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HomeMy WebLinkAboutAgenda Packet - February 21, 1995 - CC OF AZUSA Light a`Water Department T (818)334-0215 FAX (818) 334-3163 TO: HONORABLE MAYOR AND CITY C CIL VIA: Henry Garcia, City Administrator FROM: Joseph F. Hsu, Director of Utilities . RE: ,PROGRAM TO OFFER FINANCING OF ENERGY EFFICIENCY PROJECTS FOR COMMERCIAL CUSTOMERS. BACKGROUND Commercial businesses eager to expand or move into the City or to increase the size of their operating facilities require efficient equipment and services in order to accomplish their business goals. In 1993, the Department initiated energy appraisals for large industrial customers to determine energy efficiency measures appropriate for their facilities. Customers often lack enough capital to perform timely energy efficiency improvements. A Program which offers financing for energy efficiency projects in commercial and industrial customers would provide valuable customer services and the following main benefits: • To act as a partner in the energy efficiency, environmental, and business development goals of our customers; • To provide a cost-effective program which encourages customers to install efficient electrical equipment; • To help the Department remain competitive for retaining and attracting businesses; and • To allow more efficient use of existing generation and transmission facilities and expand electric revenue through managed and efficient load growth due to an influx of businesses in the electric utility service territory. The City's Redevelopment Agency has also supported this Program to further the City's redevelopment objectives. FINDINGS The Program would make available up to $200,000 to loan among several existing and new customers to complete energy efficiency improvements in their facilities. The Program would be made available for G-1, G-2, and Time-of-Use (TOU) customers in the City of Azusa service territory. The Department, would loan up to $50,000 (at approximately 4.0 % annual interest rate)to a single qualified customer per year as funds are available in the account. The City would All .. 01/0 777 North Alameda Avenue • P.O. Box 9500 • Azusa, CaBfomia 91702-9500 conduct a credit check of all applicants. The Department reserves the right to prioritize energy efficiency projects which are best suited for the Department's efficient load growth. Upon completion of all work, submittal of proper invoices to the Department, and Departmental acceptance of the completion of the project, a loan would be granted to the customer. Loans would be repaid at a fixed monthly energy services charge, to be billed separately from the monthly utility bill, until the loan amount is repaid in full over a three year period. A separate utility account would be established for the administration of the loan Program by the City. Each customer applicant would be required to follow the procedures and requirements as stated in the Program proposal. Each participant in the Program would be required to sign the Energy Efficiency Project Loan Agreement and Promissory Note. A short form deed of trust on the participant's property may also be filed with Los Angeles County by the Department. RECOMMENDATION The Financing Energy Efficiency Program is a self-financing, cost-effective Program. Funds are available in the Utility Reserve Account of up to $200,000 to be transfered into a separate utility account administered by the City. It is recommended that City Council approve this Financing Energy Efficiency Program to enhance the energy efficiency, customer service and business development goals of the City. JFH/MJP FINANCING ENERGY EFFICIENCY PROJECTS AZUSA LIGHT AND WATER DEPARTMENT OVERVIEW Financing energy efficiency projects is an important part of a successful utility partnership with its customers. The City of Azusa Light and Water Department, in response to an increasing number of requests from new or expanding businesses in Azusa, is proposing to offer small business loans for the installation of projects associated with energy efficiency and energy efficient business development projects. In 1993, the Department offered energy appraisals to its large customers and this financing Program would assist customers in completing their efficiency projects. Financing would be made available to Azusa businesses for the installation of energy efficient equipment, efficient lighting systems, and other business development projects as approved by the Department. All loans would be repaid in full to the Department via an energy services charge. With the financing arrangement, the utility expects to benefit from a more manageable load growth, an ability to offer energy services tailored to customers needs, and enhanced customer services. In order to receive a loan, the Customer would be required to submit invoices after the energy efficiency work as proposed in the customer's application and a walk-through by the Department has been completed at the customer facility. There are several main purposes to this financing Program: 1. To manage the Department's on-peak electrical load. 2. To assist customers in starting up energy efficiency projects. 3. To act as a partner in the energy efficiency, environmental, and business development goals of our customers. 4. To help the Department remain competitive for retaining and attracting businesses to Azusa. 5. To allow more efficient use of existing generation and transmission facilities and expand electric revenue through efficient load growth due to an influx of businesses in the electric utility service territory. The Light and Water Department has worked closely with the Redevelopment Agency in developing services which attract and retain businesses in Azusa. New and expanding businesses in the area increasingly inquire about the level of available utility services. Energy efficiency services are designed to be part of a package of services offered by the City to new customers which help them choose to do business with Azusa. 1 PROJECTS Eligible Equipment Equipment subject to Departmental financing considerations would include energy efficient lighting, refrigeration, motors, or heating/air-conditioning systems, electrical system costs, and other efficient equipment or system costs in an upgrade or replacement project as approved by the Department. Customers will own and be responsible for installation, operation, and maintenance of their equipment. Equipment eligible for installation with utility financing includes: • Motors • Commercial refrigerators and freezers • Computer controlled, open-air ventilation/HVAC system • Energy-efficient security, street or office lighting; plant-wide HID lighting • Energy-efficient heating, air-conditioning, or ventilation systems • Chiller consolidation • Electrical system costs • Other energy-efficient projects as approved by the Department Qualifications of Potential Projects Participation in the Program is open to all business customers in the City of Azusa Light and Water Department (Department) service territory who meet the Program qualifications. In general, the Customer applies to the financing of energy efficient equipment or efficient electrical systems in existing buildings. New construction projects which result in significant energy efficiency opportunities for the customer and the Department may be considered and should be presented to the Department for consideration. Loans may be granted to customer projects for the following purposes and which meet all of the following qualifications: • Project results in the upgrade, retrofit, and/or installation of energy efficiency equipment or efficient electrical system by an existing Department customer. • Must be a current Azusa Light and Water Department customer, (TOU, G-1, or G-2)with ability to indicate satisfactory credit. Credit checks will be completed by the City to verify credit worthiness for eligibility to participate in the Program. • Customer has requested utility service for and has taken occupancy in their building. • Customer applicants must have three contractor bids and energy efficiency specifications for the project at the time an application is submitted for review. The project must be ready to commence within two months of the application review period. Project must be completed within six months of signing the contract for loan agreement with the Department. 2 • Customer agrees to repay the utility loan through a monthly energy services charge. In most cases, project loans will be granted to those customers who can repay the full loan amount within three years of the date the contract was signed. • If required by the Department, customer agrees to receive funding in phases which coincide with the installation schedule of the energy efficiency project. No more than three phases will be established by the Department per project. • Customer agrees to Departmental review of the completion and/or progress of each phase of the project before the next phase of funding may proceed. • Customer agrees to accept ownership and responsibility for installation, operation, and maintenance of all equipment associated with the efficiency project. • Customer has submitted all appropriate Department application forms with signatures and credit histories to the Department. • For new construction projects only: Loans may not be granted for new construction projects unless significant energy efficiency measures would be achieved including technologies and features which exceed current State of California Title 24 Standards(at least 1993 Standards)by a minimum of 20% in terms of their energy savings for new buildings. Loans for new construction projects may be granted only six months prior to completion of new construction. Project Review and Approval Criteria • Projects will be reviewed and approved based upon the above qualifications. Customers must indicate that all of the qualifications are met or will be met during the application period in order to receive a loan. • All projects will be reviewed by City staff for their energy efficiency and/or load shifting potential. Those projects providing significant energy efficiency gains for the customer as well as the Department will be prioritized. • Projects or portions of projects will be funded based on three factors: the total project cost, the payback period and the ability of the customer to meet the energy services charge payments. • The Program is designed to provide manageable load building as well as load efficiency impacts on the utility system. Individual projects which represent a positive cost-test ratio to the Department and to the customer will be prioritized. • Departmental loans may be granted to qualifying customers up to the amount of$50,000 per customer per fiscal year. No more than two projects per customer may receive financing during a single fiscal year. • Customer has indicated their ability to repay the utility loan via the calculated energy services charge, acceptance of designated phases, and ability to repay the full loan amount within three years by signing appropriate application forms and submitting them to the Department. • The City reserves the right to disqualify any customer that does not satisfactorily meet the Program qualifications. 3 PROGRAM FINANCING Based on interest expressed to date by potential Customer participants, the Department expects initially to make funds available up to $200,000 in the first year of the Program until budgeted funds are exhausted by qualified projects. The Department would establish an account to administer Program loans. The Department reserves the right to prioritize projects suited to the Department's efficient load growth strategy. The Program finances available to each customer are expected to offset other customer loans which may be necessary for their project and to reduce total project finance charges for the business. PROGRAM PROCEDURES 1. The applicant shall submit the following documents in the application: all Program application forms, three written bids of the work to be completed, all pertinent Contract documents, equipment efficiency specifications, engineering estimates of energy savings, if applicable, timeline for installation work to be completed, credit information, and any other pertinent information and credit history at the Department's request in reviewing the loan application. The City will conduct a credit check of the applicant. A Trust Deed may be recorded with Los Angeles County on the property of a Customer, if warranted, by the Department. A Trust Deed is the obligation of the owner of the property. Any tenant proposing to become an applicant for an Energy Efficiency Loan must have prior approval from the owner of the property. 2. The Department shall review the customer's application and may request additional information from the customer. The Department reserves the right to approve or disapprove the Customer's application. Once the Customer's application is approved, the Department will establish project phases, benchmarks, timeline for completion, loan duration, and Energy Services Charge. Each project phase and the appropriate Energy Services Charge will be identified and agreed to by the Department and the Customer at the time the Contract is executed. 3. The Customer shall enter into a Contract for repayment of the approved loan amount by signing the Department's Contract. The Contract shall establish the total amount of project financing, Energy Services Charge, duration of loan payments, project phases (if any), and all appropriate Customer information, agreements, and procedures. 4. Upon the execution of the Contract by the Department and the Customer, financing will be reserved for the project. The applicant shall commence the energy efficiency project within two months of Contract date, and shall complete installation of the energy efficient equipment specified in the Contract within six months. One three-month extension to complete the equipment installation may be approved by the Department provided that installation had begun within the first six-month period. 5. At the time in which the project has been completed, the Customer shall arrange for a walk-through inspection of the project at the Customer facility with the Department. Upon 4 verification by the Department of the completed project, the Customer shall submit all appropriate invoices from the appropriate contractor(s) and project completion forms to the Department. The Customer may submit invoice(s) and completion forms for the initial phase of the project or invoice(s)pertaining to work completed by a single contractor who has completed their portion of work on the project. 6. The Department, having completed a walk-through inspection and received all invoices affiliated with the project from the Customer, shall provide a loan to the Customer per the executed Contract. The Energy Services Charge shall commence when the Customer has submitted all invoice(s) and project completion forms to the Department and the full loan amount is provided. 7. The Customer shall make payments via an Energy Services Charge beginning twenty(20) days after the full loan is provided. 8. The executed Contract and the Department's obligation to provide a loan shall be deemed terminated or suspended under events(a) and (b)below. Customer is obligated, if events take place, to pay an Added Facilities Charge for the amount plus interest, up to 4%, that the utility has paid to the Customer. (a) Customer's failure to comply with the installation dates as set forth in the executed Contract. (b) Customer's involvement in financial difficulties by filing a petition against such party under Title 11; or the dissolution or liquidation of the Customer. ENERGY SERVICES CHARGE An Energy Service Charge will be billed to the Customer on a monthly basis. Terms and elements of the Energy Services Charge are as follows: 1. The Department will recover its financing and associated administrative costs for Customer energy efficiency projects through a monthly Energy Services Charge. The term of the loan payments shall be no more than thirty-six(36) months from the execution date of the loan. An alternative term may be arranged at the discretion of the Department. The Energy Services Charge will be a fixed monthly amount based on the size of the loan, energy services costs, and the desired loan duration agreed upon by the Department and the Customer. 2. The Energy Services Charge may be paid in two charges: (1) the Basic Charge, which represents a "floor" and is fixed and unconditional for the term of the loan, and (2) a Supplemental Charge, which is based upon a share of the savings generated by the project and is strictly voluntary on the part of the Customer as a means to make an additional loan payment. 5 3. The Energy Services Charge is expected to be comprised of a capital recovery charge including financing, administrative and engineering costs. An annual interest rate (up to 4%) would be charged on loans through the Program. 4. The first Energy Services Charge shall be billed on the 20th day of the month after the full loan is provided. Each Energy Services Charge shall be due by the due date stated on the monthly bill, approximately twenty(20) days after receipt of the bill. A 1 1/2% monthly interest rate shall be billed on all late payments, pro-rated by the number of days the payment is late. 5. The Energy Services Charge will remain the obligation of the company represented by the original signatories to the Contract with the Department. If the real property identified in the Contract is sold or leased, the loan must be paid in full to the Department, unless prior arrangement is made with and approval is given by the Department. A short form deed of trust will be recorded on the property with Los Angeles County to provide notice that the property is subject to a Contract and principle loan payment to the Department. Any Customer who does not fulfill the terms, conditions, and agreements set forth in the executed Contract will be subject to reporting to TRW. DATE: February 13, 1995 6 Azusa Light and Water Department Customer Loan 777 N.Alameda Ave. P.O.Box 9500 Azusa,CA 91702-9500 Application (818)3340215 X351 Fax(818)3340215 Application No. Page I of 2 Company: Company Address: Telephone: Fax Type of Business(Partnership,Corp.): Years in Business: Partners or Corporate Officers Name Title Telephone Bank References Bank Name&Address Account Number(s) Contact Name&Phone Contractors/Consultants I certify that the above information is true.This information is to be used only as credit history and toward loan approval. Signature Print Name Title Date Project Completion Form Company: DATE: Address: Phase: Telephone: Contact: Application No. Certification Data Description Cost$ TOTAL I, , representing certify that the electrical equipment described herein is now installed and fully operational at the installation address specified above, that all required permits specified by the City have been obtained, and that all invoices have been submitted to the Department indicating completion of phase_of _ of this project. SIGNATURE: PRINT NAME: TITLE: DATE: To Be Filled Out By Azusa Light and Water Department Only Phase COMMENTS Invoices Submitted Payments Completed APPROVED: Utility Conservation Officer Date APPROVED: Director of Utilities Date Azusa Light and Water Department Energy777 N.Alameda Ave. P.O.Box 9500 Azusa,CA 91702-9500 Efficient (818)334-0215 X351 Fax(818)334-0215 Project costs Page 2of2 Job Description - Please use the reverse side if necessary and include a description of non-equipment related expenses if applicable to the loan amount. Please keep your written comments below to the energy efficient equipment, materials, or labor affiliated with the project for which you are asking loan financing. Equipment Operating Hours, Usage, and Proposed Costs Existing Equipment Hours Usage Proposed Hours Usage Purhase/ Equipment/Labor Installation Cost TOTAL LOAN AMOUNT REQUESTED Electric Utility Account Number(s): Anticipated Project Start Date: Completion Date: The Department will review the Total Loan Amount Requested based upon only the equipment described above. Please be sure to list all of the costs of additional materials or labor that may be required for the project. Signature Print Name Title Date /7 1' ►l:l! COMM 0 OF AZUSA OFFICE OF THE CITY CLERK DATE: February 21, 1995 / FROM: Adolph A. Solis, City Clerk 4/ L - VIA: Henry Garcia, City Administrator RE: Ordinance regarding moving the date of the General Municipal election. BACKGROUND Pursuant to your decision at the Adjourned Regular Meeting of February 13, 1995, the Ordinance is herewith submitted for your consideration and action. RECOMMENDED ACTION Waive further reading and introduce ordinance. 11," 4 d-//9:5 /4-ei7)14'.- ■■ 213 East Foothill Boulevard, Box 1395,Azusa, CA 91702 February 16, 1995 TO: Mayor and City Council FROM: City Clerk Re : Moving of General Municipal Elections date from April in even numbered years to March of odd numbered years . It has been my experience, over the years that I have been City Clerk , that the close proximity of the primary elections to our local elections has created confusion among the electorate. Just before and during the primaries , I receive many calls regarding what they feel is a lack of definition : "Why did you change my polling place? Why don 't you people make up your mind?" To the y person it often appears that "Government" is some single , enormous entity that moves erratically. This , apparently , has caused confusion on a broad scale. This is why the State Legislature has enacted legislation permitting cities to move their election dates to an off year in March . This eliminate the close succession of different elections in even numbered years . Your other option was to consolidate our elections with the County in November ; that , however , would be permitted on an off year basis , when the only other agency is the local school district appears on the ballot . The turn out for these off year November elections is the lowest of all the various governmental elections : usually only 10 to 15% . The plurality needed by candidates , especially when there is a large slate, is very small in order to be successful , For the former reason , discussed above in the first paragraph , I wholeheartedly recommend that you accept the Ordinance herein presented for first reading .