Finance - February 18th 2014

MINUTES OF THE FINANCE COMMITTEE MEETING
Tuesday, February 18, 2014 – 7:30 p. m.
Main Conference Room – Mayfield Village Civic Center

The Finance Committee meeting was held on Tuesday, February 18, 2014 in the Main Conference Room at the Mayfield Village Civic Center.  Mr. Delguyd called the meeting to order at 7:30 p.m.

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Present: Mr. Marrie, Mr. Marquardt and Mr. Delguyd

Also Present: Mr. Jerome, Chief Edelman, Mr. Metzung, Mr. Marrelli, Mr. Wynne, Chief Carcioppolo, Ms. Wolgamuth, Mr. Dinardo, and Mrs. Betsa

Also Present: John Fadel, Dovetail Solar

Mr. Delguyd stated, before we get into the meeting, I just talked to Ron about budgets for next year. We are going to schedule a Special Finance Committee meeting next week before the next Caucus to go through some of the details and discuss any issues.  If you have any questions, either e-mail them to Ron or any of us to bring to the meeting.

1) Discussion of a motion to authorize an expenditure in the amount of $7,000 to OneCommunity for annual fiber ring maintenance fee for 2014.

The Committee recommended Item #1 for approval.

2) Discussion of a motion to authorize expenditure in the amount of $121,397.57 to Bureau of Workers’ Compensation for yearly assessment for 2014.

Mr. Delguyd asked, is this for 6 months?  Mr. Wynne replied, annual.

The Committee recommended Item #2 for approval.

3) Discussion of a motion to acknowledge receipt of financial reports for January 2014 and to approve of same as submitted.

Mr. Delguyd asked, anything to add to this?

Mr. Wynne reported, January tax collections were down about $250,000 compared to last year.  We could not nail it down to anything specific.

Mr. Marrie asked, was it bonuses?

Mr. Wynne replied, it’s always going to be tied to Progressive somehow.

Mr. Marrie stated, that’s what I thought.  Maybe they had big bonuses and did not get it this year.

Mr. Wynne stated, if you noticed, in December of last year, it was over by $500,000.  I don’t know if it is a timing thing where we got more in December than January as a criss-cross, but collections so far for the month of February are $2.1 million. We are about $600,000 ahead of last year, so February is looking good.

Mr. Marrie stated, I just thought that was the reason, bonuses.

Mr. Wynne replied, I am sure it had something to do with it.

Mr. Marrelli added, also gain share in December and February.

Mr. Delguyd stated, also, any type of bonus they pay out to employees has to be paid by March 15th. They could be delaying that.

Mr. Marrelli stated, they usually split it up before Christmas and then after New Year’s.

The Committee recommended Item #3 for approval.

4) Discussion of the First Reading of Ordinance No. 2014-04, entitled, “An emergency ordinance authorizing an agreement with MetLife as and for an employee AD&D and Life Insurance Program.”  Introduced by Mayor Rinker and Council as a Whole.

Mr. Wynne reported, this is our annual renewal with MetLife. It renews on April 1st.  It can stay on three reads.

The Committee recommended Item #4 for approval.

5) Discussion of the First Reading of Ordinance No. 2014-05, entitled, “An ordinance appropriating funds for current expenses and expenditures of Mayfield Village, Ohio for the period from January 1, 2014 and ending December 31, 2014 and declaring an emergency.” Introduced by Mayor Rinker and Council as a Whole.

Mr. Wynne reported, this is going to stay on First Read, in title only.  More information will be provided at the Second Read.

The Committee deferred Item #5 for further discussion.

ANY OTHER MATTERS

Mr. Delguyd asked, any other matters?

Mr. Dinardo replied, in your packets, there is a power system evaluation for the solar production at the Mayfield Village Police Station.  We finally had a few years to review the numbers. Everyone should have received the packet in their mail.  If you have any questions, John Fadel is here.  He is the third-party consultant who has ownership of the solar panels on the roof for the next six years or so.  He can go over any of the details of the numbers. As you can see, the system is generating quite a bit of power.

Mr. Delguyd asked, what are we doing with that power, using it, selling it back?

Mr. Dinardo replied, we are using it.

Mr. Delguyd asked, so that’s what’s generating the $7,000 a year in savings?

Mr. Fadel replied, number-wise no.  What you would have been paying to the utility company you are using to pay for the system, so that in 6 years, instead of paying $310,000, you are paying $30,000 which is a savings of about $280,000. 

Mr. Delguyd asked, so the real savings will come at the end of the 6 years? 

Mr. Fadel replied, yes.

Mr. Marquardt asked, so it’s about a 6 year payback?

Mr. Fadel replied, yes, if you look at it that way.  Including interest if rates stay the same.  If rates increase, then it’s less than 6 years.

Mr. Delguyd added, plus that doesn’t include any future savings.

Mr. Fadel replied, right.

Mr. Marquardt asked, what’s the pitch on that roof?

Mr. Dinardo replied, the angle on the panel has to be 15%.

Mr. Delguyd asked, are there tax credits you got from that too?

Mr. Fadel replied, that’s exactly why. That was the whole program.  I use the tax credits the Village couldn’t use to compensate for the difference in the value of the system.

Mr. Delguyd asked, this is strictly on that building?  It’s not tied to the rest of our power grid?

Mr. Fadel replied, no, strictly to the police station.

Mr. Marrie asked, the power is all there?

Mr. Fadel replied, yes.  If you were generating more than 100% of the usage, yes, you would be selling some of it back, but you are using 18% of what the total is.

Mr. Delguyd asked, have we looked at this program for any other building?  I noticed there was no initial cost to the Village. 

Mr. Dinardo clarified. We were able to obtain a grant from NOPEC for $25,0000, all communities in the Hillcrest area.  Some used that for lighting or other energy saving item.  What we did is took that as part of our payment for the solar panel to get this thing kicked off.  It didn’t come out of our General Fund. We used that grant money.

Mr. Delguyd asked, is that grant available?

Mr. Fadel replied, you wouldn’t get another one from them.  For anyone who wasn’t a part of this in the beginning, when the proposals were first put in, it was going to be free.  Then the State dropped all of their tax credits within three days of our system coming up for State review. We lost the “free” status. It took about another year to figure out how to get some funds that would go in to this without having to come out of pocket.

Mr. Delguyd asked, if we were to do this building, it would theoretically cost $25,000 plus your annual amounts?  The question would be, what are you saving in the amount of energy at that building versus this building?

Mr. Fadel replied, you also have to look at the building itself. That building, everything has to be south facing. This building runs this way which is not south facing. This would not be a good building to do whereas you have the flat roof there and then the small south facing siding.  This building probably wouldn’t have any value.

Mr. Marrelli replied, we also pushed all of their rooftop equipment away from the center.

Mr. Dinardo stated, it was designed that way when we went through the process to maximize the roof.

Mr. Delguyd asked, what about the Fire Station?

Mr. Fadel replied, the Fire Station might work.

Mr. Jerome asked, what about the Community Room?

Mr. Fadel stated, the other thing we looked at when we had the State grant, we didn’t push a button on that one, but we put the standing systems right in the parking lot of the pool so that they would not be on the roof but they would be on the ground like canopies. We had a nice proposal for that, but again when the State pulled their funding, that was kind of flushed down the toilet.

Mr. Marrelli asked, didn’t First Energy have something to do with it too?

Mr. Fadel replied, yes.

Mr. Marrelli asked, they pulled the plug at the end?

Mr. Fadel replied, they had no desire.

Mr. Delguyd stated, I wouldn’t be opposed to taking a look at the Fire Station.   The whole payback was 6 years or 6 more years?

Mr. Fadel replied, your number was if it cost $31,000 with interest, you were saving $7,000.  That’s about 6 years.

Mr. Jerome asked, the Community Room is a possibility?

Mr. Fadel replied, possibly.  It’s southern exposure.

Mr. Dinardo stated, unless we went with a system that was a metal roof and we put them in between the seams of the metal roof.  Would it generate enough?

Mr. Fadel replied, it doesn’t matter. As long as it is southern facing.

Mr. Dinardo stated, it would be less of an –

Mr. Delguyd continued, of an eyesore, are you saying?

Mr. Dinardo replied, yes.  I didn’t want to say that.

Mr. Delguyd stated, the southern facing of the Community Room is Wilson Mills.  You have to look to see the solar panels at the Police Station because of where they are situated.

Mr. Jerome stated, you did that so people would know they were there.

Mr. Dinardo replied, we did on SOM so you could see they were there. We had enough room to do it.  But it’s also isolated.  Originally our design for the Police Station was next to the Fire Station. That was designed with a metal roof where we found the solar panel hidden between the seams of the roof panels.  It was inconspicuous because it was blended in.  You looked at this metal roof and it was just a darker metal roof.

Mr. Delguyd stated, go ahead and take an audit or survey of the cost and payback if we installed it at other locations. 

Mr. Dinardo stated, Doug just mentioned the Service garage.

Mr. Delguyd stated, it sounds like the real savings is going to come after the 6 years.  I would rather do it all at once to save a little money.

Mr. Marquardt asked, is there any potential for residents to do something like this?

Mr. Fadel replied, absolutely.

Mr. Jerome replied, there’s one resident that has it on Hickory Hill.

Mr. Delguyd stated, he heats a pool.

Mr. Jerome replied, he doesn’t think it is going to make it.

Mr. Fadel stated, you have a nice wooded community. Trees are not compatible with solar systems.  It contradicts itself. There are some basic fundamental costs to doing this.  You have to have a minimum amount to justify certain set-ups.  Houses around here, probably you are going to do it because you want to be green, not because you are going to save money. That would be my guess at this time.  With that said, the costs of these panels keep coming down every 6 months like computers do.  In fact, QED is looking at making transducers to put on solar panels.  That’s close to happening.  There’s a lot of cost reduction going on that will make it more and more effective over time.

Mr. Delguyd stated, the overall useful life is great.  When they first came out, they were 5-15 years.  Now they are guaranteed for 30 years.

Mr. Fadel replied, yours is guaranteed 25 years.  The shingles are 30 year shingles.

Mr. Jerome stated, it makes perfect sense for a government building that is going to be there for a long time.  If it is going to outlive what it costs to do it, even if it takes 10 years.

Mr. Fadel stated, you want to be sure to do it the same time you are putting a roof on.  You don’t want to get in a situation where the roof dies on the Service garage in 5 years and now you have all this cost in moving panels around to redo the roof.  You could put a white roof down so it reflects better in the summer and then you put the solar panels on the brand new white roof.  Now you have a 20 year roof and 25 year panel and you are set.  They did this in Euclid.

Mr. Delguyd asked, how old is the roof at the Fire Department?

Chief Carcioppolo replied, 17 years old.

Mr. Delguyd stated, here’s the two buildings that would make sense, the Fire Department and Service and possibly the pool. 

Mr. Fadel replied, the pool you would put the canopies up.  They look like carports.  They are real nice. They would go in the parking lot.   If you want to see them, they did the McDonald’s on Rockside in Maple.  It’s an almost all-green McDonald’s.  They have them up there.  I can send you pictures.

Mr. Delguyd stated, if it’s relatively minimal cost and a 6 year payback plus what sounds like tons of upside after, we should look in to it.

Mr. Dinardo stated, it’s even worth it if it’s a 10 year payback. 

Mr. Delguyd stated, anything between 4 and 7 years is a no-brainer.  Put a study together. We would be happy to participate.

Mr. Jerome asked, if you did it at the pool, would it do anything with heating the pool?

Mr. Fadel replied, the heaters at the pool have electric pumps.  You don’t have to put much at the pool, it doesn’t use a lot of electricity.

Mr. Delguyd asked, the heaters are gas?

Mr. Fadel replied, the heaters are gas, but the pumps are all electric.

Mr. Jerome asked, what did the guy on Hickory do?

Mr. Marrelli replied, he put a couple big hot water heaters in.  He actually has tubing running inside the panels. 

Mr. Delguyd asked, what if it’s cold outside?

Mr. Jerome replied, it shuts off.  There’s a temperature control.

Mr. Fadel replied, those pay back.  But those just control your water heater.

Mr. Delguyd stated, we should look at that too.

Mr. Jerome asked, don’t we need a new heater this year anyway?

Mr. Dinardo stated, you can go on the website and click on the solar array and you can see what’s generated.  This is just an example, a screenshot of it.  It’s a nice feature.

Mr. Delguyd asked, the solar panels wouldn’t be able to run the lights because there’s no storage?

Mr. Fadel replied, you would set up something different for that. When we looked at everything, we were going to do the bridges and walkways.  We had some great ideas, but then the State pulled the funding.  Some of those things get  pretty expensive to do if you don’t have the funding. Even with me taking the tax credits, it’s not economical.

Mr. Delguyd asked, the technology’s not really there for energy storage?

Mr. Fadel replied, it’s there.  It’s just a matter of money.  It’s like anything else. The batteries go across a certain amount of power. If you can generate enough to justify the cost, you can do it.  If you don’t, one panel with one battery is probably not justifiable.

Mr. Marquardt stated, you could switch over to LED’s.  Makes a big difference.

Mr. Fadel replied, right.  That helps the solar technology.  There’s a lot of things you can think about and do, but none of them are financially solid yet.  I am going to be honest with you. They are close with some of the stuff. The water heaters are financially solid. 

Mr. Delguyd stated, okay, work on a proposal.

Mr. Delguyd asked, are there any other matters?  Do you want to schedule a meeting now for next week?  The next Caucus is Monday, March 3rd. We would like to be able to discuss this at Caucus.

Upon coordination of calendars, a Special Meeting of the Finance Committee was scheduled for Monday, February 24th at 6:00 p.m. for the purpose of discussing the budget.

Mr. Delguyd asked if there were any further matters.  There were none.

There being no further business, the meeting adjourned at 7:55 p.m.

Respectfully submitted,

Mary E. Betsa,
Clerk of Council