SPECIAL UTILITY COMMITTEE
A Special Utility Committee Meeting was held on April 8, 2003, at 4:00 p.m. with Chairman Ruane presiding. Members present were Mr. Speed, Mr. Lambert, and Mr. Snaman. Mr. Ritter was absent. Others present were Mr. DePrima, Mayor Hutchison, Mr. McGlumphy, and Mr. Pitts.
AGENDA ADDITIONS/DELETIONS
Due to technical difficulties relating to item #1, Revenue Requirement Options - Electric Rate Study, Mr. Ruane requested that items #2 and #3 be considered first. Mr. Snaman moved for approval of the agenda, as amended, seconded by Mr. Lambert and unanimously carried.
Bid - Installation of Two (2) Transformer Pads for the Division Street and Mayfair Substations
During their Regular Council Meeting on September 23, 2002, Council approved the purchase of
two (2) 69/12 KV transformers: one (1) to be used for the Mayfair Upgrade and one (1) to be installed at the Division Street Substation. It is now necessary to have two (2) steel-reinforced concrete pads for the transformers to be placed upon.
Funding for the Mayfair Upgrade is available in the Mayfair Supply Upgrade 22KV - 69KV account, as noted in the Electric Department’s 2003 - 2007 Capital Investments Plan on page 55. Funding for the Division Street Transformer Pad is available in the Division Street Substation Rebuild Account, as noted in the Electric Department’s 2003 - 2007 Capital Investments Plan on page 57. Staff recommended awarding the bid to the lowest bidder, George & Lynch of Dover, Delaware, for the installation of both transformer pads, in the amount of $122,000.
Mr. Snaman moved to recommend approval of staff’s recommendation to award the installation of two (2) transformer pads to George & Lynch, in the amount of $122,000, seconded by Mr. Speed and unanimously carried.
SCADA Amendment - Water Treatment Plant
The Department of Public Works identified a necessary upgrade of the System Control and Data Acquisition (SCADA) system currently in operation at the Long Point Road Water Treatment Plant as the primary capital project for the water utility. During their Regular Council Meeting of August 26, 2002, Council approved the upgrade to the MICROCAT SCADA System; however, it was stipulated that the cost for the project were not to exceed $190,000. The original project budget ($190,000) was developed based on a preliminary project review by representatives of US Filter and included a baseline hardware and software package (total base price was $170,900). Over the past five (5) months, the project has progressed to the final design phase. The following enhancements/deductions have been identified to complete the system:
Enhancement #1:
Addition of chlorine & fluoride residual monitoring at 13 deep well sites. This enhancement requires the use of two (2) spare analog inputs at 11 sites and the addition of a model #9548 4-AI input module at two (2) sites. Also included is the programming for alarm set points. Price is $4,450.
Enhancement #2:
Addition of six (6) A300 level transducers in NEMA 4 enclosures to replace existing tank level analog inputs from original submittal. Addition of model #9548 AI input module at each of the six (6) elevated tank RTUs for addition of discharge pressure monitoring. Includes programming for alarm set points. Price is $11,282.
Enhancement #3:
Addition of emergency stop pushbuttons at 13 deep well RTUs. Includes programming for alarming. There are 14th & 15th pushbuttons included for separate mounting at two (2) RTUs. Price is $4,572.
Enhancement #4:
Addition of fiber-optic converters at the Water Treatment Plant and the Power Plant. Water Plant converter cable for RS-232 connection to the MICROCAT 9710. Power Plant converter with 10' cable for RS-232 connection to the existing master radio. Price is $3,056.
Enhancement #5:
Addition of local panel #9708 RTU module for redundant communication interfacing to existing local I/O modules. Includes field installation within existing panel. Price is $3,167.
Enhancement #6:
Addition of XYCOM 3015T, 15" LCD color monitor on existing supervisory panel to operate in parallel with the office HMI monitor. Includes installation of the monitor on existing panel. Price is $6,571.
Enhancement #7 (Deduction):
Deletion of the chemical signals for fluoride and chlorine at the shallow wells (Columbia Aquifer). Price of the deduction is $1,610.40.
Enhancement #8:
Addition of 15 separate enclosures for the emergency push button and the intrusion switch for mounting in the deep well locations. Price is $1,815.
Enhancement #9:
Addition of 35 Sentrol 1045 intrusion switches and three (3) Sentrol 2505A intrusion switches to various locations. Price is $1,002.
Enhancement #10:
Addition of 13 analog cards and programming to accept future signal from a drawdown transducer in the well heads. Price is $6,955.
Revised Package Price: $170,900 + $41,259.60 = $212,159.60.
Mr. DePrima indicated that the suggested enhancements (#1 - #10) will cost an additional $41,259.60. Each of the changes has been requested by the Department of Public Works for either operational, safety, or security reasons. Since the original project approval placed a cap on the project not to exceed $190,000, the Department of Public Works is requesting approval to expand the budget to $225,000 to complete the upgrade.
Funding for this project is made available through the Water Improvement & Extension Fund. The funds to alter the project budget are being transferred from the Chlorination Upgrade Project which was completed under budget for the FY 2003 project budget. In addition, funds are available from the Meter Reading Technology Project due to prior budget revisions. The FY 2003 budget for the Chlorination Upgrades was $46,402; however, only $18,132.64 was expended, which leaves $28,269.36. The Meter Reading Technology Upgrade Project was reduced by $32,492 since this is a 50/50 funding project and the sewer portion of the project had to have funds diverted. The re-appropriation of the sewer funds left $32,492 available in the Water Improvement and Extension Fund. The revised FY 2003 budget for the Meter Reading Technology Project is $35,016, of which $17,508 is from the Water Fund. No net impact on the Water Improvement and Extension budget will be created by the request.
Responding to Mr. Lambert, Mr. DePrima indicated the reason for requesting $225,000 to complete the project instead of the revised package price of $212,159.60 was that, given the nature of the project and different aspects of the design, associated costs may be incurred.
Mr. Koenig, responding to Mr. Speed, stated that the list of enhancements identified have been scrutinized and were found to be necessary.
Mr. Speed clarified the fact that Mr. DePrima has the authority to “adjust” the budget if the project cost is higher than estimated. Mr. DePrima stated that was true as long as there are no stipulations or caps indicated by Council for their approval.
Mr. Speed moved to recommend approval of staff’s request to expand the project budget for the Water System SCADA Upgrade to $212,159.60, seconded by Mr. Lambert and unanimously carried.
Cost of Service Analysis Review Meeting and Presentation - Electric Rate Study (Electric Revenue Requirements/Cost of Service/Rate Design Study)
As a follow-up to the Utility Committee Meeting of March 10, 2003, members reviewed revenue requirements, steps of cost-of-service analysis, description of cost-of-service methodology, cost-of-service analysis results, and discussed the next step - rate design (Attachment #1) in order to provide a recommendation to Mr. Brian Farber, Burns & McDonnell, for use in developing a Revenue Requirements formula.
Mr. Farber indicated that the City of Dover currently has 5 (five) classes and rate schedules as follows: Residential, Commercial, Primary, Transmission, and Municipal; however, they identified 29 different categories for customers for rate classes for the City. Mr. Farber is recommending minimizing/combining the categories for rate classes from 29 to possibly 10. He indicated that Dover’s larger customers were isolated for the study (Dover Air Force Base, Proctor & Gamble, Tilcon Delaware, First State Power Management, Dover Downs, Kraft, Simpson, Sheraton, and Playtex). He also recommended redesigning the purchase power cost adjustment and minimizing major differences in costs and revenues.
Mr. Lambert alluded to the fact that many “deals” were made in the past without written agreements and stressed the importance of abiding by these agreements to insure customer relations.
Mr. Farber indicated that several contracts do exist where a certain company was designated to pay a set rate; however, the majority of companies have simply been assigned a special rate schedule. He stated that companies having a contract with the City of Dover cannot be changed. Those companies with a special rate schedule can be revised.
Members concurred with Mr. Lambert, indicating that customer relationships are important to the City of Dover and should not be jeopardized when revising the Electric Rate Study.
Responding to Mr. Lambert, Mr. Farber stated that it was not the intention to charge customers living outside City limits more than customers living in City limits.
Mr. Farber indicated that a meeting is scheduled with Mr. DePrima, Mr. Blakeman, Mrs. Tieman, and Mrs. Mitchell on April 9, 2003 to discuss the options on how to restructure the rate classes. Based on that discussion, he will then design revised rates and provide a draft report for members to review.
Mr. Snaman moved to recommend acceptance of the report, as presented, seconded by Mr. Lambert and unanimously carried.
Mr. Snaman moved for adjournment, seconded by Mr. Lambert and unanimously carried.
Meeting Adjourned at 5:48 P.M.
Respectfully submitted,
Eugene B. Ruane
Chairman
EBR/lcg
S:ClerksOfficeAgendas&MinutesCommittee-Minutes20034-08-2003-Special-Utility.wpd
Attachment on File at the City Clerk’s Office
Attachment #1 - Electric Rate Study (Cost of Service)