On March 22, 2010, the City Council approved a contract with McKinstry Essention, Inc. to proceed with an Investment Grade Audit Report (IGAR) of the City's facilities. The IGAR was paid for with American Recovery and Reinvestment Act (ARRA) funds. This process started with a Preliminary Facility Assessment in which McKinstry, with the assistance of staff members from each department, evaluated the energy usage and energy savings potential for over 100 buildings and approximately 1.9 million square feet of the City's building spaces. This Preliminary Facility Assessment identified approximately 160 Facility Improvement Measures (FIMS). Staff and McKinstry then worked to trim the list of FIMS down to reflect projects that could show a reasonable energy payback, and included some items that were very much in need of being replaced and could benefit from the larger energy savings of other projects to help offset the installation costs. In the end, 61 FIMS were put through the Investment Grade Audit. The IGAR includes the individual project designs to upgrade the identified FIMS, construction estimates, and guaranteed energy savings calculations.

Council is being asked to approve the Investment Grade Audit findings as presented by McKinstry. Approval will allow McKinstry and the various City departments to begin putting together an Energy Performance Contract that will allow McKinstry to proceed with making the facility improvements and subsequently guaranteeing that the identified energy savings will be realized for each project over the 15 year payback period. Staff will bring each of the Energy Performance Contracts to Council for approval. For those departments that cannot or do not want to enter into an Energy Performance contract, the IGAR provides a very good road map for future capital projects that can be implemented to reduce the City's overall energy consumption.

The City Council may:

• Approve the findings of the IGAR as presented by McKinstry Essention, Inc.; or
• Not approve the findings of the IGAR as presented by McKinstry Essention, Inc.
   

While the acceptance of the IGAR has no immediate financial impact to the City, the projects identified within the report could result in numerous capital expenditures to improve the energy consumption at a number of the City's facilities and that could ultimately lead to lower energy costs over the long term.

Staff recommends that the City Council approve the IGAR as presented by McKinstry Essention, Inc.