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CCWkspMin 4-2-14
Falcon Heights Council Workshop Minutes April 2, 2014 6:30 p.m. Members present: Mayor Lindstrom, Council Members Mercer-Taylor, Harris and Long Members absent: Council Member Gosline City Staff present: City Administrator Bart Fischer 1) Presentation on the Ramsey County Economic Prosperity Initiative by Ramsey County Staff. Deputy Ramsey County Manager Heather Worthington presented information on the County’s Economic Prosperity Initiative. Due to the size of the presentation, it can be found at the following link: http://www.co.ramsey.mn.us/NR/rdonlyres/3DB46F68-51B1-4533-99C2- A4B5969DA69D/36530/ProsperityPovertyPPT114MFIP.pdf A copy can also be obtained by contacting Ramsey County Management at 651-266- 8000. Ms. Worthington also provided an update on the County’s TCAAP redevelopment project. Hand out materials are attached. 2) Presentation on the Property Assessed Clean Energy (P.A.C.E.) Program by Jeremy Kallin. Jeremy Kallin from Eutectics provided information on the commercial PACE program available through the St. Paul Port Authority and provided some thoughts on the possibilities of a residential PACE program. Handouts provided are attached. The workshop concluded at 8:27 p.m. Respectfully submitted, Bart Fischer City Administrator Clean Energy Financing | PACE Program Development! Energy Security! ! EutecticsLLC.com! Eutectics Consulting! © 2012, Eutectics Consulting LLC We connect business owners, contractors, and investors to move clean energy projects from concept to reality. Save Energy. Save Money.! What if you could reduce energy costs – at little or no cost to you? © 2012, Eutectics Consulting LLC Save Energy. Save Money.! What if you could spur economic activity – from contractors to manufacturers to Main Street businesses – with nearly all costs covered by the private sector? © 2012, Eutectics Consulting LLC $ 1 Billion / day… Going overseas… … and rarely to our friends. “We are funding both sides... “…of the war on terror.” $34 B / year of coal imports No state is immune. No state is immune. Diesel 42.9% Where should we focus? Demand Side! Supply Side Where should we focus? graphic courtesy of Metropolis magazine Where should we focus? Where should we focus? photo courtesy of CincyStreet.com © 2011 Where should we focus? photo courtesy of CincyStreet.com © 2011 Deutsche Bank, March 2012: photo courtesy of CincyStreet.com © 2011 In U.S. building retrofit market: • $1 Trillion in energy savings • 3.3 Million jobs over 10 years • Upfront cost of $279 Billion • Reduce consumption 30% • Reduce CO2 by 10% (600MMT) Building Owner! “My utility costs are way too high! Help!” © 2012, Eutectics Consulting LLC Energy Contractor! “We know how to cut energy costs!” © 2012, Eutectics Consulting LLC “But times are tight - how will I pay for the upfront costs?” © 2012, Eutectics Consulting LLC © 2012, Eutectics Consulting LLC What about tax credits? Rebates? Will that help? Sorry, folks, that won’t cut it. I’ll look elsewhere to invest. Investors © 2012, Eutectics Consulting LLC Investors © 2012, Eutectics Consulting LLC Hmmm… You could get an equipment lien…? If the owner defaults and I foreclose, what do I get? Your boiler? No thanks… Investors © 2012, Eutectics Consulting LLC But, my utility costs are STILL way too high! Help! © 2012, Eutectics Consulting LLC There’s got to be a better way…! © 2012, Eutectics Consulting LLC Set up the loan as secured “recourse” loans, and we’ll talk… © 2012, Eutectics Consulting LLC I think we can help… © 2012, Eutectics Consulting LLC Property Assessed. + + Building Owner! Property Assessed. Clean Energy. 1. Request an Energy Audit The Main Street Model © 2012, Eutectics Consulting LLC + + Property Assessed. Clean Energy. Energy Contractor! 1. Conduct an Energy Audit 1. Request an Energy Audit The Main Street Model © 2012, Eutectics Consulting LLC + + Property Assessed. Clean Energy. Energy Contractor! 1. Conduct an Energy Audit 2. Create Initial Proforma 1. Request an Energy Audit The Main Street Model © 2012, Eutectics Consulting LLC + + Building Owner! Property Assessed. Clean Energy. 1. Conduct an Energy Audit 2. Create Initial Proforma 1. Request an Energy Audit 2. Apply for PACE loan The Main Street Model © 2012, Eutectics Consulting LLC + + Property Assessed. Clean Energy. 1. Conduct an Energy Audit 2. Create Initial Proforma 1. Request an Energy Audit 2. Apply for PACE loan Local Government! 1. Approve PACE loan The Main Street Model © 2012, Eutectics Consulting LLC + + Property Assessed. Clean Energy. 1. Conduct an Energy Audit 2. Create Initial Proforma 1. Request an Energy Audit 2. Apply for PACE loan Local Government! 1. Approve PACE loan 2. Sell Revenue Bond The Main Street Model © 2012, Eutectics Consulting LLC + + Property Assessed. Clean Energy. 1. Conduct an Energy Audit 2. Create Initial Proforma 1. Request an Energy Audit 2. Apply for PACE loan Local Government! 1. Approve PACE loan 2. Sell Revenue Bond 3. Issue Assessment The Main Street Model © 2012, Eutectics Consulting LLC + + Building Owner! Property Assessed. Clean Energy. 1. Conduct an Energy Audit 2. Create Initial Proforma 1. Request an Energy Audit 2. Apply for PACE loan 3. Hire Contractors 1. Approve PACE loan 2. Sell Revenue Bond 3. Issue Assessment The Main Street Model © 2012, Eutectics Consulting LLC + + Property Assessed. Clean Energy. 1. Conduct an Energy Audit 2. Create Initial Proforma 3. Install Equipment 1. Request an Energy Audit 2. Apply for PACE loan 3. Hire Contractors 1. Approve PACE loan 2. Sell Revenue Bond 3. Issue Assessment Energy Contractor! The Main Street Model © 2012, Eutectics Consulting LLC + + Building Owner! Property Assessed. Clean Energy. 1. Conduct an Energy Audit 2. Create Initial Proforma 3. Install Equipment 1. Request an Energy Audit 2. Apply for PACE loan 3. Hire Contractors 4. Repay loan from savings 1. Approve PACE loan 2. Sell Revenue Bond 3. Issue Assessment The Main Street Model © 2012, Eutectics Consulting LLC + + Property Assessed. Clean Energy. 1. Conduct an Energy Audit 2. Create Initial Proforma 3. Install Equipment 4. Measure and Verify! 1. Request an Energy Audit 2. Apply for PACE loan 3. Hire Contractors 4. Repay loan from savings 1. Approve PACE loan 2. Sell Revenue Bond 3. Issue Assessment Energy Contractor! The Main Street Model © 2012, Eutectics Consulting LLC Ex. 1: Restaurant upgrade – LED lights and controls 5 Year PACE The Main Street Model © 2014 Eutectics Consulting LLC Ex. 2: 40kW Solar PV w LED lighting upgrade 5 Year PACE The Main Street Model TOTAL COST: $180,500 Investor Tax Credit 54,150 Utility Lighting Rebate 3,000 EPACT Tax Deduction 3,200 Net to Finance $174,300 Owner Contribution 19,480 Green Loan – 4% 50,000 TOTAL PACE LOAN $111,020 PACE loan repayment 25,131 Energy savings and displacement 13,693 with avg. annual energy inflation of 2.25% TOTAL AVG. COST / YRS 1-5 $10,128 TOTAL SAVED / YR 6+ $15,304 © 2014 Eutectics Consulting LLC Ex. 3: 200kW Solar PV w no state incentive 20 Year PACE The Main Street Model TOTAL COST: $539,270 Investor Tax Credit 161,780 Net to Finance $539,270 Owner Contribution 0 TOTAL PACE FINANCING $539,270 PACE loan repayment 49,890 Solar Production 17,499 with avg. annual energy inflation of 2.25% TOTAL NET / YR 1 $163,652 NET AFTER 20 YEARS $ 97,255 © 2014 Eutectics Consulting LLC The Main Street Model © 2012, Eutectics Consulting LLC Ex. 4: Corp. HQ 10 Year PACE © 2012, Eutectics Consulting LLC 1. Apply for PACE loan. © 2012, Eutectics Consulting LLC 1. Apply for PACE loan. 2. City issues special assessment. © 2012, Eutectics Consulting LLC 1. Apply for PACE loan. 2. City issues special assessment. 3. City sells bond. © 2012, Eutectics Consulting LLC WIN. © 2012, Eutectics Consulting LLC WIN. WIN. © 2012, Eutectics Consulting LLC WIN. WIN. WIN. © 2012, Eutectics Consulting LLC WIN. WIN. WIN. WIN. © 2012, Eutectics Consulting LLC 1. Sign Joint Powers Agreement © 2012, Eutectics Consulting LLC 1. Sign Joint Powers Agreement 1. PACE Loan Review: a. Technical Review b. Underwriting 2. Loan Origination 3. PACE Bond Issuance 4. Bond Debt Service © 2012, Eutectics Consulting LLC 1. Sign Joint Powers Agreement 2. Enroll Special Assessments, and Distribute Assessment Payments to SPPA. 1. PACE Loan Review: 1. Technical Review 2. Underwriting 2. Loan Origination 3. PACE Bond Issuance 4. Bond Debt Service © 2012, Eutectics Consulting LLC 1. Commercial 2. Agricultural 3. Industrial 4. Multifamily (5 units or more) 5. Nonprofit But what about ResidenMal PACE? But what about ResidenMal PACE? 1. Apply for PACE loan. 2. City issues special assessment. But what about ResidenMal PACE? 1. Apply for PACE loan. 2. City issues special assessment. Whatcha doin’? But what about ResidenMal PACE? 1. Apply for PACE loan. 2. City issues special assessment. STOP!! Fannie and Freddie say NO! But what about ResidenMal PACE? 1. Apply for PACE loan. 2. City issues special assessment. But what about ResidenMal PACE? But…. Wait! But what about ResidenMal PACE? But what about ResidenMal PACE? But what about ResidenMal PACE? RESIDENTIAL PACE: ALIVE & KICKING! Jeremy Kalin, President | Jeremy@EutecticsLLC.com ! 612.353.5760!