5.1. ERMUSR 10-21-201401
Elk River
Municipal Utilities
UTILITIES COMMISSION MEETING
TO:
FROM:
Elk River Municipal Utilities Commission
Troy Adams, P.E. — General Manager
John Dietz — Chair
Mark Fuchs — Electric Superintendent
Al Nadeau — Vice Chair
Daryl Thompson — Trustee
MEETING DATE:
AGENDA ITEM NUMBER:
October 21, 2014
5.1
SUBJECT:
Frost Trenching
DISCUSSION:
Over the past five years ERMU has been evaluating operations. Processes that were once
efficient and economical to perform in -house no longer make sense with our growth; for
example, our billing and inventory software. With other processes we have found great gains in
efficiencies, quality, and value by bringing them in- house; for example: meter reading, tree
trimming, directional bore rig operations, conservation and key accounts, water main repair,
etc... This process of evaluating operations is ongoing and has been beneficial.
More than two decades ago ERMU stopped doing frost trenching for new services and
outsourced this work to local contractors. This was due to the retirement of equipment, system
growth, and company priorities.
With the addition of an experienced Lead Bore Rig Operator this year, we have discovered we
can do more in -house than we had imagined. All signs indicate that the economy is on the rise
and we have seen an upward trend in new services. It would be an ideal time to bring frost
trenching back in- house. ERMU has the personnel to perform this work during the winter. This
year ERMU purchased a new Vermeer RTX550 cable plow that can do this work, but does not
have the trenching attachment. This attachment will cost $15,000. This was not a budgeted
equipment purchase for 2014.
Last season ERMU outsourced 1152 feet of frost trenching for a total of 21 new homes for an
approximate cost of $7,500 which was passed on to those customers. If this process were to be
brought in -house and based on the market rate for frost trenching, management would propose a
frost trenching rate of $5 1ft. This rate would be less that what our customers were paying when
ERMU outsourced this work. The number of new service installations requiring frost trenching
is projected to increase.
The equipment approved on the 2014 capital budget has been purchased at a better value than
estimated back in 2013. The new plow came in at $104,000 which was $4,000 under budget.
The new wire trailer came in at just under $9,000 when it was budgeted for $15,000. The new
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vactron was budgeted for $80,000 and came in $8,000 under budget. The new mini excavator
which was budgeted for $37,000 was purchased for $33,000.
FINANCIAL IMPACT:
There has been sufficient saving in the 2014 capital budget to pay for the unbudgeted $15,000
for this proposed frost trenching attachment. The proposed frost trenching rate would have a
breakeven point of about two years for a piece of equipment that should last more than five.
ACTION REQUESTED:
Staff requests commission approval to purchase an unbudgeted frost trenching attachment for
$15,000.
ATTACHMENTS:
• RDO Equipment quote for Vermeer RTX550 C0455 Trencher Attachment
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Investment Proposal for: Pat Arnold
ELK RIVER MUNI UTILITIES 1675126th Street West
13069 ORONO PARKWAY r RDOe Burnsville, MN 55337
P.O. BOX 430 0
ELK RIVER, MN 55330 Mobile: (320) 290 -3285
Phone: (763) 441 -2020 EQUIPMEW CO. Fax: (952) 882 -2980
Thank you for allowing me the opportunity to quote you this equipment. We appreciate your business. Pat
Equipment: NEW 2013 VERMEER RTX550 S0455 Trencher Attach
Key Features
RTX550325 SO455 SLIDING OFFSET TRENCHER
RTX550329 SO455 TRENCHER HOSE PLUMBING KIT
RTX550431 BOOM - 48 "" (3990)(15 "" IDLER)(60 PINS)
RTX550576 48 "" TRENCH CLEANER BRIDGE(HYD)(15 "" IDLER)(6 "" SHOE)
Model Description
The new RTX550 is the only 65- horsepower (48.4 -kW) utility tractor available with rubber tires or
the innovative rubber quad -track system, which provides increased tractive effort and
maneuverability, greater stability and decreased surface and turf damage. This new offering also
features the Vermeer- exclusive TrenchSenseTm electronic control system that monitors engine rpm
and automatically reacts when a sudden drop Is detected to prevent stall or engine stop. The
RTX550 fills an important niche, especially for secondary, shorter -run utility service installations
where confined space is often a concern.
Serial Number
TBD (0 Approximated Hours)
Additional Items
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Equipment Price $10,505.00
Other H -plate style welded rotary 6" width $3,309.00
Estimated Conversion Price: $13.814.00
This proposal was created on October 15, 2014 and is valid until November 15, 2014 D721457 C2020029
Page 1 of 3 and is subject to prior sale. After that date the quote and terms in the proposal may
need to be revised.
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