Title
Resolution to Approve a Best Source Professional Services Agreement with IMEG Consultants Corp. for Design, Engineering, and Advisory Services Related to the Installation of a Community Geothermal System in the Bryant Neighborhood ($1,821,628.00) (8 Votes Required)
Memorandum
Attached for review and consideration is a best source professional services agreement with IMEG Consultants Corp. to provide geothermal-related design, engineering, and construction advisory services related to the installation of a community geothermal system in the Bryant neighborhood. This work stream will be funded through a U.S. Department of Energy grant also before Council for authorization. This scope of work is the continuation of work completed by IMEG Consultants Corp. in the first phase of our U.S. Department of Energy award related to designing a geothermal system in the Bryant neighborhood.
In late 2023, the City of Ann Arbor’s Office of Sustainability and Innovations (OSI) won a planning grant from the U.S. Department of Energy to design a district energy system in the Bryant neighborhood capable of reducing thermal heating and cooling load by 75% (R-23-378). The design project involved extensive engagement with the residents of the Bryant neighborhood, Ann Arbor Public Schools, Washtenaw County, IMEG Consultants Corp., Community Action Network, Midwest Geothermal Energy Association, International Ground Source Heat Pump Association, International Brotherhood of Electrical Workers Local 252, U.A. Local 190, Michigan Energy Services, Arbor Consultants, D4 Consultants, Midwest Geothermal, DTE Gas, and the University of Michigan. IMEG Consultants Corp. led the project’s design and engineering elements, professionally guiding the project through all requirement stages of design. Working in deep collaboration with the City and community collaborators, IMEG Consultants Corp. was able to design a system capable of providing all the heating and cooling load for the residents of Bryant and, when stacked with energy efficiency and other renewable energy deployment, the designed system will be capable of reducing energy usage and associated costs for Bryant residents by over 70%.
Upon completion of the project design, OSI, IMEG Consultants Corp., and collaborators submitted an application to the U.S. Department of Energy for a grant to fund a portion of the designed system. Specifically, OSI applied to build a well field and pump house capable of powering the entire 262 homes in the Bryant neighborhood but only doing the road work and home conversions for slightly over 100 households. The application was sized at this level because the grant award amount could not exceed $10,000,000.00 (the City was unexpectedly awarded more), and the City was required to bring at least a 50% match. Given these parameters, the City submitted a package totaling an estimated $22,123,145.00 (for the full well field, pump house, and installation of geothermal in just over 100 households). In this grant application, IMEG Consultants Corp. (IMEG) was noted as being responsible for the following:
• Assisting A2 in preparation of Request for Proposals for Financing. IMEG will assist with preparation of the bid package including technical design elements, economic models, and historical documentation.
• IMEG will support site visits from potential financing firms and respond to design and construction related questions.
• IMEG will review proposals and answer questions as needed to support A2 with selecting a financing firm.
• IMEG will finalize all civil, mechanical, and electrical designs in tandem with the system constructor and operator and submit all relevant permits. Support additional NEPA paperwork as required.
• IMEG will prepare and submit design documents and specifications for building permits and non-potable well permits required to drill the geothermal wells.
• IMEG will prepare and submit design documents and specifications for right of way and traffic control permits to install the geothermal distribution system in the right of way. Additionally, IMEG will assist A2 with procuring existing conditions studies for utility potholing, geotechnical investigation, and environmental consultant. Fees include consultant time for 2 separate site visits during engineering design phase and 3 separate site visits during survey/subsurface utility locating phase.
• IMEG will provide a set of guidelines that can be used by residential contractor and the homeowners to utilize the geothermal utility. IMEG will not provide design, drawings, construction support or permit applications for connection from the main distribution utility to each home.
• IMEG will provide a set of guidelines that can be used by residential contractor and the homeowners to utilize the geothermal utility for the in-home equipment, including the indoor heat pumps, air handlers, and electrical panel upgrades, and other MEPT equipment. IMEG will not provide design, drawings, construction support or permit applications for installation of indoor heat pumps, air handlers, or any other supplemental MEPT equipment upgrades required for operation in each home.
• IMEG will update energy model to reflect final system design and provide documentation to A2 and DOE in support of project documentation.
• IMEG will assist with the preparation of the drilling and loop construction bid package including technical design elements, economic models, and historical documentation to share with prospective bidders.
• IMEG will assist with preparation of the bid package for the geothermal drilling, including technical design elements, economic models, and historical documentation. IMEG will assist in conducting a Prebid meeting, if necessary. IMEG will respond to contractor questions and prepare addenda information as required and will assist with bid evaluation and recommend award to successful contractor.
• IMEG will assist with preparation of the geothermal distribution loop bid package including technical design elements, economic models, and historical documentation. IMEG will respond to contractor questions and prepare addenda information as required and will assist with bid evaluation and recommend award to successful contractor.
• IMEG will provide construction administration, job site observations, shop drawing review, review and recommendation to A2 of contractor-initiated change orders, and RFI support throughout the construction period. Includes regular project check ins and ongoing data collection.
• IMEG will support virtual biweekly project team meetings to keep project team abreast of major developments, challenges, and key decision points. Includes DOE team as appropriate.
• IMEG will provide construction administration, job site observations, shop drawing review, review and recommendation to A2 of contractor-initiated change orders, and RFI support throughout the construction period for the geothermal bore field. Includes regular project check ins and ongoing data collection.
• IMEG will provide construction administration, job site observations, shop drawing review, review and recommendation to A2 of contractor-initiated change orders, and RFI support throughout the construction period for the pump house. Includes regular project check ins and ongoing data collection. Included in this fee is 3 separate job site observations and one final job site observation.
• IMEG will provide construction administration, job site observations, shop drawing review, review and recommendation to A2 of contractor-initiated change orders, and RFI support throughout the construction period for the geothermal distribution field. Includes regular project check ins, ongoing data collection, and completion of as-built conditions with information provided from Contractor. Included in this fee is 5 separate job site observations and one final job site observation.
• IMEG will review system testing results from the contractors and provide guidance as necessary.
• Based on results from system testing by a third party, not IMEG, will commission the system for full operation. Geothermal system commissioning agent report to be reviewed and approved by IMEG. Commissioning report will verify that geothermal well field, pumps, and supplemental equipment were tested and are operating per the design specifications.
• IMEG will provide support in education and training of system components in conjunction with third-party Commissioning Agent.
• IMEG will update energy model to reflect final system installation and provide documentation to A2 and DOE in support of project documentation.
• In addition, IMEG will prepare applicable specifications, prepare contract documents suitable for pricing and construction purposes, conduct 2 pre-construction design meetings with selected contractors; and aid in evaluating proposed construction costs.
Recently, the U.S. Department of Energy restarted negotiations and alerted the City that the grant award would be moving forward. As such, the Office of Sustainability and Innovations is bringing this Best Source Professional Service Agreement with IMEG Consulting Corp., along with the DOE grant agreement, and a few sub-recipient awards, for Council’s consideration. Staff aims to get as much of the funding encumbered as possible so that the project can start immediately upon execution of the grant agreement.
Budget/Fiscal Impact: All funding for this contract will come from the U.S. Department of Energy grant award.
Staff
Prepared by: Missy Stults, Sustainability and Innovations Director
Reviewed by: Valerie Jackson, Assistant City Attorney - Sustainability
Reviewed by: Shoshannah Lenski, Sustainable Energy Utility Executive Director
Reviewed by: Kim Hoenerhoff, Financial Analyst
Reviewed by: Marti Praschan, Chief Financial Officer
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, The City’s A2ZERO work focuses on equitably decarbonizing as many homes and businesses as possible;
Whereas, Staff in the Ann Arbor Office of Sustainability and Innovations worked with numerous community stakeholders, including IMEG Consultants Corp., Washtenaw County, Ann Arbor Public Schools, Community Action Network, and many others to design a project that would allow us to work directly with residents to design a district geothermal system;
Whereas, The Project team, including IMEG Consultants Corp. and the City of Ann Arbor, put together a grant application to the U.S. Department of Energy to fund the installation of a significant portion of the designed geothermal system in the Bryant neighborhood;
Whereas, This grant application included funding for IMEG Consultants Corp. to finalize all designs and engineering for the proposed geothermal system and to serve as an advisor to the City on the installation of the proposed system;
Whereas, This scope of work is the continuation of work initiated by IMEG Consultants Corp. during the first phase of the project;
Whereas, The U.S. Department of Energy selected the City’s grant application for award; and
Whereas, IMEG Consultants Corp. complies with the requirements of the City’s Non-Discrimination and Living Wage ordinance;
RESOLVED, That City Council approve a Best Source Professional Services Agreement with IMEG Consultants Corp. in the amount of $1,821,628.00 for professional engineering, design, and advisory services related to the Bryant community geothermal project;
RESOLVED, That funding for this Best Source Professional Services Agreement come from the U.S. Department of Energy grant award, which will be appropriated to a dedicated Major Grants Account fund;
RESOLVED, That City Council authorize a 10% contingency in the amount of $182,163.00;
RESOLVED, That any remaining funding in the FY26 expenditure budget related to this Professional Services Agreement with IMEG Consultants Corp be carried forward without regard to fiscal year;
RESOLVED, That the Mayor and City Clerk are authorized to sign the Professional Services Agreement after approval as to substance by the City Administrator and approval as to form by the City Attorney; and
RESOLVED, That the City Administrator is authorized to take all appropriate actions to implement this resolution, including signing all necessary documents and sub-agreements.
Sponsored by: Mayor Taylor and Councilmember Radina