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| issue date = 03/12/2013 | | issue date = 03/12/2013 | ||
| title = Written Communication as Specified by 10 CFR 50.4(b)(1) Regarding the Response to the University of Missouri at Columbia - Request for Additional Information Updated Financial Information for License Renewal (TAC No. ME1580), Dated 02/11/20 | | title = Written Communication as Specified by 10 CFR 50.4(b)(1) Regarding the Response to the University of Missouri at Columbia - Request for Additional Information Updated Financial Information for License Renewal (TAC No. ME1580), Dated 02/11/20 | ||
| author name = Butler R | | author name = Butler R, Fruits J | ||
| author affiliation = Univ of Missouri - Columbia | | author affiliation = Univ of Missouri - Columbia | ||
| addressee name = | | addressee name = | ||
Line 13: | Line 13: | ||
| document type = Letter | | document type = Letter | ||
| page count = 10 | | page count = 10 | ||
| project = TAC:ME1580 | |||
| stage = Request | |||
}} | }} | ||
=Text= | |||
{{#Wiki_filter:UNIVERSITY of MISSOURI RESEARCH REACTOR CENTER March 12, 2013 U,S. Nuclear Regulatory Commission Attention: Document Control Desk Mail Station P1-37 Washington, DC 20555-0001 | |||
==REFERENCE:== | |||
Docket 50-186 University of Missouri-Columbia Research Reactor Amended Facility License R-103 | |||
==SUBJECT:== | |||
Written communication as specified by 10 CFR 50.4(b)(1) regarding the response to the "University of Missouri at Columbia - Request for Additional Information Re: | |||
Updated Financial Information for License Renewal (TAC No. ME1580)," dated February 11, 2013 On August 31, 2006, the University of Missouri-Columbia Research Reactor (MURR) submitted a request to the U.S. Nuclear Regulatory Commission (NRC) to renew Amended Facility Operating License R- 103. | |||
On July 10, 2009, as part of the NRC staff's review of the renewal request, the NRC requested financial information in the form of four (4) questions. By letter dated September 14, 2009, the MURR responded to those questions. | |||
By letter dated February 11, 2013, the NRC requested updated financial information in the form of four (4) questions because the information provided by the September 14, 2009 response had become outdated. Those questions, and the MURR's responses to those questions, are attached. If there are questions regarding this response, please contact me at (573) 882-5319 or FruitsJ@missouri.edu. I declare under penalty of perjury that the foregoing is true and correct. | |||
ENDORSEMENT: | |||
Sincerely, Reviewed and Approved, John L. Fruits Ralph A. Butler, P.E. | |||
Reactor Manager Director MARGEE P.STOUT My Cormnison NOTAF(Y'- io xpe March 24, 2016 SMontgomery County 1513 Research Park Drive Columbia, MO 65211 Phone: 573-882-4211 Fax: 573-882-6360 Web: www.murr.missouri.edu Figbting Cancer witb Tomorrow's Tecbnology | |||
Enclosed: | |||
: 1. University of Missouri System - 2011 Financial Report | |||
: 2. University of Missouri System - 2012 Financial Report | |||
: 3. Statement of Intent, from the Office of the Vice Chancellor for Administrative Services, University of Missouri-Columbia, dated March 5, 2013 | |||
: 4. Letter from the Office of the General Counsel, University of Missouri, dated February 28, 2013 | |||
: 5. Section 70.010, "General Execution of Corporate or Board Instruments," of Chapter 70, "Execution of Instruments," University of Missouri Collected Rules and Regulations xc: Reactor Advisory Committee Reactor Safety Subcommittee Dr. Robert Duncan, Vice Chancellor for Research Mr. Alexander Adams, U.S. NRC Mr. Geoffrey A. Wertz, U.S. NRC Mr. Craig Basset, U.S. NRC* | |||
The US. Nuclear Regulatory Commission (NRC) staff will analyze the financial statements for the current year, which are required by 10 CFR 50.71 (b), to determine if the applicant is financially qualified to operate the MURK. Since MU'sfinancial statements included with the applicationare out of date, please provide a copy of the latestfinancial statementsfor the NRC staff's review. | |||
Enclosed you will find the 2011 and 2012 Financial Reports for the University of Missouri System. | |||
Each report provides an overview of the financial position and activities of the University for the fiscal years that ended June 30, 2011 and 2010 and June 30, 2012 and 2011. The University is a component of the state of Missouri and an integral part of the state's Comprehensive Annual Financial Report. | |||
The University of Missouri System 2011 and 2012 Financial Reports include the following five financial statements: | |||
" The three financial statements for the University of Missouri and its Discretely Presented Component Unit include the Statement of Net Assets, the Statement of Revenues, Expenses, and Changes in Net Assets, and the Statement of Cash Flows, where applicable. | |||
* The two financial statements for the University's fiduciary fund, which include the Retirement and the Other Postemployment Benefits Trust Funds, are the Statement of Plan Net Assets and the Statement of Changes in Plan Net Assets. | |||
The University's financial statements are prepared in accordance with U.S. generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board (GASB), | |||
which establishes financial reporting standards for public colleges and universities. | |||
: 2. Pursuantto 10 CFR 50.33W(9(2), "ft/he applicantshall submit estimatesfor total annual operating costs for each of the firstfive years of operationsof the facility. " Since the information included in the applicationis now out of date, please provide the following additionalinformation: | |||
(a) Projected operatingcosts of the MURR for each of the fiscal years (FY) 2014 thru FY 2019 (thefirstfive year periodafter the projected license renewal). | |||
TABLE 1 FISCAL YEAR 2014-2018 PROJECTED EXPENDITURES (in thousands of dollars) | |||
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Projected Projected Projected Projected Projected Salaries/Wages & Benefits 11,088 11,421 11,763 12,116 12,480 Supplies/Services/Equipment < $5K 3,154 3,248 3,346 3,446 3,550 Debt Service 934 934 934 934 934 Reserves 659 679 699 720 742 Grants 3,900 4,017 4,138 4,262 4,389 Other 940 969 998 1 028 1058 TOTAL EXPENDITURES $ 20,675 $ 21,268 $ 21,878 $ 22,506 $ 23,153 Page 3 of 10 | |||
(b) AU's source(s) offunding to cover the operatingcosts for the above fiscal years. | |||
TABLE 2 FISCAL YEAR 2014-2018 PROJECTED REVENUES (in thousands of dollars) | |||
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Projected Projected Projected Projected Projected Campus Allocation 3,488 3,592 3,700 3,811 3,925 Service Operations 11,902 12,259 12,626 13,005 13,395 Partnerships 52 53 55 56 58 Grants 3,900 4,017 4,138 4,262 4,389 Other 1,154 1,188 1,224 1261 1,298 TOTAL REVENUES $ 20,494 $ 21,109 $ 21,742 $ 22,395 $ 23,067 Notes: | |||
: 1. The University of Missouri fiscal year (FY XXXX) begins July 1 and ends June 30. | |||
: 2. All projected revenues and expenditures reflect a 3% increase per year except for Debt Service. | |||
: 3. MURR reserves will be used to cover fiscal year end deficits as needed. | |||
"Campus Allocation" represents an annual allocation of the State of Missouri funds for the University. "Service Operations" is primarily based on the sale of irradiation, processing and analytical services. Revenue is subject to market fluctuations, however many of the MURR's major customers have been clients for several years and the MURR continues to develop significant new customers each year. "Grants" are a revenue source received from non-University sources. | |||
: 3. The application references a decommissioning cost estimate for the MURR that was developed using NUREG/CR-1756, Technology, Safety and Costs of Decommissioning Reference Research and Test Reactors. The application states that the decommissioning cost estimate was $47.3 million in 2009 dollars, including safe storage (SAFSTOR) costs, and a 25 percent contingency factor. The NRC staff needs the following additional information to complete its review of the MURR decommissioning cost estimate: | |||
(a) A current decommissioning cost estimate in 2013 dollarsfor the MURR to meet the ANRC's radiologicalrelease criteriafor decommissioningthe facility for unrestricteduse, pursuantto 10 CFR 50. 75(d)(2). Accordingly, describe the basis for how the cost estimate was developed (if NUREG/CR-1 756 is still the basisfor the decommissioning cost estimate,please so state). | |||
The current decommissioning cost estimate is $58.9 million in 2013 dollars. The original decommissioning cost estimate was developed using the methodology proposed in NUREG/CR-1756, Technology, Safety and Costs of Decommissioning Reference Research and Test Reactors, for a reference test reactor using the passive safe storage (SAFSTOR) option for a period of 30 years. The reference test reactor approach was used because this was thought to more closely represent the decommissioning efforts that would be needed for the MURR. The original decommissioning estimate was transmitted to the NRC in a letter dated June 29, 1990. In this Page 4 of 10 | |||
letter, the MURR committed to adjusting our cost estimate at five year intervals using the decommissioning inflation formula provided in 10 CFR 50.75(c)(2). | |||
Our initial decommissioning cost estimate was $9.0 million, which included a 25% contingency. In 1995 this estimate was revised to delete the 30-year annuity method of determining the present values of the annual costs associated with SAFSTOR. This revision to the original estimate, which changed the cost estimate to $11.8 million (1989 $), was made to assure that this aspect of the decommissioning cost would not introduce significant under-estimation of the annual costs. | |||
The current decommissioning cost estimate was developed using the inflation formula provided in 10 CFR 50.75(c)(2). The use of this formula requires information from the most recently published NUREG-1307, Report on Waste Burial Charges; in this case Revision 15, dated January 2013. | |||
The calculation also requires information form Bureau of Labor Statistics (BLS) data for Employment Cost Index (ECI) to develop L, and for Producer Price Index (PPI) to develop E, for the formula. These BLS datasets currently contain preliminary data for January 2013, thus the inflation calculation provided in 2013 dollars. | |||
(b) A summary of total decommissioning costs by labor, waste disposal, other items (such as energy, equipment, and supplies) in current dollars, and a 25 percent contingencyfactor. | |||
The following Table 3, an update of Table 17-2 found in Chapter 17 of the Safety Analysis Report (SAR) that was submitted as part of the MURR's renewal application, provides a summary of the breakdown of categories in current dollars. This table contains the categories the M1JRR used to develop our initial decommissioning estimate using the guidance of NUREG/CR-1756 that was submitted to the NRC by letter dated June 29, 1990. | |||
TABLE 3 | |||
==SUMMARY== | |||
OF COST (in millions of dollars) | |||
Category Cost (1989 $) Cost (2013 $) | |||
Labor 4.9 24.4 Equipment 0.27 1.35 Radioactive Shipments 0.6 2.99 Termination Survey 0.06 0.30 Annual Storage Cost 3.6 17.96 Subtotal $ 9.43 $ 47.04 Contingency (25%) $ 2.36 $ 11.76 Total $11.8 $ 58.9 Page 5 of 10 | |||
(c) Provide an update of the total and annual MURR SAFSTOR costs provided in your September 14, 2009 response to RAI No. 3. (c) to current dollars as well as the supporting bases for the costs associatedwith the SAFSTOR option. Also, please provide a numerical example showing how the SAFSTOR costs will be escalated each year. | |||
The following Table 4, an update of Table 17-1 found in Chapter 17 of the SAR, indicates the annual cost estimates from the original cost estimate as revised in 1995 as well as these same annual costs in current dollars as escalated using the cost inflation formula of 10 CFR 50.75(c)(2). | |||
Table 4 is an example of the items in each category of the table. These examples are taken from NUREG/CR-1756, Volume 2 of 2, page J-79. | |||
By letter dated June 29, 1990, the MURR committed to escalating the decommissioning cost estimates at five year intervals using the methodology proposed in 10 CFR 50.75(c)(2). There is no regulatory requirement to escalate these costs on a yearly basis. With the 25% contingency included in the estimate, because of the uncertainty of an estimate, an annual escalation exercise would provide little benefit. | |||
The supporting bases for the annual costs associated with the SAFSTOR option were the categories specified in NUREG/CR-1756, adjusted to our judgment in 1990 where the reference test reactor estimates could be revised. One example was the cost for security systems. MURR decided the current system we have in use would provide more than adequate security for the safe storage period so that category estimate was reduced. | |||
TABLE 4 ANNUAL COST DURING SAFSTOR (in thousands of dollars) | |||
SAFSTOR Categories Cost (1989 $) Cost (2013 $) | |||
Security 15.0 74.8 Minor Maintenance and Repair 10.0 49.9 Major Repair 10.0 49.9 Offsite Laboratory Work and Equipment Repair 6.0 29.9 Reactor Facility Services 50.0 249.4 Laboratory Samples, EPA Reports, and Surveillance 30.0 149.7 Total $121.0 $ 603.6a aThe summation of the estimated annual cost during SAFSTOR is $18.1 million dollars | |||
($603,600/year x 30 years). | |||
Page 6 of 10 | |||
Examples of Items in Each SAFSTOR Category of Table 4 Securit Minor Maintenance and Renair | |||
* Maintenance of existing security system " Custodial | |||
* Monitoring, supervision and security patrols " Grounds and yard Offsite l ,ahoratorv Work and Faiuinment Renairs Laboratory Samples. EPA Ren~orts. and Surveillance | |||
" Sample analysis " Surveys | |||
* Contamination counter repairs " Regulatory reports Reactor Facility Services Major Repair | |||
" Electrical | |||
* Roof repairs | |||
" Water | |||
* Ventilation system repairs | |||
" HVAC | |||
* Water systems repair | |||
" Sewer (d) Provide a numerical example showing how the 2013 cost estimate will be updated periodicallyin the future. | |||
Future cost estimates will be performed using the same methodology that was used for the most recent 2013 estimate, as described below. | |||
Adjustment Factor The adjustment factor was designed for updating reference Pressurized Water Reactor (PWR) and Boiling Water Reactor (BWR) decommissioning estimates, but serves as a convenient method to adjust the MURR decommissioning cost estimates over time. Whenever a calculation is specified for a PWR or BWR, an average of the PWR and BWR factors is used. | |||
The decommissioning cost inflation equation of 10 CFR 50.75(c)(2) is divided into three general categories that tend to escalate similarly: (1) labor, materials and services, (2) energy and waste transportation, and (3) radioactive waste burialltreatment. A relatively simple equation is used to update the estimate of cost by multiplying the revised original cost estimate (in our case, $11.8 million in 1989 $) by a factor developed using the three categories described above. The equation is: | |||
Estimated Cost (2013): | |||
= [Costin 1989$]x[ALx+BE,+CBx]; | |||
= estimated decommissioning costs in 2013 dollars; where: | |||
[Cost in 1989 $] | |||
= revised original decommissioning cost estimate ($11.8M in 1989 $); | |||
A fraction of the [Cost in 1989 $] attributable to labor, materials and services; B fraction of the [Cost in 1989 $] attributable to energy and transportation; C fraction of the [Cost in 1989 $] attributable to waste burial/treatment; Lx labor, materials, and service cost adjustment, January 1989 to December 2012; Page 7 of 10 | |||
E, = energy & waste transportation cost adjustment, January 1989 to January 2013; and B, = LLW burial/treatment cost adjustment, January 1989 to January 2013. | |||
The coefficients in the adjustment factor of 10 CFR 50.75(c)(2) are established as A = 0.65, B = | |||
0.13, and C = 0.22. The escalation formula then becomes: | |||
Estimated Cost (2013) | |||
= [Cost in 1989 $] x [0.65 L,+ 0.13 Ex+ 0.22 Bx] | |||
Determination of LxE_ and B_ | |||
These ratios are determined using the information supplied in the most recently published NUREG-1307, Report on Waste Burial Charges, Revision 15, January 2013, and by using the most recent U.S. Department of Labor-Bureau of Labor Statistics (BLS) data. | |||
Labor Adjustment Factor The Employment Cost Index (ECI) is taken from Table 6 of current BLS data entitled "Employment Cost Index for total compensation for private industry workers, by bargaining status, census region and metropolitan area status." The Base Lx is taken from Table 3-2, Regional Factors for Labor Cost Adjustment, in NUREG-1307 referenced above. | |||
Lx = [(ECI, December 2012) x (Base L.)] / 100 | |||
= [(115.9)x(2.08)]/ 100 | |||
= 2.411 Energy Adjustment Factor This adjustment factor for energy, Ex, is a weighted average of two components, namely, industrial electrical power, Px, and light fuel oil, Fx. | |||
For the reference PWR: Ex(PWR) = 0.58 Px + 0.42 F, For the reference BWR: Ex(BWR) = 0.54 Px + 0.46 Fx Px and Fx are the ratios of the current Producer Price Indexes (PPI) divided by the corresponding indexes for January 1986. | |||
P, = 198.8 (January 2013 value for code wpu0543) / 114.2 (January 1986 value for code wpu0543) | |||
= 1.74 F, = 303.4 (January 2013 value for code wpu0573) / 82.0 (January 1986 value for code wpu0573) | |||
= 3.70 Therefore: | |||
E,(PWR) EX(BWR) | |||
= (0.58 x 1.74) + (0.42 x 3.70) = (0.54 x 1.74) + (0.46 x 3.70) | |||
= 2.563 = 2.642 Page 8 of 10 | |||
Ex for MURR is calculated as an average of E,(PWR) and Ex(BWR), therefore: | |||
Ex(average) | |||
= (2.563+2.6416)/2 | |||
= 2.602 Waste Burial Adjustment Factor The adjustment factor for waste burial/treatment, Bx, is taken directly from Table 2-1 of NUREG-1307, Values of B. as a Function of LLW Burial Site, Waste Vendor, and Year. For facilities that have no disposal site available for LLW, the NUREG assumes the cost of disposal is the same as that provided for the Atlantic Compact, for lack of a better alternative at this time. | |||
Bx(PWR) = 13.885 Bx(BWR) = 14.160 Bx for MURR is calculated as an average of BX(PWR) and Bx(BWR), therefore: | |||
Bx(average) | |||
= (13.885+ 14.160)/2 | |||
= 14.023 Adjusted Decommissioning Cost Estimate Estimated Cost (in 2013 $) | |||
= [Cost in 1989 $] x [A L, +B E,+ C B,] | |||
= [$11.8 Million] [(0.65 x 2.411) + (0.13 x 2.602) + (0.22 x 14.023)] | |||
= [$11.8 Million] [4.990] | |||
= $58.9 Million (this includes the 25% contingency) | |||
: 4. The applicationindicates that MU plans to use a statement of intent (SO1) as the method to provide decommissioning funding assurance, as provided for by 10 CFR 50.75(e)(1)(iv). Where the applicant intends to use a S01, the NRC staff must find that the applicant "is a Federal,State, or local government licensee." To make this finding, the applicant must state that it is a State government organization and that the decommissioning funding obligations of the applicant are backed by the State government, and also provide corroboratingdocumentation. Further, the applicant must provide documentation verifying that the signator of the S01 is authorized to execute said document that binds the University. This document may be a governing body resolution, managementdirectives, or otherform thatprovides an equivalent level of assurance. As the applicationdoes not include all of the above information,please submit the following: | |||
(a) An updatedSO1 which includes the current (2013 dollars)cost estimatefor decommissioning, a statement that funds for decommissioning will be obtained when necessary, and the signator'soath or affirmation attesting to the information. | |||
Enclosed you will find the most recent Statement of Intent (dated March 5, 2013), signed by Jacquelyn K. Jones, Vice Chancellor of Administrative Services of the University of Missouri, which provides assurance that funding will be requested from the Board of Curators of the University of Missouri if decommissioning activities are commenced at the MURR. | |||
Page 9 of 10 | |||
(b) Documentation that corroboratesthe statement in the application that AMU is a State agency and a State of Missouri government licensee under 10 CFR 50.75(e)(2)(iv). | |||
Enclosed you will find a letter from Kelly Mescher (dated February 28, 2013), Office of the General Counsel, University of Missouri, which states that The Curators of the University of Missouri is a state university which was created by the Missouri Constitution in Article IX Section 9(a). | |||
(c) A statement as to whether the decommissioningfunding obligationsfor the MURR are backed by the State of Missouri government. The application must also present documentation that corroboratesthis statement. For example, the documentation may be a copy of or complete citation to a state statute that expressly provides that the obligations, or at least the decommissioningfunding obligations, of the applicant are backed or supported by the full faith and credit of the State of Missouri, or an opinion of the applicant's General Counsel with citations to statutes, regulations, and/or case law that the obligations, or at least those with respect to the decommissioning funding of the applicant are obligations back or supportedby the full faith and credit of the State ofMissouri. | |||
Enclosed you will find a letter from Kelly Mescher (dated February 28, 2013), Office of the General Counsel, University of Missouri, which states that the state is constitutionally required to provide funding to the University. | |||
(d) Documentation verifying that the signator of the SO1 is authorized to execute such a document that binds the applicant financially. For example, provide a copy of MU's governing board or equivalent resolution that shows that the signator of the S01 has been authorized by MU to bind MU financially, at least with respect to funding the decommissioning of the MURR, or provide a copy of an official MU delegation of authority showing that the signator of the SO1 is authorized to bind MU financially, at least with respect to funding the decommissioning of the MURR. | |||
Enclosed is a copy of Section 70.010, "General Execution of Corporate or Board Instruments," of Chapter 70, "Execution of Instruments," from the University of Missouri Collected Rules and Regulations, which authorizes Jacquelyn K. Jones, Vice Chancellor of Administrative Services of the University of Missouri, to execute the Statement of Intent regarding decommissioning costs for the MURR. | |||
Page 10 of 10}} |
Latest revision as of 21:33, 4 November 2019
ML13079A214 | |
Person / Time | |
---|---|
Site: | University of Missouri-Columbia |
Issue date: | 03/12/2013 |
From: | Rhonda Butler, Fruits J Univ of Missouri - Columbia |
To: | Document Control Desk, Office of Nuclear Reactor Regulation |
References | |
TAC ME1580 | |
Download: ML13079A214 (10) | |
Text
UNIVERSITY of MISSOURI RESEARCH REACTOR CENTER March 12, 2013 U,S. Nuclear Regulatory Commission Attention: Document Control Desk Mail Station P1-37 Washington, DC 20555-0001
REFERENCE:
Docket 50-186 University of Missouri-Columbia Research Reactor Amended Facility License R-103
SUBJECT:
Written communication as specified by 10 CFR 50.4(b)(1) regarding the response to the "University of Missouri at Columbia - Request for Additional Information Re:
Updated Financial Information for License Renewal (TAC No. ME1580)," dated February 11, 2013 On August 31, 2006, the University of Missouri-Columbia Research Reactor (MURR) submitted a request to the U.S. Nuclear Regulatory Commission (NRC) to renew Amended Facility Operating License R- 103.
On July 10, 2009, as part of the NRC staff's review of the renewal request, the NRC requested financial information in the form of four (4) questions. By letter dated September 14, 2009, the MURR responded to those questions.
By letter dated February 11, 2013, the NRC requested updated financial information in the form of four (4) questions because the information provided by the September 14, 2009 response had become outdated. Those questions, and the MURR's responses to those questions, are attached. If there are questions regarding this response, please contact me at (573) 882-5319 or FruitsJ@missouri.edu. I declare under penalty of perjury that the foregoing is true and correct.
ENDORSEMENT:
Sincerely, Reviewed and Approved, John L. Fruits Ralph A. Butler, P.E.
Reactor Manager Director MARGEE P.STOUT My Cormnison NOTAF(Y'- io xpe March 24, 2016 SMontgomery County 1513 Research Park Drive Columbia, MO 65211 Phone: 573-882-4211 Fax: 573-882-6360 Web: www.murr.missouri.edu Figbting Cancer witb Tomorrow's Tecbnology
Enclosed:
- 1. University of Missouri System - 2011 Financial Report
- 2. University of Missouri System - 2012 Financial Report
- 3. Statement of Intent, from the Office of the Vice Chancellor for Administrative Services, University of Missouri-Columbia, dated March 5, 2013
- 4. Letter from the Office of the General Counsel, University of Missouri, dated February 28, 2013
- 5. Section 70.010, "General Execution of Corporate or Board Instruments," of Chapter 70, "Execution of Instruments," University of Missouri Collected Rules and Regulations xc: Reactor Advisory Committee Reactor Safety Subcommittee Dr. Robert Duncan, Vice Chancellor for Research Mr. Alexander Adams, U.S. NRC Mr. Geoffrey A. Wertz, U.S. NRC Mr. Craig Basset, U.S. NRC*
The US. Nuclear Regulatory Commission (NRC) staff will analyze the financial statements for the current year, which are required by 10 CFR 50.71 (b), to determine if the applicant is financially qualified to operate the MURK. Since MU'sfinancial statements included with the applicationare out of date, please provide a copy of the latestfinancial statementsfor the NRC staff's review.
Enclosed you will find the 2011 and 2012 Financial Reports for the University of Missouri System.
Each report provides an overview of the financial position and activities of the University for the fiscal years that ended June 30, 2011 and 2010 and June 30, 2012 and 2011. The University is a component of the state of Missouri and an integral part of the state's Comprehensive Annual Financial Report.
The University of Missouri System 2011 and 2012 Financial Reports include the following five financial statements:
" The three financial statements for the University of Missouri and its Discretely Presented Component Unit include the Statement of Net Assets, the Statement of Revenues, Expenses, and Changes in Net Assets, and the Statement of Cash Flows, where applicable.
- The two financial statements for the University's fiduciary fund, which include the Retirement and the Other Postemployment Benefits Trust Funds, are the Statement of Plan Net Assets and the Statement of Changes in Plan Net Assets.
The University's financial statements are prepared in accordance with U.S. generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board (GASB),
which establishes financial reporting standards for public colleges and universities.
- 2. Pursuantto 10 CFR 50.33W(9(2), "ft/he applicantshall submit estimatesfor total annual operating costs for each of the firstfive years of operationsof the facility. " Since the information included in the applicationis now out of date, please provide the following additionalinformation:
(a) Projected operatingcosts of the MURR for each of the fiscal years (FY) 2014 thru FY 2019 (thefirstfive year periodafter the projected license renewal).
TABLE 1 FISCAL YEAR 2014-2018 PROJECTED EXPENDITURES (in thousands of dollars)
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Projected Projected Projected Projected Projected Salaries/Wages & Benefits 11,088 11,421 11,763 12,116 12,480 Supplies/Services/Equipment < $5K 3,154 3,248 3,346 3,446 3,550 Debt Service 934 934 934 934 934 Reserves 659 679 699 720 742 Grants 3,900 4,017 4,138 4,262 4,389 Other 940 969 998 1 028 1058 TOTAL EXPENDITURES $ 20,675 $ 21,268 $ 21,878 $ 22,506 $ 23,153 Page 3 of 10
(b) AU's source(s) offunding to cover the operatingcosts for the above fiscal years.
TABLE 2 FISCAL YEAR 2014-2018 PROJECTED REVENUES (in thousands of dollars)
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Projected Projected Projected Projected Projected Campus Allocation 3,488 3,592 3,700 3,811 3,925 Service Operations 11,902 12,259 12,626 13,005 13,395 Partnerships 52 53 55 56 58 Grants 3,900 4,017 4,138 4,262 4,389 Other 1,154 1,188 1,224 1261 1,298 TOTAL REVENUES $ 20,494 $ 21,109 $ 21,742 $ 22,395 $ 23,067 Notes:
- 1. The University of Missouri fiscal year (FY XXXX) begins July 1 and ends June 30.
- 2. All projected revenues and expenditures reflect a 3% increase per year except for Debt Service.
- 3. MURR reserves will be used to cover fiscal year end deficits as needed.
"Campus Allocation" represents an annual allocation of the State of Missouri funds for the University. "Service Operations" is primarily based on the sale of irradiation, processing and analytical services. Revenue is subject to market fluctuations, however many of the MURR's major customers have been clients for several years and the MURR continues to develop significant new customers each year. "Grants" are a revenue source received from non-University sources.
- 3. The application references a decommissioning cost estimate for the MURR that was developed using NUREG/CR-1756, Technology, Safety and Costs of Decommissioning Reference Research and Test Reactors. The application states that the decommissioning cost estimate was $47.3 million in 2009 dollars, including safe storage (SAFSTOR) costs, and a 25 percent contingency factor. The NRC staff needs the following additional information to complete its review of the MURR decommissioning cost estimate:
(a) A current decommissioning cost estimate in 2013 dollarsfor the MURR to meet the ANRC's radiologicalrelease criteriafor decommissioningthe facility for unrestricteduse, pursuantto 10 CFR 50. 75(d)(2). Accordingly, describe the basis for how the cost estimate was developed (if NUREG/CR-1 756 is still the basisfor the decommissioning cost estimate,please so state).
The current decommissioning cost estimate is $58.9 million in 2013 dollars. The original decommissioning cost estimate was developed using the methodology proposed in NUREG/CR-1756, Technology, Safety and Costs of Decommissioning Reference Research and Test Reactors, for a reference test reactor using the passive safe storage (SAFSTOR) option for a period of 30 years. The reference test reactor approach was used because this was thought to more closely represent the decommissioning efforts that would be needed for the MURR. The original decommissioning estimate was transmitted to the NRC in a letter dated June 29, 1990. In this Page 4 of 10
letter, the MURR committed to adjusting our cost estimate at five year intervals using the decommissioning inflation formula provided in 10 CFR 50.75(c)(2).
Our initial decommissioning cost estimate was $9.0 million, which included a 25% contingency. In 1995 this estimate was revised to delete the 30-year annuity method of determining the present values of the annual costs associated with SAFSTOR. This revision to the original estimate, which changed the cost estimate to $11.8 million (1989 $), was made to assure that this aspect of the decommissioning cost would not introduce significant under-estimation of the annual costs.
The current decommissioning cost estimate was developed using the inflation formula provided in 10 CFR 50.75(c)(2). The use of this formula requires information from the most recently published NUREG-1307, Report on Waste Burial Charges; in this case Revision 15, dated January 2013.
The calculation also requires information form Bureau of Labor Statistics (BLS) data for Employment Cost Index (ECI) to develop L, and for Producer Price Index (PPI) to develop E, for the formula. These BLS datasets currently contain preliminary data for January 2013, thus the inflation calculation provided in 2013 dollars.
(b) A summary of total decommissioning costs by labor, waste disposal, other items (such as energy, equipment, and supplies) in current dollars, and a 25 percent contingencyfactor.
The following Table 3, an update of Table 17-2 found in Chapter 17 of the Safety Analysis Report (SAR) that was submitted as part of the MURR's renewal application, provides a summary of the breakdown of categories in current dollars. This table contains the categories the M1JRR used to develop our initial decommissioning estimate using the guidance of NUREG/CR-1756 that was submitted to the NRC by letter dated June 29, 1990.
TABLE 3
SUMMARY
OF COST (in millions of dollars)
Category Cost (1989 $) Cost (2013 $)
Labor 4.9 24.4 Equipment 0.27 1.35 Radioactive Shipments 0.6 2.99 Termination Survey 0.06 0.30 Annual Storage Cost 3.6 17.96 Subtotal $ 9.43 $ 47.04 Contingency (25%) $ 2.36 $ 11.76 Total $11.8 $ 58.9 Page 5 of 10
(c) Provide an update of the total and annual MURR SAFSTOR costs provided in your September 14, 2009 response to RAI No. 3. (c) to current dollars as well as the supporting bases for the costs associatedwith the SAFSTOR option. Also, please provide a numerical example showing how the SAFSTOR costs will be escalated each year.
The following Table 4, an update of Table 17-1 found in Chapter 17 of the SAR, indicates the annual cost estimates from the original cost estimate as revised in 1995 as well as these same annual costs in current dollars as escalated using the cost inflation formula of 10 CFR 50.75(c)(2).
Table 4 is an example of the items in each category of the table. These examples are taken from NUREG/CR-1756, Volume 2 of 2, page J-79.
By letter dated June 29, 1990, the MURR committed to escalating the decommissioning cost estimates at five year intervals using the methodology proposed in 10 CFR 50.75(c)(2). There is no regulatory requirement to escalate these costs on a yearly basis. With the 25% contingency included in the estimate, because of the uncertainty of an estimate, an annual escalation exercise would provide little benefit.
The supporting bases for the annual costs associated with the SAFSTOR option were the categories specified in NUREG/CR-1756, adjusted to our judgment in 1990 where the reference test reactor estimates could be revised. One example was the cost for security systems. MURR decided the current system we have in use would provide more than adequate security for the safe storage period so that category estimate was reduced.
TABLE 4 ANNUAL COST DURING SAFSTOR (in thousands of dollars)
SAFSTOR Categories Cost (1989 $) Cost (2013 $)
Security 15.0 74.8 Minor Maintenance and Repair 10.0 49.9 Major Repair 10.0 49.9 Offsite Laboratory Work and Equipment Repair 6.0 29.9 Reactor Facility Services 50.0 249.4 Laboratory Samples, EPA Reports, and Surveillance 30.0 149.7 Total $121.0 $ 603.6a aThe summation of the estimated annual cost during SAFSTOR is $18.1 million dollars
($603,600/year x 30 years).
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Examples of Items in Each SAFSTOR Category of Table 4 Securit Minor Maintenance and Renair
- Maintenance of existing security system " Custodial
- Monitoring, supervision and security patrols " Grounds and yard Offsite l ,ahoratorv Work and Faiuinment Renairs Laboratory Samples. EPA Ren~orts. and Surveillance
" Sample analysis " Surveys
- Contamination counter repairs " Regulatory reports Reactor Facility Services Major Repair
" Electrical
- Roof repairs
" Water
- Ventilation system repairs
" HVAC
- Water systems repair
" Sewer (d) Provide a numerical example showing how the 2013 cost estimate will be updated periodicallyin the future.
Future cost estimates will be performed using the same methodology that was used for the most recent 2013 estimate, as described below.
Adjustment Factor The adjustment factor was designed for updating reference Pressurized Water Reactor (PWR) and Boiling Water Reactor (BWR) decommissioning estimates, but serves as a convenient method to adjust the MURR decommissioning cost estimates over time. Whenever a calculation is specified for a PWR or BWR, an average of the PWR and BWR factors is used.
The decommissioning cost inflation equation of 10 CFR 50.75(c)(2) is divided into three general categories that tend to escalate similarly: (1) labor, materials and services, (2) energy and waste transportation, and (3) radioactive waste burialltreatment. A relatively simple equation is used to update the estimate of cost by multiplying the revised original cost estimate (in our case, $11.8 million in 1989 $) by a factor developed using the three categories described above. The equation is:
Estimated Cost (2013):
= [Costin 1989$]x[ALx+BE,+CBx];
= estimated decommissioning costs in 2013 dollars; where:
[Cost in 1989 $]
= revised original decommissioning cost estimate ($11.8M in 1989 $);
A fraction of the [Cost in 1989 $] attributable to labor, materials and services; B fraction of the [Cost in 1989 $] attributable to energy and transportation; C fraction of the [Cost in 1989 $] attributable to waste burial/treatment; Lx labor, materials, and service cost adjustment, January 1989 to December 2012; Page 7 of 10
E, = energy & waste transportation cost adjustment, January 1989 to January 2013; and B, = LLW burial/treatment cost adjustment, January 1989 to January 2013.
The coefficients in the adjustment factor of 10 CFR 50.75(c)(2) are established as A = 0.65, B =
0.13, and C = 0.22. The escalation formula then becomes:
Estimated Cost (2013)
= [Cost in 1989 $] x [0.65 L,+ 0.13 Ex+ 0.22 Bx]
Determination of LxE_ and B_
These ratios are determined using the information supplied in the most recently published NUREG-1307, Report on Waste Burial Charges, Revision 15, January 2013, and by using the most recent U.S. Department of Labor-Bureau of Labor Statistics (BLS) data.
Labor Adjustment Factor The Employment Cost Index (ECI) is taken from Table 6 of current BLS data entitled "Employment Cost Index for total compensation for private industry workers, by bargaining status, census region and metropolitan area status." The Base Lx is taken from Table 3-2, Regional Factors for Labor Cost Adjustment, in NUREG-1307 referenced above.
Lx = [(ECI, December 2012) x (Base L.)] / 100
= [(115.9)x(2.08)]/ 100
= 2.411 Energy Adjustment Factor This adjustment factor for energy, Ex, is a weighted average of two components, namely, industrial electrical power, Px, and light fuel oil, Fx.
For the reference PWR: Ex(PWR) = 0.58 Px + 0.42 F, For the reference BWR: Ex(BWR) = 0.54 Px + 0.46 Fx Px and Fx are the ratios of the current Producer Price Indexes (PPI) divided by the corresponding indexes for January 1986.
P, = 198.8 (January 2013 value for code wpu0543) / 114.2 (January 1986 value for code wpu0543)
= 1.74 F, = 303.4 (January 2013 value for code wpu0573) / 82.0 (January 1986 value for code wpu0573)
= 3.70 Therefore:
= (0.58 x 1.74) + (0.42 x 3.70) = (0.54 x 1.74) + (0.46 x 3.70)
= 2.563 = 2.642 Page 8 of 10
Ex for MURR is calculated as an average of E,(PWR) and Ex(BWR), therefore:
Ex(average)
= (2.563+2.6416)/2
= 2.602 Waste Burial Adjustment Factor The adjustment factor for waste burial/treatment, Bx, is taken directly from Table 2-1 of NUREG-1307, Values of B. as a Function of LLW Burial Site, Waste Vendor, and Year. For facilities that have no disposal site available for LLW, the NUREG assumes the cost of disposal is the same as that provided for the Atlantic Compact, for lack of a better alternative at this time.
Bx(PWR) = 13.885 Bx(BWR) = 14.160 Bx for MURR is calculated as an average of BX(PWR) and Bx(BWR), therefore:
Bx(average)
= (13.885+ 14.160)/2
= 14.023 Adjusted Decommissioning Cost Estimate Estimated Cost (in 2013 $)
= [Cost in 1989 $] x [A L, +B E,+ C B,]
= [$11.8 Million] [(0.65 x 2.411) + (0.13 x 2.602) + (0.22 x 14.023)]
= [$11.8 Million] [4.990]
= $58.9 Million (this includes the 25% contingency)
- 4. The applicationindicates that MU plans to use a statement of intent (SO1) as the method to provide decommissioning funding assurance, as provided for by 10 CFR 50.75(e)(1)(iv). Where the applicant intends to use a S01, the NRC staff must find that the applicant "is a Federal,State, or local government licensee." To make this finding, the applicant must state that it is a State government organization and that the decommissioning funding obligations of the applicant are backed by the State government, and also provide corroboratingdocumentation. Further, the applicant must provide documentation verifying that the signator of the S01 is authorized to execute said document that binds the University. This document may be a governing body resolution, managementdirectives, or otherform thatprovides an equivalent level of assurance. As the applicationdoes not include all of the above information,please submit the following:
(a) An updatedSO1 which includes the current (2013 dollars)cost estimatefor decommissioning, a statement that funds for decommissioning will be obtained when necessary, and the signator'soath or affirmation attesting to the information.
Enclosed you will find the most recent Statement of Intent (dated March 5, 2013), signed by Jacquelyn K. Jones, Vice Chancellor of Administrative Services of the University of Missouri, which provides assurance that funding will be requested from the Board of Curators of the University of Missouri if decommissioning activities are commenced at the MURR.
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(b) Documentation that corroboratesthe statement in the application that AMU is a State agency and a State of Missouri government licensee under 10 CFR 50.75(e)(2)(iv).
Enclosed you will find a letter from Kelly Mescher (dated February 28, 2013), Office of the General Counsel, University of Missouri, which states that The Curators of the University of Missouri is a state university which was created by the Missouri Constitution in Article IX Section 9(a).
(c) A statement as to whether the decommissioningfunding obligationsfor the MURR are backed by the State of Missouri government. The application must also present documentation that corroboratesthis statement. For example, the documentation may be a copy of or complete citation to a state statute that expressly provides that the obligations, or at least the decommissioningfunding obligations, of the applicant are backed or supported by the full faith and credit of the State of Missouri, or an opinion of the applicant's General Counsel with citations to statutes, regulations, and/or case law that the obligations, or at least those with respect to the decommissioning funding of the applicant are obligations back or supportedby the full faith and credit of the State ofMissouri.
Enclosed you will find a letter from Kelly Mescher (dated February 28, 2013), Office of the General Counsel, University of Missouri, which states that the state is constitutionally required to provide funding to the University.
(d) Documentation verifying that the signator of the SO1 is authorized to execute such a document that binds the applicant financially. For example, provide a copy of MU's governing board or equivalent resolution that shows that the signator of the S01 has been authorized by MU to bind MU financially, at least with respect to funding the decommissioning of the MURR, or provide a copy of an official MU delegation of authority showing that the signator of the SO1 is authorized to bind MU financially, at least with respect to funding the decommissioning of the MURR.
Enclosed is a copy of Section 70.010, "General Execution of Corporate or Board Instruments," of Chapter 70, "Execution of Instruments," from the University of Missouri Collected Rules and Regulations, which authorizes Jacquelyn K. Jones, Vice Chancellor of Administrative Services of the University of Missouri, to execute the Statement of Intent regarding decommissioning costs for the MURR.
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