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Home My WebLink About1992-10-13 - AGENDA REPORTS - HONEYWELL MUNI SERVICES (2)PUBLIC HEARING DATE: SUBJECT: DEPARTMENT: BACKGROUND AGENDA REPORij- s er A-Faroval r112(421" 1 1' 1 1 1 1 October 13, 1992 Honeywell Municipal Services Program Public Works In early April 1992, Public Works Staff began discussions with representatives from the Commercial Buildings Group, Honeywell Incorporated, to explore the potential of entering into an agreement with Honeywell, Inc. to participate in their Municipal Services Program. The Municipal Services Program is a procedure where both City staff and Honeywell representatives will jointly inspect and evaluate the condition and efficiency of existing heating, ventilation and air conditioning equipment (HVAC); lighting and controls; irrigation equipment; and electric motors/pumps with their associated control equipment for the City Hall and Field Services Facilities. After the inspections are completed, analysis is performed to determine what, if anything, can potentially be done to repair or upgrade the equipment and make it operate in a more efficient and cost effective manner. The cost of the improvements are paid for from the savings realized by reduced cost of operation, utility company rebates and energy savings. The Municipal Services Program is designed to be self -funding, and does not require any up -front capital expenditures.. Savings are guaranteed in writing by Honeywell, Inc.; if the actual savings are not realized, Honeywell will issue the City a check for the shortfall. During April 1992, Staff and a Honeywell representative conducted a preliminary feasibility study. The purpose of the study was to determine the general type and condition of existing HVAC, lighting, and irrigation equipment; review existing control technology and energy conservation measures; and analyze our utility and training needs. The study revealed there are potential savings or modernization needs in the following areas: Source of Potential Savinas Electrical Gas Utilities Building Maintenance Supplies Contractual Services Total Estimated Annual Savings: Estimated Annual Savings $39,000.00 $4,000.00 $8,400.00 $8,000.00 $59,400.00 Agenda Item:'-(,, Agenda Report Honeywell Municipal Services Program r October 13, 1992 Page Two Honeywell, Inc. delivers this program on a design/build basis. All elements of engineering, equipment selection, installation and equipment maintenance are included in the proposal. Contractual maintenance is provided only to newly installed equipment or to the components that were modified or retrofitted on the existing equipment. All other maintenance requirements remain the responsibility of the City. PURCHASE PROCESS The method of purchasefor the Municipal Services Program is through a negotiated, sole source contract with Honeywell, a process which is in compliance with California Government Code, Chapter 3.2, Section 4217, Energy Conservation Contracts. Section 4217.12 of this code provides the authority to enter into energy service contracts. Competitive bids are not a requirement of an energy conservation contract that is self - funding. Furthermore, the City Attorney has reviewed and approved these actions. IMPLEMENTATION PLAN 1. Conceptual presentation Completed: May 1992 2. Feasibility Study presentation Completed: July 16; 1992 3. Preliminary Survey - Cost of Operations Completed: July 21, 1992 4. Preliminary Proposal Completed: July 31, 1992 City Council Approval of Letter of Intent Completed: 6. In Depth Survey Completed: 7. Final proposal and contract approval Completed: No cost or obligation is incurred by the City until Item #5, Letter of Intent, is approved by the City Council. If staff determines at any time during the Implementation Plan process and prior to the issuing of the Letter of Intent that the Municipal Services Program is not in the best interest of the City, all further actions may. be terminated without any obligation. RECOMMENDATION It is recommended that the City Council receive public testimony and authorize Honeywell, Inc. to initiate the program and authorize the City Manager to execute the necessary documents. J.n. PUBL:C HEARING PROCE:U?E 1. Mayor Opens Hearing. a. States Purpose of Hearing 2. City Clerk Reports on Hearing Notice 3. Staff Report (City Manager) or (City Attorney) or (RP Staff) 4. Proponent Argument (30 minutes) 5. Opponent Argument (30 minutes) 6. Five-minute Rebuttal (Proponent) a. .Proponent 7. Mayor Closes Public Testimony a. Discussion -by Council 9. Council Decision 10. Mayor Announces Decision CITY OF SANTA CLARITA NOTICE OF PUBLIC HEARING FOR CONSIDERATION OF AN ENERGY SERVICE CONTRACT AND LEASE PURCHASE AGREEMENT FOR THE FINANCING OF THE ENERGY SERVICE CONTRACT WITH HONEYWELL, INC. PUBLIC NOTICE IS HEREBY GIVEN: A Public Hearing will be held before the City Council of the City of Santa Clarita for consideration of entering into an Energy Service Contract with Honeywell, Inc. for energy services and equipment for City facilities. In conjunction with this contract, the City is considering entering into a lease -purchase agreement for the financing of the equipment. Thehearing will be held by the City Council in. the City Hall Council Chambers, 23920 'Valencia Blvd., 1st Floor, Santa Clarita, the 13th day of October, 1992, at or after 6:30 p.m. Proponents, opponents, and any interested persons may appear and be heard on this matter at that time. Further information may be obtained by contacting the City Clerk's Office, Santa Clarita City Hall, 23920 Valencia Blvd., 3rd Floor, Santa Clarita. If you wish to challenge this order in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City Council, at, or prior to, the public hearing. Dated: September 24, 1992 Dona M. Grindey, CHC City Clerk Publish Date: September 29, 1992 09/21/92 11:19 $805 259 8125 99/21/92 10.35 $213 236 2709 I. w ...4. nLLaT M M.W741 Y.Lrwl. WW%NNONM ARA v N. w...... sM'TPax ,YxL � IW+ w .y41Y11w iIIWM1. W+M+ n LWI[u 944roNq � ...ln Nupn � wNlN.iwi.�i WNI. +MCMI M iYGYUW YI11VW II CGNN[TM NiI Y NYw4 4LL 9 F'IAP. V :ILDG\Ire[ .lVI.•� 0nq 1 A LIILY.NHY.9np1 •MwP wLIMMp ARM% h nNn LOwN i A01.L4Ln n N. YwV.�w .L.Nt.A A 0010.1. WIN[ t ..awq[ CTY SN -TA CLARITA ++ CORP YARD FAX BW&S LA r-- SANTA CLARITA b1.W oF►ICCG 13170x8, WILLUX-S & SORNMAINN Olt WC*! OI%TA 97R99q GUIT9 [.00 Los w1.g969*, C^Lwa.,, . OOOW inml eae•nenn 7[199ON4[I 1291 Li0•n00 1111MYLNN.I L6/IpI.+4Y \1 MLM01iO4w KLOLurMY.pxl..c[ w urW 1. u11.uA ML.TfCp M fN4NW4 x0,18./ L MGLRYM •.OIIRN r W.0 wW+9 MILL Ht1nn rlr.1 Y h.Iwc.. NxwLNI September.18,•1992 Jesse Juarros General Services Manager City o! Santa Clarita 23920 Valencia Boulevard, Suite 300 Santa Clmrita, California 91355 M. MN.Ir. INiN• NII.I! ' L\I/1 LNNIIr1aN 11NM nws . 1. Y.lx... 101 M.nYlw .1114 IgwO M+}\Li1 LR+q9L 90UNF 011191 110 1.1814, V,IV 1NIIL [.Y G131• ALM, 4w 000M11 *a"& Ar., In 0.69 WMq►, WILLIAMO, OYWLMOLM Y VAAR U"TNN ^1.L& +.u4 VO61.w6 00.1.6.!44 YmL Yy Ww.M.0 w!, Lx.YIY /,IYn. WqI+Lr'tl 010997 91LL (213) 236-2832 OUR MR MO. 02n12MAnn1 Re: Energy Management Program/city or Santa Clarita and Honeywell, Inc. Agreement near Jesse: This is in response to your raquact that our office review the energy management proposal submlttad by Honeywell, the statutory authorization to the City under the Government code, and the proposed letter of intent and ccrv£cca agreement. The Government Code, at SecLlon 4217.12 provides the authority to the City of Santa Clarita to enter into an energy service contract. That section also allows the City to enter into a facility ground lease, which Y do not believe is applicable hero. The City Council may enter into the contract an terms that it deems are in the beat interest of the City. That determination muni. be made at a regularly scheduled pubilc hearing, public notice of which is given at a two a es in. 1a� I adv3riCe. That public. nntirr would net be satisfied by tha Public noticetchouldilbohours atandardanoticeuOf£atpublic.hearing, Published in a newspaper of general circulation at least two weeks prior to the meeting at which this item will be considered. wrn.t 09/21/92 11:20 77805 259 8123 09/2142 1036 'M213 236 2700 Jesse duarros rcneral services Manager teptember is, 1992 Pago 2 CTY 5\T9 CLLRITA ++» CORP YMW FAX U005.007 BWES LA --- SANTA CLARITA RA03 The notice should describe the energy.manayement program and energy service -contract briefly and state that the public in invited to attend and sp0ak for and againRt the item. The statute further provides that, following the public hearing on the item, the Council may authorize the service contract if it makes the necessary findings. There are two findings required under Section 4217.12. However, the second finding is relevant only.when there is a facility ground lease. The first finding, however, must be made. The Council must find that the anticipated cost to the agency for the anergy conservation services under the contract will be lona than the anticipated marginal cost to the agency of thermal, electrical or other energy that would have been consumed by the agency in the absence of the contract. This finding, and the facts supporting the finding, must be set forth by the Council in the resolution authorizing the execution of the contract. Unclosed with this letter in a revised "letter of intent" which was aubmittod--to-the City by.Ftonoywcll. The letter Of intent is not a necessary-AOCUMOn"nder the statutory procedure. however, if the City will issue a letter to Mr. Casey and Mr. Wilson, this office recommends the modification* ao shown on the enclosed document. The agreements you have submitfpd are entitled "Commercial Buildings Group - services" and "Honeywell Packaged Air-Conditioning/provantative Haintenanca Service." These documents appear to be in draft and must be cnmpleted.prior to the Council authorizing their ezeuuLlon. for example, on the first agreement, it will be necessary to identify the type of service and the price to the City for the service. It is my understanding laves Llie maLeridju that the price for the service will not oxcead the savings to the city in energy coats. Additionaiiy, the documents ahnilld incorporate by reference the entire draft and final proposal by Honeywell for the provision of thee% service%. In closing, you may provide notioe.of the public hearing and set the item for the first regular meeting of the City Council in October. Tha latter of intent may be modified and sent to Honeywell, pursuant. to that letter, Honeywell will be preparing a final proposal covering energy conservation, equipment retrofits and maintenance in the city buildings as outlined in the preliminary proposal. in addition, you -should work with Honeywell to oomplcte-the proposed contract documents. 09/21/92 11:20' $805 259 8125 CTY S\TA CURITA +4+ CORP YARD FAX UOOS- 007 09i21/92 10:36 $213236 2700 BWAS'LA »»- SANTA CLARITA - IN05 Jesse Juarros General Services Manager September 18, 1992 page 3 Again, those contract documents should incorporate by reference the final proposal. Finally, it is important to note that the five year proposed agreement with Hone yste11 is a services agreement and not a lease agreement. In addition, the agreement may be extended from year to year for a total of five additional- years. The draft proposal from HonQywell contemplates a total savings of Approximately 6246,00o.00 over a six year period, and not the initial five year period. If you have any Additianal Nfittiend or comments, Please do not hesitate to contact me. gin erely, v Y 8. for Bum, Enclosures cc: George caravalho, city Manager Jeff Kolin, Public Works Director Carl K. Newton, City Attorney MCOSKER WILLIAMS i SORF.NSEN