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File Number: 20-593 <br />institution selected through an informal RFP process. Per the Installation Agreement, Climatec will <br />install at the City’s WPCP up to $8,045,781 of energy saving and resiliency equipment. <br />Fifteen-year lifecycle savings/revenue are projected at $14,322,177 with an estimated net <br />positive fiscal impact of $6,276,396 over the same period. First year savings/revenue are <br />anticipated to be $842,517. It is noted that this project also includes new revenue-generating <br />aspects, but for a worse-case scenario and due to anticipated market fluctuations for the <br />revenues, only the total debt costs are indicated here. <br />In November 2020, staff received four proposals from financial institutions offering to finance the <br />equipment installation. Proposals were received from Bank of America, Holman Capital, the <br />California Infrastructure and Economic Development Bank (Ibank), and US Bank (Union Bank and <br />Wells Fargo did not respond). Proposals were evaluated based on interest rate, business terms <br />and experience. Bank of America provided the proposal most advantageous to the City. The bid <br />allows for a 15-year amortization of the principal amount financed. Annual lease payments are <br />expected to be $592,925.08 (includes Principal + Interest) based on the lease rate in effect on <br />the bid date. The interest rate is 1.989%, assuming the financing closes as scheduled on January <br />22, 2021. <br />It is noted that the Phase I citywide energy and water-efficiency work (started in 2016 and <br />completed in 2018 at various sites throughout the City and including upgraded streetlighting), was <br />also financed through Bank of America (up to $5,500,000 over 16 years and at a rate of 2.19%). <br />Financing Structure <br />Over the years, the City had used certificates of participation and lease revenue bonds to finance <br />the construction and retrofitting of its public facilities. Certificates of participation are a variation of <br />the general lease-purchase financing method that had been commonly used in California. Due to <br />a perceived preference for private placement tax-exempt leases in today’s market, the short-term <br />nature of the financing, and the disclosures required to be made by the City compared to a public <br />offering, the financing will be structured as a tax-exempt private placement lease. For the <br />proposed lease, the Bank will lease the equipment to the City and the City will make lease <br />payments to the Bank from the WPCP Enterprise Fund. As noted above, the Equipment is the <br />collateral, securing the City’s payment obligations under the Agreement during the intended <br />15-year lease period. <br />The Financing Team <br />Staff worked with the firms listed below to bring this financing transaction to the Council for <br />approval. Therefore, the resolution of issuance to be adopted by the Council directs staff to enter <br />into agreements for services with the following firms in the following capacities: <br />Name of Firm Capacity <br />Banc of America Public Capital Corp.Lessor <br />Jones Hall, APLC Special Counsel <br />Bank of America, NA Escrow Agent <br />The Bank was chosen via a request for proposals. The Bank was deemed to be the most <br />advantageous lessor from a group of four proposals received by the City. The primary reasons for <br />the Bank’s selection are its pricing, experience, and structuring <br />Page 2 City of San Leandro Printed on 12/30/2020 <br />276