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8A - GESP Contract Approval
O� PRION U 4646 Dakota Street SE Prior Lake, MN 55372 so- CITY COUNCIL AGENDA REPORT MEETING DATE: DECEMBER 8, 2014 AGENDA#: 8A PREPARED BY: KATY GEHLER, PUBLIC WORKS/NATURAL RESOURCES DIRECTOR PRESENTED BY: KATY GEHLER AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION ENTERING INTO A COW TRACT WITH HONEYWELL ESG FOR A GUARANTEED ENERGY SAVINGS PERFORMANCE (GESP) CONTRACT, ENTERING INTO A LEASE AGREE- MENT WITH US BANK, AND TERMINATING THE JOINT POWERS AGREE- MENT WITH THE STATE OF MINNESOTA RELATED TO ENERGY PERFOR- MANCE CONTRACTING DISCUSSION: Introduction The purpose of this agenda item is for the City Council to consider entering into a contract with Honeywell ESG to perform a GESP contract. In addition the res- olution approves the lease agreement with US Bank to finance the project and terminates the Joint Powers Agreement with the State. History Staff has been working with Honeywell ESG to evaluate projects city wide that have energy savings associated and could be accomplished under a Guaran- teed Energy Savings Program contract. 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 recom- mended to be included in the GESP contract that capture energy savings or are linked to projects that provide energy savings. These projects were reviewed at the October 28, 2014 council work session. The City Council also amended the Facilities Management Plan on November 24, 2014 to reflect the intention of using the GESP program to accomplish several of the planned projects. Current Circumstances Staff has been working with Honeywell, the City Attorney, and our financial ad- visors to prepare the contract documents to move forward with the project. There are two documents the City Council is being asked to approve. 1) The first approval requested is a contract with Honeywell ESG that defines the projects to be completed, stipulates the energy savings to be guaran- teed, and defines the measurement and verification procedures for the life of the contract which is 10-years. The following projects are included in the GESP: • Citywide Lighting Upgrades -Lighting retrofit&fixture replacement(in- terior & exterior), Lighting controls , where applicable, Memorial Park Field Lighting, Traffic signal LED installation, City Hall emergency lighting replacement • Citywide Building Controls Upgrades — Re-commission existing DDC controls systems; modify setpoints & strategies (City Hall, Police), ex- pand DDC systems to provide energy savings and improved operation of HVAC systems (Fire Station#2). Install new systems, where applicable, to allow for citywide remote monitoring (Maintenance Center, Fire Station #1) • Chiller Plant Improvements & Install isolation damper— City Hall • Citywide Building Envelope - Weather strip & seal doors, windows & roof-to-wall junctions • VAV Occupancy Sensors— City Hall, Library, Police Station • Rebalance AHU's — City Hall, Library, FS #1, Maintenance Center, Po- lice Station • Overhead Door Replacement & Controls — Maintenance Center, FS #1 • Replace infrared heaters - Maintenance Center, FS #1 • Replace AHD's— Maintenance Center, FS#1 • Replace MUA Units - Maintenance Center, FS#1 • Replace Boiler— Library Once the contract is approved, the work will commence with a kick-off meet- ing being held with the project management team late December 2014. The work is anticipated to be completed in 12-18 months. 2) The second Approval requested is a lease agreement with US Bank which provides the financing for the$2.67 million project. Financing for the project will be take advantage of 2.119% interest rate with a 10-year payback term. The first payment will be December, 2015. In addition to approving the contract documents, it is also recommended for the Council to terminate the Joint Powers Agreement that is in place with the State of Minnesota. The City entered into this agreement early in the process antici- pating the use of the state's authority for Guaranteed Energy Savings Projects under statute §16C.144. However, it was found that there is more flexibility for financing the project using authority granted to municipalities under statute §471.345. Staff reviewed the differences at the October 27, 2014 work session which are summarized below. State GESP — MS 16C.144 Muni — MS 471.345 Master Contract and Work Order Directly negotiated contract docu- documents developed under State's ments purchasing rules and oversight Capital Cost buy-down allowed Capital Cost buy-down allowed from budgeted funds from planned (CIP) funding Annual Capital Cost Avoidance lim- Annual Capital Cost Avoidance not ited to budgeted amounts per es- addressed tablished state guideline Savings Guarantee requires sav- Savings Guarantee typically allows ings be met each year of the guar- excess savings to be carried for- antee ward 2 Although this action is not necessary for the City to move forward with the con- tract under 471.345, it provides clarity with the City's intent to no longer use the state's program for this project. Conclusion The Council should consider approving the resolution which approves the con- tract with Honeywell ESG, approves the lease agreement with US Bank, and terminates the JPA with the State of Minnesota. ISSUES: The City owns eight building facilities with four of them starting to require more significant maintenance and replacements. In 2011 the City completed the Fa- cilities Management Plan which documented the impending projects to allow City officials to be systematic in scheduling and funding these improvements. Many of these projects will impact electricity usage and will produce energy sav- ings. In light of this staff reviewed the GESP program as an option for complet- ing the projects in a timelier manner with minimal financial impact to the tax levy. FINANCIAL As part of the review of the GESP and the Investment Grade Audit that was IMPACT: conducted, staff identified a suite of projects in the FMP and other capital plans that has been recommended to be included in the GESP contract. These pro- jects capture energy savings or are closely linked to projects that provide energy savings. The GESP project will be financed with an equipment lease with the payments being made from three sources: energy rebates, energy/operational savings and capital cost avoidance. The Council expressed interest in pursuing a 10-year lease term for the $2.67 million in projects that includes an estimated $151,000 annual capital cost avoid- ance contribution. This will have an impact on the tax levy starting in 2016. The remaining projects in the FMP will be funded by the issuance of bonds, contributions from the Water Fund and Sewer Fund and the property tax levy. When evaluating the impact on the tax levy for the GESP and the remaining projects in the FMP, staff estimated that the City would levy approximately $950,000 less during the period 2015-2024 than it would have if the City had not utilized the GESP approach. Originally, the first payment of the lease agreement was anticipated to be sched- uled in 2016. Based on a December 19, 2014 closing date for the Lease Agree- ment, the first payment will be scheduled for December, 2015. Staff reasonably expects to receive approximately $69k in energy rebates in 2015 which were a planned funding source for repaying the lease. There is uncertainty regarding the amount of energy/operational savings that will be realized in 2015; therefore, staff does not recommend relying on this exclusively as a funding source for this first payment. Rather, staff recommends transferring funds from the Facilities Management Fund to cover the remaining portion of this first lease payment which would be approximately $81k. 3 2015 Budget Impact Staff has incorporated the capital improvement expenditures, energy rebates, debt service payments and the transfer of funds into the 2015 proposed budget that the Council is considering for approval this evening. This impacts the Fa- cilities Management Fund and the Debt Service Funds. The capital lease pro- ceeds will actually be received in 2014; therefore, the 2015 budget will reflect a planned use of reserves in 2015 to fund the GESP expenditures ALTERNATIVES: The following alternatives are available to the City Council: 1. Approve a resolution entering into a contract with Honeywell ESG, entering into a lease agreement with US Bank, and terminating the JPA with the State of Minnesota; 2. Table the Resolution for a specific reason. 3. Deny the Resolution and provide staff with additional direction. RECOMMENDED Alternative#1 MOTION: REPORTS 1. Resolution ATTACHED 2. Honeywell ESG Contract (To be distributed 12/5,2014) 3. US Bank Lease Agreement (To be distributed 12/5,2014) 4 o� PRION ti U 4646 Dakota Street SE XEs00 Prior Lake,MN 55372 RESOLUTION 14-xxx ENTERING INTO A CONTRACT WITH HONEYWELL ESG FOR A GUARANTEED ENERGY SAVINGS PERFORMANCE (GESP)CONTRACT, ENTERING INTO A LEASE AGREEMENT WITH US BANK,AND TERMINATING THE JOINT POWERS AGREEMENT WITH THE STATE OF MINNESOTA RELATED TO ENERGY PERFORMANCE CONTRACTING Motion By: Second By: WHEREAS, Under Minnesota Statues§471.59, the city is empowered to enter in agreements with other governmental units to jointly or cooperatively exercise any power common to the contracting powers or similar powers, as deemed necessary; and WHEREAS, The City of Prior Lake entered into a Joint Powers Agreement to utilize the Minnesota Department of Commerce's Guaranteed Energy Savings Program (the State's Program) under Minnesota Statue §16C.144 as a contracting option for guaranteed energy savings projects; and WHEREAS, The City of Prior Lake entered into a work order contract with Honeywell ESG under the State's program to complete an Investment Grade Audit of the facilities within the City ; and WHEREAS, The Investment Grade Audit identified a suite of projects (the Project) that have energy savings associated with them; and WHEREAS, Under Minnesota Statues §471.345, Subdivision 13, the city is empowered to enter into a guaranteed energy-savings contract with a qualified provider to significantly reduce energy or operating costs; and WHEREAS, The City wishes to implement the Project under the authority granted to the city under Minnesota Statue §471.345, Subdivision 13; and WHEREAS, The City has prepared a Guaranteed Energy Savings Contract with Honeywell ESG incorporated by reference; and WHEREAS, In accordance to the MS §471.345, Subdivision 13, notice was published in the Prior Lake American on December 6, 2014 of the City's intent to enter into a Guaranteed Energy Savings Contract; and WHEREAS, The City has solicited proposals for financing the project with a lease agreement; and WHEREAS, The City has prepared a lease agreement with US Bank to provide financing for the project. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The City Council hereby terminates the Joint Powers Agreement with the State of Minnesota to utilize the State's Program and directs staff to provide notice of the termination to the State as required by the JPA. 3. The City Council hereby approves a contract with Honeywell ESG for the completion of a Guaranteed Energy Savings Contract for the amount of$2,667,924. 4. The City Council hereby approves a lease agreement with US Bank for an amount of$2,667,924 to be financed over 10 years at an interest rate of 2.119%with payments to be made semiannually. 5. The Mayor and City Manager are hereby authorized to sign the above mentioned agreements on behalf of the City of Prior Lake, 6. Project costs will be recorded in the Facilities Management Fund for the Project. 7. Proceeds from the lease agreement will be deposited in the Facilities Management Fund. PASSED AND ADOPTED THIS 8T" DAY OF DECEMBER 2014. VOTE Hedberg Keeney McGuire Morton Soukup Aye ❑ ❑ ❑ ❑ ❑ Nay ❑ ❑ ❑ ❑ ❑ Absent ❑ ❑ ❑ ❑ ❑ Abstain ❑ ❑ ❑ ❑ ❑ Frank Boyles, City Manager 2 Energy Services Agreement City of Prior Lake December 8, 2014 Contract Energy Services Agreement 1 Schedule A: Scope of Work 18 Schedule B: Payment Schedule 37 Schedule C: Certificate of Completion 39 Schedule D: Base Year 40 Schedule E: Performance Guarantee 41 Schedule F: Service Agreement 44 Schedule G: Client/HESG Responsibilities 50 Schedule H: Performance and Payment Bonds 52 Exhibits 54 Exhibit 1.0 Guarantee Summary 55 Exhibit 2.0 Space Occupancy and Utilization 66 Exhibit 3.0 Energy Management System and Controls 71 Exhibit 4.0 Other Control Improvements 103 Exhibit 5.0 Lighting System Improvements 119 Exhibit 6.0 Mechanical System Improvements 138 Exhibit 7.0 Building Envelope/Air Leakage 158 Exhibit 8.0 Building Envelope Floor Plans 165 ENERGY SERVICES AGREEMENT This Energy Ser December 8, 2014 by and between Honeywell Building Solutions SES Corporation, a Delaware corporation acting through its HESG by Honeywell business unit, having its offices at 1985 Douglas Drive North, Golden Valley, Minnesota 55422Hthe City of Prior Lake, a Minnesota municipal corporation ), having its principal offices at 4646 Dakota St SE, Prior Lake, MN 55372, for the purpose of furnishing certain equipment and work designed to reduce energy consumption and operational costs at the premises identified in Schedule A and guaranteeing a minimum level of energy and operational savings within the Premises per Schedule E. HESG respectively. ARTICLE 1 - THE WORK AND PAYMENT Article 1.01. Scope. HESG will provide Client with the work and services identified on Schedule A of this Agreement (Work and Services). HESG shall supervise and direct the Work and Services and shall be solely responsible for all construction means, methods, techniques, sequences, and procedures and for coordinating all portions of the Work and Services under this Agreement. HESG shall be responsible to pay for all labor, materials, equipment, tools, construction equipment and machinery, transportation, and other facilities and services necessary for the proper execution and completion of the Work and Services, whether temporary or permanent and whether or not incorporated or to be incorporated in the Work or Services. Excluded from the Work and Services are any modifications or alterations to the Premises (not expressly included within the Work or Services as defined) that may be required by operation of the Americans with Disabilities Act or any other law or building code(s). Article 1.02 Schedule . The Work and Services to be performed under this Agreement shall be commenced immediately after execution of this Agreement . The Work and Services shall be substantially completed within fourteen months of the Commencement Date. Article 1.03. Price and Payment. (a) The total price for the Work and Services is $2,677,924.00 (b) HESG shall obtain at least two quotes or bids for any Work and/or Services not provided directly by HESG and Client shall have the right to reject any such quote or bid sole discretion. (c) The maximum total markup for overhead and profit that HESG may apply to direct purchases of material, equipment and subcontracts under this Agreement is 33%. (d) If the total awarded quotes and bid plus permitted markups sthe project exceed the cost of the project as estimated by HESG in its proposal , HESG shall be responsible for payment of the difference between the Awards and the Estimate. If the Awards are less than the Estimate, the Client shall receive a credit against the Agreement Price for the difference between the Estimate and the Awards. Any such credit to Client may be used to reduce the amount owed under the Agreement Price and/or to add additional work to the Work and Services. 1 City of Prior Lake ESA Honeywell Energy Services Group December 2014 (e) HESG shall submit to the Client, on a monthly basis, an itemized invoice for Work and Services performed under this Agreement. Such invoices shall be accompanied by documentation supporting all Work and Services invoiced including but not limited bids and invoices for all Work and/or Services not provided directly by HESG. Invoices submitted shall be paid within 35 days of receipt of such invoice. For reimbursable expenses, if provided for in the Agreement, HESG shall provide an itemized listing and such project number and a progress summary showing the original (or amended) amount of the contract, current billing, past payments and unexpended balance of the contract. (f) To receive any payment on this Agreement, the invoice or bill must include the following alty of perjury that this account, claim, or (g) Client shall retain ten percent of the Agreement Price for retainage until final completion of the Work and Services including all punch list items. (h) Final payment , constituting the entire unpaid balance for the Work and Services and the retainage, shall be made to HESG within 30 days after Final Completion of the Work and Services and acceptance of the Work and Services by the Client in writing. The acceptance of Final Payment shall constitute a waiver of all claims by HESG except those previously made in writing and identified by HESG as unsettled at the time of application for Final Payment. No Final Payment shall be made to HESG until HESG has provided satisfactory evidence to the Client that HESG and each of its subcontracts has complied with the provisions of Minn. Stat. Section 290.92 relating to withholding of income taxes upon wages. A certificate by the Commissioner of Revenue shall satisfy this requirement. (i) Payments may be withheld on account of any breach of this Agreement by HESG and claims by third parties (including HESG subcontractors and material suppliers), but only to the extent that written notice has been provided to HESG and HESG has failed, within ten (10) days of the date or receipt of such notice, to provide adequate security to protect Client from any loss, cost, or expense related to such claims. Article 1.04 Condition and Inspection. All goods and other materials furnished under this Agreement shall be new and in current manufacture, unless otherwise specified, and all goods and Work and Services shall be of good quality, free from faults and defects and in conformance with this Agreement. All goods and Work and Services not conforming to these requirements shall be considered defective. Goods shall be subject to inspection and testing by the Client. Defective goods or goods not in current manufacture may be returned to HESG at HESG Article 1.05. Final Completion. HESG that the Work and Services are ready for final inspection and acceptance, Client and HESG shall inspect the Work and Services and determine whether the same has been performed in accordance with this Agreement. If Client considers the Work and Services to have been performed in accordance with this Agreement, Client shall issue a Certificate of Substantial Completion and Acceptance, as defined in Schedule B and substantially in the form attached hereto as Schedule C. Article 1.06. Delays. If HESG is delayed in the commencement or completion of any part of the Work or Services due to events beyond HESG HESG 2 City of Prior Lake ESA Honeywell Energy Services Group December 2014 (including but not limited to fire, flood, labor disputes, unusual delays in deliveries, unavoidable its obligations under this Agreement or to cooperate with HESG in the timely completion of the Work and Services, then HESG will notify Client in writing of the existence, extent of, and reason(s) for such delay(s). HESG and Client may equitably adjust the Agreement Price and/or extend the contract time by change order, for such reasonable time, as they may agree. Article 1.07. Equipment Location and Access. Client shall provide mutually satisfactory rent-free space for the installation and operation of the items referred to in Schedule A and shall protect the Equipment, in the same careful manner that Client protects its own property. Client shall provide access to the Premises for HESG and its contractors or subcontractors during regular business hours, or such other hours as may be requested by HESG and reasonably acceptable to Client, to install, adjust, inspect, maintain and repair the Equipment and to otherwise complete the Work and Services and other duties and responsibilities under this Agreement. HESG shall have free access to the Premises to correct any emergency condition. Article 1.08. Right to Inspect the Work and Services. Client or any of its representatives shall at all times have the right to inspect the Work and Services. Article 1.09. Manuals and Drawings. HESG shall provide equipment manuals, as-built drawings and other appropriate information regarding the Equipment installed to Client prior to Final Payment. Article 1.10. Permits and Governmental Fees. HESG shall be responsible for obtaining all permits and related permit fees associated with the Work and Services. HESG shall pay sales, consumer, use, and other similar taxes and shall secure and pay for the building permit and other permits and governmental fees, licenses, and inspections necessary for proper execution of the Work and Services. The Client shall be responsible for securing any necessary approvals, easements, assessments, or zoning changes and shall be responsible for real estate and personal property taxes where applicable. Article 1.11. Concealed or Unknown Conditions. In the performance of the Work and Services, if HESG encounters conditions at the Premises that are (i) subsurface or otherwise concealed physical conditions that differ materially from those indicated on the drawings or (ii) unknown physical conditions of an unusual nature that differ materially from those conditions ordinarily found to exist and generally recognized as inherent in construction activities of the type and character as the Work and Services (c, HESG shall notify Client of such Conditions promptly, prior to significantly disturbing the same, and in no event later than fourteen (14) days after first observing the Conditions. If such Conditions differ materially and cause an increase in HESG required for, performance of any part of the Work and Services, HESG and Client may mutually agree that HESG may be entitled to a Change Order or an equitable adjustment in the Agreement Price. Article 1.12. Damage to Equipment; Casualty or Condemnation of Premises. Any fire, flood, other casualty or condemnation affecting any portion of the Premises may affect the Savings Guarantee as defined in section 2.01. HESG shall notify Client of such effect and HESG and Client may mutually agree to a modification of the Utility Base Use as defined below. If any fire, flood, other casualty, or condemnation renders a majority of the Premises incapable of being occupied or destroys a substantial part of the area(s) within which the Work and Services is to be performed, HESG may terminate this Agreement by delivery of a written notice to Client. If any significant item of Equipment is irreparably damaged by the negligence or willful misconduct of an employee, agent or invitee of Client, or is destroyed or stolen, and if Client fails to repair or replace said item within a reasonable period of time, 3 City of Prior Lake ESA Honeywell Energy Services Group December 2014 HESG may terminate this Agreement by delivery of a written notice to Client. Client shall pay HESG for all parts of the Work and Services furnished to the date of termination. Article 1.13. Cleanup. HESG shall keep the Premises and the surrounding area free from accumulation of waste materials or rubbish caused by the Work or Services and, upon completion of the Work and Services, HESG shall remove all waste materials, rubbish, tools, construction equipment, machinery, and surplus materials. Article 1.14. Safety. HESG shall be responsible for initiating, maintaining, and supervising all safety precautions and programs in connection with the performance of the Work and Services. HESG shall comply with all applicable laws, ordinances, rules, regulations, and lawful orders of public authorities related to safety of persons or property. Article 1.15. Subcontractor. HESG shall pay any subcontractor involved in the performance of the Work and/or Services within ten (10) days of HESG's receipt of payment by the Client for undisputed services provided by the subcontractor. If HESG fails within that time to pay the subcontractor any undisputed amount for which HESG has received payment by the Client, HESG shall pay interest to the subcontractor on the unpaid amount at the rate of 1.5 percent per month or any part of a month. The minimum monthly interest penalty payment for an unpaid balance of $100 or more is $10. For an unpaid balance of less than $100, HESG shall pay the actual interest penalty due to the subcontractor. A subcontractor who prevails in a civil action to collect interest penalties from HESG shall be awarded its costs and disbursements, including attorney's fees, incurred in bringing the action. Article 1.16. Upgrading or Altering the Equipment. HESG shall have the right to replace, delete or substantially alter any item of Equipment, add additional Equipment, revise any procedures described in Schedule A, or take other energy savings actions, subject to the Client approval shall not be unreasonably withheld, delayed or conditioned. All replacements, deletions, substantial alterations, or additions of equipment or revisions to the prescribed procedures shall be described in an additional schedule to be attached hereto. Replacements, substantial alterations, or additions of Equipment shall belong to and become the property of Client, and shall be part of the Equipment for purposes of this Agreement. ARTICLE 2 PERFORMANCE GUARANTEE Article 2.01. Savings Guarantee. HESG guarantees (as detailed in Schedule E and hereinafter referred to as ) that the Total Energy Savings and Operational Savings (each as defined during the 10 year term of the guarantee Termwill be at least equal to the costs incurred by Client in payment of the Agreement Price less the , and costs for HESG to perform services to measure and verify those energy conservation measures more fully described in Schedule F (M&V Services Costs. The Agreement Price less the capital contributions, Project Financing Costs and M&V Services Costs are collectively referred to as the Project CostsIn the event that the Total Actual Savings realized by Client are less than the Project Costs during the Guarantee Term, HESG will, as specified within Article 2.08, remit an amount equal to such deficiency to Client. Article 2.02. Total Energy Savings. TotalEnergy Savings are those savings achieved through reduction in energy cost or demand use. Total Energy Savings includes a combination of Measured and Verified Energy Savings, and the Pre-Agreed Energy Savings both as further described below. 4 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Schedule E and its Exhibits. Article 2.03 Pre-Agreed Energy Savings. Client and HESG agree that as a direct result of the Work and Services the Pre-Agreed Energy Savings detailed in Schedule E are satisfied upon contract execution and shall be credited each Guarantee Year during the Term. HESG will start recording Pre- Agreed Energy Savings upon installation of each piece of energy savings Equipment. Article 2.04. Measured and Verified Energy Savings. Measured and Verified Energy Savings shall be calculated using the Base Utility Use and the Base Utility Rates. Base Utility Useis the projected energy usage as shown in Schedule E and its ExhibitsBase Utility Rates rates in effect for each facility as of the date of this Agreement as shown in Schedule E and its Exhibits. Each year the savings will be calculated using the actual applicable rates or the Base Utility Rates multiplied by the annual escalation factor of 4%, whichever is larger. The Base Utility Rates will be used as the floor price for the Guarantee Term and shall be the lowest rate used to calculate energy savings in the event of a utility rate decrease. Article 2.05. Operational Savings. Client and HESG agree that, as a direct result of Work and Services, the parties stipulate that the perational Savings detailed in Schedule E are satisfied upon execution of this Agreement and shall be credited to the Guarantee Term. Article 2.06. Capital Contribution and Rebates. Client and HESG agree that, as a direct result of the Work and Services, the amounts representing capital cost avoidance and energy rebates that will be applied to the Work and Services are satisfied upon contract execution and shall be credited to the project funding and/or Project Costs. Article 2.07. Disputes. In the event HESG and Client disagree as to the Total Actual Savings in any year during the Guarantee Term, resolution of such disagreement will be negotiated in good faith by the parties. If such disagreement is not resolved within sixty (60) days after the end of the time period in respect to which the disagreement arises, HESG and the Client may submit the dispute to the dispute resolution mechanism(s) set forth in Article 12.01 of this Agreement. Article 2.08. Guarantee Reconciliation. Within sixty (60) days after the final month of each calendar year of the Guarantee Term, HESG will determine the Total Actual Savings for the immediately preceding period. Within 30 days after completion of the reconciliation activities, HESG will deliver to Client a report detailing the reconciliation calculations and results for the current calendar year Within sixty (60) days after the final month of the Guarantee Term HESG shall provide an Annual Guarantee Report for the final year and a summary of all Annual Guarantee Reports for the Guarantee Term. If the Total Actual Savings exceed the Project Costs over the Guarantee Term, the Savings Guarantee shall be considered satisfied. If the Project Costs exceed the Total Actual Savings over the Guarantee Term, HESG shall pay the Client the difference. Such payment shall accompany the summary of Annual Guarantee Reports. Article 2.09. Adjustments. HESG, with mutual consent of Client, shall be allowed to make adjustments to the Utility Base Use using standard and sound engineering principles as follows: (a) Building Occupancy Hours: The hours the Premises are occupied and/or equipment and lighting is utilized is a variable which will be adjusted for if the number of hours rises or drops more than 10% from the quantity identified in Schedule E and its Exhibits. HESG will utilize energy management systems to monitor and verify hours of equipment operation. Buildings without 5 City of Prior Lake ESA Honeywell Energy Services Group December 2014 staff as specified in Schedule G. (b) Building Changes: Energy software models and energy saving calculations will be adjusted to account for any building square footage changes, major remodeling, and addition of equipment or change in usage. Client agrees to contact HESG within five (5) days of any changes or additions of equipment or environments that may affect the energy consumption associated with the buildings. (c) New Information: At HESG or otherwise not readily available at the time the Utility Base Use was prepared. Article 2.10. Client Responsibilities. Client agrees to perform the following tasks in addition to those referenced in Schedule G of this Agreement: (a) Maintain and/or Replace Equipment: Properly maintain and/or replace all energy consuming equipment that is being repaired, replaced or modified as a result of the Work and Services identified in Schedule A, or that will have an impact on HESG Schedule E with equipment of equal or better energy and operational efficiencies. If Client fails to maintain and/or replace such equipment, HESG may, after providing Client thirty (30) days advance notice, adjust the Utility Base Use during the period in which such savings were affected to reflect the impact such actions had on such savings. (b) Correct Problems and Provide Notification: Promptly provide HESG notice of system and building changes which impact the Work and Services identified in Schedule A, or will impact HESG (c) Log Meters: Log any utility meters as directed by HESG. (d) Telephone Service: Provide dial-up telephone line access to the energy management system for remote monitoring. (e) Energy Management System: Program trends, tantalizations, and points logs as requested by HESG. Compare energy management system data to targets to ensure savings strategies are working. Provide custom energy management system status reports to HESG for guarantee reconciliation. Article 2.11. Independent Audit. Within thirty (30) days following HESG delivery of the Annual Guarantee Report to Client, Client shall have the right to seek an independent audit, by a qualified auditor, of the savings calculations in the Annual Guarantee Report Client shall notify HESG in writing of its intent to obtain an Independent Audit, and Client shall bear in full the cost of the Independent Audit. Exercising its right to obtain an Independent Audit shall in no way relieve Client of its continuing obligation to make current payments pursuant to this Agreement. Any dispute arising from or related to the Annual Guarantee Report or Independent Audit shall be resolved in accordance with the dispute resolution procedures set forth in this Agreement. Failure of Client to notify HESG of its intent to obtain an Independent Audit in accordance with this provision shall Annual Guarantee Report. Annual Guarantee Reports accepted by Client shall not be subject to subsequent Independent Audits. ARTICLE 3 - The Parties acknowledge and agree that the projected Total Actual Savings may not be obtained unless certain 6 City of Prior Lake ESA Honeywell Energy Services Group December 2014 procedures and methods of operation designed for energy conservation are implemented and followed by Client on a regular basis. Client agrees that it shall adhere to, follow, and implement the procedures set forth on Procedures in ScheduleG. If Client fails to perform the Checklist Procedures HESG may, after providing Client thirty (30) days advance notice, adjust the Utility Base Use during the period in which such savings were affected to reflect the impact such actions had on such savings. Article 3.02. Compliance with Checklist Procedures. HESG shall have the right, with prior notice to Checklist Procedures. Client shall have the right to witness each inspection and completion of the Checklist Procedures. For the purpose of determining such compliance, the Checklist Procedures shall be completed and approved by Client and HESG compliance with the Checklist Procedures. In the event any inspection discloses that Client has failed to comply with any of the Procedures, HESGSavings Guarantee shall be reduced by the excess of (a) the actual energy consumed by Client based on such failure or (b) the energy that would have been consumed had Client fulfilled its responsibilities identified in Schedule G. The excess savings shall be calculated using the appropriate calculation in the respective exhibit. If good faith negotiations between HESG and Client cannot resolve any calculation discrepancies, HESG and Client will have the option to have an Independent Audit performed per Article 2.11. Article 3.03. Actions by Client. Client shall maintain the Premises, the Equipment and all existing mechanical and electrical systems, equipment and other energy consuming systems located on the Premises in good repair, in the same or better condition, reasonable wear and tear excepted, as existed prior to the Work and Services, and to protect and preserve the building envelope and the operating condition and standard of performance of all mechanical and electrical systems, and Equipment and other energy consuming systems located on the Premises. Client shall notify HESG within 5 days of any modification to the Equipment. If Client fails to satisfy its obligations in Schedule G, HESG Savings Guarantee shall be reduced by the excess of (a) the actual energy consumed by Client based on such failure or (b) the energy that would have been consumed had Client fulfilled its responsibilities in Schedule G. The excess savings shall be calculated per the appropriate calculation in the respective exhibit. If good faith negotiations between HESG and Client cannot resolve any calculation discrepancies, HESG and Client will have the option to have an Independent Audit performed per Article 2.11. Article 3.04. Damage to or Destruction of Equipment. If any significant item of Equipment is irreparably damaged by the negligence or willful misconduct of an employee of the Client, destroyed, or stolen, and if Client fails to repair or replace said item within a reasonable period of time, not to exceed 120 days, Savings Guarantee shall be reduced by the excess of (a) the actual energy consumed by Client based on such damage or failure or (b) the energy that would have been consumed had Client repaired or replaced the Equipment. The excess savings shall be calculated per the appropriate calculation in the respective exhibit. If good faith negotiations between HESG and Client cannot resolve any calculation discrepancies, Client will have the option to have an Independent Audit performed per Article 2.11 Article 3.05. Representations and Warranties of Client. Client hereby warrants and represents to HESG that: (a) Client has provided HESG with all records requested by HESG, and the information set forth therein is, and all information in other records to be subsequently provided pursuant to this 7 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Agreement will be, true and accurate in all material respects, except as may be disclosed by Client in writing attached to this Agreement; (b) Client presently intends to continue to use, for a period at least equal to the Term, the Premises in a manner similar to its present use, except as may have been disclosed by Client in writing and attached hereto and made a part thereof. If a material change in the use of any of the Premises at the Premises, the parties agree to negotiate an appropriate adjustment to HESGSavings Guarantee; (c) Client is a Minnesota municipal corporation, duly organized, existing and operating under the constitution and laws of the state; (d) Client shall provide to HESG any other documents reasonably requested to consummate this Agreement or any schedule or attachment hereto as reasonably required under this Agreement; (e) Client has obtained all required governmental or other approvals, consents and authorizations required to execute, deliver and perform its obligations under of this Agreement; (f) There are no suits, actions or proceedings threatened or pending against Client, which would is Agreement; (g) Client has furnished (or caused its energy suppliers to furnish) to HESG, upon its request, accurate and complete data concerning energy usage for the Premises, including the following data for up to the most current thirty-six (36) month period or other mutually agreed to period less than thirty-six (36) months: utility records; occupancy information; descriptions of any changes in the building structure or its heating, cooling, lighting or other systems or energy requirements; description of all energy consuming or saving equipment used in the Premises; description of any major malfunction or abnormal operations at the Premises during such 36- month period; description utilized of energy management procedures presently utilized; and (h) Client will provide HESG with copies of any successor or additional contracts for management or servicing of preexisting equipment, which may be executed from time to time hereafter within ten (10) days after execution thereof. Any Client default of the aforementioned responsibilities will be resolved through the remedies identified in Article 10. ARTICLE 4 INSURANCE 4.01 Insurance. a. General Liability. Prior to starting the Work and/or Services, HESG shall procure, maintain and pay for such insurance as will protect against claims or loss which may arise out of operations by HESG or by any subcontractor or by anyone employed by any of them or by anyone for whose acts any of them may be liable. Such insurance shall include, but not be limited to, minimum coverages and limits of liability specified in this Paragraph, or required by law. b. HESG shall procure and maintain the following minimum insurance coverages and limits of liability for the Work and Services: Statutory Limits $500,000 each accident 8 City of Prior Lake ESA Honeywell Energy Services Group December 2014 $500,000 disease policy limit $500,000 disease each employee Commercial General Liability $5,000,000 property damage and bodily injury per occurrence $6,000,000 general aggregate $6,000,000 Products Completed Operations Aggregate $100,000 fire legal liability each occurrence $5,000 medical expense Comprehensive Automobile Liability $3,000,000 combined single limit each accident (shall include coverage for all owned, hired and non-owed vehicles.) c. Commercial General Liability. The Commercial General Liability Policy shall be on ISO form CG 00 01 12 07 or CG 00 01 04 13, or the equivalent. Such insurance shall cover liability arising from premises, operations, independent contractors, products-completed operations, personal and advertising injury, and liability assumed under an insured contract. There shall be no endorsement or modification of the Commercial General Liability form arising from pollution, explosion, collapse, underground property damage or work performed by subcontractors. d. y coverage is not available. e. as an additional insured on ISO forms CG 20 10 07 04 or CG 20 10 04 13; and CG 20 37 07 04 or CG 20 37 04 13, or their equivalent. f. All polices shall contain a waiver of subrogation in favor of the Client. g. All policies shall be primary and non-contributory. h. indemnity obligations assumed by HESG under this Agreement. i. HESG agrees to maintain all coverage required herein throughout the term of the Agreement and for a minimum of and Services. j. required herein. k. All policies shall contain a provision or endorsement that coverages afforded thereunder shall not be cancelled or non- prior notice to the Client, except that if the cancellation or non-renewal is due to non- 9 City of Prior Lake ESA Honeywell Energy Services Group December 2014 payment, the coverages may not be terminated or non- notice to the Client. l. HESG shall maintain in effect all insurance coverages required under this Paragraph at Minnesota and having a current A.M. Best rating of no less than A-, unless specifically accepted by Client in writing. and Declarations Page which evidence m. the compliance with this Paragraph, must be filed with Client prior to the start of and Services. Such documents evidencing Insurance shall be in a form acceptable to Client and shall provide satisfactory evidence that HESG has complied with all insurance requirements. Renewal certificates shall be provided to Client prior to the expiration date of any of the required policies. Client will not be obligated, however, to review such Certificate of Insurance, declaration page, Rider, Endorsement or certificates or other evidence of insurance, or to advise HESG of any deficiencies in such documents and n. If HESG fails to provide the specified insurance, then HESG will defend, indemnify and hold harmless the Client, the Client's officials, agents and employees from any loss, claim, liability and expense (including reasonable attorney's fees and expenses of litigation) to the extent necessary to afford the same protection as would have been provided by the specified insurance. HESG agrees that this indemnity shall be construed and applied in favor of indemnification. HESG also agrees that if applicable law limits or precludes any aspect of this indemnity, then the indemnity will be considered limited only to the extent necessary to comply with that applicable law. The stated indemnity continues until all applicable statutes of limitation have run. If a claim arises within the scope of the stated indemnity, the Client may require HESG to: i. Furnish and pay for a surety bond, satisfactory to the Client, guaranteeing performance of the indemnity obligation; or ii. Furnish a written acceptance of tender of defense and indemnity from HESG's insurance company. HESG will take the action required by the Client within fifteen (15) days of receiving notice from the Client. (a) Client shall be responsible for purchasing and and amount Client deems necessary and appropriate. (b) Client shall purchase and maintain, until Final Payment, property insurance for the Work and Services in progress at least in an amount equal to the Agreement Price, as the same may be adjusted from time to time, for the Work and Services (including the Equipment) on a replacement cost basis. Such property insurance shall include the interests of Client, HESG, and its subcontractors (as whatever tier). The property insurance purchased by Client shall be on an all-risk policy from and shall insure against the perils of fire and extended coverage and physical 10 City of Prior Lake ESA Honeywell Energy Services Group December 2014 damage or loss, including (without duplication of coverage) theft, vandalism, malicious mischief, collapse, false works, temporary buildings and debris removal, including demolition occasioned by enforcement of any applicable legal requirements. The property insurance shall cover portions of the Work and Services stored off site after written approval of Client at the value established in the approval and any Work and Services in transit. Client hereby waives all rights of subrogation against HESG and any of its subcontractors, agents, employees, and officers with respect to any damage to the property. (c) made payable to Client as a fiduciary for the insured's, as their respective interest may appear, subject to requirements of any applicable mortgagee clause. HESG shall pay its subcontractors their just shares of insurance proceeds received by Client, and, by appropriate agreements, written where legally required for validity, shall require said subcontractors to make payments to their subcontractors in a similar manner. In its fiduciary role, Client shall have the power to adjust and settle a loss with insurers; provided, however, that at least ten (10) days prior to agreeing to the proposed adjustment or settlement, Client shall advise the parties interest in writing of the terms of the same and the parties in interest shall have seven days thereafter to object in writing to the proposed adjustment or settlement; if such objection is made, Client shall not enter into or agree to the proposed adjustment or settlement and the parties shall proceed pursuant to Article 12.01. ARTICLE 5 - HAZARDOUS MATERIALS Article 5.01. Hazardous Materials; Environmental Requirements. The Work and Services may produce or reveal (imold, urea formaldehyde, hazardous wastes, hazardous materials or contaminants, (iii) lamps and ballasts . HESG is responsible for the storage, handling, use, transportation, treatment, disposal, discharge, leakage, detection, removal and contamination of all Hazardous Materials which are generated or brought onto the Premises by HESG. All other Hazardous Materials shall be the responsibility of the Client. Client shall remain the sole generator of any Hazardous Materials. Client agrees that if performance of the Work and Services involves any Hazardous Materials, HESG may perform or arrange for the performance of such Work and Services, which may include disposal of the Hazardous Materials, but HESG shall not take title to any such Hazardous Materials. ARTICLE 6 - INDEMNIFICATION AND LIMITATION OF LIABILITY Article 6.01. Indemnification. HESG and Client shall each indemnify, defend with counsel of its choice, and hold the other harmless from any and all claims, actions, costs, expenses, damages and death or bodily injury or damage to property of the other or other persons, to the extent arising out of or resulting from, breach of this Agreement and the negligence or misconduct of their respective employees or other authorized agents in connection with their activities within the scope of this Agreement. However, neither Party shall indemnify the other against claims, damages, expenses or liabilities to the extent attributable to the negligence or misconduct of the other party. If the Parties are both at fault, then the obligation to indemnify shall be proportional to their relative fault. The duty to indemnify will continue in full force and effect, notwithstanding the expiration or early termination of this Agreement, with respect to any claims based on facts or conditions, which occurred prior to expiration, or termination. In no event 11 City of Prior Lake ESA Honeywell Energy Services Group December 2014 however, shall Client be obligated to pay any amount in excess of the liability limitations set forth in Minn. Stat. Chap. 466. Article 6.02. Claims for Consequential Damages . Client and HESG waive claims against each other for consequential damages arising out of or relating to this Agreement. This mutual waiver includes: (a) damages incurred by Client for rental expenses, for losses of use, income, profit, financing, business and reputation, and for loss of management or employee productivity or of the services of such persons; and (b) damages incurred by HESG for principal office expenses including the compensation of personnel stationed there, for losses of financing, business and reputation, and for loss of profit. This mutual waiver is applicable, without limitation, to all consequential damages due to either party's termination in accordance with this Agreement. Nothing contained in this Article shall be deemed to preclude an award of liquidated direct damages, when applicable. ARTICLE 7 PERFORMANCE AND PAYMENT BONDS Article 7.01. Performance and Payment Bonds. HESG will provide Client with performance and payment bonds in the form attached hereto as H and Payment Bondsin the amount of the Agreement Price for the faithful performance of the Work and Services and payment of all HESG. ARTICLE 8 WARRANTY Article 8.01. Representations and Warranties of HESG. (a) HESG warrants that the Work and Services and all materials and equipment to be installed pursuant to this Agreement will be of superior quality and new unless the Agreement permits otherwise. HESG further warrants that the Work and Services will conform to the requirements of the Agreement and will be free from defects in materials and workmanship. Work, Services, materials, or equipment not conforming to these requirements may be considered defective. HESG makes all such warranties for a period of two years following Final Completion. warranty excludes remedy for damage or defect caused by abuse, alterations to the Work and Services not executed by HESG, improper or insufficient maintenance, improper operation, or normal wear and tear. In addition, to the extent permitted under this Agreement, HESG will pass HESG will warranties. These warranties do not apply in any way to the Saving Guarantee in equity and ; shall not be construed as a waiver by Client of any other remedy and (b) H recommendation of any Equipment or services or in any rate negotiations. Article No representation or warranty by the suppliers or manufacturers of the Equipment is binding on HESG nor shall breach of any such HESG. HESG shall administer all manufacturers 12 City of Prior Lake ESA Honeywell Energy Services Group December 2014 HESG of any failure of the Equipment within twenty- same. Except as specifically provided otherwise in this Agreement, Client acknowledges that HESG is not a manufacturer or a vendor of equipment such as the Equipment. Article 8.03. Warranty Exclusion. Except as provided in Article 8.01, HESG HAS NOT MADE, AND WILL NOT MAKE, ANY REPRESENTATION, WARRANTY OR COVENANT, EXPRESS OR IMPLIED, WITH RESPECT TO THE MERCHANTABILITY, CONDITION, QUALITY, DURABILITY, EQUIPMENT DESIGN, OPERATION, FITNESS FOR USE OR SUITABILITY OF THE EQUIPMENT PROVIDED BY MANUFACTURERS OR SUPPLIERS IN ANY RESPECT WHATSOEVER OR IN CONNECTION WITH OR FOR THE PURPOSE AND USES OF CLIENT, OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT THERETO, AND HESG SHALL NOT BE OBLIGATED OR LIABLE FOR ACTUAL, INCIDENTAL, CONSEQUENTIAL OR OTHER DAMAGES OF OR TO CLIENT OR ANY OTHER PERSON OR ENTITY ARISING OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF THE EQUIPMENT AND THE MAINTENAN be against the manufacturer with the active assistance of HESG, and such matter shall have no effect whatsoever on the rights and obligations of HESG to receive full and timely payments under this Agreement. ARTICLE 9 DEFAULT Article 9.01. Default by Client. Events, which shall be deemed a default by Client, include: (i) Any failure by Client to pay HESG, or its assigns any sum due, within thirty (30) days after notice by HESG to Client of any such failure; or (ii) Any failure by Client to perform or comply with the terms and conditions of this Agreement and its Schedules, provided that such failure shall not be a default if it is corrected or cured with thirty (30) days after notice to Client demanding that such failure to perform be cured, and HESG is compensated for any loss suffered by reason of said failure. Article 9.02. Default by HESG. Events, which shall be deemed a default by HESG, include: (i) A failure of the Work and Services to materially provide the standards of service and comfort set forth in Schedule D; or (ii) Any failure by HESG to perform or comply with the terms and conditions of this Agreement and its Schedules, provided that such failure shall not be a default if it is corrected or cured within thirty (30) days after notice to HESG demanding that such failure to perform be cured, shall be deemed cured upon payment to Client of any loss suffered by reason of such failure. ARTICLE 10 REMEDIES UPON DEFAULT Article 10.01. Remedies Upon Default by Client. In the event Client defaults, HESG may, without a waiver of any other remedies which exist in law or equity: (i) terminate this Agreement; (ii) exercise any and all remedies at law or equity; or (iii) institute other proceedings including, without limitation, bringing an action or actions from time to time for specific performance, and/or for the recovery of amounts due and unpaid and/or for damages. The party who shall prevail in any such proceeding shall 13 City of Prior Lake ESA Honeywell Energy Services Group December 2014 be entitled to recover all costs and expenses reasonably incurred including specifically, reasonable Article 10.02. Remedies Upon Default by HESG. In the event of default by HESG, Client may, without waiver of any other remedies which exist in law or equity: (i) terminate this Agreement; (ii) exercise any and all remedies at law or in equity; or (iii) institute other proceedings including, without limitation, bringing an action or actions from time to time for specific performance, and/or for the recovery of amounts due and unpaid and/or for damages. The party who shall prevail in any such proceeding shall be entitled to recover all costs and expenses reasonably incurred including specifically, reasonable ARTICLE 11 TERMINATION Article 11.01. Termination. At any time following the first Guarantee Year, Client shall have the right to terminate this Agreement at the end of any Guarantee Year upon ninety (90) days prior written notice to HESG. ARTICLE 12 - GENERAL PROVISIONS Article 12.01. Dispute Resolution. Any dispute, controversy or claim (hereinafter collectively referred either party, first shall be submitted to mediation. Mediation shall commence no later than thirty (30) days after submission of the Dispute and shall be conducted at the locality where the Premises are situated and in accordance with the then prevailing rules of the Construction Industry Mediation Rules of the American Arbitration Association. Except to the extent that this Agreement expressly permits a party to suspend performance, pending final resolution of a Dispute, the parties shall each proceed diligently and faithfully with performance of their respective obligations under this Agreement. The expenses of any mediation shall be borne equally by the parties thereto, provided that each party shall pay for and bear the cost of its own experts, evidence and counsel. Article 12.02. Conditions Beyond Control Of Parties. Except as otherwise provided herein, if either Party shall be unable to carry out any material obligation under this Agreement due to events beyond its control, such as acts of God, governmental or judicial authority, insurrections, riots, labor disputes, labor or material shortages, fires, explosions, or floods, this Agreement shall (i) remain in effect but the e terminated upon written agreement of both Parties, in which event, Client shall pay HESG for all parts of the Work and Services furnished to the date of termination. Article 12.03. Notice and Changes of Address. All notices to be given by either party to the other shall be in writing and must be either personally delivered or mailed by registered or certified mail, return receipt requested, addressed as follows: If to HESG: If to Client: Honeywell Building Solutions SES Corporation City of Prior Lake 1985 Douglas Drive North, 4646 Dakota St SE Golden Valley, MN 55442 Prior Lake, MN 55372 Attention: Cindy Schmidt Attention: Public Works Director or such other addresses as either party may hereinafter designate by notice to the other. Notices are deemed delivered or given and become effective upon mailing if mailed as aforesaid and upon actual receipt if otherwise delivered. 14 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Article 12.04. Assignment. Neither HESG nor Client may assign, transfer, or convey this Agreement, or any part hereof, or its right, title or interest herein, without the written consent of the other party. Article 12.05. Applicable Law. This Agreement is made and shall be interpreted and enforced in accordance with the laws of the state in which the Premises is located. Article 12.06. Tax Deductions . Client agrees to execute any documents and to provide additional reasonable cooperation to HESG related to HESG tax filings under Internal Revenue Code Section 179D. HESG will be designated the sole Section 179D beneficiary. Article 12.07. Independent Contractor. HESG is an independent contractor engaged by Client to perform the services described herein and as such (i) shall employ such persons as it shall deem necessary and appropriate for the performance of its obligations pursuant to this Agreement, who shall be employees, and under the direction, of HESG and in no respect employees of Client, and (ii) shall have no authority to employ persons, or make purchases of equipment on behalf of Client, or otherwise bind or obligate Client. No statement herein shall be construed so as to find HESG an employee of the Client Article 12.08 Non-Discrimination. During the performance of this Agreement, HESG shall not discriminate against any employee or applicant for employment because of race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, disability, sexual orientation or age. HESG shall post in places available to employees and applicants for employment, notices setting forth the provision of this non-discrimination clause and stating that all qualified applicants will receive consideration for employment. HESG shall incorporate the foregoing requirements of this paragraph in all of its subcontracts for program work and services, and will require all of its subcontractors for such work and services to incorporate such requirements in all subcontracts for program work and services. HESG further agrees to comply with all aspects of the Minnesota Human Rights Act, Minnesota Statutes 363.01, et. seq., Title VI of the Civil Rights Act of 1964, and the Americans with Disabilities Act of 1990. Article 12.09. Audit Disclosure and Data Practices. Any reports, information, data, etc. given to, or prepared or assembled by HESG under this Agreement which the Client requests to be kept confidential, shall not be made available to any individual or organization without the Client's prior written approval. The books, records, documents and accounting procedures and practices of HESG or other parties relevant to this Agreement are subject to examination by the Client and either the Legislative Auditor or the State Auditor for a period of six (6) years after the effective date of this Agreement. This Agreement is subject to the Minnesota Government Data Practice Act, Minnesota Statutes Chapter 13 (Data Practices Act). All government data, as defined in the Data Practices Act Section 13.02, Subd 7, which is created, collected, received, stored, used, maintained, or disseminated by HESG in performing any of the functions of the Client during performance of this Agreement is subject to the requirements of the Data Practice Act and HESG shall comply with those requirements as if it were a government entity. All subcontracts entered into by HESG in relation to this Agreement shall contain similar Data Practices Act compliance language. Article 12.10 Severability. The provisions of this Agreement are severable. If any portion hereof is, for any reason, held by a court of competent jurisdiction to be contrary to law, such decision shall not affect the remaining provisions of this Agreement. 15 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Article 12.11 Conflicts. No salaried officer or employee of the Client and no member of the Council of the Client shall have a financial interest, direct or indirect, in this Agreement. The violation of this provision renders the Agreement void. Article 12.12. No Waiver. The failure of HESG or Client to insist upon the strict performance of the terms and conditions hereof shall not constitute or be construed as a waiver or relinquishment of either a continuing or subsequent default on the part of HESG or Client. Any waiver, permit, consent or approval on the part of one party of any breach or default of the other party under this Agreement, any Agreement document or any provision or condition thereof, must be in writing specifically set forth herein. Article 12.13. Complete Agreement. This Agreement and the Guarantee attached hereto, together with any documents incorporated herein by reference, shall constitute the entire Agreement between both parties and this Agreement many not be amended, modified or terminated except by a writing signed by the parties hereto. Article 12.14 Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be considered an original. Article 12.15. Further Documents. The parties shall timely execute and deliver all documents and perform all further acts that may be reasonably necessary to effectuate the provisions of this Agreement. Article 12.16. Schedules. The following Schedules are attached hereto and incorporated herein by this reference: Schedule A: Premises Description and Scope of Work and Services Schedule B: Terms and Payment Schedule Schedule C: Certificate of Completion and Acceptance Schedule D: Base Year and Supporting Data Schedule E: Performance Guarantee Schedule F: Service Agreement Schedule G: Client/ESG Responsibilities Schedule H: Performance and Payment Bonds Article 12.17. Exhibits. Any and all Exhibits will be attached hereto and incorporated herein. Exhibit 1.0 Guarantee Summary Exhibit 1.1 Facility Improvement Measures Matrix Summary Exhibit 1.2 Cash Flow Analysis Exhibit 2.0 Space Occupancy and Utilization Exhibit 2.1 Standards of Comfort and Equipment Schedules Exhibit 3.0 Energy Management System and Direct Digital Controls Guarantee Exhibit 3.1 Energy Management System and Direct Digital Controls Savings Calculations Exhibit 4.0 Control System Improvements Guarantee Exhibit 4.1 Control System Improvements Savings Calculations Exhibit 5.0 Lighting System Improvements Guarantee Exhibit 5.1 Lighting System Improvements Savings Calculations and Inventory Exhibit 6.0 Mechanical System Improvements Guarantee 16 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Exhibit 6.1 Mechanical System Improvements Savings Calculations Exhibit 7.0 Envelope Improvements Guarantee Exhibit 7.1 Envelope Improvements Savings Calculations Exhibit 8.0 Building Envelope Floor Plans Financing Article 12.18. . Notwithstanding anything else provided herein or elsewhere, if the City does not close on financing for this project by December 21, 2014 City may terminate this Agreement in its entirety by written notice to HESG and this Agreement shall have no further force and effect. IN WITNESS WHEREOF, the duly authorized representatives of the parties have each executed the Agreement, effective as of the date first above written. CITY OF PRIOR LAKE HONEYWELL BUILDING SOLUTIONS SES CORPORATION Signature: Signature: ____________ Printed Name: Printed Name: __ Title: Title: Date: Date: 17 City of Prior Lake ESA Honeywell Energy Services Group December 2014 SCHEDULE A. PREMISES DESCRIPTION AND SCOPE OF WORK AND SERVICES CITY WIDE L.3a Athletic Field Lighting - Memorial Park Equal Illumination Existing Conditions The athletic field lights at memorial park consists of pole mounted 1500w metal halide lamps and fixtures. Some of the lighting systems have become obsolete and have limited parts availability. The City would like to consider the most energy efficient replacement of these systems and optimize the remaining systems. Planned Implementation Replace the existing lighting fixtures with new pulse-start metal halide fixtures and lamps with equal illumination. The project scope includes the lighting fixtures, crossarms, luminaire wiring, pole wiring, and remote electrical component enclosures (ballasts, capacitors, fusing, and disconnects). The replacement will also include a new Control-Link wireless control system and contactor cabinet. Please note that this scope does not included replacement of the underground wiring. Exhibit includes detailed list of fixtures. L.5b Exterior Lighting - Replacement Existing Conditions The city owned exterior lights are a combination of park, pedestrian, and parking lot lighting consisting of a varied mixture of T-8, flood, wall packs, and steel poles with acorn, tulip and area lighter fixtures using 100w or 150w or 200w or 250w high pressure sodium lamps and 100w or 250w or 400w metal halide lamps. Planned Implementation Retrofit the T-8 lighting fixtures with light emitting diode (LED) lamps. Retrofit the high pressure sodium and metal halide lighting fixtures with light emitting diode (LED) kits. Replace high pressure sodium and metal halide lighting fixtures with light emitting diode (LED) fixtures. Please note Minnesota Valley Electric (MVEC), Shakopee Public Utilities (SPUC), and Xcel Energy owned street lights are not part of this scope. Exhibit includes detailed list of fixtures. L.6 Traffic Signal Lighting Existing Conditions The city owns traffic signal lighting at several intersections throughout the city. There are two remaining intersections that will be converted from incandescent to new LED modules. Planned Implementation Retrofit the incandescent lamps in the signal lighting with new light emitting diode (LED) modules. LED upgrade includes module replacement and electrical work to complete a turnkey installation. Replacement or refurbishment of traffic signal control boxes are not included. Exhibit includes detailed list of fixtures. L.7 City Hall Emergency Lighting-Replacement Existing Conditions The emergency lighting in city hall consists of battery backed ballasts and T-8 lamps in the existing fixtures. The batteries have begun to fail, and this has become a chronic maintenance issue. The city has identified the emergency lighting for replacement in the capital improvement plan. Planned Implementation Replace the existing emergency lighting with new wall mounted and recessed ceiling mounted emergency lighting fixtures. Exhibit includes detailed list of fixtures. 18 City of Prior Lake ESA Honeywell Energy Services Group December 2014 O&M.2 Miscellaneous Operations and Maintenance Repairs Existing Conditions Typically, there are operations and maintenance needs throughout the facilities that cannot be identified precisely during the survey. Some examples that are very common include the following: Control System Enhancement/Repair Contingency An expanded digital control system will be installed as part of this project. Inevitably, during the installation, problems with existing equipment are discovered or existing situations and conditions change. It is also common that once the facilities personnel discover the capabilities of the system they typically wish they had additional funds to expand it. Establish a contingency pool of funds to expand or enhance the new system, fix problems that arise or adjust for changes in conditions. These funds would be earmarked for control system improvements. Control Valve Repairs and Upgrades There are a large number of control valves on HVAC equipment in the facilities. Some of these valves are older and showing signs of leaking, others are not operating properly or not working at all. The proper operation of these valves is critical to the comfort of the occupants and the efficiency of the heating systems. This recommendation includes contingency funds for inspection and repair of the control valves throughout the buildings. Control and Backdraft Damper Repairs and Upgrades The control and backdraft dampers on some of the HVAC equipment are old (original with the equipment) and are showing signs of their age. Some are leaking, not operating properly or have been disconnected because they are not functioning and are causing problems. The proper operation of the control dampers is critical to the comfort of the occupants and the ventilation of the facilities. Backdraft dampers will need to be serviced on roof relief louvers and exhaust fans to allow automatic control. This recommendation includes contingency funds for inspection and repair of the control dampers throughout the buildings. Air Handling Unit and Coil Cleaning The air handling unit components need to be cleaned to improve existing unit efficiency and allow proper system operation. The air handling unit coils cannot heat or cool properly due to dirt buildup and the resultant pressure drop limits supply airflows. Many of the coils are very difficult to get to and require disassembly of units. The air handling unit fans, dampers, and plenum would also benefit from cleaning. This recommendation includes contingency funds to clean the air handling unit fans, dampers, plenums, and heating and cooling coils throughout the facilities. This also includes adding access panels where needed to encourage future cleaning and routine maintenance. Planned Implementation This measure is a contingency pool of funds to be used at the discretion of the facilities personnel for repairs and upgrades from the above list and those not yet discovered. The operations and repairs priorities will be established based on prioritization of the needs, amount of the available budget and the accepted projects. TRS.1 Technical Resource Services Baseline Development Planned Implementation This activity occurs on a one-time basis during installation of the various improvements. Provide all measurement and verification services to obtain guarantee baseline information. Typical information will consist of: Electrical measurements before and after lighting retrofits. Verify quantities of miscellaneous improvements such as insulation retrofits. Quantify all assumptions regarding operating hours, conditions, and costs (that cannot be measured) and 19 City of Prior Lake ESA Honeywell Energy Services Group December 2014 TRS.2 Technical Resource Services Annual Measurement and Verification Planned Implementation This activity occurs on a continual basis during the term of the guarantee. Year One fees are included in this agreement. Invoicing separately will begin in Year Two. Details are included in Schedule F. This option consists of annual services provided: Provide all required monitoring and guarantee management services for the FEMP Measurement and Verification Option A for all selected improvements. Provide regular site visits to verify proper operation of facility improvements. Verify proper operation of energy management system through remote monitoring, site visits, analysis of being overridden. Verify proper maintenance of improvements such as lighting to insure equivalent replacement products are being utilized. Also verify systems are being maintained to continue predicted efficiencies. Provide consulting on building operation, changes, and problems. Provide annual reports and reconciliation of savings status. CITY HALL C.1 Energy Management and Direct Digital Controls Existing Conditions The heating, ventilating and air conditioning (HVAC) systems in City Hall utilize direct digital (DDC) controls. The TAC energy management system (EMS) is used to provide the HVAC equipment in the building with occupied / unoccupied scheduling, and controls the operation of the air handling units (AHUs), heating system, chilled water system, and terminal equipment such as the variable air volume (VAV) systems. Based on the site survey, observations of equipment operation and trend data, some of the system controls were identified to have sequence and calibration issues. These issues result in inefficient operation and uncomfortable building conditions. The following are some of the control issues that were identified during the Comprehensive Facility Study. The Exhibit includes existing control parameters and setpoints. Energy Management System The existing direct digital controls on HVAC equipment have not been recommissioned or tuned in many years resulting in inefficient, inconsistent and ineffective system performance. There are multiple sensors located in positions that provide faulty readings to the EMS. This includes the outdoor weather station that is located in close proximity to the boiler exhaust stacks. There are multiple sequence and calibration issues including system setpoints and operating schedules that result in inefficient operation and reduced occupant comfort. Heating Water System and Circulating Pumps Boilers-1, 2 are Cleaver Brooks natural gas fired high efficiency modular condensing boilers. Pumps P-5C, P-6C serve the heating system, and utilize variable speed drives to vary the flow The enable/disable control for the boilers and pumps is accomplished via switching on EMS. The EMS provides sequences for switching the lead/lag operation of the Boilers-1, 2 and Pumps-1, 2 based on a user-defined interval to even out equipment run time and provide alarms for each. 20 City of Prior Lake ESA Honeywell Energy Services Group December 2014 The heating loop hot water supply temperature is not being reduced when the building is unoccupied or when outdoor air temperature (OAT) conditions are mild. The reset schedule for the heating water supply: OAT Supply Water Temp 95F 140F 0F 180F Chilled Water System and Circulating Pumps The chiller is controlled for a fixed chilled water supply temperature setpoint of 45F. Pumps-1C, 2C serve the chilled water system, which provide constant flow to the chiller. Pumps-3C, 4C serve the chilled water system, which utilizes variable speed drives to vary the flow to the The enable/disable control for the chiller and pumps is accomplished via switching on EMS. The EMS provides sequences for switching the lead/lag operation of the Pumps-1C,-2C and Pumps-3C,- 4C based on a user-defined interval to even out equipment run time and provide alarms for each. Air Handling Units AHU-1-C serves the lobby, and the council chamber area on the main level. AHU-2-C serves the offices, and common areas on the lower level, main level, and upper level water heating coils with two way control valves and chilled water cooling coils with two way control valves. There are fifty-one (51) VAV boxes serving different zones throughout the building. during mild outdoor condition) based on current setpoints. mperature reset control strategy (resetting the discharge air temperature setpoint based upon actual building cooling load conditions) that could be fined tuned to provide better comfort and performance based on current setpoints. The air handling unit (AHU-1-C) is currently operating 24/7. The air handling unit (AHU-2-C) is currently operating 24/7. Planned Implementation This energy management system (EMS) and direct digital controls (DDC) recommendation is aimed at re- commissioning the existing TAC digital control system. Re-commission existing direct digital controls to provide improved reliability, efficiency and performance. The following are examples of the proposed hardware, software program, control strategy and sequence of operation upgrades that would be incorporated for improving control of applicable HVAC equipment in the facility. The Exhibit includes proposed control parameters and setpoints. Energy Management System Re-commission the existing DDC system and relocate applicable sensors and wiring to their correct locations to insure proper system operation. 21 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Re-commission the applicable HVAC systems controlled by the EMS and implement occupancy schedules within the existing direct digital control system that will provide operating schedules based on the actual occupancy of the spaces served. Heating Water System and Circulating Pumps Re-commission the existing boiler control and reset enable/disable control of the hot water boilers based on outdoor air temperature and building occupancy. The hot water supply temperature will be reduced by an adjustable setback factor during unoccupied periods. The outside air enable set point could be changed to below 50F for heating, and from 70F-95F for dehumidification. Outside air is available for free cooling between 50F-70F, and supplemented with mechanical cooling. Dehumidification is generally not required in this temperature range. The high reset hot water supply temperature set point could be lowered from 140F to 110F, allowing the boiler to condense, and raising the combustion efficiency. Chilled Water System and Circulating Pumps Changing from a fixed chilled water supply temperature setpoint to a chilled water reset strategy would reduce chiller cycling, and improve efficiencies. The chiller control panel can accommodate a 4-20ma control input signal for chilled water reset control. Air Handling Units Re-commission air handling unit start/stop controls and modify operating schedules to better match actual occupancy of the associated spaces. Building staff occupancy (AHU-1-C serving the lobby and Council Chamber area) is Monday through Friday 7:00am 10:00pm. Saturday and Sunday as required for occasional rentals. Building staff occupancy (AHU-2-C serving the offices, and common areas on the lower level, main level, and upper level) is Monday through Friday 7:00am 4:30pm. Saturday and Sunday Off on average per staff discussion and survey. Modify the economizer control set point. Modify the discharge air temperature reset control set points. Modify the DDC sequence of operation for optimal start programming control of air handling systems to automatically start the systems based on outside air temperature and previous operating trend data. Sequence shall prevent outdoor air dampers from opening during the morning warm-up cycle until scheduled space occupancy. VAV system components are discussed in a separate FIM, C.2, listed below. C.2 Occupancy Control of VAV Boxes Existing Conditions The terminal variable air volume (VAV) boxes utilize direct digital controls (DDC). Space thermostats modulate the VAV box dampers and reheat coil valves in sequence to regulate airflow volume and temperature being delivered to maintain space temperature set points. These systems are designed to deliver a constant amount of ventilation to the spaces served regardless of occupancy. The Exhibit includes existing control parameters and setpoints. Planned Implementation This project includes providing an interface from the existing room lighting controls to the VAV boxes, and controlling the minimum damper position to a reduced minimum set point when the room is unoccupied. Provide pushbuttons to allow temporary schedule override in the conference rooms and the council chamber. This will reduce the fan horsepower and heating/cooling load on the fan. The Exhibit includes proposed control parameters and setpoints. 22 City of Prior Lake ESA Honeywell Energy Services Group December 2014 L.1 Lighting Improvements Existing Conditions Lighting sources in the building include a variety of fixture and lamp combinations. Much of the lighting in the facility consists of 25-watt fluorescent fixtures with T-8 fluorescent lamps and electronic ballasts. Planned Implementation The following items are planned for the lighting retrofit in the building: Retrofit with T-8 Light emitting diode (LED) lamps and low wattage electronic ballasts to replace existing 25-watt T-8 fluorescent systems. Reduce the number of lamps and ballasts and add reflectors in areas that are over lit. Replace compact fluorescent lamps with LED. Replace exterior wall pack metal halide lamps with LED. Exhibit includes detailed list of fixtures. M.1 Rebalance Air Handling Systems Existing Conditions The air handling units serving City Hall have not been balanced in many years. The air handling unit fans should have measurement and rebalancing of airflows to optimize system performance and occupant comfort. The Exhibit includes existing control parameters. Planned Implementation Rebalance the air handling units after cleaning, repair and controls work have been completed. Balance the supply and return/exhaust fans to provide design airflow.The Exhibit includes existing control parameters. The following units will require rebalancing: AHU-1-C air handling unit supply and return/exhaust fans. AHU-2-C air handling unit supply and return/exhaust fans. M.2 Air Handling Unit (AHU-1-C) Isolation Damper Existing Conditions Air handling unit AHU-1C needs to be running anytime AHU-2C is started. Otherwise, the supply air back feeds through the AHU-1C to the AHU-2C, and the fan spins backwards. Planned Implementation Add an isolation damper to the ductwork with an end switch interlock to prevent the fan from starting unless the damper proves open. Rebalance the air handling units (see M.1 above) after the damper installation and controls work has been completed. S.1 Building Envelope Air Leakage Existing Conditions The facility building envelope was inspected and tested, using a smoke puffer, to identify the location and severity of air leakage paths in the building. Air leakage is defined as the "uncontrolled migration of conditioned air through the building envelope". Air leakage is typically caused by pressure differences due to wind, stack effect and mechanical systems. Tests carried out by the National Research Council of Canada on High Rise Commercial and Residential Buildings, Schools, Supermarkets and Houses have shown that levels of 30 % to 50% of building heat loss could be attributed to air leakage. Control of air leakage involves the sealing of gaps, 23 City of Prior Lake ESA Honeywell Energy Services Group December 2014 cracks and holes using appropriate materials and systems to create, as near as possible, a continuous plane of "air- tightness" to completely encompass the building envelope. The following is a list of building envelope issues identified in the facility: Exterior Door Leakage detected along exterior door thresholds Roof/Wall Leakage detected along roof/wall connections as evidenced by cobwebs and dirt streaking Planned Implementation This recommendation includes the reduction of air leakage through the sealing of gaps, cracks and holes in the building envelope using appropriate materials and systems (weather stripping, caulking, etc.). The following is a list of corrective actions that would be taken to address the identified air leakage issues. The Exhibit includes floor plans which identify specific areas. Exterior Doors Weather strip and seal Seal the roof to wall perimeter construction that is leaky with two component polyurethane foam FIRE STATION #1 C.1 Energy Management and Direct Digital Controls Existing Conditions The heating, ventilating and air conditioning (HVAC) systems in fire station #1 utilize programmable thermostats to control the rooftop air handling units with natural gas fired heaters, and direct expansion (DX) air conditioning. Based on the site survey and observations of equipment operation, the programmable thermostats were identified to be operating with occupied and unoccupied setpoints that were virtually identical. The Exhibit includes existing control parameters and setpoints. Planned Implementation This energy management system (EMS) and direct digital controls (DDC) recommendation is aimed at expansion of the existing TAC digital control system to include the building and replacing the standalone control system with networkable versions of the thermostats for remote monitoring by city staff. The Exhibit includes proposed control parameters and setpoints. Building staff occupancy is Monday through Sunday 6:00am 10:00pm on average per staff discussion and survey. One networkable thermostat needed for each rooftop air handling unit. L.1 Lighting Improvements Existing Conditions Lighting sources in the building include a variety of fixture and lamp combinations. Much of the lighting in the facility consists of fluorescent fixtures with T-8 fluorescent lamps and electronic ballasts. Planned Implementation The following are projects are planned for the lighting retrofit in the building: Retrofit with T-8 Light emitting diode (LED) lamps and low wattage electronic ballasts to replace existing 25-watt T-8 fluorescent systems. Reduce the number of lamps and ballasts and add reflectors in areas that are over lit. Retrofit with 32w T-8 fluorescent systems to replace existing high output (HO) T-12 fluorescent systems. Replace compact fluorescent lamps with LED. Replace incandescent flood lamps with LED. Replace exterior wall pack metal halide lamps with LED Exhibit includes detailed list of fixtures. 24 City of Prior Lake ESA Honeywell Energy Services Group December 2014 L.2 Lighting Controls Existing Conditions There are some areas of the building such as conference rooms and restrooms where the occupancy is variable but the lighting sources are often left on when the spaces are unoccupied. Planned Implementation Install occupancy controls in various spaces such as conference rooms, restrooms, and storage rooms to shut off lights when the rooms are unoccupied. M.1 Overhead Door Replacement & Controls Existing Conditions The overhead doors at Fire Station #1 are older and in need of updating. The city has identified the overhead doors for replacement in the capital improvement plan. Planned Implementation This project includes firm pricing for the following: Replace ten (10) existing overhead doors with new overhead doors and openers. M.2 Infrared Heater Unit (IR-1 through IR-8)-Replacement Existing Conditions The Infrared Heater Units (IR-1 through IR-8) have exceeded their expected service life. Over time, the equipment will generally experience a decrease in efficiency and performance due to degradation of components and controls. Planned Implementation Replace the existing infrared heater units with new infrared heater units. The new equipment will be, at minimum, a like for like replacement or an approved equal. Provide commissioning of the systems, mechanical, and electrical work associated with the installation to ensure proper function, maintainability, and operator training. Ensure that the fresh air intake will be piped utilizing exterior air. S.1 Building Envelope Air Leakage Existing Conditions The facility building envelope was inspected and tested, using a smoke puffer, to identify the location and severity of air leakage paths in the building. Air leakage is defined as the "uncontrolled migration of conditioned air through the building envelope". Air leakage is typically caused by pressure differences due to wind, stack effect and mechanical systems. Tests carried out by the National Research Council of Canada on High Rise Commercial and Residential Buildings, Schools, Supermarkets and Houses have shown that levels of 30 % to 50% of building heat loss could be attributed to air leakage. Control of air leakage involves the sealing of gaps, cracks and holes using appropriate materials and systems to create, as near as possible, a continuous plane of "air- tightness" to completely encompass the building envelope. The following is a list of building envelope issues identified in the facility: Overhead Doors Leakage detected around overhead doors Exterior Doors Leakage detected along exterior door thresholds Roof/Wall Leakage detected along roof/wall connections as evidenced by cobwebs and dirt streaking Planned Implementation This project includes the reduction of air leakage through the sealing of gaps, cracks and holes in the building envelope using appropriate materials and systems (weather stripping, caulking, etc.). The following is a list of 25 City of Prior Lake ESA Honeywell Energy Services Group December 2014 corrective actions that would be taken to address the identified air leakage issues. The Exhibit includes floor plans which identify specific areas. Weather-strip overhead doors Weather-strip exterior doors Seal the roof to wall perimeter construction that is leaky with two component polyurethane foam V.1 Rooftop Air Handling Unit (RTU-1,-2) - Replacement Existing Conditions Rooftop air handling units (RTU-1,-2) serve the exterior office areas and training room respectively. The units are original to the building and beyond their useful service life. The original control systems are no longer functional and the units are only capable of controlling for a single space temperature set point. The city has this listed for replacement in the capital improvement plan. Planned Implementation Replace the rooftop air handling units (RTU-1,-2) with new rooftop air handling units designed to provide required heating and ventilation control. The new systems will be designed to comply with current codes, standards and statutes with regard to return/relief air, ventilation rates and air filtration. Existing supply, return, and exhaust ductwork will be reused where feasible. Provide new direct digital controls and implement energy management system (EMS) control sequences and strategies to operate the air handling systems and exhaust systems based on anticipated occupancy schedules and actual ventilation demand. Provide commissioning of the systems, mechanical, and electrical work associated with the installation to ensure proper function, maintainability, and operator training. V.2 Makeup Air Handling Unit (MAU-1,-2) - Replacement Existing Conditions Makeup air handling units (MAU-1,-2) serve the apparatus bays and mezzanine storage areas respectively. The units are original to the building and beyond their useful service life. Over time, air handling equipment generally experiences a decrease in efficiency and performance due to degradation of components and controls. The city has this listed for replacement in the capital improvement plan. Planned Implementation Replace the makeup air handling units (MAU-1,-2) with new makeup air handling units designed to provide required heating and ventilation control. The new systems will be designed to comply with current codes, standards and statutes with regard to return/relief air, ventilation rates and air filtration. Existing supply ductwork will be reused where feasible. Provide commissioning of the systems, mechanical, and electrical work associated with the installation to ensure proper function, maintainability, and operator training. FIRE STATION #2 C.1 Energy Management and Direct Digital Controls Existing Conditions The heating, ventilating and air conditioning (HVAC) systems in fire station #2 utilize programmable and single-set point thermostats to control the three forced air furnaces with natural gas fired heaters and direct expansion (DX) air conditioning. Forced air furnace FAF-1 has outdoor air ducted to it with a package economizer style actuator on the mixed air dampers. Forced air furnaces FAF-2 and FAF-3 have fresh air supplied to them from a shared heat recovery ventilator. Based on the site survey and observations of equipment operation, the programmable thermostats were identified to be operating with occupied and unoccupied set points that were identical. The Exhibit includes existing control parameters and setpoints. 26 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Planned Implementation This energy management system (EMS) and direct digital controls (DDC) recommendation is aimed at expansion of the existing TAC digital control system to include the building, and replacing the standalone control system with networkable versions of the thermostats for remote monitoring by city staff. The Exhibit includes proposed control parameters and setpoints. Building staff occupancy is Monday through Sunday 6:00am 10:00pm on average per staff discussion and survey. One networkable thermostat needed for each forced air furnace unit. Thermostat locations will be adjusted, if needed, to provide proper temperature control. L.1 Lighting Improvements Existing Conditions Lighting sources in the building include a variety of fixture and lamp combinations. Much of the lighting in the facility consists of fluorescent fixtures with T-8 fluorescent lamps and electronic ballasts. Planned Implementation The following items are planned for the lighting retrofit in the building: Retrofit with T-8 Light emitting diode (LED) lamps and low wattage electronic ballasts to replace existing 25-watt T-8 fluorescent systems. Reduce the number of lamps and ballasts and add reflectors in areas that are over lit. Replace metal halide flag flood lamp with LED. Replace exterior metal halide lamps with LED Replace exterior compact fluorescent lamps with LED Replace Parking lot metal halide lamps with LED Exhibit includes detailed list of fixtures. L.2 Lighting Controls Existing Conditions There are some areas of the building such as conference rooms and restrooms where the occupancy is variable but the lighting sources are often left on when the spaces are unoccupied. Planned Implementation Install occupancy controls in various spaces such as conference rooms, restrooms, and storage rooms to shut off lights when the rooms are unoccupied. S.1 Building Envelope Air Leakage Existing Conditions The facility building envelope was inspected and tested, using a smoke puffer, to identify the location and severity of air leakage paths in the building. Air leakage is defined as the "uncontrolled migration of conditioned air through the building envelope". Air leakage is typically caused by pressure differences due to wind, stack effect and mechanical systems. Tests carried out by the National Research Council of Canada on High Rise Commercial and Residential Buildings, Schools, Supermarkets and Houses have shown that levels of 30 % to 50% of building heat loss could be attributed to air leakage. Control of air leakage involves the sealing of gaps, cracks and holes using appropriate materials and systems to create, as near as possible, a continuous plane of "air- tightness" to completely encompass the building envelope. The following is a list of building envelope issues identified in the facility: Overhead Doors Leakage detected around overhead doors Exterior Doors Leakage detected along exterior door thresholds 27 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Planned Implementation This recommendation includes the reduction of air leakage through the sealing of gaps, cracks and holes in the building envelope using appropriate materials and systems (weather stripping, caulking, etc.). The following is a list of corrective actions that would be taken to address the identified air leakage issues. The Exhibit includes floor plans which identify specific areas. Weather-strip overhead doors Weather-strip exterior doors LIBRARY C.1 Energy Management and Direct Digital Controls Base Project Existing Conditions The heating, ventilating and air conditioning (HVAC) systems in the Library utilize a combination of direct digital (DDC) and electric controls. The Alerton energy management system (EMS) is used to provide the HVAC equipment in the building with occupied / unoccupied scheduling, and controls the operation of the air handling units (AHUs), , heating system , direct expansion (DX) cooling equipment, and terminal equipment such as variable air volume (VAV) systems. Based on the site survey, observations of equipment operation and trend data, some of the system controls were identified to have sequence and calibration issues. These issues result in inefficient operation and uncomfortable building conditions. The Exhibit includes existing control parameters and setpoints. The following are some of the control issues that were identified during the Investment Grade Audit: Energy Management System The existing direct digital controls on the original HVAC equipment have not been recommissioned or tuned in many years resulting in inefficient, inconsistent and ineffective system performance. Some areas of the facility experienced upgrades in 2013. There are multiple sensors located in positions that provide faulty readings to the EMS. There are multiple sequence and calibration issues including system setpoints and operating schedules that result in inefficient operation and reduced occupant comfort. Heating Water System and Circulating Pumps Boilers-1, 2 are Lochinvar natural gas fired boilers. The enable/disable control for the boilers and pumps is accomplished via switching on EMS. The EMS provides sequences for switching the lead/lag operation of the Boilers-1, 2 and Pumps-1, 2 based on a user-defined interval to even out equipment run time and provide alarms for each. The heating loop hot water supply temperature is not being reduced when the building is unoccupied or when outdoor air temperature (OAT) conditions are mild. The reset schedule for the heating water supply: OAT Supply Water Temp 90F 140F 0F 180F Air Handling Units Air handling unit AHU-S-1, serves the main Library area. The air handling unit consists of a variable air volume volume system with a supply and return fan, electric mixed air dampers, two stages of direct expansion cooling with hot gas bypass, hot water heating coil with an inline booster pump, a three way electric control valve, and an electric steam humidifier. There are twelve (12) variable air volume (VAV) boxes associated with this fan. Air handling unit AHU-S-2, serves the Club Prior area of the Library. The air handling unit consists of a constant volume system with a supply fan, electric mixed air dampers, and two stages of direct expansion 28 City of Prior Lake ESA Honeywell Energy Services Group December 2014 cooling, hot water heating coil with an inline booster pump, a three way electric control valve, and an electric steam humidifier. during mild outdoor condition) based on current setpoints. The A setpoint based upon actual building cooling load conditions) that could be fined tuned to provide better comfort and performance based on current setpoints. The air handling unit (AHU-S-1) is currently operating 24/7. The air handling unit (AHU-S-2) is currently operating 24/7. Planned Implementation This base energy management system (EMS) and direct digital controls (DDC) recommendation is aimed at re-commissioning the existing Alerton digital control system. Re-commission existing direct digital controls to provide improved reliability, efficiency and performance. The following are examples of the proposed hardware, software program, control strategy and sequence of operation upgrades that would be incorporated for improving control of applicable heating, ventilating and air conditioning (HVAC) equipment in the facility. The Exhibit includes proposed control parameters and setpoints. Energy Management System Re-commission the existing DDC system and relocate applicable sensors and wiring to their correct locations to insure proper system operation. Re-commission the applicable HVAC systems controlled by the EMS and implement occupancy schedules within the existing direct digital control system that will provide operating schedules based on the actual occupancy of the spaces served. Heating Water System and Circulating Pumps Re-commission the existing boiler control and reset enable/disable control of the hot water boilers based on outdoor air temperature and building occupancy. The hot water supply temperature will be reduced by an adjustable setback factor during unoccupied periods. The outside air enable set point could be changed to below 50F for heating, and from 70F-90F for dehumidification. Outside air is available for free cooling between 50F-70F, and supplemented with mechanical cooling. Dehumidification is generally not required in this temperature range. Air Handling Units Re-commission air handling unit start/stop controls and modify operating schedules to better match actual occupancy of the associated spaces. Building staff occupancy (AHU-S-1 serving the main Library area) is Monday, Tuesday, Thursday 10:00am 8:00pm. Wednesday 1:00pm 8:00pm. Friday 1:00pm 5:00pm. Saturday 10:00am 4:00pm. Building staff occupancy (AHU-S-2 serving Club Prior) is Tuesday through Thursday 9:00am 3:00pm. Saturday and Sunday Off on average per staff discussion and survey. Modify economizer control set point. Modify the discharge air temperature reset control set points. Modify the duct static pressure reset control set points. Modify the DDC sequence of operation for optimal start programming control of air handling systems to automatically start the systems based on outside air temperature and previous operating trend data. Sequence shall prevent outdoor air dampers from opening during the morning warm-up cycle until scheduled space occupancy. VAV system components are discussed in a separate FIM, C.2, listed below. 29 City of Prior Lake ESA Honeywell Energy Services Group December 2014 C.2 Occupancy Control of VAV Boxes Existing Conditions The terminal variable air volume (VAV) boxes utilize direct digital controls (DDC). Space thermostats modulate the VAV box dampers and reheat coil valves in sequence to regulate airflow volume and temperature being delivered to maintain space temperature set points. These systems are designed to deliver a constant amount of ventilation to the spaces served regardless of occupancy. The Exhibit includes existing control parameters. Planned Implementation This project includes providing an interface from the existing room lighting controls to the VAV boxes, and controlling the minimum damper position to a reduced minimum set point when the room is unoccupied. Provide pushbuttons to allow temporary schedule override in the conference rooms and the Library offices. This will reduce the fan horsepower and heating/cooling load on the fan. The Exhibit includes proposed control parameters. L.1 Lighting Improvements Existing Conditions Lighting sources in the building include a variety of fixture and lamp combinations. The majority of the lighting in the facility consists of 32-watt T-8 fluorescent lamps with electronic ballasts. Other areas utilize inefficient lighting technologies such as the exterior wall pack metal halide fixtures. Planned Implementation The following items are planned for the lighting retrofit at this building: Retrofit with T-8 Light emitting diode (LED) lamps and low wattage electronic ballasts to replace existing 32-watt T-8 fluorescent systems. Reduce the number of lamps and ballasts and add reflectors in areas that are over lit. Replace compact fluorescent lamps with LED Replace exterior metal halide wall pack lamps with LED Exhibit includes detailed list of fixtures. M.1b Boiler System Replacement Existing Conditions The existing hot water boilers, rated at 985 MBH each, are original to the building and approaching their useful service life. Over time, heating equipment will experience a decrease in efficiency and performance due to degradation of components and controls. The city has the boilers listed for replacement in the capital improvement plan. Planned Implementation Replace the existing hot water boilers with new hot water high efficiency modulating boilers that have the capacity to meet the peak heating load requirements. The new equipment will be, at minimum, a like for like replacement or an approved equal. The new unit will be designed to comply with current codes, standards and statutes. Honeywell will provide commissioning of the system, mechanical, and electrical work associated with the installation to ensure proper function, maintainability, and operator training. M.2 Rebalance Air Handling Systems Existing Conditions The air handling units serving the Library have not been balanced in many years. The air handling unit fans should have measurement and rebalancing of airflows to optimize system performance and occupant comfort. The Exhibit includes existing control parameters. 30 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Planned Implementation Rebalance the air handling units after cleaning, repair and controls work have been completed. Balance the supply and return/exhaust fans to provide design airflow.The Exhibit includes proposed control parameters. The following units will require rebalancing: AHU-S-1 air handling unit supply and return/exhaust fans. AHU-S-2 air handling unit supply fan. Investigate the VAV boxes for the rest rooms, and the Club Prior kitchen that were part of the building renovation, to determine why they are chronically short of air and not able to make airflow set points, and make corrections to resolve the problem. The City has recently added heaters to the restrooms. S.1 Building Envelope Air Leakage Existing Conditions The facility building envelope was inspected and tested, using a smoke puffer, to identify the location and severity of air leakage paths in the building. Air leakage is defined as the "uncontrolled migration of conditioned air through the building envelope". Air leakage is typically caused by pressure differences due to wind, stack effect and mechanical systems. Tests carried out by the National Research Council of Canada on High Rise Commercial and Residential Buildings, Schools, Supermarkets and Houses have shown that levels of 30 % to 50% of building heat loss could be attributed to air leakage. Control of air leakage involves the sealing of gaps, cracks and holes using appropriate materials and systems to create, as near as possible, a continuous plane of "air- tightness" to completely encompass the building envelope. Building envelope issues identified: Exterior Door Leakage detected along exterior door thresholds Planned Implementation This recommendation includes the reduction of air leakage through the sealing of gaps, cracks and holes in the building envelope using appropriate materials and systems (weather stripping, caulking, etc.). The following is a list of corrective actions that would be taken to address the identified air leakage issues. The Exhibit includes floor plans which identify specific areas. Weather-strip exterior doors and interior doors MAINTENANCE CENTER C.1 Energy Management and Direct Digital Controls Existing Conditions The heating, ventilating and air conditioning (HVAC) systems in maintenance center utilize programmable thermostats to control the rooftop air handling units with natural gas fired heaters, and direct expansion (DX) air conditioning. Based on the site survey and observations of equipment operation, the programmable thermostats were identified to be operating outside business hours. The Exhibit includes existing control parameters. Planned Implementation This energy management system (EMS) and direct digital controls (DDC) recommendation is aimed at expansion of the existing TAC digital control system to include the building, and replacing the standalone control system with networkable versions of the thermostats for remote monitoring by city staff. The Exhibit includes proposed control parameters. Building staff occupancy is Monday through Friday 7:00am 4:30pm on average per staff discussion and survey. One networkable thermostat needed for each rooftop air handling unit. 31 City of Prior Lake ESA Honeywell Energy Services Group December 2014 L.1 Lighting Improvements Existing Conditions Lighting sources in the building include a variety of fixture and lamp combinations. Much of the lighting in the facility consists of fluorescent fixtures with T-8 fluorescent lamps and electronic ballasts. Planned Implementation The following are items are planned for the lighting retrofit in the building: Retrofit with T-8 Light emitting diode (LED) lamps and low wattage electronic ballasts to replace existing T-8 fluorescent systems. Reduce the number of lamps and ballasts and add reflectors in areas that are over lit. Retrofit with 32w T-8 fluorescent systems to replace existing high output (HO) T-12 fluorescent systems. Replace compact fluorescent lamps with LED. Replace exterior wall pack metal halide lamps with LED Replace Parking lot metal halide lamps with LED Exhibit includes detailed list of fixtures. M.1 Overhead Door Replacement & Controls Existing Conditions The overhead door systems at the Maintenance Center are older and in need of updating. The city has identified the overhead doors for replacement in the capital improvement plan. Planned Implementation This recommendation includes firm pricing for the following: Replace four (4) of the existing overhead doors with new overhead doors and openers. M.2 Infrared Heater Unit (IR-1 through IR-10)-Replacement Existing Conditions The Infrared Heater Units (IR-1 through IR-8) have exceeded their expected service life. Over time, the equipment will generally experience a decrease in efficiency and performance due to degradation of components and controls. Planned Implementation Replace the existing infrared heater units with new infrared heater units. The new equipment will be, at minimum, a like for like replacement or an approved equal. Provide commissioning of the systems, mechanical, piping where needed, and electrical work associated with the installation to ensure proper function, maintainability, and operator training. Ensure that the fresh air intake will be piped utilizing exterior air. S.1 Building Envelope Air Leakage Existing Conditions The facility building envelope was inspected and tested, using a smoke puffer, to identify the location and severity of air leakage paths in the building. Air leakage is defined as the "uncontrolled migration of conditioned air through the building envelope". Air leakage is typically caused by pressure differences due to wind, stack effect and mechanical systems. Tests carried out by the National Research Council of Canada on High Rise Commercial and Residential Buildings, Schools, Supermarkets and Houses have shown that levels of 30 % to 50% of building heat loss could be attributed to air leakage. Control of air leakage involves the sealing of gaps, cracks and holes using appropriate materials and systems to create, as near as possible, a continuous plane of "air- tightness" to completely encompass the building envelope. The following is a list of building envelope issues identified in the facility: 32 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Windows Leakage detected around windows Exterior Doors Leakage detected along exterior door thresholds Roof/Wall Leakage detected along roof/wall connections as evidenced by cobwebs and dirt streaking Planned Implementation This recommendation includes the reduction of air leakage through the sealing of gaps, cracks and holes in the building envelope using appropriate materials and systems (weather stripping, caulking, etc.). The following is a list of corrective actions that would be taken to address the identified air leakage issues. The Exhibit includes floor plans which identify specific areas. Seal the windows, including office windows, where needed Weather-strip exterior doors Seal the roof to wall perimeter construction that is leaky V.1 Rooftop Air Handling Unit (RTU-1,-2) - Replacement Existing Conditions Rooftop air handling units (RTU-1,-2) serve the exterior office areas and lunch room areas respectively. The units are original to the building and beyond their useful service life. The original control systems are no longer functional and the units are only capable of controlling for a single space temperature set point. The city has them listed for replacement in the capital improvement plan. Planned Implementation Replace the rooftop air handling units (RTU-1,-2) with new rooftop air handling units designed to provide required heating and ventilation control. The new systems will be designed to comply with current codes, standards and statutes with regard to return/relief air, ventilation rates and air filtration. Existing supply, return, and exhaust ductwork will be reused where feasible. Provide new direct digital controls and implement energy management system (EMS) control sequences and strategies to operate the air handling systems and exhaust systems based on anticipated occupancy schedules and actual ventilation demand. Honeywell will provide commissioning of the systems, mechanical, and electrical work associated with the installation to ensure proper function, maintainability, and operator training. V.2 Makeup Air Handling Unit (MAU-1,-2,-3,-4,-5) - Replacement Existing Conditions Makeup air handling units (MAU-1,-2,-3,-4,-5) serve the mechanics bays and garage storage areas. The units are original to the building and beyond their useful service life. Over time, air handling equipment generally experiences a decrease in efficiency and performance due to degradation of components and controls. The city has this listed for replacement in the capital improvement plan. Planned Implementation Replace the makeup air handling units (MAU-1,-2,-3,-4,-5) with new makeup air handling units designed to provide required heating and ventilation control. The new systems will be designed to comply with current codes, standards and statutes with regard to return/relief air, ventilation rates and air filtration. Existing supply ductwork will be reused where feasible. Provide commissioning of the systems, mechanical, and electrical work associated with the installation to ensure proper function, maintainability, and operator training. POLICE STATION C.1 Energy Management and Direct Digital Controls Existing Conditions The heating, ventilating and air conditioning (HVAC) systems in the Police Station utilize direct digital (DDC) controls. The TAC energy management system (EMS) is used to provide the HVAC equipment in the building with occupied / unoccupied scheduling, and controls the operation of the air handling units (AHUs), heating 33 City of Prior Lake ESA Honeywell Energy Services Group December 2014 system, direct expansion (DX) cooling system, and terminal equipment such as the variable air volume (VAV) systems. Based on the site survey, observations of equipment operation and trend data, some of the system controls were identified to have sequence and calibration issues. These issues result in inefficient operation and uncomfortable building conditions. The Exhibit includes existing control parameters and setpoints. The following are some of the control issues that were identified during the Investment Grade Audit: Energy Management System The existing direct digital controls on HVAC equipment have not been recommissioned or tuned in many years resulting in inefficient, inconsistent and ineffective system performance. There are multiple sensors located in positions that provide faulty readings to the EMS. There are multiple sequence and calibration issues including system setpoints and operating schedules that result in inefficient operation and reduced occupant comfort. Heating Water System and Circulating Pumps Boilers-1, 2 are Cleaver Brooks natural gas fired high efficiency modular boilers. Pumps P-1, P- and terminal equipment based on the heating demand. The enable/disable control for the boilers and pumps is accomplished via switching on EMS. The EMS provides sequences for switching the lead/lag operation of the Boilers-1, 2 and Pumps-1, 2 based on a user-defined interval to even out equipment run time and provide alarms for each. The heating loop hot water supply temperature is not being reduced when the building is unoccupied or when outdoor air temperature (OAT) conditions are mild. The reset schedule for the heating water supply: OAT Supply Water Temp 95F 140F 0F 180F Air Handling Units AHU-1-P serves the offices, and common areas on the lower level, and main levels The air handling units (AHU) is a variable air volume system with a supply fan, mixed air dampers, hot water heating coils with two way control valves and direct expansion (DX) cooling coil. There are twenty-eight (28) VAV boxes serving different zones throughout the building. during mild outdoor condition) based on current setpoints. eset control strategy (resetting the discharge air temperature setpoint based upon actual building cooling load conditions) that could be fined tuned to provide better comfort and performance based on current setpoints. The air handling unit (AHU-1-P) is currently operating 24/7. Planned Implementation This energy management system (EMS) and direct digital controls (DDC) recommendation is aimed at re- commissioning the existing TAC digital control system. Re-commission existing direct digital controls to provide improved reliability, efficiency and performance. The following are examples of the proposed hardware, software program, control strategy and sequence of operation upgrades that would be incorporated for improving control of applicable HVAC equipment in the facility. The Exhibit includes proposed control parameters and setpoints. 34 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Energy Management System Re-commission the existing DDC system and relocate applicable sensors and wiring to their correct locations to insure proper system operation. Heating Water System and Circulating Pumps Re-commission the existing boiler control and reset enable/disable control of the hot water boilers based on outdoor air temperature and building occupancy. The hot water supply temperature will be reduced by an adjustable setback factor during unoccupied periods. The outside air enable set point could be changed to below 50F for heating, and from 70F-95F for dehumidification. Outside air is available for free cooling between 50F-70F, and supplemented with mechanical cooling. Dehumidification is generally not required in this temperature range. The high reset hot water supply temperature set point could be lowered from 140F to 110F, allowing the boiler to condense, and raising the combustion efficiency. Air Handling Units Re-commission air handling unit start/stop controls and modify operating schedules to better match actual occupancy of the associated spaces. Modify economizer control set point. Modify the discharge air temperature reset control set points. VAV system components are discussed in a separate FIM, C.2, listed below. C.2 Occupancy Control of VAV Boxes Existing Conditions The terminal variable air volume (VAV) boxes utilize direct digital controls (DDC). Space thermostats modulate the VAV box dampers and reheat coil valves in sequence to regulate airflow volume and temperature being delivered to maintain space temperature set points. These systems are designed to deliver a constant amount of ventilation to the spaces served regardless of occupancy. The Exhibit includes existing control parameters. Planned Implementation This recommendation includes providing an interface from the existing room lighting controls to the VAV boxes, and controlling the minimum damper position to a reduced minimum set point when the room is unoccupied. Provide pushbuttons to allow temporary schedule override in the conference rooms. This will reduce the fan horsepower and heating/cooling load on the fan. The Exhibit includes proposed control parameters. L.1 Lighting Improvements Existing Conditions Lighting sources in the building include a variety of fixture and lamp combinations. Much of the lighting in the facility consists of 32-watt fluorescent fixtures with T-8 fluorescent lamps and electronic ballasts. Planned Implementation The following items are planned for the lighting retrofit in the building: Retrofit with T-8 Light emitting diode (LED) lamps and low wattage electronic ballasts to replace existing 32-watt T-8 fluorescent systems. Reduce the number of lamps and ballasts and add reflectors in areas that are over lit. Replace compact fluorescent lamps with LED. Replace exterior wall pack and flood metal halide lamps with LED. Exhibit includes detailed list of fixtures. 35 City of Prior Lake ESA Honeywell Energy Services Group December 2014 M.1 Rebalance Air Handling Systems Existing Conditions The air handling units serving the police station have not been balanced in many years. The air handling unit fans should have measurement and rebalancing of airflows to optimize system performance and occupant comfort. The Exhibit includes existing control parameters. Planned Implementation Rebalance the air handling units after cleaning, repair and controls work have been completed. Balance the supply and return/exhaust fans to provide design airflow. The Exhibit includes proposed control parameters. The following units will require rebalancing: AHU-1-P air handling unit supply and return/exhaust fans. S.1 Building Envelope Air Leakage Existing Conditions The facility building envelope was inspected and tested, using a smoke puffer, to identify the location and severity of air leakage paths in the building. Air leakage is defined as the "uncontrolled migration of conditioned air through the building envelope". Air leakage is typically caused by pressure differences due to wind, stack effect and mechanical systems. Tests carried out by the National Research Council of Canada on High Rise Commercial and Residential Buildings, Schools, Supermarkets and Houses have shown that levels of 30 % to 50% of building heat loss could be attributed to air leakage. Control of air leakage involves the sealing of gaps, cracks and holes using appropriate materials and systems to create, as near as possible, a continuous plane of "air- tightness" to completely encompass the building envelope. The following is a list of building envelope issues identified in the facility: Overhead Doors Leakage detected around overhead doors. Exterior Doors Leakage detected along exterior door thresholds. Interior Doors Leakage detected along interior door thresholds. Roof/Wall Leakage detected along roof/wall connections as evidenced by cobwebs and dirt streaking. Planned Implementation This recommendation includes the reduction of air leakage through the sealing of gaps, cracks and holes in the building envelope using appropriate materials and systems (weather stripping, caulking, etc.). The following is a list of corrective actions that would be taken to address the identified air leakage issues. The Exhibit includes floor plans which identify specific areas. Weather-strip overhead doors. Weather-strip exterior doors. Weather-strip interior doors. Seal the roof to wall perimeter construction that is leaky with two component polyurethane foam. IGA Investment Grade Audit This energy conservation measure includes the work performed to complete the Investment Grade Audit, as agreed to with the City of Prior Lake. 36 City of Prior Lake ESA Honeywell Energy Services Group December 2014 SCHEDULE B. TERMS AND PAYMENT SCHEDULE The Agreement Price shall be paid in the currency of the United States of America by the Client to HESG on a progress payment basis. This Terms and Payment Schedule applies only to the extent of the Work and Services performed as identified in Schedule A, Scope of Work and Services, and does not apply to the measurement and verification services described in Schedule F (Service Agreement). 2. Payment Schedule (b) The Payment Schedule will be on a progress percent of completion basis; and (c) The Payment Schedule set forth below is an anticipated Payment Schedule and shall be amended to adjust for actual progress of work completion. Month Cumulative Work is PaymentPayment Completed Dec 2014 $ 533,585 $ 533,585 $ 266,792 Jan 2015 $ 800,377 $ - Feb 2015 $ 800,377 $ - Mar 2015 $ 800,377 Apr 2015 $ 266,792 $ 1,067,170 $ 1,333,962 May 2015 $ 266,792 Jun 2015 $ 400,189 $1,734,151 Jul 2015 $ 266,792 $ 2,000,943 Aug 2015 $ 133,396 $ 2,134,339 Sep 2015 $ 133,396 $ 2,267,735 $ 2,427,811 Oct 2015 $ 160,075 Nov 2015 $ 106,717 $ 2,534,528 Dec 2015 $ 53,358 $ 2,587,886 Jan 2016 $ 53,358 $ 2,641,245 Feb 2016 $ 26,679 $ 2,667,924 TOTAL $ 2,667,924 $ 2,667,924 3. Term and Commencement . The term of this Agreement shall begin on the Commencement Date. The , terms of Schedule E, Performance Guaranteeand of Schedule F, Service Agreement, are set forth on those schedules. 4. Substantial Completion and Acceptance Date. The Substantial Completion and Acceptance Date shall be the date on which the Client executes a Certificate of Substantial Completion and Acceptance Certificate. If the Work and Services are divided into phases for which individual prices have been negotiated, then separate Substantial Completion and Acceptance Dates shall apply to each phase. 5. Delays. If HESG is delayed in the commencement or completion of the Work or Services by causes beyond its control and without its fault or negligence, including but not limited to fire, flood, labor disputes, unusual delays in deliveries, abnormal adverse weather conditions and acts of God, or by failure by the Client to perform its obligations under the Agreement and Schedules or failure by the Client to cooperate with HESG in the timely completion of the Work or Services, then HESG shall provide written notice to the 37 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Client of the existence, extent of and reason for such delays. An equitable adjustment in Substantial Completion Date shall be made as a result. 6. Certificate of Substantial Completion and Acceptance. The Certificate of Substantial Completion and Acceptance to be executed by the Client shall include: (a) An acknowledgement by the Client of the facility improvements and/or facility substantially completed and the Substantial Completion Date for each facility improvement and/or facility. (b) An acknowledgement by the client of receipt of manuals and training provided by HESG under the Agreement. (c) An acknowledgement by the client of the warranty start date and warranty period. (d) An acknowledgement that HESG will not be held responsible nor warrant against system malfunction caused by improper use, misuse or wrong entry of data by the client, and HESG shall not be liable for situations or damages that are the direct result of user-generated data bases. (e) A punchlist of items remaining to be completed by HESG. 38 City of Prior Lake ESA Honeywell Energy Services Group December 2014 SCHEDULE C. CERTIFICATE OF SUBSTANTIAL COMPLETION AND ACCEPTANCE Pursuant to the Agreement, by and between HESG and Client, Client does hereby acknowledge the following: 1.Substantial Completion and Acceptance. Client agrees that the energy savings and/or other retrofits specified below have been substantially completed by HESG and are hereby accepted by Client. 2.Manuals and Training. Client has received manuals and training provided by HESG under this agreement. 3.Warranty Start Dates and Warranty Periods. HESG has informed Client of all warranty coverage's, start dates and warranty periods. 4.Liability. HESG will not be held responsible nor warrant against system malfunction caused by improper use, misuse or wrong entry of data by the Client, and HESG shall not be liable for situations or damages that are the direct result of user-generated data bases. 5.Punchlist. Client has provided HESG with a punchlist of items to be completed by HESG. CERTIFICATE OF COMPLETION AND ACCEPTANCE FIM Client Approval ESG Approval Facility Code Facility Improvement Measure Client Date Client Date 39 City of Prior Lake ESA Honeywell Energy Services Group December 2014 SCHEDULE D. BASE YEAR AND SUPPORTING DATA 1.Space Occupancy and Utilization. The space occupancy and utilization data will be documented and amended as part of this agreement. 2. Standards of Comfort and Service. The space conditions during occupied and unoccupied hours will be as follows: 1. Temperatures will be maintained at designated levels as identified in calculation spreadsheets after retrofits have been completed. Typically, occupied room temperature setpoints are 70 degrees F during the heating season and 75 degrees F during the cooling season. Heating unoccupied temperatures will be 55 degrees F or higher and cooling unoccupied temperatures will be allowed to drift. 2. Operation of HVAC systems will be at current operating conditions (ventilation rates) when buildings are at design occupied conditions. Buildings which do not have proper ventilation rates (as identified by recommissioning efforts and other analyses) will have ventilation rates modified and adjustments reflecting the revised ventilation rates will be made to the energy baseline. 3. Lighting levels are to be maintained at or above current lighting levels unless areas are overlit in which case light levels shall be maintained at or above IES (Illuminating Engineering Society) standards. 3. Lighting Utilization. Information on current hours of use of lighting will be documented and amended as part of this agreement. 4. HVAC System Utilization. Information on current hours of use and setpoints of specific HVAC equipment and systems will be documented and amended as part of this agreement. 5. Baseline Calculation Procedures. The Measurement and Verification methodology selected for this project will involve determining baseline information on a specific retrofit and building basis. All of this information will be documented and amended as part of this agreement. 40 City of Prior Lake ESA Honeywell Energy Services Group December 2014 SCHEDULE E. PERFORMANCE GUARANTEE Term. 1. The term of the Performance Guarantee Schedule shall be 120 months and shall commence on the first day of the month following the Substantial Completion and Acceptance Date set forth in Schedule C. The terms and conditions for this Performance Guarantee are identified in Articles 2 and 3 of this Agreement. Guarantee. 2. HESG guarantees that Client will save $1,594,957 in Total Energy Savings, Operational Savings, Capital Contribution and Rebates, as calculated herein, over the term of this Agreement. The Energy Savings shall be computed as per attached Exhibits which are hereby incorporated as a part of this Schedule E. Annual savings shown below are for illustration purposes only. The Savings Guarantee will be determined in accordance with Article 2 of the Agreement. PROGRAM COSTS Capital Project Costs $ 2,667,924 Third Party Finance Costs $ 338,214 Technical Resource Services Cost (10 years) $ 111,830 ($ 1,535,000) Less: Capital Cost Avoidance $ 1,582,968 TOTAL PROGRAM COSTS GUARANTEED SAVINGS Utility Savings Measured and Verified Utility Savings $ 1,197,242 Operational Savings Maintenance and Operations Savings $ 328,789 Rebates $ 68,926 $ 1,594,957 TOTAL GUARANTEED SAVINGS Annual Guaranteed Savings Table: Operational Savings Total Savings Operations and Rebates Year Utility Savings Maintenance 0 $0 $25,671 $68,926 $ 94,597 1 $104,436 $26,441 $130,877 2 $107,569 $27,234 $134,803 3 $110,796 $28,051 $138,847 4 $114,120 $28,893 $143,013 5$117,544 $29,760 $ 147,304 6 $121,070 $30,653 $ 151,723 7 $124,702 $31,572 $ 156,274 8 $128,443 $32,519 $ 160,962 9 $132,297 $33,495 $ 165,792 10 $136,265 $34,500 $ 170,765 Totals $1,197,242 $328,789 $68,926 $1,594,957 41 City of Prior Lake ESA Honeywell Energy Services Group December 2014 3. Measured and Verified Energy Savings. HESG guarantees that the cumulative facility improvement measures will save the total annual units of energy as follows. Individual Exhibits are attached which describe how the energy savings will be validated. FacilityECM CodeEnergy Conservation MeasureYear 1 Savings C.1a $32,631 City Wide Energy Management and DDC - Base Project L.1b $20,149 City Wide Lighting Fixture Replacement L.2 $191 City Wide Lighting Controls L.3a $4,023 City Wide Athletic Lighting-Memorial Park-Equal Illumination L.5b $16,570 City Wide Exterior Lighting-Replacement L.6 $11,136 City Wide Traffic Signal Lighting S.1 $4,929 City Wide Building Envelope/Air Leakage C.2 $1,589 City Hall VAV Boxes - Occupancy Controls M.5 $4,921 City Hall Chiller Plant Improvements (cost in EMS FIM) M.1 $1,363 City Hall Air Handling Units -- Rebalancing M.1 $514 Fire Station #1 Overhead Door Replacement and Controls C.2 $1,066 Library VAV Boxes - Occupancy Controls M.1b $680 Library Hot Water Boiler Plant - Replacement M.2 $685 Library Air Handling Units -- Rebalancing M.1 $705 Maintenance Overhead Door Replacement and Controls C.2 $1,625 Police Station VAV Boxes - Occupancy Controls Police Station Air Handling Units -- Rebalancing M.1 $1,659 Grand Total$104,436 Energy Conservation Measure Annual Use Annual Natural Gas Electric (kWh) Demand (kW) (MMBtu) Energy Management and DDC - Base Project 227,253 0.0 1,871.3 Lighting Fixture Replacement 189,304 623.0 0.0 Lighting Controls 1,822 0.0 0.0 Athletic Lighting-Memorial Park-Equal 13,155 378.9 0.0 Illumination Exterior Lighting-Replacement 140,156 369.0 0.0 Traffic Signal Lighting 90,591 265.0 0.0 Building Envelope/Air Leakage 0 0.0 582.1 VAV Boxes - Occupancy Controls 10,164 29.7 55.2 Chiller Plant Improvements (cost in EMS FIM) 57,006 29.9 0.0 Air Handling Units -- Rebalancing 8,718 25.5 47.3 Overhead Door Replacement and Controls 0 0.0 60.0 VAV Boxes - Occupancy Controls 8,823 15.6 28.1 Hot Water Boiler Plant - Replacement 0 0.0 82.6 Air Handling Units -- Rebalancing 5,672 10.0 18.1 Overhead Door Replacement and Controls 0 0.0 81.7 VAV Boxes - Occupancy Controls 12,990 22.9 41.3 Air Handling Units -- Rebalancing 13,261 23.4 42.2 Grand Total 778,915 1,792.9 2,909.8 42 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Energy Conservation Measure Annual Use Annual Natural Gas Electric (kWh) Demand (kW) (MMBtu) Energy Management and DDC - Base 17,624 0.0 145.1 Project Lighting Fixture Replacement 10,517 34.6 0.0 Lighting Controls 101 0.0 0.0 Athletic Lighting-Memorial Park-Equal 731 21.1 0.0 Illumination Exterior Lighting-Replacement 7,786 20.5 0.0 Traffic Signal Lighting 5,033 14.7 0.0 Building Envelope/Air Leakage 0 0.0 51.4 VAV Boxes - Occupancy Controls 897 2.6 4.9 Chiller Plant Improvements (cost in EMS 5,030 2.6 0.0 FIM) Air Handling Units -- Rebalancing 769 2.3 4.2 Overhead Door Replacement and Controls 0 0.0 5.3 VAV Boxes - Occupancy Controls 779 1.4 2.5 Hot Water Boiler Plant - Replacement 0 0.0 7.3 Air Handling Units -- Rebalancing 500 0.9 1.6 Overhead Door Replacement and Controls 0 0.0 7.2 VAV Boxes - Occupancy Controls 1,146 2.0 3.6 Air Handling Units -- Rebalancing 1,170 2.1 3.7 Grand Total 52,084 104.7 236.8 4. Guaranteed Operational Savings. HESG guarantees that the cumulative facility improvement measures will save the operational costs as follows: ECM Guaranteed Facility Code Energy Conservation Measure Savings City Wide C.1a Energy Management and DDC - Base Project $978 City Wide L.1b Lighting Fixture Replacement $4,839 City Wide L.2 Lighting Controls $76 City Wide L.3a Athletic Lighting-Memorial Park-Equal Illumination $1,451 City Wide L.5b Exterior Lighting-Replacement $988 City Wide L.7 City Hall Emergency Lighting-Replacement $16,250 City Hall C.2 VAV Boxes - Occupancy Controls $256 Fire Station #1 V.1 Air Handling Units (RTU-1,-2) - Replacement $293 Fire Station #1 V.2 Makeup Air Handling Unit (MAU-1,-2) - Replacement $312 Library M.1b Hot Water Boiler Plant - Replacement $228 Grand Total $25,671 43 City of Prior Lake ESA Honeywell Energy Services Group December 2014 SCHEDULE F SERVICE AGREEMENT MN City of Prior Lake ESA Project Name: 12/08/2014 Date: TBD Agreement Number: (PROVIDER) (CLIENT) City of Prior Lake 1985 Douglas Drive North 4646 Dakota Street SE Golden Valley, MN 55422 Prior Lake, MN 55372-1714 Scope of Work: M&V scope documents and terms and conditions, which form a part of this Service Agreement. Preferred Temperature Control Services Site Services Flex Temperature Control Services Honeywell Energy Analysis Reporting Preferred Automation Maintenance Services Air Filter Services Flex Automation Services Water Treatment Services Preferred Fire Alarm Maintenance Services Critical Parts Stocking Fire Alarm Test and Inspect Services Thermography Services Preferred Security System Inspect Services Emergency Generator Services Flex Security System Services In Suite Services Preferred Mechanical Maintenance Services Remote Monitoring/Radionics Flex Mechanical Maintenance Services Indoor Air Quality Auditing Services Service Management Software ServiceNet Remote Monitoring and Control Services FM Worksite EBI Services Online Services Other/Special Provisions____________________ Advanced Support Honeywell Users Group M&V Services Guarantee Special Provisions Contract Term: Ten (10) years from the Effective Date. Client___ Honeywell___ (INITIALS) Service Agreement Effective Date: First (1st) day of the month following the date of Final Project Acceptance of the Work and Services. Price for Year 1: Year 1 price included in the Agreement Price. Client will receive invoice for M&V beginning in Year 2. Payment Terms: annual in advance Sales Tax will be invoiced separately Use Tax is included in the Price This sale is tax exempt Renewal: The Service Agreement Term will automatically be renewed for consecutive terms of one year for the full term of the Performance Guarantee as set forth in the Agreement unless terminated by Client by 60 days prior written notice to HESG. Acceptance: This proposal and the pages attached shall become a Services Agreement governed by the General Terms and Conditions herein and the terms and conditions of the Agreement in accordance with Article 13 below and only upon signature below by an authorized representative of HONEYWELL by Honeywell and CLIENT. unless defined specifically in this Service Agreement. HONEYWELL BUILDING SOLUTIONS SES CORPORATION CITY OF PRIOR LAKE Signature: Signature: Name: Name: Title: Title: Date: Date: 44 City of Prior Lake ESA Honeywell Energy Services Group December 2014 General Descriptions The following are general descriptions of one or more approaches to providing guarantee analysis services. The specific details of the M&V relating to the Retrofit as set forth in this Services Agreement take precedence over these descriptions. Option ARetrofit Isolation with Key Parameter Measurement This option is based on a combination of measured and estimated factors when variations in factors are not expected. Measurements are spot or short-term and are taken at the component or system level, both in the baseline and post- installation cases. Measurements should include the key performance parameter(s) which define the energy use of the ECM. ineering calculations of baseline and post-installation energy use based on measured and estimated values. Savings are calculated using direct measurements and estimated values, engineering calculations and/or component or system models often developed through regression analysis. Adjustments to models are not typically required. Option BRetrofit Isolation with All Parameter Measurement This option is based on periodic or continuous measurements of energy use taken at the component or system level when variations in factors are expected. Energy or proxies of energy use are measured continuously. Periodic spot or short-term measurements may suffice when variations in factors are not expected. Savings are determined from analysis of baseline and reporting period energy use or proxies of energy use. Savings are calculated using direct measurements, engineering calculations, and/or component or system models often developed through regression analysis. Adjustments to models may be required. Option C Utility Data Analysis This option is based on long-term, continuous, whole-building utility meter, facility level, or sub-meter energy (or water) data. Savings are determined from analysis of baseline and reporting period energy data. Typically, regression analysis is conducted to correlate with and adjust energy use to independent variables such as weather, but simple comparisons may also be used. Savings calculations use regression analysis of utility meter data to account for factors that drive energy use. Adjustments to models are typically required. Option DCalibrated Computer Simulation Computer simulation software is used to model energy performance of a whole-facility (or sub-facility). Models must be calibrated with actual hourly or monthly billing data from the facility. Implementation of simulation modeling requires engineering expertise. Inputs to the model include facility characteristics; performance specifications of new and existing equipment or systems; engineering estimates, spot-, short-term, or long-term measurements of system components; and long- term whole-building utility meter data. After the model has been calibrated, savings are determined by comparing a simulation of the baseline with either a simulation of the performance period or actual utility data. Savings calculations are done based on computer simulation model (such as eQUEST) calibrated with whole-building or end-use metered data or both. Adjustments to models are required. Coverage The M&V includes all labor, travel, and expenses to perform the M&V and frequency described in the M&V Plan. In general, and subject to details of the M&V Plan, Honeywell will provide a single (1) reporting submission of the determination of the amount of Cost Avoidance for each Guarantee Year. Any work and services not explicitly described in the M&V Plan, including Client Guarantee Responsibilities, are not included. 45 City of Prior Lake ESA Honeywell Energy Services Group December 2014 46 City of Prior Lake ESA Honeywell Energy Services Group December 2014 M&V Plan : In general, the M&V: a) are required to be performed for the entire Guarantee Term; b) may employ one or more of Options A, B, C or D; and c) include delivering a report on an annual basis, for either the entire Guarantee Term, or for a shorter M&V reporting term. The details of the M&V are set forth in the M&V Plan, as described in detail in the Exhibits to the Contract, which takes precedence over the general description in this Section. The services identified below will be provided by HESG at the Client's facilities: The annual services to be provided: Provide all required monitoring and guarantee management services for all selected improvements. Provide regular site visits to verify proper operation of facility improvements. Verify proper operation of energy management system through remote monitoring, site visits, analysis of trend data, and data logging. Provide report to administration of any energy strategies that are being overridden. Verify proper maintenance of improvements such as lighting to ensure equivalent replacement products are being utilized. Also, verify systems are being maintained to continue predicted efficiencies. Provide consulting on building operation, changes and problems. Provide annual reports and annual reconciliation of savings status. HESG Responsibilities HESG shall assume the following responsibilities as part of this Service Agreement: (a) Monitor Equipment Operation. HESG will monitor schedules, temperature alarms, overrides, and other necessary information from the energy management system. (b) Utility Measurements. HESG will take necessary utility measurements before/after the implementation of the facility improvements for the purpose of calculating the energy cost avoidance of the improvements. (c) Facility Walk-Throughs. HESG will provide routine walk-throughs proper operation and maintenance of the improvements. (e) Facility System Performance Reviews. HESG will review with Client system performance, identified operational improvement opportunities and new technologies that are available to improve District-wide efficiencies. (f) Annual Reconciliation. HESG will provide Client with an annual reconciliation of the guaranteed cost avoidance. (g) Legislative Body Presentations. HESG will assist Client in presenting the legislative body on an annual basis. (h) Construction Meetings. HESG will organize and direct regular construction administration meetings. Meetings will be scheduled on an as needed basis. Mutual Responsibilities Client and HESG hereby agree to the following rights and obligations: (a) Periodic Meetings. Client and HESG will meet on a periodic basis as needs and opportunities dictate to assess progress in meeting established goals, discuss stra resolve any outstanding issues. (b) Service Agreement Amendment. Client and HESG agree to amend any part of this agreement on the mutual consent of the parties. Client Responsibilities. Client shall assume the following responsibilities as part of this Service Agreement: (a) Client Equipment is in good working condition and that the Client has given HESG all information of which Client is aware concerning the condition of the equipment. During the term of this Service Agreement, the Client will: (i) or if not inform HESG; 47 City of Prior Lake ESA Honeywell Energy Services Group December 2014 (ii) Keep accurate and current work logs and information on the Equipment as recommended by the manufacture; (iii) Provide an adequate environment for Equipment as recommended by the manufacturer or as recommended by HESG, including adequate space, electrical power, air conditioning, and humidity control; (iv) Notify HESG of any Equipment malfunction, breakdown, or other condition affecting the operation of the Equipment; and (v) Allow HESG, at times and for durations approved by Client in its sole discretion, to start and stop, periodically turn off, or otherwise change or temporarily suspend Equipment operations so that HESG can perform any inspection services of the Equipment; The Client acknowledges that its failure to meet any of these obligations will relieve HESG of any responsibility for any breakdown, or any necessary repair or replacement, of any Equipment caused by the failure of the Client to meet any of these obligations and may require adjustments. The Client, in consultation with HESG, shall retain the right to make opriate changes to the scope or the price of this Service Agreement or both or make adjustments to the Performance Guarantee, Schedule E. Access. The Client will give HESG full access to all Equipment when HESG requests such access, at times and for durations approved by Client in its sole discretion this Service Agreement as it relates to the inaccessible equipment will be suspended until such access to the Equipment is provided. Matters affecting the removal, replacement, repair, refinishing, restoration, reconstruction, or other remedial actions taken by the Service Agreement. property. HESG retains the right to remove such items at any time during the term, or upon the termination of this Service Agreement. (b) Submit Utility Bills. Upon request from Honeywell, Client will provide HESG with all utility bills on a quarterly basis. (c) Operating Equipment. Client will operate the equipment according to Article 3 of the Agreement. (d) Maintain and/or Replace Faulty Equipment. Client shall maintain and/or replace all energy consuming equipment that is being repaired, replaced or modified as a result of the Work and Services identified in Schedule A, according to Article 2.10 of the Agreement. (e) Equipment Environment. Client shall provide an adequate environment for equipment as recommended by the manufacturer or as recommended by HESG, including adequate space, electrical power, air conditioning, and humidity control. (f) Controlling Equipment. Client shall, at times and for durations approved by Client in its sole discretion, allow HESG to start and stop, periodically turn off, or otherwise change or temporarily suspend equipment operations so that HESG can perform any inspection services of the equipment. (g) Notification of Problems. Client shall provide HESG notice of system and building changes which impact the Work and Services identified in Schedule A, Premises Description and Scope of Work and Services, or will impact in Schedule E, Performance Guarantee including but not limited to: Schedule/occupancy changes (+ or 10%). Overrides of schedules. Changes, additions or deletions to HVAC equipment. Additional square footage added to the buildings (h) Logging Information. Client will log any utility meters as directed by HESG. 48 City of Prior Lake ESA Honeywell Energy Services Group December 2014 (i) Assist in Conservation. Client shall assist in maintaining and implementing facility improvement measures and building operations to conserve energy including but not limited to: Maintain thermostat setpoints. Turning off lights in unoccupied rooms. Controlling HVAC equipment in the unoccupied mode when spaces are unoccupied. Keeping vestibule doors closed to reduce infiltration. Keeping windows closed during heating and cooling periods. (j) Construction Requirements. Client shall provide a secure space on the job site for material storage, meeting room and toilet facilities for construction personnel. (k) Miscellaneous Provisions. (i) Any notice that is required to be given under this Service Agreement must comply with the requirements of the Energy Services Agreement. (iii) the Client agrees to negotiate with HESG for appropriate changes to the scope or price of this Service Agreement or both. (iv) If there is a conflict between the terms and conditions of the Service Agreement and the terms and conditions of the Agreement, the terms and conditions of the Agreement shall control. (v) Price Adjustment: The annual Service Agreement price will escalate each year on the Effective Date anniversary, and shall be as follows: Year 2 $10,048 Year 5 $10,979 Year 8 $11,997 Year 3 $10,349 Year 6 $11,309 Year 9 $12,357 Year 4 $10,660 Year 7 $11,648 Year 10 $12,728 49 City of Prior Lake ESA Honeywell Energy Services Group December 2014 SCHEDULE G. CLIENT/HESG RESPONSIBILITIES Client hereby agrees to assume the following responsibilities as part of this Agreement: 1.Submit Utility Bills. Client will provide HESG with all utility bills on a quarterly basis. 2.Operating Equipment . Client will operate the equipment as specified in Article 3 of the Agreement. 3.Maintain and/or Replace Faulty Equipment. Client shall maintain all energy consuming equipment that is being repaired, replaced or modified as a result of the Work and Services identified in Schedule A or that will have an impact on HESG Schedule E as required by Section 2.10 of the Agreement. 4.Equipment Environment. Client shall provide an adequate environment for equipment as recommended by the manufacturer or as recommended by HESG, including adequate space, electrical power, air conditioning, and humidity control. 5.Controlling Equipment. Client shall discretion, allow HESG to start and stop, periodically turn off, or otherwise change or temporarily suspend equipment operations so that HESG can perform any inspection services of the equipment. 6.Notification of Problems. Client shall, within 5 days, provide HESG notice of system and building changes which impact the Work and Services identified in Schedule A or will impact HESG including but not limited to: Schedule/occupancy changes (+ or 10%). Overrides of schedules. Changes, additions or deletions to HVAC equipment. Additional square footage added to the buildings 7.Logging Information. Client will log any utility meters as directed by HESG. 8.Assist in Conservation. Client shall assist in maintaining and implementing facility improvement measures and building operations to conserve energy including but not limited to: Maintain thermostat setpoints. Turning off lights in unoccupied rooms. Controlling HVAC equipment in the unoccupied mode when spaces are unoccupied. Keeping vestibule doors closed to reduce infiltration. Keeping windows closed during heating and cooling periods. 9.Construction Requirements. Client shall provide a secure space on the job site for material storage, meeting room and toilet facilities for construction personnel. HESG hereby agrees to assume the following responsibilities as part of this Agreement: 1.Monitor Equipment Operation. HESG will monitor schedules, temperature alarms, overrides, and other necessary information from the energy management system. 2.Utility Measurements. HESG will take necessary utility measurements before/after the implementation of the facility improvements for the purpose of calculating the energy cost avoidance of the improvements. 50 City of Prior Lake ESA Honeywell Energy Services Group December 2014 3.Facility Walk-Throughs. HESG will provide routine walk-throughs of the Clients and inspect for proper operation and maintenance of the Work and Services. 4.Facility System Performance Reviews. HESG will review with Client system performance, identified operational improvement opportunities and new technologies that are available to improve Client-wide efficiencies. 5.Annual Reconciliation. HESG will provide Client with an annual reconciliation of the guaranteed cost avoidance. 6.Legislative Body Presentations. HESG Legislative Body 7.Construction Meetings. HESG will organize and direct regular construction administration meetings. Meetings will be scheduled on an as needed basis. Client and HESG hereby agree to the following rights and obligations: 1.Periodic Meetings. Client and HESG agree to meet on a periodic basis as needs and opportunities dictate to assess progress in meeting established goals, to discuss strategies for Agreement Amendment. Client and HESG agree to amend any part of this agreement on the mutual consent of the parties. 51 City of Prior Lake ESA Honeywell Energy Services Group December 2014 SCHEDULE H. PERFORMANCE AND PAYMENT BONDS PAYMENT BOND BOND NO. PENAL SUM , a corporation organized under the laws of the State of Surety held and firmly bound unto CITY OF PRIOR LAKEObligee DOLLARS ($ ), for the payment whereof well and truly to be made, the Principal and the Surety bind themselves, their heirs, executors, administrators, successors, and assigns, jointly and severally, firmly by these presents. WHEREAS the Principal and the Obligee have entered into an Agreement, dated the ______ day of , 20____AgreementAgreement is by reference made a part hereof, as if fully set forth. NOW, THEREFORE, the condition of this obligation is such that if the Principal, its heirs, executors, administrators, successors, or assigns, or a subcontractor, shall fail to pay any person or persons furnishing labor and/or materials, as defined in Minnesota Statute Section 574.26, pursuant to the Agreement, then Surety will pay for the same, in or to an amount not exceeding the penal sum of this bond, set forth, and also will pay in case suit is This bond shall inure to the benefit of any persons furnishing labor and/or materials, as defined in Minnesota Statute Section 574.26, pursuant to the Agreement, so as to give a right of action to such person or their assigns in any suit brought upon this bond. It is further stipulated and agreed that the Surety of this bond shall not be exonerated or released from the obligation of the bond by any change, extension of time for performance, addition, alteration or modification in, to, or of any contract, plans, specifications, or agreement pertaining or relating to any scheme or work of improvement hereinabove described or pertaining or relating to the furnishing of labor, materials, or equipment therefore, nor by any change or modification of any terms of payment or extension of the time for any payment pertaining or relating to any scheme or work of improvement hereinabove described, nor by any rescission or attempted rescission of the contract, agreement or bond, nor by any conditions precedent or subsequent in the bond attempting to limit the right of recovery of claimants otherwise entitled to recover under any such contract or agreement or under the bond, nor by any fraud practiced by any person other than the claimant seeking to recover on the bond and that this bond be construed most strongly against the Surety and in favor of all persons for whose benefit such bond is given, and under no circumstances shall Surety be released from liability to those for whose benefit such bond has been given, by reason on any breach of the Agreement, but the sole conditions of recovery shall be that claimant is a person furnishing labor and/or materials, as defined in Minnesota Statute Section 574.26, pursuant to the Agreement, and has not been paid the full amount of his/her or its claim and that Surety does hereby waive notice of any such change, extension of time, addition, alteration or modification herein mentioned. SIGNED, sealed, and dated this day of , 20 . By Principal By Attorney-in-fact . 52 City of Prior Lake ESA Honeywell Energy Services Group December 2014 PERFORMANCE BOND BOND NO. PENAL SUM , a corporation organized under the laws of the State of Surety held and firmly bound unto CITY OF PRIOR LAKEObligee DOLLARS ($ ), for the payment whereof well and truly to be made, the Principal and the Surety bind themselves, their heirs, executors, administrators, successors, and assigns, jointly and severally, firmly by these presents. WHEREAS the Principal and the Obligee have entered into an Agreement, dated the day of , 20____AgreementAgreement is by reference made a part hereof, as if fully set forth. NOW, THEREFORE, the condition of this obligation is such that if the Principal, his heirs, executors, successors, and assigns shall in all things well and truly perform and observe all of the covenants, agreements, and conditions on their part to be performed and observed which are contained in the Agreement then this obligation shall be void; otherwise, it shall remain in force. SIGNED, sealed, and dated this day of , 20 . By Principal By Attorney-in-fact 53 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Exhibits - Table of Contents Exhibit # Exhibit Name Page No. Exhibit 1.0 Guarantee Summary..................................................................................................55 Exhibit 1.1 Energy Conservation Measures Matrix Summary ....................................................61 Exhibit 1.2 Cash Flow Analysis ..................................................................................................62 Exhibit 2.0 Space Occupancy and Utilization .............................................................................66 Exhibit 2.1 Standards of Comfort and Equipment Schedules .....................................................67 Exhibit 3.0 Energy Management System and Controls Guarantee ..........................................71 Exhibit 3.1 Energy Management System and Controls Savings Calculations .........................76 Exhibit 4.0 Other Control Improvements Guarantee ..............................................................103 Exhibit 4.1 Other Control Improvements Savings Calculations ............................................107 Exhibit 5.0 Lighting System Improvements Guarantee .........................................................119 Exhibit 5.1 Lighting System Improvements Savings Calculations and Inventory .................124 Exhibit 6.0 Mechanical System Improvements Guarantee .....................................................138 Exhibit 6.1 Mechanical System Improvements Savings Calculations ...................................142 Exhibit 7.0 Building Envelope/Air Leakage Guarantee .........................................................158 Exhibit 7.1 Building Envelope/Air Leakage Savings Calculations ........................................162 Exhibit 8.0 Building Envelope Floor Plans ...............................................................................165 54 City of Prior Lake ESA Honeywell Energy Services Group December 2014 EXHIBIT 1.0 Guarantee Summary Table of Contents 1.0 Agreed Upon Parameters ................................................................................................... Page 56 a) Applicability .................................................................................................................. Page 56 b) Utility Rates ................................................................................................................... Page 56 c) Existing Conditions........................................................................................................ Page 57 d) Proposed Conditions ...................................................................................................... Page 57 e) Energy Calculation Input Data & Parameters................................................................ Page 57 2.0 Pre-Retrofit Consumption Data ......................................................................................... Page 57 a) Measurement Methodology ........................................................................................... Page 57 3.0 Post-Retrofit Measurements............................................................................................... Page 58 a) Measurement Methodology ........................................................................................... Page 58 4.0 Computation of Savings ..................................................................................................... Page 59 a) Computation and Presentation of Utility Savings.......................................................... Page 59 55 City of Prior Lake ESA Honeywell Energy Services Group December 2014 1.0 Agreed Upon Parameters: The following are mutually agreed upon parameters that form the basis of this performance guarantee. These parameters are hereby recognized, for the purposes of this Agreement, as fact and will not be measured, monitored or adjusted. a) Applicability: This performance guarantee applies to the facility improvement measure for City of Prior Lake (CoPL). FacilityFIM CodeFacility Improvement Measure C Energy Management System and Controls City-Wide C.1a - Energy Management System and Controls L Lighting System Improvements L.1b - Lighting Fixture Replacement L.2 - Lighting Controls M Mechanical System Improvements M.X - Mechanical System Improvements O Other Control Improvements E.2 - Variable Speed Drives/Ventilation Control E.X - Various Other Control Improvements S Structural Improvements S.1 - Building Envelope/Air Leakage b) Utility Rates: The base utility rates in the table below are those used to calculate the Guaranteed Savings and are the current rates in effect for each facility. Throughout the term of this Agreement, the savings are to be whichever is larger. These rates will be used as the floor price for the Term and shall be the lowest rate used to calculate energy savings in the event of a utility rate decrease. The natural gas rate includes any Purchase Gas Adjustment (PGA) charges. The heating utility rates are based on the average annual data from May 2013 to April 2014. 56 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Electric Utility:Gas Utility: MN Valley Electric Centerpoint Energy NaturalWater/ WinterSummerElectric Fuel Oil GasSewer DemandDemandUse Facility $/kW$/kW$/kWh $/MMBtu$/MMBtu$/CCF City Hall $8.98 $12.86 $0.072 $7.27 $0.00 $0.00 Fire Station #1 $8.98 $12.86 $0.060 $7.75 $0.00 $0.00 Fire Station #2 $0.00 $0.00 $0.106 $7.65 $0.00 $0.00 Library $8.98 $12.86 $0.067 $7.44 $0.00 $0.00 Maintenance $8.98 $12.86 $0.066 $7.80 $0.00 $0.00 Police Station $8.98 $12.86 $0.071 $7.60 $0.00 $0.00 Exterior Lighting $0.00 $0.00 $0.113 $0.00 $0.00 $0.00 Athletic Lighting $5.87 $8.07 $0.106 $0.00 $0.00 $0.00 Traffic Signal Lighting $0.00 $0.00 $0.118 $0.00 $0.00 $0.00 c) Existing Conditions: The building systems covered in this Exhibit were studied by HESG and have the existing operating parameters, setpoints and schedules identified in the Exhibits. The operating parameters, setpoints and schedules were derived from interviews with CoPL staff, on site physical measurement and data logging, and from surveys conducted by HESG subcontractors. These values are mutually agreed to by Client and HESG and are key inputs in the energy saving spreadsheets created by HESG. d) Proposed Conditions: The proposed operating setpoints and schedules are identified in the spreadsheet calculations in the Exhibits. e) Energy Calculation Input Data and Parameters: The spreadsheet energy models have to utilize existing and projected building system characteristics to accurately model individual building system energy consumption and savings. These building characteristics were obtained from sources as listed above. The major building input data are identified in the Exhibits. 2.0 Pre-Retrofit Consumption Data: The pre-retrofit consumption data was established utilizing the following methodology: a) Measurement Methodology: The individual measurement methodology is given in the Exhibits. Existing major variable parameters are site data and historic natural gas and electric utility rates. These parameters were quantified and have been included in Exhibits. 57 City of Prior Lake ESA Honeywell Energy Services Group December 2014 3.0 Post-Retrofit Measurements: The following describes the stipulated methodology for proving the savings resulting from the installation of mechanical system improvement measures. a) Measurement Methodology: The existing major variable parameters were quantified and have been included in the data in Exhibits. Since all external variables (weather, utility rates, building dimensions and thermal values, mechanical system specifications, etc.) have been established, the only remaining item to validate is that the performance of each conservation measures is per original design. The following items will be verified during installation of the improvement measures: ItemAttribute to be Verified Control System Improvements - Energy Management System Verify control setpoints and schedules. The Energy and Controls Management System (EMS) will be utilized to verify that these proposed parameters are functional and energy management strategies are being implemented. Lighting System Improvements - Lighting Fixture Replacement Test lighting circuits on a representative sample (typically about 10%) of the various major types of light fixtures after retrofit or new fixture installation. - Lighting Controls Verify installation per recommendations. Mechanical System Improvements - Mechanical System Improvements Verify installation per recommendations. Other Control Improvements - Variable Speed Verify minimum and maximum speed of each Drives/Ventilation Control variable speed drive. - Various Other Control Improvements Verify installation per recommendations. Structural Improvements - Building Envelope/Air Leakage Verify installation per recommendations. 58 City of Prior Lake ESA Honeywell Energy Services Group December 2014 4.0 Computation of Savings: The following describes the stipulated methodology for computing Total Energy Savings based on the installation of mechanical system improvement measures. a) Computation and Presentation of Utility Savings: The facility improvement measure savings will be generated as calculated by the spreadsheet software analysis programs that utilize standard engineering formulas, and are presented in the Exhibits. Actual savings will be based on the ability of the systems to operate per the intended design, which is verified in Section 3.0. The following table summarizes the guaranteed energy savings from implementation of the facility improvement measures. Annual Guaranteed Savings Electric Natural DemandFuel OilSewer Facility Improvement Measure UseGas Energy Management System and kWhkWMMBtuMMBtuCCF Controls 246,732 0.0 2,031.7 0.0 0.0 - Energy Management System and Controls Lighting System Improvements - Lighting Fixture Replacement 452,424 1,708.5 - Lighting Controls 1,902 Mechanical System Improvements - Mechanical System Improvements 93,613 98.1 367.0 0.0 0.0 Other Control Improvements - Variable Speed Drives/Ventilation 0 0.0 0.0 - Various Other Control Improvements 35,360 75.4 137.8 0.0 0.0 Structural Improvements - Building Envelope/Air Leakage 643.6 0.0 TOTALS830,0311,882.03,180.10.00.0 59 City of Prior Lake ESA Honeywell Energy Services Group December 2014 EXHIBIT 1.1 and 1.2 Facility Improvement Measure Matrix Summary Cash Flow Analysis 60 City of Prior Lake ESA Honeywell Energy Services Group December 2014 City of Prior Lake Energy Conservation Measures (ECMs) Annual Savings ECM Utility Facility Energy Conservation MeasuresNet Cost Code Rebate UtilityO&MTotal City of Prior C Energy Management System and Controls Lake C.1a - Energy Management and DDC - Base Project $32,631 $978 $33,609 $0 $375,021 L Lighting System Improvements L.1b - Lighting Retrofit with Fixture Replacement $20,149 $4,839 $24,988 $32,790 $278,964 L.2 - Lighting Controls $191 $76 $267 $0 $1,476 L.3a - Athletic Lighting-Memorial Park-Equal Illumination $4,023 $1,451 $5,474 $0 $152,371 L.5b - Exterior Lighting-Replacement $16,570 $988 $17,558 $15,896 $199,527 L.6 - Traffic Signal Lighting $11,136 $0 $11,136 $4,864 $46,841 L.7 - City Hall Emergency Lighting-Replacement $0 $16,250 $16,250 $0 $43,832 City Wide O&M Operations and Maintenance Improvements O&M.2 - Miscellaneous Operations & Maintenance Repairs $0 $0 $0 $0 $27,258 S Structural Improvements S.1 - Building Envelope/Air Leakage $4,929 $0 $4,929 $0 $64,183 TRS Technical Resource Services (M & V) TRS.1 - Baseline Development $0 $0 $0 $0 $9,982 TRS.2a - Annual M&V and Preventative Maintenance Services $0 $0 $0 $0 $9,755 C Energy Management System and Controls C.2 - VAV Boxes - Occupancy Controls $1,589 $256 $1,845 $0 $44,147 M Mechanical System Improvements City Hall M.5 - Chiller Plant Improvements (cost in EMS FIM) $4,921 $0 $4,921 $0 $0 M.1 - Air Handling Units -- Rebalancing $1,363 $0 $1,363 $0 $28,973 M.2 - Air Handling Unit (AHU-1C) -- Isolation Damper $0 $0 $0 $0 $7,113 M Mechanical System Improvements M.1 - Overhead Door Replacement and Controls $514 $0 $514 $0 $79,975 M.2 - Infrared Heaters - Replacement $0 $0 $0 $2,000 $71,231 Fire Station #1 V Ventilation Improvements V.1 - Air Handling Units (RTU-1,-2) - Replacement -$1,819 $293 -$1,526 $1,170 $177,384 V.2 - Makeup Air Handling Unit (MAU-1,-2) - Replacement -$240 $312 $72 $0 $88,556 C Energy Management System and Controls C.2 - VAV Boxes - Occupancy Controls $1,066 $0 $1,066 $0 $10,762 Library M Mechanical System Improvements M.1b - Hot Water Boiler Plant - Replacement $680 $228 $908 $8,260 $248,658 $685 $0 $685 $0 $8,975 M.2 - Air Handling Units -- Rebalancing M Mechanical System Improvements M.1 - Overhead Door Replacement and Controls $705 $0 $705 $0 $44,976 $0 $0 $0 $2,500 $96,707 M.2 - Infrared Heater Unit (IR-1 through IR-10) - Replacement Maintenance V Ventilation Improvements V.1 - Air Handling Units (RTU-1,-2) - Replacement -$902 $0 -$902 $1,445 $202,001 V.2 - Makeup Air Handling Unit (MAU-1 thru -5) - Replacement -$5,680 $0 -$5,680 $0 $212,547 C Energy Management System and Controls C.2 - VAV Boxes - Occupancy Controls $1,625 $0 $1,625 $0 $24,876 Police Station M Mechanical System Improvements M.1 - Air Handling Units -- Rebalancing $1,659 $0 $1,659 $0 $18,758 IGA IGA Fee IGA Fee TOTAL before $24,150 IGA IGA Fee rebates Financial Project Summary Impact $2,667,924 $104,436$25,671$130,107$68,926$2,598,998 FINAL 61 City of Prior Lake ESA Honeywell Energy Services Group December 2014 SCHEDULE E. PERFORMANCE GUARANTEE 1. Term. The term of the Performance Guarantee Schedule shall be 180 months and shall commence on the first day of the month following the Substantial Completion and Acceptance Date set forth in Schedule C. The terms and conditions for this Performance Guarantee are identified in Article 2 and 3 of this Agreement. 2. Guarantee . HESG guarantees that Client will save $1,594,957in Total Energy Savings, Operational Savings, Capital Cost Avoidance and Rebates, as calculated herein, over the term of this Agreement. The Energy Savings shall be computed as per attached Exhibits which are hereby incorporated as a part of this Schedule E. PROGRAM COSTS Capital Project Costs $ 2,667,924 Third Party Finance Costs $ 338,214 Technical Resource Services Costs (10 Years) $ 111,830 Less: Capital Cost Avoidance (1,535,000) TOTAL PROGRAM COSTS $ 1,582,968 GUARANTEED SAVINGS Utility Savings $ 1,197,243 Measured and Verified Utility Savings Operational Savings Maintenance and Operations Savings $ 328,789 Rebates $ 68,926 TOTAL GUARANTEED SAVINGS $ 3,129,958 Operational Savings Capital Cost Year Utility Savings Total Savings Operations and Avoidance and Maintenance Rebates 0 $0 $25,671 $68,926 $94,597 1 $104,436 $26,441 $130,877 2 $107,569 $27,234 $134,803 3 $110,796 $28,051 $138,847 4 $114,120 $28,893 $143,013 5 $117,544 $29,760 $147,304 6 $121,070 $30,653 $151,723 7 $124,702 $31,572 $156,274 8 $128,443 $32,519 $160,962 9 $132,297 $33,495 $165,792 10 $136,265 $34,500 $170,765 Totals $1,197,242 $328,789 $68,926 $1,594,957 63 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Measured and Verified Energy Savings. HESG guarantees that the cumulative facility improvement measures will save the total annual units of energy as follows. Individual Exhibits are attached which describe how the energy savings will be validated. Year 1 FacilityFIM CodeFacility Improvement MeasureSavings City Wide C.1a Energy Management and DDC - Base Project $32,631 City Wide L.1b Lighting Fixture Replacement $20,149 City Wide L.2 Lighting Controls $191 City Wide L.3a Athletic Lighting-Memorial Park-Equal Illumination $4,023 City Wide L.5b Exterior Lighting-Replacement $16,570 City Wide L.6 Traffic Signal Lighting $11,136 City Wide S.1 Building Envelope/Air Leakage $4,929 City Hall C.2 VAV Boxes - Occupancy Controls $1,589 City Hall M.5 Chiller Plant Improvements (cost in EMS FIM) $4,921 City Hall M.1 Air Handling Units -- Rebalancing $1,363 Fire Station #1 M.1 Overhead Door Replacement and Controls $514 Library C.2 VAV Boxes - Occupancy Controls $1,066 Library M.1b Hot Water Boiler Plant - Replacement $680 Library M.2 Air Handling Units -- Rebalancing $685 Maintenance M.1 Overhead Door Replacement and Controls $705 Police Station C.2 VAV Boxes - Occupancy Controls $1,625 Police Station M.1 Air Handling Units -- Rebalancing $1,659 Grand Total$104,436 Electric Annual Natural GasFuel Oil Facility Improvement MeasureWater (CCF) (kWh)(kW)(MMBtu)(MMBtu) Energy Management and DDC 246,732 0.0 2,031.7 0.0 0.0 Lighting Fixture Replacement 197,702 650.7 0.0 0.0 0.0 Lighting Controls 1,902 0.0 0.0 0.0 0.0 Athletic Lighting-Memorial Park 13,739 395.7 0.0 0.0 0.0 Exterior Lighting-Replacement 146,374 385.3 0.0 0.0 0.0 Traffic Signal Lighting 94,610 276.8 0.0 0.0 0.0 Building Envelope/Air Leakage 0 0.0 643.6 0.0 0.0 VAV Boxes - Occupancy Controls 11,239 32.9 61.0 0.0 0.0 Chiller Plant Improvements 63,037 33.0 0.0 0.0 0.0 Air Handling Units -- Rebalancing 9,640 28.2 52.3 0.0 0.0 Overhead Door Replacement & controls 0 0.0 66.3 0.0 0.0 VAV Boxes - Occupancy Controls 9,757 17.2 31.1 0.0 0.0 Hot Water Boiler Plant - Replacement 0 0.0 91.4 0.0 0.0 Air Handling Units -- Rebalancing 6,272 11.1 20.0 0.0 0.0 Overhead Door Replacement & controls 0 0.0 90.3 0.0 0.0 VAV Boxes - Occupancy Controls 14,364 25.3 45.7 0.0 0.0 Air Handling Units -- Rebalancing 14,663 25.9 46.7 0.0 0.0 Grand Total830,0311,882.03,180.10.00.0 64 City of Prior Lake ESA Honeywell Energy Services Group December 2014 3. Guaranteed Operational Savings. HESG guarantees that the cumulative facility improvement measures will save the operational costs as follows: Guaranteed FacilityFIM CodeFacility Improvement MeasureSavings City Wide C.1a Energy Management and DDC - Base Project $978 City Wide L.1b Lighting Fixture Replacement $4,839 City Wide L.2 Lighting Controls $76 City Wide L.3a Athletic Lighting-Memorial Park-Equal Illumination $1,451 City Wide L.5b Exterior Lighting-Replacement $988 City Wide L.7 City Hall Emergency Lighting-Replacement $16,250 City Hall C.2 VAV Boxes - Occupancy Controls $256 Fire Station #1 V.1 Air Handling Units (RTU-1,-2) - Replacement $293 Fire Station #1 V.2 Makeup Air Handling Unit (MAU-1,-2) - Replacement $312 Library M.1b Hot Water Boiler Plant - Replacement $228 Grand Total $25,671 65 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Exhibit 2.0 Guarantee Space Occupancy and Utilization Each building varies in occupancy and utilization. The following are the approximate hours open: City Hall: Monday-Friday: 7:00am-10:00pm Saturday & Sunday as required Fire Station #1: Monday-Friday: 24 hours as needed Saturday & Sunday: 24 hours as needed Fire Station #2: Monday-Friday: 24 hours as needed Saturday & Sunday: 24 hours as needed Library/Club Prior: Library: Monday, Tuesday, Thursday: 10:00am-8:00pm Wednesday: 1:00pm-8:00pm Friday: 1:00pm -5:00pm Saturday: 10:00am-4:00pm Sunday: closed. Club Prior: Monday: closed Tuesday-Thursday: 9:00am-3:00pm Friday: closed Saturday: closed Sunday: closed Maintenance Facility: Monday-Friday: 7:00am-4:30pm Saturday & Sunday as needed Police Station: Monday-Friday: 24 hours Saturday & Sunday: 24 hours 66 City of Prior Lake ESA Honeywell Energy Services Group December 2014 EXHIBIT 3.0 Guarantee Energy Management System and Controls Table of Contents 1.0 Agreed Upon Parameters ................................................................................................... Page 72 a) Applicability .................................................................................................................. Page 72 b) Utility Rates ................................................................................................................... Page 72 c) Existing Conditions........................................................................................................ Page 72 d) Proposed Conditions ...................................................................................................... Page 72 e) City of Prior Lake Performance ..................................................................................... Page 72 f) Energy Calculation Input Data & Parameters ................................................................ Page 72 2.0 Pre-Retrofit Consumption Data ......................................................................................... Page 74 a) Measurement Methodology ........................................................................................... Page 74 3.0 Post-Retrofit Measurements............................................................................................... Page 74 a) Measurement Methodology ........................................................................................... Page 74 4.0 Computation of Savings ..................................................................................................... Page 75 a) Computation and Presentation of Utility Savings.......................................................... Page 75 71 City of Prior Lake ESA Honeywell Energy Services Group December 2014 1.0 Agreed Upon Parameters: The following are mutually agreed upon parameters that form the basis of this performance guarantee. These parameters are hereby recognized, for the purposes of this Agreement, as fact and will not be measured, monitored or adjusted. a) Applicability: This performance guarantee applies to the facility improvement measure for City of Prior Lake (CoPL) involving the execution of Energy Management System (EMS) and Control System Improvements. b) Utility Rates: The base utility rates in the table below are those used to calculate the Guaranteed Savings and are the current rates in effect for each facility. Throughout the term of this Agreement, the savings are to be whichever is larger. These rates will be used as the floor price for the Term and shall be the lowest rate used to calculate energy savings in the event of a utility rate decrease. The electric consumption rate includes any Fuel Cost Adjustment (FCA) charges. The summer electric demand period is from June to September. The electric utility rates are based on the average annual data from May 2013 to April 2014. The natural gas rate includes any Purchase Gas Adjustment (PGA) charges. The heating utility rates are based on the average annual data from May 2013 to April 2014. Electric Utility:Gas Utility: MN Valley Electric Centerpoint Energy WinterSummerElectricNaturalWater/ Fuel Oil FacilityDemandDemandUseGasSewer $/MMBtu $/kW$/kW$/kWh$/MMBtu$/CCF City Hall $8.98 $12.86 $0.072 $7.27 $0.00 $0.00 Fire Station #1 $8.98 $12.86 $0.060 $7.75 $0.00 $0.00 Fire Station #2 $0.00 $0.00 $0.106 $7.65 $0.00 $0.00 Library $8.98 $12.86 $0.067 $7.44 $0.00 $0.00 Maintenance $8.98 $12.86 $0.066 $7.80 $0.00 $0.00 Police Station $8.98 $12.86 $0.071 $7.60 $0.00 $0.00 Exterior Lighting $0.00 $0.00 $0.113 $0.00 $0.00 $0.00 Athletic Lighting $5.87 $8.07 $0.106 $0.00 $0.00 $0.00 Traffic Signal Lighting $0.00 $0.00 $0.118 $0.00 $0.00 $0.00 c) Existing Conditions: The mechanical and electrical building systems covered in this Exhibit were studied by HESG and have the existing operating setpoints and schedules identified in Exhibit 3.1. The operating setpoints and schedules were derived from interviews with CoPL staff, on site physical measurement and data logging, existing EMS programs, and from past energy audit information. The values in the identified Exhibit are mutually agreed to by Client and HESG and are key inputs in the computer models created by HESG. 72 City of Prior Lake ESA Honeywell Energy Services Group December 2014 d) Proposed Conditions: The savings due to the EMS are primarily based on the ability to schedule mechanical and electrical systems to match actual building occupancy. Systems will be shutdown during unoccupied conditions and building setback temperatures maintained during the heating and cooling seasons. Heating and cooling of ventilation air and operation of exhaust fans will be delayed until actual building occupancy hours. The proposed operating setpoints and schedules are also identified in Exhibit 3.1. The values in the identified Exhibit are mutually agreed to by Client and HESG and are key inputs in the computer models created by HESG. e) City of Prior Lake Performance: HESG is responsible for engineering and design of the energy savings strategies and communicating these requirements to CoPL. CoPL personnel are performing key roles in the utilization of the EMS. These roles include programming and maintenance of equipment schedules as specified by HESG, and operation of the mechanical equipment as designed. The energy savings due to the EMS are contingent upon a completely functioning EMS that is capable of achieving the operating setpoints and schedules as previously identified. The EMS must be correctly programmed and maintained to achieve mechanical system operational sequences and setpoints as provided by HESG. f) Energy Model Input Data and Parameters: The HESG spreadsheet energy models have to utilize existing building characteristics to accurately model individual building energy consumption. These building characteristics were obtained from a variety of sources. The type and source of the major building input data are identified below. Type of Input DataSource of Data Facility Dimensions CoPL Floor Plans, HESG Field Survey Exterior Wall Construction CoPL Construction Blueprints Window Construction and Dimensions HESG Field Survey and CoPL Construction Blueprints Occupancy Schedules HESG-CoPL Developed Standards Lighting Information HESG Field Survey HVAC Winter Setpoints HESG Field Survey and Occupant Interviews HVAC Summer Setpoints HESG Field Survey and Occupant Interviews HVAC Equipment Motors HESG Field Survey & CoPL Construction Documents HVAC Equipment Capacity (CFM/GPM) CoPL Construction Documents Outside Air Ventilation Rates Original Design Minimums 73 City of Prior Lake ESA Honeywell Energy Services Group December 2014 2.0 Pre-Retrofit Consumption Data: The pre-retrofit consumption data was established utilizing the following methodology: a)Measurement Methodology: Spreadsheet energy analysis software was used to model the energy consumption and calculate savings for each building. The known input parameters such as local weather data, internal building loads, mechanical system parameters, etc. were all utilized in the calculations. The existing major variable parameters were quantified and have been included in the Exhibit 3.1. The accuracy of savings calculations was validated by comparison to the actual utility consumption data for City of Prior Lake. 3.0 Post-Retrofit Measurements: The following describes the stipulated methodology for proving the savings resulting from the installation of the Energy Management System and Control System Improvements. a) Measurement Methodology: Spreadsheet energy analysis software was used to model the energy consumption and calculate savings for each building. The known input parameters such as local weather data, internal building loads, mechanical system parameters, etc. were all utilized in the calculations and are left constant. The proposed major variable parameters identified in Exhibit 3.1 were utilized to calculate the energy savings resulting from these strategies. Since all external variables (weather, occupancy, utility rates, building dimensions and construction, mechanical system specifications, etc.) have been established, the only remaining item to validate is that the performance of the conservation measures. The EMS will be utilized to verify that these proposed parameters are functional and energy management strategies are being implemented. HESG will provide CoPL a list of required data. HESG and CoPL will program the EMS to provide the required data and will compare it to the proposed values and provide data for the following table: Proposed Actual CoPL Acceptance FacilitySystemOperating Operating Initials-Date HoursHours 74 City of Prior Lake ESA Honeywell Energy Services Group December 2014 4.0 Computation of Savings: The following describes the stipulated methodology for computing Total Energy Savings based on the validated Energy Management System operation and Control System Improvements. a) Computation and Presentation of Utility Savings: Utilizing standard engineering formulas, spreadsheet energy analysis software was used to model the energy consumption and calculate savings for each building. The spreadsheet program printouts are included in Exhibit 3.1. The EMS will be utilized to verify that the proposed operational parameters are functional and energy management strategies are being implemented. If the EMS system is operated as designed the energy management savings will be generated as predicted by the spreadsheet software analysis programs: Energy Management System and Controls Annual Natural Gas Annual Fuel Oil Savings Annual kWh Savings Savings (MMBtu)(MMBtu) Facility GuaranteedProjectedGuaranteedProjectedGuaranteedProjected City Hall 129,283 0 882.7 0.0 0.0 0.0 Fire Station #1 10,230 0 44.1 0.0 0.0 0.0 Fire Station #2 10,745 0 100.9 0.0 0.0 0.0 Library 68,438 0 406.3 0.0 0.0 0.0 Maintenance 27,523 0 169.8 0.0 0.0 0.0 Police Station 513 0 428.0 0.0 0.0 0.0 Exterior Lighting 0 0 0.0 0.0 0.0 0.0 Athletic Lighting 0 0 0.0 0.0 0.0 0.0 Traffic Signal Lighting 0 0 0.0 0.0 0.0 0.0 TOTALS246,73202,031.70.00.00.0 75 City of Prior Lake ESA Honeywell Energy Services Group December 2014 EXHIBIT 3.1 Savings Calculations Energy Management System and Controls 76 City of Prior Lake ESA Honeywell Energy Services Group December 2014 City HallCity of Prior Lake Prior Lake, MN C.1a DDC Boiler Reset Control Upgrade Recommendation: Provide DDC control sequence for enable/disable control of hot water boilers based on building occupancy and outdoor air temperature. Provide sequence of operation to reset the hot water supply temperature based on outdoor air temperature and reduce the hot water temperature by a setback factor during unoccupied hours. This will prevent overheating of the building. Assumptions: Existing Proposed Units Hot water peak heating load at design conditions: 3,500 3,500 MBH Peak Heating Load Factor: 28.0% 28.0% Natural Gas Boiler combustion efficiency: 80.0% 80.0% design Estimated heating system distribution losses: 3.0% 3.0% estimated Outdoor temperature at design conditions (99.6%): -16.0 -16.0 ºF Outdoor temperature for boiler enable/disable: 95.0 95.0 ºF Unoccupied outdoor air temperature for boiler enable/disable: 45.0 45.0 ºF Unoccupied Hours as % of Total Hours: 25.0% 25.0% Outdoor air reset temperature: Low load 50.0 50.0 ºF High load 10.0 10.0 ºF Hot water reset schedule: Low load 140.0 110.0 ºF min High load 180.0 180.0 ºF max High limit 200.0 200.0 ºF Unoccupied hot water temperature setback: 10.0 ºF Conversion Factor: 1,000,000 Btu / MMBtu Calculations: Existing Existing Proposed Proposed Peak Heating Outdoor Annual Bin Energy Load Energy Use Energy Load Energy Use Savings Load (MBH) Temp Hrs (MBH) (MMBtu) (MBH) (MMBtu) (MMBtu) 67.5 600 867 182 142 118 92 50 62.5 863 1,025 215 241 149 167 74 57.5 633 1,182 248 204 182 149 55 52.5 553 1,340 281 202 216 155 47 47.5 480 1,498 315 196 252 157 39 42.5 433 1,655 464 261 379 213 47 37.5 626 1,813 508 413 431 350 63 32.5 603 1,971 552 432 484 379 53 27.5 486 2,128 596 376 539 340 36 22.5 363 2,286 640 302 595 280 21 17.5 572 2,444 684 508 652 484 24 12.5 310 2,601 728 293 710 286 7 7.5 204 2,759 773 205 770 204 1 2.5 169 2.917 817 179 830 182 -3 -2.5 104 3,074 861 116 883 119 -3 -7.5 127 3,232 905 149 905 149 0 -12.5 71 3.390 949 88 937 86 1 -17.5 24 3,547 993 31 981 31 0 -22.5 2 3,705 1,037 3 1,024 3 0 -27.5 0 3,863 1,082 0 1,068 0 0 Totals: 7,223 4,341 3,828 513 Utility Usage: Total Annual Heating Consumption 5,517 MMBtu/yr Natural Gas Use from Centerpoint Energy Domestic Hot Water 552 MMBtu/yr 10.0% Est. % of Total (0% if Firm) Cooking Equipment 0 MMBtu/yr 0.0% Est. % of Total (0% if Firm) Gas Rooftop HVAC Equipment 0 MMBtu/yr 0.0% Est. % of Total (0% if Firm) 4,964 Annual AHU Boiler Heating Consumption MMBtu/yr 90.0% Savings % Gas by Boilers Ventilation Savings (C.1a) 297 100.0% 297 MMBtu/yr Mixed Air Reset (C.1a) 0 100.0% 0 MMBtu/yr Setback Savings (C.1a) 18 100.0% 18 MMBTu/yr Total Energy Savings for Boilers 315 315 MMBTu/yr Projected Annual Boiler Gas Consumption After Above Improvements 4,650 MMBTu/yr 89 City of Prior Lake ESA Honeywell Energy Services Group December 2014 LibraryCity of Prior Lake Prior Lake, MN C.1a DDC Boiler Reset Control Upgrade Recommendation: Provide DDC control sequence for enable/disable control of hot water boilers based on building occupancy and outdoor air temperature. Provide sequence of operation to reset the hot water supply temperature based on outdoor air temperature and reduce the hot water temperature by a setback factor during unoccupied hours. This will prevent overheating of the building. Assumptions: Existing Proposed Units Hot water peak heating load at design conditions: 985 985 MBH Peak Heating Load Factor: 23.5% 23.5% Natural Gas Boiler combustion efficiency: 80.0% 80.0% design Estimated heating system distribution losses: 3.0% 3.0% estimated Outdoor temperature at design conditions (99.6%): -16.0 -16.0 ºF Outdoor temperature for boiler enable/disable: 90.0 90.0 ºF Unoccupied outdoor air temperature for boiler enable/disable: 45.0 45.0 ºF Unoccupied Hours as % of Total Hours: 55.0% 55.0% Outdoor air reset temperature: Low load 50.0 50.0 ºF High load 10.0 10.0 ºF Hot water reset schedule: Low load 140.0 110.0 ºF min High load 180.0 180.0 ºF max High limit 200.0 200.0 ºF Unoccupied hot water temperature setback: 10.0 ºF Conversion Factor: 1,000,000 Btu / MMBtu Calculations: Existing Existing Proposed Proposed Outdoor Annual Peak Heating Savings Energy Load Energy Use Energy Load Energy Use Temp Bin Hrs Load (MBH) (MMBtu) (MBH) (MMBtu) (MBH) (MMBtu) 67.5 600 209 22 17 14 11 6 62.5 863 256 27 30 19 21 9 57.5 633 302 32 26 23 19 7 52.5 553 348 37 26 28 20 6 47.5 480 395 42 26 34 21 5 42.5 433 441 104 58 83 47 12 37.5 626 488 115 93 95 77 16 32.5 603 534 126 98 108 84 14 27.5 486 581 136 86 121 76 10 22.5 363 627 147 69 134 63 6 17.5 572 674 158 118 148 110 8 12.5 310 720 169 68 162 65 3 7.5 204 767 180 48 177 47 1 2.5 169 813 191 42 191 42 0 -2.5 104 860 202 27 204 28 0 -7.5 127 906 213 35 210 35 1 -12.5 71 952 224 21 218 20 1 -17.5 24 999 235 7 228 7 0 -22.5 2 1,045 246 1 239 1 0 -27.5 0 1,092 257 0 250 0 0 Totals: 7,223 898 794 104 Utility Usage: Total Annual Heating Consumption 1,586 MMBtu/yr Natural Gas Use from Centerpoint Energy Domestic Hot Water 159 MMBtu/yr 10.0% Est. % of Total (0% if Firm) Cooking Equipment 159 MMBtu/yr 10.0% Est. % of Total (0% if Firm) Gas Rooftop HVAC Equipment 0 MMBtu/yr 0.0% Est. % of Total (0% if Firm) 1,269 Annual AHU Boiler Heating Consumption MMBtu/yr 80.0% Savings % Gas by Boilers Ventilation Savings (C.1a) 298 100.0% 298 MMBtu/yr Mixed Air Reset (C.1a) 0 100.0% 0 MMBtu/yr Setback Savings (C.1a) 20 100.0% 20 MMBTu/yr Total Energy Savings for Boilers 318 318 MMBTu/yr Projected Annual Boiler Gas Consumption After Above Improvements 951 MMBTu/yr 90 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Police StationCity of Prior Lake Prior Lake, MN C.1a DDC Boiler Reset Control Upgrade Recommendation: Provide DDC control sequence for enable/disable control of hot water boilers based on building occupancy and outdoor air temperature. Provide sequence of operation to reset the hot water supply temperature based on outdoor air temperature and reduce the hot water temperature by a setback factor during unoccupied hours. This will prevent overheating of the building. Assumptions: Existing Proposed Units Hot water peak heating load at design conditions: 1,401,40MBH Peak Heating Load Factor: 25.025.0Natural Gas Boiler combustion efficiency: 80.080.0design Estimated heating system distribution losses: 3.0% 3.0% estimated Outdoor temperature at design conditions (99.6%): -16.0 -16.0 ºF Outdoor temperature for boiler enable/disable: 95.0 95.0 ºF Unoccupied outdoor air temperature for boiler enable/disable: 45.0 45.0 ºF Unoccupied Hours as % of Total Hours: 0.0% 0.0% Outdoor air reset temperature: Low load 50.0 50.0 ºF High load 10.0 10.0 ºF Hot water reset schedule: Low load 140.0 110.0 ºF min High load 180.0 180.0 ºF max High limit 200.0 200.0 ºF Unoccupied hot water temperature setback: 0.0 ºF Conversion Factor: 1,000,000 Btu / MMBtu Calculations: Peak Heating Existing Existing Proposed Proposed Outdoor Annual Bin Savings Load Energy Load Energy Use Energy Load Energy Use Temp Hrs (MMBtu) (MBH) (MBH) (MMBtu) (MBH) (MMBtu) 67.5 600 347 87 68 56 44 24 62.5 863 410 102 115 71 79 35 57.5 633 473 118 97 86 71 26 52.5 553 536 134 96 103 74 22 47.5 480 599 150 93 120 75 18 42.5 433 662 166 93 138 78 15 37.5 626 725 181 147 157 127 20 32.5 603 788 197 154 176 138 17 27.5 486 851 213 134 196 123 11 22.5 363 914 229 108 216 102 6 17.5 572 977 244 182 236 176 6 12.5 310 1,041 260 105 257 104 1 7.5 204 1,104 276 73 279 74 -1 2.5 169 1,167 292 64 300 66 -2 -2.5 104 1,230 307 42 319 43 -2 -7.5 127 1,293 323 53 327 54 -1 -12.5 71 1,356 339 31 339 31 0 -17.5 24 1,419 355 11 355 11 0 -22.5 2 1,482 370 1 370 1 0 -27.5 0 1,545 386 0 386 0 0 Totals: 7,223 1,6681,471197 91 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Utility Usage: 1,852 MMBtu/yr Natural Gas Use from Centerpoint Energy Total Annual Heating Consumption Domestic Hot Water 185 MMBtu/yr 10.0% Est. % of Total (0% if Firm) Cooking Equipment 0 MMBtu/yr 0.0% Est. % of Total (0% if Firm) Gas Rooftop HVAC Equipment 0 MMBtu/yr 0.0% Est. % of Total (0% if Firm) Annual AHU Boiler Heating Consumption 1,667 MMBtu/yr 90.0% Savings % Gas by Boilers Ventilation Savings (C.1a) 0 100.0% 0 MMBtu/yr Mixed Air Reset (C.1a) 0 100.0% 0 MMBtu/yr Setback Savings (C.1a) 0 100.0% 0 MMBTu/yr Total Energy Savings for Boilers 0 0 MMBTu/yr Projected Annual Boiler Gas Consumption After Above Improvements 1,667 MMBTu/yr Engineering Formulas Outside Air Temperature Load Profile Hours are the hours in that temperature BIN Load is prorated on outside air temperature: 100% at the summer design temperature, 0% at the balance temperature and -100% at the winter design temperature Discharge air temperature is determined by the discharge air reset schedule %OA is the higher of the minimum outside air percent and amount needed to maintain the mixed air (discharge air) temperature and the amount needed for economizer mode. %CFM is 100% for constant speed modulation or the higher of the minimum fan speed and the cooling load and heating load times the maximum heating airflow %. %CFM is even higher if a percentage of VAV boxes are stuck 100% open Fan kW = (Actual kW) × (% Power kW which is a function of percentage of % CFM and the unloading curve for the fan). Cooling load is the higher of the sensible load or the total enthalpy load Sensible Cooling load = 1.08 × (Total Airflow) × (% Outside air) × (Mixed air temperature - discharge air temperature) / (12,000 Btu/ton) Total Cooling load = 4.5 × (Total Airflow) × (% Outside air) × (Mixed air enthalpy - discharge air enthalpy) / (12,000 Btu/ton) Mixed air conditions = % OA × (outside air condition) + (1 - % OA) × (room air condition) Preheat load = higher of 0 or 1.08 × (Total Airflow) x (% CFM) × (Discharge air temperature - Mixed air temperature) / (1000 Btu/Mbtu) Reheat load = 1.08 × (Total Airflow) × (% CFM) x (Reheat air temperature - Discharge air temperature) / (1000 Btu/Mbtu) Reheat air temperature = (Room temperature) - (Load %) / (% CFM) x (Room air temperature - Discharge air temperature) Fan savings = (Existing Fan kW - Proposed Fan kW) × (BIN Hours) × (Season hrs on %) Cooling savings = (Existing - Proposed Cooling Load) × (BIN Hours) × (Season hrs on %) × (Cooling efficiency) Heating savings = (Existing - Proposed Preheat and reheat Load) × (BIN Hours) × (Season hrs on %) / (Heating efficiency) / (1000 MBtu/MMBtu) 92 City of Prior Lake ESA Honeywell Energy Services Group December 2014 City of Prior Lake Prior Lake, MN Setback Calculations C.1a Utilize DDC Setback Thermostats Energy Saved = U * A * T * Setback Factor * Unoccupied Hrs/Wk * Weeks/Yr * %stats / Eff where: U = U values for wall, roof, windows, doors A = Area of walls, roof, windows, doors = Existing setback temperature - Proposed setback temperature Setback Factor = Adjustment since room temperature floats to the setback and may not reach it Unoccupied Hours/Wk = Hours per week in setback condition % stats = % of total thermostats (space) affected by temperature setback Setback factor 50% Heating Cooling Weeks/Yr = Number of weeks of season = 27.2 23.7 Eff = Seasonal efficiency of central system = 85% 0.80 kW/ton Heating Mode Setback TemperaturesSetbackAnnual Savings Facility% Stats ExistingProposedHrs/WeekkWhMMBtu City Hall 68 65 60 100% 0 17.7 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Total 0 17.7 Building Areas and U Values City Hall Wall Roof Window Door Facility Sq. Ft. Area U Area U Area U Area U City Hall 37,420 26,457 0.067 12,000 0.040 6,153 0.61 325 0.39 Note: Heating setback savings are based on a higher average room temperature as it floats down to the thermostat setback temperature of 65.0°F 98 City of Prior Lake ESA Honeywell Energy Services Group December 2014 City of Prior Lake Prior Lake, MN Setback Calculations C.1a Utilize DDC Setback Thermostats Energy Saved = U * A * T * Setback Factor * Unoccupied Hrs/Wk * Weeks/Yr * %stats / Eff where: U = U values for wall, roof, windows, doors A = Area of walls, roof, windows, doors = Existing setback temperature - Proposed setback temperature Setback Factor = Adjustment since room temperature floats to the setback and may not reach it Unoccupied Hours/Wk = Hours per week in setback condition % stats = % of total thermostats (space) affected by temperature setback Setback factor 50% Heating Cooling Weeks/Yr = Number of weeks of season = 27.2 23.7 Eff = Seasonal efficiency of central system = 84% 1.20 kW/ton Heating Mode Setback TemperaturesSetbackAnnual Savings Facility% Stats ExistingProposedHrs/WeekkWhMMBtu Fire Station #1 68 65 124 100% 0 17.1 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Total 0 17.1 Building Areas and U Values Fire Station #1 Wall Roof Window Door Facility Sq. Ft. Area U Area U Area U Area U Fire 17,625 12,192 0.067 17,625 0.036 932 0.61 2,142 0.39 Station #1 Note: Heating setback savings are based on a higher average room temperature as it floats down to the thermostat setback temperature of 65.0°F 99 City of Prior Lake ESA Honeywell Energy Services Group December 2014 City of Prior Lake Prior Lake, MN Setback Calculations C.1a Utilize DDC Setback Thermostats Energy Saved = U * A * T * Setback Factor * Unoccupied Hrs/Wk * Weeks/Yr * %stats / Eff where: U = U values for wall, roof, windows, doors A = Area of walls, roof, windows, doors = Existing setback temperature - Proposed setback temperature Setback Factor = Adjustment since room temperature floats to the setback and may not reach it Unoccupied Hours/Wk = Hours per week in setback condition % stats = % of total thermostats (space) affected by temperature setback Setback factor 50% Heating Cooling Weeks/Yr = Number of weeks of season = 27.2 23.7 Eff = Seasonal efficiency of central system = 82% 1.20 kW/ton Heating Mode Setback TemperaturesSetbackAnnual Savings Facility% Stats ExistingProposedHrs/WeekkWhMMBtu Fire Station #2 68 65 103 100% 0 9.7 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Total 0 9.7 Building Areas and U Values Fire Station #2 Wall Roof Window Door Facility Sq. Ft. Area U Area U Area U Area U Fire 10,300 8,448 0.067 10,300 0.040 665 0.61 1,274 0.39 Station #2 Note: Heating setback savings are based on a higher average room temperature as it floats down to the thermostat setback temperature of 65.0°F 100 City of Prior Lake ESA Honeywell Energy Services Group December 2014 City of Prior Lake Prior Lake, MN Setback Calculations C.1a Utilize DDC Setback Thermostats Energy Saved = U * A * T * Setback Factor * Unoccupied Hrs/Wk * Weeks/Yr * %stats / Eff where: U = U values for wall, roof, windows, doors A = Area of walls, roof, windows, doors = Existing setback temperature - Proposed setback temperature Setback Factor = Adjustment since room temperature floats to the setback and may not reach it Unoccupied Hours/Wk = Hours per week in setback condition % stats = % of total thermostats (space) affected by temperature setback Setback factor 50% Heating Cooling Weeks/Yr = Number of weeks of season = 27.2 23.7 Eff = Seasonal efficiency of central system = 85% 1.20 kW/ton Heating Mode Setback TemperaturesSetbackAnnual Savings Facility% Stats ExistingProposedHrs/WeekkWhMMBtu Library 68 65 125 100% 0 20.1 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Total 0 20.1 Building Areas and U Values Library Wall Roof Window Door Facility Sq. Ft. Area U Area U Area U Area U Library 18,578 8,934 0.067 18,578 0.036 3,334 0.61 137 0.39 Note: Heating setback savings are based on a higher average room temperature as it floats down to the thermostat setback temperature of 65.0°F 101 City of Prior Lake ESA Honeywell Energy Services Group December 2014 City of Prior Lake Prior Lake, MN Setback Calculations C.1a Utilize DDC Setback Thermostats Energy Saved = U * A * T * Setback Factor * Unoccupied Hrs/Wk * Weeks/Yr * %stats / Eff where: U = U values for wall, roof, windows, doors A = Area of walls, roof, windows, doors = Existing setback temperature - Proposed setback temperature Setback Factor = Adjustment since room temperature floats to the setback and may not reach it Unoccupied Hours/Wk = Hours per week in setback condition % stats = % of total thermostats (space) affected by temperature setback Setback factor 50% Heating Cooling Weeks/Yr = Number of weeks of season = 27.2 23.7 Eff = Seasonal efficiency of central system = 82% 1.20 kW/ton Heating Mode Setback TemperaturesSetbackAnnual Savings Facility% Stats ExistingProposedHrs/WeekkWhMMBtu Maintenance 68 65 134 100% 0 27.4 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Total 0 27.4 Building Areas and U Values Maintenance Wall Roof Window Door Facility Sq. Ft. Area U Area U Area U Area U Maintenance 43,000 21,847 0.077 39,314 0.045 584 0.6 829 0.35 Note: Heating setback savings are based on a higher average room temperature as it floats down to the thermostat setback temperature of 65.0°F 102 City of Prior Lake ESA Honeywell Energy Services Group December 2014 EXHIBIT 4.0 Guarantee Other Control Improvements Table of Contents 1.0 Agreed Upon Parameters ................................................................................................. Page 104 a) Applicability ................................................................................................................ Page 104 b) Utility Rates ................................................................................................................. Page 104 c) Energy Calculation Input Data & Parameters.............................................................. Page 104 2.0 Pre-Retrofit Consumption Data ....................................................................................... Page 105 a) Measurement Methodology ......................................................................................... Page 105 3.0 Post-Retrofit Measurements............................................................................................. Page 105 a) Measurement Methodology ......................................................................................... Page 105 4.0 Computation of Savings ................................................................................................... Page 105 a) Computation and Presentation of Utility Savings........................................................ Page 105 103 City of Prior Lake ESA Honeywell Energy Services Group December 2014 1.0 Agreed Upon Parameters: The following are mutually agreed upon parameters that form the basis of this performance guarantee. These parameters are hereby recognized, for the purposes of this Agreement, as fact and will not be measured, monitored or adjusted. a) Applicability: This performance guarantee applies to the facility improvement measure for City of Prior Lake (CoPL) involving the installation of other control improvements. FacilityFacility Improvement Measure City Hall C.2 - VAV Boxes - Occupancy Controls Library C.2 - VAV Boxes - Occupancy Controls Police Station C.2 - VAV Boxes - Occupancy Controls b) Utility Rates: The base utility rates in the table below are those used to calculate the Guaranteed Savings and are the current rates in effect for each facility. Throughout the term of this Agreement, the savings are to be calculated using the will be used as the floor price for the Term and shall be the lowest rate used to calculate energy savings in the event of a utility rate decrease. The electric consumption rate includes any Fuel Cost Adjustment (FCA) charges. The summer electric demand period is from June to September. The electric utility rates are based on the average annual data from May 2013 to April 2014. The natural gas rate includes any Purchase Gas Adjustment (PGA) charges. The heating utility rates are based on the average annual data from May 2013 to April 2014. Electric Utility:Gas Utility: MN Valley Electric Centerpoint Energy WinterSummerNaturalWater/ Electric Use DemandDemandGasFuel OilSewer Facility $/kW$/kW$/kWh$/MMBtu$/MMBtu$/CCF City Hall $8.98 $12.86 $0.072 $7.27 $0.00 $0.00 Fire Station #1 $8.98 $12.86 $0.060 $7.75 $0.00 $0.00 Fire Station #2 $0.00 $0.00 $0.106 $7.65 $0.00 $0.00 Library $8.98 $12.86 $0.067 $7.44 $0.00 $0.00 Maintenance $8.98 $12.86 $0.066 $7.80 $0.00 $0.00 Police Station $8.98 $12.86 $0.071 $7.60 $0.00 $0.00 Exterior Lighting $0.00 $0.00 $0.113 $0.00 $0.00 $0.00 Athletic Lighting $5.87 $8.07 $0.106 $0.00 $0.00 $0.00 Traffic Signal Lighting $0.00 $0.00 $0.118 $0.00 $0.00 $0.00 c) Energy Calculation Input Data and Parameters: The spreadsheet energy models have to utilize existing and projected building system characteristics to accurately model individual building system energy consumption and savings. These building characteristics were obtained from sources as listed above. The major building input data are identified in Exhibit 4.1. 104 City of Prior Lake ESA Honeywell Energy Services Group December 2014 2.0 Pre-Retrofit Consumption Data: The pre-retrofit consumption data was established utilizing the following methodology: a) Measurement Methodology: Spreadsheet energy analysis software was used to model the energy consumption and calculate savings for each building. The known input parameters such as local weather data, internal building loads, mechanical system parameters, etc. were all utilized in the calculations. The existing major variable parameters were quantified and have been included in the Exhibit 4.1. The accuracy of savings calculations was validated by comparison to the actual total utility consumption data for CoPL. 3.0 Post-Retrofit Measurements: The following describes the stipulated methodology for proving the savings resulting from the installation of other control improvements. a) Measurement Methodology: The major variable parameters were quantified and have been included in the data in Exhibit 4.1. Since all external variables (weather, utility rates, building dimensions and thermal values, mechanical system specifications, etc.) have been established, the only remaining item to validate is that the performance of each conservation measures is per original design. The following items will be verified during installation of the other control improvements: CoPL Acceptance ItemAttribute to be Verified Initials-Date City Hall - C.2 - VAV Boxes - Occupancy Controls Library - C.2 - VAV Boxes - Occupancy Controls Police Station - C.2 - VAV Boxes - Occupancy Controls 4.0 Computation of Savings: The following describes the stipulated methodology for computing Total Energy Savings based on the installation of other control improvements. a) Computation and Presentation of Utility Savings: The other control improvements savings will be generated as calculated by the spreadsheet software analysis programs that utilize standard engineering formulas, and are presented in Exhibit 4.1. 105 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Actual savings will be based on the ability of the systems to operate per the intended design, which is verified in Section 3.0. The following table summarizes the energy savings from implementation of the above other control improvements: Guaranteed Annual Savings Facility ElectricAnnualNatural GasFuel OilWater kWhkWMMBtuMMBtuCCF City Hall 11,239 33 61 0 0 Fire Station #1 0 0 0 0 0 Fire Station #2 0 0 0 0 0 Library 9,757 17 31 0 0 Maintenance 0 0 0 0 0 Police Station 14,364 25 46 0 0 Exterior Lighting 0 0 0 0 0 Athletic Lighting 0 0 0 0 0 Traffic Signal Lighting 0 0 0 0 0 TOTALS35,3607513800 106 City of Prior Lake ESA Honeywell Energy Services Group December 2014 EXHIBIT 4.1 Savings Calculations Other Control Improvements 107 City of Prior Lake ESA Honeywell Energy Services Group December 2014 EXHIBIT 5.0 Guarantee Lighting System Improvements Table of Contents 1.0 Agreed Upon Parameters ................................................................................................. Page 120 a) Applicability ................................................................................................................ Page 120 b) Utility Rates ................................................................................................................. Page 120 c) Existing Conditions...................................................................................................... Page 120 d) Proposed Conditions .................................................................................................... Page 120 2.0 Pre-Retrofit Consumption Data ....................................................................................... Page 121 a) Measurement Methodology ......................................................................................... Page 121 3.0 Post-Retrofit Measurements............................................................................................. Page 122 a) Measurement Methodology ......................................................................................... Page 122 4.0 Computation of Savings ................................................................................................... Page 122 a) Computation and Presentation of Utility Savings........................................................ Page 122 119 City of Prior Lake ESA Honeywell Energy Services Group December 2014 1.0 Agreed Upon Parameters: The following are mutually agreed upon parameters that form the basis of this performance guarantee. These parameters are hereby recognized, for the purposes of this Agreement, as fact and will not be measured, monitored or adjusted. a) Applicability: This performance guarantee applies to the facility improvement measure for City of Prior Lake (CoPL) involving the installation of lighting retrofits and controls. b) Utility Rates: The base utility rates in the table below are those used to calculate the Guaranteed Savings and are the current rates in effect for each facility. Throughout the term of this Agreement, the savings are to be whichever is larger. These rates will be used as the floor price for the Term and shall be the lowest rate used to calculate energy savings in the event of a utility rate decrease. The electric consumption rate includes any Fuel Cost Adjustment (FCA) charges. The summer electric demand period is from June to September. The electric utility rates are based on the average annual data from May 2013 to April 2014. Electric Utility: MN Valley Electric Winter Summer Electric Use Customer DemandDemand FacilityRate Schedule Charge $/kW$/kW$/kWh City Hall Gen Srvc-Xcel $25.70 $8.98 $12.86 $0.072 Fire Station #1 Gen Srvc-Xcel $25.70 $8.98 $12.86 $0.060 Fire Station #2 GS25-MVEC $18.80 $0.00 $0.00 $0.106 Library Gen Srvc-Xcel $25.70 $8.98 $12.86 $0.067 Maintenance Gen Srvc-Xcel $25.70 $8.98 $12.86 $0.066 Police Station Gen Srvc-Xcel $25.70 $8.98 $12.86 $0.071 Exterior Lighting Various $144.00 $0.00 $0.00 $0.113 Athletic Lighting Various $86.00 $5.87 $8.07 $0.106 Traffic Signal Various $48.00 $0.00 $0.00 $0.118 c) Existing Conditions: The lighting as identified in Exhibit 5.1 was surveyed by HESG and was determined to have the identified fixture types, quantities, and operating hours. The values in the identified Exhibit are mutually agreed to by Client and HESG and will be stipulated for the purposes of this Agreement. d) Proposed Conditions: The lighting as identified in Exhibit 5.1 will include the new or modified fixture types, quantities and operating hours. The values in the identified Exhibit are mutually agreed to by Client and HESG and will be stipulated for the purposes of this Agreement. 120 City of Prior Lake ESA Honeywell Energy Services Group December 2014 2.0 Pre-Retrofit Consumption Data: The pre-retrofit consumption data was established utilizing the following methodology: a) Measurement Methodology: Since all external variables (hours of operation, utility rates, etc.) have been established, the only remaining item to validate is the kilowatt (kW) power draw. To accomplish this, HESG will perform the following test on a representative sample (typically about 10%) of the various major types of light fixtures prior to installation: A properly calibrated, instantaneous reading, wattmeter (or other suitable meter capable of reading the appropriate electrical parameters) will be installed on the power leads entering each light fixture (or group of light fixtures). The power draw of the light fixture will be measured and recorded when the fixture is at its normal operating condition. Light fixture power will be measured with new lamps installed so that pre and post retrofit conditions are similar. Note: It is advisable that an appropriate representative of Client be present to witness the above referenced testing procedure. Fixture Electrical Power CoPL Acceptance Initials- Date FacilityRoom #Qty TypeMeasurementConsumption 121 City of Prior Lake ESA Honeywell Energy Services Group December 2014 3.0 Post-Retrofit Measurements: The following describes the stipulated methodology for proving the savings resulting from the installation of lighting retrofits and controls. a) Measurement Methodology: HESG will perform the following test on a representative sample (typically about 10%) of the various major types of light fixtures after retrofit or new fixture installation: A properly calibrated, instantaneous reading, wattmeter (or other suitable meter capable of reading the appropriate electrical parameters) will be installed on the power leads entering each light fixture (or group of light fixtures). The power draw of the light fixture will be measured and recorded when the fixture is at its normal operating condition. Light fixture power will be measured with new lamps installed so that pre and post retrofit conditions are similar. Note: It is advisable that an appropriate representative of Client be present to witness the above referenced testing procedure. Fixture Electrical Power CoPL Acceptance Initials- Date FacilityRoom #Qty TypeMeasurementConsumption 4.0 Computation of Savings: The following describes the stipulated methodology for computing Total Energy Savings based on the validated light fixture power consumption. a) Computation and Presentation of Utility Savings: Once the true operating characteristics of the light fixtures have been determined, actual annual savings will be calculated. To accomplish this, HESG will enter the measured kilowatt data for each representative type of light fixture before and after retrofit into the spreadsheet calculation in Exhibit 5.1. The spreadsheet calculations will be prorated to yield actual annual savings. 122 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Annual kWh SavingsPeak kW SavingsAnnual kW Savings Facility GuaranteedProjectedGuaranteedProjectedGuaranteedProjected City Hall 37,570 0 12.4 0.0 131.9 0.0 Fire Station #1 44,181 0 17.6 0.0 186.2 0.0 Fire Station #2 17,612 0 3.2 0.0 34.0 0.0 Library 40,332 0 13.1 0.0 139.3 0.0 Maintenance 12,134 0 5.6 0.0 58.9 0.0 Police Station 47,775 0 9.5 0.0 100.4 0.0 Exterior Lighting 146,374 0 36.4 0.0 385.3 0.0 Athletic Lighting 13,739 0 37.3 0.0 395.7 0.0 Traffic Signal 94,610 0 26.1 0.0 276.8 0.0 TOTALS454,3270161.20.01,708.50.0 123 City of Prior Lake ESA Honeywell Energy Services Group December 2014 EXHIBIT 5.1 Savings Calculations and Inventory Lighting System Improvements 124 City of Prior Lake ESA Honeywell Energy Services Group December 2014 EXHIBIT 6.0 Guarantee Mechanical System Improvements Table of Contents 1.0 Agreed Upon Parameters ................................................................................................. Page 139 a) Applicability ................................................................................................................ Page 139 b) Utility Rates ................................................................................................................. Page 139 c) Energy Calculations ..................................................................................................... Page 140 2.0 Pre-Retrofit Consumption Data ....................................................................................... Page 140 a) Measurement Methodology ......................................................................................... Page 140 3.0 Post-Retrofit Measurements............................................................................................. Page 140 a) Measurement Methodology ......................................................................................... Page 140 4.0 Computation of Savings ................................................................................................... Page 141 a) Computation and Presentation of Utility Savings........................................................ Page 141 138 City of Prior Lake ESA Honeywell Energy Services Group December 2014 1.0 Agreed Upon Parameters: The following are mutually agreed upon parameters that form the basis of this performance guarantee. These parameters are hereby recognized, for the purposes of this Agreement, as fact and will not be measured, monitored or adjusted. a) Applicability: This performance guarantee applies to the facility improvement measure for City of Prior Lake (CoPL) involving the installation of mechanical system improvements. FacilityFacility Improvement Measure City Hall M.5 - Chiller Plant Improvements (cost in EMS FIM) City Hall M.1 - Air Handling Units -- Rebalancing Fire Station #1 M.1 - Overhead Door Replacement and Controls Library M.1b - Hot Water Boiler Plant - Replacement Library M.2 - Air Handling Units -- Rebalancing Maintenance M.1 - Overhead Door Replacement and Controls Police Station M.1 - Air Handling Units -- Rebalancing b) Utility Rates: The base utility rates in the table below are those used to calculate the Guaranteed Savings and are the current rates in effect for each facility. Throughout the term of this Agreement, the savings are to be whichever is larger. These rates will be used as the floor price for the Term and shall be the lowest rate used to calculate energy savings in the event of a utility rate decrease. The electric consumption rate includes any Fuel Cost Adjustment (FCA) charges. The summer electric demand period is from June to September. The electric utility rates are based on the average annual data from May 2013 to April 2014. The natural gas rate includes any Purchase Gas Adjustment (PGA) charges. The heating utility rates are based on the average annual data from May 2013 to April 2014. Electric Utility:Gas Utility: MN Valley Electric Centerpoint Energy WinterSummerNaturalWater/ Electric UseFuel Oil DemandDemandGasSewer Facility$/kWh$/MMBtu $/kW$/kW$/MMBtu$/CCF City Hall $8.98 $12.86 $0.072 $7.27 $0.00 $0.00 Fire Station #1 $8.98 $12.86 $0.060 $7.75 $0.00 $0.00 Fire Station #2 $0.00 $0.00 $0.106 $7.65 $0.00 $0.00 Library $8.98 $12.86 $0.067 $7.44 $0.00 $0.00 Maintenance $8.98 $12.86 $0.066 $7.80 $0.00 $0.00 Police Station $8.98 $12.86 $0.071 $7.60 $0.00 $0.00 Exterior Lighting $0.00 $0.00 $0.113 $0.00 $0.00 $0.00 Athletic Lighting $5.87 $8.07 $0.106 $0.00 $0.00 $0.00 Traffic Signal Lighting $0.00 $0.00 $0.118 $0.00 $0.00 $0.00 139 City of Prior Lake ESA Honeywell Energy Services Group December 2014 c) Energy Calculation Input Data and Parameters: The spreadsheet energy models have to utilize existing and projected building system characteristics to accurately model individual building system energy consumption and savings. These building characteristics were obtained from sources as listed above. The major building input data are identified in Exhibit 6.1. 2.0 Pre-Retrofit Consumption Data: The pre-retrofit consumption data was established utilizing the following methodology: a) Measurement Methodology: Spreadsheet energy analysis software was used to model the energy consumption and calculate savings for each building. The known input parameters such as local weather data, internal building loads, mechanical system parameters, etc. were all utilized in the calculations. The existing major variable parameters were quantified and have been included in the Exhibit 6.1. The accuracy of savings calculations was validated by comparison to the actual total utility consumption data for CoPL. 3.0 Post-Retrofit Measurements: The following describes the stipulated methodology for proving the savings resulting from the installation of mechanical system improvements. a) Measurement Methodology: The major variable parameters were quantified and have been included in the data in Exhibit 6.1. Since all external variables (weather, utility rates, building dimensions and thermal values, mechanical system specifications, etc.) have been established, the only remaining item to validate is that the performance of each conservation measures is per original design. The following items will be verified during installation of the mechanical system improvements: CoPL Acceptance ItemAttribute to be VerifiedInitials-Date City Hall - M.5 - Chiller Plant Per Improvements (cost in EMS FIM) City Hall - M.1 - Air Handling Units - Per Recommendations - Rebalancing Fire Station #1 - M.1 - Overhead Per Recommendations Door Replacement and Controls Library - M.1b - Hot Water Boiler Plant Per Recommendations - Replacement Library - M.2 - Air Handling Units -- Per Recommendations Rebalancing Maintenance - M.1 - Overhead Door Per Recommendations Replacement and Controls Police Station - M.1 - Air Handling Units Per Recommendations -- Rebalancing 140 City of Prior Lake ESA Honeywell Energy Services Group December 2014 4.0 Computation of Savings: The following describes the stipulated methodology for computing Total Energy Savings based on the installation of mechanical system improvements. a) Computation and Presentation of Utility Savings: The mechanical system improvements savings will be generated as calculated by the spreadsheet software analysis programs that utilize standard engineering formulas, and are presented in Exhibit 6.1. Actual savings will be based on the ability of the systems to operate per the intended design, which is verified in Section 3.0 The following table summarizes the energy savings from implementation of the above mechanical system improvements: Guaranteed Annual Savings ElectricAnnualNatural GasFuel OilWater Facility kWhkWMMBtuMMBtuCCF City Hall 72,677 61 52 0 0 Fire Station #1 0 0 66 0 0 Fire Station #2 0 0 0 0 0 Library 6,272 11 111 0 0 Maintenance 0 0 90 0 0 Police Station 14,663 26 47 0 0 Exterior Lighting 0 0 0 0 0 Athletic Lighting 0 0 0 0 0 Traffic Signal Lighting 0 0 0 0 0 TOTALS93,6139836700 141 City of Prior Lake ESA Honeywell Energy Services Group December 2014 EXHIBIT 6.1 Savings Calculations Mechanical System Improvements 142 City of Prior Lake ESA Honeywell Energy Services Group December 2014 City of Prior Lake Chiller Improvements Guaranteed Savings kWh kW Cost Safety kWh kW Cost FIM CodeSavingsSavingsSavingsFactorSavingsSavingsSavings Facility City Hall M.5 67,066 35.1 $5,235 94% 63,037 33.0 $4,921 Total67,06635.1$5,23563,03733.0$4,921 Facility FIM City Hall M Demand (kW) savings occurring during summer demand period of utility 75% Savings Calculations Peak kW = HP x Motor Loading / Efficiency × (0.746 kW/HP) Chiller kW, Pump kW and Tower kW at part loads follow the specific unloading curves for those pieces of equipment. Operating % = (Weekly Occupied Hours + Unoccupied Cycling % × (168 hours - Weekly Occupied Hours) / 168 Hours kWh Use = (Chiller kW + Pump, Tower kW) × Annual Hours × (Operating %) kWh Savings = Existing kWh Use - Proposed kWh Use kW Savings = (Existing kW - Proposed kW) × Annual Hours / (14 peak hours/day) / (30 days/month) The sum functions are adding the kWh and kW use at each 5°F temperature bin. 143 City of Prior Lake ESA Honeywell Energy Services Group December 2014 City of Prior Lake Prior Lake, MN City Hall M.5 Input Existing Proposed Units Peak Building Load 100 100 tons Chiller Chiller Type A/C Scroll A/C Scroll Total Capacity 100 100 tons Efficiency 0.8 0.8 kW/ton Peak Demand 80 80 kW Chilled water pump (primary or chiller) Unloading Type Constant Constant speed kW Motor HP 7.5 7.5 HP High Efficiency (yes=1) 1 1 Efficiency 90% 90% % Motor Loading 70% 70% % Peak Demand 4.3 4.3 kW Chilled water pump (secondary or distribution) Unloading Type VSD VSD kW Motor HP 5 5 HP High Efficiency (yes=1) 1 1 Efficiency 90% 90% % Motor Loading 70% 70% % Peak Demand 2.9 2.9 kW Balance (No Load) Point Temperature 54 54 °F Minimum cooling load 0% 0% Cooling Design Outside Air Temperature 88 88 °F Cooling Discharge Air Temperature 55 55 °F Room Air Temperature 72 72 °F Economizer Enable Temperature 60 71 °F Minimum VSD Speed 30% 30% Weekly Occupied Hours 168 93 hours Unoccupied Cycling 0% 10% hours Cooling Operating Hours 3975.0 2377.9 hours Existing Scenario Proposed Scenario Savings Outside Annual Net Pump, Net Pump, Air Chiller Total Chiller Total Annual Hours Cooling Tower Cooling Tower kWh Temp kW kWh kW kWh kW Load % kW Load % kW 97.5 1 128% 80.0 7.3 87 128% 80.0 7.3 52 35 0.0 92.5 23 113% 80.0 7.3 2,008 113% 80.0 7.3 1,203 805 0.0 87/5 75 99% 78.8 7.2 6,451 99% 78.8 7.2 3,866 2,585 0.0 82.5 291 84% 67.1 6.2 21,306 84% 67.1 6.2 12,772 8,534 0.0 77.5 507 69% 55.3 5.4 30,784 69% 55.3 5.4 18,462 12,323 0.0 72.5 640 54% 43.5 4.9 31,025 54% 43.5 4.9 18,617 12,407 0.0 67.5 600 40% 31.8 4.7 21,860 29% 23.4 4.6 10,077 11,783 12.2 62.5 863 25% 20.0 4.6 3,658 2% 1.2 4.6 6,991 14,210 12.2 57.5 633 2% 1.2 4.6 3,658 2% 1.2 4.6 2,245 1,412 0.0 52.5 553 0% 0.0 0.0 0 0% 0.0 0.0 0 0 0.0 47.5 480 0% 0.0 0.0 0 0% 0.0 0.0 0 0 0.0 Total 0 0 138,380 71,314 64,095 35.1 68,462 144 City of Prior Lake ESA Honeywell Energy Services Group December 2014 City of Prior Lake Prior Lake, MN Overhead Door Replacement and Controls Safety Factor: 94% Guaranteed Savings Hole Area Boiler Fuel Savings Rate (Natural Gas Fuel Savings Cost FacilityCost Savings (SF)Efficiency(MMBtu)or Fuel Oil)(MMBtu)Savings City Hall 0.00 85% 0.0 Natural Gas $ 0 0.0 $ 0 Fire Station #1 588.00 84% 70.5 Natural Gas $ 547 66.3 $ 514 Fire Station #2 0.00 82% 0.0 Natural Gas $ 0 0.0 $ 0 Library 0.00 85% 0.0 Natural Gas $ 0 0.0 $ 0 Maintenance 416.00 82% 96.1 Natural Gas $ 750 90.3 $ 705 Police Station 0.00 85% 0.0 Natural Gas $ 0 0.0 $ 0 1004.00 $ 1,297 Total 56% 166.7 156.6 $ 1,219 Savings Calculations The airflow is based on empirical formulas based on building pressurization techniques, as shown in the equation below: 0.65 2 Airflow = (Airflow Coefficient) × × Area, where Airflow is in in (in H2O), and Area is in ft. The annual heating load is based on the average heating load, as given by the equation below: Heat loss (MMBtu) = (1.08 Btu/hr/CFM/°F) × Airflow × Temperature) × (Reduced Hours Doors are Open) Efficiency × (1,000,000 Btu/MMBtu) Temperature = (Setpoint temp) - (Average heating temp) where Heat loss is in MMBtu, Airflow is in CFM, Temperatures are in °F, and Efficiency is in %. ProposedHeatingAverageTempAverage Specific Existing Daily Setpoint FacilityDaily Hours Hours Heating Air Differential Heat Load Hours OpenTemp (°F) OpenReductionTemp (°F)(°F)(Btu/CFM) City Hall 0.0 70 30.0 40.0 0.0 Fire Station #1 0.50 0.40 20.6 70 30.0 40.0 890.7 Fire Station #2 0.0 70 30.0 40.0 0.0 Library 0.0 70 30.0 40.0 0.0 Maintenance 1.00 0.81 38.7 70 30.0 40.0 1,674.4 Police Station 0.0 70 30.0 40.0 0.0 Assume 20% reduction in time open Weather Location MN-Minneapolis 20.65 Airflow Coefficient 730 cfm/ft / (in HO) 2 0.057 In HO 2 Constant 1.08 Btuh/CFM/°F Heating Conversion Factor 1,000,000 Btu/MMBtu Cooling Conversion Factor 12,000 Btu/ton Balance Point Temperature 55 °F Heating Season Hours 5,336 Hours Heating Season Hours 206 Days Airflow Fuel Savings 2 Facility Description Area (ft) (MMBtu) (CFM) Fire Station #1 Ext Doors: 3 doors (14' wide × 14' high) 588.00 66,531.4 70.5 Maintenance Ext Doors: 2 doors (16' wide × 13' high) 416.00 47,069.8 96.1 Total /Average 1,004.00 113,601.2 166.7 146 City of Prior Lake ESA Honeywell Energy Services Group December 2014 City of Prior Lake Prior Lake, MN Boiler Plant Replacement Projected Savings Guaranteed Savings FIM Rate Safety Facility Natural Cost Natural Cost Code Type Factor Fuel Oil Fuel Oil Gas Savings Gas Savings Natural Library M.1b 97.2 0.0 $724 85% 82.6 0.0 $615 Gas 97.2 0.0 $724 82.6 0.0 $615 Total Savings Savings Calculations Adjusted Gas Use with Existing Boilers = (Existing Annual Gas Consumption) - (Non-Boiler Gas Use) - (Gas Reduction from Other Improvements) Projected Gas Use after Improvements = (Projected Gas Use with Existing Boilers) × (Existing System Efficiency) / (Proposed System Efficiency) MMBtu Savings = (Adjusted Gas Use with Existing Boilers) - (Projected Gas Use) M.1b Library Utility Usage Est. % of Fuel Components (MMBtu/yr) Total Methodology: Basic Total Annual Fuel Consumption 1,586 100.0% Fuel Type: Natural Gas Domestic Hot Water 159 10.0% Cooking Equipment 0 0.0% Gas Rooftop HVAC Equipment 0 0.0% Annual Boiler Gas Consumption 1,427 90.0% Derating of Gas Consumption from Previous Improvements Natural Gas Included Facility Improvement Measure FIM Code Savings (Y/N) Y Energy Management and DDC Base Project C.1a 432.2 Y Building Envelope/Air Leakage S.1 12.3 Total Savings 1,427 90.0% Annual Boiler Fuel Consumption 1,427 Gas Reduction From Other Improvement -445 Adjusted Annual Boiler Gas Use 983 Basic MethodologyExistingProposedSavings Seasonal Combustion Efficiency From combustion analyzer 85.0%93.0% Heating System Losses Distribution and shell losses, 3.0% 2.0% estimated blowdown, boiler degradation System Efficiency Boiler combustion efficiency less system 82.0% 91.0% 0 Heat Output MMBTU 806 806 MMBtu/year 97.2 Adjusted Annual Boiler Gas Use 983 886 MMBtu/year Natural Gas Rate $7.44 $7.44 $7.44 per MMBtu $724 Utility Cost $7,317 $6,594 $/year 152 City of Prior Lake ESA Honeywell Energy Services Group December 2014 EXHIBIT 7.0 Guarantee Building Envelope/Air Leakage Table of Contents 1.0 Agreed Upon Parameters ................................................................................................. Page 159 a) Applicability ................................................................................................................ Page 159 b) Utility Rates ................................................................................................................. Page 159 2.0 Pre-Retrofit Consumption Data ....................................................................................... Page 160 a) Measurement Methodology ......................................................................................... Page 160 3.0 Post-Retrofit Measurements............................................................................................. Page 160 a) Measurement Methodology ......................................................................................... Page 160 4.0 Computation of Savings ................................................................................................... Page 160 a) Computation and Presentation of Utility Savings........................................................ Page 160 158 City of Prior Lake ESA Honeywell Energy Services Group December 2014 1.0 Agreed Upon Parameters: The following are mutually agreed upon parameters that form the basis of this performance guarantee. These parameters are hereby recognized, for the purposes of this Agreement, as fact and will not be measured, monitored or adjusted. a) Applicability: This performance guarantee applies to the facility improvement measure for City of Prior Lake (CoPL) involving the installation of building envelope/air leakage devices. b) Utility Rates: The base utility rates in the table below are those used to calculate the Guaranteed Savings and are the current rates in effect for each facility. Throughout the term of this Agreement, the savings are to be whichever is larger. These rates will be used as the floor price for the Term and shall be the lowest rate used to calculate energy savings in the event of a utility rate decrease. The electric consumption rate includes any Fuel Cost Adjustment (FCA) charges. The summer electric demand period is from June to September. The electric utility rates are based on the average annual data from May 2013 to April 2014. The natural gas rate includes any Purchase Gas Adjustment (PGA) charges. The heating utility rates are based on the average annual data from May 2013 to April 2014. Electric Utility:Gas Utility: MN Valley Electric Centerpoint Energy WinterSummerElectricNaturalWater/ Fuel Oil DemandDemandUseGasSewer Facility $/MMBtu $/kW$/kW$/kWh$/MMBtu$/CCF City Hall $8.98 $12.86 $0.072 $7.27 $0.00 $0.00 Fire Station #1 $8.98 $12.86 $0.060 $7.75 $0.00 $0.00 Fire Station #2 $0.00 $0.00 $0.106 $7.65 $0.00 $0.00 Library $8.98 $12.86 $0.067 $7.44 $0.00 $0.00 Maintenance $8.98 $12.86 $0.066 $7.80 $0.00 $0.00 Police Station $8.98 $12.86 $0.071 $7.60 $0.00 $0.00 Exterior Lighting $0.00 $0.00 $0.113 $0.00 $0.00 $0.00 Athletic Lighting $5.87 $8.07 $0.106 $0.00 $0.00 $0.00 The spreadsheet energy models have to utilize existing and projected building system characteristics to accurately model individual building system energy consumption and savings. These building characteristics were obtained from sources as listed above. The major building input data are identified in Exhibit 7.1. 159 City of Prior Lake ESA Honeywell Energy Services Group December 2014 2.0 Pre-Retrofit Consumption Data: The pre-retrofit consumption data was established utilizing the following methodology: a) Measurement Methodology: The buildings were inspected visually and using a smoke puffer to identify location and severity of air leakage paths. The known input parameters such as local weather data and typical pressure differential were all utilized in the calculations. Air leakage paths are measured and detailed in Exhibit 7.1. The accuracy of savings calculations was validated by comparison to the actual total utility consumption data for CoPL. 3.0 Post-Retrofit Measurements: The following describes the stipulated methodology for proving the savings resulting from the installation of building envelope/air leakage. a) Measurement Methodology: The major variable parameters were quantified and have been included in the data in Exhibit 7.1. Since all external variables (weather, utility rates, air leakage building dimensions, etc.) have been established, the only remaining item to validate is that the performance of each conservation measures is per original design. The following items will be verified during installation of the building envelope/air leakage: CoPL Acceptance Initials- ItemAttribute to be Verified Date Building Envelope/Air Leakage recommendations. 4.0 Computation of Savings: The following describes the stipulated methodology for computing Total Energy Savings based on the installation of building envelope/air leakage. a) Computation and Presentation of Utility Savings: The building envelope/air leakage savings will be calculated by the spreadsheet analysis that utilizes standard engineering formulas. Actual savings will be based on the ability of the systems to operate per the intended design, which is verified in Section 3.0. The airflow is based on empirical formulas based on building pressurization techniques, as shown in the equation below: 0.65 O), and Area is 2 2 in ft. The annual heating load is based on the average heating load, as given by the equation below: 160 City of Prior Lake ESA Honeywell Energy Services Group December 2014 Heat loss = (1.08 Btu/hr/CFM/°F) × Airflow × (Temperature differential) × (Heating hours) Efficiency × (1,000,000 Btu/MMBtu) where Temperature differential = Setpoint temperature - Average heating temperature, and where Heat loss is in MMBtu, Airflow is in CFM, Temperatures are in °F, and Efficiency is in %. Type of Input DataValueSource From measurements of hole area in square Hole Area Varies feet as documented in Exhibit 7.1. 20.65 Airflow Coefficient 730 cfm/ft/(in HO) Typical of current building construction. 2 Differential pressure (P) 0.07 in HO Based on average wind speed for the location. 2 Air heating coefficient 1.08 Btu/hr/CFM/°F Typical value for air. Boiler enable temperature 50°F Typical value for location. Based on local weather data and boiler enable Annual heating season 4574 hours/yr temp. Based on local weather data and boiler enable Average heating air 26.1°F temp. Occupied setpoint 68.0°F Typical setpoint. Unoccupied setpoint 62.0°F Typical setpoint. Conversion factor 1,000,000 Btu/MMBtu Boiler Efficiency Average 85% Boiler system efficiency. The following table summarizes the energy savings from building envelope/air leakage improvements: Natural Gas Savings Hole Area (SF)Fuel Oil Savings (MMBtu) (MMBtu) Facility GuaranteedProjectedGuaranteedProjectedGuaranteedProjected City Hall 2.08 0.00 57.1 0.0 0.0 0.0 Fire Station #1 7.61 0.00 211.4 0.0 0.0 0.0 Fire Station #2 3.05 0.00 86.8 0.0 0.0 0.0 Library 0.42 0.00 11.5 0.0 0.0 0.0 Maintenance 3.78 0.00 107.6 0.0 0.0 0.0 Police Station 6.16 0.00 169.1 0.0 0.0 0.0 Exterior Lighting 0.00 0.00 0.0 0.0 0.0 0.0 Athletic Lighting 0.00 0.00 0.0 0.0 0.0 0.0 Traffic Signal Lighting 0.00 0.00 0.0 0.0 0.0 0.0 TOTALS23.100.00643.60.00.00.0 161 City of Prior Lake ESA Honeywell Energy Services Group December 2014 EXHIBIT 7.1 Savings Calculations Building Envelope/Air Leakage 162 City of Prior Lake ESA Honeywell Energy Services Group December 2014 City of Prior Lake Prior Lake, MN Building Envelope/Air Leakage Savings Calculations Summary Safety Factor: 94% Guaranteed Savings Hole Area Boiler Fuel Savings Rate (Natural Gas Fuel Savings Cost FacilityCost Savings (SF)Efficiency(MMBtu)or Fuel Oil)(MMBtu)Savings City Hall 2.08 85% 60.8 Natural Gas $ 442 57.1 $ 415 Fire Station #1 7.61 84% 225.0 Natural Gas $ 1,743 211.4 $ 1,638 Fire Station #2 3.05 82% 92.4 Natural Gas $ 707 86.8 $ 664 Library 0.42 85% 12.3 Natural Gas $ 91 11.5 $ 86 Maintenance 3.78 82% 114.5 Natural Gas $ 893 107.6 $ 840 Police Station 6.16 85% 180.0 Natural Gas $ 1,368 169.1 $ 1,286 23.10 $ 5,244 Grand Total 56% 648.8 643.6 $ 4,929 Savings Calculations The airflow is based on empirical formulas based on building pressurization techniques, as shown in the 0.65 2 (in HO), and Area is in ft. 2 The annual heating load is based on the average heating load, as given by the equation below: Heat loss (MMBtu) = Efficiency × (1,000,000 Btu/MMBtu) - % Occupied ) - Average heating temp where Heat loss is in MMBtu, Airflow is in CFM, Temperatures are in °F, and Efficiency is in %. Building Envelope/Air Leakage Savings Calculations Average Heating Average Occupied Unoccupied Balance Temp Percent Specific Heat FacilitySeason Heating Air Setpoint Setpoint Point Temp Differential OccupiedLoad (Hours)Temp (°F)Temp (°F)Temp (°F)(°F)(°F) (MMBtu/CFM) City Hall 4,574 26.1 68 62 48% 50 0.192 38.8 Fire Station #1 4,574 26.1 68 62 48% 50 0.192 38.8 Fire Station #2 4,574 26.1 68 62 48% 50 0.192 38.8 Library 4,574 26.1 68 62 48% 50 0.192 38.8 Maintenance 4,574 26.1 68 62 48% 50 0.192 38.8 Police Station 4,574 26.1 68 62 48% 50 0.192 38.8 163 City of Prior Lake ESA Honeywell Energy Services Group December 2014 AverageOccupiedUnoccupiedAverageAverageTemp Cooling Percent FacilityCooling Air Setpoint Setpoint Setpoint Specific Load Differential HoursOccupied Temp (°F)Temp (°F)Temp (°F)Temp (°F)(ton-hr/CFM)(°F) City Hall 1,254 78.0 72 74 48% 73.0 0.563 5.0 Fire Station #1 1,254 78.0 72 74 48% 73.0 0.563 5.0 Fire Station #2 1,254 78.0 72 74 48% 73.0 0.563 5.0 Library 1,254 78.0 72 74 48% 73.0 0.563 5.0 Maintenance 1,254 78.0 72 74 48% 73.0 0.563 5.0 Police Station 1,254 78.0 72 74 48% 73.0 0.563 5.0 Weather Location MN-Minneapolis 20.65 Airflow Coefficient 730 cfm/ft / (in HO) 2 0.07 In HO 2 Constant 1.08 Btuh/CFM/°F Heating Conversion Factor 1,000,000 Btu/MMBtu Cooling Conversion Factor 12,000 Btu/ton Electric Cooling Airflow Fuel Savings 2 Savings Facility Description Area (ft) (MMBtu) (CFM) (kWh) City Hall Ext Doors: weatherstrip & seal (main level) 0.63 81.7 18.4 0.0 City Hall Roof/Wall Joint: seal 1.25 162.0 36.5 0.0 City Hall Int Doors: weatherstrip & seal (upper level) 0.10 13.0 2.9 0.0 City Hall Ext Doors: weatherstrip & seal (lower level) 0.10 13.0 2.9 0.0 Fire Station #1 Roof/Wall Joint: seal (general) 1.72 222.9 50.8 0.0 Fire Station #1 Roof/Wall Joint: seal (truck bay) 1.46 189.2 43.2 0.0 Fire Station #1 Overhead Doors: seal on three sides 3.28 425.1 97.0 0.0 Fire Station #1 Ext Doors: weatherstrip & seal (main level) 0.73 94.6 21.6 0.0 Fire Station 1 Int Doors: weatherstrip & seal (main level) 0.42 54.4 12.7 0.0 Fire Station #2 Overhead Doors: seal on three sides 2.63 340.9 79.6 0.0 Fire Station #2 Ext Doors: weatherstrip & seal 0.42 54.4 12.7 0.0 Library Ext Doors: weatherstrip & seal 0.42 54.4 12.3 0.0 0.0 Maintenance Roof/Wall Joint: seal 1.88 243.7 56.9 Maintenance Roof/Level Change: seal 0.94 121.8 28.5 0.0 Maintenance Windows: Seal 0.30 38.9 9.1 0.0 Maintenance Ext Doors: weatherstrip & seal 0.66 85.5 20.0 0.0 Police Station Overhead Doors: seal (upper) 1.25 162.0 36.5 0.0 Police Station Roof/Wall Joint: seal (upper) 2.81 364.2 82.1 0.0 Police Station Int Doors: weatherstrip & seal (upper level) 0.10 13.0 2.9 0.0 Police Station Ext Doors: weatherstrip & seal (upper level) 0.63 81.7 18.4 0.0 Police Station Roof/Wall Joint: seal (lower) 0.63 81.7 18.4 0.0 Police Station Ext Doors: weatherstrip & seal (upper level) 0.10 13.0 2.9 0.0 Police Station Int Doors: weatherstrip & seal (upper level) .21 27.2 6.1 0.0 Police Station Overhead Doors: seal (lower) .43 55.7 12.6 0.0 0.0 Total/Average 23.10 2,994.0 684.8 164 City of Prior Lake ESA Honeywell Energy Services Group December 2014 EXHIBIT 8.0 Building Envelope Floor Plans Table of Contents City Hall Main Level Floor Plan ........................................................................................... Page 166 City Hall Upper Level Floor Plan .......................................................................................... Page 167 City Hall Lower Level Floor Plan ......................................................................................... Page 168 Fire Hall 1 Floor Plan ............................................................................................................ Page 169 Fire Hall 2 Floor Plan ............................................................................................................ Page 170 Library Floor Plan ..................................................................................................................... Page 171 Maintenance Center Floor Plan ............................................................................................. Page 172 Police Station Upper Level Floor Plan .................................................................................. Page 173 Police Station Garage Floor Plan ........................................................................................... Page 174 165 City of Prior Lake ESA Honeywell Energy Services Group December 2014 166 City of Prior Lake ESA Honeywell Energy Services Group December 2014 167 City of Prior Lake ESA Honeywell Energy Services Group December 2014 168 City of Prior Lake ESA Honeywell Energy Services Group December 2014 169 City of Prior Lake ESA Honeywell Energy Services Group December 2014 170 City of Prior Lake ESA Honeywell Energy Services Group December 2014 171 City of Prior Lake ESA Honeywell Energy Services Group December 2014 172 City of Prior Lake ESA Honeywell Energy Services Group December 2014 173 City of Prior Lake ESA Honeywell Energy Services Group December 2014 174 City of Prior Lake ESA Honeywell Energy Services Group December 2014 DOCUMENT CHECKLIST P(2) LEASE EXECUTE TWO ORIGINALS OF ALL DOCUMENTS **NOFRONTANDBACKCOPIES,PLEASE** : RETURN ALL ORIGINALSTO U.S.BGLF,I. ANCORP OVERNMENT EASING AND INANCENC LA ISA LBRECHT THTH 95017S,7F TREETLOOR D,CO80202 ENVER 303-585-4077 Master Tax-Exempt Lease Purchase Agreement –This document must be executed in the presence of a witness/attestor. The attesting witness does not have to be a notary, just present at the time of execution. Addendum/Amendment to Master Tax-Exempt Lease Purchase Agreement –This document must be executed in the presence of a witness/attestor. The attesting witness does not have to be a notary, just present at the time of execution. Property Schedule No. 1 -This document must be executed in the presence of a witness/attestor. The attesting witness does not have to be a notary, just present at the time of execution. Property Description and Payment Schedule–Exhibit 1 Lessee’s Counsel’s Opinion–Exhibit 2 . This exhibit will need to be executed by your attorney, dated and placed on their letterhead. Your attorney will likely want to review the agreement prior to executing this opinion. Lessee’s Certificate–Exhibit 3 .1) Please fill in the person’s title who will be executing the certificate in the first paragraph (note: the person who signs this exhibit cannot be the same person as the executing official(s)for all other documents);2) Please fill inthe date that the governing body met in Line 1; 3)In the middle set of boxes, please print the name of the executing official(s) in the far left box, print their title(s) in the middle box and have the executing official(s) sign theline in the far right hand box; 4)Include in your return package a copy of the board minutes or resolution for our files; and 5)The exhibit should be executed by someone other than the executing official(s) named in the center box. Payment of Proceeds Instructions–Exhibit 4 . This is for the vendor payment information. If more than one vendor is being paid please make copies ofthis exhibit and fill out as many as are needed. Acceptance Certificate–Exhibit 5 . The date that all equipment is delivered, installed and accepted is the date that should be placed on the “DATE” line. If moneys are being deposited into escrow this exhibit should be held and returned withthe final disbursement from the escrow account. Bank Qualification and Arbitrage Rebate–Exhibit 6. Insurance Authorization and Verification –To be filled out by the Lessee and sent to your insurance carrier. A valid insurance certificate, or self-insurance letter if the Lessee self-insures, is required prior to funding. Notification of Tax Treatment– Please provide your State of Sales/Use tax Exemption Certificate. Form 8038-G –Blank form provided to Lessee. Please consult your local legal/bond counsel to fill out. Escrow Agreement –This document needs to be executed by the Executing Official defined in the Lessee’s Certificate – Exhibit 3. Investment Direction Letter –Exhibit 1. This document needs to beexecuted by the Executing Official. o Schedule of Fees –Exhibit 2. o Requisition Request –Exhibit 3. This document should be retained by Lessee and utilized to request o disbursements from the escrow account. Please make copies and fill out as many as are needed. Acceptance Certificate -Exhibit 4. This document should be retained by Lessee and provided to Lessor once all o the proceeds have been disbursed from the escrow account. Class Action Negative Consent Letter –Exhibit 6. o IRS Form W-9. This document should be retained by Lessee and submitted with the Requisition Request(s) for each o vendor being paid. Please make copies and fill out as many as are needed. Master Tax-Exempt Lease/Purchase Agreement Between:U.S. Bancorp Government Leasing and Finance, Inc.(the “Lessor”) 13010 SW 68th Parkway, Suite 100 Portland, OR 97223 And:City of Prior Lake(the “Lessee”) 4646 Dakota Street SE Prior Lake, Minnesota 55372-1714 Attention: Jerilyn Erickson, Finance Director Katy Gehler, Public Works Director Telephone: 952-447-9841 952-447-9890 Dated:December 19, 2014 ARTICLE I DEFINITIONS The following terms will have the meanings indicated below unless the context clearly requires otherwise: "Agreement"means this Master Tax-Exempt Lease/Purchase Agreement, including all exhibits and schedules attached hereto. “Code” is defined in Section 3.01(f). "Commencement Date"is the date when the term of a Property Schedule and Lessee's obligation to pay rent thereunder commences, which date shall be set forth in such Property Schedule. “Event of Default”is defined in Section 13.01. “Lease Payments"means the Lease Payments payable by Lessee under Article VI of this Agreement and each Property Schedule, as set forth in each Property Schedule. “Lease Payment Dates"means the Lease Payment dates for the Lease Payments as set forth in each Property Schedule. "Lease Term"means, with respect to a Property Schedule, the Original Term and all Renewal Terms. The Lease Term for each Property Schedule executed hereunder shall be set forth in such Property Schedule, as provided in Section 4.02. "Lessee"means the entity identified as such in the first paragraph hereof, and its permitted successors and assigns. "Lessor"means the entity identified as such in the first paragraph hereof, and its successors and assigns. “Nonappropriation Event” is defined in Section 6.06. "Original Term"means, with respect to a Property Schedule, the period from the Commencement Date until the end of the budget year of Lessee in effect at the Commencement Date. "Property"means, collectively, the property lease/purchased pursuant to this Agreement, and with respect to each Property Schedule, theproperty described in such Property Schedule, andall replacements, repairs, restorations, modifications and improvements thereof or thereto made pursuant to Section 8.01 or Article IX. "Property Schedule" means a Property Schedule in the form attached hereto for Property Schedule 1. Subsequent Property Schedules pursuant to this Agreement shall be numbered consecutively, beginning with Property Schedule 2. "Purchase Price" means the amount that Lessee may, in its discretion, pay to Lessor to purchase the Property under a Property Schedule, as provided in Section 11.01 and as set forth in the Property Schedule. "Renewal Terms" means the renewal terms of a Property Schedule, each having a duration of one year and a term coextensive with Lessee's budget year. "State"means the state where Lessee is located. "Vendor" means the manufacturer or contractor of the Property as well as the agents or dealers of the manufacturer or contractor from whom Lessor or Lessee purchased or is purchasing all or any portion of the Property. ARTICLE II 2.01Property Schedules Separate Financings.Each Property Schedule executed and delivered under this Agreement shall be a separate financing, distinct from other Property Schedules. Without limiting the foregoing, upon the occurrence of an Event of Default or a Nonappropriation Event with respect to a Property Schedule, Lessor shall have the rights and remedies specified herein with respect to the Property financed and the Lease Payments payable under such Property Schedule, and except as expressly provided in Section 12.02 below, Lessor shall have no rights or remedies with respect to Property financed or Lease Payments payable under any other Property Schedules unless an Event of Default or Nonappropriation Event has also occurred under such other Property Schedules. ARTICLE III 3.01Covenants of Lessee.As of the Commencement Date for each Property Schedule executed and delivered hereunder, Lessee shall be deemed to represent, covenant and warrant for the benefit of Lessor as follows: (a)Lessee is a public body corporate and politic duly organized and existing under the constitution and laws of the State with full power and authority to enter into this Agreement and the Property Schedule and the transactions contemplated thereby and to perform all of its obligations thereunder. (b)Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a bodycorporate and politic. To the extent Lessee should merge with another entity under the laws of the State, Lessee agrees that as a condition to such merger it will require that the remaining or resulting entity shall be assigned Lessee's rights and shall assume Lessee's obligations hereunder. (c)Lessee has been duly authorized to execute and deliver this Agreement and the Property Schedule by proper action by its governing body, or by other appropriate official approval, and all requirements have been met and procedures have occurred in order to ensure the validity and enforceability of this Agreement and the Property Schedule, and Lessee has complied with such public bidding requirements as may be applicable to this Agreement and the Property Schedule and the acquisition by Lessee of the Property thereunder. On or before the Commencement Date for the Property Schedule, Lessee shall cause to be delivered an opinion of counsel in substantially the form attached to the form of the Property Schedule as Exhibit 2. (d)During the Lease Term for the Property Schedule, the Property thereunder will perform and will be used by Lessee only for the purpose of performing essential governmental uses and public functions within the permissible scope of Lessee's authority. (e)Lessee will provide Lessor with current financial statements, budgets and proof of appropriation for the ensuing budget year and other financial information relating to the ability of Lessee to continue this Agreement and the Property Schedule in such form and containing such information as may be requested by Lessor. (f)Lessee will comply with all applicable provisions of theInternal Revenue Code of 1986, as amended (the “Code”), including Sections 103 and 148 thereof, and the regulations of the Treasury Department thereunder, from time to time proposed or in effect, in order to maintain the excludability from gross income for federal income tax purposes of the interest component of Lease Payments under the Property Schedule and will not use or permit the use of the Property in such a manner as to cause a Property Schedule to be a "private activity bond" under Section 141(a) of the Code. Lessee covenants and agrees that it will use the proceeds of the Property Schedule as soon as practicable and with all reasonable dispatch for the purpose for which the Property Schedule has been entered into, and that no part of the proceedsof the Property Schedule shall be invested in any securities, obligations or other investments except for the temporary period pending such use nor used, at any time, directly or indirectly, in a manner which, if such use had been reasonably anticipated on the date of issuance of the Agreement, would have caused any portion of the Property Schedule to be or become "arbitrage bonds" within the meaning of Section 103(b)(2) or Section 148 of the Code and the regulations of the Treasury Department thereunder proposed or in effect at the time of such use and applicable to obligations issued on the date of issuance of the Property Schedule. (g)The execution, delivery and performance of this Agreement and the Property Schedule and compliance with the provisions hereof and thereof by Lessee does not conflict with or result in a violation or breach or constitute a default under, any resolution, bond, agreement, indenture, mortgage, note, lease or other instrument to which Lessee is a party or by which it is bound by any law or any rule, regulation, order or decree of any court, governmental agency or body having jurisdiction over Lessee or any of its activities or properties resulting in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any property or assets of Lessee or to which it is subject. (h)Lessee's exact legal name is as set forth on the first page of this Agreement. Lessee will not change its legal name in any respect without giving thirty (30) days prior notice to Lessor. ARTICLE IV 4.01Lease of Property. On the Commencement Date of each Property Schedule executed hereunder, Lessor will be deemed to demise, lease and let to Lessee, and Lessee will be deemed to rent, lease and hire from Lessor, the Property described in such Property Schedule, in accordance with this Agreement and such Property Schedule, for the Lease Term set forth in such Property Schedule. 4.02Lease Term.The term of each Property Schedule shall commence on the Commencement Date set forth therein and shall terminate upon payment of the final Lease Payment set forth in such Property Schedule and the exercise of the Purchase Option described in Section 11.01, unless terminated sooner pursuant to this Agreement or the Property Schedule. 4.03Delivery, Installation and Acceptance of Property.Lessee shall order the Property, shall cause the Property to be delivered and installed at the locations specified in the applicable Property Schedule and shall pay all taxes, delivery costs and installation costs, if any, in connection therewith. To the extent funds are deposited under an escrow agreement or trust agreement for the acquisition of the Property, such funds shall be disbursed as provided therein. When the Property described in such Property Schedule is delivered, installed and accepted as to Lessee's specifications, Lessee shall immediately accept the Property and evidence said acceptance by executing and delivering to Lessor the Acceptance Certificate substantially in the form attached to the Property Schedule. ARTICLE V 5.01Enjoyment of Property.Lessee shall during the Lease Term peaceably and quietly have, hold and enjoy the Property, without suit, trouble or hindrance from Lessor, except as expressly set forth in this Agreement. Lessor shall not interfere with such quiet use and enjoyment during the Lease Term so long as Lessee is not in default under the subject Property Schedule. 5.02Location; Inspection.The Property will be initially located or based at the location specified in the applicable Property Schedule. Lessor shall have the right at all reasonable times during business hours to enter into and upon the property of Lessee for the purpose of inspecting the Property. ARTICLE VI 6.01Lease Payments to Constitute a Current Expense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Lease Payments hereunder shall constitute a current expense of Lessee and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional, statutory or charter limitation or requirement concerning the creation of indebtedness by Lessee, nor shall anything contained herein constitute a pledge of the faith and credit or taxing power of Lessee. Upon the appropriation of Lease Payments for a fiscal year, the Lease Payments for said fiscal year, and only the Lease Payments for said current fiscal year, shall be a binding obligation of Lessee; provided that such obligation shall not include a pledge of the taxing power of Lessee. 6.02Payment of Lease Payments.Lessee shall promptly pay Lease Payments under each Property Schedule, exclusively from legally available funds, in lawful money of the United States of America, to Lessor in such amounts and on such dates as described in the applicable Property Schedule, at Lessor's address set forth on the first page of this Agreement, unless Lessor instructs Lessee otherwise. Lessee shall pay Lessor a charge on any delinquent Lease Payments under a Property Schedule in an amount sufficient to cover all additional costs and expenses incurred by Lessor from such delinquent Lease Payment. In addition, Lessee shall pay a late charge of five cents per dollar or the highest amount permitted by applicable law, whichever is lower, on all delinquent Lease Payments and interest on said delinquent amounts from the date such amounts were due until paid at the rate of 12% per annum or the maximum amount permitted by law, whichever is less. 6.03Interest Component.A portion of each Lease Payment due under each Property Schedule is paid as, and represents payment of, interest, and each Property Schedule hereunder shall set forth the interest component (or method of computation thereof) of each Lease Payment thereunder during the Lease Term. 6.04Lease Payments to be Unconditional.SUBJECT TO SECTION 6.06, THE OBLIGATIONS OF LESSEE TO PAY THE LEASE PAYMENTS DUE UNDER THE PROPERTY SCHEDULES AND TO PERFORM AND OBSERVE THE OTHER COVENANTS AND AGREEMENTS CONTAINED HEREIN SHALL BE ABSOLUTE AND UNCONDITIONAL IN ALL EVENTS WITHOUT ABATEMENT, DIMINUTION, DEDUCTION, SET-OFF OR DEFENSE, FOR ANY REASON, INCLUDING WITHOUT LIMITATION, ANY DEFECTS, MALFUNCTIONS, BREAKDOWNS OR INFIRMITIES IN THE PROPERTY OR ANY ACCIDENT, CONDEMNATION OR UNFORESEEN CIRCUMSTANCES. THIS PROVISION SHALL NOT LIMIT LESSEE'S RIGHTS OR ACTIONS AGAINST ANY VENDOR AS PROVIDED IN SECTION 10.02. 6.05Continuation of Lease by Lessee. Lessee intends to continue all Property Schedules entered into pursuantto this Agreement and to pay the Lease Payments thereunder. Lessee reasonably believes that legally available funds in an amount sufficient to make all Lease Payments during the term of all Property Schedules can be obtained. Lessee agrees that its staff will provide during the budgeting process for each budget year to the governing body of Lessee notification of any Lease Payments due under the Property Schedules during the following budget year. Notwithstanding this covenant, if Lessee fails to appropriate the Lease Payments for a Property Schedule pursuant to Section 6.06, such Property Schedule shall terminate at the end of the then current Original Term or Renewal Term. Although Lessee has made this covenant, in the event that it fails to provide such notice, no remedy is provided and Lessee shall not be liable for any damages for its failure to so comply. 6.06Nonappropriation.If during the then current Original Term or Renewal Term, sufficient funds are not appropriated to make Lease Payments required under a Property Schedule for the following fiscal year, Lessee shall be deemed to not have renewed such Property Schedule for the following fiscal year and the Property Schedule shall terminate at the end of the then current Original Term or Renewal Term and Lessee shall not be obligated to make Lease Payments under said Property Schedule beyond the then current fiscal year for which funds have been appropriated. Upon the occurrence of such nonappropriation (a "Nonappropriation Event") Lessee shall, no later than the end of the fiscal year for which Lease Payments have been appropriated, deliver possession of the Property under said Property Schedule to Lessor. If Lessee fails to deliver possession of the Property to Lessor upon termination of said Property Schedule by reason of a Nonappropriation Event, the termination shall nevertheless be effective but Lessee shall be responsible for the payment of damages in an amount equal to the portion of Lease Payments thereafter coming due that is attributable to the number of days after the termination during which the Lessee fails to deliver possession and for any other loss suffered by Lessor as a result of Lessee's failure to deliver possession as required. In addition, Lessor may, by written instructions to any escrow agent who is holding proceeds of the Property Schedule, instruct such escrow agent to release all such proceeds and any earnings thereon to Lessor, such sums to be credited to Lessee's obligations under the Property Schedule and this Agreement. Lessee shall notify Lessor in writing within seven (7) days after the failure of the Lessee to appropriate funds sufficient for the payment of the Lease Payments, but failure to provide such notice shall not operate to extend the Lease Term or result in any liability to Lessee. 6.07Defeasance of Lease Payments. Lessee may at any time irrevocably deposit in escrow with a defeasance escrow agent for the purpose of paying all of the principal component and interest component accruing under a Property Schedule, a sum of cash and non-callable securities consisting of direct obligations of, or obligations the principal of an interest on which are unconditionally guaranteed by, the United States of America or any agency or instrumentality thereof, in such aggregate amount, bearing interest at such rates and maturing on such dates as shall be required to provide funds sufficient for this purpose. Upon such defeasance, all right, title and interest of Lessor in the Property under said Property Schedule shall terminate. Lessee shall cause such investment to comply with the requirements of federal tax law so that the exclusion from gross income of the interest component of Lease Payments on said Property Schedule is not adversely affected. ARTICLE VII 7.01Title to the Property.Upon acceptance of the Property by Lessee and unless otherwise required by the laws of the State, title to the Property shallvest in Lessee, subject to Lessor's interests under the applicable Property Schedule and this Agreement. 7.02Personal Property. The Property is and will remain personal property and will not be deemed to be affixed to or a part of the real estate on which it may be situated, notwithstanding that the Property or any part thereof may be or hereafter becomein any manner physically affixed or attached to real estate or any building thereon. If requested by Lessor, Lessee will, at Lessee's expense, furnish a waiver of any interest in the Property from any party having an interest in any such real estate or building. 7.03Security Interest.To the extent permitted by law and to secure the performance of all of Lessee's obligations under this Agreement with respectto a Property Schedule, including without limitation all Property Schedules now existing are hereafter executed, Lessee grants to Lessor, for the benefit of Lessor and its successors and assigns, a security interest constituting a first lien on Lessee's interest in all of the Property under the Property Schedule, whether now owned or hereafter acquired, all additions, attachments, alterations and accessions to the Property, all substitutions and replacements for the Property, and on any proceeds of any of the foregoing, including insurance proceeds. Lessee shall execute any additional documents, including financing statements, affidavits, notices and similar instruments, in form and substance satisfactory to Lessor, which Lessor deems necessary or appropriate to establish, maintain and perfect a security interest inthe Property in favor of Lessor and its successors and assigns. Lessee hereby authorizes Lessor to file all financing statements which Lessor deems necessary or appropriate toestablish, maintain and perfect such security interest. ARTICLE VIII 8.01Maintenance of Property by Lessee.Lessee shall keep and maintain the Property in good condition and working order and in compliance with the manufacturer's specifications, shall use, operate and maintain the Property in conformity with all laws and regulations concerning the Property's ownership, possession, use and maintenance, and shall keep the Property free and clear of all liens and claims, other than those created by this Agreement. Lessee shall have sole responsibility to maintain and repair the Property. Should Lessee fail to maintain, preserve and keep the Property in good repair and working order and in accordance with manufacturer's specifications, and if requested by Lessor, Lessee will enter into maintenance contracts for the Property in form approved byLessor and with approved providers. 8.02Liens, Taxes, Other Governmental Charges and Utility Charges. Lessee shall keep the Property free of all levies, liens and encumbrances, except for the interest of Lessor under this Agreement. The parties to this Agreement contemplate that the Property will be used for a governmental or proprietary purpose of Lessee and, therefore, that the Property will be exempt from all property taxes. The Lease Payments payable by Lessee under this Agreement and the Property Schedules hereunder have been established to reflect the savings resulting from this exemption from taxation. Lessee will take such actions necessary under applicable law to obtain said exemption. Nevertheless, if the use, possession or acquisition of the Property is determined to be subject to taxation or later becomes subject to such taxes, Lessee shall pay when due all taxes and governmental charges lawfully assessed or levied against or with respect to the Property. Lessee shall pay all gas, water, steam, electricity, heat, power, telephone, utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Property. Lessee shall pay such taxes or charges as the same may become due; provided that, with respect to any such taxes or charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as accrue during the then current fiscal year of the Lease Term for such Property. 8.03Insurance.At its own expense, Lessee shall maintain (a) casualty insurance insuring the Property against loss or damage by fire and all other risks covered by the standard extended coverage endorsement then in use in the State and any other risks reasonably required by Lessor in an amount equal to atleast the outstanding principal component of Lease Payments, and (b) liability insurance that protects Lessor from liability in all events in an amount reasonably acceptable to Lessor, and (c) worker's compensation insurance covering all employees workingon, in, near or about the Property; provided that Lessee may self-insure against all such risks. All insurance proceeds from casualty losses shall be payable as hereinafter provided in this Agreement. All such insurance shall be with insurers that are authorized to issue such insurance in the State. All such liability insurance shall name Lessor as an additional insured. All such casualty insurance shall contain a provision making any losses payable to Lessor and Lessee as their respective interests may appear. All such insurance shall contain a provision to the effect that such insurance shall not be canceled or modified without first giving written notice thereof to Lessor and Lessee at least thirty (30) days in advance of such cancellation or modification. Such changes shall not become effective without Lessor's prior written consent. Lessee shall furnish to Lessor, on or before the Commencement Date for each Property Schedule, and thereafter at Lessor's request, certificates evidencing such coverage, or, if Lessee self-insures, a written description of its self-insurance program together with a certification from Lessee's risk manager or insurance agent or consultant to the effect that Lessee's self-insurance program provides adequate coverage against the risks listed above. 8.04Advances.In the event Lessee shall fail to either maintain the insurance required by this Agreement or keep the Property in good repair and working order, Lessor may, but shall be under no obligation to, purchase the required insurance and pay the cost of the premiums thereof or maintain and repair the Property and pay the cost thereof. All amounts so advanced by Lessor shall constitute additional rent for the Lease Term for the applicable Property Schedule and shall be due and payable on the next Lease Payment Date and Lessee covenants and agrees to pay such amounts so advanced by Lessor with interest thereon from the date such amounts are advanced until paid at the rate of 12% per annum or the maximum amount permitted by law, whichever is less. ARTICLE IX 9.01Damage or Destruction. If (a) the Property under a Property Schedule or any portion thereof is destroyed, in whole or in part, or is damaged by fireor other casualty, or (b) title to, or the temporary use of, the Property under a Property Schedule or any part thereof shall be taken under the exercise or threat of the power of eminent domain by any governmental body or by any person, firm or corporation acting pursuant to governmental authority, Lessor and Lesseewill cause the Net Proceeds (as hereinafter defined) of any insurance claim, condemnation award or sale under threat of condemnation to be applied to the prompt replacement, repair, restoration, modification or improvement of the Property, unless Lessee shall have exercised its right to defease the Property Schedule as provided herein, or unless Lessee shall have exercised its option to purchase Lessor's interest in the Property if the Property Schedule so provides. Any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee. For purposes of Section 8.03 and this Article IX, the term "Net Proceeds" shall mean the amount remaining from the gross proceeds of any insurance claim, condemnation award or sale under threat of condemnation after deducting all expenses, including attorneys' fees, incurred in the collection thereof. 9.02Insufficiency of Net Proceeds.If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvement referred to in Section 9.01, Lessee shall (a) complete such replacement, repair, restoration, modification or improvement and pay any costs thereof in excess of the amount of the Net Proceeds and, if Lessee shall make any payments pursuant to this Section, Lessee shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Section 6.02, or (b) defease the Property Schedule pursuant to Section 6.07, or (c) exercise its option to purchase Lessor's interest in the Property pursuant to the optional purchase provisions of the Property Schedule, if any. The amount of the Net Proceeds, if any, remaining after completing such repair, restoration, modification or improvement orafter such defeasance or purchase may be retained by Lessee. ARTICLE X 10.01Disclaimer of Warranties.LESSOR MAKES NO (AND SHALL NOT BE DEEMED TO HAVE MADE ANY) WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE DESIGN, OPERATION OR CONDITION OF, OR THE QUALITY OF THE MATERIAL, EQUIPMENT OR WORKMANSHIP IN, THE PROPERTY, ITS MERCHANTABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, THE STATE OF TITLE THERETO ORANY COMPONENT THEREOF, THE ABSENCE OF LATENT OROTHER DEFECTS (WHETHER OR NOT DISCOVERABLE), AND LESSOR HEREBY DISCLAIMS THE SAME; IT BEING UNDERSTOOD THAT THE PROPERTY IS LEASED TO LESSEE "AS IS" ON THE DATE OF THIS AGREEMENT OR THE DATE OF DELIVERY, WHICHEVER IS LATER, AND ALL SUCH RISKS, IF ANY, ARETO BE BORNE BY LESSEE. Lessee acknowledges that it has made (or will make) the selection of the Property from the Vendor based on its own judgment and expressly disclaims any reliance upon any statements or representations made by Lessor. Lessee understands and agrees that (a) neither the Vendor nor any sales representative or other agent of Vendor, is (i) an agent of Lessor, or (ii) authorized to make or alter any term or condition of this Agreement, and (b) no such waiver or alteration shall vary the terms of this Agreement unless expressly set forth herein. In no event shall Lessor be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Agreement, the Property Schedules, or the existence, furnishing, functioning or use of any item, product or service provided for in this Agreement or the Property Schedules. 10.02Vendor's Warranties.Lessor hereby irrevocably assigns to Lessee all rights that Lessor may have to assert from time to time whatever claims and rights (including without limitation warranties) related to the Property against the Vendor. Lessee's sole remedy for the breach ofsuch warranty, indemnification or representation shall be against the Vendor of the Property, and not against Lessor, nor shall such matter have any effect whatsoever on the rights and obligations of Lessor with respect to this Agreement, including the right to receive full and timely payments hereunder. Lessee expressly acknowledges that Lessormakes, and hasmade, no representations or warranties whatsoever as to the existence or the availability of such warranties of the Vendor of the Property. 10.03Use of the Property.Lessee will not install, use, operate or maintain the Property improperly, carelessly,in violation of any applicable law or in a manner contrary to that contemplated by this Agreement and the applicable Property Schedule. Lessee shall provide all permits and licenses, if any, necessary for the installation and operation of the Property. In addition, Lessee agrees to comply in all respects with all laws of the jurisdiction in which its operations involving any item of Property may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the items of the Property; provided that Lessee may contest in good faith the validity or application of any such law or rule in any reasonable manner that does not, in the opinion of Lessor, adversely affect the interest of Lessor in and to the Property or its interest or rights under this Agreement. Lessee shall promptly notify Lessor in writing of any pending or threatened investigation, inquiry, claim or action by any governmental authority which could adversely affect this Agreement, any Property Schedule or the Property thereunder. 10.04Modifications.Subject to the provisions of this Section, Lessee shall have the right, at its own expense, to make alterations, additions, modifications or improvements to the Property. All such alterations, additions, modifications and improvements shall thereafter comprise part of the Property and shall be subject to the provisions of this Agreement. Such alterations, additions, modifications and improvements shall not in any way damage the Property, substantially alter its nature or cause it to be used for purposes other than those authorized under the provisions of state and federal law; and the Property, on completion of any alterations, additions, modifications or improvements made pursuant to this Section, shall be of a value which is equal to or greater than the value of the Property immediately prior to the making of such alterations, additions, modifications and improvements. Lessee shall, at its own expense, make such alterations, additions, modifications and improvements to the Property as may be required from time to time by applicable law or by any governmental authority. ARTICLE XI 11.01Option to Purchase. Lessee shall have the option to purchase Lessor's entire interest in all of the Property subject to a Property Schedule and to terminate any restrictions herein on the Property under such Property Schedule on the last day of the Lease Term for a Property Schedule, if the Property Schedule is still in effect on such day, upon payment in full of the Lease Payments due thereunder plus payment of One (1) Dollar to Lessor. Upon exercise of the purchase option as setforth in this Section 11.01 and payment of the purchase price under the applicable Property Schedule, and performance by Lessee ofall other terms, conditions and provisions hereof, Lessor shall deliver to Lessee all such documents and instruments as Lessee may reasonably require to evidence the transfer, withoutwarranty by or recourse to Lessor, of all of Lessor's right, title and interest in and to the Property subject to such Property Schedule to Lessee. 11.02Option to Prepay.Lessee shall have the option to prepay in whole the Lease Payments due under a Property Schedule, but only if the Property Schedule so provides, and on the terms set forth in the Property Schedule. Lessee shall give written notice to Lessor of its intent to purchase Lessor's interest in the Property at least sixty (60) days prior to the last day of the Lease Term for applicable Property Schedule. ARTICLE XII 12.01Assignment by Lessor.Lessor's right, title and interest in, to and under each Property Schedule and the Property under such Property Schedule may be assigned and reassigned in whole or in part to one or more assignees or subassignees by Lessorwithout the necessity of obtaining the consent of Lessee; provided that any assignment shall not be effective until Lessee has received written notice, signed by the assignor, of the name, address and tax identification number of the assignee. Lessee shall retain all such notices as a register of all assignees and shall make all payments to the assignee or assignees designated in such register. Lessee agrees to execute all documents, including notices of assignment and chattel mortgages or financing statements that may be reasonably requested by Lessor or any assignee to protect its interests in this Agreement and the Property Schedules. 12.02Property Schedules Separate Financings.Assignees of the Lessor's rights in one Property Schedule shall have no rights in any other Property Schedule unless such rights have been separately assigned. 12.03Assignment and Subleasing by Lessee.NONE OF LESSEE'S RIGHT, TITLE AND INTEREST IN, TO AND UNDER THIS AGREEMENT AND IN THE PROPERTY MAY BE ASSIGNED, SUBLEASEDOR ENCUMBERED BY LESSEE FOR ANY REASON, WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR. 12.04Release and Indemnification Covenants.To the extent permitted by applicable law, Lessee shall indemnify, protect, hold harmless, save and keep harmless Lessor from and against any and all liability, obligation, loss, claim and damage whatsoever, regardless of cause thereof, and all expenses in connection therewith, including, without limitation, counsel fees and expenses, penalties and interest (collectively, “Losses”) arising out of or resulting from the entering into this Agreement, any Property Schedules hereunder, the ownership of any item of the Property, the loss of federal tax exemption of the interest on any of the Property Schedules, the ordering, acquisition, use, operation, condition, purchase, delivery, rejection, storage or return of any item of the Property or any accident in connection with the operation, use, condition, possession, storage or return of any item of the Property resulting in damage to property or injury to or death to any person; provided, however, that Lessee shall not be required to indemnify Lessor for Losses arising out of or resulting from Lessor's own willful or negligent conduct, or for Losses arising out of or resulting from Lessor' preparation of disclosure material relating to certificates of participation in this Agreement and any Property Schedule (other than disclosure material provided to Lessor by Lessee). The indemnification arising under this Section shall continue infull force and effect notwithstanding the full payment of all obligations under this Agreement, or the applicable Property Schedule, or the termination of the Lease Term for such Property Schedule for any reason. ARTICLE XIII 13.01Events of Default Defined.Any of the following shall constitute an “Event of Default” under a Property Schedule: (a)Failure by Lessee to pay any Lease Payment under the Property Schedule or other payment required to be paid with respect thereto at the time specified therein; (b)Failure by Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed with respect to the Property Schedule, other than as referred to in subparagraph (a) above, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied is given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided that, if the failure stated in the notice cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by Lessee within the applicable period and diligently pursued until the default is corrected; (c)Any statement, representation or warranty made by Lessee in or pursuant to the Property Schedule or its execution, delivery or performance shall prove to have been false, incorrect, misleading or breached in any material respect on the date when made; (d)Lessee shall (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of Lessee, or of all or a substantial part of the assets of Lessee, (ii) be unable, fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable federal bankruptcy law, or (v) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization oran arrangement with creditors or taking advantage of any insolvency law or any answer admitting the material allegations of a petition filed against Lessee in any bankruptcy, reorganization or insolvency proceeding; or (e)An order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator of Lessee or of all or a substantial part of the assets of Lessee, in each case without its application, approval or consent,and such order, judgment or decree shall continue unstayed and in effect for any period of 60 consecutive days. The foregoing provisions of Section 13.01 are subject to the following limitation: if by reason of forcemajeureLessee is unable in whole orin part to perform its agreements under this Agreement and the Property Schedule (other than the obligations on the part of Lessee contained in Article VI hereof) Lessee shall not be in default during the continuance of such inability. The term "forcemajeure" as used herein shall mean the following: acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders or restraints of any kind of the government of the United States or of the State or any of their departments, agencies or officials, or any civil or military authority; insurrections, riots, landslides, earthquakes, fires, storms, droughts, floods, explosions, breakage or accident to machinery, transmission pipes or canals; or any other cause or event not reasonablywithin the control of Lessee. A Nonappropriation Event is not an Event of Default. 13.02Remedies on Default. Whenever any Event of Default exists with respect to a Property Schedule, Lessor shall have the right, at its sole option without any further demand or notice, to take one or any combination of the following remedial steps: (a)Without terminating the Property Schedule, and by written notice to Lessee, Lessor may declare all Lease Payments and other amounts payable by Lessee thereunder to the endof the then-current budget year of Lessee to be due, including without limitation delinquent Lease Payments under the Property Schedule from prior budget years, and such amounts shall thereafter bear interest at the rate of 12% per annum or the maximumrate permitted by applicable law, whichever is less; (b)Lessor may terminate the Property Schedule, may enter the premises where the Property subject to the Property Schedule is located and retake possession of the Property, or require Lessee, at Lessee's expense, to promptly return any or all of the Property to the possession of Lessor at such place within the United States as Lessor shall specify, and Lessor may thereafter dispose of the Property in accordance with Article 9 of the Uniform Commercial Code in effect in the State; provided, however, that any proceeds from the disposition of the property in excess of the sum required to (i) pay off any outstanding principal component of Lease Payments, (ii) pay any other amounts then due under the Property Schedule, and (iii) pay Lessor's costs and expenses associated with the disposition of the Property (including attorneys fees), shall be paid to Lessee or such other creditor ofLessee as may be entitled thereto, and further provided that no deficiency shall be allowed against Lessee except with respect to unpaid costs and expenses incurred by Lessor in connection with the disposition of the Property; (c)By written notice to any escrow agent who is holding proceeds of the Property Schedule, Lessor may instruct suchescrow agent to release all such proceeds and any earnings thereon to Lessor, such sums to be credited to payment of Lessee's obligations under the Property Schedule; (d)Lessor may take any action, at law or in equity, that is permitted by applicable law and that may appear necessary or desirable to enforce or to protect any of its rights under the Property Schedule and this Agreement. Notwithstanding the foregoing, if the proceeds are insufficient to pay items (i) to (iii) in Section 13.02(b) in whole, Lessee shall remain obligated after application of proceeds to items (i) and (ii), to pay in whole the amounts for item (iii). 13.03No Remedy Exclusive.No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle Lessor to exercise any remedy reserved to it in this Article it shall not benecessary to give any notice, other than such notice as may be required in this Article. 13.04Costs and Attorney Fees.Upon the occurrence of an Event of Default by Lessee in the performance of any term of this Agreement, Lessee agrees to pay to Lessor or reimburse Lessor for, in addition to all other amounts due hereunder, all of Lessor's costs of collection, including reasonable attorney fees, whether or not suit or action is filed thereon. Any such costs shall be immediately due and payable upon writtennotice and demand given to Lessee, shall be secured by this Agreement until paid and shall bear interest at the rate of 12% per annum or the maximum amount permitted by law, whichever is less. In the eventsuit or action is instituted to enforce any of the terms of this Agreement, the prevailing party shall be entitled to recover from the other party such sum as the court may adjudge reasonable as attorneys' fees at trial or on appeal of such suit or action or in any bankruptcy proceeding, in addition to all other sums provided by law. ARTICLE XIV 14.01Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by certified mail, postage prepaid, to the parties hereto at the addresses as specified on the first page of this Agreement (or at such other address as either party hereto shall designate in writing to the other for notices to such party), to any assignee at its address as it appears on the registration booksmaintained by Lessee. 14.02Arbitrage Certificates.Unless a separate Arbitrage Certificate is delivered on the Commencement Date, Lessee shall be deemed to make the following representations and covenants as of the Commencement Date for each Property Schedule: (a)The estimated total costs, including taxes, freight, installation, and cost of issuance, of the Property under the Property Schedule will not be less than the total principal amount of the Lease Payments. (b)The Property under the Property Schedule has been ordered or is expected to be ordered within six months after the Commencement Date and the Property is expected to be delivered and installed, and the Vendor fully paid, within eighteen months from the Commencement Date. Lessee will pursue the completion of the Property and the expenditure of the net proceeds of the Property Schedule with due diligence. (c)Lessee has not created or established, and does not expect to create or establish, any sinking fund or other similar fund (i)that is reasonably expected to be used to pay the Lease Payments under the Property Schedule, or (ii) that may be used solely to prevent a default in the payment of the Lease Payments under the Property Schedule. (d)The Property under the Property Schedule has not been and is not expected to be sold or otherwise disposed of by Lessee, either in whole or in major part, prior to the last maturity of the Lease Payments under the Property Schedule. (e)There are no other obligations of Lessee which (i) are being sold within 15 days of the Commencement Date of the Property Schedule; (ii) are being sold pursuant to the same plan of financing as the Property Schedule; and (iii) are expected to be paid from substantially the same source of funds. (f)The officer or official who has executedthe Property Schedule on Lessee's behalf is familiar with Lessee's expectations regarding the use and expenditure of the proceeds of the Property Schedule. To the best of Lessee's knowledge, information and belief, the facts and estimates set forth in herein are accurate and the expectations of Lessee set forth herein are reasonable. 14.03Further Assurances. Lessee agrees to execute such other and further documents, including, without limitation, confirmatory financing statements, continuation statements, certificates of title and the like, and to take all such action as may be necessary or appropriate, from time to time, in the reasonable opinion of Lessor, to perfect, confirm, establish, reestablish, continue, or complete the interests of Lessor in this Agreement and the Property Schedules, to consummate the transactions contemplated hereby and thereby, and to carry out the purposes and intentions of this Agreement and the Property Schedules. 14.04Binding Effect.This Agreement shall inure to thebenefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns. 14.05Severability. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 14.06Waiver of Jury Trials. Lessee and Lessor hereby irrevocably waive all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or the actions of Lessor or Lessee in the negotiation, administration, performance or enforcement hereof. 14.07Amendments, Changes and Modifications. This Agreement may be amended in writing by Lessor and Lessee to the extent the amendment or modification does not apply to outstanding Property Schedules at the time of such amendment or modification. The consent of all assigneesshall be required to any amendment or modification before such amendment or modification shall be applicable to any outstanding Property Schedule. 14.08Execution in Counterparts. This Agreement and the Property Schedules hereunder may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 14.09Applicable Law.This Agreement shall be governed by and construed in accordance with the laws of the State. 14.10Captions.The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement. IN WITNESS WHEREOF, Lessor and Lessee have caused this Agreement to be executed in their names by their duly authorized representatives as of the date first above written. Lessor: U.S. Bancorp Government Lessee: City of Prior Lake Leasing and Finance, Inc. By:By: Name:Name: Title:Title: Attest: By: Name: Title: ADDENDUM (MINNESOTA ENERGY SAVINGS) Master Tax-Exempt Lease/Purchase Agreement THIS ADDENDUM, which is entered into as of December 19, 2014between U.S. Bancorp Government Leasing and Finance, Inc. (“Lessor”) andCity of Prior Lake("Lessee"), is intended to modify and supplement Property Schedule No. 1to the Master Tax-Exempt Lease/Purchase Agreement between Lessor and Lessee (the “Agreement”). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement. 1. In addition to the representations, warranties and covenants set forth in the Agreement, Lessee makes the following representations, warranties and covenants to and with Lessor: (a) The Property subject to the Property Schedule is property included in the definition of “energy conservation measure” as set forth in Minnesota Statutes Annotated Section 471.345.13 (or, if Lessee is a school district, as set forth in Minnesota Statutes Annotated Section 123B.65). (b) The Property subject to the Property Schedule will not be placed in service prior to December 19, 2014. 2. Notwithstanding anything to the contrary set forth in the Agreement, title to the Property subject to the Property Schedule shall remain in Lessor during the Lease Term for the Property Schedule, subject to Lessee’s rights under the Agreement. 3. Audit Disclosure and Data Practices . Any reports, information, data, etc. given to, or prepared or assembled by the Lessor under this Agreement which the Lessee requests to be kept confidential, shall not be made available to any individual or organization without the Lessee's prior written approval. The books, records, documents and accounting procedures and practices of the Lessor or other parties relevant to this Agreement are subject to examination by the Lessee and either the Legislative Auditor or the State Auditor for a period of six (6) years after the effective date of this Agreement. This Agreement is subject to the Minnesota Government Data Practice Act, Minnesota Statutes Chapter 13 (Data Practices Act). All government data, as defined in the Data Practices Act Section 13.02, Subd 7, which is created, collected, received, stored, used, maintained, or disseminated by Lessor in performing any of the functions of the Lessee during performance of this Agreement is subject to the requirements of the Data Practice Act and Lessor shall comply with those requirements as ifit were a government entity. All subcontracts entered into by Lessor in relation to this Agreement shall contain similar Data Practices Act compliance language. 4. Non-Discrimination . During the performance of this Agreement, the Lessor shall not discriminate against any employee or applicant for employment because of race, color, creed, religion, national origin, sex, marital status, status with regard topublic assistance, disability, sexual orientation or age. The Lessor shall post in places available to employees and applicants for employment, notices setting forth the provision of this non-discrimination clause and stating that all qualified applicants will receive consideration for employment. The Lessor shall incorporate the foregoing requirements of this paragraph in all of its subcontracts for program work, and will require all of its subcontractors for such work to incorporate such requirements in all subcontracts for program work. The Lessor further agrees to comply with all aspects of the Minnesota Human Rights Act, Minnesota Statutes 363.01, et. seq., Title VI of the Civil Rights Act of 1964, and the Americans with Disabilities Act of 1990. 5. Conflicts . No salaried officer or employee of the Lessee and no member of the Council, or Commission, orBoard of the Lessee shall have a financial interest, direct or indirect, in this Agreement. The violation of this provision renders the agreement void. 6. Damages . In the event of a breach of this Agreement by the Lessee, Lessor shall not be entitled to recover punitive, special or consequential damages or damages for loss of business. IN WITNESS WHEREOF, Lessor and Lessee have caused this Addendum to be executed in their names by their duly authorized representatives as of the date first above written. Lessor: U.S. Bancorp Government Leasing and Lessee: City of Prior Lake Finance, Inc. By:By: Name:Name: Title:Title: Attest: By Name: Title: PropertyScheduleNo.1 Master Tax-Exempt Lease/Purchase Agreement Property Schedule No. 1 This is entered into as of the Commencement Date set forth below, pursuant to that certain Master Tax- Exempt Lease/Purchase Agreement (the “Master Agreement”), dated as of December 19, 2014, between U.S. Bancorp Government Leasing and Finance, Inc., and City of Prior Lake. 1.Interpretation. The terms and conditions of theMaster Agreement are incorporated herein by reference as if fully set forth herein. Reference is made to the Master Agreement for all representations, covenants and warranties made by Lessee in the execution of this Property Schedule, unless specificallyset forth herein. In the event of a conflict between the provisions of the Master Agreement and the provisions of this Property Schedule, the provisions of this Property Schedule shall control. All capitalized terms not otherwise defined herein shall have the meanings provided in the Master Agreement. 2.Commencement Date. The Commencement Date for this Property Schedule is December 19, 2014. 3.Property Description and Payment Schedule.The Property subject to this Property Schedule is described in Exhibit 1 hereto. Lessee shall not remove such property from the locations set forth therein without giving prior written notice to Lessor. The Lease Payment Schedule for this Property Schedule is set forth in Exhibit 1. 4.Opinion. The Opinion of Lessee's Counsel is attached as Exhibit 2. 5.Lessee's Certificate. The Lessee's Certificate is attached as Exhibit 3. 6.Proceeds. Lessor shall disburse the proceeds of this Property Schedule in accordance with the instructions attached hereto as Exhibit 4. 7.Acceptance Certificate. The form of Acceptance Certificate is attached as Exhibit 5. 8.Additional Purchase Option Provisions. In addition to the Purchase Option provisions set forth in the Master Agreement, Lease Payments payable under this Property Schedule shall be subject to prepayment in whole at any time by payment of the applicable Termination Amount set forth in Exhibit 1 (Payment Schedule) and payment of all accrued and unpaid interest through the date of prepayment. 9.Bank QualificationandArbitrage Rebate. Attached as Exhibit 6. 10.Expiration.Lessor, at its sole determination, may choose not to accept this Property Schedule if the fully executed, original Master Agreement (including this Property Schedule and all ancillary documents) is not received by Lessor at its place of business by December 21, 2014. IN WITNESS WHEREOF, Lessor and Lessee have caused this Property Schedule to be executed in their names by their duly authorized representatives as of the Commencement Date above. Lessor: U.S. Bancorp Government Leasing and Lessee: City of Prior Lake Finance, Inc. By:By: Name:Name: Title:Title: Attest: By Name: Title: EXHIBIT1 PropertyDescriptionandPaymentSchedule Property Schedule No. 1 Re:to Master Tax-Exempt Lease/Purchase Agreement between U.S. Bancorp Government Leasing and Finance, Inc. and City of Prior Lake. THE PROPERTY IS AS FOLLOWS: The Property as more fully described in Exhibit A incorporated herein by reference and attached hereto. It includes all replacements, parts, repairs, additions, accessions and accessories incorporated therein or affixed or attached thereto and any and all proceeds of the foregoing, including, without limitation, insurance recoveries. PROPERTY LOCATION: Address City, State Zip Code USE: Honeywell EPC-This use is essential to the proper, efficient and economic functioning of Lessee or to the services that Lessee provides; and Lessee has immediate need for and expects to make immediate use of substantially all of the Property, which need is not temporary or expected to diminish in the foreseeable future. Lease Payment Schedule Total Principal Amount: $2,667,924.00 Termination Principal2% Premium Amount Payment LeasePrincipalInterest Due DateAmount Amount (After Making No.PaymentPortionPortion Remaining Payment for said Due Date) 219-Dec-2015150,306.9193,474.1156,832.792,574,449.8951,489.002,625,938.88 319-Jun-2016150,306.91123,030.6127,276.302,451,419.2849,028.392,500,447.66 419-Dec-2016150,306.91124,334.1225,972.792,327,085.1646,541.702,373,626.86 519-Jun-2017150,306.91125,651.4424,655.472,201,433.7244,028.672,245,462.39 619-Dec-2017150,306.91126,982.7223,324.192,074,451.0041,489.022,115,940.02 719-Jun-2018150,306.91128,328.1021,978.811,946,122.9038,922.461,985,045.36 819-Dec-2018150,306.91129,687.7420,619.171,816,435.1636,328.701,852,763.87 919-Jun-2019150,306.91131,061.7819,245.131,685,373.3933,707.471,719,080.85 1019-Dec-2019150,306.91132,450.3817,856.531,552,923.0131,058.461,583,981.47 1119-Jun-2020150,306.91133,853.6916,453.221,419,069.3228,381.391,447,450.71 1219-Dec-2020150,306.91135,271.8715,035.041,283,797.4525,675.951,309,473.40 1319-Jun-2021150,306.91136,705.0713,601.831,147,092.3822,941.851,170,034.23 1419-Dec-2021150,306.91138,153.4612,153.441,008,938.9220,178.781,029,117.69 1519-Jun-2022150,306.91139,617.2010,689.71869,321.7217,386.43886,708.15 1619-Dec-2022150,306.91141,096.449,210.46728,225.2714,564.51742,789.78 1719-Jun-2023150,306.91142,591.367,715.55585,633.9111,712.68597,346.59 1819-Dec-2023150,306.91144,102.126,204.79441,531.808,830.64450,362.43 1919-Jun-2024150,306.91145,628.884,678.03295,902.925,918.06301,820.98 2019-Dec-2024150,306.91147,171.823,135.09148,731.102,974.62151,705.72 2119-Jun-2025150,306.91148,731.101,575.810.000.000.00 TOTALS3,006,138.152,667,924.00338,214.15 Interest Rate: 2.119% Lessee: City of Prior Lake By: Name: Title: EXHIBITA PropertyDescription Honeywell Energy Conservation Measures Scope of Work EXHIBIT2 Lessee'sCounsel'sOpinion \[To be provided on letterhead of Lessee's counsel.\] December 19, 2014 U.S. Bancorp Government Leasing and Finance, Inc. 13010 SW 68th Parkway, Suite 100 Portland, OR 97223 City of Prior Lake 4646 Dakota Street SE Prior Lake, Minnesota 55372-1714 Attention: Jerilyn Erickson, Finance Director Katy Gehler, Public Works Director RE:Property Schedule No. 1to Master Tax-Exempt Lease/Purchase Agreement between U.S. Bancorp Government Leasing and Finance, Inc. and City of Prior Lake. Ladies and Gentlemen: We have acted as special counsel to City of Prior Lake("Lessee"), in connection with the Master Tax-Exempt Lease/Purchase Agreement, dated as of December 19, 2014(the "Master Agreement"), between City of Prior Lake, as lessee, andU.S. Bancorp Government Leasing and Finance, Inc.as lessor (“Lessor”), and the execution of Property Schedule No. 1(the "Property Schedule") pursuant to the Master Agreement. We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion. All capitalized terms not otherwise defined herein shall have the meanings provided in the Master Agreement and Property Schedule. As to questions of fact material to our opinion, we have relied upon the representations of Lessee in the Master Agreement and the Property Schedule and in the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion that, under existing law: 1.Lessee is a public body corporate and politic, duly organized and existing under the laws of the State, and has a substantial amount of one or more of the following sovereign powers: (a) the power to tax, (b) the power of eminent domain, and (c) the police power. 2.Lessee has all requisite power and authority to enter into the Master Agreement and the Property Schedule and to perform its obligations thereunder. 3.The execution, delivery and performance of the Master Agreement and the Property Schedule by Lessee has been duly authorized by all necessary action on the part of Lessee. 4.All proceedings of Lessee and its governing body relating to the authorization and approval of the Master Agreement and the Property Schedule, the execution thereof and the transactions contemplated thereby have been conducted in accordance with all applicable open meeting laws and all other applicable state and federal laws. 5.Lessee has acquired or has arranged for the acquisition of the Property subject to the Property Schedule, and has entered into the Master Agreement and the Property Schedule, in compliance with all applicable public bidding laws. 6.Lessee has obtained all consents and approvals of other governmental authorities or agencies which may be required for the execution, delivery and performance by Lessee of the Master Agreement and the Property Schedule. 7.The Master Agreement and the Property Schedule have been duly executed and delivered by Lessee and constitute legal, valid and binding obligations of Lessee, enforceable against Lessee in accordance with the terms thereof, except insofar as the enforcement thereof may be limited by any applicable bankruptcy, insolvency, moratorium, reorganization or other laws of equitable principles of general application, or of application to municipalities or political subdivisions such as the Lessee, affecting remedies or creditors' rights generally, and to the exercise of judicial discretion in appropriate cases. 8.As of the date hereof, based on such inquiry and investigation as we have deemed sufficient, no litigation is pending, (or, to our knowledge, threatened) against Lessee in any court (a) seeking to restrain or enjoin the delivery of the Master Agreement or the Property Schedule or of other agreements similar to the Master Agreement; (b) questioning the authority of Lessee to execute the Master Agreement or the Property Schedule, or the validity of the Master Agreement or the Property Schedule, or the payment of principal of or interest on, the Property Schedule; (c) questioning the constitutionality of any statute, or the validity of any proceedings, authorizing the execution of the Master Agreement and the Property Schedule; or (d) affecting the provisions made for the payment of or security for the Master Agreement and the Property Schedule. This opinion may be relied upon by Lessor, its successors and assigns, and any other legal counsel who provides an opinion with respect to the Property Schedule. Very truly yours, By: Name: Title: Dated: EXHIBIT3 Lessee'sCertificate Property Schedule No. 1 Re:to Master Tax-Exempt Lease/Purchase Agreement between U.S. Bancorp Government Leasing and Finance, Inc. and City of Prior Lake. The undersigned, being the duly elected, qualified and acting ____________________of the City of Prior Lake(“Lessee”) do hereby certify, as of December 19, 2014, as follows: 1.Lessee did, at a meeting of the governing bodyof the Lessee held ________________ by resolution or ordinance duly enacted, in accordance with all requirements of law, approve and authorize the execution and delivery of the above-referenced Property Schedule (the "Property Schedule") and the Master Tax-Exempt Lease/Purchase Agreement (the “Master Agreement”) by the following named representative of Lessee, to wit: NAMETITLESIGNATURE OF EXECUTING OFFICIALOF EXECUTING OFFICIALOF EXECUTING OFFICIAL And/ Or 2.The above-named representative of the Lessee held at the time of such authorization and holds at the present time the office set forth above. 3.The meeting(s) of the governing body of the Lessee at which the Master Agreement and the Property Schedule were approved and authorized to be executed was duly called, regularly convened and attended throughout by the requisite quorum of the members thereof, and the enactment approving the Master Agreement and the Property Schedule and authorizing the execution thereof has not been altered or rescinded. All meetings of the governing body of Lessee relating to the authorization and delivery of Master Agreement and the Property Schedule have been: (a) held within the geographic boundaries of the Lessee; (b) open to the public, allowing all people to attend; (c) conducted in accordance with internal procedures of the governing body; and (d) conducted in accordance with the charter of the Lessee, if any, and the laws of the State. 4.No event or condition that constitutes, or with the giving of notice or the lapse of time or both would constitute, an Event of Default or a Nonappropriation Event (as such terms are defined in the Master Agreement) exists at the date hereof with respect to this Property Schedule or any other Property Schedules under the Master Agreement. 5.The acquisition of all of the Property under the Property Schedule has been duly authorized by the governing body of Lessee. 6.Lessee has, in accordance with the requirements of law, fully budgeted and appropriated sufficient funds for the current budget year to make the Lease Payments scheduled to come due during the current budget year under the Property Schedule and to meet its other obligations for the current budget year and such funds have not been expended for other purposes. 7.As of the date hereof, no litigation is pending, (or, to my knowledge, threatened) against Lessee in any court (a) seeking to restrain or enjoin the delivery of the Master Agreement or the Property Schedule or of other agreements similar to the Master Agreement; (b) questioning the authority of Lessee to execute the Master Agreement or the Property Schedule, or the validity of the Master Agreement or the Property Schedule, or the payment of principal of or interest on, the Property Schedule; (c) questioning the constitutionality of any statute, or the validity of any proceedings, authorizing the execution of the Master Agreement and the Property Schedule; or (d) affecting the provisions made for the payment of or security for the Master Agreement and the Property Schedule. City of Prior Lake By: Title: SIGNER MUST NOTBE THE SAME AS THE EXECUTING OFFICIAL(S)SHOWN ABOVE. EXHIBIT4 PaymentofProceedsInstructions U.S. Bancorp Government Leasing and Finance, Inc. 13010 SW 68th Parkway, Suite 100 Portland, OR 97223 Re:Property Schedule No. 1(the "Property Schedule") to Master Tax-Exempt Lease/Purchase Agreement between U.S. Bancorp Government Leasing and Finance, Inc.("Lessor") and City of Prior Lake ("Lessee"). Ladies and Gentlemen: The undersigned, an Authorized Representative of the Lessee hereby requests and authorizes Lessor to disburse the net proceeds of the Property Schedule as follows: Name of Payee: By Check: _____By Wire Transfer: _____ If by check, Payee’sAddress: If by wire transfer, instructions as follows: Pay to Bank Name: Bank Address: Bank Phone #: For Account of: Account No: ABA No.: Lessee: City of Prior Lake By: Name: Title: EXHIBIT5 AcceptanceCertificate U.S. Bancorp Government Leasing and Finance, Inc. 13010 SW 68th Parkway, Suite 100 Portland, OR 97223 Property Schedule No. 1 Re:to Master Tax-Exempt Lease/Purchase Agreement between U.S. Bancorp Government Leasing and Finance, Inc.and City ofPrior Lake Ladies and Gentlemen: In accordance with the above-referenced Master Tax-Exempt Lease/Purchase Agreement (the "Master Agreement"), the undersigned ("Lessee") hereby certifies and represents to, and agrees with, U.S. Bancorp Government Leasingand Finance, Inc.("Lessor"), as follows: (1)The Property, as such terms are defined in the above-referenced Property Schedule, has been acquired, made, delivered, installed and accepted on the date indicated below. (2)Lessee has conducted such inspection and/or testing of the Property as it deems necessary and appropriate and hereby acknowledges that it accepts the Property for all purposes. (3)No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default or a Nonappropriation Event (as such terms are defined in the Master Agreement) exists at the date hereof. Acceptance Date: ________________________________ Lessee: City of Prior Lake By: Name: Title: EXHIBIT6 BankQualificationAndArbitrageRebate U.S. Bancorp Government Leasing and Finance, Inc. 13010 SW 68th Parkway, Suite 100 Portland, OR 97223 Property Schedule No. 1 Re:to Master Tax-Exempt Lease/Purchase Agreement between U.S. Bancorp Government Leasing and Finance, Inc. and City of Prior Lake Bank Qualified Tax-Exempt Obligation under Section 265 Lessee hereby designates this Property Schedule as a "qualified tax-exempt obligation" as defined in Section 265(b)(3)(B) of the Code. Lessee reasonably anticipates issuing tax-exempt obligations (excluding private activity bonds other than qualified 501(c)(3) bonds and including all tax-exempt obligations of subordinate entities of the Lessee) during the calendar year in which the Commencement Date of this Property Schedule falls, in an amount not exceeding $10,000,000. Arbitrage Rebate Eighteen Month Exception: Pursuant to Treasury Regulations Section 1.148-7(d), the gross proceeds of this Property Schedule will be expended for the governmental purposes forwhich this Property Schedule was entered into, as follows: at least 15% within six months after the Commencement Date, at least 60% within 12 months after the Commencement Date, and 100% within 18 months after the Commencement Date. If Lessee is unable to comply with Section 1.148-7(d) of the Treasury Regulations, Lessee shall compute rebatable arbitrage on this Agreement and pay rebatable arbitrage to the United States at least once every five years, and within 60 days after payment of the final Lease Payment due under this Agreement. Lessee: City of Prior Lake By: Name: Title: Language for UCC Financing Statements Property Schedule No. 1 SECURED PARTY: U.S. Bancorp Government Leasing and Finance, Inc. DEBTOR:City of Prior Lake This financing statement covers all of Debtor's right, title and interest, whether now owned or hereafter acquired, in and to the equipment leased to Debtor under Property Schedule No. 1dated December 19, 2014to that certain Master Tax-Exempt Lease Purchase Agreement dated as of December 19, 2014, in each case between Debtor, as Lessee, and Secured Party, as Lessor, together with all accessions, substitutions and replacements thereto and therefore, and proceeds (cash and non-cash), including, without limitation, insurance proceeds, thereof, including without limiting, all equipment described on Exhibit Aattached hereto and made a part hereof. Debtor has no right to dispose of the equipment. INSURANCE AUTHORIZATION AND VERIFICATION Date: December 19, 2014Property Schedule No: 1 To: City of Prior Lake(the “Lessee”)From: U.S. Bancorp Government Leasing and Finance, Inc. (the “Lessor”) 13010 SW 68th Parkway, Suite 100 Portland, OR 97223 Attn: Lisa Albrecht TO THE LESSEE: In connection with the above-referenced Property Schedule, Lessor requires proof in the form of this document, executed by both Lessee* and Lessee’s agent, that Lessee's insurable interest in the financed property (the “Property”) meets Lessor’s requirements as follows, with coverage including, but not limited to, fire, extended coverage, vandalism, and theft: Lessor, AND ITS SUCCESSORS AND ASSIGNS, shall be covered as both ADDITIONAL INSURED and LENDER'S LOSS PAYEEastheirinterest may appearwith regard to all equipment financed or leased by policy holder through or from Lessor. All such insurance shall contain a provision to the effect that such insurance shall not be canceled or modified without first giving written notice thereof to Lessor and Lessee at least thirty (30) days in advanceof such cancellation or modification. Lessee must carry GENERAL LIABILITY (and/or, for vehicles, Automobile Liability) in the amount of no less than $1,000,000.00 (one million dollars). Lessee must carry PROPERTY Insurance (or, for vehicles, Physical Damage Insurance) in an amount no less than the 'Insurable Value' $2,667,924.00. *Lessee: Please execute this form and return with your document package. Lessor will fax this form to your insurance agency for endorsement. In lieu of agent endorsement, Lessee’s agency may submit insurance certificates demonstrating compliance with all requirements. If fully executed form (or Lessee-executed form plus certificates) is not provided within 15 days, we have the right to purchase such insurance at your expense. Should you have any questions, please contact Lisa Albrechtat 303-585-4077. By signing, Lessee authorizes the Agent named below: 1) to complete and return this form as indicated; and 2) to endorse the policy and subsequent renewals to reflect the required coverage as outlined above. Agency/Agent: Address: Phone/Fax: Email: Lessee: City of Prior Lake By: Name: Title: TO THE AGENT: In lieu of providing a certificate, please execute this form in the space below and promptly fax it to Lessor at 303-585-4732. This fully endorsed form shall serve as proof that Lessee's insurance meets the above requirements. Agent hereby verifies that the above requirements have been met in regard to the Property listed below. X Print Name of Agency: _____________________________________ X By: ____________________________________ (Agent's Signature) XX Print Name:______________________________ Date: __________________________________ Insurable Value: $2,667,924.00 ATTACHED: PROPERTY DESCRIPTION FOR PROPERTY SCHEDULE NO.: 1 Notification of Tax Treatmentto Tax-Exempt Lease/Purchase Agreement Notification of Tax Treatment This is pursuant to the Master Tax-Exempt Lease/Purchase Agreement dated as of December 19, 2014and the related Property Schedule No. 1dated December 19, 2014, between Lessor and Lessee (the "Agreement"). _______Lessee agrees that this Property Schedule SHOULD be subject to sales/use taxes __X____Lessee agrees that this Property Schedule should NOT be subject to sales/use taxes and Lessee has included our tax-exemption certificate with this document package _______Lessee agrees that this Property Schedule should NOT be subject to sales/use taxes and no tax- exemption certificate is issued to us by the State _______Lessee agrees that this Property Schedule is a taxable transaction and subject to any/all taxes _______Lessee agrees that this Property Schedule is subject to sales/use taxes and will pay those taxes directly to the State or Vendor IN WITNESS WHEREOF, Lessee has caused this Notification of Tax Treatment to be executed by their duly authorized representative. Lessee: City of Prior Lake By: Name: Title: Information Return for Tax-Exempt Governmental Obligations Form Under Internal Revenue Code section 149(e) (Rev. September 2011) OMB No. 1545-0720 See separate instructions. Department of the Treasury If the issue price is under $100,000, use Form 8038-GC. Caution: Internal Revenue Service Part IReporting Authority If , check here Amended Return 1 2 Issuers nameIssuers employer identification number (EIN) 3b 3a Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions)Telephone number of other person shown on 3a Report number (For IRS Use Only) 4 Number and street (or P.O. box if mail is not delivered to street address)Room/suite 5 3 6 City, town, or post office, state, and ZIP code 7 Date of issue 8 Name of issue 9 CUSIP number 10a Name and title of officer or other employee of the issuer whom the IRS may call for more information (see 10b Telephone number of officer or other instructions)employee shown on 10a Part IIType of Issue (enter the issue price). See the instructions and attach schedule. Education .............................. 11 11 Health and hospital .......................... 12 12 Transportation ............................ 13 13 Public safety ............................. 14 14 Environment (including sewage bonds) .................... 15 15 Housing .............................. 16 16 Utilities .............................. 17 17 Other. Describe 18 18 If obligations are TANs or RANs, check only box 19a ............. 19 If obligations are BANs, check only box 19b ................ If obligations are in the form of a lease or installment sale, check box ........ 20 Complete for the entire issue for which this form is being filed. Part IIIDescription of Obligations. Stated redemptionWeighted (c) (d) Final maturity dateIssue priceYield (a) (b) (e) price at maturityaverage maturity 21 $ $ years% Part IVUses of Proceeds of Bond Issue (including underwriters discount) Proceeds used for accrued interest ..................... 22 22 Issue price of entire issue (enter amount from line 21, column (b)) ........... 23 23 Proceeds used for bond issuance costs (including underwriters discount) .. 24 24 Proceeds used for credit enhancement ............ 25 25 Proceeds allocated to reasonably required reserve or replacement fund . 26 26 Proceeds used to currently refund prior issues ......... 27 27 Proceeds used to advance refund prior issues ......... 28 28 Total (add lines 24 through 28) ....................... 29 29 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) ... 30 30 Complete this part only for refunding bonds. Part VDescription of Refunded Bonds. Enter the remaining weighted average maturity of the bonds to be currently refunded .... 31 years Enter the remaining weighted average maturity of the bonds to be advance refunded .... 32 years Enter the last date on which the refunded bonds will be called (MM/DD/YYYY) ...... 33 Enter the date(s) the refunded bonds were issued 34 (MM/DD/YYYY) 8038-G For Paperwork Reduction Act Notice, see separate instructions. Form (Rev. 9-2011) Cat. No. 63773S 2 Form 8038-G (Rev. 9-2011) Page Part VIMiscellaneous Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) .... 35 35 Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract 36 a (GIC) (see instructions) ......................... 36a b Enter the final maturity date of the GIC c Enter the name of the GIC provider Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans 37 to other governmental units ........................ 37 If this issue is a loan made from the proceeds of another tax-exempt issue, check box and enter the following information: 38 a b Enter the date of the master pool obligation c Enter the EIN of the issuer of the master pool obligation d Enter the name of the issuer of the master pool obligation If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box .... 39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box ............. 40 If the issuer has identified a hedge, check here and enter the following information: 41 a b Name of hedge provider c Type of hedge d Term of hedge If the issuer has superintegrated the hedge, check box ..................... 42 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated 43 according to the requirements under the Code and Regulations (see instructions), check box........ If the issuer has established written procedures to monitor the requirements of section 148, check box ..... 44 If some portion of the proceeds was used to reimburse expenditures, check here and enter the amount 45a of reimbursement ......... b Enter the date the official intent was adopted Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge Signature and belief, they are true, correct, and complete. I further declare that I consent to the IRSs disclosure of the issuers return information, as necessary to process this return, to the person that I have authorized above. and Consent Signature of issuers authorized representativeDate Type or print name and title Print/Type preparers namePreparer's signatureDatePTIN Paid Check if self-employed Preparer Firms name Firm's EIN Use Only Firm's address Phone no. 8038-G Form (Rev. 9-2011) EA SCROW GREEMENT TEA(“Escrow Agreement”) is made as of December 19, 2014by and among U.S. HIS SCROW GREEMENT Bancorp Government Leasing and Finance, Inc. (“Lessor”), City of Prior Lake(“Lessee”) and U.S.BN ANK ATIONAL A,as escrow agent(“Escrow Agent”). SSOCIATION Lessor and Lessee have heretofore entered into that certain Master Tax-Exempt Lease/Purchase Agreement dated as of December 19, 2014(the “Master Agreement”) and a Property Schedule No. 1thereto dated December 19, 2014(the “Schedule”and, together with the terms andconditions of the Master Agreement incorporated therein, the “Agreement”). The Schedule contemplates that certain personal property described therein (the “Equipment”) is to be acquired from the vendor(s) or manufacturer(s) thereof (the “Vendor”). After acceptance of the Equipment by Lessee, the Equipment is to be financed by Lessor to Lessee pursuant to the terms of the Agreement. The Master Agreement further contemplates that Lessor will deposit an amount equal to the anticipated aggregate acquisitioncost of the Equipment (the “Purchase Price”), being $2,667,924.00, with Escrow Agent to be held in escrow and applied on the express terms set forth herein. Such deposit, together with all interest and other additions received with respect thereto (hereinafter the “Escrow Fund”) is to be applied to pay the Vendor its invoice cost (a portion of which may, if required, be paid prior to final acceptance of the Equipment by Lessee); and, if applicable, to reimburse Lessee for progress payments already made byit to the Vendor of the Equipment. The parties desire to set forth the terms on which the Escrow Fund is to be created and to establish the rights and responsibilities of the parties hereto. ,T, in consideration of the sum of Ten Dollars ($10.00) in hand paid, and other good and N OWHEREFORE valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Escrow Agent hereby agrees to serve as escrow agent upon the terms and conditions set forth herein. The moneys and investments held in the Escrow Fund are for the benefit of Lessee and Lessor, and such moneys, together with any income or interest earned thereon, shall be expended only as provided in this Escrow Agreement, and shall not be subject to levy or attachment or lien by or for the benefit of any creditor of either Lessee or Lessor. Lessor, Lessee and Escrow Agent intend that the Escrow Fund constitute an escrow account in which Lessee has no legal or equitable right, title or interest until satisfaction in full of all conditions contained herein for the disbursement of funds by the Escrow Agent therefrom. However, if the parties’ intention that Lessee shall have no legal or equitable right, title or interest until all conditions for disbursement are satisfied in full is not respected in any legal proceeding, the parties hereto intend that Lessor have a security interest in the Escrow Fund, and such security interest is hereby granted by Lessee to secure payment of all sums due to Lessor under the Master Agreement. For such purpose, Escrow Agent hereby agrees to act as agent for Lessor in connection with the perfection of such security interest and agrees to note, or cause to be noted, on all books and records relating to the Escrow Fund, the Lessor’s interest therein. 2.On such day as is determined to the mutual satisfaction of the parties (the “Closing Date”),Lessor shall deposit with Escrow Agent cash in the amount of the Purchase Price, to be held in escrow by Escrow Agent on the expressterms and conditions set forth herein. On the Closing Date, Escrow Agent agrees to accept the deposit of the Purchase Price by Lessor, and further agrees to hold the amount so deposited together with all interest and other additions received with respect thereto, as the Escrow Fund hereunder, in escrow on the express terms and conditions set forth herein. 3.Escrow Agent shall at all times segregate the Escrow Fund into an account maintained for that express purpose, which shall be clearly identified onthe books and records of Escrow Agent as being held in its capacity as Escrow Agent. Securities and other negotiable instruments comprising the Escrow Fund from time to time shall be held or registered in the name of Escrow Agent (or its nominee). The Escrow Fund shall not, to the extent permitted by applicable law, be subject to levy or attachment or lien by or for the benefit of any creditor of any of the parties hereto (except with respect to the security interest therein held by Lessor). 4.The cash comprising the Escrow Fund from time to time shall be invested and reinvested by Escrow Agent in one or more investments as directed by Lessee. Absent written direction from Lessee, the cash will be invested in the U.S. Bank National Association Money Market Deposit Fund. See Exhibit 1 Investment Direction Letter. Lessee represents and warrants to Escrow Agent and Lessor that the investments selected by Lessee for investment of the Escrow Fund are permitted investments for Lessee under all applicable laws. Escrow Agent will use due diligence to collect amounts payable under a check or other instrument for the payment of money comprising the Escrow Fund and shall promptly notify Lessee and Lessor in the event of dishonor of payment under any such check orother instruments. Interest or other amounts earned and received by Escrow Agent with respect to the Escrow Fund shall be deposited in and comprise a part of the Escrow Fund. Escrow Agent shall maintain accounting records sufficient to permit calculationof the income on investments and interest earned on deposit of amounts held in the Escrow Fund. The parties acknowledge that to the extent regulations of the Comptroller of Currency or other applicable regulatory entity grant a right to receive brokerage confirmations of security transactions of the escrow, the parties waive receipt of such confirmations, to the extent permitted by law. The Escrow Agent shall furnish a statement of security transactions on its regular monthly reports.Attached as Exhibit 6 is the Class Action Negative Consent Letter to be reviewed by Lessee. 5.Upon request by Lessee and Lessor, Escrow Agent shall send monthly statements of account to Lessee and Lessor, which statements shall set forth all withdrawals from and interest earnings on the Escrow Fund as well as the investments in which the Escrow Fund is invested. 6.Escrow Agent shall take the following actions with respect to the Escrow Fund: (a)Upon Escrow Agent’s acceptance of the deposit of the Purchase Price, an amount equal to Escrow Agent’s set-up fee, as set forth on Exhibit 2 hereto, shall be disbursed from the Escrow Fund to Escrow Agent in payment of such fee. (b)Escrow Agent shall pay costs of the Equipment upon receipt of a duly executed Requisition Request (substantially in the format of Exhibit 3) signed by Lessor and Lessee. Lessor’s authorized signatures are provided in Exhibit 5. Lessee’s authorized signatures will be provided in Exhibit 3 of Master Lease Purchase Agreement. Escrow Agent will use best efforts to process requests for payment within one (1) business day of receipt of requisitions received prior to 2:00 p.m. Central Time. The final Requisition shall be accompanied by a duly executed Acceptance Certificate form attached as Exhibit 4 hereto. (c)Upon receipt by Escrow Agent of written notice from Lessor that an Event of Default or an Event of Nonappropriation (if provided for under the Master Agreement) has occurred under the Agreement, all funds then on deposit in the Escrow Fund shall be paid to Lessor for application in accordance with the Master Agreement, and this Escrow Agreement shall terminate. (d)Upon receipt by Escrow Agent of written notice from Lessor that the purchase price of the Equipment has been paid in full, Escrow Agent shall pay the funds then on deposit in the Escrow Fund to Lessor to be applied first to the next Lease Payment due under the Master Agreement, and second, to prepayment of the principal component of Lease Payments in inverse order of maturity without premium. To the extent the Agreement is not subject to prepayment, Lessor consents to such prepayment to the extent of such prepayment amount from the Escrow Fund. Upon disbursement of all amounts in the Escrow Fund, this Escrow Agreement shall terminate. (e)This Escrow Agreement shall terminate eighteen (18) months from the date of this Escrow Agreement. It may, however, be extended by mutual consent of Lessee and Lessor in writing to Escrow Agent. All funds on deposit in the Escrow Fund at the time of termination under this paragraph, unless otherwise directed by Lessee in writing (electronic means acceptable), shall be transferred to Lessor. 7.The fees and expenses, including any legal fees, of Escrow Agent incurred in connection herewith shall be the responsibility of Lessee. The basic fees and expenses of Escrow Agent shall be as set forth on Exhibit2 and Escrow Agent is hereby authorized to deduct such fees and expenses from the Escrow Fund as and when the same are incurred without any further authorization from Lessee or Lessor. Escrow Agent may employ legal counsel and other experts as it deems necessary for advice in connection with its obligations hereunder. Escrow Agent waives any claim against Lessor with respect to compensation hereunder. 8.Escrow Agent shall have no liability for acting upon any written instruction presented by Lessor in connection with this Escrow Agreement, which Escrow Agent in good faith believes to be genuine. Furthermore, Escrow Agent shall not be liable for any act or omission in connection with this Escrow Agreement except for its own negligence, willful misconduct or bad faith. Escrow Agent shall not be liable for any loss or diminution in value of the Escrow Fund as a result of the investments made by Escrow Agent. 9.Escrow Agent may resign at any time by giving thirty(30) days’ prior written notice to Lessor and Lessee. Lessor may at any time remove Escrow Agent as Escrow Agent under this Escrow Agreement upon written notice. Such removal or resignation shall be effective on the date set forth in the applicable notice. Upon the effective date of resignation or removal, Escrow Agent will transfer the Escrow Fund to the successor Escrow Agent selected by Lessor. 10.Lessee hereby represents, covenants and warrants that pursuant to Treasury Regulations Section 1.148-7(d), the gross proceeds of the Agreement will be expended for the governmental purposes for which the Agreement was entered into, as follows: at least 15% within six months after the Commencement Date, such date being the date of deposit of funds into the Escrow Fund, at least 60% within 12 months after the Commencement Date, and 100% within 18 months after the Commencement Date. If Lessee is unable to comply with Section 1.148-7(d) of the Treasury Regulations, Lessee shall, at its sole expense and cost, compute rebatable arbitrage on the Agreement and pay rebatable arbitrage to the United States at least once every five years, and within 60 days after payment of the final rental or LeasePayment due under the Agreement. 11.In the event of any disagreement between the undersigned or any of them, and/or any other person, resulting in adverse claims and demands being made in connection with or for any moneys involved herein or affected hereby, Escrow Agent shall be entitled at its option to refuse to comply with any such claim or demand, so long as such disagreement shall continue, and in so refusing Escrow Agent may refrain from making any delivery or other disposition of any moneys involved herein or affected hereby and in so doing Escrow Agent shall not be or become liable to the undersigned or any of them or to any person or party for its failure or refusal to comply with such conflicting or adverse demands, and Escrow Agent shall be entitled to continue so to refrain and refuse so to act until: (a) the rights of the adverse claimants have been finally adjudicated in a court assuming and having jurisdiction of the parties and the moneys involved herein or affected hereby; or (b) all differences shall have been adjusted by Master Agreement and Escrow Agent shall have been notified thereof in writing signed by all of the persons interested. 12.All notices (excluding billings and communications in the ordinary course of business) hereunder shall be in writing, and shall be sufficiently given and served upon the other party if delivered (a)personally, (b)by United States registered or certified mail, return receipt requested, postage prepaid, (c)by an overnight delivery by a service such as Federal Express or Express Mail from which written confirmation of overnight delivery is available, or (d)by facsimile with a confirmation copy by regular United States mail, postage prepaid, addressed to the other party at its respective address stated below the signature of such party or at such other address as such party shall from time to time designate in writing to the other party, and shall be effective from the date of mailing. 13.This Escrow Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and assigns. No rights or obligations of Escrow Agent under this Escrow Agreement may be assigned without the prior written consent of Lessor. 14.This Escrow Agreement shall be governed by and construed in accordance with the laws in the state of the Escrow Agent’s location. This Escrow Agreement constitutes the entire Agreement between the parties hereto with respect to the subject matter hereof, and no waiver, consent, modification or change of terms hereof shall bind any party unless in writing signed by all parties. 15. This Escrow Agreement and any written direction may be executed in two or more counterparts, which when so executed shall constitute one and the same agreementor direction. IWW, the parties hereto have caused this Escrow Agreement to be duly executed as of the NITNESS HEREOF day and year first above set forth. U.S. Bancorp Government Leasing and Finance, Inc., as Lessor By: Name: Title: th Address: 13010 SW 68Parkway, Suite 100 Portland, OR 97223 City of Prior Lake, as Lessee By: Name: Title: Address: 4646 Dakota Street SE Prior Lake, Minnesota 55372-1714 U.S.BNA, as Escrow ANK ATIONAL SSOCIATION Agent By: Name: Title: Address: U.S. Bank National Association thth 950 17Street, 12Floor Denver, CO 80202 EXHIBIT 1 FIDELITY TREASURY ONLY AUTOMATIC MONEY MARKET INVESTMENTS INVESTMENT AUTHORIZATION LETTER Based upon client’s prior review of investment alternatives, in the absence of further specific written direction to the contrary, U.S. Bank National Associationis hereby directed to invest and reinvest proceeds and other available moneys in the following funds as permitted by the operative documents. Fidelity TreasuryOnly Fund PLEASE REFER TO THE PROSPECTUS OF FIDELITY TREASURY ONLY FUNDWHICH YOU HEREBY ACKNOWLEDGE HAS PREVIOUSLY BEEN PROVIDED. NOTE THAT THE ABOVE FUNDS’ INVESTMENT ADVISOR, CUSTODIAN, DISTRIBUTOR AND OTHER SERVICE PROVIDERS AS DISCLOSED IN THE FUNDS PROSPECTUS ARE U.S. BANK NATIONAL ASSOCIATION AND AFFILIATES THEREOF. SHARES OF THE ABOVE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY BANK INCLUDING U.S. BANK NATIONAL ASSOCIATION OR ANY OF ITS AFFILIATES, NOR ARE THEY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. AN INVESTMENT IN THE FUNDS INVOLVES INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL. U.S. BANK DOES NOT HAVE A DUTY NOR WILL IT UNDERTAKE ANY DUTY TO PROVIDE FOR INFORMATION ABOUT OTHER AVAILABLE SWEEP OPTIONS, INVESTMENT ADVICE TO YOU. CONTACT YOUR ACCOUNT MANAGER . INVESTMENT ADVICE, IF NEEDED, SHOULD BE OBTAINED FROM YOUR FINANCIAL ADVISOR. U.S. Bank National Association will not vote proxies for the Fidelity TreasuryOnly Fund. Proxies will be mailed to you for voting. SHAREHOLDER COMMUNICATIONS ACT AUTHORIZATION The Shareholder Communications Act of 1985 and its regulation require that banks and trust companies make an effort to facilitate communication between registrants of U.S. securities and the parties who have the authority to vote or direct the voting of those securities regarding proxy dissemination and other corporate communications. Unless you indicate your objection below, we will provide the obligatory information to the registrant upon request. Your objection will apply to all securities held for you in the account now and in the future unless you notify us in writing. U.S. Bank National Association is NOT authorized to provide my name, address, and securities positions to requesting issuers City of Prior Lake Company NameSignature of Authorized Directing Party Title Trust Account Number –includes existing and Date future sub-accounts unless otherwise designated. EXHIBIT 2 Schedule of Fees for Services as Escrow Agent For City of Prior Lake Equipment Lease Purchase Escrow Acceptance Fee The acceptance fee includes the administrative review of CTS01010AWAIVED documents, initial set-up of the account, and other reasonably required services up to and including the closing. This is a one-time, non-refundable fee, payable at closing. Escrow Agent Annual fee for the standard escrow agent services CTS04460WAIVED associated with the administration of the account. Administration fees are payable in advance. Direct Out of Pocket Expenses Reimbursement of expenses associated At Cost with the performance of our duties, including but not limited to publications, legal counsel after the initial close, travel expenses and filing fees. Extraordinary Services Extraordinary Services are duties or responsibilities of an unusual nature, including termination, but not provided for in the governing documents or otherwise set forth in this schedule. A reasonable charge will be assessed based on the nature of the services and the responsibility involved. At our option, these charges will be billed at a flat fee or at our hourly rate then in effect. Account approval is subject to review and qualification. Fees are subject to change at our discretion and upon written notice. Fees paid in advance will not be prorated. The fees set forth above and any subsequent modifications thereof are part of your agreement. Finalization of the transaction constitutes agreement to the above fee schedule, including agreement to any subsequent changes upon proper written notice. In the event your transaction is not finalized, any related out-of-pocket expenses will be billed to you directly. Absent your written instructions to sweep or otherwise invest, all sums in your account will remain uninvested and no accrued interest or other compensation will be credited to the account. Payment of fees constitutes acceptance of the terms and conditions set forth. IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT: To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. For a non-individual person such as a business entity, a charity, a Trust or other legal entity we will ask for documentation to verify its formation and existence as a legal entity. We may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation. E3 XHIBIT RR EQUISITION EQUEST The Escrow Agent is hereby requested to pay from the Escrow Fund established and maintained under that certain Escrow Agreement dated as of December 19, 2014(the “Escrow Agreement”) by and among U.S. Bancorp Government Leasing and Finance, Inc. (the “Lessor”), City of Prior Lake(the “Lessee”), and U.S. Bank National Association (the “Escrow Agent”), the amount set forth below to the named payee(s). The amount shown is due and payable under a purchase order or contract (or has been paid by and not previously reimbursed to Lessee) with respect to equipment being financed under that certain Master Tax-Exempt Lease Purchase Agreement dated as of December 19, 2014(the “Master Agreement”) and Property Schedule No. 1thereto dated December 19, 2014(the “Schedule”and, together with the terms and conditions of the Master Agreement incorporated therein, the “Agreement”), by and between the Lessor and the Lessee, and has not formed the basis of any prior requisition request. PAIN.E AYEEMOUNTNVOICE OQUIPMENT Total requisition amount $______________ The undersigned, as Lessee under the Master Agreement, hereby certifies: 1. The items of the Equipment beingacquired with the proceeds of this disbursement have been delivered and installed at the location(s) contemplated by the Master Agreement. The Lessee has conducted such inspection and/or testing of the Equipment being acquired with the proceeds of this disbursement as it deems necessary and appropriate, and such Equipment has been accepted by Lessee. 2. The costs of the Equipment to be paid from the proceeds of this disbursement have been properly incurred, are a proper charge against the Escrow Fund and have not been the basis of any previous disbursement. 3. No part of the disbursement requested hereby will be used to pay for materials not yet incorporated into the Equipment or for services not yet performed in connection therewith. 4. The Equipment is covered by insurance in the types and amounts required by the Agreement. 5. No Event of Default or Event of Nonappropriation (if applicable), as each such term is defined in the Master Agreement, and no event which with the giving of notice or lapseof time, or both, would become such an Event of Default or Event of Nonappropriation has occurred and is continuing on the date hereof. 6. If Lessee paid an invoice prior to the commencement date of the Master Agreement, and is requesting reimbursement for such payment, Lessee has satisfied the requirements for reimbursement set forth in Treas. Reg. §1.150-2. Request Date: __________________ Lessor: U.S. Bancorp Government Leasing Lessee: City of Prior Lake and Finance, Inc. By:By: Name:Name: Title:Title: Exhibit4 Acceptance Certificate U.S. Bancorp Government Leasing and Finance, Inc. 13010 SW 68th Parkway, Suite 100 Portland, OR 97223 Property Schedule No. 1 Re:to Master Tax-Exempt Lease/Purchase Agreement between U.S. Bancorp Government Leasing and Finance, Inc.and City of Prior Lake Ladies and Gentlemen: In accordance with the above-referenced Master Tax-Exempt Lease/Purchase Agreement (the "Master Agreement"), the undersigned ("Lessee") hereby certifies and represents to, and agrees with, U.S. Bancorp Government Leasing and Finance, Inc.("Lessor"), as follows: (1)The Property, as such terms are defined in the above-referenced Property Schedule, has been acquired, made, delivered, installed and accepted on the date indicated below. (2)Lessee has conducted such inspection and/or testing of the Property as it deems necessary and appropriate and hereby acknowledges that it accepts the Property for all purposes. (3)No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default or a Nonappropriation Event (as such terms are defined in the Master Agreement) exists at the date hereof. Acceptance Date: ________________________________ Lessee: City of Prior Lake By: Name: Title: Exhibit 6 Class Action Negative Consent Letter December 19, 2014 City of Prior Lake 4646 Dakota Street SE Prior Lake, Minnesota 55372-1714 RE: USBGLF/City of Prior Lake--Class Action Litigation Claims : Dear Jerilyn Erickson U.S. Bank National Association (“U.S. Bank”) has established its policies and procedures relative to class action litigation claims filed on behalf of its clients’ accounts. This policy may impact future claims filed by U.S. Bank on behalf of the : above-referenced account. Listed below are the policies regarding class action litigation claims 1.U.S. Bank will file class action litigation claims, at no charge, on behalf of open, eligible agency or custody accounts upon receipt of proper documented authorization. This notice, with your ability to opt out as further , described belowconstitutes such documented authorization. 2.U.S. Bank will notfile claims for agency or custody accounts that were open during the class action period but were closedprior to receipt of any notice of the class action litigation. 3.Assuming requisite information is provided by the payor to identify the applicable account, settlement proceeds of the class action litigation will be posted within a reasonable time followingreceipt of such proceeds to the entitled accounts that are open at such time. If entitled accounts are closed prior to distribution and receipt of settlement proceeds, they will be remitted to entitled beneficiaries or successors of the account net of any research and filing fees. Proceeds, less any research and filing fees, will be escheated if the entitled beneficiaries or successors of the account cannot be identified /located. If you wish U.S. Bank to continue to file class action litigation proofs of claim on behalf of your account, you do not need to take any further action. However, if you do notwish U.S. Bank to file class action proofs of claim on behalf of your account, you may notify us of this election by returning this letter with your signature and date provided below within 30 days or by filing a separate authorization letter with your Account Manager by the same date. The authorization and understanding contained in this communication constitutes an amendment of any applicable provisions of the account document for the above-referenced account. If you have any questions, please contact me at the below number. Sincerely, Leland Hansen Vice President 303-585-4594 No, U.S. Bank is not authorized to file class action litigation proofs of claim on behalf of the above-referenced account(s). By making this election, I acknowledge that U.S. Bank is not responsible for forwarding notices received on class action or litigation claims. ____________________________________________ Authorized Signer Date Give Form to the Request for Taxpayer Form requester. Do not (Rev. August 2013) Identification Number and Certification send to the IRS. Department of the Treasury Internal Revenue Service Name (as shown on your income tax return) Business name/disregarded entity name, if different from above Exemptions (see instructions): Check appropriate box for federal tax classification: C CorporationS CorporationPartnership Trust/estate Individual/sole proprietor Exempt payee code (if any) Limited liability company. Enter the tax classification (C=C corporation, S=S corporation,P=partnership) Exemption from FATCA reporting code (if any) Other (see instructions) Address (number, street, and apt. or suite no.)Requester's name and address (optional) City, state, and ZIP code List account number(s) here (optional) Part ITaxpayer Identification Number (TIN) Social security number Enter your TIN in the appropriate box. The TIN provided must match the name given on the ªNameº line to avoid backup withholding. For individuals, this is your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other ±± entities, it is your employer identification number (EIN). If you do not have a number, see How to get a on page 3. TIN Employer identification number If the account is in more than one name, see the chart on page 4 for guidelines on whose Note. number to enter. ± Part IICertification Under penalties of perjury, I certify that: 1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and 2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and 3. I am a U.S. citizen or other U.S. person (defined below), and 4. The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backupwithholding Certification instructions. because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply.For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirementarrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you mustprovide your correct TIN. See the instructions on page 3. Sign Signature of Here U.S. personDate withholding tax on foreign partners' share of effectively connected income, and General Instructions 4. Certify that FATCA code(s) entered on this form (if any) indicating that you are Section references are to the Internal Revenue Code unless otherwise noted. exempt from the FATCA reporting, is correct. . The IRS has created a page on IRS.gov for information Future developments If you are a U.S. person and a requester gives you a form other than Form Note. about Form W-9, at . Information about any future developments www.irs.gov/w9 W-9 torequest your TIN, you must use the requester's form if it issubstantially affecting Form W-9 (such as legislation enacted after we release it) will be posted similar to this Form W-9. on that page. For federal tax purposes, you areconsidered a U.S. Definition of a U.S. person. person if you are: Purpose of Form · An individual who is a U.S. citizen or U.S. resident alien, A person who is required to file an information return with the IRS must obtain your · A partnership, corporation, company, or association created or organized in the correct taxpayer identification number (TIN) to report, for example, income paid to United States or under the laws of the United States, you, payments made to you in settlement of payment card and third party network transactions, real estate transactions, mortgage interest you paid, acquisition or · An estate (other than a foreign estate), or abandonment of secured property, cancellation of debt, or contributions you made · A domestic trust (as defined in Regulations section 301.7701-7). to an IRA. Partnerships that conduct atrade or business in Special rules for partnerships. Use Form W-9 only if you are a U.S. person (including a resident alien), to the United States are generally required topay a withholding tax under section provide your correct TIN to the person requesting it (the requester) and, when 1446 on any foreign partners' share of effectively connected taxable incomefrom applicable, to: such business. Further, in certain cases where a Form W-9has not been received, 1. Certify that the TIN you are giving is correct (or you are waiting for a number the rules under section 1446 require a partnership to presume thata partner is a to be issued), foreign person, and pay the section 1446 withholding tax.Therefore, if you are a U.S. person that is apartner in a partnership conducting a trade or business in the 2. Certify that you are not subject to backup withholding, or United States, provide Form W-9 to the partnership to establish your U.S. status 3. Claim exemption from backup withholding if you are a U.S. exempt payee. If and avoid section 1446 withholding on your share of partnership income. applicable, you are also certifying that as a U.S. person, your allocable share of any partnership income from a U.S. trade or business is not subject to the W-9 Form (Rev. 8-2013) Cat. No. 10231X 2 Form W-9 (Rev. 8-2013) Page In the cases below, the following person must give Form W-9 to the partnership Updating Your Information for purposes of establishing its U.S. status and avoiding withholding on its You must provide updated information to any person to whom you claimed to be allocable share of net income from the partnership conducting a trade or business an exempt payee if you are no longer an exempt payee and anticipate receiving in the United States: reportable payments in the future from this person. For example, you may need to · In the case of a disregarded entity with a U.S. owner, the U.S. owner of the provide updated information if you are a C corporation that elects to be an S disregarded entity and not the entity, corporation, or if you no longer are tax exempt. In addition, you must furnish a new · In the case of a grantor trust with a U.S. grantor or other U.S. owner, generally, Form W-9 if the name or TIN changes for the account, for example, if the grantor the U.S. grantor or other U.S. owner of the grantor trust and not the trust, and of a grantor trust dies. · In the case of a U.S. trust (other than a grantor trust), the U.S. trust (other than a Penalties grantor trust) and not the beneficiaries of the trust. If you fail to furnish your correct TIN to arequester, you are If you are a foreign person or the U.S. branch of a foreign bank Failure to furnish TIN. Foreign person. subject to a penalty of $50 for each suchfailure unless your failure is due to that has elected to be treated as a U.S. person, do not use FormW-9. Instead, use reasonable cause and not towillful neglect. the appropriate Form W-8 or Form 8233 (see Publication515, Withholding of Tax on Nonresident Aliens and ForeignEntities). If you make a Civil penalty for false information with respect to withholding. Generally,only a nonresident Nonresident alien who becomes a resident alien. false statement with no reasonablebasis that results in no backup withholding, alien individual may use the terms of a taxtreaty to reduce or eliminate U.S. tax on you are subject to a$500 penalty. certain types of income.However, most tax treaties contain a provision known as Willfully falsifyingcertifications or Criminal penalty for falsifying information. aªsaving clause.º Exceptions specified in the saving clause maypermit an affirmations may subject you to criminalpenalties including fines and/or exemption from tax to continue for certain types ofincome even after the payee imprisonment. has otherwise become a U.S.resident alien for tax purposes. If the requester discloses or uses TINs inviolation of federal law, Misuse of TINs. If you are a U.S. resident alien who is relying on an exception contained in the the requester may be subject to civil andcriminal penalties. saving clause of a tax treaty to claim an exemption from U.S. tax on certain types of income, you must attach a statement to Form W-9 that specifies the following Specific Instructions five items: 1. The treaty country. Generally, this must be the same treaty under which you Name claimed exemption from tax as a nonresident alien. 2. The treaty article addressing the income. If you are an individual, you must generally enter the name shown on your income tax return. However, if you have changed your last name, for instance, due to 3. The article number (or location) in the tax treaty that contains the saving marriage without informing the Social Security Administration of the name change, clause and its exceptions. enter your first name, the last name shown on your social security card, and your 4. The type and amount of income that qualifies for the exemption from tax. new last name. 5. Sufficient facts to justify the exemption from tax under the terms of the treaty If the account is in joint names, list first, and then circle, the name of the person article. or entity whose number you entered in Part I of the form. Article 20 of the U.S.-China income tax treaty allowsan exemption Example. Enter your individual name as shown on yourincome tax return Sole proprietor. from tax for scholarship income received by aChinese student temporarily present on the ªNameº line. You may enter yourbusiness, trade, or ªdoing business as in the United States. UnderU.S. law, this student will become a resident alien for (DBA)º name on theªBusiness name/disregarded entity nameº line. taxpurposes if his or her stay in the United States exceeds 5calendar years. Enter the entity©s name on the Partnership, C Corporation, or S Corporation. However, paragraph 2 of the first Protocol to theU.S.-China treaty (dated April 30, ªNameº line and any business, trade, or ªdoing business as (DBA) nameº on the 1984) allows the provisions ofArticle 20 to continue to apply even after the ªBusiness name/disregarded entity nameº line. Chinese studentbecomes a resident alien of the United States. A Chinesestudent who qualifies for this exception (under paragraph 2 ofthe first protocol) and is For U.S. federal tax purposes, an entity that is disregarded as Disregarded entity. relying on this exception to claim anexemption from tax on his or her scholarship an entity separate from its owner is treated as a ªdisregarded entity.º See or fellowshipincome would attach to Form W-9 a statement that includes the Regulation section 301.7701-2(c)(2)(iii). Enter the owner©s name on the ªNameº information described above to support that exemption. line. The name of the entity entered on the ªNameº line should never be a disregarded entity. The name on the ªNameº line must be the name shown on the If you are a nonresident alien or a foreign entity, give the requester the income tax return on which the income should be reported. For example, if a appropriate completed Form W-8 or Form 8233. foreign LLC that is treated as a disregarded entity for U.S. federal tax purposes Persons making certain paymentsto you must What is backup withholding? has a single owner that is a U.S. person, the U.S. owner©s name is required to be under certain conditions withhold and pay to theIRS a percentage of such provided on the ªNameº line. If the direct owner of the entity is also a disregarded payments. This is called ªbackup withholding.º Payments that may be subject to entity, enter the first owner that is not disregarded for federal tax purposes. Enter backup withholding includeinterest, tax-exempt interest, dividends, broker and the disregarded entity©s name on the ªBusiness name/disregarded entity nameº barterexchange transactions, rents, royalties, nonemployee pay, payments made line. If the owner of the disregarded entity is a foreign person, the owner must in settlement of payment card and third party network transactions, andcertain complete an appropriate Form W-8 instead of a Form W-9. This is the case even if payments from fishing boat operators. Real estatetransactions are not subject to the foreign person has a U.S. TIN. backup withholding. Check the appropriate box for the U.S. federal tax classification of the Note. You will not be subject to backup withholding on payments you receive if you person whose name is entered on the ªNameº line (Individual/sole proprietor, give the requester your correct TIN, make the proper certifications, and report all Partnership, C Corporation, S Corporation, Trust/estate). your taxable interest and dividends on your tax return. If the person identified on the ªNameº line is an Limited Liability Company (LLC). Payments you receive will be subject to backup LLC, check the ªLimited liability companyº box only and enter the appropriate code for the U.S. federal tax classification in the space provided. If you are an LLC withholding if: that is treated as a partnership for U.S. federal tax purposes, enter ªPº for 1. You do not furnish your TIN to the requester, partnership. If you are an LLC that has filed a Form 8832 or a Form 2553 to be taxed as a corporation, enter ªCº for C corporation or ªSº for S corporation, as 2. You do not certify your TIN when required (see the Part II instructions on page appropriate. If you are an LLC that is disregarded as an entity separate from its 3 for details), owner under Regulation section 301.7701-3 (except for employment and excise 3. The IRS tells the requester that you furnished an incorrect TIN, tax), do not check the LLC box unless the owner of the LLC (required to be 4. The IRS tells you that you are subject to backup withholding because you did identified on the ªNameº line) is another LLC that is not disregarded for U.S. not report all your interest and dividends on your tax return (for reportable interest federal tax purposes. If the LLC is disregarded as an entity separate from its and dividends only), or owner, enter the appropriate tax classification of the owner identified on the ªNameº line. 5. You do not certify to the requester that you are not subject to backup withholding under 4 above (for reportable interest and dividend accounts opened Enter your business name as shown on required U.S. federal tax Other entities. after 1983 only). documents on the ªNameº line. This name should match the name shown on the charter or other legal document creating the entity. You may enter any business, Certain payees and payments are exempt from backup withholding. See Exempt trade, or DBA name on the ªBusiness name/disregarded entity nameº line. on page 3 and the separate Instructions for the Requester of Form payee code W-9 for more information. Exemptions Also see on page 1. Special rules for partnerships If you are exempt from backup withholding and/or FATCA reporting, enter in the The Foreign Account Tax Compliance Act (FATCA) What is FATCA reporting? box, any code(s) that may apply to you. See and ExemptionsExempt payee code requires a participating foreign financial institution to report all United States on page 3. Exemption from FATCA reporting code account holders that are specified United States persons. Certain payees are exempt from FATCA reporting. See on Exemption from FATCA reporting code page 3 and the Instructions for the Requester of Form W-9 for more information. 3 Form W-9 (Rev. 8-2013) Page Generally, individuals (including sole proprietors) are not GÐA real estate investment trust Exempt payee code. exempt from backup withholding. Corporations are exempt from backup HÐA regulated investment company as defined in section 851 or an entity withholding for certain payments, such as interest and dividends. Corporations are registered at all times during the tax year under the Investment Company Act of not exempt from backup withholding for payments made in settlement of payment 1940 card or third party network transactions. IÐA common trust fund as defined in section 584(a) If you are exempt from backup withholding, you shouldstill complete this Note. JÐA bank as defined in section 581 form to avoid possible erroneous backupwithholding. KÐA broker The following codes identify payees that are exempt from backup withholding: LÐA trust exempt from tax under section 664 or described in section 4947(a)(1) 1ÐAn organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements MÐA tax exempt trust under a section 403(b) plan or section 457(g) plan of section 401(f)(2) Part I. Taxpayer Identification Number (TIN) 2ÐThe United States or any of its agencies or instrumentalities If you are a residentalien and you do not 3ÐA state, the District of Columbia, a possession of the United States, or any of Enter your TIN in the appropriate box. have and are not eligible to get an SSN,your TIN is your IRS individual taxpayer their political subdivisions or instrumentalities identification number(ITIN). Enter it in the social security number box. If you do not 4ÐA foreign government or any of its political subdivisions, agencies, or have an ITIN, seebelow. How to get a TIN instrumentalities If you are a sole proprietor and you have an EIN, you may enter either your SSN 5ÐA corporation or EIN. However, the IRS prefers that you use your SSN. 6ÐA dealer in securities or commodities required to register in the United If you are a single-member LLC that is disregarded as an entity separate from its States, the District of Columbia, or a possession of the United States owner (see on page 2), enter the owner's SSN (or Limited Liability Company(LLC) 7ÐA futures commission merchant registered with the Commodity Futures EIN, if the owner has one). Do not enter the disregarded entity's EIN. If the LLC is Trading Commission classified as a corporation or partnership, enter the entity's EIN. 8ÐA real estate investment trust See the chart on page 4 for further clarification of nameand TIN Note. combinations. 9ÐAn entity registered at all times during the tax year under the Investment Company Act of 1940 If you do not have a TIN, apply for oneimmediately. To apply How to get a TIN. for an SSN, get Form SS-5, Applicationfor a Social Security Card, from your local 10ÐA common trust fund operated by a bank under section 584(a) Social SecurityAdministration office or get this form online at . You www.ssa.gov 11ÐA financial institution may also get this form by calling 1-800-772-1213. Use FormW-7, Application for 12ÐA middleman known in the investment community as a nominee or IRS Individual Taxpayer IdentificationNumber, to apply for an ITIN, or Form SS-4, custodian Application forEmployer Identification Number, to apply for an EIN. You canapply for an EIN online by accessing the IRS website atand www.irs.gov/businesses 13ÐA trust exempt from tax under section 664 or described in section 4947 clicking on Employer IdentificationNumber (EIN) under Starting a Business. You The following chart shows types of payments that may be exempt from backup can get Forms W-7and SS-4 from the IRS by visiting IRS.govor by calling1-800- withholding. The chart applies to the exempt payees listed above, 1 through 13. TAX-FORM (1-800-829-3676). If you are asked to complete Form W-9 but do not have a TIN, apply for a TIN IF the payment is for . . .THEN the payment is exempt for . . . and write ªApplied Forº in the space for the TIN, sign and date the form, and give it to the requester. For interest and dividend payments, and certain payments made with respect to readily tradable instruments, generally you will have 60 days to get Interest and dividend paymentsAll exempt payees except a TIN and give it to the requester before you are subject to backup withholding on for 7 payments. The 60-day rule does not apply to other types of payments. You will be subject to backup withholding on all such payments until you provide your TIN to Broker transactionsExempt payees 1 through 4 and 6 the requester. through 11 and all C corporations. S corporations must not enter an exempt Entering ªApplied Forº means that you have alreadyapplied for a TIN or that Note. payee code because they are exempt you intend to apply for one soon. only for sales of noncovered securities Caution: A disregarded U.S. entity that has a foreign owner must use the acquired prior to 2012. appropriate Form W-8. Barter exchange transactions and Exempt payees 1 through 4 Part II. Certification patronage dividends To establish to the withholding agent that you are a U.S. person, or resident alien, Payments over $600 required to be Generally, exempt payees sign Form W-9. You may be requested to sign by the withholding agent even if 12 reported and direct sales over $5,0001 through 5 items 1, 4, or 5 below indicate otherwise. For a joint account, only the person whose TIN is shown in Part I should sign Payments made in settlement of Exempt payees 1 through 4 (when required). In the case of a disregarded entity, the person identified on the payment card or third party network ªNameº line must sign. Exempt payees, see earlier. Exemptpayee code transactions Complete the certification as indicatedin items 1 Signature requirements. 1 through 5 below. See Form 1099-MISC, Miscellaneous Income, and its instructions. 2 1. Interest, dividend, and barter exchange accounts opened before 1984 However, the following payments made to a corporation and reportable on Form You must give your and broker accounts considered active during 1983. 1099-MISC are not exempt from backup withholding: medical and health care correct TIN, but you do nothave to sign the certification. payments, attorneys© fees, gross proceeds paid to an attorney, and payments for services paid by a federal executive agency. 2. Interest, dividend, broker, and barter exchange accounts opened after You must sign the 1983 and broker accounts considered inactive during 1983. The following codes identify payees Exemption from FATCA reporting code. certification or backupwithholding will apply. If you are subject to backup that are exempt from reporting under FATCA. These codes apply to persons withholdingand you are merely providing your correct TIN to the requester,you submitting this form for accounts maintained outside of the United States by must cross out item 2 in the certification before signing theform. certain foreign financial institutions. Therefore, if you are only submitting this form for an account you hold in the United States, you may leave this field blank. You must sign the certification.You may cross out 3. Real estate transactions. Consult with the person requesting this form if you are uncertain if the financial item 2 of the certification. institution is subject to these requirements. You must give your correct TIN, but youdo not have to sign 4. Other payments. AÐAn organization exempt from tax under section 501(a) or any individual the certification unless you have beennotified that you have previously given an retirement plan as defined in section 7701(a)(37) incorrect TIN. ªOtherpaymentsº include payments made in the course of the requester's trade or business for rents, royalties, goods (otherthan bills for BÐThe United States or any of its agencies or instrumentalities merchandise), medical and health care services(including payments to CÐA state, the District of Columbia, a possession of the United States, or any corporations), payments to anonemployee for services, payments made in of their political subdivisions or instrumentalities settlement of payment card and third party network transactions, payments to certain fishing boat crewmembers and fishermen, and gross proceeds paid to DÐA corporation the stock of which is regularly traded on one or more attorneys(including payments to corporations). established securities markets, as described in Reg. section 1.1472-1(c)(1)(i) 5. Mortgage interest paid by you, acquisition or abandonment of secured EÐA corporation that is a member of the same expanded affiliated group as a property, cancellation of debt, qualified tuition program payments (under corporation described in Reg. section 1.1472-1(c)(1)(i) section 529), IRA, Coverdell ESA, Archer MSA or HSA contributions or FÐA dealer in securities, commodities, or derivative financial instruments You must give yourcorrect TIN, but you distributions, and pension distributions. (including notional principal contracts, futures, forwards, and options) that is do not have to sign the certification. registered as such under the laws of the United States or any state 4 Form W-9 (Rev. 8-2013) Page If no name is circled when more than one name is listed,the number will be What Name and Number To Give the Requester Note. considered to be that of the first name listed. For this type of account:Give name and SSN of: Secure Your Tax Records from Identity Theft 1. IndividualThe individual Identity theft occurs when someone uses your personal information such as your 2. Two or more individuals (joint The actual owner of the account or, name, social security number (SSN), or other identifying information, without your account)if combined funds, the first permission, to commit fraud or other crimes. An identity thief may use your SSN to 1 individual on the account get a job or may file a tax return using your SSN to receive a refund. 3. Custodian account of a minor 2 The minor To reduce your risk: (Uniform Gift to Minors Act) · Protect your SSN, 1 The grantor-trustee 4. a. The usual revocable savings · Ensure your employer is protecting your SSN, and trust (grantor is also trustee) b. So-called trust account that is 1 · Be careful when choosing a tax preparer. The actual owner not a legal or valid trust under If your tax records are affected by identity theft and you receive a notice from state law the IRS, respond right away to the name and phone number printed on the IRS 3 5. Sole proprietorship or disregarded The owner notice or letter. entity owned by an individual If your tax records are not currently affected by identity theft but you think you The grantor* 6. Grantor trust filing under Optional are at risk due to a lost or stolen purse or wallet, questionable credit card activity Form 1099 Filing Method 1 (see or credit report, contact the IRS Identity Theft Hotline at 1-800-908-4490 or submit Regulation section 1.671-4(b)(2)(i)(A)) Form 14039. For this type of account: Give name and EIN of: For more information, see Publication 4535, Identity Theft Prevention and Victim Assistance. 7. Disregarded entity not owned by an The owner individual Victims of identity theft who are experiencing economic harm or a system 4 8. A valid trust, estate, or pension trustproblem, or are seeking help in resolving tax problems that have not been resolved Legal entity through normal channels, may be eligible for Taxpayer Advocate Service (TAS) 9. Corporation or LLC electing The corporation assistance. You can reach TAS by calling the TAS toll-free case intake line at corporate status on Form 8832 or 1-877-777-4778 or TTY/TDD 1-800-829-4059. Form 2553 Phishing is the Protect yourself from suspicious emails or phishing schemes. 10. Association, club, religious, The organization creation and use of email andwebsites designed to mimic legitimate business charitable, educational, or other emails andwebsites. The most common act is sending an email to a userfalsely tax-exempt organization claiming to be an established legitimate enterprise in anattempt to scam the user The partnership 11. Partnership or multi-member LLC into surrendering private informationthat will be used for identity theft. 12. A broker or registered nomineeThe broker or nominee The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request personal detailed information through email or ask taxpayers for the 13. Account with the Department of The public entity PIN numbers, passwords, or similar secret access information for their credit card, Agriculture in the name of a public bank, or other financial accounts. entity (such as a state or local government, school district, or If you receive an unsolicited email claiming to be from the IRS, forward this prison) that receives agricultural message to You may also report misuse of the IRS name, logo, phishing@irs.gov. program payments or other IRS property to the Treasury Inspector General for Tax Administration at 1-800-366-4484. You can forward suspicious emails to the Federal Trade 14. Grantor trust filing under the Form The trust Commission at: or contact them at or 1-877- spam@uce.govwww.ftc.gov/idtheft 1041 Filing Method or the Optional IDTHEFT (1-877-438-4338). Form 1099 Filing Method 2 (see Regulation section 1.671-4(b)(2)(i)(B)) Visit IRS.govto learn more about identity theft and how to reduce your risk. 1 List first and circle the name of the person whose number you furnish. If only one personon a joint account has an SSN, that person's number must be furnished. 2 Circle the minor's name and furnish the minor's SSN. 3 You must show your individual name and you may also enter your business or ªDBAº name on the ªBusiness name/disregarded entityº name line. You may use either your SSN or EIN (if you have one),but the IRS encourages you to use your SSN. 4 List first and circle the name of the trust, estate, or pension trust. (Do not furnish the TINof the personal representative or trustee unless the legal entity itself is not designated inthe account title.) Also see on page 1. Special rules for partnerships Grantor also must provide a Form W-9 to trustee of trust. *Note. Privacy Act Notice Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the IRS to report interest, dividends, or certain other income paid to you; mortgage interest you paid; the acquisition or abandonment of secured property; the cancellation of debt; or contributions you made to an IRA, Archer MSA, or HSA. The person collecting this form uses the information on the form to file information returns with the IRS, reporting the above information. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation and to cities, states, the District of Columbia, and U.S. commonwealths and possessions for use in administering their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to enforce civil and criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your TIN whether or not you are required to file a tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to the payer. Certain penalties may also apply for providing false or fraudulent information.