HomeMy WebLinkAboutWORK SESSION - GESP O� PRION
U 4646 Dakota Street SE
Prior Lake,MN 55372
IVNESO-0,
CITY COUNCIL WORK SESSION REPORT
MEETING DATE: OCTOBER 27, 2014
PREPARED BY: KATY GEHLER, PUBLIC WORKS DIRECTOR
PRESENTED BY: KATY GEHLER, PUBLIC WORKS DIRECTOR
AGENDA ITEM: GUARANTEED ENERGY SAVINGS PROJECT (GESP)
DISCUSSION: Introduction
The purpose of this item is to review the proposed Guaranteed Energy
Savings Program and have the Council provide feedback on developing the
final project.
At the August 11, 2014 Work Session Honeywell presented the preliminary
Investment Grade Audit Report for the Guaranteed Energy Savings
Project. There was some discussion about the financing of the 15 year
project and impact on the existing Facilities Management Plan (FMP). In
addition the Council expressed a desire to see a 10- year financing option.
Since the Work Session staff has been working through financing for the
project including obtaining lease proposals. Assistance has been sought
from Peter Berger with the State's Department of Commerce related to the
State's interpretation of the statutes that govern the use of their program.
Peter has been most helpful navigating these rules and providing
assistance to the City.
If you recall, there are three state statutes that provide the authority to state
agencies (16C.144), educational institutions (123B.65) and municipalities
(471.345) to complete GESP projects. The state recently developed a
process under Statute 16C.144, including contracting documents that was
made available to municipalities. Through the review of the state program
a few differences were identified between the state and municipal statutes
in how the funding and cash flow can be accomplished. Staff will review
these differences at the meeting.
The GESP project consists primarily of a number of replacements identified
in the City's Facilities Management Plan (FMP). Through the auditing
process a suite of these projects has been recommended to be included in
the GESP contract that capture energy savings or are linked to projects
that provide energy savings. Staff will review the proposed project with the
Council at the work session along with the proposed financing.
In addition the project was evaluated with a 10-year financing term. By
changing the term of the financing, either the total project cost would have
to be reduced or additional capital would have to be added to allow it to
Phone 952.447.9800 / Fax 952.447.4245/www.cityofpriorlake.com
cash flow. The attached presentation notes the project differences and
provides a summary of the savings and capital that will be needed to cash
flow the project.
Staff will be seeking direction from the council as to which option to further
develop into a contract. Note that if the City does not move forward with a
GESP contract, the projects will remain the FMP and be financed through
more traditional methods (i.e. bonding, tax levy, etc.).
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