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Council Meeting: October 12, 1982 Santa Monica, California
T0: Mayor and City Council 'fl~T_~ ~~~2
FROM: City Staff
SUBJECT: Solar Water Heating for Municipal Pool
Introduction
This report presents the results of a request for bids to supply
solar water heating for the Municipal Pool and recommends
rejection of all bids and a waiver of the bidding requirements due
to insufficient number of bids received.
Background
The City owns and operates the Municipal Pool facilities located
at Santa Monica College (the School District owns the land and
surrounding College buildings). Pool facilities consist of an
Olympic size swimming pool and a diving pool, with a combined
total pool surface area of 10,230 square feet.
Pool heating and most other operational costs are paid by the City
Recreation and Parks Department. The College reimburses the City
for their proportion of pool use (approximately 51%). The total
cost of pool heating (provided by natural gas) during FY 1981-82
was $26,794.
Two consultant reports have been .prepared for the City, and staff
analysis indicates that solar water heating would be a
cost-effective energy saving investment for the City andtlthe
College.
Although a solar system would be a cost-effective investment,
neither the College nor the City Recreation and Parks Department
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Council Meeting: October 12, 1982 Santa Monica, California
have funds budgeted for a solar system this year. The College has
expressed a preference for a solar lease arrangement or other
arrangement which does not involve a large initial capital outlay.
Bid Results
Therefore, on August 23, 1982, City staff issued a request for
competitive bids to Design and Construct a Solar Water Heating
System and Supply Solar Water Heating for the Municipal Pool. The
purpose of the request was to solicit bids for both 1) a "no
capital outlay" arrangement, and 2) conventional lump sum bids to
design and construct a system.
The Notice Inviting Bids was published August 23, 24, and 25,
1982, in accordance with Legal requirements. Specifications were
issued to 20 contractors. Two bids were opened and read publicly
by the Deputy City Clerk after 3:00 P.M. on September 21, 1982, as
follows:
Nadar, Inc... ...............$184,800 {Lump Sum)
(La Puente, CA)
Planned Energy Int'1, Inc......Percentage of avoided cost
(Newport Beach, CA) per month for 84 months,
per attached contract ("No
capital outlay")
The two bids are very different. Nadar Inc. submitted a bid to
design and construct a solar water heating system for a lump sum
of $184,800. Planned Energy International, Inc. (PEI) bid a "no
capital outlay" energy saving arrangement with qualifications.
Monthly payments would be based on a percentage of the avoided
cost of the natural gas displaced by the solar system. This means
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Council Meeting: October 12, 1982 Santa Monica, California
that rather than making payments for a solar system directly, the
City and the College would purchase the Btu's of solar energy
supplied by the system at a price 22% - 50% below the price of
natural gas. The City would have an option to renew the agreement
or to purchase the system at its fair market value at the end of
the seven-year period. The formula for determing the purchase
price would be written into the contract. In their bid, PEI
estimated the purchase price at $18,750 after seven years.
Planned Energy International attached an agreement containing the
schedule for calculating payments and containing other conditions
and provisions. Based on the information submitted, it appears
that the City and the College would realize substantial energy
cost savings under this type of energy saving arrangement.
The City Attorney has advised that Planned Energy International's
proposed agreement and bid are not acceptable due to numerous
qualifications in their proposed agreement.
It is the opinion of staff that a fair agreement for energy saving
services can be reached through direct negotiation. In order to
negotiate contract terms, competitive bidding requirements must be
waived. Staff wilt then solicit formal proposals from several
firms including PEI which have proposed no capital outlay energy
saving arrangements for the Municipal Pool and negotiate an
agreement with the best proposer, subject to City Council
approval.
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Council Meeting: October 12, 19$2 Santa Monica, California
Recommendation
Due to the suggested rejection of one bid by the City Attorney,
and the insufficient number of bids received for this project, it
is recommended that the City Council reject all bids, and waive
further competitive bidding requirements for this project. It is
further recommended that the City Council authorize the Gity
Manager to solicit formal proposals for no capital outlay energy
saving arrangements for the Municipal Pool and negotiate an
agreement for energy saving services subject to Council approval.
Prepared by: Stan Scholl
Robert Myers
Don Arnett
Nina Byrne
Attachment; Resolution for adoption
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