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01/08/2008 Strategic Planning Meeting CITY OF MONROE CITY COUNCIL STRATEGIC PLANNING MEETING 300 W. CROWELL STREET, MONROE, NC 28112 '-- JANUARY 8; 2008 - 4:00 P.M. AGENDA _ www.monroenc.org - 1. Update on Electric System Improvements/Fiber Optic Improvements 2. Update on Natural Gas. Pipeline Project <` oi-os-oasc~ 113 CITY OF MONROE CITY COUNCIL STRATEGIC PLANNING MEETING JANUARY 8, 2008 - 4:00 P.M. MINUTES The City Council of the City of Monroe, North Carolina, met in a Strategic Planning Meeting in the City Hall Council Chambers, 300 W. Crowell Street, Monroe, North Carolina, at 4:00 p.m. on January 8, 2008 with Mayor Bobby G. Kilgore presiding. Present: Mayor Bobby G. Kilgore, Mayor Pro Tem P.E. Bazemore, Council Members John Ashcraft, Billy Jordan, Lynn Keziah, Dottie Nash, Robert J. Smith, City Manager F. Craig Meadows, City Attorney Terry Sholar, and City Clerk Bridgette H. Robinson. Absent: None. Visitors: Brad Davis (President-DukeNet), Joe McCourt (Vice-President of Sales and Marketing, DukeNet), Don Mitchell, Mark Donham, and others. Mayor Kilgore called the Strategic Planning Meeting of January 8, 2008 to order at 4:00 p.m. A quorum was present. Item No. 1. Update on Electric System Improvements/Fiber Optic Improvements. Mr. Davis noted the tremendous growth in wireless usage, broadband, IP video, and long distance carriers using the Internet. Fiber infrastructure was the key to foster all of this growth. DukeNet has built a utility grade network which provides 24/7 coverage to support the infrastructure and their objective is to operate a competitive telecom network. The City's objective was to bring a competitive telecommunications landscape, economic development, and generate revenue from the fiber optic network. Mr. Davis advised of the ten year Revenue Share Agreement in which the City will receive a 10% revenue share and 15% if an opportunity emerges to build new fiber to become part of the overall big network. There are 150 businesses which have taken advantage of this fiber network. City Manager Meadows asked what the projected revenue potential was for the next 12 - 18 months. Mr. Davis replied it would depend on how successful the City was in promoting the fiber network and identifying more opportunities. Energy Services Director Don Mitchell advised that the revenue bond projects would be funded this week and both the Gas and Electric Divisions have projects involved with the revenue bonds which total over $20,000,000 in gas and electric utilities. The projects are listed below: Natural Gas Proiects: 114 To install 10.3 miles of 8" steel pipe along Unionville-Indian Trail Road and Ridge Road, pipe on order -being coated; Contract awarded to Hodges Enterprises in Loganville, GA; Pipe - $799,500, Construction Contract - $1,100,000, right-of--way acquisitions and land purchase also 1 underway and should be completed" by .March 2008. Estimated project completion was ten months. Electric Department Protects: To install 11.3 miles 100Kv transmission line which will complete a transmission loop around the City, build the Airport Substation adjacent to the Allvac Super Alloy facility located in Aero Pointe Industrial Park, Hal Coan Substation Transformer, Camp Sutton Substation Transformer, Gold Mine Road Transformer, 601 South Substation, Transmission Line, E & R Construction to begin January 14. All materials have been ordered and right-of--way acquisitions to be completed by June 2008. Estimated project cost of $6,700;000. Airport Substation: 100/35 KV and 100/13.2 KV, 35 KV to support Airport/Corporate Center area, 13.2 KV to serve Allvac SAF include 12 MW peak shaving generation, Shaw Energy Services Coordinator, $9,800,000, Hal- Coan Substation, Replace two (2) - 20 MVA transformers with 30 MVA transformers for additional capacity, Install three (3) - 100 KV Circuit Breakers, Shaw Energy Services. Estimated project cost of $2,750,000. Camp Sutton Substation: Replace one (1) - 20 MVA transformer with 30 MVA, Install one (1) - 100 KV Circuit Breaker, Shaw Energy Services. Estimated project cost of $1,520,000. Goldmine Road Substation: Install one (1) - 20 MVA transformer, Install one (1) - 35 KV ~~ Circuit Breaker, Install three (3) - 100 KV Circuit Breakers, Shaw Energy Services. Estimated project cost of $672,000. 601 South Substation: Install two (2) - 100 KV Circuit Breakers, Shaw Energy Services. Estimated project cost of $363,000. SCADA Upgrade: New servers, with one server to be placed at a substation to be completely remote from the Operations Center. Estimated project cost of $90,000. Council Member Ashcraft asked about the life expectancy of the older transformers. Mr. " Mitchell stated it was basically indefinitely as long as they have not been over heated. Staff felt the transformers were in good shape and was confident about moving them to the new stations. Item- No. 2. Update on Natural Gas Pipeline Proiect. Mr. Mitchell advised the Pipeline Project began in early 2000 and was part of a natural gas supply (RFP) for future gas supplies. A Feasibility Study was completed by Heath & Associates. The City has received Federal Energy Regulatory Commission (FERC) approval for proceeding with the project. Transcontinental Pipeline has approved the City's tap. The City has also entered into local agreements with the towns of Midland and Mooresville to become partners in .the pipeline. Mr. Mitchell advised that the current contract with Piedmont Natural Gas Company allowed the City to transport 20,000 Dt/day. The City pays Piedmont Natural Gas Company about 115 $2,520,000 in demand payments for the right to use the gas and an additional payment of $267,000 for lost and unaccounted for gas (LAUF). The current contract will expire in March (''i 2010 with a contract extension option of five years and increased capacity to 24,000 Dt/day. The ' demand payments would also increase to $2,640,000. t ' Mr. Mitchell stated the pipeline project was planned for about 41 miles with 10" steel line and will provide the City with 45,000 Dt/day. This could be increased to 69,000 Dt/day if compression was installed. The current pipeline estimate was $23,500,000 with $4,000,000 in contingencies. Mr. Mitchell provided a comparison between the two options:, Natural Gas Pipeline Piedmont Natural Gas • Provide 45,000 Dt/day; • Provide 24,000 Dt/day; • $2,000,000/year debt service; • $2,900,000/year debt service • Annual savings of $900,000; with higher demand levels and • Long term secure supply of known LAUF. costs; • Tremendous savings once debt service is retired; • Possibilities to expand the pipeline to higher capacity with some future com ression. Council Member Jordan asked was there a plan to transfer the savings to the City's customers once the pipeline was completed. Mr. Mitchell replied yes. Council Member Ashcraft asked for an explanation of "lost and unaccounted for". Mr. Mitchell stated the City has to provide 2% more gas than was used to Piedmont Natural Gas as part of the contract to make up for system losses on the Piedmont system. Mr. Mitchell advised that staff was about to finalize the pipeline route in Iredell County. Right- of-way acquisitions for the project began in June 2007 and about 11.3 miles ofright-of--way has been obtained which is about 28% of the route just in Union County and the very southern part (~ of Cabarrus County. By mid summer, all of the right-of--way should be obtained. Mr. Mitchell stated that there were some encroachments with the NCDOT that staff planned to file in May 2008 which was about three miles of a brand new five lane road in Cabarrus County. NCDOT does not envision the new road being widened or changed for a number of years. Mr. Mitchell advised that the Environmental Cultural Review would be completed this spring. This review is an in-depth environmental study to designate wetlands on the pipeline route. He felt staff would be able to trench through the wetlands and restore them in a few places if directional boring was needed. Staff planned for the project to be out for bids by September 2008, and would look at various pipe sizes to see what was the best final alternative. 116 The Transcontinental Tap will need to be put in place about this time next year and staff intends to have construction finished before January 2010 so that in March 2010, staff would be ready to (~ bring gas through the City's own pipeline. There being no further business, the City Council Strategic Planning Meeting of January 8, 2008 adjourned at 5:00 p.m. Attest: o y G gore, Mayor _ ~r~~~'~ ,~o.6iylsayl Bn ette H. Ro inso ,City Clerk oi-os-ossc~ Minutes Transcribed by Sherry K. Hicks v IVl w°F°.y' 117