DEPARTMENT: Facilities Management
FILE TYPE: Consent Action
TITLE
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Authorization To Execute Contract With McKinstry Essention, LLC, For Energy Improvements Project Phase Two
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RESOLUTION
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WHEREAS, Dakota County operates over 1.6 million square feet of buildings consuming $2,250,000 in annual energy expenses in 2023; and
WHEREAS, the Phase One Energy Improvements project converted over 14,000 lights to LED, added approximately one megawatt of solar across four sites, and completed HVAC retrocommissioning work at the Northern and Western Service Centers; and
WHEREAS, the lighting and HVAC work was completed over the course of 2024 with the solar coming online in February and March 2025; and
WHEREAS, countywide facilities energy costs decreased due to the Phase One project, and to a smaller extent, lower energy market prices; and
WHEREAS, countywide costs were $2.25 million in 2023, $1.99 million in 2024, and $1.76 million in 2025; and
WHEREAS, countywide cost reductions were 11.6 percent from 2023 to 2024; and
WHEREAS, countywide costs were reduced another 11.4 percent from 2024 to 2025; and
WHEREAS, building on the success of Phase One, staff has continued the partnership with McKinstry to explore options to maximize the County's return on investment in additional energy projects; and
WHEREAS, McKinstry reassessed all County facilities and the Phase Two project will save an additional 10 to 12 percent on top of Phase One savings; and
WHEREAS, this project includes rooftop solar at five sites, mechanical upgrades at three buildings, water conservation measures at 16 buildings, and building envelope sealing at 19 buildings; and
WHEREAS, this scope represents the best value to the County for the work to be performed; and
WHEREAS, the County will pay $250,000 for this project up-front and is guaranteed savings of $104,000 per year in energy and water costs; and
WHEREAS, those savings will be used to pay the Tax-Exempt Lease Purchase (TELP) loan used to finance the remainder of the project costs; and
WHEREAS, after factoring in the cost of filing for a federal tax credit available through the Inflation Reduction Act, the net present value of the savings that the County will realize are estimated to come to $280,000 - more than the initial investment in the project; and
WHEREAS, the total project cost and contract with McKinstry is $3,081,374 which is funded by $250,000 of levy in the 2026 Adopted Facilities Capital Improvement Program and $2,831,374 from a Tax-Exempt Lease Purchase loan coordinated by Finance and a third-party financial institution; and
WHEREAS, staff is recommending approval of the Energy Improvements Project Phase Two; and
WHEREAS, this project represents the best value to the County for the work to be performed and meets the expectations of staff and the County Board for capital expenditures on energy improvements; and
WHEREAS, the completion of the Energy Improvements Project Phase Two will position the County to seek utility rebates and state and federal funding sources, which will shorten the project return on investment and increase the net present value.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby authorizes the Facilities Management Director to execute a contract with McKinstry Essention, LLC, in an amount of $3,081,374, to perform the Energy Improvement Project Phase Two subject to approval by the County Attorney’s Office as to form.
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