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CINERGY Correspondence Diary 1 - 2005 and 2006

Early concerns and attempts to get information

2005

In this set of correspondence, CELOS raises concerns about the impending Cinergy Arena retrofit project, and asks for a due diligence review, and details of the project. The concern is rooted in informal conversations with maintenance staff about the value of contracting out the retrofit work.

See also correspondence diary pages 2, 4, and 5

September 16, 2005, letter to Brenda Librecz, General Manager, City Of Toronto Parks, Forestry and Recreation:

“...our little research group, CELOS, would like to request that you carry out some “due diligence” that seems to be missing, on the city rinks/arenas energy retrofit contract with Cinergy/Vestar – before you sign off on it. I enclose the results of our research so far, plus the questions that we feel need to be answered. It may be that this project has the potential of being a giant headache for the City, not only in terms of more bad publicity, but also in terms of its impact on your division. Your front-line staff also seem to have major misgivings – insofar as they even know about the project – and the need to follow up on this may be rather urgent by now. Please answer these questions:

A. Utility cost details

1. What is the base utility data that’s being used in this project? (We need to see the detailed records – are they better than my chart?)

2. How were these numbers obtained?

3. How will the individual rinks/arenas’ utility costs be measured as the project goes on?

B. Repayment details:

1. When does Parks and Recreation begin paying back the debt for the Vestar project?

2. What is the yearly repayment schedule as of now?

3. How will the arenas’ repayment portion be calculated? Have the arenas signed on of their own free will, or did the City just require it of them? Or did the arenas (perhaps) promote this Vestar plan? If any of the Board of Management arenas opt out of the retrofit project, how will that affect Vestar’s $10.2 million contract? C. Data from the Energy and Waste Management Office (EWMO):

(This unit within the Business and Strategic Innovation Section of the Facilities and Real Estate Division of the Corporate Services Department is responsible for the management of the City’s energy retrofit programs.)

1. The energy and water services contract between the City of Toronto and Vestar.

2. How exactly does the EWMO track and monitor Parks and Recreation’s water and energy usage?

3. Vestar’s feasibility studies and concept reports for each measure the company intends to carry out.

D. Financial data referred to in council minutes:

1. The record of the “many” water and energy efficiency improvements the city has previously completed (referred to in the Policy and Finance report on this project), with the savings resulting from each of these improvements.

2. The “detailed business case and energy audit report” required for the Vestar project at the time of the City’s annual budget review process, and also any quarterly variance reporting on this project. One would expect these reports to include baseline costs, projected and actual costs for the quarter, and estimated actuals to year-end, as well as “any remedial action that might be necessary before year-end to bring program in line with budgeted figures.”

3. The Commissioner of Corporate Services’ annual report to Council on reductions in energy use for retrofit projects.

4. Parks and Recreation’s quarterly report on energy consumption and associated savings for the four quarters in 2004 and three in 2005.

It’s our view that this due diligence research is vital in order to evaluate the merits of the rink energy retrofit contract with Vestar/ Cinergy. No work should proceed and no final contract should be signed until the General Manager of Parks, Recreation and Forestry can assemble the answers to the questions above.

Sept. 30, 2005:

letter to Elena Gruia, Project Manager, Energy and Waste Management, Corporate Services Department, Facilities and Real Estate Division.

...When we spoke on the phone yesterday, I said I would write to you about the reasons why we'd like to meet with you. "We" is a small research group CELOS, Centre for Local Research into Public Space, based at Dufferin Grove Park. We've been trying to find more information about the $10.3 million Cinergy rink energy retrofit project for some time. When Parks, Forestry and Recreation general manager Brenda Librecz was meeting with us recently, she mentioned that PFR have not yet "signed off" on the Cinergy project. But then we read the agreement (obtained after two tries, through Freedom of Information), which says the contract with Cinergy was signed on Dec.8 2004. We're confused: is PFR sign-off different than the signing of the agreement?

There are confusing elements in this contract which we need to understand better. I asked you yesterday who the main PFR staff person is, working with you on the Cinergy Project. If this information is public, could you let me know? I think a meeting between our group and that PFR staff person and yourself could perhaps clear up a number of puzzles. Hopefully, the discussion would set our minds at ease about the possibility that PFR could lose some of their operating funds each year for seven years if the project does not pan out.

Here are some of our concerns:

- It appears that the City could end up having to pay more than the $10.3 million in the contract (referred to as an "estimated cost" in Article 9.01 of the agreement), and there are other puzzling elements to the math.

- The "City representative" has many chances to stumble in this project: any delay of more than 15 days in his/her examination of the very numerous design issues and specific construction proposals means automatic acceptance of the company's work plans.

- The "base year” utility costs are crucial, although the contract seems to allow the baseline to be scrapped in favour of some alternative calculation. In addition, it's unclear how the baseline energy costs were calculated.

In order to follow up on our concerns, our researchers need to examine the following:

1. Base Year numbers for electricity, fuel, and water for each of the 100 city rinks/arenas which are listed as part of the Energy Retrofit Project.

2. The "Concept Reports" for each of the 100 rinks/arenas (or however many have been completed)

3. Which of the Concept Reports have been specifically approved by the City Representative to date

4. Which, if any, of the Concept Reports were automatically approved by the City to date (i.e. because 15 days passed after delivery, without acknowledgment)

5. Costs incurred by Cinergy to date

6. Moneys paid out to Cinergy by the City to date It's our understanding from reading the Cinergy/City agreement that Cinergy must first submit the "Approved Total Project Scope," and the City must agree to it, before the project goes ahead. Has that occurred? Following your request, I have cc'd this letter to many City staff, including PFR director Kathy Wiele, who is in charge of helping release public information which does not need to go through the Corporate Access office. I look forward to your response and, hopefully, and invitation to meet with you.”

This letter resulted in a phone call from Mr. Jim Kamstra, Manager of Energy and Waste Management, Facilities and Real Estate Department, City of Toronto. He said that he was not at liberty to answer these questions for me but would answer them internally. I heard he was invited to an internal meeting about various rink issues, to talk about the project, but did not come. I heard no more from Mr.Kamstra nor from Ms.Gruia.

October 11, 2005:

e-mail to Mayor David Miller’s office (to his assistant Carmen Smith).

The attached letter (to Cinergy Energy Retrofit Project Manager Elena Gruia) asks a number of very specific questions about this puzzling project for City rinks, for which the City has taken out a loan of $10.3 million (to pay a large American company called Cinergy to do this project). I had heard rumours that the project is ill-conceived, so our research group read as much as we could find in the council minutes, and then we got quite alarmed. Ten days ago I sent the project manager this letter containing very specific questions, with a cc to a number of relevant staff including the general manager of Parks, Forestry and R. The questions have not been answered, but Brenda Librecz (if I understood her right) did tell me that the project is not under her jurisdiction. An even bigger puzzle.

This project ought perhaps to be paused until its merits can be examined. There's a lot of money at stake and if indeed the project is ill-founded, that will be upsetting to citizens if it's left to carry on anyway. (The terms of the agreement involve more than $1 million in parks operating funds being used to pay back the loan every year for seven years, beginning in a couple of years.)

Today one of our researchers delivered our latest park newsletter, containing this story and others, to the city auditor, and to Suzanne Craig (with whom we recently had a very helpful meeting), and to the general manager of Parks Forestry and Rec, and to a deputy city manager (Susan Corke). I want to make the mayor's office aware also. (http://www.dufferinpark.ca/newsletter/newsletter.html: The "money mysteries" are on page 5 and 6 under the heading "some bad news that has to change").

I think it would be good if several of our researchers could come and meet with you or with another of the mayor's staff. We want to help city staff with this muddle but first there has to be a willingness to collaborate -- that seems to be what's missing. Perhaps your office could help with that.”

A CELOS researcher called the mayor’s assistant and asked to make an appointment. The assistant called back about a week later and said she had contacted Brenda Librecz, and that we should follow up directly with her. I called Ms.Librecz’ office and her assistant said she would follow up. It seemed a good idea to put the Cinergy questions on a timetable, so CELOS submitted the following freedom of information request:

November 15, 2005, from Brenda Librecz, General Manager, Parks, Forestry and Recreation:

Thank you for your letter of September 16 and your interest in this project... In regard to your concerns of losing moneys from Parks, Forestry and Recreation budgets, we have indicated to Facilities and Real Estate that financial reductions in the parks budget will only occur is costs are actually reduced as a result of improvements...

Answers to my specific questions:

A. Utility cost details

4. What is the base utility data that’s being used in this project? (We need to see the detailed records – are they better than my chart?) The base utility data is based on records kept in the energy/utility management system maintained /managed by the Energy & Waste Management Office (EWMO).

5. How were these numbers obtained? The numbers are electronically provided by the respective Local Distribution Companies (Toronto Hydro, Enbridge, and Toronto Water)

6. How will the individual rinks/arenas’ utility costs be measured as the project goes on? The individual rinks/arena’s utility costs will be measured based in actual monthly energy use in comparison to a base year. Both the City and Cinergy will be doing this.

B. Repayment details:

4. When does Parks and Recreation begin paying back the debt for the Vestar project? P.F,&R will start paying after construction is complete and savings are being realized.

5. What is the yearly repayment schedule as of now? The yearly repayment schedule has not been confirmed.

6. How will the arenas’ repayment portion be calculated? Have the arenas signed on of their own free will, or did the City just require it of them? Or did the arenas (perhaps) promote this Vestar plan? If any of the Board of Management arenas opt out of the retrofit project, how will that affect Vestar’s $10.2 million contract? Arena’s repayment portion has not yet been calculated (will be based on actual energy saving measures installed). The City has signed the Legal Agreement on behalf of all the arenas (including the Board of Management Arenas) and the B.O.M.s will sign off for the actual measures to be installed in their arenas (the B.O.M.s have the final decision). If a B.O.M. opt out the scope of the project would be reduced or reallocated (i.e. funding) to other measures in City arenas.

C. Data from the Energy and Waste Management Office (EWMO):

(This unit within the Business and Strategic Innovation Section of the Facilities and Real Estate Division of the Corporate Services Department is responsible for the management of the City’s energy retrofit programs.)

4. The energy and water services contract between the City of Toronto and Vestar. The contract is between the City and Cinergy (not Vestar) and was signed December 2004.

5. How exactly does the EWMO track and monitor Parks and Recreation’s water and energy usage? EWMO is tracking Parks’ water and energy usage by use of an energy management tracking system (software program that is designed to do this).

6. Vestar’s feasibility studies and concept reports for each measure the company intends to carry out. The Feasibility Study has been completed and the Concept reports have been approved.

D. Financial data referred to in council minutes:

1. The record of the “many” water and energy efficiency improvements the city has previously completed (referred to in the Policy and Finance report on this project), with the savings resulting from each of these improvements. The City as past of its ongoing operations tries to operate its buildings efficiently.

2. The “detailed business case and energy audit report” required for the Vestar project at the time of the City’s annual budget review process, and also any quarterly variance reporting on this project. One would expect these reports to include baseline costs, projected and actual costs for the quarter, and estimated actuals to year-end, as well as “any remedial action that might be necessary before year-end to bring program in line with budgeted figures.” Construction on the project is just about to begin. There are no variance reports that are relevant at this time.

3. The Commissioner of Corporate Services’ annual report to Council on reductions in energy use for retrofit projects. Nothing to report at this time.

4. Parks and Recreation’s quarterly report on energy consumption and associated savings for the four quarters in 2004 and three in 2005. The project is being carried out with defined milestones. Parks, Forestry and recreation signs off at each stage of the project: contract, feasibility study, concept reports and engineering, before construction. The project is in its initial stages.

Nov. 30, 2005, to Mr. Jim Kamstra, Manager of Energy and Waste Management, Facilities and Real Estate:

On September 16, 2005, I sent a list of questions about the Rinks and Arenas Energy Retrofit Project to the general manager of Parks, Forestry, and Recreation. On Nov.15, 2005, Ms.Librecz responded with some answers, and an invitation to contact you directly if I have any more questions. I am aware that you told me on the phone in September that you were not at liberty to answer my questions. I hope that Ms.Librecz’ invitation to contact you for more information means that you can now give me the answers I seek.

Since May 2005, our research group has also attempted to find answers to the same questions through the Freedom of Information Act, and on Nov.16, 2005, the City’s Corporate Access department sent us the most recent responses to our questions. Mr.Jerry Verhovsek, the corporate access officer in charge of this file, suggested last week that any further questions ought to be directed to you. (I understand that you will not show me the “Concept Report,” for which access was denied and our appeal is being addressed by the Province.)

So, other than the content of the Concepts Report(s), all questions are to be referred to you. Here goes:

1. Am I right, that there is currently no complete ‘base year’ utility data? Does this mean that, one year after the Cinergy contract was signed, the Energy and Waste Management Office has still not completed the record that will be used to calculate the energy savings on which the December 2004 Cinergy contract is based?

2. If no complete ‘base year’ record exists yet, when will this record be completed?

3. Am I right that the Concept Reports referred to in the plural in the Dec.2004 Cinergy Agreement were all been approved at the same time and now form one binder called The Concept Report, which is not public information?

4. If all 100 concept reports were reviewed, discussed and approved at the same time, when did that meeting take place and how long did it take?

5. I found no reference to a Feasibility Study in the contract. But it’s mentioned in Ms.Librecz’ response. What is it? Is it public information?

6. Which arenas and rinks have already had their energy retrofit design and specification documents approved?

7. What divisions were consulted for approval?

8. Who was in charge of approving these documents in the Parks, Forestry and Recreation Division?

9. Ms.Librecz wrote that construction is beginning this fall at the sites where approval has occurred. Fall is almost over. Which sites are now in the process of having the Cinergy measures implemented, and what are those measures?

10. The contract appears to have an escape clause in article 3.02: “Either party may terminate this Agreement for any reason between the date the Agreement is executed and the Approved Total Project Scope is submitted to the City.” The qualifier to article 3.02 is that any work done up to then has to be paid for by the City. Since Cinergy is starting on the implementation phase before the Total Project Scope is available, that weakens the safeguard in article 3.02. By what date will the Total Project Scope be submitted?

11. Do the provisions in Article 9.01 and Article 11.04 of the Cinergy contract mean that that the City is required to pay the actual project costs even if the savings in energy costs are not realized? If not, what do these provisions mean?

Thank you in advance for answering my questions directly. I will call you in a week to check if I have understood correctly that you are now at liberty to respond.

Cc Brenda Librecz

Councillor Adam Giambrone, Ward 18

Mayor David Miller

Councillor Jane Pitfield, Ward 26

Suzanne Craig

Dec.14 2005, to Mr. Jim Kamstra, Manager of Energy and Waste Management, Facilities and Real Estate:

I'm glad that you feel you can let me see some of the Cinergy energy retrofit information.

In our phone conversation you mentioned that you are very busy and that it might be some weeks or perhaps longer, before you would have time for me and another researcher to come and take a look at the reports. Since it has been many months since I first asked to see this information, I am hoping that we can take a look at some concept reports before then.

So I thought it would be easier for you if I start off with only five concept reports and wait until the new year for any others. I would like to see the concept reports (and the design and specification documentation) for:

  • Dufferin Rink
  • Campbell Rink
  • Christie Rink
  • Trinity Rink
  • McCormick Arena

I would also like to see the baseline energy costs for those rinks (or the deemed energy costs). In addition I would like to see the format for energy conservation training sessions to be administered to PF&R staff, an outline of the content, and the costs of this plan.

I would be able to come to your office (or wherever you prefer) to read these reports this Friday morning or mid-afternoon, or any day next week. You could also, if you prefer, send me the reports electronically, since that is the form I will request when our hearing comes up with the Ontario Information and Privacy Commissioner.

2006

This exchange highlights some deficiencies of analysis by the project staff, and difficulties in obtaining information about the project.

Feb.10, 2006, to Mr. Jim Kamstra, Manager of Energy and Waste Management, Facilities and Real Estate

At a budget consultation meeting in Scarborough last night, I raised the fact that the details of the Cinergy energy retrofit project are still unavailable. Both the mayor and Mr.Pennachetti encouraged me to contact you, with a cc to them, so that's why I'm writing to you again.

In the e-mail below, sent a couple of months ago, I asked to read the details for the rinks listed. I would much prefer to get those details electronically but if necessary I can come to your offices at your convenience.

City Councillor Adam Giambrone's office e-mailed me the Wallace Rink proposed modifications already. I think I understand the lighting changes and the toilet and vending machine suggestions on the list, but I have two questions:

  • 1. how do "capacitative reactance capacitators (KVAr)" save energy?
  • 2. why is there no reference to the energy costs related to ice thickness?

Although you must be very busy with this and other large projects, I would appreciate a chance to see this material and to hear the answers to my questions.

Feb.10, 2006, from Mr. Jim Kamstra, Manager of Energy and Waste Management, Facilities and Real Estate

In December we agreed to meet, probably in the new year. It would be best if you came to our office (Metro Hall) so that we will have access to the information you are looking for. I could meet with you on Feb 14th am or Feb 16 am next week. Feb 20, 23, 24 are also possibilities. Please let me know your preference.

From Jutta Mason to Jim Kamstra re ice thickness and hydro costs, Thu, 16 Feb 2006

Hello Jim,

Here is the link I said I would send you about the ice thickness graph: http://www.dufferinpark.ca/cityrinks/wiki/wiki.php /RinksManagementAndMaintenance.IceThickness

I spoke to a guy at CIMCO this morning who's going to ask his engineers about ice thickness/ energy use. He said that this graph makes good sense.

I just want to remind you about sending me the hydro costs for Dufferin, Campbell, and Trinity rinks, if you can put your hands on them.

Thanks for taking so much time to go through the material with me on Tuesday. And I agree with you -- face-to-face often works better than writing things. It's not as though it didn't occur to me. Last April I tried to find someone at Parks and Rec to tell me about Cinergy, but that didn't go anywhere. On Sept.29 I called Ms.Gruia and asked to come and meet with her, but she said I should write instead. And so it went. In your position, I'm sure it's not possible to follow up with all the nosy persons who might want to quiz you. However I hope that it made more sense after last Tuesday.

Best regards, Jutta

Question from Jutta Mason to Parks supervisor Peter Leiss, August 27, 2006

The Cinergy building envelope work was done last week at the rink. The contractor pointed out to me that it was odd to put weatherstripping on the garage side door when there is an opening right above it that never closes, not in winter either:


garage side door with
always-open air vents

This opening must have been on the Cinergy heat loss audit, maybe it was overlooked when the job list was made -- can you find out when that problem is scheduled to be looked after?

Comment from Energy Retrofit project manager Al Gaanderse: This is correct. The vent was overlooked. We are presently reviewing with the engineers whether the open vents can be sealed and leaving the automatic vents in place.

Subject: Re: Cinergy work Date: Mon, 28 Aug 2006 07:13:35 -0400 From: Peter Leiss <pleiss@toronto.ca> To: Mason, Jutta <jutta.mason@sympatico.ca> CC: Decastro, Tino <tdecastr@toronto.ca>, Kamstra, Jim <JKamstra@toronto.ca>, Staff <staff@dufferinpark.ca>, Straw, Sandy <sstraw@toronto.ca> References: <44F1E579.7010703@sympatico.ca>

Response from Peter Leiss

HI Jutta

I have made a request of Facilties to respond to me regarding what action will be taken.

Peter Leiss
Parks Supervisor Toronto East York

September 27 2006 Re: Arena Energy Retrofit Program, from Jutta Mason

Mr.Al Gaanderse visited the park today to have a conversation about this program. Mr.Gaanderse told us that he has worked at arenas in Scarborough for Parks and Recreation for 25 years, more recently as chief operator of a community centre as well as an arena. He is currently seconded to the company that has the energy retrofit contract with the City's arenas and outdoor artificial ice rinks. He is the Project Coordinator, Arenas Energy Retrofit Program. The project is expected to need his services for three years.

The city originally entered into an Arena Energy Retrofit Contract with Vestar Energy (an American company owned by the Cinergy Corporation, a large electrical utility based out of Cincinnati), in December 2004.

Mr.Gaanderse said that he is now seconded to Optimira Energy, formerly known as Cinergy Solutions. That company in turn was recently bought from Duke Energy by New York City-based Adamas Energy. (After Adamas Energy bought Cinergy Solutions, the name was changed to Optimira Energy. Cinergy Corporation and Duke Energy are billion dollar companies and as such, the City of Toronto contract is small, but in terms of Optimira Energy, the City of Toronto contract is quite large.


garage door opens wide

However, the scope of the energy retrofit contract is very large in local terms, and not so easy to understand. Mr.Gaanderse explained a good deal. The measures we will see at Dufferin Rink are weather-stripping of doors (already done) and the installation of a computer system that will allow better monitoring of the compressors that run the rink's cooling system (that system is not yet installed). Also, since the original work plan for Dufferin Rink did not include an automatic shut-off for the large gas heater in the garage (it heats the park whenever the garage door is opened for the zamboni or the farmers' market), Mr.Gaanderse said he would look into that.

From Mr.Gaanderse: The original scope included the control of the heater through the new computerized control system. The control sequence will include the installation of a sensor that will monitor the operation of the door. If the door is open, the heater will be disabled from operation. There is also a low limit that will start the heater irrespective of door position, if the room temperature gets close to freezing.

He also said that ice should not be thicker than three inches for outdoor rinks (one-and-a-half to two inches indoors) and that if it gets thicker it will use too much energy (the compressors run too much). The new automated system will allow central monitoring of the compressor use, giving a warning if the machines run continuously as they did at the end of the 2005/2006 rink season, when the ice was five to seven inches thick.

Once the data on energy use starts being collected, CELOS will ask to see it, and thereby follow the progress of this program.

From Kevin Beaulieu to Jutta Mason, attempting to locate report

I've had a response from the Clerk's office about the report you were looking for:

"Further to your inquiry, upon checking Clause 3 of Report 12 of The Policy and Finance Committee (2005), City Council adopted Recommendations 150-154 on the Energy Retrofit Program. Council did not adopt the report (October 26, 2005) from the Deputy City Manager and Chief Financial Officer, they just adopted some of the recommendations, but not Recommendation (2) regarding the detailed report.

Council did however adopt the following Recommendation:

"(154) that the revised cashflow projections of $7.103 million in 2007; $5.0 million in 2008; and $2.0 million in 2009 for the Energy Retrofit Program be referred to the Deputy City Manager and Chief Financial Officer for review, in consultation with appropriate staff, and report back to the Budget Advisory Committee in the Spring of 2006 on a recommended firm 5-Year Capital Plan within Council's approved debt affordability limits."

For further information on this I would suggest that you contact the author of the report Jim Kamstra, Manager, Energy and Waste Management, Facilities and Real Estate Division

I hope this is helpful,

Kevin

Kevin Beaulieu
Executive Assistant
Office of Councillor Adam Giambrone


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