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Meeting
Minutes
Tuesday, January 26, 2016 at 6:30 p.m.
1.
Introduction / Call Roll
Chair Dwayne Stenlund called the
meeting to order at approximately 6:30 p.m. and Public Works Director Mark
Culver called the roll.
Members
Present: Chair Dwayne Stenlund; Vice Chair Brian Cihacek; and Members
Joe Wozniak, John Heimerl, Kody Thurnau, Duane Seigler, and Sarah Brodt Lenz
Staff
Present: Public Works Director Marc Culver, City Engineer Jesse
Freihammer, and Environmental Engineer Ryan Johnson
2.
Public Comments
None.
3.
Approval of November 24, 2015 Meeting Minutes
Member Cihacek moved, Member
Heimerl, approval of the November 24, 2015 meeting as amended.
Corrections:
·
Page 7, Line 280 (Stenlund)
Correct to read: ??produced more
energy than it [consumed] [consumption realized]; it would be
sold on the grid??
·
Page 12, Lin3 495 (Stenlund)
Correct to read: ?cents/month?
rather than ?center/month?
·
Page 16, Line 677 (Stenlund)
Correct to read ?opinion? rather
than ?agreement?
·
Page 16, Line 704 (Cihacek)
Correct to read: ?Member Cihacek
[recognized a lot of work was in front of this committee, but stated] [stated
that this remained his pet project and] that he remained interested??
Ayes: 7
Nays: 0
Motion carried.
4.
Communication Items
City Engineer Jesse Freihammer
and Public Works Director Culver provided additional comments and a brief
review and update on projects and maintenance activities listed in the staff
report dated January 26, 2016.
Discussion included whether or
not this year?s water main breaks were comparable to other years; tax
increment financing (TIF) bonding and funding for various upcoming projects
in the Twin Lakes Redevelopment Aare; and an update on the Dale Street Fire
Station transfer to a private developer for demolition and new housing
project.
At the request of the PWETC, Mr.
Culver reported that budget/financial rollovers in the Public Works Budget
still pending until finalized for year-end 2015, with estimates by Finance
Director Miller an estimated excess of $350,000 in the General Fund and the
intent of the City Council to apply that excess to the Capital Improvement
Program (CIP). Mr. Culver further reported that the Public Works Department
would be updating their recommendations on capital fund uses and possible
sidewalk/pathway segments and extensions as part of that additional and
unexpected CIP funding.
Mr. Culver reported that the City
Council had heard the same presentation as the PWETC from Utility Service
Partners in January, and while interested in pursuing an agreement, they had
questions and asked staff to perform further research from current
subscribing cities and gather additional data. Mr. Culver advised that the
next discussion at the City Council level was scheduled for February 22. As
part of that previous City Council discussion, Mr. Culver reported that
Councilmember McGehee asked the Utility Service Partners representative, Ms.
Ashley Shiwarski, if their firm would consider as part of their service warranty
program the installation of backflow preventers if continuing problems were
evidenced. Ms. Shiwarski advised that their firm did not do so at this time,
but offered to bring it to her superiors, and subsequently their firm had
agreed to offer that as part of Roseville?s Subscriber Agreement, should it
proceed.
Mr. Culver further reported that
Councilmember McGehee continues her interest in providing lining for private
service laterals for residents parallel to the City doing lining of mains.
Mr. Culver noted the challenges in offering that, essentially requiring the
contractor to perform work on two different lines and their respective size
differentials; and their requirement for a minimum number of interested
residents in order to minimize their mobilization costs and make it
cost-effective for them to perform that more specialized work. Mr. Culver
noted that the City would also need to commit and possibly assess residents
for that work or add it to sanitary sewer base rates. Mr. Culver advised
that this issue would also return for additional discussion at the City
Council in February.
Mr. Culver reported on a new
business to Roseville, Calyxt, recently granted a Conditional Use in the Twin
Lakes area for their new corporate office headquarters, greenhouses, and
outdoor test plots. Mr. Culver advised that this was a unique company
developing seeds; and one of the conditions of approval of interest to the
PWETC was that they not allow drainage directly into Langton Lake. Mr.
Culver noted that any site clean-up of hazardous waste found on the site or
soil contamination concerns would be addressed as part of the Tax Increment
Financing hazardous Waste Fund.
5.
2016 Work Plan
Mr. Culver advised that this work
plan had been presented to the City Council at their last January 2016
meeting; and deferred to Assistant Director Jesse Freihammer to present the
PWETC with a summary of 2015 projects and accomplishments, along with 2016
proposed projects as displayed on respective maps and as detailed in the staff
report.
At the request of Member Wozniak,
Mr. Culver clarified that, while a roundabout versus a signal had initially
been discussed at Fairview Avenue, it had been determined that due to its
cost of 2 to 3 times higher than a signal installation, and since it was the
final link configuration north of there, it was easier to install a signal.
At the request of Member Cihacek,
Mr. Culver advised that it was too early to make a determination on the
delamination issues and impacts of sealcoating materials. However, Mr.
Culver reported that it was becoming more suspicious that the sealcoating
materials and oil may be the culprit, but since several different iterations
of oil types had been used through the course of issues, it was hard to nail
down the actual contributing factor and whether or not it remains
problematic. Mr. Culver advised that, while continuing to observe the
situation, it was interesting to note the parking lot stripping had not been
evidenced even though it was the same material as used on streets but without
the same load even though they experienced significant traffic as well. With
inconclusive data do-date, Mr. Culver advised that he was not confident
enough to restart the sealcoating program in 2016; and confirmed for Member
Cihacek that sealcoat funds would continue to be allocated to other mill and
overlay projects in the interim.
At the request of Member Cihacek,
Mr. Culver reported that the lifespan of lift stations was dependent on the
type of equipment (e.g. pumps and controls) and their overall design.
Mr. Freihammer continued his
report on other agency projects scheduled for 2016, including those of MnDOT,
Ramsey County, the Metropolitan Council environmental Services, and area
watershed districts that involved work in or around Roseville.
Chair Stenlund asked how the
Pavement Management Plan (PMP) was holding for funding based on current index
criteria and modeling.
Mr. Culver responded that the PMP
remained on a good pace for mill and overlay, especially with the additional
allocation of sealcoat dollars. Mr. Culver reported that the Finance
Commission and Finance Director Miller were continuing to study projections
for street maintenance and fund balances, currently reaching a negative in
years 2024 or 2015, and a dilemma if the current spending levels were
maintained. Mr. Culver noted some decisions would need to be made as to the
annual miles done for mill and overlay or additional funding for the PMP
would be needed. Mr. Culver confirmed that the City Council remained
committed to funding the CIP and to continue to increase General Fund dollars
for the Street Maintenance Fund. While remaining on track at this time, Mr.
Culver advised that more up-to-date pavement index ratings were anticipated
annually to determine PMP levels and short- and long-term planning.
At the request of Chair Stenlund,
Mr. Freihammer confirmed that the City was still performing its annual crack
sealing.
At the request of Chair Stenlund,
Mr. Freihammer reported that a double-left turn lane from eastbound County
Road C-2 onto northbound Snelling Avenue was planned in part to address
pedestrian crossing safety.
Member Lenz asked for an update
on speeding vehicle issues on Victoria Avenue southbound from County Road B.
Mr. Culver advised that he didn?t
have an update from the City?s Police Department on their efforts to
patrol/ticket violators after the speed limits were lowered from 40 mph to 30
mph to allow the City to meet State Aid standards for vertical curvature and
speed differentials going into the curve at 20 mph, as well as recognizing
residential properties on the south side having direct access onto Victoria
Street. Mr. Culver noted that, as a traffic engineer, simply installing a
sign didn?t reduce speed necessarily, only making the road smoother and more
prone to speeding. Mr. Culver advised that, while generally not done during
the winter months, Public Works staff could work with the Police Department
this spring and summer with speed display signs for educational efforts along
that stretch.
While not addressed on the 2016
work plan, Member Wozniak reminded his colleagues and staff that follow-up
was still needed on a service agreement for water/sewer service laterals and
a warranty program after staff had updated the City Council as previously
noted.
Mr. Culver clarified that the
work plan was basically a construction project work plan, and noted that the
day-to-day operations and/or other programs (e.g. solar installations,
recycling request for proposals, MS4 permit work/report, and comprehensive
plan update) were not listed on the work plan, but deserved and would be
receiving recognition as well over the next year.
In conclusion, Mr. Freihammer
reviewed the upcoming project by the Metropolitan Council Environmental
Services at Upper Villa Park, providing photos and maps for this deep pipe
and the City of Roseville?s water main replacement in conjunction with that
project.
Mr. Culver reported that there
would be impacts to Upper Villa Park related to trees and vegetation, and
noted the Public Works Department would work with the Parks & Recreation
Department to minimize those impacts, noting that the line could not be
moved, only rehabilitated.
6.
Skating Center Solar Project
Mr. Culver provided an update
since the November 2015 PWETC meeting when last discussed, seeking a final
recommendation from the PWETC for the City Council.
Mr. Culver reported that not much
had changed from that last presentation with staff meeting during the interim
with the Power Purchaser and negotiating a purchase Agreement, as well as
meeting with the Tax Equity Partner who will be the owner of the system and
provide financing for the system. Mr. Culver advised that the financier was
Kenyon Energy, an owner of installations nationwide. Even though this
installation is smaller than their typical installation, Mr. Culver advised
that they were doing a larger installation in this area (Brooklyn Park, MN)
and decided this would be a good add-on project and under their same
umbrella.
Mr. Culver advised that, after
staff?s discussion with Kenyon about what would happen if the City purchased
the system and took on its maintenance and ownership, and seeking more
detailed information on the lifecycle of the solar panels and other
equipment, Kenyon admitted that they experienced few public or private
partners exercising a buyout option because of the added operational costs,
unknowns with maintenance an operation, and what to do at the end of the
system?s life.
Mr. Culver further reported that
the City Council had expressed their concern about adding something else to
the CIP program, unknown replacement costs and operation/maintenance
dollars. Mr. Culver noted that the City could maintain the agreement,
written for twenty years, with a small inflation escalator increasing payback
incrementally; and expressed confidence that capacity credits from Xcel
Energy would be realized for producing excess solar energy, but unsure if
that capacity credit would increase over time with inflation or remain a
constant over that twenty-year term or if the credit would last for the full
twenty years. Mr. Culver noted these remained unknown questions at the
time of this report.
Mr. Culver deferred to
Environmental Engineer Ryan Johnson to provide more detailed projected financials
and options for retaining the power purchase agreement and allowing Kenyon
access to the roof space and city purchase of power from them, with a minimum
savings of $151000 projected at the end of that twenty-year period, and 11%
savings in that twentieth years. At that time, when the twenty years is up,
Mr. Johnson noted the agreement calls for the tax equity partner to remove
the panels from the roof and the city can start over again. Mr. Johnson
noted that the improved technology by that time may provide less expensive
and more efficient systems at that time, or availability of other programs,
but probably not via tax credits, if a replacement solar system was desired
for the skating center roof at that time.
Mr. Johnson and Mr. Culver noted that
staff was working out final details for roof maintenance as part of the
agreement, and had met with Parks & Recreation Department staff to
address their concerns with the city?s obligation for maintenance staff and
current agreement between the city and roofing company related to the roof
warranty and their respective maintenance of the rood to guarantee there
would be no leaks. Mr. Culver noted that the current maintenance agreement
for the skating center roof, along with the City Hall and Public Works
maintenance building roofs, represented a great arrangement and meetings had
also been held with that firm to address any impacts on that agreement and
warranty from their perspective with this solar installation. While there
seems to be little concern with Sundial Solar puncturing the roof, allowing
the roofing contractors access to the roof under the solar panels is still
pending resolution. As the agreement is solar services agreement is
currently written, Mr. Culver noted that the city would potentially lose
money if the panels needed to be moved for roof maintenance, and they were
obviously not operational or a period of time.
Mr. Culver noted that attempts
had initially been made to size the system to allow sufficient open space to
shift the panels temporarily elsewhere on the roof to access various roof
portions. However, Mr. Culver advised that a question remains whether
shifting was possible while retaining operations or shifting panels and
storing them during maintenance and reinstalling them were the best option.
Chair Stenlund asked if this
maintenance on a quadrant of the roof was for a two-week period or only
represented a loss of solar power for a 2-3 day period.
Mr. Culver responded that, in
2014, the cit performed major maintenance on the City Hall and Public Works
roofs, with this roof similar to that construction of a liner covered with
rock necessitating vacuuming the rock for reconditioning of the liner and
replacement of the rock, with that process taking between 1-2 weeks per roof.
However, Mr. Culver noted that may require a longer period of time if the
solar panels needed to be shifted around or if only one quad was addressed at
a time.
Chair Stenlund questioned the
length of vulnerability for the City of Roseville, based on best or worst
case scenarios.
Mr. Culver estimated the impact
was related to which month the work was performed, if during a lower
production month, and from the tax equity perspective, the city was expected
to purchase a certain amount of annually produced solar power.
Member Cihacek estimated, if 80%
total capacity, there should be some variance built in and some occurring
naturally on a seasonable basis, which should be part of managing this system
overall through proper asset management efforts and decreasing the city?s
exposure.
Mr. Culver noted that minor
maintenance or rehabilitation of the roof was scheduled within ten years for
the skating center roof, which Sundial Solar and the Kenyon Energy was both
aware of.
As noted by Member Cihacek, Mr.
Culver confirmed that power was connected to the meter at the skating center,
and couldn?t be shifted to a different roof at that time, part of the reason
the skating center roof was so attractive for this solar installation based
on its square footage. Mr. Culver further clarified that there were two
meters servicing the OVAL which experienced erratic usage depending on the
season, while the arena itself provided more consistent usage; with less than
one-quarter of that energy consumed annually by the skating center.
Chair Stenlund stated his support
for going forward.
Member Cihacek asked who provided
the financials currently displayed, with Mr. Ryan responding that the vendor
had provide them initially, but the more detailed projections currently
displayed had been performed by him based on their information to further
determine production and degradation and incorporating the Xcel Energy
escalator. In talking to the contractor earlier today, Mr. Ryan advised that
he was updating numbers to get closer and was still negotiating the power
purchase agreement.
At the request of Member Cihacek,
Mr. Culver confirmed that the Power Purchase Agreement would memorialize the
rate and escalator and final known numbers for the capacity credit.
Mr. Johnson noted that the
current projections include the 5% solar capacity credit blended with the
Xcel Energy rate, showing a positive cash value in years 3 and 4.
Mr. Culver stated his confidence
that the city would receive the credit, but noted that the remaining unknown
was for how long and if it would increase or not.
At the request of Member Cihacek,
Mr. Culver further confirmed that he had asked that the city?s escalator be
included in the agreement even if Excel?s rates don?t change, which Sundial
Solar considered not to be problematic and proposing language in the power
purchase agreement that the city would never pay more than the Xcel Energy
rate.
Member Cihacek noted that the
only difference or unknown was with the escalator and Xcel rate was as the
type of energy changes and the escalator model changes, and if that always
stayed comparable to what the city would have had before this agreement.
Member Seigler expressed his
concerns, admitting he didn?t understand the proposed numbers at all and
extension of the tax credits. Member Seigler questioned the rush to
recommend this agreement, since recent legislation had extended the Made in
Minnesota program until 2023. Member Seigler suggested waiting another year,
questioning if this is a good deal or only an average deal, and whether the
Made in Minnesota grant should be incorporated into this solar plan.
Mr. Culver clarified that the
city was still pursuing that grant option as well, but noted the differences
in that program compared with this, and maximum amount of 40 KWh, with staff
pursuing that solar application for potential use on smaller roofs on campus,
such as City Hall, the Police and/or Fire Station roofs. Given the size of
this system, even with a grant from Made in Minnesota, Mr. Culver opined that
it would be difficult for the city to fund on its own and other than through
this type of power purchase agreement. Mr. Culver noted that this solar
system is considerably larger and provides significant savings. Mr. Culver
noted that two proposals had been initially received during the summer of
2015, based on assumptions that tax credits were going to run out, even
though they were subsequently extended. Mr. Culver reported that, in talking
to Sundial Solar and having held numerous conversations with other developers
over the last 1.5 years, he would recommend this as the best deal from
staff?s perspective, especially since the city didn?t have to upfront any
down payment or pay toward the system, while getting an immediate return with
little if any investment.
Discussion ensued regarding
blended rates, current Xcel Energy rate, and further review of the spread
sheet; the escalator versus static rates; and other financial variables and
considerations.
Member Cihacek noted that the
power purchase agreement provides a positive cash flow and actualized savings
for the city in year one; with Mr. Johnson confirming that the City would
save approximately $8,000 in energy costs in year one. Member Cihacek opined
that this proposal represents the least risk to the city, and for the benefit
of Member Seigler, noted the only unknowns were regarding the escalator rate
and clarifications currently being concluded by staff.
Member Heimerl noted lack of
information at this time on potentially reduced rates for the skating center
load; and as referenced (Page 7 of the PPA), noted that the city would have
no interest in the solar power facility as written. Based on past
discussions about the city desiring to get into green power cooperative
opportunities for energy from solar farms, Member Heimerl questioned if this
PPA language in any way prevent the city from developing that type of
relationship at all.
Mr. Culver duly noted that
question, noting the city did not want that potential option for a
relationship prevented in anyway, and advised he would clarify that language
with Sundial Energy and the City Attorney.
Based on his review of the draft
PPA, Member Cihacek stated that the city had no equity in this system, either
upfront or at its conclusion, and should therefore have no binding effect on
community solar gardens. As previously noted, if the city should choose to
purchase the system, since it had no equity in it, they would need to pay
fair market value.
Member Seigler stated his
preference to see an annual risk analysis performed to determine
ramifications if the system was not performing up to expectations, or if
there were roof issues, or if the city decided to purchase the system in
seven years, a determination of its risk. Member Seigler expressed further
interest in what the worst possible event was for the city if everything went
wrong or in any situation where the city may need to outlay money. If the
results of this analysis proved that the city would have no financial outlay
under any scenario, Member Seigler stated that he wanted that confirmed, and
if there was any risk, what would result for the city (e.g. hail damage to
the roof or to the solar system inverters, or loss of money to the city if
Xcel changed its rate structure).
Member Cihacek assured Member
Seigler that the financial assumptions provided were fairly conservative, and
from his perspective, opined that the only risk he found was rotating how
they drew power by Xcel, whether their rates were reduced, stayed static, or
jumped higher. Member Cihacek noted that a twenty-year risk was hard to
project, but opined that a five year risk may be easier or more meaningful
and address Member Seigler?s reservations. However, to respond to Member
Seigler, Member Cihacek opined that there was actually no risk to the city,
and that the city could ask the provider to take their system and leave,
whether due to political changes from the federal or state government, or the
Public Utilities Commission affecting law change, whether those risks were to
the vendor or city, or of mutual benefit. In this case, since the City
didn?t own the system, Member Cihacek opined that the city?s highest risk was
any damage to the roof, which was currently being clarified by staff, and
whether there would be any offset for the vendor paying all or part of any
damages. However, Member Cihacek stated he didn?t find that risk of enough
significance based on the information provided to-date.
As the draft agreement is
currently written, Mr. Culver noted that the worst case scenario would be a
critical failure of the skating center roof resulting in loss of power
consumption capabilities for the system to generate power. However, if staff
is able to get those terms modified to avoid any cost to the city or at a
minimum apply a cap on the city?s exposure, Mr. Culver opined that this would
help. Mr. Culver opined that the biggest risk to the city is what Xcel rates
will do over the next twenty years of this agreement.
If that were to occur, Member
Seigler asked if there was a potential risk to the city of losing money, or
whether that was even relevant.
Member Cihacek noted that, once
the system showed a negative cash flow, the city could initiate termination
of the system and agreement in writing; and while he hadn?t reviewed that
termination clause in detail, asked that staff have the City Attorney review
it to ensure the best termination clause language possible for the city.
Mr. Culver noted that the
provider may require a minimum term to ensure their recovery of some of their
initial cost.
Member Cihacek also noted that
the force major clause should include potential political changes allowing
for termination due to political changes or due to a political process.
Chair Stenlund noted that, of
concern if delaying until next year as suggested by Member Seigler, may be
that there may be no better deals next year; and questioned if it wasn?t
prudent to not delay further and look at this as a rental agreement for the
roof space with a payment of a minimum of $8,000 annually for a roof not
being used for any other purpose.
Member Seigler concurred with
Chair Stenlund?s analogy.
Member Cihacek opined that any
time the city could develop an opportunity for immediate cash flow today to
address future CIP needs, it was a positive. Pending the two issues and
clauses he brought forward for staff to pursue clarification, Member Cihacek
noted the positive cash flow and projected numbers from a very conservative
projection.
Member Seigler admitted that the
less risk the city wanted to take, the less generous rates the vendor would
be willing to take; and as long as everyone understood those risks, it may be
beneficial to pursue this system.
Chair Stenlund asked Member
Seigler if there was anything form tonight?s discussion that would prevent
him from recommending this to the City Council upon staff?s completion of
their due diligence.
Member Seigler opined he felt the
need to better understand the projected financials.
Chair Stenlund asked Member
Seigler how those concerns could best be addressed to provide a comfort
level, such as what additional analysis staff could provide confirming and
clarifying that positive cash flow.
Member Cihacek noted the Finance
Department provided a positive cash flow analysis.
Member Seigler stated that as
long as the system could be done without any negatives or financial
expenditure by the city, he would support recommending going forward.
However, Member Seigler stated that his concerns were based on the risk that
the city could lose money in any of the twenty years of the agreement; and if
proven that wouldn?t happen, he would feel much better in making the
recommendation to proceed.
Member Cihacek noted that the
agreement had a minimum production guarantee, and if they didn?t meet it, the
city didn?t pay, or if there was any circumstance where the city couldn?t
sustain their power grid. Member Cihacek suggested that additional
information could be provided by staff to the PWETC via email if that would
address Member Seigler?s concerns.
Chair Stenlund questioned if
there was any way the OVAL may not be there in twenty years.
Mr. Culver expressed his doubt,
noting the only thing he was aware of was within the next 5 ? 6 years, a
significant investment projected at $1 million was planned for the OVAL?s
cooling system and infrastructure improvements. Mr. Culver noted that this
was one of the concerns in the City?s CIP going into a negative balance more
quickly related to that particular projected expense, and the overall
question of where that money may come from. Mr. Culver opined that he
anticipated every conceivable avenue will be pursued; and noted that, in the
past, outside funding based on the OVAL?s regional draw had been pursued
legislatively.
Member Cihacek questioned if the
building would ever be considered for demolition, and suggested a more viable
scenario may be repurposing it.
Motion
Cihacek moved, Member Seigler
seconded, recommending to the City Council that the City enter into a Master
Solar Services Agreement (Attachment A) with provider Sundial Energy or its
affiliate, LLC, for a solar power facility site license agreement; with that
recommendation contingent upon staff?s due diligence in confirming the
positive cash flow during the lifecycle of the system and addressing language
of the two clauses brought forward during tonight?s PWETC discussion.
Mr. Culver advised that staff
could provide additional information on the risks as part of their Request
for Council Action when presented to the City Council with the PWETC?s
recommendation.
Ayes: 7
Nays: 0
Motion carried.
7.
Recycling RFP Discussion
Mr. Culver deferred to
Environmental Engineer Ryan Johnson for presenting the 2017 Recycling Request
for Proposals (RFP) as detailed in the staff report dated January 26, 2016.
Noting that the city?s current
three-year contract with Eureka Recycling for city-wide recycling services
expires year-end 2016, Mr. Johnson noted that staff had been consulting with
Ramsey County as it initiated a new RFP, resulting in this first draft for
PWETC review and comment. Mr. Johnson noted the areas of discussion for
tonight suggested by staff in the staff report; and highlighted other areas
of the RFP to garner their input.
Mr. Johnson referenced and
expressed appreciation for the assistance of Jean Buckley and Kate Bartelt
with Ramsey County and that of Foth Infrastructure & Environment, LLC for
their assistance an overview in preparing an updated RFP and future contract
considerations. Mr. Johnson noted they provided good input for staff in clarifying
and fine-tuning general language.
As detailed in the staff report
and attachments provided, Mr. Johnson highlighted the following areas; with
PWETC members offering input as indicated on the RFP and related indices or
value added components.
Contract Term ? 3 or 5 years
Mr. Johnson noted that Ramsey
County recommended a five-year term for the next contract.
Member Cihacek stated his support
for a three year contact, with annual extension up to five years, especially
based on current market issues, and helping the city and vendor both maintain
a competitive stance.
Chair Stenlund stated, with that
market volatility, a five year contract would provide more consistency for
the city. Chair Stenlund opined that a positive for him would be a five year
contract, plus two extensions, anticipating a better bid for a vendor to
overcome large variances in world commodity downturns.
Mr. Johnson noted that was the
rationale of Ramsey County in recommending a five year term to even out those
market variables allowing a vendor to be more flexible in their bids.
At the request of Member Cihacek,
Mr. Johnson advised that most other municipalities are pursuing three year
contracts, and if Roseville chose a five year term, it would be one of the
few doing so.
Member Wozniak suggested whether
staff was suggesting both options - a three year term with two annual
extensions and a five year term be given, or whether they were asking the
PWETC to make that determination on a recommendation.
Mr. Johnson stated that the
option was open at this time, and whether the PWETC supported recommending 3
or 5 year contracts, staff was prepared to pursue either at this time. Mr.
Johnson noted the final decision would be when the City Council made their
determination, and suggested the PWETC provide the City Council with their
recommendation to weigh in as part of the City Council?s deliberation.
Member Cihacek opined that if a
five year term was presented in the RFP as an option and allowed a vendor to
spread their costs over that time, with a two year extension, allowing staff
to determine their actual term as part of final negotiations with a chosen
vendor, it could guarantee the city?s costs for extending the contract for up
to seven years, depending on the benefits of those economics.
Member Seigler noted that if
Ramsey County chose to add more and more expensive requirements, a 5 year
contract could provide additional protection for the city and additional
rationale in a longer term.
Member Cihacek noted the value
for a vendor to hedge and amortize costs over a longer term and in future
years.
Mr. Johnson questioned if the
city would need to renegotiate the vendor contract if Ramsey County required
additional materials be recycled during the contract term.
Mr. Culver responded that the
current contract with Eureka allowed the city to terminate the contract with
written notice, and anticipated similar language would be included in any
future vendor contracts as well.
Member Cihacek noted a shorter
term contract allowed the city to perform seven year cost-comparisons to
determine the term; and could include a minimum 3 year term as an option as
well with up to 4 annual extensions. Whichever way the city chose to
structure the term, Member Cihacek opined that the concern is with the
difficulty in managing commodities, especially the Asian markets; suggesting
his interest in seeing evidence to support Chair Stenlund?s argument related
to that term.
Member Wozniak stated his faith
in the Foth firm; and his support of their suggestion for a 5 year term as
representing the city?s best interests.
Member Cihacek noted the term was
insignificant, whether it ended up with an initial 5 year term, or a 3 year
term with 2 annual extensions, or any other configuration.
Mr. Culver noted the unknown
interest of and contractor response to a 5 year term plus 2 annual
extensions, and whether they would be interested from their perspectives.
Member Cihacek opined that a 7
year contract seemed a particularly long term in the public sector, generally
seeing maximum 5 year terms. However, Member Cihacek suggested asking the
vendor to justify price breaks in the 6th or 7th years
if they project they can recoup more costs. Member Cihacek opined it may be
advantageous for the city to include that option in the RFP, guaranteeing a 3
year contract with 2 or 4 annual extensions, while not binding the city to a
longer contract at its initiation.
Chair Stenlund noted the current
partnership status with Eureka based on the negotiated contract as a result
of the previous RFP process, with the vendor tasked with developing an annual
plan in conjunction with city staff to enhance recycling and education
efforts rather than simply operating in a vacuum.
Proposal including Costs for
Recycling within Roseville Parks (Section 5.21, Municipal Facilities ? page
24)
Mr. Johnson noted potential
impacts to parks and systems; and cost benefit analysis needed depending on
receptacle type and their location.
At the request of Member Wozniak,
Mr. Johnson clarified the rationale in three different price points, based on
the location of receptacles, whether collected by the vendor or brought to a
central location by Parks Department maintenance staff or need to separate
aggregate recycling materials, not a desired chore by those personnel based
on differences in aggregate recycling materials versus regular trash; and
dependent on the park?s frequency or use and/or events. Mr. Johnson noted
that some parks had larger receptacles also while some had intermediate drop off
points.
Member Cihacek questioned if the
vendor contract could include a provision for intermediate exclusive
recyclable content.
Mr. Johnson duly noted that
suggestion and agreed that it could be an option for consideration.
At the request of Member Seigler,
Mr. Johnson advised that recycling containers were needed more than just in
shelters, but were more heavily used along pathways for bottles and cans; as
well as a lot of use in other areas of parks.
Member Lenz agreed with the
differences in parks and uses (e.g. Acorn Park compared with other parks) and
suggested the Parks & Recreation Department should make the determination
on where best to aggregate materials.
Mr. Johnson responded that that
would be a definite option once the numbers were determined; and in response
to Member Cihacek confirmed that some would chose to aggregate while others
would be kept individually.
Member Wozniak advised that
Ramsey County would purchase containers for municipal park recyclables.
Mr. Johnson advised that more
detail would come up under each park name, and a total number of carts
needed; whether receptacles were provided in a parking lot, building, field,
or how many along a pathway; and the frequency for service.
In response to Member Wozniak,
Mr. Johnson advised that the type of cart or receptacle would be open to
vendor preference or discretion as recommended whenever feasible. Specific
to evidence of contamination of materials, Mr. Johnson advised that Eureka
hadn?t brought up any issues or concerns to staff to-date.
At the request of Chair Stenlund,
Mr. Johnson confirmed that this RFP and bid process will be using the
value-added system.
Curbside Collection of
Residential Organics - Section 5.05 (Pages 18-19)
Mr. Johnson clarified that this
would be a bid option for organics in an effort to plan ahead, even though
Ramsey County couldn?t push citywide organic collection in 2017 as originally
planned.
At the request of Member Cihacek
as to the progress by the City of St. Paul in their organic collection
efforts, Mr. Johnson responded that they would be rolling on organic
collection next year; and the City of Roseville was awaiting St. Paul?s award
to use as a model and to inform Roseville?s process and potential cost
projections.
Member Cihacek observed that it
was easier to develop an economy of scale on routes with neighboring
communities with a larger regional area.
Mr. Johnson noted that the City
of Minneapolis was already doing that and suggested it may prove the best
case for Roseville with St. Paul leading the charge; anticipating that given
the number of residents a push for organic recycling wouldn?t prove possible
at a reasonable cost, thus part of Roseville?s study of St. Paul?s process
going into this current RFP.
Chair Stenlund asked if there
were current areas of Roseville for recycling pick-up on one day, with parks
done on one of the less-busy days for a vendor; and questioned if that would
prove more economical and equitable for the vendor and city.
Mr. Johnson advised that, based
on the current vendor Eureka, it didn?t really matter, as the price remained
the same; and they worked through Roseville in under one day, no matter which
day. Mr. Johnson noted that Eureka currently picked up from most of the
City?s multi-family units on Fridays, but also did the parks on Friday. Mr.
Johnson noted that part of their rationale was in keeping single-unit
materials together to provide the city with statistical data and separating
single-units and multi-unit numbers to track what came out of each category?s
tipping?s for tonnage and types of materials collected; and how, when and
what occurred with each various pick-up type.
Missed Collection Policy &
Procedures - Section 5.11 (page 21 & 22)
Mr. Johnson advised that the most
issues experienced in this area ? or approximately 60% of missed or partial
pick-ups were complaints that some materials were left in the receptacle.
Mr. Johnson noted that Eureka was very responsive with next day pick-up
generally. However, Mr. Johnson stated staff?s desire to add this as a
liquidated damage if it becomes a recurring issue with a future contract.
With Eureka over a year, Mr. Johnson noted that of all Roseville residents,
only a small percentage was reported, or approximately 80 reported missed or
partial dumps.
Liquidated Damages - Section
8.05 (pages 34 & 35)
Mr. Johnson advised that Foth
recommended a typical $50 fee depending on frequency of occurrence.
Member Cihacek opined that the
contract language needed more specificity of what is considered ?damage? and
the results of the damage of a missed or partial dump collection.
Mr. Culver agreed, and as
included in construction contracts, suggested better language would be
?Performance Penalty.?
Member Cihacek noted that it
would be difficult to assess damages if any when the contractor agreed to
pick-up the next day, resulting in no damaged and if the resident wasn?t
filled an additional trip charge. From his perspective, Member Cihacek
questioned if a penalty was appropriate if the vendor provided a remedy,
since there was no damage. Member Cihacek opined that the $50 seemed random,
and questioned what the actual damage was equal to.
Mr. Culver defined it as the
approximate staff time to deal with the complaint(s).
Member Seigler questioned if it
was only charged if a repeated occurrence, and not for every call; with Mr.
Johnson responding that the intent was only for repeated offences to provide
the city with necessary teeth if it becomes problematic.
Member Cihacek stated that he
would find ?Performance Penalty? better terminology than ?Liquidated
Damages.? Member Cihacek also questioned if it was better to include this as
part of the contract language or part of the solicitation; and if it occurred
frequently, perhaps this vendor should not be retained, creating a different
performance issue.
Member Wozniak suggested further
discussion or some proof of how staff arrived at this city cost and how it
was reflected or justified in a performance penalty.
Member Cihacek noted that it was
important that the city not attempt to make money on the performance penalty,
but to determine whether the city was losing money due to the performance
issue; noting it may not always benefit the city in considering other issues.
Member Wozniak suggested,
however, that it needed to be based on some enforcement ability by the city
to encourage a vendor to act in good faith.
Member Lenz questioned how many
partial dumps were actually the faults of residents.
Mr. Johnson responded it
dependent on who you talked to. When some material falls out when put into
the receptacle or cart by a resident, Mr. Johnson noted that when checked out
by Eureka, frequently the materials were packed in too tight.
Mr. Culver noted that, at one
point, there was some speculation on whether the position of hydraulic arms
on the neck of medium sized carts might squeeze too hard or constrict
complete dumping, a theory seen on multiple occasions.
Member Wozniak noted that he
packed his cart tightly, but had never experienced a problem.
Member Seigler noted there were
only 80 reported incidents, and therefore may not prove problematic in any
event.
Revenue Sharing
Mr. Johnson reported that staff
recommended retaining this as part of a future contract no matter how dismal
the commodities market currently looked.
Mr. Culver noted that rates were
set by the city based on revenue share offsets in the past for recycling.
However, with that decreased revenue or revenue often coming in under
projections, Mr. Culver noted recycling rates had to be increased
accordingly. Depending on the advice of Finance Director Miller, Mr. Culver
advised that staff may recommend to the City Council that rate changes be
deferred a year and that rates be set based on the payback of services
without that revenue sharing; and if any revenue is realized, it be used the
following year to offset future rates. Mr. Culver noted that this would
result in working with a known versus projected dollar in that case. Mr.
Culver advised that this was only a proposal on his part at this point, and
had yet to be vetted by Finance Director Miller. Mr. Culver agreed that
revenue share be kept as part of the contract; especially given Roseville?s
continuing low residual rate (garbage contamination or co-mingling with
recyclable materials) compared with other communities; as well as its high
rate or participation. Mr. Culver opined that vendors should find this
beneficial in considering their proposals.
At the request of Member Seigler,
Mr. Johnson advised that the city typically had 12,000 bins: 9,600 single
units and 6,000 multi-family units; clarifying that all multi-family units
didn?t have individual carts depending on their facility.
Member Seigler asked if recycling
fees could be lowered citywide if the vendor was able to keep revenue share.
Member Wozniak noted he was going
to suggest that as well and when figures provided by a vendor projected zero
revenue share reflected in the city?s unit cost (pages 31-33), it required
lots of fiddling for vendors and cost them money to determine revenue and
report is; making it beneficial for them to not have to report it.
Mr. Culver admitted that this was
the biggest negative in his proposal to retain revenue sharing going forward;
but noted rates may fluctuate dramatically annually and impact contractors
accordingly.
Member Cihacek questioned if
revenue sharing could be allocated elsewhere; with Mr. Culver responding that
it represented a cost and revenue in and out; and traditionally had been used
to offset rates.
Member Cihacek, while varying
annually, and setting fees and rebates in a given year; suggested by not
including it, it may also directly impact consumer benefits for residents not
recycling.
Member Seigler suggested
eliminating the revenue sharing option if it meant dropping the price
$2/month for residents versus revenue sharing benefits. If a vendor could
provide a stable, basic and long-term price, Member Seigler opined revenue
sharing was no longer worth pursuing.
Chair Stenlund opined that one
benefit of revenue sharing was the interaction it provided between vendors
and the city, through presentation of their annual work plan and services
they volunteered to provide (e.g. industrial services or more bins in the
park) and the incentive it represented.
Member Cihacek noted that could
be required without making it related to revenue sharing.
Discussion ensued about the
timing for continued discussion of the RFP process, impacts in delaying
further discussion based on the City Council?s deliberation and
authorization, with staff anticipating an April 1, 2016 release of the RFP;
and desire of staff to have the PWETC?s input to inform the City Council
deliberation.
Member Cihacek asked Mr. Johnson
to provide copies of his slide presentation to the PWETC allowing for additional
ideas and questions to staff before the next discussion.
Mr. Culver suggested tabling
discussion to a future meeting and to allow the City of St. Paul to complete
their RFP process. Mr. Culver also reported staff had posted questions about
recycling on Speak Up! Roseville earlier this week; and that information
would also be available at the February meeting, and perhaps include some
ideas from Roseville residents on the recycling program. In his brief review
of the site prior to tonight?s meeting, Mr. Culver reported that he was
amazed at the number of responses in less than 24-hours; and noted he would
anticipate additional public input at the next meeting as well.
Motion
Cihacek moved, Wozniak seconded,
TABLING this discussion and the PWETC?s recommendation to the City Council to
the February 2016 PWETC meeting.
Ayes: 7
Nays: 0
Motion carried.
8.
Possible Items for Next Meeting ? February 23, 2016
Member Lenz announced that she
would not be present for the February meeting.
Items identified for the February
agenda included:
·
MS4
discussion (Stenlund)
·
Recycling
RFP continued discussion and recommendation to the City Council
·
Lake
Owasso private drive storm sewer project ? possible assessment
·
Update
on MnDot projects (e.g. managed lane between Highway 36 and Lexington Avenue)
? February agenda or deferred as time allows
·
Twin
Lakes Parkway east collector project update
·
Metropolitan
Transit representative presentation/discussion on transportation disparities;
their commitment to and accessibility for the northern corridor, and updated
information on their plans (Cihacek) ? February or March agenda
Member Wozniak reported on Ramsey
County-Washington County?s new ownership on January 1, 2016 of the Newport
facility and organized collection efforts in 2017; with a study to be
presented in the near future.
Chair Stenlund asked Member
Wozniak to provide the dates for that presentation to staff to disseminate to
the PWETC.
9.
Adjourn
Member Cihacek moved, Member
Heimerl seconded, adjournment of the meeting at approximately 9:02 p.m.
Ayes: 7
Nays: 0
Motion carried.
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