Proposed $3.34M energy deal ties a 20-year promise to first-year results

Alpharetta’s proposed $3.34 million building-upgrade contract would offer a 20-year savings guarantee—but would not require a fresh measurement-and-verification study every year. Instead, the first performance year’s verified savings would carry forward, subject to adjustments.⁠[1]

The energy-upgrade proposal we previously examined for its payback is scheduled for award consideration Nov. 16. Staff recommends the $3,340,105 McKinstry contract and $1.95 million in Bank of America lease-purchase financing. Those are requests before council, not completed awards.⁠[1][2]

Under the proposed savings-guarantee clause, if first-year verified savings meet or exceed the guarantee, McKinstry’s obligation would be deemed satisfied for that year and subsequent years. The figures could be adjusted for material changes in building use, occupancy, operating hours, weather, city maintenance and other specified conditions.⁠[1]

A first-year shortfall would also carry forward through the guarantee term, subject to adjustments and accepted corrective work. With the city’s agreement, McKinstry could address it through payment, equipment repairs or modifications, additional services or improvements of equivalent value, or a combination—not necessarily a reimbursement check alone.⁠[1]

That makes the first-year report especially consequential. The city would have 30 days to review it and submit a reasonable objection in writing. Without an objection during that period, the report would be deemed accepted and its savings figures used in subsequent years, subject to correction of manifest errors and other contract provisions.⁠[1]

The verification plan combines measurements with agreed assumptions. For lighting, it measures fixture wattage but stipulates operating hours. For building sealing and window tinting, the plan says calculated savings would be claimed after visually confirming installation.⁠[1]

That does not mean all follow-up would stop. The verification exhibit calls for annual staff interviews to confirm functionality, and its operational-efficiency provisions describe targeted ongoing monitoring. But the guarantee clause says additional measurement and verification would not be required after acceptance of the first-year report unless the parties expressly agree in writing.⁠[1]

The purchase would replace 3,750 light fixtures with LEDs across 43 sites, install 109 networked thermostats across 28 facilities and replace seven end-of-life heating-and-cooling units at six facilities. It also includes weather sealing and window tinting, water-saving fixtures at 55 facilities and work to correct operating inefficiencies at five major facilities.⁠[1]

Staff projects a 15% reduction in portfolio energy consumption and a 33% reduction in water consumption. Its financial summary identifies $176,243 in first-year guaranteed utility and operational savings, escalating about 3% annually. These are proposed savings commitments, not measured results from completed upgrades.⁠[1]

Funding would combine a $1,207,302 city contribution, $182,803 in incentives and rebates, and the $1.95 million lease financing. The proposed financing terms specify a 15-year term at a fixed 4.62% interest rate, with the first payment due Nov. 17, 2027.⁠[1]

Council’s Nov. 16 meeting begins at 6:30 p.m. in the City Hall council chambers, 2 Park Plaza. The contract is listed as New Business item 7.A.⁠[2]