| | | | | | | | Agenda Item - 5.a.
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
| To: | Scott C. Stiles
| From: | Ellis Chang
| | Dept.: | City Manager
| Dept.: | Finance
| | Subject: | Authorization to appropriate funds for the previously approved Siemens Industries, Inc., agreement for the City’s Facilities Energy Efficiency Project. (Appropriation Amount: $2,800,000) (Action Item) | Date: | 11/13/2018 |
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| | | | | | | | OBJECTIVE
For the City Council to authorize an appropriation from the General Purpose Fund for costs associated with the previously approved Siemens Industries agreement for the City’s Facilities Energy Efficiency Project. |
| | | | | | | | BACKGROUND
On July 10, 2018, the City Council approved the agreement with Siemens Industries, Inc., for the City’s Facilities Energy Efficiency Project in the amount of $2,800,000. The City Council simultaneously approved the Interfund Loan and Repayment Agreement from the Risk Management Fund to the General Purpose Fund in the amount not to exceed $2,850,000. Per the Siemens agreement the projected energy savings are expected to cover the cost of the Interfund Loan repayments. Thus, the cost of the project over time is expected to be cost neutral. |
| | | | | | | | DISCUSSION
Siemens Industries, Inc., started the energy efficiency project during fiscal year 2018-19, and payments for work performed are required to continue the project without delays. Since the Interfund Loan was made to the General Purpose Fund in the current fiscal year (2018-19), the General Purpose Fund has the money to pay Siemens for the contracted work. Staff is requesting that the City Council authorize appropriation for funds to cover the contract payments. |
| | | | | | | | FINANCIAL IMPACT
The General Purpose Fund will make the payment to Siemens for the contracted amount ($2,800,000) for the costs of the heating, ventilation, and air conditioning systems and lighting retrofit equipment and installation. The funds have been loaned from the Risk Management Fund and will be repaid with energy savings. Over time, the project cost is expected to be cost neutral. |
| | | | | | | | RECOMMENDATION
It is recommended that the City Council:
- Authorize appropriation of $2,800,000 from the General Purpose Fund to make payments on the Siemens Industries, Inc. contract, as previously approved by City Council on July 10, 2018.
By: Ellis Chang, Accounting Manager
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