President of Council Marjorie Harlow called Council to order on June
1, 2011, at 7:00 p.m.
The governmental body and those in attendance recited the pledge of allegiance.
Mrs. McNear took roll call. Present were Council members Diehl, Emerson, Galster, Hawkins, Squires, Vanover and Harlow.
Mrs. McNear said on page 8972 of the minutes, middle of the page, it says Clerk of Council/Finance Director and it should say OKI. On page 8975, under Ordinance 18, it says Mr. Vanover stated that in the past their. It should be there.
The minutes of May 18, 2011 were approved with six affirmative votes with corrections. Mr. Squires abstained.
COMMUNICATIONS - none
COMMUNICATIONS FROM THE AUDIENCE
Caitlyn Graham with Congressman Steve Chabots office said the Congressman is here to help with anything people are facing with federal agencies, problems, issues, Medicare, IRS, etc. If you have any questions our office phone number is 684-2723.
Mayor Webster said, Im being facetious, but does he have any control over the Governor?
Ms. Graham replied not exactly but he speaks with the Governor every once in a while.
Mayor Webster said tell him to tell the Governor to get his heel off the throat of the local governments and school districts.
Ms. Graham said I will certainly pass that on to the Congressman.
PRESENTATION: SPRINGDALE OFFERING SUPPORT (S.O.S.)
Mayor Webster said thanks to the very generous donations including some of you on the dais who have taken SOS on, we thought we should do something throughout the summer instead of just waiting for Christmas. We appointed a committee of Mr. Diehl, Carolyn Ghantous and Chief Mathis. We asked them to entertain some proposals and see where we could give some money that would have the most impact throughout the community. At the last meeting, Mrs. Ghantous lead the charge expressing concern about children in the two local schools who are assured of two meals a day through the school programs. Once school was out those programs go away so we were concerned about what was going to happen to those children until school is back in session. It was ascertained that the best place we could help the situation was through SOUL Ministries so tonight we would like to make a donation to SOUL Ministries. For every dollar we give they can stretch that into three dollars worth of food so tonight we are prepared to give a donation of $1,000 to SOUL Ministries to help feed the children.
ORDINANCES AND RESOLUTIONS
ORDINANCE NO. 21-2011 ACCEPTING A BID AND AUTHORIZING THE MAYOR AND CLERK OF COUNCIL/FINANCE DIRECTOR TO ENTER INTO A CONTRACT WITH LYKINS OIL COMPANY FOR GASOLINE AND DIESEL FUEL AND DECLARING AN EMERGENCY
Mr. Vanover made a motion to adopt and Mr. Squires seconded.
Mr. Parham said we opened bids for fuel on May 16, 2011. We only had one bidder, Lykins Oil. Lykins has been the provider of our fuel for some time. The department did make contact with a number of other suppliers trying to entice them to place a bid. Unfortunately, no one did and so the prices are what you see here. They are showing an OPIS, Oil Price Index Service, which is the average cost of fuel delivered to all fuel terminals on any given date. The amount of the OPIS is non-controlled by us or the supplier but the delivery amount is the real amount that will vary for us. The current rate we are paying under our 2008 contract is .0873 cents. The new rate is .1713, pretty much double. If you look at the ordinance, only two of the four identified do we intend to purchase. They are the second item listed on the ordinance, premium unleaded at 93 minimum Octane and the third item, diesel ultra-low sulfur at ULS #2 - 40 grade.
Mr. Hawkins asked did the vendors who were contacted indicate why they did not bid on this?
Mr. Parham replied no sir. They were contacted, given the date we would advertise, given the information, invited to come and participate but they did not provide us with a rationale as to why they did not participate.
Mr. Hawkins asked is this the best situation rather than re-opening bids to see if we get anything else to compare it to?
Mr. Parham responded this is probably the best we are going to get. If we had some indication from them as to why they didnt apply, it might give us some sense of whether we could get them to participate the next time. I really could not tell you. Maybe they just thought they could not compete with Lykins.
Ordinance 21-2011 passed with seven affirmative votes.
ORDINANCE NO. 22-2011 ADOPTING CHAPTER 125 OF THE CODIFIED ORDINANCE OF THE CITY OF SPRINGDALE REGULATING HOTEL AND MOTEL REGISTRATION
ORDINANCE NO. 23-2011 AN ORDINANCE AUTHORIZING ALL ACTIONS NECESSARY TO EFFECT A GOVERNMENTAL ELECTRICITY PROGRAM WITH OPT-OUT PROVISIONS PURSUANT TO SECTION 4928.20 OF THE OHIO REVISED CODE AND DIRECTING THE HAMILTON COUNTY BOARD OF ELECTIONS TO SUBMIT A BALLOT QUESTION TO THE ELECTORS, AND DECLARING AN EMERGENCY
Mr. Galster made a motion to read by title only. Mr. Vanover seconded. The motion passed with seven affirmative votes.
Mr. Vanover made a motion to adopt and Mr. Squires seconded.
Mr. Parham stated at the end of last year we began having discussions relative to a ballot issue that would allow the City to create two different aggregations: one for electrical use and one for natural gas use. Ordinance 23 addresses the electric and Ordinance 24 the natural gas. If these ordinances are adopted and the issues approved by the voters, they will permit the City of Springdale to create an aggregate of the residential units in the City as well as small business. Small business is defined by the legislation that created the opportunity. If the ballot issue passes then the City can receive bids from electrical generation suppliers. Just as the City became part of a ten community group to reduce our electrical expenses, this would offer the same opportunity to residents and small businesses in Springdale to reduce their costs. Once the issue passes, we begin to work with Eagle Energy to put forth the documentation we need to file with the State to create the
aggregate. Those homes that choose to remain in the program will be a part of the process when we find the lowest and best bidder. There may be residents and small businesses that feel they can find a better deal on their own and choose not to participate in the aggregate. Those residents can then simply opt out of our program. The difference in this program and the endorsement program is that under the endorsement program, the City simply endorses a supplier. The resident would have to be proactive to join that suppliers program. The rates generally arent going to be as favorable in the endorsement program as they are under the aggregate program. Once residents are included in the aggregation program, the suppliers tend to give you a much better rate because more people will be less likely to opt out than to move in under the endorsement program.
Mrs. Harlow said the residents will still get their service through Duke Energy.
Mr. Parham said with the electrical there are three phases: generation, transmission and distribution. Generation is where we can experience the savings. The transmission is what everyone pays no matter which supplier is generating the energy. As far as the distribution, we are all paying Duke because the entire infrastructure (poles, wires, etc.) belongs to Duke. The savings well see is on the generation end.
Mr. Diehl said it is safe to say we are doing this to save the residents money. Do we have an estimate of what that might be?
Mr. Parham replied no. We would have to form the aggregate first; then have the brokers assist us in taking it out to the market to see what the suppliers are willing to pay. Our program here with the municipal facilities, gave the City about a 42 percent savings. I cant guess at this point what the residents would be able to enjoy and Im not sure they would be enjoying a 42 percent savings, but we will try to get the best we can.
Mr. Vanover said Forest Park had this ballot issue and it went down. Do we have a feel for success rates on this process?
Mr. Parham replied: I believe that one of the local townships recently adopted an aggregate program. There are a number of other communities that have already passed such a program. I think the key is getting the information to the residents, educating them, pointing out the value of adopting such a program. Thats why we attempt to talk about it as much as we can.
Mayor Webster said we have had a few articles in the newsletter. I think when we get closer to the election we want to magnify that article.
Mr. Galster said if the aggregate passes you will still get one bill from Duke. If you opt out, its a one time thing.
Mrs. Emerson said if a resident decides to opt out of the program would there be an opportunity to join later?
Mr. Parham said I believe there is an opportunity to opt back into the program. I think we were all inundated by Duke, First Energy and Dominion. They all tried to tie you into their program through the end of 2011. With First Energy and Dominion there was no penalty if you left early. With Duke Retail I believe there was a penalty if you withdrew early. If you choose to opt out and enter into an agreement with another organization you definitely need to pay attention to what penalties, if any, there are if you decide to end that agreement before the agreed upon time. But you would have the ability to opt back into our program.
Mrs. Emerson said my understanding is the more communities and the more residents that buy in, the more savings we are going to get.
Mr. Parham says My theory is just like with health insurance, normally the higher the number of lives, the lower the rate you can expect to receive. The opt-in/aggregate program has to be passed by legislation versus the endorsement issue, which does not. With the ballot issue, everyone is included until they pull themselves out. With the endorsement program nobody is included until they put themselves in. You will get a much lower rate if you are part of the issue that has everyone in and each individual has to remove himself.
Mrs. Emerson asked if more communities join in and more residents stay, do we get a better rate.
Mr. Parham replied that may be a possibility. I think the legislation speaks to the ability to join with other jurisdictions or to go alone.
Ordinance 23-2011 passed with seven affirmative votes.
ORDINANCE NO. 24-2011 AN ORIDNANCE AUTHORIZING ALL ACTIONS NECESSARY TO EFFECT A NATURAL GAS AGGREGATION PROGRAM WITH OPT-OUT PROVISIONS PURSUANT TO SECTION 4929.26 OF THE OHIO REVISED CODE AND DIRECTING THE HAMILTON COUNTY BOARD OF ELECTIONS TO SUBMIT A BALLOT QUESTION TO THE ELECTORS, AND DECLARING AN EMERGENCY
Mr. Galster made a motion to read Ordinance 24-2011 by title only. Mr. Vanover seconded. The motion passed with seven affirmative votes.
Mr. Vanover made a motion to adopt and Mr. Squires seconded.
Mr. Parham stated this ordinance is dealing with natural gas. With the electric program you have the ability to tie in for a longer period of time. The gas program is more market driven and fluctuates more than the electric. According to the people I have talked to in other communities, for the most part their rates have been lower than Dukes rate; however, occasionally they may be slightly higher. Each of them believe that it has been an advantage for their residents to adopt the program.
Don Marshall, President and Owner of Eagle Energy said we represent six communities in the Duke serving area including Green Township, Glendale, Indian Hill, Lockland, Cheviot, and Amberley Village. There are two significant differences between the electric program and natural gas program. The issue with natural gas is that Dukes natural gas prices change monthly. Their electric prices change quarterly. Generally speaking, over the last three years, the electric wholesale prices are a lot less than Dukes retail prices. The natural gas program swings from month to month and the advantage to an opt-out program is that generally you will know what your price is for at least twelve months. It may be higher or it may be lower. There is a different tax rate on natural gas. Quite often when suppliers quote you a rate, they do not include Hamilton County sales tax. I think you all have done a very good job of educating the residents. Our goal is to try to get the issue on the ballot.
Mayor Webster asked if a resident wanted to opt out of one but not the other, could that happen?
Mr. Marshall replied yes, each program is independent of the other. Chances are the suppliers will be different. All the issues, the billing issues, opting in and out, are part of your governments plan which is filed with the Ohio Commission. Thats adopted after you have two public hearings here and allow residents to have input. Our experience and all the communities we represent are served by Dominion Retail. They know us well enough to know if they present something for you to consider such as switching fees, that we are going to insist that the fees come out. That gives the residents the ability to switch as often as they want.
Mr. Parham said my understanding is even if Council passes this and the voters approve it, there is no time frame in which we have to enact the aggregation program.
Mr. Marshall said if the ballot does pass, we recommend issuing a Request for Proposal to get pricing to see what the level of savings will be. We are very confident that your residents will see some savings. The issue we have right now is Duke Energys Retail Plan expires December 31st. They need to begin filing with the State of Ohio to begin collecting rates January 1st. They did file in November, but the Ohio Commission rejected that filing in February. That may have some impact on the level of savings.
Mr. Parham said since they have not received authority for new rates and the existing rates expire at the end of this year, do the current rates remain in effect once you go into 2012?
Mr. Marshall responded that is an option they have. Generally speaking, there are two great options, the three-year plan or make market rate option which blends their generation costs with the market. The reason the Commission rejected the proposal they filed in November, is Duke wanted the market rate and the generation rate to be blended over three years. Duke intends to leave what they call a Regional Transmission Organization or RTO which is responsible for economically dispatching the generation to make sure there is no congestion on the transmission system. Right now they are in an RTO called MISO. They want to leave that organization and move to PJM which is the RTO to the east. One of the issues the Commission found is that there are $21 million in exit fees to leave MISO and Duke never quantified the entrance fee into PJM, but its around $14 million. Duke wants the customers to pay that $35 million fee but the Commission said they havent demonstrated that its in the customers best interest.
Ordinance 24-2011 passed with seven affirmative votes.
RESOLUTION NO. R9-2011 AUTHORIZING THE MAYOR AND CLERK OF COUNCIL/FINANCE DIRECTOR TO ENTER INTO AN AGREEMENT OF COOPERATION WITH HAMILTON COUNTY, OHIO PURSUANT TO PROVISIONS OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974, AS AMENDED
Mr. Vanover made a motion to adopt and Mr. Hawkins seconded.
Resolution R9-2011 passed with seven affirmative votes.
OLD BUSINESS - none
NEW BUSINESS - none
MEETINGS AND ANNOUNCEMENTS
Finance Committee - June 7, 1:30 pm
Planning Commission - June 14
Board of Zoning Appeals - June 21
Mrs. Harlow said typically in the past we only had one meeting in July and August but I believe we decided to leave things the way there are until we see what is needed.
COMMUNICATIONS FROM THE AUDIENCE - none
UPDATE ON LEGISLATION STILL IN DEVELOPMENT
Ordinance 22 - June 15
RECAP OF LEGISLATIVE ITEMS REQUESTED
Tax Budget - June 15
Designation of Depositories - June 15
Council adjourned at 7:38 p.m.
Clerk of Council/Finance Director
Marjorie Harlow, President of Council