comtech

April 2015

Dustin Tripp

Facility Replacement

  Over the years, your Cooperative has been considering options to address the lack of headquarters facility space and numerous other issues.  Your Cooperative’s existing headquarters was constructed in 1953 and over the past 62 years, the Cooperative has outgrown the current facilities.  In summary, the current headquarters facility has been inadequate in size, space, functionality and efficiencies for years.

The Cooperative entered into an agreement with a consulting firm to evaluate the current facilities and to help identify options to address the facility needs.  This study revealed numerous issues with the existing facility including lack of vehicle storage space, lack of material storage space, lack of member convenience and privacy, lack of disaster resistant areas for employees and critical technology and lack of current ADA requirements.  As an example, due to the lack of space Cooperative line trucks, forestry trucks, trenchers, other vehicles and extensive distribution equipment are parked outside exposed to all weather elements.  This exposure leads to safety concerns, more maintenance, less reliability, shorter service life and degrades Cooperative assets.   

The Cooperative then began evaluating the available options to address the needs of the headquarters facility.  The consulting firm reported that the existing facility faces extreme challenges in an effort to make the facilities adequate.  These challenges include a fragmented floor plate design and poor site layout make some improvements virtually impossible.  The reported costs incurred to demolish some of the old facility, remodel existing space where possible and construct necessary vehicle storage and equipment storage would exceed the cost of starting over with a new facility. 

The Cooperative then began evaluating locations where a new facility could be located.  The Cooperative acquired 15 acres of property back in 2010 that is located on Route 13 just 6 miles west of Harrisburg in Saline County.  The construction of a new headquarters at this site offered advantages not available at the existing location.  This new site is more centrally located geographically and by member population.  In fact, the member population center is located only 3 miles southwest of this new site.  The construction of a new headquarters at this new site would also allow the Cooperative to reduce the number of facilities from four to three by incorporating the Marion office into the new headquarters.  This would allow the sale of the Marion office and the existing Eldorado facility.  Combining Eldorado and Marion would also provide additional productivity and efficiency gains.  Lastly, the new site would not require temporary facilities needed during construction and would not disrupt daily operations due to site construction.

After identifying the best option to address the headquarters facility needs and the best location for the facility, the Cooperative began evaluating the best time to construct the new facility.  Due to the downturn in the U.S. economy in 2008 and the subsequent lack of full economic recovery, interest rates are still at an all-time low.  It is very unlikely that interest rates will ever be any lower in the future.  In addition, due to the lack of complete economic recovery in the Midwest, construction costs are still reasonable but will begin to pick up as the economy improves.  Due to interest rates being at all-time lows and reasonable construction costs, the most fiscally responsible time to build for the membership is now.

The Cooperative completed a preliminary, conceptual design of a new headquarters facility located on the property located along Route 13 just 6 miles west of Harrisburg.  The Cooperative then received preliminary cost estimates for the preliminary design of the headquarters facility and analyzed the feasibility of the new headquarters facility.

I am pleased to inform you that the SEIEC Board of Trustees voted to proceed in the design of a new headquarters facility that will allow the Cooperative to continue providing reliable electric service to meet the future needs of its members.

At the time this article is being written, the Cooperative is currently working with architects and engineers to complete the actual design of the new headquarters facility.  Once the design is complete, the Cooperative will solicit bids and if those bids are within expectations, construction of the new headquarters facility could begin this summer.  The specific costs of the actual facility are not available at this time; however, the average annual expense of the new headquarters facility is expected to be less than one percent of the Cooperative’s annual budget.  The average rate impact to the members is expected to be less than one percent.  To put this into perspective, the Cooperative currently incurs 4 to 5 times more expense on an annual basis trimming right-of-way than the annual expense associated with a new headquarters building.

Your Cooperative is very excited about the construction of a new headquarters facility and how it will help your Cooperative in continuing to provide safe, reliable and affordable electric service to Cooperative members now and for many decades to come.

 

See you next month and as always, "We'll keep the lights on for you."