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Previously:

• Crescent City Hopes Energy Projects Will Realize Enough Savings To Fund Improvements At New City Hall Building

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Six months after they embarked on an energy audit, Johnson Controls representatives returned to Crescent City Councilors on Monday with proposed projects that could save the city $4.7 million to $7.1 million across its three major funds.

But the list of self-funded projects does not include retrofitting the old Bank of America building at 240 H Street into a future city hall, though that was a large focus of the audit. Johnson Controls still hopes to be able to use the energy savings from the project to retrofit the building, account executive Brian LaBrie told Councilors.

“The city will work with Urban Futures to determine what funds can be contributed to that city hall,” he said. “As you can see there are substantial cash-positive benefits each fund receives. Further evaluation is required to determine delivery method and overall how the city hall project can work together with the overall city energy efficiency project.”

Four members of the Crescent City Council approved a two-phased professional services agreement with Tustin-based financial advisors, Urban Futures Inc., who will analyze Johnson Control’s proposed energy efficiency project and help the city determine if it’s viable.

If Urban Futures, the city and Johnson Controls determine that the project is viable, Urban Futures will help the city obtain financing to implement those projects, according to City Manager Eric Wier.

The cost for the first-phase of Crescent City’s PSA with Urban Futures is not-to-exceed $10,000, according to Urban Futures Managing Director Wing-See Fox.

The second phase of the PSA would be a flat rate of $30,000 for a private placement or $35,000 for a public placement, though that compensation will be rolled into the financing and would not be paid out-of-pocket, according to the city’s staff report.

Mayor Pro Tem Alex Campbell was absent.

According to Crescent City Finance Director Linda Leaver, the Government Finance Officers Association recommends the city bring an independent financial advisor on board for a city that hasn’t issued debt in many years.

“Also because an energy project like this is not something that any of our city staff have worked with before, we think it would be helpful for the City Council and the public to have that outside transparent look at it to make sure everything is made very clear both to the Council and the public,” she said.

Johnson Controls would perform the work and would pay the city to offset the cost of its debt service payments if the energy savings aren’t realized, according to LaBrie. If the city doesn’t want to move past the project development phase to construction, it would pay Johnson Controls a breakage fee of $151,000, he said.

Johnson Controls’ energy audit included projects benefitting Crescent City's general fund, water fund and sewer fund.

In the general fund, the audit called for installing photovoltaic panels and using electricity rather than propane to heat the Fred Endert Municipal Pool, converting streetlights from high pressure sodium to LED and converting lighting at other facilities to LED.

According to LaBrie, the project would cost roughly $1.4 million and mean an annual savings of $89,000 and a 25-year net positive cash flow of $1.25 million. These are both energy savings and operational savings, LaBrie said.

“By implementing all the conversions at once, you now free up staff hours to be allocated through the city as needed and it frees up available resources,” he said. “The 25-year net positive cash flow is the financial value of the operational and energy savings in excess of the total cost of the project. It shows a substantial amount of net positive cash flow just for the general fund alone.”

Within the city’s water system, Johnson Controls proposes installing variable frequency drive controllers at the Ranney Collector near the Smith River; replacing the aging water meters with ones that can be automatically rather than manually read; and retrofitting pumps across the system.

According to LaBrie, this would result in a “drastic reduction” in operation hours and free up staff. The estimated budget for the project would be $2.4 million. Annual energy savings for the project is $27,000; annual operational savings is $78,000 and the city would save $37,000 a year by making the meters more efficient.
The project would have a 25-year net positive cash flow of about $1.27 million.

“The water meter project on its own — by using this structure, the city would free up approximately $1 million of capital,” LaBrie said.

Wier also noted that the city had embarked on a 10-year plan to replace its water meters with smart meters, putting in about $100,000 to replace about 500 meters a year.

“This project would pay for itself without that $100,000 for 10 years with the benefit of having it all be done right now,” he said. “In a sense, the city would get a project that would pay for itself and we will not have spent that $1 million.”

A staff member is also currently tasked with reading every single meter in Crescent City, Wier said. This project could result in the Council reallocating that position and having that staffer do something else for the water system.

For the city’s sewer fund, Johnson Controls recommended retrofitting the lighting at its wastewater treatment plant and installing a solar array at the laboratory, according to LaBrie. This includes one on the treatment plant’s roof and another 30,000 square foot ground level array in the Beachfront Park area — something that didn’t sit well with City Councilors.

According to LaBrie, the project budget would be $900,000 with approximately $40,000 in annual savings and a net positive cash flow of $92,000 over five years.

Though a solar array taking up a half acre at Beachfront Park isn’t ideal, Wier said there are other measures the city and Johnson Controls could take to look at solar covers over the parking area near the city’s dog park. He also noted that taking out that ground array wouldn’t mean there aren’t still energy savings to be realized by the rooftop panels.

“Maybe it reduces the project down so it’s a smaller self-funded type of project,” he said. “But at least the Council and community has the information that this is a viable project if there’s the appetite to do it — in this case, sacrificing a large portion of Beachfront Park is probably not the most appetizing project for us in the community.”

Crescent City Councilor Blake Inscore acknowledged that while it may not be the preferred location, the vacant area between the dog park and the city’s laboratory would be sufficient for the array.

“I’m not saying that’s where it should go, but from a visual … that area right there has the necessary footprint,” he said.

According to LaBrie, the equipment that would be used in these projects — the LED lights, solar panels, pumps and mechanical components — have life expectancies and warranties of between 15 and 25 years. The solar inverters, which convert energy from AC to DC have life expectancies of about 10 years.

LaBrie said Johnson Controls would guarantee the life of the equipment to meet the city’s financial term.

The Crescent City Council can expect an analysis of Johnson Controls’ proposed energy efficiency contract from Urban Futures in about four weeks, though it depends on the information the firm is able to receive, Fox said.

Inscore called on Fox to make sure the Council sees all options.

“If in fact City Hall is not going to be part of this specific energy project, we need to be able to see how we can balance both of these things together,” he said. “If it takes a little bit of time to do that, we’d like to see all of that together because that’s been a driving factor for us.”

Crescent City purchased the former Bank of America building with the goal of turning it into city hall in 2018. The city had to put that project on hold due to budget deficits brought on by the COVID-19 pandemic.

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