Minutes

             
A Consideration and Approval of Contract:  An Energy Efficiency Services Job Order Contract with NORESCO, LLC; and Construction Work Order No. 1 with NORESCO, LLC, in an amount not to exceed $4,423,547, for Phase One of Project Implementation.         
 
  Sustainability Director Nicole Antonopoulos introduced Kathy Krasenics, Aaron Hart, and Richard Seifert with NORESCO and provided a PowerPoint presentation that covered the following:
 
CONSIDERATION OF ENERGY EFFICIENCY SERVICES JOB ORDER CONTRACT WITH NORESCO, LLC AND CONSTRUCTION WORK ORDER NO. 1
DISCUSSION
BACKGROUND
WORK ORDER NO. 1 – PROJECT HIGHLIGHTS
WORK ORDER NO. 1 – ECMS
WORK ORDER NO. 1
FINANCIAL SUMMARY
 
Councilmember Matthews asked if rate increases are factored in with the utility savings. She also asked if NORESCO would guarantee the savings and if there was any research into their capacity to honor those paybacks if the savings is not realized. Ms. Krasenics stated that there is a conservative escalator for rate increases and they try to be more conservative with their numbers. She stated that they are a division of Carrier Corporation, a national corporation based out of Florida, and they have the financial foundation to backstop all of their guarantees. Mr. Seifert added that they have been in business over 40 years and they currently have over $5 billion in energy guarantees.
 
Ms. Antonopoulos continued the presentation.
 
WORK ORDER NO. 1 TIMELINE
CONSTRUCTION TIMELINE – 20 MONTHS
PROJECT MICROSITE – INTERACTIVE MAP
 
Councilmember Matthews asked about the replacement of commercial heat pumps and if they would be replaced with air to air pumps or water to air pumps. Mr. Hart stated that the intent is to replace with air to air pumps. Councilmember Matthews stated that the life expectancy of air to air heat pumps is 15 years and the proposal shows a realized savings over 25 years. She also noted concerns about APS infrastructure being able to handle the increase in electricity usage. She then asked about the water meter test pilot.
 
Ms. Antonopoulos stated that she has reached out to APS to set up a Work Session presentation where they can talk about their infrastructure. She then explained that the city has had updates to residential water meters on its to do list for many years. It is a huge undertaking and building it into Phase 2 of the contract will provide the assistance needed to replace the meters. The testing that will be done in Phase 1 will inform the guaranteed savings, workload expectations, and delivery time for Phase 2.
 
Councilmember House stated that she has some concerns with the shift to electric and automated water meters. Other communities have had major issues with them. She asked what the plan is to ensure there are not similar issues in Flagstaff. Ms. Krasenics stated that they have worked with staff on delving into the issues that could come up and the pilot will provide an opportunity to test things before full implementation. There is benefit to the customer in that they can see their readings in real time and city can ping a customer when anomalies arise.
 
Councilmembers Matthews stated that NORESCO has done a great job and she is trying to balance the $4.4 million cost to do things that will take time to realize a benefit while also looking at housing and how that has caused many people to commute into the community to work which is a big emission issue. She is struggling with balancing the needs associated with both of the declared crises.
 
Travis Smith addressed Council and urged them to put a pause on moving forward with the contract. $4.4 million is a lot to invest in a project that may or may not pay off.
 
Vice Mayor Aslan stated that he appreciates the time invested and that it is a phased approach with a step-wise pilot process. He believes that it is an example of how multiple things can be accomplished together in addressing the climate and housing crisis. The urgency is real and it is important to take action now.
 
  Moved by Vice Mayor Austin Aslan, seconded by Councilmember Miranda Sweet to award an Energy Efficiency Services Job Order Contract with NORESCO, LLC, award Construction Work Order No. 1 with NORESCO, LLC, in an amount not to exceed $4,423,547, for Phase One of Project Implementation, and authorize the City Manager to execute all necessary documents.
  Vote: 7 - 0 - Unanimously

Debugging Information
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chkForExtraFlds (Datasource=frsRO, Time=15ms, Records=1) in D:\inetpub\PublicPages\agpub_client_defines.cfm @ 07:08:45.045
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