6.1. ERMUSR 07-09-2007Elk River ^-
MUrilClpa.1 Ut111t1eS ~
13069 Orono Parkway • PO. Box 430 ~ Phone: 763.441.2020
Elk River, MN 55330-0430 Fax: 763.441.8099
July 5, 2007
To: Elk River Municipal Utilities Commission
Jerry Takle
Jerry Gumphrey
Jim Tralle
From: Bryan Adams
Subject: Power Plant Insurance
We maintain two different insurance policies for our power plants. They are boiler and machine
insurance and property insurance. The boiler and machine insurance through AIG/Hartford
Steam Boiler covers repair costs due to major equipment failure with very high deductibles
($50,000 minimum and $150,000 maximum). Our substation transformers are also covered
under this policy. We previously discussed self insuring the power plant generating units for
boiler and machine insurance and this is still under investigation.
The property insurance thru the League of Minnesota Cities Insurance Trust (LMCIT), covers all
of our properties for property damage including vehicle and equipment. Attached for your
review is the property insurance schedule. One issue that continues to be a problem is the
replacement value of the old generation equipment at our power plant. If the building was
destroyed and generation equipment damaged beyond repair what is its value and how would it
be replaced. The equipment in question is as follows.
2 - SSOKW Worthington Units constructed 1947
1 - 3000KW Cooper Unit constructed 1961
1 - SOOOKW Worthington Unit constructed 1971
Replacement parts for this equipment are becoming very difficult to find.
The LMCIT is proposing using high speed caterpillar units as replacements for the four above
listed generation units and have assigned values per the attached schedule. What we are really
doing is fixing a maximum financial limit on this portion of the policy. These values must be
reviewed on an annual basis to keep them current.
This appears to be a reasonable approach for the property insurance portion of the generation
equipment. Staff recommends this approach.
Sheetl
Elk River Municipal Utilities Property Insurance Schedule
12/7/2006
Location Descritpion Coverage Coverage
Type Exposure
Electrical Dept.
#22 King Av Building ?
Contents ?
13069 Orono Parkway Utiltiy Offices Building $1,400,000
Contents $250,000
Power Plant 1705 Main St Building $600,000
Contents $6,000,000
Storage Buildings 1705 Main St Building $400,000
Contents $320,000
Garage /Office 1697 Main St Building $680,000
Contents $250,000
LFG Power Plant ER Landfill 4 Engines Building $700,000
Contents $2,700,000
1705 Main St Plant Substation Contents $1,000,000
Hwy 169 @GRE Substation 14 Bank 1 Contents $1,100,000
Hwy 169 @GRE Substation 14 Bank 2 Contents $1,100,000
CR # 1 & 189 ST Substatioin WB1 Contents $1,100,000
CR # 1 ~ 189 ST Substation WB2 Contents $1,100,000
CSAH # 39 Substation Otsego Contents $1,100,000
Hwy 169 @ 313 ST Substation North Contents $1,100,000
Zebulon 8~ Co RD 35 Zebulon Substation Contents $1,100,000 Fall 2007
Water Dept.
Hwy 169 & Elk Hill DR. Booster Station Contents $100,000
192nd & Meadowvale Booster Station Contents $100,000
17501 Tyler St Booster Station Contents $100,000
19119 Freeport Pressure Reducing Station Contents $70,000
19120 Freeport 1000000 gal. Water Tower Tower $1,250,000
Contents $100,000
Jackson Ave 100000 gal Water Tower $0
Ellk River Concrete 100000 gal Water Tower $0 Demolished
505 Phil Martin Dr. Well # 2 & Filter Plant Building $200,000
Contents $500,000
Industrial Road Well # 3 & Filter Plant Building $200,000
Contents $600,000
Gary St. Water Facility 1000000 gal. Water Tower Tower $1,250,000
Contents $100,000
Gary St. Water Facility Well # 4 & Filter Plant Building $200,000
Contents $600,000
19535 Auburn St 500000 gal. Water Tower Tower $600,000
Contents $50,000
19535 Auburn St Well # 5 8 Filter Plant Building $200,000
Contents $600,000
North Meadowvale School Well # 6 & Filter Plant Well $50,000
Building $200,000
Contents $600,000
17721 Johnson St 1500000 gal Water Tower Tower $1,400,000
Contents $150,000
18561 Tyler St Well #7 & Filter Plant Building $500,000
Contents $800,000
11001 190 Av NW Well #8 Well $50,000
Vault $20,000
Well #9 Building $75,000
Contents $75,000
Property Insurance Schedule Page 1