Thank you. >> All right. Now, we will call the uh public utilities commission meeting to order for Tuesday, July 28th. And uh could we please have roll call? >> Bailis >> here. >> Jay Waso >> here. >> Hangland
>> here. Let's all rise for the pledge of allegiance. >> I pledge algiance to the flag of the United States of America and to the republic for which it stands. One nation under God, indivisible, with liberty and
justice for all. >> Should we do uh introductions now before we get into Yeah. the heart of the meeting here? >> Yeah. >> So, okay. Yeah. Paul, if you want to >> uh I'd like to introduce everyone to Jen Schum. Uh she is the new city engineer, deputy public works director. Um she's
been working with me for about the last week. This is her second week on the job. um learning lots and trying to soak it all in at this point in time, but um I just wanted to say welcome Jennifer. Um she'll be a part of these meetings moving forward. So >> yeah, welcome. Thank you.
>> All right, we have another introduction. Yes, Mr. >> Thank you, Mr. President. I'm very happy to introduce Zack Swarth and he is this is his second day. We're very happy to have him. So I don't expect a whole lot of interaction with this body, but um
we're very pleased. He's he's the last of our senior positions that we just filled. So, Zach, welcome aboard. We're happy to have you. You're going to do great things here and uh thanks for joining us. >> Great. Thank you. And welcome. Thanks for being here. Okay, we'll move on to
the approval of the agenda. Uh I do want to uh before I open that up to other commissioners just what I'd like to add there's a quote from Waterworth that I would like to add as six item 6C. So, if
we could uh review a proposal uh at that point. And then um also I just wanted to make the other commissioners aware that I will be abstaining from uh item 9A
when we take a look at that item. Is there any other comments or questions with the agenda? >> Mr. Chair, I'd move to approve the agenda then. >> A second. All right. Motion in a second. Any further discussion? Hearing none. Uh this will be a voice
voice vote. So all those in favor say I. >> I. I. >> Those oppos same sign. Motion carries. Okay. We'll move on to the consent calendar. Notice to public all matters listed are considered routine by the commission and will all be enacted by one motion. There will be no separate
discussion of these items unless good cause is shown prior to the time the commission votes on the motion to be adopted by roll call. Is there a motion? >> A motion to approve. Second. >> Okay. Motion and a second. Any further
discussion? Hearing none. Roll call, please. >> Bailis, >> here. >> Was >> yes. >> Angland. >> Yes. Okay, we will move on to presentations. And uh excited to start off with the
tower award and this is going to Janna. Janna, could you please come up? And Mr. Mayor, could you come up here as well? >> I taking photos. >> All right. There's not a good way to do this for the camera, so we'll kind of stand half-heartedly to the podium here.
But Jana, you you have been with us for 33 years. We give out a lot of these tower awards. And for those at home, uh, the Tower Award is award that we give out to people in the community for their service to Brainard residents and to the
community at large. And a lot of the times they go to our employees on their way out the door, sadly. And uh, in this instance, I got to say this is one of the longer tenur employees that we've had the honor of giving this award to.
And uh, 33 years is nothing to bat at by any means. That is a long stretch. I looked it up. I said to myself, 1993, Jurassic Park was in the theaters when you took over. And so I I they actually wrote down for
me a few of the jobs when you first started cashier/mail clerk. And that's that's an incredible journey through the entire city as it you starting off just as the mail clerk and working your way up. the various different jobs, administrative assistance, credit
collections representative, accountant one. I love how government works. You are accountant one and then for the last 5 years the accounting and b business office supervisor and you know as an organization we pride ourselves on having good people work for us and want
to be a place where people want to work. Uh, but when you know it's time to hang up the keys and and head out the door, I'm the first person to say congratulations for that. And I I can't stress enough how much uh I feel happy
for you and the ability to just go relax and take some of the stress of the world off your shoulders. Stop answering your phone, as I say. Turn your phone off. Stop answering your phone. Uh but it's an incred it's an incredible uh honor to be able to say thank you from not just myself, not just from the commission,
but from all the residents of Brainer for your service. >> Thank you very much. >> And now you got to give a speech after we take a photo. Can we take a photo? >> Let's slide this way. So we're not >> I know.
You guys are on TV. Do you want to say just a few words? >> Well, I I am forever grateful for my career at the utilities. Um, I have been very fortunate to work with a wonderful group of employees over the years, past
and present, commission. Um, and looking forward to my next chapter in life. >> That's all I got. >> All right. One more time. Thank you, Jana. Pernula, correct? Pernella, I got a rock. I TOLD YOU I WAS GOING TO GET A ROCK.
Round of applause either way for both Janas. >> Thank you, Janna. And thank you, Mr. Mayor, for uh well put. That was well put. And thank you on behalf of the BPU Commission. Any other commissioners want to have a few words for Janna? >> Congratulations
and thank you very much for your service. >> Yeah, absolutely. Congratulations. >> All right. Awesome. Okay. We will move on to the Waterorth rate study tool. Danny Lock, you're up.
>> Thank you. We have Adam Dudy from uh Waterworth here to present as well. So, he's on the team's meeting. He'll jump in here and present the tool. Staff have been working with Adam and his team at Waterworth to input uh historical data into the tool that is going to be
presented here. Um we also have in talking with Adam and his team some of the um proposed solutions for when we look at our capital plan that's also included uh just as a reference and then we're additionally the rate studies are ongoing that information is all to those
consultants but I will turn it over to Adam and he will present the tool and uh what you have in front of you is just a packet he put together and then he will jump into the software as well and navigate through there. >> Perfect. Thanks Danny. Uh thank you commission for taking time to allow me
to come and present today. Um before I jump into the actual presentation, uh can everyone hear me and see me? Okay, >> we can. >> Yeah, perfect. Perfect. Um so I want to give you a little bit of context about water what waterworth is and what we do before we look at the presentation. Uh
Waterworth is a long-term financial forecasting tool. We work with over 450 communities across North America. Um, and while many of you are uh probably fairly familiar with a traditional rate study, which we can also do, our primary focus is maintaining a live continuous
financial model that can evolve as conditions and priorities change within the community um in real time. And Danny and Paul have put in a lot of really good work into that model, which you'll see today. Um, this model is going to be an effective way to
communicate long-term financial needs, um, and allow decision makers such as yourselves to hopefully make um, uh, confident, defensible decisions around rates, uh, infrastructure reinvestment, and then we really do focus on full cost recovery, trying to keep every utility that we work with being self-sustaining.
They aren't necessarily being subsidized by other funds. Um, that is the primary goal. Um, so with that, what I'll probably do is use the actual software itself to present. Um, so I can kind of see myself. You might want to make me full screen so that I can present. I will be uh letting you know what page
I'm on as I go throughout the presentation. Um, so me share my screen. Perfect. Can everyone see that? >> Yes, we can. You're good, Adam. >> Okay. Perfect. So we are going to start
on the water uh side. So um I'm going to come into the baseline or as if not this uh model is if nothing changes going forward into the future. Um before I start explaining what every color is um just quickly we have the two axis um the
y-axis is going to be uh in millions of dollars and the x-axis is going to be in years. Anything you see in an area graph will be an expense and anything else you see as a bar is going to be a revenue for that given year. Um so I'm going to
walk through uh the three different aspects of the model. The first being all the expenses for the fund, the next being all the revenues for the fund and then lastly is going to be the cash position or any targets that we may have for the cash position. Um and then we'll
we'll look at what the cash does over time. So, I'm going to start on page four and I'm going to zoom in on the operating expenses. So, these are your your everyday expenses, salaries, benefits, things like that. Uh we have your actuals from 23 to 25 with your 26
budget um in the U model. And then what we've done is we've taken the uh national average which is roughly 3% of foreign inflation over the past decade and we've used that to forecast forward which is why you're going to see the expenses growing over time in a linear fashion. That's just the 3% uh inflation
every year growing. Now the next piece of expenses that we're going to talk about will be debt service. So the current debt service and this will be on page five is going to be this darker blue color. So that's debt the fund already has. And then we do
have some proposals for new loans to be taken out for some of the capital projects that are coming up. So when I toggle that on, that's going to be that lighter teal color that you see in the future. So there is more new debt um proposed into the future. And you will see by 2031 and then 2032 a lot a good
portion of the current debt does start to fall off with that new debt coming online. And then lastly, we have our capital improvements. So that's going to be uh page six, which is the green um what we we call them as the mountains in the background. It's
going to make up the uh background of all the expenses in that area graph. Uh you're going to be able to see the years where we are expecting more um capital projects than um some of the other years. Sorry.
Um there are quite a few larger projects out there um such as uh such as we have the reclamation uh backwash construction project in 26 and 27 for 5.3 million. Um there's the highway 10 Washington Street improvements for 4 million and 26 and
27. the new plant provision which is uh roughly $60 million from 26 to 2032 which which is going to be a large part of that large spike that you're seeing there in 2030 to 2032. Um there's uh annual $2.6 million um for lead service
replacements and then a will 9 project in 2028 for about $5 million. There are some smaller projects also in there but those are the main ones I wanted to highlight that makes up these peaks that we see. And if I layer these three on together,
what this is going to form is basically all of the expenses that the fund is going to need to uh be able to recover in terms of revenue. Um whether that be through the sale of water or borrowed funds or grants to cover those different um expenses. So before I show any of the
revenues, are there any questions on what we've just looked at? >> Nope. >> Perfect. Okay. Um, so the next piece is going to be our our revenue streams. So we have our sale of service for the city and commercial and residential sale of service which is going to be that
lighter uh yellow color. Uh this will all be on page eight. And then we have our other operating revenue, our nonoperating revenue, any grants that we are expecting to get and then our borrowed funds.
The grants that we are expecting in the future is going to be for the reclamation project for about $5 million from 26 and 27. And then the lead service replacement um is about two $2.6 million annually which is uh expected to be funded by a grant each year. That's
going to be that blue that you see. Then we do have loans in here. Um well 9 and 28 for about 5 million. The new plant provision from 26 to 32. We're going to be borrowing about $54 million of that uh project that was about 60 in the
capital expenses and that's going to be these large bars that you see here in 2030, 2031 and 2032. And then there are various other loans for some of those other projects uh each year. So when I put those together, what we're going to see is in the
background is going to be the expenses and then in the foreground with those bars is going to be the revenues. Any year that you see um the backgrounded background area graph uh exceed the bars in the foreground is a year that we're showing as a deficit or a year that we would be spending our cash to cover some
of the expenses. Any year that the bar would exceed the background is a surplus or a year that we're adding uh cash back to our cash position. And the last piece of this um is going to be our actual cash position. So we
have our cash position here which you can see is that black dot uh line. Um historically from 24 to 206 there hasn't been a lot of cash in the fund. Um and from 27 onwards the forecast basically it looks like the cash just doesn't
recover um without any adjustments to that revenue. More importantly we have this operating threshold which is that red dotted line. This is going to represent 6 months of uh operating expenses. Um, so this would
represent money that we would want to have in the fund on hand um, in case something comes up, whether that's on a project that was unforeseen or a project was over budget or uh, something like COVID happens again and maybe revenue stops for any reason. This would allow us to have 6 months worth of cash in the
fund. Right now, the cash position since 24 has been well below that line. And with the forecast into the future, the cash position not recovering will never uh come above that red dotted line in the model. So if we zoom out, we take a look at
everything. That is what the dashboard for the model is saying. Does anyone have any questions before I jump to the proposal um that Danny and Paul wanted to show where we can get to a point where the cash position is above that operating threshold in the future?
No, no questions. >> Perfect. So, the adjustments that we want to show to revenue um working with Danny and Paul is we want to try and target into the future uh point where we do have our
cash above the operating threshold. So, in this model, it's the same operating expenses, the same debt service, the same capital improvement plan. What has changed though is if we look at the um sale of service, you're going to see that those bars are growing over time. And that's going to be because uh
revenue, we're showing revenue increases um each year. So in this model it would be in 27 uh 35% increase for the residents um 30% in 28 10% in 29 uh 5%
in 2030 4% in 2031 and then 3% annually to keep up with inflation or just an inflationary increase after that. Um for the commercial and the city uh the first year is 40% and then all of the other increases are the same as the resident
side. Now, when I say that these are increases um to the revenue, that doesn't necessarily mean it's every resident or every um consumer that will be seeing these increases. We do plan, especially with the rate study as well, to be able to come up with uh rates that
could potentially uh soften some of the impact on the lower use users or um any other uh communities uh that we would like to try and protect. But overall our revenue growth goal is going to be those numbers for those different classes of
of sale. When we look at this, we do forecast between 28 and 2031 to keep the negative cash position that the fund has had over the past couple of years. But by the time we get out till 2033, 2034, not only is the cash position above zero,
but it does get above that operating threshold again. And then out into the future, it does start showing small um annual uh surpluses for us to be able to replenish the cash position. Does anyone have any questions on this?
>> Any questions? >> No, we're following you. >> Yeah, perfect. So that is the water side and again we can model out any other adjustments into the future. This was just a path forward that uh Danny and Paul really wanted to put forward to show that there is a path
of where we can get to the cash position to a sustainable point um in the future. Um but we don't necessarily have to do the numbers that are here. This is just one idea that's been put forward. Next I would like to jump to the wastewater if we don't have any questions. So, the
wastewater is going to um the model is going to look the same. Uh it's going to be a longer time frame because we do have a rather large project out in 2040 that we are forecasting for. Um which is why you're going to see a longer time frame on this model, but it's going to
be the same basic model. So, I can we can look at the operating threshold again. We have your actuals from 23 to 25 for your operating expenses. We're using the same 3% growth. um which is why again we're going to see that linear increase on the operating expenses and this is on page 15.
Um we have our debt service. So our current debt service is expected to mostly fall off by 29 and then completely fall off by 2039. But we are proposing new debts to cover some of the infrastructure projects that are coming up. Uh which is going to be
that teal color again that you can see uh growing out into the future. When we talk about our capital projects, we have two large projects um to speak about. That's going to be the plant expansion/upgrades
between 28 and 2030, which is roughly $41.5 million. Um 27, there is uh a main lift replacement project that is uh shown for $10 million. And then there's plant expansion in 2040 to 2042 for
about $76.5 million. So those two plant expansions are going to be those two large uh mountains that you see here. Everything else is going to be uh just regular maintenance or upkeep projects in the meantime. So again, when I layer these together,
this is going to be the total expenses that the funds needs to be able to uh cover with our revenue or our cash position. When we look at our sale of service, again, it's going to be the same um bars that we saw before. So, our city sale uh
service and commercial, our residential sale of service, any other operating revenue, any nonoperating revenue, and borrowed funds. These borrowed funds again are going to be for those two plant expansions um
between 28 and 30 and 2040 and 2042. And then the main lift replacement is going to be $10 million27. When I compare that again to the expenses, it's going to be the same story that um any year that we show the bars exceeding the area background would
be a surplus year. And any year the uh bars um do not exceed or fall short of the area background is a year that we're showing as a deficit. So as you can see from 27 onwards the model doesn't show a year that we have a surplus. Um and most
importantly for most years after 2031 our revenue doesn't even cover the operating expenses and the debt service um let alone any capital projects that get put in there. So what this ends up meaning for the cash position is our
cash position um by 2031 would hit zero. Um and again we aren't forecasting a recovery with those annual um deficits that the model is showing. We have the same operating threshold as well which is that uh 6 months of
operating expenses which is that red dotted line. And if I zoom in on just the cash and the operating threshold currently we are well above that. We have about $7 million in the fund to start 26. Um but by 2030 we'll be
crossing that operating threshold. And again with just annual deficits being forecast, the cash position doesn't recover past 2030. Are there any questions on this before I show the path forward that um Danny and Paul wanted to show as another another
uh way that we could keep the cash position healthy into the future um and keep our cash above that operating threshold? Most importantly, >> yeah, you got to present some good news. >> Jeez, this is depressing.
>> We had the same sentiment, Dolly. >> Uh the the path forward that Daddy and uh Paul wanted to show is if is this model here. Um if you go to page 24, you'll actually see the numbers that we are forecasting for increasing. Um that would start with 20 in 27 about a 25%
increase 28's 15 uh 29 is 7 and a half uh we have 3 years from 2030 to 33 at 5% um and then as we start getting closer to that second plant um project we start increasing the um revenue adjustments.
Uh this is largely to build a cash position up so that we don't have to have one large um increase on the consumers as that project comes online. This gives us some cash to be able to spend from 2040 to 2048 on the debt service. And by the time we get to 2048,
the revenue would have recovered and be able to fully cover the operating expenses um the debt service repayments and a little bit of the capital that we have forecast in there. Um so we have between 2038 and 39 it's a 5 percent and then by 204048 it's an annual 4
percentage a little bit more than an inflationary increase. There's a slightly larger um escalated increase on city and commercial. Um and again as I said on the water side the these numbers don't necessarily mean what every resident or every consumer
would have to see on their bill. Um there are paths forward where we don't necessarily have to have across the board adjustments. That's something we want to work towards is having different rate ideas that could potentially uh protect lower income or lower use users of the system. But the important thing
from this model is there is a path forward that we can keep the cash position above the operating threshold. And unlike the water side, we aren't starting below the operating threshold. So the increases don't have to be as drastic um as the water side is being
shown. I want to ask is there any questions on anything that we've looked at? >> No questions. >> Okay, perfect. Uh I really appreciate everyone's time allowing me to come and present um on behalf of Danny and Paul. uh really look forward to working with
them, being able to refine this model, coming back hopefully to you guys with some rates in the future uh that give you a better clarity on what the the impact could be on the community. Um this model is fully available to Paul and Danny at any time. So, if anyone
does want to see it um in uh a one-on-one session, I'm also more than happy to show it to anyone that would be interested in look at the model and coming up with their own version of the numbers that we've run. >> Thank you. Great job. >> Perfect. Thank you guys. I really
appreciate your time. >> Likewise. >> All right. Talk to you later. >> You bet. >> Yes, Paul. >> Just have some general comments. You know, I think as we reviewed um as Danny and I have been um working with Adam directly um reviewing the model, I don't
think um needless to say anything was a surprise to us. We always knew that water was in a uh difficult situation over the years. Um on the horizon, you know, as we talked with Charlie and you know, um we do have we've been more aggressive in the recent past on our
water man replacement projects as we work through road construction. Um but I think you know from our perspective from a staff level we do feel like that water treatment plant construction is of the utmost priority at this moment in time.
And so as we start talking budget in the future, you know, if there are ways that we can think, you know, creatively about, you know, um really diving into our water distribution, uh capital improvement plan and finding ways where maybe, you know, we can hold off on some
of those larger water distribution projects to help to be able to better afford the um the planned new water treatment plant. That's certainly things that we're looking at moving forward um to try to lessen those rate adjustment hikes that you saw here today. Um from
the wastewater side, you know, um we've been talking a long time about our two our two-phase approach to our wastewater treatment plant upgrades. Those are the large mountains you saw in the background um of upcoming projects. One
that's uh an immediate need and one that is kind of a limit driven need. You'll you've heard Morgan talk about if there are changes to our wastewater permit that that might drive that project either forward or backward. We have a little more reaction time when it comes to the wastewater side because usually
when there's a permit change, we'll have a compliance schedule that we'll get from MPCA to make those changes. That's usually a 5-year timeline. And so really what we're trying to do is forecast um our future rate adjustments to set us up
well like Adam was kind of indicating where we start building some cash reserves so we're not having to increase our rates um you know large jumps to try to get us in a better cash position over time. Um, and I think the wastewater is a really good example of that where you
saw those 2040 kind of timelines coming um, where we get our cash position up there and we start using more cash to finance our projects. Um the water fund is a little more of a dire situation where um with a large capital expenditure on the horizon and the way
the fund has been operated um under in that deficit position for so long, those larger rate hikes in order to be able to afford that project are going to need to um we're going to need to talk about and start planning appropriately for those larger adjustments to ensure we have
enough to capital operations and capital expenses specifically for the water treatment. plan. So, I just wanted to kind of touch on that. I don't think um Danny and I have had a lot of conversations about specifically capital expenses in the future and if we can um really um think about our capital plan
if we're doing a road construction project. Do we sincerely need to go after the water man in in the roadway in the last I don't know probably seven eight years we've been going after just about every water man when we tear into a roadway. um you know the water man that's in the ground has been in the
ground for a long time so it's not necessarily it's not not a need um and we need to continue making investments into our distribution system um but I think uh the consensus with with us three is is that um the water treatment
plant should have been done maybe 20 years ago and we're starting to see the major need for that as Charlie has a lot of emergency repairs right now that we're having to finance with cash that may be not available. And so those are
the things that we're um we're looking for, not only, you know, comments, commission guidance to us as we continue working through the rate studies with UFS. Um this will that'll be a good gut check as to our accuracy of the model um to ensure that those two are aligned.
And then once we get these rate studies completed, we'll really be able to dive in and um you know, talking during the 2027 budgeting process and how we want to start setting ourselves up for rate adjustments here um in the next three
years, especially those higher ones. >> Good. Yeah. I don't have any additional comments, I guess. >> Sure. >> Yeah. Commissioners, any comments, questions? >> No, I appreciate it. It is painting the picture. it was well presented. Um, you know, you start wondering and now I understand why things get kicked down
the road, you know. Um, but to know that the water treatment plant should have probably been, you know, being looked at as being replaced 20 years ago, that that can as well down the road. We can't keep kicking it. Um, but it it it sickens me to see a 40%,
>> you know, I mean, that's a lot. But but is it or isn't it? I mean, what are we $4.19 a thousand gallons right now? So, we'd be looking at $6. I mean, it it's a lot when you look at percentages, but I I I
get it. Um, yeah, we certainly can't continue to go in and but I love the model because you can play with it, right? I mean, you can play with the assets, you can play with the capital. Okay. Well, and I that's great. So, >> it's very Excelbased. So, we can literally change that on the fly. >> We can move projects around. We can
change rate adjustments. And that it just moves along with you, right? As you're making as you're moving a $3 million project three years down the road, you'll see that instantaneously on how that impacts your cash position. >> The only thing I wish we would have really been discussing long time ago was
I mean, knowing that Baxter put in millions of dollars into their uh water treatment plant and they're you know, it's like we're doing the same thing. Why are I mean we're sharing a wastewater plant. Why would why couldn't we be continuing to share some of these
other services such as that and rather than both cities spend millions and millions of dollars. So and just a afterthought. But thank you. No, it was a great presentation. Looking forward to more discussion on it. So >> we've been really impressed with the
tool. I'll say that from Danny and I's perspective as we got into it and and saw the um the ease of the user um moving things around and making adjustments on the fly. It really paints the long-term financial picture and
health of each fund um in a way that um a layman can understand with with the graphs and the way they have the layout of the graphs and things. It really paints a good picture and I think it's a good educational tool as we implement rate increases with the public. Having a presentation that's
like what Adam showed you today is a great uh tool to um inform the public on why these adjustments need to be made. >> Well, you're certainly dealing with facts, but you know when he had mentioned and I just obviously it's always because it's top of mind um the
2.4 4 million that he s uh indicated would continue to get funded and which we know isn't even an option. You know, to be able to tweak that and pull that back out and then see where we're at with things. I mean, those are that that's what I appreciate the the fact that you can make those modifications
right away and and still, you know, provide a a a projected outcome of what we would need and what we what we're looking at. So, thank you. >> Yeah. And most of these models I will say um from the grant perspective these are set up um for grants that we know
about right so obviously the lead service line uh for every time we have an expense there's a matching grant revenue um that we would anticipate to keep moving in the future as long as um that money keeps flowing into the um the appropriate bodies the legislative
bodies but um from like the plant expansion on the wastewater side from the water treatment plant those are um expenses is without any planned grant revenue at this point. So, as we continue to work with Bolton and the Mink on these projects and identifying sources of potential grant revenues,
bonding bills, federal earmarks, whatever that might be, um that can be plugged in here as soon as we know that we got something to reforcast how it looks in the future. I guess additionally if commissioners are not aware so the local option sales
tax is becoming harder and harder to get every year and so this uh the model that was presented shows a reduction in 2028 of the local option sales tax and right now it's about a third of our operating budget so that these rates also
reflected that change >> loss of local option sales tax >> significant obviously >> I really appreciate the fact that um we can be as a utility u provides a level of transparency with our rate payers and it's just showing the math. It's showing
the process and you know it really doesn't uh leave a lot to be um asking additional questions about what what impacts utility and what goes into establishing those rates. What do we have coming up for projects? And so I just can't tell you how much I
appreciate uh as you put it the layman can understand this. Well, that's me, you know. Uh, and so I have a very good it it paints a very good picture. And so I'm just excited. I mean, I've had recent conversations with BPU customers about this, you know, what's going to
happen with rates and and uh, you know, our customers are asking those questions. And so I think this as being part of our regular commission meetings and, you know, the frequency in which we review this information, I guess we'll just, you know, see how things go, right? and the fact that we're able to
adjust this as we go as funding opportunities may arise or you know there might be another capital need that we need to throw in there. We never know, right, Charlie? So, I just can't tell you how much I appreciate this. I think there's so much value for all of us and um I'm excited what it means for BPU staff to just think strategically
and, you know, address our current needs, our long-term needs. And I'm excited about it. I'm jazzed. I I think it's uh it's a great move. So, thank you for everybody's efforts on this. >> Any other questions, comments? >> No, I agree though. It gives the big
picture and I like when you can layer it and see kind of how everything's happening and >> yeah, >> kind of gives you the you get the realization of what's happening and you need to pay attention
to it before it gets really out of hand. >> Yeah. Yeah. And we're tasked with making decisions and it's nice when we can make educated decisions. So that's that's the value that this brings. >> Okay. Anything else? Uh I'd like to extend a thank you to Adam and his team. So when in the in this
whole process, Adam's been meeting with us weekly for the last two and a half months, making sure that we're being brought up to speed and comfortable with using the software, making sure we understand it, making sure the numbers are right. They've been fact-checking everything we've been putting in. So when their quote says unlimited service,
he has been here every week and forcing us to use the software and understand the software and put it in. So we really appreciate that. And when you go from a sales pitch to a product, you don't know what service you're going to get on the back end that they have sold what they preach. And Adam's been wonderful to
work with. >> Experience with software. >> Yes. >> Not implying anything with that statement. >> Oh, awesome. All right. Uh, so then we'll move on to item 6 C with looking at the quote.
Correct. >> Okay, Danny. >> I I take that. So Paul and I have been working with Adam over the last two and a half months. We've seen the value of the product. Um, we originally had the quote that is in front of you with electric and with storm water uh changes
with the charter that's before you. The quote that we handed out today, we just got it yesterday. uh in conversations with Adam and his team, we thought we'd put it in front of you to determine if that is something we wanted to move forward with now that you've seen the tool. Staff are seeing the value. Um we've been able to adjust and using it
as a budget tool. So in the in the model right now, we have like 50 years of a capital budget put together, which right now we're it's Excel based and not easy to adjust. This is allowing us to adjust it on the fly and have those conversations for budgeting. If you wanted to take action on it today, we
put it in front of you. uh staff's opinion is it was a a good move and when we talked about it as a management team we brought it in front of commission as Paul I don't know if there's anything more you have to add. No, I think you know when we originally had talked about um implementation of the Waterworth
software, we had said you know let's do it with um the funds that we um know Waterworth was good at um that they've been working with for a long time. Um you know they had just implemented the electric module here um more recently. I think it was in the last couple of
years. So we wanted to kind of see and make sure that this was something we were going to use long term that it provides all the value um that we wanted to provide. Um, and I think from Trent, myself, Danny, Trent's seen this, um, has worked in there a little bit with
Danny. I think from our perspective, you know, either if the commission doesn't feel comfortable moving forward with it yet, we would ask, you know, if it is included in our 2027 budget or whatever that looks like moving forward, it is our recommendation that we get this set up for all of our utility enterprise
funds that we'll be responsible for monitoring and tracking moving forward. And so that quote uh the electric module being 9,000 uh annually and then the uh uh storm water being 3,000 annually. >> Does it seem comparable to what we've I
don't remember what we paid previously for >> it was 4,3500 for the other two. >> Okay. So electric just with that that number it's the complexity of the system. It's the size of it and all those things. you have that many more rate classes in electric which is what's
driving that increase in cost >> were there are I can't remember it's purchased software there's no monthly ongoing expenses right this is once we purchase it we own it right >> it's an an that's an annual cost for access to the software so it's an access cost for the software >> 12,000 a year if we can if we went with
this and it's 307500 for water wastewater >> correct >> okay and then uh our rate consultants Um, I I presume they're going to make good use of this. I mean, I would only assume that since we can do some a lot of projecting with a tool such as this,
that might reduce some of the expense or the cost from some of our consultants. >> That would be >> looking to see where we balance it all out. So, the hope or how I would look at this is if we come back with the rate studies and they are in line with what we're doing within the software, instead of having two-year rate studies and full
cost of service studies, we might be able to move them out to five years, maybe seven years um and utilize it that way, which is they're two, three to $5,000 depending on the fund for each of those every two years. And then electric is 17,000. So, >> that would make a lot >> save the
>> Yes. >> Is this price locked in? I do see a note on the bottom that it's the prices are set to increase 4.9% each year. >> I expect that 4.9% increase per year with what their note is there. Um there
are opportunities for us to do discount pricing if we were to buy more than one year at a time. So right now we've only bought the one year at a time, but as we move forward and if we want to move forward, we could get discount pricing if we bought three or four years at a time. and that I think that discount was
10 or 12% of what they presented that the last time they presented. >> Well, they should only go with the 3% average that they've been using. But, Mr. Chair, I would like to make a motion. I would actually like to move forward with um with uh this quote as
far as uh purchasing the software for electric and storm water services for the $12,000. >> I second. >> Okay. Motion and a second. Any further discussion? The only thing I have is uh what do you think the timing would be for basically
seeing another presentation equivalent to this regarding these two? >> About a month and a half. So by the end of September, we'd probably be able to present again. >> So that aligns with uh I mean I know as far as a budgeting standpoint this year, does that align with that or is that going to prepare us for
>> We'd be able to use it for the budgeting process. >> Perfect. >> And I will say, Mr. SH if I may. Um Connie is in the middle of uh rate studies um for the sanitary sewer collection and storm water right now too also with UFS. And so >> um it's a it's a similar process that
we've been using having a a concurrent rate study going on um on the city side right now. Um, we haven't talked much about, you know, when the charter changes go into effect and how we have the cut off between Connie managing those funds to when so we'll be working
directly with Connie, at least on the storm water side. Um, maybe right beginning of 27 would be a legitimate cuto off date for sewer collection, moving over and getting it plugged into Waterworth and same with uh storm water. Um, but working with Connie um right now
to uh get Waterorth set up on the storm water side. Awesome. >> Sounds great. Okay. Uh, all those in favor say I. >> I. I. >> All those opposed, same sign. Motion carries. All right. We'll move on to public forum. Time allocated for citizens to bring matters not on the
agenda the attention of commission. Time limits may be imposed. Is there anyone here for public forum? Anybody online? No. Okay. We will move on to uh unfinished business and uh see attached separate memo
regarding updates on unfinished business. Yes, Danny. >> Couple items to actually bring up on unfinished business. So, Climate Vision Radar, they got the go-ahad last week. They got federal funding. That construction will happen before September 15th. So, that's going to be
moving really quick here. Um so, Emily Posat from Climate Vision reached out to us. We've been in contact with everybody from the city side. uh we're all good to go. So that installation is going to happen really quick. So there's going to be a lot of activity happening out at the state hospital site with cranes and
putting on a weather radar on that location that is happening. Uh as we look at the hydrogeneration, we've been talking with bar, there was some I'm going to say complications in some of the calculations related to the benefits of the new generator. So they're recalculating some calculations. We're
hoping to have those at the next meeting. >> That's all I have to add to there. >> Any commissioners? Any questions on unfinished business? >> Okay, we'll move on to item B, 2026 comprehensive policy review update
>> and this would be Paul. >> I think Danny was going to take this one. >> Sorry, Danny. >> I can go ahead. Thank you, Mr. President. So, we have two policies that we've selected for this month to present in the comprehensive policy review. The first one is the 2021 opt out of meter
reading fee policy. Uh we've just updated the policy into the new template as well as just removing the actual fee quote number from within the policy and just referencing to the fee schedule. The attached red line and uh new
template are there for you and staff are here to answer any questions. >> Thank you, Danny. Any questions regarding this? Makes sense. Okay. You want us to approve this through a motion? Y. >> Okay. All those >> move to approve. Second. Motion a second. Further discussion hearing none.
All those in favor say I. >> I. >> I. Same. Those opposed same sign. Motion carries. Okay. Danny. Number two. >> The second policy we have is the policy 20185 the non-sufficient fund checks and a payments. The actual policy statement
here was a complete rewrite. As staff looked at the policy, the information within the policy was more procedural and the processes we do internally to make those changes. So then what staff did is rewrote the policy statement to have what the policy is intended for and
then moved all of the items that are listed within the policy currently into the procedural section. Those are really the only changes to the policy. The procedures all stayed the same and were within the document and then updated into the new template format and presented for your approval today and
staff recommending approving as presented. >> Okay. Thank you Danny. Any questions, comments? like to make a motion to approve. >> Second. >> Okay. Motion and a second. Any further discussion? Hearing none. All those in favor say I. >> I. >> Those oppos same sign. Motion carries.
Thank you, Danny. >> Thank you. >> New business. Approve fee amendment with HR Green main lift station reconstruction project. And again, just a reminder, I'll abstain from voting on this issue. >> Thank you, Mr. Chair. Um, so that is a November 2025 uh utility commission
meeting. Um the commission approved a contract with HR Green for design and bidding services for our reconstruction of our main lift station located on East River Road. Since that time, uh Charlie and I and Trent have been working with uh HR Green and Witsth concurrently on
the design of the main lift station. Um as a part of uh HR Green and Witsth's original scope of work. Um it did not include any coordination or applications for um related to um the work that we need to do with the Federal Emergency
Management Agency, FEMA, on um working or replacing this lift station within the flood plane. And so that lift station is located in the Mississippi River flood plane. um this application um gets uh we work on the application
with the DNR um concurrently and it's um at the same time this was all going on James Cranvic at city hall was working on updates to the city's flood plane ordinance and so there's been multiple kind of working parts here um we've been tracking this fee amendment basically
since the inception of the original agreement um on the invoices and so if you review uh the last six months of invoices you'll see an additional task where we've been tracking their time related to this because we were notified that you know this is something that we
need to get the project approved. Um we didn't want to come to the commission until that work was completed and we knew the final cost of the applica application and the review process. So this is um all related to work in the flood plane. Um it's called the LOMAR
application letter of map revision which um we basically have to uh do modeling and environmental work to show that um we are not going to have an impact in the flood plane um and any impacts associated if there were going to be impacts would have to be mitigated in
some fashion. Um we were able to basically prove that we are in a no rise condition um with the replacement of the lift station. Um that was all um there's crosssections and things that we have to cut through the lift station and prove in this LMAR application that we are not
having an impact to the floodway. Um that work um has been completed. Uh James Cranvic has received the application and signed that um even prior to the new flood plane ordinance being in place after discussions with the DNR. Um we were able to um since they knew we were working we were
working directly with the DNR at the time on the flood plane ordinance revision. um they were comfortable with James signing that before the new ordinance was in place. The application has been submitted to FEMA um and it's a six-month review process. So at this time um with Seth and HR Green uh do
feel that their work is basically completed on this task and um the total fee to do the application, the modeling and the environmental work um totaled an amount of 64,000. staff is uh uh recommending that the commission approve that fee amendment to the agreement with
HR Green in that not to exceed amount of 64,000. Um a reminder that our original design and bidding contract with HR Green was 494,000. Um this fee amendment uh would change the total fee not to exceed to 558,000.
>> I'll answer any questions. >> Thank you, Paul. Any questions from commissioners? only not so much on this but have we recognized I mean every situation brings us new knowledge of gee are there any other lift stations in sensitive areas you know these questions
for future that we should be asking I mean from that we're learning from this and obviously when we're working with other government entities it's never going to be inexpensive so I get this I totally understand it but for future is is there anything else as we look at other lift stations
>> nothing the only one that comes to mind is right now. >> As we talk about the new water plant, that might be an area that we're going to have to look at a little closer. Um, it is protected by that dyke that is around our um, seepage basin. Um, but
that is something that I think um, when we get into preliminary design. and we'll have to talk about that um with our uh chosen consultant to ensure that um if we do have to include some scope for um environmental documentation or uh
FEMA work or whatever that might be that that's included. >> Okay, thank you. >> That's a good question. >> I did have a question. So, are we only approving the 64,000? The letter from HR Green has a total of
66,000. >> Oh, I apologize. That is a typo on my part. I was just looking at the width fee. That's a great catch. Um staff is uh looking for approval of the 66,000. That was a mistake on my part.
Thank you for bringing that up. >> Okay, any other questions, comments? I would make a motion to approve. >> Second. >> Okay. Motion in a second. Any further discussion? Hearing none. All those in favor say I. >> I. >> I.
>> Those opposed, same sign. Motion carries. All right. Staff reports. Start off with city administrator, Mr. Broyals. >> Uh, Mr. President, thank you. I don't have anything to add. My written report is attached. If you have any questions, I'll be happy to address them. Thank
you. Any questions for the city administrator? I just have to say thank you for joining uh the Brainer Fire Department construction meetings when it's possible for you. So, it's nice to have you in those meetings and if you have your questions, obviously, Rachel,
thanks for doing that. All right. Uh move on to the HR director report. >> Yeah. Thank you, Mr. President. My report is attached and I have nothing further to add. >> Okay. Any questions or comments? >> I just like to note that the wellness committee just did donuts. Now they're
doing what? Rip your floats. >> Yes, it's been hot out. So welld deserved. Rip your floats. >> Wellness is being happy and uh donuts
and riper floats makes me happy. So I'm I'm in full support. Uh public works director report. >> Uh thank you, Mr. Chair. Just a couple of items. My written report is in the packet. Um, my last couple of weeks have been uh busy on boarding obviously Jen
uh with us here today. Uh, we did have Lee Anderson uh our newest water wastewater operator. He started back on um July 17th. So, welcome Lee. I know Charlie's been um getting him acclimated. Um he comes from the city of East Skull Lake and so he has um uh he's
a paid on call firefighter so he does have some familiarity with the city already and so he uh he started on the 17th and just hit the ground running. So, um, welcome, Lee. Um, my report is pretty standard what you guys have seen in the past, uh, updates on capital construction projects. Couple of the big
ones that we're starting on right now. Um, the Southeast Brainer reconstruction project kicked off here, um, in the last week. Uh, the contractors putting up temporary water, uh, right now, and, uh, they're going to begin water main and sanitary sewer construction here, uh,
later this week. Um, highway 210. Um, the planned right now, uh, changeover from phase 1 to phase 2 is mid August. Um, that is when the detour route is going to change. Uh, to Oak Street in that east segment that they're working on right now will be open to traffic.
Um, so things are progressing on that side of town um, pretty expediently. Um, obviously we've had a lot of other uh, projects going on in the city here. um our right and 10th street project that is um in a substantial completion phase
um where we have a punch list generated uh contractors working on that right now. We have a final walkthrough scheduled uh for next uh August 5th, I should say. Um otherwise, you know, a lot of our um projects that started here in the spring are kind of wrapping up
and we're hitting kind of this second wind of of reconstruction and our galvanized service line replacement projects uh started here um earlier uh this uh last week. And so um kind of the second wind of projects coming through
right now. Um if there's any questions on my rent report, I can certainly take those now. >> Great. Thank you, Paul. Any questions or comments for Paul? >> Something that just jumped out at me and I really appreciate it is seeing these all these pending change orders saying none. I mean that just I'm loving that.
But no, the fats, oil, and grease the control program. Do we have a time frame as far as um your guys's meeting on that one? I mean, is that >> Yeah, so we um we haven't heard much from here recently. they've been working on um the last time we heard from them,
we reviewed uh some address lists of potential uh mercury um contributors to the system. So, they're not necessarily working on the fog program right now. Um we were getting our mercury program in place so they can kick off their uh mercury plan with Baxter and so we
wanted to get that one kind of wrapped up. um the oak or the fats, oils, and grease project will really be a light load for them and we're kind of tackling that right after um we finish with the mercury side. >> And then just to go back just because I know it was something um the Buffalo
Hills gully repair project, does that have anything to do with the um I mean does that have anything to do with our upsizing the piping for the apartment building that wasn't that wasn't in that area? Okay. Just wanted to confirm. Thank you. That's all I had.
>> Okay. Thank you, Paul. >> Yep. Thank you. >> Electric director report. >> Any questions or comments on the report? >> Okay. >> I'm just surprised the solar panels haven't melted, but considering that
they're performing better than the hydro, I guess that's >> that's saying something. >> That is saying something >> that that's caused right now. We're in low flow plan with the hydro facility. So, they're not able to generate as much as they'd like, but it's also summer and solar's kicking butt right now. >> Sure. That's awesome.
>> Okay, Charlie. Water, wastewater. >> Yes, please. Um, thank you very much here. I had a question. Um, so the the month of report is a month behind um in a lot of the aspects. Some things are closer to date of today. So, a question
was asked about the uh storage volumes. Um I'm I'm very pleased to to announce that we we will be wrapping up summer and the tankage is very low at this point. So within the next week uh we'll be done with that. So to address that
tank, right? >> Yep. That that that'll be empty till fall. Yeah. Till fall application and the new cropping season. So um but other than that, any any other questions? I'm I'm glad to take
>> um just one you know we talk about the uh water production and we keep and I I know it was because it was still within the year but the backer total flow um will it be necessary to keep record keep reporting on that if they're not purchasing from us anymore or is this
just something that you know we should just continue I mean you have the information anyway >> I think I think for for the time being I think we should continue that until they they can prove that they can uh handle. Um and right now they're doing very well um without our assistance. So
>> I would like to keep it on the on the radar if if you would like. >> Um it doesn't take us much. >> Okay. >> Um time. >> To me, it's fine. I guess what made me think of it further was um you know, we would negotiate at a price um if they needed it. Do we need to do that every
year? you know, that's >> we should have a signed contract with them knowing and that that goes with the Minnesota Department of Health also knowing that we're going to be providing water to another municipality. Um, but we should have discussions at least if
needed in both ways, right? >> Absolutely. It's a great question. >> Um, short of that I anything else? No, >> Charlie. >> Thank you. Impeccable and perfect as always. Charlie, no hard questions for
you. Danny, >> thank you, Mr. President. A lot in my report this month, so I'm here to take any questions. Uh, couple highlights I wanted to point out. So, we should have the videos from dying to film. Those should be coming out here anytime. I
would We have some It kernelles, I'll say, and getting us the files that are that size. So, we're working on getting those from Dying to Film, but those are going to be published here in the next week. Um, as we look towards uh the incre incremental t investment tax
credit, excuse me, uh we potentially have a funding source for some hydrogeneration. So, we're looking into that, hoping to have a quote and some more information on that next month. The AP automation is up and functioning. So, we are in the process of testing that.
Uh Sean Strong from IT would like me to point out that we are going through the information technology integration. So that um paragraph is just stating that there are going to be some changes. So you'll be hearing some information related to potentially new emails uh as
we look into this next week. Our integration week is August 17th. So there's going to be some downtime on August 17th and then the 21st. Is that Friday?
I believe is the 21st. The 21st through the 24th, that is the integration weekend. So just so you're aware of that, there will be some systems that are down as we transfer over. Um following last month's commission meeting, I do have some hydro
information and historic costs put in here. So that's the last couple pages of the report. As we look at that uh just high summary level information for that as we look in 23 24 we did not have all of the generators functioning at the hydro facility. In 25 we did. So those
are the the generational differences that we're seeing. Uh as we look cost per kilowatt hour 25 is more what staff is expecting moving forward at that 8.67 cents per kilowatt hour. um as we look
into the future, as we look at bonding for a generator project. So that's roughly 10 million in total costs for principal and interest over the next 20 years. If we move forward with that generation project, that cost would be
about 11 cents a kilowatt hour in the debt service period. We're expecting an 80-year life on those assets. So that would be roughly um 8.5 cents a kilowatt hour after the debt is retired. So when we look at 8.5 cents a
kilowatt hour, we just approved the solar agreement for 8.7 cents a kilowatt hour. So hydro would be cheaper going forward. Um just as some points for information, but that's in the report. Anything else? I'd be happy to take any questions.
>> Any questions for Danny comments? I am thoroughly impressed with thank you very much for including the cost of because it does make sense. You know, in my mind, hydro was always cheaper. And come to find out when you break it down, it's more expensive. And then my next
question is, you know, I know we're getting our electric uh from A, but my question is we move for 2040 and the renewables, you know, how I mean, is it something that we could be purchasing from states andor countries that um are
renewable? I mean, would that count for us being renewable if we're purchasing from, you know, do you see what I mean? For a produ a producer that is producing, you know, and I'm thinking of Canada. I think Duth buys a lot of their electric from Canada and it's renewable
then because I think they do it by wood. >> Yep. So, we are waiting clarification on that right now of whether it needs to be Minnesota grown renewable energy or if we can get a PPA to buy renewables on the market. Well, and then it comes back to, you know, the mandate from the top
down is, you know, I I love that in the legislative review, but the the policy that was set from the state on down to us locals, um, that we needed to be renewable. I would only assume that they're going to start setting money aside for municipalities that are
renewable. And maybe there'll be some, you know, some funding that we can secure because we are we are 20, I was it 22% renewables or 28% renewables. I mean, moving forward, I I hope that it will help us in the future because I know everybody always says what happens.
So, what if we don't meet that 2040 goal? What happens? We don't know what happens, but we also don't know that we won't be penalized, you know? So, we're running the risk of not at least preparing. So just some of the questions to ask for future. >> Thank you.
>> It's all I have. Nice report. Great. Thanks. >> Yeah. Thank you, Danny. >> Okay. Commission member council lays on reports. No council lays on. So it's up to you. You're first. >> Uh I just want to thank um all the staff
across all departments. There's a lot of work that's going into things that as consumers or customers we don't realize and we rely on every day. So I just want to thank everybody for their hard work
and their dedication. >> Awesome. Thank you. >> I just want to say she's not here but congratulations Jana just she's gone now. She'll hear it. Um but uh I also attended it with Danny um because it was held via Zoom. So that was pretty
helpful. the MMUA legislative program update. Uh so, and again, it was it was pretty overall it was they just pretty much said it was kind of a quiet year just because it's an election year. Um but that uh they did talk about funding had been approved for drinking water
infrastructure, PAS mitigation, and lead service replacement. So, I know that our staff is awesome at monitoring that stuff. So, I just wanted to say thanks for reminding me that they were having it and that it was Zoom so I could jump in and listen on on it. Always great to and we have a representative again yet
this year, right? We have funding for um our gentleman to uh represent us again down at legislative session or did that was that just for this year? >> Nope. So we have for the lobbyist Marty Seaffort still we have one more year of the lobbying expenses we've already paid for. Yep. >> Awesome.
>> Thank you. >> Bet. Thanks Dely. Uh yeah, I've got a couple of things. Uh shout outs to BPU staff and uh couple of construction projects just with owners and contractors very complimentary of the
response and uh the willingness to help and be there and do whatever it takes. So, uh, great job to everybody, um, BPU staff and also just, yeah, with Janna, I think just with her longevity here and all of her years of service is an indication of, uh, the great
organization that we have and, uh, she also contributed to obviously hopefully other people experiencing the same experience and having longevity. So, just really fun. It's really awesome to see that and fun to celebrate that. So, congrats again to Janna. That's all I
have. Anybody else have anything else? Motion to adjurnn. >> So moved. >> All right. Motion second. All those in favor say I. I. >> I. Those opposed, same sign. Motion carries. Thanks everybody. Thank you.