5.1. ERMUSR 09-13-2011~.
Elk River ---~
Municipal Utilities
13069 Orono Parkway • P.O. Box 430
Elk River, MN 55330-0430
UTILITIES COMMISSION MEETING
Phone: 763.441.2020
Fax: 763.441.8099
TO: FROM:
Elk River Municipal Utilities Commission Troy Adams, P.E. -Director of Operations
John Dietz -Chair
Daryl Thompson -Vice Chair
Al Nadeau -Trustee
MEETING DATE: AGENDA ITEM NUMBER:
Se tember 13, 2011 5.1
SUBJECT:
Review 2012 Ca ital Projects & E ui ment Bud et
BACKGROUND:
In prepazation for submittal in November, Staff continues to work through the 2012 budget
process. The first cut of the capital budget portion of the 2012 budget has been completed for
commission review. The capital budget may change as the complete 2012 budget is assembled
and when the wholesale power costs, rate changes, and cash flow become more definite.
DISCUSSION:
Attached is the following information for your review. (Note: 2012 reflects proposed capital
projects with subsequent years as projections.)
1) Electric Department Capital Budget
2) Electric Department Project Time Schedule
3) Water Department Capital Budget
4) Water Department Project Time Schedule
5) Technology Services and Administrative Capital Budgets
6) Landfill Gas Plant Analysis
The capital budget topic that typically generates the most discussion is vehicle replacement.
Based on past practice, vehicle would be replaced after 10 yeazs. Using this criterion for
replacement, there would be 1 bucket truck (Unit #5), 1 digger derrick truck (Unit #10), 1 dump
truck (Unit #16), and 4 pickup trucks (Units #2, #13, #20, and #22) due for replacement this
year. After much discussion and analysis of past practice and best practice, staff has adopted a
more analytical method for determining vehicle replacement.
First, the 10 yeaz replacement schedule would be subject to other considerations including
mechanical assessment, boom hydraulics assessment, job functionality, and general intangibles.
Basically there are other factors to be considered in addition to vehicle age. There maybe good
business and/or safety reasons to replace a vehicle sooner or conversely keep a vehicle.
Second, the 10 yeaz replacement schedule isn't applicable to all vehicle types. Because of a shift
from overhead electric distribution to underground, the use of the digger derrick truck has
decreased. They are used, but not as heavily as the bucket trucks or pickup trucks. Staff has
determined that these vehicles should have a target replacement life of 13 years instead of 10
yeazs. Staff also has determined that the dump trucks should have a tazget replacement life of 13
years instead of 10 years. The extension of life expectancy will not create safety issues as the 13
year replacement schedule would still be subject to mechanical assessment, boom hydraulics
assessment, job functionality, etc... A vehicle that is determined to be unsafe will not remain in
service regardless of age. Applying this new life expectancy replacement schedule for the digger
derricks and dump trucks in combination to the other considerations has delayed the replacement
of these two vehicles from 2012.
The mechanical assessments conducted by the City Mechanics that staff has used in determining
the eligibility for replacement on these vehicles is based on current age and mileage/hours.
When applying these mechanical assessments with the other considerations, some assumptions
were made on the additional mileage/hours that would be incurred prior to actual proposed
replacement in 2012. The bucket truck (Unit #5) and 2 of the pickup trucks (Units #2 and #13)
qualify for replacement today. One of the other pickup trucks (Unit #20) will easily qualify by
the schedule for replacement next year. The last of the 4 pickup trucks (Unit #22) looks to be in
sound mechanical shape but is undersized for the use. In the capital budget, staff has included
the replacement of the bucket truck (Unit #5) and the 3 of the pickup trucks (iJnits #2, #13, and
#20). The replaced vehicles would be traded in or sent to auction. Pickup truck Unit #22, which
is undersized but mechanically sound, will not be replaced in 2012. This vehicle will be rotated
to be used as summer help and/or spare vehicle and one of the new pickup trucks replacing Units
#2, #13, or #20 will be assigned to replace the job function that Unit #22 currently holds.
Additional information and the mechanical assessments are available for review if requested,
however they have not been included in the commission packet. This information on vehicle
replacement will be covered in greater detail at our meeting as well as the other capital budget
attachments.
ACTION REQUESTED:
Staff recommends approving the preliminary 2012 capital projects budget with final approval to
be considered at the November meeting with full budget presentation.
Elk River Municipal Utilities
2012 Electric Department Capital Budget
Capital Construction Projects -Non-Recurring Normal Distribution, Feeders, and Substations
Priority Cost Description
5 $ 100,000 Rebuild O'Day, 8 O'Brian in Otsego West of Parish
7 $ - Rebuild Sandpiper Estates delayed 2013
6 $ 100,000 Rebuild Riverview Heights Front lot line
1 $ 200,000 Rebuild Irving 4,5,6 7 to front lot line & Presidential Estates
4 $ 75,000 Rebuild 6th 8 Quinn
2 $ 50,000 Convert Islandview to 7200
3 $ 150,000 Feeder 23 Convert to 7200
Subtotal $ 675,000
Capital Construction Projects -Recurring
Cost Description
$ 200,000 Transformers and Meters
$ 150,000 New Development Distribution Installation
$ 50,000 Ongoing OH Equip Replacement (Poles, Switches, Cut-Outs)
$ 200,000 Ongoing URD Equip Replacement (Switches, J-Boxes, Fuse Pads)
$ - Additional Feeders
Subtotal $ 600,000
Capital Equipment Needs
Cost Description
$ 75,000 SOOMHz Mobile Radios (including Technical Services and Adminstration)
??? fi00MHz Base Units
$ 2,400 Pagers (including Technical Services)
$ 5,800 Laptop Computers, Software, Accessories
$ 35,000 Replace Pickup Truck#13 with new F250
$ 35,000 Replace Pickup Truck#2 with new F250
$ - Replace Pickup Truck#22 with new F250 -delayed 2013
$ 175,000 Replace Bucket Truck #5 with new
$ - Replace Digger Derrick Truck #10 with new -delayed 2014
$ - Replace Dump Truck #16 with new -delayed 2015
$ 50,000 New Mini Excavator
$ 250,000 Substation SCADA
Subtotal
Total $ 7,903,200
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Elk River Municipal Utilities
2012 Water Department Capital Budget
Water Capital Construction Needs
Cost Description
$ - Water Main Construction (cycles every other year)
$ 60,000 Well 2 engineering costs
$ 10,000 We113 VFD upgrade (may qualify for ClP reimbursement)
$ 29,000 Well 6 Liquid Chlorine transition and roof replacement
$ 68,000 Meters/ERTs
$ 35,000 Jackson WaterTOwer '
Subtotal $ 202,000
Water Notewonhy Non-Recurring Expenses
Cost Description
$ 15,000 Miscellaneous Repairs 8 Maintenance
$ 6,000 (4) Well Dehumidifiers
$ 5,000 Hydrants and Valves Maintenance
$ 24,000 Well B Cycled Pulling of Well
$ 5,400 Computers/GIS/SCADA
Subtotal $ 55,400
Capital Equipment Needs
Cost Description
$ 15,000 SOOMHz Mobile Radios (including Technical Services and Adminstration)
??? SOOMHz Base Units
$ 1,600 Pagers (including Technical Services)
Subtotal $ 16,800
Total $ 274,000
Elk River Municipal Utilities
Water Utility
Capital Improvement Program (2012-2022)
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Well2
Reheb/Recenstructlon 60,000 65000 900,000
Pull Well
We113
Rehab/Raconstructlon 100000
VFD 10,000
Pull Well
Wa111
Rahab/Recenslructlan
Pull Well 27,000
We115
Rehab/Remndmction
Pull Well 24,000
Well 8
Rehab/Remndrudion
Pull Well 24,000
Li uitl Chlorine Traneitlon 14,000
Rod 16.000
Wall?
Rehebmeconstrudion
Pull Well
Wall B
Rehab/Reconetruction
Pull Well 24 000
W6119
Reheb8lecanstruction
Pull Well 24,000
General Well Maintenance 3,000 3,000 3,000 3.000 3,000
New Wall ConstructioNPlacaholder 25,000 26.000 25,000 25,000 25,000 25,000
4 Well Dehumitliilare 8,000 8,000 3,000
Well Generetara
Mlacelleneaus 10,000 15000 10,000 15000 15,000
Towers
JY¢IiOn Tower
Paint/Sentlblast
Structural Mlc
Oe S1. Tower
PainUSentlbled 4,500 1,225,500
Structural Mlc. 3,500
Fraa n Tower
Paid/Santlblast 900,000 1,225,500
Structural Mlc. 3,500 4,500
NIIbWe Tower
PaintlSentlblast 800,000
Structural Mlc. 3,500
Foster St. Tower
PeInV58ndblast 150,W0
Structural M[c. 3,600
Placeholtler 16,000 15,000 15000 15,000 15,000 15,000
8
Rate Stud tlele etl
Removal d Dotl a Booster 20,000
Water Meln Condructlon 100,000 100000 100,000 100,000 100,000
Water Mein Re it
MMMO ul M
Meters/ERTS 88,000 10,000 5,000 5,000 5.000
H tlrantsNalves 5,000 5,000 5,000
In Dc/E ui ment 3,000
Trucks 29.000 35,000 35,000
SCADA 6.000 5,000 5,000
Cam utere/GIS 1500 2000 2,000 2,000
Mlae.
20%shared AtlminBTech bud ets 8,000 8,000 8,000 8,000 8,000 8,000 6,000 5,000 6,000 6.000 5,000
Less amourns butl etetl as r sire and maintenance (7,500 3,000 (23,000 3,000 16,000) (10,000) (10.000) (3,000) (22,000) (3,000) (15.000
Total WATER CIP 2011 Dolhra 219000 1115000 126000 1190600 638600 291600 000 143000 1268000 12300p 1 68600
IMMtetl DOlhre 03% 226570 1152800 136 81 1 8918 733 088 108 18]482 1 462 182,070 1,937403
225,5]0 1,162,904 136.591 1,339,918 969,]33 348,066 100,229 16],482 1,854,452 162,W0 1,93],403
6,5]0 6],904 11,591 149,418 133,233 58,586 20,229 39.482 386,452 59,W0 8]8,803
Psaesemenis - 5 yre, ]%)
Assessments - 5 yrs, 7%)
Assessments - 5 yrs, ]%)
Total Assessment Income
Niles:
Elk River Municipal Utilities
2012 Administration and Technical Services Departments Capital Budgets
Administration Capital Equipment Needs
Cost Description
$ 4,500 Computer, Software, Accessories -Upgrades
4,500
Administratlon Noteworthy Non-Recurring Expenses
Cost Description
$ 5,000 Website
$ 5,000 Phone Message Dialing System
$ 5,000 Scanner programming
$ 3,500 Vault
$ 2,000 Office Funriture New Chairs
Subtotal $ 20,500
Total $ 25,000
Technical Services Capital Equipment Needs
Cost Description
$ 5,500 Computers, Software, Accessories -Upgrades
$ 15,000 GPS Software and Device
$ 10,000 Power Quality Testing Equipment and Accessories (carried over from 2011)
$ 200,000 Diesel Engines Emission Retrofit ($100,000 carried over from 2011)
$ 35,000 Replace Pickup Truck#20 with new F250
Subtotal $ 265,500
Technical Services Noteworthy Non-Recurring Expenses
Cost Description
Total $ 265,500
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