Item Coversheet
City of Independence
AGENDA ITEM COVER SHEET
BILL NO. 17-0741st R.

Agenda Title:

17-074 - 1R. An ordinance authorizing a contract with Missouri City Acquisition, LLC, for the Missouri City Power Plant sale, demolition and remediation project, in an amount not to exceed $9,765,000.00; and making the necessary appropriations.
Recommendations:

Staff recommends approval of the ordinance.
Background:

The 87-acre Missouri City Power Plant site is located approximately 18 miles east of downtown Kansas City, Missouri on the north bank of the Missouri River in rural Clay County, Missouri (approximately six miles east of Missouri Highway 291).

 

The plant was originally built for Northwest Electric Cooperative (NWEC) and began commercial operation in 1954. It is a twin unit coal-fired steam electric generating station with a nameplate capacity of 38 megawatts. The City purchased the plant from NWEC in 1979 after an extensive fire. The Plant was returned to operation in the summer of 1982 after repairs and upgrades to comply with air permit regulations. The City’s Power & Light Department operated the plant until September 2015. During the first five years under the City’s ownership the plant ran in continuous base-load operation, except for typical outages. From 1987 through 1997 the Plant was kept in standby mode, because IPL was able to contract for more economical power supplies. During the summer of 1998, the plant was returned to operation as required for IPL to meet its summer seasonal peak loads. In July of 2014, the City Council passed Resolution 5933 that mandated the end of energy production at the plant by January 31, 2016. The Plant ceased generating electricity on September 19, 2015.

 

On July 19, 2016, City Council directed the City Manager to issue a Request for Qualifications (RFQ) for the Missouri City Power Plant, specifically decommissioning the power plant and repurposing the property. The RFQ was issued on August 15, 2016 and five companies submitted qualifications. None of the respondents presented a viable solution for repurposing the property; however, two of the companies submitted a model for ownership transfer that included the transfer of all environmental liabilities as part of the power plant demolition and remediation. An Evaluation Committee reviewed each response in accordance with the criteria listed in the RFQ. Based on this evaluation, it was determined that Environmental Operations, Inc. submitted the best overall qualifications for this request.

 

On February 21, 2017, a Request for Proposal (RFP) titled “Missouri City Power Plant Divestiture Services” was issued. This request called for the submission of proposals from qualified Vendors concerning the assumption of ownership and associated liability of the Missouri City Power Plant, the demolition of the Plant, and the restoration of the Plant Site. This request also required the successful Vendor to provide environmental remediation as recommended by the Missouri Department of Natural Resources (MDNR) established standards along with other associated site restoration tasks and services. Responses were received from the following Companies:

 

• Environmental Operations, Incorporated (EOI)
• Commercial Liability Partners (CLP)
• Commercial Development Company (CDC)

 

Upon review, Commercial Development Company (CDC) was deemed non-responsive due to several exceptions to the proposed Sale, Demolition and Remediation Agreement that were unacceptable to the City.

 

On May 15, 2017, staff was directed by City Council to enter into negotiations with Environmental Operations, Inc. On June 14, staff completed negotiations resulting in a proposed Sale, Demolition, and Remediation Agreement that includes a maximum not-to-exceed price of $9,765,000.00. Certain requirements of this Agreement include the following:

 

• Ownership of the Site shall be transferred to a Special Purpose Entity designated by Environmental Operations, Inc. and known as Missouri City Acquisition, LLC (MCA).
• The City shall make payments to MCA based on a Schedule of Values (Exhibit D in the contract).
• MCA shall perform due diligence in preparation for, make application, and secure an approved site-specific Risk Management Plan through the Missouri Department of Natural Resources.
• MCA shall demolish and environmentally remediate the site with the exception of Excluded Property as detailed in the Sale, Demolition, and Remediation Agreement.
• MCA shall provide Pollution Legal Liability and Excess of Indemnity Insurance that shall protect and indemnify the City of Independence for 10 years from future liabilities as defined in the Sale, Demolition, and Remediation Agreement.
• MCA shall assume, be liable and responsible for, and pay, perform, and/or discharge all of the liabilities, obligations and commitments detailed in Section 2.4 of the Sale, Demolition, and Remediation Agreement.
• MCA will enter into the appropriate binding agreements with State or Federal regulatory agencies, as necessary, to address environmental liabilities associated with the site.

 

At their meeting on June 15, 2017, the Public Utilities Advisory Board voted 4 to 1 against a motion to recommend approval to authorize the City Manager authorize and direct the City Manager to execute for, and on behalf of the City of Independence, a contract with Missouri City Acquisition, LLC for the sale, demolition and remediation of the Missouri City Power Plant for a sum not to exceed $9,765,000.00

The Request for Proposals was posted as follows:

 

1. Posted on the City’s website and Public Purchase.
2. Direct notification by Public Purchase, the City’s Internet-based, e-procurement system to 75 potential providers of this service, of which, 58 downloaded the bid documents.



Department:          Power & LightContact Person:          E. Leon Daggett


REVIEWERS:
DepartmentAction
Power and Light DepartmentApproved
Finance DepartmentApproved
City Council Mgmt AnalystApproved
Finance DepartmentApproved
Law DepartmentApproved
City Managers OfficeApproved
City Clerk DepartmentApproved

Council Action:          Council Action:         

ATTACHMENTS:
DescriptionType
OrdinanceOrdinance
Sale Demolition and Remediation AgreementContract
Bid SummaryBackup Material
Management Analyst ReviewBackup Material