ITEM 3.9 Solar East WWTFe
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DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT
REQUESTOR:
MEETING DATE:
Utilities
Utility Manager Neidermeier
July 27, 2020
PRESENTER(s)
REVIEWED BY:
ITEM #:
Consent
City Administrator/Finance Director Flaherty
AE2S Engineer Schaefer
3.9
STRATEGIC VISION
MEETS:
I THE CITY OF OTSEGO:
Is a strong organization that is committed to leading the community through innovative
communication.
X
Has proactively expanded infrastructure to responsibly provide core services.
Is committed to delivery of quality emergency service responsive to community needs and
expectations in a cost-effective manner.
Is a social community with diverse housing, service options, and employment opportunities.
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
City Staff is recommending City Council approve removal of the Alternate #2 (Solar Energy System) from
the East WWTF Biosolids Building contract with Rice Lake Construction Group.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
No
No
BACKGROUND/JUSTIFICATION:
The Green Project Reserve (GPR) program was anticipated to provide 25-percent "principal forgiveness" for
the solar portion of the project. The funding program was not able to access federal funding for this GPR,
and GPR became contingent on the state bonding bill. The second state congressional special session
adjourned without passing a bonding bill.
The contractor has held the progress on the solar as long as possible without impacting the project
schedule, so a decision is required whether to include or exclude the solar system within this project scope.
The anticipated payback period was 15 years with the GPR funding and anticipated to be 20 years without
the GPR funding. This topic was discussed at the Public Works Subcommittee on July 22, 2020, and the
direction was to remove the solar from this project.
The Biosolids Building will still be set up to accommodate a solar system. The likely scenarios will be to bid
the solar installation as a stand-alone project, which is anticipated to improve the capital costs, or to
consider a capital lease -back program, which is a more complex arrangement but does not require capital
funding from the City. These alternative delivery methods will be revisited at a later time.
SUPPORTING DOCUMENTS ATTACHED:
0 None
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE ITTO APPEAR IN THE MINUTES:
Motion to remove Alternate #2 (Solar Energy System) from the East WWTF Biosolids Building contract with
Rice Lake Construction Group via change order.
BUDGET INFORMATION
FUNDING: BUDGETED:
Fund 602 — Sanitary Sewer Utility Yes