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SARATOGA CITY COUNCIL
MEETING DATE: March 4, 2009 AGENDA ITEM:
DEPARTMENT: City Manager’s Office CITY MANAGER: Dave Anderson
PREPARED BY: Barbara Powell DIRECTOR:
Assistant City Manager
SUBJECT: Energy Management Program for City of Saratoga
RECOMMENDED ACTION:
Accept report and direct staff accordingly.
REPORT SUMMARY:
During the “Special Presentations” portion of the City Council meeting, the Council received a
presentation by Ms. Kelly Ferguson, Ph.D., P.E., LEED® AP, Business Development Manager,
Siemens Building Technologies, Inc.
The Siemens’ program involves a no-cost Preliminary Study that evaluates potential energy
savings through targeted facility improvements, together with a cash flow analysis indicating how
the improvements can be paid through utility savings. As proposed, once the Preliminary Study
has been approved, there would be an implied understanding that the City would enter into a
Letter of Intent with Siemens. During this phase, Siemens would undertake a more detailed
energy audit and would prepare a more detailed financial plan. Costs for this phase of the
program, together with actual facility improvements, would be paid for through anticipated utility
savings.
Siemens’ program takes advantage of recent changes in State law allowing the City to use a
“Design-build” approach, in which Siemens would act as the designer as well as the General
Contractor for proposed facility improvements. Alternatively, the City could determine that it
desires to independently bid the proposed facility improvements or to go out to bid for a design-
build contractor; however, in either case the City would then be obligated to pay Siemens’ for the
costs associated with the work performed up to that point.
DISCUSSION:
The City could enter into a Memorandum of Understanding with Siemens to undertake the
Preliminary Study, such as the one provided as Attachment “A”. Alternatively, the City could
issue a Request for Proposals to solicit interest from other firms that undertake energy
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management studies and could then evaluate the relative merit of these proposals, together with
the proposal provided by Siemens.
FISCAL IMPACTS:
N/A
CONSEQUENCES OF NOT FOLLOWING THE RECOMMENDED ACTIONS:
N/A
ALTERNATIVE ACTION(S):
N/A
FOLLOW UP ACTION(S):
Implement Council direction
ADVERTISING, NOTICING AND PUBLIC CONTACT:
Nothing additional.
ATTACHMENTS:
Attachment “A” – Memorandum of Understanding
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Memorandum of Understanding (‘MOU’)
This MEMORANDUM OF UNDERSTANDING is to confirm the interest of the City of Saratoga
(COS) in working with Siemens Building Technologies, Inc. (SBT) to develop an energy
management program. The program will be developed based on the process steps as attached. As a
next step in developing the program, SBT will undertake a Preliminary Study of certain City facilities
as described below.
The following objectives and responsibilities of both parties, as well as the anticipated outcomes are
defined below.
COS Objectives: To implement clean energy projects in city facilities, with consideration of the
following:
· Modernizing facilities and equipment for energy efficiency
· Generating renewable energy (in particular, solar photovoltaics)
· Reducing greenhouse gas emissions
· Conserving water resources
· Upgrading energy efficiency of infrastructure and utilities
· Optimizing operational expenditures and total life cycle cost of equipment ownership
· Providing quality work and civic environments.
SBT Solution Objectives: Conduct a preliminary study to identify clean energy opportunities
related to energy and water conservation, as well as renewable energy generation.
Preliminary Study Deliverables
· Business Review
· Incremental Cash Flow Analysis
· Recommended Energy Projects
· Potential for climate pollution reduction
· Recommended Implementation Schedule
· Preliminary Implementation Plan and Preliminary Agreement Terms
Process
To enable both parties to expeditiously evaluate the potential benefits of this MOU without
excessive speculative investment by SBT, or speculative investment by COS, a process of
progressive investment and commitment shall be undertaken. This process is as follows:
1. SBT to develop a Preliminary Study. This Preliminary Study shall list cost effective
energy/utility improvement projects, showing the savings and costs for the recommended
projects. SBT will develop a 15 year cash flow for NPV analysis.
2. Upon approval of the Preliminary Study, enter into a Letter of Intent (LOI) to fully explore
and develop this Agreement that best meets the objectives stated above. The outcome of the
LOI will include; exact scope of work, firm program costs, and a financial assessment.
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There will be no financial obligation due to SBT until the Letter of Intent (LOI) is
executed by both parties. However, it is expected that there is a qualified commitment to the
concept and to the partnership with SBT, assuming the Objectives, stated above, are met. Please
refer to the attached process sheet for preliminary dates and milestones.
This document represents the business intent of both parties and should be executed by the parties
who would ultimately be signatory to the final agreement.
Both parties are in agreement with the intent outlined by this Memorandum.
Signature: Signature:
Date: _ Date:
Print Name: Print Name:
Balachandar Jayaraman Dave Anderson
General Manager, Energy & Environment City Manager
Siemens Building Technologies City of Saratoga
Hayward, CA Saratoga, CA
Letter of Intent (LOI)
Preliminary Study / Project Timeline
for City of Saratoga