Going "Green" at Pebble Creek

With the golf season quickly approaching us the city has been active in getting our house in order for play at Pebble Creek. One area of change will be that of golf cars. Pebble Creek has had Club Car cars since it started operations in 1988. Our fleet started with gas engines. We have since phased in a complete change to electric carts. This was seen as a great move to a quieter and more energy efficient solution for the future.

We have now moved into another change in golf cars for Pebble Creek. With the conversion of the fleet many golfers were impatient with the phase out. Everyone wanted the electric cars and with several years of change we got to the point where the last two years of phase out occurred in one year. This meant we acquired approximately 30 carts rather than 15. With a rotation that provided for 15 carts to be replaced annually we sort of hit the wall with increased maintenance costs needed to replace batteries in approximately 15 carts. This is a rather large expense with limited value given the age of the cars. So options were pursued to obtain the best value for Pebble Creek.

The leasing of carts seemed to be the best option and to maximize the benefit to the golfing public a new fleet of cars was considered. After consideration and getting quotes from two makers of golf cars a decision was made to replace the fleet with 84 new EZ Go cars. In doing this all the existing cars would be traded in which brings our lease cost down.

The terms of the lease are for 5 years at a cost of $28,224 per year. This compares to an annual cost of roughly $50,000 given the past purchase option we had used. Part of the difference is we’re trading equity in the existing cars for a reduced lease payment. In thinking about this and looking at the end of the lease if the city wishes to acquire the cars we have an obligation of $1250 per car. If we choose not to acquire the cars we can look at another lease however the annual cost will be much higher than this initial lease. Keeping the differences in mind it is the intention to budget and reserve capital dollars over the lease term so that funds would be available to either acquire the cars or enter into a new lease with available funds to lower the annual cost.

The EZ Go cars will not only be a change for the golf course they are a radical change in the industry for golf carts. These carts are manufactured with mostly recycled materials. They have 350 less moving parts than previous models. They carry a 4 year bumper to bumper warranty which should dramatically reduce our maintenance costs. The motor is an AC electric motor which takes less current to run and the battery system is 30% more efficient. More total uses per battery are also part of the enhancements. The motor locks when not in use eliminating the need for a brake or for the golfer to set one. Maintenance costs are further reduced with a closed battery fill system allowing for quick service.

Looking at the end product the units will include windshields and roofs. Added features will include a rain cover for clubs and a different look. It’s a great change for the future and with a more environmentally friendly design. Please take the time to enjoy Pebble Creek while also enjoying our new golf cars.

Utility Tax Breaks

The legislative session is in full action with bills being heard and debated. As I have written in the past, the city continues to look at the utility rule change regarding valuation and the impact it has had on the city. A tax bill which included a change to the class rates for utilities was proposed. Previously we had looked at a change from 2.0% to 3.0% to bring utility property to a neutral tax considering the before and after rule change outcomes. The first year of the phase in for the rule change took effect for 2008 so all cities with utility property saw some degree of impact as a result. Almost every taxing jurisdiction has utility property of some sort. Think about pipelines, transmission lines, and substations, it doesn’t have to be a power plant. However cities with power plants see the largest impacts.

With the impact of the first year behind us the bill was amended to reflect a utility rate of 2.8%. This is a reduction of 0.2% in the rate and a tax cut for utilities. A “non-controversial” tax bill was proposed dealing with the work that was completed last year but vetoed by the governor. During the process however utilities were opposed to class rate changes and the Commissioner of Revenue warned of a possible veto by the governor if this provision continued to be included in the bill. The House passed the bill as drafted but in moving to the Senate the bill was stripped of the class rate changes for utilities. It passed in the Senate and returned to the House to be passed as amended. This bill was forwarded to the Governor for his signature.

The Governor has given his supplemental budget which provides for Transition Aid for two years for host utility cities. This only postpones the outcome for a couple of years. What the city and other host communities of power plants want however is a permanent fix to the problem. This problem was created by the state yet they want the host communities to finance the fix, another unfunded mandate. By this I mean all the tax payers who reside in host power plant jurisdictions would see a shift from utility to other tax payers.

There seems to be a commitment to find that permanent fix with a class rate change for utility property but if it happens it will be in the final tax bill that balances the states budget. A lot can happen when the state is looking at a $935 million shortfall and a governor who doesn’t want to raise taxes. What seems to be missing in all of this is the class rate change doesn’t increase taxes for the utilities; it only adjusts for the reduction in value the state imposed. Without a class rate change, taxes will increase for businesses and residents as a result of shifting burdens away from the utility taxpayer.

Utilities, state wide, since 2001 have seen tax concessions of approximately $48 million. When the rule change is fully implemented in 2010 they would receive an additional $34 million in tax breaks. Should the state continue to support tax breaks for utilities? What do you think?

Please let your Senator and Representative know what your thoughts are on this issue. Senator Wergin’s email is sen.betsy.wergin@senate.mn and Representative Olson’s email is rep.mark.olson@house.mn.

Water Progress

Spring isn’t here yet but not far away, summer will sneak up on us before we know it and that means watering season. Wow do we use water in the summer months! It seems everyone enjoys green grass in the summer and with the soils we have here in Becker, black sugar sand, it takes a good deal of sprinkling to keep the grass in top condition. So we use water in mass quantities much to the chagrin of the Mn DNR, but that’s another story.

Last year I wrote about the loss of one of our municipal wells and our efforts to replace that well. We searched all over the town looking for a good supply and finally found an area that should produce adequate quantities of water. During the winter we developed plans and specifications for a well and well house to provide for a new water source. Once they were approved, advertisements for bids were made with bids received on March 4^th.

Given the early season for bids we had a lot of interest in the work. There were 7 bids on the well house and 6 bids on the well. Both of these bids were very competitive in nature and I feel the city saw good value in the bid amounts.

The well house had a low bid of $352,697.00 from Preusser Construction of St. Cloud. They have built a number of well houses in other communities. The second bid for the well house was within 1% of the low bidder’s amount. We had originally talked about an estimate of $300,000 for a well house but increased the size to accommodate three well runs and also improved the architectural look somewhat as this will be located in Rivers Edge Park. Locating it in the park required a longer than normal for the driveway and related pipe work to get to the street.

With the well estimate we had 6 bids but one had to be eliminated. That bid had failed to acknowledge an addendum which expanded the work to be included in the bid. The lowest acceptable bidder was LTP Enterprises, Inc from Fargo, ND. There bid was $77,020.00 to drill the well and provide the related equipment. We had originally estimated the well at $75,000 but changed it to a larger casing, moved from a 12 to 18 inch to improve flow from the well and hopefully avoid a failure like we recently experienced.

One snag in the project is that of a Department of Heath permit. We have applied for it and the review has taken place. It appears we have met the requirements for paperwork and the related DNR water conservation plan but no permit has been issued. We believe it to be a matter of a few days for issuance and in the meantime the contracts and contractors bonds and insurance requirements are being prepared. Generally this process can take up to 10 days so hopefully there won’t be a delay on the project. Once the permit and contract issues have been resolved the contractors can start their work, weather permitting. We hope to have the well on line for the summer watering season but will continue to work on water resources as we have a thirsty demand for water in Becker.