8.1. SR 07-25-1994
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ITEM 8.1.
MEMORANDUM
TO:
MAYOR & CITY COUNCIL
FROM:
LORI JOHNSON, FINANCE DIRECTOR
DATE:
JULY 22, 1994
SUBJECT: LANDFILL GRANT REQUEST
At the last City Council meeting, staff presented a request from the Elk River
Landfill, Inc., for a grant to install the active gas extraction system. Chris
Kreger was also present to discuss the conditions that staff was
recommending be placed on approval of the grant. Attached is a copy of the
revised Landfill grant conditions drafted by Steve Rohlf. A seventh item was
added stating that the City will reimburse the Landfill only for the actual
costs incurred to outside contractors up to a maximum of $70,000. None of
the $70,000 would be paid to the Landfill for work completed by Landfill
employees.
At the meeting, Chris Kreger indicated that the Landfill had paid $1,488,000
in landfill tax over the last five years. City records indicate that for the years
1989-1993 landfill surcharges in the amount of $1,167,325 were collected. Of
this, 25 percent or $291,831.25 was deposited into the Landfill fund for
landfill related activities. As a point of clarification, the Landfill does not pay
the landfIll tax. Rather, the Landfill acts as an agent to collect the tax for the
City. The tax is paid by the users of the Landfill.
Chris Kreger will be present at Monday's Council meeting to discuss the
revised Landfill grant conditions with the City Council. Once the Council
and the Landfill agree on the conditions, the City Attorney will draft a grant
agreement incorporating those conditions.
P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
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REVISED LANDFILL GRANT CONDITIONS
1. That the Elk River Landfill Inc. (the Landfill) is current and remains
current with surcharge payments and other monies owed the City prior
to disbursement of funds for the active gas extraction system.
2. That the costs of constructing the active gas extraction system is
incurred before the grant is disbursed to the Landfill.
3.
That the Landfill does not make cash advances in the form of loans,
grants, gifts, contributions, etc., other than fees for actual services
rendered to other companies in excess of an aggregate amount of
$40,000 in anyone calendar year, without prior approval by the City
staff. Larger sums may be approved by staff as long as transfers are
in the form of loans, with a pay back schedule and interest, monies
owed to the City are current, and the Landfill has sufficient operating
capital.
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4. That a mechanism acceptable to staff for the timely deposit of
surcharge taxes be established if the Landfill is not caught up with
past due surcharge by December 31, 1994, or becomes delinquent
again, after December 31, 1994, by 60 days or more.
5. That if the Landfill is sold in the next three years, the City is
reimbursed the grant amount from the proceeds of the sale as follows:
1995-100%,1996-75%,1997-50%, and 1998-0%.
6. That the grant money is distributed in monthly payments over three
years, whereas payments will cease if any of the above conditions are
not met. Money may be dispersed as costs are incurred for the
construction of the act of gas extraction system, if the Landfill presents
the City with loan rejections from three banks indicating that they are
aware of the City and Counties grant offers.
7. The City will reimburse the Landfill for the actual costs incurred to
outside contractors for the gas system, up to a maximum of $70,000
dollars.
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GRANT-BZ