Committee Minutes

Minutes of the Grand Forks City Council/Service/Safety
Standby Committee - Wednesday, February 21, 2007 - 4:00 p.m.

The city council of the city of Grand Forks sitting as the Service/Safety Standby Committee met in Room A101 in City Hall on Wednesday, February 21, 2007 at 4:00 p.m. Present at roll call were Council Members Kreun, chair; Bakken, McNamara, Gershman. Others present were Al Grasser, John Schmisek, Todd Feland, Chief Packett, Mark Walker, Roxanne Fiala, Brad Gengler, Rick Duquette, Mike Korman (CPS).

1. Red River Valley Landfill presentation.
Todd Feland, public works director, presented general overview and briefing of project near Gilby with Mr. Sproule providing some additional information, along with Gary Bridgeford of ICS who is a partner, and Mike Korman, CPS. He stated that on March 1 will be at Grand Forks County District Court for the hearing at 3:00 p.m. on the City of Grand Forks v. Turtle River Township. The second item is that they have talked about our own 4-mile ET area and looking for suitable places in that area, and will bring that back in the next month or two; and have third option of hauling to Fargo and/or Gwinner Waste Management. He stated that they would look at the 4th option would be a site other than the Turtle River Township site which is outside our 4-mile extraterritorial zone, which would be the Gilby site.

He stated in looking at our outside customers that we didn't lose garbage this year from Pennington Co. which is about 8,000 tons, and received call from the City of Devils Lake and they were considering taking an offer to haul their garbage to Sawyer (waste management landfill) and were looking at a 3-year agreement; that the city of Devils Lake is about 5,000 tons and if add 8,000 plus 5,000 tons at $33.50 is between $400-500,000 in revenue which is a relatively big deal, esp. when consider our outside revenue last year for the landfill was about $2.6 million; that he doesn't know what Devils Lake has done but they were going to have a meeting last night, that that we are trying to work on issues and would like them to partner with us, and hopefully they would stay with until the end of the year.

Location of this site is 3 miles from Gilby, 7 miles from Manvel and if look at the Turtle River Twp. site there is Prairie Chicken Wildlife Habitat that is operated by the Game & Fish and if take the Turtle River Twp site it's about 6 miles away. The Gilby site is 7.5 miles from the GFAFB and 12 miles from airport. He stated that the original siting team in the 1990's looked at this particular area, and in the top 12 sites but not as good as the Turtle River Twp. mainly due to transportation, there was some concern about upgrading roads on 33 and farther from the transportation corridor on 81. He stated the issue they have is that this group wants to be the regional landfill and this is a different concept before us as before always assumed the City of Grand Forks would be the owner/operator and hold the permit and would contract with customers; in this area Mr. Sproule and his partners are going to be the developer, and that they have to discuss but don't want to close their other options because this site is scheduled to be at the Grand Forks County in March, but then have to get zoning permission and pre-application approval within a few months, and beyond that have to get permit approval, which is public hearing and more details of the site and could take up to a year from now, and wouldn't know what the results are until a year from now. He stated he would suggest we still move down the road on other alternatives but consider this - that we would be the major customer involved in this and we are about 35,000 tons of solid waste and garbage is a volume based business and that is why have regional landfills. Mr. Sproule and his associates are planning to go to Grand Forks County but his concern is that when Mr. Sproule shows up at the County in March with concept that this is going to be regional facility and that he would like to contract with the City and with other regional customers and that this would be a bale fill operation and they would want to use our baling facility at the transfer point for the transfer trailers and to bale the regional garbage, which means that we have another interface with our transfer point and questions are, who holds the permit, who operates the landfill and how do we interface with all those different details. He stated he wanted Mr. Sproule to be here so that when he gets to the County Planning & Zoning that he has a sense of what this committee is thinking, and he thinks their intent is to get zoning approval in March. He asked Mr. Sproule to give an overview of what their thoughts are, challenges he has and how they would like to interface with the City of Grand Forks and what he intends to do in March when he goes to GF County.

Gershman asked how the citizens feel out there. Mr. Sproule stated that it is a different environment with Gilby Twp than with Lakeville Twp. and that they see value in what they are doing. Mr. Feland noted that Gilby Twp. does not have planning and zoning authority and they defer to the County when they do not have enacted zoning ordinances. This site is at the crossroads of Lakeville Twp., Lavon Twp. and is in Gilby Twp.

Mr. Sproule stated they have met with the County re. roads and #33 is a class 1 road and would be utilized as such where they can do 80,000 gross vehicle weight, will build their own road on the east side of Section 12 and will have direct access, does not go by anybody's residence, no road restrictions in the spring, and that they just resurfaced that road last fall.

McNamara asked re. rates if City doesn't hold the permit and financial impact. Mr. Feland stated that there are going to be additional expenses, currently our tipping fee is $33.50/ton and this site is 18 miles from Grand Forks and that is about $2.00/ton so asking $35.50/ton and then assume the landfill site itself will cost $6 million to build, and to translate that into 71,000/tons of garbage at $93/tons being conservative on volume, would be another $7/ton and gets to approx. $40/ton; that he told Mr. Sproule that a new landfill project should be around $40/ton, and if get a new site at $40/ton then can predict what expenses are from now to 2050, but if don't have it you will probably have a hard time keeping track of costs from now until 2050, and if you develop a new site he thinks it will be about $40/ton which is not far from where currently at with our tipping fee.

Mr. Duquette stated that Mr. Feland had said if everything is progressing and approved by County and EIS process, that it would be approx. a year before final approval and another 6-7 months to a year for construction. Mr. Feland stated our permit runs out in October 1, 2008 and believes it conceivable if they really worked hard could get it done by the fall of 2008, lot of work and effort; and important part Mr. Sproule would want is even though no guarantees, that once you enter the permit area of this, will have to go out and do some site work re. soil and would probably spend about $200,000 to get a permit, and that's a bit of Mr. Sproule's concern is as we are the major customer and if have no interest, they will spend a lot of money upfront - that once they get the zoning, would re-evaluate where at with everybody else.

Kreun stated that part of the prior discussion is that we are going down several options at the same time, our best solution is to win the lawsuit and have our own landfill and operate/maintain it and that through the process continue to look at other options, one is "dirty composting" option and that is at the Health Dept. now, another is working with regional people out of MN and ND group (Red River Valley) and this option is definitely considered an option as well and also to continue to looking for our own landfill within the our own jurisdiction - to see which comes up the best, and from his standpoint doesn't know if give up on those options, but this option if not meeting the opposition that everybody else has and you did it at Oakville, and his question is where are they in the geological survey aspect or just taking the studies we have done. Mr. Sproule stated they haven't done any of that yet, are working with CPS but not initiate that until work with the County as far as planning and zoning as part of the permitting process. Kreun stated that is one of the big issues but not an issue to him because the geological type of soil, Lake Agassiz Glacier didn't change in 6 miles and consistency whether its Oakville Twp. or Manvel or Gilby, the soil consistency basically are going to be the same, alkali gets pushed up from underneath from the Rocky Mountains, thousands of miles away, and that is one of the reasons it makes it a desirable (never desirable spot for a landfill), but more reasonable because of the inversion of the pressure coming up, and curious if run across the same arguments. Mr. Sproule stated when they did the other site, dug a trench and Frank Beaver came out and checked it and spoke in behalf of our site at meeting in Gilby; and they actually didn't have the runoff that he said we would but spoke in our behalf and the vote of the residents and voted out; but not at the current site. Mr. Feland stated that at the other 3 sites that were pre-application approved in 1997, 3 of the sites were in Lavon Twp. which is north of this site, all did receive approval from the State Geologist and thinks this site can be approved but even though Frank Beaver opposed our geology on the Turtle River Twp. site would probably say this one is okay, and thinks in general any site in this area going to get approval on the geology from State Geologist and the State Health Dept. will approve that recommendation.

The question was raised as to the difference in cost of Turtle River and of this site. Mr. Feland stated he thinks both should be very similar in cost because you have a baling facility that is already constructed and a scale house; that they are going to want to make a profit off this and the difference is that we were going to pay the Twp. a host fee for entering their jurisdiction that would take care of their Twp. governmental cost, and thinks very similar in cost, and if had the baling operation and landfill costs would assume its going to be between - landfill should be between $30 and $50 - $40 midpoint.

Bakken said that if it doesn't cost the City more and they don't make money doing it, then why aren't we doing it. Gershman stated that we own the other land, and asked what could we get for that land to offset some of our expenses - that we have $2 million in that land. Feland stated over $2 million in expenses, that we have 760 acres and City paid a little over $700.00/acre; prices are up and people are buying land for investment, doesn't know that we would get everything back but we are at breaking point. He raised question about private investor is if we have concerns about control, long term costs and how they were going to operate, who is going to own the permit and wouldn't want Mr. Sproule to sell his landfill to Waste Management and Waste Management discovers or XYZ corp. discovers there is no other viable option and only want portfolio to go up, and that is his concern and will affect the consumers in Grand Forks and that is what we need to protect the City's investment for the next 50 years, we want the same thing from Mr. Sproule as he obviously has to make money but we need a good deal and we need to take this off our plate for the next 20 years because we have spent a lot of costs and a lot of time and effort on this and we should seriously consider this. Bakken stated that they need to know that we want to control the site if going to do it, and would want a long term contract at a set price so know costs going forward, and if conditions aren't acceptable know it now.

John Schmisek stated being a private development assume there would be private borrowing and what is cost of money compared to cost of money for us as a municipal government and that will have to be weighed in there also.

The question was raised to see if they would be interested in leasing or selling the land. Mr. Sproule stated their first posture was to see if the City has an interest in this project and site, and if they express that interest they have an interest in pursuing to get the permitting done in Grand Forks County, and has only talked briefly with Todd about what would make a good business plan for this enterprise and for the City of Grand Forks and what can be a lasting relationship because this landfill site will have a long life and if becomes a well run facility with good arrangement, it could be a good relationship. Feland stated its the best thing that has come our way since the Turtle River Twp. site and the concern he has is that we currently have one landfill revenue coming in and we have been able to sustain our spending on all these myriad of EIS's and expert witnesses, hearing and that is going to come to an end on October 1, 2008, even though we are going to have landfill customers and his concern is that we have a year and half until our entire model is different than what we have today.

The question was raised as to what the Court is actually going to decide on March 1. Feland stated that is our date for oral argument, that we have submitted our brief and Turtle River Twp. has submitted their brief, and we have submitted our rebuttal brief and that it could take several months for the District Judge to make a decision and however it goes if we lose then at a decision point of whether appeal to the Supreme Court and if they lose, would have the same option.

Mr. Sproule stated they will know a lot after they do the preliminary, and if pass the planning and zoning it will give them a good indication of where they're at; Todd will keep committee abreast of what is going on. He stated their request is whether the City of Grand Forks has an interest in looking at this site if they get through planning and zoning. Gershman stated he would say yes.

There was some discussion of the impact on public works in terms of staffing. Feland stated that one of the operational questions is does the City of Grand Forks operate the landfill; currently we have 4 people that operate in the landfill and 3 of those in solid waste area; and he is looking at staffing right now because he is winding down to 2008 and are not filling positions and trying to balance as best they can and are going to need to know those things. They will need if go into the contractual basis, does the City of Grand Forks operate the landfill and baling; the Department of Health will want to know who owns the permit, how this is going to be operated, constructed, who is responsible. Mr. Sproule stated that they could develop a business plan or model as to how they are going to go forth. Kreun stated that we have the expertise on how to manage and maintain and operate a landfill and if we have the permit or if we have the control, then we have the responsibility of ongoing development and process of a landfill and the closure, and if we are not in control and don't have the management ability and still going to be held responsible, that has a large effect upon the business plan, and how do we recoup our investment of $2 million; if we own our own landfill we are going to be able to recoup some of those costs and that is what we have been banking on, or are we going to say you have the landfill and are going to manage and operate it and we write off the $2 million without the ability to recoup it by setting our own rates; and those are the questions that will continue to come up, but as far as are we interested in looking at this, there is no reason why we would not be interested in looking at this option.

Feland stated that the region is interested and that we seriously look at all opportunities and are not just following the Turtle River Twp. site, though think it is a good and appropriate site, but we don't assume anything, that things are going to change and the way we operated in the past does not assume that is how we always have to operate, and this is a different model and concept.

Mr. Duquette stated there is an issue - privatization vs. governmental control of the service and if see lack of control which lends itself to good contracts, good relationships and see rise in costs - important to have clear relationship upfront.

Gershman stated if we're uncomfortable with privatization and we took the land that we have and traded that land and pay difference - Mr. Sproule stated they would have to look at all options, that this is his first visit and wanted to see if City had an interest and then sit down with his partners, need to look at all aspects.
Kreun stated once Gilby Twp. gets through process at County level and the next stage, those are the issues that will have to be brought forth and dealt with either by this committee or the council but at this point in time all we are looking for is consensus that we want to explore a privatized landfill and that we bring concerns to the council as quickly as possible so they are aware of what is taking place, and they take the next step and go from there.

Mr. Duquette suggested a staff report for next Monday to get consensus of the city council would be appropriate.

Al Grasser, city engineer, stated there is intent that there is an interest and ask the developer and staff to start putting together business plan or memorandum of understand or letter of intent to put all these things on paper so they can be reviewed.

Feland stated he will put together staff report for Monday's CW and then to city council and proceed when Mr. Sproule goes to the County Planning and Zoning and Commission in March. There was no further discussion and it was moved by McNamara and seconded by Kreun. Motion carried.

Moved by Bakken and McNamara to adjourn, motion carried, and the meeting adjourned at 4:55 p.m.

Alice Fontaine
City Clerk