Jessica Cejnar / Wednesday, June 23, 2021 @ 4:36 p.m. / Local Government
Energy Efficiency Project List Down to Two: Replace Aging Water Meters, Install Electric Heat Pump, Solar Panels at Pool
Four months after Johnson Controls created a list of potential projects that could save Crescent City up to $7.1 million, representatives returned to Councilors on Monday with a focus on the swimming pool and the city’s water meters.
In addition to approving two project development agreements with Johnson Controls, City Councilors authorized staff to continue working with financial advisor Urban Futures to determine if those projects could be self-funded, according to City Manager Eric Wier.
The first project development agreement involves replacing the propane boiler at the Fred Endert Municipal Pool with an electric heat pump as well as adding solar panels to the facility to offset its energy costs, according to Brian Labrie, a Johnson Controls account executive.
The second project development agreement focuses on replacing the city’s water meters with a system that allows them to be read remotely, Labrie said.
“Currently the city manually reads the meters, which have an average life of 50 years old,” he said. “A technician is walking and driving across the city and manually reading data. The time that’s required to do that is very valuable to the city and the city could benefit from having that time be allocated elsewhere.”
According to Labrie, project to replace the propane boiler at the Fred Endert Municipal Pool would apply to the city’s general fund. The project’s estimated budget is $480,000 and its estimated net energy efficiency savings — not counting the generation of solar electricity — is $32,000 annually, he said.
Annual energy savings from the proposed solar panels would be an extra $5,000, Labrie said. Those savings are expected to increase 3 percent each year over the 20-year term of the project, he said.
“The way this is being proposed is we enter into a measurement and verification period post construction,” Labrie told Councilors on Monday. “Johnson Controls will measure and verify the savings annually for an eight year period. The savings are guaranteed by Johnson Controls. If there is a shortfall, we’ll take the cumulative savings over an eight year period, extrapolate that over the 20-year term of the project and write the city a check for any shortfalls.”
According to the city’s staff report, if Crescent City enters into a debt service to finance the swimming pool project, total savings across a 20-year term would be roughly $228,000, according to Labrie.
Labrie noted that the estimated 3 percent in energy savings coming from adding solar panels to the pool is based on the increasing cost of electricity per year.
“Utilizing solar in the area is a challenge,” he said. “That’s part of the reason why we’re only looking at one site for solar generation. The pool has a higher electric rate compared to other areas in the city and the cost to construct a solar array is less than if we were to put in a ground-mounted system in other areas.”
The estimated project budget to replace the water meters is roughly $2 million, Labrie said. There’s also a 20 percent contingency, which brings the cost to $2.4 million, according to the city’s staff report.
Replacing the water meters is expected to create roughly $73,000 in “operational efficiency savings,” he said.
“A nuance in operational savings, it isn’t necessarily something the city can use to pay a bill or a debt service,” Labrie told Councilors. “They’re man hours used by staff to perform work. By implementing the project, those man hours can be used elsewhere.”
Replacing the aging system would also generate roughly $37,000 in water efficiency savings since the new meters would be more accurate, Labrie said.
According to Wier, replacing the water meters would rely on a cooperative purchasing agreement through Sourcewell, a Minnesota-based government agency that works with other government organizations. Joining Sourcewell is free, according to Wier.
Crescent City Mayor Pro Tem Blake Inscore, who brought Johnson Controls’ work to the city staff’s attention, said he didn’t want to debt service the pool project. With the approval of Measure S — the city’s 1 percent sales tax increase the benefits public safety as well as the swimming pool — Inscore said the city may be able to pay for the project internally through those funds.
“I believe we’re going to discover that the Measure S money will come in much higher than we had initially anticipated,” he said. “I would recommend anything above what we’ve spent already could go directly to this.”
Inscore also mentioned money the city is expected to receive through the American Rescue Plan Act — a $1.9 trillion stimulus package President Joe Biden signed into law in March. Inscore said those dollars may be used to finance the water meter project.
“I can’t think of a better way to make use of this money that we didn’t anticipate,” he said. “I think we have a good strategy for both projects and there’s a possibility that neither one of them have to incur a significant amount of debt for the city.”
Inscore’s colleague, Mayor Jason Greenough concurred but said the first step would be for Urban Futures to what the city’s financing options are for the swimming pool and water meter projects.
“I do believe that the pool is a really important project,” he said. “The infrastructure in that building has aged — we’re going to have to replace it anyway very shortly. I believe you got to strike when the iron’s hot and I think that’s a good project. We need to follow through with that one.”
Greenough added he’d like to see the swimming pool project funded through the city’s general fund or with Measure S dollars.
The city’s newest councilman, Ray Altman, was more skeptical. He said he supports both projects, but wanted to make sure the city has the money to pay for them “instead of gambling and hoping we get money later somehow.”
Altman asked his colleagues to table the issue until the city gets more information regarding Measure S revenues and potential American Rescue Plan Act dollars.
“I support clean energy programs, but you guys make me nervous sometimes,” he said. “You’re talking about ‘we don’t have the money and we’re not going to borrow it.’ Where are we getting it?”
Inscore responded by saying that the city is receiving higher than expected sales tax revenue, which means that Measure S revenue is also going to be higher than projected. One of Measure S’s goals was to ensure the pool’s sustainability, Inscore noted.
As for the water meters, though he’s supportive of entering a debt service, if the American Rescue Plan Act dollars come through, the city could use those funds to pay down that debt service, Inscore said.
Councilor Beau Smith, who said he’s trying to be conservative, said even if the city chose not to go forward with the two projects, they would still have the planning documents from Johnson Controls.
“They’re going to provide a product no matter what,” he said.