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EDA MEETING PACKET 03-03-2014CITY OF SCANDIA ECONOMIC DEVELOPMENT AUTHORITY Monday, March 3, 2014 6:30 P.M. Scandia Community Center Board Room 1. Call to Order 2. Approval of Minutes (February 10, 2014) 3. Approval of Agenda 4. Public Forum 5. New Business a) Discussion of Natural Gas Service in Scandia 6. Old Business a) Survey for Broadband Initiative b) Survey for Storefront BRE 7. Commissioner Reports 8. Executive Director's Report 9. Date and Agenda Items for Next Meeting 10. Adjournment ***Note: A Quorum of the City Council May be Present at this Meeting. However, the City Council does not intend to conduct any official business *** The Scandia Economic Development Authority met in the Board Room at the Scandia Community Center on Monday, February 10, 2014 beginning at 6:30pm. Commissioners Present: Tom Triplett, Dan Lee, Bruce Swenson, Sally Swanson, Greg Isaacson. Staff Present: Kristina Handt. The meeting was called to order at 6:30pm by Swanson. Motion by Lee, seconded by Triplett to approve the January 13, 2014 minutes. Motion carried. Motion by Swenson, seconded by Lee to approve the agenda. Motion carried. Handt introduced Bill Coleman. Coleman provided some background on the work he had done with the Blandin Foundation, mostly in rural areas. Even though Scandia is in the 7 county metro area, Blandin was convinced of our rural nature and awarded the application for technical assistance. Coleman provided maps from connectmn.org showing internet coverage in Scandia. The commissioners questioned the validity of the maps as they showed areas with Midcontinent service they knew did not exist. Coleman also provided information on wireless internet providers. The state goal is 10mb/download, 5mb/upload. Midcontinent service meets those goals but Frontier which covers more of the city does not. Coleman suggested the EDA gather data from individuals in the community about their internet service and use it in discussions with the providers. Coleman will provide sample questions after the meeting. An article will also be written for the spring newsletter and the local papers to help get the word out. The commissioners reviewed the list of businesses in Scandia. They discussed beginning with businesses that have a storefront in Scandia, as opposed to home businesses, when completing a BRE. Swanson volunteered to compile the list of businesses before the next meeting. Commissioner Reports: Swanson commented on the success of Vinterfest and the need to ask businesses how they want to be involved in the community. The commissioners discussed the possibility of creating a subcommittee to gain more business representation. Handt provided a verbal update: Washington County Economic Development Work Group continues to meet; Liz Templin provided follow up on tourism program and bicycling info from last meeting; Handt met with Washington County HRA staff to discuss ways to work together. The next meeting will be Monday, March 3, 2014 at 6:30pm to review survey questions for Broadband and the BRE. Motion by Triplett, seconded by Lee to adjourn. Motion carried. Meeting adjourned at 8:12pm. Respectfully Submitted, Kristina Handt, Secretary SCANDIA Stuff Report Date of Meeting: March 3, 2014 To: Economic Development Authority From: Kristina Handt, Executive Director Re: Natural Gas Issue Background: Scandia resident Bob Bernard began contacting the City Council about the need to expand natural gas service to his neighborhood and north to the Chisago County line in January after the cost of propane skyrocketed. Mr. Bernard was invited to address the Council during the public forum of their February 18`h regular City Council meeting. A copy of the handout Mr. Bernard provided to the Council at that meeting is included in your packet. Also included is a flyer Mr. Bernard prepared ahead of the meeting and distributed in the community. A number of interested community members have been invited to attend the meeting. The Council referred the issue to the EDA for further research and to help facilitate the discussion between the providers and residents. Issue: Is it possible to extend natural gas to undeserved areas? If so, what is the best way to do so? What is the EDA/City's role? Proposal Details: Included in your packet is a map of the Olinda/Oren area located a little more than a mile north of Hwy 97. Another map provides a broader view of the area as a point of reference. The City of Scandia has two natural gas providers-Xcel Energy and Minnesota Energy Resources (formerly People's Natural Gas). Xcel is the main natural gas provider as MN Energy Resources just serves a small area in the southern part of town (182nd/1881, streets). I spoke with their representative for our area and he said it would be cost prohibitive for them to expand to the north side of town. While Xcel Energy serves a larger portion of the community, they do not have service everywhere. Representatives from Xcel Energy will be at the meeting to discuss the rules they must follow as a utility regulated by the Minnesota Public Utilities Commission (PUC) and the process involved in extending natural gas service. Included in your packet is a memo from Colette Jurek with Xcel that provides some background information. Recommendation: Gather information from those at the meeting and determine if there is a need for the EDA/City to be further involved in the process of getting natural gas extended. Come to the Scandia City Council meeting on February 18th to talk about high propane prices and how we can get natural gas instead. The following fuel comparison chart is from www.erpud.coni/comparison.htm. (Figures for kerosene and electricity have been removed here.) Average BTU* content for propane vs. natural gas: Natural Gas 100,000 Btu per Therm Propane Gas (LP) 91,500 Btu per Gallon Amount of fuel required to obtain one million Btu: Natural Gas 10 Therms per million Btu Propane Gas (LP) 11 Gallons per million Btu Substitute Cost Form of Units to obtain your per Energy one million BTU present Million cost** BTU Natural Gas 10 Therms x $0.95 (Heat Only Rate) $9.50 Natural Gas 10 Therms x $0.85 (Year Round Rate) $8.50 Propane Gas (LP) 11 Gallons x $2.50 $27.50 ' Btu stands for British Thermal Unit. *' Costs shown reflect local encrov prices as of January 2014 As the chart shows, at $2.50 per gallon it costs three times more to heat our homes than our neighbors who heat with natural gas. If you had the money to pre -buy your propane last summer at $1.529/gallon, your pre -buy cost compared to natural gas was still 97% more expensive than the January 2014 year-round rate for natural gas. 4 We need a natural gas line to provide fuel to the homes in the "no man's land" between the end of the Excel Energy gas line on Olinda Trail Oust south of the intersection of Oren Road and Olinda) and the Chisago County line, where the gas line resumes. F Please attend the Scandia City Council meeting on Tuesday, February 181h at 7.00 pm to listen to each others' ideas on ways we can get this gas line through our neighborhood. Maybe the City of Scandia can help. Maybe Washington County can help. Maybe the State of Minnesota can help. Because at the rate we are paying for propane, natural gas would be a `pipe dream' come true. Bob Bernard 14797 Oren Road bernardinmn@gmail.com Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION 2nd Revised Sheet No. 9.00 EXTENSION OF NATURAL GAS SERVICE CUSTOMER CONNECTION PROCEDURES AND GUIDELINES A. Applications and Permits Applications for natural gas service are required for the services set forth hereunder. Connection of load subject to application without proper approval will be cause for disconnection or suspension of service pursuant to Designation 9.A.3 of these Rules and Regulations. (a) New residential service except as exempted in A.2 below. (b) Residential heating conversion from another fuel or expansion of peak heating requirements except as exempted in A.2 below. (c) Commercial service, new and expanded requirements except as exempted in A.2 below. (d) Industrial service - new and expanded requirements. 2. Applications for natural gas service are not required for: (a) Additions to base load appliances for clothes drying, water heating and cooking. (b) Additions of less than 50,000 BTU/hour in domestic heating loads over the heating load approved and connected to Company's distribution system as of May 10, 1977. Applicants for service must agree to comply with all provisions of the main and service line extension policy described in Section IX.2 of this tariff. 4. All applications will be reviewed by Company's management and shall be processed in the following manner: (a) Approved. (b) Denied. (c) Retained for future use, subject to cancellation by applicant. 5. Subject to the other requirements of the tariff, the Company reserves the right to suspend the issuance of permits for gas service on the basis of Company's sole judgment with respect to present and future connection factors and conditions. Issued By: Jim Schott *Effective Date: December 1, 2012 Vice President, Regulatory Services Proposed Effective Date: December 1, 2012 Submittal Date: *Effective with bills issued on and after this date. Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION 2nd Revised Sheet No. 9.01 EXTENSION OF NATURAL GAS SERVICE CUSTOMER CONNECTION PROCEDLJRES AND GUIDELINES (Continued) B. Applications Which Will be Considered for Attachment New Service: (a) Residential Customers Based on the Following Conditions: (i) Natural gas will be used for approved residential purposes in a single family and/or multifamily dwelling when individually metered, or master metered dwelling units where either a) or b) below prevent individual metering of service. a) Gas is used in centralized heating, cooling, water heating or ventilation units. b) Where individual metering is impractical, unreasonable, or uneconomical. (ii) If an alternate form of energy other than solar is used for heating, it must provide 100% of peak day heating requirements. (iii) Application approvals will be based on the date of pending applications, providing the above conditions are met and appropriate certifications are provided by owner. (b) Firm Commercial and Industrial Service Based on the Following Conditions: (i) Natural gas will be used for approved commercial and industrial purposes. This excludes gas used for irrigation, alfalfa dehydration and grain drying. (ii) Customer's total requirement must be less than 200 dekatherms on a peak day. (iii) If an alternate form of energy other than solar is used, it must provide 100% of peak day heating requirement. (iv) Customer must comply with heat loss or insulation standards established by Federal or State mandate or as Company may establish in its tariff. Issued By: Jim Schott Vice President, Regulatory Services Submittal Date: *Effective with bills issued on and after this date. *Effective Date: December 1, 2012 Proposed Effective Date: December 1, 2012 Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION 2nd Revised Sheet No. 9.02 EXTENSION OF NATURAL GAS SERVICE 1. CUSTOMER CONNECTION PROCEDURES AND GUIDELINES (Continued) B. Applications Which Will Be Considered for Attachment (Continued) New Service: (Continued) (c) Interruptible Service Based on the Following Conditions: (i) Company determines that the anticipated revenue from the new load is sufficient to prevent undue burden on existing ratepayers and conditions justify such service. (ii) Load to be connected must not be prohibited by the connection policy of the pipeline supplier or be in violation of any end use standards promulgated by State or Federal agencies. (iii) Applicants for service must agree to comply with all provisions of the service line extension policy described in Section IX.2 of this tariff. (d) Rural and Agricultural service to Right -of -Way Grantors in accordance with easement agreements executed with the supplier under the following conditions: (i) Applications for service must refer to and be based upon an easement clause which grants a right to a tap on the pipeline constructed pursuant to the easement. (ii) Applicant must be the Grantor of the easement, or his successor or assignee. - (iii) The pipeline tap must be on a part of the property described in the easement. (iv) The right to the tap set forth in the easement may not have been previously exercised. (v) The volume of gas to be delivered through the tap may not exceed the smaller of the capacity of the initially installed small volume meter or the limits established by the wholesale supplier for small volume users. (vi) Supplier must obtain requisite regulatory authority to make the sale. Issued By: Jim Schott *Effective Date: December], 2012 Vice President, Regulatory Services Proposed Effective Date: December 1, 2012 Submittal Date: 'Effective with bills issued on and after this date. Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION 1 st Revised Sheet No. 9.03 EXTENSION OF NATURAL GAS SERVICE CUSTOMER CONNECTION PROCEDURES AND GUIDELINES (Continued) B. Applications Which Will Be Considered for Attachment (Continued) New Service: (Continued) (vii) Gas delivered through the tap will not be resold to others by the Applicant or any of his successors. (viii) Gas delivered will not be used for such commercial services as grain drying. Issued By: Jim Schott *Effective Date: December 1, 2012 Vice President, Regulatory Services Proposed Effective Date: December 1, 2012 Submittal Date: *Effective with bills issued on and after this date. Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION 2nd Revised Sheet No. 9.04 EXTENSION OF NATURAL GAS SERVICE 2. EXTENSIONS OF COMPANY MAINS AND SERVICES A. Residential Stand -Alone Service Extensions For residential services added in an existing service area where no main extension is required and no prior feasibility study included the proposed service line, Company will, without requiring a contribution in aid of construction, provide 75 feet of service line to a permanent structure using gas for primary space heating, as measured from the customer's property line and subject to Company operating standards. Service line extensions beyond 75 feet will require a contribution in aid of construction, which shall be determined based on the incremental cost of the additional footage, not to exceed $5.00 per foot. For residential service extensions to a structure that does not use gas for primary space heating, the Company will conduct a feasibility study described in paragraph C to determine the amount of any required contribution in aid of construction. If abnormal conditions, such as rock, make it impractical in the Company's opinion to install a gas service line and at the same time satisfy all safety requirements, the Company may refuse to install a gas service line to the premises. Where such a situation exists and it is possible to install a gas service line by special design or extra construction and such gas service line can be installed safely, the Company will design and install the gas service line to suit the particular circumstances, provided the following conditions are met: (a) The design, arrangement, and location of the gas service line are accepted and approved by the applicant; and (b) The applicant agrees to pay the Company for all abnormal construction costs including the cost of casing, if required. The Company will conduct a feasibility study described in paragraph C to determine abnormal construction costs. Once the Company waives any contribution by new customers for main and service extension costs, the Company cannot at any time recover these costs from existing ratepayers. Issued By: Jim Schott *Effective Date: December 1, 2012 Vice President, Regulatory Services Proposed Effective Date: December 1, 2012 Submittal Date: *Effective with bills issued on and after this date. Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION 2nd Revised Sheet No. 9.05 EXTENSION OF NATURAL GAS SERVICE 2. EXTENSIONS OF COMPANY MAINS AND SERVICES (Continued) B. Service Extensions For residential customers where both a main and service extension is required and for all extensions to serve commercial and industrial customers, regardless of whether a main extension is involved, the Company will conduct a feasibility study described in paragraph C to determine the amount of any required contribution in aid of construction. At its option, the Company may recover the amount of the contribution in aid of construction from the developer or directly from the customer. When longer than typical service lines are omitted from the feasibility study for a particular development, the Company shall determine the contribution in aid of construction for the individual, longer service lines based on the incremental cost of the additional footage in excess of the typical footage used in the study for that development and shall recover the contribution in aid of construction from the individual customer served by the longer service line. If abnormal conditions, such as rock, make it impractical in the Company's opinion to install a gas service line and at the same time satisfy all safety requirements, the Company may refuse to install a gas service line to the premises. Where such a situation exists and it is possible to install a gas service line by special design or extra construction and such gas service line can be installed safely, the Company will design and install the gas service line to suit the particular circumstances, provided the following conditions are met: (a) The design, arrangement, and location of the gas service line are accepted and approved by the applicant; and (b) The applicant agrees to pay the Company for all abnormal construction costs including the cost of casing, if required. The Company will conduct a feasibility study described in paragraph C to determine abnormal construction costs. Once the Company waives any contribution by new customers for main and service extension costs, the Company cannot at any time recover these costs from existing ratepayers. C. Feasibility of Mains and Services In determining whether the expenditure is economically feasible, the Company shall take into consideration the total cost of serving the applicant including, but not limited to, the total investment, including mains and service related investment, the annual volume of gas to be sold, operating and maintaining expenses, margin, the acceptable level of return on the required investment, and potential for additional sales through the new facility. The specific uniform factors used by the Company in conducting its feasibility analysis along with a description of the current feasibility model are contained as an exhibit to the General Rules, Regulations, Terms and Conditions portion of this tariff. The Company will not use other uniform factors or change the feasibility model without filing an amended exhibit. Company will apply the general principal that the rendering of service to the applicant shall not result in undue burden on the other customer. If a contribution in aid of construction is required, it will be based on the results of the feasibility model. Issued By: Jim Schott *Effective Date: December 1, 2012 Vice President, Regulatory Services Proposed Effective Date: December 1, 2012 Submittal Date: *Effective with bills issued on and after this date. Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION 3rd Revised Sheet No. 9.06 EXTENSION OF NATURAL GAS SERVICE 2. EXTENSIONS OF COMPANY MAINS AND SERVICES (Continued) D. Winter Construction Charge When the service or main is installed between December I and April 1, inclusive, because of failure of customer to meet all requirements of the Company by November 31 or because the customer's property, or the streets leading thereto, are not ready to receive the service pipe or gas main by such date, the anticipated winter construction charges will be included in determining the feasibility and any necessary contribution in aid of construction. Such work will be subject to a base winter construction charge on all ditch footages, as an adder, and applies to any plowing, trenching, boring, or bell holes. In addition to the base winter construction charge, a frost charge will be assessed by the Company for those portions of main or service lines where twelve or more inches of frost exists. The frost charge is not included on boring lengths but can apply to open trench and send or receive holes for bores. When twelve inches or more of frost exists outside the Winter Construction period, the frost charge may be applied as an expense due to abnormal conditions pursuant to Sheet No. 9.04 or Sheet No. 9.05. Included within the base winter construction charge and the frost charge are the use of any thawing devices or other equipment required to install as needed. The winter construction charge shall be equal to costs in excess of normal summer construction costs. Winter construction will not be undertaken by the Company where prohibited by law or where it is not practical to install gas main or gas service pipe during the winter season. The Company may reduce winter construction charges only to the extent the Company incurs a corresponding reduction in costs to install facilities during the winter construction period. The same charge reductions will be offered to all similarly situated customers. The Company may not assess customers more than the tariffed winter construction charge(s). Current winter construction charges are as follows: • Winter Construction Charge: $5.28 (7 County Metro), $4.76 (out -state) per lineal foot, • Frost Charge: $5.81 (7 County Metro), $5.55 (out -state) per lineal foot. Bell Holes: When it is necessary to use thawing devices in order to excavate the bell hole, or locate other utility crossings, there will be a one time charge of $264.03 regardless of the number of thawing devices required. E. Extension of Mains - Limitations The Company reserves the right to refuse to install its facilities in or to any lot, tract or area if in the Company's judgment it is not economically feasible per the tariffed feasibility models, is not safe for the Company's personnel, the customer, or the general public, or the lot, tract, or area is located remotely from the Company's other general service areas such that effective service, operations, or emergency response capabilities are impacted. Issued By: Jim Schott *Effective Date: December 1, 2012 Vice President, Regulatory Services Proposed Effective Date: December 1, 2012 Submittal Date: *Effective with bills issued on and after this date. Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION 2nd Revised Sheet No. 9.07 EXTENSION OF NATURAL GAS SERVICE 2. EXTENSIONS OF COMPANY MAINS AND SERVICES (Continued) F. Title To Facilities Title to all facilities herein provided for, together with all necessary right-of-way, permits and easements shall be and remain in the Company. As a condition of receiving service, the customer shall grant to the Company, without cost, all rights -of -way, easements, permits and privileges which are necessary for the rendering of gas service. G. Exhibits Exhibit For Main and Service Extension Feasibility Model The Company has developed the following feasibility model to be used to determine if a contribution in aid of construction is required by the customer. Economic feasibility is determined by a combination of 10-year Net Present Value (NPV) and 5-year Return On Equity (ROE) calculations. The following provides a sample of the model the Company will use in conducting its feasibility study, when one is required pursuant to Section IX.2 of its tariff, including a description of the project -specific inputs required, the current applicable rates used in the calculations and the outputs generated. A copy of the feasibility study actually conducted for a project will be retained by the Company in the corresponding job file. Input Screen: Line 3: Project Name: Enter the project name. Line 8: Projected Number of Incremental Residential Customers — Enter the incremental number of residential customers projected for each year of the project. (To be determined by Sales or Operations personnel based on past experience with developer, geographic location, economy, etc.). Line 9: Total Residential Customers Per Project — Calculated by model. Line 10: Per Average Residential Customer Dekatherm Usage — Enter the average annual usage per residential customer. (To be determined annually based on recent history of weather normalized consumption data). Line 11: Margin Per Dekatherm — Current distribution charge for residential customers as specified by tariff. Line 12: Monthly Residential Customer Charge — Current monthly customer charge for residential customers as specified by tariff. Line 15: Enter YES if model is being used to analyze a single Commercial/Industrial customer with escalating usage over time. Issued By: Jim Schott *Effective Date: December 1, 2012 Vice President, Regulatory Services Proposed Effective Date: December 1, 2012 Submittal Date: *Effective with bills issued on and after this date. Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION 2nd Revised Sheet No. 9.08 EXTENSION OF NATURAL GAS SERVICE 2. EXTENSIONS OF COMPANY MAINS AND SERVICES (Continued) G. Exhibits (Continued) Line 16: Projected Number of Incremental Commercial/Industrial Customers — Enter the incremental number of Commercial/Industrial customers projected for each year of the project. (To be determined by Sales or Operations personnel based on input from prospective customer(s), geographic location, economy, etc.). Line 17: Total Commercial/Industrial Customers Per Project — Calculated by model. Line 18: Per Average Commercial/Industrial Customer Dekatherm Usage — Enter the average annual usage per Commercial/Industrial customer. Line 19: Margin Per Dekatherm — Current distribution charge for Commercial/Industrial customers as specified by tariff. Line 20: Monthly Commercial/Industrial Customer Charge — Current monthly customer charge for Commercial/Industrial customers as specified by tariff. Line 24: From Customer Estimate Form: Capital investment carried forward from electronic Customer Estimate Form if used. Line 26: Infrastructure Cost — Mains — Enter the estimated infrastructure costs for mains. (As calculated by Operations/Engineering personnel). Line 27: Cost Per Residential Customer — Services — Enter the estimated average cost per residential service associated with the project. (As calculated by Operations/Engineering personnel based on historic information and/or information provided by developer). Line 28: Cost Per Commercial/Industrial Service — Services - Enter the estimated average cost per Commercial/Industrial service associated with the project. (As calculated by Operations/Engineering personnel based on historic information). Line 29: Customer Contribution (if required) — Customer contribution required, calculated by the model on Line 69. Line 33: Cost Per Residential Customer — Other — Enter any extraordinary costs associated with residential customers. (To be determined by Sales or Operations personnel based on project -specific information). Examples of extraordinary costs are sales expense (advertising/brochures), sales labor/expenses or contract sales expense for new town piping, etc. Issued By: Jim Schott *Effective Date: December 1, 2012 Vice President, Regulatory Services Proposed Effective Date: December 1, 2012 Submittal Date: *Effective with bills issued on and after this date. Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION 2nd Revised Sheet No. 9.09 EXTENSION OF NATURAL GAS SERVICE 2. EXTENSIONS OF COMPANY MAINS AND SERVICES (Continued) G. Exhibits (Continued) Line 34: Cost Per Commercial/Industrial Service — Other - Enter any extraordinary costs associated with Commercial4ndustrial customers. (To be determined by Sales or Operations personnel based on project -specific information). Examples of extraordinary costs are sales expense (advertising/brochures), sales labor/expenses or contract sales expense for new town piping, etc. Line 36: Customer Acquisition Costs — Direct "Fixed" - Enter any extraordinary costs associated with the project that are non -customer specific. (To be determined by Sales or Operations personnel based on project -specific information). Examples of extraordinary costs are sales expense (advertising brochures), sales labor/expenses or contract sales expense for new town piping, etc. Output Screen: The Output Screen contains calculations from the Input Screen and Support Screen. Line 45: Projected Margins From Residential Customers: (margin/dekatherms x accumulated residential usage volume) + (monthly customer charge x accumulated number of residential customers x 12 months). Line 46: Projected Margins From Commercial/Industrial Customers: (margin/dekatherms x accumulated Commercial/Industrial usage volume) + (monthly customer charge x accumulated number of Commercial/Industrial customers x 12 months). Line 47: Total Margins From Project: Projected Margins From Residential Customers + Projected Margins From Commercial/Industrial Customers. Line 51: Total Incremental Investment By Year: Estimated main cost, Line 26 + (projected number of residential customers, Line 8 x estimated cost per residential service, Line 27) + (projected number of Commercial/Industrial services, Line 16 x estimated cost per Commercial/Industrial service, Line 28) + customer contribution, Line 69. Line 52: Total Net Project Investment: Sum of all annual incremental investments. Line 54: Total Other Costs Incurred (Variable & Fixed): Customer acquisition costs, Line 36 (direct fixed) + Line 33 (variable residential customer) + Line 34 (variable Commercial/Industrial customer). Issued By: Jim Schott Vice President, Regulatory Services Submittal Date: *Effective with bills issued on and after this date. *Effective Date: December 1, 2012 Proposed Effective Date: December 1, 2012 Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION 1 st Revised Sheet No. 9.10 EXTENSION OF NATURAL GAS SERVICE 2. EXTENSIONS OF COMPANY MAINS AND SERVICES (Continued) G. Exhibits (Continued) Line 59: Net Present Value (NPV) @ 10 Years with Residual: Must be > 0 to be acceptable. The NPV is the derivation of the net cash flows from Line 103 for the first ten years of the project discounted by the rate found on Line 79 (8.15%). Line 60: Net Present Value @ 10 Years without Residual: Net present value @ 10 years calculated using targeted discount rate of 8.15% and projected cash net of project without residual value. Line 61: Net Present Value @, 20 Years without Residual: Net present value @ 20 years calculated using targeted discount rate of 8.15% and projected cash net of project without residual value. Line 63: Average R.O.E. @ 5 years: Average return on equity at 5 years. Must be greater than 11.5% to be acceptable. The numerator (Net Income) per Line 116 is the simple sum of the net income from the first five years of the project divided into the denominator (Average Common Equity) per Line 110 which is the simple sum of the average common equity for the first five years of the project. Line 64: Average R.O.E. @ 10 years: Average return on equity at 10 years. Line 67: This is the estimated Customer Contribution (calculated by the model) to close the gap between the calculated ROE for the project and the targeted ROE (11.5%) per Line 63. The formula for the estimated contribution is (E110)* (.115-H63)/E84 less (($N$79*(($E$82+$E$83+$E$86)/(1+$E$81)))/$E$84). This required contribution is calculated using the Goal Seek function (See Line 69). The required inputs are: Row 1) Set Cell input H67; Row 2) To Value, input "0"; and Row 3) by Changing Cell, input H69. Line 69: Amount of Required Customer Contribution by Year Transferred to Input Screen (Line 29). Using a Microsoft/Excel software function (Goal Seek) the optimization of the project required contribution is calculated, that is the exact dollar amount, no more no less, to drive the project to the targeted ROE (11.5%) per Line 63. Typically the Customer Contribution will be collected in Year 1. Line 73: Project Margins Allocated — Percentage of margins applied to incremental O&M and system/infrastructure costs (33%). Line 74: Contract Length: Number of years used for calculations (30 years for residential). Issued By: Jim Schott *Effective Date: December 1, 2012 Vice President, Regulatory Services Proposed Effective Date: December 1, 2012 Submittal Date: *Effective with bills issued on and after this date. Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION 1 st Revised Sheet No. 9.11 EXTENSION OF NATURAL GAS SERVICE 2. EXTENSIONS OF COMPANY MAINS AND SERVICES (Continued) G. Exliibits (Continued) Support Screen: Line 79: Targeted Discount Rate: Current value = 8.15%. ((50% x 11.5%) + ((50% x 8%) x (1 — tax rate)) = 8.15%). Line 80: Effective Income Tax Rate: Current value = 40.00%. Line 8l : Statutory Income Tax Rate: Current value = 40.00%. Line 82: Selected Depreciation Rate: 3.33% (30 year estimated life, unless contract length specified). Line 83: Property Tax/Insurance Rate: Current value = 2.00%. Line 84: Equity as a Percent of Capital: Current value = 50%. Line 85: Long Term Debt as a Percent of Capital: Current value = 50%. Line 86: Weighted Cost of Long Term Debt @ 8%: Current value = 4.00%. Line 87: Cash Carrying Charge (Property Tax - Income Tax - (Depreciation x Income Tax) _ 0.133%. Line 89: Accumulated Number of Residential Customers: Brought forward from Input Page, Line 8, and accumulated at year-end for each year of the first ten years of the project. Line 90: Accumulated Residential Usage Volumes: The average use per residential customer is brought forward from Input Page, Line 10, multiplied by the Accumulated Number of Residential Customers per Line 89 to calculate the accumulated usage for each year of the first ten years of the project. Line 92: Accumulated Number of Commercial/Industrial Customers: Brought forward from Input Page Line 16, and accumulated at year-end of each year of the first ten years of the project. Line 93: Accumulated CommercialAndustrial Usage Volumes: The average use per customer is brought forward from Input Page, Line 18, multiplied by the Accumulated Number of Commercial Customers per Line 92 to calculate the accumulated usage for each year of the first ten years of the project. Issued By: Jim Schott *Effective Date: December 1, 2012 Vice President, Regulatory Services Proposed Effective Date: December 1, 2012 Submittal Date: *Effective with bills issued on and after this date. Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION 1 st Revised Sheet No. 9.12 EXTENSION OF NATURAL GAS SERVICE 2. EXTENSIONS OF COMPANY MAINS AND SERVICES (Continued) G. Exhibits (Continued) Line 96: "Cash Flow" is a description line (No input). Line 97: Contribution to System Customers: A rate of 33% per Line 73 x Projected Margins per Line 47. Line 98: Income Tax on Net Margins: Effective income tax rate per Line 80 x (projected margins per Line 47 less the contribution to system per Line 97). Line 99: Cash Incoming: Projected margins per Line 47 less the calculated contributions to system per Line 97 less the calculated income tax on net margins per Line 98. Line 100: Income tax on customer acquisition costs: Effective income tax rate per Line 80 x total other costs incurred per Line 54. Line 10 1: Net Cash Carrying Charges: Cash carrying charge per Line 87 x Projected running gross plant in service per Line 107. Line 102: Cash Outgoing: Total cash investment by year per Line 51 + total other costs incurred per Line 54 less tax on customer acquisition costs per Line 100 + net cash carrying charges per Line 101. Line 103: Cash Net of Project (with residual value in yr 10): Cash coming in per Line 99 less cash going out per Line 102. The residual value is assumed to be equal to the gross plant invested for the project less the accumulated depreciation reserve at the end of year 10. Line 104: Cash Net of Project (without residual value): Cash net of project per Line 103 less the calculated residual value (Gross Plant in Service less Accumulated Depreciation Reserve at year 10. Line 107: Projected Running Gross Plant in Service: Total investment by year brought forward from Input Page, Line 51. Line 108: Projected Running Net Plant in Service: Projected running gross plant in service per Line 51 less (projected running gross plant in service per Line 51 x depreciation rate per Line 82). The ending year calculation becomes the beginning year amount for the following year. Issued By: Jim Schott *Effective Date: December 1, 2012 Vice President, Regulatory Services Proposed Effective Date: December 1, 2012 Submittal Date: *Effective with bills issued on and after this date. Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION -2nd Revised Sheet No. 9.13 EXTENSION OF NATURAL GAS SERVICE 2. EXTENSIONS OF COMPANY MAINS AND SERVICES (Continued) G. Exhibits (Continued) Line 109: Projected Average Common Equity Balance: ((Projected running gross plant in service per Line 107 + projected running net plant in service per Line 108)/2) x equity as a % of capital, per Line 84. Line 110: Projected Average Common Equity Balance First 5 Years: Sum of first 5 years of Line 109. Line 111: Operating Book Income: Total margins from project per Line 47 less contribution to system per Line 97 less total other costs incurred per Line 54. Line 112: Depreciation Expense: Depreciation rate per Line 82 x projected running gross plant in service per Line 107. Line 113: Carrying Costs (Interest & Property Tax): (Property tax & insurance rate per Line 83 + weighted cost of long term debt per Line 86) x ((Projected running gross plant in service per Line 107 + projected running net plant in service per Line 108)/2). Line 114: Statutory Income Tax: Statutory income tax rate per Line 81 x (operating book income per Line I I I less depreciation expense per Line 112 less carry costs per Line 113). Line 115: Net Income Available for Shareholders: Operating book income per Line I I I less depreciation expense per Line 112 less carrying costs per Line 113 less statutory income tax per Line 114. Line 116: Net Income Available for Shareholders First 5 Years: Sum of first 5 years of Line 115. Line 117: Return on Equity: Net income available for shareholders per Line 116 / projected average common equity balance per Line 109. Approval: Enter CIAC amount, name of person authorizing CIAC, and date authorized. Comments: Describe all special or unusual situations connected to the project, the calculation of the feasibility, or the collection of the required CIAC. Also include any information used to determine the customer connection projection if different than the developer provided. Issued By: Jim Schott *Effective Date: December 1, 2012 Vice President, Regulatory Services Proposed Effective Date: December 1, 2012 Submittal Date: *Effective with bills issued on and after this date. Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION 2nd Revised Sheet No. 9.14 EXTENSION OF NATURAL GAS SERVICE NEW AREA SURCHARGE RIDER Availability: ervice under this rate schedule is available only to geographical areas that have not previously been served by the Company. This rate schedule will enable natural gas service to be extended to areas where the cost would otherwise have been prohibitive under the Company's present rate and service extension policy. Nothing in this rate schedule shall obligate the Company to extend natural gas service to any area. Rather, the New Area Surcharge will be used and implemented at the Company's discretion. Applicability and Character of Service: All customers on this rate shall receive service according to the terms and conditions of one of the Company's gas tariff services. Rate: As authorized by the MPUC, the total billing rate for any customer class will be the approved rate / for that customer class plus a fixed monthly_new area surcharge. All customers in the same rate class will be billed the same surcharge. The net present value of the new area surcharge will be treated as a Contribution -in -Aid -of -Construction for accounting and ratemaking purposes. Method: A standard model will be used that is designated to calculate the total revenue requirement for each year of the average service life of the plant installed. The model will compare the total revenue requirements for each year with the retail revenues generated from customers served (actual and/or expected) by the project to determine if a revenue deficiency or revenue excess exists. The Net Present Value (NPV) of the yearly revenue deficiencies or excesses will be calculated using a discount rate equal to the overall rate of return authorized in the most recent general rate proceeding. Projected customer CIAC surcharge revenues are then introduced into the model and the resultant NPV calculation is made to decide if the project is self supporting. A total NPV of approximately zero ($0) will show a project is self supporting. The model will be run each year after the initial construction phase of a project wherein actual amounts for certain variables will be substituted for projected values to track recovery of expansion costs and the potential to end the customer surcharge before the full term. The variables, which will be updated in the model, each year will be: 1. The actual capital costs and projected remaining capital costs for the project, 2. Number of customers used to calculate the surcharge revenue and the retail margin revenue, and 3. The actual surcharge and retail revenue received to date and the projected surcharge and retail revenue for the remaining term of the surcharge. Issued By: Jim Schott Vice President, Regulatory Services Submittal Date: *Effective with bills issued on and after this date. *Effective Date: December 1, 2012 Proposed Effective Date: December 1, 2012 Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION Original Sheet No. 9.15 EXTENSION OF NATURAL GAS SERVICE 3. NEW AREA SURCHARGE RIDER (Continued) Term. The term of service under this rate schedule shall vary from area to area depending on the service extension project. However, under no circumstances shall the surcharge applicable to any project remain in effect for a term to exceed fifteen (15) years. The Company assumes the risk for under recovery of expansion costs, if any, which may remain at the end of the maximum surcharge term. Expiration: The surcharge for all customers in an area subject to the New Area Surcharge Rider shall end on the date specified for the project tariff, on the date the approved revenue deficiency is retired, or at the end of fifteen (15) years, whichever occurs first. Revenue Requirements Model Definitions: All terms describe contents and general operation of the Revenue Requirements Model used to determine a New Area Surcharge Rider for a project. Column/Description 1) Time Period: Twelve (12) month calendar interval, which is one year of the project life. The year in which the project is constructed is designated as year 0. 2) Year. 3) Gross Plant Investment: Cumulative plant in service at the end of the year reduced by the net present value of surcharge revenues in year 0. Plant in service shall be all capitalized costs incurred to provide or capable of providing utility service to the consuming public. Capitalized costs will include items such as pipeline interconnects, pressure regulating facilities, measurement and instrumentation, lateral delivery lines, distribution mains, mapping, customer service lines, meters and regulators. 4) Accumulated Depreciation.Reserve: Book depreciation for the current year plus all previous years. 5) Net Plant In Service: The difference between Gross Plant Investment (Column 3) and Accumulated Depreciation Reserve (Column 4). 6) Average Net Plant: Average of Column 5. 7) Average Accumulated Deferred Income Taxes: The average of the beginning and the end of the year accumulated deferred income tax. Accumulated deferred income tax (ADIT) consists of two components: accumulated deferred income taxes on depreciation and accumulated deferred income taxes on contribution in aid of construction. At the end of the service life of the plant installed the balance of ADIT will be zero. Issued By: Jim Schott *Effective Date: December 1, 2012 Vice President, Regulatory Services Proposed Effective Date: December 1, 2012 Submittal Date: *Effective with bills issued on and after this date. Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION Original Sheet No. 9.16 EXTENSION OF NATURAL GAS SERVICE 3. NEW AREA SURCHARGE RIDER (Continued) 8) Average Rate Base: Total of Average Net Plant (Column 6) plus Average Accumulated Deferred Income Taxes (Column 7). 9) Allowed Return: Derived from the Company's most recent general rate proceeding: Equity Ratio X Return on Equity X (1+Tax Rate) — Weighted Cost Long Term Debt Ratio X Debt Cost X = Weighted Cost Short Term Debt Ratio X Debt Cost X = Weighted Cost Allowed Rate of Return The Allowed Rate of Return multiplied by the Average Rate Base (Column 8) equals the Allowed Return. 10) Book Depreciation: The straight line cost recovery of the life of the assets for Gross Plant Investment defined in Column (3). The depreciation factor used is based on a weighted average of depreciation rates used in Company's most recent general rate proceeding. 11) O & M Expense: In any year shall be based on average incremental cost per customer. The cost per customer will include provisions for incremental distribution and customer accounting expenses. The calculation is average customers multiplied by incremental cost per customer. 12) Property Tax: In any year shall be a factor of the gross plant investment (after contribution-in- aid-ofconstruction). The factor is based on historical experiences of actual taxes paid as a percentage of gross plant. 13) Total Revenue Requirement: Total of Allowed Return (Column 9), Book Depreciation (Column 10), O & M Expenses (Column 11), and Property Tax (Column 12). 14) Retail Revenue: This amount represents the retail revenue generated by multiplying the various retail billing rates (basic charge and delivery charge) approved in the Company's most recent general rate case proceeding by the expected average annual number of customers connected to the project each year. Issued By: Jim Schott *Effective Date: December 1, 2012 Vice President, Regulatory Services Proposed Effective Date: December 1, 2012 Submittal Date: *Effective with bills issued on and after this date. Minnesota Energy Resources Corporation MINNESOTA PUBLIC UTILITIES COMMISSION Original Sheet No. 9.17 EXTENSION OF NATURAL GAS SERVICE 3. NEW AREA SURCHARGE RIDER (Continued) 15) Revenue Excess or (Deficiency): Revenue excess or deficiency is the difference between the Total Revenue Requirement (Column 13) and the amount of Retail Revenue (Column 14). Excess occurs when the Total Revenue Requirement in a given year is less than the total Retail Revenue generated. Deficiency occurs when the Total Revenue Requirement in a given year is more than the total Retail Revenue generated. 16) Present Value of Cash Flows: The cash flows that produce either revenue excesses or deficiencies (Column 15) are discounted to a present value using a discount rate equal to the overall rate of return established in the most recent general rate proceeding. If the sum of the present value calculations over the life of the project is zero, or as close to zero as possible, the model demonstrates that the project is "self supporting". That is, the customer CIAC surcharge is the proper amount of customer contributed capital necessary to support the project at the projected (or actual) level of retail revenues. Issued By: Jim Schott *Effective Date: December 1, 2012 Vice President, Regulatory Services Proposed Effective Date: December 1, 2012 Submittal Date: *Effective with bills issued on and after this date. Legend Roads US Trunk Highway Minnesota Trunk Highway County Highway — Local Roads — Ramp i1 City Limits Parks Natural Gas Discuss Map 2 a Disclaimer: This drawing is neither a legally recorded map nor a wney end n not intended to be used s one This drawing is a compilation of records, information, and data 0 1,851 Feet located in various city, county, and state offices, and other sources affecting the area shown, and is to he used for reference purposes only The City of Scandia is not © Bolton & Menk, Inc -Web GI5 2/25/2014 1129 AM ,.„name fnr... ir,— r.H., herein rantained SCANDIA Legend tit City Limits ❑ Parcels (8-1-2013) — Lot Lines Right of Way Parks ` AG aAP223RD-ST--N Natural Gas r r •Y '"'� Discussion , bra r Disclaimer. This drawing is neither a legally recorded map nor a urvny and is not intended to be used at one Thrs drag a compilation of records, information, and data 0 925 Feet a locwinated iis n various city, county, and state orates, and th other sources affectinge area shown, and is to be used for reference purposes only. The City of Scandia is not ©Bolton&Menk,lnc-WebG15 2/25/201410:08AM etnnntihlefnranvinarrurarieshnreinrnW—d SUBJECT: Scandia Inquiry — Gas Main Extension 14797 Oren Road DATE: February 14, 2014 FROM: Colette Jurek, Manager — Community Relations Michael Mayerchak — Gas Business Development TO: Kristina Handt, City Administrator Kristina, In response to your recent e-mail inquiry regarding our process for natural gas main extensions, we wanted to provide you with the following information: 1. Our operations are regulated by MN Public Utilities Commission (PUC) conditions that must be met in order for our company to extend gas mains at no cost. Many factors are considered to extend main such as distance, number of buildings/customers, gas capacity, gas demand, etc. One of our gas business developers surveys the extension request and runs an analysis to determine whether the potential main extension meets our PUC operating requirements. If the main extension does not meet PUC criteria, we are only allowed to run the extension if the monetary shortfall is met by the customer or customers. This shortfall amount is determined by a Residential Extension Model (REM) which is also filed with the PUC. 2. Our gas business development department recently received a similar request from apotential customer located at 14401 Oren Road. The potential route began at 223r & Olinda, from OlMda to Oren and then west on Oren up to the address of 14401. We estimated 16 residential homes along this route. The request was reviewed and a REM model was run to determine the monetary shortfall. The shortfall amount was communicated to the requesting party. In this example, the total cost contribution to extend gas main (assuming high participation) was estimated to be $74,000. If each home along the route agreed to hook up to natural gas, each home would have to contribute $4,625.00 in order to extend gas main. The estimated payback period would be relatively short based on $5.00 per gallon propane. 3. In some gas extension cases, meeting the shortfall amount or gathering a participation commitment from the existing property owners is not feasible. 4. All gas main extension requests are reviewed by our engineering staff to ensure system capacity before approved for construction. 5. We will continue to answer questions from interested homeowners and hopefully we will be able to extend our natural gas facilities to serve some of these areas. We would be pleased to meet with you to further discuss our gas main extension process. Contact us at Colette.c.jurek a.xcelenery.com or 651/779-3105. i� SCANDIA Staff Renart Date of Meeting: March 3, 2014 To: Economic Development Authority From: Kristina Handt, Executive Director Re: Broadband Survey Background: Bill Coleman attended our February meeting and provided background information on broadband services. The EDA was approved for a Blandin program that will cover the cost of 32 hours of technical assistance from Coleman. Since there was some concern that the maps provided on connectmn.org may not be accurate, the Board discussed surveying residents. At the end of his visit, Coleman said he would send sample survey questions to review and help develop our own survey to gauge current conditions and residents' interest in expanded services. A sample survey is included in your packet as a place to begin the discussion. Issue: What questions should be included in the broadband survey? Proposal Details: The sample survey is quite comprehensive. Coleman has made the following suggestions for our survey: 1) Do you have broadband Internet service at your home? Yes. Go to # 3 No. Go to #2 2) Why don't you subscribe? a. Don't want it. b. Can't afford it. c. Available services too slow. d. Not available at my home. Go to #5 3. From which provider do you purchase broadband Internet service (check all that apply.) a. Frontier b. Midcontinent c. One of the Satellite Internet providers d. One of the Cellular Internet providers 4. Please rate your primary Internet provider on these characteristics on a scale of 5 - to 1 with 5 = Great and 1 = Poor a. Internet Speed b. Reliability c. Price d. Customer service 5. If broadband is unavailable or too slow at your home, how much you be willing to pay for installation of better Internet (up to 40 Mbps) service to your home? a. Nothing b. $100 or less c. Up to $500 d. Up to $1000 e. More than $1000 f. I already have this speed service at my home 6. Which of these statements best fits your situation? a. I do not have a home business or work from home and do not care to do either. b. I have a home business or work from home and my Internet works well for this purpose. c. I have a home business or work from home and my Internet service causes me problems. d. I would work from home and/or start or operate a home business if my Internet service was adequate for that purpose. 7. If there was a subscription -based location for small businesses and teleworkers with equipment and high speed Internet in downtown Scandia, I would use it... a. Never b. Occasionally (bad weather, special occasions, etc. c. Regularly (weekly) d. Every day 8. Please go to www.connectmn.orQ and conduct the speed test there. Mark the results here. Ping Download Upload 9. Please provide your address. Once the questions are determined, the survey may be available through Survey Monkey (10 questions and first 100 responses are free, beyond that cost $24/month) or Google Forms and in paper form at the City offices. The spring newsletter will contain an article and a press release will be sent to the local papers (Country Messenger, Forest Lake Times, Pioneer Press, and Star Tribune). Options: 1) Approve survey questions recommended by Coleman 2) Amend survey questions 3) Continue discussion at future meeting Recommendation: Option 1. Improving access to technology for area residents was identified as a goal (#4) by the Consolidated Conservation citizen's advisory committee. This committee, guided by consultant Julie Schumacher, worked through a community decision -making process in 2012 The group identified goals for a strategic plan for our area to help retain residents and to maintain jobs as well as to keep our small communities along Highway 11 viable and connected to each other and to the world. Currently, many residents in the area along State Highway 11, roughly from 15 miles east of Birchdale and west to Clementson, and specifically within the Consolidated Conservation area, do not have access to quality, reliable high-speed internet. Residents fill their need for high-speed internet through many means including: dial -up service from Wiktel, DSL from CenturyLink and Frontier in the Loman area, and at least two satellite services— WildBlue and HughesNet. These provider's services and Internet speeds do not meet current federal standards for "Broadband" access, and thus limit their customers' abilities to use services such as streaming video, Voice Over Internet Phone ("VOIP"), telecommuting, telemedicine, online education and more. As more public services and commercial software become available online in the future, we, the residents, risk being left behind if we do not have higher speed Internet access. The Birchdale Area Broadband Initiative is a group of people who live here and who are actively seeking ways to improve internet access for the residents, recreational visitors and businesses in our area. Our first step is to measure the current level of interest in higher speed Internet access and how much people would potentially be willing to pay for higher internet speeds, and/or if most residents are currently receiving their desired internet access speeds at a reasonable cost. We would also like to identify people who are interested in this issue for the purpose of providing further information to them in the future. Please be assured that by completing this questionnaire you are not obligating yourself to purchase any services, either now or in the future Your responses to this questionnaire will be analyzed in conjunction with those of everyone else and will remain confidential. Please continue to complete the brief questionnaire on the next page. Just try to answer the questions to the best of your ability, whether you currently have Internet service or not. It will only take a few minutes to complete the questionnaire. Page 1 1. Which of the following services, if any, do you currently use at your home in the Birchdale area? [Check all that apply.] Cell phone -based internet (e g. Smartphone, blackberry, WiFi, etc) 71 Dial up Internet service J High speed internet service from HughesNet ElHigh speed DSL Internet service from CenturyLink 1-1 High speed DSL Internet service from Frontier 1-1 Satellite Internet service from WildBlue Satellite TV by Dish/Direct TV Streaming movies/video from Netflix Voice over Internet phone ("VOIP") like Skype or Vonage High speed Internet service from another company. List provider: f 2. If you have Cell phone -based internet and/or Dial up Internet service, please list the providers: I 3. Who is your cell phone service provider? 4. If you DO NOT have high speed Internet service available in your home, would you be likely to subscribe to it this year? OYes ONo O1 have high speed service Page 2 5. How satisfied are you with the Internet service you CURRENTLY have at your home in the Birchdale area. Please rate your satisfaction with the SPEED of your current Internet service: 0 Excellent 0 Good 0 Fair 0 Poor 0 1 don't use any Internet services at my home. Additional comments 6. Would you be interested in using a high speed Internet Center at the Birchdale Community building? 0 Yes 0 No If yes, how would you use it? 7. For each of the following services that you do NOT currently use, how interested would you be in using these services if you had access to FASTER Internet service? Very Interested Somewhat Interested High speed Internet service 0 0 Streaming movies, video 0 0 from online Voice over Internet phone 0 0 ("VOIP') like Skype or Vonage Not Very Interested 0 0 M Not at All Interested 0 0 M Page 3 S. Which of the following, if any, do you CURRENTLY DO FROM YOUR HOME in the Birchdale area. ElWork from home for an employer ElOperate a home -based business Take or teach education courses online Get entertainment, like streaming movies Online gaming Email, Web surfing, social networking, etc Additional comments: 9. Which of the following, if any, would you be more likely to do if you had access to faster Internet service: Telecommute (do work from home for your employer) nOperate a home -based business Take or teach education courses online Get entertainment, like streaming movies ElOnline gaming ElEmail, Web surfing, social networking, online -gaming etc. 10. Are you a full-time resident, seasonal resident or recreational resident of this area? OFull Time OSeasonal ORecreational 11. Do you have children in the Indus school? OYes ONo 12. Do you home school using online access? OYes ONo Page 4 13. How likely would you be to subscribe to an ultra high-speed, broadband Internet service if the speed was 10 megabits/second (about 10 times faster than that available from current i°high speed" carriers or about 200 times faster than dialup service) if the cost of that service was: Very Likely Somewhat Likely Not Very Likely Not at All Likely Approximately $45/month O O O O forinternet Approximately $75/month O O O O for Internet Approximately $100/month O O O O for Internet, TV and phone service combined 14. Assume that you could subscribe for just a part of the year. How likely would you be to subscribe to an ultra high-speed, broadband Internet service if the speed was 10 megabits/second (about 10 times faster than that available from current "high speed" carriers or about 200 times faster than dialup service) if the cost of that service was: Very Likely Somewhat Likely Not Very Likely Not at All Likely Approximately $45/month O O O O for Internet Approximately $75/month O O O 0 for Internet Approximately $100/month O O O O for Internet, TV and phone service 15. Where do you reside in Birchdale? O Indus OManitou OMurphy OSaul OWilliams Other (please specify) Page 5 Page 6 c� SCANDIA .Stal/'Repnrl Date of Meeting: March 3, 2014 To: Economic Development Authority From: Kristina Handt, Executive Director Re: Business Retention and Expansion (BRE) Survey Background: The EDA has been discussing the possibility of conducting a Business Retention and Expansion Survey. At the last meeting, it was discussed to focus first on businesses with storefronts in Scandia. Issue: What questions should be included in the BRE survey? Which businesses will be surveyed? Proposal Details: Included in your packet is a variety of sample BRE questions. The BRE short and long forms come from the Wisconsin Department of Commerce. The U of M Extension Service has a long list of questions available at the following website http://www.extension.umn.edu/community/business-retention/tools/question-bank/ These questions cover general information, employment and training, business conditions, industrial linkages, import/export businesses, financing, future plans, information needs, community characteristics, travel and tourism, manufacturing, retail, and other questions. Starting with the list of businesses on our website may be more manageable than the Dunn and Bradstreet listings. Possible businesses to survey could include: 1) Eko Backen 2) Gammelgarden Museum 3) Ironwood Golf Range 4) Chiko's Bar and Grill 5) Meister's Bar and Grill 6) Scandia Pizza 7) The Scandia Cafe 8) Croix Ridge Chiropractic 9) Kendrick Chiropractic 10) Northland Chiropractic Clinic 11) Osceola Medical Center-Scandia Clinic 12) Scandia Chiropractic 13) Scandia Family Dental 14) Scandia Veterinary Clinic 15) Health Insurance Mart 16) Landmark Surveying Inc. 17) Prairie Restoration Inc. 18) Scandia Heating and Air Conditioning 19) The Brunfelts Keller Williams Premier Realty 20) Abrahamson's Nursery 21) Anyo Salon 22) Big Marine Lake Store 23) Crabtrees & Garden Gate 24) Designs of Sweden 25) Edward Jones Investments 26) Farmers Insurance Group -Andrea Bakken 27) Leroux's All Season Lawn and Sports 28) Oly's Swedish Massage 29) Pereboom Computer Service 30) R & B Auto 31) Salon Belleza 32) Scandia Creamery 33) Scandia Hair Design 34) Scandia Olde Town Liquors 35) Scandia Self Storage 36) Scandia Store 37) Security State Agency Insurance 38) Security State Bank of Marine 39) Todd's Home Center 40) Upholstery Specialties of Minnesota 41) Wilkerson Guthmann Options: 1) Focus on retail/storefront businesses (Approve or amend listings above) 2) Survey a wider selection of businesses 3) Wait to complete a BRE until a later date Recommendation: Option 1 as previously discussed but the EDA should confirm the businesses to survey. The BRE survey could be composed of questions from the general information, employment and training, business conditions, the service section of industrial linkage, financing, future plans, informational needs, community characteristics (could include more on broadband) and retail sections of the U of M question bank. If the Board agrees with this approach, I will bring the draft BRE survey to the next meeting for you to review and edit. The next step then would be to assign members to contact businesses to complete the survey. Economic Development Authority (EDA) Business Retention and Expansion Study City of Scandia Complete this questionnaire for local operation only. Date: Company Name: _ Address: Survey Participant: Phone: E-mail: Website Name of Corporate Headquarters (if different than above): Address: Phone E-mail: Website: Title: Thank you for participating in the EDA's Business Retention and Expansion Study. The program is sponsored by the Scandia Economic Development Authority. Objective of the BRES program: 1. To gain an understanding of the business community's views of the local government and economy. 2. To determine company plans for expansion or relocation. 3. To familiarize business leaders with assistance available through economic development programs. 4. To strengthen the communications bridge between the business community and local government. 5. To establish concrete data to aid strategic planning efforts. I. HISTORY AND STATUS OF PRESENT LOCATION 1. Where is your firm's corporate headquarters located? a. Local b. Elsewhere in Minnesota c. Out of State: d. Out of US: 2. Does your firm have multiple locations? a. Yes b. No (if No, skip to 6) 3. Where? (Please indicate all that apply). a. Local b. Elsewhere in Minnesota c. Out of State: d. Out of US: 4. If you have businesses in other area, how does the nature of the business relate to this facility? (Please indicate all that apply). a. Similar product/service b. Supply to/support local operation c. Local operation supplies/supports them d. Independent business focus 5. What is the likelihood of consolidating operations? a. Probable b. Possible c. Remote d. Non existent 6. When was your firm established? a. 0-2 years ago b. 3-5 years ago c. 6-10 years ago d. 11-20 years ago e. 21-100 years ago f. Over 100 years ago 7 What form of organization does your business have? a. Corporation (S or C) b. Cooperative c. Partnership d. Limited Liability Corp. e. Limited Liability Partnership f. Sole Proprietorship a. Other: II. NATURE OF BUSINESS 8. What is the nature of your business? (Numbers must total 100%. Please limit responses to eight selections.) _% Administration _% Agriculture _% Chemical, Petroleum, Rubber, Plastics _% Communication _% Computer, Computer Software _% Construction _% Consulting _% Distribution _% Education _% Electrical, Electrical Equipment _% Energy Fabricated Metals _% Financial/Insurance/Real Estate _% Food, Food Products _% Hospitality _% Lumber, Wood Products _% Machinery, Excluding Electrical _% Medical, Health Care _% Misc. Manufacturing _% Paper, Allied Products _% Primary Metals _% Printing, Publishing _% Recreation _% Retail _% Service _% Stone, Clay, Glass, Concrete _% Telemarketing _% Textiles, Apparel _% Transportation _% Waste, Recycling 9. What percent of raw materials/supplies utilized by your business comes from the following area? (Total 100%) _% Local/County _% Elsewhere in Minnesota _% Midwest _% National _% International 10. Please list any suppliers that you would like to have located closer to your facility? Product/Service Company/address 11 12. 13 14 What percentages of your raw III. PHYSIAL SPECIFICATION OF materials/supplies are transported in PLANT the following manner? (Total 100%) _% Truck 15. Do you own or lease this location? _% Common carrier (US Mail, a. Own (if you own, skip next UPS, Fed -Ex) question) _% Rail b. Lease _% Air c. Both _% Ship 16. If you lease, when does the lease _% Personal/company vehicle expire? _% Other: Month What percent of your finished Year products are transported in the 17. What is the property size of this following manner? (Total 100%) location _% Truck acres _% Common carrier (US Mail, 18. How much building space do you UPS, Fed -Ex) occupy at your current location? _% Rail sq. ft. _% Air 19. If you use additional spaces _% Ship elsewhere in the community for this _% Personal/company vehicle business, how much? _% Other: sq. ft. How well do the following modes of 20. Is car/truck access to your building transportation serve your business adequate? needs? (1=Excellent, 2=Good, a. Yes 3=Fair, 4=Poor) b. No Truck 21. Is there adequate on -site parking for _% Common carrier (US Mail, employees? UPS, Fed -Ex) a. Yes % Rail b. No _% Air _% Ship IV. MARKET, CUSTOMERS _% Personal/company vehicle _% Other: 22. What percent of your customers are Which of the following factors, if located in the following areas? any, have the greatest negative (Total 100%) impact on the current/future _% Local/County development of your product or _% Elsewhere in Minnesota business? (Rank up to four in order _% Midwest of priority: 1=Greatest impact, etc) _% National _ Global Competition _% International: _ Regulatory Constraints _ Domestic Competition 23. What percent of your company's _ Energy Costs sales are conducted over the _ Material Shortages Internet? —Antiquated Machinery a. None _ Insufficient Space b. Less than 10% _ Transportation Problems c. 10%-25% _ Interest Rates d. 25%-50% _ Market Condition/Economy e. 50%-75% _ Labor Supply f. More than 75% _ Labor Quality 24. How would you describe the number Wage/Benefits of customers you serve? _Employee Other: a. Increasing b. Decreasing c. Stable 25. Do you directly sell to any of the levels of government shown below? Federal: a. Yes b. No c. Don't Know State: a. Yes b. No c. Don't Know Local: a. Yes b. No c. Don't Know (If no to all, skip next question) 26. If Yes, approximately what percent of your sales are to governments? a. Less than 10% b. 10%-25% c. 25%-50% d. 50%-75% e. More than 75% 27. Are you interested in initiating or expanding government contracts? Federal: a. Yes b. No c. Don't Know State: a. Yes b. No c. Don't Know Local: a. Yes b. No c. Don't Know 28. If there are customers that would benefit by relocating closer to your facility, please provide information Product/service Company/address V. COMPETITORS 29. What percent of your competitors are located in the following areas? (Total 100%) _% Local/County _% Elsewhere in Minnesota _% Midwest _% National % International: 30. What effect are your primary competitors having on your business? a. Making significant inroads b. Future threat c. No real impact d. Never been a consideration 31. How would you describe the market share of your company's products/services? a. Increasing b. Decreasing c. Stable VI. FUTURE PLANS 32. Do you own or lease sufficient property to allow for expansion of your building(s) at this location? a. Yes b. No 33. Are you planning any expansion of your existing building(s) at this location? a. Yes b. No (If No, skip to 36) 34. If Yes, when do you plan to start construction? a. Now in progress b. This Year c. Next Year d. Within 5 years e. Beyond 5 years f. Don't know 35. How large would this addition be? sq. ft. 36. Do you have any plans to modernize or improve your present building(s) within the next two years? a. Yes b. No 37. Do you have plans for a new building on your present site or elsewhere in the community? a. Yes b. No (If No, skip to 40) 38. How large will the building be? sq. ft. 39. When do you plan to start construction? a. Now in progress b. This Year c. Next Year d. Within 5 years e. Beyond 5 years 40. 41 42. 43 44 45 46. 47 48. 49. f. Don't Know e. Sunbelt Do you have plans to expand f. West Coast elsewhere in the state? g. Other US: a. Yes h. International: b. No (If No, skip to 43). 50. If Yes, when do you plan to move? If Yes, where? a. Now in progress a. Within 50 miles b. This year b. Within 100 miles c. Next year c. Elsewhere in the State d. Within 5 years If Yes, when? e. Beyond 5 years a. Now in progress f. Don't know b. This year 51. If Yes, why? (rank top four in order c. Next year of importance: 1=Highest) d. Within 5 years Closer to Customer e. Beyond 5 years Closer to Supplier f. Don't know Building Overcrowded Do you have plans to expand No Land to Expand outside the state? Access/Egress Problems a. Yes Crime/Vandalism b. No (If No, skip to 46) Labor Costs If Yes, where? Energy Costs a. Midwest Regulatory Concerns b. Sunbelt Rigid Code Enforcement c. East Coast Property Taxes d. West Coast State Corporate Taxes e. Other US: Personal Income Taxes f. International: Other: If Yes, when? 52. In the past few years, have other a. Now in progress states' representatives contacted b. This year you trying to get you to move your c. Next year company from Minnesota? d. Within 5 years a. Yes e. Beyond 5 years b. No f. Don't Know 53. Please list states Do you have any plans to modernize or improve your present equipment within the next two years? a. Yes 54. What is the likelihood of phasing out b. No or shutting down this operation with Are there technological innovations no plans for expansion elsewhere? that you plan to put in place within a. Probable the next two years? b. Possible a. Yes c. Remote b. No d. Non-existent Do you have any plans to move all 55. If probable or possible, why? or part of your operation from this location? a. Yes b. No (If No, skip to 52) c. Possible Candidate VII. LABOR AND MANPOWER If Yes, where do you plan to move? MATTERS a. Local b. Elsewhere in Minnesota • What is your approximate number c. Midwest of full-time employees for the d. East Coast 56. 57. 58. 59. 60. 61. 62 63. 64. 65. 67 M3 following years? (Please respond to 69. Does your firm require all workers to all) have a high school diploma or # of hourly # of salaried equivalent? employees employees a. Yes b. No Current 70. What percent of your employees Last Year reside within this county? 5 Years Ago % Next Year 71. What percent of your employees, on 5 Years Out the average, retire annually? How many shifts do you have in a. 0% operation? b. Less than 3% a. One c. 3%-5% b. Two d. 6%-10% c. Three e. 11 %-25% d. Other: f. Over 25% Do you employ part-time 72. What is your total employee employees? turnover rate, on average, annually? a. Yes a. 0% b. No (If No, skip to 66) b. Less than 3% If Yes, how many part-time c. 3%-5% employees? d. 6%-10% Staff e. 11 %-25% Contracted f. Over 25% Is the number of part-time 73. What percent of your new employees related to seasonal employees leave within the first 6 fluctuation? months? a. Yes a. 0% b. No b. Less than 3% Is the number of part-time c. 3%-5% employees related to economic d. 6%-10% fluctuation? e. 11 %-25% a. Yes f. Over 25% b. No 74. What is the most common reason What percent of your employment for employee turnover? (Indicate all is: (Total 100%) that apply)/ • Professional/Technical a. Career Change • Office Staff b. College graduation Highly Skilled c. Job Security • Semi -skilled d. Other Opportunity • Unskilled e. Relocation, spouse/family What is the average hourly wage in f. Retirement your company (excluding benefits) g. Skills don't align for the following: h. Wage/benefit $ Professional/Technical i. Terminated, performance $ Office Staff j. Terminated, work ethic $ Highly skilled 75. Are replacement employees difficult $ Semi -skilled to recruit? $ Unskilled Blue Collar: Do the majority of your employees a. Yes need skills training to perform at the b. No required level? c. Not applicable a. Yes Office support (hourly): b. No a. Yes b. No c. Not applicable Professional/Technical: a. Yes b. No c. Not applicable 76. How do the following affect your recruiting? (Check appropriate box). Posi Nega No No tive tive Effect Respo nse Quality of Life Cost of Living Climate Housing Costs Available Housing Personal Taxes K-12 Ed S stem Area Tech Colle e Transport ation Other 77. How do you obtain replacement employees? (Check only one in the Best Column. Several may be aiecKeu rn uierusu useu column. Best Also Used Word of Mouth Private Service Job Center Sign Out Front Area Tech Other 78. Are you familiar with "jobs development/training programs" sponsored by county, state, or federal government? a. Yes b. No 79. Please give your perception of the following. Use Not No No -ful Use Opin Resp ful Job Center WI Mfg Outreach Center WI Mfg Ext Partnership Technical College University Apprentices hi School -to - work 80. Is your investment in employees training programs: a. Increasing b. Decreasing c. No Change 81. Approximately what percent of annual sales does the company invest in training? 82. Is the number of unfilled positions in the company: a. Increasing b. Decreasing c. No change 83. What new training programs would you like to have offered by the local technical college(s) to meet your changing needs? 84. Does your firm have a union? a. Yes b. No (if No, skip next question) 85. If Yes, what percent of your work force is unionized? Vill. ASSESSMENT OF GOVERNMENT REALTIONS, REGUALTIONS, AND SERVICES IN THE AREA 86. Is the water pressure and supply provided to your building adequate? a. Yes b. No 87. Are you satisfied with the storm water drainage and sanitary sewer services provided by your local government to your site? a. Yes b. No 88. Are voice lines provided by the local phone company adequate for you business communication needs? a. Yes b. No 89. Is Broadband or high-speed Internet service provided in your area adequate for your business communication needs? a. Yes b. No c. Not applicable 90. Are wireless communication services provided in your area adequate for your business needs? a. Yes b. No c. Not applicable 91. Is waste disposal a problem at your local site? Solid: a. Yes b. No c. Not applicable Liquid: a. Yes b. No c. Not applicable Hazardous: a. Yes b. No c. Not applicable 92. Has your facility been the target of vandalism or burglary within the last 12 months? a. Yes b. No 93. Have you or any of your employees been the victim of a crime (i.e., mugging) within a quarter mile of your facility during the past 12 months? a. Yes b. No 94. Do you feel that local law enforcement agencies are doing all they can to protect your employees/property? a. Yes b. No 95. Are you satisfied with the present configuration of traffic lights, one- way streets, and stop signs in the area? a. Yes (If Yes, skip next question) b. No 96. If No, what would you like to see changed? 97. Do you feel that local fire protection capabilities are satisfactory for your needs? a. Yes b. No 98. Are there serious potholes in the pavement near your facility? a. Yes b. No 99. Do you experience flash flooding on nearby streets? a. Yes b. No 100. Is snow removal adequate on the streets near your facility? a. Yes b. No 101. Are streets near your facility cleaned regularly? a. Yes b. No 102. Do you feel code enforcement efforts are being adequately and evenly applied? a. Yes b. No 103. Is public transportation available for employees? a. Yes (If Yes, skip next question) b. No 104. If No, do you want it? a. Yes b. No 105. What percent of your employees use the following means of transportation to get to work? (Total 100%) % Car % Car Pool • Bus/Public Transportation • Walk/Bicycle • Motor Cycle/Snow Mobile/ATV % Other: 106. Which of the following means of transportation are regularly used for business purposes? (Indicate all that apply) a. Air Travel To/From Minneapolis/St. Paul b. Air Travel To/From Eau Claire c. Air Travel To/From Duluth d. Bus e. Amtrak/Rail f. Personal Auto g. Company Auto h. Other Air Travel: 107. What is your perception of the following financing options? (check box) Use Not No No Resp -ful Use- Opin ful Local Lending Inst Targeted Jobs Tax Credit Small Bus Admin Financing Ind Rev Bonds County/City RLF TIF 108. What is your perception of the following organizations? (Check box). Use ful Not Use -ful No Opin No Resp 109. How would you rate local municipal economic development efforts? a. Excellent b. Good c. Fair d. Poor e. No Opinion 110. How could these efforts be improved to better meet the needs of your company? 111. What is your opinion of the following? (Check box) Satisf Dis No Doesn't ied - Opin Apply sat isfi ed Plan Com Bd of Zoning Appeals City Engineer City Assessor Health Ins Bldg Ins Fire Ins Public Works Dept City Administrator County Administrator Police Dept Fire Dept Local Elected Officials 112. Overall, what is your opinion of local government in this community? a. Excellent b. Good c. Fair d. Poor e. No Opinion 113. What improvements would you recommend? IX. FINANICAL MATTERS 114. Are your firm's gross sales: a. Increasing b. Decreasing c. Stable 115. What percent of the company's annual sales are dedicated to research & development? a. None b. Less than 5% c. 5%-10% d. 10%-20% e. Over 20% 116. How would your firm finance technological innovations, expansions, or modernizations? (Indicate all that apply). a. Conventional Financing b. Federal/State Programs c. Through Parent Company d. Venture Capital e. Cash Flow f. Industrial Revenue Bonds g. Small Business Administration h. Tax Increment Financing i. Other: 117. What are the most important factors, if any, negatively impacting your company's present financial condition? (Rank up to four. 1=Most important, etc.) Labor Quality Labor Supply Transportation Interest Rates Energy Costs Material Costs Local Property Taxes State Corp. Income Tax Federal Corp. Income Tax Market Conditions/Economy Employee Wage/Benefits Property/Liability Ins. Costs Other: 118. Where is your company's primary banking institution? a. Local b. Elsewhere in Minnesota c. Out of State d. Out of US: X. ENERGY MATTERS 119. Do you anticipate a change in utility needs at your facility in the next three vears? (Check box). Incre ase Decr ease No Chan e Doesn't Apply Oil Nat Gas Propane Gas Electricity Water Sewer Voice Lines Dial Lines Wireless Service 120. Do you have an energy back-up system? a. Yes b. No 121. Have you experienced any difficulties in working with local utilities? a. Yes b. No 122. Comments regarding utilities: XI. COMMUNITY LINKAGE 123. Is your firm a member of the a. Yes b. No 124. Is your firm a member of any other business organization in the local areas? a. Yes b. No 125. Are you interested in participating in a community organization? a. Yes b, No 126. Where is your residence? a. Local/County b. Elsewhere in Minnesota c. Out of State d. Out of US: XII.OVERAL IMPRESSIONS 127. What is your overall opinion of the local community as a place in which to do business? a. Excellent b. Good c. Fair d. Poor e. No Opinion 128. What do you see as positive? 129. What do you see as negative? 130. What is your opinion of the State of Minnesota as a place in which to do business? a. Excellent b. Good c. Fair d. Poor e. No Opinion 131. Over the past few years, would you say that as a place to do business, Minnesota has gotten: a. Better b. Worse c. Stayed the same d. No Opinion 132. Thinking about Minnesota as a place to do business, do you expect it to get: a. Better b. Worse c. Stay the Same d. No Opinion 133. How do you think Minnesota can become more pro -business in the next three to five years? 134. What are the key issues facing your firm in the next three to five years? 135. What is your overall opinion of the State of Minnesota Department of Employment and Economic Development (DEED)? a. Excellent b. Good c. Fair d. Poor e. No Opinion 136. What is your perception of the following DEED administered programs? Useful Not No No Useful O in Res Bus Planning Assist. Financing Programs Labor Training Pro rams Corn Dev Zones Main Street Program Int'I Trade Program 137. What suggestions or recommendations do you have for working with the Minnesota Department of Employment and Economic Development? Firm Name Address Survey Participant: Interviewed by: _ Business Description Short Form SCANDIA ECONOMIC DEVELOPMENT AUTHORITY Business Retention and Expansion Survey -Short Form Title: Date: City Issues Is there anything the community government can do to help you? Is there anything the community could do that would improve your business' well-being? Man Power Do you foresee growth in your employment force during the next year? Do you foresee possible layoffs during the next year? Ownership Do you own or lease your building? If you lease, when does your lease expire? Expansion Are you planning any modernization efforts this year? Are you planning any expansions this year? Are you planning to purchase new equipment this year? Are you planning to make building improvements this year? Relocation Are you moving? If Yes, when? If Yes, where? If Yes, why?