#09 Council memo for purchase of Ice equipment
DEPARTMENT OF PUBLIC WORKS MEMORANDUM
12 December 2011
TO: City Council
FROM: Mike Payne, Engineering Manager
SUBJECT:
DIRECTION ON ICE MAKING EQUIPMENT AT THE ICE ARENA
Summary
At the February 14, 2011 meeting, the Council considered three options for renovating
the existing Ice Arena. The Council directed staff to design the long term option but bid
the intermediate option as the base bid with alternate bid items for various components
of the long term option. The design team has met multiple times with the user groups to
obtain input in the design process.
In October 2010, the Council approved $2,000,000 for an Ice Arena project. Currently,
there is $2,080,000 in designated funds ($1,900,000 in note issue and approximately
$180,000 in Energy Efficiency Community Development Block Grant (EECDBG) funds
which are available for use on energy saving equipment. The designer recommended
we identify the ice making equipment manufacturer prior to going taking the project to
bid to accomplish three things: 1) In order to finalize the design of the mechanical room,
the specific equipment needed to be identified since all manufacturers have different
space requirements and equipment configurations, 2) the EECDBG funds needed to be
committed by the end of 2011 in accordance with the grant terms, and 3) due to long
lead times of ice making equipment, the equipment needs to be ordered prior to the end
of the year to avoid delaying the construction schedule.
The installation of the selected ice making equipment will be included in the base bid for
the project. Plans and specifications are to be distributed to contractors January 4,
2012 with bids opened January 25, 2012. Council will consider award of the base bid
and alternate bid items at the February 13, 2012 meeting. The project schedule targets
an April 1 to Sept 1 timeline to avoid the hockey and figure skating seasons.
The requirements of the green building resolution apply to this project. Typically the
energy conservation components evaluated for inclusion into a project would be
presented to Council at the time of contract award. However, since the project base bid
is anticipated to exceed authorized Council funding and the project requires a
commitment to the ice making equipment prior to the Council evaluating the general
contractor bids, staff believed it was appropriate to bring this topic to Council for input
on the decision for purchasing ice making equipment.
Recommendation
The Engineering Division recommends the conventional geothermal ice making system
equipment proposed by Thermo Source due to the estimated annual operating savings
DIRECTION ON ICE MAKING EQUIPMENT AT THE ICE ARENA
12 DECEMBER 2011 – PAGE 2.
of $21,365 with an estimated payback of less than 8 years. This equipment is
approximately $100,000 more than a traditional ammonia based ice making system.
City Manager Recommendation
The City Manager recommends the Thermo Source Geothermal due to the operational
payback over 7 ½ years.
One concern we have is that this project is approximately $460,000 over the money
borrowed and received in grants. I would recommend continuing forward, but if the
Council wants to downsize the project, we need to know this in December prior to
putting the bids out for construction.
Suggested Motion
I move to support the purchase of a conventional geothermal ice making system
proposed by Thermo Source and authorize issuing a purchase order for the equipment
in 2011 in order to apply grant funding to a portion of the purchase.
Background
The current Ice Arena and ice making equipment was installed in 1974 and has reached
the end of its useful life. In 2008, the City performed preliminary evaluations of issues
and possible deficiencies at the Ice Arena. During the spring of 2009, the City
experienced several small failures and one large failure of the ice making system.
As part of the Request for Proposals for the ice making equipment, one of the
manufacturers provided two geothermal options taking advantage of the adjacent Lions
pond for the cooling component to the ice making system. These two options add cost
to the initial installation but will lower operating costs in the future. Below is a table of
three options for ice making equipment and replacing the current heating systems. The
numbers include actual manufacturer equipment costs and estimated installation:
Cimco Thermo Source Thermo Source
Ammonia system Geothermal Geothermal
Installed equipment $923,200 $1,042,254 $1,388,088*
Additional cost baseline $119,054 $464,888
Annual savings $5,740 $21,365 $37,700
Payback n/a 7.6 years 14.5 years
Estimated base bid $2,441,228 $2,541,106 $2,845,741*
Over current funds $361,228 $461,106 $765,741
*includes replacing existing dehumidification equipment
cc: Eric Levitt, City Manager
Jay Winzenz, Asst. City Manager