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Regular City Council Meeting Monday, May 19, 2008 Page 17 Squires, with the assistance of Consulting Engineer, Randy P. Christenson, P. E., Karges-Falconbridge, Inc. (KFI). Mr. Brokke reviewed the staff report dated May 19, 2008, detailing the best value process and identification of the apparent best value proposal of Harty Mechani- cal of Austin, MN, in addition to the low base price proposal of that same firm, not including contingencies as outlined in the staff report. Discussion included Chart #1 comparisons of the Bloomington conventional ex- ample in 2007 dollars; 2008 dollars for the City of Roseville's geothermal project based on 2008 dollars; specifics of the project; recommended contingencies and staff rationale for the amount of the proposed contingency due to the uniqueness of the project; deducts and additions; ten alternates with staff recommending ac- ceptance of all ten alternates; and why new piping identified in Alternate #2 at a cost of $40,000 was identified separately rather than part of the contingency fund, with staff rationalizing that this would represent a large portion of the contingency monies; and identification of the concrete piers and unknowns related to their pre- vious removals. Financing Finance Director Chris Miller reviewed his memorandum dated May 19, 2008 and revised staff funding recommendations since previous November 19, 2007 and February 25, 2008 correspondence regarding the replacement of the Arena refrig- eration system. Mr. Miller reviewed the need to revise previous recommenda- tions based on escalated costs; short-term (3 year) versus long-term (10 year) in- ternal financing from the City's Pavement Management Plan (PMP) and impacts to that fund as along-term funding source; problematic levy impacts given the legislature's actions of last week on capping levy limits for three years; and alter- native funding sources by issuing bonds or equipment certificates to pay for the project amortized over a ten year period, with taxpayer impacts detailed in Mr. Miller's report. Discussion included pending determination by staff if debt issuance was excluded from this levy restriction, as it had been in past levy limit legislation; equipment certificates for renovating systems and equipment, rather than structures, not re- quiring voter approval; and anticipated life span of the system estimated by Mr. Christenson at 40-50 years, excluding minor replacements of some equipment, but not the entire system; and well field estimated to be in place for several hundred years, since all piping was plastic, and would only require replacement of miscel- laneous components of the equipment. Councilmember Ihlan, in light of legislation for 3.9% levy limits for 3 years; and uncertainty of whether the City would be the recipient of any Local Government Aid (LGA), expressed her discomfort in going into debt for several million dol- lars, when limited in the ability to raise revenues, and not knowing implications of