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HomeMy WebLinkAbout2011-09-27 - AGENDA REPORTS - AQUATIC CENTER POOL HEATERS (2)CONSENT CALENDAR DATE: SUBJECT: DEPARTMENT Agenda Item: 2 CITY OF SANTA CLARITA AGENDA REPORT City Manager Approval Item to be presented by: September 27, 2011 Rick Gould PURCHASE OF REPLACEMENT POOL HEATERS FOR THE SANTA CLARITA AQUATICS CENTER Parks, Recreation, and Community Services RECOMMENDED ACTION 1. City Council authorize the approval of Raypak Inc. as a single -source vendor according to the City's Purchasing Code. 2. Authorize the purchase of four replacement pool heaters manufactured by Raypak Inc. at a total cost not to exceed $106,071.05. 3. Approve a budget transfer of $64.000 from Expenditure Account 15203-5201.002 to Expenditure Account M3011601-5201.002, and appropriate $88,578.1.6 from General Capital Projects Fund Balance (601) to Expenditure Account M301 1601-5161.001; increase Transfers In from General bund Account 601-4711.100 by $64,000; and increase Transfers Out to General Capital Projects Fund Account 10019500-5501.601 by .$64,000. 4. Increase estimated revenues in the amount of $88,578.16 to General Fund Miscellaneous Revenues Account 100-4621.001 to account for reimbursement from the Gas Company. BACKGROUND The City has a unique opportunity to replace the four pool heaters at the Santa Clarita Aquatic Center. Using an innovative financing program and previously appropriated funds, staff recommends replacing the four heaters to lower energy use, realize long-term utility savings, and lower the. City's pool heater maintenance costs. Replacing the four pool heaters also gives the City significant credit toward meeting the requirements to reduce therm use outlined in the City's adopted Climate Action Plan. The City opened the Aquatics Center (AC) at the Santa Clarita Sports Complex in October 2003. At the time of construction, many features and equipment choices were state-of-the-art, including the pool heaters manufactured by a company based in Tennessee. After eight years of operating the heaters, staff has found that they require significantly higher maintenance and upkeep than the heaters in operation at the City's other five pools. Specifically, the AC pool heaters require frequent adjustments to maintain optimum heat output. Also, the heat exchangers on three of the four pool heaters have been replaced at a cost of approximately $28,000, and it is likely that more heat exchanger replacements will be required in the near future. In addition, in order to meet warranty requirements, maintenance staff is required to attend annual training at the manufacturing plant in "Tennessee at the City's expense. Staff would like to replace all four of the AC pool heaters with energy efficient pool heaters that have a lower ongoing maintenance cost. Staff received prior City Council approval to replace two of the four pool heaters at the AC, and $64,000 in funding was appropriated to an operations and maintenance expenditure account for this purpose. In researching alternative heating systems, staff learned of two programs that are available to help with the replacement of the other two pool heaters, a project which is currently unfunded. 'File first program is a rebate from the Southern California Gas Company that is based on energy savings. The replacement of all four of the heaters would qualify the City for a rebate of $22,074. The second program is an unusual zero percent financing program offered by the Southern California Gas Company. Through this program, the purchase of qualifying equipment is subsidized by the Gas Company upon installation of the heaters. Procedurally, the City would purchase and install the new pool heaters. Upon completing the installation, �the Gas Company would reimburse the City for those costs. This amount becomes a zero interest loan to the City. The $22,074 rebate would then be applied to the principal. In order to pay back the Gas Company, the City would continue to pay its monthly gas utility bills at an amount equal to the current monthly payment. The amount of the loan payment is determined by the difference between the cost of current gas usage and the usage with the energy efficient heaters. The City's monthly gas utility payment would remain as if the original pool heaters were in use, until such time as the loan is paid off. A loan of $88,578.16, less the $22,074 rebate, would be paid off in approximately five years. After the loan is satisfied, the City would realize 100 percent of the savings generated by the new heaters, and the monthly utility bills would be paid at the usage rate only. The proposed new heaters will be 16 percent more energy efficient than the current heaters, less expensive to maintain, more reliable, and have service support located close to Santa Clarita. Raypak pool heaters are currently installed at the Newhall, North Oaks; Santa Clarita, Valencia Glen, and Valencia Meadows Park pools. Replacing the heaters at the Aquatic Center with the Raypak model will standardize the City's pool heaters; helping to ensure more cost efficient maintenance and operation. In addition to lower gas utility use over the long term, the four new heaters will reduce the City's therm use by over 16 percent. This reduction in natural gas use will give the City credit toward I'm meeting the requirements of the Climate Action Plan, a document that is currently being developed. The total cost of the project is estimated at $152,578.16. This includes $106,071.05 in equipment purchase for the four new pool heaters, and $46,507.11 in professional services costs for plans, specifications, installation, and inspection. ALTCRNA"GIVE ACTIONS Other action as identified by City Council. FISCAL IMPACT The total project cost is estimated at $152,578.16. The requested budget transfer of $64,000 and the additional appropriation of $88,578.16 will fully fund the project. Upon installation of the heaters, the Gas Company will reimburse the City $88,578.16. 3