Approve second amendment to Agreement No. 16-56 with Neo Yolo, LLC and MM Yolo Power, LLC for purchase of the landfill gas production rights, landfill gas collection system, gas to energy conversion system and power transmission system. (No general fund impact) (Echiburu/Sinderson)

Approve second amendment to Agreement  No. 16-56 with Neo Yolo, LLC and MM Yolo Power, LLC for purchase of the landfill gas production rights, landfill gas collection system, and gas to energy conversion system at the Landfill, as well as the power transmission lines and interconnect system with PG&E.

On April 26, 2016, the Board of Supervisors approved an agreement with Neo Yolo, LLC and MM Yolo Power, LLC for the purchase of landfill gas production rights, collection system, energy conversion system and power transmission system at the Yolo County Central Landfill. The purchase price of the system was determined in part on allocating the parties’ respective share of maintenance expenses incurred by the Sellers prior to the contract date (referred to in the Agreement as “Major Maintenance Adjustment”).  Following Board approval of the original agreement, the parties have recalculated the respective shares, with the Sellers bearing a higher proportion of the cost.  On May 31, 2016, the Board approved an amendment which incorporated the revised calculations into the approved agreement, which resulted in a net reduction of the overall purchase price of approximately $30,000. 

As part of the purchase and sale agreement many of the existing agreements need to be assigned by third parties.  Staff recently learned that as part of the assignment of the power purchase agreement with the Sacramento Municipal Utility District (SMUD), the agreement needs to be again amended to include a deposit of $110,406 with SMUD.   This amendment seeks approval to incorporate payment of the deposit into the approved agreement.  As explained in the Fiscal Impact section below, funds for the deposit will come from cost reductions due to extended closure period. All other provisions of the approved agreement will stay in place.

In addition, staff recommend extending the 90-day closure period provided in the agreement to 136 days as allowed under the agreement to allow staff to bring this second amendment to the Board for approval.

CAO, County Counsel, Financial Services Department

As stated in the first amendment of the purchase and sale agreement, for every day that closing occurs after April 1, 2016, the purchase price is reduced by $868.51.  Because the closing date of the purchase has been extended, the purchase price has decreased by approximately $160,000. Taking the $110,000 deposit into consideration the overall cost reduction is approximately $50,000.