HomeMy WebLinkAboutMinutes 07/24/1989~;~ ;.;~, ..: ~ .: ~ ,:+r":~M1 . I~~P raved Gt5
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4-5-89
Page 1.14 Vol. 25 July 24, 1989 114
1 1VIINiJTES OF A REGULAR AIDJ®UItN~D 1VIEETING ` .
2. - PETALUMA CITY COUNCIL
3 JULY 24,1989
a . 'REGULA$Z ADJ®iTRNEI~ MEETING
5 PRESENTS Tenter, Cavanagh, Balshaw, Davis, Vice Mayor
6 Sobel, Mayor Hilligoss ,Woolsey a,r.wed a+ 3:15 pm
~ ~ . ABSENT: V~eei
8 PiJBLIC COIVIIVIENT:
9 Bonnie Nelson - 707 Sycamore Lane,, questioned the use of Alcohol in all the parks
1o in Petaluma. Bonnie works with the Petaluma City Schools and many of the schools
11 are next door to parks.
i2 Bonnie also made reference to Lynn Woolsey's comment that the Council wouldn't
13 treat the police any differently than a clerk typist regarding wages. She is all for
14 good wages, but in an emergency situation she would 'like the police to respond and
15 not a clerk.
16 COUNCIL COMIVIENT:
17 Councilman Balshaw stated that he would like to see the landscaping tended to in
18 front of the soundwall on Lakeville Hwy.
19 Councilwoman Woolsey would like the sale of alcohol at the Jet Gas Station on
20 Lakeville Hwy. brought back for discussion. Consider a plastic foam ban.
21 Councilman. Davis Stop light at the intersection of Lynch and McDowell changes to
22 quickly between green and red. Tom Hargis will check it out.
23 John Scharer. City Manager A formal appeal has been filed with regard to the
24 alcohol sale at the Jet Gas Station. That appeal will be coming before the Council.
2s State law states a city cannot legislate a ban city wide, but the Council can review
26 each case separately.
27 ORD. 1767 NCS
28 BAN ALCOHOL AT 1VICNEAR PARK
29 Adopt Ord. 1767 NCS to ban the sale of alcoholic beverages in designated areas of
3o McNear Park and to designate areas where possession and consumption are also
31 banned.
32 Introduced by John Balshaw, seconded by Larry Tenter
33 AYES: Tenter, Woolsey, Balshaw,,Davis, Vice Mayor Sobel, Mayor Hilligoss
34 NOES: Cavanagh
35 ABSENT:
36 RECESS TO STUDY SESSION
July 24, 1989
Vol. 25, Page 115 115
WA5~'EWATEIt Z'REATIVIENT.PI.ANT EXPANSION
2 John Scharer, City Manager gave a brief summary on the history of the Wastewater
3 Treatment Plant now in operation. The plant was first built in 1938 and expanded in
4 1954 to handle :a capacity of 1 million gallons per day. In 1968 an activated Judge
5 plant with a design capacity of two million, gallons'per day was added. In 1972 a 29
6 million :gallon per day capacity pumping station and .force main were constructed to
7 transfer flow to an aerated lagoon and oxidation pond system.
8 The Regional Water Quality Control Board requires a system that has reached 75%
9 capacity be expanded to accommodate the cities growth.
to The City of Petaluma has contracted with Environmental Operating. Services for the
1~ past 10 years. Anew facility could cost the City of Petaluma approximately $22
12 million dollars. Anew plant would have the capacity to treat wastewater at the rate
13 of 10 million gallons per day.
14 Mr. Dennis Dandeneau, Director of Project Development for E.O.S. was introduced
is to the Council and presented slides on the Wastewater Plant expansions and
16 meeting the growth of the city.
17 E.O.S. is a subsidiary of Rust International Corporation who is the largest
18 engineering design construction firm in the United. States. Rust International
19 Corporation grass roots plant was built in Granada, Mississippi at a cost of $350
20 million. E.O.S. arranged the finance and construction for that project.
21 A resource recovery plant located in Baltimore is owned and operated by E.O.S. It
22 runs 2,250 tons of refuse every day, .producing power approximately 60 mega watt
23 every day. This project was designed and constructed by Rust International
,24 ;Corporation. These are .some, of the capabilities' EOS has of putting construction,
25 financing, owning and operating together.
26 With 300-500 dwelling units being constructed per year, the projection for the year
27 2005 will be approximately 25,000 dwelling units on'the system.
~; .
2s A number of options for implementing the expansion. were considered. One would
29~ be to add to the existing facility with a major .overhaul. Anew facility located in the
3o same location, or at the sewer pond site. Based on the engineers evaluation the
31 pond site was selected.: Because of the availability of space, tying in with the existing
32 system, and:maintenance 'of the: operation would make rt an orderly transition: The
33 current `site that is being operated today is also being used as a corporation yard and
34 .for storage. -.
35 'The new system would provide the opportunity to design a new facility which would
36 ~ .respond to the needs of the permit requirements. With an existing system, cost is
37 tied up in maintenance. A newer system would. have a much lower maintenance
38 cost.
4
39
Page 116 Vol. 25 July 24, 1989 116
Cogeneration is a,fuel source that makes. two types of power or steam available to
the user. EOS has the- ability to become our own generator. EOS is taking a
household municipal solid w .ante and converting _it to power. '
BOS-.plans to take the- discharge; put.it into, the pond system and .have a treatment
process for the solids coming" out of that plant. EOS would leave in tact the existing
pumping station that was pu. rchased. in 1972 using that: to move the material down to
the pond area:
s This facility would treat .and produce an effluent of 3U bod and 30 solids,. the current
9 level for the plant is secondary treatment.
io As a Charter. City the city also has.home rule; with. home rule'you. can control your
11 own :affairs. Wastewater by California Law is a :municipal affair well within the
12 jurisdiction of the town. The Wastewater Treatment. Plant.. is the jurisdiction: of the
13 Public Utility Commission. The .PUC would control it with. twoexemptions: One is
14 the municipality operates the facility or a private corporation could operate the
~s facility if it has applied for an exemption. It is our suggestion; that. ~EQS apply for
16 this exemption status through the ,PUC. An application. would be submitted before
17 the P7C: State Law requires the, Pl<JC to give ~an exemption. A~ Memorandum of
is inderstanding is our understanding of what those statutes are and al-lows EOS to
19 make the application to the PUC to obtain the exemption: Once EOS makes this
20 period followed by a 90 day determii~atiohn period'ld be a 30 day application review
22 The. MOiT is the, bridge that provides us the opportunity to go before 'the PLJC: The
23 term of this MOU would., be in effect until a Service Agreement is approved. 'The
24 MOiJ would .stop at that point.; The project EOS is referring: to ,is the design,
" 25 construction. and financing to own and operate a wastewater plant; for 20 yearn. The _ .. .
26 Ground Lease would be for a term that is loner than the useful life of 'the. plant
27 which is SO years plus renelval options. The design is for a flow of 10 million gallons
2g lei day with bod at 30 and uspended solids 30. This, material would then 'be put
29 ,into ponds.. There is an aggregate.. of up to $600;000 for fines' "and penalties that
30 ~ would be :paid by EOS: `The City has to retain exclusive rights in„order to raise. rates
31. and use: charges-for-the system. Currently;the effluent and..sludge+,produced by the
32 ~ plant is owned: by. the: city and would continue with this arrangement. The `city".has _
33 the right of :approval for the'use of that facility.
_ , .~.
` 34 The project schedule has been divided up into phases. "~ ~ `~~~
' ~ ''
35 • .Phase I. .Approval of the MOU, Council, andapplication
" 36 ~ ~ to the PUC. ~ • .
37 Phase II. California Environm:entaL Quality Act requirements
3s Phase III. Execution of the engineering.. construction of
39 agreement. The rate study would have to: be undertaken to
4o deter-mine how 'the cost of the plant would be borne by the
41 various users of the :facility and a contract would be negotiated.
42 Councilwoman Woolsey would like. to see. examples of how other :faeiiities are
43 owned and operated;. comparing .cost, projected late and growth over the years.
44 John Scharer,, City 1Vlanager advised. the Council the project could. be financed by
45 placing it before the voters as a general obligation bond which would require a 2/3
46 vote.
47 As a Charter City with the home rule provision where revenue bonds can be ::issued
4s to finance a utility such as water,. sewer or ,other type. of enterprise operation.
1 4,
July 24, 1989
Vol. 25, Page 117 ~ 117
~ The City could incur bond financing-.costs, bond underwriters and bond counsel.., . , :
2 Procedurally the City would have to seek outa~consulting firm to~engirieerathe plant~and
3 design it. That will increase the cost and firne span., Having an alternate party construct ~ ;
4 the plant with no responsibility as to constructing ~rt properly, ..does not guarantee it'will ~be
5 operated and mantaned.efficiently. The advantage to a turn key private enterprise is that
6 they design, construct .and operate the plant. ,, ,
.,
- s Staffs concerns with regard to the 1VIOJ are as follows: .
9
10 1.1 Term of the MOU and Service Agreement
11 The life. of the Ground Lease, fif~ years with an option to extend an additional twenty-five
12 years. A term of forty years to fi ty years would be more reasonable. 'The' twenty year
13 Service Agreement was arrived at by past practice.
14 Times significantly change over a long penod of time and the Council might not want to be
15 involved with the same company.
16
17 1.3 Desi n
18 The City will have complete ay .of design and construction. Taking one pond (pond #4)
19 out of the 10 ponds at the site and using a portion of that. site (10 acres).
20
21 1.4 Construction Schedule
22 The Service Agreement wih be a document that is significantly more complex and more
23 detailed than the MOU which will be discussed at a later date.
24
25 1.6 Design Performance Standards
26 The level of treatment should be maintained at a secondary level until it is required to go
27 to a tertiary level. The citizens of Petaluma should not have to pay for tertiary treatment
28 without direct benefit.
29
30 1.7 Maintenance
31 The city will have complete authority to ensure that the facility is adequately maintained.
32
33 1.8 Influent. and Effluent Testing
34 All pursuant to required loss.
35
36 1.9 Personnel
37 Similar to requirement in our current Service Agreement with EOS. EOS will maintain,
3s operate and train safety programs for all its employees..
39
40 1:10 Penalties
41 The Citywill have authority to impose fines and penalties for noncompliance. This will be
42 detailed in the Service Agreement.
43
44 .1.10.1 Delav
as Events that may arise outside the control of EOS.
46
47 1.10.2 Performance
4s The City has tentatively agreed on: an~uage relating to the .annual aggregate amount of
49 $600,000 which is .imposed. upon ,the City. It also states that the City can address those
5o fines/failure by EOS to pay any fines in excess of whatwould trigger a default in those
51 provisions the City has not yef drafted. This section could possibly need more language
52 change.
.~
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Page 118 Vol., 25 { ~ July 24, 1989
1 1..10.3 ConseeLUential and Other Damages
2 ~ Is a°legal provision. ~~ ~.
3 1.11 Comyerisation to BOS-Petaluma
a ~ ~ Essen`tially' the' Game 'formula currently being used.,- 'The city, currently `has• a CPI
5 provision that has not been discussed as ,yet. Any details would have to be worked
~.,6 out in the final Service :Agreement.
7 . 1.12 ,Security for.EOS-Petaluma Compensation ° ~i
s'' All revenues would be pledged toward the payment'of the fee for the service's: This
9 is being done .currently under the enterprise system.
so This particu ar provision. says..:any deficiency, between the amount of these. fees and
11 charges„ and: the amount payable to EOS-Petaluma will be paid. from the City's
12 General Revenues or other sources identified by the City.
13 1.13 Settin Rates
14 The City will 'have the exclusive right to: set rates, connection charges, and. other fees
is payable to members of the public for sewer service:
16 1.14 Other Services' _
1z If EOS-Petaluma wishes to use the' project to provide any new additional or
is alternative service they would. have to get the cities approval.
19 1.15 Ownership of Effluent sand Sludge
118
20 The ownership of effluent and sludge will remain as is in the. Service Agreement..
21 EOS transports our sludge to the disposal site at the redwood landfill south of town
22 and they are: compensated.
23 1.18' Insurance
24 The ci`ty' provides the insurance which is part of the overall .fee setting.. It :;rnay be
25 less expensive when insurance is provided through: Rust International or whomever
26 the EOS entity -is:
27 1.19 Condemnation.
2s The final safeguard in the event that thee. agreement does. not. work out.. The city will
29 have the option to contract with someone else do the work. even though EOS owns
3o the :plant.,
31 The city can condemn their interest anytime during. the life of the agreement.
32 1.20 Force 1Vlajeure
33 This section might need more, refinement: If there is a major unforeseen
3a circumstance that. affects the sewer plant operations the fees will be amended in
..
35 accordance with the formula which will- be in; the Service Agreement, and the intent
36 would be tq cover. any increase..cost°maintaining their debt coverage rate:
37 1.23 Exclusive. Negotiation
38 This gives EOS exclusive negotiation rights to negotiate the Service Agreement for a
39 period o_ f 18' months from the date the MOU,' is igned.
4o Deputy City Attorney Joe Forest voiced his concerns in .regard to the terms of the
41 Ground Lease.
:~ .- . .
July 24, 1989
Vol. 25, Page 119 119
1 .The city -has the ability at the end of 20 years to acquire the facility, renew the Service
2 Agreement or seek new Service Agreements.
3 The main thrust of the 1VI0U is to satisfy the required statutory exemption in order to
4 receive an exemption from the PUC. The MOU initially presented sought to have a lot
5 more detail. than,ahe staff was willing to have inserted. Since. Petaluma would be the first ~ ~~
6 ~ one in the s"tate that needs a PUC exemption there is nothing the city can refer to in the
7 way of precedence. The timing of this project is important;from the point in time when the
8 MQU is.approved and turned over to the PUC. There is a possibility the PUC will not
9 accept the application without an EIR analysis. Staff is a year plus away from a Service
1o Agreement, being presented to Council which will allow the staff time to negotiate. some. of
11 the details. If a consensus. cannot be arrived at, there will be no Service Agreement.
12 Council is making certain commitments at this stage in he MOU, but there is a lot your
13 not committed to. and willrobviously be subject to negotiation. The principal concerns the
14 Council is making at this time is a commitment to the length of the Ground Lease, the
15 length of the Service Agreement, and option under the lease and penalty provisions.
16
.I7 1VIOIJ -Council
18
19 Councilman Balshaw:
20
21 1.2 Ground Lease
22 Last sentence "The ground lease shall provide that as long as the Service Agreement is in
23 effect, the property cannot be used for any purpose other than a Wastewater Treatment
24 Facility for treatment. of the City's effluent'. "If we ever terminate Service Agreement for
25 any reason what can this facility be used for"?
26
27 City Attorney Joe Forest. advised Councilman Balshaw it depended on what it was zoned
28 for and what other uses could be .made if 10 acres that is surrounded by sewer ponds.
29 Councilman Balshaw - If ,the .city and EOS have a parting of the ways what is there to
3o prevent EOS from purchasing acreage and treating the Lakeville Route 37 New Town.
31 Would it be in the cities i-merest to specify limits?
32
33 City Attorney Joe Forest advised that the .city can set limits. If the city does not have a
34 Service Agreement and EOS proposes to do something that is in conflict with what the city
35 wants then the city can condemn.
36
37 Councilman Balshaw wanted to know why the city cannot specify what we want instead of
38 leaving it open ended.
39
4o John:Scharer, City Manager related that staff had the same concerns as Councilman
41 Balshaw. AS a practical. matter EOS~will own.10 acres'in the middle of 200 acres of ponds
42 of which the wastewater system plant is located. The city could disconnect all pipes to the
43 treatment plant so EOS would .not have the capability to "do much more, because EOS is
44 going to~ be using our facilities to discharge into the river in the winter months and use
45 wastewater during the other months for irrigating.
~~ "' qtr @.~=
Page 120 Vol. 25 July 24, 1989 120
1 Councilman,$alshaw would like th%s to be in the' Service Agreement; he'also wanted; _.
2 to know what will "be ~ done. if the service: agreement 'is -not renegotiated? ;He. was
3 advised that it wi1T bespecifically addressed. The city could purchase 'it:.for the
a depreciated tax value at any point and time. -
5 ' 'Councilman Tencer: ' '' - ,, .
.. ~ . ,
6 ~ Showed concern :relating to default. Mr. Gale advised Councilman Tencer: that this
7 -would be. gelled out in the Service Agreement in detail. '
8 Council Balshaw:
9 , ,1.3; Desi n Would ake the City left:. out. of the design process. Councilman
1o Balshaw was .advised. by 1VIr--: Gale that the PUC Code: requires: the city -ao .have `~
li certain input in the design process. ~ ,
,,;-.:-
12 Vice Mayor Sober: - '
13 1.3 Design
14 Feels this paragraph: is unnecessarily restr-fictive and puts the city in harms- way:..
15 Council consensus is to change the language.
16 Councilman Tencer:
17 1.5 Construction of'the Project
i8 Questioned why EQS-Petaluma shall not be required to host payrrient or
19 performance bond? Mr. Gale. advised that it could be done, but it adds to ;the :cost.
20 Couneilman'Tencer would like `input from David Spilman, Finance Director.
21 Councilman ~alstiaw: - .
22 1.6 Design-Performance- Standards-
23 What is the weighted monthly average based upon. -City Engineer Tom,.. Hargis
24 advised ,that these are the standards that will be faced in the foreseeable °future
25 discharge .limits upon Petaluma.
26 Councilman Davis:;
27 1:7 Maintenance.
28 Concerns were shown with regard to the rna~iritenanee of the facility aril penalties if
29 not- maintained. What is the penalty for ..not adequately maintaining the facility? If
3o the city imposes a fine. will it come out of the rate payers dollars? Jose :Forest
31 advised that, the city can include that in the Service Agreement `relative to the rate
32 structure. You. can specifically say that any fines levied are not to be eonsidei•ed as
33 part of the rate structure as approved by the city.
34 Vice Mayor Sobel:
3s 1.10.2 Performance will be addressed in .the, default.
36 Why ,the. $600,000'? Mr. Dandeneau ,pointed out:. ahat. dome situations can be
37 unrelated. to the plant. It could be related to discharge from the pond :area, an
38 irrigation contract ~was~ .not renewed in. such :cases the fine protection. would not
39 :respond to that. The >$600,000 would. only apply to .items that may or `may not be
4o within. the control. of EOS. An appropriate ratio of sharing ,based upon soiree
41 arbitration mediation would be appropriate.
~.. .~
July 24, 1989
Vol. 25, Page 121 121
i Councilman Davis:
2 Wanted to know if red and white sludge-comes down the river, would the city be
3 responsible .for levying a fine?
4 John Scharer, City Manager advised that EOS would be in violation of the Industrial Waste
5 Ordinance and the city would fine the discharger and also impose penalty rates.
6
7 Councilman lialshaw:
g 1.10.3 Consequential and Other Damages
9 Omit third party'in this section - Consequential~damages incurred by the city, not to a
to third party, not to the hotel owners etc.
11
12 Councilman Tencer:
13
14 1.12 Securi for EOS-Petaluma Com ensation
is Compensation will be secured. by speci 'c allocation of various fees. The City will not
16 allocate or use these fees or charges .for any other purpose until the current obligation is
17 taken care of. If fees are not sufficient the General Fund will. be used. There may have to
is be certain guarantees that the city is going to be able to make whatever the agreed upon
19 payments are. My concern is that it'looks Pike if we have .greater revenues that this is
20 prohibiting us from using these other sewer ...................... Mayor ................
21 What is the current obligation? Length of the Service Agreement or monthly amount, or
22 other?
23
24 John Scharer, City Manager advised that it is the monthly amount. All funds are city funds,
25 I can understand they need some guarantee, in the. event there is a short fall of revenue
26 from the operations we would call upon the General Revenues of the city.
27
28 Councilman Tencer understands when you talk about current obligations, but it is written
29 in this document 'until reasonable reserves for payment of future obligations have been
3o funded'.
31
32 Mr. Dandeneau advised that since the city is EOS's only customer and the city has the
33 exclusive rights to raise rates EOS cannot address that issue.
34
35 Councilman Tencer: If the city is getting 22% more than you need right now, or for the
36 next year or two from the. existing rates, and if the city wants to do something else to
37 improve its collection system which is also funded frorn our enterprise fund. This
38 paragraph may prevent us from doing that. How do we deal with that?
39
4o Mr. Dandeneau advised that it could be arranged. .
41
a2 John :Scharer,. City Manager advised that the rates are also going ~to include the collection.
43 system, they are not just going to include the cost of their service.
44 .
45 John Scharer, City Manager A six month reserve is. probably adequate, but no one has
46 talked about what that reserve is or what is reasonable.
47
48 Councilman Balshaw Wants that put in the Service Agreement. What. is reasonable.
Page 122 Vol. 25 July 24, 1989 122
1 U.S. HIG~IWAY lO1 CORRIDOR 1tEP.ORT
2 Vice IVlayor Sobel repor-ted that there were two motions at the, last -Sonoma County
3 Transportation Committee meeting. One involved whether the city wanted to spend
4 more time looking at the 1/2 cent sales tax option as opposed to the 1 cent ales tax
5 option that the Transportation Advisory Committee has been.looking at. Qn an 8-7
6 vote it was .decided: that. the city would not look. at the 1/2 cent option that we would
7 forge ahead on the 1 cent sales tax option. Your ,representative (Vice Mayor ..Sobel)
g vofed rio. 'Vice Mayor Sobel ,feels that the 1/2 cent sales tax option should have
9 been pursued longer:
1o Second vote was whether the. city should not look at an election in 1.989. It was
11 defeated with an 11 3 vote.,. August 12 is the deadline to get it on the ballot:...
12 RECESS TO CLOSEDSESSION -Personnel 10:0 .m.
13 IVI. Patricia Hlligoss, Mayor
14 AT'TEST' / ~-- /)
15
16
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