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ELK RIVER MUNICIPAL UTILITIES <br /> <br /> 322 King Avenue <br />Elk River, Minnesota 55330 <br />Phone (612) 441-2020 <br /> Fax (612) 441-8099 <br /> <br />To: Elk River Municipal Utilities Commission <br /> Elk River City Council <br /> <br />May 3,1998 <br /> <br />From: Bryan C. Adams <br /> <br />Subject: Eastern Area Expansion <br /> <br />Enclosed is the following information for your review: <br /> <br />1) 11 X 17 Drawing of East Elk River Utility Alignments <br />2) Portions of East Elk River feasibility study reflecting street, sanitary, water main and storm drain <br /> construction costs and assessment revenue. <br />3) Peter J. Patchin & Associates East Elk River limited appraisal summary report. Water and Sewer <br /> Trunk Assessments (City Council already has their copy) <br /> <br /> In the Spring of 1998 Springsted completed a financial and debt study for Elk River Municipal Utilities <br />(ERMU). This study indicated ERMU could finance the necessary wells and water towers, estimated at <br />- ',700,000, for East Elk River with the current rates and WAC fees. At the February ERMU Commission <br />~,eeting, City staff suggested that ERMU finance the shortfall in constructing the trunk water system for the <br />East Elk River project. The water trunk shortfall is in the $500,000 to $710,000 range. The Utility Commission <br />indicated they would seriously consider this proposal. The attached Patchin report indicates acceptable <br />assessment ranges for the necessary trunk utilities. Further analysis will be required to determine more <br />accurately the water shortfall. This value can then be analyzed using our Springsted model to determine the <br />effects on water rates and WAC fees. <br /> <br /> The proposed Eastern Area development will also have a significant impact on our electric department which <br />is also not included in the City's feasibility report. We have made some initial cost estimates to determine the <br />financial impact on our electric utility. The estimated cost breakdown is as follows: <br /> <br />a) Upgrade Substation #14 <br /> will be completed May 1998 <br />b) Underground crossing of highway 169 <br />c) overhead line on County Road 12 looped <br /> back to County Road 13. This line will also <br /> aid us in territory acquisition efforts. (If underground <br /> is required instead of overhead add 9000' X $25) <br />d) Underground Feeder to serve Area South of <br /> County Road 12 <br />e) Underground Feeder to serve Area North of <br /> County Road 12 to County Road 13 <br /> <br />$225,000 <br /> <br />$500,000 <br /> <br />$100,000 <br />$524,500 <br /> <br />$368,000 <br />$344,000 <br /> <br /> <br />