5.2 ERMUSR 09-11-2018 Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
ERMU Commission Theresa Slominski— Finance & Office Manager
MEETING DATE: AGENDA ITEM NUMBER:
September 11, 2018 5.2
SUBJECT:
2019 Business Plan/Budget: 10-Year Capital Project Projections, Capital Purchases and
Equipment, and the Conservation Improvement Program
ACTION REQUESTED:
None
BACKGROUND:
In preparation for submittal in November, staff continues to work through the 2019 budget
process. The first cut of the capital budget portion of the 2019 budget has been completed for
commission review. The capital budget may change as the complete 2019 budget is assembled
and when the wholesale power costs, rate changes, and cash flow become more definite.
DISCUSSION:
The Conservation Improvement Program (CIP) budget is not included this month. With the
transition to the new power provider and the change in programs, more time is needed to
properly analyze and formulate the budgetary impacts. We will present the CIP next month,
which will include funding for 50% of the solar picnic table.
The following information is submitted for your review of the capital budgets:
1. Electric Department Capital Budget—This includes large non-recurring capital
construction projects, recurring capital construction projects and asset preservation, and
capital equipment purchases. Notable items for 2019 are constructing a storage building
for relocating equipment temporarily to facilitate the future construction of a new field
services facility as well as storing seasonal equipment, a development infrastructure
feeder for Miske Meadows, electric service territory transfer costs, replacing bucket truck
#8, and replacing the Vactron.
2. Electric Department Projects Time Schedule 10-year Projection—This highlights large
non-recurring capital construction projects, recurring capital construction projects, and
asset preservation.
3. Water Department Capital Budget—This includes large non-recurring capital
construction projects, recurring capital construction projects and asset preservation, and
capital equipment purchases.Notable items for 2019 are the Auburn Tower recondition,
and a building at well#8 for housing SCADA equipment.
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4. Water Department Project Time Schedule—This highlights large non-recurring capital
construction projects, recurring capital construction projects, and asset preservation.
5. Technology Services and Administrative Capital Budgets—This includes capital
equipment purchases as well as some noteworthy non-recurring expenses. Notable items
are the installation of bullet-proof glass in the front counter area for Administration; and
for Technical Services the retrofit of an LFG engine, replace truck#14, and pilot testing
for AMI technology.
The utilities utilize a vehicle replacement evaluation system implemented with the city.
Additional information on vehicle evaluations is available upon request.
FINANCIAL IMPACT:
The 2019 Electric Department Capital Budget is increased over the prior year with increased
infrastructure needs from new construction and territory acquisition rebuilds. As in years past,
we will use reserves to pay for the territory expansion costs, approximately $800,000 for 2019.
The 2019 Water Department Capital Budget is increased over the prior year with the
reconditioning of the Auburn Water Tower, a planned capital expenditure that will come out of
reserves.
ATTACHMENTS:
• 2019 Electric Department Capital Budget
• 2019 Electric Department Capital Projects Time Schedule
• 2019 Water Department Capital Budget
• 2019 Water Department Capital Projects Time Schedule
• 2019 Administration and Technical Services Departments Capital Budgets
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120
Elk River Municipal Utilities Business Plan/Budget
2019 Electric Department Capital Budget
Capital Construction Projects-Non-Recurring Normal Distribution,Feeders,and Substations
Labor Priority Cost Description
$ 180,000 Downtown Street Lights
$ 250,000 Equipment storage building at west sub Reserves
$ 100,000 Edison street rebuild
$ 150,000 Jarvis street rebuild
$ 50,000 Area 5&6 rebuild
$ 180,000 Area 7&8 prep
$ 50,000 Otsego Street Lights
$ 500,000 Miske Meadow Feeder
$ 100,000 199th rebuild
$ 175,000 185th Ave rebuild
$ 75,000 Cty Rd 13 Roundabouts
Subtotal $ 1,810,000
Capital Construction Projects-Recurring
Cost Description
$ 200,000 Transformers and Meters
$ 350,000 New Development Distribution Installation
$ 50,000 Ongoing OH Equip Replacement(Poles,Switches, Cut-Outs)
$ 100,000 Ongoing URD Equip Replacement(Switches,J-Boxes, Fuse Pads)
$ 30,000 Street Lighting Replacement
$ 500 Territory Acquisition-Loss of Revenue payment(1991 contract)
$ 699,735 Territory Acquisition-Loss of Revenue payment(2015 contract-Area 1&2,3&4) Reserves
$ 100,000 Area 7&8 Acquisition Reserves
$ - Additional Feeders
Subtotal $ 1,530,235
Administration Noteworthy Non-Recurring Expenses
Cost Description
$ 2,000 Sit/Stand Desk
$ 5,000 Chairs in plant breakroom
Subtotal $ 7,000
Capital Equipment Needs
Cost Description
$ 9,000 Laptop Computers, (pads,Software,Accessories
$ 2,000 SCADA equipment
$ - Pickup Trucks None for the electric department this year.
Replace Digger Truck#10 with new 2020 $275,000
$ 250,000 Replace Bucket Truck#8 with new
$ 75,000 Vactron
$ 4,200 Frostchain
$ 20,000 Multi-purpose utility vehicle(80%) 20%water dept
$ 427,360 80%share of Administration and Technical Services
Subtotal $ 787,560
Total $ 4,134,795
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Elk River Municipal Utilities Business Plan/Budget
2019 Water Department Capital Budget
Water Capital Construction Needs
Cost Description
$ 20,000 Well#6 Roof Replacement
$ 20,000 Sandblast/Paint Freeport Booster Station
$ 12,000 Wash Freeport Tower
$ 700,000 Recondition Auburn Tower Reserves
$ 10,000 New Fall Protection for Johnson Tower
$ 300,000 Well#8 building
$ 100,000 Facility Repair
$ 15,000 Gary Street reconditioning plans and specs
Subtotal $ 1,177,000
Water Noteworthy Non-Recurring Expenses
Cost Description
$ 7,000 Computers
$ 10,000 Meters/ERT
$ 15,000 Miscellaneous Tower Repairs/Maintenance
$ - Jackson Water Tower $90,000 Reserves
$ 25,000 Urban Services District Study (funded from trunk funds)
Subtotal $ 57,000
Capital Equipment Needs
Cost Description
$ - Trucks None for the water department this year.
$ 5,000 Multi-purpose utility vehicle(20%) 80%electric dept
$ 31,840 20%share of Administration and Technical Services
$ - Field Services Facility site work
Subtotal $ 36,840
Total $ 1,270,840
123
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Elk River Municipal Utilities Business Plan/Budget
2019 Administration and Technical Services Departments Capital Budgets
Administration Capital Equipment Needs
Cost Description
$ 7,000 Computer, Software,Accessories- Upgrades
$ 5,000 Network upgrade for firewall failover
Subtotal $ 12,000
Administration Noteworthy Non-Recurring Expenses
Cost Description
$ 15,000 Office Furniture (includes a tech upgrade for the commission room)
$ 1,000 printers/scanners
$ 30,000 front counter security improvements
Subtotal $ 46,000
Total $ 58,000
Technical Services Capital Equipment Needs
Cost Description
$ 10,200 Computers, Software,Accessories- Upgrades
Diesel Engines Emission Retrofit $ 350,000 Currently designated as emergency standby,
Diesel Plant to run on Natural gas. $ 20,000 Deferred until MMPA transition
upgrade tanks per inspection issues $25,000 Deferred until 2020 or later
$ 20,000 Fiber Extension Buildout
$ 300,000 LFG engine retrofit/replacement
$ 45,000 replace truck#14
$ 6,000 radio upgrades
Subtotal $ 381,200
Technical Services Noteworthy Non-Recurring Expenses
Cost Description
?Mobile Access Software 10,000 deferred until 2020 or later
$ 20,000 AMI Pilot testing
58
Subtotal $ 20,000
Total $ 401,200
125