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HomeMy WebLinkAboutMINUTES-07/26/2011-AdjournedJuly 26, 2011 COUNCIL OF THE CITY OF FORT COLLINS, COLORADO Council -Manager Form of Government Adjourned Meeting - 6:00 p.m. An adjourned meeting of the Council of the City of Fort Collins was held on Tuesday, July 26, 2011, at 6:00 p.m. in the Council Chambers of the City of Fort Collins City Hall. Roll call was answered by the following Councilmembers: Weitkunat, Kottwitz, Manvel, Ohlson, Poppaw, Horak, and Troxell. Staff Members Present: Atteberry, Krajicek, Roy. Items Relating to a Long -Term Solar Power Arrangement for the Water Treatment Facility, Adopted on First Reading The following is staff s memorandum for this item. "EXECUTIVE SUMMARY A. First Reading of Ordinance No. 092, 2011, Authorizing the Execution of a Power Purchase Agreement Contract with a Photovoltaic Provider at the Water Treatment Facility for a Term of Up to 20 Years. B. Resolution 2011-059 Authorizing a Revocable Permit to a Selected Solar Provider for the Use of the City Water Treatment Facility Property for a Solar Project. The Water Treatment Facility receives its electrical power from Xcel Energy. A solar power generation project, with a fixed electrical rate sold back to the City, allows the offset of a portion of electrical usage at the plant site. A third party Photovoltaic system developer will design, construct, operate and maintain for up to 20 years a solar power project. This Ordinance allows for a 20 year contract between the system developer and the City. The Resolution issues a revocable permit for use of a portion of land onsite of the Water Treatment Facility by the photovoltaic system developer. BACKGROUND /DISCUSSION The Water Treatment Facility is located in Larimer County and as such, receives its electrical power from Xcel Energy instead of City Light and Power. Xcel Energy has a Solar Rewards program that gives third party entities rebates and renewable energy credits for solarpower generation. The City cannot take full advantage of the rebates and credits, and instead, selects through a competitive process, a photovoltaic (Pi) system developer who designs, constructs, operates and maintains the solar system, and sells the power generated to the City, based on a negotiated fixed rate, through a power purchase agreement. 430 July 26, 2011 The City received nine proposals, interviewed three firms, and is in the process of negotiating a power purchase agreement with the selected solar system developer. The proposed solar system will generate approximately 145, 000 kWh per year. This system is not sized to supply the entire electrical demand for the Water Treatment Facility, but will contribute significantly to the energy savings at the plant. This powerpurchase agreement is a 20 year contract between the PVsystem developer and the City. The City Code provides that a multi year contract for a period of 5 years must be authorized by ordinance. The advantages of the power purchase agreement are: • Fixed rate of electricity throughout the 20 year term, based on a negotiated initial price. • The power generated will only be sold to the City at the Water Treatment Facility. • No upfront capital costs for the City. • No operation and maintenance costs for the duration of the contract • Renewable energy on site to help attain the City's sustainability goals. • Ability to purchase the system, at fair market value, after year 5, if desired. The Resolution authorizes the execution of a revocable permit to the Photovoltaic System Developer for the solar project. It addresses the project site at the Water Treatment Facility site and its use by the PV system developer to construct the solar system. The City Charter allows Council to grant a permit at any time for the use or occupation of any public place. The site where the solarproject will be located is within the security of the water treatment facility, and on raw land that is not currently in use by the plant processes. FINANCIAL /ECONOMIC IMPACTS The Water Treatment Facility utilizes electricity to treat drinking water for its customers. The power purchased from the solar developer will offset a portion of that electrical power demand that must be purchased from Xcel Energy. The advantage is the fixed rate of this portion of the power versus the expected increases in electrical costs from Xcel. Over the 20 year term of the power purchase agreement, the estimated savings is $108,000. ENVIRONMENTAL IMPACTS This project will not impact the quantity and quality of drinking water produced. By replacing utility electricity with renewable solar power, the Water Treatment Facility will continue to work towards the City's internal sustainability goal of reducing energy consumption by 20% of the 2005 baseline by 2020, and demand peak use- by 15% by 2020. " Lisa Voytko, Water Treatment Facility Water Production Manager, stated this Ordinance would allow execution of a power purchase agreement with a third party solar system provider for 20 years. July 26, 2011 Power would be sold back to the City at a fixed negotiated rate. The Resolution allows for the third party developer to access the Water Treatment Facility site for equipment installation. Benefits of this project include overall electrical cost reduction at the facility and incorporation of energy efficiency. Voytko showed photos of and plans for the site and project. Eric Sutherland, 3520 Golden Currant, expressed concern regarding the purchasing policies of the City relating to this project and stated the City's electric rates have been subsidized by Xcel rate payers. Mayor Pro Tern Ohlson asked about the habitat value of the land proposed to be used for the solar project. Voytko replied the land is currently mowed hydro -mix grass with pipeline surrounding it. The land was made grade -level in 2000. Mayor Pro Tern Ohlson asked how long this idea has been circulating within the organization. Steve Catanach, Light and Power Operations Manager, replied the original idea was presented at a Council Finance Committee meeting in late 2009. Mayor Pro Tern Ohlson asked what financial implications may concern the Water Board. Catanach replied the initial idea was that the City would fund and construct the solar array and sell the renewable energy credits to Xcel. The price for each megawatt hour has dropped from $135 to $35 since, resulting in the currently -proposed third party structure. Mayor Pro Tern Ohlson asked if the City lias passed external sustainability goals. Catanach replied the City has a community goal,, as well as an internal City organization goal, of reducing carbon emissions by 20% by 2020 and by 80% by 2050. City Manager Atteberry stated he would provide an outline of the internal and external sustainability goals prior to Second Reading. Councilmember Manvel asked about the current wholesale rate from Xcel. Voytko replied the City is on the primary general rate but Xcel charges are based on use during peak and off-peak hours and also has several additional charges. Councilmember Manvel asked if this is a feed -in tariff situation in which energy is being purchased ahead of time at a fixed rate. Catanach replied that is somewhat the case other than it is a price set, taking into account the value of the renewable energy credits to Xcel. Councilmember Troxell asked about Xcel's power quality issues with respect to the water treatment facility. Voytko replied the facility has two feeds from Xcel which are currently being improved to come from two different substations. The facility has not had any issues with power in at least the last few years. Councilmember Troxell made a motion, seconded by Councilmember Poppaw, to adopt Ordinance No. 092, 2011, on First Reading. Yeas: Weitkunat, Kottwitz, Manvel, Ohlson, Poppaw, Horak and Troxell. Nays: none. THE MOTION CARRIED. 432 July 26, 2011 Councilmember Horak made a motion, seconded by Councilmember Poppaw, to adopt Resolution 2011-059. Yeas: Weitkunat, Kottwitz, Manvel, Ohlson, Poppaw, Horak and Trokell. Nays: none. THE MOTION CARRIED. Resolution 2011-067 Creatin?a Council Futures Committee, Adopted The following is staff s memorandum for this item. "EXECUTIVE SUMMARY At the Council retreat on May 6 and 7, 2011, Council indicated an interest informing a Futures Committee, the purpose of which would be to develop a vision for the future of Fort Collins, using economic modeling and other information to help inform and establish a guide. for Council to consider in making decisions about the future of the community. BACKGROUND /DISCUSSION Prospective committee members have met informally twice in the past month in order to more clearly define the aspirations, roles and functions, meeting schedule, and intent of the committee. The intent was clearly to look beyond the present and develop ideas about the distant future, looking beyond the typical City planning horizons and to develop informed ideas about where our community should be heading. Additionally, the Committee wanted to develop an approach to the financial strategies and systems required to successfully achieve the desired future. Some of the specific considerations were to develop a clear set of measurable goals and objectives. Key questions considered for future discussion were: • What are the visionary considerations that should shape our future and make it better as a community? • A significant focus of the committee should be on energy, water, and the natural and built environment • Another focus will be on social issues such as homelessness and poverty. • Are there clearly stated goals and objectives that will keep the community on the path to achieving this future? • What are the potential roadblocks to success? • Is the budget aligned with the goals? • When considering future ideas, capital costs, lifecycle, operations and maintenance should be key considerations. • Is there a financial model which aligns funding strategies with the future vision? • Are advisory boards and commissions directly reinforcing the goals? Committees have been developed over the years on an ad hoc basis. Today there are overlapping responsibilities and duties that do not always directly r align with the City's goals, plans, and policies. The 433 July 26, 2011 committee would like to take these Boards into consideration and make sure they are directly reinforcing the future direction of the community. Are City programs and activities in alignment with the future vision? Are there clear metrics to measure outcomes and determine success? What are the regional contextual issues and what are the key considerations of this context? How does this Cityfit in with its regional partner cities? The intent is for the committee to operate in a dynamic process whereby numerous ideas are considered and evaluated. Some of the ideas may evolve into actionable recommendations to Council for programs, activities or projects, while others may not make be considered further. Generating, evaluating, and refining ideas will be a significant consideration. To add ideas to the process the committee may bring in speakers, visitsites in other Front Range communities, or attend specific seminars. Many of the City staffwill be engaged with the committee on a project by project basis, and at various times, different City departments may be asked to attend committee meetings. With respect to Plan Fort Collins, the committee should recognize the value of the Plan and be familiar with its components. The focus however, will be to consider farther into the future than the current planning horizon and attempt to determine a path to the future. The committee will meet twice a month and will elect a rotating chair. Members will be appointed by City Council and appointments will be made at the start of election terms. " City Manager Atteberry stated this item came from suggestions at the May Council workshop. If passed, the Resolution appoints, Councilmembers Poppaw, Troxell, and Horak to the Committee. A revised Resolution and Agenda Item Summary are included in tonight's packet. Bruce Hendee, Assistant to the City Manager, discussed the proposed logistics and general notion of the committee. He stated the Committee would support the City's notion of the triple bottom line which represents the balance of environment, economy and the social fabric of the community. The intent of the Committee would be ;to develop and evaluate ideas, with aid from staff and the community, to bring before Council for consideration. - Eric Sutherland, 3520 Golden Currant, expressed concern the City organization is not making progress in terms of looking at the near future. Councilmember Poppaw thanked City Manager Atteberry and staff for the vision to create this best practices committee. Councilmember Horak made a motion, seconded by Councilmember Poppaw, to adopt Resolution 2011-067. Councilmember Horak noted the committee is as much about the present as it is the future. City Manager Atteberry noted this item was Council driven. 434 July 26, 2011 The vote on the motion was as follows: Yeas: Weitkunat, Kottwitz, Manvel, Ohlson, Poppaw, Horak and Troxell. Nays: none. THE MOTION CARRIED. Other Business Mayor Pro Tern Ohlson made a motion, seconded by Councilmember Poppaw, to cancel the August 2, 2011 regular Council meeting pursuant to the provisions of Section 2-28(a) of the City Code, so that Councilinembers can attend the various neighborhood gatherings that will be held that same evening in connection with the Neighborhood Night Out celebration. Mayor Pro Tern Ohlson suggested Council meetings be rescheduled around some of.these annual events in order to prevent several summer meetings from being cancelled. The vote on the motion was as follows: Yeas: Weitkunat, Kottwitz, Manvel, Ohlson, Poppaw, Horak and Troxell. Nays: none. THE MOTION CARRIED. Executive Session Authorized Mayor Pro Tern Ohlson made a motion, seconded by Councilmember Manvel, to go into Executive Session, pursuant to Section 2-31(a)(2) of the City Code, for the purpose of meeting with attorneys for the City and affected members of City staff regarding the manner in which particular policies, practices and/or regulations of the City may be affected by existing or proposed provisions of federal, state or local law and to discuss potential litigation. Yeas: Weitkunat, Kottwitz, Manvel, Ohlson, Poppaw, Horak and Troxell. Nays: none. THE MOTION CARRIED. Meeting Reconvened Mayor Pro Tern Ohlson made a motion, seconded by Councilmember Manvel, to go into Executive Session, pursuant to Section 2-31(a)(1) of the City Code, for the purpose of conducting the mid -year performance reviews of the City Manager, City Attorney and Municipal Judge. Yeas: Weitkunat, Kottwitz, Manvel, Ohlson, Poppaw, Horak and Troxell. Nays: none. THE MOTION CARRIED. 435 July 26, 2011 Adjournment The meeting adjourned at 10:47 p.m. ATTEST: SEAL :N City Clerk 436