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CC - FOUR-FIFTHS VOTE REQUIREMENT: (1) Acceptance of Work Performed by ACCO Engineered Systems in the Amount of $183,644; and (2) Acceptance of Work Performed by Express Energy Services, Inc. in the Amount of $422,865.07; and (3) Approval of an Express Energy Systems Change Order for Additional Light Fixtures in the Amount of $18,679.52; and, (4) Authorization to File a Notice of Completion for Work Performed by ACCO Engineered Systems and Express Energy Systems; and (5) Authorization to Release the Respective Retention Payments to ACCO Engineered Systems and Express Energy Systems after Expiration of the 35-Day Lien Period; and (6) Approval Related Budget Amendments in the Amount of $907,282 for Expenditures in Fiscal Year 2014/2015, and $907,282 for Revenues in Fiscal Year 2015/2016, for the City Facilities Energy Efficiency Project, PF-004.
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Contact Person/Dept: Joe Susca/Public Works
Phone Number: (310) 253-5636
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [] Attachments: Yes [] No [X]
Commission Action Required: Yes [] No [X] Date:
Commission Name:
Public Notification: (E-Mail) Meetings and Agendas - City Council (08/06/15); ACCO Engineered Systems (08/06/15); Express Energy Systems (08/06/15); The Energy Network (08/06/15)
Department Approval: Charles D. Herbertson, Director of Public Works/City
Engineer (07/31/15)
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RECOMMENDATION
Staff recommends the City Council: (1) accept work performed by ACCO Engineered Systems in the amount of $183,643.79; and (2) accept work performed by Express Energy Services, Inc. in the amount of $422,865.07; and (3) approve an Express Energy Systems change order for additional light fixtures in the amount of $18,769.52; (4) authorize filing a Notice of Completion for work completed by ACCO Engineered Systems and Express Energy Systems; and (5) authorize the release of the respective retention payments to ACCO Engineered Systems and Express Energy Systems after expiration of the 35-day lien period; and (6) approve related budget amendments in the amount of $907,282 for expenditures in Fiscal Year 2014/2015, and $907,282 for revenues in Fiscal Year 2015/2016, to provide up-front funding to complete the City Facilities Energy Efficiency Project, CIP PF-004.
A budget amendment requires a 4/5ths affirmative vote.
BACKGROUND
Over the past couple of years, the City has been working with The Energy Network (TEN) to implement turn-key energy efficient projects citywide. TEN, administered by Los Angeles County, was created by the California Public Utilities Commission to help public agencies in Southern California implement projects that save energy and reduce operating costs.
In 2014, TEN conducted a thorough energy audit at the City’s highest energy using facilities. The audit focused on the lighting and mechanical components, and after reviewing the audit, staff and TEN agreed to implement a bundled turn-key project that retrofits lighting and Heating, Ventilation and Air Conditioning (HVAC) mechanical components along with implementation of an Energy Management System (EMS) to control these components to optimize their energy use (Project). The Project provides the greatest benefit to the City in terms of energy savings, operating cost reductions, and incentives received from utility companies. The Project also advances the City’s position as a community leader in environmental sustainability.
On January 26, 2015, the City Council approved agreements totaling $1,163,342.34 to complete the Project with ACCO Engineered Solutions (ACCO, $183,643.79), Express Energy Systems, Inc. (Express, $404,095.55) and Setpoint Systems Corporation (Setpoint, $575,603.00). The staff report at that time omitted the up-front funding required to complete the projects, some of which will subsequently be reimbursed or financed upon final project completion.
DISCUSSION
ACCO and Express have completed their portion of the Project, and Setpoint will conclude the design, programming, and installation of the EMS by the end of this year.
ACCO completed their work within budget. Express discovered the need for the following additions: (1) 48 additional LED lights were necessary to complete City Hall’s fixture replacements (a total of 690, not 642); (2) a total of nine (not seven) Police Department building up lights were necessary; and (3) substitution of four “spot” lights with “flood” lights within the courtyard of the Veterans Memorial Complex was needed. The total Express change order cost for the additional light fixtures amounts to $18,769.52.
FISCAL ANALYSIS
Sufficient additional funds exist in the City Council Adopted Budget for Fiscal Year 2015/2016 for CIP PF-004 - City Facilities Energy Efficiency Project to cover the $18,769.52 cost of the Express change order and to establish an $8,730.48 contingency to complete the remainder of the Project. The breakdown of costs and funding sources for the Project are as follows:
Costs:
Setpoint $575,603.00
Express $422,865.07
ACCO $183,643.79
SUBTOTAL $1,182,111.86
Contingency $8,730.48
TOTAL $1,190,842.34
Funding Sources:
Expenditure Accounts
Fiscal Current Amend. Ending
Year Description Account Budget Amount Budget
14-15 City Facilities Energy Efficiency 42080000.730100.PF004 $ 85,000 $907,282 $ 992,282
14-15 Building Repairs 42080000.730100.PZ132 $ 85,030 - $ 85,030
14-15 Proposition C Local & Discretionary 20380000.730100.PF004 $ 86,031 - $ 86,031
15-16 City Facilities Energy Efficiency 42080000.730100.PF004 $ 27,500 - $ 27,500
TOTALS: $283,561 $907,282 $1,190,843
Revenue Accounts
Fiscal Current Amend. Ending
Year Description Account Budget Amount Budget
15-16 Energy Efficiency - SCE Loan 42080000.348210.PF004 - $652,381 $652,381
15-16 Energy Efficiency - SCG Loan 42080000.348210.PF004 - $113,888 $113,888
15-16 Energy Efficiency - Rebates/Incentives 42080000.348210.PF004 - $141,013 $141,013
TOTALS: $ - $907,282 $907,282
The City’s cost to complete the Project is to be partially offset by Southern California Edison (SCE) and Southern California Gas (SCG) incentives and rebates amounting to $141,013, once the projects are completed. The City’s total capital contribution to complete the Project is $1,049,829.34 ($1,190,842.34 - $141,013 in incentives/rebates). However, as explained below, $766,269 of the City’s capital costs will be financed through zero interest loans from SCE and SCG through future energy savings once the projects are completed. The City will save approximately $1,769,480 from reduced energy use for a net savings to the City of $719,650.66 over the Project’s 12-year life.
Once the Project is fully completed at the end of this year, SCG/SCE will remit checks to the City in the amount of $907,282 ($766,269 in loans and $141,013 in incentives/rebates). The zero percent loans from SCE/SCG will be paid back by the energy savings the Project achieves through their On-Bill Financing Program with an average loan payback of 8.4 years. A budget amendment for Fiscal Year 2014/2015, when the agreements were originally approved, is required to provide the total up front funds necessary to complete the Project amounting to $907,282.
ATTACHMENTS
None.
RECOMMENDED MOTIONS
That the City Council:
1. Approve a budget amendment for Fiscal Year 2014/2015 in the amount of $907,282 for expenditures to provide up front funding to complete the Project; and,
2. Approve a budget amendment for Fiscal Year 2015/2016 in the amount of $907,282 for revenues; and,
3. Approve an Express Energy Systems Inc. change order in the amount of $18,769.52; and,
4. Authorize the Public Works Director/City Engineer to approve additional change orders of up to $8,730.48 to complete the remainder of the Project if necessary; and,
5. Accept the work performed by ACCO Engineered Systems in the amount of $183,644; and,
6. Accept the work performed by Express Energy Systems Inc. in the amount of $422,865.07; and,
7. Authorize filing a Notice of Completion for both firms; and,
8. Authorize release of the 5% retention payments in the amount of $9,182.20 for ACCO Engineered Systems and the amount of $21,143.25 for Express Energy Systems upon expiration of the 35-Day lien period.