5.2 ERMUSR 09-08-2020UTILITIES COMMISSION MEETING
TO:FROM:
ERMU Commission Melissa Karpinski –Finance Manager
MEETING DATE: AGENDA ITEM NUMBER:
September 8, 20205.2
SUBJECT:
2021 Annual Business Plan: Capital Projects & Equipment Purchases, and 20-Year Capital
Projections
ACTION REQUESTED:
None
DISCUSSION:
In preparation for budget submittal in November, staff continues to work through the 2021
budget process. The first draft of the capital budget portion of the 2021 budget has been
completed for commission review. The capital budget may change as the complete 2021
budget is assembled, when more information on project timing is available, when the rates
change, and once cash flow becomes more definite. Included are the timeline projections for 20
years. Non-capital noteworthy items (expenses) have been removed from the main body of the
20-year projections and are now shown separately at the bottom. The Conservation
Improvement Plan (CIP) budget is not included this month and will be presented during the
October commission meeting.
The following information is included 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 2021 are preparations (power plant
substation relocation, relocating feeders) and construction of the new field services
building, electric service territory acquisition costs, Highway 169 redefine project and
replacing digger truck #10 and bore rig #56.
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 2021 are the construction of
the new field services building, water main construction 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.
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5.Technical Services and Administrative Capital Budgets – This includes capital equipment
purchases. Notable items are IT system improvementsfor Administration,and Fiber
Extension to Substations for Technical Services.
The utilities utilize a vehicle replacementevaluation system implemented with the city.
Additional information on vehicle evaluations is available upon request.
FINANCIAL IMPACT:
The 2021 Electric Department Capital Budget is increased compared to the prior year without
considering additional funding from bonding and the use of reserves. The main drivers of this
are the preparation and construction of field services building and territory acquisition costs.
As in years past, we will use reserves to pay for the territory expansion costs, approximately
$884,000 for 2021.
The 2021 Water Department Capital Budget is increased compared to the prior year. The main
drivers of this are the construction of the field services building and water main construction
(estimated use of reserves at $500,000).
The estimated cost for the field services building for both departments is $13,590,000 with
bonding planned for in early 2021.
ATTACHMENTS:
2021 Electric Department Capital Budget
2021 Electric Department Capital Projections 20 years
2021 Water Department Capital Budget
2021 Water Department Capital Projections 20 years
2021 Administration and Technical Services Departments Capital Budgets
2021 Administration and Technical Services Departments Capital Projections 20 years
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Elk River Municipal Utilities Business Plan/Budget
2021 Electric Department Capital Budget
Capital Construction Projects - Non-Recurring Normal Distribution, Feeders, and Substations
CostDescription
$ 100,000185th Ave rebuild
$ 75,000Otsego Street Lights
$ 75,000Highway 10 project from Xenia to Jackson
$ 500,000Highway 169 redefine
$ 100,000Cty Rd 13 Tyler to Line Ave w/ Roundabout
$ 50,000Cty Rd 33
$ 140,000RDF Plant
$ 500,000Power Plant Substation RelocationReserves
$ 500,000Field Services Site Prep (relocating feeders)Reserves
$ 200,000Rebuild feeder 73 from power plant to Hwy 10
$ 100,000County Rd 35 Feeder to Waco
Subtotal$ 2,340,000
Capital Construction Projects - Recurring
CostDescription
$ 200,000Transformers and Meters
$ 350,000New Development Distribution Installation
$ 50,000Street Lighting
$ 50,000Ongoing OH Equip Replacement (Poles, Switches, Cut-Outs)
$ 100,000Ongoing URD Equip Replacement (Switches, J-Boxes, Fuse Pads)
$ 500Territory Acquisition - Loss of Revenue payment (1991 contract)
$ 884,185Territory Acquisition - Loss of Revenue payment (2015 contract - Area 1&2, 3&4, 5&6, 7&8)Reserves
Subtotal$ 1,634,685
Capital Equipment Needs
CostDescription
$ 45,000Pickup TrucksTruck #28
$ 275,000Replace Digger Truck Vehicle #10
$ 300,000Replace Bore RigVehicle #56
$ 60,000Mini Skid
$ 36,960Electric share of Administration
$ 187,750Electric Share of Technical Services
Subtotal$ 904,710
$ 12,231,000 Field Services Building
Total Capital$ 17,110,395
Electric Noteworthy Non-Recurring Expenses
CostDescription
$ 4,000Repaint Trailer
$ -Laptop Computers, Ipads, Software, Accessories
$ 7,800Electric share of Administration
$ 9,500Electric share of Technical Services
Total$ 21,300
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Elk River Municipal Utilities Business Plan/Budget
2021 Water Department Capital Budget
Water Capital Construction Needs
CostDescription
$ 30,000Well #6 Roof Replacement
$ 40,000Well #8 Rehab
$ 100,000Facility Repair
$ 20,000Meadowvale Booster Station
$ 15,000Placeholder for undetermined projects
$ 60,000SCADA upgrades
$ 20,000Highway 169 Redefine
$ 500,000Water Main Construction (Capital)Reserves
Subtotal$ 785,000
Capital Equipment Needs
CostDescription
$ -Trucks
$ 9,240Water share of Administration
$ 2,250Water Share of Technical Services
Subtotal$ 11,490
$ 1,359,000 Field Services Building
Total Capital$ 2,155,490
Water Noteworthy Non-Recurring Expenses
CostDescription
$ 3,000Computers
$ 10,000Meters/ERT
$ 1,950Water share of Administration
$ 500Water share of Technical Services
Total$ 15,450
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Elk River Municipal Utilities Business Plan/Budget
2021 Administration and Technical Services Departments Capital Budgets
Administration Capital Equipment Needs
CostDescription
$ 10,500Office Furniture
$ 20,000Network Switch (City main core)
$ 5,000Network Switches (ERMU)
$ 8,200NISC Linux Upgrade
$ 2,500Endorser
Subtotal$ 46,200
Administration Noteworthy Non-Recurring Expenses
CostDescription
$ 9,750Computer, Software, Accessories, Scanners, Printers - Upgrades
Subtotal$ 9,750
Total Administration$ 55,950
Technical Services Capital Equipment Needs
CostDescription
$ 45,000ESRI Bolt-On Software
Currently designated as emergency standby,
$ -Diesel Engines Emission Retrofit$ 350,000retrofit on hold until further notice
$ -Diesel Plant to run on Natural gas.$ 20,000Deferred until future date
$ 25,000upgrade tanks per inspection issues$25,000Deferred until 2021 or later
$ 15,000Repair Exhaust - Engine #3
$ 5,000Rebuild - Engine #3
$ 5,000VOLT/VAR Implementation
$ 25,000Fiber Extension - 169 to Sub
$ 20,000Fiber Extension - Waco Sub
$ 50,000Substation Meter and SCADA Equipment
Subtotal$190,000
Technical Services Noteworthy Non-Recurring Expenses
CostDescription
$ 10,000Computers, Software, Accessories - Upgrades
Subtotal$ 10,000
Total Technical Services$ 155,000
Total Capital Items$ 236,200
Total Non-Recuring Expenses$ 19,750
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