City of Oak Creek

Common Council Report

Meeting Date:  08/01/05      

Item No.:         3

Recommendation:  That the Common Council allocate mitigation funds of $1,140,410.96 received from WE Energies on July 29 as follows: Grant Program ($430,000.00), Project #01021 ($309,283.70),  Project #04002 ($218,263.49) and the balance of $182,863.77 to Project #05006 for past and future legal and consulting expenses.

Background:  We are pleased to advise you that WE Energies has agreed to 2005 mitigation payments starting June 29^th for two units.  The total payment in 2005 is $1,140,410.96.  This amount is based on $2,250,000.00 pro-rated for 185 days, from the start of the June 29^th construction date through the end of the year.  It is staff’s recommendation that these funds be used to repay previously unfunded City expenses incurred since 2001 associated with the power plant  based on the following:  In 2001 the City created Project #01021 for expenses associated with the proposed power plant and transferred $50,000 from the 2001 Control Account to begin funding.  Expenses were then charged to this project through 2003 and the total expenses were $1,566,539.90.  WE Energies subsequently reimbursed the City for  $1,207,256.20, leaving an unfunded City share of $309,283.70.  Project #04002 was created in 2004 to track 2004 costs, which were $412,539.07.  WE Energies reimbursed the City $194,275.58, leaving an unfunded City share of $218,263.49.  In 2005 Project #05006 was created for 2005 expenses and will continue to be used for future costs for legal and consulting expenses.  To date, 2005 expenses are $143,749.24 and the City has been reimbursed $19,401.61 by WE Energies.  Future reimbursements from WE Energies will be minimal.  There is currently an unfunded balance of $124,347.63 and there may be future expenses for the WPDES Permit proceedings and there will be future expenses for RMT consulting.    

At the 7/19 Council meeting, the Council adopted Resolution #10532-071905 creating the Dust and Noise Abatement Grant Program for Area A at an estimated cost of $430,000.  These funds will be used to begin aid for the property owners affected by the power plant construction.

Fiscal Impact:  The unfunded advances in the CIP Fund for the WE Energies projects  will be reimbursed and the Dust and Noise Abatement Grant Program will have funding to begin implementation.

Prepared by: Rose Ann Underberg, Finance Manager

Fiscal Review by: Beverly A. Buretta, CMC City Clerk