W.O. 04-26 involves the construction of a new water reservoir and pump station to service Zone 4 and Zone 5 West respectively.  The reservoir and pump station property is owned by the City, northeast of Ironwood Subdivision.  The foundation for the new reservoir is complete and construction will resume in the spring of 2010.

As with any pump station, operation requires a substantial electrical service.  NorthWestern Energy (NWE) will construct and install new lines and facilities to provide the 3-phase service needed.  However, as allowed by the Montana Public Service Commission, NWE requires advance payment and a signed Customer Agreement prior to scheduling this work.  Also, an easement must be issued to NWE to allow them to install the new lines within a stretch of City-owned park land.  To avoid conflict with the tank tower contractors and to have electrical power available for start-up of the pump station, NWE must begin this work early in April, so approval is requested now to meet the tight schedule.

City Council may:

• Approve the easement and customer agreement; or
• Do not approve the easement and customer agreement.

There is no cost associated with granting the easement to Northwestern Energy since it is serving a City facility. By granting this easement the cost of the power service is lower than it would be using other routes. The amount of the Agreement will not exceed $380,358. Any savings realized during the construction of the service will be refunded to the City.

The project is being funded by a State Revolving Fund (SRF) loan and supplemented by water construction funds.  There are adequate funds available in the project budget to pay for the costs of the new electrical service.

Staff recommends Council authorize the Mayor to execute the necessary easement and customer agreement with NorthWestern Energy and allow a maximum payment of $380,358.00 to provide a new electrical service to the Zone 4 Reservoir and the Zone 5 West Pump Station.