5.1 ERMUSR 03-11-2025UTILITIES COMMISSION MEETING
TO:FROM:
ERMU CommissionMark Hanson – General Manager
MEETING DATE: AGENDA ITEM NUMBER:
March 11, 20255.1
SUBJECT:
ERMU Power Plant Project Update
ACTION REQUESTED:
Discuss project status
BACKGROUND:
At the August 13, 2024, commission meeting, the Commission discussed the future of the Elk
River Municipal Utilities (ERMU) power plant. ERMU has maintained the existing power plant
since its construction in 1947. Since 1978, however, ERMU has met all its power generation
needs through a cooperative purchasing agency. Since then, the plant has been maintained for
auxiliary purposes only.
All five of ERMU’s substations are connected to multiple transmission lines and we have
multiple distribution tie-lines between our substations providing highly resilient back-feeding
capabilities. As such, due to the age and condition of the engines and their relatively low value
as back-up operational assets, staff proposed the plant be decommissioned, the salvageable
assets be sold, and the building be repurposed, potentially as a history/education center. The
Commission officially decommissioned the plant at their September 10, 2024, meeting via
Resolution 24-10 - Authorizing the Decommission of the ERMU Power Plant.
DISCUSSION:
Staff retained the services of LEO A DALY Architects to review the building’s structural integrity
for repurposing as a potential history/education center, identify potential funding sources,
explore potential design layouts, and estimate the potential construction costs. LEO A DALY will
be presenting the results of their work to date at the meeting.
The objectives of the presentation/discussion are:
1) Reach consensus and provide direction on the desired audience for a potential
history/education center (students/children, organizations/adults, or a combination of
both). The intended audience will influence the design layout.
2) Reach consensus and provide direction on the prioritization of costs vs architectural
value. It will be considerably more expensive to keep the architectural features of the
building such that it could be listed on the national register of historic places.
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3)Reviewthe potential constructioncosts, offsets (e.g. grants, donations, sale of
equipment), andresulting net financial commitmentrange.
4)Reach consensus and provide direction on whether to commit to the next step of the
pre-design assessment. The next step would include: determining a buildinglayout,
refining the cost estimates, and developing sufficient architectural renderings to pursue
possible grant funding. Consulting fees for this next step are $15,000.
5) Reach consensus and provide direction on the desired financial recovery for the larger
plant assets such as the fuel tanks, engines/generators, and power distribution
equipment. Similarly, is the Commission interested in engaging with the City on a
potential combined historical focus.
NEXT STEPS:
If desired, staff will continue working with LEO A Daly to complete Phase 2 of the pre-design
assessment and pursue potential funding opportunities. Additionally, staff will continue
working with peer agencies to dispose of the large equipment such as the fuel tanks, engines,
and distribution equipment.
ATTACHMENT:
The Elk River Municipal Utilities Power Plant Building Pre-Design Assessment
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ERMU Diesel Plant Pre-Design Assessment
PRESENTED AT MEETING - LEO A DALY
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PRESENTED AT MEETING - LEO A DALY
Preliminary evaluation
Historic features
Evaluation of renovations required to bring building up to code
Rough Order of Magnitude Cost
Space Programming, Financing, & Grants
Space program, bubble diagrams
Project funding
Next Steps
3
Scope of Work PRESENTED AT MEETING - LEO A DALY
What We Did
Code Analysis
Restrooms
ADA entrance
Mechanical systems
Historic Analysis
Should be eligible for listing in the National Register – need SHPO determination
Options for Programming
Adult-centric
Child-centric
Combined Adult & Child-centric
PRESENTED AT MEETING - LEO A DALY
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Child Centric – Adult Centric - Combined
PRESENTED AT MEETING - LEO A DALY
Cost Estimate
Estimate – $4,860,000 - $7,430,000*
*This is an all-in number, including…
Construction Costs (Base Bid and Alternates)
Soft Costs (30% of Construction)
5% escalation (Compounding annually through 2026)
Funding Sources
Grants - $200,000 - $400,000 (6%)
State Funding - $2,430,000 - $3,175,000 (max. 50%)
Philanthropic - $892,500 - $1,627,500 (22%)
ERMU Contributions (Remainder) - $1,069,200 - $1,634,600 (22%)
Grant Funding
State Funding
Philanthropic
Funding
ERMU Contributions
(Remainder)
$0.2M - $0.4M
6%
22%
$0.89M - $1.63M
22%
$1.07M - $1.63M
50%
$2.43M - $3.18M
PRESENTED AT MEETING - LEO A DALY
Next Steps
o Refine One (1) Layout &
Create Renderings
o Refine Cost Estimate
Possible Timeline
PRESENTED AT MEETING - LEO A DALY
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Examples of eligible projects include but are not limited to: adaptive uses of older and
historic buildings into community gathering spaces, improvements to outdoor parks or
trails, and technology projects for the public library.
Funds may opu be used for: engineering and architectural plans or fees, salaries or annual
operating expenses, or reimbursement for projects that are already completed.
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Low High
Base Bid Subtotal $ 1,750,000 $ 2,500,000
Add Alternates Subtotal
$ 1,815,000 $ 2,945,000
Total Construction Cost $ 3,565,000 $ 5,445,000
Projected Soft Costs (30%) $ 1,069,500 $ 1,633,500
Total Project Cost (2025) $ 4,634,500 $ 7,078,500
Total Project Cost (2026) $ 4,866,225 $ 7,432,425
Total Project Cost (2027) $ 5,109,536 $ 7,804,046
Total Project Cost (2028) $ 5,365,013 $ 8,194,249
Total Project Cost (2029) $ 5,633,264 $ 8,603,961
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Alternate #1 Allowance for interior finishes and buildout of main ADD $750,000 - $1,350,000
floor only (assumes roughly 7,700 SF).
Alternate #2 Allowance for educational displays. ADD $100,000 - $200,000
Alternate #3 Allowance for signage and signage related lighting. ADD $50,000 - $100,000
Alternate #4 Allowance to provide (1) additional 20 Ton RTU ADD $30,000 - $50,000
(adds 1 new zone).
Alternate #5 Allowance to include fire protection (wet system), if ADD $75,000 - $110,000
required by code.
Alternate #6 Allowance to include fire alarm, if required by code. ADD $25,000 - $40,000
Alternate #7 Curtainwall glazing at 20' x 20' opening (to remove ADD $30,000 - $50,000
engines) in lieu of filling back in with CMU/brick.
Alternate #8a Allowance to restore existing windows in lieu of ADD $125,000 - $175,000
existing to remain (assumes roughly 575 SF).
Alternate #8b Allowance to replace existing windows in lieu of ADD $100,000 - $150,000
existing to remain (assumes roughly 575 SF).
Alternate #9 Allowance for tuckpoint restoration of full existing ADD $175,000 - $250,000
building façade (assumes roughly 8,000 SF).
Alternate #10 Allowance to reroof existing structure (assumes ADD $200,000 - $250,000
roughly 7,700 SF).
Alternate #11 Allowance for an additional ADA entrance upgrade ADD $150,000 - $200,000
(per each). Assumes (2) new double door storefront
entrance doors, associated storefront glazing, and
200 SF of concrete sidewalk/ramping and
associated covered walkway.
Alternate #12 Allowance for (4) new parking stalls (assumes ADD $20,000 - $40,000
restriping in existing paved areas in not achievable).
Alternate #13 Allowance for landscaping upgrades. ADD $10,000 - $40,000
Alternate #14 Allowance to dispose of exterior exhaust ADD $75,000 - $90,000
piping/tanks.
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