5.2 EMRUSR 09-10-2024��i
Elk River ,
Municipal Utilities UTILITIES COMMISSION MEETING
TO:
FROM:
ERMU Commission
Melissa Karpinski — Finance Manager
MEETING DATE:
AGENDA ITEM NUMBER:
September 10, 2024
5.2
SUBJECT:
2025 Annual Business Plan: Capital Projects & Equipment Purchases, and 20-Year Capital
Projections
ACTION REQUESTED:
No action is required.
DISCUSSION:
In preparation for budget submittal in November, staff continues to work through the 2025
budget process. The first draft of the capital budget portion of the 2025 budget has been
completed for commission review. The capital budget may change as the complete 2025
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) are shown separately from 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 2025 Capital Budget — Includes large non -recurring capital
construction projects, recurring capital construction projects and asset preservation,
and capital equipment purchases. Notable items for 2025 include Advanced Metering
Infrastructure (multi -year project estimated to be completed in 2025), East substation
construction (multi -year project estimated to be completed in 2026), electric service
territory acquisition loss of revenue payments, additional/unidentified feeders,
replacing digger truck #9 (was scheduled for 2024 but will not be received until 2025),
and replacing bucket truck #5.
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 2025 Capital Budget — Includes large non -recurring capital
construction projects, recurring capital construction projects and asset preservation,
and capital equipment purchases. Notable items for 2025 include two new wells,
Advanced Metering Infrastructure (multi -year project estimated to be completed in
2025), Freeport booster station, and replacement of existing water main at
Upland/Meadowvale and city road project.
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4. Water Department Capital 20-Year Projections — Highlights anticipated large non-
recurring capital construction projects, recurring capital construction projects, and asset
preservation projects through 2044.
5. Technical Services and Administrative Capital Budgets — Includes capital projects and
capital equipment purchases. Notable items for 2025 include a fiber extension to East
substation, and server upgrades.
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 2025 Electric Department Capital Budget has decreased compared to the prior year. The
main driver of the decrease is the completion of AMI project in 2025 (most of the cost was
planned for 2024 but is being pushed out to 2025) and reducing construction of additional
feeders from two to one in 2025. As in years past, we will use reserves to pay for the territory
expansion costs (approximately $935,000 for 2025). We will also plan on using reserves to pay
for the East substation construction, additional feeder work, transformers, and replacement of
the digger and bucket trucks. We also plan to do an inter -fund loan from the water department
to fund the electric portion of the AMI project.
The 2025 Water Department Capital Budget has increased compared to the prior year. We plan
on using reserves to pay for the two new wells, water main construction, AMI, Freeport booster
station, and fiber projects.
In 2022, both the Electric Department and Water Department started a multi -year project
implementing AMI. $2,725,000 has been planned for 2025 between the two departments.
The Administration and Technical Services Departments' Capital Budgets have decreased
compared to the prior year. These projects get allocated to the Electric and Water Departments
and are shown as separate lines on their capital budgets.
ATTACHMENTS:
• 2025 Electric Department Capital Budget
0 2025 Electric Department Capital 20-Year Projections
• 2025 Water Department Capital Budget
• 2025 Water Department Capital 20-Year Projections
0 2025 Administration and Technical Services Departments Capital Budgets
• 2025 Administration and Technical Services Departments Capital 20-Year Projections
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