HomeMy WebLinkAboutStaff Report 4.A 1/7/2013 extd Itt✓wv#4.A
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DATE: January 7, 2013•
TO: Honorable Mayor and Members of the City Council through City Manager
FROM: Dan St. John, F.ASCE —Director, Public Works and Utilities
Larry Zimmer—.Capital Improvements Division Manager
SUBJECT: Resolution Authorizing an Increase in the Swim Center Energy Efficiency Project
Budget and Transfer of Funds
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RECOMMENDATION
It is recommended that the City Council adopt the attached,resolution authorizing an increase in
the Swim Center Energy Efficiency Project Budget and the transfer of funds.
BACKGROUND
Pacific Gas and Electric (PG'&E),administersthe On-Bill Financing:Loan Program for
municipalities to implement:energy.efficiency°projectsiwith a ten year or less pay back. The
initial capital is loaned by PG&E.and`paid back through the savings in energy costs on the
municipality%s.monthly-bill. The program allows a municipality to borrow up to one million
dollars for qualified projects where the energy savings will pay back the capital costs covered by
the PG&E loan within one=hundred:and twenty (120) months: Once the energy efficiency project
has been fully implemented and:approved by PG&E, the utility bill for the project will be set to a
typical monthly payment and the term of reimbursement"will be calculated based upon the
savings between the typical payment and the actual energy costs. If the cost of implementing an
energy efficiency measure changes, the payback period will change. This is acceptable to PG&E
as longas the term of the loanwill not exceed ten years. The'PG&E loan document will not be
executed until the implementation.costs are setiby contractor bids.
The City Council:previouslyapproved resolution 2011-170 authorizing the City Manager to
execute theioan documentswith PG&E and allowing staff to prepare the PG&E program
applicationsand=initiate facility energy audits. 'PG&E provided a detailed audit with specific
measures, probable:cost estimates, applicable rebates,aiid-calculated return of investment. With
respect to the:Swim;Center element of the overall project, staff contracted with a pool engineer
to design.the.system retrofit based on the previous loan estimate, however;;costs have increased
due to the complexity of the wading pool and Ful1 size lap pool at the same:site operating from
Agenda Review:
ArtsCity Attorney I / Finance Director City Mat b r
the.same heating and.filtrations:systems: Therefore the previous loan,authorization.needs to be
revisitedao increase the loan:amount.
The bulk of this loan will be used to renovate the Swim Center pool-heating and filtration
systems which are outdated and in need of modernization'to improve energy efficiency and
reduce maintenance costs. The remainder of the loan is:for lighting retrofits at Cavanagh
Recreation Center, Airport,Senior Center, Animal Shelter, Corporation Yard and Fire Stations 1,
2 & 3, This work continues the-City's-efforts to retrofit equipment to reduce energy use, costs,
and greenhouse gas emission.
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DISCUSSION
Under PG&E's On-Bill Financing Loan Program, a PG&E-engineer visited the sites and
-provided an energy audit including replacement costs. Modifications in the pool are required to •
meet current health and safety code, the most significant requirement being the separation of the
heating and filtration systems of the-two pools.;This was not anticipated in the-original audit and
adds unanticipated cost for a.dedidated,piping for each pool, additional surge pit capacity, and a
separate filter.unit and boiler:for-each pool.
Based on input-from PG&E, staff previously estimated the energy efficiency measures would
cost $217,361 and the project pay-back time, including consultant and project management costs,
was 4.9 years. The pool engineer has provided a revised estimate of construction and installation
cost of$312,471.25, which increases the total cost of all energy efficiency measures-to $404,028
and a pay back of 7.2 years.
Staff evaluated.a number of proposals from the;design engineer to reduce costs including using a
different filtering system and less efficient boilers, however these alternatives did not meet the
project's energy efficiency goals. The pool engineer drawings and equipment specifications have
now been submitted to the County Department`"of Environmental Health and initial conversations
with the County plans examiner indicate that the design satisfies the-major requirements and the
permit will be issued for the project.
Installation of the pool retrofits-are-scheduled prior to the 2013 summer season. The design
documents will be publicly advertised forbidding in January and subsequently brought to
Council for acceptance of construction contract.
FINANCIAL IMPACTS.
The completed projeetsmust be fully operational, and inspected by PG&E prior to the transfer of
loan funds from PG&E to the City. Thus, the City is responsible for fully funding all project
costs up-front, including City staff and•design consultant costs, until the PG&E loan funds are
received. Council had previously approved a temporary loan from the Community Facilities
Impact Fee Fund-for-upfront costs not to exceed $325,000. This action will increase the loan
amount for up-front costs to an amount not to exceed $450,000. PG&E funds will be received at
project completion and acceptance, thus the interfund loan is short term, will not have an impact
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on intended uses of.theFfund, and will be paid back with interest. The PG&E loan debt is paid
back using energy savings`within..ten years.
ATTACHMENTS
1. Resolution
2. Resolution 2011-170
3. Promissory Note for Interfund Loa
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Attachment I
RESOLUTION AUTHORIZING AN INCREASE IN THE SWIM CENTER ENERGY
EFFICIENCY PROJECT BUDGET AND TRANSFER OF FUNDS
WHEREAS, City staff has worked diligently with PG&E'Eneigy'Sohnions'Division ("PG&E
Energy") to prepare analysis of energy usage at the Swiht Centers to identify areas of increased
energy efficiency; and
WHEREAS, potential energy savings and costs for the Pool Pump Project and the Pool Boiler
Project are as reflected in the report of PG&E Energy to the City dated November 14, 2011; and
WHEREAS, City staff has Worked diligently with The Energy,Alliance Association (TEAA) to
develop and implement a lighting retrofit project to realize energy efficiencies and utility bill
savings; and
WHEREAS, City Staff and:PG&E:have selected energy efficiencymeasures to improve City-
owned facilities wherein th'e.combination of the staff and design costs and the cost of the
measures overall has a less than ten (10) year payback period,thus qualifying the energy
efficiency measures for funding-with.a PG&E General On-Bill Financing,Loan ("PG&E Loan");
and
WHEREAS, City is responsible for initial cost of implementation of efficiency measures until
funds from PG&E Loan arereceived; and
WHEREAS, the CIP Fund does not have current resources available to finance the site
improvements; and
WHEREAS, the Community Facilities lmpact'Fee:Fund has an adequate balance to lend this
project up to $450,000.00; and
WHEREAS, the CIP fund will have the ability to repay a loan of up to $450,000 from the
Community Facilities Impact Fee Fund when.the,PG&E Loan reimburses the CIP fund for the
cost of work completed to install the energy efficiency improvements; and
WHEREAS, the energy efficiency improvements to be funded by the.interfund loan are within
the purposes for which the Community Facilities Impact Fees.were.adopted because the
improvements will improve the functioning and services provided at the Swim Center and at the
community facilities served by the lighting retrofits; and
WHEREAS, the City of Petaluma/adopted the FY 2012-2013 Parks and Recreation Budget
which included funding for a variety of projects and programs to address the needs of a wide
spectrum of recreation needs;and
WHEREAS, following theadoption of that budget, a site improvement opportunity was
presented to the City which would produce energy savings;and
NOW, THEREFORE,:BE IT'RESOLVED that the City Council of the City hereby:
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1. Modifies the FY 20122013 Community.FacilitiesiImpact Fee Budget to includeTe
allocation of an amount not to-exceed $450,000 for�"the,energy.efficiency improvements at
theSwith Center, Cavanaugh Center, Airport, Senior Center, Corporation Yard and_Fire-
Stations 1, 2.and 3.
2. Authorizes the City Manager to sign theProniissory Note-for Interfund Loan attached
hereto as Exhibit A.
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Attachment 2
Resolution No. 201 1 -170 N.C.S.
of the City Hof Petalul na, California.
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AUTHORIZING THE CITYMANAGER TO EXECUTELOAN DOCUMENTS WITH
PACIFIC GAS & ELECTRIC FOR THE ON;BILL FINANCING.LOAN AGREEMENT
PROGRAM FOR ENERGY EFFICIENCY IMPROVEMENTS AT THE SWIM
CENTER, CAVANAGII CENTER, AIRPORT, SENIOR CENTER,ANIMAL SHELTER,
CORPORATION'YARD,ANDtFIRE STATIONS 1, 2, AND 3
WHEREAS;City staff has worked diligently with PG&E Energy Solutions Division
("PG&E Energy") to prepare analysis-of energy usage at the Swim Ceniers to identify areas of
increased energy efficiency; and.
WHEREAS, potential energy savings and costs for the Pool Pump Project and the Pool
Boilet:Project are as reflected in,theicport of PG&E Energy to the City dated November 14,
2011; and,
WHEREAS,•City staff has worked diligently with The Energy Alliance-Association
(TEAA) to develop a lighting retrofit project to realize energy efficiencies and utility bill
savings; and,
WHEREAS,the anticipated costs and energy efficiency savings for'the Petaluma
Airport, Animal Shelter, Cavanagh RecreatiOn Center, Corporation Yard, Senior Center and Fire
Stations#1, #2 and#3 facilities are as stated in the chart presented"in the staff report
accompanying this resolution.as Exhibit A and dated December 19; 2011; and, •
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WHEREAS, City is responsible for initial cost.ol implementation of efficiency measures
until funds from PG&E loan is received; and, '
WHEREAS, the Community Facilitieslntpact Fee Fund has adequate balance to loan
this project up to $325;000.00and.
WHEREAS, City Staff and PG&[ have selected energy efficiency measures to improve
City owned facilities-wherein the combination of the staff and design costs and the cost of the
measures ove • ll2has a"Iess than.ten.(10) year payback period.
NOW,THEREFORE',:QE IT RESOLVED that the City Council of the City hereby:
I. Authorizes the City Manager to execute a loan agreement with PG&E for the
General On Bill Financing Loan Agreement ("Agreement"), a copy of which is
• attached to thisresolution.
2. Authorizes a',luah for the actual cost of implementation of the stated energy
efficiency measures from the Community Facilities Impact lee Fund, to be paid
back in full.;with-thesame interesttihatwould have_been earned if held by the
City;:immediately upbh receiving the PG&E loan.
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Resolu)ion No 2011-1170 N.C.S. Page 1
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3. The amountof the PG&E loan and repayment to be covered by the Agreement
shall tie set pursuant,to�provision's in the attached Agreement,but shall not exceed'
$325;000; unless?adjusted by PG&Eand the,City pursuant to the Agreement. In
no;event shall the loan amount exceed',$325,000`;(three hundred twenty-five
thousand dollars) and the maximum term of the PG&E loan:of 10 years (ten
years).
Under thepower and authority conlerred upOn this Council:by the Charter of said City.
REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the App sto
Counet of the.Uty of Pet slum t ata Rceulnr meeting on the`I91h day.ol December- for
2011 bt the following vote:
City Attorney
AYES: Albertson;Barrett.Mayor Glass. Vice Mayor Mealy, Kearney:Renee
NOES: None
ABSENT: I-Loris.
ABSTAIN: None tairot_ „Ai
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City Clerk 1VI ayor
y
Resolution No. 2011-1170 N.CS; Page 2
EXHIBIT A TO RESOLUTION 2011-170 N.C.S.
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Estimated Estimated Simple Annual Annual
RetrofitMeasures Measure PG&E AnnuakBill Payback kWh Therm
Cost(5) Incentive ($) Savings($) (years) Savings Savings
Swim Center
Pump VFD" $34,150 $15,563 $22251 0'8 157,324 0
Swim Center $102,600 $5,391 $1,617 60 0 5,391
Boiler`
Airport Lighting $36,503. $14,968 $18,243' .0.8 99,792 0 •
Animal Sheller $3,267 $4.90 $888 2.7 5,965 0
Lighting
Cavanagh
Recreation $7,190 $1,078 ;$1,459 4.1 7,982 0
Center Lighting .
Corporation Yard
Lighting $9,330 $1,399 $1,872 4.0 12,572 0
Senior Center
Lighting $9,185 $1,377 $2,615 3.5 14,309 0
Are Station_#1
Lighting $6,418 $3,544 ,$3,795 0.8 23,628 0
Fire Station #2
Lighting $4,613 $1,093 $1,333 2.6 7,292 0
Fire Station #3 $4,105 $677 ;$825 4.2 4,517 0
Lighting
Measures Total $217,361 $45,580 $54,898 2.8 yr 333,381 5,391
Average
Project $35,000 $0 $0 n/a 0 0
Management
Design Engineer $15,000 $0 $0 n/a 0 0
TOTAL LOAN $267,361 $45,580 $54,898, 4.9 Years 333,381 5,391
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' Resolution No.2011-.1.70 N S. Page:3
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Attachment 3
EXHIBIT A
CITY OF.PETALUMA,;CA
PROMISSORY NOTE FOR`INTERFUND LOAN
This Promissory Note (Note) for an Interfund Loan is entered into as of
2013(date). by and between the City Treasurer of the City of Petaluma, acting as custodian of the
funds of the City of Petaluma,and the.City Manager of the City, acting for the City Council in
implementation of the directives'arid authority of Resolutions Number 2011-170 N.C.S, adopted
December 19, 2011 and 2012-XXX N.C.S, adopted.January 7; 2013.
1. The Treasurer shall transfer to the OP Project Fund 04501001, from the Community
Facilities lmpact.Fee-Fund, such amounts as the City Manager shall direct from time to
time, not to exceed the total sum of Four Hundred Fifty Thousand.Dollars ($450,000).
2. The Treasurer, as custodian of the funds, agrees,to promptly-repay any sums advanced
hereunder, plus simple-interest per annum at rate equal to the City's investment
earnings, as determined in the first quarter of 2013, upon receipt of the PG&E General
On-Bill Financing Loan described in Resolutions No. 2011-170 N.C.S. and 2012- XXX
N.C.S. All funds payable pursuant to this Note shall be repaid as funds become
available.
3. This Note is subject to the tertns'of'City of Petaluma.Resolutions Number 201 1-170 and
2012- N.C.S., which are incorporated herein and made a part of by reference.
Executed as of the date first above written.
CITY OF PETALUMA, CA..
By
City Treasurer
By — -
City Manager
Approved as to form this_day of 2013
City Attorney
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