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5.2. ERMUSR 09-10-2019 Elk River Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: ERMU Commission Theresa Slominski—Administrations Director MEETING DATE: AGENDA ITEM NUMBER: September 10, 2019 5.2 SUBJECT: 2020 Annual Business Plan: 20 Year Capital Projections, Capital Projects and Equipment Purchases, and Conservation Improvement Program ACTION REQUESTED: No action is required. DISCUSSION: In preparation for submittal in November, staff continues to work through the 2020 budget process.The first draft of the capital budget portion of the 2020 budget has been completed for commission review. The capital budget may change as the complete 2020 budget is assembled, when the rate changes, and once cash flow becomes more definite. Per commission request, the timeline projections have been increased to include 20 years. 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 2020 are preparations to facilitate the future construction of a new field services facility(power plant substation relocation, relocating feeders, relocate forced sewer main), electric service territory transfer costs, replacing bucket truck#21, and landfill engine rebuilds (from the Technical Services budget). 2. Electric Department Projects for 20-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. The notable items for 2020 are the Gary Street Tower internal paint and external wash, and SCADA equipment upgrades. 4. Water Department Projects for 20-year Projection—This highlights large non-recurring capital construction projects, recurring capital construction projects, and asset preservation. Page 1 of 2 189 5. Technology Services and Administrative Capital Budgets—This includes capital equipment purchases as well as some noteworthy non-recurring expenses. Notable items are IT system improvements for Administration; and for Technical Services the retrofit of 3 LFG engines as mentioned above. 6. Conservation Improvement Program Budget-The 2020 forecast for CIP includes $290,825 for rebates, an increase from 2019 of$26,000, as required to meet our energy savings goal mandate. The utilities utilize a vehicle replacement evaluation system implemented with the city. Additional information on vehicle evaluations is available upon request. FINANCIAL IMPACT: The 2020 Electric Department Capital Budget is increased over the prior year with preparation for the field services expansion and territory acquisition costs. As in years past, we will use reserves to pay for the territory expansion costs, approximately$850,000 for 2020. The 2020 Water Department Capital Budget is increased over the prior year with the internal painting of the Gary Street Water Tower, a planned capital expenditure that will come out of reserves. ATTACHMENTS: • 2020 Electric Department Capital Budget • 2020 Electric Department Capital Projections 20 years • 2020 Water Department Capital Budget • 2020 Water Department Capital Projections 20 years • 2020 Administration and Technical Services Departments Capital Budgets • 2020 Administration and Technical Services Departments Capital Projections 20 years • 2020 Conservation Improvement Program Budget Summary • 2020 Conservation Improvement Program Budget Detail Page 2 of 2 190 Elk River Municipal Utilities Business Plan/Budget 2020 Electric Department Capital Budget Capital Construction Projects-Non-Recurring Normal Distribution,Feeders,and Substations Cost Description $ 150,000 Jarvis street rebuild $ 100,000 Otsego Coborns $ 100,000 199th rebuild $ 175,000 185th Ave rebuild $ 100,000 Edison street rebuild $ 50,000 Otsego Street Lights $ 150,000 Cty Rd 39 Roundabouts $ 80,000 Leachate $ 500,000 Power Plant Substation Relocation $ 500,000 Field Services Site Prep(relocating feeders) $ 500,000 Relocate forced main sewer line at Field Services Site $ 250,000 Rebuild feeder 73 from power plant to Hwy 10 $ 6,000 Sectionalizing Line Recloser on Dayton River Road $ 100,000 Miske Meadow Feeder $ 500,000 Load Management Subtotal $ 3,261,000 Capital Construction Projects-Recurring Cost Description $ 200,000 Transformers and Meters $ 350,000 New Development Distribution Installation $ 50,000 Street Lighting $ 50,000 Ongoing OH Equip Replacement(Poles,Switches,Cut-Outs) $ 100,000 Ongoing URD Equip Replacement(Switches,J-Boxes,Fuse Pads) $ 500 Territory Acquisition-Loss of Revenue payment(1991 contract) $ 851,860 Territory Acquisition-Loss of Revenue payment(2015 contract-Area 1&2,3&4,5&6) Reserves Subtotal $ 1,602,360 Electric Noteworthy Non-Recurring Expenses Cost Description $ 2,400 Sit/Stand Desks $ 5,920 80%share of Administration and Technical Services Subtotal $ 8,320 Capital Equipment Needs Cost Description $ 2,200 Laptop Computers,!pads,Software,Accessories $ - Pickup Trucks None for the electric department this year. $ - Replace Digger Truck $ 250,000 Replace Bucket Truck $ 75,000 Brush Chipper $ 20,000 Bore Rig Locator $ 20,000 Trailer $ 820,000 80%share of Administration and Technical Services inlcudes$690,000 LFG engines Subtotal $ 1,187,200 Total $ 6,058,880 191 `s » 8 g8 » » 8 88888 8 88 8 8 8 88 8 8 8 88888 8 8 8 8 " A8 8 5R48R » a e8 8 » 8 88888 8 8 8 e Q " »» » 888»K » » » 88 8 » 8 ss888 8 8 8 8 A RE 8 88888 » 28 88 8 88888 8 8 8 8 " 8 y 8 8R889 » » » " a a 8 AN » 8 88888 8 g a g a '" 88 8 8 » 88 8 5888$ » a A » R 88 8 8 88 2 2 8 88888 8 8 8 8 8 Q " 88 A 8 8g 8 88888 S » » 88 s 8 8 8 sa » R 8 s8888 a 8g s 8 Q as » w R » 8! a 88a82 » »» ee o e a a o ee s » a 88888 8 e e 8 8 88 8 2 g 8 R 88 a FM Rw w » 8 » 88 s 8 A A A 88 a g g8g88 8 8 8 8 8 e8 g 8 g 8. 8 8 8g » a 8 88888 8 8g 8 8 " »» » » 8 8 » » !8888 » » »» 2i-4gg 8 8 8 88 2 8 88888 8 g 8 8 x— " »88 » 8 8 88 8 88888 » 8 » 8 08 8 88 ee 8 s 88888 8 8 88 8 8 R " w E8 w 8 8$ » Raw » a »» » A 8 8 88 8 8 8 88 2 » 8 88gg8 8 Sa8 8 Cq » "e225 8 » »» » » » » » » »» » » r- 8 8 8 88 8 a 88 S 2 8 88888 a8 8 8 8 " 8 8 8 88 8 8 8 8a » Pan » E. » — 8 8 88 8 8 8 88 8 8 88888 8 8 '" 8 8 8W. 88 aa » 8 8� 8 NR.R8A » » » 8 e 8 8 8 ee 2 » 8 88888 88 8 § 8 8 » 1 8 » » R8 8 » »» » » » » 2 » » § 8 8 8 88 $ 8s a 88888 8 88 8s 8 8 8 8 88 58 » » » »88888 8 88 d$ » » » » »» »» » » Oh 8a e a e e o e ee s » 8 888888 0 8s8 _-_ 82 8 8 » » 8 8 8g 8 88 R.Rag $ R _ 8 8 8 8 § 8 8 8 8 8 8 2 8 88888 88 88 88. 8 " 8 8 8582 o »» R^ 888 8 8 8 8 8 am NA 8 » » 88 88888 8 8 8 PARa " » 882 » » 8 » » 8888 »8 m 88 «�R888 » 2 » »a8 o 888 age a o a 88 0 8ssa8 8 8 e e " li 88'" 8 P 8 88 8 RA�� 8 4 3„ F e E 1m E x' 288p a e 882,12 ° Ag _ m _ qb3� m f q LL, » - €E �' ' ' a a2t4 21 a _ E m 4 3xEENo x o a p irc =o glA w 3 asps ; ° ii _ _ .. "kIt sll° �� w pmv1� E! a s »sagas _a'g8°'ly " a§ds S 8 s a" a $ w a .Rs Ss® a 0p e�. ., Y a "E otl 9p`&teri .� - AE E ill a > a z 2NB. l 88 v & $ Tg i s g 4 "s 5<_$_ a a 4ffit stil V. seke, a az;a 8 i �N g _ f s sry �„ � m s i �"Im_ $�a'ms8as �v az ° A 8TIO a »6°is°A � a �lll o° d"m ST 'a. mv, 'a 88 ar u{ ad ni-m'A'Izaa9ammmm 1- ra A m' a _'rv'me8mm�evevRnRR��R B.R�.Beaemmea8eg,,�gg`r°,mm8mim mmam8ammm&$&8Ssoaoo8a�"' 1-i_-__"n"n nlnr 8 m�,'al.ne Qa�S"��eea8aa Elk River Municipal Utilities Business Plan/Budget 2020 Water Department Capital Budget Water Capital Construction Needs Cost Description $ 20,000 Well#3 Roof Replacement $ 25,000 Chlorine Analyzers $ 440,000 Paint/Sandblast Gary Street Tower&wash Reserves $ 100,000 Facility Repair $ 15,000 Placeholder for undetermined projects $ 50,000 Water Main Construction(Capital) Subtotal $ 650,000 Water Noteworthy Non-Recurring Expenses Cost Description $ 10,300 Computers $ 10,000 Meters/ERT $ 40,000 SCADA upgrades $ 5,000 Rate Study $ 20,000 Jackson Water Tower 100 year anniversary kiosk $ 25,000 Urban Services District Study (funded from trunk funds) $ 1,480 20%share of Administration and Technical Services Subtotal $ 111,780 Capital Equipment Needs Cost Description Trucks None for the water department this year. $ 32,500 20%share of Administration and Technical Services $ - Field Services Facility site work Subtotal $ 32,500 Total $ 794,280 193 a gg » gs6 s g s ggo 4 4 s g — x F 8F » 2 r »» » 9» » 8 3 r F 88 »» » Z »" »— 8 88 » ss g gg g 8 4 M e r » «� 66 »«. » gJ 2 » » g 8 08. 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