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HomeMy WebLinkAbout2008-05-28 08-202 ORDERItem No, 08 202 IInK sag Item/Subject: Order, Authorizing Execution of Lease/Purchase Agreements fur Various Municipal and School Energy Conservation Measures Responsible Departmenk Executive CommerMary: In August 2806, the City selected Honeywell o peconn a CltNwide energy audit and to develop projects that could be implemented to reduce our energy use and costs. The Intent of the project was to develop sufficient savings to pay or Bre Improvements, to improve our energy ootprlm, o avoid additional future costs as the price of energy increases, and, hopefully, o we some immediate budgetary savings. We are now ready to begin implementing these projects. Total energy and operational savings for the City's General Fund buildings are estimated to be $1,383,110 over the initial ten years. Total project cross are estimated at $1,192,097, an estimate bared on energy costs prior to the most recent dramatic Increases and which will certainly be higher. Under the temps of the agreement with Honeywell, H will guarantee the savings o beachieved. Should actual annual savings W les than the guarantee, Honeywell will pay the difference o the Qty. We propose funding the project through a third parry lease purchase. Financing posts are induced in the total project cost. A complete listing and description "a various projects to be undertaken has been premausly provided to the Council We anticipate that projects to be undertaken far the School Department, Airport, and Wastewater Treatment Plant will be finalized in the near future and result In additional savings. This order will authorize executing the necessary lease/purchase agreements to allow this project to proceed. I r, Department Head Associated Information: Ory Manager Finance Clry Solicitor _ Passage _ First Reading page _ of _ Referral 08 ^02 q Assigned to ComcRor Gxetmick May 28, 2008 CITY OF BANGOR (TIiIE.) ORDER, Authorizing Execution of Lease/Purthase Agreements for Vanous Municipal and School Energy ConservaUon Meawres. By Me CRYO uma of Ne CRy of Bangor. ORDERED, THAT 'Y` AStiglMll W Councilor craty ck My za, 20M CITY OF BANGOR (TIIlE.) ORDER, Authorizing Execution of Lease/Purchase Agreements for Various Municipal and School Energy Conservation Measures. WHEREAS, over recent years, the City has experienced a dramatic increase in the cost of energy in its municipal and school facilities which has placed a strain on the City's operating budget; and WHEREAS, improved energy efficiency provides significant environmental benefits by reducing the use of non-renewable resources and the negative environmental impacts associated with them; and WHEREAS, the City Council has established a priority to reduce the City's energy use; and WHEREAS, energy performance service companies will undertake a comprehensive energy audit, identify energy conservation projects and their associated savings, and guarantee a level of savings sufficient to pay for these projects; and WHEREAS, toward that end, the City issued a Request for Proposals for Energy Performance Services; and WHEREAS, a selection pawl reviewed responses from three companies and recommended that contracts for such services be negotiated with Honeywell Corporation and its affiliates for Energy Audit, Energy Performance, and Energy Support Services (the °Energy Conservation Contracts'), a recommendation that was endorsed by the Finance Committee; and WHEREAS, it is essential to proceed with Me Energy Conservation Projects (defined below) contemplated by the Energy Conservation Contracts in order to obtain the projected economic and environmental benefits; NOW, THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT: 1. The Finance Director, for and on behalf of the City and subject to final review and approval by the Finance Committee of the City Council, be and hereby is authorized to execute and deliver one or more lease purchase agreements (the 'Lease Agreements") with Honeywell Global Finance LLC (or such other appropriate lease financing company as the Finance Director shall approve), (the "Lessor) to install, construct, and accomplish energy conservation improvements as more specifically identified in the Energy Conservation Contracts (the "Energy Conservation Projects') at various municipal and school buildings and facilities M-202 throughout the City as determined by the City Manager from time to time and identified in the Energy Conservation Contracts. 2. The Lease Agreements be in an aggregate stated principal amount not to exceed (a) $1,192,097 for the Energy Conservation Projects located in or made with reaped municipal buildings and facilities; and (b) not to exceed $4,435,358 for the Energy Conservation Projects located in or made with respect school buildings and facilities, have a term of not more than 15 years, an average annual interest rate of not more than 8.00%, and shall be in such form and contain such other terns and conditions, including indemnification provisions and provisions for eady payment with respect thereto, not inconsistent herewith, as may be approved by the Finance Director, such approval to be conclusively evidenced by her execution thereof. 3. The Energy Conservation Projects will at all times be used in connection with the City's governmental, school related, and proprietary purposes and functions and are in the beat interests at the City, and no portion of the Energy Conservation Projects will be used directly or indirectly in any trade or business carried on by any person other than a governmental unit of the State on a basis different from the general public. 4. The completion of the Energy Conservation Projects, under the terns and conditions contemplated hereby, is necessary, convenient, in the furtherance of the City's governmental, school related, and proprietary purposes and functions. S. The Finance Director be and hereby is authorized to negotiate, execute, and deliver, for and on behalf of the City, such other documents, agreements, instruments, mortgages, security agreements, and certificates, and to grant such liens or security interests in the Energy Conservation Projects, as may be necessary or appropriate as determined by the Finance Director in connection with the Lease Agreements (including a tax certificate and any consent to an assignment of the Lease Agreements) (the "Financing Documents'), which Financing Documents and certificates shall be in such forth and contain such terms and conditions, not inconsistent herewith, as may be approved by the Finance Diredor, such approval to be conclusively evidenced by her execution thereof. 8. The Finance Director be and hereby is authorized and directed to covenant and certify on behalf of the City that no part of the proceeds of the Lease Agreements shall be used directly or indirectly to acquire any securities or obligations, the acquisition of which would cause such Lease Agreements to be an "arbitrage bond"within the meaning of Sedion 148 of the Internal Revenue Code of 1988, as amended (the "Code'. 7. The Finance Director and Treasurer of the City be and hereby am authorized to covenant, agree, and certify on behalf of the City for the benefit of the Lessor under the Lease Agreements that the City will file any required reports and take any &her action that may be necessary or appropriate to ensure that interest paid pursuant to the Lease Agreements will remain exempt from federal income taxation, including without limitation, the filing of information returns and reports with the Internal Revenue Service and the payment of any rebate due to the United States of America, and that the City will refrain from taking any action that will cause interest paid pursuant to the Lease Agreements to be subject to federal income taxation. & The City cedifies that it has not issued or effected the issuance of, and reasonably anticipates that it shall not issue or effect the issuance of, more than ten million dollars ($10,000,000) of tax-exempt obligations during the calendar year in which the Lease Agreements are executed and delivered, and hereby authorizes the Finance Director to designate to the extent permissible with the advice of Bond Counsel the Lea" Agreements as a "qualified tax-exempt obligation;' as defined by Section 265(b)(3) of the Code. 9. The Finance Director, Mayor, and Clerk and other proper officials of the City (the "Authorized Representatives") be and hereby are authorized and empowered in its name and on its behalf to do or cause M be done all such acts and things as may be necessary or desirable in order to effect the execution and delivery of the Lease Agreements in accordance with the terms and provisions of this Order. 10. If any Authorized Representative is for any reason unavailable to approve and execute the Lease Agreements or any of the other Financing Documents, the person or persons then acting in any such capacity, whether as an assistant, a deputy, or otherwise, are authorized to act for such official with the same force and effect as if such official had himseff/hemelf performed such act. It The City's payment obligations under me Lease Agreements shall not be a general obligation of the City but shall be subject to annual appmpriation by the City Council. 12.AII actions of Me City previously taken to effectuate the Lease Agreements are hereby approved, ratified, and authorized pursuant to and in accordance with the transactions contemplated by the Lease Agreements. IN CITT 20@iCIL May 20. 2000 Notkf 08-202. mxm xaae ma secomm i fox Passage Y d � ORDER �' (T11'LSJ Auxhoxisfa¢ B ecutlau of Lena LITYe P Chase Agreement for Paxlou$ MnalelDel and School Enemy Cooservati" Nmauroi Asolped. to Canncilor brat k