HomeMy WebLinkAbout2007-12-17 Finance Committee Minutes
FINANCE COMMITTEE
Monday, December 17, 2007
Minutes
Councilors in attendance: Stone, Palmer, Blanchette, Hawes, D’Errico,
Farrington
Staff in attendance: Cyr, Barrett, Wardwell, Warren
Others: Bob Marcote, Jim Lucy, Greg Young, Dawn Gagnon
1. Consent Agenda
a. Ratification of Quitclaim Deed – 53 Charles St – Norumbega
Venture Company
2. Bids/Purchasing
a. Runway Deicer – Airport – Old World Industries - $95,700 (est)
Blanchette asked if these costs are passed on to the airlines. Cyr said there is
a specific airplane deicer but to take care of the runway is part of the
Airport’s fixed costs. D’Errico said one of the costs included in the calculation
of landing fees includes maintenance of the runway. Responding to
Blanchette, Barrett said that Hupp had recently completed an analysis of
comparable airports and Bangor was at the low end of fees charged to
airlines. It was $3.06 per passenger. Responding to Blanchette’s question, he
anticipates that LAX’s landing fees would be significantly higher. Blanchette
asked what is being offered that warrants a higher landing fee. Barrett said
there is a higher demand for runway space at LAX as well as a higher
overhead operating cost. Palmer said that airplane deicer is a safety
necessity. A motion was made and seconded to approve staff
recommendation.
b. Request to Waive Bid Process – Public Works – Traffic Controllers – Ocean
State Signal Co - $40,800
Cyr said this is a request to waive the bid process to purchase three traffic
controllers to be used on Main Street between Cedar and Dutton Streets. This
is a BACTS project which usually ranges between 80% and 90% State
funding. Responding to Gratwick, Wardwell said that the City has narrowed
the process down to two brand name controller systems (Eagle and
Econolite) and tries to replace them by corridor basis. Broadway and
Stillwater corridors have been done. Gratwick asked about a policy that
would integrate all controller systems. He asked if there are universal
standards in the industry. Ring said there are a number of manufacturers
and suppliers. Up until a few years ago, the City did not have control over
controllers used and installed by the State of Maine. Responding to Palmer,
Wardwell said the City maintains 110 signals or so. Barrett spoke about the
future need to start training employees to work on these signals. Currently,
the employees are relatively long-term and closer to retirement. Blanchette
asks what standard the City uses to synchronize lights to coincide with speed
limits. Ring said any signal timing involving progression between signals
must be approved by the State. Blanchette specifically asked about Drew
Lane and Stillwater Avenue. Ring said that site is part of a integrated system
on Stillwater Avenue. Barrett said that a right turn on red can ‘confuse’ a
signal. When lights are installed to control traffic, the City needs to be
sensitive as to the number of unnecessary stops and starts that citizens are
made to make. She spoke about carbon emissions. Barrett said that Bangor
was one of the first cities in the state to use overhead detection units. Tying
signals together in corridors, moves traffic more smoothly with fewer stops.
It’s not always 100% possible because of the nature of the street system.
Traffic patterns change based on time of day and time of year. A motion
was made and seconded to approve staff recommendation.
3. Review of Honeywell Energy Audit – General Fund Facilities
Cyr introduced Jim Lucy and Bob Marcote from Honeywell. The City engaged
Honeywell last year to perform energy audits of all City facilities. Due to its
complexity, staff and Honeywell chose to break the audit into four separate
groupings. Tonight’s focus will be on the general fund facilities. The other
groupings are the airport, wastewater treatment plant, and school facilities
and Honeywell’s recommendations of the latter three should be available in
January or February of 2008.
The sites included in this report are the Parks and Recreation Armory
building, Bass Park, Central Fire, City Hall, Fire Station 6, Fleet Maintenance,
the Club House at Golf Course, Health and Welfare, Public Works, Mansfield
Stadium, Recycling, BAT Area, Park Woods, Sawyer Arena, Union Street
Athletic Complex, and the Standpipe. Honeywell compiled a list of 135
projects detailing costs, energy savings, and costs associated with each
recommendation. Cyr, Barrett and Honeywell representatives have reviewed
the entire list. Staff is recommending 62 projects to be undertaken at a total
cost of $1,223,000 . Based upon the energy audit completed by Honeywell, it
is estimated that these projects will produce annual savings of $153,000 in
utility costs, which is sufficient to cover finance of these improvements over
the next 10 years. The $153,000 would be an annual budgeted item. Cyr said
the City would breakeven for the first ten years and after that the utility costs
would drop. With the projects being suggested for implementation, the City
would save overall energy costs by 13%, kilowatt charges would be reduced
by 13%, oil and LP gas consumption would be reduced by 16.8%.
Blanchette asked about the Bass Park/Auditorium/Civic Center and
questioned the payback value in light of the future auditorium. Cyr said that
Honeywell did look at the facility but staff is not recommending any money
be put into the site. Responding to Farrington, Cyr said the $1.2M is not a
budgeted amount. The City budgets annually for utility costs. From an
environmental standpoint, the City will reduce its environmental footprint,
which is an additional benefit. Gratwick said essentially Honeywell is lending
$1.2M and the City will be paying it back at $153,000/annually. Barrett said
Honeywell is guaranteeing the savings. If the savings come in less,
Honeywell will be required to make up the difference. Most likely the actual
savings will be higher than those being projected. Palmer asked if any of the
auditorium projects would impact life-safety of attendees at the facility.
Barrett said no and stressed that no projects will be undertaken at the site.
Palmer said he understands no projects will be undertaken there but he
wanted to make certain nothing was being missed. He didn’t want to see any
money being put into that site. He mentioned that perhaps Honeywell could
assist in the design of a new facility for energy saving purposes. Palmer
asked about the standpipe ownership. Barrett said the standpipe is owned by
Bangor Water District but the City has historically paid the electric utility costs
and maintained the lighting system on the top. Barrett said he would
research it. Instead of researching, Palmer asked the City Manager to contact
the Director of Bangor Water District. Palmer talked about color lights on the
standpipe. A sample of LED lights for the standpipe was available for the
Committee. Palmer asked that it be provided to the Bangor Water District’s
Director.
Responding to Stone regarding maintenance, Lucy has discussed this with
staff. At this point because he is not completely sure of the four different
sections of the City and what mix of equipment might change, Honeywell
hasn’t reached a final decision. The $1.2 and the $153,000 are not part of
maintenance. Lucy said when modernizing assets (lights, controls, water
conservation) there will be in impact in terms of operating costs. Over time,
it will be felt. He classified them as a soft savings. From a true operations
and maintenance standpoint around heating systems, lights and controls,
lights have a typical warranty from lamps and balasts, it would probably be
handled by the City to keep the cost down. Regarding HVAC, similar to how
maintenance is handled at BIA, there have been discussions with
administration to have Honeywell look at a citywide contract to maintain
heating systems and control systems associated with the project. Costs have
not been determined at this time. Barrett said with what has been proposed
to go forward with, the City is not proposing to use all of the savings to pay
debt service so there is room within savings to add additional maintenance
costs. The City has asked Honeywell for a cost estimate to maintain certain
of the City’s systems at a certain level. It would either replace some existing
maintenance contracts or would provide maintenance to facilities that are
currently being under-maintained. The process showed the City may be doing
a generally good job at maintaining its boilers but not at maintaining
ventilation systems. These will all be reviewed before entering into the final
contract. The savings can support the greater expenditures than what is
presented even on a ten-year period.
Lucy said the $153,000 doesn’t account for the existing maintenance
expenditures. The idea is to analyze the current costs, the activities being
performed for the costs, and how Honeywell proposes something that does
the proactive services at the right blend and the right cost.
Lucy narrated a slide presentation and reviewed an executive summary of the
recommendation options. He also distributed copies to the Committee. It
also contains details of what was not recommended. Lucy said they looked at
40 different locations and have broken them down into four sections.
Honeywell had met earlier in the day with the WWTP and Lucy said this is the
project they are the furthest along with. They are looking at energy
efficiency, building comfort, proper ventilation. They provided a listing of the
buildings reviewed. Lucy said their first step in this project was to measure
the baseline and many things went into that consideration: weather, heating
degree days, three years of overall billing. He noted that the City has been
very proactive in energy efficiency. Critical considerations are: what is the
weather, what are you spending today and what is the usage of the building.
Day logging devices have been installed in City buildings to fully understand
the operating conditions. Responding to a Councilor, Lucy said there have
been a half dozen Honeywell employees involved in this project thus far,
there have been some subcontractors. Lucy said the City is at approximately
$3.7M per year in energy costs for the buildings still considered in the audit.
The challenge for the review of the auditorium was that the City Manager had
asked Honeywell to review things that are five years or less. There are
certainly ways to save money at the auditorium but not worth spending the
money due to the future of the facility.
Lucy talked about various measures: building envelope which deals with
weather-stripping, caulking, accessible insulation, roof and wall joints;
temperature control improvements and Honeywell is introducing direct digital
control systems such is as BIA and the new police department facility. Lucy
said this was more at the boiler level rather than individual room control.
Water conservation is recommended in a variety of buildings replacing toilets
with low flow units, upgrading sinks with lower flow retrofits. Light retrofitting
to look for ways to use technology to improve the overall lighting. Honeywell
has worked with Bangor Gas looking, where feasible, to extend natural gas
service to City buildings. Honeywell’s proposal is to run natural gas with the
assistance of Bangor Gas to a majority of the City building sites. Oil burning
capability would still be in place. Gas or oil - whatever is cost efficient at the
time. Where gas is not recommended, Lucy recommends fuel oil pre-heaters.
Steam trap replacement is recommended. It is a maintenance item and also
an energy waste item. This is particularly true of City Hall. Honeywell
recommends a new boiler for City Hall. There currently is one and a back up
is recommended. He spoke of de-stratification fans known as a paddle fan in
ceilings. Honeywell is working with the City Information Services Department
to put power management control in place for desk top computers. Lucy
spoke of a mix of on-going support services measuring and verifying project
results. Lucy said it is not just the initial costs but one needs to look at the
overall lifecycle costs of maintaining the assets. He spoke about the
revenues and costs of the recommended options. For the given scope of
work, there will be no change orders. Interest is calculated at $300,000
making the total at $1.5M total cost. Total project revenue is approximately
$1,829,000. Regarding cost neutral, Lucy said it is an accurate statement
with the exception they look to develop a base line of the current state.
Historically, costs are rising. A good way to look at this project is not cost
savings but cost avoidance. As the number of units of energy used is
reduced, the impact of those increases is going to be less each year and thus
your cost avoidance is going to be greater.
Palmer is concerned about who is paying for the standpipe lighting. Because
of its historic nature, the lighting from the balcony should not be played with.
Changing it to LED lighting might not be seen favorably from the citizenry.
He agrees with dual fuel options and natural gas. He is concerned about the
appearance of natural gas meters.
Blanchette asked what is causing the City to use so much energy at the
Health and Community Services Department. Barrett said the number used is
for the entire building which includes the Bangor Nursing and Rehab Center
and other tenants. The BNRC is currently undergoing some projects to
improve their energy efficiency. The building requires a higher temperature
than you might prefer in standard office building given the age of patients
and state requirements. Blanchette asked about the rental of Sawyer Arena.
She asked if the cost of energy is factored into the rental fee structure.
Barrett said the prices are restructured annually and generally slightly exceed
the Arena’s operating cost annually. Gratwick asked about the local payback
projections on some sites. In some instances, Barrett said the fuel oil heater
at some of the buildings, because of the option of dual use, going primarily to
natural gas. Gratwick asked if there is a move away from individual electric
heaters in City buildings. Lucy said that building envelope is one of their
areas of concern which deals with making office environments comfortable by
sealing up around windows, doors, etc. which will address temperature
complaint. Two city buildings have electric radiators and Honeywell has
looked at replacing them with hot water radiators. The installation cost for a
change over is expensive and the payback doesn’t come within a ten-year
period. Barrett said that various City Hall employees do use electric heaters
because of being uncomfortable. To significantly solve that problem at City
Hall would take a complete redo of the entire building. At one point, the
estimate was $800,000 with a savings payback of 38 years. Barrett said he
wasn’t certain if the carbon footprint from oil heat isn’t higher from the
carbon footprint of electric heat. Gratwick asked if local contractors will be
used for Honeywell’s proposed project. Lucy said they will do a good chunk
of the work themselves and their intent is to use as many local contractors as
possible. Lucy said he would seek the City’s input on contractors.
Stone asked Barrett if the City is capable of administering temperature control
in buildings. Barrett said it is not recommended at this time because when
looking at City Buildings the payback of going to a direct centralized digital
control system was a lengthy timeframe of 50+ years. He said it would be
revisited once the work on all City facilities is completed. The City does have
a capability of a centralized controlling system out of City Hall through its
fiber network. He is not convinced that it will provide a reasonable payback.
Cyr said there are night setbacks recommended. There is a base level
included in the proposal. Barrett said the City will be moving toward room
occupancy sensors for lighting because individuals don’t always remember to
turn off lights.
Stone talked about the Airport terminal. Barrett said he hasn’t yet seen what
is being recommended by Honeywell for BIA. The City is just starting to gear
up for the design phase of the terminal expansion. Stone asked the interest
rate for the payback. Lucy said is 4.09%. Stone questioned the recommended
new boiler for City Hall. One boiler would run off fuel oil and one off natural
gas, Barrett said. Marcote said one of the driving forces for the
recommendation was because of the significance of the building and its
activities in the event of a power outage. This building originally had two
boilers. Stone asked how a payback is calculated on something that might
never be used. Marcote said it was more of an infrastructure to maintain the
building’s operation in the event of a catastrophe. Cyr said it doesn’t pay for
itself. Stone asked about propane vs. natural gas and associated taxes.
Lucy said the City is tax exempt. Stone said it was transportation taxes and
asked that it be taken into consideration. Marcote said propane is far more
expensive than natural gas. Responding to Stone, Lucy said that aesthetically
if Honeywell replaces a ceiling tile, for example, it would be responsible to
match it to what is currently in place. As an example, Barrett said it was
taken into account when looking at the various projects that if lighting in the
council chambers needed to be replaced that ceiling tiles would be replaced
as well.
Gratwick asked if City personnel will be training to deal with the upgrade and
upkeep. Barrett said it is going to depend on which part of the City is being
looked at. For example, at BIA there are electricians who are licensed in
certain areas. In other parts, there are not that type of employees in place.
As to what to do with the money saved per Councilor Stone’s question,
Barrett said it becomes a decision for the Council in the annual budget
process. Gratwick asked if this is an on-going process whereby in a set
number of years another review would be undertaken. Lucy said in many
cases they have implemented multiple phases. Honeywell would like to
establish a long-term relationship with the City. Lucy said they usually
provide an annual report and then at the request of the City they could
provide year to date updates. Barrett spoke about the City’s future plans to
change street lights to LED lights and that all new construction and major
projects for the City would be LEED certified.
Palmer asked about the Bangor Public Library. It has a severe energy
problem. Lucy said it was initially discussed but never heard back about
performing an audit. Barrett said the offer will be made again. Palmer spoke
about the former derelict police department structure that houses a boiler
that is less than ten years old. Lucy said one area being considered for this
particular boiler is the airport domestic terminal. Cyr said the boiler in
question is a one-piece cast iron unit.
Stone asked how Honeywell is compensated on this project. Honeywell and
the City agreed upfront to open book pricing. Lucy said there is a pre-agreed
upon profit and mark-up and an open book model where the mark up
structure is disclosed. There are certain overhead costs at 13% and profit at
10%. Lucy is the project leader and is a salaried employee.
In terms of standpipe lighting, Barrett said there are two things. Standpipe
lighting and standpipe wiring upgrades. Lighting indicates savings of roughly
$1,600 against a cost of $4,400. In looking at this, Honeywell identified that
the condition of the wiring on the standpipe is exceptionally poor. Even if the
light bulbs are not replaced, it needs to be rewired.
Lucy introduced Greg Young, a member of the team who is focused on
lighting improvements. Young provided information on his inspection of the
standpipe. He also provided a demonstration of LED lighting options showing
the difference between what is currently in place and what is available.
Palmer suggested that various options be tried and that individuals view the
standpipe from miles away to see how it looks. Blanchette said when you give
the public an opportunity to complain they will take more than advantage of
it. If all lights were changed, the public would not notice but if you put in
various type of bulbs it will show the comparison. Palmer disagreed. In the
interest of time, Stone suggested that the standpipe be discussed in further
detail at a later time.
Barrett said he is asking the Council at the moment to go forward with the
projects identified to date and is recommended and to take those projects
and work with Honeywell and sign a contract to get this underway. A motion
was made and seconded to approve staff’s recommendation.
Someone from the public asked a question but was not speaking into a
microphone. Lucy said it had been discussed with an analysis and suggested
talking after the meeting.
Gratwick made further comments but was not speaking into a microphone.
Barrett said he would be more than happy to come back to discuss further
questions at any time. Change orders can be entered into after a contract is
in place. Blanchette said she is concerned about the school buildings and
their inefficiency use of energy. She said that mass changes are needed.
4. Executive Session – Hardship Abatement – 36 MRSA § 841 (2)
A motion was made and seconded to move into executive session.
5. Open Session – Hardship Abatement Decision
A motion was made and seconded to approve staff’s recommendation.