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HomeMy WebLinkAbout110812_Cost Control Miniutes_APPROVED_1m_IL_Bd(tt) COUNTY OF KAUAI Minutes of Meeting OPEN SESSION Board/Committee: COST CONTROL COMMISSION Meeting Date: November 8, 2012 Location Mo'ikeha Building—Meeting Room 2AB Start of Meeting: 1:39 p.m. End of Meeting: 3:30 p.m. Present Chair Dirk Apao; Vice-Chair Lawrence Chaffin, Jr.; Members: Sandi Sterker and Arryl Kaneshiro Also present: Deputy County Attorney Mona Clark; Board& Commissions Office Staff. Support Clerk Mercedes Youn; Administrator Paula Morikami; Economic Development Specialist Ben Sullivan. Member of the Public: Mr. Jim Satterfield Excused Members: Glen Takenouchi and Laurie Yoshida Absent SUBJECT DISCUSSION ACTION Call To Order With a quorum being present, Chair Apao called the meeting to order at 1:39 p.m. Approval of Regular Open Session Minutes of October 8, 2012 Commissioner Sterker moved to approve Minutes the minutes as circulated. Vice-Chair Chaffin seconded the motion. Motion carried 4:0 Chair Apao indicated that he would move item CCC 2012-14 before item CCC 2012-13. Business CCC 2012-14 Communication dated 10/10/12 from Chair Dirk Apao to Economic Development Specialist Ben Sullivan, requesting an update of the Cost Control Commission's Energy Savings recommendations. Chair Apao called for a motion to receive item CCC 2012-14. Commissioner Sterker moved to receive item CCC 2012-14. Vice-Chair Chaffin seconded the motion. Motion carried 4:0 Mr. Sullivan provided the Commission with an update on the Commission's six (6)recommendations on energy savings for County facilities. Cost Control Commission Regular Meeting - Open Session November 8, 2012 Page 2 SUBJECT DISCUSSION ACTION Recommendation 1. The Department of Water and the Wastewater Division of the Department of Public Works should be required to develop cost-saving opportunities for their operations, through energy efficiency and conservation measures and the use of alternative energy sources (for example, methane, wind and solar power). These alternatives should be considered for implementation particularly during expansions or renovations to existing facilities and the construction of new facilities. With regard to the Wastewater Division, Mr. Sullivan stated that the County has been actively engaged with negotiations to implement an Energy Savings Performance Contract (ESPQ for the Public Works Wastewater Division with Chevron Energy Solutions. He indicated that although he could not provide more details regarding the project, there is potential that the contract would be approved and that the project could be executed within a few weeks to a month. Vice-Chair Chaffin asked how long have the negotiations being going on? Mr. Sullivan said that the contract negotiations started in January 2012 and that the contract consists of 100 pages that include specific details on how much savings would be achieved by using baseline energy measures and alternative energy sources for County facilities, what it would cost individually, and how would the savings be calculated. Vice-Chair Chaffin voiced his concerns on the amount of time it takes to approve a Performance Contract to its final execution. Mr. Sullivan stated that he agrees,but once the contract is approved the implementation of the project would be expedited. He explained that the process is different from the typical County project in that it is not an isolated procurement of an individual measure because of its broad scope. Once the contract is agreed upon, it would takel0 months to a year to complete the project. Cost Control Commission Regular Meeting - Open Session November 8, 2012 Page 3 SUBJECT DISCUSSION ACTION Commissioner Sterker asked whether Chevron Energy Solutions have done this type of project before. Mr. Sullivan said that after a lengthy review and ranking process, Chevron Energy Solutions received the highest rank out of four competing proposals. He explained that the County refers to a list of pre- qualified ESCO's (Energy Services Companies) that is made available through the State DAGS (Department of Accounting and General Services). Mr. Sullivan said that there are two major components to be considered for the project. He explained that the first component is the traditional wastewater scope that includes pumps and motors; the second component which is more than half of the proposed cost is to purchase a large size battery operated photovoltaic power system. The total capital cost projected for the project is well over$10 million. Vice-Chair Chaffin questioned what would happen if the County changed its mind and decided not to proceed with Chevron; have they received any payment so far? Mr. Sullivan stated that Chevron is at a risk which is standard when it involves an ESPC (Energy Savings Performance Contract) and that the escrow is significant in the IGA(Investment Grade Audit). He explained that payments are proposed if they are deemed to have met their scope of work and that the County would decide on its own whether or not to proceed with the contract. However, that is so far down the road and is not expected. Vice-Chair Chaffin indicated that he would like the minutes to reflect Mr. Sullivan's statement that once the contract is approved it may take up to 10 months to a year to complete the project. He voiced his concern that the time and effort expended to approve the contract may not result in the completion of Cost Control Commission Regular Meeting - Open Session November 8, 2012 Page 4 SUBJECT DISCUSSION ACTION the project. Mr. Sullivan said that the best thing for him to do is to check with the County Attorney's Office on whether he would be able to disclose any additional information at this point on the schedule proposed construction projects. Mr. Sullivan explained that because of the different types of components some projects could take up to a year for completion, while others are completed on time. He mentioned like any other construction project there is a possibility of having significant delays in which they do not have total control over. He further explained that the process is expedited because you are dealing with just one contractor. Mr. Sullivan noted for the record that he can safely say that the proposed time to complete the project is approximately within the range of a year. Commissioner Sterker asked if the land has already been procured for the project. Mr. Sullivan stated that most of the measures in regard to the Wastewater process are in place which is basically exchanging one piece of equipment for another. He further indicated that there would be no further delays because there is no additional land procurement for the proposed photovoltaic systems. Recommendation number 2. All Departments should be asked to read the Energy Use Survey Guide and to follow the recommendations outlined therein. Mr. Sullivan stated that although he could not respond specifically to the Energy Use Survey Guide, he knows that the County is doing its part to increase energy efficiency for the County. Cost Control Commission Regular Meeting - Open Session November 8, 2012 Page 5 SUBJECT DISCUSSION ACTION Recommendation number 3. Execute a new Energy Savings Performance Contract to improve energy efficiency in the County's buildings and facilities. Mr. Sullivan stated that the Office of Economic Development has been doing a lot of work in preparation of its next phase which is to focus on its resources in completing the Energy Savings Performance Contract for Wastewater. This second ESPC is expected to cover most of the County's non-water and non- wastewater facilities. He stated that the task to implement the energy efficiency recommendations requires equipment or fixture retrofits for the buildings and would proceed either way with or without a contract, which would result in significant energy savings over the next several years. Commissioner Sterker asked what is being done with the County's aging air conditioning units. Mr. Sullivan stated that he is not familiar with how the County deals with the aging air conditioning units and as for the upgrades he suggested that the Commission contact DPW Officer Brian Inouye to get the information. He indicated that the air conditioning units that are housed in the Police Department are due for significant retrofitting, if not replacement in terms of the mechanical equipment. He further indicated that although funds have been budgeted for equipment replacement and fixture retrofits, there have been talks to delay the project to decide whether or not to pursue another Performance Contract or have another aggregated vehicle to proceed with the project. He added that a decision would soon come in a form of an IFP (Invitation for Proposal) document that would allow the project to begin as soon as early next year. Cost Control Commission Regular Meeting - Open Session November 8, 2012 Page 6 SUBJECT DISCUSSION ACTION Commissioner Sterker asked what other fixture retrofits needed to be done at this point. Mr. Sullivan stated that the fixture retrofits vary from facility to facility and that the Civic Center master plan cites all improvements including the parking area and landscaping around the facility. Vice-Chair Chaffin expressed his disbelief that the life span for air conditioning units that are housed in the Police Department are only for ten(10)years. Commissioner Sterker requested that the Commission be provided with information on what is the normal life span for an air conditioning unit, particularly the unit that is housed in the Police Department. Staff acknowledged the Commission's request and will make an inquiry with DPW Officer Brian Inouye to see whether the information is available. Recommendation number 4. The County should develop cost savings opportunities for its operations through energy efficient and conservation measures by exploring the issuance of a new Performance Contract proposal solicitation for County facilities. Mr. Sullivan stated that he is unsure whether the update for this recommendation is similar to updates for recommendations 1, 2, and 3. Commissioner Sterker indicated that the update for this recommendation is the same as recommendations 1-3. Recommendation number 5. The County should form a County Departmental Green Team Committee to assess work environments, identify opportunities and make recommendations to reduce waste and improve efficiencies in their daily Cost Control Commission Regular Meeting - Open Session November 8, 2012 Page 7 SUBJECT DISCUSSION ACTION Mr. Sullivan stated that the County has implemented an energy efficiency program known as the Green Team. The Green Team is made up of County staff level employees whose purpose is to tackle projects to improve the County's resources management that will result in cost-savings and reduce the County's carbon footprint. Some of the Green Team projects include establishing a policy on thermostat settings in County offices; develop and encourage a ride-sharing program for County employees; promote a paper reduction campaign; and promote a"disposable to reusable's" campaign for County offices. Mr. Sullivan informed the Commissioners that the County is hosting an Open House on Thursday, November 16th at the Lihue Civic Center. He invited the Commissioners to attend the event which is also open to the public. The purpose of the event is an effort to get the public's input and suggestions on how to make the County of Kauai more energy efficient. Recommendation number 6. The County should engage and promote employ awareness, understanding, and sense of personal and departmental responsibility among all employees for how they use energy and other resources and how they can reduce waste and improve efficiency in their daily work by creating an`Employee Green Team" in the County. Mr. Sullivan stated that in addition to the Green Team program, the County has a solution that they are hoping to have in place as early as the first quarter of next year. He explained that over the last nine months, the County has gone online collecting information from outside sources on various products used to collect numerical energy use data. He indicated that their efforts were successful in locating a tool that would take numerical energy use data of each County facilit , visualize it and make the data accessible to the user so that the Cost Control Commission Regular Meeting - Open Session November 8, 2012 Page 8 SUBJECT DISCUSSION ACTION could compare energy usage on a month to month basis and even show energy usage from a year ago to the present. He added that the tool would also provide information on anomalies which would be very useful to help improve energy efficiency within the County. Mr. Sullivan left the meeting at 2:10 p.m. Chair Apao indicated that he would move item CCC 2012-16 before item CCC 2012-13. CCC 2012-16 Discussion on the County's special counsel contracts and expenditures to date. (a)Communication dated 10/24/12 from County Attorney Alfred B. Castillo, Jr., to Chair Apao and Members of the Cost Control Commission, regarding the County's special counsel contracts. Chair Apao called for a motion to receive item CCC 2012-16 (a). Commissioner Sterker moved to receive item CCC 2012-16 (a) for the record. Vice- Chair Chaffin seconded the motion. Motion carried 4:0 Cost Control Commission Regular Meeting - Open Session November 8, 2012 Page 9 SUBJECT DISCUSSION ACTION Mr. Jim Satterfield, member of the public, distributed a list of questions as it relates to this issue. Mr. Satterfield expressed his concerns on the amount of tax payer's money that is spent each year for outside attorney fees. He asked what are the criteria used in the hiring of contract lawyers when the County should have the ability to utilize its own attorneys on staff. Commissioner Sterker explained that the Cost Control Commission's responsibilities are to eliminate or consolidate overlapping or duplicate programs and services and to scrutinize for reduction any County operation. She stated that she is unsure whether it is within the Commission's power to place pressure on anyone to alleviate the time and cost to work a case. Deputy County Attorney Clark stated that she is unable to provide any specific details as to questions regarding special counsel contracts. Ms. Clark gave a very broad explanation that if the County decides to pursue a case, it believes that it has a valid legal base on which to act and that it would be more beneficial to the County to pursue it then to let it go. Ms. Clark stated that one must consider the facts and circumstance of each case and the legal issues to know the basis of the appeal or the court case. Commissioner Sterker questioned whether it is normal practice for the County Attorney's Office to hire outside law firms to handle nine (9) of its cases. Vice-Chair Chaffin expressed his concerns on hiring outside counsel and asked why the County Attorney's Office doesn't have a law firm here on the island on retainer. Cost Control Commission Regular Meeting - Open Session November 8, 2012 Page 10 SUBJECT DISCUSSION ACTION Commissioner Sterker stated that she would like the County Attorney to be present at the next meeting so that he could address some of the Commission's questions as it relates to what is the criteria used in determining the selection of special counsel; what are the time limits and expiration date on the contracts; and what are the reasons for hiring special counsel as opposed to using in-house attorneys in the County Attorney's Office. Staff acknowledged the Commission's request and will send a letter requesting for the information and the presence of the County Attorney at the Commission's next meeting in December. CCC 2012-13 Discussion on the County's travel budget,per diem policies, and expenditures. (a) Communication dated l0/11/12 from Budget and Purchasing Director Ernest Barreira to Chair Dirk Apao, relating to a request for travel and related costs information. Commissioner Kaneshiro pointed out that he would have liked to see the actual budget for each department. Commissioner Sterker voiced her concern that the travel expenditures for the Fire Department had increased significantly from $42,789 in 2010 to $106,916 in 2012. Commissioner Kaneshiro questioned how the County gets Federal and State travel grants. Ms. Clark indicated that she is unsure of how the County obtains those types of grants but would guess that if a seminar held by a State or Federal agency, the County may be able to apply for a grant to attend the seminar if it is beneficial to the County. Cost Control Commission Regular Meeting - Open Session November 8, 2012 Page 11 SUBJECT DISCUSSION ACTION Commissioner Sterker suggested that the Commission defer this matter for continued discussion and request that Staff contact Budget and Purchasing Director Ernest Barreira and ask him to be present at the December meeting. Chair Apao called for a motion to receive item CCC 2012-13 (a). Commissioner Sterker moved to receive item CCC 2012-13 (a). Commissioner (b) Communication dated 10/12/12 from Director of Finance Wallace Kaneshiro seconded the motion. Rezentes, Jr. to Chair Dirk Apao and Members of the Cost Control Motion carried 4:0 Commission, relating to information on travel and per diem policies. Vice-Chair Chaffin questioned whether the quarterly per diem rate of$22.50 includes meals, lodging, and transportation. Commissioner Sterker replied yes, and that same day travel per diem is based on a flat rate of$20.00. Staff informed the Commission that per diem for traveling within the state (inter-island) for more than one day amounts to $90 per day in which $50.00 would go towards lodging. Travel to the mainland would amount to $145 per diem in which $85.00 would go towards lodging. Vice-Chair Chaffin asked whether the $90.00 a day per diem is deducted from the person's pay. Commissioner Sterker said no and that per diem is allowable for business travel only. Commissioner Sterker moved to receive Chair Apao called for a motion to receive item CCC 2012-13 (b). item CCC 2012-13 (b). Vice-Chair Chaffin seconded the motion. Motion carried 4:0 Cost Control Commission Regular Meeting - Open Session November 8, 2012 Page 12 SUBJECT DISCUSSION ACTION CCC 2012-15 Discussion on the County's Real Property Home Owners Age Tax Exemption. Commissioner Sterker stated that she would still like to make a recommendation that with the exception of people ages 65 years and older, homeowners who fall below that age range would pay just a flat rate. Commissioner Kaneshiro stated that he is unclear on how it would affect the taxpayers and where the County is now as far as its revenues, and how much time it would take for the real property tax division to implement the change into their system compared to having the tax rate remain the same. Commissioner Sterker stated that the tax rate would actually come out even and would lessen the amount of work for the staff at the Real Property Tax Division because there would be only two tax categories for the staff to process as compared to how the system is currently set up. Commissioner Kaneshiro questioned whether the recommendation is an attempt to adjust the real property rate structure or make it more efficient for the staff at the Real Property Tax Division. Additionally, Commissioner Kaneshiro questioned how the Commission would decide on the ages. Commissioner Sterker stated that the Commission should come to a general conclusion on how the members would want to proceed on this issue by either acting on it or leave things the way they are. Commissioner Sterker stated that what she is proposing is to increase the home use exemption from $48,000 to $88,000 for all ages and eliminate the other home use age exemption. Cost Control Commission Regular Meeting - Open Session November 8, 2012 Page 13 SUBJECT DISCUSSION ACTION She recalls a statement that was made by Mr. Hunt at a previous meeting in which he said that there were a significant amount of people on the island whose age is 70 plus. Commissioner Sterker further stated that most people who are over age 60 are well enough along that they do not need the extra$30,000 in exemption, and that those who are under age 60 could really benefit from the extra $40,000 deduction. With regard to the people who are older and who really need the exemption they would fall under the low income exemption. Commissioner Kaneshiro voiced his concerns on whether it would be worth the trouble to present it to the County Council because he didn't want to place Mr. Hunt and Ms. Motta under fire by the Council as they were when they went before the Council for the minimum real property tax exemption increase. Commissioner Sterker stated that the basic home use tax exemption for the County of Kauai is $48,000; her proposed recommendation would amend the home use tax exemption to a flat rate of$88,000 for all age categories and eliminate the other home use age exemption types. She indicated that by doing it that way, it would lessen the workload for the staff at the Real Property Tax Division and bring in more revenue for the County. Commissioner Kaneshiro stated that he still feels uncomfortable with the recommendation and would like to see the ramifications on how this recommendation would affect the County, as well as the taxpayer. Cost Control Commission Regular Meeting - Open Session November 8, 2012 Page 14 SUBJECT DISCUSSION ACTION Commissioner Sterker asked Staff to see whether they could request the information from the Real Property Tax Division as it relates to the total number of homeowners who are under the age of 60, 60-69, and those who are age 70 and older. In addition, Commissioner Sterker requested for information on the total real property tax revenues from each of the three (3) age groups. Staff acknowledged the request and will follow-up to obtain the information from the Real Property Tax Division before the meeting in December. Announcements Next meeting: December 10, 2012 at 1:30 p.m. in the Liquor Conference Room 3. Adjournment Vice-Chair Chaffin moved to adjourn the With no further discussion, Chair Apao called for a motion to adjourn the meeting at 3:30 p.m. Commissioner Sterker meeting. seconded the motion. Motion carried 4:0 Submitted by: Reviewed and Approved by: Mercedes Youn, Staff Support Clerk Dirk Apao, Chair (X) Approved as circulated on 12/10/12. ( ) Approved as amended. See minutes of meeting.