10.3. SR 11-04-2013 /i
Elk Request for Action
Fiver
To Item Number
Mayor and City Council 10.3
Agenda Section Meeting Date Prepared by
Work Session November 4, 2013 Justin Femrite, P.E. City Engineer
Item Description Reviewed by
Wastewater Treatment Expansion Site Options Cal Portner, City Administrator
Reviewed by
Action Requested
Provide staff direction on potential alternative Wastewater Treatment facility expansion layout.
Background/Discussion
Staff has been in discussions with Great River Energy (GRE) regarding the required land transfer to
facilitate our planned WWTF expansion. The Facility Plan identifies expansion of our operations south
of the existing parking lot area onto a 1.4 acre parcel currently owned by Great River Energy. This parcel
and transfer is detailed in Item 6 of the attached Agreement from 2007.
In a meeting held between city and GRE staff on October 21, 2013, GRE asked the city to consider a
different parcel instead of the 1.4 acre piece to the south. The newly-proposed 5.5 acre parcel is shown
on Exhibit 2 of the attached agreement. Staff has reviewed the proposal and deemed it feasible to
accommodate our needed expansion on the alternative parcel providing it also includes a portion of an
additional piece of GRE's land to our immediate east to facilitate access to the new parcel.
Staff would like to review the positive and negative attributes associated with the newly proposed location
with the Council ahead of any final design and rezoning process.
Financial Impact
None
Attachments
■ 2007 Agreement.
PVawEAEU sr
mA/� uR
COPY
AGREEMENT
This Agreement is entered into this day of 2007, by and between
Great River Energy, a Minnesota cooperative corporation, with its rincipal office at 17845
East Highway 10,Elk River,Minnesota 55330 (the Cooperative),and the City of Elk River,a
political subdivision with its principal office at 13065 Orono Parkway NW, Elk River,
Minnesota, 55330 (the City).
WITNESSETH
WHEREAS, the Cooperative wishes to develop and operate a 150-200 megawatt simple-
cycle electric generation facility fueled primarily with natural gas with fuel-oil back-up (the
Project) and a site under serious consideration is adjacent to GRE's existing 230 kV
substation and RDF fired generating plant located in the City of Elk River in Sherburne
County (the Property);and
WHEREAS,the Cooperative has represented to the City that.
A. The Project will provide significant electric reliability benefits to the City and the
surrounding region. The project is environmentally benign as it will utilize
natural gas as its primary fuel and it will operate for peaking or emergency power;
and
B. Prior to construction the Project will need to be granted a Certificate of Need
and a Site Permit from the Minnesota Public Utilities Commission, and an Air
Permit from the Minnesota Pollution Control Agency;and
C. For the Project to be economically viable in the City, the Cooperative must have
the Minnesota Legislature enact legislation (the Legislation) that would exempt
electric generation equipment to be installed at the Property from taxation as
personal property;and
D. Even with the exemption contained in the Legislation, the Cooperative has
projected that the Project.if constructed and operated, would generate taxes of
approximately $310,000 annually attributable to the Project's real property and
transmission and gas pipeline interconnections;and
E. In order to maximize the probability of having the Legislation enacted, the
Cooperative has requested and received a resolution of support for the Project
from the City because without the resolution, the Legislature may not enact the
Legislation;and
F. Despite City support for the Project and Legislation, GRE may elect not to
construct the Plant at the Property.
WHEREAS, the City is willing to honor the Cooperative's request and provide support
for the Legislation as set forth in this Agreement in consideration of the promises of the
Company set forth herein.
MOW, THEREFORE, in consideration of the foregoing premises and for the good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
it is agreed as follow:
1. Recitals. The foregoing recitals are true and correct and hereby made a part
of this Agreement.
2. Responsibili for Legislation. The Cooperative will be responsible for all of
its own costs, expenses, and activities related to obtaining the Legislation
from the Minnesota Legislature. Except as set forth in Section 3 below, the
City will not have any responsibility for preparing, lobbying for, or otherwise
pursuing the Legislation.
3. City Commitment. The City agrees that it will provide confirmation of its
support for the Project,to the legislators representing constituents residing in
the City and any other legislators inquiring of the City. If Legislation is
enacted, the City agrees to support the Cooperative in defending against any
attempt to repeal the Legislation.
4. In-lieu Payments. The Cooperative shall make a $375,000 annual in-lieu
payment to the City for the first five years of plant operation. The first
annual in-lieu payment shall be due one year from the date the Project is
approved for commercial operation. The remaining four payments shall be
paid on or before the same date in subsequent years, provided the
Cooperative continues to receive the benefits of the personal property tax
exemption.
5. Other payments. The Cooperative shall make an annual in-lieu payment to
the City of$0.20 per megawatt-hour generated by the Project for five years
of plant operation. The calculation shall be based on the actual generation
produced in the previous calendar year and such payment shall be made at
the same time as the payment described in Item #4 above. A maximum
annual cap of 35,000 will apply to this payment.
6. Other Considerations. The City needs to obtain not less than 1.4 acres of
Cooperative property located adjacent to the City's wastewater treatment
facility (Exhibit 1). The Cooperative agrees to provide not less than 1.4 acres
of land to facilitate future expansion of the wastewater treatment facility, the
precise size and length of the land to be agreed on by the parties. The land -
to be p ovided wlli be coa uey d,,to the City within one year of the,City's
notice to Cooperative off.its,need for the land The City shall not give this
notice until four years after the date of this Agreement, unless within those
four years the City determines that it will be necessary to expand its
wastewater treatment facility earlier to meet the City's needs and there is no
feasible or prudent alternative to expand on the Cooperative land. The
transfer of this land requires the Cooperative to relocate some outdoor z
equipment storage to another location on its property which is northeast of
the wastewater treatment facility (Exhibit 2). This new storage location will
requite re-zoning and improvements to support that activity. The
Cooperative and the City will diligently pursue the re-zoning to facilitate the
transfer of property to the City.
7. Public Infrastructure Upgrades. GRE will be responsible for paying directly
for all infrastructure required for the construction and operation of the
Project including water,wastewater, and roads.
8. Provision Relating to o Pavment and Reimbursement. All amounts required to
be paid hereunder shall be paid,without deduction or offset, prior notice or
demand, in lawful money of the United States of America at the address set
forth in the opening paragraph of this Agreement or to any other address as
designated by the City in writing.
9. Condition Precedent. The obligations of the Cooperative under this
Agreement are expressly conditioned upon passage of the Legislation by the
Minnesota Legislature and the Legislation remaining in full force and effect
and the Project being constructed and commercially operable at the Property.
10. Representing of Parties. Each of the parties hereto represents to the other
party that the execution, delivery, and performance by each party has been
duty authorized by all necessary action and constitutes the legal, valid, and
binding obligation of each party enforceable against such party in accordance
with its terms.
11. Acknowledgements by Cooperative. The Cooperative acknowledges and
agrees that other than supporting the Project in all respects: (a) no promises
or commitments of any type or kind have been made by the City with respect
to providing financial assistance to the Project whether by loan, grant, bond
issuance, or otherwise; (b) the Cooperative will need to obtain all permits and
approvals for the Project required by applicable law, including all City
approvals and permits, and all environmental approvals and permits, and that
no promises have been made by the City with respect to waiving or
modifying any applicable permitting requirements; (c) no promises or
commitment have been made by the City, with respect to the assessed
valuation of the Property or the Project or any of the facilities ancillary
thereto; and (d) no promises or commitments have been made by the City
with respect to purchasing electricity from the Project or constricting,
recruiting, or supporting any other electrical generation facilities within the
City.
12. jurisdiction. In the event of any litigation between the parties hereto with
respect to the subject matter of this Agreement (whether or not expressly
covered by this Agreement) each of the parties agrees to the exclusive
jurisdiction of the matter in the state courts located in the City and waives
any arguments that such forum is not convenient.
13. Integration. This Agreement constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all other
agreements and understandings, both written and oral, between the parties
with respect to the subject matter hereof, and may be executed
simultaneously in several counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same
instrument. No amendment or termination of this Agreement shall be
effective unless the same shall be done in writing signed by all parties hereto.
14. Assignment. This agreement shall be binding upon each of the parties hereto
and their respective permitted successors and assigns. The Cooperative may
not assign its rights or delegate its duties hereunder without the express
written consent of the City, which consent shall not be unreasonably
withheld, except that the Cooperative may assign its rights or delegate its
duties to an affiliate, an affiliate of one of its partners or to the purchasers of
all or substantially all of its assets without the consent of the City; provided,
however, that any such assignment shall not relieve the Cooperative of any
liability hereunder unless the City expressly agrees to such release, in writing,
upon written request of the Cooperative which release shall not be
unreasonable withheld, and provided, further, that the assignee shall assume,
in writing, in form acceptable to the City, all obligations of the Cooperative
hereunder.
15. SeverabjEtyty. The invalidity or unenforceability of any one or more phrases,
sentences, clauses, or sections of this Agreement shall not affect the validity
or enforceability of the remaining portions of this Agreement
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
GREAT RIVER Y
By:
Its:
CITY OF ELK RIVER
Its:Mayor
By:
Its: City Clerk
eg'Sas?��
5
sw
o ,
f
z_
s,
.Y�
n
m{
® g
Y4
�g
I irgtxH
OOt 6-£fl0
Uri 6-SDO-9L
O-OQ6 €00-9L
i
01:641-w-9L
3;
i 9660-fi0L-OL. i -
QZ 60-6 L- L
spg*i z1%
9Z6i1=69L-9L 6
't I
PUG58-1
ot Lo
-t-99-9L
LAL to6t�-ts6-s
nnawanp
Z�TgTRxa