SUBJECT/RECOMMENDATION:
Title
Authorize a Guaranteed Maximum Price (GMP) to Bandes Construction for the installation of roof top solar panels at the Countryside Library and North Greenwood Recreation Center in the cumulative amount of $1,093,514.20 pursuant to RFQ 40-20, Construction Manager at Risk (CMAR) Continuing Contracts, and authorize the appropriate officials to execute same. (consent)
Body
SUMMARY:
The city of Clearwater continues to experience rising electricity costs, with Duke Energy’s rates increasing annually. To mitigate exposure to these escalating costs, the city has prioritized investments in on-site renewable energy generation with strong financial returns.
In 2022 McKim & Creed was hired by the city to provide a comprehensive solar feasibility study and cost benefit analysis of 41 city facilities. Facilities were ranked based on economic performance and construction readiness, with priority given to projects that offered the strongest financial return, lowest unit costs and alignment with existing building projects. Countryside Library and North Greenwood Recreation Center are high-visibility, high-use facilities that meet these criteria and deliver meaningful financial savings.
The financial performance of each proposed location assumes a 3.5% annual escalation of electric utility costs, which is considered conservative, with current estimates ranging from 3.5-10%. Solar panel degradation rate is 0.5%, which is an industry standard. A price of $2-3 per watt is considered strong for solar installations, and these projects fall within that range before incentives. With the 50% DOE grant and 30% Elective Pay cash refund applied, the price per watt drops to well below $1, making the projects exceptionally cost-effective.
The installation of 380 solar panels on the roof top of Countryside Library is projected to provide an initial annual electrical savings of $23,094 and a term savings of $1,182,003 over 30 years. The panels will be producing an estimated 243,789 kilowatt-hours of power annually which equates to 97.86% of the total power required to operate the facility. The total cost to install solar at this facility will be $415,519, with a projected 11.9% Internal Rate of Return without the grant. The payback period with all incentives is 5 years, or 25 years without incentives.
The installation of 600 solar panels on the roof top of North Greenwood Recreation Center is projected to provide an initial annual electrical savings of $33,960, and a term savings of $1,738,158 over 30 years. The panels will be producing an estimated 395,431 kilowatt-hours of power annually which equates to 42.45% of the total power required to operate the facility. The total cost to install solar at this facility will be $677,994.80, with a projected 11.2% Internal Rate of Return without the grant. The payback period with all incentives is 4 years, or 29 years without incentives.
GMP for both projects is $1,093,514.20 and includes design coordination, mobilization and all CMAR general conditions.
These solar projects qualify for a 30% cash refund through the federal Elective Pay program. To secure eligibility, construction must begin before July 4, 2026, with projects starting before Dec. 31, 2025, subject to the same rules the city successfully used to file and receive credits the past two years. Bandes and their subcontractors are confident they can meet these timelines, ensuring the city captures the full refund. For transparency, financials were shown with just the 50% DOE grant and the full 80% incentives (50% grant plus 30% Elective Pay).
On Sept. 17, 2020, Council approved 13 Construction Manager at Risk (CMAR) contracts pursuant to RFQ 40-20, and Bandes Construction was one of the approved firms. Bandes Construction has a great understanding of the needs and required end results for this project. Bandes Construction has completed numerous commercial solar projects in the Tampa Bay area, including two for the city of Clearwater (Clearwater Gas and Solid Waste Transfer Station). Bandes delivered a quality product, met designated timelines and did so in a professional manner.
Bandes Construction’s proposal includes limited engineering services necessary for the electrical and structural integration of the two rooftop solar systems. It is very typical for solar installation contractors to provide limited design and permitting as a turnkey scope of services as the solar systems are stand-alone packages. Including these services under the CMAR ensures efficient coordination between design and construction, avoids additional procurement costs and provides a single point of accountability for the full system, resulting in overall project savings and a streamlined delivery schedule.
APPROPRIATION CODE AND AMOUNT:
A first quarter budget amendment will establish capital project 315-C2602, Solar NGW Rec & Countryside Library, and provide a budget increase of $949,500 in grant revenue from US Department of Energy and a transfer of $150,000 from capital project 315-C2106, Greenprint Implementation (funding from IRS Elective Pay Rebates).
USE OF RESERVE FUNDS:
N/A
STRATEGIC PRIORITY:
High Performing Government
Objectives 1.5 Embrace a culture of innovation that drives continuous improvement and successfully serves all our customers.
Environmental Stewardship
4.2, Adopt renewable resource usage and waste reduction practices to ensure a vibrant City for current and future generations.