Performance contracting
For a while now, I've been concerned about the town considering all options for financing town projects. At the 8/30 Council meeting, I mentioned one alternative form of financing that the town may be able to use: performance contracting.
But what is performance contracting? Here's a relatively basic (if unlikely) example:
Say your house has no front door and your heating bill is $100/mo. Then Mr. Smith comes to you and offers to give you a door at no charge and install it at no charge. And Mr. Smith guarantees that your heating bill will drop to $30/mo. In turn, Mr. Smith would sign a one year contract with you that pays him $50/mo for one year. That leaves you saving money and energy from day one... and with a door after one year.
That's the basic concept that I want the town to consider.
Tim White
Town Council, Budget Committee
15 comments:
Performance contracting is solid method used by major corporations to pay for their capital expenses; through energy savings. The concept is tried and true, been proven successful many times. The main advantage is the Town could solve all of the pool issues without increasing the capital budget that in turn increases our debt load and all of our taxes. The contractor is paid on established performance criteria before the project is started. No performance, no payment.
Stop the mall and you can save a lot more money than all the performance based programs.
How is perfomance contracting going to save money on the additional classrooms and educational costs for all the mall kids, or pay for the new fire station, or for the added capacity of the sewer treatment plant, and on and on and on and more and more $$$$$$$$$$$$$$$$$$$$$$$$?
so, how does the contractor make money?
9:16... the contractor's cost would be less than $50/mo.
The contractor is also the ESCO; Energy Services Company. Funding comes from an investment bank or a capital leasing organization. The ESCO guarantees upfront the amount of energy savings the client will experience on a yearly basis. The customer makes two payments per month; one to the utility company as normal, the other to the investment or capital lease firm. The payment to the lease firm is based on a percentage of the projected monthly energy savings and the cost of the equipment, including installation. If the energy savings are not as high as projected and agreed to in the contract the customer receives a rebate at the end of the operating year. The ESCO will lose oney if the savings are not hat was expected and promised. Payment based on performance or lack thereof.
Can we do this legally
Show me another town where it is being done and the money saved
Think this idea through
Get it to the proper committees
Make sure you can show all the details
Stop saying you have been saying this for a year-no one can remember you saying this and it sounds like one of Tim's "great" ideas that he imagines he says but no one can recall
The Town of Fairfield is the first local town that comes to mind. The level of success has been so good the ESCO and Town agreed to a full time staff member on site form the ESCO to manage the project. I believe the ESCO in this case is Seimens.
Stratford issued an RFQ for their high school this year.
Three years ago, Naugatuck entered into a performance contract for their high school.
Mansfield and Newington were near the top of the google list.
And you may find this website useful
10:00 Relax Liz & Mike..maybe if you were listening you would have heard Tim say these things.
The public is still waiting Tim-what specific proposal did you put forward-
What
Huh
waht
huh
Still waiting
Should be simple to find out . Go back to the buget committee meeting and the Town Council minutes.
checked it out
still waiting
huh?
Huh?
I can hear the crickets
There are several instances of performance based contracting options that have been discussed. Several years ago Seimens Corp did a complete energy audit of Town buildings and their approach was to use performance based contracting as a way to pay for their suggestion solutions. There have been discussions in the Budget committee last year on performance based contracting solutions for the pool. A specific example was an idea to install a microturbine at the high school to generate hot water heat as a replacement for the electrical heating system. That was shelved when the fuel cell gift for free was proposed to the Town. Now we have neither. This idea has been brought up to the Town Manager and past Town Attorney, ask them why it never received a real interest level. All of the Town Council members have heard of this idea before, this is not new.
If this thing is so big and will save us money how come these companies are not knocking down our door
bc they really don't save money
stop wasting our time tim on silly weird projects that we find will not work out
They have been knocking down the doors...problem is, no one in Town government is answering the door. There is a reluctance by town management to try something new, different and an idea that has been proven to work.
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