Laserfiche WebLink
As the draft agreement is currently written, Mr. Culver noted that the worst case <br />scenario would be a critical failure of the skating center roof resulting in loss of <br />power consumption capabilities for the system to generate power. However, if <br />staff is able to get those terms modified to avoid any cost to the city or at a <br />minimum apply a cap on the city's exposure, Mr. Culver opined that this would <br />help. Mr. Culver opined that the biggest risk to the city is what Xcel rates will do <br />over the next twenty years of this agreement. <br />If that were to occur, Member Seigler asked if there was a potential risk to the city <br />of losing money, or whether that was even relevant. <br />Member Cihacek noted that, once the system showed a negative cash flow, the <br />city could initiate termination of the system and agreement in writing; and while <br />he hadn't reviewed that termination clause in detail, asked that staff have the City <br />Attorney review it to ensure the best termination clause language possible for the <br />city. <br />Mr. Culver noted that the provider may require a minimum term to ensure their <br />recovery of some of their initial cost. <br />Member Cihacek also noted that the force major clause should include potential <br />political changes allowing for termination due to political changes or due to a <br />political process. <br />Chair Stenlund noted that, of concern if delaying until next year as suggested by <br />Member Seigler, may be that there may be no better deals next year; and <br />questioned if it wasn't prudent to not delay further and look at this as a rental <br />agreement for the roof space with a payment of a minimum of $8,000 annually for <br />a roof not being used for any other purpose. <br />Member Seigler concurred with Chair Stenlund's analogy. <br />Member Cihacek opined that any time the city could develop an opportunity for <br />immediate cash flow today to address future CIP needs, it was a positive. <br />Pending the two issues and clauses he brought forward for staff to pursue <br />clarification, Member Cihacek noted the positive cash flow and projected <br />numbers from a very conservative projection. <br />Member Seigler admitted that the less risk the city wanted to take, the less <br />generous rates the vendor would be willing to take; and as long as everyone <br />understood those risks, it may be beneficial to pursue this system. <br />Chair Stenlund asked Member Seigler if there was anything form tonight's <br />discussion that would prevent him from recommending this to the City Council <br />upon staff's completion of their due diligence. <br />Page 10 of 20 <br />