Memorandum 16-165 Homer Fire Hall Natural Gas and Energy Efficient Lighting

Memorandum 16-165

TO:                       Mary K. Koester, City Manager

FROM:                 Carey Meyer, Public Works Director

DATE:                  October 4, 2016

SUBJECT:         Homer Fire Hall Improvements Utilizing Revolving Energy Fund to

Complete Energy Conservation Improvements

Although not a part of the original scope of work, this would be the time to convert the Fire Hall to natural gas and install energy efficient lighting. The Council created and has utilized the Revolving Energy Fund to provide a long-term source of funding for energy efficiency projects in City facilities. This fund was created in 2010 and currently has $138,000 in the fund. This fund has been used to complete similar energy conservation improvements at City facilities (including City Hall, Public Works, Harbor Facilities, Sewer Treatment Plant, Airport and Police Station).

Adding electric heat and improving ventilation in the bays at the Fire Hall would require costly upgrades to the electrical service. To eliminate this cost, Public Works has directed the design team to extend natural gas to the Fire Hall and convert the electric unit heaters in the bays to natural gas; freeing up electrical service capacity for heating the proposed expansion. This work can be completed within the original budget.

Currently the Fire Hall spends about $27,500 annually for electricity. Without conversion to natural gas, annual energy costs would increase to $33,000 due to square foot expansion.

Complete conversion to natural gas and installation of energy efficient lighting would decrease overall energy costs by 65%. This would result in a savings of approximately $21,500 per year. The total cost to convert to natural gas and install energy efficient lighting is estimated to be $145,000 ($30,000 from original budget; $115,000 additional funding).  The “investment” of $145,000 would be “paid back” in 6.7 years. Reduced operating costs will benefit the Fire Hall’s operating budget while the building is being used as a fire station and increase the building’s value when the time comes to sell.

Recommendation: The Council pass an ordinance amending the 2016 Operating Budget by appropriating $115,000 from the Revolving Energy Fund to provide for the conversion to natural gas and installation of energy efficient lighting at the Fire Hall and authorizing the City Manager to execute all appropriate documents. (Fiscal Note: 620-0375)