OCEAN CITY — Pleased with the savings from the first phase, Ocean City officials this week approved a request to expand a retrofitting to energy-efficient LED light fixtures at several municipal facilities in and around the resort.
Back in 2015, Ocean City contracted with Energy Systems Group (ESG) on a number of energy savings projects at city facilities including building exterior improvements, heating and cooling efficiency improvements and LED lighting retrofits. Under the terms of the contract, the town front-funded the projects, which would be paid back and then some through the cost savings associated with improved energy-efficiency.
For example, during the initial phase, which was completed in 2017, the estimated savings was around $264,000, while the actual savings came in at around $385,000. Buoyed by the success of the initial phase, City Engineer Terry McGean on Tuesday presented a proposal to amend the initial contract with ESG in order to complete similar retrofits at other municipal facilities.
McGean said the upfront cost of expanding the energy-efficient programs came in at around $541,000, which would be lowered to about $478,000 with rebates from Delmarva Power. However, the annual savings from the energy-efficient retrofits would be around $93,000, meaning the project would essentially pay for itself in the first five years and then the savings would be realized in future years.
“The savings have exceeded expectations,” he said. “We’ve had some requests from other departments and we’d like to move forward with those and take advantage of the savings.”
Town facilities targeted for the energy-efficient retrofits include each of the water plants at 15th Street, 44th Street and Gorman Avenue, the wastewater treatment plant, solid waste and recycling facilities, the Ocean City municipal airport, the Park-and-Ride in West Ocean City and the exhibit halls at the expanding convention center. McGean explained the convention center was left out of the original contract.
“The main exhibit halls at the convention center were not included in the initial work because the LED lights required in those spaces were not cost-effective at the time,” he said. “New LED fixtures are now available with acceptable payback. We want to do the LED lighting in all of the exhibit halls because we want it to be consistent.”
The staff recommendation was to pay for the amended contract and associated retrofits as a pay-as-you go project from the town’s line of credit. Last summer, the Mayor and Council approved a line of credit from the Bank of Ocean City at $2.5 million as a rainy day fund of sorts for larger projects or property acquisitions, for example. Councilman Tony DeLuca asked with utilizing the line of credit was the best option for the $478,000 energy-efficiency upgrades.
“The recommendation is to pay for this with the line of credit,” he said. “Do we have to do it that way?”
Finance Director Chuck Bireley said the short answer is no and that using the line of credit to pay for the retrofits was just one option. Budget Manager Jennie Knapp said the project could be funded in a number of different ways.
“We agreed we can do it out of fund balance,” she said. “It could also be folded into the upcoming budget. Of course, we can sav on the interest if we don’t finance it. As far as the $173,000 for the convention center, I would probably do that with fund balance.”
After some debate, the council voted 7-0 to approve the contract extension with ESG to complete the projects. Because the city partners with the Maryland Stadium Authority on the convention center, a question was raised if state funding was available, but it was learned a state share in the cost was not likely.