HomeMy WebLinkAboutPW Energy Efficiency Loan ApplicationSAN RAFAEL Agenda Item No: 2.m THE CITY WITH A MISSION Meeting Date: November 7, 2016 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Public Works Prepared by: Bill Guerin, Director of Public Works City Manager Approval: File No. 06.01.229 TOPIC: CALIFORNIA ENERGY EFFICIENCY LOAN SUBJECT: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AUTHORIZING THE CITY MANAGER TO APPLY FOR AN ENERGY EFFICIENCY LOAN FOR VARIOUS SYSTEM UPGRADES TO CITY FACILITIES AND STREET LIGHTS. RECOMMENDATION: Adopt resolution. BACKGROUND: In recent years the City of San Rafael has explored the use of energy efficiency measures in City facilities in order to reduce our energy consumption. As a result, solar panels are being installed at the Public Works Corporation Yard, the A Street Parking Facility and the Albert J. Boro Community Center. In order to fund additional energy upgrades, Public Works explored other alternative funding strategies including programs sponsored or supported by Pacific Gas and Electric Company (PG&E). Staff has been working with PG&E to find citywide opportunities for energy savings. PG&E evaluated city buildings and infrastructure and has proposed an energy efficiency upgrade plan that will replace existing electrical and gas systems that can be more efficient and will reduce our monthly bills to PG&E. PG&E's evaluation of our facilities and infrastructure identified improvements in five categories: Energy Conservation Measure (ECM) 1 2 3 4 5 File No.: 4-4 Council Meeting: 11/07/2016 Disposition: Resolution 14228 Description Interior Lighting Upgrades Exterior Lighting Upgrades Energy Management Control Systems Recommissioning Streetlight Upgrades FOR CITY CLERK ONLY SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 PG&E's analysis of these systems included specific recommended upgrades, estimates also included the design and installation costs of each, as well as a breakdown of the payback period of each system based on the energy savings achieved as shown in the table below ECM Description Annual Cost Project Installation Simple Payback Savings Cost (*) (Years) 1 Interior Lighting Upgrades $30,527 $347,663 11.4 2 Exterior Lighting Upgrades $2,791 $34,824 12.5 3 Energy Management Control $4,724 $23,750 5.0 Systems 4 Recommissioning $20,598 $80,000 3.9 5 Streetlight Upgrades $105,535 $748,255 7.1 Total $164,175 $1,234,492 * Project Installation cost includes all labor, engineering, construction, materials, equipment, inspection, demolition and incidentals for the work including a 20% contingency. Initial discussions with PG&E assumed that we would offset the installation cost with On Bill Financing where the savings associated with the reduced energy bill payment would be used to pay back the initial investment. In our discussions, PG&E also made staff aware of a California Energy Commission (CEC) program which provides for a one percent loan to fund energy efficiency initiatives. The loan can be repaid over as much as 20 years but can also be amortized over a shorter period of time. If the same energy cost savings is used, San Rafael could borrow approximately $1,235,000 at one percent interest and pay back the loan using the $164,000 in energy savings in as soon as 8 years. This approach uses a simple low interest loan to achieve significant energy savings in San Rafael and the amortization period can be set by the city in order to control the payments. The CEC acts twice a year to fund projects and the deadline for action this year is in December. PG&E further proposes to assist with necessary documentation for the loan application, prepare the paperwork to convert all the improvements to a new billing rate, as well as assist with processing PG&E rebates. PG&E will manage all construction tasks, i.e., identify low bid contractors, secure new and dispose of old fixtures, oversee the construction, and warrant the work. The City of San Rafael will pay PG&E a project management fee to accomplish this work, which is included in the amount estimated above. There are numerous advantages to partnering with PG&E. PG&E is staffed to support energy savings projects. They have the necessary technical expertise and financial capacity to design and install the system. Further, as the City's energy provider, PG&E has access to all relevant billing rate structure information and available incentives to respond to the application needs and deadlines of the CEC. Existing Public Works staff is fully engaged with the delivery of the City's CIP and are not able to expeditiously pursue this opportunity independently. To pursue this approach, the City will need to execute an agreement to allow PG&E to develop the project, oversee the work, and assist us in providing final information for the loan. PG&E will provide the funding necessary to carry the project costs until the City receives its loan from the CEC. Once the loan is in place, the City can use the proceeds to reimburse PG&E for the installation work. If the City proceeds with this application the loan should be in place in spring 2017. Based on California Government Code Section 4217, the City can forego the standard procurement processes for energy services if it finds alternative services best serve the needs of the City. The final details of the contract with PG&E will be brought to the City Council as soon as the final agreement is reached. FISCAL IMPACT: There is no initial net impact to the City's budget. The cost of the loan can be paid with the energy savings realized from the conversion, a net zero for the City during the repayment period. SAN RAFAEL CITY COUNCIL AGENDA REPORT / Pa2e: 3 The entire loan can be paid off in as soon as 8 years; after which time the City will realize the entire savings estimated at $164,175 annually. There will likely be additional annual savings associated with maintenance because the equipment will be relatively new compared with the older equipment being replaced. Much of the new energy efficient equipment to be installed will have a warranty that extends beyond the 8 year life of the loan. For instance, LED fixtures require little or no maintenance for an extended period. The fixtures will all be new when installed and will have a ten year warranty. The controls will have additional warranties. The CEC requires that the loan be repaid within a maximum term of 20 years. The CEC will amortize the loan based on the number of years a borrower needs to repay principal and interest with energy cost savings. Applicants will be billed twice a year, in June and December after the projects are completed. OPTIONS: Council may choose to approve the resolution as stated allowing the City Manager to sign necessary documents for an application for a one percent loan from the CEC for the projects stated above; recommended option. 2. Council may instruct staff to modify the resolution and allow the City Manager to sign the application for a one percent loan from the CEC; not recommended. Council may choose to withhold permission for the CEC loan application and not approve the resolution; not recommended. ACTION RECOMMENDED: Adopt resolution. ATTACHMENTS: Resolution RESOLUTION NO. 14228 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AUTHORIZING THE CITY MANAGER TO APPLY FOR AN ENERGY EFFICIENCY LOAN FOR VARIOUS SYSTEM UPGRADES TO CITY FACILITIES AND STREET LIGHTS WHEREAS, the California Energy Commission (CEC) provides loans to schools, hospitals, local governments, special districts, and public care institutions to finance energy efficiency improvements; and WHEREAS, a PG&E analysis of City facilities and street lights indicates the potential for significant energy efficiencies and reduced utility costs; and WHEREAS, the CEC program requires a utility, in this case PG&E, to submit a loan application on behalf of the City. NOW THEREFORE, BE IT RESOLVED, that the City Council of the City of San Rafael authorizes the City Manager to work with PG&E to apply for an energy efficiency loan from the California Energy Commission to implement energy efficiency measures. BE IT FURTHER RESOLVED, in compliance with the California Environmental Quality Act (CEQA), the City of San Rafael finds that the activities of modifications to present facilities and infrastructure, funded by the loan, are energy efficient upgrades which are exempt under CEQA Section 15301. BE IT FURTHER RESOLVED, that if recommended for funding by the California Energy Commission, the City of San Rafael authorizes the Public Works Department to work with PG&E to accept the CEC loan up to $1,235,000. BE IT FURTHER RESOLVED, that the amount of the loan will be paid in full plus interest under the terms and conditions of the loan agreement, a promissory note and tax certificate of the California Energy Commission. BE IT FURTHER RESOLVED, that the City Manager is hereby authorized and empowered to execute in the name of the City of San Rafael all necessary documents to implement and carry out the purpose of this resolution, and to undertake all actions necessary to undertake and complete the energy efficiency projects. I, ESTHER C. BEIRNE, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the Council of said City on the 7th day of November, 2016, by the following vote, to wit: AYES: COUNCIL MEMBERS: Bushey, Colin, McCullough & Mayor Phillips NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Gamblin A-- Je&4-f - ESTHER C. BEIRNE, City Clerk File No. 06.01.229 ATTACHMENT 1 ECAA LOAN APPUCAMN , FOR ENERGY i`�E.r� !O jilt Ir` i `U WEREST RATE 1 1. APPLICANT INFORMATION Applicant/Legal Name: City of San Rafael Type of Entity: (please check one box) ✓ City ❑ County ❑ Special District ❑ Public Hospital / Public Care Institution ❑ Public College or University (except Community Colleges) ❑ Other, please specify: Mailing 111 Morphew Street City: San Rafael, CA Zip:94901 Address: Street 111 Morphew Street City: San Rafael, CA Zip:94901 Address: County: Marin Contact Person: Bill Guerin Title: Director of Public Works E-mail: bill.guerin@cityofsanrafael.org Phone: 415-485-3110 Tax ID #: 94-6000424 Congressional District: 2nd Name of Utility Providers: PG&E, San Rafael Sanitation District, Las Gallinas Valley Sanitation District, Marin Municipal Water District Electric: PG&E I Gas: PG&E I Other: How did you hear about the Energy Commission's Loan Program? Circle one: Energy Commission Website, Energy Commission Staff Presentation, Literature at Trade Show or Workshop, Utility Company, recommendation by another State agency, or Other (Specify): PG&E SST program representative Energy Conservation Attachment 1 Assistance Act (Revised 10/4/16) 1 ECAA Loan Application 2. PROJECT INFORMATION A. Has applicant applied for, or expect to apply for any utility rebates/incentives? ✓ Yes. Please complete Section B. ❑ No. B. Source of Rebates/Incentives: P&E Liahtina and Custom Incentives (Approximate) Amount: $43.543 3. PROJECT SCHEDULE Estimated start date: August 1, 2017 Estimated completion date: April 30, 2018 4. PROJECT BUDGET Total project costs: (include all labor engineering, construction, materials, equipment inspection demolition (if applicable) and removal (if applicable, less equipment salvage value, (if applicable): $ 1 178,813 Loan amount requested from the Energy Commission: $ 1 178,813 5. CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) COMPLIANCE A Is there documentation demonstrating your compliance with CEQA? ✓ Yes, Go to B. ❑ No, STOP: Please complete CEQA compliance documentation (see requirements in the Loan Notice and (See Attachment 4) before submitting application. B. What finding did your governing body make? Measures funded by the loan are: ✓ Not a project. Describe why all measures to be funded by the loan are not CEQA projects, and analysis supporting the conclusion that the measures are not a project: All measures involve like -for -like replacement of existing light bulbs and controls, and adjustment of existing controls. There is no likelihood of a substantive effect on the environment. ❑ Is a project, and is exempt: List applicable exemption: _ Statutory (list code section): _ Categorical (list section from CEQA Guidelines): _14 CCR Was a Notice of Exemption filed? ❑ No ❑ Yes If yes, Date Filed: ❑ Is a project that is not exempt? Applicant prepared the following environmental document: Initial study + Negative Declaration Energy Conservation Attachment 1 Assistance Act (Revised 10/4/16) 2 ECAA Loan Application _ Initial study + Mitigated Negative Declaration Environmental Impact Report —Other (describe) Notice of Determination filed? ❑ No ❑ Yes Date Filed: Was a Statement of Overriding Considerations adopted? ❑ No ❑ Yes If yes, date: 6. APPLICATION DOCUMENTS Please include all of the following: ✓ Completed Loan Application (Attachment 1) ✓ Summary of Energy Measures (Attachment 2) ✓ Feasibility Study/Audit (may be submitted in a CD or flash drive) ✓ Utility Billing Data –Copies of 12-24 months of past energy data and rate schedules for electric, natural gas utilities, or other energy sources (unless utility billing data is included in the feasibility study).billing records from electric and gas utilities (unless included in the feasibility study). ✓ Signed Resolution or Documentation on of Applicant's Authority to enter into the loan agreement (see Attachment 3 for a sample Resolution) ✓ CEQA Compliance Documentation (see Attachment 4 for more information) 7. CERTIFICATION To the best of my knowledge and belief, I certify: • The information in this application is correct and complete. • By signing this application, applicant is eligible to receive state funding under all applicable laws, including but not limited to Chapter 2.8 "Project Labor Agreements", Part 1, of Division 2 of the Public Contract Code. • By signing this application, applicant does not intend to close or otherwise dispose of the building within the simple payback. • 1 have read, understand, and do hereby accept the loan agreement terms, and, further, I am willing to enter into an agreement with the Energy Commission according to the terms offered and will timely sign loan documents if the application is funded. Name of Authorized Representative: Jim Schutz Title: City Manager Signature of Authorized Representative: 7S Date:({/ , Jn- I Phone: 415-485-3475 Email: jim.schutz@cityofsanrafael.org For Assistance: Email: PubProq(&energv.ca.gov (916) 657-4630 Energy Conservation Attachment 1 Assistance Act (Revised 10/4/16) 3 ECAA Loan Application CONTRACT ROUTING FORM INSTRUCTIONS: Use this cover sheet to circulate all contracts for review and approval in the order shown below. TO BE COMPLETED BY INITIATING DEPARTMENT PROJECT MANAGER: Contracting Department: Public Works Project Manager: Talia Smith Extension: 3354 Contractor Name: PG&E Contractor's Contact: Brent Patera Contact's Email: BXPL@pge.com ❑ FPPC: Check if Contractor/Consultant must file Form 700 Step RESPONSIBLE DESCRIPTION COMPLETED REVIEWER DEPARTMENT DATE Check/Initial 1 Project Manager a. Email PINS Introductory Notice to Contractor N/A ❑ b. Email contract (in Word) & attachments to City 6/14/2017 Atty c/o Laraine.Gittens@cityofsanrafael.org ®TS 2 City Attorney a. Review, revise, and comment on draft agreement 6/14/2017 © LAG and return to Project Manager N/A © LAG b. Confirm insurance requirements, create Job on PINS, send PINS insurance notice to contractor 3 Project Manager Forward three (3) originals of final agreement to lhr'r e to ❑ contractor for their signature enter a date. 4 Project Manager When necessary, * contractor -signed agreement © N/A agendized for Council approval *PSA > $20,000; or Purchase > $35,000; or Or ❑ Public Works Contract > $125,000 Date of Council approval Click horc To enter i date PRINT CONTINUE ROUTING PROCESS WITH HARD COPY 5 Project Manager Forward signed original agreements to City Attorney with printed copy of this routing form 6 City Attorney Review and approve hard copy of signed 6// y J agreement l/% h.- 7 City Attorney Review and approve insurance in PINS , and bonds (for Public Works Contracts) 8 City Manager/ Mayor Agreement executed by Council authorized official Cold '1-1 c.4 9 City Clerk Attest signatures, retains original agreement and forwards copies to Project Manager i�; .1-7 ��• 61-3- L -I0 4 -1l -la ROUTING SLIP / APPROVAL FORM INSTRUCTIONS: Use this cover sheet with each submittal of a staff report before approval by the City Council. Save staff report (including this cover sheet) along with all related attachments in the Team Drive (T:) --> CITY COUNCIL AGENDA ITEMS 4 AGENDA ITEM APPROVAL PROCESS 4 [DEPT - AGENDA TOPIC] Agenda Item # Date of Meeting: 11/7/2016 From: Bill Guerin Department: Public Works Date: 10/19/2016 Topic: CALIFORNIA ENERGY EFFICIENCY LOAN Subject: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AUTHORIZING THE CITY MANAGER TO APPLY FOR AN ENERGY EFFICIENCY LOAN FOR VARIOUS SYSTEM UPGRADES TO CITY FACILITIES AND STREET LIGHTS. Type: ® Resolution ❑ Ordinance ❑ Professional Services Agreement ❑ Other: t APPROVALS ® Finance Director Remarks: Approved -Van Bach ® City Attorney Remarks: LG -Approved 10/28/16. Amount of loan needs to be inserted in resolution. ® Author, review and accept City Attorney / Finance changes Remarks: Modified Resolution 11-2-16 KM ® City Manager Remarks: