City Council

AGENDA--CITY COUNCIL CITY OF MARTINSVILLE, VIRGINIA Council Chambers – Municipal Building 7:00 p.m.-CLOSED SESSION prior to 7:30 p.m. regular session Tuesday, May 8, 2012 Invocation – Vice Mayor Kimble Reynolds Pledge to the American Flag 1. Items to be considered in Closed Session, in accordance with the Code of Virginia, Title 2.2 Chapter 37—Freedom of Information Act, Section 2.2-3711—Closed Meetings, the following: A. A prospective business or industry or the expansion of an existing business or industry where no previous announcement has been made of the business’ or industry’s interest in locating or expanding its facilities in the community as authorized by Subsection 5. 2. Consider approval of Council meeting minutes of March 27, 2012. (2 mins.) 3. Presentation of proclamation recognizing Public Service Recognition Week. (2 mins.) 4. Consider setting a public hearing for May 22, 2012 regarding two school board vacancies occurring June 30, 2012. (3 mins.) 5. Hear an update on Electric projects from Dennis Bowles. (15 mins.) 6. Consider PART bus funding commitment. (10 mins.) 7. Consider approval of resolutions to (1) opt out of the Line of Duty Act (LODA) Fund with the Virginia Retirement System; and (2) join the Virginia Association of Counties Self Insurance Risk Pool (VACoRP). (10 mins.) 8. Hear update from Community Development regarding city’s improvement projects in Westside area. (5 mins.) 9. Hear update on city’s efforts to address litter issues. (10 mins.) 10. Consider approval of consent agenda. (2 minutes) A. Accept & appropriate budget adjustments. 11. Business from the Floor This section of the Council meeting provides citizens the opportunity to discuss matters, which are not listed on the printed agenda. In that the Council meetings are broadcast on Martinsville Government Television, the City Council is responsible for the content of the programming. Thus, any person wishing to bring a matter to Council’s attention under this Section of the agenda should: (1) come to the podium and state their name and address; (2) state the matter that they wish to discuss and what action they would like for Council to take; (3) limit their remarks to five minutes; and (4) refrain from making any personal references or accusations of a factually false and/or malicious nature. Persons who violate these guidelines will be ruled out of order by the presiding officer and will be asked to leave the podium. Persons who  refuse to comply with the direction of the presiding officer may be removed from the chambers 12. Comments by members of City Council. (5 minutes) 13. Comments by City Manager. (5 minutes) 14. Items to be considered in Closed Session, in accordance with the Code of Virginia, Title 2.2, Chapter 37—Freedom of Information Act, Section 2.2-3711(A)—Closed Meetings, the following: A. Appointments to boards and commissions as authorized by Subsection 1.  City Council Agenda Summary Meeting Date: May 8, 2012 Item No: 2. Department: Clerk of Council Issue: Consider approval of minutes of City Council meeting March 27, 2012. Summary: None Attachments: March 27, 2012 Recommendations: Motion to approve minutes as presented March 27, 2012 The regular meeting of the Council of the City of Martinsville, Virginia, was held on March 27, 2012, in Council Chambers, Municipal Building, at 7:30 PM, with Mayor Kim Adkins presiding. Council Members present included: Mayor Kim Adkins, Vice Mayor Kimble Reynolds, Mark Stroud and Danny Turner. Gene Teague was absent. Staff present included: Leon Towarnicki, Interim City Manager, Brenda Prillaman, Eric Monday, Linda Conover, Wayne Knox, Bobby Phillips, Eddie Cassady, Marshall Thomas, Mike Rogers and Ruth Easley. Following the invocation by Mayor Kim Adkins and Pledge to the American Flag, the Mayor welcomed everyone to the meeting. Minutes: On a motion by Danny Turner, seconded by Kimble Reynolds, Council approved, with a 4-0 vote, the minutes of the February 28, 2012 and February 29, 2012 meetings. Recognitions: Police Chief Mike Rogers reported that each year the Martinsville Police Department presents its “Outstanding Citizen of the year” award to a citizen for outstanding contributions to the community. Employees of the department submit nominations for the award to a Selection Committee of 5 members of the department, who review the applications and then present their recommendation to the Chief of Police. Nominees for the award must be someone of good moral character with a good attitude towards law enforcement and the person must have shown support and/or concern for the police department in its efforts to better serve our citizens. Co-recipients of the 2012 Citizen of the Year Award, Dr. Mervyn King and Mrs. Virginia King, were recognized and Captain Eddie Cassady and Captain Marshall Thomas assisted the Police Chief in the presentation. Mayor Adkins read and presented a proclamation to Sandy Dawson of Citizens Against Family Violence recognizing Sexual Assault Awareness Month. Mayor Adkins read and presented a proclamation to Ralph Lawson and Nancy Kennett of the Martinsville Exchange Club recognizing Child Abuse Prevention Awareness Month. Mayor Adkins read and reported on a proclamation which was previously presented on March 14, 2012 at Albert Harris School recognizing March 2012 as Kindergarten Month. FEMA Hazard Mitigation Grant opportunities: Bob Phillips reported the following: As directed at the June 28, 2011 Council meeting, staff has continued to pursue grant opportunities to improve the City’s ability to alert citizens of emergency situations such as severe weather. Tropical storm Lee, and the magnitude 5.8 earthquake in Mineral, VA, both received Presidential Declarations for portions of Virginia in 2011. These disasters have resulted in significant funding of the Hazardous Mitigation Grant Program. Council’s adoption of the updated Hazardous Mitigation Plan at the November 22, 2011 Council meeting has positioned the City well so that funds can be applied for under this program. A pre-application has been submitted and approved allowing the City to prepare grant applications for two projects to: (1) enhance the City’s ability to notify citizens of acute emergencies, such as a tornado. This project would involve the installation of eight sirens, strategically placed for maximum coverage. The project is estimated to cost approximately $155,000, and; (2) install a generator providing emergency backup power to the Middle School located on Cleveland Ave. This school has been identified as the City’s emergency shelter, but does not have the needed backup power capability. This project would cost approximately $225,000. Funding for each of these grants would be 75% federal and 25% state and local funds. In-kind services can be utilized to make up most, if not all, of the local match obligation. He asked that Council authorize staff to proceed with the application process for the two HMGP grants described above; announce a public comment period to run through April 10, 2012 .Public Comment can be addressed to the Feedback portion of the City’s Webpage or emailed directly to the Emergency Management Coordinator and provide an opportunity at the April 10, 2012 Council meeting for public comment. On a motion by Mark Stroud, seconded by Kimble Reynolds, with a 4-0 vote, Council authorized staff to move forward with the application process for the sirens and generator. Littering presentation: Students from Mr. Greg Hackenberg’s class at Albert Harris were recognized and Sue Ella Ramos read her letter to Council regarding the littering issue. March 27, 2012 Dr. Noel Boaz report to Council regarding medical school: Dr. Noel Boaz reported on his current efforts to establish a medical school in the area. He pointed out the school is needed to help train doctors to prevent a shortage expected in the next 20 years and the school would encourage pupils to remain in Southside to launch their medical practices. This school would be different from other medical schools in that it will focus on students learning through clinical activities and their goal is to educate 300 per year and open in the fall of 2013 once a site is found and faculty is hired. The following document was distributing outlining the project: Monthly Finance Report: Finance Director, Linda Conover, presented the following information related to the monthly finance report: FY12 – Revenues & Expenditures through February 2012 Exclusive of School and Special Revenue funds, actual revenues were $36,585,943, representing 63.5% of budget. Highlights: • Local Sales/Use Taxes (7mos) – received 58.1% of budget • Meals Taxes – received 67.1% of budget • Refuse Fund – ARRA & loan proceeds reimbursements rec’d to date inflate revenues until appropriated through consent agenda • Sewer Fund – sewer service surcharge revenues greater than budget Actual expenditures were $37,670,262, representing 61.1% of budget. • Refuse Fund – expenditures vs. budget inflated until appropriated through consent agenda On a motion by Kimble Reynolds, seconded by Mark Stroud, with a 4-0 vote, Council approved the monthly finance report. FY13 budget process review: Interim City Manager, Leon Towarnicki, presented the following information related to the FY13 budget review process: Budget work sessions are anticipated for schools, capital needs, and city departments/constitutional offices. Administration will poll Council members for suitable dates for worksessions. March 27, 2012 • April 25th or April 26th-City Manager FY13 budget presentation to City Council. • May 1st-May 3rd- Two budget work sessions – schools & capital (afternoon or evening) • May 8-regular Council meeting date • May 7th-May 11-schedule one or two budget work sessions (afternoon or evening) • May 22th-regular Council meeting date to conduct FY13 budget public hearing and approve budget ordinance on first reading. • June 12th-regular Council meeting date to approve FY13 budget on second reading Consent Agenda: On a motion by Danny Turner, seconded by Kimble Reynolds, with a 4-0 vote, Council approved the following consent agenda: BUDGET ADDITIONS FOR 3/27/12 ORG OBJECT DESCRIPTION DEBIT CREDIT FY12 General Fund: 01100909 490104 Advance/Recovered Costs 67,528 01129290 508220 Purchasing - Physical Plant Expansion 67,528 appropriation of insurance funds for replacement HVAC 01102926 443157 Categorical Federal - Safe Routes to School 5,956 01413146 503140 Street Marking - Prof. Services - Engineering 5,956 Reimbursement 01101917 442810 Categorical Other State - Highway Projects 20,208 01413151 503140 Thoroughfare Constr - Prof. Services - Eng & Arch 20,208 Liberty Street Reimbursement Total General Fund: 93,692 93,692 Electric Fund: 14101917 442810 Categorical State - Liberty St Utility Cost 133,928 14564339 503191 Electric Construction - Prof. Serv. Labor 133,928 Liberty Street Reimbursement Total Electric Fund: 133,928 133,928 VML 2012 Policy Committee nominations: After Council discussion of the Virginia Municipal League’s request for 2012 Policy Committee nominations, Council agreed to submit the following names to VML for membership on the VML 2012 Policy Committees: Community & Economic Development—Kim Adkins, Mayor Environmental Quality—Eric Monday, City Attorney Finance—Leon Towarnicki, Interim City Manager General Laws—Gene Teague, Council Member Human Development & Education-Mark Stroud, Sr., Council Member Transportation—Kimble Reynolds, Vice Mayor Outside Agency reports review: No comments were made by Council regarding agency reports which were included in agenda packets. Business from floor: Laura Bowles, 1607 Sam Lions Tr. and Exec. Dir. of MURA-- requested that Council terminate the $50 itinerant merchant vending fee for the Farmer’s Market. She pointed out that the Farmer’s Market accomplishes many of Council’s goals for Uptown and this is a unique situation since the City owns the Farmer’s Market and it is open fewer hours than regular businesses Uptown. Commissioner of Revenue Ruth Easley--commented on Council’s options and cautioned Council to tread carefully as there should be a fair and consistent policy and there may be ramifications from other itinerant merchants. Council asked that the City Attorney prepare a draft ordinance related to the Farmer’s Market fee for consideration at the next Council meeting along with recommendations from administration after consultation with MURA and legal counsel. Ural Harris—commented that city budget should be cut and there should be no more increases in fees. March 27, 2012 Council comments: Adkins-reminder about public hearing to be held by VDOT on April 24 and reported City Manager search process is progressing with the online survey and staff will be interviewed this week; Stroud-pleased with information about siren warning systems; Turner—expressed condolences at loss of Dr. Irby and reported MHS band did an excellent job; Reynolds-commented that MHS jazz band did an excellent job and advised that the Human Relations Advisory Committee met and has been officially dissolved and their work will be used to move forward. Interim City Manager comments: Mr. Towarnicki reported (1) long range transportation priorities will be presented to Council at the next meeting (2) Lanier Rd. water line project is moving forward with construction anticipated to begin mid to late April (3) littering issue will be on next agenda. City Attorney Eric Monday emphasized the importance of citizens having a power of attorney prepared. There being no further business, the meeting adjourned at 9:05pm. _______________________________ __________________________ Brenda Prillaman Kim Adkins Clerk of Council Mayor  City Council Agenda Summary Meeting Date: May 8, 2012 Item No: 3. Department: Human Resources Issue: Presentation of proclamation – Public Service Recognition Week May 6 – 12, 2012 Summary: Human Resources Department representative will be in attendance to accept the proclamation to recognize and celebrate the contributions of the public servants in our community who provide diverse services daily with efficiency and integrity. Attachments: Proclamation Recommendations: Presentation only  PROCLAMATION WHEREAS, Americans are served every single day by public servants at the federal, state, county, and city levels. These unsung heroes do the work that keep our nation working; and WHEREAS, public service is a noble and essential profession, filled with competent, ethical and hardworking individuals that provide services which improve our daily lives, contribute to the enrichment of our community and make the City of Martinsville a better place to live; and WHEREAS, without these public servants at every level, continuity would be impossible in a democracy that regularly changes its leaders and elected officials; and WHEREAS, Public Service Recognition Week has been celebrated since 1985; and WHEREAS, the Martinsville City Council extends sincere appreciation to City of Martinsville employees for their years of devoted service; NOW, THEREFORE BE IT RESOLVED that the Martinsville City Council does hereby proclaim May 6th through May 12th, 2012 as PUBLIC SERVICE RECOGNITION WEEK in the City of Martinsville and encourage all citizens to recognize the accomplishments and contributions of government employees at all levels, who help improve our lives and safeguard our country. Kim Adkins Mayor  City Council Agenda Summary Meeting Date: May 8, 2012 Item No: 4. Department: City Manager Issue: Consider setting a public hearing for May 22, 2012 for the purpose of receiving/interviewing citizens interested in appointments for two 3-year positions beginning July 1, 2012 and ending June 30, 2015 to the City’s School Board. Summary: None Attachments: Martinsville School Board current listing 2012 Recommendations: Set the public hearing for May 22, 2012 and interview applicants in closed session following the conclusion of the May 22, 2012 Council meeting. According to State Law, only those citizens interviewed by Council or whose names were brought up during the Public Hearing can be considered for appointment, and appointments cannot be made until seven days after the Public Hearing, thus this item will be on Council's June 12, 2012 agenda.  City of Martinsville SCHOOL BOARD SCHOOL BOARD – The School Board is declared a body corporate. In its corporate capacity, it is vested with all the powers and charged with all the duties, obligations, and responsibilities upon school boards by law. It may sue, be sued, contract, be contracted with, and in accordance with the provisions of this title, purchase, take, hold, lease, and convey school property both real and personal. The School Board has the following powers and duties: 1 – to make rules for the governance of the schools within its jurisdiction; 2 – to determine the curriculum, methods of teaching, methods of administration and governance, and the length of the school term; 3 – to employ and dismiss teachers upon the recommendation of the superintendent; 4 – to suspend or expel pupils when necessary; 5 – to establish such schools as are necessary in the judgment of the Board to so constitute a complete and efficient system; 6 – to control and manage funds made available to the Board for the purpose of conducting free public schools; 7 – examine all claims for payment and authorize payment; and 8 – to submit annually to City Council a budget request. The Board consists of five members serving three-year terms appointed by City Council. School Board members can serve a maximum of three 3-year consecutive terms. Meetings are held on the second Monday of each month. Contact: Ms. Pam Heath, Superintendent, 403-5700 P. O. Box 5548, Martinsville, VA 24115. NAME INITIAL TERM FULL ADDRESS APPOINTMENT EXPIRES TERM Bill R. Manning, 1118 Knollwood Pl. 06/08/04 06/30/13 3 Craig B. Dietrich, 1227 Lanier Rd. 06/14/11 06/30/14 1 J. C. Richardson, Jr., 115 Melody Court 06/14/11 06/30/14 1 Carolyn McCraw, 1724 Meadowview Lane 06/09/09 06/30/12 1 Robert Williams, 1017 Country Club Drive 06/21/06 06/30/12 2 5/1/12  City Council Agenda Summary Meeting Date: May 8, 2012 Item No: 5. Department: Electric Issue: Hear an update on Electric projects from Dennis Bowles. Summary: Dennis Bowles will present information to Council. Attachments: AMP Wind Project 042312 BRPA Aggregate AMP Wind PPA project memo 041012 Blue Creek Wind Schedule-Martinsville Ordinance-Blue Creek Wind-Martinsville Contract-Blue Creek Wind-Martinsville AMP Wind PPA Overview 3-2012 Recommendations: For information. AMP - Iberdrola Renewables Blue Creek Wind Farm April 23, 2012 1 Types of Electricity Generating Wind Turbines Small (≤ 10 kW) Intermediate • Homes (10 - 250 kW) • Farms • Village Power • Remote Applications • Hybrid Systems • Distributed Power Large (250 kW - 2+MW) • Central Station Wind Farms • Distributed Power (e.g. Blue Creek Wind Farm) 2  Parts of a Wind Turbine 2. 3. 1. Rotor Blade 2. Rotor Hub 4. 3. Nacelle (which contains the 1. electrical switch boxes, generator, gearbox, rotor brakes & controls) 4. Yaw System (component responsible for the 5. orientation of the rotors toward the wind) 5. Tower 3 5  Gamesa G90 - 2.0 MW Turbines • Gamesa Corporation (headquartered in Spain) – 24,143 MW wind generation installed worldwide – 3,915 MW in US • Operating Characteristics – G9X product line launched in 2010 – Blades made from reinforced carbon fiber – Aerodynamic blade tip design to maximize output and minimize noise emissions – Active yaw system ensures ideal wind capture – Gamesa WindNet offers remote control and web monitoring 6  Gamesa 2 MW Turbine Power Curve The most important factors to the amount of energy available is the speed and duration of the wind. Energy is a cubic function of wind speed. In other words, if you double the wind speed, you get 8 times the energy (until you reach the rated output). Energy (kW) Cut-out Rated Speed Speed Cut-in Speed Start-up Speed 20 mph 30 mph 40 mph 50 mph 10 mph 7  Iberdrola Renewables, LLC • IBERDROLA, S.A. (headquartered in Spain) – Multi-national company with offices in 40 countries – the world’s leading wind energy company in terms of installed capacity – 13,690 MW • Iberdrola Renewables (US subsidiary) – Headquartered in Portland, Oregon – Second largest wind operator in U.S. with a presence in 18 states with over 40 wind projects with a total capacity of 5,200 MW 8  AMP - Iberdrola Renewables Wind Project • Blue Creek Wind Farm Facts – Currently, Ohio’s largest wind farm – 304 MW project in Van Wert and Paulding counties in NW Ohio – Gamesa G90 - 2.0 MW turbines 476’ – 328 foot tower height 305’ – Total height of 476 feet when a 148 foot long blade is straight up – Projected Capacity Factor = 34.6% – PJM Interconnection @ 345 kV – Construction Completed: March 2012 – Expected Commercial Operation Date (COD): July 1, 2012 – 100 MW 20-year PPA executed with First Energy Solutions – No other publicly known PPAs 9 AMP - Iberdrola Renewables Wind Project PPA Contract Terms • Participation: Up to 54 MW available through to AMP – Contingent on minimum of 30 MW participation • Term: 10-year term (expected, 7/1/12 – 6/30/22) • Initial Rate: $35.00/MWh – Variable escalation ranging from 5-10% – If AMP contracts for more than 50 MW, AMP will pay Iberdrola $1/MWh less, through 2018, and apply the difference to due diligence costs incurred by AMP (verbal from AMP) • 10-yr Average Rate: $44.62/MWh • Imbalance Energy: Difference in day-ahead schedule and real time generation 10 AMP - Iberdrola Renewables Wind Project PPA Contract Terms • Pricing: Take and pay (as available) agreement at fixed rates; no construction, O&M, fuel or emissions cost risks • RECs: AMP will sell RECs or credit at participant’s direction – 100% of RECs all years other than 50% in 2013-2016 – Analysis uses AMP’s projection of REC value • RPM: Installed capacity value is approx. 15% of contract – Iberdrola may pay limited damages if availability falls below guarantee level • Deadline for Participation: June 1, 2012 11  AMP - Iberdrola Renewables Wind Project Expected Load Shape 150 Avg. Winter Day Avg. Summer Day 150 135 135 Summer 120 120 105 105 Capacity Factor 90 Winter 90 23.5% MW 75 MW 75 60 Capacity Factor 60 45 30 45.3% 45 30 15 15 0 0 1 3 5 7 9 11 13 15 17 19 21 23 1 3 5 7 9 11 13 15 17 19 21 23 150 Avg. Annual Day Total Project 135 Generation is Capacity 120 highest at off- 105 304 MW 90 peak times MW 75 60 Annual 45 30 Capacity Factor 15 34.6% 0 1 3 5 7 9 11 13 15 17 19 21 23 12  AMP - Iberdrola Renewables Wind Project Feasibility Screening • GDS projected market power prices (LMPs) for feasibility and congestion to load • In the material provided by AMP, they compare PPA rates to a projection of 7x24 power prices but a better comparison is based on on- and off-peak production estimates – PROMOD model runs were completed projecting hourly LMPs for Blue Creek Wind Farm substation – Also, PP&L Zone, Blue Ridge Aggregate, AEP Zone and Dominion Zone LMPs were projected to project congestion costs 13  Wind PPA Rate Screening AMP- 15% Wind Estimated Projected Estimated Total PPA Annual REC RPM Capacity Value Rate Escalation Value Auction Value of Wind Year ($/MWh) (%) ($/MWh) ($/kW-yr.) ($/MWh) ($/MWh) Jul-Dec 2012 35.00 (6.00) 6.11 (0.30) 28.70 2013 35.00 0.0% (4.00) 8.48 (0.42) 30.58 2014 37.00 5.7% (2.00) 31.05 (1.53) 33.47 2015 39.00 5.4% (1.00) 46.81 (2.31) 35.69 2016 41.00 5.1% (1.00) 51.88 (2.56) 37.44 2017 43.00 4.9% (1.00) 54.31 (2.68) 39.32 2018 46.00 7.0% (1.00) 54.31 (2.68) 42.32 2019 49.00 6.5% (1.00) 54.31 (2.68) 45.32 2020 52.00 6.1% (1.00) 54.31 (2.68) 48.32 2021 56.00 7.7% (1.00) 54.31 (2.68) 52.32 Jan-Jun 2022 61.43 9.7% (1.00) 54.31 (2.68) 57.75 Weighted Avg. 44.62 5.8% (1.65) (2.17) 40.80 * REC values based on AMP projections; capacity value through May 2015 based on current AEP Zone RPM Rates; capacity value for Jun 2015-Jun 2022 based on AMP projections 14  Wind PPA Rate Screening Blue Ridge Aggregate Congestion Wind Estimated Estimated Blue Ridge Agg Total PPA REC Capacity Congestion Value Rate Value Value Costs of Wind Year ($/MWh) ($/MWh) ($/MWh) ($/MWh) ($/MWh) Jul-Dec 2012 35.00 (6.00) (0.30) 1.80 30.50 2013 35.00 (4.00) (0.42) 1.64 32.22 2014 37.00 (2.00) (1.53) 1.49 34.96 2015 39.00 (1.00) (2.31) 1.34 37.03 2016 41.00 (1.00) (2.56) 1.18 38.62 2017 43.00 (1.00) (2.68) 1.27 40.59 2018 46.00 (1.00) (2.68) 1.36 43.68 2019 49.00 (1.00) (2.68) 1.45 46.77 2020 52.00 (1.00) (2.68) 1.54 49.86 2021 56.00 (1.00) (2.68) 1.63 53.95 Jan-Jun 2022 61.43 (1.00) (2.68) 1.65 59.40 Weighted Avg. 44.62 (1.65) (2.17) 1.59 42.39 * REC values based on AMP projections; capacity value through May 2015 based on current AEP Zone RPM Rates; capacity value for Jun 2015-Jun 2022 based on AMP projections 15  Wind PPA Rate Screening Blue Ridge Aggregate 70 65 Weighted Avg. Rate (Jul 2012-Jun 2022) 60 Wind PPA: $42.39/MWh Blue Ridge Aggregate: $39.57/MWh 55 50 $/MWh 45 40 35 30 25 Jul-Dec 2013 2014 2015 2016 2017 2018 2019 2020 2021 Jan-Jun 2012 Wind PPA Blue Ridge Agg. Market 2022 16 *Assumes Wind generation delivered to Blue Ridge Aggregate  Conclusions & Recommendation • Economics of Wind PPA is are marginal with the short- term market prices at such low levels • Contract could be used as a 10-year hedge against a rising market • Adding wind to any portfolio adds risk to a future full or partial requirements deal – Due to the unpredictable nature of wind, a unit-contingent risk premium would be incurred Recommendation: The Blue Creek Wind Farm represents a good opportunity for renewable power. While the economics are marginal, this project is significantly better than other renewable opportunities recently reviewed. 17  Next Steps • Determine participation level • Perform legal review of contracts • Schedule approval process 18 cc: Marc Gerken/AMP – President/CEO  Ohio, Virginia, Kentucky, Michigan & West Virginia Participants Only Pertaining to AMP Contract No.C-2-2012-9039-R CITY OF MARTINSVILLE, VIRGINIA [ORDINANCE/RESOLUTION] NO. _______________ TO APPROVE THE FORM AND AUTHORIZE THE EXECUTION OF BLUE CREEK WIND ENERGY SCHEDULE WITH AMERICAN MUNICIPAL POWER, INC. AND TAKING OF OTHER ACTIONS IN CONNECTION THEREWITH REGARDING WIND GENERATED ENERGY PURCHASES WHEREAS, the City of Martinsville, Virginia, (“Municipality”) owns and operates an electric utility system for the sale of electric capacity and associated energy for the benefit of its citizens and taxpayers; and WHEREAS, in order to satisfy the electric capacity and energy requirements of its electric utility system, Municipality has heretofore purchased, or desires to purchase in the future, economical, reliable and environmentally sound capacity and energy and related services from, or arranged by, American Municipal Power, Inc. (“AMP”), of which Municipality is a member; and WHEREAS, AMP is an Ohio nonprofit corporation, organized to own and operate facilities, or to provide otherwise, for the generation, transmission or distribution of electric capacity and energy, or any combination thereof, and to furnish technical services on a cooperative, nonprofit basis, for the mutual benefit of AMP members (“Members”), such Members, including Municipality, being political subdivisions that operate municipal electric utility systems in Ohio, Kentucky, Michigan, Pennsylvania, Virginia and West Virginia; and WHEREAS, Municipality, acting individually and through AMP with other political subdivisions of this and other states that own and operate electric utility systems, jointly, endeavors to arrange for reliable, environmentally sound and reasonably priced supplies of electric capacity and energy and related services for ultimate delivery to its customers; and WHEREAS, it is efficient and economical to act jointly in such regard; and WHEREAS, Municipality has previously entered into a Master Services Agreement with AMP, AMP Contract No. C-3-2006-4989, which contemplates that Municipality shall enter into various schedules for the provision of capacity and associated energy and related services from AMP to Municipality; and  WHEREAS, certain Members, including the Municipality have determined that they can utilize additional sources of reliable and economical wind generated electric capacity and energy on a long term basis at reasonable costs, and have requested that AMP arrange for the same by developing or otherwise acquiring interests in certain wind energy facilities (“Wind Facilities”); and WHEREAS, in furtherance of this purpose, AMP and Blue Creek Wind Farms, LLC (“Blue Creek”), have entered into an agreement (the “Blue Creek Wind Energy Agreement”) under the terms of which AMP is to purchase and Blue Creek is to supply and sell up to 54 MW of capacity and associated energy from Wind Facilities in Van Wert, Ohio for a period of ten (10) years; and WHEREAS, it is necessary and desirable for Municipality to enter into the Blue Creek Wind Energy Schedule to Municipality’s Master Services Agreement with AMP to provide for an additional source of capacity and energy; and WHEREAS, Members now have the right, but not the obligation by the enactment of this [Ordinance/Resolution] to authorize and request AMP to acquire capacity and energy from Wind Facilities by approval and execution of the Blue Creek Wind Energy Schedule authorized below; and WHEREAS, prior to the adoption of this [Ordinance/Resolution] AMP has (i) informed the Municipality of the terms of the Blue Creek Wind Energy Agreement; (ii) provided the Municipality the opportunity to review the Blue Creek Wind Energy Agreement; and (iii) offered representatives of the Municipality the opportunity to ask such questions, review data and reports, conduct inspections and otherwise perform such investigations with respect to, as applicable, the acquisition of capacity and energy and the terms and conditions of the Blue Creek Wind Energy Schedule authorized below as Municipality deems necessary or appropriate in connection herewith; and WHEREAS, after due consideration, the Municipality has determined it is reasonable and in its best interests to proceed as authorized herein below and requests and authorizes AMP to acquire capacity and energy from Blue Creek upon those terms and conditions set forth in the Blue Creek Wind Energy Agreement. NOW, THEREFORE, BE IT [ORDAINED/RESOLVED] BY THE COUNCIL OF THE CITY OF MARTINSVILLE, VIRGINIA: SECTION 1. That the Blue Creek Wind Energy Schedule between Municipality and AMP, substantially in the form attached hereto or on file with the Clerk, including Exhibits thereto, are approved, and the City Manager of Municipality is hereby authorized to execute and deliver the Blue Creek Wind Energy Schedule with such changes as the City Manager may approve as neither inconsistent with this [Ordinance/Resolution] nor materially detrimental to the Municipality, his or her execution of the Blue Creek Wind Energy Schedule to be conclusive evidence of such approval. SECTION 2. That the City Manager is hereby authorized to (i) acquire under the Blue Creek Wind Energy Schedule, authorized above, a Contract Amount as defined in that Schedule of up to 1000 kW without bid, and (ii) make any determinations and approvals required thereunder, if any, as the City Manager shall deem necessary and advisable. 2  SECTION 3. If any section, subsection, paragraph, clause or provision or any part thereof of this [Ordinance/Resolution] shall be finally adjudicated by a court of competent jurisdiction to be invalid, the remainder of this [Ordinance/Resolution] shall be unaffected by such adjudication and all the remaining provisions of this [Ordinance/Resolution] shall remain in full force and effect as though such section, subsection, paragraph, clause or provision or any part thereof so adjudicated to be invalid had not, to the extent of such invalidity, been included herein. SECTION 4. That this [Ordinance/Resolution] shall take effect at the earliest date allowed by law. SECTION 5. That it is found and determined that all formal actions of this Council concerning and relating to the passage of this [Ordinance/Resolution] were taken in conformance with applicable open meetings laws and that all deliberations of this [Council/Board of Public Affairs] and of any committees that resulted in those formal actions were in compliance with all legal requirements including any applicable open meetings requirements. (This section, or its equivalent, is mandatory in Ohio and may or may not be in other states. Please consult with your legal counsel.) (Please contact AMP’s General Counsel, John Bentine, at 614-334-6121 or via email at jbentine@taftlaw.com to discuss any changes to this draft.) (Virginia Participants may be required to notice and hold a public hearing pursuant to the provisions of Va. Code §15.2-2606.A and should specifically check with Virginia Counsel.) 4822-0188-8014, v. 7 3  AMP Contract No. C-2-2012-9039-R CITY OF MARTINSVILLE, VIRGINIA BLUE CREEK WIND ENERGY SCHEDULE TO AMERICAN MUNICIPAL POWER, INC. AND CITY OF MARTINSVILLE, VIRGINIA MASTER SERVICES AGREEMENT AMP CONTRACT NO. C-3-2006-4989 WHEREAS, the City of Martinsville, Virginia (“Municipality”) and American Municipal Power, Inc., formerly American Municipal Power-Ohio, Inc. (“AMP”) have entered into a Master Services Agreement (“MSA”) under which certain services may be provided, pursuant to schedules entered into between Municipality and AMP; and WHEREAS, AMP has negotiated and executed a Renewable Wind Energy Power Purchase Agreement, (AMP Contract No. C-2-2012-8956) between AMP and Blue Creek Wind Farm, LLC (“Blue Creek”), for the purchase of up to 54 MW of wind generated renewable electric capacity and associated energy (the “Blue Creek Wind Energy Agreement”) from wind electric facilities to be located near Van Wert, Ohio (“Wind Facilities”) a copy of which has been made available to the Municipality; and WHEREAS, the Blue Creek Wind Energy Agreement provides, among other things, significant opportunities for the Municipality to receive from AMP reliable, economic, wind generated renewable, capacity and energy through this schedule to the MSA (the “ Blue Creek Wind Energy Schedule”). SECTION 1 - TERM The term of this Blue Creek Wind Energy Schedule shall be effective as of the Delivery Date of the Blue Creek Wind Energy Agreement (expected to be July 1, 2012) as defined therein and shall thereafter be coterminous with the same; provided, however, that Municipality’s obligation to purchase and AMP’s obligation to deliver capacity and energy pursuant to this Blue Creek Wind Energy Schedule are both contingent on Blue Creek’s performance pursuant to the Blue Creek Wind Energy Agreement. SECTION 2 - SERVICES AMP agrees to procure as Seller, pursuant to (and its obligations hereunder are specifically dependent upon) the Blue Creek Wind Energy Agreement, all output up to 54 megawatts (“MW”) of capacity and associated energy (“MWh”) for the benefit of the Municipality (the “Contract Amount”). Municipality agrees to take and pay for such capacity and energy on a pro rata basis where and as available pursuant to the Blue Creek Wind Energy Agreement. Such pro rata amounts to be determined by multiplying the Municipality’s percentage Contract Amount, as set forth on Exhibit B hereto, times the actual capacity and energy available from time to time under the Blue Creek Wind Energy Agreement. SECTION 3 - DELIVERY POINTS The Delivery Point(s) for this Wind Schedule shall be the “Point of Delivery” as defined in the Blue Creek Wind Energy Agreement – the high-side of the facility’s interconnection transformer with AEP Ohio unless the same is modified in writing by the parties. There may also be a Secondary Delivery Point, or Points of Delivery. Municipality may change the Secondary Delivery Point(s) set forth on Exhibit D with AMP’s consent, such consent not to be unreasonably withheld, provided that transmission to any modified Secondary Delivery Point shall be pursuant to appropriate FERC tariffs at Municipality’s expense, including the costs of any/all required ancillary services. SECTION 4 - SCHEDULING A. AMP shall cooperate with the Municipality to schedule the capacity and energy to a delivery point as directed by the Municipality. B. Notwithstanding any other provision of this Blue Creek Wind Energy Schedule and the MSA, Municipality shall, when available, take and pay for the wind generated capacity and energy. SECTION 5 - DEPENDENCE ON BLUE CREEK WIND ENERGY AGREEMENT Municipality recognizes that AMP’s ability to supply wind generated capacity and energy under this Blue Creek Wind Energy Schedule is dependent upon AMP’s ability to arrange for the same pursuant to the Blue Creek Wind Energy Agreement. Additionally, Municipality recognizes that AMP entered into the Blue Creek Wind Energy Agreement primarily for the benefit of Municipality and the other Members of AMP and that AMP, pursuant to the Blue Creek Wind Energy Agreement, has certain rights as well as certain obligations. Accordingly, Municipality warrants to cooperate with AMP in such a manner as to facilitate AMP’s performance of its obligations thereunder and releases AMP from any liability due to Blue Creek’s failure to perform. SECTION 6 - RATES, CHARGES AND BILLING A. Capacity and energy made available pursuant to this Blue Creek Wind Energy Schedule shall be charged for at the base rates specified in the Blue Creek Wind Energy Agreement as shown on Exhibit A and as the same may be modified under such Agreement and shall include an adder for an appropriate allocation of all costs incurred hereunder, including an appropriate allocation of AMP’s wind power development expenditures and the costs set forth in Sections 6 B and C hereof, and the Capacity and Energy Rate Schedule as the same may be modified by AMP from time to time and pursuant to the billing provisions herein and in the MSA; B. The net of the following costs shall be included as a component of a uniform rate adjustment to be charged hereunder for energy delivered or made available to Municipality (i) any ancillary service, congestion and marginal loss charges by PJM or any other applicable Regional Transmission Organization (“RTO”), (ii) any costs or credits associated with differences between day ahead schedule and actual output, and (iii) as well as any costs incurred by AMP under the Blue Creek Wind Energy Agreement not included in the rates set forth on Exhibit A (“Project Energy Rate Adjustment”). This creates a Project Energy Rate for the Wind Schedule consisting of the charges in Exhibit A as adjusted as set forth in this Section 6 (see Exhibit E – Example Project Energy Rate 2 Calculation). The Municipality shall also be responsible for any additional ancillary service, congestion or marginal loss charges to its Secondary Delivery Point. C. In addition to the other compensation to be paid to AMP pursuant to this Blue Creek Wind Energy Schedule, Municipality shall also pay AMP the Service Fee specified in the MSA. SECTION 7 – INSTALLED CAPACITY CREDIT Municipality will receive a pro-rata share of the net available Installed Capacity / RPM credits/charges (if any) from the RTO where the Wind Facilities are located. SECTION 8 – RENEWABLE ENERGY CREDITS All renewable energy credits or like Environmental Credits (Blue Creek Wind Energy Agreement, Sections 8.6 and 8.7) available to AMP under the Blue Creek Wind Energy Agreement may be monetized by AMP at Municipality’s direction and credited pro rata, to the Municipality. Such pro rata amounts to be determined by multiplying the Municipality’s percentage Contract Amount times the actual Environmental Credits available to AMP from time to time under the Blue Creek Wind Energy Agreement. Renewable energy credits or like environmental credits may also be directly credited to an appropriate account of a Municipality at the direction of Municipality. Municipality’s election of actions to be taken in regard to Municipality’s pro rata share of the Environmental Credits shall be shown on Exhibit C. CITY OF MARTINSVILLE, VIRGINIA AMERICAN MUNICIPAL POWER, INC. BY: By: TITLE: Marc S. Gerken, P.E. President/CEO DATE: DATE: APPROVED AS TO FORM: APPROVED AS TO FORM: Municipality’s Legal Counsel By: John W. Bentine General Counsel 3  EXHIBIT A RATE SCHEDULE for BLUE CREEK WIND POWER* Start Date End Date Price ($/MWh) July 1, 2012 December 31, 2013 $35.00 January 1, 2014 * December 31, 2014* $37.00 January 1, 2015 * December 31, 2015* $39.00 January 1, 2016 * December 31, 2016* $41.00 January 1, 2017 * December 31, 2017* $43.00 January 1, 2018 * December 31, 2018* $46.00 January 1, 2019 * December 31, 2019* $49.00 January 1, 2020 * December 31, 2020* $52.00 January 1, 2021 * December 31, 2021* $56.00 January 1, 2022 * December 31, 2022* $61.43 Average Contract Price (simple average $45.94 * To the extent the Delivery Start Date is later than January 1, 2013, these dates shall be similarly tolled. * Reflects only those amounts that AMP will pay to Blue Creek. Service fees, or other applicable charges will have to be supplied and added. A-1  EXHIBIT B SERVICES kW % Amount Of Total Capacity Under Blue Up to 54,000 100% Creek Wind Farm Agreement (up to) Contract Amount Of Municipality’s 1,000 1.85%% Capacity (up to) B-1  EXHIBIT C For the years 2012 and 2013, Municipality elects the following actions be taken in regard of the Municipality’s pro-rata share of Environmental Credits available under the Blue Creek Wind Energy Agreement: _______ Municipality requests that AMP sell Municipality’s pro-rata share of Environmental Credits and return proceeds of sale to Municipality. _______ Municipality requests that AMP credit Municipality’s pro-rata share of Environmental Credits to Municipality’s account. C-1  EXHIBIT D SECONDARY DELIVERY POINTS [TO COME] D-1  EXHIBIT E EXAMPLE PROJECT ENERGY RATE CALCULATION 2013 Example Rate Base Energy Rate = $35.00/MWh PJM Operating Reserves = $0.10/MWh PJM Market difference between Day Ahead schedule and Real Time output = ($0.20/MWh) Costs incurred by AMP associated with Blue Creek agreement = $0.25/MWh Final Project Energy Rate (example) - $35.15/MWh 4832-5839-3870, v. 14 E-1  City Council Agenda Summary Meeting Date: May 8, 2012 Item No: 6. Department: Public Works Issue: Consideration of Funding for FY 2013 for the Piedmont Area Regional Transit (PART) Bus System Summary: The Piedmont Area Regional Transit system, or PART, has been in operation in Martinsville and Henry County since January 2009. PART is funded by federal, state, and local money, and Martinsville- Henry County’s share of the funding was $22,742 (each) in FY12 as part of an overall budget of about $220,000. However, funding from the Commonwealth’s Department of Rail and Public Transportation for FY 2013 is being reduced. Taking into consideration the reduction in State funding and other PART budget adjustments, the projected local funding for FY13 is $64,440 to be split equally ($32,220 each) between Henry County and Martinsville. DRPT has requested a letter from the City indicating a commitment of local funding for FY13. Attachments: None Recommendations: Staff recommends approval of funding Martinsville’s share of the PART budget for FY 2013. Henry County has already committed to doing likewise. Funding for PART is included in the FY13 budget package presented to Council.  City Council Agenda Summary Meeting Date: May 8, 2012 Item No: 7. Department: City Manager/Finance Issue: Consider approval of resolutions to: (1) Opt out of the Line of Duty Act (LODA) Fund with the Virginia Retirement System; and (2) Join the Virginia Association of Counties Self Insurance Risk Pool (VACoRP). Summary: During a review of the City’s insurance program for liability, workers’ compensation, property loss, and Line of Duty Act coverage, quotes for coverage were obtained and VACoRP was determined to be the best option for the City. In order to change providers and to include the recently required Line of Duty Act coverage, it will be necessary for Council to first adopt a resolution opting out of coverage automatically provided through the Virginia Retirement System, and to adopt a resolution to join the Virginia Association of Counties Self- Insurance Risk Pool. The second resolution also authorizes the City Manager to execute such agreements as may be necessary for workers’ compensation and LODA coverage. In its 2010 session, the Virginia General Assembly established a new Line of Duty Act Fund with VRS as the investment manager. Localities that have eligible hazardous duty professionals on a paid or voluntary basis may choose to participate in this fund or choose to self-fund. Due to the proposed increases from the VRS plan, staff recommends the City opt-out of the VRS fund and join VACoRP to self-fund claims at significant cost savings. Attachments: Resolution—VRS LODA Opt Out 2012 Resolution-city to VACoRP Recommendations: (1) Motion to approve resolutions to opt out of VRS LODA. (2) Motion to approve resolution to join VACoRP and authorize City Manager to execute necessary documents  RESOLUTION Irrevocable Election Not to Participate in Line of Duty Act Fund WHEREAS, pursuant to Item 258 of the 2010 Appropriation Act, paragraph B, the Virginia General Assembly has established the Line of Duty Act Fund (the “Fund”) for the payment of benefits prescribed by and administered under the Line of Duty Act (Va. Code § 9.1-400 et seq.); and WHEREAS, for purposes of administration of the Fund, a political subdivision with covered employees (including volunteers pursuant to paragraph B2 of Item 258 of the 2010 Appropriation Act) may make an irrevocable election on or before July 1, 2012, to be deemed anon-participating employer fully responsible for self-funding all benefits relating to its past and present covered employees under the Line of Duty Act from its own funds; and WHEREAS, it is the intent of City of Martinsville to make this irrevocable election to be a non-participating employer with respect to the Fund; NOW, THEREFORE, IT IS HEREBY RESOLVED that City of Martinsville irrevocably elects to be deemed anon-participating employer fully responsible for self-funding all benefits relating to its past and present covered employees under the Line of Duty Act from its own funds; and it is further RESOLVED that the following entities: Martinsville Police Department, Fire Department, Sheriff’s Office, and the Regional E-911, to the best of the knowledge of City of Martinsville, constitute the population of its past and present covered employees under the Line of Duty Act; and it is further RESOLVED that, as a non-participating employer, City of Martinsville agrees that it will be responsible for, and reimburse the State Comptroller for, all Line of Duty Act benefit payments (relating to existing, pending or prospective claims) approved and made by the State Comptroller on behalf of City of Martinsville on or after July 1, 2010 except for benefits paid on your behalf for FY 2012; and it is further RESOLVED that, as a non-participating employer, City of Martinsville agrees that it will reimburse the State Comptroller an amount representing reasonable costs incurred and associated, directly and indirectly, with the administration, management and investment of the Fund; and it is further RESOLVED that, City of Martinsville shall reimburse the State Comptroller no more frequently than on a monthly basis for amounts invoiced by the State Comptroller. Adopted in ________________, Virginia this ______ day of _____________, ________. _______________________________________ Authorized Signature- Title  RESOLUTION TO ADOPT THE MEMBER AGREEMENT TO JOIN THE VIRGINIA ASSOCIATION OF COUNTIES GROUP SELF INSURANCE RISK POOL WHEREAS, City of Martinsville desires to protect against liability claims, workers’ compensation and property losses and to provide for payment of claims or losses for which the city may be liable; and WHEREAS, the Virginia Association of Counties Group Self Insurance Risk Pool, aka VACORP, has been established pursuant to Chapter 27 (§ 15.2-2700 et seq.) and Title 15.2 of the code of Virginia; and WHEREAS, it is desirable for City of Martinsville to join the Virginia Association of Counties Group Self Insurance Risk Pool in order to provide a method of risk sharing for liability claims, workers’ compensation and property losses; NOW, THEREFORE, BE IT RESOLVED that the governing body of City of Martinsville hereby agrees to the member agreement entitled “Member Agreement for Virginia Association of Counties Group Self Insurance Risk Pool” which creates a group fund to pay liability and workers’ compensation claims and property losses of the counties, towns, cities and other local agencies joining the Group, and we acknowledge we have received a copy of the pertinent Plan and supporting documents. BE IT FURTHER RESOLVED that the City Manager is authorized to execute the member agreement to join the Virginia Association of Counties Group Self Insurance Risk Pool and to act on behalf of City of Martinsville in any other matter relative to the Group. This the ________ day of ______________, 20__. ATTEST: _______________________ _________________________ Clerk Mayor  City Council Agenda Summary Meeting Date: May 8, 2012 Item No: 8. Department: Community Development Issue: Hear update from Community Development regarding city’s improvement projects in Westside area. Summary: Staff will update Council on Westside area projects at the meeting. Attachments: none Recommendations: For information only.  City Council Agenda Summary Meeting Date: May 8, 2012 Item No: 9. Department: Public Works Issue: Hear update on city’s efforts to address litter issues. Summary: Staff will update Council on community litter issues at the meeting. Attachments: none Recommendations: For information only.  City Council Agenda Summary Meeting Date: May 8, 2012 Item No: 10. Department: Finance Issue: Consider approval of consent agenda. Summary: The attachments amend the FY12 Budget with appropriations in the following funds: FY12: General Fund: $-65,858 – Correction from previous month; $3,088 – Confiscated Assets and Senior Citizen program donations, grants, and fees. Capital Reserve Fund: $400,000 – Energy Efficiency ARRA Grant Reimbursement Refuse Fund: $8,750 – Reimbursement for Solid Waste Mgmt. Plan Electric Fund: $143,545 – ARRA Hydro Plant Efficiency Grant Reimbursement Attachments: Spreadsheet-Bud Add for Council FY12 - 5-8-12.xls Recommendations: Motion to approve  BUDGET ADDITIONS FOR 5/08/12 ORG OBJECT DESCRIPTION DEBIT CREDIT FY12 General Fund: 01102926 436443 Federal Grant - ARRA - Efficiency Retrofit Grant -65,858 01431162 508220 City Hall Maintenance/Physical Plant Expansion -65,858 Correction from previous month - Grant Reimb. 1101917 442402 Categorical Other State - Confiscated Assets - C Atty 163 1221082 506105 Comm Atty - Conf Assets State 163 1101917 442401 Categorical Other State - Confiscated Assets - Police 471 1311085 506078 Police Dept - Conf Assets State 471 appropriation of state asset forfeitures 01100909 490801 Recovered Costs - Senior Citizens 1,604 01714212 501300 Senior Citizens - Part-time Wages 1,056 01714212 502100 Senior Citizens - Social Security 66 01714212 502110 Senior citizens - Medicare 15 01714212 506049 Senior Citizens - Vehicle Fuel 467 Transporation Grant & Class Fees 01100908 480420 Donations - Senior Citizens 850 01714212 506016 Senior Citizens - Program Supplies 850 Health Fair Donations Total General Fund: -62,770 -62,770 Capital Reserve Fund: 16102926 436443 Federal Grant - ARRA - Efficiency Retrofit Grant 65,858 16577367 508140 City Hall Maintenance/Physical Plant Expansion 65,858 Energy Efficiency Grant Reimbursement 16102926 436443 Federal Grant - ARRA - Efficiency Retrofit Grant 334,142 16577367 508140 City Hall Maintenance/Physical Plant Expansion 334,142 Energy Efficiency Grant Reimbursement Total Capital Reserve Fund: 400,000 400,000 Refuse Fund 09100909 490104 Recovered Costs 8,750 09425302 503140 Landfill - Professional Services - Engineering 8,750 HC share of Solid Waste Management Plan Cost Total Electric Fund: 8,750 8,750 Electric Fund 14102926 436440 Federal Grant - ARRA - Energy Efficiency Grant 143,545 14565340 503140 Electric - General Exp. - Prof. Serv.-Eng & Arch 143,545 Hydro Plant Efficiency Grant Reimbursement Total Electric Fund: 143,545 143,545