PLACEMENT: Departmental
TITLE:
title
REQUEST FOR APPROVAL OF ENERGY & ENERGY RELATED OPERATIONAL SAVINGS PROJECT CONTRACT AND FINANCIAL TERMS WITH TRANE U.S. INC. PURSUANT TO SECTION 489.145(4)(e), FLORIDA STATUTES
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EXECUTIVE SUMMARY:
executive summary
The General Service Department is requesting approval of an Investment Grade Audit Report, Performance Agreement for Comfort (PACT Agreement) with Trane U.S. Inc. and a Master Tax-Exempt Equipment Lease/Purchase Agreement with Banc of America Public Capital Corp. The Energy Conservation Measures (EMCs) provided in the PACT Agreement are recommended by Trane U.S. Inc. in the Investment Grade Audit (IGA) Report. The Energy and Energy Related Operational Savings Project is required to be budget neutral and will be funded with future energy and operational savings. The Master Tax-Exempt Lease/Purchase Agreement will finance the project over a 15-year term.
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DEPARTMENT: General Services
PREPARED BY: Name: Sean Donahue
Title: General Service Director
REQUESTED BY:
PRESET: 10:00 AM
PROCEDURES: None
BACKGROUND/RELATED STRATEGIC GOAL:
One of the General Services Department’s objectives is to reduce energy and operating costs, improve indoor air quality and provide an extended equipment life and replacement cycle.
In January of 2024, the Martin County Board of County Commissioners (County) requested Statements of Qualifications (SOQs) from Energy Service Companies (ESCo) for a guaranteed energy, water, wastewater and operational savings performance contract. The scope of the project included but was not limited to adding the Public Safety Complex (PSC) to the existing Holt Correctional Energy Plant; replacing the HVAC systems at Cummings Library; providing County-wide LED lighting upgrades; and making other energy, water, wastewater and operational savings improvements County-wide. The RFQ committee unanimously chose Trane U.S., Inc. (the Contractor) as the best qualified contractor to perform these services and the BOCC approved Trane U.S. Inc.’s contract to perform the IGA on June 18, 2024.
The Contractor analyzed County facilities and provided an IGA Report to the County that contains recommended Energy Conservation Measures (ECMs) and detailed projections of energy and cost savings. The total construction cost is $7,021,715. The Public Safety Complex Chiller/Generator Replacement CIP has $1,837,449 in available funding for the project. The total Lease/Purchase loan amount will be $5,221,715 with an interest rate of 4.047%. The total Year 1 energy and energy-related operational annual savings are projected at a minimum of $643,173. The simple payback of the savings program is expected to be 10.9 years and the annual payment for the 15-year Lease/Purchase loan is $473,300.
The PACT Agreement between Martin County and Trane U.S. Inc. is a guaranteed energy, water, and wastewater performance savings contract pursuant to section 489.145(4)(e), Florida Statutes for the energy and cost savings described above.
No additional capital funds are requested with this project. The Lease/Purchase loan payments of $473,300 will be made using projected annual energy savings of $203,306 and $269,994 from the General Service Department’s Fixed Asset Replacement Budgets (FARBs).
The Energy and Energy Related Operational Savings project was chosen to avoid additional funding of Capital Improvement Projects (CIPs). The equipment proposed for the energy savings project has life expectancies of 20-years or more and will provide a capital cost avoidance savings by not having to replace equipment as often. If the County does not approve the Savings project, then significant CIP or FARB funding will be required to replace the HVAC systems and generator at the Public Safety Complex and the HVAC systems at the Cummings library, which will result in no energy or operational savings. These replacement costs will be realized again in 10-12 years and will have significant cost increases at that time. Therefore, the County will incur additional costs over time to maintain the same types of systems currently at each of these facilities, and no energy or energy related operational savings will be realized.
The Investment Grade Audit Report findings, PACT Agreement and Exhibits A-G will be attached via Supplemental Memorandum.
ISSUES:
None
LEGAL SUFFICIENCY REVIEW:
This item has been reviewed for legal sufficiency to determine whether it is consistent with applicable law, has identified and addressed legal risks, and has developed strategies for legal defensibility.
RECOMMENDED ACTION:
RECOMMENDATION
• Move that the Board accept the Investment Grade Audit Report.
• Move that the Board approve the PACT Agreement with Trane U.S. Inc.
• Move that the Board approve the Authorizing Resolution that approves the Master Tax-Exempt Equipment Lease/Purchase Agreement with Banc of America Public Capital Corp, Escrow Agreement, and Lease Schedule.
• Move that the Board authorize the County Administrator or designee to execute all documents related to this request.
• Move that the Board approve a Budget Resolution to allocate the funds.
ALTERNATIVE RECOMMENDATIONS
Direct staff accordingly.
FISCAL IMPACT:
RECOMMENDATION
It is requested that the Board approve the use of Fixed Asset Replacement Funding (FARB) and projected Energy Savings to fund the payments of the Lease/Purchase Loan. No additional CIP fundings is being requested for this project.
ALTERNATIVE RECOMMENDATIONS
None
DOCUMENT(S) REQUIRING ACTION:
☐Budget Transfer / Amendment ☐ Chair Letter ☒Contract / Agreement
☐Grant / Application ☐Notice ☐Ordinance ☒Resolution
☐Other:
This document may be reproduced upon request in an alternative format by contacting the County ADA Coordinator (772) 320-3131, the County Administration Office (772) 288-5400, Florida Relay 711, or by completing our accessibility feedback form at www.martin.fl.us/accessibility-feedback <http://www.martin.fl.us/accessibility-feedback>.