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MEMORANDUM <br />DATE: March 4, 2008 <br />TO: Mike Morrison, City Manager <br />FROM: Roger Larson, Finance Director <br />ITEM: JOHNSON CONTROLS — FACILITY IMPROVEMENT PROJECT <br />Johnson Controls has presented three options for Council consideration to upgrade and <br />improve the energy efficiency of city buildings. With each of their proposals, there is <br />payment of annual principal and interest. <br />Key components of the project funding include: <br />1) Energy savings <br />2) Operational savings <br />3) Owner capital <br />Energv savings is comprised of reduction in actual utility costs (electric, heat, etc.). <br />Operational savings is a reduction in the current maintenance costs associated with <br />maintaining the current buildings as they are now versus the maintenance costs after the <br />improvements have been made. <br />Owner capital is the amount of funds necessary that the City will have to dedicate to the <br />project. Since there is no current budget for this capital expenditure, a funding source <br />must be established to balance the project. <br />The following are some financing options available for funding the improvements: <br />1) Pay Johnson Controls $20,000.00 for consultant services. <br />a. Using their recommendations for improvements, the City works with <br />independent contractors to do the necessary improvements. <br />2) Select a project based on establishing a levy for the amount of owner capital. <br />a. Option A - $118,449 <br />b. Option B - $100,869 <br />c. Option C - $ 69,553 <br />