Town officials are reviewing a 282-page contract proposal from Honeywell for $5.4 million worth of projects to make Monroe's municipal and school buildings more energy efficient and pay for it through the savings. On Monday night, representatives of the firm made a presentation to the Town Council and answered questions.
Terence M. Guiry, an energy services account executive with Honeywell, estimates that the town would save $500,000 on its utility bills annually.
"If you did nothing in fiscal year 2013-14, you're looking at budgeting $1.7 million without these projects getting done," he said. "We're saying, 'Budget what you would have anyway, make a positive cash flow and get these projects done.' It may sound too good to be true. It's not."
The scope of the work wide variety of building upgrades, from weather stripping and energy efficient lighting to improving mechanicals.
To offset costs of the contract, Guiry said CL&P recently gave Honeywell a letter showing its commitment to providing an $820,000 rebate under the Connecticut Energy Efficiency Fund. It's called a comprehensive bonus.
Town Council Chairwoman Enid Lipeles asked if the town could lose the bonus if the contact is approved after Dec. 31. Guiry expressed his belief that CL&P would be open to granting an extension.
CL&P is also offering to give Monroe a $500,000 interest free loan to be paid off within four years, according to Guiry.
For the rest of the funding, he believes the interest rate could be reduced to as low as two percent.
The contract between Honeywell and the town needs Town Council and Board of Finance approvals before voters decide on it at a Town Meeting.
Honeywell will come before the Board of Finance this Wednesday and be back before the Town Council at its Dec. 10 meeting.
Guiry asked that the council approve the contract then, but added if that is too soon, Honeywell remains committed to the project, which it sees as a significant benefit to the town.
First Selectman Steve Vavrek noted how the town has allowed its municipal and school buildings to deteriorate over the years and asked that the council not micromanage the project.
"Because we're so behind with so many buildings, we have to do something and do it quick," Vavrek said. Otherwise, he said costs could be more expensive down the road.
"I think we should go for a vote on Dec. 10," Vavrek said.
Town Councilwoman Debra Dutches asked that the town's finance and public works directors attend that meeting as the town's own experts and Lipeles said she would ask them to come.
Guiry said CL&P and ECG Engineering closely reviewed Honeywell's savings calculations, adding the utility company had to "review and bless" it before approving the rebate money.
"Our energy savings are guaranteed," he said.
Honeywell is extremely thorough in doing an audit to find the conditions of the buildings and what is needed to avoid surprises during the work, according to Guiry.
"There would only be a change order to the work if we find something outside the scope of our audit, but I bet my house that won't happen," he said.
Council members asked a number of questions about the contract. Among them, was how it says "up to $90,000" is included for Yankee Gas Co. Town Councilman Nick Kapoor asked what happens if the cost exceeds that. Guiry said that was just to protect Honeywell before the gas company made a firm commitment to $90,000.
Dee Dee Martin expressed concern over potential compatibility issues with newer lighting and equipment and the existing systems in Monroe's old buildings. Guiry said Honeywell will make it work, but will not bring every piece of town equipment up to current codes.
Dutches said even though Masuk High School recently had a major renovation, it has roof leaks.
Guiry said the goal of Monroe Public Schools was to have a positive cash flow, but roof work for Fawn Hollow and Masuk could be added to the projects, making it revenue neutral.
"Most of our customers don't want a cash flow, because they have so much that needs to be done," he said.
Town Councilman Frank Lieto asked what stipulations there are for the rebates and incentives, if any. Guiry said the only stipulation is from Yankee Gas requiring a three-to-five year commitment.
Lieto also asked how often Honeywell has exceeded project costs.
Guiry said any deviation is usually two percent over or under budget. When Honeywell goes over, he said it is usually from delays in doing the work.
Lieto asked if the town would have to pay if the project's cost goes over budget due to delays and Guiry said no, Honeywell would pay it.