An energy audit suggests the city of Gardner can save money in the long run by upgrading some of its systems and equipment, council members learned during a work session on Monday night.
Tim Burkhalter, a project manager for Burns and McDonnell, said the city spent approximately $550,000 for electricity last year, but can expect to save more than $120,000 next year if they complete a series of 16 projects at a cost of $1.3 million.
The projects would pay for themselves through savings in a little more than 11 years.
Under a proposed agreement between the city, Burns and McDonnell and the Kansas Corporation Commission, the city would issue debt to fund the projects, and Burns and McDonnell would guarantee energy savings that would be used to repay the debt.
Council member Larry Fotovich said when the cost of financing the debt and interest are considered it would take longer than 11 years for the savings to pay for the debt.
“That changes 11.2 years to 15 years,” he said.
The 11.2 figure is based on an aggregate of doing all 16 projects, interim city administrator Melissa Mundt explained. However, city council members questioned whether some of the projects could be done in house.
For example, one of the 16 projects would involve upgrading interior and exterior light fixtures to more energy efficient light bulbs at city hall. According to Burkhalter’s estimates, it would cost the city approximately $184,086.
“It looks like for a lot of the lighting solutions, we’re just switching out light bulbs,” Fotovich said.
Burkhalter explained that the upgrades would require a complete retrofit.
“There’s a complete switchout,” he said. The question would be who in the city is going to take care of ordering the parts? Who is going to put them in?”
Another project would upgrade electric systems at city hall. Burkhalter said currently city hall uses more electricity than a building of its size should. Upgrading city hall heating and cooling systems – at a cost of $246,894 – would result in better operational processes.
For example, Burkhalter said on Oct. 30, 2010 – a Saturday — an air conditioning fan was always on. There was at least one compressor running all day.
“If there’s nobody in the facility, we need to be turning it off,” Burkhalter said.
Council members expressed concerns that equipment used in upgrades may not last longer than the 11 or more years required to pay them off. For example, the existing systems at city hall were installed when the building was constructed in 2004.
According to David Green, public works director, the existing systems are not top-grade systems. By combining the city hall upgrade with other projects in the energy audit, the city would be able to finance it using energy savings, Green said.
Council member Kristina Harrison had questions about how the guarantee would work. She said the guarantee, in which Burns and McDonnell would make up the difference if the city’s cost savings didn’t cover the debt payment for the projects, seemed subjective.
Council member Chris Morrow had concerns about various projects on the list.
For example, a project that would convert Kill Creek to natural gas energy wouldn’t pay off for dozens of years.
“I’d be interested in moving forward with some of the projects if we’re expecting the equipment to last beyond the savings,” he said.
Council members Brian Broxterman and Dennis Pugh were willing to move forward on all 16 projects. Morrow and Harrison wanted to discuss some of the projects. Fotovich would like to learn more about the cost of financing projects the city may choose.
Burkhalter warned that the city could choose to do some of the projects piece-meal, however, he said the analysis for the 11.2 years and savings accrued considered all projects being completed at once.
Council members will discuss the issue again at a future council meeting.
Gardner council discusses projects gleaned from energy audit