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HomeMy WebLinkAbout2012-07-17 City Council Regular MinutesCITY COUNCIL REGULAR MEETING JULY 17, 2012 The regular meeting of the City Council of the City of Apache Junction, Arizona, was held on July 17, 2012, at the Apache Junction City Council Chambers pursuant to the notice required by law. CALL TO ORDER Vice Mayor Dietz called the meeting to order at 7:00 p.m. INVOCATION Councilmember Wilson gave the Invocation. PLEDGE OF ALLEGIANCE Councilmember Serdy led the Pledge of Allegiance. ROLL CALL Councilmembers Present:Vice Mayor Dietz Councilmember Barker Councilmember Evans Councilmember Serdy Councilmember Waldron Councilmember Wilson Staff Present: (Mayor Insalaco was absent.) Assistant City Manager Bryant Powell City Clerk Kathleen Connelly City Attorney Joel Stern Development Services Director Brad Steinke Assistant to the City Manager Matt Busby Others Present:Public Works Manager Shane Kiesow Captain Arnold Freeman REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 1 OF 24 ACCEPTANCE OF CONSENT AGENDA )Councilmember Waldron MOVED THAT THE CONSENT AGENDA BE ACCEPTED AS PRESENTED. Councilmember Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. AWARDS, PRESENTATIONS AND PROCLAMATIONS Vice Mayor Dietz presented Republic Services with a Community Partnership Award for sponsoring the fireworks show for the Fourth of July for the past three years. Vice Mayor Dietz read a proclamation designating August as Drowning Impact Awareness Month and presented it to Tina Gerola of the fire district. ANNOUNCEMENT OF CURRENT EVENTS Councilmember Serdy announced he attended the Governor's Conference on Tourism last week.Gary Mulholland was posthumously awarded the Spirit of Service Award for his many years of dedication for promoting Lost Dutchman Days and the rodeo.He hopes to be able to play the video they showed at the next council meeting and there is a movement underway to name the rodeo grounds after him. Councilmember Wilson thanked everyone involved for the great fireworks display on the Fourth of July. Councilmember Barker announced they celebrated the opening of a new fire station. CITY MANAGER'S REPORT Assistant City Manager Bryant Powell commented on the statewide recognition of Gary Mulholland, the city recycling services, read two letters on the Fourth of July fireworks, and recognized public works fleet employees and street crews for their work. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 2 OF 24 PUBLIC HEARINGS BINGO LICENSE FOR BP0 ELKS #2349 ) )City Clerk Kathleen Connelly briefed the council on the item. Vice Mayor Dietz requested the applicant address the council. Ms. Cindy Pierson, representing the Elks Lodge, addressed the council to answer any questions.Bingo will be on Sunday in the afternoon. Vice Mayor Dietz opened the public hearing on the item.There being no one wishing to speak, he closed the public hearing.He reopened the item to council discussion.There being no further discussion, he called for a motion. Councilmember Barker MOVED THAT THE BINGO APPLICATION FOR BP0 ELKS #2349 BE RECOMMENDED FOR APPROVAL TO THE ARIZONA DEPARTMENT OF REVENUE, BINGO SECTION. Councilmember Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. ORDINANCE NO. 1381, REPEALING, AMENDING AND READOPTING SECTIONS 1-16-19-C, 1-16-19-D AND 1-16-19-E ACCESSORY BUILDINGS AND STORAGE SHEDS REGARDING HEIGHT, SIZE, LOCATION AND DESIGN REQUIREMENTS FOR ACCESSORY BUILDINGS Councilmember Evans stated she would have to recuse herself. Development Services Director Brad Steinke briefed the council on the item. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 3 OF 24 Vice Mayor Dietz thanked Development Services Director Brad Steinke for the work he had done on this.He added this issue was brought to the council by the residents.It is something they wanted to do.There were two sides to this issue.They got together and worked cordially to come up with a solution.He is proud of the residents of the community working together to come to a solution. Development Services Director Brad Steinke asked for a show of hands from those that worked on the issue. Vice Mayor Dietz opened the public hearing on the item. Final County Supervisor Clark Smithson, 1700 S. Weaver Drive, Apache Junction, addressed the council as a private citizen.He feels the same as Vice Mayor Dietz.He is pleased that neighbors got together to reach an agreement. Vice Mayor Dietz closed the public hearing with no one else wishing to speak.He reopened the item to council discussion. Councilmember Wilson commented he wanted to say a special thanks to both groups of individuals who participated on this.It really shows that when they can sit down and discuss things, come to a mutual understanding between the differences of opinion, they can reach that.He is excited they were able to do this instead of sitting and arguing over one word here or there.They discussed it and came up with an agreement. Councilmembers Waldron and Barker agreed. Vice Mayor Dietz closed the discussion with no further comments and called for a motion. Councilmember Waldron MOVED THAT ORDINANCE NO. 1381 BE READ BY TITLE ONLY AND THE READING OF THE ENTIRE ORDINANCE BE WAIVED. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 4 OF 24 Councilmember Barker SECONDED THE MOTION. VOTE:Unanimous. The motion carried. City Clerk Kathleen Connelly read the ordinance by title only. Councilmember Waldron MOVED THAT ORDINANCE NO. 1381, AS READ BY THE CITY CLERK, BE APPROVED. Councilmember Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. Councilmember Evans returned to the chambers and took her seat. OLD BUSINESS POWER PURCHASE AGREEMENT FOR SOLAR FACILITIES WITH SIEMENS INDUSTRIES) Public Works Manager Shane Kiesow briefed the council on the item. Councilmember Barker asked if the two trees at parks and recreation will stay. Public Works Manager Shane Kiesow stated he believes they will.The shadow they cast will not be impacting it at the prime time of the day. Mr. Grant Wood, project manager, stated the two large pine trees are about 30 years old. They are at the end of their life.They need to evaluate whether they want to keep them or not.There is some shading to the structures.It is something they will have to decide on the impact they really do have.They will do some hour by hour REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 5 OF 24 modeling and by season to see what effect they have.They might be able to trim them back. Public Works Manager Shane Kiesow continued with his briefing. Vice Mayor Dietz thanked Siemens for taking the time to come out and explain a lot of things.They really worked with our staff.He also thanked staff for their work.He commented the council did not really have enough time to go through everything to get everything done.He appreciated their coming out early today to work with staff. Councilmember Serdy commented he wanted to thank Shane for his help in this process.He has a lot of work to do in the city and this extra work was dumped in his lap.He thanked him for his guidance and objectivity. Public Works Manager Shane Kiesow introduced Sean Navizi, sales manager, Grant Wood, the project manager, Andy Beggs who works in the background of the project and Clark Wiedetz from Georgia.He added Siemens has made some concessions with their draft dated 7/12/12. Vice Mayor Dietz asked if they could title the new things that they have given the council today. City Attorney Joel Stern stated there are two.One is dated 7/12/12 which is the original agreement.There is the new version that has some changes dated 7/17/12. Vice Mayor Dietz commented it could be titled, basically, the changes dated 7/17/12. City Attorney Joel Stern stated there are also changes from 7/12/12. Mr. Clark Wiedetz commented they would have to agree with the council on city staff.They have been working with them for months and it has been a REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 6 OF 24 pleasure putting it together.They are making every effort to provide the city with the best solar project possible.They are not building a merchant plant here.It will not be a plant where once it is built they can change the price of power that they sell in order to maximize the profit.The plant is being built for the city and is structured in this way purely for the sake of taking advantage if the Siemens' tax appetite in order to monetize the tax credits to minimize the city's price for kWh.That is the reason for the structure of the deal.To add additional complexity to it, Salt River Project has done that to us by the way they have structured it.It has made it even more complex.It was very difficult for even them to understand. With all the PPAs they have done across the country, they have not seen one structured this way.They get the highest incentive from Salt River Project.When they applied for that highest incentive it was gone in 20 minutes.They had to have their act together in order to get that highest incentive. Councilmember Barker asked if the drop in kilowatt hours and AC solar photovoltaic in the current version impacts the tables A and D. Mr. Clark Wiedetz stated on pages 30 through 36 there is Schedule 2 which is default termination value per month for every month of the 24 months. Councilmember Barker stated that is correct.She asked if that is impacted by this drop in numbers. Mr. Clark Wiedetz stated it is.They adjusted the project size per Councilmember Evans' inquiries.They spoke last night about the importance of making sure that theyk fit within the auspices of Salt River Project's metering program.The size is in flux right now.Their best estimation is that the Salt River Project board will vote on a maximum per net meter size of 200 kilowatt alternating current. Because of that there have been some changes in the size of the system.The numbers they see in Schedule 2 today are for the previous project size.These numbers will come down.They informed Mr. Stern that they have yet to deliver to him revised numbers.These numbers will all be revised down. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 7 OF 24 Mr. Grant Wood stated they decided today that the number that was in the original draft of 7/12/12 would not be the number they would be at once Salt River Project does its review.They want to give the council the number that is closer to it.They do not know if this will be the final number either but they feel it is closer to it.They do not want to mislead anybody.They took a chance on being more confusing but they do not want to mislead.The termination schedule will go down commensurate with the reduction of power. They will have that tomorrow.They could not get that schedule out today. Councilmember Barker commented this is then a plant size thing or the diffusion size. She is trying to get an idea as to what this is. Mr. Grant Wood stated it has to do with the amount of net metering that Salt River Project will allow them to put on as a system.The amount of metering maximizes the economics.If it goes above that, it actually hurts the economics.They are trying to maximize it.They went to Salt River Project and stated they were going to put this in their design for July 31 and asked Salt River Project what would happen if it changes.Salt River Project stated they would just have to give them an amendment and everything would pass very quickly.They were concerned about that.It has to do with how they have structured it.Normally when they are presenting to council they say here is the final size and here is exactly what it looks like, but Salt River Project has them under the gun with the July 31 date. Councilmember Waldron commented he had a question on the insurance.He believes the biggest thing they have had is with the insurance part of it. He asked if they would mind being named as a primary insurer on this stuff.They would be primary and the city would be secondary. Mr. Grant Wood asked what he meant by being named as a primary insurer. Councilmember Waldron asked the city attorney to explain it a little better. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 8 OF 24 City Attorney Joel Stern stated if there is a catastrophic event, it is basically whose insurance is going to cover first.That is what they are getting at.For example, if there is a one million dollar loss, and say that is theoretically our coverage, he asked who would cover the rest.If it is a two million dollar loss, and the city's covered for one million, he asked whose insurance company would cover that.He asked if they would look at the city if the city had already paid one million.If there is other insurance by Siemens, then their Coverage would be secondary. The question is which insurance provider is maxed out first. Mr. Grant Wood stated currently the way it is structured is cross indemnification with regards to what happens.They made three key changes from yesterday to today which he is sure they discussed at the previous meeting.They basically take away the system loss piece from the city.That eliminated $8,000.The way that it is structured with cross indemnification, the reason behind that is that they are unable to, in essence, protect their asset on city property.If it was a ground -mounted system in a field, they could put a fence around it and security cameras up.They could take a larger responsibility.This is on city property and they obviously cannot put a fence up because it is a parking lot.Therefore they cannot do that.They are asking the city, with regards to insurance, to take that risk via the city property insurance and they keep the cross indemnification.He does not know how else to structure the insurance provision. They had a lot of conversations about it today.He does not know how else to structure it then the way it was presented tonight. Councilmember Barker commented that is the party of the party who goes to the party who goes to the party who is invited from the party.That is the language. Vice Mayor Dietz commented of a party and there is no cover charge at the party. Councilmember Barker stated there is a cover charge. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 9 OF 24 Mr. Grant Wood commented it was that confusing. Councilmember Barker stated it was pretty interesting to read. Councilmember Waldron asked him to explain this because it is very confusing.He read "In such events, the nonpurchasing party shall promptly upon demand, therefore, from other party, reimburse purchasing party for the full cost and expense of any such insurance that is obtained by purchasing party".That is 8.2D. Vice Mayor Dietz commented it seems as though we have gotten away from seller and customer and have gone to party. Mr. Grant Wood commented he does not know why that happened.That clause was put in there as protection for both.If either one did not have insurance for this site, or they did not carry the proper insurance, then it could cause the city some significant problems if an occurrence happened.The city would have the right to go out and purchase in lieu of that in that situation and then charge Siemens back if they did not have it covered.In the same manner, they make that reciprocating language.That is what this is referring to.If the city does not have the insurance, Siemens would be able to go out and back stop it themselves. That is why it was added in there and they tried to make it reciprocal.He asked if that was better. Councilmember Waldron stated it was.He added they should have said it that way in the agreement. Mr. Grant Wood stated he is not an attorney so he would look to Mr. Stern for clarification. He cannot legitimately tell you he knows the definition of this. His impression of this language and the switch from the words customer and seller to parties, because it is a term, party can represent either one.In other words, the use of the word party in replace of the word customer and in replace of the word seller is simply to say it could be either.He asked Mr. Stern REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 10 OF 24 if that was an accurate representation from the legal terminology standpoint or has he misunderstood it. City Attorney Joel Stern commented he did not write this and he is not sure who did.He thinks one of Siemens' attorneys did.It is legal and he thinks the general concept of what both of them said is what it does. If there is not sufficient coverage then the party that needs the coverage can go buy it and then there can be a charge back if it is not in the policy for that particular loss.He does not know how long that would take to figure out whether the policy covered it; it could take a while.He thinks that is what it basically says.This is more of a bargaining issue. Councilmember Barker stated absolutely.The problem with that is that there are no guidelines set forth.It just says that if one guy decides that the other guy does not have the insurance, and he should have to cover this incident, he can just go out and buy it and then say he got the insurance and the other has to pay for it.She knows that is an oversimplification of that particular passage, but it certainly appears to read that way. City Attorney Joel Stern stated the city has Southwest Risk Insurance Company and the city gets claims.Every city gets claims.When the city gets claims, what happens is the insurance company gets the claim and he tells them they need to cover the city as this is what the contract says.The insurance company gets the claim and goes through it and says they are not sure it is covered.They will give us a reservation of rights.They send a letter and maybe they will pay for the attorney but if the city is hit with damages the city is not covered.Or the policy says it is covered at a limited amount.It might happen in this case.If something happens, the city submits the claim to Southwest Risk, they say the city is not covered, the city turns to Siemens and says it is not covered, Siemens says that is not right and they go and buy insurance for whatever the loss was and charge the city back.He believes that is the whole point of this. Mr. Grant Wood commented if he may test whether he understands the document, acknowledging that Joel is an attorney and he is not, in the original REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 11 OF 24 language, the word was in the event of customer is unable to obtain insurance then the seller, Siemens, could buy it and basically make the city pay Siemens for the insurance that the city should have had on its own.The changes that Siemens made are a concession.The concession Siemens made is now the city can flip it around on Siemens as well.If Siemens cannot afford the insurance, then the city could buy it and make Siemens pay. He asked if that is the case.This paragraph actually represents Siemens conceding a point to the city's benefit.If the original language is preferred they can return it. if he was not an attorney. an engineer. commented he is talking like one. Councilmember Waldron asked Mr. Grant Wood stated he is Councilmember Barker City Attorney Joel Stern stated it is more of a deal point issue rather than what you have to have.The gentleman is right.What is stricken says customer shall promptly upon demand therefore from seller reimburse seller for the full cost and expense of any insurance that is obtained by the seller.Notwithstanding the forgoing, seller shall be responsible for all insurance and shall reimburse customer for insurance for all periods computed on a pro rata daily basis for which the system is not in operation in excess of five days a year in aggregate.There are a lot of elements here.Basically, he thinks that what he just stated is correct but, once again, this is a negotiable item.He is not sure it is a deal killer, but he does not know.He has not talked to their attorneys about it.It is something the council can decide if they want it in there or not.It is something they might want to consider.They did talk about it, they did concede, but now it is equalized. Councilmember Wilson asked who would determine that the other party does not have the correct coverage. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 12 OF 24 -City Attorney Joel Stern stated for example they get a claim for someone hitting a pillar and part of the structure falls down.The city is not insured for that.However, he believes they are covered for that.But say they send it to Southwest Risk and they say the city is not covered.It is up to the insurance company to say the city is not covered.They would then tell Siemens sorry the city does not have coverage for this and it cannot afford it.Siemens could say they want that covered.Or it might have not happened yet and the city goes through an exercise with them and they decide they want to have that coverage so Siemens would buy it because the city did not. Vice Mayor Dietz commented they would then charge the city for it. City Attorney Joel Stern stated that is correct.As far as who will answer, ultimately, a judge will eventually decide.A judge will decide if there is a lawsuit. Mr. Grant Wood commented the way he is looking at this, he does not believe it is open to interpretation.He thinks it is a binary; it is either it is or it is not.He asked Mr. Stern if he interpreted it that way. City Attorney Joel Stern stated it depends on what the claim is.That is the problem. If there is not that type of insurance and our insurance company says the city is not covered, the question is what the city does and what Siemens does.Siemens may have coverage for it and they might want to charge back the cost of the insurance because the city does not have it.It goes both ways. Mr. Grant Wood stated they are bringing this up now and obviously they got this information late today.If they would like to talk to Siemens' attorney tomorrow about this issue and add language that clarifies or brackets it better, this is a clause they could do that with. They could have that conversation tomorrow. City Attorney Joel Stern stated that is up to the council. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 13 OF 24 Mr. Grant Wood stated if council so desires. Councilmember Serdy commented they would need a special meeting later. Councilmember Barker stated she does not really want to have another special meeting on this. Councilmember Serdy commented if they do not decide tonight then they have to have a special meeting. Councilmember Barker stated absolutely. Mr. Clark Wiedetz stated they have to turn in a briefing to Salt River Project on July 31. They have to have an executed contract for a power purchase agreement, a site plan showing the engineering plan for these three installations, and an electrical engineering free line diagram.They have to deliver all three of those by July 31 to their acceptance, otherwise the six cents per kilowatt hour, which is really valued to the city at $1.3 million over the 20 year agreement, goes away.Essentially the project will no longer function.We have a hard July 31 deadline.He is hoping they can reach a conclusion. Councilmember Wilson commented he mentioned last night they are looking to the future for the people that sit on the council in the future.One thing concerns him.For example, if Verizon came out and wanted to put a relay station on his property, they would have to have his permission and they would lease the footprint from him, but he would not have to have insurance on their relay station.He knows it was mentioned last night about the leasing of a car but he thinks that is all together apples and oranges.He thinks this is primarily that it is on city property, the city will have liability coverage on it, but the insurance on the solar panels and things like this should be falling back onto Siemens because it is Siemens' facilities that are being used on city property with the city's permission. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 14 OF 24 - Mr. Clark Wiedetz stated they heard them, and they heard them last night.They have worked hard in the last 24 hours to make every conceivable concession. He thinks they made tremendous concessions.He honestly did not expect them to make those concessions.He acknowledged that the analogy he made last night was imperfect.The councilmember's analogy, if he understands it correctly, is that if Verizon were to put a relay station for their cell phone is different.The difference here is that if Verizon were to install a relay on their building because it happened to be the tallest point in the city, it would be because they were going to be able to increase their capacity to provide cell phone service for all of their customers in the entire area.In this particular example, the city government is the singular beneficiary of the solar array, both in context and the shade, which the city staff directed was highly desirable.That is why they went away from putting things on the roof or ground -mounted systems.They specifically wanted to make sure they had structures in the parking lot to create shade.The shade and the electricity are for the city's exclusive enjoyment. Councilmember Serdy commented Siemens is the bigger beneficiary than the city is. Mr. Clark Wiedetz stated he would respectfully challenge that.They are a for profit company and they hope that if they manage their risks well, they do an excellent job in construction and if they do an excellent job of maintenance for 20 years, they hope that they will turn a profit for their shareholders.But all the benefits that are being created here, whether it is the performance -based incentive from Salt River Project or the tax credits they described earlier, all of these things are going to reduce the city's price of electricity.He realizes the price they are providing to the city does not seem like a particularly large difference from what the city is paying to Salt River Project today.Without the six cents performance -based incentive, without the ability for Siemens to take those tax credits, the price they could sell electricity to the city would not be 10.75 cents, it would be 18 to 20 cents or more.He respectfully pushed back that they are the only ones benefitting for things like the performance -based incentive or the tax credits. Siemens is transitioning this benefit to the city.Without REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 15 OF 24 those things they would be unable to provide the city with electricity at 10.75 cents. Vice Mayor Dietz commented he believed to a certain extent he is correct.The city will enjoy shaded parking for our employees and customers.He believes they were told it could not be put on the roof because there was no room up there, and that the best way for Siemens to benefit and for this to work for them was to have the shaded parking structures for their solar panels.Number two, our average is a 4, 4A per year increase from Salt River Project.We are only gaining one percent with a 3% increase per year.He asked if it is a real big advantage to the city.Not as big as he says it . is.He thinks the bigger advantage is to Siemens or they would not be here presenting what they are presenting.They would not put $4 million into a project if they were not going to benefit and benefit well.Those are his feelings. Mr. Clark Wiedetz commented he wanted to make it clear because he has heard this a couple of times; they can look at the 10.75 cents with a 3% escalator, but they should not look at it as a power price.This is not a merchant plan.They are not really selling power.They are taking the cost of the solar project and adding in incentives, whether it is tax incentives from the federal government or whether it is production -based incentive from Salt River Project, and saying here is the cost, here is the incentive, they put all that together in a bucket and say for the next 20 years they are going to take this cost and divide it up for the number that comes out that works best for the city.They picked 10.75 and 3%.It does not have to be that.It could be 13 cents with a 2% escalator.It could be 17 cents with a 1% escalator.All they are doing is taking the money in a bucket and chopping it up; what is left over after the tax incentives over a 20 year period.The vice mayor's point that Siemens is making a profit on this is right.They look at the solar projects they do and they have a return they have to make on their solar projects.It is actually where they are making their money.They are also very competitive in the solar industry.He will be passionate about it because it is his business across the country.He knows how well they are doing right now.For a solar project they are very cost competitive. He sees them winning all over the place in great cities like REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 16 OF 24 this one.They have to look at it as they are chopping up that money over a 20 year period, not selling it to maximize their profits.He just wanted to make sure that is clear. Vice Mayor Dietz asked if it is true that they are actually selling the power at roughly 16 cents to Salt River Project. Mr. Clark Wiedetz stated Salt River Project is providing a pass through function because of the interesting way that they have developed this solar PPA program that is unique to this state.That is the only reason that it looks this way.California offers another production- based incentive in front of some of the utilities.Other states have what is called extraction of energy certificates and they use those.They take the risk and they sell them to offset the cost of them to reduce the price for kWh for the cities.There are a lot of different ways to do it.Salt River Project chose this way.The 6 cents is like he says; they take the bucket of money, there is the $4 million cost which is the sale price of the project.Then there is the investment tax credit, the tax credits from the federal government which is 40% to 45% of the project, there is a production -based incentive from Salt River Project that chops that $4 million down.They then have what is left over.The only thing left is energy payments for 20 years. No recs.Salt River Project gets the recs.There is nothing else.They have to chop up what is left over 20 years and that is where the 10.75 with a 3% escalator comes from.We picked 3% because they knew Salt River Project was a percentage point and- a -half higher, but that is what they came up with.They could have said less than 10.75 with a 4% escalator.By the way, those total dollars are going to be exactly the same.It is not that we are maximizing the profit by setting it up that way. Councilmember Barker commented that makes perfect sense.She thinks it came through loud and clear last time. Vice Mayor Dietz thanked them for coming out and for the tremendous amount of work they put into this.He agreed that city staff is awesome and that they worked very hard, too. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 17 OF 24 Mr. Clark Wiedetz stated they are a real treasure.He hopes they appreciate how wonderful they are. Vice Mayor Dietz closed the discussion with no further comments and called for a motion. Councilmember Barker MOVED THAT THE SOLAR ENERGY POWER PURCHASE AGREEMENT BETWEEN THE CITY AND SIEMENS INDUSTRIES AND THE CORRESPONDING COMMERCIAL SOLAR ENERGY PROGRAM SUPPLEMENT BETWEEN SALT RIVER PROJECT, SIEMENS INDUSTRIES AND THE CITY, AND THE SITE LEASE AGREEMENT BETWEEN THE CITY AND SIEMENS INDUSTRIES AND ANY RELATED DOCUMENTS BE AUTHORIZED WITH THE FOLLOWING STIPULATION:THAT THE CHANGES IN THE RED LINE PPA DRAFT PRESENTED BY SIEMENS TO THE COUNCIL ON JULY 17, 2012, BE ACCEPTED WITH THE FOLLOWING CHANGES:SECTION 8.2 ARTICLE C, FOLLOWING THE 1, 2, 3, 4 LINES OF STRIKEOUT, RETAIN THE FOLLOWING WORDS:"EACH POLICY SHALL WAIVE THE INSURER'S RIGHT TO SUBROGATION" PERIOD; STRIKE FROM THE WORD "ACCEPT" DOWN THROUGH THE WORDS "CUSTOMER'S PROPERTY INSURER" PERIOD; RETAIN THE WORDS "ANY SUCH POLICY OF INSURANCE SHALL EXPRESSLY PROVIDE THAT INSURANCE AS TO SELLER SHALL NOT BE INVALIDATED BY ANY ACT, OMISSION OR NEGLECT OF CUSTOMER AND CANNOT BE CANCELED WITHOUT AT LEAST" AND REPLACE "FIFTEEN" WITH THE WORD "THIRTY, PARENTHESES THE NUMBER 30", "DAYS PRIOR TO WRITTEN NOTICE TO SELLER"; RETAIN THE NEXT SENTENCE THROUGH THE WORDS "SECTION 8.2" AND STRIKE THE REMAINDER OF THAT ARTICLE; AND ADD A SECTION 8.2F TO READ "IN ALL INSTANCES THE SELLER SHALL BE LOOKED TO AS THE PRIMARY INSURING PARTY"; AND STRIKE ALL OF SECTION 11; AND SECTION 8.1 ARTICLE A, FROM THE ORIGINAL DOCUMENT DATED 7-12-2012 SHALL BE TAILORED WITH THE INSURANCE PROVISION STATED ABOVE; AND THAT THE AMENDMENTS NOTED IN THE SIEMENS' 7-12-2012 VERSION SHALL BE INCORPORATED INTO THE FINAL VERSION AS WELL AS IN THE REVISED NUMBERS AS PER THE FINAL, MAXIMIZED AMOUNT OF NET METERING; AND THAT ANY CONFLICTING PROVISIONS WITH THESE AMENDMENTS SHALL BE TAILORED AT THE DISCRETION OF THE CITY ATTORNEY INTO THE PPA AS WELL AS THE SITE LEASE AGREEMENT. Councilmember Wilson SECONDED THE MOTION. VOTE:Unanimous with the changes as noted. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 18 OF 24 The motion carried. ten minute break. the meeting. NEW BUSINESS Vice Mayor Dietz called for a Vice Mayor Dietz reconvened APPOINTMENT TO FILL VACANCY ON THE PUBLIC SAFETY PERSONNEL RETIREMENT BOARD )City Clerk Kathleen Connelly briefed the council on the item. Vice Mayor Dietz called for any discussion.There being no discussion, he called for a motion. Councilmember Waldron MOVED THAT TROY MULLENDER BE APPOINTED TO THE PUBLIC SAFETY PERSONNEL RETIREMENT BOARD AS A POLICE DEPARTMENT REPRESENTATIVE WITH A TERM TO EXPIRE OCTOBER 31, 2014. Councilmember Evans SECONDED THE MOTION. VOTE:Unanimous. The motion carried. ACCEPTANCE OF RESIGNATION OF CONRAD PISINSKI FROM THE SUPERSTITION MOUNTAINS COMMUNITY FACILITIES DISTRICT BOARD OF DIRECTORS, DIRECTION TO STAFF ON FILLING THE VACANCY )Councilmember Waldron declared a conflict of interest and excused himself. City Clerk Kathleen Connelly briefed the council on the item. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 19 OF 24 Councilmember Barker commented she thinks they need to discuss their role in the sewer district before we make a determination on how they want to fill this seat.She asked that they hold off on this until September to give them the opportunity to do that. Vice Mayor Dietz commented they can put off the direction to staff until September but they still need to accept the resignation. City Attorney Joel Stern stated he believes the code states that they typically appoint individuals at the first meeting in November. City Clerk Kathleen Connelly stated that is for annual appointments and reappointments.This is out of sequence because it was a resignation in mid-term. City Attorney Joel Stern stated he does not know if they want to do it in conjunction with that or appoint in September as that is what they said. Councilmember Barker stated that is what they were looking at. City Attorney Joel Stern commented there are some issues as to how the city relates to the sewer district.Those are a little more in depth questions that may take a while to get through. Councilmember Barker commented she prefers not to do this in conjunction with city boards.She thinks that becomes a convoluted issue.But she does not see any problem with putting this off until October. City Attorney Joel Stern stated that is what he wanted to clarify, but September is okay. He just wanted to point out the city's regular board appointments and he wanted her to know the difference. City Clerk Kathleen Connelly stated we will be doing interviews in October.If they hold off on this until October, they will be mixing them. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 20 OF 24 she would rather not. on the motion. this is a five member board. stated it is. many are currently on the board. stated there are four. Councilmember Barker stated There was general discussion Vice Mayor Dietz asked if City Clerk Kathleen Connelly Vice Mayor Dietz asked how City Clerk Kathleen Connelly Assistant City Manager Bryant Powell commented if they set a specific date they may end up having more questions and want more dialogue.It may take them longer.He asked if they would be able to push it out later. City Attorney Joel Stern stated there may be legal issues and executive session issues. They would have to do another motion if they set a date and go beyond that date.They could keep it flexible.It is up to the council.It is a discretionary matter; there is no legal limit on it. There was general discussion on what date they should set for the appointment. Councilmember Serdy asked how long the terms are for this board. City Clerk Kathleen Connelly stated she thought she had attached a copy of the statute to the item from last night. Vice Mayor Dietz commented he thought they were four year terms. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 21 OF 24 Councilmember Serdy asked how far into the term Conrad was. City Clerk Kathleen Connelly stated her memo from last night states that his term would expire on July 7, 2014.These dates were set by statute and the staggered terms were set by statute based upon when the board was created.It does not line up with our city code when everything expires in October.It is a totally different sequence of events. City Attorney Joel Stern commented they were six year terms and that is probably why there is some bumping back from 1992. City Clerk Kathleen Connelly stated if they look at the item from last night, there is a copy of Arizona Revised Statute § 48-711 attached.It states that the initial terms were for six years and subsequent terms are for four years and that they are staggered. Vice Mayor Dietz closed the discussion with no further comments and called for a motion. Councilmember Barker MOVED TO ACCEPT THE RESIGNATION OF CONRAD PISINSKI, SADLY, FROM THE SUPERSTITION MOUNTAINS COMMUNITY FACILITIES DISTRICT BOARD OF DIRECTORS, AND THAT THE DIRECTION TO STAFF TO FILL THAT VACANCY BE GIVEN AT A MEETING NO LATER THAN THE SECOND MEETING OF SEPTEMBER. Councilmember Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. Vice Mayor Dietz thanked Conrad for his time served on the board and what he put into it. Councilmember Waldron returned to the council chambers and took his seat. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 22 OF 24 COUNCIL DIRECTION TO STAFF None. SELECTION OF MEETING DATES, TIMES, LOCATIONS, AND PURPOSES Councilmember Barker MOVED THAT AN EXECUTIVE SESSION AT 5:45 P.M. AND A WORK SESSION AT 7:00 P.M. BE HELD ON MONDAY, AUGUST 6, 2012, IN THE CITY COUNCIL CONFERENCE ROOM AND CITY COUNCIL CHAMBERS, RESPECTIVELY; AND THAT AN EXECUTIVE SESSION AT 5:45 P.M. BE HELD ON TUESDAY, AUGUST 7, 2012 IN THE CITY COUNCIL CONFERENCE ROOM. Councilmember Wilson SECONDED THE MOTION. VOTE:Unanimous. The motion carried. CALL TO THE PUBLIC: Mr. Dan Austin, 1353 S. Valley Drive, Apache Junction addressed the council regarding the vacancy on the Superstition Mountains Community Facilities District board of directors and gave them some recommendations. Mr. Todd House, 5027 E. Hidalgo Street, Apache Junction, addressed the council regarding his support behind the city's lawsuit against Final County on TIF funds. ADJOURNMENT )Vice Mayor Dietz adjourned the meeting at 8:58 p.m. Consent Agenda Items are as follows: 1. Acceptance of Agenda. 2. Approval of Minutes of Regular Meeting of July 3, 2012. 3. Approval of Minutes of Special Meeting of July 3, 2012. REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 23 OF 24 ACCEPTED THIS 7TH DAY OF AUGUST, 2012, BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA. SIGNED AND ATTESTED TO THIS 7TH DAY OF AUGUST, 2012. OHN S. INSALACO Mayor ATTEST: KATHLEEN CONNELLY City Clerk CITY COUNCIL MINUTES CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the regular meeting of the City Council of the City of Apache Junction, Arizona, held on the 17th day of July, 2012.I further certify that the meeting was duly called and held and that a quorum was present. Dated this 25th day of July, 2012. KATHLEEN CONNELLY City Clerk REGULAR MEETING OF THE CITY COUNCIL JULY 17, 2012 PAGE 24 OF 24