6.2. ERMUSR 08-14-2007~/
Elk River
Municipal Utilities
13069 Orono Parkway • P.O. Box 430
Elk River, MN 55330-0430
July 25, 2007
To: Elk River Municipal Utilities Commission
Jerry Takle
Jerry Gumphrey
Jim Tralle
From: Bryan Adams
Subject: 2008 Budget Process
Phone: 763.441.2020
Fax: 763.441.8099
Staff has started the process of assembling the year 2008 budgeting process. The proposed
schedule for the budgeting process is as follows.
August Meeting: Travel & Training
10 Year Personnel Projections
Conservation Improvement Program (CIP)
September Meeting: 10 Year Capital Projections
Year 2007 Capital Projections
October Meeting: Projected Purchased Power Costs
Projected Sales Revenues
Projected Expenses
November Meeting: Completed Budget with Rate Analysis
December Meeting: Adopt Budget with Rate changes, if any
Enclosed is the proposed Travel & Training, 10 Year Personnel Projections and CIP budget for
your review.
The travel and training budget reflects a modest $5200 increase. There is no increase in
personnel requested in 2008. We are anticipating one retirement in 2008 but cannot be certain.
We are starting to position ourselves to handle future retirements.
The State of Minnesota's Next Generation Energy Act of 2007 changes our Conservation
Improvement Programs (CIP) from 1.5% of gross sales spending, to spending to achieve 1.5% of
gross KWh saving. This law becomes effective in 2010. For 2008, CIP spending of 1.5% gross
2007 sales equates to $267,500. Staff is proposing to spend $412,495 of which $303,275 comes
from Great River Energy and $109,220 comes from us. We are proposing to continue ERMU's
level of spending to keep our programs viable when the large commercial rebates end. The
attached CIP budget reflects the proposed CIP spending.
Under the new legislation, we would be required to save 1.5% x (average of 3 previous years
KWh sales) or 2,940,000 KWh. By petition, this may be reduced to 1 % or 1,960,000 KWh.
1,960,000 KWh is approximately equivalent to 12,200 100 watt compact fluorescent lights. The
Minnesota Department of Commerce is in the process of determining what programs would
apply to CIP and what the KWh savings are. As a point of reference, Great River Energy's
system wide 1.5% of gross sales spending results in approximately .40% KWh savings. This
new CIP requirement is going to be difficult for Elk River. We have already done the easy
projects and our spending will need to double to triple. In 2005, all electric utilities in Minnesota
spend almost $83,000,000 in CIP spending. Is it reasonable to double or triple this number?
ELK RIVER MUNCIPAL UTILITIES
TRAINING AND TRAVEL BUDGET FOR 2008
Budget Budget Budget
ELECTRIC 2006 2007 2008
MMUA Overhead Hot Line School 3 people 1,170.00 2,418.88 2,542.50
MMUA Underground School 3 people 1,755.00 2,418.88 2,542.50
MMUA Locator Workshop 1 person 585.00 588.50 617.50
MMUA Staking Workshop 1 person 585.00 588.50 617.50
MMUA Transformer School 3 people 1,170.00 2,133.00 2,145.00
MMUA Diesel Workshop 2 people 1,170.00 1,057.00 1,065.00
MMUA Meter Repair Workshop 3 people 1,755.00 1,765.50 1,927.50
MMUA Substation Workshop 3 people 1,170.00 2,133.00 2,070.00
CAD Workshops 1 person 750.00 2,250.00 2,250.00
1st Line Supervision 2,100.00 - 550.00
Apprenticeship 2 people 2,100.00 2,530.00 2,530.00
Unknown 3,000.00. 3,000.00 3,000.00
19,065.00 20,883.26 21,857.50
WATER
Water Operators License Seminar 1,755.00 2,344.00 2,344.00
MN Section AWWA or MRW 575.00 1,683.00 1,683.00
Unknown 1,000.00 1,000.00 1,000.00
3,330.00 5,027.00 5,027.00
ADMINISTRATION
Financial 2,090.00 1,066.00 1,070.00
Engineering 3,911.00 4,035.00
MMUA Annual Summer Meeting 2 staff/ 1 commissioner 1,600.00 1,674.00 2,535.00
MMUA Fall Meeting 800.00 - -
MMUA Legislative Round-up 550.00 330.00 400.00
APPA Legislative Round-up 1 staff/ 2 commissioner 2,750.00 2,080.00 3,020.00
APPA Annual Meeting 1 staff/ 2 commissioner 2,750.00 2,530.00 3,695.00
or Engineering/Operator Workshop
MMUA Superintendent Conference 1,100.00 650.00 650.00
PMUG 4 staff 1,233.00 1,880.00
Hearing Test 375.00 375.00
Unknown 2,000.00 3,750.00 3,750.00
13,640.00 17,599.00 21,410.00
SAFETY TRAINING
CPR 1,300.00 750.00
MMUA Safety Program 18,800.00 34,000.00 35,000.00
MMUA Monthly Safety Meetings 40,000.00 25,500.00 25,500.00
58,800.00 60,800.00 61,250.00
EDUCATION 2,000.00 2,000.00 2,000.00
96,835.00 106,309.26 111,544.50
Page 1
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