Title
A Resolution Of The City Commission Of The City Of Hollywood, Florida, Authorizing The Execution And Delivery Of A Master Equipment Lease-Purchase Agreement With Banc Of America Public Capital Corp And Separate Equipment Schedules For The Acquisition, Financing And Leasing Of Certain Energy Services Equipment In An Aggregate Principal Amount Up To $6,600,000.00; Authorizing The Execution And Delivery Of An Escrow Agreement And Related Documents; Authorizing All Incidental Actions Necessary For The Consummation Of The Transaction In Accordance With Section 38.41 (C)(9) Of The Procurement Code. (Best Interest)
Strategic Plan Focus
Financial Management & Administration
Body
Staff Recommends: Approval of the attached Resolution.
Explanation:
On July 6, 2022, the City Commission approved Resolution No. R-2022-206 approving the execution of the Energy Services Agreement with Noresco, LLC to develop a comprehensive energy management plan to improve various City buildings, structures, lighting and facilities. The intent is for these improvements to be financed through guaranteed cost savings achieved through the energy improvement initiatives. As part of the master Energy Services Agreement, the City is required to execute individual work orders for energy service audits as well as construction.
As part of the July 6, 2022, approval of the master Energy Services Agreement, Audit Work Order No. 1 was approved for Noresco, LLC to study and perform an investment grade audit on the City-owned streetlight network. As a result of this audit, Construction Work Order No. 1 enabled the LED streetlight upgrade of over 2,000 City-owned streetlights, excluding those located in the Beach CRA and Downtown CRA.
Construction Work Order No. 2, Noresco, LLC will complete an investment grade audit towards potential financially viable cost saving measures and will also include permitting, material and equipment procurement, installation and commissioning of interior and exterior lighting improvements, HVAC system replacements, building automation system upgrades and park exterior lighting and athletic field lighting improvements.
The estimated cost for services is $6,558,692 to be financed through the Master Equipment Lease/Purchase Agreement with Bank of America with an interest rate of 4.294% with a term of twenty years. The guaranteed cost savings achieved from the project implementation will pay the annual debt service.
Fiscal Impact:
The annual debt service will be budgeted in future fiscal years budgets subject to approval of the City Commission. Based on a principal amount of $6,558,692, the annual debt service is estimated to be approximately $382,580 in year one growing to approximately $676,565 in year twenty, for an average annual debt service payment of approximately $516,352 over the twenty-year term. The guaranteed cost savings achieved from the project implementation will pay the annual debt service.
Recommended for inclusion on the agenda by:
Stephanie Tinsley, Director, Financial Services
Adam Reichbach, Assistant City Manager