Muskegon City weighs $554,000 project-development agreement with Johnson Controls for energy upgrades

Dan Vander Hyde, Director of Public Works, and representatives from Johnson Controls (JCI) presented a proposed project-development agreement at the Muskegon City Commission work session on Oct. 13 to begin engineering for an energy performance contract covering several city facilities.

The project-development agreement under consideration would authorize up to $554,000 for engineering, design and deep-dive assessments (the cost is not payable immediately but would be due if the city declines to move forward with the full construction contract later). Vander Hyde cautioned commissioners that the city should not approve the development agreement unless they are willing to consider the larger energy performance contract when it is brought back: "Please do not approve this item tonight unless you're comfortable with the idea of an energy performance contract of the improvements that this agreement will detail," he said.

Why it matters: The structure under discussion is a guaranteed-energy-savings contract allowed under Michigan law (Public Service Act 625). The model lets the city advance deferred maintenance and equipment replacement…