2016.04.18 CC Packet - Laserfiche WebLink

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Need to hire fewer future staff For the developed cities: Influx of capital as growing communities, via the Joint Utility, purchase access to existing infrastructure Less expensive well maintenance as more communities share in the expense of maintenance • Less expensive tower maintenance as more communities share in the expense of maintenance For the Joint Water Utility communities as a whole: g Need for fewer groundwater wells o Lower life cycle maintenance costs for the wells due to fewer installations • Need for fewer storage tanks o Lower life cycle maintenance costs for storage due to fewer installations 4 Delay in infrastructure needs Efficient use of resources + Potentially improved purchasing leverage Strategic infrastructure siting potentially resulting in easier and less costly permitting Capital cost savings through shared infrastructure and reduced redundancy • Operational cost savings through shared operations, maintenance, management staff and equipment Opportunities for cost sharing may be realized through more efficient use of infrastructure, shared labor and shared maintenance and operations. Cost savings can also be realized through reduced need for future investment in water system infrastructure. The most important costs and benefits identified in this study are outlined below. 2.3.1 Capital Costs For large capital projects, it is estimated that a joint system of the six cities would eliminate the need for 3 million gallons of water storage and seven (7) future groundwater wells over the course of the planning period through 2030, as compared to individual city development. This translates to a cost savings of $12 million as compared to individual development. 2.3.2 Operational Costs The formation of a joint utility would provide cost savings in administrative and operations staffing and equipment. Much of this savings would be dependent on how the joint utility would be governed and operated. Maximum savings would occur under Option 2 with the completely joined system. Billing and distribution system maintenance would be combined under one entity, and distribution system maintenance could be the responsibility of one joint utility crew. Since most Minnesota cities hire maintenance staff to meet snow plowing demands, cities may also need to share this responsibility to see the maximum savings. Savings would be reduced if billing and distribution system maintenance were to stay with individual cities. Given the high level scope of this study and the number of options available, cost savings are not quantified for specific operational benefits; however, it can be concluded that significant savings could be made by combining into a single utility. 2.3.3 Financial and Organizational Structure Based on the high level findings of this study, the potential for resource and rate efficiencies in forming a joint utility exists. Financially, capital costs and projected water rates are reduced overall by forming a Joint Water Utility Feasibility Study 8