title
CC - (1) Approval of an Agreement with ACCO Engineered Systems in an Amount Not-to-Exceed $648,722 to Replace the Heating, Ventilation and Air Conditioning System at the Veterans Memorial Complex; (2) Acceptance of a Five-Year 0% Interest Loan in the Amount of $450,789 from the County of Los Angeles for the Project; and (3) FOUR-FIFTHS VOTE REQUIREMENT: Approve a Budget Amendment to Increase CIP PE-005 Funding from $230,000 to $648,722 in Fiscal Year 2021/22 in Order to Complete the Project in One Phase/Fiscal Year and to Record the Loan Proceeds of $450,789 and SCE Incentive Funds of $16,833.
body
Meeting Date: December 13, 2021
Contact Person/Dept: Joe Susca, Public Works Administration
Phone Number: 310-253-5636
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [] Attachments: []
Commission Action Required: Yes [] No [X] Date:
Public Notification: (E-Mail) Meetings and Agendas - City Council (12/08/2021); ACCO Engineered Systems (11/17/2021); Southern California Regional Energy Network (11/17/2021)
Department Approval: Yanni Demitri Public Works Director/City Engineer (11/29/2021)
_____________________________________________________________________
RECOMMENDATION
Staff recommends the City Council (1) approve an agreement with ACCO Engineered Systems (ACCO) in an amount not-to-exceed $648,722 for the Veterans Memorial Auditorium (Vets) Heating, Ventilation and Air Conditioning (HVAC) system replacement; (2) accept a $450,789 five-year, interest-free loan from the County of Los Angeles to fund a portion of the project’s cost; and (3) approve a budget amendment to increase CIP PE-005 funding from $230,000 to $648,722 in Fiscal Year 2021/22, in order to complete the work in one phase/fiscal year and to record the loan proceeds of $450,789 and SCE Incentive Funds of $16,833. (budget amendment requires four-fifths vote).
BACKGROUND
The City has been working with the Southern California Regional Energy Network (SoCalREN) since 2013 to implement turn-key energy efficiency projects citywide. SoCalREN, whose contract is with the County of Los Angeles (County), is funded by public purpose utility taxes overseen by the California Public Utilities Commission. SoCalREN’s mission is to aid public agencies in Southern California to implement projects that save energy, reduce operating costs, and reduce greenhouse gas (GHG) emissions at no cost to the public agency.
DISCUSSION
SoCalREN conducted an energy audit to determine if energy efficiencies could be realized by replacing the Vets HVAC system. The audit determined that with exception of the chiller and boiler, most of the existing equipment is original to the building’s construction in 1950. Most of the existing equipment has exceeded its useful life, leading to occasional failures that require repair and/or part replacement. After reviewing the audit, staff and SoCalREN agreed that replacing the HVAC system with more efficient equipment would reduce energy use by 103,184 kWh of electricity and 1,570 natural gas therms annually (the “Project”). The Project also qualifies for approximately $16,833 in Southern California Edison (SCE) rebates and for a five-year, interest free loan in the amount of $450,789 from the County.
Initially, staff proposed the Project be completed in two phases over two fiscal years. The first phase of equipment replacements amounted to $230,000 in FY 2021/22 and the second phase amounted to $320,000 in FY 2022/23. Given the new opportunity to receive a 5-year interest free loan from the County, however, staff now recommends the Project be completed in one phase in fiscal year 2021/22.
The Project scope includes:
• Restoration of the Economizer Operation (a failed part of the existing cooling system that uses cool outdoor air to cool the building instead of operating the air conditioning compressor.)
• Replacing supply and return fans with Variable Frequency Drive models.
• A controlled fan array that uses multiple, smaller fan wheels arranged in parallel airflow paths. (When one of the fans in the array fails, the others increase their airflow volumes to make up the difference until the broken fan is replaced.)
• Replacing the heating and cooling coils.
• Replacement of existing natural gas/electric packaged units with all-electric heat pumps.
• Exhaust fan replacement.
The existing natural gas fired space heating package units will be replaced by all-electric heat pumps, thus decarbonizing space heating at Vets. Doing so will reduce natural gas use by 1,570 therms annually and reduce carbon dioxide GHG emissions by 27.09 metric tons each year.
Over the past few years, staff has had favorable experiences with ACCO, who was selected to repair or upgrade HVAC equipment located at other City facilities, including City Hall, the Police Station, and the Senior Center. The ACCO services retained for the Project are exempt from the formal competitive bidding process, pursuant to Culver City Municipal Code (CCMC) Sections 3.07.045.G (see below) and 3.07.085.C.6 (repair and maintenance of City-owned real property and buildings). CCMC Section 3.07.045.G provides an exception to bidding “where competitive bid procedures have already been utilized by the City, another public agency, including, but not limited to, federal, state and county governments, including, state of California agencies, counties, cities, joint power agencies and special districts, or nonprofit agencies whose main purpose is to assist cities or other public entities…provided, the equipment, goods or supplies are supplied to the City at the same or better price, as was obtained through the competitive bid procedures of that entity.” ACCO is a contractor that has been pre-approved and selected by the National Joint Powers Alliance (a.k.a. “Sourcewell <https://www.sourcewell-mn.gov/about>”), which is a public and transparent bidding process agency whose aim is to create a pool of pre-qualified contractors for such projects. The Gordian Group is the local administrator of the Sourcewell contracts, and they reviewed the ACCO cost estimate and confirmed that it adheres to the labor rates, prices, terms and conditions of their existing Sourcewell agreement.
Since 2013, with SoCalREN’s guidance the City’s combined energy efficiency projects have reduced energy use by 33%, qualifying the City to receive a Cool Planet award and to receive a platinum level Beacon Award from the Institute for Local Government.
If approved, staff anticipates it will take six months to complete the Project.
FISCAL ANALYSIS
A combined $550,000 in General Funds were requested in CIP PE-005 Veterans Memorial HVAC Replacement + Decarbonization in FY 2021/22 ($230,000) and 2022/23 ($320,000) to complete the Project. Since the Vets audit was completed however, equipment costs have risen, requiring a budget amendment to increase the Project cost from $550,000 to $648,722. A budget amendment of $418,722 from the General Fund reserve is requested to fully appropriate the project cost of $648,722 ($230,000 + $418,722) in FY 2021/22. The loan check of $450,789 from the County will be used to repay the General Fund once received.
County Loan Schedule:
• $450,789 County loan check received the first quarter of 2022 deposited into Account Number 42080000.386600.PE005
• $16,833 SCE incentive check received 6-8 weeks after SCE approves the installation report will be recorded in 42080000.348200.PE005. As part of the City’s loan repayment schedule, the City is then required to remit the incentive amount to the County within 90 days of its receipt.
• $433,956 balance due after SCE incentive. Ten loan payments of $43,395.60 are due every six months starting on 6/15/22 and ending on 12/15/26 paid from Account Number 42080000.810400.PE005 - Loan Payments.
Once completed, the Project will reduce energy use by $27,816 annually, amounting to a total of $367,567 over the new equipment’s 13.2-year useful life.
MOTIONS
That the City Council:
1. Approve an agreement with ACCO Engineered Systems in an amount not-to-exceed $648,722 to replace the HVAC system at the Veterans Memorial Auditorium; and
2. Accept a $450,789 five-year interest-free loan from the County of Los Angeles to partially finance the project and approve its repayment through remitting the $16,833 the City receives from Southern California Edison along with $43,395.60 in loan repayments every six months starting on June 15, 2022 and ending on December 15, 2026; and
3. Approve a budget amendment to increase CIP PE-005 by $418,722 from $230,000 to $648,722 in order to complete the project in one phase/fiscal year (budget amendment requires a four-fifth vote); and
4. Authorize the City Attorney to review/prepare the necessary documents; and
5. Authorize the City Manager to execute such documents on behalf of the City.