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Resolution - 2020-103RESOLUTION NO.2020-103 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, AUTHORIZING THE EXECUTION AND DELIVERY OF AN INSTALLATION AGREEMENT AND RELATED MEASUREMENT AND VERIFICATION AGREEMENT AND SOLAR POWER PURCHASE AGREEMENTS AND SOLAR ENERGY SYSTEM LEASE AGREEMENTS, AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND EXECUTE A FINANCING AGREEMENT, AND MAKING FINDINGS REQUIRED BY GOVERNMENT CODE SECTION 4217.10 ET SEQ. IN CONNECTION WITH THE CITY'S ENERGY SYSTEMS UPGRADES PROJECT WHEREAS, pursuant to Public Resources Code section 25008, it is the policy of the State of California and the intent of the Legislature to promote all feasible means of energy conservation and all feasible uses of alternative energy supply sources; and WHEREAS, California Government Code section 4217.10 et seq. authorizes a public agency to enter into an energy service contract if its governing body determines, at a regularly scheduled public hearing, public notice of which is given at least two weeks in advance, that the anticipated cost to the agency will be less than the anticipated marginal cost to the agency of electrical energy that would have been consumed by the agency in the absence of the energy services contract; and WHEREAS, the City of West Covina ("City") desires to reduce the steadily rising costs of meeting the energy needs at City facilities; and WHEREAS, Alliance Building Solutions, Inc. ("Alliance"), in partnership with Distributed Solar Development, LLC ("DSD"), have developed and proposed an energy efficiency project for the City that includes the implementation of energy related improvements that will reduce the cost of energy through the installation of energy efficient fixtures and improvements and the installation and operation of solar energy facilities on rooftops and carports at City -owned facilities ("Project"); and WHEREAS, the City proposes to enter into an Installation Agreement and related Measurement and Verification Agreement with Alliance, and Solar Power Purchase Agreements and Solar Energy System Lease Agreements with DSD for the implementation of the Project (collectively, the "Project Documents"); and WHEREAS, the sites where the energy efficiency improvements and solar facilities will be located are Civic Center, Cameron Park Community Center, City Yard, Fire Station 2, Fire Station 3, Fire Station 4, Palm View Center, Senior Center, Shadow Oak Recreation Center, and Shadow Oak Park; and WHEREAS, Alliance provided the City with an analysis showing the benefits of implementing certain energy conservation measures through the installation of energy efficiency improvements and solar photovoltaic energy generating facilities ("Analysis"). The Analysis is attached hereto as Exhibit "A" and incorporated herein; and WHEREAS, the Analysis includes data showing that the anticipated cost to the City for the electrical energy and conservation services provided by the Project will be less than the anticipated marginal cost to the City of electrical and other energy that would have been consumed by the City in the absence of such measures; and WHEREAS, the City Council desires to enter into the Project Documents substantially in the form presented at this meeting, subject to such changes, insertions, or omissions as the City Manager in consultation with the City Attorney reasonably deems necessary or appropriate following the City Council's adoption of this Resolution; and WHEREAS, Government Code section 4217.13 authorizes a public agency to enter into a facility financing contract and facility ground lease if the governing body determines, at a regularly scheduled public meeting, public notice of which is given at least two weeks in advance, that funds for the repayment of the financing or the cost of design, construction, and operation of the energy conservation facility, or both, as required by the contract, are projected to be available from revenues resulting from sales of electricity or thermal energy from the facility or from funding that otherwise would have been used for purchase of electrical, thermal, or other energy required by the public agency in the absence of the energy conservation facility, or both; and WHEREAS, Alliance Funding Solutions, Inc. presented to the City a financing proposal for the Project which included financing $2,815,162.00 at an interest rate of 4.150% over a 20- year term, with payments totaling $4,014,153.50; and WHEREAS, the City is pursuing alternative third -party financing options that include terms that are equal to or better than the terms proposed by Alliance Funding Solutions, Inc. for the Project; and WHEREAS, the City Council's approval of the Installation Agreement and Measurement and Verification Agreement with Alliance, and Solar Power Purchase Agreements and Solar Energy Lease Agreements with DSD is fully contingent upon the City's ability to secure financing for the Project; and WHEREAS, in accordance with Government Code section 4217.10 et seq., the City gave notice of this public hearing at least two (2) weeks prior to the date of this hearing; and WHEREAS, the City's proposed approval of the Project is a "project" for purposes of the California Environmental Quality Act ("CEQA'); and WHEREAS, the CEQA Guidelines (Title 14 California Code of Regulations Section 15000 et seq.) exempt certain projects from further CEQA evaluation; and WHEREAS, the City has reviewed the Project and determined that it is exempt from the provisions of CEQA pursuant to the CEQA Guidelines and that no exceptions to the exemption apply. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA DOES RESOLVE AS FOLLOWS: SECTION 1. Pursuant to California Government Code section 4217.10 et seq., the City Council hereby finds and determines that all of the recitals set forth above are true and correct. SECTION 2. The City Council hereby finds that the terms of the Project Documents in the form presented at this City Council meeting are in the best interests of the City. SECTION 3. In accordance with Government Code section 4217.12, and based on data provided by the Analysis, the City Council finds that the anticipated cost to the City for electrical energy and conservation services provided by the Project will be less than the anticipated marginal cost to the City of electrical and other energy that would have been consumed by the City in the absence of the Project. SECTION 4. The City Council hereby finds that the Project is exempt from CEQA on multiple grounds, each of which is independently sufficient to exempt the whole of the Project from CEQA, including: a. The Project is exempt from CEQA pursuant to the statutory exemption outlined in Public Resources Code section 21080.35 for installation of solar energy systems. Specifically, that section states that CEQA "does not apply to the installation of a solar energy system on the roof of an existing building or at an existing parking lot." Pub. Res. Code § 21080.35. A solar energy system "includes all associated equipment." Id. "Associated equipment consists of parts and materials that enable the generation and use of solar electricity or solar -heated water, including any monitoring and control, safety, conversion and emergency responder equipment necessary to connect to the customer's electrical service or plumbing and any equipment, as well as any equipment necessary to connect the energy generated to the electrical grid, whether that connection is onsite or on an adjacent parcel ofthe building and separated only by an improved right-of-way." Id. The Project meets this exemption because it involves installation of energy efficient fixtures and improvements and the installation and operation of solar energy facilities on existing rooftops and carports at City owned facilities. b. The Project is exempt from CEQA under a Class 1 categorical exemption (14 C.C.R. § 15301) because it involves the minor alteration of existing facilities with improvements that would lead to negligible or no expansion of use beyond the use existing at this time. The installation of solar energy facilities on existing carports and rooftops will make the City more energy efficient. The solar energy facilities would not lead to an intensification of the existing uses because the improvements do not expand building square footage or office space. Furthermore, the Project does not involve any improvements that would increase the maximum employee capacity. In all, the Project would result in net environmental benefits by reducing traditional electrical energy consumption of the City. Therefore, the Project would be exempt under a Class 1 exemption. C. The Project is exempt from CEQA under a Class 3 exemption (14 C.C.R. § 15303) (new construction or conversion of small structures) because the Project involves installation of energy efficient fixtures and improvements and the installation and operation of solar energy facilities on rooftops and carports at City owned facilities that will benefit the environment by creating more renewable energy. d. The Project is exempt from CEQA under the commonsense exemption (14C.C.R. § 15061(b)(3)) because CEQA applies only to projects which have the potential for causing a significant effect on the environment, and it can be seen with certainty that there is no possibility that the Project may have a significant effect on the environment. e. The Project is exempt from CEQA under a Class 11 exemption (14 C.C.R. § 15311) because it involves the construction of minor structures accessory to existing facilities. As explained above, the Project involves installation of energy efficient fixtures and improvements and the installation and operation of solar energy facilities on existing rooftops and carports at City -owned facilities. The solar panels would lie within the existing permitted height of the City's buildings. Views would not be interrupted by the solar panels, and they would blend with the existing structures. Therefore, the Project would be exempt under a Class 11 exemption. None of the exceptions to the categorical exemptions set forth in 14 C.C.R. § 15300.2 apply. Specifically, the Project is not located in a particularly sensitive environment. The improvements will be installed on existing structures in developed areas. The cumulative impact of successive projects of this same type in the same place over time would not be significant because the facilities are limited in size. As explained above, the Project involves installation of energy efficient fixtures and improvements and the installation and operation of solar energy facilities on rooftops and carports at City -owned facilities. These types of improvements are not unusual. Moreover, the carports and buildings impacted by the Project are not located within an officially designated state scenic highway. Thus, the Project would not have an impact in this regard. Similarly, the proposed improvements are not located on sites designated pursuant to Government Code section 65962.5. Finally, the Project does not involve any improvements, modifications, or other changes to a historical resource. Therefore, none of the circumstances outlined in 14 C.C.R. § 15300.2 apply. SECTION 5. Subject to the financing contingency described below, the City Council hereby approves the Project and an award of the Installation Agreement and Measurement and Verification Agreement to Alliance Building Solutions, Inc. and Solar Power Purchase Agreements and Solar Energy System Lease Agreements to Distributed Solar Development, LLC, in accordance with Government Code section 4217.12; and SECTION 6. The City Manager, in consultation with the City Attorney, is hereby authorized and directed to negotiate any further changes, insertions and omissions to the Project Documents as the City Manager reasonably deems necessary, and thereafter to execute and deliver the Project Documents. The City Manager is further authorized and directed to execute or cause to be executed any and all papers, instruments, opinions, certificates, affidavits and other documents and to do or cause to be done any and all other acts and things necessary or proper for carrying out this Resolution and said agreements. SECTION 7. In accordance with Government Code section 4217.13, based upon the financing proposal presented by Alliance Funding Solutions, Inc., which included financing $2,815,162.00 at an interest rate of 4.150% over a 20-year term, with payments totaling $4,014,153.50, and the Analysis provided by Alliance Buildings Solutions, Inc., the City Council hereby finds that funds for the repayment of the financing for the Project are projected to be available from funding that otherwise would have been used for the purchase of electrical energy required by the City in the absence of the energy conservation facilities. SECTION 8. The City Council hereby authorizes and directs City staff to pursue alternative third party financing options that include terms that are equal to or better than the terms proposed by Alliance Funding Solutions, Inc., including but not limited to an interest rate that does not exceed 4.150%, and to select the financing option that is in the City's best interests and is consistent with the findings set forth in this Resolution. The City Council further authorizes the City Manager, in consultation with the City Attorney, to negotiate and execute a financing agreement that is consistent with the authorization set forth herein and to execute or cause to be executed any and all papers, instruments, opinions, certificates, affidavits and other documents and to do or cause to be done any and all other acts and things necessary or proper for carrying out this Resolution and said agreement. The City Council's approval of the Project and award of the Installation Agreement and Measurement and Verification Agreement to Alliance Building Solutions, Inc., and Solar Power Purchase Agreements and related Solar Energy System Lease Agreements to DSD is fully contingent upon the City's ability to secure financing for the Project. SECTION 9. The City Council hereby authorizes and directs City staff to file and process a Notice of CEQA Exemption for the Project in accordance with CEQA, the CEQA Guidelines and the findings set forth in this Resolution. SECTION 10. The City Clerk shall certify to the adoption of this Resolution and shall enter the same in the book of original resolutions and it shall become effective immediately. APPROVED AND ADOPTED this 6th day APPROVED AS TO FORM Thoma . Du •te City Attorney ATTEST Lisa errick Ass' ant City Clerk I, LISA SHERRICK, Assistant City Clerk of the City of West Covina, California, do hereby certify that the foregoing Resolution No. 2020-103 was duly adopted by the City Council of the City of West Covina, California, at a regular meeting thereof held on the 6th day of October, 2020, by the following vote of the City Council: AYES: Castellanos, Johnson, Lopez-Viado, Wu NOES: Shewmaker ABSENT: None ABSTAIN: None Lisa errick As tant City Clerk EXHIBIT A COST ANALYSIS [j('] BALLIATNNC,E Year 13 Year 14 Year 15 Year 16 Year 17 Year 29 Year 19 Year 20 Year 21 Year22 Yea. 23 Year24 Year 25 T—