Minutes - Council - 12/21/1999 - Special

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. . . Motion carried. Voting Yes: Mayor Gamec, Councilmembers Hendriksen, Connolly, and Anderson. Voting No: None. City Administrator Norman noted that the applicant will be signing a hold harmless agreement with the City to begin preparation of the site, Case #4: Consider Installation of Geothermal Heating and Air Conditioning in Fire Station #2 Fire Chief Kapler stated that Ramsey's Fire Station #2 is in the final stages of design with mid January targeted for requesting bids for construction. Recently, Connexus Energy has contacted staff to inquire about installing Geothermal Heating and Air Conditioning (GHAC) in the building. GHAC is a closed system that circulates liquid through the ground utilizing the constant ground temperature of 55 - 57 degrees to heat in the cold season and cool during warm weather. The Police building utilizes this type of system and staff has been quite pleased with the function of the system. The system does come with an additional cost over the originally proposed natural gas system. At a cost of $118,900, the GHAC system costs approximately $18,200 more than a conventional system. (The figure includes a $18,800 rebate directly from Connexus along with additional architectural fees for design). Connexus has calculated a simple payback schedule on the $18,200 additional cost to be 1.6 years. Calculations include both higher efficiency of the GHAC system and also the flat electrical rate that Connexus offers (five cents per Kilowatt Hour as compared to seven cents for industrial/commercial rate). Savings beyond the 1.6 years would be reflected in lower operational cost. Included in the 1999 Fire Department budget was a line item that included principle and interest payments on the intra fund loan that at a later date was determined to be more beneficial to obtain Lease Revenue Bonds. The $18,000 can be taken from that line item. Tim Dougherty, Connexus Energy, stated that he had recommended Geothermal Heating and Air Conditioning since it is the most economic and efficient. He explained that the system uses heat from the emih to heat the building in the winter and the cooler ground air instead of the hot summer air to cool the building. Motion by Councilmember Anderson, seconded by Councilmember Connolly, to approve staffs recommendation to include installation of Geothermal Heating and Air Conditioning in Fire Station #2. Further discussion: Councilmember Connolly questioned the life expectancy of the system. Mr. Dougherty explained that the above ground system has a life expectancy of 20 to 25 years, as compared to a conventional system of 15 years, and the plastic piping system has a theoretical life of 250 years, but warranted for 50 years. Councilmember Connolly inquired as to what the replacement cost would be for the inside parts. Mr. Dougherty replied that they would be 10 to 20 percent of the overall cost of the system. City Council/December 21, 1999 Page 9 of 15