HomeMy WebLinkAbout12184RESOLUTION NO. 12184
A RESOLUTION AWARDING A CONSTRUCTION CONTRACT IN
THE AMOUNT OF $1,568,955 TO JOHNSON CONTROLS, INC.,
FOR THE PURPOSE OF UNDERTAKING ENERGY EFFICIENCY
IMPROVEMENTS TO PUBLIC BUILDINGS AND AUTHORIZING
THE PURCHASING AGENT TO EXECUTE THE SAME
WHEREAS, the City of Pueblo entered into a contract with Johnson Controls, Inc.,
authorized under Resolution No. 11752, which consisted of an audit that would determine the
feasibility and cost of implementing energy and water saving measures for the City, and a
project proposal setting for a plan for implementing such measures through an Energy
Performance Contract, and;
WHEREAS, the City of Pueblo has identified the measures that it wishes to undertake.
NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
Contingent upon approval of a Resolution authorizing the execution of a Lease/Purchase
agreement with Banc of America Public Capital Corp and the execution of said Lease/Purchase
Agreement, a contract for energy efficiency retrofit measures, and the same is hereby awarded
to Johnson Controls, Inc. in the amount of $1,568,955.
SECTION 2.
The Purchasing Agent is hereby authorized to execute said contract on behalf of Pueblo,
a Municipal Corporation, and the City Clerk shall affix the seal of the City thereto and attest the
same.
SECTION 3.
Funds for said project shall be provided from an Equipment Lease/Purchase Agreement
in the amount not to exceed $1,528,955 and $40,000 from utility company energy rebates. Said
funds for annual lease purchase payments shall be provided from utility savings in the annual
operating budget of the General Fund and Enterprise Funds that have buildings and facilities
included within said project.
INTRODUCED June 27, 2011
BY: Larry Atencio
COUNCILPERSON
Background Paper for Proposed
RESOLUTION
DATE: JUNE 27, 2011 AGENDA ITEM # M-2
DEPARTMENT:
PUBLIC WORKS
DIRECTOR- EARL WILKINSON
TITLE
A RESOLUTION AWARDING A CONSTRUCTION CONTRACT IN THE AMOUNT OF
$1,568,955 TO JOHNSON CONTROLS, INC., FOR THE PURPOSE OF
UNDERTAKING ENERGY EFFICIENCY IMPROVEMENTS TO PUBLIC BUILDINGS
AND AUTHORIZING THE PURCHASING AGENT TO EXECUTE THE SAME
ISSUE
Should City Council award a construction contract for general construction for energy-
efficiency improvements to Johnson Controls, Inc., for $1,568,955?
RECOMMENDATION
Approval of the Resolution.
BACKGROUND
On November 23, 2009, the City of Pueblo entered into a contract for a Technical
Energy Audit and Project Proposal with Johnson Controls. The contract consisted of
two phases. Johnson Controls has completed the initial evaluation phase, which
consisted of an audit that determined the feasibility and cost of implementing energy
and water saving measures for the City. The second phase is the implementation of the
energy and water saving measures identified in the evaluation through an Energy
Performance Contract. This resolution awards a second contract to Johnson Controls
in the amount $1,800,245 for energy efficiency improvements in 37 City buildings and
facilities. The first contract was awarded to Johnson Controls, Inc. on May 23, 2011,
and in the amount of $388,943 utilizing funding from a Department of Energy - Energy
Efficiency and Conservation Block Grant program. The approval of this Resolution is
contingent upon the concurrent approval of a Resolution for an Equipment
Lease/Purchase Agreement between the City and All American Investment Group, LLC.
(AAIG) related to the funding for this construction contract.
FINANCIAL IMPACT
The project is being financed through an Equipment Lease Purchase Agreement
between the City and AAIG in the amount not to exceed $1,528,955 and $40,000 in
utility company energy efficiency rebates. The total cost of the lease/purchase
agreement with AAIG is $2,071,969 based on an annual percentage rate of 3.95%. The
City will pay an average of $138,131.27 per year in lease payments that will be paid
over a 15 year term beginning in FY2012. The lease payments will be paid from utility
savings in the annual operating budget of the General Fund and Enterprise Funds that
have buildings and facilities included within the project. A critical part of the financing
plan is that the energy savings are being guaranteed by JCI based on an operation
procedure developed for each building and facility. In the event the energy savings do
not provide sufficient funds in the operating budget for the annual lease-purchase
payment, and the City has complied with the operation procedures, JCI is guaranteeing
payment of any shortfall. In the event of non-appropriation of funds in any given year, it
shall not constitute a default under the lease purchase and the City will not be
responsible for payment of further lease payments under the lease/purchase
agreement. However, in such event, the equipment will be surrendered to the leasing
company.
City of Pueblo EPC Contract Approved C4 June 15, 2011
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Project Cost Analysis
Project Level
Summary Customer Selling
,, Project Cost I Cost Detail Price
Summary C ustomer Project Bond 12,045
- Selling Price
Contingency 55,656
Installation Period Components Design 80,088
'_ Project Level 481,917 Project Management 74,477
FIM Item Level 1,087,039 Permits
Contr
suctlon: `x 1:;568,955 Commissioning 18,619
Performance Period Components Warranty 13,058
Service Training 12,416 ,
Measurement Verification 231,290 Construction M &V 23,318
Total Performance Period 231,290 TEA Contract 52,192
Project SellPPrice , .. 1,800,245 TEA Contract Addendums 30,048
Asbestos Test/Contingency 100,000
Financing Cost 10,000
Total: Project Level Costs a ...,ii 481,917 ,,
Project Payback
1 Project Level Payback (Years] 13.43 I ,
z
FIM Type Cost GSF Adjusted
FIM GHG First Year Total Total Total
Detail Type Sell Price Savings Capital Operational Payback
Include (Tons CO2) Annual Rebates Avoidance Savings
Savings
1 LTG Lighting Retrofit & Control Yes ' $ 491,317 405 $ 53,75 $ $ $ 70,471 13.2
2 LTG Ball Field Lighting No 1 $ 0 $ $ $ $
5 CNT Control Sequence Optimization Yes ' $ 9,925 51 $ 3,683 $ $ $ 3.9
6 CNT Programmable Thermostat (NSI Yes ' $ 44,718 200 $ 27,183 $ $ $ 2.4
10 CNT Garage Door Interlock w Heat Yes ' $ 5,235 0 $ 136 $ $ $ 55.7 '
11 CNT Heater Control on Occupancy Yes ' $ 2,332 5 $ 1,997 $ $ $ 1.7
12 CNT Charger Timer Control Yes ' $ 485 0 $ 667 $ $ $ 1.0
13 VND Vendingmiser Yes ' $ 5,965 13 $ 926 $ $ $ 9.3
15 VFD Variable Frequency Drives Yes ' $ 18,782 5 $ 366 $ $ $ 74.0
18 DHW Domestic Hot Water (Elec to GE Yes .r $ 9,576 0 $ 749 $ $ $ 18.4
19 DHW Domestic Hot Water (Tankless' Yes ' $ 0 $ $ $ $
• 20 FUR Furnace /DX High Eff Replacem Yes ' $ 15,650 1 $ 263 $ $ $ 85.8
21 CNV Heat Conversion (Elec to Gas) Yes � $ 20,987 10 $ 4,139 $ $ $ 7.3
22 INF Infrared Heat No , $ 0 $ $ $ $
23 RTU RTU Replacement High Eff Yes 7 $ 59,044 2 $ 459 $ $ $ 185.5
24 OAR MAU Outside Air Reduction No 1 $ 0 $ $ $ $
29 BLR Boiler Replacement High Eff No 1 $ 0 $ $ $ $
30 BLR Boiler Replacement (Elec to Ga! Yes ' $ 60,982 131 $ 12,038 $ $ $ 7.3
40 INS Insulation Pipe Yes ' $ 64,688 11 $ 2,791 $ $ $ 33.5
41 INF Infiltration Study & Seal Yes ' $ 197,228 54 $ 7,582 $ $ $ 37.5
49 DCT Elmwood HVAC Ducting No ' $ 0 $ $ $ $
50 Roof Roof Replacement Yes ,' $ 73,755 0 $ $ $ $
51 UH High Efficiency Unit Heater Rep No ' $ 0 $ $ $ $
53 FRG Refrigerator Replacement Yes - 4 $ 6,369 1 $ 111 $ $ $ 83.2
100 RBT Xcel Energy Audit Rebate Yes ' $ 0 $ $ $ $
FIMiTypeiF :......, ....... , . _,...... -x .. .. '$. 1,087,039. 891 . '$ . 116,843 ...$... ... _$. .. , ... 4,'70,471. .. _ . - 13.4..
2 29 PM June 15, 2011 CSM_City_of Pueblo_C4 EPC 6 -15 -11 model
City of Pueblo EPC Contract Approved C4 June 15, 2011 -.,,awc4 ' '''','; " . '
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Financial Analysis
Financial Summary
Resource Name Mortgage 1` Project Analysi
Resource Allocation 100.00 % Project NPV 275,852
Construction Sell Price $1,568,955, Annualized Project IRR 3.62%
Paydown Capital Contribution $ NPV Discount Rate 1.50%
of Debt Rebates $ 40,000 i
•
Grants
Fees Miscellaneous Fees `
Adjusted Financed Amount $ 1,528,955
Loan Structure Lease' Note
Finance Term Months 180 Cash flows presented in this report are to be
Construction Term Months 12
n Loan Payment Frequency Annual.` used for modeling purposes only Final interest
Loan Payments per Year 1 rates and actual cash flows will be determined
Interest Rate 3.95 ° at the time of project closing when final terms
Effective Rate 3.95 °i° and conditions are executed.
Accrue Interest in First Performance Period No
Capitalize Interest during Performance Period No
Construction Interest Expense $ 60,394 .
Construction Escrow Interest Rate 0.00 %'
Net Interest Const. Period $ 60,394
Total Financed Amount $ 1,528,955
Construction
Business Case Utility Operational Total Savings Loan Performance Savings Balance
Summary Savings Savings Payment Management Carry-
forward
•
Construction Years Year 0 $ 43,246 $ $ 43,246 $ $ $ 43,246
Year 1 $ 116,843 $ 10,895 $ 127,738 $ 158,548 $ 12,436 $ 43,246 $
Year 2 $ 120,555 $ 11,222 $ 131,776 $ 118,967 $ 12,809 $ $
Year 3 $ 124,386 $ 11,558 $ 135,944 $ 122,751 $ 13,193 $ $
Year 4 $ 128,341 $ 11,905 $ 140,246 $ 126,657 $ 13,589 $ $
Year 5 $ 132,423 $ 12,262 $ 144,685 $ 130,689 $ 13,996 $ $
Year 6 $ 136,637 $ 12,630 $ 149,267 $ 134,851 $ 14,416 $ $
Year 7 $ 140,988 $ $ 140,988 $ 126,139 $ 14,849 $ $
Performance Years Year 8 $ 145,478 $ $ 145,478 $ 130,184 $ 15,294 $ $
Year 9 $ 150,114 $ $ 150,114 $ 134,361 $ 15,753 $ $
Year 10 $ 154,900 $ $ 154,900 $ 138,674 $ 16,226 $ $
Year 11 $ 159,841 $ $ 159,841 $ 143,128 $ 16,712 $ $ .i
+ Year 12 $ 164,942 $ $ 164,942 $ 147,728 $ 17,214 $ $
Year 13 $ 170,208 $ $ 170,208 $ 152,477 $ 17,730 $ $
Year 14 $ 175,644 $ $ 175,644 $ 153,407 $ 18,262 $ $ 3,975
Year 15 $ 181,257 $ $ 181,257 $ 153,407 $ 18,810 $ $ 9,040
Sum of ESCalatlon'Years ;z $ 2 ;245,803•, $ .. 70, $ 2,316,274 _. $ 2 ,071,969.. •$' 231 ;290:" $'...43,246. .,.$. . , .56,261
2 30 PM June 15, 2011 CSM_City_of Pueblo_C4 EPC 6 -15 -11 model
City of Pueblo EPC Contract Approved C4 June 15, 2011
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2 30 PM June 15, 2011 CSM_City_of Pueblo_C4 EPC 6-15-11 model