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5.6. ERMUSR 10-11-2011Elk River Municipal Utilities 13069 Orono Parkway • P.O. Box 430 Elk Rivec, MN 55330-0430 UTILITIES COMIVQSSION MEETING PBNEAEe er I`~lA~'UR~ P O W p p E p T O S E R V E Phone: 763.441.2020 Fax: 763.441.8099 TO: FROM: Elk River Municipal Utilities Commission Troy Adams, P.E. -Utilities Director John Dietz -Chair Daryl Thompson -Vice Chair Al Nadeau -Trustee MEETING DATE: AGENDA ITEM NUMBER: October 11, 2011 5.6 SUBJECT: Pro osed Street Li ht Policy Revisions BACKGROUND: In 2007 Elk River Municipal Utilities and the City of Elk River established an agreement regarding costs associated with new and replacement street lights related to street rehabilitation and improvement projects. DISCUSSION: Although there are currently a few street lights within the City of Elk River that aze not within Elk River Municipal Utilities' electric service territory, generally speaking the residents and businesses that pay through taxes for the replacement of street lights within the City of Elk River are also paying for electricity to Elk River Municipal Utilities. With this observation in mind, to provide the most efficient services to the residents, businesses, and electric customers this goes beyond the philosophical question of whether a service should be funded through taxes or rates. In the recent years it has been noted that there are many light fixtures within the City of Elk River that are in serious disrepair and require painting or replacement. Unfortunately, these fixtures often go unaddressed until the fixtures are beyond repair. It is more expensive to replace fixtures than to repaint or repair fixtures. Therefore, it would be in the residents', businesses', and customer's best interests for these street lights to be maintained in a timely manner in an effort to be efficient and cost effective with the limited resources available. City staff is more than capable to forecast the costs and implement amaintenance/replacement plan for street lights. However, there is some efficiency to be gained by having the entity currently responsible for general maintenance and also be responsible for installation of new and long-term replacement planning of existing street lights. Elk River Municipal Utilities is equipped with the bucket and digger/derrick trucks required to do maintenance on street lights. Elk River Municipal Utilities also is licensed as an electrical contractor and would be able to legally perform electrical maintenance to street lights under the National Electric Safety Code and the National Electric Code. Generally speaking, this is an opportunity for ERMU to help create efficiencies and provide better value to our residents, businesses, and customers. There are a number of issues to coordinate with the City. The street lights installed on Hwy 10 are currently under a maintenance contract with a third party. Elk River Municipal Utilities would not be able to take over maintenance of these lights until that contract is done or terminated. Also, there are street lights that are located outside of Elk River Municipal Utilities' electric service territory yet located within the corporate boundaries of the City of Elk River. Elk River Municipal Utilities would not be able to take over the maintenance of these lights until that service territory is acquired. The acquisition of service territory within the corporate boundaries of a city is within the legal right of the municipal utilities since 1974. Also, there may be street lights that are recorded as assets of the City. These would need to be transferred to the Utilities. FINANCIAL IMPACT: The City has recently added $10,000 for street light replacement or maintenance to the 2012 City budget. This would be a reoccurring yearly budget item. By shifting these costs to Elk River Municipal Utilities, this would eliminate these costs from the City budget. These capital costs would be included under a new street lighting maintenance category in the Elk River Municipal Utilities capital budget. Elk River Municipal Utilities would need to inventory and assess the street lighting to create a structured maintenance program. Initially, this budget Line item would be listed as $15,000. This would not be an increase in the capital budget, but rather a displacement of other capital maintenance projects. After a year to assess, ERMU will be able to more accurately prioritize maintenance projects including street lighting and determine an appropriate annual maintenance amount for budgeting. ACTION REQUESTED: Staff recommends approving the proposed ERMU Street Light Installation and Maintenance Policy with revisions and recommends submittal for consideration to the City Council. ATTACHMENTS: Elk River Municipal Utilities Street Light Payment Policy -dated July 16, 2007 Proposed Street Light Installation and Maintenance Policy Revisions -dated October 11, 2011 Street Light Payment Policy The intent of the Street Light Payment Policy (Policy) is to address the payment for street lights installed in street rehabilitation and improvement projects. This Policy addresses both the replacement of existing street lights and the installation of additional street lights in street improvement and rehabilitation projects. It does not apply to new developments. The cost fox street lights in street reconstruction and improvement projects will be allocated as follows: Replacement Street Lights: ^ The City will pay the material cost of replacement lights. ERMLJ will invoice the City fox the replaced street light material cost providing documentation of the actual costs along with the invoice. ^ ERMU will provide the labor to install the lights. 2. New Street Lights: • ERMU will pay for the material cost of new street lights. • ERMU will provide the labor to install the lights. The Ciry will notify ERMU of the estimated street lighting costs when a street improvement or rehabilitation project is being considered. The City will notify ERMU when a project is being considered and provide cost estimates as soon as they axe available. Considered by City Council on 07/16/07 S:\POLICIES\Sneet Light Payment PoGry.doc Elk Ri Municip al Utilities 810d STREETLIGHT ~`~"z~;-L',l~~INS"I'ALLA~fION~aNDMA_IN"fGNANCI? POLICY 1.1I Purpose and Summary The intent of the Street Light ~t Installation and Maintenance Policy (Policy) is to address the nwtcrial yosts and I aboi assoc iated_with ~.,,~;r~ street lights installed in street rehabilitation and improvement projects lucate~l witlnn the Iilk River titunic~il Lulitics~ electric - -- - -- - - ;ct}ice tcrriU>~~ within the Ch of Llk [Zi~er. This Policy addresses both the replacement of existing street lights and the installation of additional street lights in street improvement and rehabilitation projects. It does not apply to ~hc main ial costs and lahui is,ucieucd v<ith the ins[ illation ut ,treet I~hL,_in new developments. Ihiv Polio alx~ addrusc, the ongoing __ _ ~- mainluiancc of sued h~ris_located within the P.II: Iti~cr Municfp<il l ~tilitics' electric sor~ice - -- t~rntoiy within die C;t~ of l,ll._IZi~cr. Ihis Police Blocs out addles: the cncrg~ usa~~c of these lights, ui ,U'cct IighLq located o~ttsidc_ul~ I~;II: Knci Municipal l tihhes' clcunc scn ice tcrrto~~_ o~the installation of uvvnership_ul new, csisu~~, or rcpla~cmcnt scni~~~ho~cs within dre City o~ l ik IZi~cr. ~~Y~c._,,.,,s ~ ~,onrtt r ., :n .. .:a,. «ti,. i.. w,..- «,.:.. ~.,n «~~4- ~ ni.,., c...,,., ~ :,.~.«~ 2.11 [nstallntion of New cued Replncemen[ Street Li_hts lal: Rivcr Munic~al Ulilrtieti wil_I_pn~~~ide as a conUibutgr~ to the C~it~ of LIh_Ki~ci all the rnatenal costs and hrb~i axgciated ~~ ith thy, wstal_lation ol~_ncw or_r_c~u cmcnt_street lights r~ircd in sLrcct_intpru~cnrent and rchabilitalion~todccts located within the I;Ik Rivcr Nlunici~l Utilnics' clcc trig 5cryi~c tcrriton wit_h_n the ('it~_ oC1:11. Riv.~. I.Ik [Ziycr Municipal Utilities will he the ~iwner of the su'eel lighting and associated I<ccilitics assets. lt_i~ccd that the khe City oC Llk Rivcr will notify £liA4[1 Llk Ki~cr ~luni~~tl l ~til[cs oft#~e - --- es:i::;a;,d °'~°°''~•~"'~~•- •-~~'° ~ "°~ ° street improvements or rehabilitation projects-i~being considered on a un~c__ly basis to n~ucide ade~atc time, for dcs~n ~in~i_hudge~ii~ "''".;T~ 3.U tLtaintenm~ce o/~ Streer Li~~lus l~ak Rivcr Nlunic~I l~ttliue5 will ~ovidc n a cuntnt~ution to the ('ily ot~ I?Ik Ili~u all matcri_~I -- cosls and labor associated wifh_the maintc Hance of [hc street Ii~ts localal within the Llk Rivcr Municipal lluhucs~ clccluc ~scr~uc territory within the _City_ol I.II< [Ziycr. I he maullcnance g~ street ligh~s will inclu~ic lan~hing btllast~p~iin~ing, and ~hc IocaUng of a~socitucd undcrgruunei facilities. d.0 Maintenance of S'eman~rores L:Ik Rncr_N1utticipal lluhucs will ~oyidc as a eonn~ihutign tp the. (it~_uf I II. Iti~cr Invited - -- - -- giain~u~ancc ol~thc scsn~hores owned b~ the City of L Ik laver I he Innucd manucnaucc u( - - - - - - these sernak~fwres will inclu~lc lau~ping tend the lucaung of aswu~~tc~ undcr~,rowi~l ta~ilitie5. Adopted by the Utilities Commission June 12, 2007. Considered by City Council July 16, 2007. PRuP~)SI[1) RI~.VItiIU(v l)ctuhcr I I..'_01 I.