HomeMy WebLinkAbout2016/10/24 - ADMIN - Minutes - City Council - Regular111St. Louis Park OFFICIAL MINUTES
M I N N E S O T A SPECIAL CITY COUNCIL MEETING
ST. LOUIS PARK, MINNESOTA
OCTOBER 24, 2016
1. Call to Order
Mayor Spano called the special meeting to order at 6:15 p.m.
Councilmembers present: Mayor Jake Spano, Tim Brausen, Steve Hallfin, Gregg Lindberg,
Anne Mavity, Thom Miller, and Susan Sanger.
Councilmembers absent: None
Staff present: City Manager (Mr. Harmening), Environmental & Sustainability Coordinator (Ms.
Pine), Planning and Zoning Supervisor (Mr. Walther), Director of Engineering (Ms. Heiser),
Chief Financial Officer (Mr. Simon), Economic Development Coordinator (Mr. Hunt), Planner
(Ms. Monson), and Recording Secretary (Ms. Pappas).
la. Pledge of Allegiance
lb. Roll Call
2. Resolutions, Ordinance, Motions and Discussion Items
2a. Made in MN Solar Project for Fire Station #2. Resolution No. 16-139
Ms. Pine explained that the city entered into agreements with the help of an energy
consulting firm, Apex, and applied for the Made in Minnesota (MIM) Solar Rebate
Program. The city was awarded the opportunity to commit to the program requirements.
The program allows the city to embark on renewable energy as is required in the
Environmentally Preferable Purchasing Policy and as stated in the goals of the city's
Energy Action Plan. The program requires the city to enter into a 10 -year lease and
power purchase agreement with the developer, Viridi Investments, LLC. Financial
incentives from the program for the 10 -year agreements include: no initial construction or
operating costs to the city; a slight reduction on monthly electric bills; and an annual
production financial credit from the program based on the amount of solar electricity
generated by the panels the previous year. These incentives offset the cost to the city for
the power purchased from the developer, which is at a higher rate than the current utility
rate for a 10 -year agreement. The system is to be installed and operational by June 1,
2017, and the city attorney has reviewed, modified, and approved the contractual
agreements with Apex and Viridi Investments, LLC.
Ms. Pine reiterated there is no up -front cost to the city and, at the end of the 10 -year
lease, the city is able to retain the whole system at a very low cost. The system could then
continue to be used for its remaining life, under a 30 -year warranty. An added bonus is
that it would reduce annual electric costs.
Mayor Spano asked why the system would not be free to the city at the end of the 10 -year
agreement. Ms. Pine stated it is a tax issue with the IRS.
Special City Council Meeting -2- October 24, 2016
Councihnember Miller asked if the process to receive the rebate involved a lottery. Ms.
Pine stated a lottery was involved, adding there are strict requirements. Additionally, she
noted there are rebates every year from the state fund for having the system.
Councilmember Brausen questioned why the kilowatt hours go up over time, but
production decreases over time. Ms. Pine noted there is a 1% depreciation per year on
solar panels.
Councilmember Brausen asked if there is 90% functionality on the panels at the end of
the 10 years, to which Ms. Pine answered yes.
Councilmember Mavity asked about selling at the end of the 10 -year tax credit period.
She noted there is no mention of a range of fair market value and asked if this could be
better defined. Ms. Pine stated this is virtually unknown, and a value cannot be put on the
panels.
Councilmember Mavity asked if we cannot agree on a fair market value, are they
required to remove the panels from the roof and, if so, in what time frame. Ms. Pine
stated they would remove the panels or sell them to the city through the agreement.
Councilmember Mavity stated she would like clarity on this language in the agreement.
Mr. Harmening stated the language in the agreement is acceptable, and other cities have
accepted it also; however, if council is not comfortable with the language, he is not sure
the project could be completed.
Councilmember Sanger asked if this agreement would only be used for the fire station or
other buildings, as well. Ms. Pine stated it is only for the fire station building.
It was moved by Councilmember Hallfin, seconded by Councilmember Sanger, to adopt
Resolution No. 16-139, authorizing the Mayor and City Manager to enter into
agreements with Viridi Investments, LLC.
The motion passed 7-0.
3. Adjournment
The meeting adjourned at 6:30 p.m.
Jqelissaenned ,City Clerk