5.3. ERMUSR 07-08-2003 - Laserfiche WebLink

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Elk River Municipal Utilities 322 King Avenue phone: 763.441.2020 Elk River,MN 55330 Fax 763-141.8099 June 25. 2003 To: Elk River Municipal Utilities Commission John Dietz Jerry Takle James Tralle From: Bryan C. Adams Subject: Additional Engine/Generator at Landfill Staff is starting the process of investigating the possibility of adding a 4`h engine/generator at our LFG facility. There will be enough gas to run the 4th engine in about a year. It is also projected to take that long to secure the necessary air permits to run the 4th engine. Attached is a preliminary pro-forma reflecting the capital expense, operating expense, and operating revenue associated with the 4th engine. This pro-forma assumes the same terms and conditions as the existing facility. With an estimated capital expense of $737,900, margins will be generated over a 20 year period of$937,705, which will more than cover the initial investment with no interest. Preliminary discussion with Sherburne County staff indicate a high interest to financing the 4`h engine/generator. The big variable still remains the cost of the air permits. We have approximately $35,000 in air permit costs to be paid for the current facility. This is a disputed amount that Waste Management and Elk River Municipal Utilities feels the other party is responsible for. Instead of a legal battle, it may be more productive to pay for this cost with this facility addition. The environmental assessment worksheet (EAS) for approximately $20,000, will be required due to the addition of the 4th engine. Depending upon the EAS outcome, an environmental impact study (EIS) at approximately $200,000, may be required. Unfortunately, we have no control over the EIS. Minnesota Pollution Control Agency (MPCA) determines the criteria and hires the consultants. We are required to pay all associated costs and implement the recommendations. The initial financial projections and public relation response is favorable for adding the 4th engine. If this commission desires to proceed with this proposed addition, I will continue to firm up the numbers and initial assumptions.