2016-01-26_PWETC_Minutes - Laserfiche WebLink

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Mr. Johnson noted that was the rationale of Ramsey County in recommending a five year term to even out those market variables allowing a vendor to be more flexible in their bids. At the request of Member Cihacek, Mr. Johnson advised that most other municipalities are pursuing three year contracts, and if Roseville chose a five year term, it would be one of the few doing so. Member Wozniak suggested whether staff was suggesting both options - a three year term with two annual extensions and a five year term be given, or whether they were asking the PWETC to make that determination on a recommendation. Mr. Johnson stated that the option was open at this time, and whether the PWETC supported recommending 3 or 5 year contracts, staff was prepared to pursue either at this time. Mr. Johnson noted the final decision would be when the City Council made their determination, and suggested the PWETC provide the City Council with their recommendation to weigh in as part of the City Council's deliberation. Member Cihacek opined that if a five year term was presented in the RFP as an option and allowed a vendor to spread their costs over that time, with a two year extension, allowing staff to determine their actual term as part of final negotiations with a chosen vendor, it could guarantee the city's costs for extending the contract for up to seven years, depending on the benefits of those economics. Member Seigler noted that if Ramsey County chose to add more and more expensive requirements, a 5 year contract could provide additional protection for the city and additional rationale in a longer term. Member Cihacek noted the value for a vendor to hedge and amortize costs over a longer term and in future years. Mr. Johnson questioned if the city would need to renegotiate the vendor contract if Ramsey County required additional materials be recycled during the contract term. Mr. Culver responded that the current contract with Eureka allowed the city to terminate the contract with written notice, and anticipated similar language would be included in any future vendor contracts as well. Member Cihacek noted a shorter term contract allowed the city to perform seven year cost -comparisons to determine the term; and could include a minimum 3 year term as an option as well with up to 4 annual extensions. Whichever way the city chose to structure the term, Member Cihacek opined that the concern is with the difficulty in managing commodities, especially the Asian markets; suggesting his Page 13 of 20