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Home My WebLink About2008-10-27 08-343 ORDER,,sa Mp, 08 343 Dean: 10-27-08 Item/Subject: Order, Authorizing Execution of tease/Purchase Agreements for Vanous School Energy Conservation Measures Responsible Department: Executive In May 2008, Me Ory authorized funding certain energy conservation measures through a third party lease purchase. At Mat time, Me City and School department were evaluating the option of wood bolters. Since than, the School Department has decided to transition the High School to natural gas for heading purposes. By eliminating the costs associated with a mod boiler, Me School Department decided to review all the projects originally proposed but not selected to Ise undertaken. Based upon Me availatillty of funding, the School Committee has recommended that the School department undertake a total of $7,091,928 in projects ($2,123,909 was previously approved as was $2,656,570 for a wood boiler at the high school). The attached order would authorize the additional funding necessary to undertake projects with a payback period of 15 years or less as compared to the original order which looked at projects with a payback period of 10 Were of less. The majority of the additional projects are related to Me air handling roof top units at the schools, as well as DDC controls throughout the facilities. Under Me terms of the agreement with Honeywell, annual savings are guaranteed. Should actual annual savings be less Man Me guarantee, Honsom0l will pay Me difference to Me City. We propose funding Me project through a third parry lease purchase, the interest costs of which are induced in the total project cost and factored I= the payback period. This order will authorize executing Me necessary lease/purchase agreements to allow this project M proceed. Department Head Manager's Comments: City Manager Associated Information: Budget Approval: IRA Finance Director Passage _X First Reading Page _ of _ Referel to Finance 11-3- 1115 p.m. 08 343 Assigiwd b Councilor Stoue October 27, 20M F�enm,ra•^V CITY OF BANGOR (TITLE.) ORDER, Authorizing Execution of Lease/Purchase Agreements for Various School Energy Conservadon Measures. WHEREAS, over recent years, the City has experienced a dramatic increase In the cost of energy in As municipal and school facilities, increases that have placed a strain on the CiWs 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 consenation 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 panel 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 Consenabon Contracts'), a recommendation that was endorsed by the Finance Committee; and WHEREAS, it is essential to proceed with the Energy Conservation Projects (defined below) contemplated by the Energy Conservation Contracts in order to obtain the projected economic and enNronmental 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 Oty and subject to final review and approval by the Finance Committee of the City Council, be and hereby is authorized to emo to antl diver one or more lease purchase agreements (the "Lease Agreements') with Honeywell Global Finance LLC (or such offer appropriate lease financing company as the Finance Director shall approve), (the"Lessor") to install, construct, and accomplish energy conservation improvements as more specifcally Identified in the Energy Conservation Contracts (the "Energy Conservation Projects') at various school buildings and fadl'hies throughout the City and identified in the Energy Conservation Contracts. 2. The Lease Agreements be in an aggregate stated principal amount not to exceed $2,656,520 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 farm and contain such other hand and conditions, including Indemnification provisions and provisions for early 08 343 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 Proje=will a[ all times be used In connection with the City's governmental, school related, and proprietary purposes and functions and are in the best interests "a 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 geheml public. 4. The completion of the Energy Conservation Projects, under the terms and conditions contemplated hereby, is necessary, convenient, in the furtherance of the City's governmental, school related, and proprietary purposes and functions. 5. 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 tease Agreements) (the "Financing Documents'), which Financing Documents and certificates shall be in such form and contain such terms and conditions, not inconsistent herewith, as may be approved by the Finance Director, such approval to be conclusively evidenced by her execution thereof. 6. The finance Director be and hereby is authorizetl and directed to covenant and certify on behalf a 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 Section 148 of the Internal Revenue Code of 1986, as amended (the "Code-). 7. The Finance Director and Treasurer of the City be and hereby are authorized to covenant agree, and certify on behalf of the City for the benefit of the Lessor under the Lease Agreements Mat the City will file any required reports and take any other action that may be necessary or appropriate to ensure that interest pald pursuant to Me lease Agreements will remain exempt from federal income taxation, including without lImitation, the filing a information realms and reports with the Internal Revenue Service and the payment of any rebate due to the un ced States of Amenca, and that the City will retain from taking arty soon that will cause Interest paid pursuant to the Lease Agreements to be subject to federal income taxation. S. The City certifies that it has not issued or effected the issuance of, and reasonably aMcipates that it shall not issue or effect the issuance of, come 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 France Director to designate to the extent permissible with the advice of 9oM Counsel the lease Agreements as a "qualified tax-exempt obligation," as defined by Section 265(b)(3) of the Code. 9. The France Director, Mayor, and Berk and other proper officials of Me City (the "Authorized be and hereby are authorized and empowered In its name and on its behalf to do or cause to be dance all such acts and things as may be I9 343 necessary or desirable in order to effect the execution and delivery of me Lease Agreements in accordance with the terns 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 far such official with the same force and effect as H such official had himself/herself performed such act. It. The CiWs payment obligations under the Lease Agreements shall not be a general obligation of the City but shall be subject to annual appropriation by the City Council. 12. All Mons of the City previously mom to effectuate the Lease Agreements are hereby approved, rabfled, and authorized pursuant to and in accordance with the transactions contemplated by the tease Agreements. pqircin -,+L COumcn ,g, October Y7—,2008 ReadingPirontl eva Refet dtot Referred m the Finance 0 ee Meeting 0 H Dse H' ITY d�N ,I (IiI W puthocieinq ffiecutlon of turchaee dgre®encs for Various School Energy Connery.tion Meeauree IM Cin COMM November 10. 2008 Motion !lade and Seconded fa aesnge li e to nnlpea to Cvunpptimr—,L/A uCM 11 �n„u S,re� M,wrc = 9L rt w nnena nNlewn imq ervnnenu w4 NoemW M W �wiweimia.eMW M. aM ft Mme vnaa� di.W IhI "bl bftfl� -11 mw ovx�i M.®wAw�blkineYµm4.wlw me air. m. 31, eoe.GMQSY