HomeMy WebLinkAbout13.F.2. Energy Savings-Letter of Intent 13.~.z.
CITY OF SHAKOPEE
Memorandum
TO: Mayor and Council
Mark McNeill, City Administrator
FROM: Gregg Voxland, Finance Director
SUBJ: Energy Savings Contracts
DATE: May 16, 2008
Introduction
Staff has been talking with Harris Services about energy savings. The
next step is to authorize the "letter of intent" to performing the
comprehensive technical study for energy savings at the Community
Center and Fire Station 51.
Background
The city has been contacted by Harris Mechanical for the purpose of
entering into an "energy savings contract". Such contracts are
authorized by law to perform the engineering and construction not
subject to bidding requirements if the energy savings is equal or
greater than the cost of the project in 15 years or less. A couple of
other cities with experience with Harris were contacted for references
and reported positive results.
As a starting point, the city had Harris look at the community center
and fire station 51. They were built about the same time and haven't
had any substantial changes to the mechanical systems. Harris has done
a "feasibility" study and the next step is to do the comprehensive
technical study. This entails a financial commitment by the city to
pay for the comprehensive technical study ($8,000 for the community
center and $2,000 for fire station 51) if the city decides not to go
forward with Harris and complete the projects. If the terms in the
letter of intent can not be met by Harris, the $10,000 is waived.
The energy audit done through SPUC was used as a resource in the
process and identified many of the same items.
Community Center identified modifications are;
1. Lighting upgrades
2. Variable frequency drive controls for air handling.
3. Variable frequency drives for heating and cooling.
4. Water conservation
5. Boiler operation modifications
6. Mechanical improvements
7. Controls upgrades
8. Water heater operation
Fire station identified modifications are;
1. Lighting upgrades
2. Programmable thermostats
3. C02 control
4. Boiler operation modifications
5. Mechanical repair
6. Control system
7. Water heater recirculation pump controls.
Attached are data charts prepared by Harris to illustrate potential
savings. Their package includes almost all maintenance operational
responsibility including replacement of mechanical units..
• Operational costs include the changing of air filters, preventive
maintenance, daily thermostat checks, etc.
• Cost avoidance is repair and replacement based on industry
standards, condition and age.
• Rebate is energy rebates from SPUC or Centerpoint Energy,
estimated at $10,000 minimum.
• Harris service is the cost for Harris to take over the operation,
maintenance and replacement of the systems.
• M & V is measurement and verification of energy use by Harris -
optional depending on the city attorney's opinion on contract
terms for verification of the energy savings.
The Community Center chart shows a savings of $25,000 in the first year
for energy and a total positive cash flow of $45,000 based on a 15 year
financing. Over 15 years, the energy saving is $493,000 and total
positive cash flow of $594,000. These are very preliminary numbers and
would be developed in more depth during the technical study. Initial
cash outlay would be around $266,400.
The fire station chart shows a savings of $7,000 in the first year for
energy and a total net cost of $5,000. Over 15 years, the energy
saving is $150,000 and total net cost of $144,000. These are very
preliminary numbers and would be developed in more depth during the
technical study. Initial cash outlay would be around $70,000. Due to
those projected numbers, while saving money on energy, the total
package with Harris would come out at about a wash. Council may want
to proceed with some or all of the modification but not commit to an
ongoing contract and savings guarantee with Harris.
Funding may be a combination of operational budgets, the building fund
and the $25,000 green initiatives allocation.
After the completion of the technical study, staff will meet with
Harris to decide which items or all of the items studied, to recommend
that council follow through on. A proposed contract would be brought
to council to approve at that time.
Alternatives
1. Status Quo.
2. Select a different firm to work with.
3. Proceed with Harris by authorizing the "letter of intent" to
perform the comprehensive technical study on the Community Center
and Fire Station 51.
Action
Move to proceed with Harris Services by authorizing the "letter of
intent" to perform the comprehensive technical study for energy
savings at the Community Center and Fire Station 51.
r~ Voxland
Finance Director
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b~~~ ~~a ~i;,,~~~ ~ Shakopee Community Center
tin ~Payrnerit CiaSrlflOW SC@Ilal"10
~7F>~'"~ n~,yr (='4~`.~`-~s ~ ~a m,;. -'r_; S 266,400
le~,~-~~ ~„`-t.:o~^1~ ~ let-~~.~~.~~~`~ 4.8%0
ut 'st'`.y~ti>Z';+~,' ~ ~'~~~~i~~1~'},"~$,r~~ 4.00%
Erierd}, Operational Cost Avoid.
~ ~~c:~"`~ $24,641 $ 35,tifsy $73,370 $10,236 $143,936 ($25,118 $69,000} $4,000) $45,818 $45,818
r; = . 'r';iv~~ iii' $25,627 $36,760 $75,571 $137,957 ($25,118 $71,070 $4,120 $37,650 $83,468
'W~`~,~~„ ;,;,;+r~ $26,652 $37,863 $77,838 $142,352 ($25,118) $73,202) ($4,244) $39,789 $123,257
~,°`';3~?~' ~~=7~ $27,718 $38,999 $80,173 $146,889 ($25,118 $75,398} $4,371 $42,003 $165,259
~.h~~tF=~A? x`~eM; $28,826 $40,169 $82,578 $151,573 ($25,118 $77,660} $4,502) $44,293 $209,552
"';;~iT ^ $29,979 $41,374 $85,056 $156,409 ($25,118 $79,990} $4,637} $46,664 $256,216
i $31,179 $42,615 $87,607 $161,401 ($25,118) {$82,390) ($4,776) $49,117 $305,334
-S~ ~rti ~ $32,426 $43,893 $90,235 $166,555 ($25,118} ($84,861} ($4,919) $51,656 $356,990
~4~, ~ • : $33,723 $45,210 $92,942 $171,875 ($25,118) ($87,407) ($5,067} $54,283 $411,273
ti . $35,072 $46,566 $95,731 $177,369 ($25,118) ($90,029 $5,219) $57,003 $468,276
" ' ~~Jfi~':;ti $36,475 $47,963 $66,454 $150;892 ($25,118} ($92,730 $5,376) $27,669 $495,945
W.V 4 ~
7 ' $37,934 $49,402 $68,448 $155,784 {$25,118 ($95,512 $5,537} $29,617 $525,562
w $39,451 $50,884 $70,501 $160,837 ($25,118 ($98,378 $5,703) $31,638 $557,200
~ ~~4; ';~-j, ~ ^ $41,029 $52,411 $56,318 $149,758 ($25,118 $161,329 $5,874} $17,437 $574,637
$42,670 $53,983 ~ $58,007 $154,661 {$25,118) ($104,369} ($6,050) $19,124 $593.761
Total ' $ 493,399 $ 663,783 $ 1,160,829 $ 10,236 S 2,328,247 S (376,766) S (1;283,325) S (74,396) S 593,761
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_ - ~ - Shakopee Fire Station
r~_,;~~ ~~,i V Cashflow Scenario
.-'~+f~~~,r'~~.'~,~ ~~~.,YR $ 70,232
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~r,~~;~ ~ S 5~i~ ~'J1,P~'i 4.00%
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Enery Operational Cost Avoid. • . - ~ . • ~
e;- $7,516 $15,083 $0 $22,599 $6;622 {$18,000) $3,200 $5,223) ($5,223)
:'~;1.r ; ti $7,817 $0 $15,535 $23,352 ($6,622) {$18:540) {$3,296 $5,106) {$Y0,328)
y~,' $8,130 $0 $16,001 $24,131 ($6,622) ($19,096 $3,395} $4,982 {$15,310
n"~? ,~~K $8,455 $0 $16,481 $24,936 $6,622) ($19,669} ($3,497 $4,851 ($20,161
~ " " $8,793 $0 $16,976 $25,769 $6,622) $20,259 {$3,602 ($4,714 ($24,875
; - $9,145 $0 $17,485 $26,630 ($6,622) $20,867) {$3,710} $4,569} $29,444}
~c~'~~-i ~ $9,511 $0 $18,010 $27,520 $6,622 $21,493) {$3,821 $4,415) $33,859}
{~`,;xF , '°'r $9,891 $0 $18,550 $28,441 ($6,622) ($22,138 $3,936 ($4,254) $38,113)
,';ter $10,287 $0 $8,492 $18,779 {$6,622) ($22,802 $4,054 ($14,699 $52,812.
yw~ r $10,698 $0 $8,746 $19,445 ($6,622) ($23,486) ($4,175} ($14,838} ($67,651)
$11,126 $0 $9,009 $20,135 {$6,622) ($24,190) ($4,301} {$14,978) ($82,628)
,4 ~ ~ ,A r $11,571 $0 $9,279 $20,850 ($6,622) $24,916) ($4,430) $15,117) {$97,746}
~ ~ ~ > $12,034 $0 $9,558 $21,592 $6,622) $25,664 ($4,562 ($15,256 $113,002
.E '~h-,, ~r':~ $12,515 $0 $9,844 $22,360 $6,622) ($26,434 {$4,699} ($15,395 {$128,397}
e" $13,016 $0 $10,140 $23.,156 ($6,622) ($27,227) ($4,840) ($15,533) ($143,930)
Total $ 150,507 $ S 199,189.' $ - $ 349,695 (99,329) $ (334';780) $ (59,517) $ (143',930)
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A ZINC Service® Contractor -----•-a-
When Should You Plan For Your
Replacement Costs? '
,Table 5: Equipment Service Life.
- -
Air Conditioners Coils
Window Unit 10 DX, water, or steam..................... 20
Residential single or split package 15 ~ Electric 15
Commercial through-the-wall........ 15 Heat Exchangers
Water-cooled package:..: 15 Shell-and-tube 24
Heat Pumps Reciprocating compressors 20
Residential air-to-air 15 Package chillers
Commercial air-to-air 15 20
Commercial water-to-air 19 Centrifugal 23
Roof-top air conditioners Absorption 23
Single zone 15 Cooling towers
Multizone 15 Galvanized metal 20
Boilers, hot water (steam) Wood 20
Steel water-tube 24 (30) Ceramic 34
Steel fire-tube 25:(25) Air-cooled condensers 20
Cast iron 35 (30) Evaporative condensers 20
Electric 15 Insulation
Burners 21 Mo.lded 20
Furnaces Blanket 24
.Gas or oil-fired 18 Pumps
Unit Heaters Base-mounted 20
Gas or Electric 13 Pipe-mounted 10
Hot water or steam 20 Sump and Well i0
Radiant Heaters Condensate 15
Electric 10 Reciprocating engines 20
Hot water or steam......... 25 Steam turbines 30
Air terminals Electric motors 18
Diffusers, grilles, and registers 27 Motor starters 17
Induction and fan-coil units 20 Electric transformers 30
VAV and double-duct boxes 20 Controls
Air washers 17 Pneumatic 20
Duct work 30 Electric 16
Dampers 20 Electronic 15
Fans ~ ~ Valve actuators
25 H draulic 15
Centrifugal y
.Axial 20 Pneumatic 20
Propeller 15 Self-contained 10
Ventilating roof-mounted 20
* ASHRAE HANDBOOK
Customized Rrofessional Maintenance Program II Harris Companies
Bundled Energy Solutions H
Letter of Intent k,a q ~ ~
~m ~ ~r
May 1, 2008
Mr. Kurt Schoenecker
Harris Mechanics! Service, LLC.
909 Montreal Circle
St. Paul, MN 55102
Subject: Letter. of Intent
Dear Mr. Schoenecker,
We are encouraged by the preliminary indications regarding opportunities for reducing our energy
and operational costs within the City of Shakopee. We recognize that this project will result in
increased energy efficiency, comfort, and equipment reliability. We also understand that the
projected energy andoperational savings will comply with MN Statute 471.345-Uniform Municipal
Contracting Law, and will be sufficient to cover the debt service of the project within a period not to
exceed 1S years (after incorporating all rebates). .
The City of Shakopee is interested in further investigating the savings to be realized by this project..
We understand that to quantify said savings and confirm implementation costs; a Comprehensive
Technical Study by Harris is required. By signing this letter, we are indicating our intentto award
Harris a contract, if the cost and savings numbers presented on 5/1/2008 are validated during the
Comprehensive Technical Study. The following criteria must be met:
• First year implementation costs not to exceed $430,000.
• Self funding .pro}ect within 15 years per MN Statute
Harris will be responsible for the complete installation of the solution. The final estimates and
validation will be completed and the results presented within forty five (45) days of signing this
letter.
-We understand the investment required to conduct the Comprehensive Technical Study. If The.
City of Shakopee elects to not proceed with this project and the program meets all outlined
requirements, The City of Shakopee will agree to pay for engineering time invested during the
Comprehensive Technical Study in the amount of.$1O,OOO.
The scope of this project will include the following .Energy Conservation Opportunities (ECOs):
Building Measure
ECO 1 Comm unity Ctr /Ice Arena Lighting Upgrades
ECO 2 Community Ctr /Ice Arena Variable Frequency Drives
ECO 3 Community Ctr /Ice Arena Water Conservation
ECO 4 Communit Ctr /Ice Arena Boiler O eration Modifications
ECO 5 Communit Ctr/Ice Arena Vendmisers
ECO 6 Communit Ctr /Ice Arena Mechanical Im rovements
ECO 7 Communit Ctr /Ice Arena Controls U rades
ECO 8 Community Ctr /Ice Arena Water Heater operation
ECO 9 Fire Station Mechanical re air
ECO 10 Fire Station Control S stem
ECO 11 Fire Station Boiler o eration
ECO 12 Fire Station HW circ um
ECO 13 Fire Station Pro rammable Stats
ECO 14 Fire Station Li htin
ECO 15 Fire Station C02 Control
ECO 16 Fire Station / CC /Ice Arena Guaranteed Lifetime Protection program
..During this-detailed study, Harris will. work with Shakopee Public Utilities and Centerpoint Energy to
solidify all available. rebates on our. behalf. Harris. will investigate and. bring o our attention other
ECOs if they meet our financial criteria. Harris will advise the City of Shakopee on any funding
mechanisms that can be used for this project. The City of Shakopee understands implementing.
these additional ECOs may result in increased costs and savings..
Sincerely,
The City of Shakopee.
Signature
Date
7