HomeMy WebLinkAbout5.F.7. Energy Savings Contracts-Informational ~
CITY OF SHAKOPEE
Memorandum
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~
TO: .Mayor and Council
Mark McNeill, City Administrator
FROM: Gregg Voxland, Finance Director
SUBJ: Energy Savings Contracts - Informational
DATE: May 21, 2008
This memo is an attempt to rephrase the information on energy savings
for the community center arad fire station 51. See attached staff memo.
After the technical studies are completed and details finalized, a
contract for the project would be brought the council for authorization
before any work is performed.
Fire Station 51
Fire station 51 cost of the project if all items are included is
estimated at $70,232. Energy savings would be $7,516 per year at
current prices. If the city agreed with the calculations for savings
when the project is done, that would be the end of the deal with
Harris. That is a nine year payback on the cost plus "green" and other
benefits.
Optional: the city could continue the relationship with Harris for
ongoing maintenance. If the city wanted to continue the relationship
and have Harris responsible for maintenance and replacement of the
systems, the cost would be $18,000 in the first year offset by cost
avoidance for replacements of $15,083.
The next step would be to sign the letter of intent with Harris under
which the city is obligated to pay Harris $2,000 after the technical
study is done if the city does not pursue the project.
Community Center
Community center cost of the project if all items are included is
estimated at $266,400. Energy savings would be $24,641 per year at
current prices. If the city agreed with the calculations for savings
when the project is done, that would be the end of the deal with
Harris. That is a 10 year payback on the cost plus "green" and other
benefits.
Optional: the city could continue the relationship with Harris for
ongoing maintenance. If the city wanted to continue the relationship
and have Harris responsible for maintenance and replacement of the
systems, the cost would be $69,000 in the first year offset by cost
avoidance for replacements of $73,370 and operational savings.
The next step would be to sign the letter of intent with Harris under
which the city is obligated to pay Harris $8,000 after the technical
study is done if the city does not pursue the project.
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.
Recommendation
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.
Gr.~ Voxland
99
Finance Director
H:\Finance\docs\energy
.CITY OF SHAKOPEE
Memorandum
TO: Mayor and Council
Mark McNeill, City Administrator
FROM: Gregg Voxland, Finance Director
SUBJ: Energy Savings-Contracts
DATE: May 16, 2006
Introduction
Staff has been;calking-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
arid. 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 caii-:not be met -by -Harris ~ -the-$1-0-; D-O-D- 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
Z. 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 SPIIC 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 $493,00.0 and total
positive c-ash 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 $266,4.00.
The fire tation 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 otal'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
gg
Finance Director
H:\Pinanoe\doCS\
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' ~ Cashflow Scenario
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_ _ _ ~ - .x .,_~a~t Y.rw -~F T., ~~f~ ~T ~.%^`[~~5.~ Ff`•H-
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.$24,641 $ 35,689 $73,370 $10,236 $143,936 ($25;118 $69,000) ($4,OOOj $45,818 $45,818
$25,627 $36,760 $75,571 $137,957 ($25,118 $71,070 ($4,120) $37,650 $83,468
$26,652 $37,863 $77,838 $142,352 ($25,118 $73,202) ($4,244) $39,789 $123,257
$27,718 $38,999 $80,173 $146,889 ($25,118 $75,398} ($4,371} $42,003 $165,259
$28,826 $40,169 $82,578 $151,573 ($25,118 {$77,660 ($4,502} $44,293 $209,552
$29,979 $41,374 $85,056 $156,409 ($25,118 ($79,990) ($4,637) $46,664 $256,216
$31,179 $42,615 $87,607 - $161,401 ($25,118) ($82,390) ($4,776) $49,117 $305,334
.$32,426 $43,893 $90.,235 $166,555 ($25,118) ' ($84,861) ($4,919) $51,656 $356,990
$33,723 $45,210 $92,942 $171,875 ($25,118 ($87,407 $5,067) $54,283 $411,273
t $35,072 $46,566 $95,731 $177,369 ($25,118 ($90,029) $5,219) $57,003 $468,276
$36,475 $47;963 $66,454 $150,892 $25,118) ($92,734) . $5,376 $27,669 $495,945
$37,934 $49,402 $68,448 $155,784 ($25,118) ($95,512) $5,537) $29,617 $525,562
$39,451 $50,884 $70,501 $160,837 {$25,118) ($98;378) $5,703) $31,638 $557,200
$41,029 $52,411 $56,318 $149,758. $25,118 $101,329 $5,874) $17,437 $574,637
$42,670 $53,983 $58,007 $154,661 ' . ($25,118) ($104,369) ($6,050) $19,124 $593,761
To}af~- $ 493;39 Gf3 753.. ~ 1,160~$~~` $ 10,7~3f , ~ 23-,~,24~ 137 ~ (1 2~,~~51 (74,3se) ,g; ~5,7~1
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- Cashflow Scenario
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$7,516 $ - $15,083 $0 - $22,599 `($6,622) ($18,000) {$3,200 ($5;223) ($5,223)
$7,817 $0 $15,535 $23,352 ($6,622) {$18,540 ($3,296 ($5,106 ($10,328)
$8;130 $0 $16,001 $24;131 ($6,622) ($19,096) ($3,395} ($4,982 ($15,310
$8,455 $0 $16,484 $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 ($4,214 ($24,875
$9,145 $0 $17,485 $26,630 $6,622} $20,867} ($3,710 ($4,569) $29,444}
$9,511 $0 $18,010 $27,520 ($6,622 $21,493} ($3,821 ($4;415) $33,859]
$9,891. $0 $18,550 $28,441 ($6,622} ($22,138 $3,936 {$4,254} ($38,113)
$10,287 $0 $8,492 $18,779 ($6,622) - ($22;802) ($4,054) ($14,699 $52;812
$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}
$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 ($1'5,256 ($113,002
$12,515 $0 $9,844 $22,360 ($6,622) ($26,434 {$4;699) ($15,395 {$128,397}
$13,016 ` ' $0 $10,140 $23,156 ($6,622} ($27,227} ($4,840) {$15,533} {$143,930)
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~ ~ Tbtaf" - $ 15U50T , $ _ 1-~~~$9~ _ $ • '349,6 $ ~ {99;320 (3~4,~8D) (59,517) (1. 3,930) "
4.
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A LINC Service ® Contracfor
W~en Shou/d You Plan :For Your
Replacement Costs?
;Table 5: Equipment Serrrice-.Life
- -
- - -
Air Conditioners Coils -
Window Unit 10 DEC, 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 Gentrifugef 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
Electric 15 .Insulation
,Burners 21 ~ Molded 20
Furnaces Blanket. 24
Gas or oil-fired 18 Pumps
Unit Heaters Base-mounted 20 '
.Gas or Electric I3 Pipe-mounted 10
Hot-water or steam 20 Sump and Weli............................ 10
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
Centrifu al
g 25 Hydraulic 15
-Axial 20 Pneumatic 20
Propeller......: 15 Self-contained 10
Ventilating roof-mounted........:..... 20:
* ASHRAE HANDBOOK
Customized Professional Maintenance Program II Harris Companies
3-
Bundled Energy Solutions ~~~,~i
`Letter of Intent o,~ ,
-May 1, 2008
Mr. Kurt Schoenecker
.Harris Mechanical 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 and operational 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 15 years (after incorporating all rebates).:
The City of Shakopee is interested in further investigating the savings to be i•ealzed'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 intent o 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 project. 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 notproceed 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 $10,000.
,The scope of this project-will :include the following Energy Conservation Opportuni#ies (ECOs):
Building Measure
ECO 1 Community Otr /Ice Arena Lighting Upgrades
ECO 2 -Community Ctr / tce Arena Variable Frequency Drives
ECO 3 Community Ctr /Ice Arena Water Conservation
ECO 4 Communit Ctr /Ice Arena Boiler O eration Modifications
ECO 5 Community Ctr/ IceArena Vendmisers
EC0 6 Communit Ctr /Ice Arena Mechanical Im rovements
ECO 7 Communit Ctrl Ice Arena Controls U rades
ECO 8 Community Ctr/Ice Arena, Water Heater operation
EC0 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 1 IceArena ,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 to 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