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ORDINANCE
CITY OF SAINT PAUL, MINNESOTA
Presented By
Referred To
Council File # O t � � '
OidiltanCe #
Committee Date :
AN ORDINANCE GRANTING TO NRG ENERGY CENTER
2 ROCK-TENN LLC (`2IRG"), A SPECIAL PURPOSE
3 SUBSIDIARY OF NRG THERMAL CORPORATTON, AND TTS
4 SUCCESSORS AND ASSIGNS, PERMISSION TO CONSTRUCT,
5 OPERATE AND MAINTAiN A HIGH PRESSURE
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STEAM LINE UNDER AND TFTROUGH PUBLIC
RIGHTS OF WAY AT SEVERAL LOCATIONS
WITHIN THE CITY OF SAINT PAUL
THE COUNCIL OF THE CITY OF SAINT PAUL DOES ORDAIN:
5ection 1
Pernvssion and authority are granted to NRG Energy Center Rock-Tenn LLC ("NRG"), a
special purpose subsidiary ofNRG Thermal Corporation, its successors and assigns, to operate
and maintain a high pressure steam line under and through public rights of way at several
locations within the City of Saint Paul. Said line has been constructed underground along the
tracks or right of way of the Chicago, Milwaukee, Saint Paul and Pacific Railway Company
(hereafter, "Milwaukee"), and along the tracks of the Chicago and Northwestern Transportation
Company (hereinafter, "Northwestern"), between Xcel Energy Inc.'s High Bridge Plant and the
Rock-Tenn Company's ("Rock-Tenn") recycled paperboard and folding carton manufacturing
facilities at 2250 Wabash Avenue in Saint Paul, and crosses public streets, ways and/or air rights
at severallocations. The location of said tracks or rights-of-way is described as foilows:
Begim�ing at Xcel Energy's High Bridge Plant and Milwaukee's right-of-way,
adjacent Cliff Street near Smith Avenue; thence running southwesterly along Cliff
Street to Ann Street; thence curving westerly to Western Avenue and Grace
Street; thence westerly along Grace Street and Benhill Road to Short Line Road;
thence along Short Line Road to Selby Avenue; thence continuing northwesterly
on a line crossing Snelling Avenue at Mazshall Avenue and Fairview Avenue at
Interstate 94; thence along St. Anthony Avenue to Prior Avenue, continuing on
same line to Vandalia Avenue, north of Interstate 94 and to Itock-Tenn's facilities
which are the ternunus of the line.
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2 The steam line herein authorized is for the purpose of serving Rock-Tenn (its successors
3 and assigns, including as a partial assign of Rock-Teru� the Aousing and Redevelopment
4 Authority of the City of Saint Paul, Mnnesota) and such other franchised distributors of thermal
5 energy as may be specifically authorized by the Ciry by sepatate City Council resolution in
6 advance. The City shall have sole discretion regarding whether to gtant or deny such permission
7 to serve other users and distributors of thermal energy. Said Iviilwaukee tracks cross public
S streets or ways at several locations along their length, including:
10 Cleveland Avenue and Gilbert Street, sidetrack,
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Ordinance No. 1827, 7uly 22, 1895; and
Igiehart Avenue and Fry Street, spur tracks,
Ordinance No. 2&06, January 9, 1909, and
Ordinance No. 2855, August 23, 1909.
Permission and authority are further granted for such steam line to cross over, under and
through all other public streets or ways along the ]ength of the Milwaukee and Northwestem
tracks as now constructed and located from the Xcel Energy High Bridge Plant to the Rock-Tenn
facilities, where such tracks or crossings now lawfully eacist pursuant to ordinance granting such
pernussion. Such permission and authority shall be given for a period of years beginning with the
effective date of this Ordinance, and continuing unti] June 30, 2011.
5uch pernvssion and authority are not effective and are not granted for any period of time
during which permittee, its successors and assigns, has not obtained andfor maintained in full
force and effect a surety bond and insurance policy pursuant to Sections 2(a) and 2(b) and
approved as required therein, nor shall any e�ensions of pernvssion and authority be granted on
account of cancellation, lapse or absence of said surety bond or insurance policy.
5ection 2
The Director of the Department of Public Works is hereby authorized to ea�tend the pernut
already issued to NRG for the construction, operation and maintenance of the underground steam
line according to approved plans filed with the Department, upon said permitee's (hereafter to
include NRG and its successors and assigns) continued compliance with the foliowing conditions:
(a) Said pemuttee shall furnish and maintain a surety bond to and in fauor of the City
of Saint Paul as obligee in the annual amount of one and one half million
($1,500,000) dollars conditioned to require the surety to comply with and fully
perform all of the terms, conditions, requirements and obligations of this
Ordinance, including, but not limited to, the payment of compensation as required
by subsection (m) below, if the pernvttee fails to so perform and comply, without
regard to whether the failure is or could be construed as a default or a breach; and
further conditioned to fully indemnify, hold harniless and defend the Cityof Saint
Paul, its agents, oflicers and employees from any and all damages, claims, losses,
judgments, suits or expenses arising out of the failure of the pernuttee to comply
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with or perform the terms, conditions, requirements and obligations of this
Ordinance. Said bond shall expressly refer to this Ordinance and incorporate its
terms by reference, including any amendments authorized by subsection (n) below_
Said bond shall by its terms not be subject to cancellation �cept upon the
e�cpiration of ninety (90) days following receipt of written notice by permittee and
by the Clerk of the City of Saint Paul. Permittee shall not be in compliance with
this subsection until said bond has been obtained and is in force, and has been
approved as to form, coverage and compliance with this subsection by the City
Attorney and the Director of the Department of Finance and Management
Services. The surety on said bond shall be a persoq firm or corporation resident in
the State of M'innesota and registered to transact business therein, and shall have
complied with applicable statutory certification or authorization provisions;
(b) 5aid permitte shall fully indemnify, hold harmless and defend the City of Saint
Paul, its agents, officers and employees from any and all damages, claims, losses,
judgments, suits or expenses on account of al] claims of whatever nature for injury
to person(s) and/or property arising out of or connected with the construction,
maintenance, operation and/or removal of said underground steam line, or out of
the pernvssion and authority granted herein, except for damage caused to the
underground steam line itself by the negligent act or omission of an agent, officer
or employee of the City; and that supplemental and in addition to all other
obligations on its gart, jointly and/or severally, hereunder, said pernuttee shall
furnish and mairrtain and pay al] premiums and other expenses therefor, liability
insurance coverage with a duly licensed liability insurance company, or an
authorized surplus lines insurance company, authorized or certified as may be
required by law to transact business in Minnesota, naming the pernuttee an as
insured and the City of Saint Paul as an additional named insured, to the eactent of
a minimum of ten million ($10,000,000) dollars combined single limit for injury
(including death) to any person andlor persons and for damage to property in any
single accident, insuring the City of Saint Paul against liability on account of all
claims of third persons for injury to person(s) and/or property arising from or
conneeted with the construction, maintenance, operation andlor removal of said
underground steam line hereunder; except for damage caused to the underground
steam line itself by the negligent act or omission of an agent, oflicer or employee
of the City. Such policy shall not be a"claims made" policy, and shall not have
any endorsements restricting the foregoing coverage; provided, however, that a
claims made policy will be acceptable if it meets all the other requirements of this
subsection and includes an option in form satisfactory to the City, which provides
defense and indemnification for the City as to all claims required to be covered by
this subsection, for at least three yeazs after the termination of such policy,
regardless of when or whether the pernussion granted under this Ordinance has
expired or been ternunated. Nor shall the above ]imits be considered or provided
as annual aggregate limits. The pernuttee shall furnish a certificate of this
insurance policy from time to time to the City of Saint Paul as described in
subsection (c) below. If permittee is required to indemnify and defend the City, it
will thereafter have complete control of such litigation, but pernvttee may not
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1 settle such litigarion without the consent of the Ciry, which consent shall not be
2 unreasonably withheld. This subsection is not, as to third parties, a waiver of any
3 defense or immunity othenvise available to the City or pemuttee; and perrnittee, in
4 defending any action on behalf of the City, shall be entitled to assert in any action
5 every defense or immunity that the City could assert in its own behaif.
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(c) Said gernrittee shall suhmit the surety bond and insurance policy(ies) required by
subsections (a) and (b) above, on or before the effective date of this Ordinance, to
the City Engineer of the Department of Public Works. The City Engineer shall
submit said documents to the City Attomey for review and if the insurance and
bond are acceptable, said documents shall be filed with the Department of Finance
and Management Services of the City of Saint Paul.
(d) Said pernuttee shall without any cost to the City in accordance with all applicable
ordinances of the City of Saint Paul, statutes of the State of Minnesota and
regulations of public authority having cognizance, maintain and operate said
underground steam line;
(e) Said pernilttee shall maintain and operate said underground steam line entirely
without cost to the City, in accordance with the pernuttee's approved plans on file
in the Department of Pubiic Works;
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Said pemuttee shall pay the costs of publication of this ordinance and all
resolutions or ordinances passed in relation to said ordinance;
Said perntittee shali pay the costs of administratioq engineering and inspection
incurred by the Department of Public Warks due to this undertaking, up to a
maYimum amount of $2,000;
(h) Said underground steam line shall be removed andlor relocated by said permittee
without arry cost to the City, Port Authority or Housing and Redevelopment
Authority whenever the Council of the City of Saint Paul shall by resolution after
notice and opportunity for hearing by the perntittee, determine such removal
and/or relocation necessary (1) to discontinue or avoid interference with the public
use of a public street or way as e�sting, or with any improvement of such street or
way, which shall include the repair andJor reconstruction of the railroad bridge and
ad,}acent public streets or ways, crossing Marshall and Snelling Avenues in the
vicinity of the intersection thereof; or (2) to avoid interference with the
development of an industrial park, major housing project, or redevelopment area
project. In the event of vacation of a public street or way which is not part of a
public improvement project, industrial park, majar housing project, or
redevelopment project, the City shall only vacate subject to the rights granted by
this permit. Upon or after July 1, 2011, or upon the earlier ternvnation of the
pernussion granted herein, the Council of the City of Saint Paul may, without
notice or hearing, order the said steam line and all appurtenant equipment removed
from all public streets and ways by the permittee at its sole cost and expense,
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ailowing a reasonable time therefor. If noi so removed, the City may perform the
work, and permittee shall pay all costs therefor within thirty (30) days after receipt
by it of an invoice or invoices from the City.
Said permittee shall coordinate all work involving existing or proposed utility
installations, public or private, with the affected utility companies or agencies;
(j) Said pemuttee shall properly protect all excavations made in or adjacent to public
streets or ways so as to avoid all damage or injury to persons or property, shall
properly fill and compact said street right-of-way to avoid settiing and shail restore
said street right-of-way in accordance with the Department ofPublic Works
standards for street openings, under the supervision and to the satisfaction of the
Director ofthe Department ofPublic Works.
(k) Said pem�ittee shall, during the term of this pernvt, restore and repair (1) all public
properiy damaged by the construction, operation, maintenance, removal or
relocation or presence of said underground steam line provided for herein, and (2)
all private property damaged by the negligent construction, operation,
maintenance, removal or relocation, or presence of said underground steam line;
(1) Said pernuttee shall, within thirty (30) days from and after the pubiication of this
ordinance, file written acceptance thereof, speci6cally agreeing to all the
provisions, terms and conditions herein, with the City Cierk; and the filing of said
ruritten acceptance shall also constitute permittee's acknowledgment that this
Ordinance settles and complies in all respects with the terms and conditions of the
settlement of any litigation referred to in any predecessor ordinances to this
Ordinance.
(m) Compensation. Fees due under this Ordinance:
2001-2002 For the fiscal year beginning July 1, 2001 and ending 7une 30,
2002, permittee wiil pay to the City the sum of $330,000.00,
the sum of $330,000.00 (which is based on the amount contained in
the original petmit as adjusted and as shown in the attached
spreadsheet entitled "History of Steam Line Ordinance Payments",
which spreadsheet shall be included as reference to this ordinance),
in twelve monthly payments of $27,500.00 commencing Aua st 1,
2001 and continuing on the first day of each month thereafter until
paid in full.
2002-2011 For the fiscal year beginning 7uly 1, 2002, and for each year
thereafter until and including the fiscal year beginning 7uly 1, 2010,
pernuttee will pay to the City an Annual Permit Fee equal to the
Base Amount increased by the product of the Annual Escalator,
times the Base Amount, as those terms are herein defined. The
Annual Pernut Fee shall not, however, be decreased in any event.
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1 For example, if there is a decrease in the Annual Escalator that
2 would cause the Annual Permit Fee to decrease, then the Annual
3 Permit fee shall remain the same for the following fiscal year.
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5 The "Base AmounY' shall be equal to the total annual pernrit fee
6 required to be paid by pemuttee during the immediately preceding
7 Sscal year beginning July 1 and ending 7une 30. For example, the
8 Base Amount for the fiscal year beginning July 1, 2001 and ending
9 June 30, 2002 would be $330,000.00.
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The "Annual Escalato�" shall be a percentage equal ta the
Producers' Price Index for cammodity code 4961, steam supply
systems, as calculated and published by the US Bureau of Labor
Statistics (BLS} for the yeaz ending December 31 immediately prior
to the beginning of the fiscal year on July 1 or, in the absence
thereof, to a comparable inde�c, subject to mutual agreement of the
parties.
Pernuttee may provide for the payment of compensation and pernut
fees by another, but shall remain primarily responsible for
compliance with all terms and conditions herein, including those
relating to compensation and fees.
Permittee shall timely pay all pernvt fees and compensation required
herein without regard to cessation of use of the steam line, or
temporary interruptions of the delivery of steam through the line;
provided, however, that if the use of the steam line is discontinued
for 30 consecutive days, or if the Energy Agreement between NRG
and Rock-Tenn is terminated, then the obligation to make month]y
payments of the Annua] Permit Fee shall cease beginning in the
month following the thirty (30) day discontinuance, and without
any pro rata allocation or discount for mid-month discontinuances;
and provided further however, that if for any reason deliveries of
steam aze once more made through the steam line under the e�sting
agreement or an amendment thereof, or under a new agreement
between NRG and Rock-Tenn or any successor or assign thereof,
monthly installments sha11 be due for the remainder of the period
until7une 30, 2011 as of the first of the month in which service
resumes. The Base Amount and Annual Esca]ator, in case of
resumption after a cessation which resulted in discontinued
payments, shall be computed as if the cessation had not occuned
and the steam line had remained in operation.
n. Every section, provision or part of this ordinance, is declared separate from
every other section, provision or part; and if any section, provision or part
shall be held invalid, it shall not affect any other section, provision or part.
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1 If Section 2(m) or any part thereof is held invalid, the City may at its option
2 amend said Section 2(m), to which amendment or new language pemrittee,
3 and its successors and assigns are bound and shall accept its terms and
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conditions so long as the total amount of the annual payment required by
the terms of this Ordinance is not increased;
o. The provisions of this Ordinance are for the benefit of the City, the
pernuttee, the users of the steam service, and the successors and assigns of
such parties, and not for the benefit of third parties, except as and to the
ea�tent provided in subsections h, i, and j herein; nothing herein shall be
deemed to relieve any person, persons or corporations from liability arising
out of the failure to exercise reasonable care to avoid injuring the
permittee's facilities while performing any work connected with the
grading, regrading, or changing the line of any public street or way, or with
the construction or reconstruction of any utility system or other
construction project.
Section 3
This ordinance shall take effect and be in force thirty (30) days from and after its passage,
approval and publication, or upon filing of the written acceptance required by Section 2(I), above
whichever date is later.
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Form Approved by C�it� Attor ey
BY� ��Gl.k4[[/.i._ cL' ( ;�`�UL/(
Approved by Mayor for Submission to
Council �
By: � �/�s
p �f''13 y i Y .'�;?�'t y �� ,
1'
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Adopted by Council: Date D
Adoption Certi£ied by Counc Secretary
Of£ice o£ Financial
Services
Tom Cran 266-8547
on Council Agenda by:
ALL
GREEN SHEET
No. 113450
ON REQUESTED: Renewal of the permit (through the approval of a special
nance) £or NRG Energy Center Rock-Tenn LLC to operate a Steam Line across
ain public rights of way between the Exoel Energy High Bridge power plant
the Rock-Tenn paper manufacturing facility at I-94 and Vandalia Street.
: APPROVE (A) OR REJECT (R]
NiNG C�FPtISSION CIVIL SERVICE COM+:ISSIOI
COM�1ITTEE BUSINESS REVIEW COUNCIL
F
'RICT COURT
WHICH COUNCIL OBJECTIVE?
Date:
April 2, 2001
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SERVICE CAN2RACT5 MOST ANSWP.R THE FOS.LOWZNG:
Nas the person/ficm ever vorked under a contract for this department?
YES NO
Has this person/firm ever been a City employee?
YES NO
Does this pecson/firm possess a ski11 not nonmally possessed by any
Current City employee?
YES NO
ain ail YES answers oa a sapazate sneet and attach.
(Who, What,
[n 1988 the City approved a permit for Norenco (a legal subsidiary o£ the
Former Northern States Power Company)to construct and operate a high pressure
steam line ta serve the former Horner Waldorf paper manufacturing plant at I-
34 and Vandalia. The original 13 year permit is scheduled to expire on June
30, 2001 and the sucaessors of Norenco (NRG Energy Center} and Horner Waldorf
(Rock-Tenn) are seeking renewal of the permit for another 10 years, with a
ninar downward adjustment in the fee paid to the City by NRG.
SF
11 allow the uninterrupted operation of the steam line and continuation of
rmit fees to the City of Saint Paul. The minor reduction in fees is based
the actual increase in steam charges durinq the period of the original
rmit. (There is no in£ormation available that describes the factors used to
lculate the original fee) . „ry ���i�� �
Apparent
IF APPROVED:
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Steam Line could not continue to operate and the City of Saint Paul would
revenue in excess of $330,000 annually.
AMOUNT OF TRANSACTION: $'330,000 COST/REVENUE BUDGETED YES NO
SOURCE _
L INFORMATION: (EXPLAIN) (Background memo attached)
History of Steam Line Ordinance payments
Fiscal Yr
Ban Jui� Annual % incr. Adjusted * Over a
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
250,000
260,000
275,158
290,374
292,755
299,3i3
294,524
304,102
314,279
323,707
331,668
351,7Q0
354,096
5.83%
5.53%
0.82%
2.24%
-1.60%
-3.55%
3.35%
3.00%
2.46%
6.04%
0.68%
250,000
260,000
275,158
290,374
292,755
299,313
279,732
284,207
293,719
302,530
309,970
328,692
330,931
19,581
19,895
20,560
21,177
21,698
23,008
23,165
� adjustment allowed for deflated NRG rates to
Champion/Waldort/Rock-Ten to average of NRG rate increases.
PROJECTION : for 10 Year Period begining July 1, 2001
11 yr. avg.
Annu I % in r. AdJusted *
2001 330,000
2002
2003
2004
2005
2006
2007
2008
2009
2010
0.033217
0.033217
0.033217
0.033217
0.033217
0.033217
0.033217
0.033217
0.033217
340,962
352,287
363,989
376,080
388,572
401,479
414,815
428,593
442,830
20,833
21,667
22,930
24,198
24,396
24,943
24,544
25,342
26,190
26,976
27,639
29,308
29,508
27,500
28,413
29,357
30,332
31,340
32,381
33,457
34,568
35,716
36,902
o►.-�t53
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