Loading...
HomeMy WebLinkAbout12-27-2011 Regular MeetingPublic Meeting Notice Committee: Fairhope Financial Advisory Committee Date & Time: Tuesday, December 27, 2011 at 4:45 p.m. Place: Delchamps Room ,,, 161 North Section Street Subject: See Attached Agenda Notice must be stamped, dated and initialed before posted on bulletin board. PO STED /g/19/11 SIGNATURE City of Fairhope Financial Advisory Committee Agenda -Tuesday, December 27, 2011 4:45 p.m. in the Delchamps Room City Hall -161 N. Section St., Fairhope, AL 1. Approval of Minutes for October 24, 2011 Regular Meeting. 2. Vann Saltz and Erik Cortinas to present the Recreation Board's request for $75,000 to be allocated from Impact Fee funds. A portion of the $75,000 would be used to level and reconfigure soccer fields 5, 6, & 7 at Founders Park. The remainder of the money would be u se d for surveyin g and preliminary planning for development of the Manley Road Soccer Complex . 3. Discussion of Alabama Guaranteed Energy Savings Legislation, and the potential application at Fairhope for upgrading energy-related infrastructure . (See addendum for relevant sections of the Alab_ama Code.) 4 . Discu ssion of a Solid Waste RFQ. Schedule Of Future Meetings (Note: Regular meetings are on the 4 th Monday of each month at 4:45 p.m. in the Delchamps Room at City Hall, 161 N. Section St., Fairhope, AL.) • Next regular meeting: Monday, January 23, 2012 STATE OF ALABAMA COUNTY OF BALDWIN )( )( The Financial Advi sory Co mmittee met at 4:45 p .m., C it y Hall , D e lchamp s Room, 161 No rth Section Street , Fairhop e , A labam a 36532 , on Tuesday, 27 December 20 11 . Present were: Chuck Zunk, Chairman Members: Stan Grubin , Marvin Wilder, John Brown, Bob Ri ggs, and Mayor Kant. Ex- Officio Members: D ebbie Quinn, Dan Stankoski, Lonni e Mixon, and Rick Kingrea. Mac Mccawley and Mike Ford we re ab sent. Chuck Zunk called the m ee tin g to order at 4:45 p.m. He announced that the first it em is to approve the minutes from the Octob er 24 , 2011 Financial Advisory Committee m eeting. Marvin Wilder moved to approve the minutes from the October 24, 20 11 Fi nancial Advisory Committee meeting as amend ed . Seconded b y Stan Grubin, motion passed unanimous ly by voi ce vote. Chairman Zunk state d we ne ed to amend our agenda b y adding the reques t to di scu ss a so lid waste RFQ. Lonnie Mixon moved to a dd the request to di scuss a solid waste RFQ to th e agenda. Seconded by Marvi n Wilder, motion passed una nim ously by voice vote. The next it em on the age nd a was the presentation by Vann Salt z and Erik Cortinas for the Recreation Bo ard's request for $7 5,000 to be allocated from Impact Fee funds. A portion of the $75,000 w ould b e to level and reconfigure soccer fields 5, 6 , and 7 at Founders Park. The remainder of the money would b e u sed for surveying and preliminary planning for deve lopment of the Manl ey Road Soccer Complex. Lonni e Mixon mentioned there may be a probl e m w ith th e upgrades to Fou nd ers P ark and using Imp act Fee funds , so City Attorney Wynne is researching if the funds ca n be u s ed. Sta n Grubin , Chairman of th e Budget Committee for 20 12 , ex pressed his concern to the F inancial Advisory Committee and th e City Council regarding the deficit in the Recreational D ep artment and thi s request for $75 ,000 fro m the Recreation Board for the Manley Road Proj ect and upgrades to Founders Park. (See attached Statement). After further di scu ssion , Lonnie Mixon moved to recommend the $75 ,000 to the C it y Council; $6 0 ,000 for the Manley Ro ad Proj ect and hold the remainder $15 ,000 until City A ttorn ey Wynne gives us a lega l opinion on whether or not we can upgrade Founder Park. Seconded by Rick Kingrea, motion pas sed unanimously b y voice vote. Financial Advisory Committee Tuesday, 27 December 2011 Page-2- Rick Kingrea stated we need to plan for debt. Chairman Zunk commented this is a righteous request and he will vote to support this motion. However, the Library, School Committee, etc. are all requesting money. We have a Budget Committee who makes decisions of how funds are disbursed out and recommends these to the City Council. Robin Sanders and Kevin Brown discussed the next item on the agenda, Discussion of Alabama Guaranteed Energy Savings Legislation, and the potential application at Fairhope for upgrading energy-related infrastructure. Mr. Sanders briefly went over the presentation from Linc Energy and Building Solutions. If there is a shortfall, the Linc will make up the difference. This could be a $300,000 to $700 ,000 savings per year. Chairman Zunk said there were two features unique: 1) performance guaranteed contract and 2) ability on how you treat this on budget/can spread out over time making it budget neutral. We need to appoint a committee to study this who will address funding and accounting rules. Mayor Kant said you may want to go out on a RFQ for a company. Chairman Zunk appointed a Study Committee of five members to look at this agenda item: Marvin Wilder will be Chairman; John Brown, Chuck Zunk, Ken Eslava, and Scott Sligh will be the other members. The next item to be presented is the request to discuss a solid waste RFQ by Debbie Quinn. She stated there was a Public Works Study Committee who advised to go out on an RFQ for a consultant to decide whether or not Solid Waste would be outsourced or take an in-depth look at our own process. She requested to look at a consultant to look at the efficiencies. Debbie Quinn stated that she had spoken to several cities and a consultant. The RFQs have come back for the consultant, but have not been opened or evaluated . The cost would probably be between $12 ,000 to $15,000 and wants approval to go forward with the RFQ for the consultant. Lonnie Mixon replied that we just separated Public Works and need to do an internal study for Solid Waste. Mayor Kant said that we probably need help with recycling because it is the one costing the City money; and could possibly go to single source recycling. Mayor Kant suggested that he and Debbie Quinn meet regarding this issue and bring back to the Financial Advisory Committee. There being no further business to come before the Financial Advisory Committee, the meeting was duly adjourned at 5:40 p .m. Chuck Zunk, Chai ADDENDUM ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• Alabama Code -Section 41-16-140: SHORT TITLE This artic le s ha ll b e known as the "Guaranteed Energy Cost Savings Act." Alabama Code -Section 41-16-141: DEFI NITIONS For purposes of this article , the following terms shall have the fo ll owing meanings : (1) ENERGY C OST SA VIN GS MEASURE. A training program or new facility or existing facility a lterati on designed to redu ce energy consumption or operating costs , or water and other natural resources cons umption , and may include one or more of the following: a . Insu lation and reduced air infi ltrati on of the building structure including w alls , ceilings , and roofs or systems w ithin the buildi ng. b . Storm w indo ws or doors, caulkin g or weather-stripping, multiglazed windows or doors , heat absorbing or heat reflective glazed and coated window or door systems, additional g laz in g, reductions in g lass area , or other window an d door system modificatio ns that reduce energy cons umpti on. c . Automated or computerized energy contro l systems , incl udin g computer software and technical dat a li censes . d . Heatin g, ventil atin g , or air co nditioning system modifications or replacements. e . Replacement or modification of li ghting fixtures to increase the en ergy efficiency of the lighting system without increasing th e overall illumi nation of a facility , unless an increase in illumination is necessary to conform to the app li cab le state or local building code for the li ghting system after the proposed modifications are made . f. Indoor air quality improvements . g. Energy recovery systems. h. Electric systems improvements. i. Life safety measures that provide long-term operating cost reductions. j . Buildin g operat ion programs that reduce operating costs . k. Other energy-conservation-related impro ve ments or equipm ent , includin g improvements or equipment related to renewable energy. 1. Water and other natural resources conservation . (2) GOVERNMENTAL UNIT . A state government agency, department, institution , co ll ege, university, techni cal sc hool , legislati ve body, or other es tabli shment or official of the Executi ve, Judicial , or Legis lati ve Branches of the state authorized b y law to enter into contracts, including a ll lo ca l political subdi visions su ch as co unti es, municipalities , or public school di stri cts. (3) GUARANTEED ENERGY COST SAVINGS CONTRACT. A contract for th e implementation of one or more energy cost savings measures. (4) OPERATIONAL COST SAVINGS. Expenses eliminated and future replacement expenditures avoided as a result of new equipment installed or serv ic es performed. (5) QUALIFIED PRO VI DER. A p erson or bu s in ess experien ce d in the design , implementation, and in stallat ion of en ergy cos t savings m eas ures. (6) REQUES T FOR PROPOSALS . A negotiated procurement that is announced throu gh a public notice from a governmental unit which will administer the guaranteed energy cost sav ings contract requesting inno vati ve solutions an d propo sals for energy conservation measures. The request for propo sa l sha ll include the following : a. The nam e and address of the gove rnmental un it. b . The name , address , title , an d phone number of a contac t p erson. c . The date , time, and place w here proposal s mu st be received. d . The evaluation criteria for assessing the propo sals. e. Any other stipulations and clarifications the governmental unit may require. Alabama Code -Section 41-16-142: ENERGY COST SAVINGS MEASURES AUTHORIZED (a) A governmental unit may enter into a guaranteed energy cos t sav ings contract in order to re duce energy consumption or operating costs of government facilities in accordance with this article . (b) A ll energy cost savings measures s hall co mpl y with current lo cal, state , and fe d eral construction and environmenta l codes and regulations . Notw ith sta ndin g anything to the contrary, a guaranteed energy cos t sav in gs co ntract does not incl ud e imp rovemen ts or equ ipment that allow or cause water from any condensi ng , cooling, or industrial process or any system of non potable usage over which public water supp ly system officia ls do not have sanitary control, to be returned to the potable water supply. Alabama Code -Section 41-16-143: REQUEST FOR PROPOSALS; MEETING; PUBLIC NOTICE; GUARANTEE REQUIRED; BOND; TYPE, DURATION, FUNDING, ETC., OF CONTRACT (a) Before entering into a guaranteed energy cost savings contract, a governmental unit shall submit a request for proposals. The governmental unit shall eva luate any proposal from a qualified provider and shall select the qualified provider that best meets the needs of the unit. After reviewing the proposals , the governmenta l unit may enter into a guaranteed energy cost savings contract with a qualified provider if it finds that the amou nt it would spend on the energy cost sav in gs measures recommended in the proposal would not exceed the amount of energy or operational cost savings , or both, within the lesser of a 20-year period or the average useful life of the energy cost savings measures from the date installation is complete and has been accepted by the governmental unit, if the recommendations in the proposal are followed. The governmental unit shall analyze the following: ( 1) The estimates of all costs of installation , modifications , or remodeling , including, witho ut limitation, costs of a pre-installation energy audi t or analysis, design, engineering, installation , maintenance, repairs , debt service, and post-installation project monitoring, data collection, and reporting, as well as whether energy consumed or the operating costs, or both, will be reduced. (2) The qualifications of the provider. (b) The governmental unit shall provide public notice of the meeting at which it proposes to award a guaranteed energy cost sav in gs contract , of the names of the parties to the proposed contract, and of the purpose of the contract. The public notice shall be made at least 10 days prior to the meeting. (c) The guaranteed energy cost savings contract shall include a written guarantee of the qualified provider that either the energy or operational cost savings, or both, will meet or exceed the costs of the energy cost savings measures within the lesser of 20 years or the average useful life of the energy cost savings measures. The qualified provider shall reimburse the governmental unit for any sho 1i fall of guaranteed energy cost savings on an annual basis . The guaranteed energy cost sav in gs contract may provide for payments over a period of time, not to exceed the lesser of 20 years or the average useful I ife of the energy cost savings measures. ( d) Notwithstanding any law to the contrary, before entering into a guaranteed energy cost savings contract, the governmenta l unit may require the qualified provider to file with the governmental unit a payment and performance bond relating to the installation of energy cost savings measures that is in an amount the governmental unit finds reasonable and necessary to protect its interests and that may also cover the value of the guaranteed savings on the contract and is conditioned on the faithfu l execution of the terms of the contract. (e) A governmenta l unit, or several governmental units together, may enter into an installment payment contract or lease purchase agreement with a qualified provider or a third party financing company designated by th e qualified provider, or both , for the purchase and installation of energy cost savin gs measures with a term not to exceed the lesser of 20 years or the average useful life of the energy cost savings measures from the date the energy cost savings measures have been completed and accepted by the governmental unit. (f) Guaranteed energy cost sav ings contracts , in cl udin g installment payment co ntracts and lease purchase agreements financing the contracts , may extend beyond the fiscal year in which they become effective . The governmental unit may include in its annual budget and appropriations measures for each subsequent fiscal year any amounts payable under guaranteed energy savings contracts, including installment payment contracts and lea se purchase agreements financing the contracts, during that fiscal year. (g) A governmental unit may use a combination of funds designated for operating, capital expenditures, or other specially designated fund s for any guaranteed energy cost savings contract including purchases using installment payment contracts or lea se purchase agreements. (h) State aid and other amounts appropriated for distribution to , or reimbursement to , a governmental unit may not be reduced as a result of energy cost savings realized from a guaranteed energy cost savings contract or a lease purchase agreement for the purchase and installation of energy cost savings measures. Alabama Code -Section 41-16-144: CONSTRUCTION OF ARTICLE The provisions of this article shall not be construed to alter or circumvent present law which requires education s upport personnel to work under the direct supervision, employment, and/or control of local boards of education. Statement to FAC Committee about Agenda Item 2 Recreation Board's request for additional$ 75,000 to 2012 budget. As Budget Chairman for 2012, I expressed concern to the FAC and Council that the planned amount of Recreational deficit for this year ($838,266) was not sufficiently explained. I felt that this large amount of money (EXP=Sl,229,970 -INC=391, 704 =$838,266) needed further explanation. For example: What is the ongoing financial condition of the Rec Center? The pool? How much of the deficit applies to Soccer or Baseball? In other words: how does that $838k break down? At today's meeting Council is asked to add another $75,000 for a grand total of $913,266 as the planned deficit. I am well aware that our FAC is strictly an advisory group to the Council. And, I am certainly aware that Council in its wisdom has every right to underwrite worthy recreational programs for our citizenry, especially the precious youth in our community. However, I also strongly believe that for the Council to make enlightened spending decisions, which are easily explainable to our city taxpayer's, the investment in recreation must be better accounted for along functional lines. In conclusion, I have made a personal goal to better understand the inter-workings and value of services delivered by the Recreation Department. To do this, I have mostly interviewed several parents and students who have or are participating in City recreational programs. The conclusions that I draw from all this is that the Recreation Board, the staff and many generous volunteers have every reason to be very proud of the effect they are having. ~~ 12)1/4 Stan Grubin FAC Member ' . energy & building solutions ~~===~S SM Funding Solutions for City of Fairhope State of Public Budgets Linc's Financial Services Project Development Timeline Questions and Next Steps . . . "•*£~ ·,. 2 • Declining Revenues • Unfunded Mandates • Bond Issues & New Funding Difficult • Capital dollars needed for new construction and infrastructure improvements • Existing Facilities needs cannot wait for the economy to changel • Do not want to reduce services 3 ~ --·~/ .. ,j~i~J~J,+(f):'-! ·# • Bundled Energy Solutions (BES) is Linc's program that includes performance contracting {PC}. PC is a vehicle that enables public entities to realize energy and operational savings through capital replacements utilizing the savings to pay for the replacement over multiple years. • Savings are guaranteed so risk is mitigated. • Typical projects including upgraded lighting, controls, new heating and air conditioning, renewable projects, water conservation and utility upgrades such as reduction in non-revenue water and new utility plant upgrades to name a few. • Projects have local economic impact 4 \i-,; ... ~.-v~! .. Mf~:~ · • Optimized energy and operational budget created through efficient Sm a rt Bu ii dings/Fa c i I it i es. • New infrastructure funded through energy and operational savings -Not funded totally from capital dollars • Dedicated energy professionals "on staff" at your facilities • Behavioral program that educates and trains staff, citizens and students on energy conservation. Help Fairhope as well as individual homes. ~ ~·:1~ , .. ,~i,.1,_.-,; 1"~ . ' 5 The national average for energy usage in municipal environments and convention facilities is $2.00/sq ft. With utilities, $3.00. • Energy represents 3 to 5 % of total operating budget • • Biggest energy users include lighting, utility management, air conditioning, water heating, traffic lights and pumping. These areas represent approximately 80% of total usage Areas of cost include consumption for electricity, natural gas and water and demand for electricity. Sewer is a multiple of the water cost. Figure 1: Diagram of a hypothetical da ily lo ad shape 0 l======= ~ is ====== ::..: • • • a rfiope's utility spend is $1,468,000 for electricity, natural gas and for water/sewer charges. With 400,000 square feet of space, Fairhope spends $3.75/sq ft If Linc can get Fairhope to National Average levels, the total utility bill would drop to approx $1,200,000 or a savings of approx $300,000 annually. This is a savings of 20%. If Linc can get Fairhope to Energy Star levels, the total utility bill would drop to approx $700,000 or a savings of approx $768,000 annually. This is a savings of 50% Program will also affect operational spend by reducing maintenance and repair issues 4 3.5 3 2.5 2 1.5 1 0.5 0 I $/Sq Ft ■ $/Sq Ft • A 15 year program saving $300,000 annually and approximately $20,000 annually in maintenance will self fund $4M+ in infrastructure improvements without the need to issue bonds or raise taxes. Numbers based on 3.0% interest rate. • Program will help reduce utility costs by a minimum of 20%. Savings will be reallocated to pay for upgrades • Environmental impact will be large with Greenhouse Gas reduction being significant and possible solutions include using Landfill Gas and Wastewater Sludge • Lighting ( Indoor and Out) • Water Conservation • Controls • Tuning of Building Systems • HVAC Replacements ' • . ,. •}r' ~,.,~,:~f'&ilt; • Water and Wastewater Plant Upgrades • · New Generators and Maintenance • Anything that pays for itself over 15 year period of time 9 Removing the barriers to funding CRITICAL facility needs Current Operating Budget $$ Unfunded Capital Needs Capital Generation Without Increased Taxpayer Burden ' ' 10 • '~ ,. })' ... ~~.ii~ 1yf; ~-f~> Owning & Operating Costs Capital Avoidance _I In-House Staff I Energy Administration 11 • -< ff • ,, \" ,,,~f:lf:.-1:•!;.;\ • Financing can be facilitated by ESCO. Linc, for instance, makes no money from financing and has no preference on type of financial instrument used or who provides. • Typical financing includes: -Tax Free Municipal Lease -Operational Lease -Third Party Agreement with local bank -Public Private Partnership -Private Placement Bond • Instrument usually depends on amount borrowed and owner preference • Refinancing, Debt Wraps also can contribute to project viability ' '•' :,}~i~ ... ,•.·· 12 7..SO t~I================================: Aver age : 5 .3 0 Curren t : 4.09 M inimum: 3.82 3..50 ___________________________________________________ _, ~,~ 'P'~~~ .. ~~'V-#-1,t)'~~~ o.fl~._(f,.tJ-1 ,,--fa~~~r;r.'1fi, ~4b\'{l,#gi,,~~~,-ffe"f!¼,f(l-1~~ .. 'ia()\,(#l~'fl"l,~,..P\1:i':,4),~cl-... ~t>~,f),~'{:)\1,~,1..P~1 .. ~'fl1 ~~~~ ..... ~ ... (i~,()~ .... ~'() ~~'' • Typical Savings would deliver 20%-50% energy savings to the city while upgrading infrastructure. Conservative savings {20%) would be $300,000 annually. • Other infrastructure projects could be rolled into program such as energy saving measures at plant, operational improvements, etc. • Financial opportunities such as debt wraps, refinance and PPP 14 • :,,~)f',•~1~~-;~,~ 1 •, nc FISCAL POTENTIAL WORKSHEET 5M Investment Amount $4,058,180 Proforma Cash Flow Funding Sources I Program Costs Term Utility Reallocation Opsllvlnp Total Annual Funding Annual Payment Maintenance Annual M&V Services Annual Program Costs Comprehenlive Production Services Annual Cash Flow 0 $ 15,000 $ 15,000 $15,000 1 $ 300,000 $ 20,000 $ 320,000 $ 295 ,000 $ 25,000 $ - $ 320,000 $0 2 $ 309,000 s 20,600 $ 329,600 $ 303,850 '$ 25,750 $ - $ 329 ,600 $0 3 $ 318,270 $ 21,218 $ 339,488 $ 292,966 '$ 26 ,523 $ 20,000 $ 339,488 $0 4 $ 327,818 $ 21,855 $ 349,673 $ 301 ,754 '$ 27 ,31 8 '$ 20,600 $ 349 ,673 $0 5 $ 337,653 s 22,510 $ 360,163 $ 310,807 '$ 28 ,1 38 '$ 21,218 $ 360 ,1 63 $0 6 $ 347,782 $ 23,185 $ 370,968 $ 320 ,1 31 '$ 28,982 '$ 21 ,855 $ 370,968 $0 7 $ 358,216 $ 23,881 $ 382,097 $ 329,735 '$ 29 ,851 '$ 22 ,510 $ 382 ,097 $0 8 $ 368,962 $ 24,597 $ 393,560 $ 339 ,627 '$ 30,747 '$ 23,185 $ 393,560 $0 9 $ 380,031 $ 25,335 $ 405 ,366 $ 349 ,816 '$ 31 ,669 '$ 23 ,881 $ 405,366 $0 10 $ 391,432 $ 26,095 $ 417,527 $ 360 ,311 '$ 32,619 '$ 24,597 $ 417,527 $0 11 $ 403,175 $ 26,878 $ 430,053 $ 371,120 '$ 33,598 '$ 25,335 $ 430 ,053 $0 12 $ 415,270 $ 27,685 $ 442,955 $ 382,254 '$ 34,606 '$ 26,095 $ 442 ,955 $0 13 $ 427,728 $ 28,515 $ 456,243 $ 393,721 '$ 35 ,644 '$ 26 ,878 $ 456 ,243 $0 14 $ 440,560 $ 29,371 $ 469,931 $ 405 ,533 '$ 36 ,71 3 '$ 27 ,685 $ 469 ,931 $0 15 $ 453,777 s 30,252 $ 484,029 $ 417 ,699 '$ 37 ,815 '$ 28,515 $ 484,029 $0 Totals $ 5,594,674 $371,978 $ 5,966,652 $ 5,174,324 $ 464,973 $ 312,356 $ 5,951,652 $ 15,000 15 ~ • ,t: {'1,~'l ,1-~t?-•t'<' .. \ .. ;r*l!i'~,..,. • Present to Boa rd • RFQ • Detailed Investment Grade Audit • Signed Contract • Implementation • Monitoring and Maintenance 16 . ,,•:, ,'~~)w .. MAINTENANCE •Mobile maintenance technicians •Industrial equipment maintenance engineers •Union employee management •Building engineers electricians. plumbers , carpenters, HVAC PARKING •Valet and shuttle Services •Paid parking management •Parking enforcement •Fully automated (cashier-l ess ) parking •Parking utilization analysis •Stack parking programs •Pre-construction design and layout consulting •"Green • fleet management •Electronic vehicle charging stations JANITORIAL •General cleaning / green cleaning -Carpet and hard surface floor care •Restroom cleaning and supplies •Public space maintenance •Window and blind cleaning •Emergency response •Supply management LANDSCAPING ENERGY •Turf management •Snow removal •Irrigation controls •Tree trimming •Parking areas •Low voltage lighting systems •LEED certification documentation I Energy Star benchmarking •Facility Funding Plans •Infrastructure analysis •Detailed engineering calculations and design •Planning / construction dentification of utility rebates and EPA tax incentive •Processing of utility rebates SECURITY •Access control and background investigations •Concierge services •Crowd control and special event services •Fire watch coverage •Life safety monitoring •Patrol & alarm response •Security consulting & surveys •Security system design •Ushers & ticket takers SUPPLIER MANAGEMENT •Vendor retention •Contract administration •Supplier consolidation •FM MRO consolidation •Buying SME's for most spend areas including cafeteria, mail elevator, pest, waste , mail , snow , HVAC, utilities management ~ . '... . 17 . .'~ · k'~~, .. ,\~~~1,A~