A joint Finance and Capital Improvements committee meeting was held May 24 in the Old City Hall Auditorium, where one of the major topics of discussion was a Facility Improvement Project for the City of Salem.
The proposed project would address a number of necessary repairs and replacements to city facilities.
The cost of repairs and unbudgeted replacements for aging, ready-to-fail HVAC equipment is increasing each year, according to City Administrator Ray Walden.
The city hired Energy Solutions Professionals (ESP) to perform a preliminary energy performance audit on city facilities with the intention of ascertaining what necessary improvements have become increasingly imminent over past years.
According to a presentation given at the meeting by Chris Salzman of ESP, his firm studied a vast array of projects that need to be done in order to properly maintain city facilities. The express purpose of the audit has been to evaluate the potential benefits of using Guaranteed Energy Performance Contracting as a way to upgrade failing and inefficient heating ventilation and air condition equipment. This is possible due to Missouri revised statute 8.231, which allows a partnership between a system owner and an Energy Services Company that conducts a comprehensive energy audit for the facility or facilities under consideration and identifies improvements to save energy.
In consultation with the City of Salem, the ESCO designs and constructs a project that meets the organization's needs and in many cases arranges the necessary funding. The ESCO guarantees that the improvements will generate energy cost savings sufficient to pay for the project over the term of the contract. After the contract ends, all additional cost savings accrue to the organization.
According to energy.gov, most ESPC projects include maintenance of all or some portion of the new equipment over the life of the contract, the cost of which is folded into the overall project. The ESCO usually provides any specialized training needed, so that the customer's maintenance staff can take over this duty at the end of the contract period.
ESP’s report claims that once associated projects are completed the city could expect to see annual utility cost savings of around $9,305 as well as operation and maintenance savings of around $9,000, for a total annual savings of around $18,305.
ESP’s energy performance audit included a detailed breakdown of the inefficiencies of each city building with a specialized analysis of what needs to be done at each.
In total, the energy conservation measure and associated building costs would be $1 million and the locked-in payment option that Salzman suggested would be paid annually in increments over a 15-year period. Costs include:
• $419,441 - Old City Hall
• $34,607 - City Admin Office
• $289,651 - Community Center
• $75,699 - Police Department
• $116,242 - Parks and Building (Old Power Plant)
• $12,479 - Miscellaneous
• $57,474 - Other
There’s a broad spectrum of work that this GEPC would fund if approved. Things like HVAC (roughly half of the million dollars), interior and exterior lighting (including new lights at Al Brown Field), domestic water devices, heating systems and irrigation systems, building envelope (roof, windows, doors, insulation), as well as temperature controls.
Walden said that he believes that this contract will be good stewardship of taxpayer dollars and city property because most of these projects either have needed to be done for a while or will need to be done in the near future. Walden thinks that it will save the city money in the long run. Instead of paying for unbudgeted expenses whenever something gets so bad that it has to be fixed, this creates a proactive strategy to city expenses.
“We’ve waited so long to do some of these things that we don’t have much of a choice,” said Walden, a sentiment that Mayor Brad Nash echoed during the meeting.
“We need to make a decision,” Nash said. “I don’t know that we have a better option.”
The Finance and Capital Improvements committees opted to table discussion about Guaranteed Energy Performance Contracting until its next meeting 6 p.m. June 14.
Most recently listed members of the Finance Committee are East Ward Alderwoman Kim Steelman, who was present and acted as chairman and called the meeting. East Ward Alderman Shawn Bolerjack (present), Alderman Greg Parker, Sherry Lea (present) and Bob Jenkins (present).
“Usually we do the Capital Improvements meeting and then the Finance Committee meeting, but I thought with the state everything, I think it’s really important we look at the budget now and where we’re at before we talk about capital improvements,” Steelman said.
The Salem News asked the city for a list of the Capital Improvements Committee members. No list was provided. Nash is expected to make official appointments soon.
