Galion City Council held another long discussion about the Efficiency Smart contract during its March 25 meeting. If approved, it authorizes Efficiency Smart to continue to provide energy efficiency programs and consulting to homes, businesses and industries for the next three years.
Law Director Thomas Palmer informed Council that some changes were made to contract since the previous meeting. The automatic renewal clause was removed and the rate was capped at $1.40 per megawatt hour, but can become lower than that.
Council member Susan Bean then pointed out a detail that had not been addressed during previous discussions: In the previous contact $354,339, or 50 percent of the program cost, was differed to be paid through 2017. She asked if that was in addition to the new program cost in the contract under consideration.
Palmer confirmed there is 50 percent of the cost of the previous contract that still needs to be paid.
Jolene Thompson, senior vice president of member services at American Municipal Power, was on hand to explain in more detail. She stated that when AMP offered the program to participants, some of them wanted to differ part of the program cost until they started to see the energy savings. The savings for the different measures available through the program last for about 13 years, so AMP gave participants the option to differ 50 or 100 percent of the cost for three years after the contract expired.
The differed payment is subject to compounding interest at 1.5 percent. With the new contract, the city has the option to differ 25 percent of the cost for three years after the contract expires.
“If we do not renew, what would the city be obligated to pay?” Council member Mike Richart asked.
Thompson said Galion would still be obligated for the amount differed from the first contract, which is $354,339, or $1.15 per megawatt hour.
In previous discussions there was mention of a $40,000 grant that would be given to the city if it enrolls by March 31. Thompson clarified that it is more of a rebate than a “grant” because the first contract ended with dollars remaining due to the program being more efficient than expected. The board decided to redistribute that money to the participants.
Galion is still eligible for the rebate, which has increased to $71,800 (it increases as other municipalities decide not to renew their contracts).
Mayor Tom O’Leary emphasized that the city owes the deferred amount no matter what. “I don’t want us to confuse the benefits moving forward with trying to pay these tail costs,” he stated, adding that the rebate could be used to pay down some of it.
Richart then motioned to suspend the rules to pass the item as an emergency, which was seconded by Council member Eric Webber. The motion failed with “no” votes from Council members Susan Bean, Tom Fellner, Jon Kleinknecht and Steve Rowan.
Police Chief Brian Saterfield then referred to the ongoing projects Efficiency Smart has with local businesses. “What happens if this does not pass?”
Kristyn Wilder, executive director of Efficiency Smart, affirmed her company does have several businesses engaged in projects, such as Covert Manufacturing, the YMCA and Galion City Schools. She said those projects would go away if the city is not under a contract.
Joe Kleinknecht, president/CEO of the Chamber of Commerce, then gave his opinion: “I think your’e taking a whale of a gamble on asking for a extension. The figure that sticks in my mind is the nearly $6 million in lifetime savings for people who have already participated in the program.”
Bob Cerar, a citizen in attendance, noted there is about $722,000 in cost, plus interest (after the rebate). “I just want to make sure the taxpayers get their money’s worth for this,” he said.
Wilder noted that residents and businesses in Galion saved $421,999 each year during the previous three years of the program.
Fellner asked if there was any way to extend the enrollment deadline. Thompson responded that is a board decision, but she would be happy to take it back to them. However, she could not guarantee how soon the board could convene, and if it decides not to extend the deadline, Galion would not receive the rebate regardless of renewing the contract.
“Galion has $36 million projected for power sales over the next three years. The $700,000 sounds like a lot, but it is small in perspective,” O’Leary said. “I’m concerned the cost of not becoming more efficient may cost us more…Now you’re asking Ms. Thompson to go back and see if they will work to extend the deadline and we look like the team that keeps moving the ball back from the goal line.”
After more than 30 minutes of discussion, Richart called for a vote on the second reading. It passed 5-1, with Bean dissenting. (Council member Shirley Clark was absent that evening due to an injury. She was excused.)
The third reading for the contract ordinance will be reviewed at Council’s special meeting, which was set for March 28 at 6:30 p.m.
Another item that will be considered at the special meeting is Ord. 2014-40, which amends permanent appropriations for a payment to OPERS. During the March 25 meeting, Council members unanimously voted down the first reading, due to a lack of information.
City Auditor Brian Treisch explained that a former city employee retired this year. “When we submitted the paperwork, we were notified that contributions were not being paid correctly… Then we were told on March 17 there were delinquencies going back to February of 1982…We’re on the hook for this.”
The $26,100 payment includes interest and penalties. The amount will continue to grow if the city does not pay by March 31.
The law director advised there is no question that the city owes the money. However, Social Security was withdrawn at the same time, so it is unclear if there is a “double dipping” issue with Social Security and OPERS. The law director is to investigate the issue further before the special meeting.
In other legislation, Ord. 2014-28 approved the exempt employee pay and benefits. Council passed it as a third reading. Ord. 2014-29 was a transfer of appropriations within the City Council budget and it also passed as a third reading.
Ord. 2014-33 was a reimbursement from ODOT for the utility pole relocation. The amount is 80 percent of the project cost, capped at a dollar amount of $110,000. It was passed as an emergency. Ord. 2014-34 was an agreement with ODOT for bridge inspections. Through this pilot program, the state bears 100 percent of the cost for the inspections, which the city would normally pay engineers to do. It passed as an emergency.
Ord. 2014-35 increased appropriations by $57,000 and transferred appropriations to various line items in a total amount of $441,001. It includes $10,000 for slide painting at the Heise Park Pool, $31,322 for a new pump at the Wastewater Treatment Plant and a $409,499 transfer within the Electric Fund, to get it into the proper line item. The ordinance passed as an emergency.
Ord. 2014-36 amended Chapter 355 of the the Codified Ordinances, which involves parking during snow emergencies (three inches of snowfall or greater). This was requested by the police chief. During the meeting, Saterfield explained this came to light when the city enacted the ordinance this winter. “We found that the majority of the streets that were listed were related to the old neighborhood schools,” he explained. The chapter was originally passed in 1987.
Saterfield said they simplified and updated the list of streets designated as snow emergency streets, where parking would be prohibited during emergencies. The revised list of streets is: Harding Way East and West (all), Church Street (all), North Jefferson Street (between Church and Harding Way), Liberty Street (between Church and Atwood), Columbus Street (between Church and Walnut), Market Street (all), Union Street (between Church and Walnut), Atwood Street (between Boston and Erie railroad tracks), Walnut Street (between Union and Liberty), Boston Street (between Harding Way West and Grove Avenue), and Grove Avenue (between Boston and Portland Way South).
The item passed as a first reading.
Ordinances 37-39 all related to a property annexation for 812 Portland Way North, the new Keep It Classy car wash. The property owner filed a Type 2 annexation on March 18, which does not require a public hearing. The city has 20 days to respond after the petition is filed. The three pieces of legislation approved utility services, rezoning of the parcel and the land annexation, respectively. All three passed as emergencies.
Res. 2014-11 appointed David Keller as the city’s prosecuting attorney. This is an item that was never done since the change in government. The law director recommended it be passed as soon as possible to officially give Keller the authority. Council passed it as an emergency.
Res. 2014-12 reappointed Joice Hayden-Cating to the Egbert M. Freese Foundation’s board of trustees. It passed as an emergency.