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HomeMy WebLinkAbout~Master - Special Meeting of the Ames City Council 12/06/2011MINUTES OF THE SPECIAL MEETING OF THE AMES CITY COUNCIL AMES, IOWA DECEMBER 6, 2011 The Ames City Council met in special session at 7:00 p.m. on the 6 day of December, 2011, in theth City Council Chambers in City Hall, 515 Clark Avenue, pursuant to law with Mayor Ann Campbell presiding and the following Council Members present: Davis, Larson, Mahayni, Orazem, and Wacha. Council Member Goodman arrived at 8:02 p.m. REQUEST BY MAIN STREET CULTURAL DISTRICT (MSCD) FOR ELECTRICAL CONNECTION NEAR EVERGREEN TREE IN FRONT OF POWER PLANT: Bill Malone, 229 Main Street, Ames, represented the MSCD. He told the Council that an Ames Beautification Project is underway to change the east end of Main Street. Mr. Malone said that the three parts of the project include a large spruce tree with landscaping, an arch, and a major art installation. He said an electrical outlet near the tree would be used year round for holiday lights and a lighted art platform. Council Member Larson asked if lights would be installed this season. Mr. Malone said there is not time for that this year, so different decorations will be used. Assistant City Manager Sheila Lundt said that a contractor is in place to do the work if this is approved by City Council. Moved by Larson, and seconded by Davis, to adopt RESOLUTION NO. 11-532 approving the request for an electrical connection near the evergreen tree in front of the Power Plant. Roll Call Vote: 5-0. Resolution declared adopted unanim ou sly, signed by the Mayor, and hereby m ade a portion of the se M inu tes. REQUEST BY MSCD FOR DONATION OF ELECTRICITY FOR HOLIDAY LIGHTS ON EVERGREEN TREE IN FRONT OF POWER PLANT: Moved by Larson, seconded by Davis, to adopt RESOLUTION NO. 11-533 approving the request for donation of electricity near the evergreen tree in front of the Power Plant. Roll Call Vote: 5-0. Resolution declare d a do pte d unanim ously, signed by the Mayor, and hereby m ade a portion of the se M inu tes. PRESENTATION OF WASTE-TO-ENERGY ALTERNATIVES FEASIBILITY STUDY: Ms. Lundt introduced Dr. Shapoor Hamid to review the study by URS Corporation (URS) with the Council via GoToMeeting® from Los Angeles, California. She also introduced Gary Erickson and Cathy Brown, members of the Electric Utility Operations Review and Advisory Board (EUORAB). Dr. Hamid said in late 2010 the Electric Department contracted with URS to do a Feasibility Study to identify improvements and alternatives to the current method of direct burning refuse- derived fuel (RDF) in the City’s Power Plant. Dr. Hamid reviewed the current operation. Dr. Hamid then described a Conversion Technology (CT) as a technology that converts municipal solid waste (MSW), RDF, and biomass into useful products including electricity, alternative fuel, and other useful byproducts. He described the three categories of CTs: 1. Thermal A. Pyrolysis B. Gasification C. Pyrolysis/Gasification D. Plasma Gasification 2 2. Biological A. Anaerobic Digestion B. Composting 3. Hybrid and Others A. Gasification/ Fermentation B. Others Dr. Hamid described the CT options to the Council as analyzed by URS. Ms. Lundt said that staff asked URS to look at the current technology and suggest improvements, some of which are already being used, and to analyze current conversion technologies available. She said as a staff, more research needs to be done to move forward on a specific recommendation. Council Member Orazem said the net present value seems to be very small. He said it appears that after the initial investment, the improved facility would break even. Dr. Hamid said that is correct. Ms. Lundt said that what is being discussed is the secondary shredder and air knife going offline, the amount of ash being reduced, and lessening landfill rejects. She said real numbers are needed so that the real savings and costs to the operation can be determined. She also said the Resource Recovery Plant (RRP) is fast approaching its capacity to process, and the Power Plant’s ability to burn RDF in its current form. Staff Member Brian Phillips added that staff asked URS to be conservative with its estimates, so the numbers do not account for any increase in per capita fees or tipping fees over the 20 year period . City Manager Steve Schainker said that technology will help alleviate challenges on both sides, at the RRP and at the Power Plant. He said the intent of this study was to look at alternatives. Looking ahead, the next step will be a more detailed report with more detailed numbers on costs of construction and operation. Mr. Schainker said that staff first wants to visit different types of operations. He told the Council that staff desires to be innovative but not the first and only one with a certain technology. Mr. Schainker said any capital improvements for the RRP would also involve 12 other communities in addition to Ames, as well as Story County and Iowa State University. He told the Council that this study focused on relative costs, and the focus will now be more narrow. Dr. Hamid added that the relative costs included in this study are meant for comparison purposes, but at this point the technical differences in the options are more relevant. Council Member Wacha asked what the percentage of gas burned would be in relation to coal. Ms. Lundt and Dr. Hamid said that will need to be explored further. Member Wacha also asked if the Kansas test facility was the only other facility in the US with technology comparable to what the City of Ames is considering. Dr. Hamid said that is correct, that many other communities have researched these technologies and do not desire to be the first or only ones to construct a facility of this type. He said there are large operations in Germany and Japan that process 350 - 400 tons of MSW per day. Mr. Schainker said that Ames already has the components in place, except for the gasification part. He said much of the investment has already been made with the current RRP. Dr. Hamid said that Ames is just one system away from using a different CT, and he would like to see Ames be the first one. 3 Council Member Larson said that possible U.S. Environmental Protection Agency (EPA) changes should be considered. Mr. Schainker agreed. Council Member Orazem asked if there are federal funds available for pilot projects. Dr. Hamid said that once the specific technology is determined, a specific analysis would need to be done to show green house gas emissions savings, landfill diversion information, and cost savings by using gasification. He said some funding sources are included in the report and some must be explored further. Council Member Goodman arrived at 8:02 p.m. Council Member Orazem asked about EPA’s concerns. Dr. Hamid said toxic air pollutants are a concern, but burning syngas instead of RDF will not increase any of the toxic air pollutants. He said that because there is no air pollution control before the RDF goes to the boilers, the chlorine from the RDF is causing corrosion in the boilers. Ms. Lundt said that the molecular components of the gas as the RDF is converted, as well as what will happen in the boiler must be explored. She said if the City moves forward with this, conversations must be had with the Iowa Department of Natural Resources regarding testing. Dr. Hamid told the Council that air emissions would be much lower when burning syngas than when burning MSW. Ms. Lundt said there are many questions, but there will be many operational advantages if this can work. Mr. Schainker told the Council that there are many options as to how the gas could be burned. Council Member Larson asked if it would be beneficial to separate plastic to prevent corrosion in the boilers. Dr. Hamid said that plastic accounts for 40-50% of the RDF so eliminating plastic would take away much of the RDF. He told the Council that the Thermal CTs are better options, since Biological CTs cannot process plastics. Council Member Davis asked what the time frame is for next steps, and what the anticipated cost of the next phase will be. Ms. Lundt said when the budget is completed staff hopes to know more. She said with a project like this it cannot be design-build, by state law, so staff will be working with Electric Engineering staff as well as Dr. Hamid’s staff to investigate places where syngas is being burned, and to put a bid package together. Ms. Lundt said that before that, staff may have to create a Request for Proposals for some outside engineering assistance. Dr. Hamid said this project would be termed a demonstration project, which could qualify it for governmental incentives. Discussion continued, and Council Member Orazem asked if some EPA changes would be effective in January. Assistant Electric Director Brian Trower said that the EPA is working on a number of rules, including the Cross-State Air Pollution Rule which replaces the Clean Air 2 XInterstate Rule regulating SO and NO . The compliance date is January 1, 2012. Mr. Trower said that its intent is not to have everyone convert, but to look at ways Power Plants can be managed while complying with the law, which is a challenge. He said other EPA rules will also be coming including the Mercury and Air Toxics Standard and the Coal Combustion Residues which limits ash residue from Power Plants. Mr. Schainker said that another important element in dealing with some of these issues is the tie line franchise that is needed for the future of electric services in the community. Council Member Wacha said he appreciated the presentation and looks forward to hearing more. The meeting recessed at 8:16 p.m and reconvened at 8:23 p.m. 4 PRESENTATION OF CONVENTION “FLAT SPACE” PLAN: Mayor Campbell introduced Ames Convention and Visitors Bureau Director Julie Weeks. Ms. Weeks said the Ames Convention and Visitors Bureau (ACVB), the City of Ames, Ames Economic Development Commission, Iowa State University (ISU), and the Chamber of Commerce jointly funded two studies. Ms. Weeks introduced Dan Culhane, Chamber of Commerce President and Chief Executive Officer; John Grzywacz, Board President of Ames Convention and Visitors Bureau; and Steve Sankey, RDG Planning & Design (RDG). Weeks told the Council that the two studies have spanned two years, and that this discussion will include a presentation by RDG of the recent study. Ms. Weeks told the Council that overnight visitors spent $64.5 million in Ames in 2010. Ms. Weeks reviewed Story County employment information and the tax role. She reviewed revenue, which stayed fairly steady until 2009, when Ames lost individual travelers but group travel stayed strong through 2010. Council Member Davis asked about the projected revenue for 2011. Ms. Weeks said that tax receipts will be about 26% higher than last year. Ms. Weeks said the ACVB will work with 198 groups this year, of which 152 are either hosted by ISU or use ISU facilities. She said ISU is the driving force for overnight visits and the hospitality industry in Ames. She told the Council that there has been a drop in the “annual group,” category, which consists of groups that have a 3-5 year contract. She said as a result of the groups lost, 8,000 room nights are lost, which equate to about $2.5 million of direct spending. She said all of the lost groups are a result of the lack of convention space. Ms. Weeks discussed 1969-73 when the Iowa State Center was built, and the only other similar facility in Iowa was Vets Auditorium. She said that Ames had the best facilities for many years, but the quality of space now desired is different than what the current Iowa State Center can offer. Ms. Weeks said the first study two years ago revealed that Ames is still a prime location for meeting, having no competition within a 100 mile radius other than Des Moines. She reviewed the results of a survey completed by past, current, and potential users regarding the types of space needed. Ms. Weeks discussed the lack of sufficient meeting space, ballroom space, and exhibit space. Discussion continued regarding the facilities at the Iowa State Center. Mr. Sankey discussed the existing facilities at the Iowa State Center, mentioning the advantages of the parking, the meeting space available in the Scheman Building, and the exterior design and materials, as well as the concern of flooding while considering how to add to the complex. Mr. Sankey said that RDG needed to consider how to add flat space and how to utilize the existing Scheman Building, while focusing on energy efficiency and quality environments that are desirable. He said many scenarios were considered, and that the proposed scenario is to construct a building adjacent to the current Scheman Building that would add 127,000 gross square feet. Mr. Sankey said the proposed building would feature a raised exhibit floor, which would place it one level out of the flood plain, while also creating a covered, protected parking lot. He said RDG is also proposing creating a defined entrance that would provide drop-off opportunities. He told the Council that all exhibit space would be protected from flooding. Mr. Sankey further described the details of the proposed building and showed diagrams of the area in reference to 5 the existing Iowa State Center. There was discussion on the design of the building. Mr. Sankey said the total budget for the proposed building is $52 million, which includes upgrades to the Scheman Building and the south entryway building. Ms. Weeks said after the additional space is available, the space would serve much more of the market . She discussed funding options. She reviewed traditional funding sources for projects such as this including the Lodging Tax, Gaming Revenues, Tax Incremental Financing, Local Option Tax, Property Tax, and Restaurant and Bar Tax. Ms. Weeks said the Restaurant and Bar Tax is being used in several communities, and that estimated revenue from a Restaurant and Bar Tax of 1% would be $1,122,760. Discussion ensued regarding taxes and funding options. Ms. Weeks told the Council that the proposed facility would operate with an estimated $211,000 deficit per year and would need a subsidy. She proposed that the increase in Hotel/Motel Tax and current Hotel/Motel Tax would go to operate the facilities deficit. She told the Council that between $92,000 - $108,000 is budgeted annually for the current deficit, and for subsidizing groups that come to Ames and use facilities. Mayor Campbell said state enabling legislation would need to occur to allow for new taxes. Ms. Weeks said that was correct. Ms. Weeks reviewed the benefit to the community as the City of Ames and ISU partners together for the project. Mayor Campbell asked if these ideas have been tested with legislative representatives. Mr. Culhane said the legislators have asked them to discuss this with statewide legislators, of which they are in the process of doing. Council Member Orazem asked how much additional business would be generated. Ms. Weeks said that 10,000-15,000 room nights per year for group events would be added in addition to the current 50,000-60,000 room nights annually. Council Member Davis asked if there are enough hotel rooms available in Ames for large events. Ms. Weeks said the rooms in Ames are mostly sufficient, but when the largest groups such as the Farm Progress Show come to Ames, the ACVB works with nearby communities for some hotel rooms. Council Member Goodman asked why Tax Incremental Financing was disregarded. She said a hotel onsite was considered, but it became evident from other projects in Iowa that finding a private partner to build a hotel is unlikely. Member Goodman asked about the net conference activity trend. Ms. Weeks said Ames is unique because of ISU, and does many educational conferences. She said the need for face-to-face educational conferences including exhibits is continuing to grow. Council Member Orazem asked for clarification on the revenue generated by overnight visitors. Ms. Weeks said in 2010 $17.4 million was spent on hotels, $13 million on food, $7.7 million on entertainment, $18 million on transportation, and $7.7 million on shopping. Council Member Larson asked about financing the City’s portion if a hospitality tax was presented to voters and approved. Mr. Schainker said since the money is needed up front, the City could issue $25 million in bonds, and abate the debt with the revenue each year through the source of revenue. Member Larson said he appreciates the funding ideas as well as the partnership between the City and ISU, and said to fund the City’s portion with a source of revenue other than property tax is even more attractive for the City. 6 Mayor Campbell reminded the Council of the legislative hurdle, as well as the local hurdle in getting a new tax passed. Discussion continued on revenue. Council Member Davis asked about ISU’s commitment to this project. Ms. Weeks said it is being requested that the City of Ames take the leadership role in moving this project forward. Member Davis said he doesn’t believe a decision from the City should be made until the new leadership at ISU is in place and on board with the project. Member Larson said he would appreciate receiving information from the ACVB so the City can begin to approach the State now. Mayor Campbell said City officials will be meeting with legislators next week. Member Orazem said the numbers are compelling, and that the City should be interested in this, but he hopes revenue other than property taxes can be used. Council Member Goodman wondered if this project could be scaled back at all. Ms. Weeks said the dollars could be scaled back some, but they would be hesitant to move away from the 35,000 square feet. Mr. Grzywacz said that by elevating the floor to the second level, $5.1 million was added to the project. Ms. Weeks said they feel very strongly that the decision makes sense in terms of flooding and traffic flow. Mr. Culhane said the Restaurant and Bar Tax has raised some concern, but that this is very preliminary and every alternative will be researched. Council Member Davis said he hopes more than $15 million in private donations can be raised. COMMENTS: Moved by Larson, seconded by Davis, to refer to staff the letter from Matt Randall regarding the property on SE 17 Street; that staff would provide a briefing and backgroundth information including history on the particular area and reason for the request. Vote on Motion: 6-0. Motion declared carried unanimously. Council Member Orazem congratulated the new City Council Member, Victoria Szopinski. ADJOURNMENT: The meeting adjourned at 9:43 p.m. _______________________________________________________________________ Diane R. Voss, City Clerk Ann H. Campbell, Mayor ___________________________________ Erin Thompson, Recording Secretary