HomeMy WebLinkAboutCC WORKSESSION 04082008City of St. Anthony Village
Work Session
Agenda
April 8, 2008
Following City Council Meeting
1. Call to Order.
2. Review Proposed Snow Plowing Policy - Mike Mornson, City Manager
and Jay Hartman, Public Works Director
3. Johnson Controls Proposal - Mike Mornson, City Manager, Jay Hartman
Public Works Director and Roger Larson, Finance Director
4. Community Center Great Hall Improvements - Jay Hartman, Public
Works Director
5. Adjourn.
City Council
Work Session Notes 3/18/08
Time: 6:30
Place: Fire Station
Attendance:
Jerry Faust — Mayor
Jim Roth — Councilmember
Randy Stille — Councilmember
Brian Thuesen — Councilmember
Staff:
Mike Mornson — City Manager
Jay Hartman — Public Works Director
Roger Larson — Finance Director
Other Staff /Consultants:
Stacie Kvilvang — Ehlers and Associates
Jay Lindgren Dorsey and Whitney
Hal Gray entered the meeting by conference call.
Mayor Faust welcomed everyone and indicated the goal was to not exceed a 30 minute
time line on all subjects.
Johnson Controls
Presenting: Madonna Rykken — Ellie Blankenship
Ms. Rykken stated that the scope of the project could be whatever the City wanted it to
be. A breakdown of how the project is funded included:
1) Reduction in energy costs (Energy use is constant).
2) Reduction in operational maintenance.
3) Capital — Ownership (currently non - budgeted)
Johnson Controls presented three project options:
Option A — Total Cost = $2,573,983 — Annual principal /interest $230, 964
Option B — Total Cost = $2,364,321 — Annual principal /interest $212,151
Option C — Total Cost = $1,974,271 — Annual principal /interest $177,152
Roth — Present condition of HVAC system?
Hartman — 11 Years on Present HVAC system and that maintenance costs are increasing
as the HVAC gets older.
Council discussed the three options and what would be removed with each option.
Stille — Who is the contractor or would there be sub - contractors used?
Ms. Rykken - Sub contractors are used by Johnson Controls; however they are 100%
responsible for the project.
Thuesen — Is there a consistent list of sub - contractors that Johnson Controls uses?
Ms. Rykken — Johnson Controls has several quality subs that they work with.
Roth — Is this a big project for Johnson Controls?
Ms. Rykken — Johnson Controls is a local company that does projects of all sizes without
placing value on the size of the project. Of the projects they do, the size of this project on
a scale of 1 -10 is in the middle (4 -5).
Faust — When will the improvements be done? When will the payments start?
Ms. Rykken — Johnson Control would complete over a 6 month period.... Payments will
start upon completion of the project.
Thuesen — What work will Johnson Controls do versus using sub - contractors?
Ms. Blankenship — Johnson Controls will use their own energy manager. In doing the
HVAC work, Johnson Controls owns York so they would use them for replacement of
the HVAC system. They also use companies that they have an established/good working
relationship.
Ms. Rykken — also stated that it is essential that the preventive maintenance be done to
maintain Johnson Controls guarantee.
Gray — Wanted clarification on the 10% inflationary numbers for operational savings and
how those numbers were determined.
Ms. Rykken — Indicated that they review the past 2 years of operational costs to
determine the number.
Gray — Expressed concern with using data of only 2 years and would prefer to see cost
over the last 5 — 7 years. He asked if the current budget included line items to cover the
existing costs.
Larson/Hartman — Yes, however, if the project is approved, the current budget would be
redirected to the P/I payment.
Ms. Rykken — Summarized by saying the project can be whatever size the City would
like to make it. Within the framework of the project, is the ability for the City to change
the project to fit the City's needs.
Faust — thanked Johnson Controls and asked what direction the Council wants to take.
Gray — Could staff do these changes? Can we do these effectively?
Morrison — Some professional involvement would be necessary. If we were to do the
project ourselves in -house we would add 15% - 20% to the project for professional
services.
Stille - Could we pull this off ourselves? His calculation indicated that Johnson Controls
was $331,000 higher after factoring in professional services and doing it ourselves.
Faust — Staff does not have expertise? Does staff want Council to pay $20,000 and do it
ourselves or will they recommend Johnson Controls?
Faust — Option C gives us the biggest bang for our buck (241 % return). Owner capital
$69,553 plus he suggested adding back in the Facility Performance Indexing of $5,414
Mornson — Suggested that we move ahead with Johnson Controls. They have to
guarantee the project, are professional in their approach and it forces us to do something.
Thuesen- Cherry picking is not the way to go. He is okay with Option C, but wants a
budget in place to replace the roof.
Faust — Johnson Controls is a highly qualified company. They did a $6 million project
for Rochester and highly recommended working with Johnson Controls. He indicated
that the present roof is in good condition and we are not having any problems but
indicated it should be part of the annual CIP plan.
Faust — The Council doesn't seem to want to commit and asked each Council member to
weigh in.
Faust — Favor approval of Option C with the addition of the Facility Performance
Indexing.
Thuesen — Does not want cherry picking and supports Option C.
Stille — He would have difficulty in supporting if the City can save $500,000.
Gray - He has concerns about the numbers and does not feel we should move ahead with
the project.
Roth — Feels like we should not move forward with the project.
Direction to Staff - pay Johnson Controls the $20,000.00 and not move forward.
Silver Lake Village Development
Kvilvang /Lindgren — Discussed the changes in the 1B Housing Development concept.
Lindgren — indicated the City could move forward with a default with the present
agreement or work with the developer and revise the agreement.
Faust — asked about the limited levy of return on investment and if this would impact the
TIF?
Lindgren — stated that the limited level of return is capped to retain affordability.
Kvilvnag — stated that it does impact our TIF and there is a loss in taxes when the TIF is
decertified.
Lindgren — stressed the need to reach 60% of pre -sold units or have financing in place
within 12 months.
Faust — stated that Pratt does keep an element of quality with his projects and will have to
meet the design requirements of the agreement. Faust felt the changes are responding to
the market and they are adjusting the project accordingly.
Gray - does not want the developer to pull out of the project.
Faust — What happens to the Fannie Mae loan?
Lindgren - Fannie Mae is a pay -off by the end of 2008 with no extension.
Stillie — this revision would be a better option than forcing the issue with the developer
but indicated he wants to maintain quality.
Thuesen — working with Pratt has been favorable and wants to continue working with
them.
Roth — wants to keeps the project moving forward with the redevelopment.
Council directed staff to work with the City Attorney to amend the agreement allowing
the changes (7`h amendment).
Staff is to advise Pratt verbally that the Council will support the proposed amendments,
but, the language in the amendment must be clear that the developer needs to reach the
60% benchmark.
Council will give formal direction for staff to negotiate the amendments to the
agreement at the April 81h meeting.
Key Financial Management
Faust — expressed that Emerald Park ($1.4 Million) needs to be part of Key Financial
Management Planning.
Kvilvang — Presented:
1) St. Anthony's financial planning is an excellent example for all Cities.
2) War Chest theory. In 2007, the City allocated over 4 million dollar from the chest on
goals with no expense to the taxpayers. They included $1.2 on Silver Lake Road, $1.2 on
Foss Road Lift Station, $700,000 on wireless water meters and $925,000 to pay -off 3
bond issues.
3) Capital Equipment Funding — MSA funding has been cut back and the need to cut back
on expenditures or look for another funding source to cover the $60,000.
4) Silver Lake Road — Because the City cannot assess the project, the goal is offset the
increased levy by the three bond issues that were paid off ($87,000).
5) Chandler TIF — a total $322,000 is available from the 2009 and 2010 proceeds.
6) Reduction in road improvement levy. Based upon the current fund balance, there is
the ability to reduce the levy by $200,000. Ms. Kvilvang stated that for every $100,000
in levy it is equal to $1,000,000 in debt. If we were to reduce the levy it would equate to
an average saving of $22.00 on a $258,000 home.
Faust — supported using the $200,000 toward funding of the Capital Improvement Plan
for improvements to our buildings and incorporating the redevelopment of Emerald Park
into the plan. He indicated that because of the economy it might be a good environment
to bid the project at a lower cost.
Question was asked when was the best time to bid Emerald Park.
The consensus of the Parks Commission was in January or February of 2009
Morrison - indicated that because of gas tax increase State Aid will go up and should fill
the gap in the MSA funding for Capital Equipment.
Morrison — suggested that we should sit on the Chandler District and not decertify early.
The City could issue debt in 2010 for Capital Equipment or Projects with a first year levy
in 2011. The impact would be offset by the $87,000 coming back on the tax rolls without
an impact on taxpayers.
Council directed Staff to come up with a recommendation on how to fill in the $60,000
gap for 2008 and 2009 at the April 29`x' work session. Council also directed Staff to
indentify the needs and time frame for building improvements and develop a detailed
CIP budget.
Snow Plowing:
Should the City change its current ordinance to no parking from 12:00 to 7:00 on a 2"
snowfall or until your street is plowed.
Gray - get rid of timeframe and go with a 2 "'snowfall ordinance.
Faust — with the language presented, Lauderdale with the 2" requirement is the cleanest.
Faust — suggested as a pilot suspending the current ordinance for 1 year with no tagging
and see how difficult it is, track the towing and the complaints.
Thuesen — did not want to direct the Police Department not to enforce City Ordinance.
Roth - make it simple language (Lauderdale) and approach Falcon Heights to the same.
Stillie — thought it was reasonable to keep it clear and simple.
Council directed Staff to draft and E -mail the revisions to Council. The City Council
will review and respond with their thoughts.
Mornson - asked that if there are changes they should be done by June so the City can
notify the community of the changes as earliest as possible.
Adjourned: 9:18PM
To: Mayor and City Council
From: Mike Morrison, City Manager
RE: Snow Plowing Policy
Date: 4/4/2008
In discussion with the council it is our understanding that the council is interested in considering a
change to the city ordinance on parking during snow removal. The current ordinance states as
follows:
920.07 Parking During_ Snow Removal.
Subd. 1. During the period commencing November 1 of any year, to and including April 1 of the
following year, no person may stop, park or leave standing a vehicle on any street or highway in the City
of St. Anthony between the hours of 3:00 a.m. to 7.00 a.m. or in such a manner as to impede the plowing
and/or removal of any snow, ice or waste on the street or highway.
If the council is interested in changing the ordinance to make it less restrictive, the following
amendment would work:
Subd. 1. No person shall park a vehicle on any city street for a period of 48 hours, commencing immediately
after two (2) inches or more of continuous snowfall, or until snow removal has been completed curb to curb.
With this new version of the ordinance, the City Council could consider a pilot program with a
sunset date of July, 2009. This is the same thing as we did with the single sort recycling ordinance.
We could then prior to the 2009 - 2010 snow fall season, determine if we should stay with the less
restrictive change or revert back to the more restrictive. If the council is interested in this, the
readings would be as follows:
First Reading - April 22
Second Reading - May 13
Final Reading - May 27
To: Mayor and City Council
From: Mike Mornson, City Manager
Date: 4/1/2008
RE: Johnson Controls
After the March 18, 2008 Work Session, staff has had more time to review and think about the Johnson
Controls proposal. Listed below are some of the overall benefits that staff feels that Johnson Controls
provides the city, that may not of been articulated on the 18th of March:
Turnkey Approach
Financing
Guaranteed Price - NO CHANGE ORDERS
Guaranteed Performance
Guaranteed Savings
Project Management
Competitively Bid
Carbon Reduction from Energy Savings (Meets our Overall Environmental Goal_
In addition, staff is of the opinion that the HVAC bid that the Public Works Director received wasn't
comparing apples to apples. The Johnson Controls bid had four boilers to other vendor of one boiler. The
efficiency of the Johnson Controls bid was 95% compared to the other bid of 87 %. lastly, Johnson Controls
received several bids to come up with their bid proposal compared to the one bid from city staff.
We have asked the vendor to bid the HVAC system the same way Johnson Controls bid on it In addition,
Roger Larson, Finance Director, is working on the financing options for the Johnson Controls Project. We
will have staff from Johnson Controls back for one more meeting with the Council to discuss the possibility
of authorizing option C which is attached for your review in a memo from Johnson Controls.
In addition, Jay Hartman and I met with Sebesta Blomberg. This is a company out of Roseville that would
work as a consultant to the city if we didn t go with Johnson Controls. They have worked with WSB on
over 30 projects that related to building improvements. They assisted St. Anthony with improvements to
the Water Filtration Facility . If the council has questions on this firm, Jay and I will be available for
questions at the April 8tb worksession.
ZAMike\memo johnson controls.doc
MEMORANDUM
TO:
ST. ANTHONY VILLAGE CITY COUNCIL
FROM:
JOHNSON CONTROLS, INC.
SUBJECT:
FACILITY IMPROVEMENT PROJECT OPTIONS
DATE:
FOR APRIL 8m WORK SESSION
CC:
MICHAEL MORNSON, JAY HARTMAN, ROGER LARSON
After the work session on March 18'x', 2008, we were informed the Council has questions which need to be
addressed in order to support a Facility Improvement Project. Per out discussions with the City Manager,
there are concerns about an alternate bid on the `HVAC and Control Systems Replacement' at City Hall and
the annual inflation rate on `Operations and Maintenance Savings'. We have addressed these items below.
First and foremost, the HVAC Project in Option C is much more comprehensive than a typical plan and
specification project. Secondly, the alternate bid by Alliance is not an apples to apples comparison. There are
many items which are included in the Johnson Controls project that produce real long -term value, comfort
improvements and substantial savings to the City of St. Anthony. We have listed the significant differences
below:
Overall Benefits of a Project with JCI
• Turnkey approach with Financing
• Guaranteed Price- NO CHANGE ORDERS
• Guaranteed Performance
• Guaranteed Savings for 15 years
• Support /Training /Service
• Measurement and Verification
• Project management and engineering
• Efficiency guarantees
• Lifecycle approach
• Competitively bid
• Guaranteed completion date
• Improved comfort
Controls
• Latest technology with extended architecture
• Graphics, Server and Headend
• More capacity and expandable
• Ability to integrate with fire and security
• Additional commissioning capabilities
• 50 technicians on staff
• Revision and upgrades for future expansion
• Occupancy sensors
• Warranty services direct from manufacturer
® Johnson Controls, Inc 2008
Proprietary and Confidential
Boiler
• High efficiency boilers- 95% vs. 87%
• Longer life and less maintenance
• Redundancy
• 4 boilers versus only one- staging capability
increased energy efficiency
• Direct heat hot water- more efficient
• Baseboard heat in 11 areas included
• Destratification fans included
• Significantly improved comfort and efficiency
Rooftop Units (RTUs)
• Ductwork and VAV Box modifications
• Redesign of air handlers- more CFM to
provide proper cooling
• Improved comfort
• Proper air flow
• High efficiency rooftops with new refrigerate
• Hail guards allows for longer life and
efficiency
• Rooftop controls with better flexibility for
sequencing of operations
• Variable Frequency Drives for RTUs
• Replacement of RTUs now addresses
escalating repair costs
Page 1 of 2
We invited Alliance to bid on this project and were very interested in working with them. They did not
attend the mandatory pre -bid meeting and, therefore, did not submit a bid. We are scheduled to walk the
project with Alliance on April 2nd in order for them to submit a bid based on the performance
specifications that have been designed.
It was an original goal of the HVAC project to create long term value for the city that significantly reduces
energy and operational costs. Currently the existing design of this improvement measure alone will reduce
energy and operational cost by $26,000 /yr. This line item represents almost 40% of the total savings for the
City of St. Anthony on the entire project!
It is our understanding, that the option being considered at this time is Option C. We have provided a
summary of that project below.
Current Option C
Project Cost $1,999,082
Savings (average over 15 yrs.):
Utility $72,992/yr.
Operational $36,393/yr.
Long Tenn Operating Capital $69,553/yr.
The environmental benefits of this project are worth noting. Based on the energy savings, the following
emissions reductions are estimated:
Type of Pollution
Amount of Reduction Per Year
Greenhouse Gases (COQ
742,086 pounds
Nitrogen Oxides (NOO
1,877 pounds
Sulfur Dioxides (SOD
1,922 pounds
Mercury (Hg)
4,115 milligrams
These reductions are equivalent to taking 74 cars off the road, or lighting 436 homes, or planting 102 acres
of trees per year.
An interactive spreadsheet will be available at the Work Session for the Council to utilize in order to make
desired changes and see the immediate impact to your project. For example, a new Option C could be
considered that does not include Fire and Security upgrades and changes the inflation rate to 7% for
Operations and Maintenance savings. For demonstration purposes, a summary is provided below:
Project Cost $1,794,834
Savings (average over 15 yrs.):
Utility $72,992/yr.
Operational $27,195/yr.
Long Term Operating Capital $60,423/yr.
We are most interested in working with the Council to design a project that you are comfortable with and
that meets your overall goals. We look forward to working with you to finalize a project that the City
Council can support.
Regards,
Madonna Rykken and Ellie Blankenship
Johnson Controls
C Johnson Controls, Inc 2008 Page 2 of 2
Proprietary and Confidential
MEMORANDUM
DATE: April 2, 2008
TO: Mike Morrison, City Manager
FROM: Roger Larson, Finance Director
ITEM: JOHNSON CONTROLS — FACILITY IMPROVEMENT PROJECT
Johnson Controls has presented three options for Council consideration to upgrade and
improve the energy efficiency of city buildings. Council has decided to revisit Option C
at a cost of $1,999,082 with an annual P/I payment of approximately $178,938.
Key components of the project funding include:
1) Energy savings (Guaranteed performance savings by Johnson Controls)
2) Operational savings (Budget reductions redirected to annual P/I payment)
3) Owner capital (Additional annual Capital City needs to provide)
Energy savings is comprised of reduction in actual utility costs (electric, heat, etc.)
Operational savings is a reduction in the current maintenance costs associated with
maintaining the current buildings as they are now versus the maintenance costs after the
improvements have been made.
Owner capital is the amount of funding necessary that the City will have to dedicate to
do the project. Since there is no current budget for this capital expenditure, a funding
source must be established to balance the project.
The following are potential financing options available for funding the Johnson Controls
project:
1) Select Option C based on establishing a levy for the amount of owner capital.
a. Annual Levy =$ 69,553
2) Incorporate the annual cost of owner capital into the current capital equipment
budget. Changes to the capital equipment budget could include:
a. Incorporate the annual owner capital costs into the current capital
equipment budget by permanently inserting this line item into the budget.
b. Defer large ticket items (mostly P/W items) until 2010.
i. In 2010 the City issues an Equipment Certificate for the large
ticket items (first year levy = 2011.
ii. The impact is offset by the decertification of the Chandler District.
3) Bond Fund — annual funding available = $200,000.
a. Issue $2,000,000 in debt.
b. Annual principal and interest payments are made from the $200,000.
4) Reduce the project so that the savings equals the cost of the project with no Levy.
Other considerations:
When reviewing the Johnson Controls numbers it is important to focus on the numbers
they have presented under the heading of Operational Savings an how that impacts the
budget process.
Under this concept, the Public Director would have to trim the current maintenance
budget starting with $17,003 in 2009. Then add an additional 10% reduction for each
year thereafter. This may be an unrealistic expectation based on inflation and what might
or might not occur with this budget over the next 15 years.
It concerns me that since Johnson Controls does not guarantee or have an on -going
responsibility of making sure the operational savings is accomplished that the projected
savings won't become reality. If the savings are not accomplished, my thinking is that
the levy would have to be increased to balance any shortfall.
Recommendation:
Any of the first three options is viewed as acceptable; however, my recommendation is
rather than take the approach of trimming the Operational Savings line item out of the
budget, to include the amount as part of the levy. Example (Continues to 2023):
2009 $69,553 plus $17,003 = Levy $86,556
2010 $69,553 plus $18,703 = Levy $88,256
2011 $69,553 plus $20,573 = Levy $90,126
2012 $69,553 plus $22,631 = Levy $92,184
2013 $69,553 plus $24,894 = Levy $94,447
MEMORANDUM
DATE: April 3, 2008
TO: Mike Morrison
FROM: Jay Hartman
RE: Foyer Area Seating
Mike,
Per our discussion, the front office staff and I have been working on a design to provide seating in
the front foyer area of the community center due to the increase of activities scheduled through the
Community Services Department and also general seating for our residents. In addition, an
example of benches to be used in our City Wide "Adopt a Bench" program
will also be included to this project.
Provided are an estimated cost and a design for the proposed seating area. Finance has identified a
funding source to complete this project in 2008. Please let me know your thought.
Number of Seats Total Cost
Single Seating 12 @ $ 775.68 $ 9308.16
Double Seating 4 @ $ 1406.88 $ 5627.52
Wall Seating 4 @ $ 531.84 $ 2127.36
Cube Tables 8 @ $ 236.98 $ 1895.84
Refurbish Planters 4 Existing $ 2000.00
Area Rug 20'X 30' $ 3500.00
$24,458.88
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Seating & Tables
Larry Voelkers
Director
1101 West River Parkway
Suite 100
Minneapolis, MN 55415
direct 612 330 0049
cell 612 868 2531
fax 612 330 0008
lvoe(kers@lienrilksenpsg.com
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