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Home My WebLink AboutItem Ui I . AGENDA REPORT l DATE: April 23, 2001 n / TO: Honorable Mayor and City Council THRU: John B. Bahorski, City Manager FROM: Stephen G. Badum, Director of Public Works/City Engineer SUBECT: ENERGY SERVICES PROGRAM - CAL -AIR INC. SUMMARY OF REOUEST: The proposed City Council action will hold a public hearing and approve a resolution approving the proposed energy conservation measures. BACKGROUND: The proposed Energy Services Agreement with Cal -Air, Inc. is a design build approach to 1) replace deteriorated HVAC equipment Citywide; and 2) reduce electrical power usage through the installation of energy efficient HVAC units and lighting modifications. Since the replacement of the existing HVAC units and energy reduction strategy requires extensive engineering to develop a capital improvement project, the design build approach was adopted by staff to expedite the installation of these energy saving improvements. This turnkey approach allows the City of Seal Beach to: 1) design an energy saving program; 2) immediately replace deteriorated, unrelihble, and inefficient equipment and lighting in all city facilities using lease/purchase financing; and 3) institute a long term service program over the tern of the lease to reduce on -going maintenance costs and guarantee efficiency. The proposed program is designed to be guaranteed budget neutral. The cost of the new energy saving equipment will be offset by the energy saving and the reduction of maintenance and repair costs. Government code 4217.10- 4217.18 permits public agencies to negotiate energy conservation programs directly with qualified contractors. Cal -Air, Inc. was selected after a through background and reference check by Staff and the City attorney. Based in Whittier, CA, they are a full service firm that provides energy program development, energy audits and analysis, engineering design services, installation, maintenance, and financing of energy saving systems. Cal -Air has an extensive list of successful projects including recent projects with City of Buena Park, City of Whittier, City of Victorville, Hemet Unified School District, Ojai Unified School District, Willows Unified School District, and Borrego Springs Unified School District. The proposed Energy Services Agreement, which is currently being reviewed by staff and the City Attorney, sets the terns and conditions for the design, installation, Agenda Item V. Energy Services Program Agenda Report March 13, 2001 maintenance, and financing of the proposed work. In general, the key points of the agreement are: 1) work scope and specifications for the replacement of HVAC and lighting systems at City Hall, Police Station, Corporation Yard, Mary Wilson Library, North Seal Beach Community Center, Marina Community Center, and the Ig Sheet Beach Maintenance Facility; 2) energy savings and performance guarantee; 3) energy audits; 4) a long term maintenance contract; 5) project delivery schedule; 6) payment terms and schedule; and 7) equipment warranties. The lease purchase financing will have a twelve year team at the current market rate which is 5.30 %. The City's Director of Administrative Services is currently reviewing the financing package and will seek quotes from qualified financing institutions to ensure a competitive rate. Upon completion of the agreement and financing review process, City staff will submit the completed agreement and financing plan to City Council for approval at the May 14, 2001 meeting. FISCAL IMPACT: The proposed total cost for the Energy Services program is $ 896,502.00 and will be pro- rated over a period of twelve years at an average annual lease and maintenance cost of cost of $119,105. The average annual savings to the City is estimated at $2,372. The City will also realize considerable manpower savings in maintenance and emergency repairs. These savings will allow the City to shift its manpower to other important needs. Staff recommends that the City Council hold a public hearing and approve a resolution approving the proposed energy conservation measures. Stephen G. Badum, P.E., Director of Public Works/City Engineer NOTED AND APPROVED: A) Resolution B) Energy Audit Contract with Cal -Air r' % r• CALAM INC. 12393 Slauson Avenue ffia Whittier, CA 90606 (562) 698 -8301 December t, 2001 �. - -sacra lie Mr. Don McIntyre Interim City Manager City of Seal Beach 211 Eighth Street Seal Beach, Ca. 90740 Reference: Energy Services Program - Multiple City Facilities Dear Don: Cal -Air is pleased to present this Letter of Agreement to develop and implement an Energy Services Program at various City of Seal Beach facilities. We look forward to working with you as this program further develops. Based upon our discussions, it is our understanding that the City of Seal Beach expects the Energy Services Program to accomplish the following goals: Operational • Develop the most cost- effective solution necessary to provide long term improved comfort and system reliability while resolving short range heating and air conditioning system and space conditioning concerns. • Perform all project upgrades in a manner that will not negatively impact facility occupant comfort (i.e. maintain or improve upon existing comfort levels). • Replace and/or upgrade Heating, Ventilation and Air Conditioning.(HV.AC) equipment and/or systems, as appropriate, keeping energy efficiency, occupant comfort and long term system reliability in mind. • Upgrade the existing lighting systems with energy efficient components keeping system reliability and maintaining and/or improving light levels in mind. • Install a "user friendly" control system related to HVAC and Lighting systems at City facilities where an appropriate application exists. • Investigate any other appropriate retrofit applications based upon existing conditions, system reliability and/or energy efficiency considerations. • Schedule and expedite the retrofit work with minimal impact to facility occupants. • Include a preventive maintenance agreement, which incorporates the new revisions. • Present Final Agreement six (6) weeks from receipt of approved Letter of Agreement. Financial • Develop an approach that will reduce energy consumption along with operational and deferred maintenance costs. • Investigate utility company rebate incentives and/or any other funding sources available, on the City's behalf, which will offset the net cost of the program. • Provide a "budget neutral" self - funding energy services program, the savings of which are generated by the reduction of existing budgeted expenses. • Provide outright purchase and financing procurement method options. If financing is chosen, secure the best financing package available on the City's behalf. Ut"Obn McIntyre Citymf Seal Beach December 6, 2000 Page 2 Legal CAL -AIR INC 12393 Slauson Avenue • Negotiate this project directly with Cal -Air, which is permissible and encouraged by the State of California, through the California State and Government Code 4217.10 - 4217.18, for energy conservation projects. If Cal -Air is able to meet the above stated goals, the Customer agrees to proceed with the proposed project within thirty (30) days. If Cal -Air is able to meet the above stated goals, and the City does not proceed with the project with Cal -Air within thirty (30) days, the City agrees to reimburse Cal -Air, Inc. for all reasonable engineering and development costs incurred, not to exceed (NTE) Five Thousand Dollars ($5,000). If Cal -Air cannot achieve the above stated goals, the City will not be required to compensate Cal - Air, or to proceed with the implementation of the Energy Services Program. I trust that this Agreement meets with your approval. If you have any questions, or if I can be of further assistance, please do not hesitate to contact me at 562 -464 -3210. Thank you for allowing us the opportunity to serve you. Sincerely, Cal -Air, Inc. Dennis McVey Energy Services Specialist cc: Stephen G. Badum — City of Seal Beach, Director of Public Works, City Engineering Rallie P. Rallis — R & D Resources, Inc APPROVAL City of Seal Beach Date