5.2 ERMUSR 09-12-2023UTILITIES COMMISSION MEETING
TO:FROM:
ERMU Commission Melissa Karpinski –Finance Manager
MEETING DATE: AGENDA ITEM NUMBER:
September 12, 2023 5.2
SUBJECT:
2024 Annual Business Plan: Capital Projects and Equipment Purchases and Capital 20-Year
Projections
ACTION REQUESTED:
No action is required.
DISCUSSION:
In preparation for budget submittal in November, staff continues to work through the 2024
budget process. The first draft of the capital budget portion of the 2024 budget has been
completed for commission review. The capital budget may change as the complete 2024
budget is assembled, when more information on project timing is available, when the rates
change, and once cash flow becomes more definite. Included are thetimeline projections for 20
years.Non-capital noteworthy items (expenses) are shown separatelyfrom the capital budgets
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 2024 Capital Budget – Includes large non-recurring capital
construction projects, recurring capital construction projects and asset preservation,
and capital equipment purchases. Notable items for 2024 include Advanced Metering
Infrastructure (AMI) which is a multi-year project estimated to be completed in 2025,
electric service territory acquisition loss of revenue payments, data center feeder and
additional/unidentified feeders, Dayton rebuild (multi-year project estimated to be
completed in 2028, and partially funded through the Infrastructure Investment and Jobs
Act grant), Highway 169 Redefine project (multi-year project wrapping up in 2024),
replacing digger truck #9, and replacing pickup truck #13.
2. Electric Department Capital 20-Year Projections – Highlights anticipated large non-
recurring capital construction projects, recurring capital construction projects, and asset
preservation projects through 2044.
3. Water Department 2024 Capital Budget – Includes large non-recurring capital
construction projects, recurring capital construction projects and asset preservation,
and capital equipment purchases. Notable items for 2024 include AMI (multi-year
project estimated to be completed in 2025) and replacement of existing water main at
Upland Avenue and Meadowvale Road.
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4.Water Department Capital 20-Year Projections – Highlightsanticipatedlarge non-
recurring capital construction projects, recurring capital construction projects, and asset
preservationprojects through 2044.
5.TechnicalServices and Administrative Capital Budgets – Includescapital projects and
capital equipment purchases. Notable items for 2024 include a fiber loop (shared
project with ERMU, the City, and ISD 728) and several fiber extensions (from Highway
169 to North substation, Johnson Tower, and Auburn Tower).
6. Administration and Technical Services Departments Capital 20-Year Projections –
Highlights anticipated large non-recurring capital construction projects, recurring capital
construction projects, and asset preservation projects through 2044.
The utilities utilize a vehicle replacement evaluation system implemented with the City.
Additional information on vehicle evaluations is available upon request.
FINANCIAL IMPACT:
The 2024 Electric Department Capital Budget has increased compared to the prior year. The
main driver of the increase is the implementation of AMI and constructionof additional
feeders. As in years past, we will use reserves to pay for the territory expansion costs
(approximately $950,000 for 2024). We will also plan on using reserves to pay for some feeder
work and the County Road 12 interconnection agreement with Connexus. We also plan to do an
inter-fund loan from the water department to fund the electric portion of the AMI project.
Lastly, the Dayton rebuild project is expected to be partially (50%) funded by Infrastructure
Investment and Jobs Act grant money.
The 2024 Water Department Capital Budget is comparable to the prior year. We plan on using
reserves to pay for AMI and the water main construction.
In 2022, both the Electric Department and Water Department started a multi-year project
implementing AMI. $4,500,000 has been planned for 2024 between the two departments.
The Administration and Technical Services Departments Capital Budgets are comparable to the
prior year. These projects get allocated to the Electric and Water Departments and are shown
as separate lines on their capital budget.
ATTACHMENTS:
2024 Electric Department Capital Budget
2024 Electric Department Capital 20-Year Projections
2024 Water Department Capital Budget
2024 Water Department Capital 20-Year Projections
2024 Administration and Technical Services Departments Capital Budgets
2024 Administration and Technical Services Departments Capital 20-Year Projections
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