Title
Gainesville Police Department's Electrical Performance Contracting Program (B)
This item will install an energy management system plus replace the existing HVAC system and convert to more efficient lighting at the Gainesville Police Headquarters building.
Explanation
The City Commission has advised its interest in supporting sustainability projects and staff have made efforts in that direction. Gainesville Police Department (GPD) is in need of a new heating and cooling system, as well as upgrades to the electrical lighting system. As a result, the Facilities Division sought advice from Gainesville Regional Utilities (GRU) on an appropriate approach. GRU advised of a program that would address energy management issues and allow the City to obtain new equipment without the burden of paying the up front cost. GRU has a contractual relationship with Siemens Building Technologies, Inc., which is also on state contract, to provide energy management services to GRU customers. Siemens Building Technologies, Inc. has developed a proposal for GPD to replace the two centrifugal chillers, the two cooling towers, all of the interior building lighting and install an energy management system. The cost of this upgrade will be $942,136 but will be offset by an equal amount of savings on the GPD utility bill. Siemens Financial Services, Inc. will finance the $942,136 for 12 years @ 4.37% interest. Additional payments for technical support over the 12 years is expected to be $147,135. This will be offset annually by $98,649 in projected energy savings and $14,000 in projected maintenance work that does not have to be performed. The total cost of the system will be $1,362,812. Using this program will result in additional costs of $407,252 over the life of the project; however, GPD does not have the funds to pay for the new system outright. The proposed financing is a tax exempt lease of the equipment that may require review by the City's bond counsel in an amount not to exceed approximately seven thousand dollars. Additionally, this transaction may use a portion of the City's ten million dollar cap on any bank qualified loans. This transaction would essentially use approximately one million dollars of that cap.
Fiscal Note
The Gainesville Police Department will use the savings on their monthly utility bills to pay Siemens Financial Services, Inc. Funds in the amount of the projected energy savings ($98,649) and reduced maintenance costs ($14,000) will be moved annually from the GPD and Facilities Management operating budgets, respectively, into an account designated to pay the principal and interest under the proposed contract.
Recommendation
Recommended Motion: The City Commission: 1) Approve the signing of an agreement with Siemens Building Technologies, Inc., subject to review and approval by the City Attorney; and 2) authorize the City Manager or his designee to sign an agreement with Siemens Financial Services, Inc. in the amount of $1,362,812.
Alternative Recommendation A:
The City Commission: 1) Deny the requested energy management systems approval and approve payment of $15,000 to Siemens Building Technologies for engineering services in developing this proposal.