City of Montpelier, Vermont

- The Smallest Capital City in the United States -

Mayor John Hollar City Council: Tom Golonka Thierry Guerlain Andy Hooper Angela Timpone Anne Watson Alan Weiss William Fraser, City Manager

M E M ORANDU M To: F rom: Re: Date: Mayor Hollar & City Council Members William Fraser, City Manager District Heat Revised Action Plan August 29, 2012

The following is a revised plan for the District Heat project based on discussions which have occurred since last week s meeting. Please authorize the City Manager to proceed with the District Heat project in accordance with the Recommended Action Plan Recommended A ction Plan 1) Commit to constructing, at minimum, Phase 1 of the project (Heat Plant to State/Elm). 2) Authorize release of bids as soon as they are ready. This is anticipated to be in September with receipt of bids due in October. 3) Prepare options for a independent operation of the district heat system. These may include, but are not limited to: a separate quasi-municipal entity, a private non-profit or for-profit entity or contracted management of a city owned system. The State of Vermont is entitled to approve any third party entity operating the system. 4) Negotiate revisions to the Thermal Purchase and Sale Contract and/or Procurement Agreement with the State of Vermont as necessary to reflect agreed upon phased in operational fees and the state s use of unused capacity. 5) Present signed formal Customer Agreements in time for award of construction contracts. Continue seeking additional customer commitments in all potential phases of the project. 6) Present bids to City Council after receipt and technical review. Evaluate pricing, funding and customer commitments for remaining project phases at that time. Council will award construction contract for as many phases as financially feasible. This is anticipated to occur in November.
(802)-223-9502, Telephone 39 Main Street, Montpelier, Vt 05602 www.montpelier-vt.org (802)-223-9519, Fax

7) In the event that additional funds are available, consider use of those funds to assist with connection costs and/or additional capacity purchase. 8) Begin construction project (of at least Phase 1) in spring of 2013. 9) Complete project, connect customers and begin providing thermal energy on October 1, 2013. 10) Officially notify the State of Vermont, US Department of Energy, Clean Energy Development Fund and current committed customers of this approved plan.

For information purposes, the following are the current cost estimates broken into potential project phases.
Phase 1 H eat Plant to State/E lm $1,288,881

(12 designed connections, 7 committed connections) Phase 2 State/E lm to School/M ain (11 designed connections, 3 committed connections) $859,460

Combined Phase 1 & 2 (can t do Phase 2 without Phase 1)

Phase 3a School/M ain to Union E lementary School

$2,148,340 $657,577

(3 designed connections, 1 committed connections)

Combined Phases 1, 2 & 3a (U ES but no City Complex)

Phase 3b L angdon to C ity Complex

$2,805,918 $926,419

(8 designed connections, 3 committed connections)

Combined Phases 1, 2 & 3b (City Complex but no U ES)

Combined Phases 1, 2, 3a & 3b (complete project)

$3,075,759 $3,732,337

(34 designed connections, 14 committed connections, 6 more under active discussion)

T O T A L FUNDIN G A V AIL AB L E

$4,314,768

(802)-223-9502, Telephone 39 Main Street, Montpelier, Vt 05602 www.montpelier-vt.org

(802)-223-9519, Fax