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HomeMy WebLinkAboutRes2021-088 CITY OF SEWARD,ALASKA Sponsored by: Bower RESOLUTION 2021-088 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA,SUPPORTING THE CITY MANAGER TO SEEK ADDITIONAL FUNDS FROM THE FEDERAL INFRASTRUCTURE/STIMULUS PACKAGE, AND ANOTHER TIME EXTENSION FROM THE ALASKA ENERGY AUTHORITY FOR THE HEAT LOOP PROJECT GRANT WHEREAS, the Alaska Energy Authority requested "a resolution from the City Council that describes and affirms the city's intentions for the project moving forward"including: • Proposed plan forward; • Potential gap funding; and • Requested extension time frame and rational schedule; and WHEREAS, the city manager requests direction from council to expend the time and resources seeking funds for the heat loop, and whether to fund a partial project for$1.4 million or the full project for$3.6 million(both are 2020"pre-COVID-19"estimates and should be increased 50%); and WHEREAS, the proposed plan forward is to first secure the necessary funding from the new federal infrastructure and stimulus package by December 31,2021,then proceed to complete the project by June 30,2023; and WHEREAS,potential gap funding would be requested with the federal funding requests; and WHEREAS, the requested time extension would move to June 30, 2023 to allow more time to purchase the equipment and supplies during these difficult COVID-19 delays and shortages. NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD,ALASKA that: Section 1.The Seward City Council has determined that it is in the public interest to pursue funding for the heat loop project, and hereby authorizes the city manager to continue to work on time extensions with Alaska Energy Authority to secure funds and complete the heat loop project. Section 2. Funding is not requested at this time. The required match was approved through Resolution 2019-022. If additional funds are required, a resolution will be brought forward to the council for consideration. Section 3.This resolution shall take effect immediately upon adoption. CITY OF SEWARD, ALASKA RESOLUTION 2021-088 PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 23rd day of August, 2021. TH CIT OF SEWARD, ALASKA risty Terry, ay� AYES: Osenga, McClure, Casagranda, DeMoss, Terry NOES: None ABSENT: Seese, Baclaan ABSTAIN: None ATTEST: renda J. Ballo , MMC City Clerk (City Seall......... •A Of SEiiN ••• V.••'.oa F4r''••. • sl, t`�: • • • i .- - s • t SEAL 1 • .• 4 �ryrs T P 1; 0FA .••• . City Council Agenda Statement Meeting Date: August 23, 2021 To: City Council Through: Janette Bower, City Manager From: Doug Schoessler, Public Works Director Agenda Item: Resolution 2021-088: Supporting the City Manager to Seek Additional Funds from the Federal Infrastructure/Stimulus Package, and Another Time Extension from the Alaska Energy Authority for the Heat Loop Project Grant Background and justification: In 2018,the City of Seward accepted a grant of$725,000 from the Alaska Energy Authority(AEA) for a heat pump system to serve 4 city buildings. The City committed to provide matching funds totaling$157,000 for a total proj ect cost of$892,000. The paid design and engineering fees to"Your Clean Energy, LLC" have totaled nearly their budgeted $138,000. The original project timeline was from September 01, 2018 to December 31, 2019. AEA granted a time extension until June 30,2021.As design was finishing in 2020 we solicited for an independent professional cost estimator to evaluate the project costs to insure it was viable. The professional estimator gathered information from all involved to produce the current time price. That total was $3,600,934. This price was nearly $2.9M over the budgeted funds. Thus,Your Clean Energy,LLC(YCE)wanted to try for a 2-building version of the project using just the Library and the Annex. He worked with the profession estimator to reduce scope to keep the project. That revised project scope cost came back at $1,440,884 increasing the City's cost to $715,884. The Covid-19 outbreak interrupted many things including any decisions or funding sources on this project. Prior to the expiration of the grant agreement on June 30, 2021 we applied for another extension.AEA gave us 90 days to find other funding as they wrote: "the reduced scope and increase in cost has changed the economics of the project negatively. The project does not appear to be economically viable based on AEA's assumptions." City Manager Bower worked with AEA to seek more time to try to secure other funding through the new federal economic stimulus package. This resolution asks for Council support and commitment to AEA to continue efforts for additional funding for this heat loop project,or to end this proj ectnow and move on to find other energy conserving projects. The intent is to have Council and the City formally show their support to AEA for Administration to continue seeking these project funds and extend the grant expiration timeline. Consistency checklist: Comprehensive Plan: 3.1.1.7, 2.1.1.7 energy projects Strategic Plan:page 7 reduce energy costs Other: N/A Fiscal note: no fiscal impact at this time. Funding is from: N/A Finance Department approval: Attorney Review: Yes ❑ No F Not applicable ❑ Recommendation City Council adoption of Resolution 2021-088.