REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, City Manager
VIA: Chau Vu, Director of Public Works
PREPARED BY: Patrick Bannon, Capital Projects Supervisor
Subject:
title
Conduct a Public Hearing to adopt Resolution No. 2025-72 approving a Performance Contract with Energy Consulting Group, LLC. (ESG) for the construction of energy conservation at various City facilities
body
Statement of Issue:
Request City Council approval for a resolution and agreement to implement energy efficiency and infrastructure measures.
Financial Impact:
The total estimated project cost is $449,123 to be funded via City utility enterprise funds. The City’s total savings through this project are estimated at $1,263,546. The City is anticipating the cost of the Project will be less than the anticipated marginal cost to the City in the absence of such measures.
Recommended Action:
recommendation
A) Adopt Resolution No. 2025-72 authorizing “Performance Contract” and related exhibits for the energy conservation project with Energy Consulting Group, LLC in the amount of $449,123; and,
B) Request City Council to appropriate $449,123 out of water enterprise capital funds; and,
C) Authorize City Manager to execute the "Guaranteed Energy Savings Agreement” for Performance Contract of Energy Conservation Measures' in the amount of $449,123 with Energy Consulting Group, LLC; and,
D) Authorize City Manager to execute any subsequent documents approved as to form by the City Attorney necessary to advance, manage and complete the project.
end
Alternative Action(s):
Do not adopt Resolution No. 2025-72 and advise staff on how to proceed.
Analysis:
On November 19, 2024, City Council approved a Professional Services contract with Energy Systems Group for a Comprehensive Investment Grade Audit of City Facilities. Energy Systems Group (formerly PacWest) was competitively selected through an Request for Proposals (RFP) and interview process. Energy Systems Group audit of the project costs, feasibility and energy savings must be completed prior to entering into the construction agreement since the audit becomes the scope of work for the construction agreement including the energy savings.
Project Scope
The proposed improvements include a range of energy and infrastructure upgrades for utilities facilities:
Replace sixty-one (61) block heaters with new circulating type, with built-in circulating pumps to better distribute the heat at 20 locations.
Lighting: LED retrofits and smart lighting controls one interior site.
Collectively, these measures have an average simple payback of approximately 13 years. A cost and savings breakdown is provided in the accompanying table.
Savings:
|
Services |
Annual Total Savings ($) |
15-Year Total Savings ($) |
Cost |
Utility Incentives |
|
Circulating Block Heaters |
$53,620 |
$1,137,332 |
$330,956 |
$16,470 |
|
Utility Yard LED Lighting |
$6,175 |
$126,214 |
$118,167 |
$0 |
|
Totals |
$59,795 |
$1,263,546 |
$449,123 |
$16,470 |
Statutory Authority
City staff recommends awarding the construction agreement under Government Code Section 4217.10 et seq., which provides an alternative procurement pathway for energy efficiency projects. This statute allows public agencies to select contractors based on best value - rather than lowest bid - when implementing energy performance contracts. Huntington Beach successfully used this provision in 1999 and 2011 for previous energy-saving initiatives.
Under the proposed structure, the City will also benefit from a guaranteed savings provision: if the systems underperform, ESG is contractually obligated to reimburse the difference.
Environmental Status:
This project is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15031c under Class 1 of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect on th
Strategic Plan Goal:
Goal 6 - Infrastructure Investment, Strategy C - Conduct an assessment of all City facilities to determine priorities for upgrades and repairs, implementation and financial priority.
Attachment(s):
1. RCA Contract Agreement Summary
2. Resolution No. 2025-72
3. City of Huntington Beach Performance Contract