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Extension of water service into the northwest areas is expected to require a$28.2 million investment (in
<br />today's dollars) within the first five years. If the ERMU or the City issued $28.2 million in bonds to fund the
<br />initial project, the annual debt service would be approximately $2.2 million assuming an interest rate of
<br />4.5% and a term of 20 years. If development does not occur at a pace to generate $2.2 million in annual
<br />fee revenue, the ERMU would need to increase water rates to make the annual debt payment.
<br />Table 5.5 - Project Phasing for Sanitary Sewer Infrastructure in the Northeast Expansion Area
<br />Item No. Description Total 0-5 Years 6-30 years 11-15 Years 16-20 Years
<br />1 Bonds, Insurance, General Conditions 432,900 310,205 23,983 71,448 27,265
<br />2 Mobilization/Demobilization 865,800 620,409 47,966 142,895 54,529
<br />3 10-inch PVC Sanitary Sewer Pipe 464,000 232,000 232,000
<br />4 12-inch PVC Sanitary Sewer Pipe 234,000 117,000 117,000
<br />5 15-inch PVC Sanitary Sewer Pipe 270,000 270,000
<br />6 18-inch PVC Sanitary Sewer Pipe 247,000 247,000
<br />7 48-inchSanitary5ewerManhole 396,000 130,680 130,680 134,640
<br />8 6-inch PVC Forcemain 475,600 380,480 95,120
<br />9 8--inch PVC Forcemain 1,432,500 1,432,500
<br />10 12-inch PVC Forcemain 2,158,300 2,158,300
<br />11 Forcemain Pressure Testing 30,000 9,900 9,900 10,200
<br />12 Air Release Valve Manhole on Single Forcemain 30,000 15,000 15,000
<br />13 Air Release Valve Manhole on Dual Forcemain 50,000 50,000
<br />14 North Lift Station 425,000 425,000
<br />15 West Lift Station 540,000 540,000
<br />16 Regional Lift Station 1,900,000 1,900,000
<br />17 Connect to Existing System 6,000 6,000
<br />SUBTOTALS 9,957,100 7,134,994 551,629 1,643,363 627,114
<br />Contingency (10%) 995,710 713,499 55,163 164,336 62,711
<br />Construction Subtotal 10,952,800 7,848,500 606,800 1,807,700 689,800
<br />I ndirect Costs (20%) 2,190,560 1,569,700 121,360 361,540 137,960
<br />TOTAL PROJECT COSTS 13,143,000 9,418,000 728,000 2,169,000 828,000
<br />Table 5.6 - Project Phasing for Sanitary Sewer 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 505,100 42,553 - 437,516 25,031
<br />2 Mobilization/Demobilization 1,010,200 85,107 - 875,033 50,061
<br />3 10-inch PVC Sanitary Sewer Pipe 224,000 224,000
<br />4 12-inch PVC Sanitary Sewer Pipe 270,000 270,000
<br />5 48-inch5anitary5ewerManhole 180,000 180,000
<br />6 6-inch PVC Forcemain 446,600 178,640 267,960
<br />7 12-inch PVC Forcemain 2,519,900 2,519,900
<br />8 16-inch PVC Forcemain 3,568,000 3,568,000
<br />9 Forcemain Pressure Testing 22,500 7,425 7,425 7,650
<br />10 Air Release Valve Manhole on Dual Forcemain 25,000 25,000
<br />11 NW-LS-1 LiftStation 440,000 440,000
<br />12 NW-LS-2 LiftStation 450,000 225,000 225,000
<br />13 Regional Lift Station 1,950,000 1,950,000
<br />14 Connect to Existing System 6,000 6,000
<br />SUBTOTALS 11,617,300 978,725 - 10,062,874 575,702
<br />Contingency (10%) 1,161,730 97,872 - 1,006,287 57,570
<br />Construction Subtotal 12,779,000 1,076,600 - 11,069,200 633,300
<br />I ndirect Costs (20%) 2,555,800 215,320 - 2,213,840 126,660
<br />TOTAL PROJECT COSTS 15,335,000 1,292,000 - 13,283,000 760,000
<br />5.4 Potential Development Fees
<br />The City and ERMU's financial risks are also dependent on having competitive development fees. If the
<br />development fees are too high, they may push the sale price of a home above the Elk River market, making
<br />development less financially feasible and slowing the pace of development.
<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 25
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