Committee Minutes

Grand Forks City Council Service/Safety Standby Committee
July 17, 2007 - 4:00 p.m.__________________________________

The city council of the city of Grand Forks sitting as the Service/Safety Standby Committee met in the council chambers in City Hall on Tuesday, July 17, 2007 at 4:00 p.m. Present at roll call were Council Members Kreun, chair; Bakken, McNamara.

Others present were Todd Feland, Dave Kresl, Al Grasser, Adam Jonasson, Chief Packett, Melanie Parvey-Biby, Earl Haugen, John Schmisek, Brad Gengler, reps. of RDO Foods.

Chair Kreun called the meeting to order at 4:09 p.m., there were 3 items on the agenda with an additional item from Mr. Grasser re. Storm sewer 182 update, no action.

Todd Feland stated that he would like to move the RDO Foods Co. update to the Comm. of the Whole on Monday and also the Public Transit update, and has additional info. on the landfill update.

1. RDO Foods, Inc. wastewater billing update.
Mr. Feland stated they performed the analysis regarding what our costs were re. RDO wastewater billing issue, and reviewed information - that they looked at the total cost from February through May for base fee, flow fee and industrial fee and that totals to $597,849.83 that they owe, that they paid $84,294.98 in February. He stated that the City and RDO Foods agree that the base and flow fees are not part of the analysis, those are things we have to pay irregardless of the incident that occurred at RDO Foods. The total for base and flow fees that they have charged is $108,915.06, paid $25,890.80 leaving balance owed to the City of $83,024.26, which they need to pay. He stated that they looked at the wastewater billings from February though May and has separated the industrial fees for fees that were charged that were within their permit limits and those that were charged from outside the permit limits. RDO Foods as well as Simplot and Western Polymer has a permit limit that they can discharge to us that relates to our capacity at our plant, the excess charges are multiplied by 2, and if go over your permit you get a penalty charge, and has separated each month between what we charge is within the permit limits and what we are without - the charges within the permit limits are $231,000 and the excess charges were $341,000 which gives you the $573,000 that we totally billed for the industrial fees in question. They paid $58,000 so balance we have is $514,000. He stated in this year's budget they budgeted $950,000 for industrial fees they anticipate; that generally Simplot will pay 90% of those fees and expect Simplot to pay $850,000 to $900,000 of that, and that the $500,000+ that was billed to RDO is extraordinary.

He presented cost analysis summary ests: Operating costs of $88,422.00 (including electrical polymer, labor and lab.); Debt Service Impacts, $121,120.00; Lagoon dredging, $58,428.00 and Contingency (for adm. costs) of $68,786.00 for a total of $336,776.00.

He stated before presenting options, would like to present two areas in the Code section, which is 15-0304 Industrial Waste Surcharge which determines how they bill for industrial fees, have 3 industrial users (Simplot, RDO Foods and Western Polymer); and 15-0305 Excess Strength Charge, that the amount is two times determined by the formula which gives authorization to multiply. He noted that they checked with the ND Dept. of Health who is regulator for the industrial portion of our wastewater, they regulate the industrial pre-treatment process, to see if there is anything in State or federal rules that the City does not have discretion to waive or suspend or hold off fees; and they reported that there is nothing that they knows that you can't look at suspending or waiving fees. He stated he has also had conversations with Mr. Swanson, city attorney, and he was not aware of any regulations to say that you could not suspend or waive fees. He stated that with information that he has sees nothing to say council doesn't have discretion on this issue.

He presented options: #1 is do nothing and that RDO Foods has to pay the fees; and Option #2 is to look at ways in which they can provide some relief as they have asked for: Suspending $236,453.76 and if did that would have strings attached: that they show good faith in trying to get the situation corrected as quickly as they could, Mr. Fietzek, RDO Foods has been authorized for some additional capital improvements at the plant to make improvements in the wastewater system, that they would provide better training for their employees and hire operators that would help in the wastewater system.

He stated the final issue they need to discuss is that they are looking at a change in ownership of RDO Foods, that nothing would change in how they would pay the bills, a change in how they are going to do business, bit of consolidation in their industry.

McNamara stated that he had thought that Todd would come back to committee with some kind of determination, that want to be reasonable and fair, questioned if this is an act of God but if this was certainly preventable, makes it harder to waive penalties, and asked if able to give us any opinion that this was preventable or not based on program for preventative maintenance. Feland stated he thinks it was act of God that their wastewater system failed, failure of liner, if had more experienced operators and analysts at the plant, would have found the problem sooner. McNamara stated that the liner failing was act of God, problem was acerbated by lack of experience by operators.

Henry Fietzek, RDO Foods, stated he agreed with Todd that it was an act of God, the inner liner did rip, that they did seek consultant's help and talked to City and everybody trying to figure out problem and not sure where the problem was and doesn't deny that it could have been lack of operator experience. He stated they did seek outside help right away and it took about third outside seeking before found somebody that sent them in the right direction. He presented some preliminary information giving general idea of what kind of money they have spent in trying to fix the problem, est. as of today $207,456.92, and reviewed repairs to the liner.

Council Member Gershman reported present.

Mr. Fietzek stated he has been asked by management to work and come up with viable agreement, that they are hooked to city water and city waste and is unusual for a dehydration plant, and does add to their costs; that with current plans before they had 3 ownership plants, we were the highest priced plant for these areas and labor rates are extremely high compared to other plants and do want to try to keep the plant going. He stated that today is the first day that RDO Foods is now called North American Foods, LLC, papers were signed yesterday, and new company is a group of 8 plants located in Grand Forks, Nevada, Idaho, and today controlling interest of these plants is under Aafedt Company, partnership, press release coming out in next day or so.

Bakken stated he was willing to spend the $236,453.76 which would leave a balance of $361,396.08, but strings would be that the upgrades to the plant would have to be done so that they would not have this issue again, because if it happens again fines won't be suspended. Some of this was caused by circumstances beyond their control and to do something fair and equitable is okay, that if we recover our costs. Mr. Fietzek asked that they take into consideration and they would be willing to pay everything along but questions contingency costs of 30% of $68,000+ and asked that if reconsider the $68,000 down to about $248,000 and would also pay the $83,000+. Feland stated Mr. Fietzek is saying that if took $336,776.00 and subtracted $68,786.00 for balance of $267,990; and would subtract $267,990 from $573,229.76 and alternative would be $305,239.76; and would suspend $305,239.76 as opposed to suspending $236,453.76. He stated the discussion was of suspending these charges based upon compliance of RDO Foods making these improvements, having updates with strings attached so that you complete all these things.

Gershman asked if and what precedent they would be setting. Feland stated precedence is a big issue because have not done this since he has been here, that this is an extraordinary circumstance. Their bill is $573,000 for industrial fees and our budget is about $950,000 under revenue line item and typically would expect Simplot to pay 90% of that amount, and billing for 3 or 4 months to RDO Foods is extraordinary upset that is significant. He noted their office talked to the Dept. of Health and asked industrial pre-treatment regulator if city council has discretion to do such a thing, and he stated that there is nothing that he knows of, whether State or Federal regulation, that council wouldn't have discretion to waive or suspend to do this, nor did the city attorney; has to be a city council decision.

Kreun stated they have it in ordinance, but what was the reasoning behind setting this kind of penalty charges. Feland stated that if you go over your permit there is a multiplier of 2, and penalty charges were $170,000+. It was noted that the city council would have the ability or discretion to make that decision if wanted to waive or change or adjust the bill. It was noted that they had a failure that was beyond their control, liner failed, don't know when that would happen but what compounded the problem is lack of their knowledge in wastewater treatment and to define the problem as quickly as possible, and some of the thought process might be is that can't know when a certain part or liner is going to fail, but could have the ability to detect it sooner and treat it sooner if had trained people who understood the process. He stated what precedent does that set for the next commercial problem that we have, each and every residence that we deal with in the same manner may not be to this magnitude in dollars but would be to that individual resident and is one of the issues.

McNamara stated that if they are operating in good faith and doing everything they should be doing in terms of the fines, don't want to deter their ability to be an ongoing facility, question is whether act of God and could not foresee, however problem was acerbated by lack of experience of both the operators and the lab techs, certain techniques - that there is 30% contingency and chief concern is that the City is insulated from bearing any of this burden, would be willing to discuss suspending fines but make sure that the City in no way picks up the tab for any of this. Gershman asked if there was any retroactive action that would be taken against the City by some other major entity in the same situation. Feland stated we are looking at the industrial fees, 3 entities in Grand Forks that pay industrial fees - Simplot, RDO and Western Polymer paying BOD and total suspended solids charges (industrial fees), partners - Polymer takes starch from Simplot and makes a chemical to help make paper; RDO is here because Simplot is here. He stated these aren't about base or full fees that everybody, residential or commercial and light industrial, pays - not eliminating any of those, only industrial fees.

Mr. Fietzek stated that they hired several consulting companies and not just lack of training of operators but took 5 different companies that worked with before finding out what was wrong, wasn't an easy find for anybody, and not just operator training. Feland stated that they took a little offense as blaming them for the problem, people are hard working and trying to find the problem and has told them not blaming them. Kreun stated not trying to lay blame but that there is an overall ability to manage these types of facilities, that precautions and training needs to be updated and maintained, and that part of the penalty wind up paying is that going to have to increase the training and monitoring systems that are in there; that we do even in residential areas compensate people that leave their hose on 2 weeks at a time, have made some adjustments in the past, but that is a separate issue from this, and that we can only determine that it is only 3 entities involved, and have contacted Simplot as well. Feland stated he hasn't contacted other 2 entities.

Bakken stated that if consultants couldn't find it, operators wouldn't either; and probably reduce 30% contingency and perhaps 20% cover adm. fees. John Schmisek, stated 30% not excessive, and in looking at the $336,000+ and that is covering our costs plus the 30% which may be unknown, and not classified as penalty but revenue lost, but basically with the $336,000 only recovering our costs, and no penalty, but is discretion of the council.

Feland stated if wanted to look at suspending the industrial fees would look at Contingency before getting to final number, if 30% is appropriate, or whether lower, typically overhead is 20% and added 30%. Schmisek stated contingency is unknown but of increase in Bod and suspended solids, and doesn't think 30% is excessive.

Feland stated the flow and base fees of $83,000+ that they owe that amount, and of the $573,000+ they have paid $58,000+, and that we should suspend $236,453.76 based upon our cost estimates of $336,776.00, with the total being $573,229.76, total industrial cost; that all have concurred as a part of that there were penalty charges.

Bakken stated motion would be to suspend $236,453.76 with the understanding that the upgraded plant would have no future violations or suspension may go away. Feland stated they operate the facility in an appropriate and reasonable manner and make all the necessary improvements and to continue their move to hire professional consultants and staff to operate the facility, and to provide periodic updates. Kreun stated that there is going to be timeline - they will fix it in August but period of time that they operate it in manner stated by Todd, -- looking for sustained performance in excess of 24 months to 36 months after the repairs have been made. Bakken moved to amend his motion to the time period of 36 months from date of completion. McNamara seconded the motion.

Feland reviewed motion - that the $83,000+ which is the balance they shall pay which are the base and flow fees irregardless; the total over that 4 month period that they billed was $573,229.76 of which RDO has paid $58,404.18; that the cost determined over this event with the 30% contingency, and total bill was $573,229.76 and our cost estimate was $336,776.00 with the 30% contingency which is $236,453.76, and is the amount being suspended.

Upon call for the question the motion carried.

This recommendation from the committee will be brought to the next committee of the whole meeting next week; and Mr. Feland will confer with Western Polymer and Simplot.

2. Public Transportation Plan update.
Todd Feland reported they have been running this route for about 2 months (new route - 12/13), and that we are not picking anybody up in Industrial Park and if are, only 1 person - MPO surveyed when people start working, most shifts are starting at 6:00 a.m. and 7:00 a.m. (people don't want to ride bus - want freedom) - and for the most part Public Transit System doesn't start until 6:30/7:00 a.m. and we would have to shift our entire transportation system to start beginning at 5:30 a.m. or sooner. He stated he sent out e-mail to Industrial Park customers that he was going to be at this meeting today and that it has not been very successful because of times of the routes - Public Transp. not able to serve them very well as they are set up for regular users throughout the day, but in Industrial Park set up for shifts, tried to run a demand bus where start at the MTC downtown early in the morning and in the evening but that there is not a lot of traffic in between, what they really need is a bunch of vans, need to drive van out and pick them up, our Public Transp. System is not set up for that car pooling, our concept is not right to help them out - not sure they know what would help them out.

Gershman stated yesterday at Growth Fund looked at and would recommend to council to build 142 parking spaces for Cirrus and LM Glasfiber, doesn't solve the problem for people who don't have cars but will solve the congestion problem and rebate some of the issues of people having parking places, and if change the system will drive costs up significantly. Feland stated best they can tell only 1 person needing ride religiously on route - it was noted by HR that 15% of the employees don't have license for one reason or another but getting to work.

Feland stated they did some ridership for May which is 170 riders, June 146 riders, drops off in June because don't have college student any longer, 34 college riders in May and 14 in June, and those people are going to the Canad Inn, to Aurora Medical Complex, Altru but not to the Industrial Park except for that one person. He noted the route that they are running today and just discontinued Industrial Park and will talk to the one person who is rider to see if can work out something with him, because the route they are running terminates at the Alerus Center, CanadInn Complex and area by the Altru and by giving up Industrial Park we are able to serve Altru and through that residential area; and would like to recommend that settle on this route, first one was modified route, look at it for a year on a trial period.

He presented 2008 Public Transit budget in overview and have the route in the budget, revenues over expenses about $68,000 and this route get 50% paid for by the federal government, applied for the grant and federal govt. paying half this new route and thinks we will get funding for the next couple years - route hits Canad Inn, Southend, Aurora Med. Center with coverage to the west and to the south and people riding it now; and thinks there is a more efficient way to service Industrial Park because different than regular public transit and would like to come to the COW on Monday and recommend that we go with this revised route that we are running today.

Moved by Bakken that we recommend to the committee of the whole that we use the revised route system. McNamara seconded the motion. Carried.

3. Landfill Planning update.
Mr. Feland reported they have looked at 11 sites and gave brief overview. The closure project is going well, closing 28 acres and may come back to ask to close another 20 acres of this landfill under a change order, which would get us down to 32 acres left, Strata is doing it at a good price, are willing to do it and may bring back to extend the project.
The permitting of the non-putrescible waste at the landfill, and is asking that we keep these 8 acres open for asbestos, ash and other non-putrescible and other non-decaying waste and to continue to take UND's ash and all the ethanol plant's ash, working on getting this permitted as special use landfill with the Dept. of Health, that we are going to preserve this and redefine what it is.

He reported he talked to the City of Fargo and they are reviewing our request and they are considering it and on the first part of August they will have a Commission meeting where they review it and get an answer back to us. He stated he is planning to have meeting end of July with our customers.

He stated re. the Strabane Twp. site, that the County Planning and Zoning Comm. of which Council Member Kreun is a member, reviewed the application of the conditional use permit, and deferred a decision until August 2, 2007, the next meeting, and if the Commission moves it forward will go to the County Commission meeting unless deferred; that would give them zoning permission and then the developer is anticipating going to pre-application with ND Dept. of Health. He noted two important things in the application, Lane Magnuson's staff report, relating to the City of Grand Forks and the Planning staff is recommending approval of the Strabane Twp. site as a municipal solid waste landfill with 13 conditions, including No. 4 that all trucks should be transferred to a facility and follow a specified route, lot of the people in the Twp. were concerned that every truck would be going on every Twp. road, County is saying it would have to end up at a central point. No. 6 is that 30% of the total waste can be loose and the balance bailed and would have to have a baling facility and that involves the City of Grand Forks. No. 8 condition is that all inert waste shall originate from a bailing facility, County saying that it has to come to central location and hauled in transport truck. No. 12 is that if ownership of the facility changes it basically opens up the whole thing because it is a conditional use permit with conditions on who is owning the facility. He noted they had received e-mail with questions asked from Strabane Twp. supervisors; and that the City agreed that there was condition on the City owning it because of concern that the developer will sell it to Waste Mgmt. and rather than this small local group owning it, Waste Mgmt. owns it and would have to come back and ask for permission for transfer of ownership and if City doesn't agree to it, then means no conditional use permit.

Kreun stated that if ownership of the facility changes, the special use permit shall be re-opened to address potential repair of the Twp. road system. Feland stated that his concern is that they are going to make it contingent on any ownership change.

He also noted there another question in the e-mail is that if the City buys the landfill after it is developed, that it would not be taken off the tax rolls but pay a fair and reasonable assessment as a taxpayer as have done in Turtle River Twp. - the City has paid property taxes for the Turtle River Twp. site from 1998 forward,


Gershman questioned that if the adjacent land owners property is devalued, what stipulation and if a condition put on the owners re. mitigation any loss of value to somebody's land. Feland stated that if do something to somebody's property and it is devalued, that is specified in State Code - and that included is a question asked by the Twp. asked about land values and nearby homes, and it was noted that there is not devaluation of agricultural or residential values and only based upon two examples, one in Gwinner and one in Karlstad. Feland stated that they are moving forward and they are moving on a course sometime in the fall for two groups to get together, thinks they will get zoning and may get to the pre-application process and come October, they maybe at a permitting stage and will probably want to talk to the City of Grand Forks.

Gershman stated that he had talked with Dexter Perkins and they have been working on some other sites and if anticipate any issue from that group. Feland stated having some discussions with Twp. people after meeting, they seemed to be a group of people that want to find out the answers and is important to show good faith and even if showed them what and how we do it, they are caught in the crossfire and not used to being a part of these things, but nobody from the Twp. spoke against it but they are supposed to come back with a recommendation at their August meeting, and that there were others there from outside of the Twp.; that only people who spoke against it were outside that Twp. The site is 38 miles from landfill, 8 miles north of Larimore. Kreun stated that is why they want to continue to look at other sites.

Feland reported that he has been working on several things re. landfill, one is co-composting, and that he sent letter July 9 to Dept. of Health asking about co-composting ideas that has come from BacTee System and asking if do some things re. co-composting, what kind of requirements will we have to have for a landfill, and when gets answers back and if no other options, may not want to look at this, but to look at it conceptually as a cost standpoint. He stated this idea he sent on and have been working on is not far off what Mr. Perkins and Mr. Schafer are working on, and has been supplying information to them because they are working on a plan for Grand Forks re. some ideas. He thinks they will come back with some proposals, and they will come to different conclusions on landfill sites and can show you what ideas are, and will get this in a week or so and is reviewing it now.

He reviewed the 11 site options in the 4-mile ET with GIS (2006 aerial): to the south of Grand Forks: Section 34 - County 5 which turns to Merrifield Road and has 3 farmsteads and a residence; Section 35 - residence and farmstead, and these 2 wouldn't seriously look at and residents do not welcome landfill in Sections 34 and 35; Section 36 agricultural with rail line next to Merrifield and has Drees farming operation and is area to contemplate; Section 1 has housing units; Section 6 which they would like to consider, Agsco and farmstead in this section, and talked to reps. of Agsco and in no uncertain terms do they want a landfill in Section 6; Section 7, farmstead; Section 18, less residential density and are on the corridor; has included one recommendation from Burns & McDonnell and if pick 4 sections to examine, look at 36, 6, 7 and 18. Gershman stated don't impact growth if go north but do if go south. Kreun stated will have to go on the technology, narrow sites down, take others into consideration, north and south, look at all of the factors involved and make the decision. Feland stated that they also have the Strabane site, which will be taken into consideration as well, but need to know costs and that City would be involved in how that landfill is operated.

The north end includes Sections 12 and 18, nothing is off table but go by science and technology, and continue to explore all the options and narrow down options. Feland stated that it is only the solid waste portion that is going to go there; that they are in different options of this - doing public input, looking at options on potential sites and getting ready to prepare for a pre-application, and when and if look at something in our ET is that we go to a suburban landfill and take reps. there to show them how a landfill co-exists in an urban or suburban area and look at features that would make more amendable if look at it that way. Kreun stated there is consensus that want to continue on process with landfill siting and work in those areas, contact those people.
4. Stormsewer 182 update.
Al Grasser, city engineer, reported they have some issues with pump station 182 located at 11th Ave.S. and 20th Street, one of our main stormwater pump stations and had discussion with public works and Dave Kresl, stormwater/wastewater supt. - have problem with lift station but don't have costs and have a situation where having to deal and that some of this will come back to you in forms of engineering agreement to do analysis on what options are.

Tom Hanson, WFW, reported there was an initial leak, did testing and just a web of steel there and not enough to survive, this area serves about a section from DeMers to 17th and Washington to Columbia Road, and if this pipe fails won't be able to get water out of the system, down to one pump working in that area, and everything in that area is undersize anyway and is a concern. Their intention is to come up with a plan, a major crossroad that council is facing but can do by special assessment, this lift station is to be upgraded next year; has to be in operation by February or early March, can get plans and specs. put together for upgrade by then and whether get special assessment process in by then, and if don't do that have to have patch work done, station built around steel pipe in 1959, put in and welded in place and no way to get piece in that size into that station or get the old one out - wouldn't recommend designing anything that way. Feland stated that storm station rehabilitation is special assessed to those served, wastewater stations are paid by utility funds through rates, and even though on the list for next year for up to $2 million will be special assessed, paid by individual property owners.

Mr. Schmisek stated if do assessment, would have to start immediately. Grasser stated some of the options and may have to determine whether have to do an emergency fix with utility funds that weren't in the budget and probably excessive, and/or can get a special assessment process quick enough to go through and do the repair and have this work done by next spring, the situation they are facing is have a semi-failed pipe in the station and can't go in and repair it because there is no metal that is strong enough to make a patch to, have piping that can't remove except through wall or top of building, and in the meantime have a station that has about a one-month storm frequency capacity, normally talk about stormsewer design in terms of 5 and 10 years, and this has 1 month, that this area floods pretty regularly and have one of our pumps shut down and only operating with one month capacity on only half the pumps because we don't feel that we have ability if turn them all on we may close it. He stated they would try to come back with options and answers to that.

Kreun stated that this needs to be completed by next spring; Grasser stated there is no way to get that done in the next few weeks and our target is that we have this back up and functional by next spring so we are in a position to handle the spring and summer rains. The mechanics of the assessment district takes about 2 months from time create the district to receive bids, the politics of it are going to be potentially longer than that as had big public reaction last time tried to do a project. Project would not be protestable. Feland stated this is more complicated than L.S. 189 because of how it was constructed and more costly just to bring it back to what it should be. Grasser stated almost have to demo the building to get at the pipe and not attractive options.

Bakken stated that if do that shouldn't make it better when doing it. Mr. Hanson stated that repairs have been done at minimal cost, that he has a 2-page list of problems with that structure, with operational safety for workers and etc. and is a real concern and make every effort to do it right this time. Kreun stated that doing it right isn't going to increase the capacity. Mr. Hanson stated they might be able to add 10% to capacity of that station. Grasser stated what want to evaluate is to get as much as can for the existing forcemain and costs and if do make provisions and add more pipes and pumps in the future, because doesn't want to decide to tackle the forcemain and then pump station becomes substandard piece, will want to look at those features and try to come to a good decision as to what invest today for a future benefit tomorrow. Hanson stated they have to have it done by spring but if do a temporary repair, spend lot of money to make temp. repair, and then need to do the rest of the things to get capacity, etc. Grasser stated they will hear from constituents about special assessment levels and should be City cost, etc. but mechanical process of the special assessment, but will bring it back to this committee an engineering agreement for WFW for approval. Committee asked for difference between cost of a rehab and an upgrade. Grasser stated that is what they would have them do.

Bakken stated get rehab costs which were going to be assessed and difference between two and maybe figure out a way of paying the difference and assess the rehab. Grasser stated may have to define what is emergency work and find out what that would have been as part of our budget, all of those are options; and is very concerned about the schedule. It was also noted that a portion of that section was assessed for Pump Station 189 and some overlap. Kreun stated when they went through that to begin with the concern was that area is undersized and they wanted it left undersized, wouldn't go for reconstruction just to rehab, this is basically like having 2 options and still going to have the same area that it serves, can't change that, and that is where the money is going to have to come from if use special assessments or do we go to our stormwater funds and maybe upgrade come out of stormwater funds if had increase onto stormsewer funds throughout the city. It was noted that they would have to start the special assessment process because doesn't think would pay for it out of any other funds. Grasser asked if they create the district but don't have the engineer's report and have to bring engineer's report back later, do they save any time - not saving any time. He stated they will bring the contract to the next committee of the whole but in the meantime WFW will be starting on it, Kreun stated they have consensus to move forward with it from this group and that you put together, and bring it directly to the committee of the whole.

Adjourn

The meeting adjourned at 6:20 p.m.

Alice Fontaine
City Clerk