HomeMy WebLinkAboutHoneywell 2011-06-15I,
June 15, 2011
Robert Falco
Energy Services Account Executive
Honeywell International Inc.
353 A Vintage Park Drive
Foster City, CA 94545
Re: Letter of Intent Regarding Comprehensive Efficiency and Conservation Measures Program
Dear Robert,
This letter is to confirm that the City of Ukiah ("City") intends to proceed with Honeywell, Inc. toward
finalizing a contract for energy efficiency, water conservation, operational and facility improvements of
City-owned facilities and equipment. The purpose of the contract is for Honeywell to offer a turn-key
program for design, implementation and financing, utilizing 3`d party financing vehicles such as a tax-
exempt municipal lease instrument, for capital improvements resulting in improved efficiency, revenue
generation from City owned assets, conservation savings, and operational improvements for the City.
This Letter of Intent shall be effective for 180 days or until superseded by an executed contract between
the parties. During the time this Letter of Intent remains in effect, the City of Ukiah shall not negotiate
with any party other than Honeywell concerning the comprehensive efficiency and conservation measures
described in this letter. Additionally, Honeywell will undertake certain activities including, but not
limited to, an investment grade assessment and Contract documents creation for the following Scope of
Services:
1. Design and implementation of Ukiah Municipal Golf Course irrigation improvements, "Flip-flop"
renovation and Driving Range creation. The Investment Grade Assessment of the Ukiah
Municipal Golf Course improvements is contingent upon the acquisition of a parcel of land
adjacent to the golf course currently owned by the Ukiah Unified School District.
Honeywell will proceed with Investment Grade Assessment activities as soon as the referenced parcel of
land for this item is in escrow. Should negotiations with the District continue for a period of 180 days
beyond the effective date of this Letter of Intent, the City will work with Honeywell to either extend the
term of the Letter of Intent or abandon the golf course improvement program. Unless the City is
successful in obtaining the property in question, the City will have no financial obligation to Honeywell
for this item.
"Investment grade assessment," as used herein means the work outlined in the attached Program
Development Schedule and any additional work performed by Honeywell to develop a contract proposal
to the City. The City of Ukiah intends to enter into a contract with Honeywell International Inc. provided
that (1) the City Council determines that the projects and proposed financing are acceptable to the
community; (2) can be approved in compliance with California Environmental Quality Act; and (3) prior
to entering negotiations with the City for a contract to perform a project, Honeywell provides the City in
writing all of the information and data developed or considered by Honeywell in determining whether the
project is feasible and meets the intent of this letter of intent, including reasonable detail (30%design) for
all components of the contract, and program cash flows and the opportunity cost of maintaining the status
quo; and (4) Honeywell develops a contract that meets the following criteria:
300 SEMINARY AVENUE UKIAH, CA 95482-5400
Phone# 707/463-6200 Fax# 707/463-6204 Web Address: www.cityofukiah.com
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• The proposed project savings and/or additional revenue projections allow the project to be paid
for in not more than 13-years out of savings in energy, operational costs and new revenue
generation.
• The proposed project costs do not increase the total energy and operational expenditures for the
facilities above the level spent in 2010 beyond the adjustment for CPI.
• Honeywell financially guarantees the proposed annual energy savings under terms mutually
negotiated with the City. The City of Ukiah uses the savings to pay the debt instrument.
• Honeywell arranges financing for the Projects on terms mutually negotiated with the City.
• The proposed project Contract Documents will address the overall intent of this Letter of Intent
which is a project consisting of capital improvements paid for through energy savings,
operational savings and/or additional revenue generation forecasts. The mutually negotiated
contract will provide a detailed scope of work and document energy savings guarantees.
• Other mutually agreed contract terms, provided that both Honeywell and the City negotiate in
good faith.
The project's final scope of work, to include all asset improvement measures, will be co-authored and
agreed to by both Honeywell and the City.
If Honeywell meets all of the requirements listed above, and the City decides not to enter into a Contract
for a final project with Honeywell, then the City shall reimburse Honeywell $25,000. At that time,
Honeywell will present an itemized listing of all Assessment Grade Investment Grade Activities
associated with the break fee.
Sincerely,
kae ers
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