The Grand Marais PUC met on Wednesday, December 16, with all three board members, George Wilkes, Tim Kennedy and Ann Possis, present.
Joining the meeting a few minutes late was Grand Marais Administrator Mike Roth. Also in attendance at the Zoom meeting was Shane Steele, the city’s Sustainability Coordinator.
The topic on hand was setting PUC rates for 2021.
Wilkes led the meeting, advocating for a one percent increase in electric rates.
“Mike is recommending no change,” said Wilkes, who added he thought a one percent increase in rates would be appropriate because of the PUC’s climate action plans, which include someday installing a solar garden and making sure there are electric vehicle charging stations for the emergence of electric-powered vehicles.
“If we increase solar power systems, what change would that have on our system? Wilkes asked.
Possis responded by saying that adding electric vehicle charging stations and expanding the city’s solar power production sounded like good ideas.
A one percent increase in electric rates would bring in about $27,000, said Wilkes, adding that was a pretty modest amount, “and I would also argue we are trying to bring up our capital reserves. If things change and we get into a situation where we would have to raise rates, we wouldn’t have to raise them as much.”
Kennedy agreed with Wilkes, saying it seemed a “pretty wise choice to raise rates one percent. We can always reduce rates in the future.”
But Roth argued, “I’m not sure we need to do that. With the SMMPA rebate, they are paying out about $80,000. That’s about three years of rate increases for us. It’s one-time money, but we probably don’t need to raise this year, or next year or even the following year.
“I can understand the symbolism of it (raising rates), but I don’t think we need it,” added Roth.
Possis asked Mike, “Can we earmark $25,000 of that money for climate change work?”
“Currently, there isn’t any need to earmark (projects) on our books. You can spend it however you want,” said Roth.
Wilkes asked about building up the PUC’s capital reserves and Roth responded that a one percent increase would bring in anywhere from $25,000 to $30,000 but, “We already have $200,000 in the fund balance, and half of that isn’t designated.
“I don’t know if we have to build it up any faster, and I’m not sure this is the right time to do that.”
“We can spend that as we see fit? Asked Kennedy.
Yes,” said Mike.
With that in mind, I feel comfortable with a zero percent increase,” said Kennedy. “Any rate increase does put a burden on our residents and businesses, and we all know this has been a pretty tough year. I would support keeping to a zero percent increase.”
Ann and George agreed with Tim and the electric rate won’t increase for city residents next year and neither will the rate for water. However, the 2021 sewer fund will increase three percent in 2021.
Roth outlined the need for an increase at the November PUC meeting, stating, “The increase is necessary to help cover the shortfall due to decreased sales. When sales recover it will position the sewer fund to contribute to multiple City priority projects: AMI meter upgrades, the 1st Street area reconstruction, 5th Avenue reconstruction. One additional significant capital item, mercury reduction in the treatment plant, is not sufficiently understood to get a good budget number.”
The last portion of the meeting was saying goodbye to George and Tim. George has served for six years on the PUC board and Tim has somewhere in the vicinity of 15 years on the board.
Because of their departure, there won’t be a PUC board meeting in January, said Roth, adding the two board members were going to be greatly missed.
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