10.C.
City Council Meeting
- Meeting Date:
- 05/07/2013
- From:
- Barbara Goodrich, Management Services Director
Information
TITLE:
Consideration and Adoption of Ordinance No. 2013-10: An ordinance of the City Council of the City of Flagstaff approving the form and authorizing the execution and delivery of an Equipment Lease/Purchase Agreement for Renewable Energy Equipment; delegating authority to the Management Services Director of the City to determine certain matters and terms with respect to the foregoing; authorizing the taking of all other actions necessary to the consummation of the transactions contemplated by this ordinance; and authorizing clerical corrections.
RECOMMENDED ACTION:
1) Read Ordinance No. 2013-10 by title only for the first time on May 7, 2013.
2) City Clerk reads Ordinance No. 2013-10 by title only (if approved above)
3) Read Ordinance No. 2013 -10 by title only for the final time on May 7, 2013. (This requires a unanimous vote of the Council members present. City Charter, Article VII, Section 6)
4) City Clerk reads Ordinance No. 2013-10 by title only for the final time (if approved above)
5) City Council makes a finding that an emergency exists.
6) Adopt Ordinance No. 2013-10 on May 7, 2013 (Requires six affirmative votes because of the emergency clause)
2) City Clerk reads Ordinance No. 2013-10 by title only (if approved above)
3) Read Ordinance No. 2013 -10 by title only for the final time on May 7, 2013. (This requires a unanimous vote of the Council members present. City Charter, Article VII, Section 6)
4) City Clerk reads Ordinance No. 2013-10 by title only for the final time (if approved above)
5) City Council makes a finding that an emergency exists.
6) Adopt Ordinance No. 2013-10 on May 7, 2013 (Requires six affirmative votes because of the emergency clause)
Policy Decision or Reason for Action:
To provide authorization to enter into a fifteen year capital lease for solar photovoltaic equipment to be placed at the Aquaplex, Rio de Flag, and the Wildcat Wastewater plant.
Financial Impact:
All costs related to the solar projects will be financed. Banc of America Public Capital Corporation has been awarded this financing at a rate of 2.86% for fifteen years with no lump-sum payout at the end of the period.
Connection to Council Goal:
Effective governance
Has There Been Previous Council Decision on This:
Yes.
April 2, 2013: Capital financing award to Banc of America Public Capital
March 15, 2010: Solar system installation award to Ameresco
April 2, 2013: Capital financing award to Banc of America Public Capital
March 15, 2010: Solar system installation award to Ameresco
Options and Alternatives:
1. Approve the financing to be completed by the Management Services Director. Recommended.
2. Approve the financing, but direct other staff to manage the process. Impact: May slow the process to bring other staff up to speed.
3. Do not approve the financing. Impact: The proposed rate would expire and a higher rate may result. The incentives would have to returned to Arizona Public Service.
2. Approve the financing, but direct other staff to manage the process. Impact: May slow the process to bring other staff up to speed.
3. Do not approve the financing. Impact: The proposed rate would expire and a higher rate may result. The incentives would have to returned to Arizona Public Service.
Background/History:
In November 2009, staff was directed to develop renewable energy systems on City properties. In March 2010, a solar installation contract was awarded to Ameresco (formerly APS Energy Services). Phase 1 and 2 installed three (3) solar systems to date totaling 862 kilowatts (kw). Phase 3 initially proposed four (4) additional sites including the Airport, Aquaplex, Rio de Flag Wastewater Treatment Facility,and Wildcat Wastewater Treatment Facility totaling 927 kw, however the Airport project has been withdrawn due to length of time it would take to complete the Environmental Assessment. This revises the project size to 802 kw.
The City received incentives from the Arizona Public Service Schools and Government and Performance Based Incentive Programs ranging between $0.06 - $0.12 per kw hour of renewable energy generation. This initiative supports the City's commitment to achieve the goals set forth in Resolution 2010-16 (Increased Energy Efficiencies and Renewable Energy Production and Purchase).
The City has awarded the contract for the lease purchase of this project to Banc of America Public Capital. This action completes the needed authorization through an ordinance for the execution and delivery of the lease purchase agreement.
The City received incentives from the Arizona Public Service Schools and Government and Performance Based Incentive Programs ranging between $0.06 - $0.12 per kw hour of renewable energy generation. This initiative supports the City's commitment to achieve the goals set forth in Resolution 2010-16 (Increased Energy Efficiencies and Renewable Energy Production and Purchase).
The City has awarded the contract for the lease purchase of this project to Banc of America Public Capital. This action completes the needed authorization through an ordinance for the execution and delivery of the lease purchase agreement.
Key Considerations:
The interest rate as offered by Banc of America is only valid until May 28, 2013. If the financing is not culminated by that time, the City will either have to renegotiate a rate with Banc of America or reissue the capital lease financing RFP. In addition, the APS incentives expire October 2013 and the construction needs to be complete at that time. Future APS renewable energy incentives are unavailable for an indeterminate amount of time.
Expanded Financial Considerations:
Approving the financing for these projects will not increase overall City costs. Rather, this will be paid from the projected savings per site after allowing for the additional operational, maintenance, insurance, and interest costs. The lease term is 15 years and the equipment is anticipated to have a minimum 15 year life. It is between years sixteen (16) and twenty (20) that will generate the greatest return to the City.
Community Benefits and Considerations:
The Flagstaff community will benefit from the City utilizing a safe, reliable and long-term affordable energy source. Additionally the City can increase awareness of renewable energy technologies by implementing projects that include educational components.
Community Involvement:
Inform
Expanded Options and Alternatives:
1. Approve the financing to be completed by the Management Services Director. Recommended.
2. Approve the financing, but direct other staff to manage the process. Impact: May slow the process to bring other staff up to speed.
3. Do not approve the financing. Impact: The proposed rate would expire and a higher rate may result. The incentives would have to returned to Arizona Public Service.
2. Approve the financing, but direct other staff to manage the process. Impact: May slow the process to bring other staff up to speed.
3. Do not approve the financing. Impact: The proposed rate would expire and a higher rate may result. The incentives would have to returned to Arizona Public Service.
Attachments
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| City Clerk | lburke | 04/23/2013 05:10 PM |
| Legal Assistant | Vicki Baker | 04/23/2013 05:58 PM |
- Form Started By:
- bgoodrich
- Started On:
- 04/21/2013 11:00 AM
- Final Approval Date:
- 04/25/2013