Fulton County finance committee discusses guaranteed energy savings
The Fulton County Finance and Insurance Committee met Feb. 22 to discuss the guaranteed energy savings.
Here are the meeting's minutes, as provided by the committee:
February 22, 2017 Special Finance and Insurance Committee Meeting Minutes
Fulton County Board- Finance & Insurance Committee Meeting Agenda
Fulton County Board Office, 100 N. Main, P. O. Box 226, Lewistown, IL 61542
Phone 309-547-3041ext 104-Fax 309-547-3326-email email@example.com
Committee: Finance/Insurance Committee
Meeting Place Fulton County Courthouse, Rm 313, Lewistown, IL
Time: 5:30 p m
Date: February 22, 2017
1. Call to Order
2. Roll Call
Doug Manock (present/xxxxxx)
Garry Hensley (present/xxxxxx)
Lisa Joachim (present/xxxxxx)
Eric Pigg (present/xxxxxx)
Warren Potter (present/xxxxxx)
Roll call was taken and Quorum was present
OTHER BOARD MEMBERS: Bob Bucher – Fulton Co. Board President
Terry Pigg – Fulton Co. Board Vice President
Steven Bohler, Roger Clark Board Members
STAFF: John D Young – Executive Asst. FCB
ELECTED & APPOINTED OFFICALS: Staci Mayall – Co. Treasurer
James Nelson – Co. Clerk
Jeff Standard – Sheriff
GUESTS: Arica Finney, Drake Wahlers, Joel Khaln and Rob Vollrath – Leopardo Energy
3. Call for Additions/Deletions To and Approval of the Agenda – None
Member Joachim moved to accept the agenda as presented with a second from Member Pigg. No Discussion was made. Motion carried by voice vote with all voting ayes.
4. Announcements, Communications and Correspondence – None
5. Public Comments – None
6. New Business
Arica Finney – Business Development Manager from Leopardo introduced the team that had been working on the feasibility study; Drake Wahlers, Mechanical Engineer, Joel Klahn, Director of Operations and Rod Vollrath; Director Green Building Solutions. Finney proceeded to tell a bit about the firm, what they do. Leopardo is a family owned and operated company with over 400 employees. They have over 25 years of national experience in the construction industry with over a decade of experience in the energy saving business. Finney concluded her portion of the presentation and turned the floor over to Joel Khaln – Director of Operations. Khaln pointed out several of the types of construction they do including the work for governments and educational institutions. Khaln stated the work they do with energy savings programs was a natural fit adding that they had already been doing the installation work for companies like Johnson Control. Khaln said that their program was more cost effective because they are not required to use a specific type of product to install, making Leopardo’s operation much more flexible to the customer’s needs. Khaln said that their company, since 2005, had completed or is in the process of complete over half a billion dollars in where their energy savings projects had been utilized.
Rod Vollrath; Chief Financial Officer next address how guaranteed energy savings programs like the one Leopardo is purpose can be done. 50 ILCS 515/1 establishes the basis for energy efficiency in state and local government buildings. The bill authorizes a program for achieving energy, operational and capital cost avoidance savings in state and local government buildings through ESPCs. Vollrath pointed out the numerous ways energy savings programs work, emphasizing these programs offer guaranteed savings, guaranteed equipment performance, avoids using capital and operational budgets for building needs. Project financing is exempt from net allowed indebtedness and avoid future budgeting issues, reduces maintenance costs, updates inefficient equipment with the latest efficient equipment and on-going operational support is offered. Verification of annuals savings through a monitoring program was another part of the program the Vollrath stated was part of why Leopardo is so success, Vollrath added that these are just part of the reason why their program is so successful and why they can offer to pay any difference with a check from them to cover any shortfall the ESPC surpasses. Vollrath gave the example, if they project a $100,000.00 savings but the resulting savings are only $90,000.00, Leopardo writes a check for $10,000.00 to cover the shortfall. Vollrath concluded by saying to day, Leopardo has never written a shortfall check.
Khaln and Vollrath both addressed issues that come with contracting methods that can cost an organization. Traditional contracting has a greater amount of direct risk to the organization than, the need for hiring outside engineers and general contracts which can bring a different set of concerns to an organization. Khaln made the point that by utilizing the performance contract, Leopardo does all the work and is responsible for keeping their systems in proper order. Khaln continued b giving the example, if a light bulb goes out they not only have to provide the preplacement but also have to install it.
Vollrath took the floor again; going over several points on how they guaranteed savings; through energy savings, operational and maintenance savings, billable revenue increases, Fuel and Power Improvements, and lastly capital cost avoidance savings. These steps help avoid unexpected costs from having to replace old equipment as well as planned or capital expenses, plus transfers the responsibility of operation and maintenance and/or repair and replacement on Leopardo.
Drake Wahlers, Energy and Development Engineer took over to discuss some of the finds from the field work he had done at the county facilities. Wahlers outlined what improvements they concentrated on with their evaluation, lighting, mechanical upgrades, fleet services, and building automation were the primary points of interest based upon their findings. Wahlers proceeded to go over their finding from each of the sites they visited. It was pointed out by members of the audience that the Fulton Co. Health Department was a separate entity that has only the name as its affiliation. The group from Leopardo said that would impact their overall figures but was easy to do. Wahlers, Khaln and the committee members made general discussion on what sorts of mechanical improvements would be made, what warranties and services would be provided as part of this ESP, Member Manock and Pigg asked specifics about the mechanical systems. Vollrath and Khaln both stated that the Leopardo guarantee will cover a mechanical system that fails even if it is out of manufactures warranty because Leopardo is selecting equipment based on a longevity and efficiency of products, if it fails within the fifteen years of the agreement then it is Leopardo’s responsibility to replace and install at no cost. Wahlers turned to the courthouse boiler, pointing out that it is one of the major cost to an organization is the cost of operating an outdated boiler. Member Joachim started a discussion about the improvement in technology; Khaln pointed out that if a company that has a contract with Leopardo wants to change equipment on their own, there is a clause that allows both parties to discuss this option and the Leopardo guarantee might still be valid with the equipment.
The next part of the presentation addressed the savings that come from fleet; Wahlers said that just about ESP will see a large portion of their savings from fleet services and how vehicles are obtained. Focusing on the Sheriff’s fleet of thirty vehicles has an annual fuel cost of over $75,000.00. Wahlers explained how the installation of a propane system would save the county roughly $43,000.00 a year not including the reduction in wear and tear on vehicles and maintenance costs. These vehicles would be dual power, automatically switching from gasoline to propane without loss of performance or notice to the drivers. Jim Nelson – Co. Clerk mention that Fulton Co is the eight largest counties in the state and do not have road like in the collar counties of Chicago, asking how would the propane power vehicles hold up. Both Wahlers and Khaln stated that Leopardo has many accounts in Kentucky and there is no problem with these systems. Jeff Standard, Sheriff expressed concerns about propane based upon past experiences and encounters with propane powered vehicles. Khaln said that with the advances in technology past issues with using propane as a fuel source were a thing of the past, adding that propane systems can be moved from one vehicle to another.
Additional savings would come from a fleet leasing program which includes the Sheriff’s fleet and some of the highway departments fleet would be roughly $82,000.00 per year.
After further general discussion on the topic, the presentation was turned over to Vollrath who outlined the cash flow analysis for the study. The Cash Neutral Option would save the county over the term of the contract, 1.86 million dollars. This plan did not address the Courthouse air handler replacement which was brought up in the Capital Contribution Option, the saves would be just under $790,000.00 over the term of the contract. Vollrath said that all of their predictions on savings are very conservative and the saves will likely be high then what was being presented. Nelson asked to confirm the information as presented, specifically about the guarantee of savings and Leopardo’s guarantee to cover shortfalls due to miscalculations. Vollrath said that they had never had to pay out on their guarantee. Bob Bucher, Co. Chairman asked what the next set was in the process. Vollrath outline the process with a review of what has been a process that was begun in August of 2016, adding that after the board meeting on the 14th of March, assuming they were to proceed, advertising in the local papers, submitting RFQ, selecting providers and contact negotiations would follow, taking about three to eight weeks. Once a contract was ready to present for approval, final designs, permits and equipment ordering would happened and the project could begin within ten to twenty weeks. Member Eric Pigg asked if union contractors would be used. Khaln stated that they preferred to use union workers but the decision would be up to the county.
At the conclusion of the presentation; Member Manock asked the committee and other members present if they felt this should be passed to the full board for review and consideration. With the committee support Member Manock moved to send the proposal and feasibility study as presented by Leopardo to the full board for further consideration with a second from Member Joachim. No further Discussion was made. Motion carried by voice vote with all voting ayes.
7. Executive Session – None
Time: 7:18 pm
Member Joachim made the motion to adjourn with a second from Member Pigg at 7:18 p.m. The motion carried by voice vote.
Organizations in this Story
100 North Main Street
Lewistown, IL 61542