ADVERTISEMENT

ADVERTISEMENT

BPU: Commission approves budget and capital plan

The Brainerd Public Utilities Commission Tuesday approved a 5-year capital improvement plan and a 2017 operating budget. The utility will now submit its budget to the Brainerd City Council for adoption at the council meeting on Monday. Secretary/...

The Brainerd Public Utilities Commission Tuesday approved a 5-year capital improvement plan and a 2017 operating budget.

The utility will now submit its budget to the Brainerd City Council for adoption at the council meeting on Monday.

Secretary/finance director Todd Wicklund led the commission through a 20-minute presentation on the 2017 operating budget. He broke down revenue and expenses across the electric, water and wastewater departments. The budget proposes an overall revenue increase of 2 percent and an overall increase of 2.5 percent for expenses. The overall projected revenue for 2017 is $25.4 million.

Electric department revenues are projected to increase 2.3 percent, while expenses in the department are projected to increase 1.7 percent. Electric expenses rely heavily on purchased power costs, Wicklund said, which can fluctuate. The purchased power costs from Minnesota Power can be affected by whether or not taconite plants on the Iron Range are operating, he said.

"When they're running, our costs tend to go flat," Wicklund said. "It's when they're shut down is when we can have wide fluctuations on our demand charge."

ADVERTISEMENT

Water department revenues are projected to increase 5.7 percent, while expenses in the department are projected to increase 10 percent. Wicklund noted 7.8 percent of the 10 percent increase in expenses is related to bond expenses for the Brainerd Lakes Regional Airport utility extension project.

Wastewater department revenues are projected to decrease 2 percent, while expenses in the department are projected to increase 2.6 percent.

Purchased power costs in the electric department have decreased in recent years, thanks mostly to the utility generating electricity from the hydro dam, Wicklund said. As a percentage of total revenue in the department, purchased power costs have decreased 8 percent since 2013.

Payroll costs for the coming year aren't set yet, because the utility is in the middle of negotiations with its different employee groups, Wicklund said. Over the years, Wicklund's budgets have been pretty accurate, commission member Bill Wroolie said.

Capital improvements

Superintendent Scott Magnuson led the commission through about a half-hour presentation on the 5-year capital improvement plan, which runs from 2017 to 2021. The plan is broken down between electric, water, wastewater, hydro and administration departments. Projects within each department are generally categorized as building improvements, maintenance, system improvements, special equipment, vehicles and safety equipment.

Overall, the capital improvement plan includes $10.9 million in projects over the next five years, for an average of $2.18 million per year.

A total of $5.3 million in electric department projects are proposed in the plan, for an average of $1.06 million per year. It includes $220,000 over the next five years for converting to energy efficient street lighting. There's $56,000 set aside in 2017 to upgrade the 178 street lights along Highway 210 to LED lighting.

ADVERTISEMENT

The department has tried a few different LED, or light-emitting diode, models, Magnuson said. The preferred lights cost $310 each and have 70-watt, 101-watt and 133-watt settings. They're used to replace 200-watt lights and have worked at 70 watts.

The money saved by lower-usage LED lights means the lights pay for themselves in a little more than three years, Magnuson said.

"They're using about a third of the energy," Magnuson said.

A total of $2.7 million in water department projects are proposed in the plan, for an average of $551,400 per year. There is $1 million set aside in 2018 for watermain projects to be done during the proposed Business 371 construction project.

A total of $1.1 million in wastewater department projects are proposed in the plan, for an average of $230,600 per year. There is $600,000 set aside over the next five years for lift station improvements. Heavy rains this year led to greater stress on the lift stations, Magnuson said, so he budgeted $200,000, as opposed to $100,000, for lift station improvements in 2017.

"We don't necessarily anticipate that they will (fail), but we had a lot of hours put on our lift stations this past summer," Magnuson said.

A total of $532,200 in hydro department projects are proposed in the plan, for an average of $106,440 per year. This winter, employees will paint the interior of the dam and the following summer will complete the exterior painting project which started this year, Magnuson said.

"They take pride in that building, you can definitely see it," Magnuson said. "They've said thank you to all of us for allowing them to make some really small changes that have made a huge improvement to that building."

ADVERTISEMENT

There's $332,000 set aside over the next five years for costs to re-license the hydro dam with the Federal Energy Regulatory Commission. The license lasts for 30 years, Magnuson said. Utilities generating less than 10 megawatts can apply for a license exemption, an option Magnuson said he would look into.

A total of $1.1 million in administration department projects are proposed in the plan, for an average of $227,200 per year. There is $110,000 set aside over the next five years for exterior security improvements at the BPU service center on Highland Scenic Road. This would include a fence and automatic gate so rear portion of the facility isn't as easily accessible, Magnuson said.

"Everybody's kind of buttoning up their security," Magnuson said.

There's $720,000 set aside from 2017-19 for advanced metering infrastructure, which will make it easier to remotely read electric meters, Magnuson said. The pilot project in 2017 would start with the largest customers and downtown Brainerd, he said, before expanding.

"You'll be able to see demand, be able to reset the demand from the shop," Magnuson said. "We can see all of the information on it."

Each year, the utility completes about 75-80 percent of the proposed capital improvement projects, Magnuson said. Some projects get delayed into the future while some projects are dropped in favor of something else, he said.

In other business, the commission approved a quote from CliftonLarsonAllen to perform the 2016 audit at a cost of $20,900. The cost for the 2015 audit was $20,300.

Related Topics: MINNESOTA POWER
What To Read Next
Inmates in-custody in the Mille Lacs County jail in Milaca, Minnesota
Inmates in-custody in the Hubbard County jail in Park Rapids, Minnesota
Inmates in-custody in the Todd County jail in Long Prairie, Minnesota
Inmates in-custody in the Wadena County jail in Wadena, Minnesota