Title
Additional Payment Authority for Owner Representative for Energy Performance Contracts at City Facilities (Ordinance S-45818)
Description
Request Council authorization for the City Manager, or his designee, to increase the payment authority for Celtic Energy, which is providing third-party consulting and acting as Owner's Representative for Energy Performance Contracts with Job Order Contract (JOC) vendors. The requested authority is for an additional $220,000 (including applicable taxes) increasing the total contract value to $400,000. Further request authorization for the City Treasurer to accept, and for the City Controller to disburse, all funds related to this item.
Report
Summary
The City entered into contracts last year with five Energy Service Companies (ESCOs) under the Job Order Contracting program to install energy efficiency measures on a large number of City facilities, totaling approximately 11.5 million square feet of space. The Owner's Representative acts as a Project Facilitator, working with all ESCOs to achieve the City's energy reduction goal of 20 percent by 2020 following all phasing with complete oversight requirements as mandated by U.S. Department of Energy: Energy Services Performance Contracts must include ESCO review, project development, project implementation and construction, post-completion performance/first year and subsequent Measurement and Verification (M&V) reviews.
Progress to Date
The Owner Representative assisted with the development of the initial job order contracts for each of the ESCO vendors and with the walk-through assessments of facilities in Aviation and the Convention Center. As the City enters into the next phase of the project requiring investment grade audits of these facilities and corresponding Job Order Agreements (JOA) for each project, additional funding is needed for the Owner Representative to review the terms of each contract and assist in developing M&V protocols. While the initial funding to set up the project and contracts was paid out of the Public Works Department budget, Owner Representative costs for specific projects will be included in the business case for each project--where project costs, including the costs of review by the Owner Representative, will be paid by the participating department out of the energy savings. As required under the terms of the JOC, each project will result in a positive cash flow for each year and over the life of program.
Contract Term
The initial one-year City Contract 146596 term began on or about Nov. 1, 2017, and includes three one-year options to extend. The first one-year option to extend was exercised on Oct. 31, 2018.
Financial Impact
The aggregate contract value including all option years will not exceed $400,000 (including applicable taxes). Funds are available in the Public Works Department's budget based on the initial $180,000 authorization, however, the Investment Grade Audits and the corresponding implementation will be paid out of the energy savings by the department in which upgrades are made.
Concurrence/Previous Council Action
City Contract 146596 was approved by City Council on Nov. 1, 2017. On June 5, 2019, the Water, Wastewater, Infrastructure and Sustainability Subcommittee unanimously recommended City Council approval of this item.
Department
Responsible Department
This item is submitted by Deputy City Manager Karen Peters, the Office of Sustainability, and the Public Works Department.