The city predicts it will save $250,000 a year through energy- and water-system upgrades in the 48-year-old City-County Building, Indianapolis Mayor Greg Ballard said Tuesday afternoon.

While most of the $8 million project to “green” the 28-story downtown tower consists of fairly conventional retrofits, one of the more radical projects will involve installation of a geothermal heat recovery system. It will use water already pumped from the lower floor of the parking garage to provide heating and cooling.

The city also plans to install solar thermal panels on the roof to heat hot water for the 25th floor.

Lighting of the southern plaza of the City-County Building will be powered by photovoltaic panels and by small wind turbines, as a publicly visible portion of the initiative that “will serve as an example to other building owners,” said Ballard.

About a year ago, the mayor announced plans to study how to extract energy and resource savings from the city’s considerable real estate portfolio, which includes about 70 buildings being examined for retrofits. The city worked with a team of local experts and with the not-for-profit Rocky Mountain Institute to come up with the greening plan.

It is “something that should have been done a long time ago,” said Ballard.

All told, the upgrades should shave the City-County Building’s energy consumption by 35 percent, officials estimated.

The upgrades will be funded under an energy savings contract, primarily through Indianapolis-based Performance Services Inc.

Under the contract, the city won’t pay directly for the cost of the building upgrades, which are expected to produce $750,000 a year in energy and water cost savings.

Rather, $500,000 of that amount saved will be plowed toward paying for the upgrades, with the city pocketing the remaining $250,000 a year in savings.

The $8 million in upgrades will be paid for in about 15 years, after which time the city gets to keep full amount of the annual savings.

Other upgrades include low-flow faucets and toilets, which have already been installed on 18 floors of the building. More energy-efficient lighting will be installed throughout the government complex, including sensors that will turn lights on and off depending on whether rooms are occupied.

City officials also are trying to make employees more sensitive about energy usage, said Karen Haley, director of the city’s Office of Sustainability. An employee survey was recently conducted to learn more about their habits and to generate new conservation ideas.