2012 2:00:00 PM

Monday, August 27, 2012 2:00 PM
Sparks Council Chambers, 745 4th Street, Sparks, NV

Consent Items: 5.4

Title: Consideration and possible approval of reimbursement to the City of Reno in the amount of $47,003.23 for Sparks’ share of an agreement with Ameresco, Inc. to perform a financial grade energy usage operational audit at the Truckee Meadows Water Reclamation Facility.

Petitioner/Presenter: Neil C. Krutz, P.E. – Deputy City Manager/Kim Laber – Acting Plant Manager/ Todd Saxberg – Operations Manager

Recommendation: Staff recommends City Council approve an agreement with Ameresco Inc. to perform a financial grade operational audit at TMWRF. Reimbursement to the City of Reno equal to $47,003.24.

Financial Impact: There is no general fund impact for this new project and will use a portion of the $2,307,264.00 of appropriations that has been set aside in the 5-year Capital Improvement Plan (CIP) for the City of Sparks under TMWRF Projects as CIP 136600, under Fund 1631, Sanitary Sewer Capital Project Fund. The City of Reno will enter into an agreement with Ameresco Inc. to provide financial grade operational audit services for up to $149,835.00 and will administer the project. Reimbursement will be sought from the City of Sparks for its share of expenses through the current cost sharing agreement for TMWRF capital projects, based on the ownership of TMWRF with the City of Reno being 68.63 %, or up to $102,831.77 and Sparks being 31.37%, or up to $47,003.23. Expenses for this additional project, TMWRF Energy Analysis Project, will post to account 604090, TMWRF Construction using CIP 13-6600C. An analysis of how to adjust funding for the approved six projects in order to incorporate this additional project will be done.

Total Costs: $47,003.23

Fund: Sanitary Sewer Operations Fund Account: 604090
Program: TMWRF Energy Analysis Project (13-6600C)
Amount: $47,003.23 Budget Status: Budget Exists

Business Impact (Per NRS 237):
A Business Impact Statement is not required because this is not a rule.

Agenda Item Brief: Based on the results of a Request for Proposal process carried out collaboratively between the cities of Reno and Sparks. Ameresco, Inc. will be contracted as an Energy Services Company (ESCO) working under a performance contract (NRS 332). The energy usage and process factors related to the overall day to day operation of the Truckee Meadows Water Reclamation Facility (TMWRF) will be examined in detail. This initial agreement will provide funding for the financial grade operational audit (FGOA) through approval of Financial Grade Audit Agreement No. 112-013. Reimbursement to the City of Reno in the amount of $47,003.24 for Sparks’ share of this project slated for FY 12/13 is integral in approval of this request. Total outlay for both cities related to the FGOA workup on this project is not to exceed $149,835.00. This matter is scheduled to go before the Reno City Council on August 22, 2012 for approval to enter into a contract with Ameresco Inc. to perform a financial grade operational audit at TMWRF. Under the capital projects cost sharing agreement with Reno, Sparks will reimburse Reno for 31.37% of the total amount being $149,835.00 (Sparks share is $47,003.24).

Background: TMWRF is jointly owned by the Cities of Reno and Sparks. Electrical power consumed by TMWRF represents approximately 20% (2.1- 2.3 MM) of the annual plant operations and maintenance budget. Staff believes potential opportunities for reduction in electrical consumption exist and that possible long term benefits will accrue to both Cities if savings in electrical power costs are identified and captured through the ESCo process. The Financial Grade Operational Audit to be developed and prepared by Ameresco, Inc. in accordance with RFP 1425, analyzes potential energy, water, and operating cost savings measures and develops a performance project. The audit will include the estimated savings to be accrued, the costs to implement the project, and the internal controls used to ensure that project performance is achieved. The measures to be evaluated include any improvements, repair or alteration to a facility, or any equipment, fixture or furnishing to be added or used in a building that is designed to reduce operating costs, including those costs related to electrical energy and demand, thermal energy, water consumption, waste disposal and contracted-labor costs, and increase the operating efficiency of the facility for the appointed functions that are cost effective. A project resulting from the Financial Grade Operational Audit will have the project savings and performance guaranteed by Ameresco, Inc., under NRS 332, for a period of up to 15 years. An RFP was issued for qualified ESCo’s to review and evaluate one occupied building and one process operation at TMWRF and provide staff with proposals addressing how they would evaluate and implement performance contract measures. Ten companies attended the mandatory walk through on May 3, 2012 and three companies’ submitted proposals by the June 7, 2012 deadline. A staff team reviewed the three proposals and scored each based on a fair and equal grading criteria developed specifically for this project. Based on the scoring, the staff team decided to bring in two companies for presentations and oral interviews. At the end of the presentations by the final two candidates, grades were given and by consensus the team recommended Ameresco, Inc. to perform the work. The Financial Grade Operational Audit will take place over a 6-9 month period. At the end of the Audit, staff will evaluate the feasibility of the proposal to determine if further action is warranted.

Analysis: This action includes authorization to enter into an agreement in an amount not to exceed $149,835 for the performance of the Financial Grade Operational Audit by Ameresco, Inc. The cost of the Financial Grade Operational Audit will be included in the cost to implement the performance contract. If Ameresco, Inc.’s final Financial Grade Operational Audit report does not contain a package of energy and/or water and/or operational savings measures which, if implemented, provide TMWRF with cash savings sufficient to fund costs and fees associated with the savings performance contract, the Cities will have no payment obligation for the audits. If however, after the Financial-Grade Operational Audit is prepared, and a decision is made to not execute the performance contract, the City of Reno and the City of Sparks would be obligated to pay the ESCo the costs of preparing the audit, unless savings cannot be attained which meet the terms set forth in NRS 332. If the City of Reno and the City of Sparks decide not to proceed with and execute a performance contract the Cities would pay their respective shares of the $149,835.00 The City of Reno will administer the agreement and will be reimbursed for a portion of the costs by the City of Sparks through the current cost sharing agreement for TMWRF operation and maintenance. The City of Reno and the City of Sparks share the cost of this project which is 68.63% for Reno and 31.37% for Sparks, as shown in Table 1. Table 1 – Cost Sharing between Reno and Sparks TOTAL COST: RENO SHARE: SPARKS SHARE: $149,835.00 $102,831.76 $47,003.24 Percentages: 68.63% 31.37%

Alternatives: City Council could direct staff to provide other alternatives.

Recommended Motion: I move to approve an agreement with Ameresco Inc. in an amount not to exceed $149,835.00.

Attached Files:

Energy_Audit_Agreement-TMRWF.pdf

STAFF_REPORT_TMWRF_ESCO_Aug_2012.pdf

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