Inter-Departmental Correspondence

Department of Public Works



May 19, 2004


June 8, 2004



Honorable Board of Supervisors


Neil R. Cullen, Director of Public Works


Installation of a Cogeneration Plant at the Maguire Correctional Facility - Redwood City Area (Project No. P8W02)



Adopt resolutions:



Approving an Appropriation Transfer Request (ATR) in the total amount of $548,800 to supplement the appropriation for the installation of a Cogeneration Plant at the Maguire Correctional Facility. Funding will be provided by the transfer of unanticipated revenues into the Capital Projects Fund from the Association of Bay Area Governments' (ABAG) Wind Up Agreement Funds in the amount of $ 417,230, and from the California Public Utility Commission (CPUC) Program Incentive Funds in the additional amount of $131,570 (4/5th's vote required); and



Awarding and authorizing execution of a contract to install a 300 kW Cogeneration Plant at the Maguire Correctional Facility.


Previous Board Action

Adopted Resolution No. 66555 on March 23, 2004, adopting plans and specifications, determining prevailing wage scales, and calling for sealed proposals for the proposed work.



On April 20, 2004, bids were accepted for this project and subsequently referred to this office for checking and recommendation. The bids have been checked and the base bid of:


American Air Conditioning, Plumbing & Heating Company

820 Aladdin Avenue

San Leandro, CA 94577


at $821,795 was the lowest bid received. The Engineer's estimate was $550,000. A summary of the bids received is as follows:


American Air Conditioning, Plumbing & Heating



Therma Corporation



ACCO Engineered Systems



The low bid exceeds the Engineer's estimate by $271,795 (49.4%). We believe that recent significant increases in the cost of steel and copper, which are used extensively in a cogeneration plant, coupled with the consultant's underestimating the degree of difficulty involved with working in a high security facility, is the reason for the bids being significantly over the engineer's estimate. However, after reviewing construction costs with the bidder, we also believe that the low bid is reasonable for the work that is to be performed.


We have reviewed the contract documents and have determined the Affirmative Action Program submitted by American Air Conditioning, Plumbing & Heating is in accordance with the current Affirmative Action Guidelines; and we have also confirmed that they are in compliance with the equal benefit provisions of the County Ordinance Code.


Vision Alignment

We believe our recommendation is consistent with Goal Number 20, "government decisions are based on careful consideration of future impact rather than temporary relief of immediate gain" of the Shared Vision Commitment to be a "responsive, effective and collaborative government," as the short term cost of the cogeneration system will be offset by a long term reduction in energy usage as well as reduced energy costs.


Fiscal Impact

The total estimated project cost of $1,200,000, which includes engineering, administration, construction, inspection and contingencies, is proposed to be financed as follows:


ABAG Wind Up Agreement Funds

$ 417,230


General Fund



CPUC Program Incentive Funds ($168,430 plus an additional $131,570)



5% Facility Surcharge






The project financing includes for a one-time incentive of $300,000 from a California Public Utilities Commission program that is administered by PG&E. The incentive payment may be claimed after the installed system is inspected and approved by PG&E.


We estimate, based on current price of gas and electricity, that the project will pay for itself in terms of reduced energy costs in approximately 4.5 years. We anticipate additional energy savings and energy cost avoidances over at least another 16 years, as the estimated life expectancy of the cogeneration plant is more than 20 years. This is a positive impact to the General Fund as on going energy costs are financed in part by the General Fund.


Forms of resolutions have been approved by County Counsel.