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Start of the Final Paper

Background  

The Capital District YMCA is a 501(c) not-for-profit focused on building strong kids, families, and communities.  The YMCA’s mission is “to put Christian principles into practice through programs that build healthy spirit, mind, and body for all.”  Currently, the CDYMCA has ten branches, along with three summer camps, and three childcare centers.  With 1,200 employees and 1,400 volunteers, it serves over 105,000 members.  The CDYMCA is the largest childcare provider in the region, and has numerous after-school and scholarship programs available.

 

Last Year’s Recommendations

Of the recommendations from last year’s G3 team, the YMCA has focused on cost reduction in three main areas: paper usage, mileage from travel, and water usage.  Currently, no measurements have been made as to the total cost savings of the recommendations.

Paper Reduction – The YMCA now prints double-sided when possible, uses recycled paper, limits packaging, and has moved to consent agendas for all board meetings, which reduced the size of printed packets.  The savings from this area is estimated at $17,000 over the past year, but those savings were offset by the cost of changing the YMCA’s corporate logo on all paper.

Mileage from Travel – The YMCA is currently finalizing plans to use audio/video conferencing software instead of traveling to meetings.  This of course will tremendously decrease gas and travel expenses.

Water Usage – Low-flow showerheads and sinks, and waterless urinals have been installed to save water.

 

Actions Taken toward Sustainability (already in progress or done)

Glass-Paper-Plastic – A comprehensive recycling plan was put in place three years ago at each YMCA for glass, paper and plastic.  Keeping track of this program and measuring reduced waste management costs at each of the locations has proven very useful.  Waste removal costs have been reduced by approximately 40% during that three year period from $75,000 to $44,000 for services at the 14 YMCA locations.

Electronic Recycling – Three years ago, the YMCA also signed a contract with a local company for all of its electronic recycling needs (computers, bulbs, ballasts, batteries, etc.); the cost of this program is negligible.  The program complies with mandatory local and federal standards regarding the disposal of this type of waste.

Cleaning Products – The YMCA has reduced the number of overall daily-use cleaning products from dozens at some sites to an average of 2-4 products at each of its locations.  These are green cleaning products, and are far more environmentally friendly than the previously-used products.  One green product supplier takes care of all of the YMCA’s needs.

Lighting and Lighting Control – The YMCA is currently working on a lighting control performance contract that is set to begin in about two months.  The bank is expected to close on this project by the end of May 2011. The $1.3 million dollar project will replace all existing lighting at 7 YMCA locations (about 500,000 square feet of building space).  The contract includes the installation of ECS lighting software and calls for the installation of “time of use” electrical meters.  This will allow the YMCA to purchase electricity differently than it has in the past, and also participate in demand/response programs.  The cash savings generated from this lighting control system will be more than the monthly payment associated with the contract.

Variable-speed Direct Drives – These units control the speed of the pool filtration pump motors.  A computer monitors what energy is needed by each pump based on water turnover ratios and adjusts the speed of the motor accordingly.  This project saves about $8,000 per year.

HVAC System – The current HVAC pool pack unit uses condensers and large air compressors to control the temperature and humidity of the pool area, resulting in high energy costs; this unit will need replacement in 3-4 years.  In combination with a gas-powered pool heater, energy costs per year are between $100,000 and $110,000.  In addition, the coils for the HVAC unit cost $30,000 each and only last about five years.  Lastly, there is an unquantifiable cost resulting from the high humidity in the pool area, which rusts the metal and iron (the ceiling, ventilation system, and pipes).  The YMCA is looking into a large fan unit that will keep the humidity low by cycling air from outside the building into the pool area.  The fan unit is expected to cost between $130,000 and $170,000, and save $12,000 annually.

Summary and Plan of Attack

Like many nonprofit organizations, the YMCA is presently dealing with actual and anticipated decreases in income and the subsequent budget cuts that accompany these changes.  In an effort to reduce expenses, the organization has taken steps to reduce energy consumption, lower utility expenses, etc.

The YMCA has allocated numerous resources to reducing energy consumption in its branches for the last ___ years.  Patrick Barrington, Facilities & Project Manager, has hired InnoVerde to assist him with fine-tuning his energy reduction plan and developing a strategy for achieving organizational buy-in from the numerous stakeholders throughout the Capital District YMCA.  If implemented, our plan would assist our client with developing growth strategies that will improve the organization’s long-term viability.

InnoVerde has developed a proposal that will assist Mr. Barrington in convincing internal and external stakeholders that a companywide sustainability approach will:

  • Mitigate risk;
  • Create new competitive and revenue opportunities;
  • Fuel innovations by motivating employees and other stakeholders to look at other ways to reduce consumption/expenses;
  • Enhance employee recruiting, development and retention – Generation Y is more concerned with the environment than previous generations. Employees are more likely to have a positive perception of the company;
  • Improve the external image of the organization, thus attracting socially concerned employees, volunteers and investors (donations); (get more info on how much money socially/environmentally concerned people donated to likeminded nonprofit organizations).
  • Benefit the bottom line of the financial statement by reducing costs and improving efficiencies;
  • Stakeholders – Any implementation of a sustainability effort would require buy-in first from the internal and external stakeholders listed below (Corporate social responsibility). (Research each)
    • Management
    • Employees
    • Volunteers
    • Board Members
    • Members
  • Explain how this relates to the organization’s mission
  • Efforts made to this date
  • Provide statistics/reports that show how the company’s bottom line is positively impacted by a strong internal sustainability policies
  • Best Practices – Efforts done by other organizations. Have any other YMCA organizations implemented similar initiatives?

Plan

Step 1.

Develop an internal structure for implementing the plan, including identifying a Chief Sustainability Officer and a Sustainability Committee of the YMCA Board.  These individuals will be responsible for implementing our plan and making any additional recommendations for energy-saving actions.

Step 2

Needs assessment (option) – assess the energy-saving steps that have been taken so far and recommend additional opportunities.  If not previously conducted, decisions must be made as to whether the YMCA will be allocating resources for a professional energy-usage assessment (ie, potential building or appliance upgrades, opportunities for consolidating energy-consuming activities occurring at multiple branches, etc) at any of the YMCA properties to determine potential energy-saving investments, or whether the plan will be based entirely on the YMCA’s own internal assessments.

Step 2.

Create new programs for members and employees that promote sustainability, recycling, and reduction of carbon footprint.  Program outcomes must be measurable and provide results either by attracting more members, donors, and/or impacting the financial bottom line.  Examples might include:

  • Community garden;
  • More visible on-site recycling opportunities at branches for both members and employees;
  • YMCA programming that provides education on topics such as recycling and reducing waste.

Step 3

Create a communications and marketing plan that will guide communications with YMCA members and the public about the initiative and its benefits.  Specific actions include:

  • Working with the YMCA marketing department to promote the initiative;
  • Surveying YMCA members as to how energy use can be reduced as a part of their membership experience;
  • Promoting the benefits and results to members;
  • Developing incentives for buy-in from members. For example: raffle off an Ipad for members to make some kind of efforts.

Step 4

Create a plan, in conjunction with the YMCA’s Human Resources Department, to roll out the initiative internally with staff.  Specific actions include:

  • Soliciting recommendations from employees for how they can reduce energy consumption as part of their own work processes;
    • Staff trainings, seminars, mentoring & coaching , and assessments;
    • Promoting the benefits and results to employees;
    • Revising the employee manual as necessary

Step 5

Implement a solar energy strategy to reduce the organization’s utility bills/consumption.  Explain how much the organization is spending now.  How much can be saved by adding solar panels to the roof of one Y.  Use the information from your flow chart.

Solar Thermal Project Financial Calculations

CDYMCA  Guilderland Solar Thermal Project Financial Calculations

Price Increase for Natural Gas 3%  
Internal Rate of Return 87%  
Total Savings (10 years) $200,551.34

 

Projected Cash Flows for the Solar Thermal

Year of Operation Expected Natural Gas Costs Capital Spent on Solar Thermal System Net Cash Flows
0 0 ($50,000.00) ($50,000.00)
1 $42,000.00 $0.00 $42,000.00
2 $43,260.00 $0.00 $43,260.00
3 $44,557.80 $0.00 $44,557.80
4 $45,894.53 $0.00 $45,894.53
5 $47,271.37 $0.00 $47,271.37
6 $48,689.51 $0.00 $48,689.51
7 $50,150.20 $0.00 $50,150.20
8 $51,654.70 $0.00 $51,654.70
9 $53,204.34 $0.00 $53,204.34
10 $54,800.47 $0.00 $54,800.47
       

 

Evaluating Profitability

Solar Thermal Project/Debt to Equity Ratio 4 1.5 1 0.666666667 0.25 0
Debt (D)* $50,000.00 $40,000.00 $30,000.00 $25,000.00 $20,000.00 $10,000.00 $0.00
Cost of Debt (rd)* 6.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%
Equity 0.00 10000.00 20000.00 25000.00 30000.00 40000.00 50000.00
Cost of Equity 19.00% 19.00% 19.00% 19.00% 19.00% 19.00% 19.00%
Tax Rate 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Equity Weight 0.00% 20.00% 40.00% 50.00% 60.00% 80.00% 100.00%
Debt Weight 100.00% 80.00% 60.00% 50.00% 40.00% 20.00% 0.00%
Weighted Average Cost of Capital (WACC) 6.0000% 10.2000% 12.4000% 13.5000% 14.6000% 16.8000% 19.0000%
NPV of projected Cash flows $282,443.17 $214,634.34 $187,049.23 $174,871.12 $163,635.71 $143,654.51 $126,513.73

 

Funding Conversation with Local Expert

 

Solar Energy

—–Original Message—–
To: (Funding Contact)
Subject: Re: eligibility for funding

Ms. (Funding Contact),

You put up a PDF file on the EPA’s website called “Accelerating Solar Energy at the Local Level.”  I was searching for possible funding avenues for the non-profit, YMCA organization. The 3rd page of your power-point is titled “Recovery Act Financing Options for Solar.” I was wondering which if any possibilities were open for the YMCA. The pdf can be found by searching the words “recovery act financing
options setup” on google.  Please let us know.  Thank you,

Team InnoVerde

————————————————————————————————————

—–Reply—–

To: Team InnoVerde

Subject: Re: eligibility for funding

There may still be some funding available through EECBG (you’d need to ask your local jurisdiction) or the State Energy Program (you’d need to ask your state).

Every solar installation gets the 30% federal tax credit so you will get that.

The others listed on slide 3 likely do not apply.

Depending on where you’re located, the best bet for a solar project on a non-profit facility (assuming you’re talking solar electricity instead of solar hot water) would be a third party power purchase agreement (PPA) which can be arranged through many different solar companies. This allows you to pay for the electricity over time instead of purchasing the system up front, and allows a third party to pass
along the tax benefits to you in the form of lower cost.  You may also reach out to my contact Jake, who does HVAC in Albany, NY.  I helped him with the PPA for his photo-voltaic solar setup; I will give him a heads up that you may call.

A solar hot water system could be a good solution for a YMCA if it has a pool that needs heating. PPA’s for solar hot water are not common so in that case you’re looking at an upfront purchase. Depending on what state you’re in there are varying rebates and incentives for solar hot water. If the albany.edu email indicates you’re in NY, you’re in luck – NYSERDA has pretty good incentives.

I recommend you get in touch with local installers or a local solar organization like NYSERDA for more info.

Please let me know if I can be of further assistance.

Best,
(Funding Contact)

YMCA Potential Areas for Improvement

Notes, Thought Process, and Potential Areas for Improvement

We met with our contact Pat for the tour of the YMCA.  Armed our list of questions, we got a lot of answers and generated many different ideas for where we can make an impact.

Ideas

Camp Nassau and Chingachgook: TOSS

  • Open on Saturday in the afternoon
  • Open on Sunday in the afternoon and at night
  • Open on Monday nights
  • Camp Chingachgook (yes that is the name) and Nassau already do corporate picnics and teambuilding. Abercrombie and Fitch did it one year.  These are usually set up as low-key family events.  Pat says that the YCMA doesn’t advertise for things like corporate training (and it also appears that they aren’t interested in it).  They pretty much have the entire schedule filled for each camp with the occasional time slot.

Sustainability Orientation and Training: KEEP

  • Currently orientation is 4 hours long
  • Could spend some time on sustainability (Pat thinks 1 hr might be a little much – maybe 30 minutes). Pat likes the idea and believes that parents would love it; this would show stewardship in the community, which is what the YCMA tries to do.
  • As for training, Pat says that the best course of action would be to have a sustainability person (job position) in the YCMA. That person gets trained on sustainability and then trains employees and management at the YMCA. Training would be especially good for the childcare staff.
  • Maybe the trainer should be a member of the Green Team
  • As an idea, sustainability training will have a trickle-down effect. The staff of the YMCA is very young.  In general, the younger generation is more “green.”  Over the next decade, hiring and natural attrition will lead to a YMCA composed of a more sustainably conscious staff naturally.  If supplemented by training, the YCMA will be in a good position, as it would aid sustainability thinking and efforts.

Sustainability Curriculum: MODIFY

  • Daycare centers are where the only “teaching” occurs. They have a “creative curriculum” that follows OCFS guidelines (which we need to look up and mention).  A 30 min. lesson on sustainability themes could be offered during the afterschool programs, but it’s the kids’ choice whether they go or not.
  • There is no daycare at the Guilderland branch.
  • Sustainability teaching can be incorporated into summer camp theme weeks (think something like Earth Day).

Green Teams: KEEP

  • Green teams should meet after 12pm during the “lull” time that Karen spoke about. People come in before work and then after 3pm.  B/n 12 and 3 is a perfect time for the Green team to meet for the facility.  As for regional meetings, Pat said that the property and staff have a monthly meeting.  The green team could just show up for this meeting each month instead of having a separate meeting.  Also, Pat said that sustainability topics could be incorporated into the meetings.
  • Green employee of the month seems like a good idea – it’s recognition for personal efforts to sustainability; helps to promote the idea of sustainability throughout the organization.

Benchmarking and Last Year’s ideas

  • Pat benchmarks his YMCA against other YMCAs in the district for gas and electricity costs. Electricity is $2.24/ft for the Guilderland YMCA.
  • Pat did the paper idea and low flow shower heads from last year. They are currently finalizing the video-conferencing suggestion.
  • Pat has not tracked anything implemented from last year. Probably saved about 25% of their paper (~1 million sheets) due to last year’s recommendation.
  • “Time of use”/smart meters are being installed in 3 weeks, which will give Pat info on energy consumption. We can suggest metrics for future use since he will have the capability to measure things in 3 weeks.

Solar Panels: KEEP

  • A new roof ($400K) is being installed 2-4 years from now.  The solar panels should probably be installed at the same time.  We should use a tiered approach and mention when to implement each item we recommend.

 

Issues

The Pool Heating and Ventilation Issues

  • The primary way of heating the pool is through a gas heater. This means that there is a substantial cost for the gas to run the heater.
  • Guilderland YMCA currently uses an HVAC pool pack unit for ventilation. This unit is sold by a limited number of suppliers and is very energy intensive to run.  The system uses condensers and large air compressors to dehumidify the air (which is why it requires so much energy).  The HVAC unit is used as a supplement to the gas heater.  While the HVAC unit is running, it produces a lot of heat, which is transferred to the water somehow.  The main purpose of ventilation is to protect the building infrastructure because the high humidity rusts the metal and iron (the ceiling, ventilation system, and pipes).  In total, heating the pool and controlling the humidity of the pool area costs $100,000 – $110,000 annually. In addition, the coils for the HVAC unit cost $30K each and only last (5) years or so (I think it was 5 yrs – we have to look it up online and double check).
  • Pat has contacted ERSI to install two large fans that will keep the humidity low by taking air from o/s of the building and cycling it into the pool area. This system will not have air compressors, dramatically decreasing the YMCA’s energy bill
  • Total YMCA utility bill = $300K/yr. This includes electricity, gas, and delivery costs for each.
  • YMCA wants to maintain a humidity level of 65%.
  • HVAC unit will need to be replaced in 3-4 years.
  • ½ of the YMCAs have software to go w/ the HVAC system

Additional  Problem – Open Sand Pit Filtration System

  • The polluted air from the system comes out since the system isn’t covered. This air erodes everything in the HVAC room (once again, all the metal and piping).

Capital District YMCA First Engagement

SUNY Albany’s Going Green Globally (G3) Program is a key element of the overall MBA program, allowing teams of MBA students to work with local businesses to create innovative sustainability strategies and initiatives in an effort to increase savings and decrease costs in a changing economy.

Team InnoVerde was originally engaged by the Capital District YMCA for this purpose.

The calendar was as follows:

  • Team formation
  • Initial client meeting and tour at YMCA
  • Sustainability initiative research and white paper creation
  • Follow up meeting at YMCA
  • Further research and cost analysis
  • Executive presentation of findings and recommendation

In the initial meeting, Team InnoVerde’s goal was to identify the following:

  • What (if anything) the YMCA is doing in regard to sustainability
  • Who the key stakeholders are and where any resistance lies
  • Areas of opportunity

The team used the following questions in the first meeting:

  • How do you decide the rates for memberships in each community?  Does the money made stay within that community, or is that money shared among all the Capital District YMCA’s?
  • Do you offer services outside of the YMCA (building)?  If so, does that present any challenges?
  • What would you consider the YMCA’s main strengths/weaknesses?
  • What is the “Reach out for the Youth” program?  Do you lower the cost of the services?  How do you determine what to charge, if so?
  • Do you feel your services are well publicized?  Events, offerings, as well as fund-raisers?
  • Is it difficult to find volunteers?  Is it challenging to get children/teens interested in joining programs, such as “Student Achievers?”
  • Has the recession affected the YMCA?  Has membership increased/decreased?  Has fundraising become more difficult?
  • Can you please elaborate on the rental/ residence offerings?
  • Net Assets at year end were: $20,827,950, up $662,553 from last year.  What is the average for net assets?
  • The Strategic Plan began in 2010.  Have all your goals stayed the same?  Have there been any changes/edits to those plans?  What challenges are you currently facing?  What have you achieved?
  • Do you have large (corporate) sponsors?  If not, have you tried to find some?  What strategies did you use and how effective were they?
  • Where does the profit go?  Who decides what to do with the money?  Is the money invested at all, or put back into the company for other projects?
  • For paid employees, do they receive fair/average salaries?  Benefits?  Do you know the economic background of the individuals?  Are they mostly from the need-based demographics that you are attempting to reach out to?  What incentives (other than pay) do you feel they need/want?  What are their concerns?
  • As a goal, stronger ties with schools, libraries, etc is mentioned.  How do you feel your relationship with them is now?  Do you feel they offer mutual support/ referrals to you?
  • Do you have relationships with local businesses?
  • For those in need, do you have strong enough ties to offer deals/ discounts for services they might be in need of, such as medical/dental, etc.?  Do you offer information to those looking for such information?  Either where to find help, or how to receive offerings?
  • Why do you want to implement the sustainability measures (being that it is not part of your mission, vision, or goals)?
  • Who would support a sustainability initiative (person, position in organization)?
  • Is your organization involved in any outside activities or groups relating to sustainability?
  • Are there any types of incentives or compensation for implementing sustainability measures? (If so, what are the criteria for each? What level of employee is the incentive/compensation for?)
  • Do you have any metrics you use to measure achievement toward sustainability goals?
  • Do you offer training or education on sustainability issues?
  • Have you made any R&D investments for low-carbon products, technologies, or services?
  • Are you involved in any emissions-trading programs?
  • What actions have you taken to reduce energy, wastes, or resource consumption?
  • Of the recommendations from last year’s group, what solutions, if any, have you implemented?

After collecting all of this information from various staff and management members, the team returned to SUNY Albany to begin research.