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HomeMy WebLinkAboutcc min 1982/01/14 MINUTES OF AN ADJOURNED REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA Held Thursday, January 14, 1982 - 4 P.M. Council Conference Room, City Hall ROLL CALL Councilmen present: ~ayor Cox, Councilmen Scott, Gillow, Campbell Councilwoman McCandliss arrived at 4:20 P.M. Councilmen absent: None Staff present: City Manager Cole 1. PRESENTATION OF SAN DIEGO ENERGY RECOVERY (SANDER) PROJECT PROPOSAL - Supervisor Hamilton Mayor Cox announced that the purpose of the meeting was to hear a proposal by Supervisor Hamilton, on behalf of the County of San Diego, concerning the SANDER Project specifically related to its possible siting on "J" Street. Supervisor Hamilton introduced SANDER staff members Nicole Clay, Project Director, and Kathy Warburton, assistant to Ms. Cole, and Mr. Ted McLynn, Director of Advertising for Signal Corporation, one of the four bidding finalists for the resource recovery project. Following introductions, Supervisor Hamilton stated that the reason for this presentation was to explain and define SANDER as a means of providing an economical and environmentally sound method of refuse disposal into the 21st century. He cited the increasing need in the County for an alternative to land fills; the diminishing supply of open canyons to use for refuse disposal; the increasing amount of refuse generated by the growing Oopula- tion; the environmental problems which are now surfacing as a result of the use of land fills for trash disposal. In explaining the process of waste-to-energy recycling in brief, he noted that these facilities burn refuse to generate heat which in turn would generate steam to drive a turbine to produce electricity. The mass remaining from the incineration process, called "klinker", is a solid, gravel-type product which can be sold and used in the construction of streets and highways and other similar uses. He commented that the waste stream in San Diego County was found to have a very high BTU rating because of its low moisture content, and, therefore, the process could be used very efficiently. S~upervisor Hamilton commented regarding the facilities and technology which have been used throughout Europe for 25 years and more recently in Yokohama, Japan. Slides and moving pictures were projected ~f a~recent'evaluation tO6~o~ those facilities taken by Supervisor Hamilton and SANDER representatives. The SANDER facility is envisioned to have a 1200 ton capacity which would incinerate 18 to 20% of the entire region's waste stream; from this it is estimated that 25-28 megawatts of electricity would be produced which has the potential of serving 30,000 homes. SANDER is also planning a recycling and resource separation program as part of the overall resource recovery concept. Supervisor Hamilton noted the financial aspects of the project; that Merrill-Lynch is under contract to conduct the financial feasibility studies; the project will require approximately a $200,000 million bond issue, if publicly owned. However, Requests for Proposals will be issued to the four qualified companies with an option of private or public ownership. Due to President Reagan's tax incentives, there is a very high probability that the plant will be privately owned. Revenue would be derived from a tipping fee and the sale of energy and "klinker." It is projected that if in public ownership the project will turn a profit above the payoff of the bonded indebtedness within five years. Supervisor Hamilton then commented on the major issues to be resolved in order to construct and manage the project economically; permits to be obtained relating to air quality and residue disposal; ownership and financial arrangements and the currently high bond interest rate; State limitations on how much can be bonded and how much can be paid for the bonds. The Public Utilities Co~rm~ission(PUC) has adopted rules that will make the project more viable in that if this type of facility is developed in San Diego County, SDG&E is obligated to buy the steam or electricity for the same price that it would cost SDG&E to produce the energy. Contracts must be negotiated for the construction and operation of the project with one of the four qualified firms that would come within SANDER's capabilities for bonding and financing. Council Conference -2- January 14, 1982 Regarding the site, Supervisor Hamilton commented that the project will require approximately ten acres with good freeway access; the land must be either zoned industrially or closely situated to iddustrial uses so that the facility is compatible with adjacent uses and is a "good neighbor." The site should also be close to steam and electricity customers. Following the conceptual and philosophical presentation, slides and movies were projected of the plants toured in Europe and Japan. Supervisor Hamilton noted the technical and operational ~ifferences among the plants and explained that although there are plants in operation in Saugus, Massachusetts, and Chicago, it was necessary to evaluate the facilities in Germany, Switzerland, France and Yokohama which were constructed by the four qualified bidders. During the audio-visual presentation, Supervisor Hamilton responded to Council's questions concerning use of water for cooling the "klinker"; the composition of'the gases leaving the stack; efficiencies of different types of grates (with preference for the Martin-Stoker grate); the effect of negative air pressure in preventing odor from escaRing the stack; the design of the facilities toured to permit private individuals to drive in mnd dump refuse; the probability that Otay would remain open to serve ~r~vate cit±Z~s and SANDER would only be available for commercial/industrial use; location of the Berne plant near residential areas and absence of any complaints from the residents. Following additional questions and discussions comparing the plants toured, Supervisor Hamilton concluded his presentation and suggested that Council refer further study to staff with direction to work with SANDER staff. It was recommended that an evaluation be returned in two weeks addressing specific concerns regarding the "J" Street site. Supervisor Hamilton referred to the mass-burning plant in Chicago, which utilizes the Martin-Stoker grate, and asked any Councilmember wanting to tour that plant when in transit to or from Washington, D.C. in March to notify him and he will make arrangements with Signal Corporation. Discussion ensued regarding the Joint Powers Agreement between the County and City of San Diego and the composition of SANDER Board of Directors: Paul Fordem, Supervisor Hamilton, Dick Murphy, and Lucy Killea as voting members, and Tom Frazee as a non-voting member. If the JPA were amended to include Chula Vista, it would require concurrence of a majority of the Board. If the City became a partner in the JPA it would share equally in the profits, if publicly owned, or in the property tax, if privately owned. Comment and discussion followed concerning alternative sites; SANDER is also looking at a Mission Valley location, but Chula Vista is as far south as the project could go and remain economically sound. Chula Vista was the last site proposed in the EIR, and if the project does not become viable in Chula Vista, "SANDER is dead." Councilman Scott commented that if the City is willing to accept the project then Chula Vista should get a "bigger share." Shpervisor Hamilton remarked that those items were negotiable. MSUC (Scott/Campbell) to refer to staff for a study on the feasibility both for the technical aspects (as far as the property location) and also as to the economics of it from the plant's point of view and from the City's point of view, and that the study be brought back with a recommendation for the City Council. As to timing, it was recommended that a progress report be given in time for the January 28 Council Conference identifying the concerns, noting that some of those concerns can be addressed sooner than others and that much of the information is already available through Supervisor Hamilton and SANDER staff. It was requested that Ms. ClaN attend the Council Conference. Supervisor Hamilton also noted that SANDER is establishing buy-back centers for paper and glass as part of its recycling/resource separation program and has initiated discussions with Owens-Corning in Illinois for glass buy-back. He requested that when the City reaches the point of serious interest in SANDER, siting in on the "J" Street site, and the City's concerns can be met, that the City then make formal application to become a partner in the Joint Powers Agreement. Council Conference -3- January 14, 1982 Mayor Cox commented that four members of the Council would be attending the League of California Cities Congressional Conference in early March and it would be advisable for City staff to contact SANDER to determine which plants are proto- types (in Saugus, Chicago, and Harrisburg) and to arrange for Councilmembers to tour the different plants while in-transit. Supervisor Hamilton responded that Ms. Cole would make arrangements to tour those facilities. 2. REPORT OF THE CITY MANAGER -- None 3. MAYOR'S REPORT Mayor Cox reported that the E1 Torito is opening on Monday, January 18, and Council is invited to have lunch at 12:30 P.M. He asked that Councilmembers let him know if they plan to attend so that reservations can be made. 4. COUNCIL COMMENTS -- None ADJOURNMENT at 5:45 P.M. to the regular scheduled meeting of Tuesday, January 19, 1982, at 7:00 P.M. JENNIE M. FULASZ, CMC, CITY CLERK Elzz~eth W. Conti, Deputy City Clerk