5.4. ERMUSR 10-12-2010Elk River -
MunicipalUtilities
13069 Orono Parkway • P.O. Box 430
Elk River, MN 55330-0430
UTILITIES COMMISSION MEETING
Phone: 763.44 L2020
Fax: 763.441.8099
TO: FROM:
Elk River Municipal Utilities Commission Troy Adams, P.E. -Director of Operations
John Dietz, Chair 'i
Jerry Gumphrey, Vice Chair
Dar 1 Thom son, Trustee
MEETING DATE: AGENDA ITEM NUMBER:
October 12, 2010 5.4
SUBJECT:
Bore Ri Analysis
BACKGROUND:
At the October Utilities Commission the purchase of a Bore Rig was discussed as a way to bring
work in-house and save money. The Commission directed staff to perform a cost analysis of the
purchase of a bore rig.
DISCUSSION:
Over the years, the placement of electric distribution cable for ERMU has been performed by contractors
as well as ERMU staff. Contractors were often used when the project work load was more that what
ERMU staff could complete in a required deadline. Using contractors was an effective way to mitigate
the volatility in work load volume which is often related to the economy. Also, many contractors have
and are proficient at using bore rigs. This piece of equipment allows for placement of cable in developed
and landscaped areas with minimal need for restoration as well as placement of cables under roads.
[n our current economy it makes sense [o analyze whether or not purchasing a bore rig and brining some
of that type of work in house is viable. Some of the work that would typically be performed by a
contractor with a bore rig, like placement of large cable for feeders or major road/railroad crossing, would
require a larger bore rig. Most of this work, like placement of secondary services and primary taps
servicing developments, require only a smaller bore rig. The most logical scenario for bringing this type
of work in-house would be to analyze the bulk of this type of work associated with the smaller sized bore
rigs. Over the last 3 years, the average cost for contracted cable placement that could be performed in-
house using one of these smaller bore rigs was approximately $100,000. The cost for this equipment is
approximately $200,000 with a 5 year life. The payback for purchasing one of these smaller sized bore
rigs would be just over 2 years with a positive net present value. Refer to the attached analysis for further
detail.
ACTION REQUESTED:
Staff recommends authorizing the purchase of a bore rig with the 2011 Budget.
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Bore Rig Work Order Data for last 3 years
2010 Work Orders w/Bore Services Total Comment Likely In-House Likely Out-sourced
10-03 $519.75 Midwest $519.75
10-12 Engers Addn Rebuild $4,500.00 estimated $4,500.00
10-14 Watson Rebuild $4,515.75 MP $4,515.75
10-19 30tt J-box Changeout $4,320.00 MP $4,320.00
10-20 1sU2nd Street Rebuild $46,751.75 Midwest $46,751.75
10-22 Area 22 Rebuild $4,500.00 estimated $4,500.00
10-29 5th Street Rebuild $49,969.50 estimated $49,969.50
10-30 UHG Temp - 14100 Bus Center Dr. $4,500.00 estimated $4,500.00
$119,576.75 $119,576.75 $0.00
2009 Wor k Orders w/Bore Services Total Comment Likely In-House Likely Out-sourced
09-08-38 CTY 1 Rebuild $50,558.00 Underground Piercing $50,558.00
09-14 $6,962.80 Midwest $6,962.80
09-13 $788.50 Midwest $788.50
09-16 $975.00 Midwest $975.00
exp $5,059.60 Midwest $5,059.60
09-10 CR 77 $399.75 Midwest $399.75
09-18 191 1/2 Rebuild $16,838.45 Midwest $16,838.45
09-20 Simonet Rebuild $13,987.10 Michels $13,987.10
09-21 Xenia/Tipton Rebuild $11,950.00 Michels $11,950.00
09-22 New GW Store $1,200.00 Midwest $1,200.00
09-24 Area 23 Taps $3,697.00 Midwest $3,697.00
09-26 HWY 101 crossing $13,004.50 Midwest $13,004.50
$125,420.70 $61,858.20 $63,562.50
2008 Wor k Orders w/Bore Services Total Comment Likely In-House Likely Out-sourced
08-26 $2,717.00 MP $2,717.00
08-40 $540.00 MP $540.00
exp Place Service $395.00 MP $395.00
07-03 Misc Frost Trenching $1,683.75 Michels $1,683.75
07-40 URD Trench Super Target $3,455.93 Michels $3,455.93
08-03 Seviceinstall/frosttrench $1,628.75 $1,628.75
OS-03 Sevice install/frost trench $1,465.30 Michels $1,465.30
08-35 Elk Lake Rd $1,318.00 Michels $1,318.00
08-18 Brentwood $108,375.00 Michels $108,375.00
08-46 169 crossing $15,425.00 Michels $15,425.00
08-44 Feeder 52 $6,000.00 Michels $6,000.00
08-49 CR 39 - 3 Phase $9,000.00 Michels $9,000.00
OB-20 $195.00 Midwest $195.00
08-08 $844.00 Midwest $844.00
exp $325.00 Midwest $325.00
exp $201.25 Midwest $201.25
08-11 Deerfield 86855.13 Midwest $86,855.13
08-18 Brentwcod $931.25 Midwest $931.25
08-40 Hwy 101 $325.00 Midwest $325.00
08-51 MN School of Bus $7,973.50 Midwest $7,973.50
$249,653.86 $116,541.36 $133,112.50