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HomeMy WebLinkAbout5. NEW BUSINESS 04/01/2008 Mount Prospect Public Works Department INTEROFFICE MEMORANDUM FROM: DEPUTY DIRECTOR OF PUBLIC WORKS -ata ' ~.,.~, + l'/o~ TO: VILLAGE MANAGER MICHAEL E. JANONIS DATE: MARCH 27, 2008 AUTHORIZATION TO ENTER INTO AN AGREEMENT FO WA TERISEWER PUMPING ELECTRICAL ENERGY SUPPLY SUBJ: In October 2006, the Village conducted an auction for electrical energy to power water distribution and wastewater collection pumps. This inaugural auction was conducted in an effort to mitigate dramatic electrical energy cost increases prompted by state-wide deregulation of the electricity industry and expiration of a 1 O-year electric rate freeze. The auction resulted in a 17-month contract with Mid American Energy of Davenport, Iowa to supply required electrical energy at an 18% rate increase. Although significant, this rate increase allowed the Village to avoid an estimated 50% rate increase slated by Commonwealth Edison. This contract is due to expire in May 2008. In an effort to secure reliable, cost-effective pricing past May, staff intends to conduct another auction on or about April 9, 2008. This auction will attempt to secure all- inclusive, fixed rate pricing for water/sewer pumping electrical energy for the term commencing in June 2008 and concluding in May 2010 (24 months). As was the case with our first electric auction in 2006, electricity rates remain highly volatile and can change dramatically over short periods of time. Consequently, we expect that bidders will require acceptance and execution of an offer within 1 or 2 business days. This industry norm makes it unlikely that we will be able to hold bid results for formal award at a regular Village Board meeting. Additionally, given the fickle nature of this market, our auction date might coincide with an unforeseen rate spike. If this occurs, it may be in the best interest of the Village to allow all bids to lapse and repeat the auction process a few days later in the hopes that prices will mediate. In order to conduct the auction with this much flexibility, it will be necessary to suspend procedural rules for bidding such as public notice, rejection of bids, etc. A Page 2 of 2 Authorization to Enter into an Agreement for Water/Sewer Pumping Electrical Energy Supply March 27, 2008 Therefore, we ask that the Village Board be petitioned to authorize you to enter into an agreement and award a contract to the successful bidder. The results of the auction will be reported to the Village Board after the fact on an informational basis only. We also ask that the Village Board be petitioned to waive the procedural rules for public bidding for the purpose of obtaining a contract to supply electrical energy for water/sewer pumping. Finally, it is poignant to note that the State of Illinois has abandoned the infamous "reverse auction" process that resulted in Commonwealth Edison's and Ameren's dramatic 2006 rate hikes. In its place, the legislature has created the Illinois Power Agency. This agency has been tasked with procuring wholesale electricity for the state starting in 2009. No information is currently available regarding the operation of this agency or the methods it will utilize to procure electricity. Staff believes it will be prudent to overlap the start-up of this agency with our own electricity contract and be afforded the opportunity to assess its value to the Village prior to making a commitment. It is possible that the Illinois Power Agency may provide an attractive alternative to the auction process in the future. If you have any questions, or would like to discuss this matt r in further detail, please contact me at your convenience. Sean P. Dorsey Cc: Director of Public Works Glen R. Andler Water/Sewer Superintendent Matt Overeem sd 03/26/08 RESOLUTION NO. A RESOLUTION AUTHORIZING THE VILLAGE MANAGER OF MOUNT PROSPECT TO ENTER INTO ONE OR SEVERAL CONTRACTUAL AGREEMENTS TO SUPPLY ELECTRICAL ENERGY FOR VILLAGE-OWNED WATER AND SEWER PUMPING FACILITIES LOCATED IN MOUNT PROSPECT, ILLINOIS WHEREAS, the electrical energy supply market has been deregulated in the State of Illinois; and WHEREAS, the Village of Mount Prospect is now permitted to secure electrical energy from multiple supply sources; and WHEREAS, it has been determined that the best interests of the Village of Mount Prospect would be served by entering into one or several contractual agreements to supply electrical energy for Village-owned water and sewer pumping facilities through a competitive bid process conducted by the Village. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND BOARD OF TRUSTEES OF THE VILLAGE OF MOUNT PROSPECT, COOK COUNTY, ILLINOIS: SECTION ONE: The Mayor and Board of Trustees of the Village of Mount Prospect authorize the Village Manager to enter into one or several contractual agreements to supply electrical energy for Village-owned water and sewer pumping facilities. SECTION TWO: This Resolution shall be in full force and effect from and after its passage and approval in the manner provided by law. AYES: NAYS: ABSENT: PASSED and APPROVED this day of April, 2008. Irvana K. Wilks Mayor ATTEST: M. Lisa Angell Village Clerk H :\CLKO\files\WI N\RES\Authcontractual agreementsforelcelectricalenergyapril2008.doc Village of Mount Prospect Community Development Department Mount Prospect MEMORANDUM TO: MICHAEL E. JANONIS, VILLAGE MANAGER ~~. ~-n, .... ~ L' FROM: DIRECTOR OF COMMUNITY DEVELOPMENT DATE: SUBJECT: mSTORY Last year the State of Illinois adopted the Elevator Safety Act; this Act regulates the construction of new elevators and the annual inspection/enforcement of existing elevators. The State is now beginning to enforce this act and we must decide if we wish to maintain a local elevator inspection program. The Village currently maintains an elevator inspection program that has been in place for many years. We use Thompson Elevator to conduct all plan reviews and inspections, and then invoice the costs back to the building owners through the license program. If we wish to maintain our local elevator inspection program, we must sign into an agreement with the State that requires us to comply with the Act. If we do not wish to continue the elevator inspection program, we must notify the state and they will then take over the program. The Elevator Safety Act includes requirements that will have a negative financial impact on our operations and on the financial resources of building owners with elevators. The two parts of the act that contain these financial impacts are the upgrade requirements for existing elevators and the record keeping/reporting requirements. UPGRADE REQUIREMENTS FOR EXISTING ELEVATORS There are 20 upgrades required by the Act. Eighteen of these upgrades must be completed by January 1,2009. These upgrades are considered the "lower cost" upgrades. The two remaining upgrades are the most expensive of the twenty and have to be completed by January 1, 2011. These cylinder replacements can cost up to $100,000 per elevator. The opinion of most in the elevator field is that the very expensive hydraulic cylinder replacement requirement is not necessary and is an overly burdensome requirement. Of our 185 elevators in Mount Prospect, Thompson Elevator estimates that approximately 80% will need some level of upgrades, with approximately 30% requiring the most expensive upgrades. If we sign the state agreement, all enforcement falls to us. Even though we would have enforcement responsibility, we will have no authority to grant extensions or variances. Only the State Elevator Board may approve extensions and/or variances. Enforcement of these provisions will require additional staff time and potentially increased attorney representation. RECORD KEEPINGIREPORTING REQUIREMENTS By signing the state agreement, we are required to provide monthly and yearly reporting and record keeping. These requirements are far above and beyond what we currently maintain and would require additional staff time to administer. They include the following: · Annual report that includes the number and types of inspections performed during the past year; · The number of certificate of operations issued during the past year; · The number of permits issued for new conveyances during the past year; · A list of conveyances identified by address and state J.D. number after conveyance is registered, that were red tagged or put out of service during the past year; · A copy of any report prepared as the result of an elevator accident that was not reported to the state; · A copy of amendments to the programs enabling ordinance or resolution adopted by the local authority; · Submit on the 15th of each month the list of conveyances inspected for the previous month identified by the state I.D; · To require all conveyances in it's jurisdiction to register and pay the associated fee to the state and report to the state the names of owners of those conveyances that fail to register within 30 days of determination that the conveyance is not registered; and · Maintain for a period of not less than one year the following records for inspection by the state: o Copies of all inspection reports. o Copies of all elevator permits applications. o Copies of all elevator permits issued. o Records of the number of certificates of operation issued. RECOMMENDATION Staff recommends that we defer the elevator program to the state. We do have the option of making an application to restart our local elevator program and take it over at any time in the future. I recommend we revisit the possibility of reapplying to run the program locally if the regulations should change or after the deadline for the upgrades passes. lJJ( 11. IC\Ca1\~r ~:,.:t1('1\ \(.l-'\'! i J mla 3/28/08 RESOLUTION NO. A RESOLUTION CEDING LOCAL AUTHORITY FOR AN ELEVATOR SAFETY INSPECTION PROGRAM TO THE STATE OF ILLINOIS WHEREAS, in 2007 the State of Illinois adopted the Elevator Safety Act to regulate the construction of new elevators, and the annual inspection and enforcement of existing elevators; and WHEREAS, the State of Illinois has recently initiated enforcement of the Act and the Village must either sign an agreement with the State to continue the Village's local elevator inspection program or cede the elevator safety inspection program to the State; and WHEREAS, by entering into an agreement with the state the Village must-comply with inspection, record keeping and reporting requirements that will have a significant financial impact on the Village's current elevator inspection program. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND BOARD OF TRUSTEES OF THE VILLAGE OF MOUNT PROSPECT, COOK COUNTY, ILLINOIS: SECTION ONE: That the Mayor and Board of Trustees of the Village of Mount Prospect, Cook County, Illinois, have determined that it is in the best interest of the Village to cede the elevator inspection program to the State. SECTION TWO: That this Resolution shall be in full force and effect from and after its passage and approval in the manner provided by law. AYES: NAYS: ABSENT: PASSED and APPROVED this day of April, 2008. Irvana K. Wilks Mayor ATTEST: M. Lisa Angell Village Clerk H :\CLKO\files\WI N\RES\ElevatorsafetyactinspectionprogramapriI2008.doc 8> Village of Mount Prospect Community Development Department Mount Prospect MEMORANDUM ~ TO: MICHAEL E. JANONIS, VILLAGE MANAGER FROM: DIRECTOR OF COMMUNITY DEVELOPMENT DATE: MARCH 28, 2008 SUBJECT: MODIFICA nONS TO EMPLOYER ASSISTED HOUSING PROG In September, Staff presented information regarding the Employer Assisted Housing Program. The program was sponsored by the Metropolitan Planning Council last year and was presented to four other Northwest Suburbs (Arlington Heights, Buffalo Grove, Rolling Meadows, and Palatine). The program offers down payment assistance to employees purchasing a home in Mount Prospect. $20,000 was included in the 2008 budget for the program. As staff moved forward with the implementation of the program, we have determined that MPC presented incorrect information which diminishes the benefits of the program to either the Village of Mount Prospect or its' participating employees. The following provides background on what was originally proposed and what are now our current options. Program Description & Modifications When the Metropolitan Planning Council (MPC) first presented this program to the Village, they provided a "Pilot Program" budget to illustrate the program costs. The "Pilot Program" budget lead the Village of Mount Prospect to believe that approximately 40% of the program costs would be recuperated through tax credits. Once staff began working more closely with MPC for the administration of the program, MPC realized that an error had been made when the "Pilot Program" budget was prepared. An employer participating in the EAH program must pay administrative costs to MPC and the agency providing the counseling and administration of the program. $1,000 is paid to MPC for their assistance and $500 per referral and closing is paid to the organization administrating the program. The housing counseling and administration for the program is contracted to Housing Opportunity Development Corporation (HODC). This element of the program is important because they not only counsel employees on home buying, but they also work with the applicant on qualifying for the program so that an employee's peer does not have to handle sensitive information (i.e. income verification). The Village's responsibility is to refer employees to the service if they appear to meet the criteria for the program: buying within the corporate limits of Mount Prospect, meeting income limits, working for the Village for at least a year, etc. Given the new information on the program's costs, staff is bringing this matter back the Village Board to determine if they remain interested in participating in the program. If the Village chooses to participate, there are two options available. Option #1 reduces the benefit to the employee but maintains the tax credit for the Village. Option #2 maintains the full benefit to the employee but eliminates the tax credits to the Village (shaded areas reflect modifications from original "Pilot Program" budget). Pilot Pro ram $0 $19,000 $1,000 $20,000 -$8,000 $12,000 $1,000 $20,000 -$8,000 $12,000 o tion #2 $0 $19,000 $1,000 $20,000 $0 $20,000 * The counseling fee is based on a structure of $500 paid to the counseling agency for every employee referred for counseling, and an additional $500 for any employee who closes on a home. Option #1: Ifthe Village of Mount Prospect decided to work with the HODC directly, the "Option # 1" budget would apply. The Village of Mount Prospect would pay HODC and MPC for their services. Each referral is charged to the Village, which reduces the amount of funding available to employees for their down payment. Tax credits would be available for the Village and are typically received about two years after the credits are sold. Option #2: Under the "Option #2" Budget, costs for administration and counseling are waived. MPC is working with Charter One Bank to underwrite the costs of counseling and administration for the first year of the program for any small business participating in the Employer Assisted Housing Program. MPC has considered the Village to be a small business in order for the Village to participate in the "Small Business Consortium" and to have the counseling fees paid by Charter One. However, if the Village of Mount Prospect is considered to be part of the Small Business Consortium, the Village will not be eligible to receive tax credits. The down payment assistance amount to the employee is maximized with this option. Analysis: The Village of Mount Prospect has three options for the Employer Assisted Housing: I. Do not participate in the Employer Assisted Housing Program. 2. Participate as an individual employer and have less funding available for down payments, but recuperate tax credits (Option #1). 3. Participate under the Small Business Consortium and waive tax credits (Option #2). Recommendation While the error made in the original program design was significant, there are benefits to offering a pilot program for Mount Prospect employees. Staff recommends that the Village continue with the program and is looking for direction from the Village Board as to whether they concur, and if so, which program option is preferred. Please forward this memo to the Village Board for the April I, 2008 Village Board meeting. Staff will be present to answer questions at the meeting. ~~q~~. William J. Cooney, Jr., AICP