Mille Lacs Energy Cooperative (MLEC) is preparing for the strategic financial planning session that will be facilitated by one of MLEC’s cooperative lenders, Cooperative Finance Corporation (CFC). CEO Sarah Cron, the MLEC Board of Directors, and the senior management team are excited to look at the future opportunities available to MLEC and its membership, but also look at how those opportunities align with MLEC’s ten-year financial forecast.
In the May 2020 Outlet newsletter, Cron briefly mentioned discussions of a “desperately needed” new headquarters building with the MLEC board. However, due to the COVID-19 pandemic, the topic has been delayed. With the 2021 budget just around the corner, it is time to refocus on the future. MLEC needs to continue to deliver safe reliable electricity, continue to build out the MLEC Fiber Internet network, and consider what a future headquarters could look like. During the strategic financial planning session, the board and management team will look at these, and other opportunities, and assess the feasibility of them. They will also look at the financial impact to MLEC over the next 10, 20, and 30 years.
Since Cron started at MLEC (January 2019), employees have expressed the need for a new building. A long list of reasons and justifications was compiled quickly. The current MLEC headquarters building has undergone several renovations, MLEC’s staff, fleet, and technology have outgrown the 1960’s facility. The Minnesota Department of Transportation (MNDOT) has advised MLEC that they will be closing the two driveways off of 169, forcing the cooperative to reconfigure the existing driveway/parking area, and wetland constraints will not allow an expansion to the east of the current property. MLEC leadership views relocating as the best option.
MLEC needs a facility that is going to operate effectively, efficiently, and allow MLEC to serve its members in the best possible way. After careful analysis, MLEC staff have determined that the cooperative needs a location that allows MLEC to serve the membership effectively while minimizing the cost to each member. In reviewing a new location, MLEC would want a close proximity to the majority of the member density, ready highway access, an easy tie into the existing infrastructure (poles and wires), and close to diesel fueling. Considering outages, maintenance, and construction patterns, the group kept coming back to an ideal location being on Highway 169 close to Highway 18. With 550,000 acres (51%) of Aitkin County being jurisdictional wetlands, there are not a lot of parcels that meet the requirements.
Recently, a piece of property became available, and MLEC made an offer on the property contingent on obtaining a conditional use permit by the County, and getting MNDOT to authorize a driveway move – two very challenging asks. As of now, here are the things that are factual about this prospect:
- MLEC has not finalized the purchase of the land.
- The land is not zoned commercial and must go through a conditional use permitting process prior to the purchase of and acquisition of land.
- A rough sketch of a potential option of what a development of land could look like was submitted to the county, per the conditional use permitting process. MLEC has not met with an architect or drawn up plans. All of those things will depend on what type of property MLEC is able to secure.
- The cooperative has not discussed this openly because no land has been purchased and MLEC leadership felt the current property owners deserved their privacy.
- MLEC is currently borrowing just above 1% and will likely never see money that low again. The difference between starting to plan and act now and waiting until interest rates go back up to 4 – 5% could add $5 to $10 million to the cost of a construction loan. In MLEC’s upcoming strategic financial planning session, the Board of Directors and management team will discuss land, building, and financing options to see what the long-term financial implications to the cooperative and our members could be.
- If MLEC does not obtain a conditional use permit, the land will not be purchased, and MLEC will continue to look for another piece of property.
When there is concrete information about future plans, MLEC will be sure to share with the entire membership. MLEC does take the principle of Democratic Member Control very seriously. MLEC members have elected a strong and fiscally minded Board of Directors that is working for their best interests, and together with the MLEC staff, will plan for the sustainable future of the cooperative.
MLEC is a not-for-profit, electric distribution cooperative owned by the members we serve. We provide service to over 13,000 members in parts of Aitkin, Crow Wing, and Mille Lacs counties. Our headquarters is located at 36559 US Highway 169, one mile east of Aitkin, MN.