Johnson Controls Docs. Secured by FOIA Request

1. Twenty Years?!?!

2. By far, the largest portion of the cost of this project, $32,984,738. to be exact, goes for the installation of the water meters.

   Should not someone have looked around to see what other cities with similar populations have paid? As I stated previously, Hollywood Florida has a larger population than Evansville, 140K versus 117K, and I do not believe they paid anywhere near what Evansville is going to pay.

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   • Does anyone have accurate information on the number of water meters the Evansville Water and Sewer Utilities currently has deployed?

     If so, we can divide the $33.million figure by that number to get a more accurate picture of the cost of this project.

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     • The US census reports that there are 57,799 housing units in Evansville along with 8,659 commercial businesses. This will not equate to an exact number of meters but I would expect that a number like 50,000 should be close. Of course according to Tom Barnett nearly 10,000 of those housing units are abandoned and unlivable. It would make little sense to outfit an unlivable unit with a space age water meter, but we have all seen worse from local government so who knows.

3. There are aprox 50,000 residental accounts small meters 5/8 to 1inch. There are aprox 3000 large meter accounts. 2″ to 10″. the large ones 4″ an up cost $5000 on up plus install small ones about $80 plus install. Industry SOP is to change 10% a year. All 4″ an up tested every two years.

   • Using the 50K figure it works out to about $660.00 per meter. That is just the cost of the meter. Does that not seem a little exorbitant?

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     • Here’s another aspect of this project that will effect everyone.

       http://abclocal.go.com/kgo/story?section=news/7_on_your_side&id=8388211

       JMHO

4. This agreement really blows chunks!

   1) Johnson Controls: fully paid for their price of $ 51,313,431 in 26 MONTHS;

   2) City has a lease payment for 20 YEARS, total outlay of $ 79,761,903 !

   3) Johnson Controls stops coming to town after 5 YEARS, when their “Measurement and Verification” 5- year gig of $ 827,544 concludes;

   4) There is a Schedule 2A which purports to “guarantee” annual benefits.
   If only Einstein were still alive, he might be able to administer this (on one of his good days). City of Evansville (or any municipality) has no continuity of managers which lasts 20 years, I would bet after Johnson Controls stops showing up, no one will ever even attempt to measure the savings (but those lease payments of $ 79 Million are 100% certain). MEMO to Russ Lloyd Jr: your first act on Day 1 in office should be to give a 20 year contract to independent Engineering and Accounting firms to make this annual measurement.

   5) Finally, as to that FREE Municipal Network, pg. 58 states that Johnson Controls will deliver this for a Guaranteed Maximum Price, but alas the contract does not then define what that Guarantee is.

5. A lot of those are in the county. I am not clear if this contract is for all meters. City an county. The WiFi did not look like it included the county.

6. This is such a horribly bad deal for the City that the ERC must have negotiated it. With interest over 20 years the City will pay Johnson Controls $79,761,903, for a “projected” utility and operational savings of $82,117,679. In other words, the City will pay almost $80,000,000 over 20 years hoping that it may save $3,000,000 or so at the end. This is like buying 10 fluorescent light bulbs for your home that are projected to save 10% of your $200/mo. utility bill ($20/mo est. savings) and paying for the light bulbs at $18/mo for 20 years at 3.9% interest ($6,549) and hoping the amount you paid for the energy saving fluorescent light bulbs over 20 years is less than the 20 year total of the “projected” energy savings. If I were Mr. Winnecke my first act would be to undo this travesty.

   • well said

   • MainStreetDemo:

     It’s even worse than you stated–Johnson Control’s spreadsheet jockey made a mistake ! Look at the Financial Analysis document, pg. 1 of that is titled “Business Case Summary”. That Excel genius counted the savings in “Year -1 and Year 0” twice. If you add up the “Savings” ($ 82,117,679), less the Loan Payments ($ 79,761,903) less the Performance Management Fees ($ 1,665,791), you are left with only $ 689,985 of “SAVINGS”, and note that ALL OF THE SAVINGS only happen in Years 18, 19 and 20 !!!! LMAO, the poster beerguy is correct, “Johnson Controls” is aptly named and will be controlling our johnsons for the next 20 years (ladies, they will also be controlling you too).

7. Comment on Schedule 2A (“Annual Performance Guarantee–Utility Meters”), pg. 129 & 130 of the Contract:

   pg. 129 states: ” the parties agree that the Utility is deemed to achieve $ 30,985,000 in Non-Measured savings; and the parties agree that the Utility will achieve $ 41,344,000 in Measured savings”. The total of the purported savings is $ 72,329,000 over 20 years , of which 43 % will be Non-Measured.

   pg. 130 then goes into to details about the Non-measured and Measured benefits:

   Accuracy Benefits-Measured: $ 27,494,000 (includes Small Meter; 2″ Meter; Large Meter Tested).

   Accuracy Benefits–Not Measured: $ 44,835,000 (includes Large Meter-not Tested; 2″ Meter Right-Typing; Large Meter Right-Typing; Leak Detection; and Operations & Maint. Cost Avoidance).

   Summary, within one page of this contract, the Non-Measured savings went from $ 30,895,000 all the way up to $ 44,835,000. The Non-Measured savings (from page 130, $ 44,835,000) are now a cool 62 % of the Total Savings deriving from Meters.

8. Comment on Schedule 2 (“Assured Performance Guarantee”), pg. 105. This appears to be the savings from everything EXCEPT meters–Meters savings shown on Schedule 2A per earlier post.

   Pg. 104: “The parties agree that the Utility is deemed to acheive $ 2,171,000 in non-measured Operations and Maint. Cost avoidance”.

   Utility Cost Avoidance: “The parties agree that the Utility will achieve $ 8,475,000 in Measured savings”. It futher states that this is the “anticipated increase in unit energy costs”. My guess, this is the savings of converting french fry grease into methane, and avoiding Vectren cost increases in the future. I guess because it doesn’t say what it is ! Wonder if McDonald’s got this memo ? The “grease police” are coming ?

9. OVERALL SUMMARY OF THIS CONTRACT with Johnson Controls:

   Non-Measured Savings $ 47,006,000 57%
   Measured Savings 35,969,000 43
   *Total Savings $ 82,975,000

   (this number exceeds the ‘Non-Measured Savings’ number of $ 82,117,000 included in the two-page “Financial Analysis”).

   **All of these numbers are predicated on an undefined “mutually-agreed fixed annual escalation rate of 2.8 %**”.

   Conclusion: The City will make $ 79,762,000 in Lease Payments over 20 years for a project on which $ 47,006,000 of purported savings have been “deemed to achieve” and cannot/will not be measured. Thus the measured part of the savings, $ 35,969,000 (the “Assured Performance”/guaranteed savings) represents only 45% of the Lease Payments of $ 79,762,000 which the City will have to make !

   I asked the guy next to me at the tavern as I typed this what he thought: his comment: “Johnson Controls has us by the johnson !!”.

10. BG, keep up the great posts. The bottom line is the more you look at this, the dumber a deal it is for the City.

    • Vice-President Biden:

      Thank you for the kind words, Sir. But I believe you the word ‘dumber’ an apology . . . this contract is way worse than that !

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