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The major disadvantage to SAC fees is that waiting for the building permit furthers extends the time between
<br />when the improvements are installed and when the fee is collected. Land can be platted and development
<br />may still be delayed due to the economy or developer performance.
<br />Proposed Funding Method. Given the logistical difficulty of assessing the utility expansion, this study
<br />proposes recovering most of the City's capital costs from trunk charges. The improvements at the sewer
<br />treatment plant, estimated at $8 million, would be paid by the existing SAC fee. Our analysis of the current
<br />demands on the SAC fee revenue show capacity to pay for these improvements assuming continued
<br />modest 3% annual fee increases. The SAC Fee analysis is shown in Appendix C.
<br />5.3 Financial Risk and Project Phasing
<br />To assess the potential financial risk of recovering costs with development fees rather than imposing up-
<br />front assessments, a preliminary infrastructure phasing plan was prepared for the expansion areas. The
<br />phasing is shown in Tables 5.3 through 5.6.
<br />Table 5.3 - Project Phasing for Water Infrastructure in the Northeast Expansion Area
<br />Item No. Description Total 0-5 Years 6-10 years 11-15 Years 16-20 Years
<br />1 Bonds, Insurance, General Conditions 1,042,000 574,276 98,665 303,282 65,777
<br />2 Mobilization/Demobilization 2,084,000 1,148,553 197,330 606,565 131,553
<br />3 12-inch Watermain 4,543,000 1,362,900 1,362,900 908,600 908,600
<br />4 Nydrant and Valve 1,175,200 352,560 352,560 235,040 235,040
<br />5 12-inch Gate Valve and Box 322,400 96,720 96,720 64,480 64,480
<br />6 Ductile Iron Fittings 536,900 161,070 161,070 107,380 107,380
<br />7 850 gpm Well with Treatment 9,500,000 9,500,000
<br />8 1 MG Composite WaterTower 4,750,000 4,750,000
<br />9 Connectto Existing5ystem 12,000 12,000
<br />SUBTOTALS 23,965,500 13,208,079 2,269,245 6,975,347 1,512,830
<br />Contingency (10%) 2,396,550 1,320,808 226,924 697,535 151,283
<br />Construction Subtotal 26,362,100 14,528,900 2,496,200 7,672,900 1,664,100
<br />I ndirect Costs (20%) 5,272,420 2,905,780 499,240 1,534,580 332,820
<br />TOTAL PROJECT COSTS 31,635,000 17,435,000 2,995,000 9,207,000 1,997,000
<br />While growth is expected to occur over 20 years or more in the northeast areas, over half of the water
<br />project costs must be incurred in the first five years. This is a similar situation in expanding water into the
<br />northwest areas as shown in Table 5.4.
<br />Table 5.4 - Project Phasing for Water Infrastructure in the Northwest Expansion Area
<br />Item No. Description Total 0-5 Years 6-10 years 11-15 Years 16-20 Years
<br />1 Bonds, Insurance, General Conditions 1,448,500 928,779 464,789 54,932 -
<br />2 Mobilization/Demobilization 2,897,100 1,857,622 929,611 109,868 -
<br />3 12-inch Watermain 6,380,000 3,828,000 1,914,000 638,000
<br />4 16-inch Watermain 1,368,000 820,800 410,400 136,800
<br />5 HydrantandValve 1,853,200 1,111,920 555,960 185,320
<br />6 12-inch Gate Valve and Box 452,600 271,560 135,780 45,260
<br />7 16-inch Gate Valve and Box 80,000 48,000 24,000 8,000
<br />8 Ductile Iron Fittings 852,800 511,680 255,840 85,280
<br />9 BS-1 BoosterStation 575,000 575,000
<br />10 BS-2 BoosterStation 575,000 575,000
<br />11 Pressure Reducing Manholes 72,000 72,000
<br />12 Two 850 gpm Wells with Treatment 12,000,000 6,000,000 6,000,000
<br />13 1 MG Composite Water Tower 4,750,000 4,750,000
<br />14 Connectto ExistingSystem 12,000 12,000
<br />SUBTOTALS 33,316,200 21,362,360 10,690,380 1,263,459 -
<br />Contingency (10%) 3,331,620 2,136,236 1,069,038 126,346 -
<br />Construction Subtotal 36,647,800 23,498,600 11,759,400 1,389,800 -
<br />I ndirect Costs (20%) 7,329,560 4,699,720 2,351,880 277,960 -
<br />TOTAL PROJECT COSTS 43,977,000 28,198,000 14,111,000 1,668,000 -
<br />Feasibility Report
<br />Northeast & Northwest Urban Service Area Expansion Study
<br />City of Elk River, MN
<br />WSB Project No. 020010-000
<br />Page 24
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