Public Hearing January 30, 2013
Willington Public Library 6:30 P.M.
First Selectman Mailhos called the meeting to order at 6:30 P.M with members from the Willington Energy Advisory Committee, Board of Education, Fire Department, Senior Center and residents.
First Selectman Mailhos read the call of the hearing:
TOWN OF WILLINGTON
NOTICE OF
PUBLIC HEARING
The Board of Selectmen, will hold a Public Hearing on Wednesday January 30, 2013 in the Community Room at the Willington Public Library; 7 Ruby Road, Willington, at 6:30 P.M. for the following purpose:
- Presentation of a detailed Energy Audit/Report for Town owned buildings at a potential cost of over $10,000.
First Selectman Mailhos opened the floor to Jerry Drummond, from Siemens. Mr. Drummond introduced his team who have been working on the audit; Mark Buzzell, Curtis Rose and Andy Merola of CCM.
Mr. Drummond reviewed the Performance Contracting scope and what was discussed over the summer at the last Public Hearing. At that time, Siemens had not had a chance to review the heating systems at any of the buildings. The buildings that have been audited are: Hall School, Center Elementary School, Library, Town Office Building, Senior Center, Willington Fire Dept. #1 and the Public Works Garage.
Mr. Drummond stated the performance contacting has helped many other municipalities do this over the past several years. Siemens will install the proposed equipment at no up-front cost to us and when the project is done, the Town would begin to pay Siemens back out of energy cost savings over time. The way the CCM program is designed is that every dollar of cost on an annual basis is offset by savings from our existing budgets. Mr. Drummond went on to say that many municipalities have capital needs that are bigger than their budgets to support the needs. This would be an innovative way to purchase “large ticket items” such as boilers and heating sources without raising tax dollars because we would be paying for the upgrades with the current budget.
Peter Latincsics stated at the last public hearing Siemens said there would be some up front costs and asked why that is not the case now. Mr. Drummond answered no, that the up front costs were for the audit, would need to be paid if the Town does not move forward. The costs would incur in a one time payment, only if the Town decided not to proceed with the upgrade. In return, the stipend ($10,000) would go towards the detailed energy audit that has been performed over the past few months. Otherwise, the audit is included in the upgrade.
Curtis Rose presented the scope on the lighting evaluation. All of the buildings that were audited were found to be candidates for lighting upgrades. CL&P has incentives available to go toward the upgrades to help offset the costs. With the upgrades, the operating costs would be lower and he added that the new lights last longer and would also offset maintenance costs. The suggested solution would be to upgrade a mix of LEDs, and delamping areas that are over-lit.
Mr. Rose reviewed the building envelopes for each structure involved. He stated that one thing the Town does well is maintaining heating costs, especially compared to other municipalities that have had audits done in Connecticut.
The School boilers were discussed. Mr. Rose stated that the school boilers are reaching their end of their useful life. They ran tests on them and found that they are not very efficient. The proposed solution for both schools would be to install 2 new smaller propane boilers at each school. He added that propane would allow more consistent comfort levels in the buildings. Propane is cheaper and burns cleaner.
Mark Buzzell stated that they looked at all of the other buildings; Town Offices, Senior Center and Fire Department. They found the boiler at the Fire Station to be oversized, but well kept. The Senior Center boiler is also newer and in good shape. He added that they considered proposing upgrades of those boilers to propane as well (noting that both buildings already have propane on site) but stated that the buildings do not use a lot of fuel and there would not be a lot of savings incurred with the upgrades. He noted the Town Office Building is probably the worst offender of all buildings, but added any of these boilers would simply take too long to payback.
Peter Latincsics asked about the Public Works Garage? Mr. Buzzell stated that the Pubic Works Garage uses hardly any fuel (which is propane) but uses a waste oil tank.
Alex Strong asked about the safety issue of propane? He stated that he lived in Mexico City and Texas and there were propane explosions all the time and a lot of people were killed. Mr. Buzzell stated that we have propane at most of these locations already. He added that they have professionals who have installed many systems and have not had any problems and most municipalities are going this route.
WFD#1 Chief Millix asked if they looked at revamping the water heater to an on demand service. Mr. Buzzell stated that they did not, but it could be an option and could result to a quicker payback option – especially during the summer months.
Curtis Rose went over the Energy Management System; they looked at adding brand new automation systems in both schools, but found it to be costly, and because of the amount of fuel that is used these are also measures that cost hundreds of thousands of dollars and the savings would not support them. He added the proposed boilers come with intelligence in the control panels which would help level out the heating systems. They did, however look at programmable thermostats. Ralph Tulis stated that the programmable thermostats work great if nobody touches them. Mr. Rose said the type they are proposing would be wi-fi based and also have occupancy controls, which learns when the building is in use, and when it is not.
Cooler controls were then discussed. Mr. Buzzell explained that most freezer doors are heated to prevent them from frosting on the outside. They have suggested swapping them out with ECM motors which are 50-60% more efficient. Normally the fans run all the time, but the new set up would cycle the power and have a quicker payback at Hall School. Center School does not have the door heater, and would take longer for a payback.
Network controllers will be installed on all computers that are left on during the day. It would be a network based PC control system that puts the pc into hibernation mode when not in use and this would reduce the wattage. They discussed this with the new IT person at the Schools and he would be in favor of it.
Mr. Drummond then presented a spreadsheet with the suggestions that were proposed. He added that his suggestions were based on money and trying to get the maximum amount of capital dollars in a 20 year plan. He then stated that they were just suggestions and the Town will make the decisions of what will be added to the program. The spreadsheet is programmed to work out all of the scenarios so you (the Town) can decide which way to go, but explained the sheet the way it was presented, based on upgrades of $1,064,542, with additional incentives from CL&P, etc. of $63,290.
The financing rate was based on a recent project that Siemens just finished with the town of Hebron, which was based on a similar amount at 3.30%, but was just setting that as an example. He clarified it is not a bond; it is a municipal lease.
Mr. Drummond stated the financing can be set up many different ways. Arbitrage – which is known as construction interest is the difference between the interest charged and interest earned is factored into the program. The construction program could go 12 or 18 months; depending on the size of the project.
Superintendent Harding asked what Siemens used as a baseline for the energy consumption reports. Mr. Rose stated they used October 1, 2010 through September 20 of 2011. Mr. Drummond stated since it is one of the most important factors of the process, it can be established based on the Town’s suggestion and agreement with Siemens.
Mr. Merola added that the payment process will not begin until after the construction is done. This is to ensure that savings will cover the amount of the costs of the lease. Mr. Drummond then explained that the town would still be paying the same budgeted amount on utilities, but the costs will actually be less. The money that is being saved will pay the costs of the upgrades. The difference is that the town would be getting (for an example) a million dollars worth of equipment at no extra costs. If the Town does not go forward, it would still be paying for the energy costs and they are slated to go up with inflation.
Superintendent Harding said he wanted to make sure everyone is clear when talking about savings to be sure everyone is talking about it the same way. The savings are going to be rolled into paying the bill, and we are still going to budget what we are paying, and the increase in inflation is still going to be paid each year.
Alex strong said he doesn’t understand because it looks like we would be saving a miniscule amount of money in the long run. Mr. Drummond clarified that we would be getting $1 million worth of equipment for our Town, warning that some day the boilers at the school are going to fail and gave an example that it would be on a cold day, the town would have to react fast to get it fixed and might end up with a boiler that isn’t the most efficient and could end up being costly. Ron Strong, Head Custodian of Hall School agreed and said they are going to fail someday. First Selectman Mailhos added that the actual appropriation of money takes time as well, noting that we (the Town) do not have that kind of money set aside anywhere.
Mr. Latincsics asked for further clarification on the maintenance costs of a new boiler versus an old one. Superintendent Harding clarified that we would be paying the same budget as we are now but the difference would be paying for the equipment.
Discussion was held on converting the schools over to propane boilers. Mr. Buzzell stated he thinks the steam section of Center School would be converted to a hot water system, which is configured into the proposed cost and scope, but would have to check. Ron Strong said that would be a great improvement to that school. Technical discussion was held on the upgrades for the schools systems between Mr. Buzzell and Ron Strong. Mr. Buzzell added that Siemens added as much mechanical upgrades as they could with the savings that they had.
Mr. Drummond clarified that the Performa number and the scope of work will need to be decided by the Town (this consists of the amount the Town is willing to spend and what the Town would like to add in for purchases). Once the scope of work is decided, a comfort zone would be established, an agreement would be maintenance will be agreed to be done by the Town
A gentlemen asked what happens if the savings are not reached during the scheduled program. Mr. Drummond said that is part of the performance assurance, and if the guarantees are not met, Siemens will cut the Town a check on a yearly basis. They will run a detailed report on a monthly basis. Mr. Buzzell added that Siemens would investigate what went wrong and rectify the problem to assure that the savings will be realized. Mr. Drummond added that in most cases, the municipalities who have signed on have exceeded the guaranteed savings, and the extra money saved benefits those municipalities
Alex Strong asked how the guarantee would work if one of the schools were closed due to regionalization. Mr. Drummond stated the loan would still need to be paid back; at that point a non-appropriation clause would come into affect - if the town does not appropriate money for the building, the lender would take that risk.
Mr. Drummond reiterated that the proposal is the best scenario of what would work based on a 20 year loan. Mr. Buzzell stated that Siemens will work with the Town on improvements to the building envelope which is small stuff we (the Town) can do ourselves to save even more money. Mr. Wiecenski asked what would happen if the Town decided in 10 years that they no longer wanted to pay on the loan. Mr. Drummond stated that the loan would still need to be paid back. If the Town decided it did not want to pay monthly any longer, it could be paid off by using capital funds.
Suzanne Chapman asked if it would be possible for the Town to purchase some of the upgrades (using upgrade of lighting as an example) and have the savings go towards the project. Mr. Drummond stated yes; it would be applied as a capital contribution (or a down payment) towards the project – and the energy savings will help offset the costs.
Discussion was held on the proposed scope presented by Mr. Drummond and Siemens. Mr. Drummond stated the figures for the financing and costs are examples based on recent projects Siemens has performed. He added that it is the Town’s decision what is needed and what makes most sense.
Mr. Drummond added that Siemens has exceeded every one of their guarantees from 8 to 15 percent. He added that Siemens makes 99.5 % of their guarantees and they have$2 billion in guaranteed in savings and they do write checks to the ½ % that does not realize the savings. Superintendent Harding asked if there has been any litigation. Mr. Drummond said there is no litigation in New England. He added that there are clauses involved in the scope and contract – there are responsibilities that must be met by both the Town and Siemens. For example you cannot turn the heat up to 86 degrees for weeks at a time and expect to incur savings.
Mr. Drummond recommended forming a committee who would discuss the project and make recommendations to the Board of Selectmen to move forward. First Selectman Mailhos stated that she would also like to have the Willington Energy Advisory Committee involved in this group and one or two people from the involved departments and groups as well. Mr. Drummond stated the meetings can be held at any time to accommodate everyone’s schedule.
Alex Strong asked if a Town Meeting would need to be held to make the final decision. Mr. Drummond stated that none of the projects went to referendum in other Towns. The decision was made by the Board of Selectmen in every case. First Selectman Mailhos referenced the recent purchase of the fire trucks where a public hearing was held, but the Board of Selectmen made the final decision. Mr. Merola added that the non appropriation language is tailored to benefit the Board of Educations so they can plan appropriately year to year.
Peter Latincsics asked for clarification regarding the fire truck purchase going to public hearing – this would be different because the truck was voted on at referendum; in this case the Town would be signing a lease that suggests that there would be no public approval process. First Selectman Mailhos said the point is that it is still part of the budget. Mr. Latincsics asked where in the budget it would be. Superintendent Harding said part of it would be part of the heating oil bill, or the electricity bill. First Selectman Mailhos stated she assumes we would get one invoice per year and it will be broken down among the departments where the savings are incurred. Mr. Drummond concurred and said that is the way you want to do it. Everyone has the same budget they always had, but an additional
line item would be added for the savings as well. That way the savings can be tracked and see a consistent pattern over the years.
Selectman Blessington said he is still confused and does not understand the concept. Mr. Drummond explained that this is a unique opportunity for the Town to upgrade equipment without up front costs. The expenses of each individual line item will remain the same as originally budgeted and the savings incurred from the upgrades will pay for the equipment over the length of the lease.
First Selectman Mailhos stated that the Board of Selectmen will discuss the appointments to the working committee at the next BOS meeting; February 4th. The Energy Advisory Committee will also discuss at their next meeting which will be the first Wednesday of the month.
The meeting was adjourned at 9:00 P.M.
Respectfully submitted,
Robin Campbell
Recording clerk
Board of Selectmen
860-487-3100
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