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4.1. ERMUSR 12-15-2009Ji Elk River ---1 Municipal Utilities 13069 Orono Parkway • P.O. Box 430 Elk River, MN 55330-0430 December 9, 2009 To: Elk River Municipal Utilities Commission John Dietz Jerry Gumphrey Daryl Thompson From: Troy Adams Subject: Review and Consider 2010 Budget, Rate, and Fee Changes Phone: 763.441.2020 Fax: 763.441.8099 Enclosed for commission review and consideration is the proposed 2010 Budget. The Great River Energy rate increase has been finalized with no changes from the preliminary numbers used by staff during the electric rate design process. The proposed budget reflects the new 80/20 Electric/Water split for the applicable accounts as well as some minor changes to the capital budget and expense budget. The change from a 75/25 split to the 80/20 split resulted in an approximate $79,000 shift in cost from Water to Electric. Other analysis identified additional areas where expenses needed to be allocated differently between Water and Electric. This included some costs associated with meter reading and fuel. These changes do impact the Water and Electric budgets. The Water budget profit margin increase by approximately $90,000 to be -$322,980. The Water net to reserves increased by approximately $82,000 to be -$56,530. The Electric budget needed to revise the rate increase to compensate for the increases in expenses. This was done through a minor increase in the winter energy (kWh) charge for residential and non-demand small commercial as well as a minor increase in energy (kWh) charge for demand commercial. The Electric budget profit margin increase by approximately $10,000 to be.$388,020. This is still an approximate 1.5% profit margin. The Electric budget net to reserves decreased by $16,449 to be $339,597. This is the result of an increase in capital projects to reflect current and more accurate costs. Also included is the proposed 2010 Fee Schedule reflecting the proposed rate changes. ELK RIVER MUNICIPAL UTILITIES SUMMARY OF YEAR 2010 BUDGETS ELECTRIC BUDGET SUMMARY 2010 ELECTRIC REVENUE $ 25,397,192 ELECTRIC EXPENDITURES 25,009,172 ELECTRIC NET FOR CAPITAL 388,020 DEBT RETIREMENT 512,500 PROMISSORY NOTE TO COUNTY 191,323 LESS DEBT PRINCIPAL PMTS (315,803) CAPITAL EQUIPMENT/CONSTRUCTION 1,469,600 BONDING NET (1,785,403) DEPRECIATION 2,125,000 NET TO RESERVES 339,597 BUDGET SUMMARY2010 zolo ESTIMATED BUDGET WITH HISTnRV ACCOUNT # !. DESCRIPTION i _ 2007 2008 ~, 2009 ~ 2010 T ACTUAL ACTUAL 1 BUDGET T BUDGET _ITOTAL RESIDENTIAL 7,417,286 ~~i 7,934,766 1 8,468,1541 8,920,781 _. _ __ __ _.. __ ~i, TOTAL NON-DEMAND ~i 1,976,224 2,202,142 2,350,173 2,141,105 TOTAL DEMAND 8,532,019 1 10,888,466 ----- -- ' - 11,633,572 i 12,288,662 . I TOTAL SECURITY LTS '' 44,972 'i, 07,446 1 48,000 ~ 49,000 _ _ !TOTAL PUBLIC ST/H_WY LIGHTING 217,954 ~;' 236,623 _ ~ 'I 242,000 ~ 250,000 ~TOTAL SALES ~', 18,188,4551 21,309,444 _.__. _ 1 22,741,8991 23,649,548 REVENUE INCREASE FOR CIP j i RATE INCREASE __TOTAL SALES WITH CIP/RATE INCREA 18,188,455 ~~ 21,309,444 22,741,899 23,649,548 i li TOTAL OTHER _ 2,502,702 2,215,788 j 1,878,089 j 1,747,644 TOTAL REVENUE 20,691,157 i 23,525,232 j 24,619,988 j 25,397,192 ~, prior period adj -audit ~ (108,899) (108,417) ~ _. _ ~ __ _ _ _ _ ~ ._- __.~___ _._ __- - __-.. _. _..__ _.__._._.___ 1. ~ _-. ,__ _ - ___ j I ~ I - -__ _._ ~__- _._ ACCOU_N_T # ''. __ DESCRIPTION 2007 2008 2009 2010 ~ ACTUAL ACTUA L __ BUDGET i j BUDGET ' OPERATING/MTCE _ ~ _ PURCHASED POWER __ 12,176,034 14,778,270 , 16,079,258 . 17,026,271 ~ TOTAL 12,926,703 I 15,659,935 _ ~ 16,988,508 _ ~ 17,864,685 _ _- _ _ DISTRIBUTION __ ___ '. TOTAL i 189,569 236,252 181,250 202,000 _ MAINTENANCE ~ _._ _ ~ TOTAL 720,905 ~ 869,335 1,027,100 895,000 _ OTHER EXPENSE _ TOTAL _ ~ 3,244,5161 - 3,512,719 3,591,258 j 3,717,024 _ CUSTOMER ACCOUNTS EXP TOTAL 225,0341 242,363 244,0001 268,167 _ ADMINISTRATIVE/GENERAL EXPENSE j TOTAL 1,758,705 1,959,257 1,864,546 2,062,296 TOTAL EXPENSE ~ 19,065,432 22,479,861 23,896,662 25,009,172 I j ELECTRIC _ 2007 2008 2009 2010 ACTUAL ACTUAL BUDGET BUDGET TOTAL REVENUES 20,582,258 23,416,815 24,619,988 25,397,192 TOTAL EXPENSES 19,065,432 22,479,861 23,896,662 25,009,172 PROFIT (LOSS) 1,516,826 936,954 723,326 388,020 BUDGET COMPARISON Elk River Municipal Utilities 2010 Electric Department Capital Budget Capital Construction Projects -Non-Recurring Normal Distribution, Feeders, and Substations Priority Cost Description 1 $ 120,000 Rebuild Area 22 taps 2 $ 120,000 Rebuild 1st & 2 st Gates & Evens So of Main St carryover from 2009 3 $ 50,000 Rebuild Area 21 (S of Co Rd 33 -York & Watson) carryover from 2009 4 $ 100,000 Power Plant Sub Conductor Upgrade 5 $ 100,000 Co Rd 30 Engers Addition Rebuild OH to URD 6 $ 40,000 Co Rd 30 South Side rebuild pole mounted URD 7 $ 100,000 Co Rd 30 Convert to 7200 West of Waco 8 $ 50,000 Zane Commons 9 $ 35,000 Rebuild Cretex Facility carryover from 2009 10 $ 150,000 Rebuild Irving 4,5,6 7 to front lot line 11 $ - New Feeder 75 to 194th postponed one year $300,000 project Subtotal $ 865,000 Capital Construction Projects -Recurring Cost Description $ 200,000 Transformers and Meters $ 150,000 New Development Distribution Installation $ 100,000 Ongoing URD Equip Replacement (Switches, J-Boxes, Fuse Pads) $ - Additional Feeders Subtotal $ 450,000 Capital Equipment Needs Cost Description $ 10,000 Hand Held Radios and Pagers $ 38,000 Trade-in Vactron for new $ 55,000 Trade-in 1996 Dumptruck for new $ 12,000 T-14 or T-12 Trailer $ 8,000 Laptop Computer, Software, Accessories - On-Call Truck $ - Trade-in Cable Plow for new postpone 1 year $ - Replace 1999 pickup postpone 1 year Subtotal $ 123,000 Total $ 1,438,000 Elk River Municipal Utilities 2010 Administration and Technical Services Departments Capital Budgets Administration Capital Equipment Needs Cost Description $ 7,000 Computer, Software, Accessories -Upgrades Subtotal $ 7,000 Administration Noteworthy Non-Recurring Expenses Cost Description $ 5,500 Miscellaneous Equipment $ 1,000 Office Funriture Subtotal $ 6,500 Total $ 13,500 Technical Services Capital Equipment Needs Cost Description $ 8,000 Laptop Computer, Software, Accessories -Meter Downloading $ 8,000 Laptop Computer, Software, Accessories -Locating/GPS $ 10,000 Power Quality Testing Equipment and Accessories Subtotal $ 26,000 Technical Services Noteworthy Non-Recurring Expenses Cost Description Subtotal $ Total $ 26,000 ELK RIVER MUNICIPAL UTILITIES SUMMARY OF YEAR 2010 BUDGETS WATER BUDGET SUMMARY 2010 WATER REVENUE $ 2,079,500 WATER EXPENDITURES 2,402,480 WATER NET FOR CAPITAL (322,980) DEBT RETIREMENT 527,650 GROSS (850,630) CAPITAL PROJECTS 195,900 BONDING NET (1,046,530) DEPRECIATION 990,000 NET TO RESERVES (56,530) BUDGET SUMMARY2010 2010 ESTIMATED BUDGET unru werncv ACCOUNT#'___ DESCRIP_T_ION __ 2007 2008 2009 2010 ____ ACTUAL I ACTUAL ' BUDGET BUDGET - - -- ~ i TOTAL REVENUES -- 3,109,674 ~I 2,427,447 I 2,302,500 1 2,079,500 . Prior Period Ad'ustment I -- _ I (77 492) ~ _ 8560 - -- --- - - ___ -- ~I _ - - ~ -- ~ ~ ~ _ it --~ I _ ..__ ___ - ___ ___. ~ ~ 20,000 -. _. _.__20,000 ', __ __ 20,000 '~ - ._ . __- __- 20,000 ___. r- _-_ .__ .-._ -_._-- __._. - __ _~ II _ -- --- - ' I MAINTENANCE --- _ _ - - I _ - _ I TOTAL -__ _~ -~~ ! 50,991 ___ 34,236 37,500 ~ 34,000 PUMPING _ - - ~ ~ TOTAL ~ 416,141 380,363 401,500 ~ 375,000 _ _ DISTRIBUTION _ __ TOTAL 221,213 1 182,712 229,100 213,000 OTHER EXPENSE _; _ --- ___... _„____. TOTAL ~ 1,152,812 1 1,267,304 1,238,297 1,263,825 __ _ ''..CUSTOMER ACCTS EXP _ TOTAL 65, 621 72, 811 56,150 59, 833 _ ADMIN/GEN EXPENSE _ i 1 _____ _ i TOTAL 459,298.691 535,291.921 535,716.001 456,822.00 TOTAL EXPENSE 2,366,077 2,472,717 2,498,263 I , 2,402,480 __ i WATER --- TOTAL REVENUES 3,032,182 j 2,418,687 2,302,500 2,079,500 TOTAL EXPENSES 2,366,077 2,472,717 ~ 2,498,263 2,402,480 PROFIT LOSS 666,104 53,830 ~ 195,763 322,980 BUDGET COMPARISON Elk River Municipal Utilities 2010 Water Department Capital Budget Water Capital Equipment Needs Cost Description $ 60,000 Water Main Construction $ 50,000 Water Main Repair $ 68,000 Meters/ERTs $ 10,000 SCADA Computers/GIS Subtotal $ 188,000 Water Noteworthy Non-Recurring Expenses Cost Description $ 15,000 Miscellaneous Repairs & Maintenance (4) Well Dehumidifiers $6,000 postponed Rate Study $10,000 postponed Subtotal $ 15,000 Total $ 203,000 ELK RIVER MUNCIPAL UTILITIES TRAINING AND TRAVEL BUDGET FOR 2009 Budget Budget Budget Budget ELECTRIC 2007 2008 2009 2010 MMUA Overhead Hot Line School 3 people 2,418.88 2,542.50 2,587.50 2,674.50 MMUA Underground School 3 people 2,418.88 2,542.50 2,587.50 2,674.50 MMUA Transformer School 3 people 2,133.00 2,145.00 2,190.00 2,250.00 MMUA Substation Workshop 3 people 2,133.00 2,070.00 2,190.00 2,205.00 1st Line Supervision 1 person - 550.00 565.00 570.00 Apprenticeship 2 person 2,530.00 2,530.00 850.00 2,800.00 Unknown 3,000.00 3,000.00 3,000.00 2,000.00 14,633.76 15,380.00 13,970.00 15,174.00 WATER Water Operators License Seminar 4 people 2,344.00 2,344.00 2,420.00 2,480.00 MN Section AWWA or MRW 3 people 1,683.00 1,683.00 1,740.00 1,785.00 1st Line Supervision 1 person 570.00 Unknown 1,000.00 1,000.00 1,000.00 1,000.00 5,027.00 5,027.00 5,160.00 5,835.00 TECHNICAL SERVICES MMUA Locator Workshop 1 person 588.50 617.50 657.50 680.50 MMUA Staking Workshop 1 person 588.50 617.50 657.50 680.50 MMUA Diesel Workshop 1 person 1,057.00 1,065.00 1,195.00 620.50 MMUA Meter Repair Workshop 2 people 1,765.50 1,927.50 1,972.50 1,361.00 CAD Workshops 1 person 2,250.00 2,250.00 2,252.00 2,252.00 Power Limited Classes 3 people 924.00 1st Line Supervision 1 person 570.00 Unknown 1,000.00 6,249.50 6,477.50 6,734.50 8,088.50 ADMINISTRATION Financial 1,066.00 1,070.00 340.00 340.00 Engineering 3,911.00 4,035.00 4,125.00 4,125.00 MMUA Annual Summer Meeting 2 staff/ 1 commissioner 1,674.00 2,535.00 2,625.00 2,670.00 MMUA Fall Meeting - - - MMUA Legislative Round-up 330.00 400.00 400.00 400.00 APPA Legislative Round-up 1 staff/ 2 commissioner 2,080.00 3,020.00 3,020.00 3,020.00 APPA Annual Meeting 1 staff/ 2 commissioner 2,530.00 3,695.00 3,695.00 3,695.00 or Engineering/Operator Workshop MMUA Superintendent Conference 650.00 650.00 670.00 670.00 PMUG 4 staff 1,233.00 1,880.00 2,340.00 2,400.00 Hearing Test 375.00 375.00 500.00 600.00 Unknown 3,750.00 3,750.00 3,750.00 3,750.00 17,599.00 21,410.00 21,465.00 21,670.00 SAFETY TRAINING Safe Driver Training 1,965.00 CPR 1,300.00 750.00 1,500.00 Anoka Tech Safety Program 1,000.00 MMUA Safety Program 34,000.00 35,000.00 37,053.60 24,450.00 MMUA Monthly Safety Meetings 25,500.00 25,500.00 26,265.00 27,050.00 60,800.00 61,250.00 64,818.60 54,465.00 EDUCATION 2,000.00 2,000.00 2,000.00 3,000.00 106,309.26 111, 544.50 114,148.10 108,232.50 Page 1 ~ p ?~ X~ ~ iS ~S X '~ ~ ~ ~ ~ ~S o p 25 ~S o o 25 ~i ~ p ~ ~ ~ 2 5 g 25 ? 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D E 1 Residential Electric Connection Developer i Current P_ roposed $420.00 $420.00 ~ % Increase ', !, !, I 2 Residential Electric Connection Developer i $520.00 $520.00 3 Residential Electric Connection Builder T $800.00 _ $800.00 - l_ _ _ T _ _ 4 -- Commercial & Industrial Electric Connection ---- _ 50% 50%~ - _ __ _ - , 5 - -- 6 - - -__---- -- Street Lights & Security Lights ~ -- -_ -- 1 _ _ ~ --- -- _ I ~ - ~_ - - -- _ 7 -- W OOd Pole w/6' Amt ezistin area onl ( s r) __ i -- $950.00 $950.00 _ ._. -_ -- 1 - ll - 8 9 30' Decorative Pole w/6' Arm 23' Decorative Pole w/Traditionaire Lamp ---- ~ 1 $1,800.00 1, $1,800.00 $1,450.00 $1,450.00 1 ~ ~ ~ 1 _ _ i ii 10 i ' - - -- - ~ ~ - -- L 11 -- -__ -_ - Residential Water Connection ~ $2,500.00 $2,000.00 - 25 % __ j - _ -_ 12 Commercial Water Connection $2,000.00 $2,500.00 ___ ~ 25% ~ 13 - - -- Abandoned Water Service 2,500.00 2,500.00 - 1 __ _ _ j 14 Water Meters - (Commercial 1 per bldg) ~ ~ 1 I i 15 5/8" Disc -Residential $240.00 $240.00 _ _ ~ ~ I 16 _ _ 3/4" Disc $270.00 $270.00 i, 17 ___ 1" Disc $320.00 $320.00 _ _ _- - I - - - 18 1-1/2" Disc _ $570.00 $570.00 -- _ _ ~ - I _ _ _ 19 - 1-1/2" Turbo - Irri ation onl - 9 Y $860.00 i $860.00 - I - - l ~ I -. -- 20 21 - 2" Disc - -- - --- 2" Turbo -- $740.00 $940.00 $740.00 $940.00 - -- ._ --- _ _ _~ _ _ _ ~ i -_ 22 --- 3" Turbo $1,050.00 $1,050.00 - -- - -I - -- .._ - _ - 23 2" Com ound p - - $1,900.00 $1,900.00 _- ___i ~ _-- i - ~ - - __ 24 25 3" Compound - -- - $2,250.00 $2,250.00 ' I ~ 1 1 26 - ----- NSF Fee $20.00 $20.00 -- - - - ---~ ~ -- - i- _ -- - Disconnect Fee -Residential Disconnect Fee - 3 Phase Red Tag Handling Fee Electric -Residential Basic Monthly Charge _ May -Sept usage Oct - April usage 00.00 50.00 $20.00 $20.00 ~-- $8.50 $9.00 per month ~ __ $0.1090 $0.1139 ~ per KWh $0.0950 $0.1017 per KW h 39 40 41 Offpeak Energy Storage Offpeak Dual Fuel Cycled AC (5 months only, May -Sept) $0.0420 $0.0480 $8.00 42 Wind Power _ ___ $1.00 43 Dispersed Generation - __- --- ~ 45 Electric -Non Demand CommerciaVlndustrial 46 Non-Demand Basic Monthly ~ $ Non-Demand May -Sept usage - Non-Demand Oct - Apol usage ctric -Demand CommerciaVlndustrial Demand Basic Monthly Demand Energy Charge Demand May -Sept usage Demand Oct -April usage $0.0420 KW h per month __ _ $0.0480 KW h per month _ $8.00 per month $1.00 per 100 KW Blocks 16.00 $16.00 ~permonth 1050 $0.1097 per KWh 0850 $0.0910 per KW h $50.00 $50.00 per month $0.0515 $0.0545 per KWh $15.50 $15.89 per KW _ $10.75 $11.02 per KW 5.9% Typical 6% 4.5% 7°/a Ratelncrease 5.7°~ Typical Non-Demand Customer Rate Increase I- - ~ - --- 4.5 _._~ -- 7"/0 - ~--- _...1 _ 4.3°h - 4.7%Typical Demand Customer Rate Increase ---~ I 5.8% 2.5% 2.5 Elk River Munici al Utilities ' ', ', p _ - - Pro osed 2010 Fees _____ - - _'~ - - -! ---- - P _ ~I - - --- --- A B C I p '~ E _ 58 __ Current I Proposed ; j % Increase ~I - - - - - -- - ---i - -- ------- L_- - -- _ -- Street Lights i ' I - 58 - _ - -- - _ -- - - - ;- -$20.60 $20.60 monthly.- _ - _ - - - $1880 monthly 150W HPS ' 59 _ - - - -- -- '- -- -- y --_- --- - ', - - - - -- 200W HPS j $23.00 $23.00 Imonthl I 80 - - -- --- ----- -- _- - - - __ .- - _ - _ -_ --- _ - - 250W HPS I $24.50 ~ $24.50 monthly J I 'I 'I -i _ 61 62 83 84 - - -- _ 400W HPS _ i t00W MV Existing Only _I $17.95 - $17.95 Imonthly ---~ III ' - -- 175W MV Existin Onl ! ' I'- I - -~ ___ -_-. _ 9 Y _ $19 50 I _-$19.50 monthly I - 250W MV Existing Only I $23 40 $23.40 month) Y I 1 5 -- 400WMV Existing Only - - -_ - -- _ _ _I Y - - $29.20_ $29.20 Imonthl 88 - 1000W MV Existin Onl -- - - 9 - y-- _$5000 I $50.00 Imonthly ' I 67 68 -_ Security Lights Overhead ~ - - -1 _ i ----- - I~ - -- --- I I 69 _ _- _ 100W MV Existing OnIY _ $8.40 - -- $8.40 Imonthl - - L I-- ' 70 --- -- - _ 175W MV Existing Only $g,g0 - $8.90 ~ _ month -_ _ - ~ _ 71 250W MV Existing Only - - $12.80 ~ i --- ' $12.80 - - month) i Y - _- - _ j - - _ - - __ - ' 72 400W MV Existing Only _ $18.70 j _ $18.70 monthly - _ _ -~ ,I - _ - 73 1000W MV Existin Onl $39.70_ 9 y - $39.70 month) Y ~ - 1 - - . I _ 74 100W HPS - - _ _ $8.20 I - $8.20 i monthl - _- - __-- -- 75 150W HPS - $10.00 - -- _ $10.00 _ monthly J I 76 250W HPS ~ $13.90 $13.90 monthly -- ~ - --- _ _ 77 400W HPS _ ____ __ -- $19.50 j $19.50 - jmonthly , I - -- - 78 - _ - - - _ - - ~ I' _ 79 Security Lights -Underground ~ - _ I ---- -~- -- I ~ 80 - 100W MV Existing Only _ -- j $9.20 $9.20 Imonthly --- -- __- --- - I - _ --- ~ I 81 - 175W MV Existing Only _ _ _ $10 40 $10.40 jmonthly j I 82 250W MV Existing Only --- - Imonthly j ~ ~ 83 - 400W MV Existing Onty _I $20.60 li $20.60 Imonthly -- - --- __ -- _ _ ~ j _ 84 1000W MV Existing Only j $41.80 $4180 ~ Y - _ - -- - - - - _- - - -- ~ 0 0 - ~ 88 - 150W HPS $1 1.90 $11 .90 jmonthly - ---- j ~ i - - I 87 250W HPS I $15.80 $15.80 monthly - - - -- _ __ - - - - - L ~I 88 i 400W HPS $21.30 j $21.30 Imonthly -- - _ _ . _ - 89 ~ __ ~ - - _-._ - I - - - - - --- ---_ -- I 90 Water I I 91 - _ Basic Monthly Charge -Residential $7.50 $7.50 per month J 92 Senior Citizen Monthly Charge _ - $5.50 $5.50 j (upon application) I _ I 93 1st Step Rate (0 - 9,000 gallons) I _ - _ $1 50 - $1.50 per 1000 gallons _ - 94 2nd Step Rate (9,000 - 15,000 gallons) ~ - -- - - - $3 50 _ $3.50 per 1000 gallons _I j - - - 95 3rd Step Rate (15,000+ gallons) _i $4.00 i $4.00 per 1000 galons I ~ - -- -- -- 98 - Irrigation Meter (5 months onty, May-Sept) $40.00 i- $40.00 i per month ~ _ _ 97 - - - ---- - --- L - ~ - - I _ __ - - 98 Water Salesman (Bulk water) -- - _ $5.00 j $5.00 Deposit j I I -- I 99 _ - i - - $3.50 - $3.50 per 1000 gallons _- -- I -- 100 _ -_ _ _ _ , - - ~ ~--- -- - ~ _ - - - 101 Hydrant Rental _j -- - $150 00 $150.00 j per month I -I -- - ------ 102 Plus cost of water j -- - -- I i _ $3.50 per 10 00 g na olloll s $3 50 - - ll I 103 - _ _ ~ _ - j - -- -- 104 ----- Secunty System Monitoring -- - -- $18.75 $18.75 Monthly ----- - j --- -- ----- 105 Security System Service Calls $65.00 $75.00 per hour - - -_ 159'0 --- - - - 108 Medical Alerts _ $23.75 __ $23.75 j ~ J - ---- j 107 Medical Alerts -County administrative fee _j $10.00 $10.00 - - -_ _ - _-- I _-__ _ _ _ _ --- 108 Alarm Net (Cell Phone) _--- --- - $24.75 j $24.75_] j _ -_ ~ _ --j _ - - _- - 109 110 111 Fire System j Burglar & Fire $399.00 $399.00 $460.00 j $460.00 Annualy Annually _ _ j J - --- -- - L _ __ - - -- - - - 112 Billable charges I ~ ~ -- --- 113 114 115 116 Cost of Material plus j - Labor fees plus Vehicle /Equipment rates -Line Truck _ Vehicle / E ui ment rates -Pick-u Truck _ _ 15%~ 15% 55%I 55% $40.00 j $40.00 j $20.00 j $20.00 j - per hour _ per hour ~ _-__ - - _ - ____ ~_ -- ~ ~ _ ~ _ ~ I -~ j __- --