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Page 2 of 3 Johnson Controls also noted that the City’s heating system is approaching end of life (approximately 20 years) and maintenance costs have been similar to the A/C costs. A proposal for replacement of the heating system was also included, see below for pricing. If the projects were done concurrently the City could expect approximately 5% savings on the project due to the economies of scale of having both projects done at once. The proposed boilers are high efficiency boilers, a lower cost option could be available but at a reduced efficiency rating (pricing is unknown, but it could be included in any final proposals). Option Equipment Type Cost Notes Heating High Efficency Boilers $140,954 Remove water heater, high efficency boilers, eligible for Xcel rebates For illustrative purposes, the breakdown of costs for the Chiller and Boiler replacement from Johnson Controls was about 11% for design, 29% for HVAC equipment, 7% for HVAC controls, 24% for installation material and labor, and 29% for subcontractor work. The City could pursue either option independently or together. At the work session it was noted Johnson Controls is part of Sourcewell, formerly known as the National Joint Powers Alliance, which meets all of the bidding requirements for state purchasing guidelines. This means the City could award this project directly to Johnson Controls. The City Council directed staff to research other options regarding replacement of the equipment. Staff reached out to Harris Controls, Metropolitan Mechanical Contractors (MMC), and Air Mechanical. MMC was the only company to provide another proposal and staff can speak to this proposal at the work session. MMC is not part of a purchasing cooperative, and the City could not award this contract directly to MMC. Following discussion with the City Council, if the City Council decides to move forward with Johnson Controls, the City can bring forward necessary approvals to a future Council meeting. If the proposal from Johnson Controls is not acceptable, the City would likely need to hire an independent mechanical engineer to review the City’s current system and create design documents for bidding. As this project is likely to exceed the State’s bidding threshold of $175,000, the City would need to put this project out for bid following normal project bidding rules, unless it were to negotiate with a company that is a part of cooperative purchasing agreement. Staff did reach out to HGA, the firm that did the City’s needs assessment in 2017, as they could put together the design plans for the City. An estimate of the cost for the design was between $19,500 and $57,500 depending on recommended changes (this proposal was based on two parts, $17,500 for the initial consultation and evaluation, and between $2,000 and $40,000 for the design documents). If the City were to consider hiring an independent contractor, we are not obligated to use HGA, but their proposal gives an idea of the expected cost for an independent design.