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Home My WebLink About15.F.6. Request for Cost Participation-SPUC Building ~ CITY OF SHAKOPEE I~f. 6. Memorandum cn~~cr~HT ' U j~~ ~. t ~^~ ' , "~. f' , ,,~ . . TO: Mayor and City Council FROM: Mark McNeill, City Administrator SUBJECT: Request for Cost Participation - SPUC Building DATE: October 15,2004 INTRODUCTION: The Council is asked to pass a motion requesting that Shakopee Public Utilities Commission share in the cost of under grounding water and some electrical lines adjacent to the former headquarters building. The City is purchasing the building. BACKGROUND: On October 13th, Councilmembers Joos and He1kamp, Public Works Director Loney, and I met with two SPUC Commissioners, and SPUC staff, to discuss the impact of some overhead power lines on the south and west side of the former headquarters building, and a water line on the south side of the building. That will need to be moved to accommodate the anticipated construction of the new Public Works building. The costs ofthe removal were not part ofthe negotiations earlier this year when a sales price for the building had been established. It was decided at that meeting that the closing (sale) of the building should not be further delayed, and that Shakopee Public Utilities Commission would consider a request to participate in the extra cost to relocate these lines. For that reason, the attached memorandum has been drafted, and it is our recommendation that the City Council approve sending this to SPUC, for consideration at a future meeting. Note that at a future time, Council will need to make a decision as to whether to ask SPUC to underground an additional electric line on the east side of the building, and the overhead lines which run along First Avenue from Gorman Street to east of Marschall Road. The estimated cost of that undergrounding is $65,000. Those costs would be eligible to be funded by an undergrounding surcharge which would be paid by all Shakopee rate payers. RECOMMENDATION: I recommend that the attached memorandum be authorized to be sent to the Shakopee Public Utilities Commission, for consideration of cost participation in the undergrounding ofthe overhead lines on the south and west sides of the building, and relocation of a watermain on the south side of the building. ACTION REQUIRED: If the Council concurs, it should, by motion, direct that staff send the attached memorandum to Shakopee Public Utilities, requesting cost participation in the relocation of utility lines as described. !1/t;J2~ Mark McNeill City Administrator MM:th "" . .... ~ ,o.lllIfll I - ::: l.o""",6I'I_' I - .,wll"'fI.,lON ..... ;C ~ 10 ......1&1 f. .:11.10)," ......... ..,1f'tO}pvO- , 2 ""f;DUP """ lallC .,jl:Iw. I "-Jo-,~ I nN, (I'..) .. './JM$ '"I'C>~ :~::):*~~: .. ./13H) I ....... 'S1I\t1'tl" :!':';o/:\': H, l"'R) I ............. "~.'::":: _.}o-ui6" I ~~~::*: ".(~ "- ...." 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'. ~; ....... ",:..' , CITY OF SHAKOPEE Memorandum TO: President Mark Miller SPUC Board of Commissioners Lou VanHout, Manager DRAFT FROM: Mark McNeill, City Administrator SUBJECT: Request for Assistance -Utility Relocation Costs DATE: October 20, 2004 INTRODUCTION: The Shakopee City Council has asked the Shakopee Public Utilities Commission to share in the cost of undergrounding electrical lines that border the west and south sides, and the relocation of a water main in the parking lot on the south side of the former SPUC headquarters building site. BACKGROUND: Earlier this year, the Shakopee Public Utilities Commission and City Council agreed to terms for the purchase of the former SPUC headquarters building, and two paracels of land, for a total price of $725,000. $50,000 of this amount was for acquisition of an "orphan" parcel owned by Shakopee Public Utilities to the south of the current Public Works site; the remainder of that was for the headquarters building and adjacent property. One item which was not considered at that time was the impact of the overhead power lines which are on the west and south sides, and also a water main across the southern side of the building which was installed to provide for looping. The total cost of under grounding the electrical lines is estimated at $30,000 - $35,000, depending upon whether rock is encountered; the estimated cost of the relocation of the water main is $10,000. Again, these are costs that were not anticipated, at least by the City, at the time that the negotiations were finaled. The Public Works building budget is very tight, and the estimate of an additional $45,000 for the relocation of these utility lines creates an added financial burden. For this reason, the City requests that SPUC consider participating in the cost of relocating both of these. The City's position had been that the power lines were on easements owned by the City, and because of the impending Public Works building construction, they must now be moved. It is our understanding that SPUC's position is that easements were not routinely ~ required for SPUC utility lines. In addition, we further understand SPUC's position that this sale was "as is". However, we hope that there is recognition that the relationship between the City and SPUC is unique, and that there could be consideration by SPUC to share in the cost of relocating these two lines. Based on the $45,000 estimate, an equal sharing would obviously be $22,500. This request does not include relocation of the power line on the east side ofthe building; that is part of an additional undergrounding option which is tied to the Fourth Avenue overhead power lines. The City Council may be asked to recommend undergrounding of those lines (to come from an additional undergrounding fee), at a future time. ACTION REQUIRED: At its meeting of October 10t\ the City Council approved a motion requesting that the Shakopee Public Utilities Commission agree to fund half the cost of the relocation of the power lines, and watermain adjacent to the former SPUC building. Mark McNeill City Administrator MM:th ~