Aspen contemplates $1.4 million energy upgrade
ASPEN, Colorado – The city of Aspen is poised to embark on a $1.4 million project that would make energy-efficient upgrades to 14 government-owned buildings.
The Aspen City Council was asked last week to contract with McKinstry – a national firm focused on efficiency systems – to be the general contractor for the project.
The city hired the firm last summer to perform technical energy audits on 14 buildings around town. That work cost $38,000.
McKinstry proposes work be done on all buildings that were audited – some with extensive improvements and others that are as simple as changing the light bulbs.
McKinstry proposes a “creative financing structure,” which calls for the city kicking in $756,005 from its capital budget, while $590,642 would be financed through a tax-exempt municipal lease purchase agreement. The loan would span up to 12 years at between a 4.5 and 5 percent interest rate. Another $14,950 would be found in grants and rebates for the city.
The return on investment, McKinstry representatives propose, is that the improvements will further the city’s commitment to reduce carbon emissions and do its part in addressing climate change.
McKinstry also guarantees that the city will save $67,941 a year in energy and operational costs, and reduce the government’s carbon emissions by 871,828 pounds annually, or 12 percent of current consumption.
Council members were skeptical, yet supportive of the proposal. They had several questions regarding financing, the purchase lease agreement, guarantees and a host of other issues.
“It definitely has potential,” said Councilman Dwayne Romero. But “we owe it to the public to review it further.”
McKinstry representatives suggested that a contract be signed next month so financing can be secured and construction can occur through March.
Council members said not so fast.
City Manager Steve Barwick said it would be at least December before all the details are hashed out.
“Maybe even a few months more,” Romero countered.
If the deal is approved, several projects would occur at various public buildings. All 14 of them would be retrofitted with energy-efficiency lighting at a cost of $206,087. McKinstry estimates a savings of $21,756 during the first year for that upgrade alone.
Vending machines at all buildings would be retrofitted so they don’t suck as much energy as they do now, costing $1,306.
McKinstry also plans to install energy controls at the Aspen Recreation Center (ARC) pool so pumps and heating mechanisms don’t run continuously.
Other improvements include programmable thermostats at the Red Brick and Rio Grande buildings, tank covers at the water treatment plant and new windows at the streets department.
There was discussion about whether to install a back-up generator at City Hall to prevent power outages from damaging internal systems, specifically in the information technology department.
But Barwick informed the council that a major, $7.5 million overhaul of the historic building is budgeted between 2013 and 2015. It’s planned to be funded by a potential sale of the Zupancis property.
“The idea is to gut this building and put a modern office in it,” he said. “It’s not particularly functional … it’s over 100 years old.”
Barwick said it’s up to the council to decide whether to make energy improvements now or wait to do them during the overhaul.
Councilman Steve Skadron questioned why one-third of the work McKinstry is proposing is at the ARC, which is a relatively new building and should have up-to-date energy installations.
Tim Anderson, director of the city’s recreation department, said at the time the ARC was being designed and built, there were disagreements with the architect and engineers. As a result, little effort was put into green technologies.
Some council members questioned the ramifications of entering into a purchase lease agreement with McKinstry.
Barwick said leases and purchase agreements are fairly standard for municipalities, and are used for equipment like copy machines and other services the government sources out.
“We’ve never had to do a lease purchase agreement because we’ve always had the money,” he said, adding if the council isn’t comfortable contracting with McKinstry, some of the work can be done in-house and the rest can be sourced out.
Mayor Mick Ireland said before he makes any decision, he wants assurances that McKinstry is financially stable and doesn’t leave the city hanging in the event it goes belly up during these economically unstable times.
He also wants more details on the financing structure and questioned whether the savings will really measure up to McKinstry’s claims.
“I’m not sure if it pays for itself, or if it needs to pay for itself,” Ireland said.
Ireland also said he wants a better definition of “simple payback,” a term McKinstry used when referring to financing the energy-efficiency improvements.
Acting as the general contractor, McKinstry would hire subcontractors to complete the jobs. Ireland said he wants a clause in the agreement that mandates a certain percentage of hired laborers are local.
“I’d like to see some of the dollars remain in this community,” he said.