2023_0725_PWETCPacket - Laserfiche WebLink

Home

78 Mr. Seidel explained that is the statutory maximum, in Minnesota, for this type of 79 contract for cities, is twenty years. Typically, the contract will be within the fifteen- 80 to -twenty-year range. Ideally, they want to be in a financial situation. Some 81 projects have expensive capital assets that are not going to pay for themselves with 82 efficiencies and they are really trying to find a way to pay for these so these items 83 could be bundled with some other efficiency items that could either pay for it or 84 could turn a 2.5-million-dollar problem by pairing other savings into a half million- 85 dollar problem, for example. 86 87 Member Mueller indicated she was curious about the five percent projected 88 increase in costs annually. She wondered if this is what the City has typically been 89 seeing or is this a higher projection based on some of the shifts and the environment 90 or a standard amount by ABM. 91 92 Mr. Seidel explained it is more on the standard side. hi terms of what ABM has 93 experienced in Minnesota over the last half decade to a decade, the five percent is 94 actually low. There is definitely an argument for increasing that by a couple of 95 points which would increase the four -million -dollar figure. He indicated this is on 96 the conservative side. 97 98 Member Luongo asked as a part of this process does ABM assess what is end of 99 life for existing equipment and timelines for that rather than to trash everything the 100 City has already invested in. 101 102 Mr. Seidel explained core to this process is what they call a capital volatility 103 assessment and essentially his company goes through all of the relevant existing 104 equipment and then analyze its life, analyze its current condition and efficiency 105 capabilities, and assign it a letter grade based on that and furthermore, take that and 106 assign it a volatility index of the likelihood of failure over an x number of years. 107 108 Member Mueller was curious about the annual savings for HVAC repairs, lighting 109 replacement, which was touched on in the presentation, she wondered how that 110 related to the fees the City would be paying to ABM because whether it is existing 111 equipment or equipment being implemented, the City is still paying to maintain it 112 all. She did not understand how that is calculating into the savings. 113 114 Mr. Seidel explained for lighting replacement, in most of the budgets within the 115 four facilities with one or two exceptions, there is not a capital budget for lighting, 116 it is just built into the maintenance and operations budget and if doing a large LED 117 retrofit in the building, not only are all the lights new but will also last longer. ABM 118 is able to project the typical savings on that over a number of years. For HVAC 119 repairs, by replacing older equipment that requires more time, more parts, more 120 breakage of parts with more time servicing it, both internally and externally, 121 replacing with newer equipment that either by design or just by being newer, 122 require less repairs, which is how ABM build out some items like that. Once they Page 3 of 7 Page 5 of 76