4.6. SR 11-21-2011~i
City of
Elk -~-~
River
REQUEST FOR ACTION
TO ITEM NUMBER
Ma or and Ci Council 4.6.
AGENDA SECTION MEETING DATE PREPARED BY
Consent November 21, 2011 Tro Adams, P.E. - Utilities Director
ITEM DESCRIPTION REVIEWED By
Request for Approval of a Memorandum of Understanding
Regarding Street Light Installation and Maintenance between REVIEWED BY
Elk River Municipal Utilities and the City of Elk River,
Minnesota
ACTION REQUESTED
Elk River Municipal Utilities requests Ciry Council approval and execution of the proposed
Memorandum of Understanding Regarding Street Light Installation and Maintenance between Elk River
Municipal Utilities and the City of Elk River, Minnesota. This MOU was approved by the Utilities
Commission on November 15, 2011.
BACKGROUND/DISCUSSION
In 2007, Elk River Municipal Utilities and the Ciry of Elk River established an agreement regarding costs
associated with new and replacement street lights related to street rehabilitation and improvement
projects.
Although there are currently a few street lights within the Ciry of Elk River that axe 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 Ciry 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. It also should be noted that Elk River
Municipal Utilities' electrical service territory extends beyond the corporate limits of the City of Elk River
into Big Lake Township, Dayton, and Otsego.
In recent years it has been noted that there are many light fixtures within the Ciry 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 to 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
PO~ERE6 ~Y
N:\Public Bodies\City Council\Council RCA\Agenda Packet\I1-21-2011\2011-11-21 - ERMU -City Council Action ~~, f~~
Requested Memo -Street Lighting MOU.docx V
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 axe a number of issues to coordinate with the city. The street lights installed on Highway 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 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 has been 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 responsibilities and associated costs to
Elk River Municipal Utilities, this would eliminate these reoccurring costs from the City budget.
ATTACHMENTS
• Elk River Municipal Utilities Street Light Payment Policy -dated July 16, 2007
• Memorandum of Understanding Regarding Street Light Installation and Maintenance
Between Elk River Municipal Utilities and the City of Elk River, Minnesota -dated January
1, 2012
Action Motion by Second by Vote
FOllow Up
N:\Public Bodies\City Council\Council RCA\Agenda Packet\11-21-2011\2011-11-21 - ERMU -City Council Action Requested Memo -Street
Lighting MOU.docx
:-.-.~ Street Light Payment Policy
,~--'~
The intent of the Street Light Payment Policy {Policy) is m address the payment for street
lights installed in street rehabilitation and improvement projects. This Police addresses both
the replacement of existung street lights and the installation of additional street lights in street
improvement and rehabilitation projects. It does not apply ~ new developments.
The cost for street lights in street reconstruction and improvement projects will be allocaUed
as follows:
9. .Replacement Street Lights:
^ The City will p~.y the material cost of replacement lights. ERMU will
invoice the City for the replaced street fight material rnst providing
documentation of the actual costs along with the invoice.
^ ERM[J will provide the labor to install the lights.
2. New Street Lights:
• ERMU.will pay for the material, cost of new streetlights.
^ ERMU will provide the labor to install the lights.
The City will notify ERMU of the estimated street lighting costs when a street improverneat
or =ehabilitation project is being considered. The City will notify ERMU when a project is
being considered and provide cost estimates as soon as they are available.
Considered by Citq Council on t)7/16/l)7
&\POI.ICIBS\Sheet Lime Payment Policy.doe
MEMORANDUM OF UNDERSTANDING
REGARDING
STREET LIGHT INSTALLATION AND MAINTENANCE
BETWEEN
ELK RIVER MUNICIPAL UTILITIES
AND
THE CITY OF ELK RIVER, MINNESOTA
This MEMORANDUM OF UNDERSTANDING, hereinafter referred to as "MOU", is hereby
made and entered effective the 1St day of January, 2012, by and between the City of Elk River,
Minnesota, hereinafter referred to as the "City" and Elk River Municipal Utilities, hereinafter
referred to as the "Utilities".
1.0 Purpose
The purpose of this MOU is to address the material costs and labor associated with the
installation and maintenance of street lights located within the Utilities' electric service territory
within the City of Elk River, Minnesota.
2.0 Installation of New and Replacement Street Lights
The Utilities will provide as a contribution to the City all the material costs and labor associated
with the installation of new or replacement street lights in street improvement and rehabilitation
projects located within the Utilities' electric service territory within the City. The City will
notify the Utilities of street improvement or rehabilitation projects being considered on a timely
basis to provide adequate time for design and budgeting and will specify the number and location
of street lights to be provided.
Street lights in new developments shall be installed by the Utilities, pursuant to the Utilities'
standards, as part of the Utilities' process of providing electrical distribution service to the
development.
The Utilities will specify the street light fixtures and be the owner of the street lighting and
associated facilities assets.
3.0 Maintenance of Street Lights
The Utilities will provide as a contribution to the City all material costs and labor associated with
the maintenance of street lights located within the Utilities' electric service territory within the
City of Elk River, Minnesota. The maintenance of street lights will include lamping, ballasts,
painting, and the locating of associated underground facilities.
4.0 Maintenance of Semaphores
The Utilities will provide as a contribution to the City limited maintenance of semaphores owned
by the City. The limited maintenance of these semaphores will include lamping and the locating
of associated underground facilities.
S.0 Termination of MOU
This MOU maybe cancelled or terminated without cause by either party by giving (30) calendar
days advance written notice to the other party. Such notification shall state the effective date of
termination or cancellation. Any and all amendments must be made in writing and must be
agreed to and executed by the parties before becoming effective.
IN WITNESS WHEREOF, each of the parties has caused this MOU to be executed by their duly
authorized representatives:
ELK RIVER MUNICIPAL UTILITIES
By
John Dietz
Chair
By
Troy Adams, P.E.
Utilities Director
GP:3069797 vl
THE CITY OF ELK RIVER, MINNESOTA
By
By.
John Dietz, Mayor
2
Tina Allard, City Clerk