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5.3. SR 08-06-2007 REQUEST FOR ACTION To Ci Council Agenda Section Administration Item Description Resolution Approving the Plans and Specifications and Ordering the Advertisement for Bids in the matter of the Wastewater Treatment Plant Phase II Improvement of 2007 Meeting Date A st 6, 2007 Administrator Action Requested Consider adoption of Resolution Approving the Plans and Specifications and Ordering the Advertisement for Bids for the Wastewater Treatment Plant Phase II Improvement and authorize an expenditure not to exceed $4,500 for Ehlers and Associates to complete an updated utility rate study. BackKround/Discussion As previously discussed with the City Council, the WWTP Phase II Improvement is the last improvement at the Treatment Plant due to added treatment requirements by the Minnesota Pollution Control Agency (MPCA). Future expansions of the WWTP will be driven by development of the City and increased flow to the plant. The major components of the Phase II improvement are as follows: 1. A new building containing a mercury reduction sand filter process. 2. Replacement and additional equipment in the ultraviolet disinfection building that currendy exists on the site. 3. Providing permanent on-site generation for operation during electrical service disruption. 4. An addition to the garage building, adding an enlarged garage stall for the jet truck which currendy just barely fits into the existing building. The garage stall freed up by the new addition will be utilized to house smaller equipment. 5. Miscellaneous and piping improvements around the site. Approval to bid Phase II is being requested from the Council now; however, the MPCA must approve the plans before the project can be awarded so advertisement for bid will happen after we receive preliminary approval from MPCA. The specifications and timing for the project call for the majority of construction to start next spring. The utility rate study is necessary since the last utility rate study was done many years ago. Sewer rates have increased slighdy each year to help offset inflationary increases in operating costs. Recent changes in our permit limits have required additional treatment which in turn increases operating expenses. These additional treatment costs now need to be included in the rates. With a projected slowdown in the SAC revenue, population growth, Phase II, and future Phase III expansions it seems the appropriate time to review the rates for the Sewer Fund. Ehlers and Associates have conducted numerous studies and would be ideal for the City of Elk River, since the City uses them on all debt-related issues. They have quoted a price not to exceed $4,500 for a rate study analysis. This would be completed yet this year in time to set 2008 sewer rates. Financial Impact The estimated project cost for the WWTP Phase II Improvements is 4.3 million dollars plus engineering. Final project financing including the amounts financed with sewer funds and bonds will be determined after bids are received. Attachments . Resolution Approving the Plans and Specifications and Ordering the Advertisement for Bids in the Matter of the Wastewater Treatment Plan Phase II Improvement of 2007 . Sewer Fund Financial Statement . Project Budget Action Motion by _ Second by _ Vote Follow Up S:\EngineedmprovProj\2007 Improvement Projects\ WWfP Phase n\08 06 07 CC memo revised LJ.doc RESOLUTION 07-_ A RESOLUTION FOR THE CITY OF ELK RIVER A RESOLUTION APPROVING THE PLANS AND SPECIFICATIONS AND ORDERING THE ADVERTISEMENT FOR BIDS IN THE MATTER OF THE WASTEWATER TREATMENT PLANT PHASE II IMPROVEMENT OF 2007 WHEREAS pursuant to City Council direction, the Project Engineer has prepared plans and specifications for the Wastewater Treatment Plant Phase II improvement, which plans and specifications have been reviewed by the City; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River, Minnesota: 1. Such plans and specifications, a copy of which are available for inspection through the City Clerk's office and incorporated herein by this reference, are hereby approved. 2. The City Administrator shall prepare and obtain the publication of an advertisement for bids for the making of the improvement pursuant to the plans and specifications. The advertisement shall be published once each week for three consecutive weeks and shall specify the work to be done. No bids will be considered unless sealed and filed with the City Administrator and accompanied by a cash deposit, cashier's check, bid bond, or certified check payable to the City Administrator in the amount of 5% of the amount of such bid. Passed and adopted this 6th day of August, 2007. Stephanie A. Klinzing, Mayor ATTEST: Tina Allard, City Clerk s: \EngineerImprovProj\2007 Improvement Projects \ WWfP Phase II\Resolution app plans&specs ad for bids.doc BALANCE SHEET CITY OF ELK RIVER As of: 7/31/2007 Page: 1 8/3/2007 10:28 am Balances Fund Type: 20 Enterprise funds Fund: 602 - W ASTEW A TER TREATMENT SYSTEM Assets Acct Class: 1000 Current Assets 1010 Cash 1012 Fair Value-Investments 1150 Accounts Receivable 1380 Interest Receivable Acct Class: 1000 Current Assets Acct Class: 1560 Other Assets 1560 Deferred Charges Acct Class: 1560 Other Assets Acct Class: 1600 Capital Assets 1610 Land 1620 Buildings & Structures 1630 Collection & Distribution 1640 Equipment 1650 Accumulated Depreciation Acct Class: 1600 Capital Assets 5,942,030.88 18,283.00 431.25 29,885.00 5,990,630.13 23,836.51 23,836.51 Total Assets 411,094.98 8,725,665.93 23,195,212.81 483,551.13 -10,314,181.83 22,501,343.02 28,515,809.66 Liabilities Acct Class: 2000 Current Liabilities 2040 Salaries Payable Acct Class: 2000 Current Liabilities Acct Class: 2250 Long-term Liabilities 2250 Bonds Payable Acct Class: 2250 Long-term Liabilities 17,070.99 17,070.99 Total Liabilities 1,660,000.00 1,660,000.00 1,677,070.99 Reserves/Balances Acct Class: 2400 Fund Equity 2400 Fund Balance 2600 Change In Fund Balance Acct Class: 2400 Fund Equity Total Reserves/Balances 26,460,512.43 378,226.24 26,838,738.67 26,838,738.67 28,515,809.66 Total Liabilities & Balances CITY OF ELK RIVER, MINNESOTA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS SEWER FUND YEAR ENDED DECEMBER 31,2006 Sewer Current Year Prior Year Operating revenues: User charges $ 1,350,922 $ 1,250,222 Delinquency collections Other 1,725 11 ,631 Total operating revenues 1,352,647 1,261,853 Operating expenses: Personal services 341,620 303,247 Supplies 69,001 65,996 Purchased power Other service charges 394,050 327,342 Depreciation 849,818 767,400 Total operating expenses 1,654,489 1,463,985 Operating income (loss) (301,842) (202,132) Nonoperating revenues (expenses): Connection charges 978,235 1,167,045 Interest income 280,208 147,214 Miscellaneous revenue Interest expense (66,631) (130,661) Bond issuance costs (3,027) (20,281 ) Gain (loss) on sale of capital assets (14,426) Total nonoperating revenues (expenses) 1,188,785 1,148,891 Income before contributions and transfers 886,943 946,759 Capital contributions 1,134,740 556,429 Transfers in Transfers out (272,175) (33,030) Change in net assets 1,749,508 1,470,158 Total net assets - January I 24,711,004 23,240,846 Total net assets - December 31 $ 26,460,512 $ 24,711,004 1 Probable Project Costs Wastewater Treatment Facility - Phase II Improvements City of Elk River, MN 80M Consulting Engineers, PLC Apr-07 Process Equipment 1 Filter Equipment (1) 2 Filter Equipment Installation 3 Filter Structure 4 Filter Control Building 5 Filter Enclosure 6 Miscellanous Improvements 7 Stand by power 8 Storm Sewer replacement 7 UV System 8 Garage Expansion 9 Trickling Filter Repairs 10 Site Works (10%) 11 Process Piping (10%) 12 Mechanical (6%) 13 Electrical, Instrumentation and Controls (10%) 14 Contingency (20%) Subtotal overhead and Profit (10%) Total Construction Cost Unit Is % Is sf sf Is Is ft Is sf Is Number of Units 1 30% 1 1,000 2,880 1 1 500 1 1,350 1 Unit Costs 560,000 560,000 350,000 200 150 225,000 150,000 100 203,000 100 40,000 Opinion of Probable Capital Cost ($) 560,000 168,000 350,000 200,000 432,000 225,000 150,000 50,000 203,000 135,000 40,000 251,300 251,300 150,780 251,300 502,600 3,920,280 392,028 4,312,000 Note: (1) Equipment cost based on US Filter Hydro Clear sand filters.