, INC738 HSA EMPLOYEE CONTRIBUTION 2,810.16
HSA EMPLOYEE CONTRIBUTION 599.61
Total for Check/Tran - 5147:3,409.77
WIRE51483/3/26 IRS - USA TAX PMT (ELECTRONIC)152 PAYROLL TAXES - FEDERAL & FICA 17,001.56
PAYROLL TAXES - FEDERAL & FICA 23,947.06
PAYROLL TAXES - FEDERAL & FICA 3,838.59
PAYROLL TAXES - FEDERAL & FICA 5,613.56
Total for Check/Tran - 5148:50,400.77
WIRE51503/5/26 MINNESOTA REVENUE (ELECTRONIC)154 PAYROLL TAXES - STATE 7,603.36
PAYROLL TAXES - STATE 1,752.94
Total for Check/Tran - 5150:9,356.30
WIRE51513/5/26 HEALTHEQUITY, INC738 FSA CLAIM REIMBURSEMENTS - 164 222.22
FSA CLAIM REIMBURSEMENTS - 164 55.55
Total for Check/Tran - 5151:277.77
WIRE51523/6/26 ONLINE UTILITY EXCHANGE (ELECTR166 UTILITY EXCHANGE REPORT - FEB 2026 261.60
UTILITY EXCHANGE REPORT - FEB 2026 65.40
Total for Check/Tran - 5152:327.00
WIRE51533/9/26 HEALTHEQUITY, INC738 ADMINISTRATIVE FEE INVOICE - MARCH 2026 125.70
ADMINISTRATIVE FEE INVOICE - MARCH 2026 25.30
Total for Check/Tran - 5153:151.00
WIRE51543/10/26 AMERICAN PUBLIC POWER ASSOCIATI1 APPA NAT'L CONF - 20 151 186 201 6.26 4,780.00
WIRE51573/10/26 MEDICA8708 MEDICAL EE INSURANCE - MARCH 2026 11,203.80
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Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
MEDICAL ER INSURANCE - MARCH 2026 55,646.23
MEDICAL INSURANCE COBRA - MARCH 2026 1,374.88
MEDICAL EE INSURANCE - MARCH 2026 2,712.20
MEDICAL ER INSURANCE - MARCH 2026 14,094.50
Total for Check/Tran - 5157:85,031.61
WIRE51583/18/26 IRS - USA TAX PMT (ELECTRONIC)152 PAYROLL TAXES - FEDERAL & FICA 17,005.93
PAYROLL TAXES - FEDERAL & FICA 23,848.74
PAYROLL TAXES - FEDERAL & FICA 3,778.02
PAYROLL TAXES - FEDERAL & FICA 5,538.50
Total for Check/Tran - 5158:50,171.19
WIRE51593/18/26 PERA (ELECTRONIC)153 PERA EMPLOYEE CONTRIBUTION 10,791.29
PERA CONTRIBUTIONS 12,451.52
PERA EMPLOYEE CONTRIBUTION 2,480.70
PERA CONTRIBUTIONS 2,862.34
Total for Check/Tran - 5159:28,585.85
WIRE51603/18/26 VOYA INSTITUTIONAL TRUST COMPAN160HCSP EMPLOYEE CONTRIBUTIONS 2,480.56
HCSP EMPLOYEE CONTRIBUTIONS 466.03
Total for Check/Tran - 5160:2,946.59
WIRE51613/18/26 VOYA INSTITUTIONAL TRUST COMPAN161MNDCP EE MANAGER CONTRIBUTIONS 368.37
MNDCP EMPLOYEE CONTRIBUTIONS 3,710.20
MNDCP EMPLOYER CONTRIBUTION 3,009.70
MNDCP EMPLOYER MGR CONTRIBUTION 619.55
MNDCP EE ROTH CONTRIBUTIONS 1,824.51
MNDCP EE ROTH MGR CONTRIBUTIONS 251.18
MNDCP EE MANAGER CONTRIBUTIONS 51.74
MNDCP EMPLOYEE CONTRIBUTIONS 354.07
MNDCP EMPLOYER CONTRIBUTION 607.51
MNDCP EMPLOYER MGR CONTRIBUTION 85.51
MNDCP EE ROTH CONTRIBUTIONS 393.43
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Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
MNDCP EE ROTH MGR CONTRIBUTIONS 33.77
Total for Check/Tran - 5161:11,309.54
WIRE51623/18/26 JOHN HANCOCK285 W&A EMPLOYER CONTRIBUTION 1,668.01
W&A MANAGER CONTRIBUTION 436.88
WENZEL EMPLOYEE CONTRIBUTIONS 1,791.97
WENZEL MANAGER CONTRIBUTIONS 136.43
DEF COMP ROTH CONTRIBUTIONS W&A 900.00
WENZEL EE ROTH MGR CONTRIBUTIONS 300.45
W&A EMPLOYER CONTRIBUTION 539.23
W&A MANAGER CONTRIBUTION 67.50
WENZEL EMPLOYEE CONTRIBUTIONS 191.45
WENZEL MANAGER CONTRIBUTIONS 34.11
DEF COMP ROTH CONTRIBUTIONS W&A 347.78
WENZEL EE ROTH MGR CONTRIBUTIONS 33.39
Total for Check/Tran - 5162:6,447.20
WIRE51633/18/26 MINNESOTA CHILD SUPPORT PAYMEN598 CHILD SUPPORT 304.10
WIRE51643/19/26 MINNESOTA REVENUE (ELECTRONIC)154 PAYROLL TAXES - STATE 7,578.09
PAYROLL TAXES - STATE 1,745.97
Total for Check/Tran - 5164:9,324.06
WIRE51663/19/26 HEALTHEQUITY, INC738 HSA EMPLOYEE CONTRIBUTION 2,794.58
HSA EMPLOYEE CONTRIBUTION 575.19
FSA CLAIM REIMBURSEMENTS - 164 0.04
FSA CLAIM REIMBURSEMENTS - 164 0.01
Total for Check/Tran - 5166:3,369.82
WIRE51673/20/26 HEALTHEQUITY, INC738 FSA CLAIM REIMBURSEMENTS - 164 222.18
FSA CLAIM REIMBURSEMENTS - 164 55.54
Total for Check/Tran - 5167:277.72
WIRE51683/23/26 HEALTHEQUITY, INC738 2026 HSA RENEWAL FEE 320.00
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Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
2026 HSA RENEWAL FEE 80.00
Total for Check/Tran - 5168:400.00
WIRE51693/16/26 CARDMEMBER SERVICE9654 FIRST NATIONAL BANK VISA 18,201.48
FIRST NATIONAL BANK VISA 1,711.47
Total for Check/Tran - 5169:19,912.95
MP51703/25/26 MARCO TECHNOLOGIES, LLC8605 PRINTER MTC CONTRACT - 3/1 to 4/1/26 196.66
PRINTER MTC CONTRACT - 3/1 to 4/1/26 49.16
Total for Check/Tran - 5170:245.82
WIRE51723/23/26 MINNESOTA REVENUE SALES TX (ELE174 SALES AND USE TAX - FEB 2026 231,506.23
SALES AND USE TAX - FEB 2026 -2.59
SALES AND USE TAX - FEB 2026 3,005.36
Total for Check/Tran - 5172:234,509.00
WIRE51743/23/26 MARTIN MARIETTA MATERIALS797 HEATED SAND 104.53
WIRE51753/31/26 PERA (ELECTRONIC)153 PERA EMPLOYEE CONTRIBUTION 10,974.12
PERA CONTRIBUTIONS 12,662.46
PERA EMPLOYEE CONTRIBUTION 2,428.19
PERA CONTRIBUTIONS 2,801.75
Total for Check/Tran - 5175:28,866.52
WIRE51763/31/26 VOYA INSTITUTIONAL TRUST COMPAN160HCSP EMPLOYEE CONTRIBUTIONS 2,548.08
HCSP EMPLOYEE CONTRIBUTIONS 489.04
Total for Check/Tran - 5176:3,037.12
WIRE51773/31/26 VOYA INSTITUTIONAL TRUST COMPAN161MNDCP EE MANAGER CONTRIBUTIONS 368.32
MNDCP EMPLOYEE CONTRIBUTIONS 3,945.65
MNDCP EMPLOYER CONTRIBUTION 2,945.61
MNDCP EMPLOYER MGR CONTRIBUTION 619.49
MNDCP EE ROTH CONTRIBUTIONS 1,824.50
MNDCP EE ROTH MGR CONTRIBUTIONS 251.17
MNDCP EE MANAGER CONTRIBUTIONS 51.79
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520319
Page 704/01/2026 1:56:01 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
MNDCP EMPLOYEE CONTRIBUTIONS 351.62
MNDCP EMPLOYER CONTRIBUTION 604.60
MNDCP EMPLOYER MGR CONTRIBUTION 85.57
MNDCP EE ROTH CONTRIBUTIONS 393.44
MNDCP EE ROTH MGR CONTRIBUTIONS 33.78
Total for Check/Tran - 5177:11,475.54
WIRE51783/31/26 JOHN HANCOCK285 W&A EMPLOYER CONTRIBUTION 1,665.48
W&A MANAGER CONTRIBUTION 436.88
WENZEL EMPLOYEE CONTRIBUTIONS 1,791.67
WENZEL MANAGER CONTRIBUTIONS 136.43
DEF COMP ROTH CONTRIBUTIONS W&A 900.00
WENZEL EE ROTH MGR CONTRIBUTIONS 300.45
W&A EMPLOYER CONTRIBUTION 539.10
W&A MANAGER CONTRIBUTION 67.50
WENZEL EMPLOYEE CONTRIBUTIONS 191.32
WENZEL MANAGER CONTRIBUTIONS 34.11
DEF COMP ROTH CONTRIBUTIONS W&A 347.78
WENZEL EE ROTH MGR CONTRIBUTIONS 33.39
Total for Check/Tran - 5178:6,444.11
WIRE51793/31/26 MINNESOTA CHILD SUPPORT PAYMEN598 CHILD SUPPORT 304.10
WIRE51803/31/26 HEALTHEQUITY, INC738 HSA EMPLOYEE CONTRIBUTION 2,936.83
HSA EMPLOYEE CONTRIBUTION 582.44
Total for Check/Tran - 5180:3,519.27
WIRE51813/31/26 IRS - USA TAX PMT (ELECTRONIC)152 PAYROLL TAXES - FEDERAL & FICA 17,327.05
PAYROLL TAXES - FEDERAL & FICA 24,155.26
PAYROLL TAXES - FEDERAL & FICA 3,628.46
PAYROLL TAXES - FEDERAL & FICA 5,387.66
Total for Check/Tran - 5181:50,498.43
DD233203/5/26 CITY OF ELK RIVER11 2025 SHARED COSTS 103,458.10
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Page 804/01/2026 1:56:01 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
2025 SHARED COSTS 25,864.50
FUEL USAGE - JAN 2026 2,090.20
FUEL USAGE - JAN 2026 552.53
PARTS & LABOR FOR UNIT #7 -5.00
PARTS & LABOR FOR UNIT #7 263.43
PARTS & LABOR FOR UNIT #7 -3.81
PARTS & LABOR FOR UNIT #7 182.20
DOT INSPECTION - UNIT #7 162.50
PARTS & LABOR FOR UNIT #16 -45.68
PARTS & LABOR FOR UNIT #16 755.68
PARTS & LABOR FOR UNIT #24 -1.30
PARTS & LABOR FOR UNIT #24 82.88
PARTS & LABOR FOR UNIT #65 -25.39
PARTS & LABOR FOR UNIT #65 607.89
Total for Check/Tran - 23320:133,938.73
DD233213/5/26 ELK RIVER MUNICIPAL UTILITIES23 CYCLE 2 - ACCT 41038 - JAN 2026 166.41
CYCLE 2 - ACCT 41038 - JAN 2026 8.76
CYCLE 2 - INV GRP 436 - JAN 2026 2,523.32
Total for Check/Tran - 23321:2,698.49
DD233223/5/26 HAWKINS, INC.809 Water Chemicals 1,418.99
DD233233/5/26 INNOVATIVE OFFICE SOLUTIONS LLC6836 OFFICE SUPPLIES 77.82
OFFICE SUPPLIES 19.45
Total for Check/Tran - 23323:97.27
DD233243/5/26 MARILU INC828 MONTHLY CLEANING FOR THE PLANT-FEB 2026 2,982.74
MONTHLY CLEANING FOR THE PLANT-FEB 2026 426.11
Total for Check/Tran - 23324:3,408.85
DD233253/5/26 NORTHERN TOOL43 SHOP SUPPLIES 78.29
DD233263/5/26 RALPHIE'S MINNOCO8897 RALPHIE'S MINNOCO 244.29
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520321
Page 904/01/2026 1:56:01 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
DD233273/5/26 RESCO130 FIBERGLASS POLE 6,948.11
FIBERGLASS POLE -507.21
Discount -2.92
Ground Ferrule 721.80
Discount -0.36
Total for Check/Tran - 23327:7,159.42
DD233283/5/26 RUSSELL STUHR9276 Park fees from schooling 8.75
vermeer school in St Cloud 24.80
Total for Check/Tran - 23328:33.55
DD233293/10/26 CITY OF ELK RIVER11 TRASH BILLED - FEB 2026 173,602.83
DD233303/10/26 ELK RIVER MUNICIPAL UTILITIES23 CYCLE 3 - INV GRP 395 - JAN 2026 11,143.76
DD233313/10/26 HAWKINS, INC.809 CHLORINE CYLINDER RENTAL 240.00
DD233323/10/26 HYDROCORP5686 Backflow Device Inspection 2.26-12.26 14,062.86
Backflow Device Inspection 1.26 1,278.45
Total for Check/Tran - 23332:15,341.31
DD233333/10/26 JT SERVICES OF MINNESOTA8083 CORRUGATED CONDUIT 17,260.00
LED LIGHTS 25,016.21
SWITCHGEAR -42,276.21
Total for Check/Tran - 23333:0.00
DD233343/10/26 METRO SALES, INC330 COPIER MTC CONTRACT - 1/21 to 2/20/26 176.64
COPIER MTC CONTRACT - 1/21 to 2/20/26 44.15
Total for Check/Tran - 23334:220.79
DD233353/10/26 MINNESOTA MUNICIPAL POWER AGEN1001 PURCHASED POWER - FEB 2026 1,604,377.10
PURCHASED POWER - FEB 2026 277,735.14
Total for Check/Tran - 23335:1,882,112.24
DD233363/10/26 RESCO130 RISER ARRESTER 1,368.00
Discount -0.68
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520322
Page 1004/01/2026 1:56:01 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
Total for Check/Tran - 23336:1,367.32
DD233373/10/26 WATER LABORATORIES INC135 WATER SAMPLING - FEB 2026 360.00
DD233383/10/26 WRIGHT HENNEPIN COOPERATIVE ELE610ANNUAL SECURITY 750.17
SECURITY - 1435 & 1705 MAIN ST 116.89
ANNUAL SECURITY 4,635.90
SECURITY - 1435 & 1705 MAIN ST 7.79
Total for Check/Tran - 23338:5,510.75
DD233883/20/26 ARCHER PLUMBING LLC728 FSB WATER HEATER REPAIR -24.51
FSB WATER HEATER REPAIR 1,254.37
FSB WATER HEATER REPAIR -3.49
FSB WATER HEATER REPAIR 179.18
Total for Check/Tran - 23388:1,405.55
DD233893/20/26 AUTOMATIC SYSTEMS CO1327 SERVICE - WELL #4 & #7 908.75
DD233903/20/26 JENNY S BIORN211 MNCPA Renewal - 133 312.00
MNCPA Renewal - 133 78.00
Total for Check/Tran - 23390:390.00
DD233913/20/26 BORDER STATES ELECTRIC SUPPLY9 BAYONET FUSE 511.20
PADDLE MATERIAL 800.13
Wire 327.39
LED PHOTO CELL 1,019.96
ARRESTER 46.78
Overhead Material -4,186.90
Mtce of URD Primary 117.88
Ox Block 1,363.56
Total for Check/Tran - 23391:0.00
DD233923/20/26 CAMPBELL KNUTSON8843 LEGAL SERVICES - FEB 2026 1,336.00
LEGAL SERVICES - FEB 2026 334.00
Total for Check/Tran - 23392:1,670.00
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520323
Page 1104/01/2026 1:56:01 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
DD233933/20/26 CITY OF ELK RIVER11 SEWER BILLED - FEB 2026 253,288.65
STORMWATER BILLED - FEB 2026 58,918.78
Total for Check/Tran - 23393:312,207.43
DD233943/20/26 CRC7448 CUSTOMER SERVICE AFTER HOURS-FEB 2026 2,578.98
CUSTOMER SERVICE AFTER HOURS-FEB 2026 644.74
Total for Check/Tran - 23394:3,223.72
DD233953/20/26 CROW RIVER FARM EQUIP CO36 HOOKS - UNIT #46 100.50
MISC PARTS & SUPPLIES 959.25
Total for Check/Tran - 23395:1,059.75
DD233963/20/26 ELK RIVER MUNICIPAL UTILITIES23 CYCLE 4 - ACCT 51086 - FEB 2026 62.59
CYCLE 4 - INV GRP 396 - FEB 2026 423.29
Total for Check/Tran - 23396:485.88
DD233973/20/26 FRONTIER ENERGY, INC664 PROFESSIONAL SERVICES - JAN 2026 10,000.00
DD233983/20/26 HEARTLAND BUSINESS SYTEMS LLC731 Service 2,000.00
Serivice 500.00
FLEX SERVICES 274.00
FLEX SERVICES 68.50
Total for Check/Tran - 23398:2,842.50
DD233993/20/26 INSIGHT PUBLIC SECTOR5381 Toughbook 137.77
Toughbook 274.72
Total for Check/Tran - 23399:412.49
DD234003/20/26 NISC9300 PRINT SERVICES - FEB 2026 7,123.54
PRINT SERVICES - FEB 2026 1,780.88
MISC INVOICE - FEB 2026 1,775.90
MISC INVOICE - FEB 2026 193.96
AGREEMENTS INVOICE - FEB 2026 53.94
AGREEMENTS INVOICE - FEB 2026 792.40
AGREEMENTS INVOICE - FEB 2026 11,787.03
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520324
Page 1204/01/2026 1:56:01 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
AGREEMENTS INVOICE - FEB 2026 260.00
AGREEMENTS INVOICE - FEB 2026 339.60
AGREEMENTS INVOICE - FEB 2026 2,658.22
AGREEMENTS INVOICE - FEB 2026 65.00
Total for Check/Tran - 23400:26,830.47
DD234013/20/26 DEREK S PALMER460 MRWA Tech Conf Mileage 70.04
DD234023/20/26 RESCO130 Ground Ferrule 721.80
Discount -0.36
Total for Check/Tran - 23402:721.44
DD234033/20/26 ROYAL SUPPLY INC603 SHOP SUPPLIES 476.38
SHOP SUPPLIES 119.09
Total for Check/Tran - 23403:595.47
DD234043/20/26 SAUBER MFG. CO411 TENSIONING BRAKE ASSY 4,109.26
DD234053/20/26 MATTHEW WESTGAARD5312 APPA LEGIS CONF HOTEL & MILEAGE - 150 1,417.04
DD234503/26/26 A1 RENT IT725 CHAINSAW SUPPLIES 21.09
DD234513/26/26 AK MATERIAL HANDLING SYSTEMS, IN590Pallet Racking 1,917.26
DD234523/26/26 AMERICAN PAYMENT CENTERS191 DROP BOX CHARGES - 2026 Q2 224.38
DROP BOX CHARGES - 2026 Q2 56.10
Total for Check/Tran - 23452:280.48
DD234533/26/26 CITY OF ELK RIVER11 REVENUE TRANSFER - FEB 2026 147,951.29
REVENUE TRANSFER - FEB 2026 3,044.73
Total for Check/Tran - 23453:150,996.02
DD234543/26/26 ELFERING & ASSOCIATES3667 PROFESSIONAL SERVICES - FEB 2026 900.00
PROFESSIONAL SERVICES - FEB 2026 CTY 44 825.00
Total for Check/Tran - 23454:1,725.00
DD234553/26/26 ELK RIVER MUNICIPAL UTILITIES23 CYCLE 1 - INV GRP 421 - FEB 2026 5,200.36
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520325
Page 1304/01/2026 1:56:01 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CYCLE 1 - ACCT 183 - FEB 2026 1,306.15
CYCLE 1 - INV GRP 101 - FEB 2026 3,831.74
CYCLE 1 - INV GRP 101 - FEB 2026 28.25
CYCLE 1 - INV GRP 101 - FEB 2026 632.89
CYCLE 1 - INV GRP 101 - FEB 2026 625.00
CYCLE 1 - INV GRP 101 - FEB 2026 158.22
Total for Check/Tran - 23455:11,782.61
DD234563/26/26 GOPHER STATE ONE-CALL91 LOCATES FOR - FEB 2026 170.57
LOCATES FOR - FEB 2026 8.98
Total for Check/Tran - 23456:179.55
DD234573/26/26 HAWKINS, INC.809 Water Chemicals 1,876.37
DD234583/26/26 INSIGHT PUBLIC SECTOR5381 RAM 313.17
DD234593/26/26 JT SERVICES OF MINNESOTA8083 SWITCHGEAR -323.63
150W BULBS 323.63
Total for Check/Tran - 23459:0.00
DD234603/26/26 NORTHERN TOOL43 PRESSURE WASHER HOSE 87.01
DD234613/26/26 SAUBER MFG. CO411 SADDLE FOR BRAKE ASSY 340.31
MP904203/4/26 CINTAS28 MATS & TOWELS 529.75
MATS & TOWELS 75.67
MATS & TOWELS 529.75
MATS & TOWELS 75.67
Total for Check/Tran - 90420:1,210.84
CHK905493/5/26 ACE HARDWARE766 FASTENERS 7.30
CHK905503/5/26 AT & T MOBILITY4531 CELL PHONES & iPAD BILLING 41.07
CELL PHONES & iPAD BILLING 2,508.66
CELL PHONES & iPAD BILLING 17.60
CELL PHONES & iPAD BILLING 688.53
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Page 1404/01/2026 1:56:01 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
Total for Check/Tran - 90550:3,255.86
CHK905513/5/26 BLUE CROSS BLUE SHIELD OF MINNES5224 VISION INSURANCE - APRIL 2026 377.42
VISION INSURANCE - APRIL 2026 105.91
Total for Check/Tran - 90551:483.33
CHK905523/5/26 CORE & MAIN LP54 Water Meter 3,444.46
WATER METER -251.46
METER ADAPTOR -2,400.00
MISC PARTS & SUPPLIES 1,227.56
METERS 50,489.60
Water Meter -3,050.00
WATER METER 3,352.57
WATER METER -244.74
Total for Check/Tran - 90552:52,567.99
CHK905533/5/26 ELK RIVER PRINTING & VENTURE PRO24 CIP REBATES & CERTIFICATES 299.37
CHK905543/5/26 FERGUSON WATERWORKS #25168247 CLIMBING HARNESS - 196 -11.87
Fall Protection 187.67
ELL & UNION 140.63
Key 291.75
Total for Check/Tran - 90554:608.18
CHK905553/5/26 KERI FRANKLIN9997 INACTIVE REFUND 47.19
CHK905563/5/26 KATHLEEN D HAGEN9997 INACTIVE REFUND 81.08
CHK905573/5/26 LANDFORM PROFESSIONAL SERVICES9997 INACTIVE REFUND 222.66
CHK905583/5/26 LANDFORM PROFESSIONAL SERVICES9997 INACTIVE REFUND 232.46
CHK905593/5/26 ASHLEY LUZAICH-JEPPESEN9997 INACTIVE REFUND 64.31
CHK905603/5/26 SAMUEL MAHON9997 INACTIVE REFUND 253.22
CHK905613/5/26 MARCO TECHNOLOGIES, LLC8605 PRINTER MTC CONTRACT - 2/1 to 3/1/26 196.66
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520327
Page 1504/01/2026 1:56:01 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
PRINTER MTC CONTRACT - 2/1 to 3/1/26 49.16
Total for Check/Tran - 90561:245.82
CHK905623/5/26 MARCO TECHNOLOGIES, LLC8605 OFFICE 365 - 1/25 TO 2/24/26 1,314.10
OFFICE 365 - 1/25 TO 2/24/26 305.33
ACE PROGRAM - 1/29 to 2/27/26 1,531.39
ACE PROGRAM - 1/29 to 2/27/26 382.85
Total for Check/Tran - 90562:3,533.67
CHK905633/5/26 GENEVIEVE MCGUIRE9997 INACTIVE REFUND 34.58
CHK905643/5/26 MENARDS145 MISC PARTS & SUPPLIES 54.98
MISC PARTS & SUPPLIES - well #4 51.20
DUBURRING TOOL & BLADES 14.00
Total for Check/Tran - 90564:120.18
CHK905653/5/26 NAPA AUTO PARTS120 ATF FLUID - UNIT #47 46.33
SPARK PLUG - POLE PULLER 5.38
Total for Check/Tran - 90565:51.71
CHK905663/5/26 PETTY CASH45 TAB RENEWAL - UNIT #9 & #20 BALANCE 22.25
CHK905673/5/26 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 - 90567:150.00
CHK905683/5/26 RDO EQUIPMENT CO.3218 PARTS & LABOR FOR UNIT #70 -1.77
PARTS & LABOR FOR UNIT #70 384.78
Total for Check/Tran - 90568:383.01
CHK905693/5/26 STUART C. IRBY CO.6107 FEED THRU & ELBOWS 7,179.00
CHK905703/5/26 TINA TAYLOR9997 INACTIVE REFUND 34.97
CHK905713/5/26 THE UPS STORE 50933360 SHIPPING 14.34
SHIPPING MATERIALS 9.22
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520328
Page 1604/01/2026 1:56:01 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
Total for Check/Tran - 90571:23.56
CHK905723/5/26 TROPHY FLOORING9997 INACTIVE REFUND 219.14
CHK905733/5/26 WESCO RECEIVABLES CORP.55 Elbow Probe 527.75
CABINET 11,560.00
Total for Check/Tran - 90573:12,087.75
CHK905743/5/26 WILD DISTRICT9997 INACTIVE REFUND 292.66
CHK905753/5/26 EUGENE WIPF9997 INACTIVE REFUND 94.17
CHK905763/10/26 DGR ENGINEERING656 ELEC SYSTEM STUDY - JAN 2026 2,500.00
CHK905773/10/26 ELECTRIC PUMP594 SUBMERSIBLE PUMP MTC - WTP WELL #7&9 1,000.00
CHK905783/10/26 FAIRVIEW HEALTH SERVICES8709 RANDOM DOT TESTING - 196 45.00
CHK905793/10/26 GRAINGER80 CUT OFF WHEEL -7.98
CUT OFF WHEEL 109.26
Total for Check/Tran - 90579:101.28
CHK905803/10/26 GREATAMERICA FINANCIAL SERVICES730LEASE FOR COPIER AT PLANT 105.01
LEASE FOR COPIER AT PLANT 26.26
Total for Check/Tran - 90580:131.27
CHK905813/10/26 HEALTHPARTNERS631 DENTAL EE INSURANCE - APR 2026 1,063.62
DENTAL ER INSURANCE - APR 2026 2,874.69
DENTAL EE INSURANCE - APR 2026 182.09
DENTAL ER INSURANCE - APR 2026 862.45
Total for Check/Tran - 90581:4,982.85
CHK905823/10/26 KURITA AMERICA INC567 Gauge 1,120.85
CHK905833/10/26 LEAGUE OF MN CITIES INS TRUST48 WORK COMP AUDIT - 10/24 to 10/25 5,429.73
WORK COMP AUDIT - 10/24 to 10/25 968.27
Total for Check/Tran - 90583:6,398.00
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520329
Page 1704/01/2026 1:56:01 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK905843/10/26 MENARDS145 MISC PARTS & SUPPLIES 225.02
MISC PARTS & SUPPLIES 18.24
MISC PARTS & SUPPLIES 1.38
MISC PARTS & SUPPLIES 8.06
MISC PARTS & SUPPLIES 40.73
BUTTON SOCKET 5.57
MISC PARTS & SUPPLIES - WELL #3 124.68
ELL - WELL #8 8.61
REBATE -1.60
REBATE -0.40
Total for Check/Tran - 90584:430.29
CHK905853/10/26 MINNESOTA COMPUTER SYSTEMS INC119 COPIER MTC CONTRACT - 2/12 to 3/11/26 89.99
COPIER MTC CONTRACT - 2/12 to 3/11/26 22.50
Total for Check/Tran - 90585:112.49
CHK905863/10/26 MINNESOTA DEPT OF COMMERCE7293 2026 QTR 4 INDIRECT ASSESSMENT 7,711.24
CHK905873/10/26 MINNESOTA DEPT OF HEALTH16 WATER CONNECTION FEE - 2026 QTR 1 22,282.00
CHK905883/10/26 AUDREY MORRIS9997 Credit Balance Refund 174.66
CHK905893/10/26 MARY ANN POVLITZKI9997 Credit Balance Refund 94.25
CHK905903/10/26 PRIME ADVERTISING & DESIGN, INC.811 COMMUNITY RESOURCE GUIDE AD 531.00
Marketing 1,500.00
Total for Check/Tran - 90590:2,031.00
CHK905913/10/26 DAVE ROSFJORD9997 Credit Balance Refund 11.33
CHK905923/10/26 STUART C. IRBY CO.6107 Connector 6,255.00
Arc Flash Shield 286.17
Total for Check/Tran - 90592:6,541.17
CHK905933/10/26 THE SHERWIN-WILLIAMS CO.2560 PAINT - WELL #4 47.40
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Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK905943/10/26 WESCO RECEIVABLES CORP.55 Connector 826.00
CHK905953/20/26 ABDO LLP102 AUDIT SERVICES - 2025 10,320.00
AUDIT SERVICES - 2025 2,580.00
Total for Check/Tran - 90595:12,900.00
CHK905963/20/26 AIRGAS USA LLC218 COMPRESSED GAS 117.08
CHK905973/20/26 ALTEC INDUSTRIES, INC398 PARTS FOR UNIT #21 766.92
CHK905983/20/26 AUTO ZONE834 CIP - LIGHTING REBATE 195.73
CHK905993/20/26 B & W INVESTMENTS9997 Credit Balance Refund 49.74
CHK906003/20/26 SHAWN BRANDT9997 INACTIVE REFUND 160.54
CHK906013/20/26 CAPSTONE HOMES9997 Credit Balance Refund 150.46
CHK906023/20/26 CAPSTONE HOMES9997 Credit Balance Refund 130.10
CHK906033/20/26 CAPSTONE HOMES9997 Credit Balance Refund 127.78
CHK906043/20/26 CAPSTONE HOMES9997 Credit Balance Refund 138.10
CHK906053/20/26 CAPSTONE HOMES9997 Credit Balance Refund 132.60
CHK906063/20/26 DEGREEFF PROPERTIES LLC III9997 INACTIVE REFUND 245.56
CHK906073/20/26 MATT DIEHL9997 INACTIVE REFUND 98.86
CHK906083/20/26 MATTHEW DREWES9997 INACTIVE REFUND 149.26
CHK906093/20/26 E.H. RENNER & SONS, INC2789 WATER LEVEL SENSOR - WELL #4 756.25
CHK906103/20/26 EVANS MEADOWS APARTMENTS833 CIP - LIGHTING REBATE 2,329.57
CHK906113/20/26 GEARED UP APPAREL5550 EMPLOYEE CLOTHING - EE BALANCE 264.00
EMPLOYEE CLOTHING - ER BALANCE 694.00
EMPLOYEE CLOTHING - EE BALANCE 66.00
EMPLOYEE CLOTHING - ER BALANCE 173.50
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Page 1904/01/2026 1:56:01 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
EMPLOYEE CLOTHING 564.08
EMPLOYEE CLOTHING - EE BALANCE 170.40
EMPLOYEE CLOTHING 141.02
EMPLOYEE CLOTHING - EE BALANCE 42.60
Total for Check/Tran - 90611:2,115.60
CHK906123/20/26 GERTENS GREENHOUSES - 446133403 STRAW BALES 32.36
STRAW BALES 64.72
Total for Check/Tran - 90612:97.08
CHK906133/20/26 GRACELAND OTSEGO HOLDINGS LLC9997 Credit Balance Refund 164.15
CHK906143/20/26 KENNETH GULBRAA9997 INACTIVE REFUND 137.41
CHK906153/20/26 TRAVIS HAGEN9997 INACTIVE REFUND 275.07
CHK906163/20/26 IIA LIFTING SERVICES, INC646 TRUCK INSPECTIONS-4 8 9 10 11 15 21 3,603.04
CHK906173/20/26 J T LAND CO9997 INACTIVE REFUND 150.46
CHK906183/20/26 JONNY POPS719 CIP - REBATE 8,518.28
CHK906193/20/26 CHRISTINA MARSH9997 INACTIVE REFUND 100.82
CHK906203/20/26 MCDOWALL COMPANY3419 ROOF INSPECTIONS - FSB,GARAGE&PLANT 1,270.00
ROOF INSPECTIONS - FSB,GARAGE 80.00
ROOF INSPECTIONS - WELLHOUSE 950.00
Total for Check/Tran - 90620:2,300.00
CHK906213/20/26 MENARDS145 TOILET CLEANER 19.33
CHK906223/20/26 MICHELS UTILITY SERVICES, INC520 TRENCHING - BRADFORD PARK 2ND 148,950.49
CHK906233/20/26 MOMENTUM FITNESS ENDEAVOR9997 INACTIVE REFUND 1,566.89
CHK906243/20/26 NAPA AUTO PARTS120 PARTS FOR UNIT #56 32.69
CHK906253/20/26 NORTHWESTERN POWER EQUIP CO IN583 Dehumidifier 10,071.00
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520332
Page 2004/01/2026 1:56:01 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK906263/20/26 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 - 90626:150.00
CHK906273/20/26 RDO EQUIPMENT CO.3218 PARTS FOR UNIT #56 92.34
CHK906283/20/26 REPUBLIC SERVICES, INC574 TRASH & RECYCLING SERVICE - MARCH 2026 1,405.91
TRASH & RECYCLING SERVICE - MARCH 2026 200.84
TRASH SERVICE - MARCH 2026 486.55
RECYCLING SERVICE - MARCH 2026 87.50
RECYCLING SERVICE - MARCH 2026 12.43
Total for Check/Tran - 90628:2,193.23
CHK906293/20/26 ELAINE SOKOLOWSKI9997 INACTIVE REFUND 17.67
CHK906303/20/26 STUART C. IRBY CO.6107 BUSHING INSERT 1,417.50
CHK906313/20/26 SUMMIT AR822 COMMISSIONS DUE COLLECTION AGENCY 72.95
CHK906323/20/26 THE UPS STORE 50933360 OFFICE SUPPLIES 31.58
CHK906333/20/26 KENNETH TIETZ9997 INACTIVE REFUND 261.73
CHK906343/20/26 RON VRATISOVSKY9997 INACTIVE REFUND 21.95
CHK906353/20/26 KENNETH ZIMMER9997 INACTIVE REFUND 423.17
CHK906363/26/26 1ST AYD CORPORATION328 Safety 126.89
Safety 31.73
Safety 499.68
Safety 124.92
Total for Check/Tran - 90636:783.22
CHK906373/26/26 ACE HARDWARE766 FASTENERS - UNIT #56 1.57
CHK906383/26/26 BANK OF ELK RIVER8128 CIP - LIGHTING REBATE 6,304.92
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Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK906393/26/26 BENEFIT EXTRAS, INC662 COBRA ADMIN FEE 15.00
CHK906403/26/26 BUDDERFLY, INC5538 CIP - LIGHTING REBATE 113.89
CHK906413/26/26 CENTERPOINT ENERGY3982 NATURAL GAS & IRON REMOVAL - FEB 2026 4,031.22
NATURAL GAS & IRON REMOVAL - FEB 2026 1,146.54
Total for Check/Tran - 90641:5,177.76
CHK906423/26/26 CNA SURETY264 RIGHT OF WAY BOND - WRIGHT COUNTY 100.00
CHK906433/26/26 FS3 INC.8949 PARTS FOR UNIT #56 1,347.47
CHK906443/26/26 JEFFREY HENDRICKSON9997 INACTIVE REFUND 55.97
CHK906453/26/26 HIERLINGER SHOES5518 EMPLOYEE CLOTHING - 142 BOOTS 374.99
CHK906463/26/26 HOME DEPOT CREDIT SERVICES824 HOME DEPOT 66.49
HOME DEPOT 32.23
Total for Check/Tran - 90646:98.72
CHK906473/26/26 LENNAR HOMES9997 Credit Balance Refund 99.48
CHK906483/26/26 LENNAR HOMES9997 Credit Balance Refund 178.07
CHK906493/26/26 LENNAR HOMES9997 Credit Balance Refund 240.82
CHK906503/26/26 LENNAR HOMES9997 Credit Balance Refund 218.59
CHK906513/26/26 LENNAR HOMES9997 Credit Balance Refund 182.37
CHK906523/26/26 LGI HOMES, MN9997 Credit Balance Refund 225.34
CHK906533/26/26 LGI HOMES, MN9997 Credit Balance Refund 195.84
CHK906543/26/26 CADI LOFGREN9997 INACTIVE REFUND 33.84
CHK906553/26/26 MARCO TECHNOLOGIES, LLC8605 ACE PROGRAM - 2/28 to 3/28/26 1,444.34
ACE PROGRAM - 2/28 to 3/28/26 361.09
Total for Check/Tran - 90655:1,805.43
/pro/rpttemplate/acct/2.64.1/ap/AP_CHK_REGISTER.xml.rpt2520334
Page 2204/01/2026 1:56:01 PM
Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK906563/26/26 MENARDS145 CLEANING SUPPLIES 17.16
CLEANING SUPPLIES 4.29
MISC PARTS & SUPPLIES 8.08
MISC PARTS & SUPPLIES 7.54
Total for Check/Tran - 90656:37.07
CHK906573/26/26 MPCA279 WATER PERMIT FEE - 1705 MAIN 345.00
WATER PERMIT FEE - 741 QUINN 345.00
Total for Check/Tran - 90657:690.00
CHK906583/26/26 MUTUAL OF OMAHA633 ELEC LIFE INSURANCE - APRIL 2026 261.25
LIFE & LTD INSURANCE - APRIL 2026 1,771.77
ELEC LIFE INSURANCE - APRIL 2026 212.90
LIFE & LTD INSURANCE - APRIL 2026 450.77
Total for Check/Tran - 90658:2,696.69
CHK906593/26/26 AZALEA NEW9997 INACTIVE REFUND 19.99
CHK906603/26/26 PREMIER LIGHTING745 CIP - LIGHTING REBATE 958.82
CHK906613/26/26 FRANCO PRETELL9997 INACTIVE REFUND 67.24
CHK906623/26/26 RAMBOW837 RODEO HATS 972.00
RODEO SHIRTS 309.00
Total for Check/Tran - 90662:1,281.00
CHK906633/26/26 RDO EQUIPMENT CO.3218 PARTS FOR UNIT #56 415.37
CHK906643/26/26 STUART C. IRBY CO.6107 BRACKET 745.00
SCREWDRIVERS 269.69
WIRE 897.75
Total for Check/Tran - 90664:1,912.44
CHK906653/26/26 THE SHERWIN-WILLIAMS CO.2560 PAINT - WELL #4 94.80
CHK906663/26/26 THE UPS STORE 50933360 SHIPPING 119.20
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Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
03/01/2026 To 03/31/2026
Bank Account: 5 - GENERAL FUND WITHDRAWALS
Check /
Tran Date
Pmt
Type AmountVendor NameVendor Reference
CHK906673/26/26 TRANSUNION331 SKIP TRACING - FEB 2026 80.00
SKIP TRACING - FEB 2026 20.00
Total for Check/Tran - 90667:100.00
CHK906683/26/26 UC LABORATORY222 SAMPLING - PHOSPHORUS 17.66
CHK906693/26/26 WESCO RECEIVABLES CORP.55 Connector 767.50
CHK906703/26/26 TREVOR WICKLUND9997 INACTIVE REFUND 268.57
Total for Bank Account - 5 :(206)3,823,346.75
Grand Total :3,834,585.59(207)
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Rev: 202303050106
Accounts Payable
Check Register
Elk River Municipal Utilities
PARAMETERS ENTERED:
Check Date:03/01/2026 To 03/31/2026
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.rpt2520337
Elk River Municipal Utilities Commission Meeting Minutes
March 10, 2026
Page 1
ELK RIVER MUNICIPAL UTILITIES
REGULAR MEETING OF THE UTILITIES COMMISSION
HELD AT UTILITIES CONFERENCE ROOM
March 10, 2026
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
Chris Sumstad, Electric Superintendent
Jenny Foss, Communications & Administrative Coordinator
Others Present: Jared Shepherd, Attorney; Doug Eli, Energy Engineer with Frontier Energy;
Noah Halmar, Energy Analyst with Frontier Energy
1.0 GOVERNANCE
1.1 Oath of Office – Nick Zerwas
1.2 Call Meeting to Order
The regular meeting of the Utilities Commission was called to order at 3:30 p.m. by Chair Dietz.
1.3 Pledge of Allegiance
The Pledge of Allegiance was recited.
1.4 Consider the Agenda
Moved by Commissioner Westgaard and seconded by Commissioner Zerwas to approve the
March 10, 2026, agenda. Motion carried 5-0.
1.5 2026 Election of Officers – Chair and Vice Chair
Mr. Mauren conducted the election of officers for 2026. There was agreement among the
Commission to maintain the officer appointments from the previous year.
38
Elk River Municipal Utilities Commission Meeting Minutes
March 10, 2026
Page 2
Moved by Commissioner Zerwas and seconded by Commissioner Westgaard to
reappoint Commissioner Dietz as Chair and reappoint Commissioner Stewart as the Vice
Chair. Motion carried 5-0.
1.6 2026 Committee Appointments
There was agreement among the Commission to maintain the committee appointments from
the previous year.
Moved by Commissioner Zerwas and seconded by Commissioner Larson-Vito to make
the following committee and chair appointments for 2026:
Reappoint Chair Dietz and Commissioner Stewart to the Wage and Benefits Committee
with Chair Dietz to continue to serve as committee chair.
Reappoint Commissioner Westgaard and Commissioner Zerwas to the Financial
Reserves and Investment Committee with Commissioner Westgaard to continue to
serve as committee chair.
Reappoint Commissioner Stewart to the Information Security Committee.
Reappoint Commissioner Westgaard and Commissioner Larson-Vito to the Dispute
Resolution Committee with Commissioner Westgaard to continue to serve as committee
chair.
2.0 CONSENT AGENDA (Approved By One Motion)
Moved by Commissioner Stewart and seconded by Commissioner Westgaard to approve the
Consent Agenda as follows:
2.1 Check Register – February 2026
2.2 Regular Meeting Minutes – February 10, 2026
Motion carried 5-0.
3.0 OPEN FORUM
No one appeared for open forum.
39
Elk River Municipal Utilities Commission Meeting Minutes
March 10, 2026
Page 3
4.0 POLICY & COMPLIANCE
4.1 Annual Commission Orientation
Under Commission Policy G.2d, an annual orientation program for new and existing
commission members was implemented in 2018. This year’s orientation featured a
presentation from Frontier Energy which was added to the packet after the meeting.
Frontier Energy representatives updated the Commission on ERMU's Conservation
Improvement Program, describing their efforts in helping ERMU achieve its 2025 kWh savings
goals while staying under budget for the second consecutive year.
4.2 Annual Commission Bylaw and Attendance Policy
Mr. Mauren presented the commission bylaws and conducted the annual attendance policy
review requested by the City. No changes were proposed.
4.3 ERMU Mission, Vision, and Values
Mr. Hanson provided a review of his memo, outlining staff-proposed updates to ERMU’s
Mission, Vision, and Values.
Commissioners praised the clarity, flow, and staff involvement that shaped the revised
Mission, Vision, and Values.
Mr. Hanson noted that staff would update the commission policies that contain Mission,
Vision, and Values language to reflect the changes for approval at the April meeting. Staff
also recommended removing the Organizational Fundamentals and Planning Themes
policies from the manual as their original intent no longer served current practice. The
Commission agreed with that action.
Moved by Commissioner Larson-Vito and seconded by Commissioner Stewart to adopt
the proposed Mission, Vision, and Organization Values policy language as presented,
and to remove Planning Themes and Organizational Foundations policies from the
manual. Motion carried 5-0.
4.4 Commission Compensation Stipend
Mr. Hanson presented the options and rationale for the Commission’s consideration
regarding compensation and stipend adjustments.
The Commission discussed the options and proposed increasing monthly compensation
from $150 to $300, approximately the midpoint between the low of $274 and the high of
40
Elk River Municipal Utilities Commission Meeting Minutes
March 10, 2026
Page 4
$333 from peer utilities. The Commission also proposed increasing the additional activity
stipend from $75 to $85.
It was discussed that, similar to recent staff wage adjustments, the changes would not be
retroactive.
Mr. Hanson clarified that the proposed changes must go through City Council and may
require an amendment to a city ordinance. Mr. Hanson said he will speak with Mr.
Shepherd to determine the next steps.
Chair Dietz requested that Mr. Hanson present the proposed changes to the City Council,
if necessary.
Commissioner Stewart asked a clarifying question about adding an additional stipend for
members who serve on external utility boards.
Mr. Hanson noted that one utility included in the study provides an additional stipend for
members who hold a board seat.
Commissioners discussed what an additional stipend might look like to compensate for
the extra work associated with serving on a board. Mr. Hanson suggested adding a “prep
day” stipend of $85, in addition to the $85 stipend upon attending board meetings, for
commissioners who have been assigned to an external board.
Commissioner Stewart requested a formal review of Commission compensation every
three years and that it be considered during budget planning.
Moved by Commissioner Larson-Vito and seconded by Commissioner Westgaard to
approve increasing monthly commission compensation to $300, increasing the
additional activity stipend to $85, establishing an additional $85 prep day stipend for
members assigned to an external board, and establishing a formal compensation review
every three years. Motion carried 5–0.
5.0 BUSINESS ACTION
5.1 Financial Report – January 2026
Ms. Karpinski presented the January 2026 financials. She noted that revenue was above
budget, largely due to connection fees for the Oakwater Ridge development. She also
highlighted that the Energy Adjustment Clause was lower than expected, resulting in a zero
Power Cost Adjustment for customers for February and March.
Accounts receivable remain in good standing, with approximately 93% of balances current and
3% in the 90-day past-due category.
41
Elk River Municipal Utilities Commission Meeting Minutes
March 10, 2026
Page 5
Year-to-date, electric sales increased 4% and water sales increased 3%.
Moved by Commissioner Westgaard and seconded by Commissioner Larson-Vito to
receive the January 2026 Financial Report. Motion carried 5-0.
5.2 Letter of Support for Minnesota Municipal Power Agency Solar Project
Mr. Hanson explained that the Minnesota Municipal Power Agency (MMPA) is requesting a
letter of support from the utilities commission to the Sherburne County Board of
Commissioners for its proposed 3.5-megawatt solar project in Big Lake Township.
Mr. Hanson reminded the Commission that Minnesota has a mandate for carbon-free power
by 2040 and noted that although this is a small project, it will provide local benefits. The
project will connect directly to ERMU’s substation, and the power generated will serve local
customers.
Commissioner Zerwas stated that connecting directly to ERMU’s substation is significant
because it avoids delays associated with connecting to the grid.
Mr. Hanson agreed, noting that projects requiring grid interconnection must go through a
permitting process that can result in delays of up to six years.
Moved by Commissioner Zerwas and seconded by Commissioner Stewart to approve
the Letter of Support for Minnesota Municipal Power Agency Solar Project. Motion
carried 5-0.
6.0 BUSINESS DISCUSSION
6.1 Staff Updates
Mr. Hanson confirmed that flight reservations have been made for all commissioners attending
the American Public Power Association’s National Summer Conference in Boston, MA.
Mr. Mauren stated that instructions and documents for Mr. Hanson’s performance review will
be provided via email in March.
Mr. Tietz shared a “thank you” card from Connexus Energy with the Commission. He explained
that ERMU provided Connexus with two urgently needed reclosers to assist them with a
planned road project. Mr. Tietz highlighted this as an example of the positive collaborative
relationship between the utilities.
6.2 City Council Update
Chair Dietz provided a City Council update.
42
Elk River Municipal Utilities Commission Meeting Minutes
March 10, 2026
Page 6
6.3 American Public Power Association Legislative Rally Update - Verbal
Mr. Hanson gave a verbal update on the American Public Power Association Legislative Rally in
Washington, D.C. He was joined this year by Commissioner Westgaard and Commissioner
Zerwas. During the rally, the Minnesota contingent met with U.S. Senators Amy Klobuchar and
Tina Smith to share the utility’s key legislative messages and requests. A separate meeting was
held with Tom Emmer’s staff, as he was unavailable due to the President’s State of the Union
address taking place the same day.
6.4 Future Planning
Chair Dietz announced the following:
a. Regular Commission Meeting – April 14, 2026
b. 2026 Governance Agenda
6.5 Other Business
There was no other business.
7.0 ADJOURN REGULAR MEETING
Moved by Commissioner Westgaard and seconded by Commissioner Larson-Vito to adjourn
the regular meeting of the Elk River Municipal Utilities Commission at 4:52 p.m. Motion
carried 5-0.
Minutes prepared by Jenny Foss.
___________________________________
John J. Dietz, ERMU Commission Chair
___________________________________
Jolene Richter, Deput City Clerk
43
______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Melissa Karpinski – Finance Manager
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
2.3
SUBJECT:
Resolution Electing Not to Waive Statutory Tort Limits for Liability Insurance
ACTION REQUESTED:
Adopt Resolution 26-5 Electing Not to Waive the Statutory Tort Limits for Liability Insurance
BACKGROUND:
The League of Minnesota Cities Insurance Trust (LMCIT) requires annual approval of the
Utilities’ intent to waive or not waive the statutory limits on tort liability as set forth in
Minnesota Statutes.
DISCUSSION:
Attached is the waiver form which also has information regarding making a decision on whether
to elect not to waive, or to waive, the statutory limits. Last year we did not waive the limits. The
recommendation we have received from our insurance agent is not to waive the limits.
FINANCIAL IMPACT:
This limits our exposure to $500,000 rather than $2,000,000 for an individual claimant; and
$1,500,000 rather than $2,000,000 for all claimants of a single occurrence.
ATTACHMENTS:
• Resolution No. 26-5 - Electing Not to Waive the Statutory Tort Limits for Liability
Insurance
• League of Minnesota Cities Insurance Trust Liability Coverage Waiver Form
44
RESOLUTION NO. 26-5
BOARD OF COMMISSIONERS
ELK RIVER MUNICIPAL UTILITIES
A RESOLUTION OF THE BOARD OF COMMISSIONERS OF ELK RIVER MUNICIPAL UTILITIES
ELECTING NOT TO WAIVE THE STATUTORY TORT LIMITS FOR LIABILITY INSURANCE
WHEREAS, Elk River Municipal Utilities (Utilities) participate in the League of Minnesota Cities
Insurance Trust (LMCIT) insurance program; and
WHEREAS, The LMCIT requires annual approval of the Utilities’ intent to waive or not waive the
statutory limits on tort liability as set forth in Minnesota Statutes;
WHEREAS, The Utility has evaluated whether to waive the limit of tort liability, and whether to
purchase excess liability coverage from the LMCIT.
NOW, THEREFORE, BE IT RESOLVED that the Elk River Municipal Utilities of the City of Elk River
elects to not waive the statutory tort liability limit established by Minnesota Statute
466.04.
This Resolution Passed and Adopted this 14th day of April 2026.
John Dietz, Chair
Mark Hanson, General Manager
45
League of Minnesota Cities 1/1/2026
Liability Coverage Waiver Form Page 1
LIABILITY COVERAGE WAIVER FORM
Members who obtain liability coverage from LMCIT must decide whether to waive the statutory tort liability limits to
the extent of the coverage purchased. The decision to waive or not waive the statutory tort limits must be made
annually by the member’s governing body, in consultation with its attorney if necessary. The decision has the
following effects:
•If the member does not waive the statutory tort limits, an individual claimant could recover no more than
$500,000 on any claim to which the statutory tort limits apply. The total all claimants could recover for a single
occurrence to which the statutory tort limits apply would be limited to $1,500,000. These statutory tort limits
would apply regardless of whether the member purchases the optional LMCIT excess liability coverage.
•If the member waives the statutory tort limits and does not purchase excess liability coverage, a single claimant
could recover up to $2,000,000 for a single occurrence (under the waive option, the tort cap liability limits are
only waived to the extent of the member’s liability coverage limits, and the LMCIT per occurrence limit is
$2,000,000). The total all claimants could recover for a single occurrence to which the statutory tort limits apply
would also be limited to $2,000,000, regardless of the number of claimants.
•If the member waives the statutory tort limits and purchases excess liability coverage, a single claimant could
potentially recover an amount up to the limit of the coverage purchased. The total all claimants could recover for
a single occurrence to which the statutory tort limits apply would also be limited to the amount of coverage
purchased, regardless of the number of claimants.
Claims to which the statutory municipal tort limits do not apply are not affected by this decision.
Check one:
☐The member DOES NOT WAIVE the monetary limits on municipal tort liability established by
Minn. Stat. § 466.04.
☐The member WAIVES the monetary limits on municipal tort liability established by Minn. Stat. § 466.04, to
the extent of the limits of the liability coverage obtained from LMCIT.
LMCIT Member Name:
Date of member’s governing body meeting:
Name of person completing this form:
Position of person completing this form:
Signature of person completing this form:
Members who obtain liability coverage through the League of Minnesota Cities Insurance Trust
(LMCIT) must complete and return this form to LMCIT before their effective date of coverage.
Email completed form to your city’s underwriter, to pstech@lmc.org, or fax to 651.281.1298.
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Tony Mauren – Governance & Communications Manager
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
2.4
SUBJECT:
Summary of Information Security Committee Closed Session
ACTION REQUESTED:
None
BACKGROUND:
On March 10, 2026, the Information Security Committee held a scheduled meeting. Portions of
this meeting were closed to the public pursuant to Minnesota Statute § 13D.05, subd. 3(d) to
discuss security recommendations regarding ERMU and the City of Elk River’s
telecommunications system, the disclosure of which could compromise public safety and the
electronic security of financial information. State statute requires that the Committee shall then
summarize its conclusions from the closed session at the next public meeting.
DISCUSSION:
Summary from Chair Stewart:
• Committee Members present from ERMU: Chair Mary Stewart, General Manager Mark
Hanson, Administrations Director Sara Youngs, Technical Services Superintendent Mike
Tietz, IT/OT Technician Parker Theisen
• Committee Members present from the City of Elk River: Assistant City Administrator Joe
Stremcha, IT Manager Seth Calvin, IT Specialist Carl Munzke
• Also present: ERMU Governance & Communications Manager Tony Mauren, City of Elk
River Network Specialist Jake Tourville.
The open portion of the meeting consisted of approving the agenda and the previous meeting
minutes.
The Committee then moved into a closed session, in which the group reviewed the Incident
Response Plan.
Mary Stewart
Commission Chair
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Tony Mauren – Governance & Communications Manager
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
2.5
SUBJECT:
Mission, Vision, Values Policy Updates
ACTION REQUESTED:
Adopt updated policy language
BACKGROUND/DISCUSSION:
At the March 2026 meeting, the Commission adopted updates to ERMU’s Mission, Vision, and
Values as well as the elimination of Planning Themes and Organizational Fundamentals because
their original intent no longer serve current practice. These items exist formally through their
respective, dedicated policies in the Authority and Purpose section of the Commission Policy
Manual. Within the manual broadly these policies are also referenced in other policies. Staff
reviewed the dedicated policies and performed a keyword search to locate those references to
ensure the impacted language could be corrected as needed. There are also minor text edits to
policies G.1e and G.2d.
Attached are the policies requiring updates with the following color code applied:
Updates/References to Mission
Updates/References to Vision
Updates/References to Values
Added Language
Removed Language
ATTACHMENTS:
• ERMU Policy - G.1b - Organizational Core Purpose
• ERMU Policy - G.1c - Mission Statement
• ERMU Policy - G.1d - Vision Statement
• ERMU Policy - G.1e - Organizational Values
• ERMU Policy - G.1f - Organizational Fundamentals
• ERMU Policy - G.1g - Planning Themes
• ERMU Policy - G.2d - Commission Member Role Responsibilities and Orientation
• ERMU Policy - G.4g1 - Performance Metrics and Incentive Compensation
• ERMU Policy - G.5b - Competitive Rates
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COMMISSION POLICY
Section: Category:
Governance Authority and Purpose Policies
Policy Reference: Policy Title:
G.1b Organizational Core Purpose
PURPOSE:
The purpose for organizational initiatives and goals is to produce desirable results. In order for
any organization to be effective and maintain sustainable success, the organization must define
its organizational core purpose. This core purpose then becomes the basis for establishing the
criteria from which results and organization success are measured. Just as the economy, industry,
and community evolve and change, the organizational core purpose must also evolve and
change. The organization must establish and maintain a review process of their organizational
core purpose for sustainable success.
With this policy, the Commission commits that it will govern as a body in a manner consistent
with its adopted mission statement, vision statement, and organizational values and
organizational fundamentals. The Commission acknowledges the importance for the
development and support of the mission statement, vision statement, and organizational
values organizational fundamentals, and planning themes to achieve the following: an
environment of transparency; a clear line of sight from tasks through goals; and a work
environment for meaningful work providing value to the community. The Commission also
commits to engage in an ongoing review process of the organizations core purpose, to maintain
organizational effectiveness and sustainable success.
POLICY:
The Commission will adopt and maintain relevant and sustainable organization core purpose
documents including a mission statement, a vision statement, and organizational values
organizational fundamentals, and planning themes. The Commission will govern ERMU in a
manner consistent with these adopted documents outlining the organization’s core purpose. The
Commission will review and update these documents as necessary at a minimum of once every
five years through engaging with management and staff in a strategic planning process.
POLICY HISTORY:
Adopted May 9, 2017
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ERMU Commission Policy – G.1b Organizational Core Purpose
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Reviewed February 14, 2023
Revised April 14, 2026
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COMMISSION POLICY
Section: Category:
Governance Authority and Purpose Policies
Policy Reference: Policy Title:
G.1c Mission Statement
PURPOSE:
One of the key components in establishing an organizational core purpose is the development
and ongoing support of a relevant mission statement. Through the development, adoption, and
ongoing support of an organizational mission statement, the Commission establishes a guiding
statement to communicate both internally and externally the day to day purpose for the
organization’s existence. The mission statement then plays an important role in the development
of policies and programs and serves as a guide for effective governance and operations.
POLICY:
The Commission adopts and commits to govern in a manner consistent with the following
mission statement:
Serving our Community: Every Home, Every Business, Every Day
Provide our customers with safe, reliable, cost effective and quality long term electric
and water utility service. To communicate and educate our customers in use of utility
services, programs, policies, and future plans. These products and services will be
provided in an environmentally and financially responsible manner.
POLICY HISTORY:
Adopted May 9, 2017
Revised April 14, 2026
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COMMISSION POLICY
Section: Category:
Governance Authority and Purpose Policies
Policy Reference: Policy Title:
G.1d Vision Statement
PURPOSE:
A vision statement is a key component in establishing an organizational core purpose. Through
the development, adoption, and ongoing support of an organizational vision statement, the
Commission establishes a guiding statement to communicate both internally and externally
where the organization aspires to be. The vision statement then plays an important role in
inspiring the employees to engage and help support the organization in achieving their goals. The
vision statement also plays an important role in providing transparency in policy development
and organization initiatives to the customers and the public.
POLICY:
The Commission adopts and commits to govern in a manner consistent with the following vision
statement:
Leading the Way to a Stronger Community
Provide exceptional services and value to those we serve.
POLICY HISTORY:
Adopted May 9, 2017
Revised April 14, 2026
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COMMISSION POLICY
Section: Category:
Governance Authority and Purpose Policies
Policy Reference: Policy Title:
G.1e Organizational Values
PURPOSE:
Governance and leadership style set the tone for organizational culture. With this policy, the
Commission acknowledges the importance of for establishing expectations for organizational
values to guide policy development and organizational behavior.
POLICY:
The Commission adopts, as an expectation of organization operational behavior, and commits to
govern in a manner consistent with the following organizational values:
• Resilience in Practice: We build reliable systems and continually improve
essential services.
• Integrity in Action: We do what is right and focus on clear, transparent
communications.
• Stewardship in Promise: We commit to protecting our collective resources
for future generations.
• Excellence in Purpose: We pursue the highest standards and value in
everything we do.
• Safety Always: We prioritize the safety of our team and the community we
serve.
Value 1: Integrity – Honest, accountable and united in all that we do.
Value 2: Quality – Services that reflect excellence, dependability and expertise.
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ERMU Commission Policy – G.1e Organizational Values
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Value 3: Communication – Respectful and engaged interactions that are timely and
clear.
Value 4: Safety – A culture that protects our customers, employees and assets.
Value 5: Competitive – Provide the best value for the services we deliver.
POLICY HISTORY:
Adopted May 9, 2017
Revised June 12, 2018
Revised April 14, 2026
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COMMISSION POLICY
Section: Category:
Governance Authority and Purpose Policies
Policy Reference: Policy Title:
G.1f Organizational Fundamentals
PURPOSE:
The foundation to a building provides the structure stability to support the many components of
the building, each of which service for different functions and combine to provide value and
meaningful purpose. Similarly, organizational fundamentals serve as foundational concepts on
which to build a company. These organizational fundamentals then align with and provide
support and guidance for achieving the mission and vision of the organization.
POLICY:
The Commission adopts and commits to govern in a manner consistent with the following
organizational fundamentals:
Fundamental 1: Safety, Reliability, and Quality of Utility Services.
Fundamental 2: Customer Service and Employee Development.
Fundamental 3: Competitive Rates, and Financial and Organizational Health.
POLICY HISTORY:
Adopted May 9, 2017
Revised November 13, 2018
Removed April 14, 2026
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COMMISSION POLICY
Section: Category:
Governance Authority and Purpose Policies
Policy Reference: Policy Title:
G.1g Planning Themes
PURPOSE:
Providing transparency and a clear connection between the organizational mission and vision to
initiative and task, is an important leadership guide to make sure resources are contributed
towards meaningful work. Line of sight between mission and task also helps to create a positive
work environment where employees can identify the value of their efforts in achieving the
organizational goals. Planning themes are used to prioritize initiatives, schedule and budget
required resources, and create a clear line of sight between mission and task. With this policy the
Commission acknowledges the importance of planning in a manner consistent with the
organizational mission and vision such that the organizations resources are being used
responsibly for meaningful work.
POLICY:
The Commission adopts and commits to govern in a manner consistent with the following
planning themes:
Theme 1: Communication – Improve the effectiveness of our communications inside the
organization, with our customers, and with the community.
Theme 2: Personnel and Governance – Develop our most valuable and vulnerable
assets….our commissioners, employees, leaders, and future leaders.
Theme 3: Strategic Thinking – Create a culture of strategic thinking and ensure line of
sight from mission to vision.
Theme 4: Technology – Implement the prudent use of technology to improve efficiency
and increase customer choice, communication, and value.
Theme 5: Growth – Assess the growth curve to make decisions regarding organizational
change.
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ERMU Commission Policy – G.1g Planning Themes
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Theme 6: Process, Measurement, and Financial Health – Improve processes and
measurement to better determine and report efficiency and effectiveness of
organization and to ensure financial and organizational health.
POLICY HISTORY:
Adopted May 9, 2017
Removed April 14, 2026
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COMMISSION POLICY
Section: Category:
Governance Governance Policies
Policy Reference: Policy Title:
G.2d Commission Member Role,
Responsibilities, and Orientation
PURPOSE:
With this policy, the Commission describes the role and responsibilities of ERMU Commission
members when acting in their capacity as a Commission in accordance with applicable law. The
Commission also establishes its expectations for the orientation of new Commission members.
POLICY:
The Commissioners of ERMU act in the interests of customers, employees and other
stakeholders. ERMU stakeholders expect the Commission to make policy decisions that ensure
appropriate organizational performance as set forth in the Commission’s adopted Vision, Core
Purpose, Mission, and Core Values.
Consistent with this general statement:
1. The Commission will continuously create and enhance connections between ERMU and its
stakeholders.
2. The Commission will produce, maintain and use written governing policies that, at the
broadest levels, address each of the following categories of deliberation and decision-
making.
a. Authority and Purpose: Policies that recognize the Utilities’ and Commission’s right to
exist, and authorities and policies to define organizational core purpose.
b. Governance: Policies that specify how the Commission conceives, carries out and
monitors its own tasks.
c. Commission-Management Connection: How organizational authority is delegated, its
proper use is monitored, and the General Manager is accountable for ERMU’s
performance.
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ERMU Commission Policy – G.2d Commission Member Role, Responsibilities, and Orientation
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d. Delegation to Management: Limitations on executive authority that establish the
prudence and ethics boundaries within which all executive activity and decisions must
take place.
e. Results: ERMU’s outcomes, impacts and benefits.
3. The Commission will measure and evaluate the General Manager’s performance against its
Results and Delegation to Management policies.
4. Commission members will perform their responsibilities to protect and enhance the value of
ERMU, exercising due diligence and using sound business judgment consistent with
ERMU’s enabling legislation and other applicable laws.
5. The ERMU Commission is committed to excellent governance. This requires that individual
Commissioners be well-informed about ERMU, its customers and stakeholders, the utility
business, prudent financial management, and the Commission’s own governance structure
and processes. Consistent with this commitment and Commission policies, the ERMU
Commission will develop, implement and maintain a current, a formal orientation program
for new Commission members.
POLICY HISTORY:
Adopted May 9, 2017
Revised April 14, 2026
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COMMISSION POLICY
Section: Category:
Governance Delegation to Management Policies
Policy Reference: Policy Title:
G.4g1 Performance Metrics and Incentive
Compensation
1.0 PURPOSE AND SUMMARY
The successful performance of the ERMU is measured in terms of the Utilities’ ability to meet
our strategic goals and mission. By improving our efficiency and level of performance in
meeting our strategic goals and mission we can improve the delivery of value to our customers.
To create incentives for employees to take personal responsibility for accomplishment of the
Utilities’ strategic goals and mission, the Utilities has established a Utilities Performance
Metrics-based Incentive Compensation system (“UPMIC”). Through UPMIC the employees of
ERMU will have an opportunity, as a group, to earn annual incentive compensation for each
qualifying employee by contributing individually to the overall success of ERMU on a daily
basis.
Under UPMIC, either all qualifying employees will earn an incentive compensation distribution
in a given year, or none will. And not only will incentive compensation under UPMIC in that
sense be an all or nothing proposition each year, but there will be an equal percentage share basis
for all on which the incentive compensation will be paid out if earned. This appropriately reflects
the reality that we all succeed, or fall short, together as a team.
To administer the UPMIC and measure objectively the level of performance that must be
achieved for qualifying employees to earn incentive compensation, the attached UMPIC
Performance Metrics Policy Scorecard (“Scorecard”) has been created. The Scorecard will be
subject to revision annually based on the performance metrics adopted by the Commission
annually for the coming year (“Performance Metrics”). By tracking and measuring the
Performance Metrics and creating incentive for employees to achieve the goals the Metrics
embody, the Utilities believes it will be better able to focus efforts and resources on becoming
more efficient and successful in meeting our strategic goals and mission and delivering
improved value to our customers.
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ERMU Commission Policy – G.4g1 Performance Metrics and Incentive Compensation
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2.0 UTILITIES PERFORMANCE METRICS SCORECARD
As reflected on the Scorecard, the Performance Metrics are divided into the following five
categories: Safety, Reliability and Quality of Utility Services; Workforce Development;
Financial Goals; Communications/Customer Service; and Strategic Plan. These categories are
used to characterize the overall strategic goals and mission of ERMU.
Under the Performance Metrics, these five main categories are then divided into various
weighted factors, or sub-categories. These sub-categories, their percentage weight, and the goal
or target for each, shall be established by the Utilities Commission annually. The Performance
Metrics as adopted are reflected in the attached Scorecard. As discussed above, the Performance
Metrics and thus the Scorecard are subject to modification and adoption by the Commission
annually, which will normally occur during the Utilities’ budgeting process.
3.0 UTILITIES PERFORMANCE INCENTIVE COMPENSATION DISTRIBUTION
CRITERIA
Under the UPMIC a Performance-Based Compensation Incentive, if earned, will be distributed
to Qualifying Employees annually. The total amount available to be earned by Utilities
employees as a Performance Based Compensation Incentive each year will be an amount up to
2% of the Utilities’ total gross wages paid to Qualifying Employees during the Measurement
Period.
The measuring period used to calculate how much, if any, of the Performance-Based
Compensation Incentive the Utilities employees have earned will be the calendar year (the
“Measurement Period”). After the Measurement Period is complete and the Commission has
received its audit in the spring of the year following the Measurement Period, the Performance
Metrics will be applied to determine whether the Performance-Based Compensation Incentive
has been earned for the Measurement Period. In doing so, the performance of the Utilities in each
sub-category will be reviewed. If the sub-category performance meets or exceeds the established
goal, the sub-category will be scored with the designated percentage that will contribute to a total
Performance Metrics Multiplier to be used as a factor in calculating the distribution earned, if
any, as shown in the Scorecard (“Multiplier”). The Multiplier has a maximum factoring effect of
100%. The Multiplier is used to determine how much, if any, of the amount established by the
Commission for the UPMIC Performance-Based Compensation Incentive has been earned in the
Measurement Period. (For example, if the Multiplier equals 100%, the distribution would equal
2%. If the Multiplier equals 75%, the distribution would equal 1.5%.) In other words, the
amount established by the Commission may be earned on an annual basis by the group of
Qualifying Employees (as defined below in Section 4.0) in whole, in part, or not at all.
After the Multiplier is calculated on the Scorecard, the Performance Based Compensation
Incentive earned, if any, will be distributed to Qualifying Employees. The total amount to be
distributed as the Performance Based Compensation Incentive will be the product of: a) the
Multiplier; and b) 2% of the Utilities’ total gross wages paid to Qualifying Employees during the
Measurement Period.
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ERMU Commission Policy – G.4g1 Performance Metrics and Incentive Compensation
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The percentage of the Performance Based Compensation Incentive awarded to each Qualifying
Employee will be based on the gross wages of each Qualifying Employee during the
Measurement Period. To each Qualifying Employee, the distribution would be allocated in a
lump sum equal to the product of: a) the Multiplier; and b) 2% of that employee’s gross wages
paid during the Measurement Period. For example, if a Qualifying Employee’s gross wages
earned during the Measurement Period were equal to $50,000 and the Multiplier was equal to
100%, the total distribution to that employee would be equal to: $50,000 x 2% x 100% = $1000.
If the Utilities’ margins are negative due to sudden and unforeseen material changes to the
industry or customer base, the Commission reserves the right to withhold distribution of the
Performance Based Compensation Incentive in any given year.
4.0 EMPLOYEE QUALIFICATIONS AND DISTRIBUTION OF THE INCENTIVE
COMPENSATION
An employee of the Utilities will be eligible for participation in the Performance Metrics
Incentive Compensation distribution if the employee meets the following eligibility requirements
and is therefore a “Qualifying Employee” for purposes of this policy.
a. The employee is in good standing with the Utilities. An employee would not be eligible
while on disciplinary probation or a performance improvement action plan.
b. The employee was a Full Time or Part Time employee during the Measurement Period.
Seasonal, and Temporary employees are not eligible.
The UPMIC Performance Based Compensation Incentive distribution will be made to Qualifying
Employees within thirty days of the date on which the Commission formally receives its annual
auditor’s report in an open meeting.
POLICY HISTORY:
Adopted December 12, 2012
Revised January 14, 2020
Revised December 13, 2022, effective January 1, 2023
Revised December 12, 2023, effective January 1, 2024
Revised December 10, 2024, effective January 1, 2025
Revised May 13, 2025
Revised April 14, 2026
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COMMISSION POLICY
Section: Category:
Governance Results Policies
Policy Reference: Policy Title:
G.5b Competitive Rates
PURPOSE:
Competitive rates play a critical role in customer satisfaction, economic development
opportunities, and business retention. The organization’s Authority and Purpose Policies reflect
the expectations of customers, the consumer-owners, that ERMU will provide cost-effective
services. The organization’s Mission includes the statement that the services provided are “cost
effective.” And the organization’s Fundamentals and Values both specify “competitiveness.”
These defining organizational position policies reflect the expectations of the customers, the
consumer-owners. With this policy, the Commission recognizes the importance of remaining
competitive through strategic short-term and long-term planning, budgeting, and rate design.
Consistent will all Results Policies, the Commission shall establish clear expectations for
producing the right results for the right people in the right way. With this policy the Commission
affirms their commitment to the Organization Fundamentals Policies prioritizing financial and
organization health by establishing reporting requirements regarding the competitiveness of rates.
POLICY:
To provide the Commission with the information needed, in a timely manner, for evaluation of rate
competitiveness, the General Manager annually provides a rate competitive analysis report to the
Commission prior to rate setting for the following budget year. The report shall include the
following information:
1. Electric
a. Report the blended $/kWh effective electric rate data (total revenue collected/total
kWh sold) as available through the U.S. Department of Energy, Energy
Information Administration, Form EIA-861. The report shall include ten-year trend
data graphing ERMU electric rates compared to neighboring competitor electric
utilities. Recognizing that the data release lags one year, the intent of the report
shall be to provide graphical trend data for long term planning rather than short
term comparisons. The report shall be provided to the Commission annually prior
to rate setting for the following budget year.
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ERMU Commission Policy – G.5b - Competitive Rates
b. Report customer class rate analysis comparing ERMU electric rates to neighboring
competitor electric utilities. The report shall include ten-year trend data graphing
ERMU electric rates compared to neighboring competitor electric utilities. The
intent of this is to show, from a customer perspective, how rate competitiveness
would be perceived currently. The report shall include all rate classes or other
unique customer types within rate classes.
2. Water
a. Report tiered water rate comparisons, as available locally sourced. The report shall
include data graphing ERMU water rates compared to neighboring water utilities.
The intent of the report shall be to provide trend data for long term planning rather
than short term comparisons.
b. Report customer class rate analysis comparing ERMU water rates to neighboring
communities, as available through regional AE2S survey reports. The report shall
include ten-year trend data graphing ERMU water rates compared to neighboring
competitor water utilities. The intent of this is to show, from a customer
perspective, how rate competitiveness would be perceived currently. The report
shall include all rate classes.
POLICY HISTORY:
Adopted December 13, 2022
Revised April 14, 2026
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Sara Youngs – Administrations Director
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
2.6
SUBJECT:
2026 Schedule of Rates & Fees Update
ACTION REQUESTED:
Approve updates to the Large Industrial Demand Electric Service Rate and place a moratorium
on the Transmission Transformed Service Rate.
BACKGROUND/DISCUSSION:
At its December 18, 2025, meeting, the Commission reviewed and approved the 2026 Schedule
of Rates and Fees as part of the Annual Business Plan.
Staff is returning with updates to the Large Industrial Demand Electric Service Rate to better
align with current operations. These updates do not impact any existing customers on this rate.
In addition, staff recommend an eight-month moratorium on the Transmission Transformed
Service rate to allow for additional research and discussions with Minnesota Municipal Power
Agency. Currently, ERMU has no customers on the Transmission Transformed Service Rate.
FINANCIAL IMPACT:
None
ATTACHMENTS:
• Updated Large Industrial Demand Electric Service Rate
• Updated Transmission Transformed Service Rate
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LARGE INDUSTRIAL DEMAND ELECTRIC SERVICE RATE
Available: Within Elk River Municipal Utilities (ERMU) established service territory.
Applicable to: Non-residential customer accounts. Existing or new Customer accounts with actual or
projected demand greater than or equal to 1 MW. A Customer account with a billing demand of less
than 1 MW for 12 consecutive months may be switched to the Demand Electric Service Rate. The
Customer accounts shall be in compliance with all policies, procedures, safety requirements, and shall
be taken through one or more meters. Not applicable to resale, standby or auxiliary service.
Character Of Service: 3-Phase Primary, 7,200/12,470 volt, AC, 60 cycles.
Special Conditions: Customer must provide a location suitable for the installation of a utility customer-
owned metering cabinet(s). Customer will be responsible for providing suitable wire and connection in
the utility owned metering cabinet(s). The primary meter(s) and cabinet(s) shall be installed to service
one class of business. If additional buildings are required for a given business, they shall be
interconnected by the customer to the existing meter(s), unless an exception is approved by
management. If additional meters and services are requested by the customer, each shall be treated as
a separate customer and billed individually. A customer on the rate may qualify for integrity testing.
Customer must execute Commercial Electric Service Application and Commercial Service Agreement
with the utility.
ERMU equipment and metering must be accessible to ERMU 24 hours per day.
Demand Service Rate:
Basic Monthly Electric Charge: $ 125.00per month.
Summer Winter
Demand Charge: $ 16.50 $ 11.50 in kW / month
Energy Charge: $ 0.07293 $ 0.07293 in kWh / month
Summer Rate: Applicable during the five monthly billing periods of June – October.
Winter Rate: Applicable during the seven monthly billing periods of November – May.
Rates are subject to application of Power Cost Adjustment (PCA).
Federal, state, and local taxes may apply.
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Minimum Bill: Maximum billing demand during previous twelve months times 3.0% of the demand
charge, or the actual demand multiplied by the demand charge, whichever is greater plus $1.00 per kW
per month of excess transformer load capacity requested by customer in the electric service agreement.
Determination of Billing Demand: The billing demand shall be the highest measured demand (corrected
for power factor if required) during any fifteen (15) minute period occurring in the current billing period.
Fluctuating Loads: Customers operating equipment having a highly fluctuating or large instantaneous
demand, such as welders and X-ray machines, shall be required to pay all non-betterment costs of
isolating the load from the balance of ERMU’s system so that the load will not unduly interfere with
service on ERMU’s lines. No motor larger than ten (10) HP (or 7.355 kW) will be allowed to be across-
the-line started without notification and written authorization from ERMU.
Power Factor Adjustment: Power factor adjustments may be made in the billing demand, when the
power factor, as determined by test, at the time of the Customer’s maximum use is less than 98%. If the
power factor, as measured by ERMU’s electric department, is lower than 98%, the monthly demand
charge may be multiplied by the ratio 98% divided by the measured power factor, or at ERMU’s option,
the power factor may be corrected at the Customer’s expense.
Billing and Terms of Payment: See ERMU Service Policies Policy (Billing Due Dates, and Penalties and
Delinquent Notices.)
Terms and Conditions:
1. Usage may be fractionalized on the actual days of service for application of a change in rate.
2. Service will be furnished pursuant to ERMU’s rules.
3. Extensions made for service under this schedule are subject to the provisions of ERMU’s rules
governing Extension of Service and Facilities.
4. The rates set forth herein may be modified by the amount of any governmental changes
imposed and levied on transmission, distribution, production, or the sale of electrical power.
5. Exceptions by management approval only.
Adopted December 18, 2025
Effective January 1, 2026
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MORATORIUM EFFECTIVE APRIL 14, 2026, ON TRANSMISSION TRANFORMED SERVICE RATE
TRANSMISSION TRANSFORMED SERVICE RATE
Available: Within Elk River Municipal Utilities (ERMU) established service territory.
Applicable to: Non-residential Customer accounts with projected demand greater than or equal to 10
MW. The Customer must maintain an annual load factor greater than or equal to 75%. A Customer
account with a monthly billing demand of less than 10 MW for 12 consecutive months or an annual load
factor less than 75% may be switched to another electric rate schedule (additional charges may apply to
recover stranded costs). The Customer owned equipment must be in compliance with all policies,
procedures, safety requirements, and applicable electrical codes.
Character of Service: 3-Phase Transmission Transformed 7,200/12,470-volt, AC, 60 cycles.
Special Conditions: The Customer must execute a contract with the utility that commits to a minimum
term of service, identifies the annual peak demand and load factor, agrees to the requirements for
registering generation with Midcontinent Independent System Operator (MISO) if applicable, and
accepts the certain risks that include fluctuating market-based rates and prices established by MISO.
The Customer must connect directly to the Utility’s distribution substation(s) and provide the location
suitable for the installation of the utility owned transformer(s) and metering equipment on the
Customer’s property. Customer will be responsible for providing suitable wire and connection in the
utility owned metering equipment. The metering equipment shall be installed to service one class of
business. If additional buildings are required for a given business, they shall be interconnected by the
customer to maintain one metered account, unless an exception is approved by management. If
additional meters and services are requested by the customer, each shall be treated as a separate
customer and billed individually.
ERMU equipment and metering must be accessible to ERMU 24 hours per day.
Transmission Demand Charge:
Transmission Demand charges are determined by monthly maximum metered 15-minute Customer
demand, adjusted for applicable MISO zone transmission losses. All applicable MISO transmission
charges, including but not limited to the below, shall apply to all transmission demand quantities:
A. Schedule 1
B. Schedule 2
C. Schedule 9
D. Schedule 26
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Transmission Transformed Service Rate
Page 2 of 3
Capacity Charge:
Capacity charges are determined by Customer selection of one of the options below:
A. If customer has its own generation, then the capacity billing determinant shall be the maximum
metered 15-minute demand in excess of Customer’s registered generation in a given month. To
qualify for this billing determinant, Customer’s generation must be registered with MISO and
comply with all MISO requirements for capacity resources.
B. If Customer does not have its own generation, or if Customer fails to register its generation with
MISO or fails to comply with all MISO requirements for capacity resources, then the capacity
billing determinant shall be monthly maximum metered 15-minute Customer demand.
The capacity billing determinants defined above are pass-through costs.
Energy Charge:
Energy billing is determined by actual hourly usage. The following charges shall apply to all energy (kWh)
quantities:
A. MISO Real-Time Locational Marginal Price at the applicable MISO Node.
B. All applicable MISO Ancillary Services Charges.
C. MISO Multi-Value Project Charges.
D. A charge of $0.002 per kWh for the cost of compliance with the State of Minnesota’s Renewable
Energy Standard.
E. A charge of $0.01 per kWh to cover all dispatch, billing, and administrative costs. This charge
shall be inclusive of all regulatory charges collected by Utility on all customers.
City fees, such as franchise and storm water, will apply.
Federal, state, and local taxes may apply.
Failure to Generate: If Customer has registered generation that does not perform as registered when
requested by utility, utility’s wholesale supplier, or MISO, Customer shall be responsible for:
A. Any financial or other penalties imposed by MISO related to the generation’s failure to perform.
B. All costs of utility or utility’s wholesale supplier to acquire replacement capacity to replace
registered generation that did not perform.
Transformation Charge: Customer shall pay a monthly transformation charge based on the cost of
providing transmission transformed service to Customer, including recovery of costs for any new
substation or related facilities.
Minimum Bill: Charges for failure to meet minimum peak demand and load factor requirements shall be
outlined in the contract between Customer and Utility.
Power Factor Adjustment: Power factor adjustments may be made in the billing demand, when the
power factor, as determined by test, at the time of the Customer’s maximum use is less than 98%. If the
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Transmission Transformed Service Rate
Page 3 of 3
power factor, as measured by ERMU’s electric department, is lower than 98%, the monthly demand
charge may be multiplied by the ratio 98% divided by the measured power factor, or at ERMU’s option,
the power factor may be corrected at the Customer’s expense.
Billing and Terms of Payment: See ERMU Service Policies Policy (Billing Due Dates, and Penalties and
Delinquent Notices.)
Terms and Conditions:
1. Service shall comply with all applicable ERMU Policies and rules.
2. Extensions made for service under this schedule are subject to the provisions of ERMU’s rules
governing Extension of Service and Facilities.
3. Customer is responsible for any new charges or fees imposed by MISO or any new regulatory or
legislative action that results in increased costs to provide power supply to Customer.
4. All rates in this electric rate schedule are subject to change with commission approval.
5. Exceptions by management approval only.
Adopted December 18, 2025
Effective January 1, 2026
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______________________________________________________________________________
Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Melissa Karpinski – Finance Manager
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
4.1
SUBJECT:
2025 Financial Audit
ACTION REQUESTED:
Receive and file the 2025 Annual Financial Report
BACKGROUND:
Audit fieldwork was completed February 17 and 18 by the Utilities’ auditors, Abdo. As in prior
years, Abdo completed the audit, compiled the enclosed report and issued an opinion letter.
Elk River Municipal Utilities staff has reviewed the report and recommends its acceptance.
DISCUSSION:
Justin Nilson of Abdo will attend the meeting to present the 2025 audit and respond to any
questions. There were two audit adjustments resulting from General Accounting Standards
Board reporting requirements related to Pensions and Leases. These adjustments are provided
by Abdo and are discussed in Notes 2 and 4 of the financial statements.
FINANCIAL IMPACT:
None
ATTACHMENTS:
• 2025 Audit Presentation
• 2025 Executive Governance Summary
• ERMU Annual Financial Report for the Year Ended December 31, 2025
71
Elk River Municipal Utilities
2 0 2 5 F i n a n c i a l S t a t e m e n t A u d i t
72
2abdosolutions.com2
Introduction
•Audit Results
•Electric Fund Results
•Water Fund Results
73
3 Audit Results
Unmodified
opinion under
GAAP
No instances
of
noncompliance
M i n n e s o t a L e g a l
C o m p l i a n c e
A u d i t o r ’ s O p i n i o n
74
4abdosolutions.comElectric Fund Expenditures by Type
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
Purchased Power Production and
Distribution
Customer Accounts Depreciation General and
Administrative
2023 2024 2025
75
5abdosolutions.comElectric Fund
Cash Flows from
Operations and
Cash Balances
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
$50,000,000
2022 2022 2023 2023 2024 2024 2025 2025
Operating Receipts Operating Disbursements Debt Payments
$16,674,862 $16,675,251
$14,793,957 $14,691,854
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
$20,000,000
2022 2023 2024 2025
Unrestricted Cash Restricted for Debt Service Unrestricted Designated Cash Reserve
76
6abdosolutions.comElectric Operations
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
$50,000,000
2023 2024 2025
Operating Revenues Operating Expenses Cash and Investments Bonds Payable
77
7abdosolutions.comWater Fund Expenditures by Type
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
Production Distribution Depreciation Customer accounts General and
administrative
2023 2024 2025
78
8abdosolutions.comWater Fund
Cash Flows from
Operations and
Cash Balances
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
2022 2022 2023 2023 2024 2024 2025 2025
Operating Receipts Operating Disbursements Debt Payments
$10,067,584
$10,879,501
$9,961,189
$11,160,427
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
2022 2023 2024 2025
Unrestricted Cash Balance Unrestricted Designated Reserve
79
9abdosolutions.comWater Operations
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
2023 2024 2025
Operating Revenues Operating Expenses Cash Bonds Payable
80
10abdosolutions.comDebt Obligations
Authorized Bonds Year of
and Issued Outstanding Maturity
Electric Revenue Bonds, Series 2016A 9,755,000$ 6,510,000$ 2036
G.O. Water Revenue Bonds, Series 2021C 1,615,000 1,380,000 2041
Electric Revenue Bonds, Series 2018A 10,000,000 8,595,000 2048
Electric Revenue Bonds, Series 2021B 11,810,000 10,910,000 2051
Totals 27,395,000$
Total Remaining Interest Payments 9,325,606$
Description
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Principal Interest81
11abdosolutions.comCash and Investments Balance
$27,554,752
$24,755,146 $25,852,281
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
2023 2024 2025
Electric Water
82
12abdosolutions.comN I L S O N
Justin
CPA - Partner
F A G A N
Senior Associate
W I N T E R S
Associate
P U D A S
Associate
E R I C K S O N
Intern
Jason Hope
Erika JackiYour Abdo Team83
Executive Governance
Summary
Elk River Municipal Utilities
Elk River, Minnesota
For the year ended December 31, 2025
84
April 7, 2026
Management and Public Utilities Commission
Elk River Municipal Utilities
Elk River, Minnesota
We have audited the financial statements of the Elk River Municipal Utilities (the Utilities) of the City of Elk River,
Minnesota, (the City) as of and for year ended December 31, 2025. Professional standards require that we provide you
with information about our responsibilities under generally accepted auditing standards as well as certain information
related to the planned scope and timing of our audit. We have communicated such information in our letter dated
December 1, 2025. Professional standards require that we provide you with the following information related to our audit.
Significant Audit Findings
In planning and performing our audit of the financial statements, we considered the Utilities internal control over financial
reporting (internal control) as a basis for designing the audit procedures that are appropriate in the circumstances for the
purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the Utilities internal control. Accordingly, we do not express an opinion on the effectiveness of the
Utilities internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees,
in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely
basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a
reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected
and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was
not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies.
Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be
material weaknesses. However, material weaknesses may exist that have not been identified.
Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we
performed tests of compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with
which could have a direct and material effect on the financial statements. However, providing an opinion on compliance
with those provisions was not an objective of our audit. The results of our tests disclosed no instances of noncompliance
or other matters that are required to be reported under statutes set forth by the State of Minnesota.
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting
policies used by the Utilities are described in Note 1 to the financial statements. No new accounting policies were
adopted and the application of existing policies were not changed during the year ended December 31, 2025. We noted no
transactions entered into by the Utilities during the year for which there is a lack of authoritative guidance or consensus.
All significant transactions have been recognized in the financial statements in the proper period.
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Accounting estimates are an integral part of the financial statements prepared by management and are based on
management’s knowledge and experience about past and current events and assumptions about future events. Certain
accounting estimates are particularly sensitive because of their significance to the financial statements and because of
the possibility that future events affecting them may differ significantly from those expected. The most sensitive
estimates affecting the financial statements were as follows:
• Management’s estimate of depreciation is based on estimated useful lives of the assets. Depreciation is
calculated using the straight-line method.
• Allocations of gross wages and payroll benefits are approved by the Commission within the Utilities’ budget and
are derived from each employee’s estimated time to be spent servicing the respective functions of the Utilities.
These allocations are also used in allocating accrued compensated absences payable.
• Management’s estimate of its pension liability is based on several factors including, but not limited to, anticipated
investment return rate, retirement age for active employees, life expectancy, salary increases and form of annuity
payment upon retirement.
• Management’s estimates of its lease receivable are based on several factors including, but not limited to, a
discount rate based on the estimated incremental borrowing rate.
We evaluated the key factors and assumptions used to develop these accounting estimates in determining that it is
reasonable in relation to the financial statements taken as a whole. The disclosures in the financial statements are
neutral, consistent, and clear. Certain financial statement disclosures are particularly sensitive because of their
significance to financial statement users.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than
those that are trivial, and communicate them to the appropriate level of management. Management has corrected all
such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by
management were material, either individually or in aggregate, to each opinion unit’s financial statements taken as a
whole.
Management Representations
We have requested certain representations from management that are included in the management representation letter
dated April 7, 2026.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a financial accounting,
reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our
audit.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters,
similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting
principle to the governmental unit’s financial statements or a determination of the type of auditor’s opinion that may be
expressed on those statements, our professional standards require the consulting accountant to check with us to
determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other
accountants.
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86
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with
management each year prior to retention as the Utilities’ auditors. However, these discussions occurred in the normal
course of our professional relationship and our responses were not a condition to our retention.
Other Matters
We applied certain limited procedures to the required supplementary information (RSI) (Management’s Discussion and
Analysis, the Schedules of Employer’s Share of the Net Pension Liability and the Schedules of Employer’s Contributions,),
which is information that supplements the basic financial statements. Our procedures consisted of inquiries of
management regarding the methods of preparing the information and comparing the information for consistency with
management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our
audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance
on the RSI.
We were engaged to report on the supplementary information (Schedule of Operating Revenues and Expense), which
accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain
inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the
information complies with accounting principles generally accepted in the United States of America, the method of
preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit
of the financial statements. We compared and reconciled the supplementary information to the underlying accounting
records used to prepare the financial statements or to the financial statements themselves.
We were not engaged to report on the introductory section or statistical sections, which accompany the financial
statements but are not RSI. We did not audit or perform other procedures on this other information, and we do not
express an opinion or provide any assurance on them.
Future Accounting Standard Changes
The following Governmental Accounting Standards Board (GASB) Statements have been issued and may have an impact
on future Utilities financial statements:
GASB Statement No. 103 – Financial Reporting Model Improvements Effective: 12/31/2026
GASB Statement No. 104 – Disclosure of Certain Capital Assets Effective: 12/31/2026
Further information on upcoming GASB pronouncements.
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* * * * *
Restriction on Use
This communication is intended solely for the information and use of the Public Utilities Commission, City Council,
management, and the Minnesota Office of the State Auditor and is not intended to be and should not be used by anyone
other than these specified parties.
The comments and recommendations in this report are purely constructive in nature, and should be read in this context.
Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of
accounting records and related data.
If you have any questions or wish to discuss any of the items contained in this letter, please feel free to contact us at your
convenience. We wish to thank you for the opportunity to be of service and for the courtesy and cooperation extended to
us by your staff.
Abdo
Minneapolis, Minnesota
April 7, 2026
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88
ANNUAL FINANCIAL REPORT
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2025
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Elk River Municipal Utilities
Elk River, Minnesota
Table of Contents
For the Year Ended December 31, 2025
Page No.
Introductory Section
Public Utilities Commission and Administration 7
Financial Section
Independent Auditor’s Report 11
Management’s Discussion and Analysis 15
Financial Statements
Statement of Net Position 20
Statement of Revenues, Expenses and Changes in Net Position 23
Statement of Cash Flows 24
Notes to the Financial Statements 27
Required Supplementary Information
Schedule of Employer’s Share of Public Employees Retirement Association Net Pension Liability -
General Employees Fund 48
Schedule of Employer’s Public Employees Retirement Association Contributions -
General Employees Fund 48
Notes to the Required Supplementary Information - General Employees Fund 49
Supplementary Information
Schedule of Operating Revenues and Expenses 52
Other Information
Electric Fund
Summary of Operations and Unaudited Statistics 56
Water Fund
Summary of Operations and Unaudited Statistics 58
Other Report
Independent Auditor’s Report
on Minnesota Legal Compliance 63
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92
INTRODUCTORY SECTION
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2025
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Elk River Municipal Utilities
Elk River, Minnesota
Public Utilities Commission and Administration
For the Year Ended December 31, 2025
Name Title
John Dietz Chairperson
Mary Stewart Vice-Chair
Matt Westgaard Commissioner
Jill Larson-Vito Commissioner
Nick Zerwas Commissioner
Name Title
Mark Hanson General Manager
Melissa Karpinski Finance Manager
Tom Geiser Operations Director
Chris Sumstad Electric Superintendent
Dave Ninow Water Superintendent
Mike Tietz Technical Services Superintendent
Sara Youngs Administrations Director
Tony Mauren Governance & Communications Manager
COMMISSION
ADMINISTRATION
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FINANCIAL SECTION
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2025
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INDEPENDENT AUDITOR’S REPORT
Public Utilities Commission
Elk River Municipal Utilities
Elk River, Minnesota
Report on the Financial Statements
Opinion
We have audited the accompanying financial statements of the Elk River Municipal Utilities (the Utilities) of the City of Elk
River, Minnesota (the City), as of and for the year ended December 31, 2025, and the related notes to the financial
statements, as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of
the Utilities as of December 31, 2025, and the changes in financial position and cash flows thereof for the year then ended
in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America
(GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Financial Statements section of our report. We are required to be independent of the Utilities and to meet our other
ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the Utilities ability to continue as a going concern for
twelve months beyond the financial statement date, including any currently known information that may raise substantial
doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an
audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are
considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the
judgment made by a reasonable user based on the financial statements.
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In performing an audit in accordance with GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Utilities internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise
substantial doubt about the Utilities ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the
audit.
Emphasis of Matter
As discussed in Note 1B, the financial statements present only the Electric and Water enterprise funds and do not purport
to, and do not present fairly the financial position of the Utilities as of December 31, 2025, the changes in its financial
position, its cash flows for the year then ended in accordance with accounting principles generally accepted in the United
States of America. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and
Analysis Page 15 and the Schedule of Employer’s Share of the Net Pension Liability, the Schedule of Employer’s
Contributions, and related note disclosures to be presented to supplement the basic financial statements. Such
information, although not a part of the financial statements, is required by the Government Accounting Standards Board,
who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the information for consistency
with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during
our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
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Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the
Utilities’ basic financial statements. The schedule of operating revenues and expenses is presented for purposes of
additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of
management and was derived from and relates directly to the underlying accounting and other records used to prepare
the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic
financial statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the schedule of operating revenues and expenses is fairly stated,
in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises the
introductory section, summary of operations and unaudited statistics but does not include the basic financial statements
and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and
we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and
consider whether a material inconsistency exists between the other information and the basic financial statements or the
other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an
uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Abdo
Minneapolis, Minnesota
April 7, 2026
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Management’s Discussion and Analysis
The following Management’s Discussion and Analysis (MD&A) provides an overview of the financial activities of Elk River
Municipal Utilities (the Utilities) for the year ended December 31, 2025. This section should be read in conjunction with the
accompanying financial statements and notes.
Elk River Municipal Utilities operates as a municipal utility providing electric and water services.
Overview of the Financial Statements
Financial Statements
The Statement of Net Position includes the Utilities’ assets, deferred outflows of resources, liabilities, and deferred
inflows of resources, with the difference between them reported as net position. The Statement of Net Position provides
information about the nature and amount of investments in resources (assets), deferred outflows of resources, the
obligations to creditors (liabilities), and deferred inflows of resources. Net position increases when revenues exceed
expenses. The Statement of Revenues, Expenses and Changes in Net Position reports the revenues and expenses during
the period indicated. The Statement of Cash Flows provide information about the Utilities’ cash receipts and payments
from operations, as well as funds provided and used in investing and financing activities.
Notes to Financial Statements
The notes to the financial statements provide additional information that is essential to a full understanding of the
amounts provided in the financial statements.
Required Supplemental Information
The required supplemental information provides historical information about Elk River Municipal Utilities’ defined benefit
pension plan including changes in the net pension liabilities, annual contributions made to the pension plan, and changes
in plan provisions and actuarial assumptions.
Financial Highlights
• The net position of Elk River Municipal Utilities at the close of 2025 was $89,880,637, an increase of $5,026,085
from 2024.
• The ending unrestricted cash and investment balance for 2025 was $24,073,265, an increase of $1.1 million from
2024.
• Electric retail revenue increased $3.6 million (8.4%), driven by a 4.4% increase in kilowatt-hour sales. Residential
usage increased 5.5%, commercial 1.4%, and industrial 4.3%.
• No electric rate increase was implemented in 2025, and rates remained stable.
• Water retail revenue increased $273,000 (9.4%), with total usage increasing 4.7%. Residential usage increased
3.7% and commercial usage increased 5.7%.
• Water rates increased between 1% and 3% depending on usage tier.
• A cost-of-service study was completed in 2025. Resulting rate adjustments are being phased in over four years,
with 2026 rates approved at increases of 4% for electric and 2% for water.
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Financial Analysis of the Utilities
Table A-1
Condensed Statements of Revenues,
Expenses and Changes in Net Position
Increase
2025 2024 (Decrease)
Revenues
Operating 50,004,280$ 46,082,215$ 3,922,065$
Nonoperating 1,993,027 1,776,015 217,012
Total Revenues 51,997,307 47,858,230 4,139,077
Expenses
Operating 45,819,530 43,560,442 2,259,088
Nonoperating 766,535 807,697 (41,162)
Total Expenses 46,586,065 44,368,139 2,217,926
Income Before Contributions and Operating Transfers 5,411,242 3,490,091 1,921,151
Capital Contributions - Developer Infrastructure and Connection Fees 688,392 477,998 210,394
Contribution from Customers 577,319 712,844 (135,525)
Transfers to Other City Funds (1,650,868) (1,527,629) (123,239)
Change in Net Position 5,026,085 3,153,304 1,872,781
Net Position, January 1 84,854,552 81,701,248 3,153,304
Net Position, December 31 89,880,637$ 84,854,552$ 5,026,085$
Table A-2
Condensed Statement of Net Position
Increase
2025 2024 (Decrease)
Assets
Current and other 31,293,211$ 29,660,285 1,632,926$
Capital and other non-current 104,198,765 101,204,766 2,993,999
Total Assets 135,491,976 130,865,051 4,626,925
Total Deferred Outflows of Resources 478,776 383,601 95,175
Liabilities
Current 10,172,974 9,760,324 412,650
Non-current 29,394,306 30,737,715 (1,343,409)
Total Liabilities 39,567,280 40,498,039 (930,759)
Total Deferred Inflows of Resources 6,522,835 5,896,061 626,774
Net Position
Net investment in capital assets 69,108,416 66,966,175 2,142,241
Restricted for debt service 1,779,016 1,779,016 -
Unrestricted 18,993,205 16,109,361 2,883,844
Total Net Position 89,880,637$ 84,854,552$ 5,026,085$
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Revenues. Table A-1 shows that operating revenue increased $3.9 million (8.5%) in 2025 for the Electric and Water
Departments combined. The following chart summarizes operating revenue by department.
Nonoperating revenue consists primarily of transmission rebate revenue in the Electric Department and water tower lease
revenue in the Water Department.
The Electric Department’s transmission assets are recognized in the Midwest Independent Transmission System
Operator (MISO) market. Our transmission assets generate a revenue rebate, which helps offset costs and stabilize our
rates. In 2025, rebates averaged approximately $57,613 per month.
The Water Department generates lease revenue from telecommunications providers for antennas on the water towers.
Lease revenue totaled approximately $461,410 in 2025 and is expected to continue over the term of the existing
agreements.
Expenses. Table A-1 shows that total expenses increased $2.2 million (5.0%) in 2025. The primary driver was a 7.0%
increase in purchased power costs in the Electric Department, which represents 71.6% of total electric expenses. The
following chart summarizes expenses by department.
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Capital Assets and Debt Administration
Capital Assets. The Utilities’ investment in capital assets for its business-type activities as of December 31, 2025, is
shown below (net of accumulated depreciation). This investment in capital assets includes land, intangibles, buildings,
improvements, equipment, and infrastructure. The following table summarizes the balances by type:
Increase
2025 2024 (Decrease)
Land 898,584$ 898,584$ -$
Intangible 24,814,117 24,540,931 273,186
Land Improvements 7,366 8,079 (713)
Buildings 14,693,053 15,236,051 (542,998)
Machinery and Equipment 2,604,156 2,343,954 260,202
Infrastructure 53,492,159 53,368,273 123,886
Construction in Progress 2,335,830 325,998 2,009,832
Total 98,845,265$ 96,721,870$ 2,123,395$
Percent increase (decrease)2.2%
The most significant increases in the Electric Department relate to loss of revenue payment associated with territory
acquisition, recorded as intangible assets.
Both the Electric and Water Department completed Advanced Metering Infrastructure (AMI) projects, contributing to
increases in infrastructure assets.
Machinery and Equipment assets increased due to fleet additions, including the purchase of a new Freightliner Digger
Truck for the Electric Department.
Additional detail is provided in Note 2C in the financial statements.
Long-term Debt: Long-term debt decreased by $1,121,513 in 2025. The current portion of outstanding debt due in 2026
includes $70,000 for General Obligation Water Bonds (Series 2021C) and $1 .035 million for Electric Revenue Bonds
(Series 2016A, 2018A, and 2021B). Additional detail is provided in Note 2D in the financial statements.
Economic Factors and Next Year’s Budgets and Rates
The utility industry continues to evolve as greater emphasis is placed on carbon-free energy, conservation, and long-term
infrastructure sustainability. At the same time, Elk River Municipal Utilities must plan for future growth while maintaining
reliable service and preserving system assets. These factors are expected to place upward pressure on operating and
capital costs in the coming years.
Elk River Municipal Utilities remains committed to prudent financial management, responsible capital planning, and
operational efficiency to help mitigate rate impacts. The Utilities’ goal is to deliver safe, reliable, and cost -effective electric
and water services through strong environmental and financial stewardship.
Elk River Municipal Utilities’ competitive rates and solid financial performance reflect that ongoing commitment to
providing safe, reliable, and affordable services to our community, every home, every business, every day.
Requests for Information
The financial statements, notes, and management’s discussion and analysis are designed to provide a general overview
of Elk River Municipal Utilities’ financial condition. Questions or requests for additional financial information should be
addressed to Elk River Municipal Utilities, PO Box 430, Elk River, Minnesota 55330-0430 or at 13069 Orono Parkway in Elk
River, MN. Additional information may also be found on Elk River Municipal Utilities’ website at ermumn.com.
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FINANCIAL STATEMENTS
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2025
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Elk River Municipal Utilities
Elk River, Minnesota
Statement of Net Position (Continued on the Following Page)
December 31, 2025
Electric Water Total
Assets
Current Assets
Cash and temporary investments 12,912,838$ 11,160,427$ 24,073,265$
Receivables
Accrued interest 5,318 89,279 94,597
Accounts, net of allowance 2,109,538 177,603 2,287,141
Special assessments 17,811 20,116 37,927
Leases - 269,338 269,338
Other 205,280 45,823 251,103
Due from other City funds 8,721 128,850 137,571
Inventories 2,064,304 81,754 2,146,058
Prepaid expenses 178,940 38,255 217,195
Total Current Assets 17,502,750 12,011,445 29,514,195
Non-current Assets
Lease receivable - 5,353,500 5,353,500
Capital Assets
Land 697,870 200,714 898,584
Intangible 29,656,945 - 29,656,945
Land improvements 34,081 - 34,081
Buildings 15,734,276 3,279,913 19,014,189
Machinery and equipment 5,690,816 766,736 6,457,552
Infrastructure 64,097,687 45,839,302 109,936,989
Construction in progress 2,068,580 267,250 2,335,830
Capital Assets, Cost 117,980,255 50,353,915 168,334,170
Less Accumulated Depreciation (44,192,856) (25,296,049) (69,488,905)
Total Capital Assets, Net 73,787,399 25,057,866 98,845,265
Total Non-current Assets 73,787,399 30,411,366 104,198,765
Other Assets
Restricted cash 1,779,016 - 1,779,016
Total Assets 93,069,165 42,422,811 135,491,976
Deferred Outflows of Resources
Deferred pension resources 396,358 82,418 478,776
The notes to the financial statements are an integral part of this statement.
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Elk River Municipal Utilities
Elk River, Minnesota
Statement of Net Position (Continued)
December 31, 2025
Electric Water Total
Current Liabilities
Accounts payable 3,955,556$ 272,415$ 4,227,971$
Salaries and benefits payable 315,321 68,978 384,299
Accrued interest payable 324,857 15,250 340,107
Due to other City funds 1,006,772 144,841 1,151,613
Due to other governments 250,634 2,905 253,539
Customer deposits payable 1,197,466 166,647 1,364,113
Unearned revenue - 234,762 234,762
Compensated absences 974,545 137,025 1,111,570
Bonds payable - current portion 1,035,000 70,000 1,105,000
Total Current Liabilities 9,060,151 1,112,823 10,172,974
Non-current Liabilities
Bonds payable, net - less current portion 26,115,538 1,413,644 27,529,182
Net pension liability 1,541,981 323,143 1,865,124
Total Non-current Liabilities 27,657,519 1,736,787 29,394,306
Total Liabilities 36,717,670 2,849,610 39,567,280
Deferred Inflows of Resources
Deferred pension resources 1,034,353 216,118 1,250,471
Deferred lease resources - 5,272,364 5,272,364
Total Deferred Inflows of Resources 1,034,353 5,488,482 6,522,835
Net Position
Net investment in capital assets 45,649,540 23,458,876 69,108,416
Restricted for debt service 1,779,016 - 1,779,016
Unrestricted 8,284,944 10,708,261 18,993,205
Total Net Position 55,713,500$ 34,167,137$ 89,880,637$
The notes to the financial statements are an integral part of this statement.
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Elk River Municipal Utilities
Elk River, Minnesota
Statement of Revenues, Expenses and Changes in Net Position
For the Year Ended December 31, 2025
Electric Water Total
Operating Revenues
Charges for services 46,148,519$ 3,023,865$ 49,172,384$
Substation credit 4,800 - 4,800
Connection maintenance 382,901 120,418 503,319
Customer penalties 288,178 35,599 323,777
Total Operating Revenues 46,824,398 3,179,882 50,004,280
Operating Expenses
Purchased power 30,577,687 - 30,577,687
Production 1,980 799,154 801,134
Distribution 2,701,193 432,989 3,134,182
Depreciation 3,471,092 1,385,340 4,856,432
Customer accounts 653,527 103,890 757,417
General and administrative 4,571,998 1,120,680 5,692,678
Total Operating Expenses 41,977,477 3,842,053 45,819,530
Operating Income (Loss)4,846,921 (662,171) 4,184,750
Nonoperating Revenues (Expenses)
Interest income (loss)452,949 127,692 580,641
Miscellaneous revenue 841,944 592,933 1,434,877
Interest expense and other (735,069) (31,466) (766,535)
Gain/(Loss) on sale of capital assets (22,491) - (22,491)
Total Nonoperating Revenues (Expenses)537,333 689,159 1,226,492
Income (Loss) before Contributions and Transfers 5,384,254 26,988 5,411,242
Capital Contributions -
Connection Fees - 643,802 643,802
Contributions from Developers - 44,590 44,590
Contribution from Customers 577,319 - 577,319
Transfers to Other City Funds (1,650,868) - (1,650,868)
Total Contributions and Transfers (1,073,549) 688,392 (385,157)
Change in Net Position 4,310,705 715,380 5,026,085
Net Position, January 1 51,402,795 33,451,757 84,854,552
Net Position, December 31 55,713,500$ 34,167,137$ 89,880,637$
The notes to the financial statements are an integral part of this statement.
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Elk River Municipal Utilities
Elk River, Minnesota
Statement of Cash Flows (Continued on the Following Page)
For the Year Ended December 31, 2025
Electric Water Total
Cash Flows from Operating Activities
Receipts from customers and users 46,705,488$ 3,139,758$ 49,845,246$
Other operating cash receipts 423,726 603,928 1,027,654
Payments to suppliers (34,982,406) (1,556,810) (36,539,216)
Payments to employees (3,425,809) (899,297) (4,325,106)
Net Cash Provided
by Operating Activities 8,720,999 1,287,579 10,008,578
Cash Flows from
Noncapital Financing Activities
Transfers to City (1,650,868) - (1,650,868)
(Increase) decrease in due from other City funds (5,151) 21,910 16,759
(Decrease) increase in due to other City funds (137,965) (98,632) (236,597)
Net Cash Provided (Used) by Noncapital
Financing Activities (1,793,984) (76,722) (1,870,706)
Cash Flows from Capital
and Related Financing Activities
Acquisition of capital assets (5,696,617) (630,036) (6,326,653)
Proceeds from connection fees - 643,802 643,802
Proceeds on sale of capital assets 17,540 - 17,540
Principal payments on bonds (990,000) (65,000) (1,055,000)
Interest paid on bonds (811,306) (39,200) (850,506)
Net Cash Provided (Used) by Capital
and Related Financing Activities (7,480,383) (90,434) (7,570,817)
Cash Flows from Investing Activities
Interest on investments 451,265 78,815 530,080
Net Increase (Decrease)
in Cash and Cash Equivalents (102,103) 1,199,238 1,097,135
Cash and Cash Equivalents, January 1 14,793,957 9,961,189 24,755,146
Cash and Cash Equivalents, December 31 14,691,854$ 11,160,427$ 25,852,281$
Reconciliation of Cash and Cash
Equivalents to the Statement of Net Position
Cash and temporary investments 12,912,838$ 11,160,427$ 24,073,265$
Restricted cash 1,779,016 - 1,779,016
Total Cash and Cash Equivalents 14,691,854$ 11,160,427$ 25,852,281$
The notes to the financial statements are an integral part of this statement.
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Elk River Municipal Utilities
Elk River, Minnesota
Statement of Cash Flows (Continued)
For the Year Ended December 31, 2025
Electric Water Total
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities
Operating income 4,846,921$ (662,171)$ 4,184,750$
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities
Other revenue related to operations 841,944 592,933 1,434,877
Bad debt expense 8,782 - 8,782
Depreciation 3,471,092 1,385,340 4,856,432
(Increase) decrease in assets/deferred outflows:
Accounts receivable (108,416) (44,339) (152,755)
Other receivables (65,030) 92,122 27,092
Special assessments receivable (10,494) 4,215 (6,279)
Lease receivable - (889,418) (889,418)
Inventories (426,465) (24,908) (451,373)
Prepaid expenses 73,277 18,081 91,358
Deferred pension resources (74,177) (20,998) (95,175)
Increase (decrease) in liabilities/deferred inflows:
Accounts payable 263,823 (119,975) 143,848
Salaries and benefits payable 282 6,976 7,258
Unearned revenue (4,305) 83,499 79,194
Compensated absences payable 111,397 32,809 144,206
Due to other governments 66,252 (5,716) 60,536
Customer deposits payable 64,793 45,574 110,367
Net pension liability (166,055) (5,841) (171,896)
Deferred pension resources (172,622) (15,722) (188,344)
Deferred lease resources - 815,118 815,118
Net Cash Provided by Operating Activities 8,720,999$ 1,287,579$ 10,008,578$
Noncash Capital and
Related Financing Activities
Amortization of Bond Premium 59,862$ 6,651$ 66,513$
Gain (Loss) on Disposal of Capital Assets (22,491)$ -$ (22,491)$
Book Value of Disposed Capital Assets 106,031$ -$ 106,031$
Capital Assets Purchased on Account 987,321$ 115,346$ 1,102,667$
Contribution of Capital Assets 577,319$ 44,590$ 621,909$
The notes to the financial statements are an integral part of this statement.
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 1: Summary of Significant Accounting Policies
A. Nature of the Business
Elk River Municipal Utilities (the Utilities) is a municipal utility established by action of the City of Elk River (the City)
pursuant to Minnesota statute 412.321 and consequently its Electric and Water funds are enterprise funds of the City. The
Public Utilities Commission (the Commission) members are appointed by the City Council. The Commission determines
all matters of policy. The Commission appoints personnel responsible for the proper administration of all affairs relating
to the Utilities. The Utilities distribute electricity to the residents and businesses of Elk River and parts of Dayton, Big Lake
Township and Otsego, Minnesota. The Utilities distribute water to the residents and businesses of Elk River, Minnesota.
The Utilities has considered all potential units for which it is financially accountable, and other organizations for which t he
nature and significance of their relationship with the Utilities are such that exclusion would cause the Utilities ’ financial
statements to be misleading or incomplete. The Governmental Accounting Standards Board (GASB) has set forth criteria
to be considered in determining financial accountability. These criteria include appointing a voting majority of an
organization’s governing body, and (1) the ability of the primary government to impose its will on that organization or (2)
the potential for the organization to provide specific benefits to or impose specific financial burdens on the primary
government. There are no component units.
B. Measurement Focus, Basis of Accounting and Basis of Presentation
The accounts of the Utilities are organized and operated on the basis of funds . A fund is an independent fiscal and
accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended
purpose and is used to aid management in demonstrating compliance with finance -related legal and contractual
provisions. The minimum number of funds is maintained consistently with legal and managerial requirements.
Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded
on an accrual basis when the exchange takes place.
Non-exchange transactions, in which the Utilities receives value without directly giving equal value in return, include
grants, entitlements and donations. Revenue from grants, entitlements and donations is recognized in the year in which all
eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year
when the resources are required to be used or the year when use is first permitted, matching requirements, in which the
Utilities must provide local resources to be used for a specified purpose, and expenditure requirements, in which the
resources are provided to the Utilities on a reimbursement basis.
Grants and entitlements received before eligibility requirements are met are also recorded as unearned revenue.
The preparation of the financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
Proprietary funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of
accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are
incurred. Proprietary funds include the following fund type:
Enterprise funds account for those operations that are financed and operated in a manner similar to private business or
where the Utilities has decided that the determination of revenues earned, costs incurred and/or net income is necessary
for management accountability.
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 1: Summary of Significant Accounting Policies (Continued)
The Utilities reports the following major proprietary funds:
The Electric fund accounts for the electric distribution operations.
The Water fund accounts for the water distribution operations.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and
expenses generally result from providing services and producing and delivering goods in connection with a proprietary
fund’s principal ongoing operations. The principal operating revenues of the Electric and Water enterprise funds are
charges to customers for sales and service. Operating expenses for enterprise funds include the cost of sales and
services, administrative expenses and depreciation on capital assets. All revenues and expen ses not meeting this
definition are reported as nonoperating revenues and expenses.
C. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position
Cash and Cash Equivalents
The Utilities’ cash and cash equivalents are considered to be cash on hand, demand deposits and short -term investments
with original maturities of three months or less from the date of acquisition. The proprietary funds’ portion in the
government-wide cash and temporary investments pool is considered to be cash and cash equivalents for purposes of
the statements of cash flows.
Cash balances from all funds are pooled and invested, to the extent available, in certificates of deposit and other
authorized investments. Earnings from such investments are allocated on the basis of applicable participation by each of
the funds.
The Utilities may also invest idle funds as authorized by Minnesota statutes, as follows:
1. Direct obligations or obligations guaranteed by the United States or its agencies.
2. Shares of investment companies registered under the Federal Investment Company Act of 1940 and received the
highest credit rating, rated in one of the two highest rating categories by a statistical rating agency, and have a
final maturity of thirteen months or less.
3. General obligations of a state or local government with taxing powers rated “A” or better; revenue obligations
rated “AA” or better.
4. General obligations of the Minnesota Housing Finance Agency rated “A” or better.
5. Obligation of a school district with an original maturity not exceeding 13 months and (i) rated in the highest
category by a national bond rating service or (ii) enrolled in the credit enhancement program pursuant to statute
section 126C.55.
6. Bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System.
7. Commercial paper issued by United States banks corporations or their Canadian subsidiaries of highest quality
category by at least two nationally recognized rating agencies and maturing in 270 days or less.
8. Repurchase or reverse repurchase agreements and securities lending agreements with financial institutions
qualified as a “depository” by the government entity, with banks that are members of the Federal Reserve System
with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal
Reserve Bank of New York, or certain Minnesota securities broker-dealers.
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 1: Summary of Significant Accounting Policies (Continued)
9. Guaranteed Investment Contracts (GIC's) issued or guaranteed by a United States commercial bank, a domestic
branch of a foreign bank, a United States insurance company, or its Canadian subsidiary, whose similar debt
obligations were rated in one of the top two rating categories by a nationally recognized rating agency.
Broker money market funds operate in accordance with appropriate state laws and regulations. The reported value of the
pool is the same as the fair value of the shares. The Utilities categorizes its fair value measurements within the fair value
hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to
measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs
are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The Utilities’ recurring fair value
measurements are listed in detail on page 34 and are valued using a matrix pricing model (Level 2 inputs).
The Utilities has the following recurring fair value measurements as of December 31, 2025:
• Negotiable certificates of deposit of $2,691,658 are valued using a matrix pricing model (Level 2 inputs).
• Asset backed securities of $3,885,642 are valued using a matrix pricing model (Level 2 inputs).
Restricted Assets
The amounts in the restricted cash account are set aside in accordance with the issuing resolution for specific bond
issues. They will be used for future debt service.
Accounts Receivable
Accounts receivable include amounts billed for services provided before year end. The Utilities has established a reserve
for uncollectible accounts which is adjusted annually based on the receivable activity. No substantial losses from present
receivable balances are anticipated. The allowance for uncollectible accounts at December 31, 2025 are shown in the
table below.
Electric 25,355$
Water 250
Total 25,605$
Interfund Receivables and Payables
Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the
fiscal year are referred to as either “interfund receivables/payables” (i.e., the current portion of interfund loans) or
“advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between
funds are reported as “due to/from other funds”.
Inventories and Prepaid items
Inventories of materials and supplies are recorded at average cost, using the first-in, first-out (FIFO) method.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items.
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 1: Summary of Significant Accounting Policies (Continued)
Lease Receivable
The Utilities’ lease receivable is measured at the present value of lease payments expected to be received during the
lease term. Under the lease agreement, the Utilities may receive variable lease payments that are dependent upon the
lessee’s revenue. The variable payments are recorded as an inflow of resources in the period the payment is received.
A deferred inflow of resources is recorded for the lease. The deferred inflow of resources is recorded at the initiation of
the lease in an amount equal to the initial recording of the lease receivable. The deferred inflow of resources is amortized
on a straight-line basis over the term of the lease.
Capital Assets
Capital assets are stated at cost. Capital assets are defined by the Utilities as assets with an initial individual cost of m ore
than $5,000 and an estimated useful life in excess of two years. Expenditures for maintenance and repairs are charged to
operations and expenditures that extend the useful life of the asset are capitalized and depreciated. When assets are
retired or sold, the related cost and accumulated depreciation are removed from the accounts and any gain or loss on
disposition is included as non-operating revenues or expenses. Donated capital assets are recorded at acquisition value
at the date of donation.
Major expenditures for improvements or capital asset projects are capitalized as projects are constructed.
The Utilities follow the policy of providing depreciation on the straight -line method over the estimated useful lives of the
assets, which are as follows:
Description Electric Water
Production 4 - 20 25 - 50
Transmission 30 0
Distribution 10 - 33 25 - 50
General 10 - 50 10 - 50
Machinery, Tools and Equipment 5 - 10 5 - 10
Automobiles 3 - 8 3 - 8
Lives in Years
Deferred Outflows of Resources
In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of
resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net
assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditu re)
until then. The Utilities has one item, deferred pension resources, which qualifies for reporting in this category. Deferred
pension resources result from actuarial calculation and current year pension contributions subsequent to the
measurement date.
Compensated Absences
Vacation: All vacation benefits can carry over from year to year and will be payable upon termination or retirement. Upon
retirement, vacation can also be converted to cash and deposited into their Post Employment Health Care Savings Plan
account. Unused vacation carryover is limited to the number of hours accrued during the previous year.
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 1: Summary of Significant Accounting Policies (Continued)
Sick Leave: Sick leave can accumulate to a maximum of 960 hours from year to year. Upon termination employees will
have 50% of unused sick leave, up to a maximum of 960 hours, converted to cash and deposited into their Post
Employment Health Care Savings Plan account. Upon retirement employees will have 50-100% of unused sick leave, up
to a maximum of 960 hours, converted to cash and deposited into their Post Employment Health Care Savings Plan
account.
The liability for vacation and sick pay is reported as a liability in the respective funds at year end.
Postemployment Benefits other than Pensions
Under Minnesota statute 471.61, subdivision 2b., public employers must allow retirees and their dependents to continue
coverage indefinitely in an employer-sponsored health care plan, under the following conditions: 1) Retirees must be
receiving (or eligible to receive) an annuity from a Minnesota public pension plan, 2) Coverage must continue in group
plan until age 65, and retirees must pay no more than the group premium, and 3) Retirees may obtain dependent coverage
immediately before retirement. Elk River Municipal Utilities has switched to age-based medical premiums and no longer
has an Other Post-Employment Benefits liability. Since medical premiums are age-based, the premiums are equal to the
expected true cost of retiree coverage. As a result, there is no implicit subsidy for these benefits. There is also no explicit
subsidy, since retirees must pay the full premium to remain covered during retirement.
Pensions
For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense,
information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions
to/deductions from PERA’s fiduciary net position have been determined on the same basis as they are reported by PERA
except that PERA’s fiscal year end is June 30. For this purpose, plan contributions are recognized as of employer payroll
paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms.
Investments are reported at fair value.
The total pension expense for all plans recognized by the Utilities for the year ended December 31, 2025 was ($64,889).
The components of pension expense are noted in the plan summaries in Note 4.
Long-term Obligations
Long-term debt is reflected as a liability in the fund issuing the obligation. Bond premiums and discounts are amortized
over the life of the bonds. Bond issuance costs are reported as an expense in the period incurred.
Performance Metrics and Incentive Compensation
Through the Utilities Performance Metric-based Incentive Compensation system (UPMIC) the Utilities employees will have
an opportunity, as a group, to each earn a maximum of 2% of their total gross wage paid during the Measurement Period.
The percentage of UMPIC is calculated using a Scorecard. The Scorecard has five categories: Safety, Reliability and
Quality of Utility Services, Workforce Development, Financial Goals, Communications/Customer Service, and Strategic
Plan, which are divided into various weighted factors. This incentive was created to help the Utilities to become more
efficient and successful in meeting strategic goals and mission and deliver improved value to the Utilities customers. The
liability at year end is recorded as part of accrued wages.
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 1: Summary of Significant Accounting Policies (Continued)
Deferred Inflows of Resources
In addition to liabilities, the statement of net position and fund financial statements will sometimes report a separate
section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of
resources (revenue) until that time. The Utilities has two types of items which qualify for reporting in this category. The
items, deferred pension resources and deferred lease resources, are reported in the statement of net position and results
from actuarial calculations and future lease receipts.
Net Position
Net position represents the difference between assets and deferred outflows of resources and liabilities and deferred
inflows of resources. Net position is displayed in three components:
a. Net investment in capital assets - Consists of capital assets, net of accumulated depreciation reduced by any
outstanding debt attributable to acquired capital assets.
b. Restricted net position - Consists of net position restricted when there are limitations imposed on their use
through external restrictions imposed by creditors, grantors, laws or regulations of other governments.
c. Unrestricted net position - All other net positions that do not meet the definition of “restricted” or “net investment
in capital assets”.
When both restricted and unrestricted resources are available for use, it is the Utilities’ policy to use restricted resource s
first, then unrestricted resources as they are needed.
Note 2: Detailed Notes on All Funds
A. Deposits and Investments
Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the Utilities’ deposits a nd
investments may not be returned or the Utilities will not be able to recover collateral securities in the possession of an
outside party. In accordance with Minnesota statutes and as authorized by the Commission, the Utilities maintains
deposits at those depository banks, all of which are members of the Federal Reserve System.
Minnesota statutes require that all Utilities deposits be protected by insurance, surety bond or collateral. The fair value of
collateral pledged must equal 110% of the deposits not covered by insurance or bonds, w ith the exception of irrevocable
standby letters of credit issued by Federal Home Loan Banks as this type of collateral only requires collateral pledged
equal to 100% of the deposits not covered by insurance or bonds.
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 2: Detailed Notes on All Funds (Continued)
Authorized collateral in lieu of a corporate surety bond includes:
• United States government Treasury bills, Treasury notes, Treasury bonds;
• Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation
service available to the government entity;
• General obligation securities of any state or local government with taxing powers which is rate d “A” or better by a
national bond rating service, or revenue obligation securities of any state or local government with taxing powers
which is rated “AA” or better by a national bond rating service;
• General obligation securities of a local government with taxing powers may be pledged as collateral against
funds deposited by that same local government entity;
• Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by
written evidence that the bank’s public debt is rated “AA” or better by Moody’s Investors Service, Inc., or Standard
& Poor’s Corporation; and
• Time deposits that are fully insured by any federal agency.
Minnesota statutes require that all collateral shall be placed in safekeeping in a restricted account at a Federal Reserve
Bank, or in an account at a trust department of a commercial bank or other financial institution that is not owned or
controlled by the financial institution furnishing the collateral. The selection should be approved by the government entity.
At December 31, 2025, the Utilities’ carrying amount of deposits, bank balance, FDIC coverage and pledged collateral are
shown in the chart below.
Carrying amount of deposits 14,131,634$
Bank Balance 14,093,035$
Covered by FDIC (550,695)
Remaining balance collateralized with securities pledged in the Utilities' name 13,542,340$
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 2: Detailed Notes on All Funds (Continued)
Investments
The Utilities’ investment balances were as follows for December 31, 2025:
Credit Segmented
Quality/Time
Ratings (1)Distribution (2)Amount Level 1 Level 2 Level 3
Pooled Investments
Broker Money Markets N/A less than 1 year 5,142,547$ -$ -$ -$
Non-pooled Investments
Negotiable certificates of deposits N/A less than 1 year 982,196 - 982,196 -
Negotiable certificates of deposits N/A 1 - 5 years 1,709,462 - 1,709,462 -
Asset backed securities N/A 1 - 5 years 3,503,405 - 3,503,405 -
Asset backed securities N/A more than 5 years 382,237 - 382,237 -
Total Non-pooled Investments 6,577,300 - 6,577,300 -
Total Investments 11,719,847$ -$ 6,577,300$ -$
Types of Investments
Fair Value Measurement Using
(1) Ratings were provided by various credit rating agencies where applicable to indicate associated credit risk.
(2) Interest rate risk is disclosed using the segmented time distribution method.
N/A Indicates not applicable.
A reconciliation of cash and temporary investments as shown in the financial statements for the Utilities follows:
Deposits 14,131,634$
Investments 11,719,847
Cash on Hand 800
Total 25,852,281$
Cash and Temporary Investments
Unrestricted 24,073,265$
Restricted 1,779,016
Total 25,852,281$
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 2: Detailed Notes on All Funds (Continued)
The investments of the Utilities are subject to the following risks:
• Credit Risk. Is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings
are provided by various credit rating agencies and where applicable, indicate associated credit risk . Minnesota
statutes and the Utilities’ investment policy limit the Utilities’ investments to the list on page 28 of the notes.
• Custodial Credit Risk. The custodial credit risk for investments is the risk that, in the event of the failure of the
counterparty to a transaction, a government will not be able to recover the value of investment or collateral
securities that are in the possession of an outside party. According to their investment policy the Utilities’
portfolio maturities shall be staggered to avoid undue concentration of assets with one broker -dealer or financial
institution.
• Concentration of Credit Risk. Is the risk of loss attributed to the magnitude of a government's investment in a
single issuer. According to their investment policy the Utilities’ portfolio maturities shall be staggered to avoid
undue concentration of assets in any one type of instrument. As of December 31, 2025 the Utilities has no
individual issuers invested in 5.0% or more of its total investment portfolio.
• Interest Rate Risk. Is the risk that changes in interest rates will adversely affect the fair value of an investment.
According to their investment policy the Utilities’ will stagger maturities to avoid undue concentration of assets at
a specific maturity sector.
B. Lease Receivable
The Utilities has multiple leases with AT&T, Sprint, and Verizon that allows them to place antennas on water towers. The
lease payments increase yearly. As of December 31, 2025, the Utilities’ lease and interest receivable balance was
$5,710,788. The lease receivable is partially offset with deferred inflow of lease resources.
Lease
Receivable Interest
Authorized Issue Maturity Balance at Receivable at Balance at
and Issued Date Date Year End Year End Year End
Sprint Lease on Johnson St.741,068$ 1.41 %06/01/10 05/31/35 564,794$ 4,662$ 569,456$
Sprint Lease on Gary St.694,752 1.41 06/01/10 05/31/35 529,494 4,371 533,865
Sprint Lease on Auburn St.694,752 1.41 06/01/10 05/31/35 529,494 4,371 533,865
Verizon Lease on Johnson St.837,781 1.59 09/01/14 08/31/39 709,599 3,768 713,367
Verizon Lease on Gary St. 837,781 1.59 09/01/14 08/31/39 709,599 3,768 713,367
Verizon Lease on Auburn St.909,094 1.70 01/01/17 12/31/42 847,515 14,521 862,036
Verizon Lease on Freeport St.724,310 1.78 10/01/20 09/30/45 642,180 2,861 645,041
AT&T Lease on Freeport St.1,090,163 4.46 09/01/25 08/31/50 1,090,163 49,628 1,139,791
Total Lease Receivable 5,710,788$
Interest
Description Rate
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 2: Detailed Notes on All Funds (Continued)
Future lease receivable payments are as follows:
Year Ending
December 31,Principal Interest Total
2026 269,338$ 121,447$ 390,785$
2027 288,450 117,291 405,741
2028 308,502 112,779 421,281
2029 329,537 107,893 437,430
2030 351,600 102,610 454,210
2031 - 2035 1,893,276 418,358 2,311,634
2036 - 2040 1,156,960 269,342 1,426,302
2041 - 2045 605,681 155,443 761,124
2046 - 2050 419,494 49,827 469,321
Total 5,622,838$ 1,454,990$ 7,077,828$
C. Capital Assets
Capital asset activity for the year ended December 31, 2025 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Capital Assets not
being Depreciated
Land 898,584$ -$ -$ 898,584$
Intangible 7,169,412 941,321 - 8,110,733
Construction in progress 325,998 4,894,832 (2,885,000) 2,335,830
Total Capital Assets
not being Depreciated 8,393,994 5,836,153 (2,885,000) 11,345,147
Capital Assets being Depreciated
Intangible 21,546,212 - - 21,546,212
Land improvements 34,081 - - 34,081
Buildings 18,925,576 88,613 - 19,014,189
Machinery and equipment 5,970,147 767,809 (280,404) 6,457,552
Infrastructure 106,719,859 3,278,283 (61,153) 109,936,989
Total Capital Assets
being Depreciated 153,195,875 4,134,705 (341,557) 156,989,023
Less Accumulated
Depreciation for
Intangible (4,174,693) (668,135) - (4,842,828)
Land improvements (26,002) (713) - (26,715)
Buildings (3,689,525) (631,611) - (4,321,136)
Machinery and equipment (3,626,193) (446,103) 218,900 (3,853,396)
Infrastructure (53,351,586) (3,109,870) 16,626 (56,444,830)
Total Accumulated
Depreciation (64,867,999) (4,856,432) 235,526 (69,488,905)
Total Capital Assets
being Depreciated, Net 88,327,876 (721,727) (106,031) 87,500,118
Business-type Activities
Capital Assets, Net 96,721,870$ 5,114,426$ (2,991,031)$ 98,845,265$
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 2: Detailed Notes on All Funds (Continued)
Depreciation expense was charged to functions/programs of the Utilities as follows:
Business-type Activities
Electric 3,471,092$
Water 1,385,340
Total Depreciation Expense - Business-type Activities 4,856,432$
D. Long-term Debt
General Obligation Revenue Bonds
The City of Elk River issues general obligation bonds to provide funds for the acquisition and construction of major capital
facilities. The following bonds are to be paid out of Utilities’ revenues and are backed by the full faith and credit of the
City.
Authorized Issue Maturity Balance at
and Issued Date Date Year End
G.O. Water Revenue
Bonds, Series 2021C 1,615,000 2.00 - 4.00 %06/10/21 08/01/41 1,380,000$
Rate
Interest
Description
The annual debt service requirements to maturity for the general obligation revenue bonds are as follows:
Year Ending
December 31,Principal Interest Total
2026 70,000$ 36,600$ 106,600$
2027 70,000 33,800 103,800
2028 75,000 31,000 106,000
2029 75,000 28,000 103,000
2030 80,000 25,000 105,000
2031 - 2035 430,000 85,900 515,900
2036 - 2040 480,000 39,300 519,300
2041 100,000 2,000 102,000
Total 1,380,000$ 281,600$ 1,661,600$
In 2025, annual principal and interest payment on the bonds required about 3.3% of revenues from the Water fund. The
principal and interest paid and total customer revenues for the Water fund were $104,200 and $3,179,882, respectively.
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 2: Detailed Notes on All Funds (Continued)
Revenue Bonds
The revenue bonds were issued to facilitate the membership buy-in with MMPA and construction of major capital
facilities and are to be repaid from future revenue pledged from the Electric fund. They will be retired from net revenues of
the fund.
Authorized Issue Maturity Balance at
and Issued Date Date Year End
Electric Revenue Bonds, Series 2016A 9,755,000$ 2.00 - 4.00 %07/14/16 02/01/36 6,510,000$
Electric Revenue Bonds, Series 2018A 10,000,000 3.50 - 5.00 09/26/18 08/01/48 8,595,000
Electric Revenue Bonds, Series 2021B 11,810,000 2.00 - 5.00 05/13/21 08/01/51 10,910,000
Total Revenue Bonds 26,015,000$
Interest
RateDescription
The annual debt service requirements to maturity for the revenue bonds are as follows:
Year Ending
December 31,Principal Interest Total
2026 1,035,000$ 774,406$ 1,809,406$
2027 1,075,000 738,256 1,813,256
2028 1,105,000 700,606 1,805,606
2029 1,140,000 663,606 1,803,606
2030 1,190,000 624,488 1,814,488
2031 - 2035 6,525,000 2,505,300 9,030,300
2036 - 2040 4,670,000 1,635,681 6,305,681
2041 - 2045 4,580,000 1,035,806 5,615,806
2046 - 2050 4,145,000 353,481 4,498,481
2051 550,000 12,376 562,376
Total 26,015,000$ 9,044,006$ 35,059,006$
v
In 2025, annual principal and interest payment on the bonds required about 3.8% of revenues from the Electric fund. The
principal and interest paid and total customer revenues for the Electric fund were $1,801,306 and $46,824,398,
respectively.
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 2: Detailed Notes on All Funds (Continued)
Changes in Long-term Liabilities
Long-term liability activity for the year ended December 31, 2025 was as follows:
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Business-type Activities
Bonds Payable
General obligation
revenue bonds 1,445,000$ -$ (65,000)$ 1,380,000$ 70,000$
Revenue bonds 27,005,000 - (990,000) 26,015,000 1,035,000
Unamortized premium
on bonds 1,305,695 - (66,513) 1,239,182 -
Total Bonds Payable, Net 29,755,695 - (1,121,513) 28,634,182 1,105,000
Compensated
Absences Payable 967,364 1,248,897 (1,104,691) 1,111,570 1,111,570
Business-type Activity
Long-term
Liabilities 30,723,059$ 1,248,897$ (2,226,204)$ 29,745,752$ 2,216,570$
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 2: Detailed Notes on All Funds (Continued)
E. Interfund Receivables, Payables and Transfers
Interfunds
The composition of interfund balances at year end is as follows:
Amount Purpose
Electric City 8,721$ Billing services
Total Electric Fund Receivable From City 8,721
Water City 128,850 TIF 22 Water access charge
Total Water Fund Receivable From City 128,850
Total Receivable From City 137,571$
City Electric 256,111$ Franchise fees
City Electric 113,043 Revenue transfer
City Electric 248,779 Billed sewer on behalf of City
City Electric 113,613 Billed stormwater on behalf of City
City Electric 167,514 Billed trash on behalf of City
City Electric 103,458 Shared costs
City Electric 302 Vinyl stickers for trucks
City Electric 2,256 Fuel
City Electric 1,696 Parts and labor
Total Electric Fund Payable to City 1,006,772
City Water 766$ Fuel
City Water 275 Parts and labor
City Water 25,865 Shared costs
City Water 117,935 2025 Street improvements
Total Water Fund Payable to City 144,841
Total Payable to City 1,151,613$
Payable FundReceivable Fund
Transfers
During the year ended December 31, 2025, the Utilities made the following transfers:
Transfer to
Other
City Funds
Electric 1,650,868$
• The transfer out of the Electric fund was the annual transfer of 4% of 2025 Elk River revenues to City funds.
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 3: Other Information
A. Territorial Acquisition Agreement
In 2015, the Utilities entered into an agreement to transfer ownership of electric plants and electric service to customers
in eight designated areas receiving service from Connexus Energy. Specific payment terms have been negotiated for 5
years, and if any of the eight areas are not acquired within this timeframe, the payment terms may be ren egotiated. In
2019, the Utilities acquired the final service areas.
The agreed cost of property purchased from Connexus Energy is net book value, integration expenses, and a loss of
revenue payment. The loss of revenue payment for each area acquired is based on a formula outlined in the agreement,
payable for the subsequent ten years after initial purchase.
The Utilities acquired designated service area 1 in 2015 for $877,807, service area 2 in 2016 for $663,586, service areas 3
and 4 in 2017 for $276,776, service areas 5 and 6 in 2018 for $298,736 , and service areas 7 and 8 in 2019 for $78,457. The
loss of revenue payments made were $411,157 in 2017, $570,725 in 2018, $751,860 in 2019, $834,185 in 2020, $857,538
in 2021, $924,187 in 2022, $940,467 in 2023, $933,159 in 2024, $946,133 in 2025, and $941,321 in 2026. All amounts paid
are included in property and equipment, and loss of revenue payments are included in intangible assets.
B. Risk Management
The Utilities are exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and
omissions; injuries to employees; and natural disasters for which the Utilities carries commercial insurance. The Utilities
obtain insurance through participation in the League of Minnesota Cities Insurance Trust (LMCIT), which is a risk sharing
pool with approximately 800 other governmental units. The Utilities pays an annual premium to LMCIT for its workers
compensation and property and casualty insurance. The LMCIT is self-sustaining through member premiums and will
reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded the
Utilities’ coverage in any of the past three fiscal years.
Liabilities are reported when it is probable that a loss has occurred, and the amount of the loss can be reasonably
estimated. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBNRs). The Utilities’
management is not aware of any incurred but not reported claims.
C. Commitments
The Utilities entered into an agreement in 2007 with Central Minnesota Municipal Power Agency (CMMPA) to acquire an
interest in the CAPX Initiative Brookings Project, a power transmission line in Minnesota. The project is a 250 -mile, 345 kV
AC transmission line with a rating of 2,300 MW, between Brookings, South Dakota, and the Southeast Twin Cities. In 2011
there was increased opportunity for investment, and subsequent agreements provide the Utilities with an ownership share
of $5.6 million or 18.89%. Revenues have been less than originally projected due to the decrease in Rate of Return (ROE)
issued by FERC. The original ROE 12.38% has been reduced to 10.48%. The current return of 10.48% on this investment
through CMMPA is designed to provide approximately $80K annually over the 40-year project life. With majority of the
distribution once the bonds are paid off. The project under recovery in 2025 is estimated to be $241K. The bond
obligations are satisfied first, distribution to participants is directly affected by under recovery. The under recovery is
rolled forward under the true up. However, the under recovery in 2025 (approximately $241K) would be included in the
revenue requirements in 2027. The transmission payments for 2025 were $15,650.
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 4: Defined Benefit Pension Plans - Statewide
A. Plan Description
General Employees Retirement Plan (General Plan)
B. Benefits Provided
General Employees Plan Benefits
The Utilities participates in the following cost-sharing multiple-employer defined benefit pension plans administered by
the Public Employees Retirement Association of Minnesota (PERA). These plan provisions are established and
administered according to Minnesota Statutes chapters 353, 353D, 353E, 353G, and 356. Minnesota Statutes chapter
356 defines each plan’s financial reporting requirements. PERA’s defined benefit pension plans are tax qualified plans
under Section 401(a) of the Internal Revenue Code.
Membership in the General Plan includes employees of counties, cities, townships, schools in non-certified
positions, and other governmental entities whose revenues are derived from taxation, fees, or assessments. Plan
membership is required for any employee who is expected to earn more than $425 in a month, unless the employee
meets exclusion criteria.
PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute and can
only be modified by the state Legislature. Vested, terminated employees who are entitled to benefits, but are not
receiving them yet, are bound by the provisions in effect at the time they last terminated their public service. When a
member is “vested,” they have earned enough service credit to receive a lifetime monthly benefit after leaving public
service and reaching an eligible retirement age. Members who retire at or over their Social Security full retirement age
with at least one year of service qualify for a retirement benefit.
General Employees Plan requires three years of service to vest. Benefits are based on a member’s highest average
salary for any five successive years of allowable service, age, and years of credit at termination of service. Two
methods are used to compute benefits for General Plan members. Members hired prior to July 1, 1989, receive the
higher of the Step or Level formulas. Only the Level formula is used for members hired after June 30, 1989. Under the
Step formula, General Plan members receive 1.2% of the highest average salary for each of the first 10 years of
service and 1.7% for each additional year. Under the Level formula, General Plan members receive 1.7% of highest
average salary for all years of service. For members hired prior to July 1, 1989 a full retirement benefit is available
when age plus years of service equal 90 and normal retirement age is 65. Members can receive a reduced
retirement benefit as early as age 55 if they have three or more years of service. Early retirement benefits are
reduced by .25% for each month under age 65. Members with 30 or more years of service can retire at any age with a
reduction of .25% for each month the member is younger than age 62. The Level formula allows General Plan
members to receive a full retirement benefit at age 65 if they were first hired before July 1, 1989 or at age 66 if they
were hired on or after July 1, 1989. Early retirement begins at age 55 with an actuarial reduction applied to the benefit.
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 4: Defined Benefit Pension Plans - Statewide (Continued)
C. Contributions
General Employees Fund Contributions
D. Pension Costs
General Employees Fund Pension Costs
Utilities' proportionate share of the net pension liability 1,865,124$
State of Minnesota's proportionate share of the net pension
liability associated with the Utilities 44,993
Total 1,910,117$
Minnesota Statutes chapters 353, 353E, 353G, and 356 set the rates for employer and employee contributions.
Contribution rates can only be modified by the state Legislature.
General Plan members were required to contribute 6.50% of their annual covered salary in fiscal year 2025 and the
Utilities was required to contribute 7.50% for General Plan members. The Utilities’ contributions to the General
Employees Fund for the year ended December 31, 2025, were $397,427. The Utilities' contributions were equal to the
required contributions as set by state statute.
At December 31, 2025, the Utilities reported a liability of $1,865,124 for its proportionate share of the General Employees
Fund’s net pension liability. The Utilities’ net pension liability reflected a reduction due to the State of Minnesota’s
contribution of $16 million. The State of Minnesota is considered a non-employer contributing entity and the state’s
contribution meets the definition of a special funding situation. The State of Minnesota’s proportionate share of the net
pension liability associated with the Utilities totaled $44,993.
Benefit increases are provided to benefit recipients each January. The postretirement increase is equal to 50% of the
cost-of-living adjustment (COLA) announced by the SSA, with a minimum increase of at least 1% and a maximum of
1.5%. The 2025 annual increase was 1.25%. Recipients that have been receiving the annuity or benefit for at least a
full year as of the June 30 before the effective date of the increase will receive the full increase. Recipients receiving
the annuity or benefit for at least one month but less than a full year as of the June 30 before the effective date of the
increase will receive a prorated increase.
The net pension liability was measured as of June 30, 2025, and the total pension liability used to calculate the net
pension liability was determined by an actuarial valuation as of that date. The Utilities’ proportion of the net pension
liability was based on the Utilities’ contributions received by PERA during the measurement period for employer payroll
paid dates from July 1, 2024 through June 30, 2025, relative to the total employer contributions received from all of
PERA’s participating employers. The Utilities’ proportionate share was 0.0563% at the end of the measurement period
and 0.0551% for the beginning of the period.
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Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 4: Defined Benefit Pension Plans - Statewide (Continued)
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between expected and actual economic experience 177,706$ -$
Changes in actuarial assumptions 44,939 429,159
Net difference between projected and actual investment earnings - 742,151
Changes in proportion 59,636 79,161
Employer contributions subsequent to the measurement date 196,495 -
Total 478,776$ 1,250,471$
2026 (223,334)$
2027 (373,660)
2028 (238,621)
2029 (132,575)
E. Long-Term Expected Return on Investment
Domestic Equity 33.5 %5.10 %
International Equity 16.5 5.30
Fixed Income 25.0 0.75
Private Markets 25.0 5.90
Total 100.0 %
The State Board of Investment, which manages the investments of PERA, prepares an analysis of the
reasonableness on a regular basis of the long-term expected rate of return using a building-block method in which best-
estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined
to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset
allocation percentages. The target allocation and best estimates of geometric real rates of return for each major asset
class are summarized in the following table:
Long-Term
For the year ended December 31, 2025, the Utilities recognized pension expense of ($57,988) for its proportionate share
of the General Employees Plan’s pension expense. In addition, the Utilities recognized an additional ($6,901) as pension
expense (and grant revenue) for its proportionate share of the State of Minnesota’s contribution of $16 million to the
General Employees Fund.
At December 31, 2025, the Utilities reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
The $196,495 reported as deferred outflows of resources related to pensions resulting from Utilities' contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended
December 31, 2026. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions
will be recognized in pension expense as follows:
Target Expected Return
Asset Class Allocation on Investment
44
132
Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 4: Defined Benefit Pension Plans - Statewide (Continued)
F. Actuarial Method and Assumptions
The following changes in actuarial assumptions and plan provisions occurred in 2025:
General Employees Fund
Changes in Actuarial Assumptions:
Changes in Plan Provisions:
G. Discount Rate
The total pension liability for each of the cost-sharing defined benefit plans was determined by an actuarial valuation as
of June 30, 2025, using the entry age normal actuarial cost method. The long-term rate of return on pension plan
investments used to determine the total liability is 7%. The 7% assumption is based on a review of inflation and
investment return assumptions from a number of national investment consulting firms. The review provided a range
of investment return rates considered reasonable by the actuary. An investment return of 7% is within that range.
- The post-retirement benefit increase formula changed to 100% of the Social Security annual increase, between 1%
and 1.75%, beginning January 1, 2026. If the funded ratio (on a market value of assets basis) is less than 85% for
the last two consecutive annual valuations or is less than 80% in the most recent actuarial valuation, the
maximum is reduced to 1.5%. Previously, the benefit increase was 50% of the Social Security annual increase,
between 1% and 1.5%.
- The 1% additional employer contribution is eliminated when the plan reaches 98% funded status (on an actuarial
value of assets basis); this contribution was previously scheduled to stop when the plan reached 100% funded
status.
The discount rate used to measure the total pension liability in 2025 was 7.0%. The projection of cash flows used to
determine the discount rate assumed that contributions from plan members and employers will be made at rates set in
Minnesota Statutes. Based on these assumptions, the fiduciary net position of the General Employees Plan was
projected to be available to make all projected future benefit payments of current plan members. The long-term
expected rate of return on pension plan investments was applied to all periods of projected benefit payments to
determine the total pension liability.
- Inflation is assumed to be 2.25% for the General Employees Plan.
- Benefit increases after retirement are assumed to be 1.50% for the General Employees Plan.
Salary growth assumptions in the General Employees Plan range in annual increments from 11.5% after one year of
service to 3% after 27 years of service.
Mortality rates for the General Employees Plan are based on the Pub-2010 General Employee Mortality Table. The tables
are adjusted slightly to fit PERA’s experience.
Actuarial assumptions for the General Employees Plan are reviewed every four years. The General Employees Plan was
last reviewed in 2022. The assumption changes were adopted by the board and became effective with the
July 1, 2023 actuarial valuation.
- The combined service annuity loading factors increased from 15% to 19% for vested, terminated members and
from 3% to 44% for non-vested, terminated members.
- The assumed post-retirement benefit increase changed from 1.25% to 1.5%.
45
133
Elk River Municipal Utilities
Elk River, Minnesota
Notes to the Financial Statements
December 31, 2025
Note 4: Defined Benefit Pension Plans - Statewide (Continued)
H. Pension Liability Sensitivity
1%1%
Decrease (6.00%)Current (7.00%)Increase (8.00%)
General Employees Fund 4,530,094$ 1,865,124$ (296,766)$
I. Pension Plan Fiduciary Net Position
The following presents the Utilities’ proportionate share of the net pension liability for all plans it participates in,
calculated using the discount rate disclosed in the preceding paragraph, as well as what the Utilities’ proportionate share
of the net pension liability would be if it were calculated using a discount rate one percentage point lower or one
percentage point higher than the current discount rate:
Detailed information about each pension plan’s fiduciary net position is available in a separately issued PERA
financial report that includes financial statements and required supplementary information. That report may be obtained
on the Internet at www.mnpera.org.
46
134
REQUIRED SUPPLEMENTARY INFORMATION
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2025
47
135
Elk River Municipal Utilities
Elk River, Minnesota
Required Supplementary Information
For the Year Ended December 31, 2025
Schedule of Employer’s Share of Public Employees Retirement Association Net Pension Liability - General Employees
Fund
State's
Proportionate
Utilities'Share of
Proportionate the Net Pension
Share of Liability Utilities'
Fiscal the Net Pension Associated with Covered
Year Liability the Utilities Total Payroll
Ending (a)(b)(a+b)(c)
06/30/25 0.0563 %1,865,124$ 44,993$ 1,910,117$ 4,907,823$ 38.0 %90.8 %
06/30/24 0.0551 2,037,020 52,673 2,089,693 4,663,185 43.7 86.7
06/30/23 0.0576 3,220,927 88,808 3,309,735 4,581,529 70.3 83.1
06/30/22 0.0570 4,514,419 132,415 4,646,834 4,272,380 105.7 76.7
06/30/21 0.0550 2,348,746 71,625 2,420,371 3,957,147 59.4 87.0
06/30/20 0.0540 3,237,547 99,718 3,337,265 3,848,179 84.1 79.0
06/30/19 0.0520 2,874,964 89,329 2,964,293 3,680,233 78.1 80.2
06/30/18 0.0520 2,884,747 94,615 2,979,362 3,494,641 82.5 79.5
06/30/17 0.0540 3,447,324 43,337 3,490,661 3,478,022 99.1 75.9
06/30/16 0.0508 4,124,708 53,908 4,178,616 3,151,720 130.9 68.9
Utilities'
Proportionate
Share of the
Net Pension
Plan Fiduciary
Utilities'
Liability as a
Net Position
Proportion of
Percentage of
as a PercentageCovered
the Net Pension Payroll of the Total
Liability (a/c)Pension Liability
Schedule of Employer’s Public Employees Retirement Association Contributions - General Employees Fund
Contributions in
Relation to the
Statutorily Statutorily Contribution Utilities'
Required Required Deficiency Covered
Year Contribution Contribution (Excess)Payroll
Ending (a)(b)(a-b)(c)
12/31/25 397,427$ 397,427$ -$ 5,299,027$ 7.5 %
12/31/24 349,758 349,758 - 4,663,435 7.5
12/31/23 339,650 339,650 - 4,528,667 7.5
12/31/22 333,178 333,178 - 4,442,376 7.5
12/31/21 312,376 312,376 - 4,165,013 7.5
12/31/20 289,644 289,644 - 3,861,920 7.5
12/31/19 285,668 285,668 - 3,808,909 7.5
12/31/18 265,424 265,424 - 3,538,988 7.5
12/31/17 257,780 257,780 - 3,437,072 7.5
12/31/16 244,012 244,012 - 3,253,493 7.5
(b/c)
Contributions as
a Percentage of
Covered Payroll
48
136
Elk River Municipal Utilities
Elk River, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2025
Notes to the Required Supplementary Information - General Employees Fund
Changes in Actuarial Assumptions
2025 - The combined service annuity loading factors increased from 15% to 19% for vested , terminated members and
from 3% to 44% for non-vested, terminated members. The assumed post-retirement benefit increase changed from 1.25%
to 1.5%.
2024 - Rates of merit and seniority were adjusted, resulting in slightly higher rates. Assumed rates of retirement were
adjusted as follows: increase the rate of assumed unreduced retirements, slight adjustments to Rule of 90 retirement
rates, and slight adjustments to early retirement rates for Tier 1 and Tier 2 members. Minor increase in assumed
withdrawals for males and females. Lower rates of disability. Continued use of Pub -2010 general mortality table with
slight rate adjustments as recommended in the most recent experience study. Minor changes to form of payment
assumptions for male and female retirees. Minor changes to assumptions made with respect to missing participant data.
2023 - The investment return assumption and single discount rate were changed from 6.5 % to 7.00%.
2022 - The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021.
2021 - The investment return and single discount rates were changed from 7.50% to 6.50%, for financial reporting
purposes. The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020.
2020 - The price inflation assumption was decreased from 2.50% to 2.25%. The payroll growth assumption was
decreased from 3.25% to 3.00%. Assumed salary increase rates were changed as recommended in the June 30, 2019
experience study. The net effect is assumed rates that average 0.25% less than previous rates. Assumed rates of
retirement were changed as recommended in the June 30, 2019 experience study. The changes result in more unreduced
(normal) retirements and slightly fewer Rule of 90 and early retirements. Assumed rates of termination were changed as
recommended in the June 30, 2019 experience study. The new rates are based on service and are generally lower than
the previous rates for years 2-5 and slightly higher thereafter. Assumed rates of disability were changed as recommended
in the June 30, 2019 experience study. The change results in fewer predicted disability retirements for males and females.
The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010
General Mortality table, with adjustments. The base mortality table for disabled annuitants was changed from the RP -
2014 disabled annuitant mortality table to the PUB -2010 General/Teacher disabled annuitant mortality table, with
adjustments. The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019. The assumed
spouse age difference was changed from two years older for females to one year older. The assumed number of married
male new retirees electing the 100% Joint & Survivor option changed from 35% to 45%. The assumed number of married
female new retirees electing the 100% Joint & Survivor option changed from 15% to 30%. The corresponding number of
married new retirees electing the Life annuity option was adjusted accordingly.
2019 - The mortality projection scale was changed from MP-2017 to MP-2018.
2018 - The morality projection scale was changed from MP-2015 to MP-2017. The assumed benefit increase was
changed from 1.00% per year through 2044 and 2.50% per year thereafter to 1.25% per year.
2017 - The Combined Service Annuity (CSA) loads were changed from 0.8% for active members and 60% for vested and
non-vested deferred members. The revised CSA loads are now 0.0% for active member liability, 15.0% for vested deferred
member liability and 3.0% for non-vested deferred member liability. The assumed post-retirement benefit increase rate
was changed from 1.0% per year for all years to 1.0% per year through 2044 and 2.5% per year thereafter.
49
137
Elk River Municipal Utilities
Elk River, Minnesota
Required Supplementary Information (Continued)
For the Year Ended December 31, 2025
Notes to the Required Supplementary Information - General Employees Fund (Continued)
Changes in Actuarial Assumptions (Continued)
2016 - The assumed annual increase rate was changed from 1.0% per year through 2035 and 2.5% per year thereafter to
1.0% per year for all years. The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was
changed from 7.9% to 7.5%. Other assumptions were changed pursuant to the experience study dated June 30, 2015.
The assumed future salary increases, payroll growth and inflation were decreased by 0.25 % to 3.25% for payroll growth
and 2.50% for inflation.
Changes in Plan Provisions
2025 - The post-retirement benefit increase formula changed to 100% of the Social Security annual increase, between 1%
and 1.75%, beginning January 1, 2026. If the funded ratio (on a market value of assets basis) is less than 85% for the last
two consecutive annual valuations or is less than 80% in the most recent actuarial valuation, the maximum is reduced to
1.5%. Previously, the benefit increase was 50% of the Social Security annual increase, between 1% and 1.5%.The 1%
additional employer contribution is eliminated when the plan reaches 98% funded status (on an actuarial value of assets
basis); this contribution was previously scheduled to stop when the plan reached 100% funded status.
2024 - The workers’ compensation offset for disability benefits was eliminated. The actuarial equivalent factors updated
to reflect the changes in assumptions.
2023 - An additional one-time direct state aid contribution of $170.1 million will be contributed to the Plan on
October 1, 2023. The vesting period of those hired after June 30, 2010, was changed from five years of allowable service
to three years of allowable service. The benefit increase delay for early retirements on or after January 1, 2024, was
eliminated. A one-time, non-compounding benefit increase of 2.5% minus the actual 2024 adjustment will be payable in a
lump sum for calendar year 2024 by March 31, 2024.
2022 - There were no changes in plan provisions since the previous valuation.
2021 - There were no changes in plan provisions since the previous valuation.
2020 - Augmentation for current privatized members was reduced to 2.0% for the period July 1, 2020 through
December 31, 2023 and 0.0% after. Augmentation was eliminated for privatizations occurring after June 30, 2020.
2019 - The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0
million per year. The state’s special funding contribution was changed prospectively, requiring $16.0 million due per year
through 2031.
2018 - The augmentation adjustment in early retirement factors is eliminated over a five-year period starting July 1, 2019,
resulting in actuarial equivalence after June 30, 2024. Interest credited on member contributions decreased from 4.00 % to
3.00%, beginning July 1, 2018. Deferred augmentation was changed to 0.00%, effective January 1, 2019. Augmentation
that has already accrued for deferred members will still apply. Contribution stabilizer provisions were repealed. Annual
increases were changed from 1.00% per year with a provision to increase to 2.50% upon attainment of 90.00% funding
ratio to 50.00% of the Social Security Cost of Living Adjustment, not less than 1.00 % and not more than 1.50%, beginning
January 1, 2019. For retirements on or after January 1, 2024, the first benefit increase is delayed until the retiree reaches
normal retirement age; does not apply to Rule of 90 retirees, disability benefit recipients, or survivors. Actuarial e quivalent
factors were updated to reflect revised mortality and interest assumptions.
2017 - The State’s contribution for the Minneapolis Employees Retirement Fund equals $16,000,000 in 2017 and 2018,
and $6,000,000 thereafter. The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund
changed from $21,000,000 to $31,000,000 in calendar years 2019 to 2031. The state’s contribution changed from
$16,000,000 to $6,000,000 in calendar years 2019 to 2031.
2016 - There were no changes in plan provisions since the previous valuation.
50
138
SUPPLEMENTARY INFORMATION
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2025
51
139
Elk River Municipal Utilities
Elk River, Minnesota
Supplementary Information
Schedule of Operating Revenues and Expenses (Continued on the Following Page)
For the Year Ended December 31, 2025
Electric Water Total
Operating Revenues
Charges for services
Elk River 41,395,983$ 3,023,865$ 44,419,848$
Otsego 4,251,487 - 4,251,487
Big Lake Township 219,682 - 219,682
Dayton 281,367 - 281,367
Substation credit 4,800 - 4,800
Connection maintenance 382,901 120,418 503,319
Customer penalties 288,178 35,599 323,777
Total Operating Revenues 46,824,398 3,179,882 50,004,280
Operating Expenses
Purchased power 30,577,687 - 30,577,687
Production
Supervision and labor - 80,063 80,063
Supplies and power for pumping 1,028 354,618 355,646
Maintenance of structures - 128,715 128,715
Maintenance of equipment 952 235,758 236,710
Total production 1,980 799,154 801,134
Transmission and distribution
Supervision and labor 35,183 9,011 44,194
Maintenance of overhead lines 713,239 - 713,239
Maintenance of underground lines 529,390 - 529,390
Maintenance of station equipment 156,906 - 156,906
Transportation 247,509 22,890 270,399
Maintenance of customer service 6,423 80,792 87,215
Maintenance of customer meters 265,972 322,500 588,472
Miscellaneous 746,571 (2,204) 744,367
Total transmission and distribution 2,701,193 432,989 3,134,182
Services to City 238,983 871 239,854
Depreciation and amortization 3,471,092 1,385,340 4,856,432
Customer accounts expense
Meter reading 32,539 6,209 38,748
Billing and collection 373,223 96,810 470,033
Bad debts 8,782 - 8,782
Total customer accounts expense 414,544 103,019 517,563
52
140
Elk River Municipal Utilities
Elk River, Minnesota
Supplementary Information
Schedule of Operating Revenues and Expenses (Continued)
For the Year Ended December 31, 2025
Electric Water Total
Operating Expenses (Continued)
General and administrative
Salaries 952,805$ 284,945$ 1,237,750$
Employee pensions and benefits 2,136,646 522,502 2,659,148
Dues 140,529 77,034 217,563
Office supplies and billing expense 131,769 34,354 166,123
Office utilities and maintenance 29,439 7,360 36,799
Consulting fees 129,767 61,360 191,127
Legal and audit 38,507 40,771 79,278
Environmental compliance 32,994 2,006 35,000
Conservation improvement project 577,238 771 578,009
Insurance 151,178 42,015 193,193
Telephone 34,258 8,483 42,741
Advertising 13,391 7,363 20,754
Education and meetings 200,473 30,956 231,429
Miscellaneous 3,004 760 3,764
Total general and administrative 4,571,998 1,120,680 5,692,678
Total Operating Expenses 41,977,477 3,842,053 45,819,530
Operating Income (Loss)4,846,921 (662,171) 4,184,750
Nonoperating Revenues (Expenses)
Interest income 452,949 127,692 580,641
Miscellaneous revenue 841,944 592,933 1,434,877
Interest expense and other (735,069) (31,466) (766,535)
Gain/(loss) on sale of capital assets (22,491) - (22,491)
Total Nonoperating Revenues 537,333 689,159 1,226,492
Income before Contributions and Transfers 5,384,254 26,988 5,411,242
Capital Contributions
Connection Fees - 643,802 643,802
Contributions from Developers - 44,590 44,590
Contributions from Customers 577,319 - 577,319
Transfers to Other City Funds (1,650,868) - (1,650,868)
Total Contributions and Transfers (1,073,549) 688,392 (385,157)
Change in Net Position 4,310,705 715,380 5,026,085
Net Position, January 1 51,402,795 33,451,757 84,854,552
Net Position, December 31 55,713,500$ 34,167,137$ 89,880,637$
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141
THIS PAGE IS LEFT
BLANK INTENTIONALLY
54
142
OTHER INFORMATION
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2025
55
143
2016 2017 2018 2019
Operating Revenues
Sales of electricity 34,569,098$ 36,458,061$ 39,039,573$ 37,640,985$
Other operating revenues (expenses)(104,702) (337,237) (259,668) 453,648
Total Operating Revenues 34,464,396 36,120,824 38,779,905 38,094,633
Operating Expenses
Purchased power 23,991,069 25,402,576 26,710,514 24,851,301
Distribution 2,041,810 2,385,263 2,660,231 2,546,634
Services to the City 230,312 202,421 215,296 210,791
Depreciation 2,005,093 2,046,935 2,297,349 2,856,258
Other operating expenses 3,558,315 3,357,276 3,318,016 4,090,102
Total Operating Expenses 31,826,599 33,394,471 35,201,406 34,555,086
Operating Income 2,637,797 2,726,353 3,578,499 3,539,547
Capital Contributions - 209,051 352,104 125,764
Transfers to Other City Funds (1,089,287) (1,113,264) (1,188,664) (1,157,445)
Special Item 330,923 - - -
Nonoperating Revenues 8,991 145,034 218,586 82,440
Net Income 1,888,424$ 1,967,174$ 2,960,525$ 2,590,306$
Percent of Change
Sales of electricity 5.702%5.464%7.081%-3.582%
Purchased power 8.881%5.883%5.149%-6.961%
Percent of Revenues
Purchased power 69.611%70.327%68.877%65.236%
Miscellaneous
2016 2017 2018 2019
kWh's purchased 311,990,595 320,349,631 339,917,944 336,570,637
kWh's sold 301,838,731 313,952,561 331,124,011 325,981,176
Line loss 10,151,864 6,397,070 8,793,933 10,589,461
Percent of line loss 3.254%1.997%2.587%3.146%
Revenues Per kWh Sold 0.1145$ 0.1161$ 0.1179$ 0.1155$
Cost Per kWh Purchased 0.0769$ 0.0793$ 0.0786$ 0.0738$
Number of Customers 10,816 11,448 11,983 12,244
Total Contribution/Transfers to City 1,089,287$ 1,113,264$ 1,188,664$ 1,157,445$
Summary of Operations
Unaudited Statistics
Elk River Municipal Utilities
Elk River, Minnesota
Electric Fund
Summary of Operations and Unaudited Statistics
For the Years Ended December 31, 2016 through December 31, 2025
56
144
2020 2021 2022 2023 2024 2025
37,714,965$ 39,719,268$ 42,395,048$ 43,986,269$ 42,557,925$ 46,148,519$
207,542 1,041,676 1,428,008 464,470 617,177 675,879
37,922,507 40,760,944 43,823,056 44,450,739 43,175,102 46,824,398
24,240,440 28,169,146 31,544,604 31,232,788 28,590,698 30,577,687
2,458,699 2,585,796 2,808,964 2,539,170 2,704,352 2,703,173
229,086 224,814 231,861 253,564 229,359 238,983
2,896,839 2,957,685 3,062,751 3,177,120 3,317,829 3,471,092
4,133,940 3,688,401 4,763,425 4,855,110 5,148,660 4,986,542
33,959,004 37,625,842 42,411,605 42,057,752 39,990,898 41,977,477
3,963,503 3,135,102 1,411,451 2,392,987 3,184,204 4,846,921
174,557 385,316 298,935 489,452 690,934 577,319
(1,340,218) (1,407,734) (1,531,633) (1,620,378) (1,527,629) (1,650,868)
- - - - - -
98,427 (193,410) (62,440) 335,209 474,055 537,333
2,896,269$ 1,919,274$ 116,313$ 1,597,270$ 2,821,564$ 4,310,705$
0.197%5.314%6.737%3.753%-3.247%8.437%
-2.458%16.207%11.983%-0.988%-8.459%6.950%
63.921%69.108%71.982%70.264%66.220%65.303%
2020 2021 2022 2023 2024 2025
337,016,741 347,974,385 344,137,778 341,681,928 327,715,292 340,639,930
324,469,638 341,047,710 333,644,951 329,773,349 316,756,062 330,803,279
12,547,103 6,926,675 10,492,827 11,908,579 10,959,230 9,836,651
3.723%1.991%3.049%3.485%3.344%2.888%
0.1162$ 0.1165$ 0.1271$ 0.1334$ 0.1344$ 0.1395$
0.0719$ 0.0810$ 0.0917$ 0.0914$ 0.0872$ 0.0898$
12,365 12,789 12,955 13,232 13,466 13,610
1,340,218$ 1,407,734$ 1,531,633$ 1,620,378$ 1,527,629$ 1,650,868$
57
145
2016 2017 2018 2019
Operating Revenues
Sales of water 2,173,521$ 2,326,245$ 2,515,821$ 2,303,670$
Operating Expenses
Operating expenses less depreciation 1,325,831 1,614,095 1,430,539 1,521,719
Services to City - - - 1,583
Depreciation 1,148,310 1,191,894 1,193,745 1,147,149
Total Operating Expenses 2,474,141 2,805,989 2,624,284 2,670,451
Total Operating Income (Loss)(300,620)$ (479,744)$ (108,463)$ (366,781)$
Percent of Change
Sales of water (1.32%) 7.03% 8.15% (8.43%)
Miscellaneous
2016 2017 2018 2019
Water Pumped (Gallons)801,603,000 788,182,000 822,546,000 778,595,000
Water Sold (Gallons)666,656,000 686,032,000 737,689,000 664,924,000
Water Loss 16.83% 12.96% 10.32% 14.60%
Revenues Per 1,000 Gallons Pumped 2.71$ 2.95$ 3.06$ 2.96$
Revenues Per 1,000 Gallons Sold 3.26$ 3.39$ 3.41$ 3.46$
Number of Customers 4,903 5,011 5,140 5,256
Water Supplier Services
2016 2017 2018 2019
Flushing Hydrants 46,816,000 47,470,500 47,894,000 48,240,500
Back Washing 4,430,000 4,125,542 3,823,903 3,850,801
Fire Department Use 5,000,000 5,000,000 5,000,000 5,000,000
New Water Main Disinfectant and Flushing 5,000,000 5,000,000 5,000,000 5,000,000
Street and Sewer Maintenance 1,800,000 1,550,000 1,550,000 1,550,000
Water Tower Paint and Clean/Maintenance 4,000,000 4,000,000 4,000,000 4,000,000
Well Maintenance 7,358,000 7,000,000 7,000,000 7,000,000
Water Supplier Services (Gallons)74,404,000 74,146,042 74,267,903 74,641,301
Summary of Operations
Unaudited Statistics
Elk River Municipal Utilities
Elk River, Minnesota
Water Fund
Summary of Operations and Unaudited Statistics
For the Years Ended December 31, 2016 through December 31, 2025
58
146
2020 2021 2022 2023 2024 2025
2,674,544$ 3,120,660$ 2,988,835$ 3,383,999$ 2,907,113$ 3,179,882$
1,540,043 2,004,037 2,050,084 2,021,225 2,346,511 2,455,842
463 1,259 540 - - 871
1,133,179 1,139,802 1,117,357 1,174,752 1,223,033 1,385,340
2,673,685 3,145,098 3,167,981 3,195,977 3,569,544 3,842,053
859$ (24,438)$ (179,146)$ 188,022$ (662,431)$ (662,171)$
16.10% 16.68% (4.22%) 13.22% (14.09%) 9.38%
2020 2021 2022 2023 2024 2025
872,733,000 977,238,000 886,422,000 1,004,271,000 841,107,000 867,629,000
756,383,000 863,076,000 805,096,000 915,053,000 775,275,000 811,870,000
13.33% 11.68% 9.17% 8.89% 7.83% 6.43%
3.06$ 3.19$ 3.37$ 3.37$ 3.46$ 3.67$
3.54$ 3.62$ 3.71$ 3.55$ 3.75$ 3.92$
5,320 5,430 5,551 5,611 5,708 5,812
2020 2021 2022 2023 2024 2025
53,779,500 19,850,600 23,831,500 25,390,750 25,506,250 25,679,500
6,441,523 5,967,131 5,130,934 5,771,470 5,679,945 6,032,507
5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000
5,000,000 5,000,000 2,021,250 3,003,000 1,886,500 2,290,750
1,550,000 1,550,000 1,550,000 1,550,000 1,550,000 6,500,000
5,000,000 4,000,000 4,000,000 3,000,000 2,000,000 1,003,795
7,000,000 7,000,000 7,000,000 7,000,000 7,000,000 7,000,000
83,771,023 48,367,731 48,533,684 50,715,220 48,622,695 53,506,552
59
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60
148
OTHER REPORT
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2025
61
149
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62
150
INDEPENDENT AUDITOR’S REPORT
ON MINNESOTA LEGAL COMPLIANCE
Public Utilities Commission
Elk River Municipal Utilities
Elk River, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of America, the financial
statements of the Elk River Municipal Utilities (the Utilities) of the City of Elk River, Minnesota (the City) as of and for the
year ended December 31, 2025, and the related notes to the financial statements which collectively comprises the Utilities
basic financial statements, and have issued our report thereon dated April 7, 2026.
In connection with our audit, nothing came to our attention that caused us to believe that the Utilities failed to comply with
the provisions of the contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims
and disbursements, and miscellaneous provisions sections of the Minnesota Legal Compliance Audit Guide for Cities,
promulgated by the State Auditor pursuant to Minn. Stat. § 6.65, insofar as they relate to accounting matters. However,
our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed
additional procedures, other matters may have come to our attention regarding the Utilities’ noncompliance with the
above referenced provisions, insofar as they relate to accounting matters.
This report is intended solely for the information and use of those charged with governance and management of the
Public Utilities Commission, and the State Auditor and is not intended to be, and should not be, used by anyone other than
these specified parties.
Abdo
Minneapolis, Minnesota
April 7, 2026
63
151
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Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Melissa Karpinski – Finance Manager
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
4.2
SUBJECT:
2025 Year End Reserve Balance
ACTION REQUESTED:
Designate unrestricted reserve balances exceeding target levels for Water funds.
BACKGROUND:
The purpose for reserves to a public utility is to meet bond covenants and provide a financial
buffer to mitigate unforeseen or volatile operational costs. In 2010, the Commission adopted a
financial reserves policy that defined the structure and formula on how financial reserves will
be calculated for the Electric Utility and Water Utility funds. This policy was most recently
revised in December 2025. The policy revisions provide additional transparency by clearly
defining the purpose and target levels of utility reserves. It is also consistent with Governance
Policy G.4i2 Financial Reserves, adopted by the commission in 2017.
DISCUSSION:
As defined by policy, the year-end reserve balances are reviewed following completion of the
annual audit. Any balances exceeding target levels shall be unrestricted with a default
designation as working capital. The Commission shall then consider optimal use of these
unrestricted reserves.
Staff recommend that unrestricted reserve balances exceeding target levels in the Water Utility
fund be designated for an inter-utility loan to the Electric Utility.
FINANCIAL IMPACT:
None
ATTACHMENTS:
• ERMU Policy – A.6 – Financial Reserves
• ERMU Policy – G.4i2 – Financial Reserves
• Electric Reserves Policy Calculation
• Water Reserves Policy Calculation
152
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Page 1 of 3
MANAGEMENT POLICY
Section: Category:
Management Administration
Policy Reference: Policy Title:
A.6 Financial Reserves
1.0 PURPOSE
In order to maintain stable rates and provide reliable services, Elk River Municipal Utilities
(ERMU) requires financial buffers in the form of reserves to mitigate changes in costs or
operational performance. For ERMU there are two utility funds, the Electric Utility and the
Water Utility. These funds shall have separate reserves. Their reserve balances shall be classified
as either Restricted for Debt Service or Unrestricted Designated Reserve. This policy, and the
target levels and criteria herein, are intended for use as a guide only.
The target levels for these reserves shall be determined by the criteria herein. These target levels
and target criteria will be reviewed annually, modified by Utilities Commission to support the
long-term goals of ERMU, and adopted with the annual budget. Unless otherwise specified by
bond covenants, these reserve balances shall be invested consistent with ERMU’s Management
Investment Policy.
2.0 ELECTRIC UTILITY RESERVE CLASSIFICATIONS
Restricted for Debt Service
This reserve is established to maintain compliance with bond covenants.
The target level for this reserve shall be set at the level specified by bond covenants.
Unrestricted Designated Reserve
This reserve is established to address the short-term financial variability inherent in operating an
Electric Utility. Potential sources of this variability include but are not limited to failure to
achieve budgeted levels of net income, reduction in overall customer or system usage, changes in
cost of purchased power, general operational exposures, and risks associated with natural
disasters.
153
ERMU Management Policy – A.6 Financial Reserves
______________________________________________________________________________
______________________________________________________________________________
Page 2 of 3
The target levels for the unrestricted, designated reserve shall be set as follows
Annual Debt Service Reserve Current year's principal and interest payment due on
outstanding debt
Operating Reserve Two months of budgeted operating expenses (including
purchased power)
Capital Reserve Average of the next five-year capital plan in the budget
Catastrophic Reserve Estimated current replacement cost of a substation
3.0 WATER UTILITY RESERVE CLASSIFICATIONS
Restricted for Debt Service
This reserve is established to maintain compliance with bond covenants.
The target level for this reserve shall be set at the level specified by bond covenants.
Restricted for Trunk/Capacity
This reserve is established to ensure water access charges and trunk funds received are restricted
to trunk/capacity related capital projects.
There is no target level for this reserve. Funds accumulate until needed for trunk/capacity
expansion projects.
Unrestricted Designated Reserve
This reserve is established to address the short-term financial variability inherent in operating a
Water Utility. Potential sources of this variability include but are not limited to: failure to
achieve budgeted levels of net income, reduction in overall customer or system usage, general
operational exposures, and risks associated with natural disasters.
The target levels for the unrestricted, designated reserve shall be set as follows
Annual Debt Service Reserve Current year's principal and interest payment due on
outstanding debt
Operating Reserve Two months of budgeted operating expenses
Capital Reserve Average of the next five-year capital plan in annual budget
Catastrophic Reserve Estimated replacement cost of a water treatment plant
4.0 Year-end Reserve Balances
If the year-end reserve balances are above their target levels after the completion of the year-end
audit, these balances shall be unrestricted with a defaulting designation as working capital. The
Utilities Commission shall then consider optimal uses of these unrestricted reserves through any
of the following but not limited to: working capital, designated for power costs (electric fund
only), debt reduction, retention for reserve fund growth for future needs, or use for rate
stabilization or reduction.
154
ERMU Management Policy – A.6 Financial Reserves
______________________________________________________________________________
______________________________________________________________________________
Page 3 of 3
If the year-end reserve balances are below their target levels after the completion of the year-end
audit, the Utilities Commission shall consider the balances and plan for their replenishment to
target levels in a timely manner.
5.0 INTER-UTILITY ADJUSTMENTS
If the year-end reserve balances are sufficient to sustain the transfer, the Utilities Commission
may opt to use inter-utility adjustments for loans between electric and water utilities in lieu of
external borrowing.
POLICY HISTORY:
Adopted May 11, 2010
Revised May 10, 2011
*Moved November 12, 2019
Revised July 14, 2020
Revised December 9, 2025
*As part of the Policy Manual Initiative, authority of this Financial Reserves Policy was
delegated to management on November 12, 2019, and the policy was moved to the Management
Policy Manual.
155
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Page 1 of 1
COMMISSION POLICY
Section: Category:
Governance Delegation to Management Policies
Policy Reference: Policy Title:
G.4i2 Financial Reserves
PURPOSE:
With this policy, the Commission sets forth its expectations for the General Manager concerning
the maintenance of ERMU’s financial reserves.
POLICY:
The General Manager shall ensure that ERMU maintains cash reserves for its electric and water
utility enterprises that are reasonable, prudent and necessary to:
1. Meet or exceed the requirements of all bond covenants
2. Demonstrate to rating agencies and investors that ERMU’s utility enterprises are credit worthy
3. Provide liquidity that is adequate, along with other risk-management measures, to ensure
ongoing operation of the utility systems
4. Stabilize revenue requirements and customer rates
5. Manage the level of debt by funding a portion of the capital investments
In addition, the General Manager shall implement a Management Financial Reserves Policy that
sets forth the designated reserve funds to be maintained, along with their purposes and methods
for determining appropriate target levels and requirements for internal controls, monitoring and
reporting. Designated reserve funds may include, but are not limited to reserves restricted for
debt service and unrestricted designated reserves.
POLICY HISTORY:
Adopted December 12, 2017
Revised July 14, 2020
156
Elk River Municipal Utilities - Reserves Policy 4/2026ProposedERMU Electric Fund - 61DescriptionAnnual Average Monthly2026 Budgeted Expenditures47,108,326$ 3,925,694$ 2026 Budgeted Interest Expense759,406$ 63,284$ 2026 Budgeted Purchased Power Cost31,659,362$ 2,638,280$ 2026 Budgeted Principal and Interest1,794,406$ 2025 Average 5 year capital plan (non-debt)4,158,850$ Average Substation Replacement Cost3,500,000$ 2025 Peak Monthly Purchased Power Cost3,536,856$ 2026 Budgeted Depreciation3,533,136$ 294,428$ 2026 Reserves2025 Reserves2025 Audited Cash Balances14,691,854$ 14,793,957$ Restricted2026 Calculated Reserves1,779,016$ 1,779,016$ Reserves2026 Proposed Calculated Reserves1,779,016$ Unrestricted2026 Calculated Reserves17,178,076$ 9,988,709$ Designated2026 Proposed Calculated Annual Debt Service Reserve1,794,406$ Reserves2026 Proposed Calculated Operating Reserve7,724,820$ 2026 Proposed Calculated Capital Reserve3,393,612$ 2026 Proposed Calculated Catastrophic Reserve-$ Unrestricted 2026 Calculated Reserves-$ 3,026,233$ Reserves2026 Proposed Calculated Reserves-$ 2026 Total Proposed Calculated Reserves14,691,854$ 157
Elk River Municipal Utilities - Reserves Policy 4/2026ProposedERMU Water Fund - 62DescriptionAnnual Average Monthly2026 Budgeted Expenditures4,164,879$ 347,073$ 2026 Budgeted Interest Expense35,433$ 2,953$ 2026 Budgeted Principal and Interest105,433$ n/a2025 Average 5 year capital plan (non-debt)1,778,280$ Average WTP Replacement Cost8,000,000$ 2026 Budgeted Depreciation1,415,000$ 117,917$ 2026 Reserves2025 Reserves2025 Audited Cash Balances11,160,427$ 9,961,189$ Restricted2026 Calculated Reserves-$ -$ Reserves2026 Proposed Calculated Debt Service Reserves-$ 2026 Proposed Calculated WAC/Truck Reserves-$ Unrestricted2026 Calculated Reserves10,571,954$ 1,423,172$ Designated2026 Proposed Calculated Annual Debt Service Reserve105,433$ Reserves2026 Proposed Calculated Operating Reserve688,241$ 2026 Proposed Calculated Capital Reserve1,778,280$ 2026 Proposed Calculated Catastrophic Reserve8,000,000$ Unrestricted 2026 Calculated Reserves588,473$ 8,538,018$ Reserves2026 Proposed Calculated Reserves588,473$ 2026 Total Proposed Calculated Reserves11,160,427$ 158
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Page 1 of 1
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Melissa Karpinski – Finance Manager
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
4.3
SUBJECT:
2025 Utilities Performance Incentive Compensation Distribution
ACTION REQUESTED:
Award the Performance Metrics and Compensation Distribution of 2% to qualifying employees
per the terms of the policy
BACKGROUND:
The Commission adopted a Performance Metrics program in December 2012, for
implementation January 1, 2013, and revised in December 2024. This program was based on
the American Public Power Association’s Reliable Public Power Provider (RP3) program with the
addition of financial goals. As defined by policy, this company performance-based program is
designed to incentivize employee commitment towards the company’s success. “The successful
performance of ERMU is measured in terms of the Utilities’ ability to meet our strategic goals
and mission. By improving our efficiency and level of performance in meeting our strategic goals
and mission we can improve the delivery of value to our customers.” Divided into categories
representing core values of the company and again into sub-categories that are quantifiable,
this program is designed to track goals that require the companywide support of employees to
continually achieve. When the employees work together as a team to achieve these goals, the
company recognizes a corresponding increase in value to our customers.
DISCUSSION:
The performance metrics were tracked and communicated to the employees and the
Commission quarterly throughout the year. The program has functioned as intended, with
employee motivation and efforts aligning to enhance company performance. Attached are the
final results of the scorecard, showing that employees have successfully met all company
performance targets. In accordance with the policy, a multiplier of 100% will be applied, and
qualifying employees will be eligible for a 2% distribution.
FINANCIAL IMPACT:
Budgeted item.
ATTACHMENTS:
• ERMU Policy – G.4g1 – Performance Metrics and Incentive Compensation
• ERMU Performance Metrics and Incentive Compensation Policy Scorecard - 2025
159
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Page 1 of 3
COMMISSION POLICY
Section: Category:
Governance Delegation to Management Policies
Policy Reference: Policy Title:
G.4g1 Performance Metrics and Incentive
Compensation
1.0 PURPOSE AND SUMMARY
The successful performance of the ERMU is measured in terms of the Utilities’ ability to meet
our strategic goals and mission. By improving our efficiency and level of performance in
meeting our strategic goals and mission we can improve the delivery of value to our customers.
To create incentives for employees to take personal responsibility for accomplishment of the
Utilities’ strategic goals and mission, the Utilities has established a Utilities Performance
Metrics-based Incentive Compensation system (“UPMIC”). Through UPMIC the employees of
ERMU will have an opportunity, as a group, to earn annual incentive compensation for each
qualifying employee by contributing individually to the overall success of ERMU on a daily
basis.
Under UPMIC, either all qualifying employees will earn an incentive compensation distribution
in a given year, or none will. And not only will incentive compensation under UPMIC in that
sense be an all or nothing proposition each year, but there will be an equal percentage share basis
for all on which the incentive compensation will be paid out if earned. This appropriately reflects
the reality that we all succeed, or fall short, together as a team.
To administer the UPMIC and measure objectively the level of performance that must be
achieved for qualifying employees to earn incentive compensation, the attached UMPIC
Performance Metrics Policy Scorecard (“Scorecard”) has been created. The Scorecard will be
subject to revision annually based on the performance metrics adopted by the Commission
annually for the coming year (“Performance Metrics”). By tracking and measuring the
Performance Metrics and creating incentive for employees to achieve the goals the Metrics
embody, the Utilities believes it will be better able to focus efforts and resources on becoming
more efficient and successful in meeting our strategic goals and mission and delivering improved
value to our customers.
160
ERMU Commission Policy – G.4g1 Performance Metrics and Incentive Compensation
______________________________________________________________________________
______________________________________________________________________________
Page 2 of 3
2.0 UTILITIES PERFORMANCE METRICS SCORECARD
As reflected on the Scorecard, the Performance Metrics are divided into the following five
categories: Safety, Reliability and Quality of Utility Services; Workforce Development;
Financial Goals; Communications/Customer Service; and Strategic Plan. These categories are
used to characterize the overall strategic goals and mission of ERMU.
Under the Performance Metrics, these five main categories are then divided into various
weighted factors, or sub-categories. These sub-categories, their percentage weight, and the goal
or target for each, shall be established by the Utilities Commission annually. The Performance
Metrics as adopted are reflected in the attached Scorecard. As discussed above, the Performance
Metrics and thus the Scorecard are subject to modification and adoption by the Commission
annually, which will normally occur during the Utilities’ budgeting process.
3.0 UTILITIES PERFORMANCE INCENTIVE COMPENSATION DISTRIBUTION
CRITERIA
Under the UPMIC a Performance-Based Compensation Incentive, if earned, will be distributed
to Qualifying Employees annually. The total amount available to be earned by Utilities
employees as a Performance Based Compensation Incentive each year will be an amount up to
2% of the Utilities’ total gross wages paid to Qualifying Employees during the Measurement
Period.
The measuring period used to calculate how much, if any, of the Performance-Based
Compensation Incentive the Utilities employees have earned will be the calendar year (the
“Measurement Period”). After the Measurement Period is complete and the Commission has
received its audit in the spring of the year following the Measurement Period, the Performance
Metrics will be applied to determine whether the Performance-Based Compensation Incentive
has been earned for the Measurement Period. In doing so, the performance of the Utilities in each
sub-category will be reviewed. If the sub-category performance meets or exceeds the established
goal, the sub-category will be scored with the designated percentage that will contribute to a total
Performance Metrics Multiplier to be used as a factor in calculating the distribution earned, if
any, as shown in the Scorecard (“Multiplier”). The Multiplier has a maximum factoring effect of
100%. The Multiplier is used to determine how much, if any, of the amount established by the
Commission for the UPMIC Performance-Based Compensation Incentive has been earned in the
Measurement Period. (For example, if the Multiplier equals 100%, the distribution would equal
2%. If the Multiplier equals 75%, the distribution would equal 1.5%.) In other words, the
amount established by the Commission may be earned on an annual basis by the group of
Qualifying Employees (as defined below in Section 4.0) in whole, in part, or not at all.
After the Multiplier is calculated on the Scorecard, the Performance Based Compensation
Incentive earned, if any, will be distributed to Qualifying Employees. The total amount to be
distributed as the Performance Based Compensation Incentive will be the product of: a) the
Multiplier; and b) 2% of the Utilities’ total gross wages paid to Qualifying Employees during the
Measurement Period.
161
ERMU Commission Policy – G.4g1 Performance Metrics and Incentive Compensation
______________________________________________________________________________
______________________________________________________________________________
Page 3 of 3
The percentage of the Performance Based Compensation Incentive awarded to each Qualifying
Employee will be based on the gross wages of each Qualifying Employee during the
Measurement Period. To each Qualifying Employee, the distribution would be allocated in a
lump sum equal to the product of: a) the Multiplier; and b) 2% of that employee’s gross wages
paid during the Measurement Period. For example, if a Qualifying Employee’s gross wages
earned during the Measurement Period were equal to $50,000 and the Multiplier was equal to
100%, the total distribution to that employee would be equal to: $50,000 x 2% x 100% = $1000.
If the Utilities’ margins are negative due to sudden and unforeseen material changes to the
industry or customer base, the Commission reserves the right to withhold distribution of the
Performance Based Compensation Incentive in any given year.
4.0 EMPLOYEE QUALIFICATIONS AND DISTRIBUTION OF THE INCENTIVE
COMPENSATION
An employee of the Utilities will be eligible for participation in the Performance Metrics
Incentive Compensation distribution if the employee meets the following eligibility requirements
and is therefore a “Qualifying Employee” for purposes of this policy.
a. The employee is in good standing with the Utilities. An employee would not be eligible
while on disciplinary probation or a performance improvement action plan.
b. The employee was a Full Time or Part Time employee during the Measurement Period.
Seasonal, and Temporary employees are not eligible.
The UPMIC Performance Based Compensation Incentive distribution will be made to Qualifying
Employees on the first payroll date after the thirty-day period following the date on which the
Commission formally receives its annual auditor’s report in an open meeting.
POLICY HISTORY:
Adopted December 12, 2012
Revised January 14, 2020
Revised December 13, 2022, effective January 1, 2023
Revised December 12, 2023, effective January 1, 2024
Revised December 10, 2024, effective January 1, 2025
GP:3300714 v4
162
Elk River Municipal Utilities
G.4g1a - Performance Metrics and Incentive Compensation Policy Scorecard - 2025
Category Percent Sub-Category
Sub-
Percent Goal Score
Awarded
Multiplier
Percent
Water Quality Standards 5 Meet
Requirements met requirement
Lead and Copper quality 5 90th percentile met requirement
Bacteria Detection 5 0 positive
samples 0 met requirement
CAIDI 5 <120 Min 63 met requirement
SAIDI 5 <60 Min 19 met requirement
SAIFI 5 <0.4 0.3 met requirement
Line Loss 5 <5%3% met requirement
Water Loss 5 <12%2% met requirement
Employee Turnover 10 < 7.5%2% met requirement
Participation in Recommended
and Mandatory Trainings 10 95%100% met requirement
Margins/Net Profit 15 > Budget met requirement
Inventory Accuracy 5 >98%100% met requirement
Clean Energy Choice Program
Participation 5 +30 net +66 met requirement
Conservation Improvement
Program 5 >95%100% met requirement
Strategic Plan 10 Dashboard Progress (Average) 10 >50%79% met requirement
2.0%
Adopted December 12, 2012
Revised October 11, 2016
Revised December 17, 2019
Revised December 14, 2021
Revised December 13, 2022
Revised December 12, 2023
Revised December 10, 2024
Communications/
Customer Service 10
Total Multiplier:
Safety, Reliability
and Quality of
Utility Services
40
Workforce
Development 20
Financial Goals 20
163
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Page 1 of 2
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Melissa Karpinski – Finance Manager
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
5.1
SUBJECT:
Financial Report – February 2026
ACTION REQUESTED:
Receive the February 2026 Financial Report
DISCUSSION:
Please note that these are the preliminary unaudited financial statements.
Electric
February year to date (YTD) electric kWh sales are up 3% compared to the prior year. The
breakdown is as follows:
• Residential usage increased 2%
• Small Commercial usage increased 1%
• Large Commercial usage increased 5%
For February 2026, the Electric Department is performing ahead of the prior YTD and is
favorable to the YTD budget. Additional variance analysis is provided in the attached Summary
Electric Statement of Revenues, Expenses and Changes in Net Position.
Water
February YTD gallons of water sold are up 2% compared to the prior year. The breakdown is as
follows:
• Residential usage decreased by less than 0.1%
• Commercial usage increased 3%
For February 2026, the Water Department overall is in line with prior YTD results and favorable
to the YTD budget. Additional variance analysis is provided in the attached Summary Water
Statement of Revenues, Expenses and Changes in Net Position.
ATTACHMENTS:
• Balance Sheet
• Electric Balance Sheet
• Water Balance Sheet
• Summary Electric Statement of Revenues, Expenses and Changes in Net Position
• Summary Water Statement of Revenues, Expenses and Changes in Net Position
• Graphs Prior Year and YTD 2026
164
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Page 2 of 2
• Detailed Electric Statement of Revenues, Expenses and Changes in Net Position
• Detailed Water Statement of Revenues, Expenses and Changes in Net Position
• Financial Presentation
165
ELECTRIC
3,183,780
2,934,569
2,532,281
269,215
2,421,528
11,341,373
1,779,016
7,800,932
0
9,579,948
795,920
0
2,305,024
57,385,042
25,905,542
86,391,527
(39,835,238)
46,556,289
21,546,212
8,110,733
(4,954,185)
24,702,760
396,358
92,576,727
4,009,425
1,219,202
926,091
0
0
510,000
16,725
6,681,443
0
0
0
0
26,105,560
1,541,981
27,647,541
34,328,984
1,034,353
1,779,016
0
53,934,485
1,499,889
57,213,390
92,576,727
TOTAL FUND EQUITY 33,890,734
TOTAL LIABILITIES & FUND EQUITY 42,006,575
CONTRIBUTED CAPITAL 0
RETAINED EARNINGS 34,167,141
NET INCOME (LOSS) (THROUGH PREVIOUS MONTH)(276,407)
TOTAL LIABILITIES 2,627,359
DEFERRED INFLOWS OF RESOURCES 5,488,482
FUND EQUITY
CAPITAL ACCOUNT CONST COST 0
BONDS PAYABLE, LESS CURRENT PORTION 1,412,535
PENSION LIABILITIES 323,143
TOTAL LONG TERM LIABILITIES 1,735,678
LFG PROJECT 0
DUE TO COUNTY 0
DUE TO CITY 0
UNEARNED REVENUE 230,275
TOTAL CURRENT LIABILITIES 891,681
LONG TERM LIABILITIES
OPEB LIABILITY 0
DUE TO OTHER FUNDS 0
NOTES PAYABLE-CURRENT PORTION 0
BONDS PAYABLE-CURRENT PORTION 70,000
ACCOUNTS PAYABLE 366,711
SALARIES AND BENEFITS PAYABLE 193,296
DUE TO CITY 31,399
OTHER ASSETS AND DEFERRED OUTFLOWS 82,418
TOTAL ASSETS 42,006,575
LIABILITIES AND FUND EQUITY
CURRENT LIABILITIES
LOSS OF REVENUE INTANGIBLE 0
LESS ACCUMULATED AMORTIZATION 0
TOTAL INTANGIBLE ASSETS, NET 0
LESS ACCUMULATED DEPRECIATION (25,529,034)
TOTAL FIXED ASSETS, NET 24,788,628
INTANGIBLE ASSETS
POWER AGENCY MEMBERSHIP BUY-IN 0
DISTRIBUTION 31,206,714
GENERAL 1,794,651
FIXED ASSETS (COST)50,317,662
FIXED ASSETS
PRODUCTION 17,316,297
LFG PROJECT 0
TRANSMISSION 0
EMERGENCY RESERVE FUND 4,328,674
UNRESTRICTED RESERVE FUND 0
TOTAL RESTRICTED ASSETS 4,328,674
CONSTRUCTION IN PROGRESS 102,694
TOTAL CURRENT ASSETS 12,806,856
RESTRICTED ASSETS
BOND RESERVE FUND 0
ACCOUNTS RECEIVABLE 5,988,510
INVENTORIES 76,339
PREPAID ITEMS 81,340
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
COMBINED BALANCE SHEET
FOR PERIOD ENDING FEBRUARY 2026
WATER
ASSETS
CURRENT ASSETS
CASH 6,557,972
166
February 28, 2026 January 31, 2026
3,183,780 3,009,864 173,915
2,934,569 3,674,406 (739,837)
2,532,281 2,518,549 13,732
269,215 282,656 (13,442)
2,421,528 2,241,034 180,494
11,341,373 11,726,510 (385,137)
1,779,016 1,779,016 0
7,800,932 7,775,460 25,472
9,579,948 9,554,476 25,472
795,920 795,920 0
2,305,024 2,305,024 0
57,385,042 57,259,854 125,188
25,905,542 25,905,542 0
86,391,527 86,266,339 125,188
(39,835,238)(39,591,812)(243,426)
46,556,289 46,674,527 (118,238)
21,546,212 21,546,212 0
8,110,733 8,110,733 0
(4,954,185)(4,898,507)(55,678)
24,702,760 24,758,438 (55,678)
396,358 396,358 0
92,576,727 93,110,309 (533,582)
4,009,425 4,975,713 (966,288)
1,219,202 1,219,061 141
926,091 865,851 60,240
510,000 510,000 0
16,725 18,398 (1,673)
6,681,443 7,589,023 (907,580)
26,105,560 26,110,549 (4,989)
1,541,981 1,541,981 0
27,647,541 27,652,530 (4,989)
34,328,984 35,241,553 (912,569)
1,034,353 1,034,353 0
1,779,016 1,779,016 0
53,934,485 53,934,485 0
1,499,889 1,120,902 378,987
57,213,390 56,834,403 378,987
92,576,727 93,110,309 (533,582) TOTAL LIABILITIES & FUND EQUITY
DEFERRED INFLOWS OF RESOURCES
FUND EQUITY
CAPITAL ACCOUNT CONST COST
RETAINED EARNINGS
NET INCOME (LOSS) (THROUGH PREVIOUS MONTH)
TOTAL FUND EQUITY
TOTAL CURRENT LIABILITIES
LONG TERM LIABILITIES
BONDS PAYABLE, LESS CURRENT PORTION
PENSION LIABILITIES
TOTAL LONG TERM LIABILITIES
TOTAL LIABILITIES
CURRENT LIABILITIES
ACCOUNTS PAYABLE
SALARIES AND BENEFITS PAYABLE
DUE TO CITY
BONDS PAYABLE-CURRENT PORTION
UNEARNED REVENUE
LOSS OF REVENUE INTANGIBLE
LESS ACCUMULATED AMORTIZATION
TOTAL INTANGIBLE ASSETS, NET
OTHER ASSETS AND DEFERRED OUTFLOWS
TOTAL ASSETS
LIABILITIES AND FUND EQUITY
GENERAL
FIXED ASSETS (COST)
LESS ACCUMULATED DEPRECIATION
TOTAL FIXED ASSETS, NET
INTANGIBLE ASSETS
POWER AGENCY MEMBERSHIP BUY-IN
EMERGENCY RESERVE FUND
TOTAL RESTRICTED ASSETS
FIXED ASSETS
PRODUCTION
TRANSMISSION
DISTRIBUTION
INVENTORIES
PREPAID ITEMS
CONSTRUCTION IN PROGRESS
TOTAL CURRENT ASSETS
RESTRICTED ASSETS
BOND RESERVE FUND
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
ELECTRIC BALANCE SHEET
Current Month
Change from
Prior MonthASSETS
CURRENT ASSETS
CASH
ACCOUNTS RECEIVABLE
167
February 28, 2026 January 31, 2026
6,557,972 6,701,601 (143,628)
5,988,510 6,014,397 (25,887)
76,339 77,506 (1,167)
81,340 53,011 28,329
102,694 101,650 1,044
12,806,856 12,948,164 (141,309)
4,328,674 4,322,306 6,368
4,328,674 4,322,306 6,368
17,316,297 17,316,297 0
31,206,714 31,206,714 0
1,794,651 1,784,580 10,071
50,317,662 50,307,591 10,071
(25,529,034)(25,412,481)(116,553)
24,788,628 24,895,110 (106,482)
82,418 82,418 0
42,006,575 42,247,998 (241,423)
366,711 333,544 33,167
193,296 191,899 1,397
31,399 149,380 (117,981)
70,000 70,000 0
230,275 230,275 0
891,681 975,098 (83,417)
1,412,535 1,413,089 (554)
323,143 323,143 0
1,735,678 1,736,232 (554)
2,627,359 2,711,330 (83,971)
5,488,482 5,488,482 0
34,167,141 34,167,141 0
(276,407)(118,955)(157,452)
33,890,734 34,048,186 (157,452)
42,006,575 42,247,998 (241,423)
DEFERRED INFLOWS OF RESOURCES
FUND EQUITY
RETAINED EARNINGS
NET INCOME (LOSS) (THROUGH PREVIOUS MONTH)
TOTAL FUND EQUITY
TOTAL LIABILITIES & FUND EQUITY
TOTAL CURRENT LIABILITIES
LONG TERM LIABILITIES
BONDS PAYABLE, LESS CURRENT PORTION
PENSION LIABILITIES
TOTAL LONG TERM LIABILITIES
TOTAL LIABILITIES
CURRENT LIABILITIES
ACCOUNTS PAYABLE
SALARIES AND BENEFITS PAYABLE
DUE TO CITY
BONDS PAYABLE-CURRENT PORTION
UNEARNED REVENUE
LESS ACCUMULATED DEPRECIATION
TOTAL FIXED ASSETS, NET
INTANGIBLE ASSETS
OTHER ASSETS AND DEFERRED OUTFLOWS
TOTAL ASSETS
LIABILITIES AND FUND EQUITY
TOTAL RESTRICTED ASSETS
FIXED ASSETS
PRODUCTION
DISTRIBUTION
GENERAL
FIXED ASSETS (COST)
INVENTORIES
PREPAID ITEMS
CONSTRUCTION IN PROGRESS
TOTAL CURRENT ASSETS
RESTRICTED ASSETS
EMERGENCY RESERVE FUND
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
WATER BALANCE SHEET
Current Month
Change from
Prior MonthASSETS
CURRENT ASSETS
CASH
ACCOUNTS RECEIVABLE
168
202620262026 YTD 202620252025 YTDVariance YTD Budget ANNUALVARIANCEItemElectricBUDGET VarianceBUDGET2,940,371 6,445,676 6,691,004 (245,328) (4) 43,306,594 2,806,377 6,196,786 248,890 4301,205 695,104 700,985 (5,880) (1) 4,454,313 280,948 655,391 39,713 617,950 41,681 41,946(265) (1) 241,665 16,844 39,203 2,478 622,521 50,673 51,009(336) (1) 294,054 21,028 48,116 2,558 523,824 47,699 46,666 1,033 2 280,000 23,900 45,766 1,933 44008008000 0 4,8004008000 03,306,273 7,281,634 7,532,410 (250,775) (3) 48,581,426 3,149,497 6,986,061 295,573 442,927 75,297 58,334 16,963 29 350,000 52,668 78,876 (3,579) (5)20,873 41,775 50,834 (9,059) (18) 305,000 20,880 44,990 (3,215) (7)11,950 111,480 42,500 68,980 162 255,000 (15,225) 17,309 94,171 544 (1)55,911 602,087 193,002 409,085 212 1,193,000 80,932 274,598 327,488 119 (2)131,661 830,638 344,670 485,968 141 2,103,000 139,255 415,773 414,865 1003,437,933 8,112,272 7,877,080 235,192 3 50,684,426 3,288,752 7,401,834 710,438 101,882,112 3,998,706 4,794,735 (796,029) (17) 31,659,362 2,014,616 4,169,313 (170,607) (4) (3)158175 53,666 (53,491) (100) 321,993 27,110 57,097 (56,921) (100) (4)2,741 5,820 11,666 (5,846) (50) 70,000 2,802 5,966(145) (2)64,715 152,648 90,834 61,814 68 545,000 38,344 86,945 65,703 76 (5)166,847 301,861 358,492 (56,631) (16) 1,990,000 162,570 365,033 (63,172) (17) (6)299,104 596,569 588,856 7,713 1 3,533,136 286,576 574,227 22,343 459,108 119,091 119,0910 0 699,543 61,983 125,241 (6,150) (5)3,700 26,245 18,210 8,035 44 414,250 4,413 8,815 17,430 19846,899 79,186 72,500 6,686 9 435,000 31,820 66,945 12,241 18349,751 929,406 931,751 (2,345) (0) 4,617,413 372,778 892,478 36,928 435,860 78,525 109,548 (31,023) (28) 657,300 29,150 73,462 5,063 7 (7)2,910,995 6,288,232 7,149,349 (861,116) (12) 44,942,997 3,032,162 6,425,522 (137,290) (2)147,951 324,151 334,550 (10,399) (3) 2,165,330 113,004 249,324 74,827 30 (8)00000019,212 39,042 (39,042) (100) (9)147,951 324,151 334,550 (10,399) (3) 2,165,330 132,216 288,366 35,785 12378,987 1,499,889 393,181 1,106,708 281 3,576,100 124,374 687,946 811,943 118ItemVariance of +/- $25,000 and +/- 15%(1)Budget and PYTD variance is due to large a large connection agreement in January 2026.(2)(3)Budget variance is mainly due to EAC charges.(4)Budget and PYTD variance is due to not using majority of generating g/l accounts in 2026 due to retirement of power plant engines and reclassing to distribution expense.(5) Budget and PYTD variance is due to reclassing generating g/l accounts in 2026 to distribution expense.(6) Budget variance is mainly due to an even budget spread throughout year and PYTD variance is mainly due to tree trimming (contracted in 2025).(7) Budget variance is due to timing of commercial rebates.(8)PYTD variance is due to PILOT being changed from 4% to 5%, increased usage and rates in 2026.(9)PYTD variance is due to the change to PILOT that was made in 2026.Budget and PYTD variance is mainly due to Contributions from Customers having a large SOW for a dedicated feeder in January 2026. Utilities & Labor Donated Total Operating Transfer Net Income Profit(Loss) Interest Expense Operating Transfer/Other Funds Other Operating Expense Customer Accounts Expense Administrative Expense General Expense Total Expenses(before Operating Transfers)Operating Transfer Operating & Mtce Expense Transmission Expense Distribution Expense Maintenance Expense Depreciation & Amortization Purchased Power Customer Penalties Connection Fees Misc Revenue Total Other Revenue Total RevenueExpensesRevenueOperating Revenue Elk River Otsego Interest/Dividend Income Rural Big Lake Dayton Public St & Hwy Lighting Other Electric Sales Total Operating RevenueOther Operating RevenueELK RIVER MUNICIPAL UTILITIESELK RIVER, MINNESOTASTATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONFOR PERIOD ENDING FEBRUARY 20262026 YTD Bud Var%2025 v. 2026 Actual Var%FEBRUARY YTD FEBRUARY YTD169
202620262026 YTD 202620252025 YTDVariance YTD Budget ANNUALVARIANCEItemWaterBUDGET VarianceBUDGET152,236 322,434 332,137 (9,703) (3) 3,226,078 148,609 314,258 8,177 3152,236 322,434 332,137 (9,703) (3) 3,226,078 148,609 314,258 8,177 311,907 22,400 21,000 1,400 7 126,000 14,059 21,957443 2945 2,817 5,834 (3,017) (52) 35,000 1,204 5,787 (2,970) (51)22,349 70,040 74,334 (4,294) (6) 446,000 16,759 48,441 21,599 45(1)1,005 1,980 2,016(36) (2) 477,350 2,067 3,352 (1,372) (41)36,206 97,237 103,184 (5,947) (6) 1,084,350 34,089 79,538 17,699 22188,443 419,671 435,321 (15,650) (4) 4,310,428 182,697 393,795 25,876 715,426 28,783 20,834 7,949 38 125,000 9,682 20,970 7,813 3757,353 110,656 111,336(680) (1) 668,000 51,371 105,510 5,146 533,485 48,023 97,082 (49,059) (51) 447,500 45,931 72,539 (24,516) (34)(2)116,553 232,986 235,834 (2,848) (1) 1,415,000 115,419 231,000 1,986 12,496 4,992 4,9920 0 28,782 2,712 5,425(433) (8)178389104285 274 50,62552135254 1888,564 16,892 17,376(484) (3) 104,250 7,785 16,408484 3108,742 246,760 243,620 3,140 1 1,251,950 96,189 217,651 29,108 1353149 1,210 (1,061) (88) 7,250781446 3342,850 689,629 732,388 (42,758) (6) 4,098,357 329,220 669,781 19,848 33,045 6,449 6,643(194) (3) 64,52200 6,449 000334(334) (100) 2,00000003,045 6,449 6,977(528) (8) 66,52200 6,449 0(157,452) (276,407) (304,043) 27,637 9 145,550 (146,522) (275,986) (420) (0)ItemVariance of +/- $15,000 and +/- 15%(1) PYTD variance due to a large connection agreements in 2026.(2)Budget variance is mainly due to an even budget spread throughout year. PYTD variance is due to water mapping labor and water meter service repairs.ELK RIVER MUNICIPAL UTILITIESELK RIVER, MINNESOTASTATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONFOR PERIOD ENDING FEBRUARY 20262026 YTD Bud Var%2025 v. 2026 Actual Var%FEBRUARY YTD FEBRUARY 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 Transfer Operating Transfer/Other Funds170
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
2025 2026
15,000
20,000
25,000
30,000
35,000
40,000
Energy Purchases in MWHMonth
Elk River Municipal Utilities Monthly Energy Purchases
2025 2026
171
15,000
20,000
25,000
30,000
35,000
40,000
Electric Load in MWHMonth
Elk River Municipal Utilities Monthly Total Electric Load
2025 2026
$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
2025 2026
172
-
5,000
10,000
15,000
20,000
25,000
Loads in MWHMonth
Elk River Municipal Utilities Monthly Residential, Commercial & Industrial
Loads
2025 Residential 2026 Residential 2025 Commercial
2026 Commercial 2025 Industrial 2026 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
2025 Residential 2026 Residential 2025 Commercial
2026 Commercial 2025 Industrial 2026 Industrial
173
0.0
20.0
40.0
60.0
80.0
100.0
120.0
Pumpage in Million Gal.Month
Elk River Municipal Utilities Monthly Water Pumpage
2025 2026
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
2025 2026
174
$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
2025 MG 2026 MG 2025 $2026 $
175
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING FEBRUARY 2026
2026
FEBRUARY
2025
FEBRUARY
2026
YTD
2025
YTD
2026
YTD
BUDGET
2026 YTD
Bud Var%
2025 v. 2026
Actual Var%
YTD
VARIANCE
2026
ANNUAL
BUDGETElectric
Revenue
Operating Revenue
Elk River
ELECT SALES - ELK RIVER RESID 1,121,759 2,438,8181,189,150 2,599,8572,514,708 (3)314,974,097 75,890
ELECT SALES - ELK RIVER NON-D 295,882 606,046307,161 640,710618,837 (3)23,713,891 12,791
ELECT SALES - ELK RIVER DEMA 1,342,326 2,679,9811,444,059 2,689,8912,864,969 7 719,613,600 184,987
PCA SALES REVENUE - ELK RIVE 15,323 171,3410279,007159,013 (43)(7)1,606,959 (12,327)
PCA SALES REVENUE - ELK RIVE 4,452 44,519075,66640,853 (46)(8)438,600 (3,666)
PCA SALES REVENUE - ELK RIVE 26,632 256,0770405,871247,293 (39)(3)2,959,444 (8,783)
2,940,371 6,445,676 6,691,003 2,806,376 6,196,785(4)4Total For Elk River:43,306,593 248,890
Otsego
ELECT SALES - OTSEGO RESIDEN 120,668 266,407131,409 295,753285,625 (3)71,703,415 19,218
ELECT SALES - OTSEGO NON-DEM 38,400 81,39039,665 95,24884,452 (11)4552,104 3,061
ELECT SALES - OTSEGO DEMAND 117,450 257,030130,130 235,399275,458 17 71,716,440 18,427
PCA SALES REVENUE - OTSEGO R 1,635 18,601031,73918,170 (43)(2)182,803 (431)
PCA SALES REVENUE - OTSEGO N 588 6,27308,6076,030 (30)(4)49,894 (242)
PCA SALES REVENUE - OTSEGO D 2,204 25,687034,23825,367 (26)(1)249,653 (320)
301,205 695,104 700,984 280,948 655,391(1)6Total For Otsego:4,454,313 39,713
Rural Big Lake
ELECT SALES - BIG LAKE RESIDE 16,451 36,24617,776 36,20138,754 7 7208,506 2,507
ELECT SALES - BIG LAKE NON-DE 163 344173806359(55)44,674 14
PCA SALES REVENUE - BIG LAKE 227 2,59703,8842,554 (34)(2)22,376 (43)
PCA SALES REVENUE - BIG LAKE 1 1301,05413 (99)(7)6,107 0
17,950 41,681 41,946 16,843 39,202(1)6Total For Rural Big Lake:241,664 2,478
Dayton
ELECT SALES - DAYTON RESIDEN 17,651 38,23419,237 38,59740,720 5 6222,309 2,485
ELECT SALES - DAYTON NON-DE 3,097 6,7663,283 7,1386,967 (2)341,376 201
PCA SALES REVENUE - DAYTON R 236 2,63104,1422,535 (39)(4)23,857 (96)
PCA SALES REVENUE - DAYTON 41 48301,131449 (60)(7)6,511 (33)
22,521 50,673 51,008 21,028 48,115(1)5Total For Dayton:294,054 2,557
Public St & Hwy Lighting
ELECT SALES - SEC LTS 23,899 45,76523,824 46,66647,699 2 4280,000 1,933
23,824 47,699 46,666 23,899 45,7652 4Total For Public St & Hwy Lighting:280,000 1,933
Other Electric Sales
SUB-STATION CREDIT 400 8004008008000 04,800 0
176
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING FEBRUARY 2026
2026
FEBRUARY
2025
FEBRUARY
2026
YTD
2025
YTD
2026
YTD
BUDGET
2026 YTD
Bud Var%
2025 v. 2026
Actual Var%
YTD
VARIANCE
2026
ANNUAL
BUDGETElectric
400 800 800 400 8000 0Total For Other Electric Sales:4,800 0
Total Operating Revenue
3,149,497 6,986,0613,306,272 7,532,4097,281,634 (3)448,581,426 295,572
Other Operating Revenue
Interest/Dividend Income
INTEREST & DIVIDEND INCOME 52,668 78,87542,926 58,33475,296 29 (5)350,000 (3,579)
42,926 75,296 58,334 52,668 78,87529 (5)Total For Interest/Dividend Income:350,000 (3,579)
Customer Penalties
CUSTOMER DELINQUENT PENALT 20,879 44,98920,872 50,83441,774 (18)(7)305,000 (3,215)
20,872 41,774 50,834 20,879 44,989(18)(7)Total For Customer Penalties:305,000 (3,215)
Connection Fees
DISCONNECT & RECONNECT CHA (15,225)17,30911,950 42,500111,480 162 544255,000 94,171
11,950 111,480 42,500 (15,225)17,309162 544Total For Connection Fees:255,000 94,171
Misc Revenue
MISC ELEC REVENUE - TEMP CHG 1,100 1,54044050066032 (57)3,000 (880)
STREET LIGHT 0 002,50029,800 1,092 025,000 29,800
TRANSMISSION INVESTMENTS 50,836 110,98846,821 113,334108,438 (4)(2)680,000 (2,549)
MISC NON-UTILITY 5,635 11,9738,650 18,33428,454 55 138110,000 16,480
GAIN ON DISPOSITION OF PROPER 0 16,5000000 (100)25,000 (16,500)
CONTRIBUTIONS FROM CUSTOME 23,360 133,596058,334434,733 645 225350,000 301,137
55,911 602,086 193,002 80,931 274,598212 119Total For Misc Revenue:1,193,000 327,488
Total Other Revenue
139,254 415,772131,660 344,670830,637 141 1002,103,000 414,864
131,660 830,637 344,670 139,254 415,772141 100Total For Total Other Revenue:2,103,000 414,864
3,288,751 7,401,8343,437,933 7,877,079 Total Revenue 8,112,272 3 1050,684,426 710,437
Expenses
Purchased Power
PURCHASED POWER 1,601,253 3,355,6821,604,377 3,529,9513,423,683 (3)224,051,075 68,000
ENERGY ADJUSTMENT CLAUSE 413,362 813,630277,735 1,264,783575,022 (55)(29)7,608,286 (238,608)
1,882,112 3,998,705 4,794,735 2,014,615 4,169,313(17)(4)Total For Purchased Power:31,659,361 (170,607)
Operating & Mtce Expense
OPERATING SUPERVISION - DNU 13,313 27,416026,7980 (100)(100)160,783 (27,416)
NATURAL GAS 1,062 7,02504,5840 (100)(100)27,501 (7,025)
ELECTRIC & WATER CONSUMPTI 5,971 11,921010,8680 (100)(100)65,208 (11,921)
177
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING FEBRUARY 2026
2026
FEBRUARY
2025
FEBRUARY
2026
YTD
2025
YTD
2026
YTD
BUDGET
2026 YTD
Bud Var%
2025 v. 2026
Actual Var%
YTD
VARIANCE
2026
ANNUAL
BUDGETElectric
PLANT SUPPLIES & OTHER EXPEN 412 49702,0000 (100)(100)12,000 (497)
MISC POWER GENERATION EXPE 140 1401571661755 251,000 35
MAINTENANCE OF STRUCTURE -1,962 4,36802,5000 (100)(100)15,000 (4,368)
MTCE OF PLANT ENGINES/GENER 201 2010840(100)(100)500 (201)
MTCE OF PLANT/LAND IMPROVE 4,046 5,52506,6660 (100)(100)40,000 (5,525)
157 175 53,666 27,109 57,096(100)(100)Total For Operating & Mtce Expense:321,992 (56,921)
Transmission Expense
TRANSMISSION MTCE AND EXPE 2,801 5,9652,741 11,6665,820 (50)(2)70,000 (145)
2,741 5,820 11,666 2,801 5,965(50)(2)Total For Transmission Expense:70,000 (145)
Distribution Expense
SUPERVISION & ENGINEERING - D 0 014,226 026,880 0 0026,880
REMOVE EXISTING SERVICE & M 58 1667433474(78)(56)2,000 (92)
SCADA EXPENSE 3,713 10,0425,427 10,83412,235 13 2265,000 2,193
TRANSFORMER EXPENSE OH & U 1,193 2,4191,279 4,1662,368 (43)(2)25,000 (50)
MTCE OF SIGNAL SYSTEMS 0 0050092184 03,000 921
METER EXPENSE - REMOVE & RE 484 48402500(100)(100)1,500 (484)
TEMP SERVICE - INSTALL & REM 797 1,4215671,4166,689 372 3718,500 5,267
MISC DISTRIBUTION EXPENSE 32,096 72,41143,139 73,334103,478 41 43440,000 31,067
64,714 152,648 90,834 38,344 86,94568 76Total For Distribution Expense:545,000 65,702
Maintenance Expense
MTCE OF STRUCTURES 6,055 19,5549,817 15,00014,225 (5)(27)90,000 (5,328)
MTCE OF SUBSTATIONS 0 5922,293 6,6665,788 (13)87640,000 5,195
MTCE OF SUBSTATION EQUIPME 3,624 6,7801,497 18,6661,557 (92)(77)112,000 (5,222)
MTCE OF OH LINES/TREE TRIM 48,147 101,96023,489 56,00051,829 (7)(49)175,000 (50,130)
MTCE OF OH LINES/STANDBY 3,458 6,7963,727 8,3326,276 (25)(8)50,000 (520)
MTCE OF OH PRIMARY 4,574 37,2077,166 32,50018,573 (43)(50)195,000 (18,633)
MTCE OF URD PRIMARY 32,940 43,00311,886 50,00026,838 (46)(38)300,000 (16,165)
LOCATE ELECTRIC LINES 5,366 9,1244,617 20,8328,343 (60)(9)125,000 (781)
LOCATE FIBER LINES 38 1140666187(72)644,000 72
MTCE OF LINE TRANSFORMERS 4,294 7,82834,057 15,83235,750 126 35795,000 27,921
MTCE OF STREET LIGHTING 3,401 10,4928,684 11,66616,386 40 5670,000 5,894
MTCE OF SECURITY LIGHTING 1,070 5,3693,493 4,1663,715 (11)(31)25,000 (1,653)
MTCE OF METERS 1,255 2,4875,564 10,00010,290 3 31460,000 7,803
VOLTAGE COMPLAINTS 595 1,1375241,6661,907 15 6810,000 769
SALARIES TRANSMISSION & DIST 2,987 6,1453,135 6,1665,986 (3)(3)37,000 (158)178
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING FEBRUARY 2026
2026
FEBRUARY
2025
FEBRUARY
2026
YTD
2025
YTD
2026
YTD
BUDGET
2026 YTD
Bud Var%
2025 v. 2026
Actual Var%
YTD
VARIANCE
2026
ANNUAL
BUDGETElectric
ELECTRIC MAPPING 10,005 25,77716,819 27,00040,022 48 55162,000 14,244
FIBER MAPPING 0 001,6660 (100)010,000 0
MTCE OF OH SECONDARY 2,440 5,1351,353 5,0002,442 (51)(52)30,000 (2,692)
MTCE OF URD SECONDARY 3,287 10,2033,513 13,3346,832 (49)(33)80,000 (3,371)
TRANSPORTATION EXPENSE 29,026 65,31925,202 53,33444,904 (16)(31)320,000 (20,415)
166,846 301,860 358,492 162,569 365,032(16)(17)Total For Maintenance Expense:1,990,000 (63,171)
Depreciation & Amortization
DEPRECIATION 230,898 462,870243,426 477,500485,213 2 52,865,000 22,342
AMORTIZATION 55,677 111,35555,677 111,356111,355 0 0668,136 0
299,104 596,569 588,856 286,576 574,2261 4Total For Depreciation & Amortization:3,533,136 22,342
Interest Expense
INTEREST EXPENSE - BONDS 66,971 135,21764,096 129,067129,067 0 (5)759,406 (6,150)
AMORTIZATION OF DEBT DISCOU (4,988)(9,977)(4,988)(9,977)(9,977)0 0(59,863)0
59,107 119,090 119,090 61,982 125,2400 (5)Total For Interest Expense:699,543 (6,150)
Other Operating Expense
EV CHARGING EXPENSE 198 40188208165(21)(59)1,250 (236)
LOSS ON DISPOSITION OF PROP (C 0 00000 025,000 0
OTHER DONATIONS 91 2170334804141 2712,000 587
MUTUAL AID 0 00018,042 0 0018,042
PENSION EXPENSE 0 00000 0280,000 0
OTHER INTEREST EXPENSE 0 009,3340 (100)056,000 0
INTEREST EXPENSE - METER DEP 4,123 8,1963,611 8,3347,232 (13)(12)50,000 (963)
3,700 26,245 18,210 4,412 8,81544 198Total For Other Operating Expense:414,250 17,430
Customer Accounts Expense
METER READING EXPENSE 2,653 6,0992,213 4,1664,455 7 (27)25,000 (1,643)
DISCONNECT/RECONNECT EXPEN 0 008340(100)05,000 0
MISC CUSTOMER ACCOUNTS EXP 28,717 60,19631,062 63,33460,917 (4)1380,000 721
BAD DEBT EXPENSE & RECOVER 449 64913,623 4,16613,812 232 2,02525,000 13,162
46,899 79,186 72,500 31,820 66,9459 18Total For Customer Accounts Expense:435,000 12,240
Administrative Expense
SALARIES OFFICE & COMMISSION 76,034 159,11775,621 180,834156,086 (14)(2)1,085,000 (3,030)
TEMPORARY STAFFING 0 006660(100)04,000 0
OFFICE SUPPLIES 8,968 14,37211,191 20,83420,877 0 45125,000 6,505
ELECTRIC & WATER CONSUMPTI 1,845 3,7181,616 4,7583,294 (31)(11)28,552 (424)
BANK FEES 208 496198500456(9)(8)3,000 (40)
179
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING FEBRUARY 2026
2026
FEBRUARY
2025
FEBRUARY
2026
YTD
2025
YTD
2026
YTD
BUDGET
2026 YTD
Bud Var%
2025 v. 2026
Actual Var%
YTD
VARIANCE
2026
ANNUAL
BUDGETElectric
LEGAL FEES 1,322 1,8991,336 4,1662,141 (49)1325,000 242
AUDITING FEES 1,720 3,4401,800 3,7503,600 (4)522,500 160
INSURANCE 14,866 29,73310,087 23,83420,174 (15)(32)143,000 (9,558)
UTILITY SHARE - DEFERRED COM 14,256 37,30815,859 40,00043,437 9 16125,000 6,128
UTILITY SHARE - MEDICAL/DENT 65,354 247,71968,498 259,000268,843 4 9945,000 21,124
UTILITY SHARE - PERA 24,552 52,82125,116 58,08453,889 (7)2348,500 1,068
UTILITY SHARE - FICA 23,570 50,25624,114 57,08451,173 (10)2342,500 917
EMPLOYEE SICK PAY 34,128 63,80015,380 38,90863,821 64 0233,450 21
EMPLOYEE HOLIDAY PAY 15,938 47,43016,287 50,00049,653 (1)5197,401 2,223
EMPLOYEE VACATION & PTO PA 24,586 92,26725,631 96,00097,048 1 5344,307 4,781
UPMIC DISTRIBUTION 0 00000 086,000 0
LONGEVITY PAY 0 01,550 1,4731,550 5 08,040 1,550
CONSULTING FEES 21,220 21,22019,153 9,30025,458 174 2055,800 4,238
TELEPHONE 2,840 5,7162,860 5,1665,739 11 031,000 23
ADVERTISING 1,115 2,4351,015 3,3342,520 (24)320,000 85
DUES & SUBSCRIPTIONS - FEES 12,758 24,53113,669 23,64630,162 28 23141,878 5,631
SCHOOLS & MEETINGS 26,624 32,46218,223 48,58028,394 (42)(13)291,482 (4,068)
MTCE OF GENERAL PLANT & OFFI 865 1,7305401,8341,080 (41)(38)11,000 (650)
349,751 929,405 931,751 372,778 892,4780 4Total For Administrative Expense:4,617,413 36,927
General Expense
CIP REBATES - RESIDENTIAL 3,937 15,6526,690 15,12615,608 3 090,758 (44)
CIP REBATES - COMMERCIAL 1,964 1,964018,6660 (100)(100)112,000 (1,964)
CIP - ADMINISTRATION 10,257 21,34016,057 30,30626,224 (13)23181,840 4,884
CIP - MARKETING 1,674 10,6959129,14412,065 32 1354,864 1,370
CIP - LABOR 8,313 17,5468,682 22,68017,663 (22)1136,078 117
CIP REBATES - LOW INCOME 0 004,9600 (100)029,760 0
CIP - LOW INCOME LABOR 786 1,7078441,6661,631 (2)(5)10,000 (76)
ENVIRONMENTAL COMPLIANCE 2,374 4,7572,669 6,1665,349 (13)1237,000 592
MISC GENERAL EXPENSE (158)(202)2 834(18)(102) 915,000 183
35,859 78,524 109,548 29,150 73,462(28) 7Total For General Expense:657,300 5,062
Total Expenses(before Operating Transfers)
3,032,161 6,425,5222,910,995 7,149,3486,288,232 (12)(2)44,942,996 (137,289)
Operating Transfer
Operating Transfer/Other Funds
TRANSFER TO CITY ELK RIVER R 113,003 249,324147,951 334,550324,150 (3)302,165,329 74,826180
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING FEBRUARY 2026
2026
FEBRUARY
2025
FEBRUARY
2026
YTD
2025
YTD
2026
YTD
BUDGET
2026 YTD
Bud Var%
2025 v. 2026
Actual Var%
YTD
VARIANCE
2026
ANNUAL
BUDGETElectric
147,951 324,150 334,550 113,003 249,324(3)30Total For Operating Transfer/Other Funds:2,165,329 74,826
Utilities & Labor Donated
UTILITIES & LABOR DONATED TO 19,212 39,0420000 (100)0 (39,042)
0 0 0 19,212 39,0420 (100)Total For Utilities & Labor Donated:0 (39,042)
Total Operating Transfer
147,951 324,150 334,550 132,215 288,366(3)12Total For Total Operating Transfer:2,165,329 35,784
124,374 687,945378,987 393,180 Net Income Profit(Loss)1,499,888 281 1183,576,099 811,942
181
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING FEBRUARY 2026
2026
FEBRUARY
2025
FEBRUARY
2026
YTD
2025
YTD
2026
YTD
BUDGET
2026 YTD
Bud Var%
2025 v. 2026
Actual Var%
YTD
VARIANCE
2026
ANNUAL
BUDGETWater
Revenue
Operating Revenue
Water Sales
WATER SALES RESIDENTIAL 91,220 192,47896,755 210,396198,967 (5)31,821,515 6,488
WATER SALES COMMERCIAL 55,671 118,37653,687 117,766119,944 2 11,039,959 1,568
WATER SALES IRRIGATION 1,716 3,4021,793 3,9743,521 (11)3364,602 118
152,236 322,434 332,137 148,608 314,257(3)3Total For Water Sales:3,226,078 8,176
Total Operating Revenue
148,608 314,257152,236 332,137322,434 (3)33,226,078 8,176
152,236 322,434 332,137 148,608 314,257(3)3Total For Total Operating Revenue:3,226,078 8,176
Other Operating Revenue
Interest/Dividend Income
INTEREST & DIVIDEND INCOME 14,059 21,95711,907 20,83421,833 5 (1)125,000 (123)
OTHER INTEREST/MISC REVENUE 0 00166566242 01,000 566
11,907 22,400 21,000 14,059 21,9577 2Total For Interest/Dividend Income:126,000 442
Customer Penalties
CUSTOMER PENALTIES 1,203 5,7869445,8342,816 (52)(51)35,000 (2,969)
944 2,816 5,834 1,203 5,786(52)(51)Total For Customer Penalties:35,000 (2,969)
Connection Fees
WATER/ACCESS/CONNECTION FE 14,400 39,60018,000 61,00063,510 4 60366,000 23,910
CUSTOMER CONNECTION FEES 2,247 5,3992,849 8,3344,230 (49)(22)50,000 (1,168)
BULK WATER SALES/HYDRANT R 111 3,4421,500 5,0002,299 (54)(33)30,000 (1,142)
22,349 70,040 74,334 16,759 48,441(6)45Total For Connection Fees:446,000 21,598
Misc Revenue
MISC NON-UTILITY 0 31030163088 (90)100 (280)
GAIN ON DISPOSITION OF PROPER 0 00000 04,000 0
MISCELLANEOUS REVENUE 1,091 1,09101660(100)(100)1,000 (1,091)
HYDRANT MAINTENANCE PROGR 975 1,9509751,8341,950 6 011,000 0
WATER TOWER LEASE 0 00000 0386,250 0
LEASE INTEREST REVENUE 0 00000 075,000 0
1,005 1,980 2,016 2,066 3,352(2)(41)Total For Misc Revenue:477,350 (1,372)
Total Other Revenue
34,088 79,53736,206 103,18497,237 (6)221,084,350 17,699
36,206 97,237 103,184 34,088 79,537(6)22Total For Total Other Revenue:1,084,350 17,699
182
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING FEBRUARY 2026
2026
FEBRUARY
2025
FEBRUARY
2026
YTD
2025
YTD
2026
YTD
BUDGET
2026 YTD
Bud Var%
2025 v. 2026
Actual Var%
YTD
VARIANCE
2026
ANNUAL
BUDGETWater
182,697 393,795188,442 435,321 Total Revenue 419,671 (4)74,310,428 25,875
Expenses
Production Expense
MTCE OF STRUCTURES 9,681 20,97015,426 20,83428,782 38 37125,000 7,812
15,426 28,782 20,834 9,681 20,97038 37Total For Production Expense:125,000 7,812
Pumping Expense
SUPERVISION 5,670 12,5035,849 13,33412,849 (4)380,000 346
ELECTRIC & GAS UTILITIES 25,631 46,08119,105 50,00040,400 (19)(12)300,000 (5,680)
SAMPLING 3,142 4,0322,586 4,0003,926 (2)(3)24,000 (105)
CHEMICAL FEED 1,048 5,0791,658 8,3344,029 (52)(21)50,000 (1,050)
MTCE OF ELECTRIC PUMPING EQ 0 0002250 00225
MTCE OF WELLS 15,535 37,12127,939 33,33448,727 46 31200,000 11,606
SCADA - PUMPING 342 6922122,334496 (79)(28)14,000 (195)
57,352 110,656 111,336 51,371 105,509(1)5Total For Pumping Expense:668,000 5,146
Distribution Expense
MTCE OF WATER MAINS 3,579 6,3073,174 29,1665,489 (81)(13)175,000 (818)
LOCATE WATER LINES 909 1,6123134,166681 (84)(58)25,000 (931)
WATER METER SERVICE 11,248 14,9051,512 8,3346,301 (24)(58)50,000 (8,603)
BACKFLOW DEVICE INSPECTION 1,439 2,6691,387 3,8342,666 (30)023,000 (2)
MTCE OF CUSTOMERS SERVICE 2,510 5,3982,531 6,0005,438 (9)136,000 40
WATER MAPPING 3,540 11,794174,16640 (99)(100)25,000 (11,753)
FIBER MAPPING 0 001,6660 (100)010,000 0
MTCE OF WATER HYDRANTS - PU 1,032 6,5812253,666792 (78)(88)22,000 (5,789)
MTCE OF WATER HYDRANTS - PR 0 001,0000 (100)06,000 0
WATER CLOTHING/PPE 0 791872,500443 (82)46215,000 364
WAGES WATER 732 1,5147951,5841,456 (8)(4)9,500 (57)
TRANSPORTATION EXPENSE 901 1,6391,447 4,0002,818 (30)7224,000 1,179
WATER PERMIT 20,037 20,03721,893 27,00021,893 (19)927,000 1,856
33,484 48,023 97,082 45,931 72,538(51)(34)Total For Distribution Expense:447,500 (24,515)
Depreciation & Amortization
DEPRECIATION 115,418 231,000116,552 235,834232,985 (1)11,415,000 1,985
116,552 232,985 235,834 115,418 231,000(1)1Total For Depreciation & Amortization:1,415,000 1,985
Interest Expense
INTEREST EXPENSE - BONDS 3,266 6,5333,050 6,1006,100 0 (7)35,433 (433)
AMORTIZATION OF DEBT DISCOU (554)(1,108)(554)(1,108)(1,108)0 0(6,650)0
183
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING FEBRUARY 2026
2026
FEBRUARY
2025
FEBRUARY
2026
YTD
2025
YTD
2026
YTD
BUDGET
2026 YTD
Bud Var%
2025 v. 2026
Actual Var%
YTD
VARIANCE
2026
ANNUAL
BUDGETWater
2,495 4,991 4,991 2,712 5,4240 (8)Total For Interest Expense:28,782 (433)
Other Operating Expense
DAM MAINTENANCE EXPENSE 0 3013302990 8680269
PENSION EXPENSE 0 00000 050,000 0
INTEREST EXPENSE - METER DEP 52 1044410489(14)(14)625 (14)
177 388 104 52 134274 188Total For Other Operating Expense:50,625 254
Customer Accounts Expense
METER READING EXPENSE 539 1,1086838341,180 41 65,000 71
MISC CUSTOMER ACCOUNTS EXP 7,245 15,2997,880 16,50015,711 (5)399,000 411
BAD DEBT EXPENSE & RECOVER 0 00420(100)02500
8,563 16,891 17,376 7,785 16,407(3)3Total For Customer Accounts Expense:104,250 483
Administrative Expense
SALARIES OFFICE & COMMISSION 22,234 46,71124,884 55,50051,114 (8)9333,000 4,403
TEMPORARY STAFFING 0 001660(100)01,000 0
OFFICE SUPPLIES 2,095 3,4192,582 5,0007,251 45 11230,000 3,832
ELECTRIC & WATER CONSUMPTI 461 9304041,080823 (24)(11)6,500 (106)
BANK FEES 52 130491181202 (8)708 (9)
LEGAL FEES 330 4743341,000535 (46)136,000 60
AUDITING FEES 430 8604501,166900 (23)57,000 40
INSURANCE 3,487 6,9743,534 7,1667,069 (1)143,000 94
UTILITY SHARE - DEFERRED COM 2,304 5,6592,698 7,5006,968 (7)2325,000 1,308
UTILITY SHARE - MEDICAL/DENT 16,722 58,40318,020 64,00064,273 0 10251,110 5,870
UTILITY SHARE - PERA 4,792 10,3485,794 11,91612,058 1 1771,500 1,710
UTILITY SHARE - FICA 4,614 9,9235,591 11,75011,567 (2)1770,500 1,644
EMPLOYEE SICK PAY 5,725 10,8513,449 8,83412,242 39 1353,000 1,391
EMPLOYEE HOLIDAY PAY 3,155 9,4133,747 10,95011,081 1 1843,000 1,668
EMPLOYEE VACATION & PTO PA 4,243 18,2515,299 21,00021,208 1 1672,000 2,956
UPMIC DISTRIBUTION 0 00000 019,000 0
WELLHEAD PROTECTION 0 002500(100)01,500 0
LONGEVITY PAY 0 00780(100)01,260 0
CONSULTING FEES 4,680 9,5602,676 4,3664,002 (8)(58)26,200 (5,557)
TELEPHONE 638 1,2757761,4341,547 8 218,600 272
ADVERTISING 589 969253834630(24)(35)5,000 (339)
DUES & SUBSCRIPTIONS - FEES 16,153 18,55624,916 18,58027,875 50 50111,474 9,318
SCHOOLS & MEETINGS 3,263 4,5073,143 10,4825,218 (50)1662,897 711184
ELK RIVER MUNICIPAL UTILITIES
ELK RIVER, MINNESOTA
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR PERIOD ENDING FEBRUARY 2026
2026
FEBRUARY
2025
FEBRUARY
2026
YTD
2025
YTD
2026
YTD
BUDGET
2026 YTD
Bud Var%
2025 v. 2026
Actual Var%
YTD
VARIANCE
2026
ANNUAL
BUDGETWater
MTCE OF GENERAL PLANT & OFFI 216 432135450270(40)(38)2,700 (162)
108,741 246,759 243,620 96,189 217,6511 13Total For Administrative Expense:1,251,949 29,108
General Expense
CIP REBATES - RESIDENTIAL 25 25033425(93)02,000 0
CIP REBATES - COMMERCIAL 0 001660(100)01,000 0
CIP - MARKETING 0 002500(100)01,500 0
CIP - LABOR 0 00840(100)05000
ENVIRONMENTAL COMPLIANCE 52 11853334124(63)42,000 5
MISC GENERAL EXPENSE 0 00420(100)02500
53 149 1,210 77 143(88)3Total For General Expense:7,250 5
Total Expenses(before Operating Transfers)
329,219 669,781342,849 732,387689,629 (6)34,098,356 19,847
Operating Transfer
Operating Transfer/Other Funds
TRANSFER TO CITY ELK RIVER R 0 03,044 6,6436,448 (3)064,521 6,448
Utilities & Labor Donated
WATER & LABOR DONATED TO CI 0 003340(100)02,000 0
Total Operating Transfer
3,044 6,448 6,977 0 0(8)0Total For Total Operating Transfer:66,521 6,448
(146,522)(275,986)(157,451)(304,043) Net Income Profit(Loss)(276,406)9 0145,549 (420)
185
February 2026 Financials
Report Highlights
4/14/2026
PRESENTED AT MEETING - FEBRUARY 2026 FINANCIAL PRESENTATION
2
YTD Profit & Profit Margin %
Purpose: To show the overall health of the organization.
•YTD ERMU’s revenue is exceeding expenses by $1.2M
•Resulting in a profit margin of 14.34%
Profit & Profit Margins %
February 2026
$1,223,482
14.34%
Revenue Expense
$8,531,943 $7,308,461
PRESENTED AT MEETING - FEBRUARY 2026 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 - FEBRUARY 2026 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 - FEBRUARY 2026 FINANCIAL PRESENTATION
5
Accounts Receivable-Utility Aging 2/28/2026
Purpose: an overview of
outstanding payments from
customers and how long
they are past due.
•City services make up
$439k of total A/R balances
of $2.63M
•Over 90 days is only 3% of
total A/R compared to 88%
being current
GREEN
IS
GOOD!
PRESENTED AT MEETING - FEBRUARY 2026 FINANCIAL PRESENTATION
6
Accounts Receivable-Utility Aging 2/28/2026
Note: Electric and water accounts receivable
can be reviewed separately on the “Combined
Balance Sheet” provided in the packet.
PRESENTED AT MEETING - FEBRUARY 2026 FINANCIAL PRESENTATION
7
Electric Department – Purchased Power
Purpose: To illustrate 5-year
comparison in purchased power
costs.
•Purchased power 2026 YTD is
approximately 60% of total
expenses.
•2026 YTD purchased power is
favorable to budget 17%.
•2026 expense is 4% less than
2025. YTD 2026 is $171k less
than 2025. 1% higher kWh
purchased but 29% less EAC
charges.
PRESENTED AT MEETING - FEBRUARY 2026 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 3% higher in
2026 as compared to 2025.
•***Through March 2026***
PRESENTED AT MEETING - FEBRUARY 2026 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 2% YTD and
sales revenue is up 3% YTD over
prior year.
•***Through March 2026***
PRESENTED AT MEETING - FEBRUARY 2026 FINANCIAL PRESENTATION
Thank You!
Melissa Karpinski, CPA - Finance Manager
mkarpinski@ermumn.com
PRESENTED AT MEETING - FEBRUARY 2026 FINANCIAL PRESENTATION
______________________________________________________________________________
Page 1 of 3
UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Mike Tietz – Technical Services Superintendent
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
5.2
SUBJECT:
2025 Annual Reliability Report
ACTION REQUESTED:
Receive the 2025 Annual Reliability Report
BACKGROUND:
Minnesota Rules Chapter 7826 Public Utilities Commission Electric Utility Standards cover
safety, reliability, service, and reporting requirements. Per 7826.0100(A), municipal utilities are
exempt from these requirements. However, the Elk River Municipal Utilities Commission
adopted several parts of this chapter as a Distribution Reliability Standard policy requiring
annual reporting on system reliability.
DISCUSSION:
In 2025, our reliability index numbers remained impressive. These reliability index numbers
demonstrate the condition of our solidly built electrical system as well as the excellent response
times our line crews provide. The Utility’s commitment to accountability, long term visioning of
system design, and ongoing system maintenance are also reflected by these numbers.
The table below reflects the number of customer outage minutes for the last 10 years.
Year # of Customers # of Outage Minutes # of Outages
2016 10,862 432,310 59
2017 11,489 354,625 40
2018 12,158 117,055 51
2019 12,463 312,885* 59
2020 12,604 197,884 51
2021 13,038 628,670 61
2022 13,228 174,500 50
2023 13,543 187,469 51
2024 13,797 575,509 44
2025 14,001 262,996 54
*118,978 of these minutes are due to two separate transmission outages.
186
______________________________________________________________________________
Page 2 of 3
Listed below are several reliability indices that are used within the electric industry to make it
easier to compare performance among utilities along with ERMU’s 2024 and 2025 statistics.
Average Service Availability Index (ASAI)
ASAI is a measure of the average availability of the sub-transmission and distribution systems
to serve customers. It is the ratio of the total customer minutes that service was available to
the total customer minutes available in a time period. This is normally expressed as a
percentage.
ERMU’s 2025 ASAI is 99.9964% Availability ERMU’s 2024 ASAI is 99.9921% Availability
Customer Average Interruption Duration Index (CAIDI)
CAIDI is defined as the average duration (in minutes) of an interruption experienced by
customers during a specific time frame. It is calculated by summing the customer minutes off
during each sustained¹ interruption in the time period and dividing this by the number of
customers experiencing one or more sustained¹ interruptions during the time period. The
resulting unit is minutes. The index enables utilities to report the average duration of a
customer outage for those customers affected.
ERMU’s 2025 CAIDI is 62.2034 minutes ERMU’s 2024 CAIDI is 119.4102 minutes
System Average Interruption Duration Index (SAIDI)
SAIDI is defined as the average interruption duration (in minutes) for customers served
during a specified time period. It is determined by summing the customer minutes off for each
sustained¹ interruption during a specified time period and dividing that sum by the average
number of customers served during that period. The resulting unit is minutes. This index
enables the utility to report how many minutes’ customers would have been out of service if all
customers were out at one time.
ERMU’s 2025 SAIDI is 18.954 minutes ERMU’s 2024 SAIDI was 41.917 minutes
System Average Interruption Frequency Index (SAIFI)
SAIFI is defined as the average number of times that a customer is interrupted during a
specified time period. It is determined by dividing the total number of sustained¹ interrupted
customers in a time period by the average number of customers served. The resulting unit is
“interruptions per customer.”
ERMU’s 2025 SAIFI is 0.305 ERMU’s 2024 SAIFI was 0.351
¹ Only outages lasting longer than five minutes are included in the calculations, as defined by IEEE 1366.
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Staff review these statistics in detail to find ways to continually improve our system. These
statistics are very good when compared with other utilities. As indicated by the following pie
chart and statistics list, you can see the causes for the outages experienced in 2025.
Many investor-owned and cooperative run utilities “storm normalize“ their reliability numbers
by removing “major outages” due to storms from their reliability index number calculations.
Our reliability numbers have not been storm normalized. Our numbers reflect these major
outages and represent what our customers experienced in 2025. Overall, our electric
distribution system remains resilient, and our system reliability continues to be excellent.
The attached American Public Power Association’s (APPA) eReliability Annual Report contains
published averages that can be used to better understand the performance of our electric
system relative to other utilities nationally and to those within their region or size class.
ATTACHMENT:
• APPA eReliability Tracker 2025 Annual Report for Elk River Municipal Utilities
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Elk River Municipal Utilities
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I. About This Report
This report focuses on distribution system reliability across the country and is customized to
each utility that participates in the American Public Power Association's PowerTRX Reliability
powered by ESAMS. APPA created the Annual Reliability Benchmarking Report to assist
utilities in their efforts to understand and analyze their electric system. In 2012, APPA
developed the eReliability Tracker thanks to a grant from the Demonstration of Energy &
Efficiency Developments (DEED) program. In 2025, APPA transitioned the eReliability Tracker
to a new platform PowerTRX Reliability powered by ESAMS by paternering with HGW &
Associates, Inc.
This report reflects data in the PowerTRX Reliability from January 1, 2025 to December 31,
2025. This analysis might not properly reflect your utility's statistics if you do not have a full
year of data in the system. The report includes data recorded as of March 23, 2026.
Reliability reflects both historic and ongoing engineering investment decisions within a utility.
Proper use of reliability metrics ensures that a utility is performing its intended function and
is providing service in a consistent and effective manner.
While the primary use of reliability statistics is for self-evaluation, you can use these statistics
to compare your utility with similar utilities. However, differences such as electrical network
configuration, ambient environment, weather conditions, and number of customers served
typically limit most utility-to-utility comparisons. Due to the diverse range of utilities that use
the PowerTRX Reliability, this report endeavors to improve comparative analyses by grouping
utilities by size and region.
Since this report contains data for all utilities that use the PowerTRX Reliability, it is important
to consider how a particularly large or small utility can affect comparative benchmarks. To
ease the issues associated with comparability, each utility's reliability statistics are weighted
based on customer count when aggregated. This means that all utilities are equally weighted,
and all individual statistics are developed on a per customer basis.
The aggregate statistics in this report are calculated from the 312 utilities with verified 2025
outage data. Utilities that experienced no outages in 2025, or did not upload any data, will
have NULL, None, or "0" values in their report for utility-specific data and were not included in
the aggregate analysis. Also note that log-normal data with a z-score[1] greater than 3.25 may
be excluded if it significantly distorts the aggregate statistics.
[1]: A z-score indicates how much a data point differs from the mean. For instance, a z-score of 3.25 indicates that the data point
is three and one-quarter standard deviations from the mean. A z-score of 0 indicates that the data point is identical to the mean.
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Utility Classifications
This report separates utilities into groups according to geographic region and the number of
customers served. Table 1 shows the range of customer counts for utilities that use the
PowerTRX Reliability by five distinct groups of approximately 111 utilities per group.
Your utility is in size class 4 and region 3.
Table 1. Customer count range per size class
Customer Count Range
Class 1 >0
Class 2 >1,511
Class 3 >3,518
Class 4 >7,262
Class 5 >14,547
Each utility is also grouped with all other participating utilities within their region. Figure 1
shows the number of utilities using the PowerTRX Reliability in each region and Figure 2
shows the states and territories included in each region.
Figure 1. Number of utilities subscribed to the PowerTRX Reliability by region
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Figure 2. Regions
4192
II. IEEE Statistics
When it comes to reliability, the industry standard metrics are defined in the Institute for
Electrical and Electronics Engineers' Guide for Electric Power Distribution Reliability Indices, or
IEEE 1366 guidelines. For each utility, the PowerTRX Reliability performs IEEE 1366 calculations
for System Average Interruption Duration Index (SAIDI), System Average Interruption
Frequency Index (SAIFI), Customer Average Interruption Duration Index (CAIDI), Momentary
Average Interruption Frequency Index (MAIFI), and Average Service Availability Index (ASAI).
It is important to note how major events (MEs) are calculated and used in this report. An
example of an ME includes severe weather, such as a tornado or hurricane, that leads to
unusually long outages in comparison to your distribution system's typical outage. This report
uses the APPA ME threshold, which is based directly on the SAIDI for specific outage events,
rather than a daily SAIDI. The APPA ME threshold allows a utility to remove outages that
exceed the IEEE 2.5 beta threshold for outage events, which considers up to 10 years of the
utility's outage history. In the PowerTRX Reliability, if a utility does not have at least 36 outage
events prior to the year being analyzed, then no threshold is calculated. If this is the case for
your utility, then you will have a NULL value in the following field and the calculations without
MEs in the SAIDI, SAIFI, CAIDI, and ASAI sections of this report will be the same as the
calculations with MEs for your utility. More outage history will provide a better threshold for
your utility.
Your utility's APPA major event threshold is 7.06 minutes.
For each of the reliability indices, this report displays your utility's metrics alongside the mean
values for all utilities using the PowerTRX Reliability and within the same class and region as
your utility. The first table within each of the following subsections allows you to better
understand the performance of your electric system relative to other utilities nationwide and
to those within your same region or size class. The second table breaks down the national
data into quartile ranges, a minimum value, and a maximum value.
All indices, except MAIFI, are calculated for outages with and without MEs. Furthermore, the
tables show indices for scheduled and unscheduled outages. Note that scheduled and
unscheduled calculations include MEs. Also note that wherever MEs are excluded, the
exclusion is based on the APPA ME threshold for your system.
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II.1. System Average Interruption Duration Index
SAIDI is the average duration (in minutes) of an interruption per customer served by the utility
during a specific time frame.
Since SAIDI is a sustained interruption index, only outages lasting longer than five minutes
are included in the calculations. SAIDI is calculated by dividing the sum of all customer
minutes of interruption[2] within the specified time frame by the average number of
customers served during that period. For example, a utility with 100 customer minutes of
interruption and 100 customers would have a SAIDI of 1.
Note that in the tables below, scheduled and unscheduled calculations include MEs. Also note
that wherever MEs are excluded, the exclusion is based on the APPA ME threshold for your
system.
Table 2. Average SAIDI with and without MEs
In minutes
All No MEs Unscheduled Scheduled
Your utility 18.95 11.84 18.54 0.41
Utilities that use PowerTRX Reliability 110.25 54.6 106.69 6.51
Utilities in your region 67.08 46.73 65.28 3.0
Utilities in your size class 79.94 30.48 74.25 8.53
Table 3. Summary SAIDI data from the PowerTRX Reliability
In minutes
All No MEs Unscheduled Scheduled
Minimum 0.04 0.04 0.04 <0.01
First Quartile 20.91 12.73 19.08 0.2
Median 50.24 25.79 48.17 1.01
Third Quartile 111.47 54.03 108.6 4.63
Maximum 965.21 760.33 948.5 280.35
[2]: Customer minutes of interruption is calculated by multiplying total customers interrupted and total minutes of interruption.
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Figure 3. Average SAIDI by region
7195
II.2. System Average Interruption Frequency Index
SAIFI is the average instances a customer on the utility system will experience a sustained
interruption during a specific time frame.
Since SAIFI is a sustained interruption index, only outages lasting longer than five minutes are
included in the calculations. SAIFI is calculated by dividing the total number of customers that
experienced sustained interruptions by the average number of customers served during that
period. For example, a utility with 150 customer interruptions and 200 customers would have
a SAIFI of 0.75.
Note that in the tables below, scheduled and unscheduled calculations include MEs. Also note
that wherever MEs are excluded, the exclusion is based on the APPA ME threshold for your
system.
Table 4. Average SAIFI with and without MEs
In interruptions
All No MEs Unscheduled Scheduled
Your utility 0.3 0.2 0.29 0.01
Utilities that use PowerTRX Reliability 0.86 0.54 0.83 0.04
Utilities in your region 0.68 0.45 0.66 0.02
Utilities in your size class 0.64 0.4 0.61 0.03
Table 5. Summary SAIFI data from the PowerTRX Reliability
In interruptions
All No MEs Unscheduled Scheduled
Minimum <0.01 <0.01 <0.01 <0.01
First Quartile 0.28 0.15 0.27 <0.01
Median 0.61 0.35 0.56 0.01
Third Quartile 1.12 0.71 1.09 0.05
Maximum 4.68 4.16 4.67 0.63
8196
Figure 4. Average SAIFI by region
9197
II.3. Customer Average Interruption Duration Index
CAIDI is the average duration (in minutes) of an interruption experienced by customers during a
specific time frame.
Since CAIDI is a sustained interruption index, only outages lasting longer than five minutes
are included in the calculations. CAIDI is calculated by dividing the sum of all customer
minutes of interruption by the number of customers that experienced one or more
interruptions during that period. This metric reflects the average customer experience
(minutes of duration) during an outage.
Note that in the tables below, scheduled and unscheduled calculations include MEs. Also note
that wherever MEs are excluded, the exclusion is based on the APPA ME threshold for your
system.
Table 6. Average CAIDI with and without MEs
In minutes
All No MEs Unscheduled Scheduled
Your utility 62.2 58.93 62.94 40.93
Utilities that use PowerTRX Reliability 114.78 94.95 113.99 161.38
Utilities in your region 100.36 89.45 101.31 187.25
Utilities in your size class 112.33 89.04 108.33 139.02
Table 7. Summary CAIDI data from the PowerTRX Reliability
In minutes
All No MEs Unscheduled Scheduled
Minimum 11.4 11.4 9.81 10.0
First Quartile 60.95 55.27 60.95 60.0
Median 93.37 78.01 91.69 91.21
Third Quartile 134.84 108.01 135.38 155.92
Maximum 834.46 577.44 842.31 4,453.93
10198
Figure 5. Average CAIDI by region
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II.4. Momentary Average Interruption Frequency Index
MAIFI is the average number of momentary interruptions a utility customer will experience during a
specific time frame.
In this report, an outage with a duration of five minutes or less is classified as momentary.
MAIFI is calculated by dividing the total number of customers that experienced momentary
interruptions by the total number of customers served by the utility. For example, a utility
with 20 momentary customer interruptions and 100 customers would have a MAIFI of 0.20.
Momentary interruptions can be more difficult to track and utilities without an automated
outage management system might not log these interruptions; therefore, some utilities have
a MAIFI of zero.
Table 8. Average MAIFI
In interruptions
All
Your utility NULL
Utilities that use PowerTRX Reliability 0.44
Utilities in your region 0.8
Utilities in your size class 0.39
Table 9. Summary MAIFI data from the PowerTRX Reliability
In interruptions
All
Minimum <0.01
First Quartile <0.01
Median 0.16
Third Quartile 0.51
Maximum 3.82
12200
Figure 6. Average MAIFI by region
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II.5. Average Service Availability Index
ASAI is the percentage of time the sub-transmission and distribution systems are available to serve
customers during a specific time frame.
This load-based index represents the percentage availability of electric service to customers
within the period analyzed. It is calculated by dividing the total hours in which service is
available to customers by the total hours that service is demanded by the customers. For
example, an ASAI of 99.99% means that electric service was available for 99.99% of the time
during the given period. Note that the higher your ASAI value, the better the performance.
In the tables below, scheduled and unscheduled calculations include MEs. Also note that
wherever MEs are excluded, the exclusion is based on the APPA ME threshold for your system.
Table 10. Average ASAI with and without MEs
In percentage
All No MEs Unscheduled Scheduled
Your utility 99.9963 99.9977 99.9964 99.9999
Utilities that use PowerTRX Reliability 99.9792 99.9897 99.9798 99.9987
Utilities in your region 99.9872 99.9911 99.9876 99.9994
Utilities in your size class 99.9848 99.9942 99.9859 99.9983
Table 11. Summary ASAI data from the PowerTRX Reliability
In percentage
All No MEs Unscheduled Scheduled
Maximum 99.9999 99.9999 99.9999 99.9999
First Quartile 99.996 99.9975 99.9963 99.9999
Median 99.9906 99.9951 99.9908 99.9998
Third Quartile 99.9792 99.9899 99.9795 99.9991
Minimum 99.8163 99.8553 99.8195 99.9466
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Figure 7. Average ASAI by region
15203
II.6. Energy Information Administration Form 861 Data
Form EIA-861 collects annual information on electric power industry participants involved in the
generation, transmission, distribution, and sale of electric energy in the United States and its
territories.
In 2014, Energy Information Administration (EIA) began publishing reliability statistics in Form
EIA-861; therefore, APPA included these statistics in this report for informational purposes.
Please note that the following data includes 171 investor-owned, 467 rural cooperative, and
332 public power utilities that were large enough to be required to fill out the full EIA-861
form. The statistics do not include data from utilities that complete the EIA 861-S form, which
smaller entities complete. Note that the 332 participating public power utilities include
entities classified by EIA as municipal, political subdivision, and state. In addition, since the
collection and release of EIA form data lags by a year, the data is based on 2024 data that was
published October 7, 2025. Therefore, we suggest you only use the aggregate statistics
contained herein as an informational tool for further comparison of reliability statistics.
In Form EIA-861, an entity provides SAIDI and SAIFI including and excluding ME days in
accordance with the IEEE 1366-2003 or IEEE 1366-2012 standard.
Although EIA collected other reliability-related data, the tables below only include SAIDI and
SAIFI data including and excluding ME days. You can download the full set of data at:
www.eia.gov/electricity/data/eia861/.
Table 12. Your utility's SAIDI and SAIFI with and without IEEE ME days
SAIDI with IEEE ME
days (minutes)
SAIDI without IEEE
ME days (minutes)
SAIFI with IEEE ME days
(interruptions)
SAIFI without IEEE ME
days (interruptions)
18.95 18.95 0.3 0.3
Table 13. Summary SAIDI data from Form EIA-861, 2024
In minutes
All No MEs
Average 520.78 169.31
Minimum 0 0
First Quartile 80.85 54.00
Median 199.20 101.58
Third Quartile 403.56 180.00
Maximum 17,313.00 17,059.00
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Table 14. Summary SAIFI data from Form EIA-861, 2024
In interruptions
All No MEs
Average 1.75 1.24
Minimum 0 0
First Quartile 0.84 0.64
Median 1.41 1.02
Third Quartile 2.26 1.61
Maximum 10.41 6.86
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III. Outage Causes
Equipment failure, extreme weather events, wildlife, and vegetation are some of the most
common causes of electric system outages. The following pie chart shows the percentages of
the primary causes of outages for all utilities using the PowerTRX Reliability in 2025.
Figure 8. Primary causes of outages in 2025
Certain factors, such as regional weather and animal/vegetation patterns, can make some
causes more prevalent for a specific group of utilities. The following section includes graphs
depicting common causes of outages for your utility, all utilities in your region, and all utilities
using the PowerTRX Reliability.
Charts containing aggregate information are customer-weighted to account for differences in
utility size for a better analytical comparison. For example, a particularly large utility may have
a large number of outages compared to a small utility. To avoid skewing the data toward large
utilities, the number of cause occurrences is divided by customer size to account for the
differences. In Figures 9 to 14, the data represent the number of occurrences for each group
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of 1,000 customers. A customer-weighted occurrence rate of "1" means an average of one
outage from that cause occurred per 1,000 customers in 2025.
Note that the sustained outage cause analysis is more comprehensive than the momentary
outage cause analysis due to a larger and more robust sample size for sustained outages.
Regardless, tracking both sustained and momentary outages helps utilities understand and
reduce outages. To successfully use the outage information tracked by your utility, it is
imperative to classify and record outages in detail. The more information provided per
outage, the more conclusive and practical your analyses will be.
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III.1. Sustained Outage Causes
In general, sustained outages are the most commonly tracked outage type. In analyses of
sustained outages, utilities tend to exclude scheduled outages, partial power, customer-
related problems, and qualifying major events from their reliability indices calculations. While
this is a valid method for reporting, these outages should be included for internal review to
make utility-level decisions. In this section, we evaluate common causes of sustained outages
for your utility, corresponding region, and for all utilities that use PowerTRX Reliability
powered by ESAMS. It is important to note that sustained outages are classified in this report
as outages that last longer than five minutes, as defined by IEEE 1366.
Figure 9. Top five causes of sustained outages for all utilities that use the PowerTRX
Reliability[3]
Figure 10. Top five causes of sustained outages for your utility[4]
[3]: Cause occurrence rates reflect the total number of outages across all participating utilities. In some cases, a high occurrence
rate for a specific cause may be driven primarily by a small number of utilities (or a single utility) that experienced a large number
of outages for that cause during the reporting period.
[4]: The number of occurrences for each cause is divided by the utility's customer count (in thousands) to create an occurrence
rate that can be compared across different utility sizes.
20208
Figure 11. Top five causes of sustained outages in your region
21209
III.2. Momentary Outage Causes
The ability to track momentary outages can be difficult or unavailable on some systems, but
due to the hazard they pose for electronic equipment, it is important to track and analyze the
causes of momentary outages. This section evaluates the common causes of momentary
outages for your utility, region, and size class as well as common causes for all utilities that
use the PowerTRX Reliability. Please note that only outages lasting less than five minutes are
classified as momentary, as defined by IEEE 1366. In Figures 12–14, for each utility, the
number of occurrences for each cause is divided by that utility's customer count (in
thousands) to create an occurrence rate that can be compared across different utility sizes.
Figure 12. Top five causes of momentary outages for all utilities that use the PowerTRX
Reliability
Figure 13. Top five causes of momentary outages for your utility
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Figure 14. Top five causes of momentary outages in your region
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Thank you for your active participation in the PowerTRX Reliability service. We hope this
report is useful to your utility in analyzing your system. If you have any questions regarding
the material provided in this report, please contact:
APPA's Reliability Team
PowerTRX@PublicPower.org
For more information on reliability, visit https://www.publicpower.org/reliability-tracking.
Copyright 2026 by the American Public Power Association. All rights reserved.
24212
2451 Crystal Drive
Suite 1000
Arlington, VA 22202-4804
www.PublicPower.org
#PublicPower
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Sara Youngs – Administrations Director
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
5.3
SUBJECT:
Information Technologies Services Memorandum of Understanding with the City of Elk River
ACTION REQUESTED:
Approve Information Technologies Services Memorandum of Understanding with the City of Elk
River
BACKGROUND:
The current Information Technologies (IT) Services Memorandum of Understanding (MOU) was
adopted on June 15, 2021. Several IT staffing and resource allocation changes have occurred
since that time. The purpose of this MOU is to set forth the understanding and agreement
between the parties with respect to IT services provided by the City to ERMU. ERMU will also
provide infrastructure support to the City. ERMU’s administration director, IT/OT systems &
network administrator, and City IT staff attended the March 16, 2026, City Council work session
to review the MOU. The session allowed council members to ask questions ahead of Council’s
ultiamte approval on April 6, 2026.
DISCUSSION:
The proposed updates to the 2021 MOU reflect current IT/OT staffing, roles, and resource
allocation, as well as clarify service expectations and responsibilities between City and ERMU
staff. The MOU is intended to support reliable operations, enhance the partnership between
the City and ERMU, and align with the ongoing technology and cybersecurity needs.
FINANCIAL IMPACT:
ERMU will maintain ownership of all IT and OT assets it acquires and will pay the City for IT
services to support ERMU's IT assets. The amount to be paid shall be sufficient to cover 10
hours per month (120 hours per year) of the City IT manager’s time, and 10 hours per month
(120 hours per year) for the City IT specialist’s time. The amount due for these support services
shall be billed to ERMU annually.
Further, prorated joint IT purchases or maintenance contracts for shared equipment will be
based on anticipated usage by each entity. A cost-sharing spreadsheet will be maintained and
reviewed quarterly and updated for annual budgeting.
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Page 2 of 2
ATTACHMENTS:
• Information Technologies Services Memorandum of Understanding with the City of Elk
River
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Mark Hanson – General Manager
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
5.4
SUBJECT:
Letter of Intent for Large Industrial Electric Load
ACTION REQUESTED:
Approve Letter of Intent for Large Industrial Electric Load
BACKGROUND:
Staff have been approached by a potential customer requesting electric service for a proposed
data center project located at 19178 Industrial Blvd NW. The facility is expected to require a
total of 33 megawatts (MW) when fully operational. Staff have been working with the customer
to define preliminary development terms agreeable to both parties. The attached Letter of
Intent (LOI) outlines the agreed upon terms. If the LOI is executed, staff and the customer will
work toward negotiating a detailed Electric Service Agreement that will include final
infrastructure requirements, payment schedules, operational terms, and applicable rates.
DISCUSSION:
This project represents a significant new load on ERMU’s electric system and will require
several modifications to support the load growth. Although the LOI represents negotiated
terms to date, final commitments will be subject to completion of an Electric Service
Agreement, verification of transmission capacity through a System Impact Study, confirmation
of generation capacity from our power provider, and the installation of numerous
infrastructure modifications.
The project is proposed to be developed in two phases:
• Phase One includes minor infrastructure modifications to existing feeders and the
installation of two new feeders from existing substation transformers to support
approximately 23 MW of capacity in 2027.
• Phase Two includes major infrastructure modifications to an existing substation to
support the installation of a third substation transformer in 2029. The new transformer
will support two additional feeders to provide 10 MW of additional capacity and ensure
system redundancy.
The customer has indicated the project will include a closed-loop glycol-based cooling system
so it will not require any additional water beyond a typical domestic water service. It will also
include customer-owned backup generation.
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FINANCIAL IMPACT:
Since the property has an existing service that is being upgraded, the customer is responsible
for all costs that directly support their capacity needs. The customer is also responsible for most
of the costs incurred by ERMU to provide the requested capacity. Cost-sharing may apply for
infrastructure upgrades that also benefit the broader distribution system.
ATTACHMENTS:
• Letter of Intent for Large Industrial Electric Service
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April 14, 2026
DRAFT – SUBJECT TO COMMISSION APPROVAL
VIA E -MAIL ONLY
Elk River Capital, LLC
Attn: Ned Abdul
510 – 1st Avenue North #600
Minneapolis, MN 55403
ned@swervo.com
RE: Letter of Intent for MSP6 – 19178 Industrial Blvd. NW, Elk River, MN 55330
Elk River Municipal Utilities (“ERMU”) and Elk River Capital, LLC, a Minnesota limited liability
company, authorized to conduct business in Minnesota (the “Customer,” together with ERMU, the
“Parties”) have discussed the Customer’s desire to build one or more data centers located in Elk
River, Minnesota.
Specifically, the Customer has communicated a desire to have ERMU provide a total of thirty-
three (33) megawatts of capacity to the specific data center to be located at 19178 Industrial Blvd
NW, Elk River, MN 55330 (the “Data Center”) in two phases; with Phase One Capacity (defined
below) constituting twenty-three (23) megawatts available in the 4th quarter of 2026 or the 2nd
quarter of 2027, and Phase Two Capacity (defined below) constituting an additional ten (10)
megawatts available in 2028 or 2029, or earlier as discussed below (collectively, the “Data Center
Capacity”). Both Parties acknowledge and agree that the requested capacity is contingent upon the
ability of Great River Energy (GRE), as ERMU’s transmission provider, to provide additional
capacity to ERMU’s West substation.
Accordingly, subject to the terms and conditions herein, ERMU is providing this letter of intent
regarding the Data Center Capacity (this “LOI”) to memorialize: (1) ERMU’s current
understanding of the Customer’s plans for the Data Center and the need for the Data Center
Capacity; (2) ERMU’s current understanding and ability to fulfill the Customer’s request for the
Data Center Capacity; and (3) the general understanding and terms upon which ERMU would be
willing to provide the Data Center Capacity.
For the avoidance of doubt, this LOI is limited solely to the Data Center Capacity. This LOI does
not and is not addressing any other plans, projects, options, requests, etc. the Customer currently
has or may have in the future. Any other capacity to be provided by ERMU to the Customer, or its
affiliates, agents, subsidiaries, designees, etc. shall be exclusively addressed in other
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correspondence, communications, or agreements, as applicable. Accordingly, the Customer
understands, acknowledges, and agrees that: (1) ERMU shall not be bound by any terms,
conditions, promises, representations, or warranties in this LOI with respect to any other capacity
or services provided to the Customer; and (2) such other requests for capacity or services may
require a system impact study through Great River Energy or the Midcontinent Independent
System Operator (“MISO”), as applicable.
Please be advised that, unless otherwise expressly set forth herein, nothing contained in this LOI
shall constitute a binding agreement between the Parties. The Parties hereby acknowledge and
agree that neither ERMU nor the Customer shall have any obligation to each other under this LOI,
except for the agreement found in Section D titled “Capacity Availability Agreement.” The Parties
hereby further acknowledge and agree that the Parties shall have no other obligation to each other,
including without limitation with respect to the Data Center Capacity, unless and until the Parties
have fully and finally executed a written agreement, or agreements as applicable, regarding the
Data Center Capacity, which agreement(s) shall contain such terms and conditions that are
acceptable to ERMU in its sole discretion, or other such written agreements as may be necessary
in ERMU’s sole discretion, defined below as an Electric Services Agreement.
A. CUSTOMER NEEDS
ERMU understands that the Data Center will need a total capacity of up to 33 megawatts when
completed, but is expected to be operational starting in the 1st quarter of 2027. ERMU understands
that the initial operational capacity needed at the Data Center in the 4th quarter of 2026 or the 2nd
quarter of 2027 is 23 megawatts of capacity (“Phase One Capacity”) and that an additional 10
megawatts of capacity will be needed in 2028 or 2029 (Phase Two Capacity”).
B. ERMU’s CAPABILITIES
ERMU has analyzed its capacity availability for the Data Center. ERMU has determined that it has
sufficient capacity to deliver Phase One Capacity in the 4th quarter of 2026 or the 2nd quarter of
2027 and Phase Two Capacity in 2028 or 2029 as of the date of this LOI. However, in order to
provide the Data Center Capacity, ERMU must make certain infrastructure modifications to
provide the Data Center Capacity to the Data Center. Additionally, Great River Energy (GRE), as
ERMU’s transmission provider, may require infrastructure modifications to provide the Data
Center Capacity to ERMU’s substations. ERMU has initiated a system impact study to determine
the cost and timing of any transmission system upgrades needed to serve the Data Center.
ERMU has estimated the costs for the necessary Infrastructure Modifications (defined below) to
ensure its distribution system will be capable of delivering the Data Center Capacity to the Data
Center in Exhibit A (the “Estimated Costs”) covering the period of 2026 through 2029, which
assumes that Phase One Capacity will be delivered in the 4th quarter of 2026 or the 2nd quarter of
2027 and Phase Two Capacity will be delivered in 2028 or 2029. ERMU has yet to receive the
estimated costs from GRE as to Infrastructure Modifications related to the transmission system.
The Customer acknowledges and agrees that: (i) the Estimated Costs are purely estimates and do
not reflect the real, actual, payable costs to be incurred for the Infrastructure Modifications; (ii) the
costs in Exhibit A are subject to change over time; (iii) that no estimate of costs in any Electric
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Services Agreement (defined below) shall bind ERMU to any such estimated costs and all costs
are subject to true up to actual.
C. SUMMARY OF REQUIRED TERMS AND CONDITIONS FOR ELECTRIC
SERVICES AGREEMENT
As set forth above, ERMU is willing to provide Phase One Capacity and Phase Two Capacity to
the Data Center, for the total Data Center Capacity of 33 megawatts of capacity, but only upon the
execution by the Parties of a written “Electric Services Agreement,” which is: (1) a written
agreement (or series of incorporated agreements as applicable) between the Parties regarding the
delivery of utility services to the Data Center; (2) contains such terms and conditions that are
necessary and acceptable to ERMU in its sole discretion; and (3) except as otherwise qualified in
this Section C, must containing following terms and conditions:
1. Customer Class. The Data Center will be included in a tariff category of “Large Industrial
Demand Electric Service Rate,” which requires a separate agreement with ERMU
concerning electric service.
2. Infrastructure Modifications.
a. Condition to Providing Capacity. As a condition to providing the Data Center
Capacity to the Data Center, certain infrastructure modifications must be made at
ERMU’s discretion, including without limitation:
i. Phase One: installation of two substation feeders to the Data Center in the 4th
quarter of 2026 or the 2nd quarter of 2027 (West Bank One and West Bank
Two ).
ii. Phase Two: In 2028 or 2029, installation of two additional feeders to the Data
Center from the new West Bank Three (to be installed in 2028 or 2029) and
expansion work at West Substation to make room for a third transformer. In
2028 or 2029, installation of the new transformer, Bank Three, at ERMU’s
West Substation.
iii. Any other equipment required to provide service to the Data Center, including
without limitation, transmission system modifications required by GRE
(collectively, the “Infrastructure Modifications”).
b. Infrastructure Modification Plans. ERMU, in its discretion, and in coordination
with Great River Energy, will determine the necessary Infrastructure Modifications,
including without limitation, the distribution and transmission facilities and work
necessary to provide the requested utility services to the Data Center. The process
for implementing the Infrastructure Modifications must follow the respective
requirements of ERMU and GRE, including without limitation, requirements for
design, competitive bidding, procurement, construction, and technical
specifications.
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c. Usage Authority. The Infrastructure Modifications, and services provided in
connection therewith, may include components that are used to serve users other
than the Customer and/or the Data Center.
d. Infrastructure Ownership. ERMU will solely own and operate the Infrastructure
Modifications upon completion, except for any transmission system components
owned by GRE.
e. Infrastructure Modification Cooperation.
i. The Customer shall fully cooperate with ERMU by, among other things,
providing detailed specifications and information needed to plan the
Infrastructure Modifications and determine their costs of completion.
ii. The Customer shall be responsible, at its own cost, for enabling the Data
Center to receive the Data Center Capacity, including without limitation,
providing primary metered service and all downstream equipment according
to ERMU’s Large Industrial Demand Electric Service Rate and other standard
terms, conditions, and policies for providing primary metered electric service.
f. Infrastructure Costs. The costs to complete the Infrastructure Modifications (the
“Infrastructure Costs”) shall include without limitation: the actual fees, costs,
charges, expenses, etc. associated with, necessary for, and incurred for design,
engineering, planning, purchasing equipment, facilities, and materials, labor,
professional services, restoration, transmission modifications, easement rights,
acquisition, installation, and construction of the Infrastructure Modifications to
ERMU’s distribution system and to GRE’s transmission system.
The Customer will be responsible for payment of 100% of the Infrastructure Costs
as an agreed-upon capital contribution in aid of construction and shall be payable
as set forth below.
g. Payment of Infrastructure Costs.
i. The Parties shall agree upon and incorporate a payment schedule which sets
forth the payment dates and payment amounts that Customer shall make for
the Infrastructure Costs (the “Payment Schedule”). The dates and amounts
included on the Payment Schedule shall be based on ERMU’s estimated
infrastructure costs and associated timeline. On an annual basis, the Parties
will then reconcile the amounts paid by the Customer under the Payment
Schedule with those actually due under an Electric Services Agreement.
ii. Estimates for Infrastructure Costs to be incurred by ERMU for GRE’s
transmission system will be made known to the Customer as soon as practical
after ERMU has received them from GRE.
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iii. ERMU will have no obligation to order materials or incur expenses until
Customer has made the required payments under the Payment Schedule.
3. Water Usage Limitations. The Customer is expressly prohibited from using water
services for any cooling or other non-domestic purposes related to the Data Center Capacity
and the Data Center shall contain a closed loop cooling system. ERMU shall provide the
Data Center with domestic water services, pursuant to a separate agreement, at the capacity
assessed by the Metropolitan Council through their Sewer Access Charge (SAC)
Determination and in accordance with ERMU’s standard terms, conditions, and/or policies,
including without limitation ERMU’s “Water Rules.”
4. Operations.
a. ERMU Standard Terms. Any Electric Services Agreement shall include terms and
conditions for ongoing power supply from ERMU to the Data Center as required
by ERMU in its discretion, including without limitation, specifying delivery points,
events of default and remedies, representations and warranties, minimum demand
and energy requirements, minimum power factor, taxes, future regulatory expenses,
interruption of service (including load shedding required by MISO or local system
emergencies), conservation improvement program expenses, security, force
majeure, responsibilities, dispute resolution, and billing, among other customary
provisions.
b. Regulatory. The Customer and/or the Data Center must comply with all applicable
ERMU utility service requirements, applicable MISO requirements, and applicable
law (federal, state, and local), including, but not limited to City zoning, permit, and
noise requirements.
D. CAPACITY AVAILABILITY AGREEMENT
1. Reservation Payment. No later than ten (10) days after mutual execution of this LOI,
Customer shall make a nonrefundable payment to ERMU in the amount of $10,000.00 (the
“Reservation Payment”) for the Reservation Period (defined below). In the event and to
the extent the Parties enter into an Electric Services Agreement, the Reservation Payment
may be credited to amounts due and owing by the Customer under such Electric Services
Agreement, but is otherwise non-refundable.
2. Reservation of Capacity. For good and valuable consideration, the sufficiency of which
is hereby acknowledged, the Parties agree that upon ERMU’s receipt of the LOI, executed
by the Customer, and the Reservation Payment, and subject to the results of the system
impact study noted in Section B, ERMU shall ensure that the Data Center Capacity is
available for the benefit of the Data Center for a period not to exceed two (2) months from
the date of this LOI or until such time as the Parties enter into an Electric Services
Agreement, whichever occurs first (the “Reservation Period”). During the Reservation
Period, ERMU shall not promise, pledge, sell, encumber, or otherwise prevent the Data
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Center Capacity from being available to the Data Center. The Reservation Period may be
extended beyond the deadline set forth herein so long as the Parties continue to negotiate
an Electric Services Agreement in good faith and such extension is agreed upon in writing,
signed by both Parties.
3. LOI Costs. Each Party will be responsible for its own costs and expenses of the
transactions contemplated by this LOI, including without limitation attorneys’ fees and
costs.
4. Counsel. Each Party understands, acknowledges, and agrees that they have had the
opportunity to consult with legal counsel of their choice regarding this LOI. Customer
agrees and acknowledges that it has read and understands this LOI, is entering into it freely
and voluntarily, has been advised to seek counsel prior to entering into this LOI and has
had ample opportunity to do so. This LOI has resulted from negotiations and discussions
between the Parties and no one party shall be treated as drafting this LOI for purposes of
interpreting any provision hereof.
5. Captions. Captions and paragraph headings used herein are for convenience only and are
not a part of this LOI and shall not be used in construing it, except that the Parties expressly
agree that heading D and the contents thereof are the only binding terms of any agreement
of the Parties under this LOI.
6. Entire Agreement. This LOI is the complete and exclusive statement of the Parties hereto
with respect to the Reservation Period and supersedes all prior oral and written
communications, proposals, agreements, LOI, representations, statements, negotiations,
and undertakings, whether express or implied, between the Parties hereto with respect to
the Reservation Period. The Customer acknowledges and agrees that: (a) this LOI is not
entered into in reliance, in whole or in part, upon any statement or representation made by
or on behalf of ERMU, or its agents, except any such statement or representation expressly
set out in this LOI; (b) no agreement has been reached between ERMU and the Customer
obligating ERMU to provide any services to the Customer and/or the Data Center; (c)
ERMU shall have no obligations to the Customer and/or the Data Center for any services
or capacity described (including the Data Center Capacity) herein unless and until the
Parties have entered into an Electric Services Agreement duly executed by the Parties; (d)
ERMU has made no commitment to enter into an Electric Services Agreement; and (e) this
LOI does not constitute an Electric Services Agreement.
7. Modification. No term or provision of this LOI may be changed, revised, altered, or
waived, except by an instrument in writing signed by both of the Parties.
8. Choice of Law & Venue . This LOI shall be governed by and interpreted under the laws of
the State of Minnesota. Any dispute under this LOI resulting in litigation shall be venued
in a court of competent jurisdiction in Sherburne County, Minnesota. The Customer hereby
waives any objection that it may have to the venue of any such suit, action, or proceeding,
arising under or related to this LOI and hereby irrevocably consents to the personal
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jurisdiction of the District Courts for the State of Minnesota in any such suit, action, or
proceeding.
9. Counterparts. This LOI may be signed in counterparts and executed and delivered by
facsimile or other signature that is electronically transmitted (e.g., PDF) and such signature
may be treated as an original by the recipient.
Sincerely,
ELK RIVER MUNICIPAL UTILITIES
___________________________
By:
Its:
Dated:___________________
DRAFT – SUBJECT TO COMMISSION APPROVAL
ACKNOWLEDGED AND AGREED BY
ELK RIVER CAPITAL, LLC
x ________________________________
By: ______________________________
Its: ______________________________
Dated:____________________
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EXHIBIT A
ERMU Estimated Infrastructure Costs
(as of April 6, 2026)
Estimated
Date Description of Work
Estimated
Amount
Customer
Share
Customer
Amount
May 2026 Feeders 75/85 Material Procurement $700,000 100% $700,000
West Bank 3 Engineering/Design $150,000 100% $150,000
West Bank 3 Transformer Procurement $1,800,000 100% $1,800,000
June 2026 GRE Transmission Costs $500,000 75% $375,000
April 2027 Feeders 75/85 Installation $150,000 100% $150,000
Feeders WB3A/B Material Procurement $700,000 100% $700,000
West Bank 3 Structures & Equipment
Procurement $850,000 100% $850,000
April 2028 Feeders WB3A/B Installation $200,000 100% $200,000
West Substation Bank 3 Expansion $1,200,000 75% $900,000
April 2029 West Bank 3 Transformer Installation $250,000 100% $250,000
$6,500,000 $6,075,000
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Mark Hanson – General Manager
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
6.1a
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• The Minnesota Municipal Utility Association (MMUA) has released its third video in their
2026 legislative session update series. The video and the accompanying one-page
summary (attached) have been designed to assist interested individuals in learning
about the legislative matters that affect municipal utilities. These are the same issues
Commissioner Zerwas and I discussed with Senator Lucero and Representatives
Hudson/Novotny during MMUA’s Legislative Conference (March 24-25, 2026).
• I attended MMUA’s Reasonable Suspicion Training last Thursday, April 2, 2026. MMUA
offered the session to assist crew leads and supervisors with identifying and addressing
potential drug and alcohol use in the workplace.
• The Minnesota Municipal Power Agency Board of Directors met on March 31, 2026, at
Chaska City Hall in Chaska, Minnesota, and via videoconference. Commissioner Stewart
attended. The public summary is below:
o The Board reviewed the Agency’s financial and operating performance for
February 2026.
o Participation in the residential Clean Energy Choice program increased by 22
customers. Customer penetration for the program is at 6.7% of residential
customers.
o The Board discussed the status of electric generation and renewable natural gas
projects the Agency is pursuing.
ATTACHMENTS:
• MMUA April 2026 Legislative Update
230
April 2026
Throughout the session, watch for the Capitol Letter, a frequent update on the session as it progresses in real time, and consider
attending the weekly GRAG virtual meetings on Friday mornings. To be added to the GRAG list, email bblack@mmua.org. Learn more at
mmua.org.
This month’s video acknowledges the start of the Minnesota State Legislature’s 2026 regular session, overviews a few early
bills of interest, and summarizes the 2026 APPA Legislative Rally.
1. Despite weather causing travel challenges, about 60 representatives of Minnesota utilities made it to Washington,
DC, for the APPA Legislative Rally. They did a great job meeting in small groups with their members of the House,
and in full-group meetings with Senators Tina Smith and Amy Klobuchar.
2. The top federal priorities this year are:
• Preserving tax-exempt bonding
• Supporting LIHEAP funding
• Bringing back tax-exempt advance refunding bonds
• Increasing the small-issuer threshold for financial institutions
• Permitting reform
• FEMA reform
• Protecting local control of infrastructure
3. The 2027 APPA Rally runs February 28 through March 4. Please save those dates and look for hotel room
information this fall.
4. The State legislative session started with a heartfelt moment welcoming Senator John Hoffman back after surviving
a tragic attack by a gunman. But the day centered on a joint House–Senate memorial honoring Speaker Emeritus
Melissa Hortman, her husband Mark, and their family dog, Gilbert.
5. Early bills of interest to municipal utilities include:
• HF2986, a bill that commences a planning process for virtual power plants.
• HF 3555, a bill that would authorize “plug-in solar.”
• HF 3296, a bill that would exempt sales to some data centers from ECO mandates.
6. In an unusual move, at the end of a House Energy Committee meeting, Representative Dave Baker, a former
member of the Wilmar Utility Commission, led a discussion on net metering reform. No bill, motions, or votes
followed, and the stakeholders remain a long way apart on the particulars of reform.
7. When not working on specific bills, the MMUA Government Relations team keeps busy meeting with legislators,
energy stakeholders, and groups like the Nuclear Alliance. We advocate for your priorities—and push back where
needed.
Remember, what happens in St. Paul affects us all.
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Sara Youngs – Administrations Director
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
6.1b
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• Office walk-in traffic for March consisted of 145 customers, averaging 36 customers per
week over the four-week period.
• ERMU disconnections for March: The Cold Weather Rule was in effect, preventing
customer disconnections until 30 days after a disconnection notice is issued.
o Cycle 1 – 15 disconnections
o Cycle 2 – 8 disconnections
o Cycle 3 – 8 disconnections
• During the month of March 2026, the customer service team entered into 50 payment
arrangements with customers. During March 2025 there were 42 payment
arrangements.
• Currently there are two active residential solar photovoltaic projects planned or under
construction in the ERMU service territory.
• Staff from both the office and field will be participating in a Business Process
Consultation (BPC) with National Information Solutions Cooperative (NISC). NISC will be
onsite April 28–30, 2026, focusing on Work Management solutions. This consultation
will help ERMU gain a better understanding of current processes, identify opportunities
for improvement, and optimize the use of Work Management tools.
• Parker Theisen was promoted to Information Technology/Operational Technology
(IT/OT) Systems & Network Administrator on March 24, 2026. In this new role, Paker
will serve as our technical lead across an expanded scope of responsibilities, including:
o Leading network infrastructure, server, and systems administration to ensure
reliability and performance across our IT and OT environments.
o Providing advanced support and administration of enterprise applications,
including critical platforms like Advanced Metering Infrastructure, Supervisory
Control and Data Acquisition, and GIS.
o Spearheading our cybersecurity and information protection efforts, including
security awareness training and incident response.
o Owning business continuity and disaster recovery planning to keep our
operations resilient.
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o Managing IT/OT budgeting and capital planning, and leading major technology
projects from scoping through delivery.
o Coordinating with external service providers and internal departments to ensure
seamless service across the organization.
• With the growth of ERMU’s IT/OT needs, we have posted an IT/OT specialist position.
This role will support, maintain, and enhance our technology systems while helping
ensure reliable, secure, and efficient operations across the organization.
• The administration director, IT/OT systems & network administrator, and City IT staff
attended the City Council work session on March 16, 2026, to review 2026 updates to
the Memorandum of Understanding between the City and ERMU’s IT departments.
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Melissa Karpinski – Finance Manager
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
6.1c
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• I would like to recognize the accounting department for their continued dedication and
professionalism. Their attention to detail and commitment to high-quality work play are
essential to ensuring a smooth and efficient audit process.
• The annual Midwest Independent System Operator (MISO) Attachment O reporting has
been completed and approved. This filing is used to determine our transmission rebates
that we will receive as a part owner of the transmission system.
• Annual surveys and required regulatory reports continue to be completed.
• Currently working on Property & Casualty insurance renewal application for the 2026-
2027 coverage period.
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Tony Mauren – Governance & Communications Manager
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
6.1d
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• In April, all customers will receive the residential and commercial Clean Energy Choice
certificates highlighting the impact participants have through renewable energy use.
This recognition serves two purposes: to thank current participants and to encourage
others to join the program.
• Staff recently updated the Programs & Rebates webpage to include a new rebate
category for battery-powered yard tools. Information will be included in the April billing
and on social media, just in time for spring yard cleanup.
• In addition to the bill insert topic, March social media will cover the American Public
Power Associations Lineworker Rodeo, Call Before You Dig, AC Tune-Up Rebate, Severe
Weather Week and a commission meeting reminder.
• ERMU recognized Fix a Leak Week with a week-long social media campaign from March
16-20. These posts helped customers identify common household leaks and provided
information on how to fix such leaks.
• ERMU’s scholarship program received 13 applications this year. Staff will notify the two
recipients by May 1. We plan to invite them to the May commission meeting.
• I attended the Municipal Clerks & Finance Officers Association conference, March 25-27,
in Brooklyn Center, MN. This was a particularly strong year for relevant categories as
there were trainings on government communications, parliamentary procedure, notary
regulations, AI, government writing, and website accessibility from subject matter
experts.
• The Americans with Disabilities Act Title II requires municipalities with populations
below 50,000 to make their websites and other digital content accessible to people with
disabilities by April 2027 via compliance with the Web Content Accessibility Guidelines
(WCAG) 2.1 Level AA. ERMU’s website has had a built-in accessibility widget since 2020
that appears in the lower left corner on all pages, which can alter site content to suit a
user’s needs. That service also does monthly audits of our website to assess its
accessibility, providing its most recent compliance certification on April 1, 2026.
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A big topic in the municipal administration world this year and the biggest effort for
ERMU going forward will be to ensure that the PDFs that are regularly posted to our
website (e.g. commission packets, rates, policies, etc.) also satisfy (WCAG) guidelines.
Compliance dictates numerous elements within a document including its font, layout,
color schemes, metadata, and more. Staff has attended training sessions from the State
and League of Minnesota Cities on the topic, had discussions with peers, and
interviewed accessibility service providers to learn what the best approach will be for
ERMU. We expect to have a course of action selected in time for budget discussions,
should there be a cost associated.
ATTACHMENTS:
• Bill Insert – Clean Energy Choice Certificate – Residential
• Bill Insert – Clean Energy Choice Certificate – Commercial
• Bill Insert – Yard Tool Rebates
236
This certificate recognizes the households in ERMU’s service territory that participated in the
Clean Energy Choice program, collectively using 4,980,960 kWh of renewable energy in 2025.
Driving 10,882,970 miles in
a gas-powered vehicle
Electricity use in 783
homes for one year
Charging 270,550,601
smartphones
CLEAN ENERGY CERTIFICATE
RESIDENTIAL
Their combined reduction of emissions is equivalent to:
237
Not an energy superhero?
Sign up for Clean Energy Choice
and activate your superpowers!
ERMUMN.COM
238
This certificate recognizes the businesses in ERMU’s service territory that participated in the
Clean Energy Choice program, collectively using 12,015,008 kWh of renewable energy in 2025.
Their combined reduction of emissions is equivalent to:
CLEAN ENERGY CERTIFICATE
Driving 26,251,761 miles in
a gas-powered vehicle
Electricity use in 1,888
homes for one year
Charging 652,618,699
smartphones
BUSINESS
239
Powering
Your Business
with Renewable Energy
ERMUMN.COM
240
Heard the big news?
ERMU is now offering
rebates for yard tools!
See details on back.
241
Whether replacing your gas-powered tools or buying
outdoor equipment for the first time, it’s easier than
ever to save money with NEW rebates from ERMU.
Battery-Powered Chainsaw
Battery-Powered Leaf Blower
Battery-Powered Riding Lawn Mower
Battery-Powered Trimmer/Weed Whip
Battery-Powered Walk Behind Lawn Mower
VISIT ERMUMN.COM
OR SCAN HERE TO
LEARN MORE
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Thomas Geiser – Operations Director
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
6.1e
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• Working through the second round of maps for the new GIS mapping system that we
plan to move forward with in the future. I have gone through maps 1-85 to this point.
• ERMU has received seven repaired reclosers so far. Still waiting for 23 out of 30 units to
be repaired. A plan has been set for now to receive and repair the rest.
• ERMU has started the cooper switchgear replacement plan. We have replaced two so
far and plan to do approximately 15 per year for the next 3-4 years.
• Working with Sherburne County on the County Road 44 plans.
• Our new Bucket Truck #5 went back to Altec in Shakopee for some corrections.
• Meeting with the Minnesota Department of Transportation on the Highway 10 Project,
spanning from Cleveland Street/Jarvis Street to a half mile west of Ramsey Boulevard,
scheduled for 2027.
• Gathering info and having meetings on data centers.
• General Manager Mark Hanson and I went to the American Public Power Association
Engineering & Operations Conference in Huntsville Alabama, following the Lineworkers
Rodeo. Lineworkers Jack and Adam did a great job representing ERMU at the rodeo.
• Helping with gathering info for GIS mapping.
• Attended a meeting with the City and Bolton Menk on the Main Street Elk River parking
lot realignment.
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Chris Sumstad – Electric Superintendent
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
6.1f
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• Installed nine 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, was here
March 25-26, and held safety training on de-escalation techniques and workplace
violence.
• Tree trimming has continued for ERMU crews this past month, with the finish coming
around April 15 for this season.
• Crews recently pulled the new wire along the final section of the overhead Feeder 65
rebuild.
• There has been lots of progress at the new East substation this past month. Two to
three lineworkers have assisted the substation apparatus technician daily on site since
mid-March.
• The bore crew is planning to start the spring construction season the week of April 13.
First stops for them will be the Main Street Elk River parking lot for its realignment
project as well as up to the landfill for 500 mcm underground install to the renewable
natural gas plant.
• Spending time getting spring and summer jobs lined up. This year will be a good mix of
underground feeder work as well as residential primary/secondary replacement, and
multiple new housing developments being built.
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Mike Tietz – Technical Services Superintendent
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
6.1g
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• In March, the locators processed 243 locate tickets. These consisted of 193 normal
tickets, 2 emergency tickets, 34 updated tickets, 8 meetings, 1 boundary survey, 2
planning and 3 cancellations. This resulted in a 74.8% increase in tickets from the
previous month and a 14.6% increase from the prior March.
• In March, the electrical technicians completed 437 service order tasks, updated the
power bill, addressed customer meter issues and any off-peak concerns.
• The electrical technicians have continued to replace 3-phase meters and test current
transformers at all of our commercial accounts. 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 Advanced Metering Infrastructure project remains at an
overall completion rate of 99%.
• Staff has made excellent progress at our East substation this month. The steel structures
were delivered on March 17 and staff immediately started assembly. As of March 31, all
the steel structures are in place and staff is currently working on installing the bus work.
Great River Energy is planning to start their installation of transmission structures the
week of April 6. The fiber communications should be completed before the end of April.
The transformer ship date from WEG is tentatively scheduled for August 25, 2026, which
is 25 days behind schedule. This date is still subject to change. We have also just been
notified that the circuit breaker has been delayed and is now expected to arrive in June.
The manufacturer has also requested a change order to account for US tariffs that were
put in place in February. We have requested clarification of what specific items have
been affected by these tariffs. I still anticipate that we will commission the substation
around the middle of September.
• Our monthly peak was 45.47 MW on March 17, at 9:09am.
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UTILITIES COMMISSION MEETING
TO:
ERMU Commission
FROM:
Dave Ninow – Water Superintendent
MEETING DATE:
April 14, 2026
AGENDA ITEM NUMBER:
6.1h
SUBJECT:
Staff Update
ACTION REQUESTED:
None
DISCUSSION:
• Delivered a water meter, installed a Smart Point 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 22 routine fluoride samples
o All samples met MDH standards
o Submitted MDH Fluoride Report
• Submitted the Discharge Monitoring Report for the diesel generation plant to the
Minnesota Pollution Control Agency.
• Completed and submitted the 2025 Water Conservation Report to the DNR.
• Water department staff have completed draining, cleaning, inspecting, and refilling the
Johnson Street Water Tower. American Water Works Association maintenance
standards require thorough inspection and washout every three to five years to ensure
structural integrity, water quality, and coating protection. The tower is scheduled for full
sandblasting and repainting, as identified in the 2030 Capital Improvement budget.
• Municipal Builders, Inc. (MBI) have completed the replacement of a corroded pipe
section at the Well #2 water treatment plant. The fluoride injection point was originally
located at the top of the pipe and over decades, residual fluoride dripped down on the
inside bottom of the pipe at times when the treatment plant was not running, leading to
internal corrosion. MBI has repositioned the pipe section, so the injection point is now
at the bottom, preventing prolonged fluoride contact and eliminating the risk of future
corrosion.
• Staff applied for service line replacement funding from the Minnesota Department of
Health. If approved, this funding would be used in 2027 to replace 13 of the 38 known
water services that are galvanized pipes. The State of Minnesota has set a goal to
replace all lead and galvanized service lines by 2033.
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• On March 27 gates at Lake Orono Dam were opened for the first time this season to
maintain the lake level. Water department staff continue to check the lake level at the
dam and adjust the gates accordingly.
• Our annual water treatment plant preventative maintenance is complete. Water staff
have done an outstanding job ensuring that the wells and filters are ready for the
summer months. The annual preventive maintenance includes recharging and cleaning
filters, replacing chemical lines, changing compressor oil, changing pump motor oil for
the wells, and painting. One key aspect of our maintenance process is the staff’s use of
their experience to anticipate potential problems that may arise during the summer. To
prevent these issues, they proactively replace items known to have a higher likelihood
of failure.
• We will begin flushing hydrants the week of April 20. Customers will be notified and a
map with the zones and dates for flushing will be made public. Flushing is expected to
take approximately six weeks.
ATTACHMENTS:
• March 2026 Pumping by Well
• Photos - Well #2 Pipe Replacement
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Values Are Displayed in Millions of Gallons (Well #, Gallons Pumped, Percentage of Pumping)
Well #2, 1.503, 3%
Well #3, 10.441, 21%
Well #4, 12.002, 24%
Well #5, 4.827, 10%
Well #6, 5.008, 10%
Well #7, 6.692, 14%
Well #8, 5.362, 11%
Well #9, 3.418, 7%
March 2026 Monthly Pumping By Well
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Photos—Well #2
Before
After
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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
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