20240122 Finance and Property Committee Meeting Minutes Matthew J. St. Hilaire-Chair C I F(
Julie R. Flowers FCCri':'F
Brendan S. Sweeney C I T
ZOA FED 15 A 8: 3 8
Finance and Property /City Council Committee of the Whole Meeting Minutes
Monday,January 22, 2024, 6:30PM
City Council Committee Room, 3rd Floor,Beverly City Hall, 191 Cabot St.
St. Hilaire called the meeting to order at 6:30pm.
Members present: Julie Flowers, Brendan Sweeney, Matthew St. Hilaire
Others present: Director of Finance Bryant Ayles, Assistant Finance Director Amit Chhayani, City Council
Budget Analyst Gerry Perry, Mayor Michael Cahill, Director of Sustainability Erina Keefe, Director of Public
Services and Engineering Michael Collins
Other Councilors present: Hannah Bowen, Steven Crowley, Scott Houseman, Danielle Spang
Order Date to Description Action Taken
Number Committee
A request for approval of a loan authorization to borrow
Fourteen Million Four Hundred Sixteen Thousand Seven
#017 1/16/2024 Hundred Ten Dollars ($14,416,710)to pay costs of building
and systems construction, renovations, or improvements at
the Beverly Public Library main branch
#021 1/16/2024 Reappointment-Pauline Teixeira, to serve as Beverly's
Director of Human Resources
Discussion on Order#017
Cahill stated before the public hearing there will be a presentation at a meeting. Cahill stated it has been
confirmed that the city can use the Family Dollar building for city hall without triggering the building code and
it could also be used as a satellite library office space before city hall goes in there.
St. Hilaire asked Ayles to talk about cost.
Ayles stated there have been considerable HVAC issues at the library. A feasibility study was done, and there
were other things such as envelope work, insulation, and roofing, that were brought forward as concerns. When
they dug deeper, there was more work than what was originally cost out. A report summary from the
engineering firm B2Q was given to committee members. Ayles stated the firm will be here for the public
hearing and will dive into more detail in a presentation. The original feasibility study included only the
construction costs for equipment and no soft costs. This is a moving target, and we realize that we have to come
up with other ways to fund it.
St. Hilaire asked Mr. Perry for any comments on the cost side.
Perry stated he has been meeting with Mr. Ayles since September on it. It sounds like the goal posts keep
moving.
St. Hilaire asked if all construction projects are going up this much and if the project was misjudged.
Cahill stated some of these pieces were not part of the scope of the feasibility study such as significant electrical
upgrades,roof and ceiling improvements, ice dam improvements, garage modification, and improvements to the
outdoor stairwell. The addition from the early `90s needs investment.
Collins stated 132Q helped determine a direction. We could do a one-for-one replacement,but that building has
never really worked all that well. The HVAC has had problems since the beginning. There is no way to control
humidity. Some of these other designs allow for addressing those initial inadequacies of the building. Collins
stated this process has been about determining the responsible path going forward. It will use less electricity
going forward than it does now.
Flowers stated that some of the ways of bringing the costs down includes state earmarks. At the last Finance and
Property meeting, the committee saw state earmarks that were planned on and then halved. Flowers asked if
there should be concern about those coming in lower.
Ayles stated when this funding structure was submitted it was based on the assumption that the earmarks would
be halved. Since then, confirmation has been received that they will not be halved. The numbers could be up to
$150,000 better if the city gets full amounts.
Flowers asked about the expected useful life of a system like this.
Cahill stated the geothermal underground should last a long time, even 75-100 years, and the heat pumps in the
building will last longer than similar outdoor systems.
Collins stated the expected life for the current kind of HVAC system at the library is 20-25 years, and this one is
at year 31. With the new system, the meat and potatoes would be inside the building and protected and easier to
replace components along the way in the future. There will never be this level of expense since infrastructure is
being put in. Once the components are in place, it will just be replacing pieces as needed.
Flowers asked if the future money saved will eventually be more than this project costs.
Collins stated any of the options would not pay for themselves. If it had a life cycle of 27 years then with all the
incentives and grants it would just about break even, and geothermal would be slightly better for the city, but it
is not just a HVAC project.
There was some discussion about a leveling of costs.
Sweeney asked for updated figures for options 1 and 2 from the feasibility study.
Ayles stated there are additional hard numbers that are a little more refined than the other version. There are
issues that need to be fixed.
Sweeney stated his concern is that this is a large cost for an energy project for the building. It sounds like
regardless of whatever option, the floor has been raised significantly. It would be helpful if the scope could be
scaled down at all or information could be provided on why the increase in scope is absolutely necessary.
Sweeney stated he would like to understand, as it appears this is the most intensive option, why this route was
selected over other proposals.
Rotondo and Houseman expressed disappointment that the council was not kept in the loop.
Houseman stated he cannot vote for this without seeing how all the pieces fit together. Houseman stated he
wants to understand how this will actually be completed when other capital expenditures have not been
completed such as the work on the fire station.
Cahill stated breakdowns will be provided to councilors in advance of the public hearing. Our work has been to
identify and secure various funding streams to make it as comparable as possible to a gas replacement.
Geothermal is the most energy efficient option and cuts the most greenhouse gas. The library is one of the
buildings that is open the most and has a big footprint.
Collins stated the library has the highest number of hours of service. This is the first foray into taking an old
building and turning it into what future buildings will look like. The plan is to make city hall geothermal ready
without incurring the initial cost of a wellfield. It will later be possible to add without much modification.
Collins stated that air source systems can be challenging at extremes. Geothermal is impervious to extreme heat
and extreme cold.
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Rotondo asked for a comparison on the return for savings on the police station's geothermal system and for
electric buses.
Cahill stated with the police station there is not much of a comparison to the prior building because that was
attached to city hall and the new building has a larger footprint.
Rotondo asked for a comparison of the projected savings and what the actual savings have been.
Cahill stated there is a significant difference to the scope than what exists in the feasibility study. We can pull
out the increase in the scope and just compare the cost of the geothermal.
Sweeney asked for information on why the scope was increased.
Collins stated the council can be brought up to speed on the information that has been presented by the
engineering firm.
Sweeney asked if any of the financing mechanisms only apply to the geothermal option.
Cahill stated some funding could go to any type and others are solely for clean energy projects. The roof piece
is a matter of public safety and building efficiency. Cahill stated there were other pieces, such as windows,that
were left aside.
Collins stated the sloped roof on the addition is not airtight. If the roof is not done, more geothermal wells will
be needed, or more of any kind of energy. Replacing it will be more effective.
Perry stated he is comfortable with the numbers. There is a risk that we won't come up with all the money. The
stabilization fund is there with a little bit of insurance should some of these funds not come through. Perry
stated he thought that the city hall project would have to be scaled back in order to fit this all in financially. The
plan was to come forward with the city hall project in the late spring. Perry stated that based on his review,
there is not enough ARPA money for the McPherson Center and the project will be short$600,000 to $700,000.
It looks like most of the earmarks can be used on either geothermal or gas.
Collins stated that while the language does not specifically require it, much of the work with Senator Moulton
to get the earmark was done with the understanding that it would be geothermal.
Perry stated part of the strategy of funding this are claw backs from existing projects that are already completed.
Perry stated there is a debt stabilization fund of one million dollars and recommended using that to offset some
of these costs. Perry recommended the city be aggressive in how free cash is used. Perry stated he does not
think the city should be using free cash except for emergencies or public safety and otherwise it should go to
reducing the debt.
Flowers asked to hear from Ms. Keefe in the future about the cost of not moving toward energy efficiency and
if she could help quantify the cost of doing less energy-efficient projects.
The meeting adjourned at 7:59pm.
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