Town Office Building September 22, 2011
Selectmen’s Conference Room 6:30 P.M.
First Selectman Mailhos called the meeting to order at 6:30 P.M. with the following in attendance: Selectmen Millix & Blessington, Chopeta Lyons; Board of Finance Member; Ed Taiman, Ralph Tulis, Energy Advisory Committee Members; Superintendent Harding, Andy Merola of CCM (Connecticut Conference of Municipalities) and Residents.
- Energy Advisory Committee discussion and recommendation of Performance Contracts
Ed Taiman, Chairman of the Energy Advisory Committee led the discussion. He said the EAC recommends going with the CCM Program for Energy Efficiency. The advantage CCM has over all the other contractors is that we would eliminate a whole layer of fees associated with the project. He then introduced Andy Merola, CCM Energy and Program Development Manager.
Mr. Merola presented the Energy Savings Performance Contracting offered by CCM. It is a financing concept aimed at Municipal Government where needed improvements are made to municipal buildings without using tax dollars to fund them. He said to think of the process as a partnership with a long term agreement. The length of the agreement is determined by what is needed in the buildings as well as the cost involved. Most projects are covered through a municipal lease, which is tax free. The default rate is less than ½ of 1% and is low risk for essential government services – lighting, heating, etc.
Performance Contracting consists of analyzing every energy-using system and improving cost savings on them. What you want to do with a program like this is not focus on the money saved, but on savings of energy units, which protects from increasing energy prices. The energy services company is financially incentivized to make sure what is installed in the building works as promised. The financial institution payment is offset from the savings from the energy service company. To summarize, we would be using future guaranteed energy savings to pay for the installation of efficient equipment in the buildings today. The program can last as long as the Town decides. CCM helps to make the financial decision as well as look for financial rebates.
The first step is to perform a preliminary energy audit at no cost or obligation. CCM will take data usage and building information (square footage) and put into an EPA portfolio Manager. A report is then generated with a score of 1 to 100 in terms of energy use. This gives the engineers an indication of where to start.
The second step is a detailed energy audit. The engineers will work up a design and specific recommendations for improvements and installations. This phase comes with a cost associated and a request to commit to paying a portion of the cost; which is folded into the program and will end up saving money over an amount of time. The contract can be terminated after the preliminary report is made. The only cost involved would be for the binder with the preliminary report findings.
The final step would be to sign a standard energy contract, which would need to have approvals from Town Officials. A standard energy contract would be signed with CCM’s service provider – Siemens Industry. They have negotiated a favorable bid for the lowest cost possible. The financing will go out to bid as well. Construction takes around 12 months. Calculations of savings will be reported on a monthly basis.
The preliminary report can start within 30 days after the letter of intent is signed.
Selectman Blessington asked if we chose not to go forward after the detailed energy audit, what the cost would be associated with that. Mr. Merola said it is based on the square footage (5-6 cents per square foot) of the building where the audit was performed and is outlined in the one page letter of intent.
Mr. Merola said this project could be considered as a perfect program to take care of deferred maintenance all at once. He then said they will also include renewable energy applications as they look at the buildings; and give the options for other incentives as well as solar.
Mr. Taiman said two other companies were interviewed and had the same concept, however the difference is one company required a $20,000 down payment plus a 3% fee; the other required 0 down but 4% interest. Those fees would be eliminated by going through CCM.
Ralph Tulis said to think of it as we are paying $10,000 in energy costs this year, $10,200 the next year and more the next and so forth; but by the improvements made here; each of the subsequent years we will be saving a chunk of that and if it ends up to be 30% for the duration of the loan we may see the bottom line and the savings quicker.
Superintendent Harding described similar initiatives that were undertaken at both schools, but on a much smaller scale.
Discussion was held on holding a Town Meeting to inform residents. Selectman Blessington said he is not convinced on this program right now. It makes him a little nervous and feels it will cost the Town something. It may be worth it, but who knows. There is a lot of stuff that needs to be done, but not sure if the Town will end up making money.
Mr. Taiman said where else can you get potentially millions of dollars worth of upgrades and improvements to all Town buildings without having to pay any money. First Selectman Mailhos stated that it is not about the savings so much as it is about the avoided cost over time. Mr. Merola agreed and added that it is about finding the way to pay for something that is needed, where it costs less to own in the long run where it will end up paying for itself. Selectman Blessington said sometimes it works, and sometimes it doesen’t. Mr. Merola said that is where the guarantee comes in. Whatever is promised has to be delivered.
Selectman Blessington said we may want to get P&Z and the Building Inspector on board before we move forward.
Mr. Taiman said he will send the materials to First Selectman Mailhos to begin the preliminary audit, which will be at no cost and thanked Mr. Merola for presenting before the Board.
The meeting was adjourned at 7:45 P.M.
Respectfully submitted,
Robin Campbell
Robin Campbell
Administrative Assistant
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