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•/i <br />Ells River <br />Municipal Utilities UTILITIES COMMISSION MEETING <br />TO: <br />FROM: <br />ERMU Commission <br />Chris Kerzman — Engineering Manager <br />MEETING DATE: <br />AGENDA ITEM NUMBER: <br />June 4, 2024 <br />5.4 <br />SUBJECT: <br />East Substation Construction Project <br />ACTION REQUESTED: <br />• Authorize East Substation Project and authorize staff to begin procurement efforts in <br />accordance with procurement policies. <br />• Approve DGR Engineering Task Order No. 2 for Engineering Services for East Substation. <br />BACKGROUND: <br />When the City of Elk River developed Natures Edge Business Park, the area southeast of <br />Gateway Road/168th Avenue was designated to be shared between stormwater requirements <br />for the property and a future substation that will be labeled East substation. <br />Planned development in the area, as well as a desire for increased redundancy and reliability in <br />the southeast portion of the service territory are driving this project. <br />DISCUSSION: <br />Staff plans to complete the majority of the construction with internal resources while soliciting <br />quotes for fencing and foundation scopes. Staff expects the transformer bid will be publicly <br />advertised, while the remainder of materials will be quoted through existing vendors. Material <br />procurement would begin in summer of 2024, with construction beginning in 2025. Staff is <br />requesting authorization of the East substation project, which includes material procurement in <br />2024, and construction in 2025-2026. <br />In addition, staff is looking for approval of the attached Task Order No. 2 from DGR Engineering, <br />which will be subject to the terms of the Master Services Agreement currently in place with <br />DGR. DGR has provided a budget estimate for the project of $4,500,000 which includes <br />contracted construction labor, materials, design fees, and a 10% contingency. Staff has <br />reviewed the efforts that would be needed to construct the East substation with both internal <br />resources and DGR Engineering resources and is comfortable with requesting a project budget <br />of $3,750,000. <br />FINANCIAL IMPACT: <br />The East Substation project has been identified on the long-term capital plan and the financial <br />impacts for 2024 are expected to be within the amounts approved in the 2024 budget. Full <br />project budget of $3,750,000 is $1.1M higher than previously anticipated. Staff expects to have <br />Page 1 of 2 <br />110 <br />