WEBVTT

METADATA
Video-Count: 1
Video-1: youtube.com/watch?v=NPCcrmrYl7k

NOTE
MEETING SECTIONS:

Part 1 (Video ID: NPCcrmrYl7k):
- 00:05:24: Call to Order, Consent Agenda Approval, Introductions
- 00:05:59: Employee of the Month: Maria Bernick Recognition
- 00:07:34: Water/Wastewater Rate Study 2026: Alternative Five Overview
- 00:12:18: Residential/Commercial/Industrial Impact Rate Increases Analysis
- 00:17:50: Communication Strategy for Proposed Rate Increase Discussed
- 00:25:30: Public Comment 1: Community Comparables Help Communication
- 00:25:49: Public Comment 2: Budgetary Effects on Municipal Departments
- 00:26:27: Public Comment 3: Responsible Party for Large Companies
- 00:27:20: New Business: Joint City Council Information Meeting
- 00:28:27: New Business: Upsizing Natural Gas Meter at Power Plant
- 00:29:51: New Business: 69 KV Breaker Upgrades at Substation
- 00:31:12: New Business: Report of Claims and Adjournment


Part: 1

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to go whenever you're ready. >> Okay. >> Good afternoon. I'll call to order the Public Utilities Commission meeting for Tuesday, May 26, 2026. Um, digging in. Our first item on our agenda is our con consent agenda.

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>> Make a motion to approve the consent agenda. >> I'll second. >> Have a motion, a second. Is there any further discuss um discussion? All in favor say I. >> I. >> Opposed? Motion carries. Next up is our employee of the month.

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Commission President, Commissioners, uh, thank you for the opportunity to nominate Maria Berick as employee of the month. I'd like to nominate her because of her continued effort to make the gas department more efficient in its operation. She's the clerical assistant for the gas department. Um, she looks

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for ways to get things done in a timely manner. Her past work experience in IT gives her an insight needed to keep the gas department running smoothly through our meter database and work order systems. Um, I particularly appreciate her IT experience that she can help out the office, including myself, um, and

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help make us more efficient. Maria is always willing to help with projects. Recently, she reviewed our entire on&m uh, manual to look for discrepancies with our old version. Maria is a dedicated independable employee, and she is very deserving to be recognized as employee of the month. So, with that, I would like to nominate Maria Bernick as

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employee of the month. I'll make a motion to rec recognize Maria Barick as employee of the month for April 2026. >> Second. >> All right, we have a motion and a second. Is there any further discussion? >> If not, all in favor say I. >> I. >> I.

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>> Opposed? Motion carries. Now on to old business. Brett. >> Excellent. I'll make my way up to the Okay. Presentation. All right, Commissioner President, Commissioners, um thank you for the opportunity to speak again. Today we're

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talking about the 2026 water and weight wastewater rate study. Um, just to bring everybody up to speed and folks who maybe are following along for the first time, uh, both on camera and in the room. So, how we got here on April 28th, Dave Berg Consulting presented rate

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study findings to the PUC, this group showing a significant need for additional revenue. Um, if you're interested, you can click on that link and it will take you to that presentation. Uh at that point, the PUC recommended that we go into um a two-eek cadence to

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try to to discuss what needs to be done to to address that recommendation. On May 13th, in a work session, I gave a presentation on the rationale, the history, and four rate history and four alternatives. Um through some really constructive discussion, this group

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asked for a fifth alternative that we'll be discussing this evening. Um which is where we're at. Um after that I will ask for your guidance on how and when and where and in what level you'd like to uh have communication with our customers.

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And then um I am suggesting or proposing that the PUC look at adopting the new rate schedule at the June 23rd PUC meeting with um implementation beginning October 1st. And so we can talk about that. But again, both of those are

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simply proposals. So, just as a reminder, those four rate alternatives, excuse me, those four rate alternatives that we discussed on May 13th, um they had four different uh sort of increase schedules over four increases versus

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five increases starting in July versus October. Um the primary trade-off, if you recall, is that um you can do uh in if earlier increases result in a lower ultimate rate cost over the 5-year

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period. And so there's that trade-off. If we started in July, uh folks would be experiencing a rate increase in July already with not much time to plan. However, that resulted in a higher rate over the long run. So, um, with that, the PUC requested a fifth alternative

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with the first rate increase starting October 1st and then three annual increases going on the, uh, July 1st, 2027, 28, and 29. Um, if you're wondering why one was not done in 2030 for four increases, it's because the, um, study period ends July, excuse me,

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January 2030. It's that's that's how the um, the study went. So, if we went, we could we could do a different alternative with another rate increase, but um I think you'll find that this option that you all came up with does a nice job of finding the middle.

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So, these would be um uh this first chart in the list, excuse me, is a comparison of all of those alternatives. So, each of the bars in each grouping, so that would be the first increase from alternative one to alternative five, left to right. So, alternative one would

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have been an increase of $7.89. 89 cents um for that total water and sewer bill for the median customer beginning in July of 2026. Um that will not be happening. Uh so we're looking in this case in the pink or magenta alternative five and how that looks versus the other

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alternatives. If that is the alternative that is adopted, the median customer would see an approximate $10.36 increase in their bill beginning with the October bill that would be build in November. You can see what that looks like um that

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on the chart on the right, the history for um where the bills have been for that water wastewater combined rate um for the median customer and for the 90th percentile customer. And you can see where that looks like where we are in 2025 at $601.

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Again, it's calculated so you're in the ballpark and where that would go over the 5-year period. If you look at the 90th percentile, uh the med, excuse me, the levelized monthly bill increase would be $16.78 more in the summer, less in the winter

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depending on demand. That's the levelized uh increase over the entire year. And this is what we were getting at about the trade-off between starting earlier or later, and what that does to the rate at that 5-year point. And you can see the ultimate increase between

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alternative 1 2 3 4 and five for the median and 90th percentile. and that alternative three and four were delaying those increases. Alternative one and two were increases um right away. And you can see that that alternative 5 does a nice job of splitting the difference

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between um the ultimate rate level from where it stands today. So the takeaway message here is if alternative 5 is adopted uh at this time the median uh utility payer for water and wastewater would expect to see their bill go up

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88.7% between now and January 1st 2030 if that makes sense which I think is consistent with what we've been talking about for the last month and a half. So, let's talk about the residential water and wastewater rates or I should

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say median bills versus sort of the utility cost index. And again, this is a national utility cost index provided by um the federal government. Um you can see on the in the chart on the left we're looking at water and in the chart on the right we're looking at wastewater. And it tells the two stories

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of why this rate increase is proposed. On the left, you can see that the actual utility rates really fell behind generalized utility cost inflation, meaning that we were deferring a lot of maintenance and replacement. And this increase is requested essentially to try to bring us back into par with where

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that is. So that's sort of the the primary explanation on the water side. On the wastewater side, we've really actually kept up with the utility cost inflation. However, we're at the end of life for most of the assets on the wastewater side, particularly the wastewater plant. And so to pay for

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those, you need to raise more money. That's really where it's at. So those are, you can see those two explanations are quite clear in the two charts. If you combine those two, if you combine the water and the wastewater portions of the bill and look at that versus the index, um right now, uh even with the

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first increase in 2026, uh we'd be a little bit behind the index in 2027. As of as as of that increase, there would be par from the long-term average of the utility cost index from 2000 to now. Um and then after that, it would surpass that. Again, primarily driving uh excuse

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me, being driven by those wastewater costs. I got ahead of my own bullet points. Excuse me. You can read what I just said. Looking at this on the commercial side, what is alternative five look like for the um the different levels of

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commercial? So, we have the small commercial class median user, small commercial class 90th percentile user. So, in dark blue and orange, the large commercial class median user, and the large commercial class 90th percentile. small and large commercial classes are

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based on how much water they use. So seeing those sort of go up in an exponential fashion just reflects those businesses using a higher amount of water. And you can see what those monthly increases look like for those those different classes. So if you are a small median uh commercial user using

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about 3,000 gallons a month, you can expect your bill if this is approved to go up by approximately $6 a month um in the starting October 1st. From an industrial perspective, this is the water side. I'll talk about wastewater

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in a second. Um the total change from the current rate to the January 1st, 2030 rate um would be 105 to 108%. Again, this is across four large industrial water customers. So, if you blend those together, that's what you get. Um we were talking about uh what

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the impact would be in quarter 4 for those uh uh industrial users. So I added up uh the monthly change multiplied by three for that total difference in in uh quarter 4 versus what may have been projected. So for the business using 14

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excuse me 1.4 million gallons per month, 2.5 million gallons per month, 3.5 million gallons per month, and 6 million gallons a month, you can see what that quarter um four difference is. And on the chart on the left again, you can take a look at what those rate changes do to those customers versus where

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they've been. Okay, on the wastewater side, uh similar approach in graphs on the left is what you see from historical wastewater costs for um in this case the top four industrial users in the city. Um the

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chart on the right will show you um what those monthly cost changes would be by year. So in that first year, you I'm sorry, uh they're grouped by customer and then left to right by year. I apologize, it's it's the opposite there. So, customer A uh would see a $3,000 per

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month increase in their bill beginning in October. Um the following July, they would see an additional 2781. And again, these are estimated. Um the following July after that, 32. The following July after that, 36. That's how that would step in for customer A. And then you

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have B, C, and D there as well. If you'll notice, there's a $0 increase for July 1st, 2030. Again, that's because um this uh rate proposal was looking at rate increases that ended um uh uh January of 2030

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and that would be July. uh industrial wastewater again looking at what if you take those four customers and you blend them together you do a weighted average of their wastewater costs and you take a look at that versus consumer price index consumer PI that's the orange in the bottom versus the utility price index that's that utility

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um uh index that I've been talking about you can see how um they kept up with that index until 2008 2009 and then we got into a pretty flat area there for where there was zero increases for 8 years and then limited increases over the last four or five years. um these increases would bring them up closer to

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that long run utility index, but still within the realm of um what other folks nationwide would be seeing. So, what are the next steps? Um what I'm looking for tonight is uh some advice on preferred communication approach, whether that's communication channels,

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priority messages, important questions that you want to ask our customer base. Um we're planning to as a part of that to host a key accounts meeting with major water and wastewater users, perhaps five or 10 large accounts um to have more of a tailored presentation about commercial industrial users, why

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we're doing these things, and then getting some feedback. Um like I said, we're proposing the PUC rates schedule be adopted on July on June 3rd, 23rd, excuse me, for a proposed rate increase on October 1st. This is just a reminder on

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>> uh the need for funding. I posted uh three slide three additional slides from the previous uh presentation for um uh for the public to see. They're in both sets is what I'm trying to get at. So uh with that, are there any questions from the commission?

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Seeing none. Okay. >> All right. happy to leave up a slide. Okay. >> Motion. >> No, this is just review discussion. >> Discussion. >> Yeah. >> All right. I'll open it up for discussion if there's any further discussion. We have some of the

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commission or counselors here today if they've got any additional questions. I would just say I think alternative number five really did sort of meet sort of what we were looking for from the work session, right? It was a good balance. It gives time I think to communicate. I think it spreads the

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increases a little bit nicer than the the right away right back to back. >> Yeah, I agree with you Darren. I think especially the July 1st would have been a quick >> Yeah, quick turn around. >> Yeah, the time to communicate is is key. We we know it has to happen one way or

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another, but I think this is a good middle ground between some of the alternatives >> as far as um commission as far as um how you would like the me message to get out. Um examples being um you know

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articles in the journal. I put out a um in the next utility newsletter there'll be an article about the why and then in the following newsletter it would be about the the scale the amount essentially of getting people to prepare. So um and then the the newsletter after that if if we do move

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forward with that would be um steps that customers can take to to um take control of their bill a little bit. So, sort of a multi-part newsletter series. Um, talking to the journal of course and writing something there. um can get in front of K andJ can get in front of um

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new um like I discussed about doing that key accounts meeting um uh with our largest customers so that we can make sure that everybody's understanding why this needs to happen and um and how they can prepare and if they have any questions and and frankly if there's any

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um feedback that would cause an additional adjustment um prior to any kind of an adoption. I think that's the biggest one is is discussing the key accounts. >> Okay. >> Some of those would it make sense to try to do a >> hot topics?

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We do that. >> It's a little bit more open, right? For people that >> aren't necessarily a key account, but would want some information. >> You know, the newsletter hits all the customers, correct? >> Comes in the bill, right?

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if they read it. That's the other thing. >> Right. But not a lot of people subscribe to the journal anymore too or it's online which see it but >> social media >> um >> and that's just it is and I think a u part of this would be sort of multi to

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sort of feed on itself so that um when we're putting something in the journal saying hey if you get you know make sure you pay attention to your utility bill if someone reads it if you're online on you know Facebook or a YouTube video or something like that of referencing them back to that material so they know it's available.

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Um, if there's any other >> Are there any other social media accounts that the PUC has? >> Yeah, Facebook. We can do it through the city account as well. Um, >> okay. >> I mean, we can do it through park newsletter as well if there's space on

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there. >> So, multiple options. Um, the hot topic or town hall um meeting, we can do that. We do that for some of um our projects as well. So, kind of open to everything and we'll kind of hit all the facets. I mean, I was at Rotary this morning and

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kind of talked about it a little bit. >> Um, just, hey, it's coming, >> but >> now that if once we have direction, we can go out to those service groups again. >> I can post a link on the payment website. >> That's a good idea, too.

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>> And with the not with the um commission agenda this evening is the potential rate sheet essentially, so folks can can dive in if they'd like. um along with this presentation and then in the starting of the presentation are those two links to the earlier presentation. So um we're just trying to make sure

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that folks understand that we're trying to get the word out um and we're going to really go full court here um in the next couple of weeks but um you know people don't want to read I don't know what you can do about that. >> I mean yeah there's a lot of information

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and I don't explanation helps as you're looking at it for sure. Is there a way to summarize this so it's a little more simplified? >> Absolutely. And that would be the intent as we move forward with those individualized channels. Um for example, if we're talking to the journal, um I

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wouldn't include much information on industrial commercial for example. >> Right. >> And same with key accounts focusing on those those costs and Exactly. Right. >> Yeah. >> So yes, that it'll be what you guys are getting is the everything. Um and then we'll try to tailor it a little bit as

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we go. Yeah, I think the more you see the why, right, it makes sense especially >> and the chart that shows >> right >> where everybody else's went like this and we went like this >> comparables. Yeah. In the index. Yeah. >> Yeah. Yeah.

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>> Yeah. Okay. >> Mhm. Okay. That seemed good. >> That makes sense. Any um so those are some of the key messages. Are there any um sort of question key questions where you say I'd really want to know how people view X Y and Z. Um is there

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anything just in general general feedback? >> I don't think so. >> Okay. >> Okay. >> Yeah. I mean the timing of it we did the report we had to do it. I think you know there may be why didn't we do it sooner but >> here we are. >> What do you do?

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>> Yeah. love to if I was in Peoria, Arizona. Sorry. But I again I will give credit all day long to my predecessor for getting this started. Um particularly >> absolutely >> um >> you know getting it rolling.

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>> So >> you guys start communicating with the public. Can you post kind of comparables to other communities? >> Sorry. >> It's like what was that? Sorry. Um just just a question. when you

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guys start actually putting this out to the public, is there a way of showing where other communities similar to us lie? Cuz when you were showing at that work session, we were already below >> like what other rates were? I think when the public sees this and they see we were already significantly below what

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St. Peter is, Hutchinson is, those other communities, that part is going to help with the communication I think a lot. Okay. >> So that's all. >> Thank you for that. Appreciate it. Hi there, commissioners. Tom Schmidtz, uh, representing Ward Three of the City

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Council. I greatly appreciate your work on this and I agree with your plans and thoughts. Um, I I presume it's also going to affect our PUC and and municipal budgets. Um, because we've got some departments that are pretty big water users. Um, I'm

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thinking, you know, aquatic facilities at park and wreck, um, and so on and irrigation. So, we'll have to be working on that for for next year's budget and future budgets. >> Thank you. >> We appreciate that. >> Um, hi. I was just curious as who would

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be kind of the responsible party or parties for working with our largest companies in town. I mean, these are very significant increases um obviously that we can explain and can be expected, but I I know someone on the commission, you know, runs a very big water user in

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town. Um and so who would who do you have kind of lined up to have those conversations? >> Uh right now, I think that's me that's on the hook to have those conversations. >> All right, perfect. Thank you. >> Mhm. >> Unless I can delegate. No.

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I will I will be there with you, but >> just kidding. >> And I would be willing to come along as well. >> All right. Anything else about there? No. >> Thank you. >> Yeah, I don't think we need a motion or anything. All right.

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>> All right. We'll move on to new business. Schedule a joint city council public utilities information meeting >> for Tuesday, June 16th at 3:30. >> Commissioners, this is the annual meeting to discuss the audit results for

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2025. >> Abda will be here to present it. >> Okay. >> You need anything to just note for scheduling? >> We need the motion. >> Motion motion. >> All right. I'll take a motion on the meeting to schedule a meeting.

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>> I'll make the motion to schedule a joint city council PU's public utilities commission information meeting at 3 p.m. 3:30 p.m. Tuesday, June 16th, 2026 in the city hall council chambers to discuss the audited financial statements for the year ended December 31st, 2025.

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>> I'll second it. >> All right, we have a motion and a second. Um, is there any further discussion? If not, all in favor say I. I >> I motion carries. Uh, next item is upsize the natural gas meter in the power plant.

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>> Yes, Commissioner President, commissioners, thanks for your time. Um, yes, this is to upsize the natural gas meter at the power plant. While reviewing the annual testing, it was found that the current meter um needs to be uh upsized to take into account sort of that um edge condition when you have

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really really high flows. After reviewing the options, they looked at upsizing the current meter or replacing it altogether. Um, replacing it altogether was over $100,000, $101,000 and upsizing it was approximately $18,000. Um, so obviously it made more

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sense to simply rebuild and upsize the one that we have. Um, this money will come out of the uh meter and regulator capital account. So that money is already budgeted. um it's uh used as necessary essentially, but this these are budgeted funds and um I think this is a really good solution uh that the

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natural gas folks came up with. >> Oh, absolutely. >> So, I'd like to recommend uh ask that this is receive an order filed, excuse me. >> I'll make the motion to receive and order filed the quote from Energy Economic Inc. to upsize the turbo inside

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the current natural gas meter and the power plant at a total cost of $17,93951. >> Second. >> All right, we have a motion and a second. Is there any further discussion? If not, all in favor say I. >> I oppos. >> Motion carries. Next up is a uh 69 KV

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breaker upgrades. Dan, >> good afternoon. Yep. This is the fourth of five oil breakers we're working our way through replacing. Uh the now we're starting on the southside substation. This breaker was installed when the

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substation was built in 1982. It's original. Again, it's obsolete. We're going away from oil to SF6 gas. And this was budgeted. We have already ordered the breaker. So now we're just getting the engineering and stuff in. This

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project should come in significantly under budget. scheduled to be installed next year. >> Okay. Excellent. >> I'll make the motion to authorize the city manager to accept the proposal from Power System Engineering Incorporated to

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develop plans and oversee the replacement of the 69 KV Breaker at the Southside substation in the amount of $35,000. >> I'll second them. >> All right, we have a motion and a second. Um, is there any further

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discussion? If not, all in favor say I. I >> opposed. Motion carries. And last up is our uh report of claims. >> Make a motion to accept a list of claims in the amount of $3,359,53465. >> Second.

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>> All right, we have a motion and a second. Is there any further discussion? If not, all in favor say I. >> I. I. >> Motion carries last up. As do our commissioners have any additional comments? Just want to thank Brett and PUC team for pulling together the the presentation in short short order with

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the alternative number five. So, thank you. >> Thank you for your input. It was very helpful. >> All right, with that we are adjourned. Thank you everybody.