HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/15/2008 - SECOND READING OF ORDINANCE NO. 074, 2008 APPROPRI ITEM NUMBER: 6
AGENDA ITEM SUMMARY DATE: July 15, 2008
FORT COLLINS CITY COUNCIL
STAFF: Terri Bryant
Steve Catanach
SUBJECT
Second Reading of Ordinance No. 074, 2008 Appropriating Prior Year Reserves in the Light and
Power Fund for Capital Expansion at the Portner Substation and Capital Additions to the Timberline
Substation.
RECOMMENDATION
Staff recommends adoption of this Ordinance on Second Reading.
EXECUTIVE SUMMARY
This Ordinance,unanimously adopted on First Reading on July 1,2008,authorizes the appropriation
of$4,017,604 in prior year reserves in the Light and Power Fund for substation facilities. The funds
will be used to supplement existing appropriations for the Portner Substation, located west of the
Transfort facility. In addition,the appropriation will also purchase and install two transformers and
foundations for the Timberline Substation, south of Prospect Road.
ATTACHMENTS
1. Copy of First Reading Agenda Item Summary- July 1, 2008.
(w/o original attachments)
ATTACHMENT 1
ITEM NUMBER: 20
AGENDA ITEM SUMMARY DATE: July 1, 2008
FORT COLLINS CITY COUNCIL STAFF: Terri Bryant
? Steve Catanach
I
SUBJECT fir.
First Reading of Ordinance No. 074, 2008 Appropriating Prior Year Reserves in the Light and
Power Fund for Capital Expansion at the Portner Substation and Capital Additions to the Timberline
Substation.
RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
The Electric Board reviewed this appropriation request at its June 18, 2008 meeting and concurred
with the staff recommendation.
FINANCIAL IMPACT „.
This Ordinance authorizes the appropriation of$4,017,604 in prior year reserves in the Light and
Power Fund for substation facilities. The funds will be used to supplement existing appropriations
for the Portner Substation. In addition, the appropriation will also purchase and install two
transformers and foundations for the Timberline Substation.
EXECUTIVE SUMMARY
To meet the electric needs of current and future customers, the Utilities plans to build two new
distribution substations at existing sites on Portner Road (west of the Transfort facility) and
Timberline Road(south of Prospect). Funds for the Portner Substation were budgeted in 2008 and
the Timberline Substation was pl e for 0. tr are needed at each substation.
The Utilities recently received ids f sub ti t s s and the bids were 33% higher
than budgeted. Vendors have i icated at the s ansf ers and electrical switchgear will
continue to escalate at a rapid r ov r e ne tw ears du ` o increasing copper and core steel
costs. To avoid future increases,the Utilities now propose to purchase all four transformers needed
for the two substations based on the current bid. An appropriation of$4,017,604 is needed to
purchase the transformers,install foundations,and supplement the original switchgear budget. The
funds are available from prior year reserves in the Light and Power Fund.
July 1, 2008 -2- Item No. 20
BACKGROUND
Portner Substation
AF
The Utilities have planned to b ld a sub tion P n Roa d Trilby for many years. The site
was purchased in 1981 before t are v de o The c struction of the Portner Substation
was budgeted for 2008 at a total of 5.2 million. Two 230 kilovolt transformers are needed for the
Portner Substation. These transformers were recently bid. While staff knew that the cost of
transformers had escalated, the bids for the Portner Substation came in $797,918 higher than
budgeted. The total bid for the two transformers was $3,197,918 compared to the budget of
$2,400,000. An appropriation of$797,918 is needed to supplement the existing appropriation to
purchase the transformers for the Portner Substation. Electrical substation switchgear for Portner
is expected to be $1,775,000. An appropriation of$275,000 is needed to supplement the original
budgeted amount of$1,500,000. In total, an additional appropriation of$1,072,918 is needed for
the Portner Substation.
Timberline Substation
A transmission substation has been in place at the Timberline Substation site near the southwest
corner of Timberline and Prospect ' ce the 'd 19 A ' ibut' n substation is planned for the
same site in 2010. This subst on r es t 1 suers. Due to the rapid rise in
transformer costs, when the P er tran orme w t fo d, the Utilities also requested bids
for these two 115 KV transfo ers,.✓B f h 15 KV sformers were received totaling
$2,700,686. Based on evaluation of the bids and projections of future cost increases, staff has
determined that it is fiscally prudent to purchase the two 115 KV transformers at this time and to
store them on the Timberline site until the substation is built in 2010. This will require an
appropriation from prior year reserves for both the transformer purchase and install and for the
construction of foundations for the transformers. Staff is recommending that Council appropriate
$2,944,686 for these transformers and the foundations.
The total appropriation request for both substations totals $4,017,604.
ATTACHMENTS
1. Electric Board Minutes qgy
ORDINANCE NO. 074, 2008
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING PRIOR YEAR RESERVES IN THE
LIGHT AND POWER FUND FOR CAPITAL
EXPANSION AT THE PORTNER SUBSTATION AND
CAPITAL ADDITIONS TO THE TIMBERLINE SUBSTATION
WHEREAS, the staff of the Light and Power Utility has identified a need to build a
substation at Portner Road and Trilby Road as part of the 1984 Master Plan Study; and
WHEREAS, due to anticipated long range growth in the area and the annexation of the
Southwest Enclave, the Portner Substation is planned for construction in 2008; and
WHEREAS, City staff budgeted the cost of two transformers and associated equipment for
the Portner Substation at$3.9 million, but unusual increases in copper and core steel costs resulted
in a bid that was $1,072,918 more than the amount budgeted; and
WHEREAS,new load additions are also anticipated in the area of the Timberline Substation
located near Timberline and Prospect Roads which necessitate the purchase and installation of two
additional transformers at an estimated cost of$2,944,686; and
WHEREAS, staff anticipates beginning construction of the capital additions to the
Timberline Substation in 2010 but has decided that, due to the escalating cost of transformers, the
transformers for the 2010 addition should be purchased this year and stored at the Timberline
Substation site until needed; and
WHEREAS,there are adequate prior year reserves in the Light and Power Fund to cover the
total appropriation for both substations of$4,017,604; and
WHEREAS, Article V, Section 9,of the Charter of the City of Fort Collins permits the City
Council to appropriate by ordinance at any time during the fiscal year such funds for expenditure as
may be available from reserves accumulated in prior years,notwithstanding that such reserves were
not previously appropriated.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that there is hereby appropriated for expenditure from the Light and Power Fund Reserves
the sum of FOUR MILLION SEVENTEEN THOUSAND SIX HUNDRED FOUR DOLLARS
($4,017,604) for the purchase and installation of Portner and Timberline Substation equipment.
Introduced,considered favorably on first reading,a r ered published this 1 st da of July,
A.D. 2008, and to be presented for final passage on t h ay o uly, 2008.
Mayo
ATTEST:
City Clerk
Passed and adopted on final reading this 15th day of July, A.D. 2008.
Mayor
ATTEST:
City Clerk