CITY COMMISSION AGENDA ITEM

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Department:

City Manager’s Office

Commission Meeting Date: February 7, 2017

Staff Contact:

Eileen Horn, Sustainability Coordinator

Recommendations/Options/Action Requested:

Consider adopting Resolution No. 7191, authorizing the City Manager to enter into a contract with 360 Energy Engineers in the amount of $10,937,472, to complete energy efficiency projects at various city facilities, the Community Health Building, and the Lawrence Public Library, and authorizing the financing in the amount of $11,033,159 plus issuance costs for the projects. Consider authorizing the City Manager to enter into agreements with Douglas County and the Lawrence Public Library regarding their respective financial participation in the Community Health and Library projects.

Executive Summary:

Over the past year, the City has participated in the Facilities Conservation Improvement Program (FCIP), a state program that assists public entities in implementing energy efficiency and maintenance upgrades.

In that time, and with the support of the Commission, we hired 360 Energy Engineers to conduct an Investment Grade Audit of 40+ city facilities, to recommend energy conservation measures, to design each of these systems, and to bid the projects on behalf of the City. Today, we have the final Energy Performance Contract to present to the Commission, which includes the recommended energy conservation measures, the project financing, and the energy savings guarantee.

Staff recommends initiating the Energy Performance Contract with 360 Energy Engineers. We believe these projects represent an excellent opportunity for the city to save energy, save money, improve our buildings, and address identified needs from the CIP process. The Finance Director is recommending funding this project with “Green Bonds” a type of municipal bond created for projects that have environmental benefits. Lawrence would be the first city in Kansas to use this innovative financing mechanism.

Throughout the attached documents, you will see several cost figures cited. Here are those costs and what they include:

$10,873,472	This is the final project pricing of all of the energy saving projects.
$10,937,472	This is the final project pricing + the fee for the investment grade audit IGA ($64,000). This is the amount we are entering into a contract with 360 for.
$11,033,159	This is the final project pricing + IGA fee + FCIP program fee. This is the amount the City will be issuing bonds for.
$11,288,159	This is an estimate of the total project financing amount ($11,033,159 + cost of issuance).

Strategic Goal Area:

Other (Sustainability and Energy Efficiency)

Fiscal Impact (Amount/Source):

The City will finance $11,033,159 (plus cost of issuance) with debt service payments funded by utility and maintenance savings. To be conservative, the savings projections were decreased by $87,000 for the first year. The latest debt service estimates show that if all assumptions stay constant, the overall net budget impact would be zero.

Attachments:

Presentation to Commission

City of Lawrence Investment Grade Energy Audit

Final Project Pricing and Compensation to ESCO (Schedule D)

General Obligation Bonds Debt Service Schedules

Bond Resolution No. 7191

Energy Performance Contract Summary Memo

Energy Performance Contract and Schedules - Updated 02/07/17 (Schedule C, Section 5 - Page 33)

Letter from the Kansas Corporation Commission

Letter of agreement from Douglas County

Letter of agreement from Lawrence Public Library