HomeMy WebLinkAbout15-Facilities Management
. CITY OF SAN BERNODINO - REQUEST FfJ COUNCIL ACTION
From: James W. Sharer, Manager Subject: ENTER INTO AN AGREEMENT WITH SOUTHERN
CALIFORNIA EDISON COMPANY FOR THE
Dept: Facilities Management INSTALLATION AND FINANCING OF ENERGY
CONSERVATION MEASURES AT VARIOUS
Date: November 17, 1994 FACILITIES WITHIN THE CITY
Synopsis of Previous Council action:
11/21/94 Public Hearing Set
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Recommended motion:
Adopt Resolution
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Signature
Contact person: James W. Sharer
Phone: 384-5244
Supporting data attached: Yes
Ward:
FUNDING REQUIREMENTS:
Amount:
Source: (Acct. No.)
(Acct. DescriPtion)
Finance:
~ouncil Notes:
75-0262
Agenda Item No. J ~
CITY OF SAN BERNODINO - REQUEST FfJ COUNCIL ACTION
STAFF REPORT
The Facil ities Management Division of the City of San Bernardino is
responsible for the safe and efficient operation of over 140 buildings
throughout the city. The total current annual utility expenditure for
these facilities exceeds $2,990,OOO. There are several opportunities
which exist to reduce these utility expenses.
As with all of Southern California, the continuing economic downturn has
had a negative effect on the revenue available to run the City business.
This reduction in revenue, combined with increased demands for other City
services such as police protection, has created additional pressures on
the City to reduce operating costs. This places the City in the
difficult position of deferring needed maintenance and delaying equipment
replacement which, while meeting short term budgetary constraints, does
not provide for a long term solution.
Through discussions with Mr. James W. Sharer, Manager - Facilities
Management Division, it was agreed to focus the initial energy
conservation efforts on three major facilities managed by his division.
City Hall
The Carousel Mall
The Main Library - Feldheym
The annual electrical energy consumption in these three facilities is in
excess of $760,000.
CITY HALL
The City Hall Building, a six story, 95,000 square foot facility, was
built in 1971 prior to the introduction of the California energy
efficiency standards. The mechanical systems in the building are typical
of this time frame. As a result, the City Hall is, unfortunately, a poor
energy performer.
The original central chiller plant was designed to serve not only the
City Hall but also a Conventi on Center. The Conventi on Center was
disconnected from this facility resulting in an oversized, inefficient
central chiller plant.
The main air distribution systems are constant volumn double duct
systems. This type of system maintains space temperatures by mixing both
cool and hot air. This was a concept often used in the days of cheaper
energy costs and is now actually prohi bi ted by the Cali forni a energy
conservation requirements in most applications.
The City has made some innovative, and successful, investments to reduce
the operating costs in this building. In late 1993, a lighting retrofit
was completed which has resulted in lowering both electrical demand and
consumption leading to lower electric utility bills.
'5.0264
CITY OF SAN BERN~DINO - REQUEST Fe COUNCIL ACTION
STAFF REPORT
As successful as this lighting retrofit project has been, there remain
opportunities for the City to capture additional, significant energy
savings by retrofitting the central mechanical systems and parking
structure lighting. Additional attention is needed to address the
central chiller system which contains a CFC refrigerant. In addition to
this type of refrigerant being known to cause holes in the ozone layer, a
ban on its future manufacture will cause maintenance costs to increase in
the future.
CAROUSEL MALL
This facility, built in the early 1970's, is a multi-tenanted, multi-use
commercial facility. The City has the responsibility to light and
condition the common areas of the mall.
The mechanical systems serving these areas seem to operate fairly
efficiently, however there is an opportunity to improve the efficiency of
the lighting system and reduce operation costs through some HVAC control
system modifications.
CENTRAL LIBRARY
The Central Library was built in 1984. The mechanical systems reflect
the Cal ifornia Title 24 energy efficiency requirements in force at the
time. There are two 80 ton air cooled chillers serving individual fan
coil units for each zone. The chillers have an EER of 9.7 and there is
no s'ignificant performance improvement available. At this time, we do
not project any economi ca lly vi ab 1 e improvements to the exi sti ng HVAC
system.
The lighting systems in this facility use T12, 34w, lamps with magnetic
ballasts. They are a good target for retrofit which will lead to reduced
operating costs. During the initial field survey we also noticed a few
unoccupied conference rooms with all the lights on which could utilize
occupancy sensors to turn off the ights unless the space is occupied.
ENVEST SOLUTION
This section addresses the actual energy conservation measures (ECM) to
be performed as the Envest solution is implemented. The savings
associated with each aspect of the project are also identified.
CITY HALL
City Hall HVAC
The ex is t i ng chi 11 ers , cool i ng towers and pumps a re oversized for the
peak load required for the City Hall facility. The chiller plant will be
resized and new chillers, cooling tower and pumps will be installed to
meet the actua 1 peak capacity of 300 tons (to be verifi ed duri ng the
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5-0264
CITY OF SAN BERN~DINO - REQUEST F~ COUNCIL ACTION
STAFF REPORT
design phase). To achieve a level of redundancy, two chillers, sized at
2/3 of the peak capacity (200 tons) will be installed. The total
capacity of the new plant will be 400 tons. The chillers will use a non-
CFC refrigerant. The chillers will be installed in parallel in a
variable flow primary/secondary pumping arrangement (also termed a
decoupling system) with the chilled water distribution system. The
primary chiller loop will use constant flow pumps and the secondary
distribution system will use a pump controlled by an electric variable
speed drive (VSD) based on system pressure requirements. The existing
cooling coil pumps and 3-way valves will be removed and replaced with 2-
way valves.
To assure there is no loss of City Hall operation during the central
plant renovation, a temporary chiller has been included as part of the
implementation strategy.
The existing double duct system in the penthouse serving the main floor
areas will be converted to a double duct variable air volume system using
variable speed drives (VSD's) on the main fan motors and replacement of
the mixing boxes with double duct VAV boxes specifically designed for
this type of system.
As part of the initial verification study, the cool ing loads of the
individual zones will be recalculated based on current occupancy and use.
As part of the des i gn, new double duct VAV boxes wi 11 be selected based
on the new load requirements and the system will be balanced to these new
requirements as part of the implementation scope.
Carousel Mall
In the common areas, existing T12-34w lamps will be replaced with T8
lamps and the magnetic ballasts will be replaced with electronic
ballasts. The parabolic reflectors will be cleaned with an ultrasonic
cleaning system.
The economizer operation on all the rooftop air handl ing units serving
the common areas will be put in working order.
LIBRARY
Library Lighting
Existing T12-34w lamps will be replaced with T8 lamps, the magnetic
ballasts will be replaced with electronic ballasts and the fixtures will
be washed. Occupancy sensors will be installed in five areas that have
1 imited occupancy. Any broken sockets or cracked diffusers wi 11 be
replaced.
Energy Management and Control System (EMCS)
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CITY OF SAN BERNJt;DINO - REQUEST Fc:J COUNCIL ACTION
STAFF REPORT
Implementation of HVAC improvements at the City Hall requires upgrading
of the existing control system to a DOC based system. This new system
will be a Carrier CCN Control System and will interface with the existing
pneumatic actuators at City Hall. A Carrier workstation is included.
Also included are provisions for start/stop control and status monitoring
of the Carousel Mall and Library HVAC systems by the new workstation to
be located in City Hall. A gateway already exists at the Library for
digital communications, but a gateway must be installed at the Mall.
Benefits of the Envest Solution
Non-financial Benefits
The Envest solution is tailored to provide solutions to the wants and
needs addressed earlier in the proposal. Through the Envest solution a
single point of contact and coordination will be provided to ensure
successful implementation of the project. This in turn allows the City
to util ize staff resources to address the everyday operating needs of
your facilities and continue performing scheduled maintenance needs.
This also reduces the 'hassle' of developing, designing, procuring,
project managing and verifing the results of such a comprehensive
project. Envest provides the resources and experience needed to
successfully complete the project with little burden on City staff. In
addition to this staff support, the City will have the Southern
California Edison Co. standing in front of the solution providing:
Financial strength
Long term continuing business relationships
Long term customer satisfaction
The City can take a proactive leadership role in environmental
improvements in the Inland Empire through implementation of the proposal.
You will be replacing the ozone depleting refrigerant in your chillers
with an environmently friendly one. The reduced electrical consumption
projected for the City will also carry a related environmental benefit by
reducing the pollutants emitted by electrical power generation.
Through evaluation of the actual heating and cooling requirements in the
City Hall and modifications to the air del ivery system you should see
significant improvements in the comfort conditions throughout the
facility.
Financial Benefits
By providing 100% of the financing for the project, the Envest solution
will free-up your capital budget for investments in other City services
or programs. There will be no up front out of pocket investment required
by the City.
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CITY OF SAN BERN~DINO - REQUEST FC"'--...'~ COUNCIL ACTION
STAFF REPORT
By implementing the proven energy efficient technologies proposed the
City will reduce it's annual utility costs will be reduced by a projected
$166,000. This represents a 21% reduction in the utility costs for these
facil ities.
In addition the City will gain economic benefit through reduced
maintenance costs. Because all of the new lighting and mechanical
equipment will be under warranty, there will be no bulb and ballast
replacement or repair service on the mechanical equipment installed as
part of this solution during the equipment manufacturers specified
warranty period.
Cost Analysis
The currently estimated price for the Envest solution described above is
approximately $971K which includes all aspects of the development,
implementation, commissionin9 and post-implementation monitoring. In
addition, the Envest solution includes financing of this amount over a
term of 10 years at a fixed annual interest rate of 7.20% (0.6% monthly)
in the form of a municipal lease. The annual payment will be $137K per
year. This, combined with the expected energy savings of $166K per year
will result in the City of San Bernardino enjoying an estimated net
annual cash flow of $29K.
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1 RESOLUTION OF THE CITY OF SAN BERNARDINO TO ENTER INTO AN AGREEMENT WITH
SOUTHERN CALIFORNIA EDISON COMPANY FOR THE INSTALLATION AND FINANCING OF
2 ENERGY CONSERVATION MEASURES AT VARIOUS FACILITIES WITHIN THE CITY.
3 WHEREAS, Government Code Sections 4217.10 et seq., authorized the
4 governing board of a city to enter into negotiated agreements for the
5 installation and financing of energy conservation measures; and
6
7 WHEREAS, the energy conservation measure set forth in the proposed
8 agreement by and between Southern California Edison Company and the City of
9 San Bernardino will result in a projected net cost savings to the City of San
10 Bernardino.
11
12 NOW, THEREFORE, the Mayor and Common Council FINDS, DECLARES, RESOLVES
13 and ORDERS as follows:
14
15 1. The anticipated cost to the City of San Bernardino for conservation
16 services provided by the energy conservation facility under the proposed
17 agreement with Southern California Edison Company/Envest will be less than
18 the anticipated marginal cost to the City of electrical or other energy that
19 would have been consumed by the City in the absence of this purchase.
20
21 2. The funds for the repayment of the fi nanci ng or the cost of des i gn,
22 construction, and operation of the energy conservation facility, or both, as
23 required by the agreement with SCE/Envest are projected to be available from
24 revenues resulting from funding which otherwise would have been used for
25 purchase of electrical, or other energy required by the City in the absence
26 of the energy conservation facility, or both.
27
28
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1 RESOLUTION OF THE CITY OF SAN BERNARDINO TO ENTER INTO AN AGREEMENT WITH
SOUTHERN CALIFORNIA EDISON COMPANY FOR THE INSTALLATION AND FINANCING OF
2 ENERGY CONSERVATION MEASURES AT VARIOUS FACILITIES WITHIN THE CITY.
3 3. The terms of the proposed agreement with SCEIEnvest are in the best
4 interest of the City of San Bernardino.
5
6 4. The agreement for energy conservati on servi ces and fi nanci ng is
7 exempt from the provisions of the California Environmental Quality Act within
8 the meaning of Title XIV of the California Code of Regulations Section 15301.
9
10 5. The City Clerk is hereby authorized and directed to give notice that
11 the proposed energy conservation measures are exempt for the provisions of
12 the California Environmental Quality Act; and
13
14 6. The energy service agreement with SCEIEnvest is hereby approved.
15 IIII
16 IIII
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19 IIII
20 IIII
21 IIII
22 IIII
23 IIII
24 IIII
25 IIII
26 IIII
27 IIII
28 IIII 2
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1 RESOLUTION OF THE CITY OF SAN BERNARDINO TO ENTER INTO AN AGREEMENT WITH
SOUTHERN CALIFORNIA EDISON COMPANY FOR THE INSTALLATION AND FINANCING OF
2 ENERGY CONSERVATION MEASURES AT VARIOUS FACILITIES WITHIN THE CITY.
4 Mayor and Common Council of
5 held on the day of
6
7 Council Member:
8
9 NEGRETE
10 CURLI N
11 HERNANDEZ
12 OBERHELMAN
13 DEVLI N
14 POPE-LUDLAM
15 MILLER
16
17
18
3 I HEREBY CERTIFY that the foregoing resolution was duly adopted by the
the City of San Bernardino at a meeting thereof,
, 1994 by the following vote, to wit:
AYES
NAYS
ABSTAIN
ABSENT
19
20
21
22
City Clerk
The foregoing resolution is hereby approved this
, 1994,
day of
Tom Minor, Mayor
City of San Bernardino
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C I T Y 0 F SAN B ERN A R DIN 0
INTEROFFICE MEMORANDUM
TO:
Mayor and Common Council
FROM:
Dennis A. Barlow, Sr. Asst. City Attorney
DATE:
December 5, 1994
RE:
Agenda Item No. 15 (Southern California Edison)
Attached are replacement pages reflecting changes in the above
agenda item relating to the private activity bond and binding
arbitration provisions. Attorneys for Southern California Edison
have agreed with our concerns and have made the appropriate
changes. We now recommend approval.
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IHHGRAHD
SOlUTIOHS
PROPOSAl
City of San Bernardino
The City Hall, Carousel Mall, and Central Library
November 1994
USE AND DISCLOSURE OF DATA
The information disclosed herein is proprietary material of Southern Califlll7lia
Edison Company and is not to be reproduced, used, or disclosed in whole or in part
for any purpose other than to evaluate this proposal or quotation witbout the urit-
ten permission of Southern Califlll7lia Edison Company.
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TABU
Or
[OHHHT~
:)
1.0 EXECUTIVE SUMMARY
2.0 CURRENT OPERATIONS/CUSTOMER NEEDS
- PRESENT SITUATION
3.0 ENVEST SOLUTION
- DESCRIPTION
- GENERAL BENEFITS OF ENVEST
- FINANCIAL BENEFITS OF ENVEST
- QUESTIONS/CONCERNS
4.0 ECONOMIC EVALUATION
- CASH FLOW ANALYSIS FOR PROPOSED SOLUTION
5.0 PROJECT MANAGEMENT
- PROJECT MANAGEMENT FUNCTIONS
6.0 PROJECT IMPLEMENTATION
- SCHEDULED PROJECT DELIVERABLES
- ABOUT ENVEST
7.0 IMPLEMENTATION PLAN
- IMPLEMENTATION TEAM
- PROJECT SCHEDULE
8.0 ApPENDICES
- APPENDIX A, ENVEST PROCESS DESCRIPTION
- APPENDIX B, ENERGY CONSERVATION MEASURES
- APPENDIX C, PERIODIC REPORT EXAMPLE
CUSTOMER AGREEMENT
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tHfCUTIUf
SUMMARY
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ENVESTsCE Incegratedj,olution Proposal- The City of San Ber~ '~no
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November 1994
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Section 1.
Executive Summary
The Facilities Managemenc Deparrmenc of rhe City of San Bernardino is responsible for the safe
and efficienc operation of over 140 buildings throughout the City. Over 25% of the nearly
$3,000,000 utility budget is spenc in three facilities, including the City Hall, Carousel Mall and
Cencral Library. The purpose of this proposal is to demonstrate how an ENVEST Integrared
Solution can modernize these facilities, reduce operating expenses and improve comfort without
negatively impacting the City's general fund.
No up/ront cash is required and the Solution will generate a positive cash flow for the City from
the first day onward. The value of the proposed ENVEST Solution is:
Project Price:
Cash Flow to City Over 10 Years:
$ 971,000
$ 290.000
Total Value of Solution
$1,261,000
ENVEST proposes that the City of San Bernardino implemenc the following ENVEST
Incegrated Solution:
PROJECT SITE/COMPONENT BENEFITIRESULT OFTHCM "
A. City Hall
. Cencral Mechanical System Reduce COSt of operation
Modernization Improve occupant comfort
Eliminate CFC-based refrigeranc
. Parking Structure Lighting Retrofit Improve lighting levels
Reduce operating costs
B. Carousel Mall Courts
. Lighting Retrofit Reduce operating costs
. Air Handling Unit Economizer Repairs Increase comfort
Reduce operating cOSts
C. Central Library
. Lil(htinl( Retrofit Reduce operatinl( costs
Use and disc/osure of this proposal data is subject to the restriction on the title page of this document. 1
r~
sal - The Cit of San Bern' 0
November 1994
The ENVEST Solution offers rhe City several benefits:
.
Efficienr use of the City's scaff through the "single poinr of conract" project managemenr
provided by ENVEST
.
The ability to implemenr several energy efficiency tetrofit projects at once by leveraging
ENVEST 's project managemenr and financing
.
Modernization of targeted City facilities
.
The reduction of specific pollutanrs emitred during electrical power generation (by lowering
the City's overall power consumption)
.
Improving occupanr/employee comfotr
The ENVEST Solution is projected to save the City $166,000 in the first year of implemenration.
Paymenrs to ENVEST will be $137,000 per year over the 10 year term of the agreemenr. This
will provide the City with an annual positive cash flow of $29,000 per year, for a tocal retained
savings of $290,000 over the 10 years.
To ensute the City conrinues ro receive the savings projected from implemenration of this
Solution, ENVEST will provide:
. Equipmenr performance verification
. Initial operations and mainrenance training for the facilities staff
. Measuremenr and verification of system performance for the first two years
. Periodic energy reporting for the life of the agreemenr
In recenr years, the State has passed legislation to help cities in their effort to implemenr Energy
Conservation Projects (ECPs). This legislation clearly states that a city may enter into a sole
source energy conservation project and project financing if the anticipated savings to be
realized through the implementation of the project are expected to exceed the costs to
install and finance the project. This ENVEST Solution satisfies this requirement.
Upon immediate approval by the City of San Bernardino, ENVEST will begin the
implemenrarion phase of the project with preliminary estimates of completion in less
than eight monrhs.
Use and disclosure of this proposal data is subject to the restriction on the title page of this document. 2
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[URRfHT
OPfRRTIOHS
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ENVESTsCE Integrated ~;tion Proposal - The City of San Berna~;o
November 1994
Section 2.
Current Operations/Customer Needs
PRESENT SITUATION
Orerview
The Facilities Management Department of the City of San Bernardino is responsible for the safe
and efficient operation of over 140 buildings throughout the City. Fulfilling this responsibility
requires significant expenditures for both staffing and energy. In fact, the rotal current annual
utility expenditure for these facilities exceeds $2,990,000. There are, however, several
opporruniries which exist ro reduce these utility expenses.
As wirh all of Southern California, the continuing economic downturn has had a negative effect
on the revenue available ro run the City business. This reducrion in revenue, combined with
increased demands for other City services such as police protection, has created additional
pressures on the City ro reduce operating COSts. This places the City in the difficult position of
deferring needed maintenance and delaying equipment replacement which, while meeting shorr
tetm budgetary constraints, does not provide for a long term solution.
Through discussions with Mr. James Sharer, Manager of the City's Facilities Management
Deparrment, it was murually agreed ro focus the initial energy conservation efforrs on three
major facilities managed by his department:
. The City Hall
. The Carousel Mall Courrs
. The Central Library
The annual electrical energy consumption in these three facilities is in excess of $760,000.
A). City Hall
The City Hall Building, a six srory, 95,000 squate foot facility, was built in 1971 prior
to the introduction of the California energy efficiency standards. The mechanical systems
in the building are typical of this time frame. As a tesult, the City Hall is, unfortunately,
a poor energy performet.
The original centtal chiller plant was designed ro serve nOt only the City Hall bur also
an exhibit center. The exhibit center has been disconnected from this facility resulring in
an oversized, inefficient cenrral chiller plant.
The main air distribution systems are constanr volume double duct systems. This type of
system maintains space temperatures by mixing both cool and hot air. This was a concept
often used in the days of cheaper energy costS and is now actually prohibited by the
California energy conservation requirements in most applications.
Use and disclosure of this proposal data is subject to the restriction on the title page of this document. 3
ENVESTSCE Inte.'(rared S~tion Proposal - The City of San Bernal"''qo
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November 1994
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The City has made some innovative, and successful, investments to reduce the operating
costs in this building. In late 1993, a lighting retrofit was completed which has resulted
in lowering borh electrical demand and consumption leading to lower electric utility
bills.
There are also areas of this facility which operate twenty-fout hours a day. Two chillers
located in the lower level of the Parking Structure are operated at night to serve these
areas, thus avoiding running the main chiller plant at night.
As successful as this lighting retrofit ptoject and these operating ptocedures have been,
there remain opportunities for the City to capture additional, significant energy savings
by retrofitting the centtal mechanical systems and parking structure lighting. Additional
actention is needed to address the central chiller system which contains a CFC refrigerant.
In addition to this type of refrigerant being known to cause holes in the ozone layer, a ban
on its future production will cause maintenance costs to increase in the coming years.
B). Carousel Man Courts
This facility, built in the early 1970's, is a multi-tenanted, multi-use commercial facility.
The City has the responsibility co light and condition the common areas of the mall.
The heating, ventilating and air conditioning (HV AC) system for the common areas
utilizes twO small chiller plants with reciprocating compressors urilizing R-22 reftigerant
and evaporative cooling cowers. Alrhough newer more efficient compressors are
available, the improvement is relarively small and the energy COSt savings would
normally not justify replacement. There is also no CFC issue in the near future with the
R-22 refrigerant. The savings potential is further minimized by the operating scenatio
where the chillers are usually noc operated during the November ro February winter
season.
There is no heating currently used for the common areas. There are electric heaters
located near the entrances but they are no longer used and therefore do not cause energy
waste.
There are several air handling units located on the roof with a bypass around the cooling
coil for supply air temperature control. No heating capability is currently energized in
these units.
The mechanical systems serving these areas seem co operate fairly efficiently, however
there is an opportunity to improve the efficiency of the lighting system and reduce
operation cosrs through some HV AC control system modifications.
Use and disclosure of this proposal data is subject to the restriction on the title page of this document. 4
ENVESTSCE Integrated Solution Proposal - The City of San Bernap-lj,no
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November 1994
C). Central Library
The Central Library was built in 1984. The mechanical systems reflect the California
Title 24 energy efficiency requirements in force at that time. There are two 80 ron air
cooled chillers serving individual fan coil units for each zone. The chillers have an EER
of 9.7 and there is no significant performance improvement available. At this time, we do
not project any economically viable improvements ro the existing HV AC system.
The lighting systems in this facility use T12, 34W, lamps with magnetic ballasts. They
are a good target for retrofit which will lead ro teduced operating costs. During our
initial field survey we also noticed a few unoccupied conference rooms with all the lights
on which could utilize occupancy sensors ro turn off the lights unless the space is
occupied.
Customer Needs
Four key objectives regarding the City facilities and their operation were uncovered in
conversations with the City staff. These objectives are:
. Modernization of facilities without impacting the general fund
. Efficiency and comfort in the operation of the facilities
. Proactive approach to environmental issues
. Resources needed for coordination and project management of retrofit projects
The first of these is ro modernize the facilities without unfavorably impacting the general fund
budgeting. The City is facing many significant challenges and the budget dollars need to be
focused in these areas first. The City must also protect the investment base which lies in these
facilities. Money ro fund improvements in these areas is scarce and difficult to secure.
Secondly, the City is faced with the challenge and need ro operate the facilities in the most
efficient manner possible while providing a comfortable environment for the occupantsl
employees. This challenge is complicated by several issues. Many of the mechanical systems in
the City Hall are nearing the end of their economic life and need ro be replaced. New
technologies and manufacturing procedures allow the new replacement equipment ro operate in
a much more energy efficient manner. There are also many changes taking place on the
environmental front. The chillers currently installed in the City Hall run on a CFC-based
refrigerant. This type of tefrigerant is being removed from production and is ro be banned in the
near future. A problem also exists in maintaining consistent comfort levels in City Hall.
Original system design being oversized, the addition of personal computers and the many
modifications thar have been made in the space configurarions have lead ro serious comfort
problems rhrough-our the facility.
Use and disclosure of this proposal data is subject to the restriction on the title page of this document. 5
November 1994
A third challenge facing the City is the increased awareness and pressure of dynamic
environmental issues. A primary objective of rhe City is ro be proactive wirh regard ro
compliance of environmental regulations and ro support conservation projects that also help ro
reduce the level of airborne pollutants emitted during electrical power generation.
Finally, the City recognizes the need for dedicated project management to provide coordination
and project suPPOtt for the specified building retrofits. In addition ro the manpower issue, the
City is aware of the expertise required ro effectively design/develop, procure, manage and verify
the results for projects of this caliber.
Proposal Objective
The purpose of this proposal is ro demonstrate how an ENVEST Solution will meet each of these
needs while requiring no up-front cash and generate a positive cash flow for the City from the
first day on.
Use and disclosure of this proposal data is subject to the restriction on the title page of this document 6
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fHUfST
SOlUTIOH
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ENVESTSCE Integrated Solution Proposal - The City of San Bern~no
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November 1994
Section 3.
ENVEST Solution
DllSCRIPTION
The ENVEST Solution contains a wide variety of process sreps which lead to the City's desired
results. The following list is an outline of the process steps used to develop this proposal and
the proposed plan for implementarion of this ENVEST Solution. A more derailed descriprion of
this process can be found in Appendix A.
. Preliminary Energy Assessment
. Scope of Work Development
. Service Provider Nerwork Review and Preliminary Selecrion
. Comperirive Evaluation Process of Service Providers
. Proposal Development
. Customer Agreement Approval
. Procurement
. Engineering & Design
. Projecr Implemenrarion
. Commissioning
. Operator Training
. Measuremenr & Evaluarion of Results
This secrion addresses the acrual energy conservarion measures (ECMs) to be performed as the
ENVEST Solution is implemenred. The savings associated with each aspect of the project are also
identified.
A). City Hall
HVAC-
The existing chillers, cooling towers and pumps are oversized for the peak load required
for the City Hall facility. The chillet planr will be resized and new chillers, cooling
tower and pumps will be installed to meet rhe acrual peak capacity of 300 rons (to be
verified during the design phase). To achieve a level of redundancy, two chillers, sized at
two-thirds of the peak capacity (200 tons) will be installed. The total capaciry of the
new planr will be 400 tons. The chillers will use a non-CFC refrigerant. The chillers
Use and disclosure of this proposal data is subject to the restriction on the title page of this document. 7
ENVESTsCE Integrated Solution Proposal - The Ciry of San BernaJ;d.i..no
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will be installed in parallel in a variable flow primary/secondaty pumping atrangement
(also termed a de-coupled system) with the chilled water distribution system. The
primary chillet loop will use constant flow pumps and the secondary distribution system
will use a pump controlled by an electronic variable speed drive (VSD) based on system
pressure requitements. The existing cooling coil pumps and thtee-way valves will be
removed and replaced with two-way valves.
To assure there is no loss of City Hall operation during the central plant renovation, a
temporary chiller has been included as pace of the implementation strategy.
The existing air-cooled chillers in the parking structure will be retained for backup but
normally will not be operated. It is anticipated that the pace load efficiency of a new
chiller, even at the 40 con level for the basement, will be better than the air-cooled
chillers.
The existing double duct systems in the penthouse serving the main floor areas will be
conveceed CO a double duct variable air volume system using vatiable speed drives
(VSDs) on the main fan motors and replacement of the mixing boxes with double duct
V A V boxes specifically designed for this type of system.
The damper arrangement for an economizer cycle exists but the controls are inoperative.
The economizer operation will be placed in working order.
As pace of the initial verification study, the cooling loads of the individual zones will be
recalculated based on current occupancy and use. As patt of the design, new double
duct V A V boxes will be selected based on the new load tequirements and the system
will be balanced co these new requirements as pace of the implementation scope.
* ECM will save an estimated $73,800 in annual electric costs.
Parking Structure Lighting-
Existing T12-34W lamps will be replaced with T8 lamps and the magnetic ballasts and
the fixtures will be washed. In addition specular optical reflectors will be installed in
the existing fixtures which will allow the fixtures to be de-Iamped from two lamps to
one lamp without lowering lighting levels. This futther enhances the savings potential.
Any broken sockets or cracked diffusers will be replaced.
* ECM will save an estimated $66,500 in annual electric COSts.
Use and disc/osure of this proposal data is subject 10 the restriction on the title page of this dacument. 8
ENVESTSCE Integrated ~,ution Proposal - The City of San Berna~o
November 1994
B). Carousel Mall Courts
Ughting -
In the common areas, existing Tl2-34W lamps will be replaced with T8 lamps and the
magnetic ballasts will be replaced with electronic ballasrs. The parabolic reflectors will
be cleaned with an ultrasonic cleaning system.
* ECM will save an esrimated $7,800 in annual electric COSts.
HVAC -
The economizer operation on all the rooftop air handling units serving the common areas
will be put in working order.
* ECM will save an estimated $2,600 in annual electric costs.
C). Central Library
Ughting -
Existing T12-34W lamps will be replaced with T8 lamps, the magnetic ballasts will be
replaced with electronic ballasts and the fixtures will be washed. Occupancy sensors
will be installed in five areas that have limited occupancy. Any broken sockets or
cracked diffusers will be replaced.
* ECM will save an estimated $15,300 in annual electric costs.
D). All Facilities (Ciry Hall, Carousel Mall Courts, Central Library)
Energy Management and Control System (EMCs) -
Implementation of HV AC improvements at the City Hall requires upgrading the
existing control system to a DDC based system. This new system will be a Carrier CCN
Control System and will interface with the existing pneumatic actuators at City Hall.
Also included are provisions for stare/stop control and status moniroring of the Carousel
Mall Coures and Central Library HV AC systems via a new workstation to be located at
the City Hall. A gateway already exists at the Library for digital communications, but a
gateway must be installed at the Mall.
A more detailed listing of implementation products and approaches can be found in Appendix B.
Use and disc/osure of this proposal data is subject to the restriction on the title page of this document. 9
sal- The Cit of San Bem~no
November 1994
"'....,...
BENEFITS OF THE ENVEST SOLUTION (GENERAL)
The ENVEST Solution is tailoted to provide Solutions to the wams and needs addtessed eadiet in
this ptoposal. Through the ENVEST Solution we will provide the single poim of comact and
coordination ro ensure successful implememation of your projeCt. This in rum allows you ro
utilize your staff resources to address the everyday operating needs of your facilities and continue
performing scheduled maimenance needs.
This also reduces the "hassle" of developing, designing, procuring, project managing and
verifying the results of such a comprehensive project. ENVEST provides the resources and
experience needed ro successfully complete the project with litde burden on your staff. In
addition ro this staff suPPOrt, the City will have Southem Califomia Edison standing in front of
the Solution providing:
. Financial strength
. Long term cominuing business relationships
. Long term cusromer satisfaCtion
Finally, this approach lets you realize the benefits of many successful projects being completed
at one time. Your staff has proven they can successfully implemem enetgy conservation projects
through the City Hall lighting retrofit project. However, they are not able, on their own, ro
leverage up on the funding required ro implemem many projeCts at once and would not have the
time available ro develop and implemem these projects while cominuing to perform their daily
duties.
The City can take a proactive leadership role in environmemal improvemems in the Inland
Empire through implememation of this proposal. The City will be replacing the ozone-
depleting CFC refrigetam with an environmemally friendly one. The reduced electrical
consumption projeCted for the City will also carry a related environmemal benefit by reducing
the pollutams emitted by electrical power generation. Table 3.1 lists the projeCted reductions ro
be achieved over the next 10 years.
Table 3.1
Emissions Reducrion Over 10 Years
POLLUTANT REDUCTION (ToNS)
NOx 9
SOx 4
CO2 10,000
Use and disc/osure of this proposal data is subject to the restriction on the title page of this document. 10
ENVESTSCE Inregrared S~ion Proposal - The Ciry of San Bernal'" '?
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November 1994
Through evaluarion of rhe acrual heating and cooling requiremenrs in the City Hall and
modificarions ro the air delivery system, significanr improvemenrs in the comfort conditions
throughout rhe facility should be achieved.
BENEFITS OF THE ENVEST SOLUTION (FINANCIAL)
By providing 100% of the financing fot the project, the ENVEST Solution will ftee-up the
capital budget fot investmenrs in othet City services or progtams. There will be no upfronr,
out-of-pocket investmenr required by the City.
By implemenring the proven enetgy efficiency technologies proposed, the City's annual utility
costs will be reduced by a projected $166,000. This tepresenrs a 21% reduction in the utility
costs for these facilities.
In addition, the City will gain economic benefit through teduced mainrenance costs. Because all
of the new lighting and mechanical equipmenr will be under warranry, the Ciry will not have to
pay for bulb and ballast replacemenr or repair service on the mechanical equipmenr installed as
part of this Solution during the equipmenr manufactuters specified warranry petiod.
QUESTIONS/CONCERNS
Q. How can the City do all of this without going out for bids?
A. The State legislatute recognized the need for cities to make energy efficiency improvemenrs to
their facilities. Because there are proven energy conservation technologies available to provide
self funding retrofits projects, Governmenr Code 4217.10-4217.18 was passed to allow the
facilitation of these projects. Briefly stated, this allows a city to enrer inro a sole source energy
conservation projecr and project financing if the anricipated savings to be tealized through the
implemenration of the project are expected to exceed the costs to install and finance the projecr.
This ENVEST Solution satisfies this tequitemenr.
(Note: The City of San Bernatdino has been advised by Edison to seek the advice of its own tax,
accounring and legal advisots and acknowledges that it is not relying on Edison for any tax,
accounring or legal advice with respect to the transactions conremplated.)
Use and disclosure of this proposal data is subject to the restriction on the title page of this document. I I
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fCOHOMIC
fUAlUATIOH
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of San Berna' . '''''0
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November 1994
Section 4.
Economic Evaluation
CASH FLOW ANALYSIS FOR PROPOSED SOLUTION
Project Price
The currently estimated price fot the ENVEST Solution desctibed below is approximately
$971 K which includes all aspects of the development, implementation, commissioning and POSt-
implementation monitoring. In addition, the ENVEST Solution includes financing of this amount
over a term of 10 years at a fixed annual interest rate of 7.20% (0.6% monthly) in rhe form of a
municipal lease. This, combined wirh rhe expected energy savings of $l66K per year, will result
in the City of San Bernardino enjoying an estimated net annual cash flow of $29K (as shown in
Figure 4.1 below).
Figure 4.1
Estimated Annual Cash Flow
$761K
$166K
Ini6al Annual Savings
1$29K l
Current Energy
Bill.
ENVEST
Salu6an
Saving.
ENVEST
Payment
Energy Bills
During
Repayment
Ene;.~iII.
Repayment
. Electric Casts/Saving.
~ ENVEST Payments
The ENVEST Salu6an provides !he Cily al San Bernardina wi!h emmated savi~g. resul6"!l in $291<
al net energy savings during !he repayment periad, and $166K al energy sav'ngslallaw'ng !he
repayment periad.
Use and disclosure of this proposal data is subject to the restriction on the title page of this document. 12
of San Bern",..l,no
November 1994
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The resulting cumularive cash flow the City will receive over the next 10 years is presented
below in Figure 4.2.
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
Figure 4.2
Cumulative Cash Flow Over 10- Years
CUMULATIVE CASH FLOW
$0
2
3
5
7
8
10
9
4
6
Year
Use and disclosure of this proposal data is subject to the restriction on the title page of this document. /3
I"'"
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PROJfCT
MAHAGfMfHT
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ENVESTsCE Integrared Sq.lJ,lrion Proposal - The Cicy of San Bernar.t.-,p
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November 1994
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Section 5.
Project Management
PROJECT MANAGEMENT FUNCTIONS
The ENVEST Solution includes overall Project Management for che entire project. This secrion
will highlight the major roles chat rhe ENVEST Project Manager will play.
. Qualiry Assurance
. Projecr Scheduling
. Project Budget Management
. Project Status Reports
Quality Asstmma!
As patt of the ENVEST Solution, a quality conuol process will be conducted to accomplish two
goals:
1. Validate that the ECMs actually function as intended by design.
2. Support City staff to ensure proper system operation.
Equipment Performance Verificarion -
ENVEST will provide a third-party quality control engineet to verify the installation of
each ECM and confirm that the product specifications, as indicated by the manufacturer's
nameplate rating, are consistent with those listed in the design intent. Petsonnel will test
equipment in all modes of operarion, both individually and in relation to othet
components in the system. This field testing ptocess will be based on customized ECM-
specific commissioning procedutes that the contractors will implement and the quality
control engineer will wicness.
Operations and Maintenance Support -
Since proper operation and maintenance is essential for the ongoing petfotmance of the
ECMs, ENVEST will provide a customized and integrated systems operating and
maintenance manual for the City. ENVEST will also ptovide an initial session to rrain
City operators and maintenance personnel how to operate, control and maintain the ECMs
to ensure maximum efficiency,
Use and disclosure of this proposal data is subject to the restriction on the title page of this document. 14
ENVESTsCE Ineegrated t:urion Proposal - The City of San Bern~o
November 1994
Project Scheduling
The ENVEST Project Manager will be rhe poine of coneact berween the City's Project
Coordinaror and ENVEST's Service Providers. In addition, the ENVEST Project Manager will
documene and disrribute the minutes of all formal job-site meetings.
Project Budget Mat14gement
Adherence ro rhe project's budget is primarily ENVEST's responsibility. ENVEST is responsible
for the accuracy of the estimates of the time and resources required ro implement the Solution.
In the event of an unforeseen condition arising at the site, or a desired change in the scope of the
work by the City of San Bernardino following the execution of the Cusromer Agreement, the
ENVEST Project Manager shall prepare and submit ro the City's Project Coordinator, change
order documentation that shall define the change in the scope of work, it's cost, and the impact
on the project schedule. No additional work, or change to the scope of work, shall proceed
without the written authorization as executed by the City and ENVEST.
Project Status Reports
ENVEST's Project Managet shall issue Projecr Status Reports incorporating the minutes of the
regularly scheduled on-site meetings ro insure all involved parries are aware of the wotk as
completed ro date, tasks wirh the responsible party identified, unforeseen and contraCt
administration issues with subsequent resolutions, notifications given, and overall progress as
compared ro the project schedule. The key objectives of the Project Status Reports are ro:
. Keep the City's, the Service Provider's and ENVEST's staff and management informed on
all aspects of the project
. Officially record completion of phase activities and project milesrones
. Communicate coordination and scheduling issues between the City, the Service Providers
and ENVEST
Use and disc/osure of this proposal dara is subject to the restriction on the title page of this document. J 5
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PROJfCT
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ENVESTsCE Ince,gratedCurion Proposal - The Ciry of San BernOo
November 1994
Section 6.
Project Implementation
SCHEDULED PROJECT DELlVERABLES
Design
ENVEST will prepare, complete and furnish ro the Ciry for approval, the design documencs for
rhe improvemencs in accordance wirh the general design direcrion and philosophy established.
Licenses alld Permits
ENVEST shall obtain all necessary licenses and permits necessary for the installation of the
improvemencs. If any authority having jurisdiction requires a revision to rhe designs prior to
issuing consenc for the insrallarion of the improvemencs, ENVEST will, with the City's approval,
revise the designs.
Contracts
ENVEST will have full responsibiliry for the negotiation, managemenc, supervision, coordination
and administration of all concracts required for the implemencation of the improvemencs,
including, without limitation:
. the preparation of the documencs and presencation of these documencs ro the
potencial Service Provider or concracrors, in order eo obtain pricing with respect to
completion of the imptovemencs
. the award of the concracts eo one or more con: :ors who will complete the
improvemencs or part of the improvemencs encered ineo between ENVEST and the
Service Provider or contractors.
Construction Phase
ENVEST will be responsible for:
. Preparation of purchase orders and subcontracts
. Verification of shop drawings and manufacturers' drawings
. Correspondence relating to the completion of the improvements
Use and disclosure of this proposal data is subject to the restriction on the title page of this document. 16
ENVESTSCE IntegraredCurion Proposal- The Ciry of San BernOo
November 1994
.
Approval of subsrirurion merhods and mare rials afrer consulrarion wirh rhe Ciry
.
Development of rhe projecr schedule and rhe final projecr descriprion
.
Periodic visirs to rhe consrrucrion sire to ensure rhe progress of work and qualiry of
marerials and workmanship are, in general, conforming wirh rhe requirements of rhe
design and rhe contracr entered into berween EN VEST and rhe COntracrors ro complere
rhe improvements
.
Prepararion and submirral to rhe Ciry of rwo copies of rhe projecr manuals and as-
builr drawings of mechanical and electrical sysrems relared ro rhe improvements
.
Final inspecrion of rhe insrallarion
.
Acceprance of rhe work of rhe contractors
.
Srarr-up and verificarion of equipment performance upon insrallarion of rhe
improvemenrs
.
Training rhe Ciry's rechnical personnel to ensure proper operation and maintenance of
rhe new equipmenr and modified sysrems
.
Implementarion of a moniroring and verificarion process ro measure and document
resulrs
Post-Construction Phase
ENVEST will provide rhe following services:
. Periodic visirs ro rhe faciliry to ensure rhar ENVEST's insrructions have been followed
and, if nor, norificarion to rhe Ciry of any irregularities
. In rhe evenr rhar rhe performance of rhe imNovemenrs falls shorr of rhe projecrions.
invesrigarion of rhe cause, and norificarion indicaring whar acrion rhe Ciry should rake
to improve performance
. Periodic reporrs (refer to Appendix C)
. Administrarion and supporr of all warranries on Ciry's behalf for marerials and
equipmenr insralled for a period of 12 monrhs
. Verify specific energy efficiency measures were insralled as planned
Use and disc/osure of this proposal data is subject to the restriction on the title page of this document. 17
ENVESTSCE Integrated Cion Pro
sal - The Cit of San Bernar
November 1994
. Ensure thar enetgy consumption and savings teported fot the installed measures are
valid, reliable and accurately derermined
. End-use moniroring is done in an timely and cost-effecrive manner
Past experience has shown rhat a properly designed and implemented end-use moniroring
program is rhe best way ro validate that the petfotmance expectations are being met.
Verification is an integtal part of overall quality control fot the installation itself, and further
acts ro encourage the continuation of appropriate operating and maintenance procedures required
for the continued efficient performance of the energy-saving equipment.
ABOUT ENVEST
ENVEST is uniquely qualified ro provide the best solution for the City of San Bernardino.
Backed by the 106 years of experience of quality, reliable electrical service of Southern
California Edison, ENVEST has the financial backing required ro ensute continued support for
the life of the agreement. In addition, through the 20 years of energy conservation program
implementation, ENVEST has learned what it takes to develop and implement successful energy
conservation projects.
ENVEST's only business is to provide energy efficiency solutions ro Southern California Edison
cusromers. ENVEST does not manufacture or sell any hardware or services which allows for the
development and selection of the most cost-effective products and services provided by our
Service Providers ro meet the City's specific needs.
Through quality project management, ENVEST's wrap-around warranty, and post-installation
evaluation and reporting, the City will be assured of a successful energy efficiency improvement
project for the life of the agreement.
Use and disclosure of this proposal data is subject to the restriction on the title page of this document. 18
-
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'-
IMPUMfHTATIOH
PlAH
,
~
ENVESTsCE Integrare~ution Proposal - The City of San BernJIO
November 1994
\
Section 7.
Implementation plan
IMPLEMENTATION TEAM
The box below highlights recommended ENVEST Operations and Technical staff, along with
proposed Service Providers for the upcoming City of San Bernardino projeCt:
TITLE ROLE/RESPONSIBILITIES
Project Manager . Primary Client Contact
(David Taylor) . Project Management
. Quality Conrrol
. Post-installation Review
Project Engineer . Preliminary Energy Assessment
(John Tamney) . Project Scope Development
. Service Provider Scope/Pricing Review
. Selection of Service Providers
. Post-installation Review
M & V Project Manager . Pre and Post-installation Measurement &
(Richard Pulliam) Verification Of Ener~v Usa~e
Mechanical Service Provider . Mechanical Retrofit Work
(Cal-Air Conditioning Service)
Lighting Service Provider . Lighting Retrofit Work
(Advanced Resource Management)
PROJECT SCHEDULE
Please refer ro the following pages for HV AC and lighting schedules.
Use and disc/osure of this proposal data is subject to the restriction on the title page of this document. /9
ENVESTSCE IntegrareC1urion Proposal - The Ciry of San BerOno
November 1994
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ENVESTSCE IntegratedC;ution Proposal - The City of San Ber'Ono
November 1994
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ENVESTSCE Inre~rared SWucion Proposal - The City of San Bernro\110
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ENVESTsCE Integtated S"I.~tion Ptoposal - The City of San BetnatP~')
I
, .."",.~
Novembet 1994
I
Section 8.
Appendices
ApPENDIX A - ENVEST PROCESS DESCRIPTION
The ENVEST Solution began with a Pteliminary Energy Assessment (PEA). During rhis time the
ENVEST sales and operations teams evaluated the energy usage in the City's facilities, surveyed
the mechanical and electrical systems and forecast potential COSts necessary to implement energy
conservation measures (ECMs) and corresponding savings. This was accomplished through
review of facility drawings, interviews with rhe building operations staff and a site survey.
Having identified a viable energy conservation project scope, focus tutned to the ENVEST
Service Provider Network. ENVEST has developed an extensive nerwork of qualified Service
Providers co meet the requirements of each specific project. These organizations have been
reviewed for technical proficiency as well as financial stability to ensure positive long term
results on projects.
Four lighting firms and three mechanical firms were identified to participate in the next phase of
the process, the Competitive Evaluation. During this phase of the project these firms were given
a base scope of work to consider and were also encouraged to identify and evaluate additional
opportunities they found. The resulting proposals were reviewed and oral presentations were
held with each of the Service Providers in order co select the firms who will provide the City the
best technical solutions.
Once the Service Providers for the lighting and mechanical work were selected, the Proposal
Development phase of the process began. ENVEST reviewed the scope and economics with the
City's staff co be sure their needs were being met. A final review with the Service Providers was
then held in order co confirm the resulrs co be obtained from implementation of the project.
Finally, ENVEST developed this preliminary proposal for presentation to the City for
acceptance.
The next step following acceptance of this proposal is to negotiate and procure the services of
the Service Providers fOt the specific scope of this Solution.
The final design engineering will now begin. The Service Providers will perform the required
engineering calculations necessary co complete the design of the Solution. Once this design phase
is complete ENVEST, in conjunction with the Service Providers and the City's staff, will obtain
Use and disclosure of rhis proposal dara is subjecrro rhe resrricrion on rhe rirle page of rhis dacumenr. 23
ENVESTSCE Integraced ~.1""cion Pcoposal - The Cicy of San Bernac~':"'lo
November 1994
........,..
~
all necessary permits and approvals necessary for che project, Project implementation is now
ready co begin. ENVEST will provide Qualicy Assurance Projecr Management chroughouc che
implementacion phase of che projecc. ENVEST will work very closely wich che Cicy's scaff co see
thac scheduling and operacing needs are mec chroughouc che project.
As the end of the inscallacion nears ENVEST will begin che commissioning and operacor craining
phase. No energy conservacion recrofit will produce che resulcs expecced if ic is not inscalled and
operating properly from the scart. Also, che Cicy's operacing scaff needs co know how co operace
and maintain che new equipment co assure continued performance. The ENVEST Solucion will
provide chese services.
During the first year following che commissioning of the project, ENVEST will provide a
comprehensive "wrap-around" warranty for all work done. If chere are any performance or
producc problems che Cicy need only CO nocify ENVEST for resolucion of che sicuacion. If
manufaccurers offer excended warranties on cheir produccs, chese exrended warranties will be
passed on CO che Ci cy at che end of this one year period.
The final phase of the projecr is che Measurement and Evaluation period. For cwo years
following the commissioning, ENVEST will pro-actively monicor and reporr the accual savings
being generated by the Solution. If operaring strategy changes are identified, ENVEST will norify
che City and work cogether co bring them back in line wich original design of the Solution. If
equipment performance should fall off, ENVEST will work with the manufaccurers and Service
Providers CO correCt che sicuation. In this phase the accual resulrs realized will be calculated and
reporred co the Cicy.
Use and disclosure of Ihis proposal dala is subjecllo the restriction on the title page of Ihis document. 24
ENVESTsCE Inte
o
November 1994
ApPENDIX B - ENERGY CONSERVATION MEASURES
Specified ECMs
ENVEST provides the following package of ECMs:
Lighting Upgrades
City Hall
. Insrall Specular Oprical Reflectors in approximately 1794 existing fixtures, replace
exisring fluorescent lamps and ballasts wirh T8-32W tubes and electronic ballasts
and clean fixtures. Replace lamp holders as required.
Carousel Mall CouttS
. Replace existing fluorescent lamps and ballasts with T8-32W lamps and electronic
ballasts in approximately 784 fixtures, clean fixture and parabolic reflectots.
Replace lamp holders as required.
. Replace approximately 2S circline lamps and clean fixtures.
. Replace incandescent lamps in approximately four (4) fixtutes with appropriate
sctew-in PL type lamps and clean fixtures.
Central Library
. Replace existing fluorescent lamps and ballasts with T8-32W lamps and electronic
ballasts in approximately 286 fixtures, clean fixture and parabolic reflectors.
Replace lamp holders as required.
. Install five (S) occupancy sensors
. Replace incandescent lamps in approximately 4 fixtures with appropriate screw-in PL
type lamps and clean fixtures.
Use and disclosure of this proposal data is subject to the restriction on the title page of this dacumenr. 25
ENVESTSCE Integrated ~lJ,1tion Proposal - The City of San BernatP;-\lo
November 1994
'......,..'
"-..,
EquiPment Required:
- Approximately 6,350 T8-32W, -loft. fluorescent tubes
- Approximately 3610 electronic ballasts
- Approximately 25 circline lamps
- Approximately 4 PL type lamps
HVAC Upgrades
City Hall
. Replace existing central chiller plant at the City Hall with a new downsized plane
having a nominal capacity of 400 rons and using a variable flow chilled water
distribution system. The plant will have twO new equal sized chillers, a new cooling
tower and new pumps as required. Existing chilled water pumps at the cooling coils
will be removed and 2-way control valves will replace the existing 3-way valves.
. Put the existing economizer cycle in working order.
. Convert the twO main penthouse double duct air handling systems to double duct
variable air volume systems. This will include new double duct V A V boxes as
required and re balance of the air distribution system.
Carousel Mall Courts
. Put the existing economizer cycle in working order.
. Provide a Carrier CCN control system including workstation ro opetate existing City
Hall HV AC system and upgrades.
. Provide start/stop control and status for the Carousel Mall Courts and Central
Library HV AC systems.
Use and disclosure of this proposal data is subject to the restriction on the title page of this document. 26
ENVESTsCE Incegrated ~lJ,irion Proposal - The City of San Berna~o
.
....,1
November 1994
..........
Equipment Required:
Two 200-con high efficiency electric cencrifugal chillers
One 400-con twO cell cooling cower with two mocor fan drives
Two primary chilled water pumps
Two secondary chilled water pumps
Two condenser water pumps
VSDs for secondary chilled water pumps
- VSDs for main AH unit fan mocors
Double Duct V A V boxes as required
Two-way chilled water concrol valves as required
DOC concrols as required
Carrier CCN workstation
Concrol gateway at Mall
Use and disclosure of this proposal data is subject to the restriction on the title page of this document. 27
ENVESTSCE Integrated ~()Iution Proposal - The City of San BernarJ'-Qo
Novembet 1994
ApPENDIX C - PERIODIC REpORT EXAMPLES
This report describes the perfonnance of the
efficiency invesunents at
during the month of February 1995.
energy
Demand savings in February were 255 kW. Energy consumption savings were 48,300
kWh. Figure I shows demand and consumption savings since June 1994, when the
ENVEST energy efficiency retrofits were completed.
Cost savings during February were $7,800. This is the sum of electric energy and demand
charge reductions and gas charge reductions achieved as a result of the ENVEST energy
efficiency retrofits. To date, cost savings are $56,500,
or 8.7 percent of its net invesunent cost. Figure 2 shows cumulative cost savings to the
due 10 the energy efficiency retrofit.
During February, HVAC and lighting demand savings were 17 percent and 21 percent of
pre-retrofit whole building demand, respectively. HV AC and lighting energy savings were
19 percent and 24 percent of pre-retrofit whole building energy consumption, respectively.
Demand and demand savings are shown by end use in Figure 3. Energy consumption and
energy savings are shown by end use in Figure 4.
The trends in HVAC demand and energy consumption in the retrofitted are shown
in Figures 5 and 6 respectively. The trends in lighting demand and energy consumption are
shown in Figures 7 and 8 respectively.
Use and disclosure of this proposal data is subject to the restriction on the title page of this document. 28
ENVESTSCE Integrated ~olution Proposal - The Ciry of San Berna~d.(no
.' '" - ~
III
CD
C
oS;
'"
(/J
~
300
250
200
150
100
50
o
November 1994
.---," "'T" 60,000
50,000
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30,000 c
oS;
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20,000 (/J
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Figure 1. Building Load and Consumption Savings
$60,000 ,
i
i
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-4
III ~
CI $40,000
c 0"
0> I ~~: .{~.
III i
I/) $30,000 i ",
, .~
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0 c,
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(J) (J) (J) (J) O? O?
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Figure 2. Cumulative Utility Bill Savings
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Use and disclosure of this proposal data is subject to the restriction on the title page of this document. 29
ENVESTSCE Integrated )If.l,lution Proposal - The City of San Bern~no
November 1994
,
"'-"......
---"
Other Load
23%
Lighting
Savings
21%
Lighting Load
17%
HVAC Savings
17%
HVAC Load
22%
Figure 3. February Demand, by End-Use (kW)
Other
Consumption
21%
HVAC Savings
19%
Lighting
Consumption
16%
....:e,;\~,;~~t~
. .
Lighting
Savings
24%
HVAC
Consumption
20%
Figure 4. February Energy Consumption, by End-Use (kWb)
Use and disclosure of this proposal data is subject to the restriction on the title page of this document. 30
ENVESTSCE Integrared ~rion Proposal - The Ciry of San Berna1>'L"<i.o
~ ,~
;:
~
~
"C
C
III
E
ell
C
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November 1994
..;..
. Savings !
[] DerIBlId!
I
60,000 ,
.s::. I
~ I
50,000 1
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0 40,000 ~ c,
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Co '. Savings I
e 30,000 1 !
::I i D Consumptioo i
III 20,000 J
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Figure 5. BY AC Demand and Savings
Figure 6. BY AC Energy Consumption and Savings
Use and disc/osure of rhis proposal dara is subjecr 10 rhe resrriclion on rhe ritle page ofrhis documenr. 31
~
ENVESTSCE Integrated .SooI.vtion Proposal - The City of San BernQo
. V
November 1994
450 "
400 !
~
i
350 J
~ 300 i .:-
]
TJ~ 250 I
c 200 ! <. . Savings I
ftI ~ ,-" ,
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Figure 7. Lighting Demand and Savings
80,000 ,
70,000 "
.c 60,000
~ 1
c 50,000 -1 a Savings I
0 ,
a 40,000 J , [] Consumption .
E I
30,000 J ' .
::I
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>- 10,000
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...., <: (/) z 0 ...., u.
Figure 8. Lighting Energy Consumption and Savings
Use and disclosure of this proposal data is subject to the restriction on the title page of this dacument, 32
r-
'-
-
,.....""'\
'-'
fHUfST
[USTOMfR
AGRHMfHT
City of San Bernardino
November 1994
USE AND DISCLOSURE OF DATA
The information disc/osed herein is proprietary material of Southem California
Edison Company and is not to be reproduced, //Sed, or disc/osed in whole or in part
for any purpose other than to evaluate this ap;-eement, without the written permis-
sion of Southem California Edison Company.
" ~
~ V
TABLE OF CONTENTS
Page
I. DEFINITIONS 1
II. EDISON'S OBLIGATIONS AND COVENANTS 3
2.1 Implemenration of the Project 3
2.2 Completion of the Project 3
2.3 Work Schedule 3
2.4 Permitting 3
2.5 Changes 3
2.6 Environmental Matters 4
2.7 Periodic Reports 4
2.8 Optional Reporrs 4
III. OWNERSHIP AND PAYMENT OBLIGATIONS 4
IV. EDISON'S REPRESENTATIONS AND WARRANTIES 4
4.1 Authority 4
4.2 No Adverse Proceedings 4
4.3 Compliance with Laws 4
V. CUSTOMER'S REPRESENTATIONS AND WARRANTIES 5
5.1 Otganization and Authority 5
5.2 No Adverse Proceedings or Conflicts 5
5.3 Licenses and Permits; Compliance with Laws 5
5.4 Financial Condition; Matetial Adverse Change 5
5.5 Performance of Obligations 5
5.6 Environmenral Marrets 5
5.7 Agreemenrs Affecting Project Site 6
5.8 Advice 6
VI. CUSTOMER'S OBLIGATIONS AND COVENANTS 6
6.1 Financial Statemenrs and Other Reports 6
6.2 Compliance with Laws 7
6.3 Cooperation and Access to Project Site 7
, 6.4 Access to Records and Documenrs 7
6.5 Confidenriality 7
VII. WARRANTIES 8
7.1 Warranty of Equipmenr 8
7.2 Conditions ofWarranry 8
t 7.3 No Other Warranries 8
VIII. INSURANCE 8
8.1 Edison Provided Insurance 8
8.2 Customer Provided Insurance 8
MUNI.2B.V4.11/4194
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TABLE OF CONTENTS
XII.
XIII.
IX.
x
XI.
DEFAULTS
9.1 Default by Customer
9.2 Default by Edison
REMEDIES UPON DEFAULT
10.1 Remedies Upon Customet Events of Default
10.2 Remedies Upon Edison Events of Default
TERMINATION
11.1 Tetmination Upon an Event of Default
11.2 Tetmination Ptior to Commencement of Work
11.3 Termination Prior to Completion
11.4 Termination Upon Force Majeure
11.5 Termination Following Completion
LIMITATION ON DAMAGES
MISCELLANEOUS
13.1 Public Utilities Commission Jurisdiction
13.2 Assignabiliry
13.3 Ownership of Trade Secrets and Know-How
13.4 Severability
13.5 Effect of Waiver; Remedies Cumulative
13.6 Marshalling; Payments Set Aside
13.7 Notices
13.8 Survival
13.9 Applicable Law
13.10 Final Agreement; Amendments
13.11 Article and Section Headings
13.12 Dispute Resolution
13. 13 Counterparts
SCHEDULES
EXHIBITS
5 .6 Hazardous Materials
5.7 Agreements Affecting Real Ptoperty
Exhibit A
Exhibit B
Exhibit C
Exhibir D
Exhibit E
Descriprion of Project Site
Form of Certificate of Acceptance
Form of Certificate of Final Completion
Form of Lease Agreement
Form of Recording Memorandum
MUNI.25J.V4.11/4194
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10
10
11
11
11
12
12
12
12
13
13
13
13
13
13
14
14
14
14
14
14
15
15
15
15
15
t'"'
\wi
Customer Agreement
""
....)
THIS AGREEMENT, dated as of
, is enteted into by
and between SOUTHERN CALIFORNIA
EDISON COMPANY ("Edison") and the
CITY OF SAN BERNARDINO
("Customer ") telative to the following:
A. Edison has developed ENVESTSCE,
a progtam providing for the engineering,
design, packaging, procurement,
installation, financing and moniroring of
cost-effecrive, energy-efficient equipment
ro public and private secror, commercial
and industrial customers.
B. Edison has delivered ro Cusromer a
preliminary ptoposal fot the
implementation and financing of certain
energy efficiency solutions at Customer's
premises.
C. Based on such proposal, Customer
desites to enter into this Agreement ro
implement the Projecr (as hereinafter
defined) on the terms and conditions set
forth hetein.
Accordingly, Cusromer and Edison hereby
agree as follows:
I. DEFINITIONS
Capitalized terms used in this Agreement
have the following meanings:
"Acceptance" means the execution and
delivery of the Cettificate of Acceptance as
provided in Section 2.2 heteof.
"Agreement" means this Agteement
rogether with all Schedules, Exhibits and any
Amendments herero.
"Amendment" means a written document
executed by Cusromer and Edison which amends
or modifies this Agreement Ot any other Project
Document in any respect.
"Change Order" means a document
executed by Edison and Customer for a change
in the Work specified in the Project
Description.
"Environmental Claim" means any
accusation, allegation, notice of violation, claim,
demand, abatement order or other order or
direction, conditional or otherwise, by any
governmental authority or any person for any
damage, including without limitation, personal
injury, tangible or intangible property damage,
conttibution, indemnity, indirect or
consequential damages, damage to the
environment, nuisance, pollution,
contamination or other adverse effects on the
environment, or for fines, penalties or
restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials
and relating ro the Project.
"Environmental Laws" means all
statutes, ordinances, orders, rules, regulations,
plans, policies or decrees and the like relating ro
(a) environmental matters including, without
limitation, those relating to fines, injunctions,
penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from
the Release or thteatened Release of Hazardous
Materials, (b) the generation, use, srorage,
transportation or disposal of Hazardous
Materials, or (c) occupational safety and health,
industrial hygiene, land use or the protection of
human, plant or animal health or welfare in any
manner applicable ro the Project or Project Site.
"Event of Default" shall have the
meaning set forth in Article IX hereof.
MUNI.2~~.V4.1114l94
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"Excluded Activity" means the
containment, detection, disposal, discharge,
handling, removal, storage, transportation,
treatment or use of Hazatdous Materials.
"Final Completion List" means a list of
corrective Work required to complete the
Ptoject.
"Force Majeure" means any of the
following events: (a) fire, lightening, flood,
earthquake or othet natural disaster; or (b) war,
riot, civil disturbance or sabotage.
"Hazardous Materials" means (a) any
chemical, material or substance at any time
defined as or included in any fotmulations
intended to define, list or classify substances by
reason of deleterious properties such as
ignitability, cortosivity, radioactivity, reactivity,
carcinogenicity, roxicity, or words of similar
import under any applicable Environmental
Laws or publications ptomulgated pursuant
thereto; (b) asbestos in any form; (c) urea
formaldehyde foam insulation; (d) equipment or
fixtures containing polychlorinated biphenyls;
and (e) any other chemical, material or
substances, exposure ro which is prohibited,
limited or regulated by any governmental
authority or which mayor could pose a hazard ro
health and safety of the owners, occupants or any
orher persons at or in the vicinity of the Project
Site.
"Lease Agreement" means the agreement
to be entered into by Edison and Customer
pursuant ro Article III hereof.
"Material Adverse Effect" means (a) a
material adverse effect upon the activities,
operations, properties, assets, condition
(financial or otherwise) of Cusromer or (b) the
impairment of, the ability of Customer to
perform its obligations, or Edison's ability ro
enforce Customer's obligations, under any
Project Document.
"Option Purchase Price" as of any date
means the Option Purchase Price determined in
accordance with the Lease Agreement.
"Payment" or "Payments" means each
payment (including without limitation Base
Rental and Additional Rental payments)
provided for under the Lease Agreement.
"Project" means the complete range of
services and equipment to be provided by
Edison under this Agreement as set forth in the
Ptoject Description.
"Project Description" means the
description of the Project to be agreed upon by
the parties pursuant ro Section 2.1 hereof.
"Project Documents" means this
Agreement, the Lease Agreement, the Project
Descri ption and any other documents or
instruments executed and delivered by Customer
ro Edison in connection with the Project.
"Project Site" means the location or
locations of the Project specified in Exhibit A
heteto.
"Release" means any release, spill,
emission, leaking, pumping, pouting, injection,
escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous
Materials into the indoor or outdoot
environment (including, without limitation, the
abandonment or disposal of any barrels,
containers or other closed teceptacles containing
any Hazardous Materials), or into or out of the
Project Site, including the movement of any
Hazatdous Materials through the air, soil,
surface water or ground water or property.
"Subcontractor" means either an entity
contracting directly with Edison to furnish
equipment or services as a part of or related ro
the Project or an entity contracting with a
Subcontracror of any tier to furnish equipment
or services as part of or related to the Project.
MUNI.213.V4.11l4194
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"Substantial Completion" means
completion of the Pcoject except fot matters set
forch on the Final Completion List, The date of
Substantial Completion shall be the date of
Acceptance,
"Work" means all labor, materials, rools,
equipment, services, transportation and other
items required for the completion of the Project,
II. EDISON'S OBUGATIONS AND
COVENANTS
2.1 Implementation of the Project.
Edison has deliveted a preliminary pcoposal ro
Cusromet containing a preliminary pcoject
description and preliminary proposal for
financing the Pcoject. Within approximately
weeks following the execution of
this Agreement, Edison will perform such
additional assessments, including engineering
and design work, as necessary ro develop the
final pcoject description. Upon completion of
such assessments and consultation with
Cusromer, Edison will submit ro Cusromet the
final project description (the "Project
Description"). If the Pcoject Description is
unacceptable ro Customer, Cusromer may
terminate this Agteement in accordance with
Section 11,2 hereof. Edison hereby undercakes ro
perfotm the Work required ro complete the
Ptojecr in accordance with the Project
Description. All or any portion of the Work or
other obligations of Edison hereunder may be
pcovided by Subcontracrors as determined by
Edison in its sole discretion. Edison will seek ro
perform the Work in a manner which will
minimize the disruption of the Pcoject Site and
Cusromer's operations and conduct of business.
2.2 Completion of the Project. At the
rime of Substantial Completion of the Pcoject,
Edison will have performed cettain acceptance
tests and reponed the results thereof ro
Cusromer. Edison and Cusromer will theteupon
execute a Certificate of Acceptance substantially
in the form of Exhibit B herero.
Minor deficiencies which are nor sufficient
ro delay Acceprance will be listed on a Final
Completion Lisr prepared by Edison. Edison will
rhereafter pcomprly complete the items on the
Final Completion List ro the reasonable
satisfaction of, and by dates reasonably
acceptable to, Cusromer. Upon completion of
the items on the Final Completion List,
Cusromer and Edison will execute a Certificate
of Final Completion substantially in the form of
Exhibit C hereto.
2.3 Work Schedule. Edison will use
its reasonable efforts ro commence and complete
performance of the Work required to complete
the Project within the schedule set forch in the
Pcoject Description. Edison will give notice to
Cusromer any time it becomes reasonably
apparent that the Work will nOt be completed
within such schedule.
Edison will not be responsible for any
delay in completion of the Work resulting from
(a) shortage of labor or materials, (b) strike or
labor disturbance, (c) weather conditions, (d)
governmental rule, regulation Ot order,
including orders or judgments of any court or
commission, (e) delay in obtaining any necessary
permits, approvals, rights of way or easements,
(f) delay in obtaining materials or labor at
commercially reasonable prices or (g) the
necessity of Customer undertaking any Excluded
Activity, any Force Majeure or any other cause
Ot condition beyond the control of Edison.
2.4 Permitting. Edison will use its
reasonable efforts ro obtain any and all permits
or ocher governmental authorizations required
for completion of the Pcoject other than those to
be obtained by Cusromet as set forth in the
Project Description and those related to
Excluded Activities. Cusromer agrees to
cooperate with Edison or its Subcontracrors in
all respects in applying for and obtaining all
necessary permits and apptovals.
2.5 Changes. Changes in the Wotk as
specified in the Pcoject Description may only be
made by a Change Order. Edison may requesr a
MUNI.2B.V4.l1/4194
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IlL OWNERSHIP AND PAYMENT OBLIGATIONS
change in the Work by delivering a Change
Order ro Cusromer or Cusromer may request a
Change Order. If the changes in the Work
specified in a Change Order will affect the Costs
of the Project or the schedule for completion of
the Work, Edison and Cusromer shall mutually
agree on any necessary Amendments ro the
Project Documents ro modify the Payments
and/or the schedule for completion of the Work.
2.6 Environmental Matters. Cusromer
understands and agrees that Edison has not
inspected the Ptoject Site for the purpose of
detecting the presence of Hazardous Materials.
Neither Edison nor any of its representatives,
agents ot Subcontracrors will be responsible for
any Excluded Activity telative ro Hazardous
Materials. If the completion of the Work
requites any Excluded Activity, or othet activity
involving Hazardous Materials, Cusromer will
promptly arrange for the same at its sole risk
and expense. Cusromer further heteby releases
and agrees ro indemnify, defend and hold
harmless Edison and its directors, officers,
employees, agents, customers, pattners and
Subcontracrors (as well as each of their respective
direcrors, officers, employees, agents, customers
and partners) from all costS, claims, damages and
other liability atising out of any Environmental
Claims, Hazardous Materials or Excluded
Activities, except ro the extent that such costs,
claims, damages and other liability are the direct
result of willful misconduct on the part of the
indemnified party.
2.7 Periodic Reports. Following
Acceptance, Edison will provide ro Cusromer for
a period of 3 years after the date of acceptance,
on a regular basis, reports estimating usage and
savings resulting from implementation of the
Project.
2.8 Optional Reports. At the election
of Cusromer and subject ro payment of any
charges hereafter ro be agreed upon in writing
by Edison and Customer, Edison will provide ro
Cusromer such additional reports as may be
mutually agreed upon.
Concurrently with the delivery of the
Project Desctiption, Edison shall deliver to
Cusromer a lease agreement substantially in the
form of Exhibit D hereto (the "Lease
Agreement ") specifying the relative ownership
rights of Customer and Edison in the Work and
the terms and conditions of Customer's
obligations ro make Payments for the Project to
Edison. If such Lease Agreement is acceptable to
Cusromer, Customer and Edison shall execute
and deliver the Lease Agreement and any other
documents required to be executed in
connection therewith. If the Lease Agreement is
not acceptable ro Customer, Customer may
terminate this Agreement in accordance with
Secrion 11.2 hereof.
IV. EDISON'S REPRESENTATIONS AND
WARRANTIES
4.1 Aurhority. Edison has all requisite
power and authority to enter inro rhis
Agreement and any Project Documents and ro
perform irs obligations hereunder and
thereunder, and this Agreement and any other
Projecr Documents, when execured and
delivered, will be legal, valid and binding
obligations of Edison enforceable in accordance
wirh their respective terms.
4.2 No Adverse Proceedings. There
are no suirs, actions or orher proceedings
pending or, ro Edison's knowledge, threatened
against Edison, which would reasonably be
expected ro adversely affect Edison's ability to
perform its obligations under this Agreement or
any other Project Document.
4.3 Compliance with Laws. Edison
will perform its obligations hereunder in
marerial compliance wirh applicable laws, rules
and regulations and in material compliance with
any and all reasonable rules of Cusromer relative
ro rhe Projecr Sire which are specified in writing
ro Edison.
MUNI.2HV4.llf4194
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V. CUSTOMER'S REPRESENTATIONS AND
WARRANTIES
5.1 Organization and Authority.
Customer is a city organized and existing under
the Constitution and laws of the State of
California and has all requisite power and
authority to carryon its activities as now
conducted and as ptoposed to be conducted, to
enter into this Agteement and any other Project
Documents, and to carry out the transactions
contemplated heteby and thereby. This
Agreement and any other Project Documents
have been duly authorized and, when executed
and deliveted, will be legal, valid and binding
obligations of Customer enforceable in
accordance with their respective tetms.
5.2 No Adverse Proceedings or
Conflicts. There are no suits, actions or other
proceedings pending or, to Customer's
knowledge, threarened against Cusromer which
would adversely affect Customer's ability to
perform its obligations under this Agreemen~ or
any ocher Project Documents. The executlo?,
delivery and performance by Customer of thiS
Agreement and any other Project Docum~nts
and the consummation of the transactIOns
contemplated hereby and thereby do not and
will not: (a) violate any provision of law or any
order, judgment oc decree of any court or other
governmental agency binding on Customer, (b)
violate any material contract, lease, deed of
trust, undertaking, agreement, license, permit or
other insrrument to which Customer is a parry.
or (c) require any approval or consent of any
governmental agency or other person, except
such approvals and consents as have been
obtained or, with respect to causes (a) and (b)
above excepr to the extent such violation would
not r;asonably be expected to have a Material
Adverse Effect.
5.3 Licenses and Permits;
Compliance with Laws. Customer has all
approvals, licenses and permits of all
governmental or regularory agencies, whether
Federal, state or local, necessary for the conduct
of its activities as presently conducted and
proposed to be conducted, and Customer is in
compliance with all applicable laws (including
Envitonmental Laws), codes, starutes, rules,
regulations and orders of any governmental or
regulatory agency whether Federal, state or local
(including zoning and building codes), except to
the extent non-compliance would not reasonably
be expected co have a Material Adverse Effect.
5.4 Financial Condition; Material
Adverse Change. Customer has provided
Edison with its audited, if available, otherwise
unaudited, financial statements for the three
fiscal years ended immediately preceding the
date of this Agreement if available, otherwise fot
such fiscal petiods as may be acceptable to
Edison. Such financial statements were prepared
in conformity with generally accepted
accounting ptinciples excepr as orherwise noted
thereon, and fairly present the financial position
of Customer at the respective dates thereof and
the results of operations and changes in financial
position of Cusromer for the periods covered
thereby. Since the date of the most recent
financial statemenrs delivered ro Edison
pursuant to this Section 5.4, there has been. no
change in the business, operations, properrles,
prospects, assets or condirion (financial or
otherwise) of Customer which has had or would
reasonably be expected to have a Material
Adverse Effect.
5,5 Performance of Obligations.
Cusromer is not in default in the performance,
observance or fulfillment of any of the
obligations, covenants or conditions conrained
in any indenture, mortgage, deed of trust,
contract, lease, undertaking, agreement or other
instrument to which Customer is a party or by
which any of its properties are bound, and no
condition exists that, with the giving of notice
or the lapse of time or both, would consritute
such a default, except where the consequences,
direct or indirect of such default or defaults, If
any, would not reasonably be expected to have a
Material Adverse Effect.
6 E. t 1 Matters. All
5, nVIConmen a
. d d tons at the PtoJ'ect Site
operatIOns an con i i
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comply in all material respecrs with all
Environmental Laws. None of the operations of
Cus,t~mer at the Project Site is subject ro any
JudICIal or ~dministrative proceeding alleging
the, vIOlatIOn of or liability under any
EnvIronmental Laws. Neither the Project Site
nor any operations thereon are subject ro any
outstandIng order or agreement with any
governmental authority or privare parry relating
to (,a) any Envitonmental Laws Ot (b) any
Envltonmental Claims. Except as disclosed on
Schedule 5.6 hereto, to che best knowledge of
Customer, no Hazardous Materials exist on
undet or about any Project Site are disclosed o~
Schedule 5.6 hereto, ocher chan Hazardous
Macerials used in customary quanticies in che
ordinary course of Customer's accivicies which
would noc reasonably be expecced ro interfere
wich or affecr che performance of rhe Work.
5.7 Agreemencs Affecting Project
Site. All deeds of trust, leases, subleases and
other agreements relating ro the ownership, use
Ot occupancy of, or encumbrances on, the Project
Sice are listed on Schedule 5.7 hereto and true
and correcc copies of each document listed on
Schedule 5,7 hereto and any amendments
chereto have been delivered co Edison.
5.8 Advice. Customer hereby
acknowledges chat it has been advised by Edison
that (a) there are other Edison sponsoted energy
efficiency ptograms available to Customer
including rebate ptograms and (b) there ar~
ocher vendors ptoviding services similar ro rhe
ENVESTSCE program. Cusromer further
acknowledges ic is not relying on Edison fot any
legal, tax or accounting advice with respect ro
the transactions contemplaced by che Project
Documents and chat Edison has advised
Customer to consult its own legal, business,
accounting and tax advisors,
VI. CUSTOMER'S OBLIGATIONS AND
COVENANTS
6.1 Financial Statements and Other
Reports. Cusromer shall deliver the following
ro Edison:
(a) Financial Statements. Financial
statements, audited if available, as soon as
practicable in any event within 60 days
after the end of each fiscal quarter and
within 120 days after the end of each fiscal
year, including the balance sheet of
Customer as at che end of such period and
the related statements of income and cash
flow of Cusromer for such period, all such
financial statements to be in such fotm as
reasonably acceptable to Edison.
(b) Litil>ation. Promptly upon
obtaining any knowledge of the
institution of, Ot thteat of, any action, suit,
ptoceeding, governmental investigation or
arbittacion against oc affecting Cuscomer
chat would reasonably be expected to have
a Macerial Adverse Effect or is relaced to
che Project, shall pcomptly give nocice
thereof to Edison and provide such
information as may be reasonably available
ro ic to enable Edison to evaluate such
macter.
(c) Events of Defaulc. Promptly
upon becoming aware of any condicion or
event chac conscitutes an Event of Default
or would conscituce an Event of Defaulc
after norice or lapse of time or both,
Customer shall promptly give written
notice thereof co Edison.
(d) Material Events. Promptly
upon becoming awace of any event,
circumsrance or condition chac would
reasonably be expected to result in a
Macerial Adverse Effect, Customer shall
promptly give written nocice thereof ro
Edison.
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(e) Environmental Notices.
Customer shall ptomptly notify Edison in
writing and in reasonable detail of:
(i) any Environmental
Claims relating to the Project or
Project Site or any Release of
Hazardous Materials at the Project
Site required to be reported to any
Federal, state or local governmental
or regulatory agency under any
applicable Environmental Laws;
(ii) Customer's discovery of
any Hazardous Materials ar the
Ptoject Sire not previously disclosed
to Edison or any condirion on the
Project Site or adjoining or in the
vicinity of the Project Site that
would reasonably be expected to
resulr in an Envitonmental Claim;
and
(iii) any request for
information from any governmental
agency that suggests that such
agency is investigating whether an
Environmental Claim may exist in
relation to the Project or Project
Site.
(I) Insurance Certificate. Upon
execurion of the Lease Agreement and
upon each anniversary date thereof,
Cusromer shall deliver to Edison a
certificate executed by the Superintendent
or Assistant Superintendent of Customer
or another official designated by such
officer and authorized to act on behalf of
Customer under or with respect to the
Project Documents certifying rhat all
policies or self-insurance required by
Section 8.2 have been obtained and are in
full force and effecr and specifying the
dollar limits thereof.
(g) Other Reports. Any other
information regarding Cusromer relevant
to rhe performance of the Work or
Customer's performance of its obligarions
under the Project Documents, as from
time to time may be reasonably requesred
by Edison.
6.2 Compliance with Laws. Customer
shall comply with the requitements of all
applicable laws, rules, regulations and orders of
any governmental authority, whether Federal,
state or local, non-compliance with which
would be reasonably expected to have a Material
Adverse Effect.
6.3 Cooperation and Access to
Project Site. Customer will cooperate with
Edison, its agents, representatives and
Subconttactors in connection with all aspects of
the Project including engineering, design,
permitting, installation, testing and monitoring.
Customer will provide Edison, its agents,
representatives and Subcontractors, with
reasonable access to the Project Site and to
power and water at all times as necessary to
complete the Project, to perform any warranry
repairs and to monitor petformance of the
Wotk. Following completion of the Project
until all obligations under the Lease Agreement
have been indefeasibly paid in full, Customer
will permit Edison to enter the Project Site at
any time during normal business hours and
upon reasonable notice to inspect the Work to
ensure Customer's compliance with its
obligations under the Project Documents.
6.4 Access to Records and
Documents. Customer will provide Edison
with full access to construction documents
relating to the Project Site, equipment
submittals, operation and maintenance manuals,
utility usage bills and records and any other
public access records or other records of
Customer as ate reasonably necessary or useful to
Edison in completing the Project. Edison may
copy any such records and documents for its own
use under this Agreement.
6.5 Confidentiality. Customer agrees
that all analyses and proposals prepared by
Edison for Customer in connection with this
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Agreement and all copies thereof are and shall
remain the sole property of Edison. Cusromer
acknowledges and agrees rhat such documents
contain confidential and proprierary information
belonging ro Edison and Cusromer agrees rhat
rhey shall not be reproduced or disclosed ro any
orher person wirhout the prior wrirten consent
of Edison.
VII. WARRANTIES
7.1 Warranty of Equipment. For a
period of one year from the date of Acceptance,
Edison warrants the performance of the
equipment in accordance with the specifications
agreed upon and ser forth in the Project
Description. This warranty will include
reasonable and cusromary labor costs ro make
any warranty correction or repair . Upon
termination of the one-year period, Edison will
assign ro Cusromer Edison's rights under any
manufacturers' warranties relating ro the
equipment, and Customer's sole remedy
thereafter will be under such manufacturers'
warranties.
7.2 Conditions of Warranty. The
warranty set forth in Section 7.1 above is subject
ro the following conditions applicable to each
irem for which a breach of warranty is claimed:
(a) upon discovery of any alleged breach of
warranty, Cusromer will give Edison prompt
written notice thereof; (b) Cusromer will operate
and maintain all equipment in accordance with
all applicable operation and maintenance
procedures; and (c) Customer will make
available ro Edison or irs agents or
Subcontractors facilities at rhe applicable Project
Site ro facilirare making any warranty correction
or repair.
7.3 No Other Warranties. The
warranties set forth in this Article VII are
exclusive and are in lieu of all other warranties.
Edison makes no other warranties or
representations of any kind with respect ro the
Project, whether staturory, express or implied,
including, without limitarion, any warranties of
merchantability and firness for a parricular
purpose, any warranties arising from course of
dealing or usage of trade, or any warranty of
savings ro be realized as a result of
implementing the Project.
VIII. INSURANCE
8.1 Edison Provided Insurance. Prior
ro Acceprance, Edison will maintain valid and
collectible insurance as described below:
(a) Worker's Compensation
Insurance with statutory limits, as
required by the State of California and
Employer's Liability Insurance with limits
of not less than $2,000,000.
(b) Commercial General Liability
Insurance, written on an "occurrence"
basis, including owners' and contractors'
protective liability, products/completed
operations liability, broad form property
damage liability and contractual liability.
Such insurance will bear a combined single
limit per occurrence and annual aggregate
of not less than $2,000,000, exclusive of
defense costs. Such insurance will (i) name
Customer as an additional insured as
respects Edison's acts or omissions; and (ii)
contain standard cross-liability or
severability of interest provisions.
(c) Auromobile Bodily Injury and
Property Damage Liability Insurance with
a combined single limit of $2,000,000 per
occurrence. Such insurance will cover
owned, non-owned and hired auromotive
equipment used in connection with the
Project. Such insurance will acknowledge
Customer as additional insured.
(d) Edison may elect ro self-insure
all or part of its insurance obligations
under this Section 8.1.
As
8.2 Customer Provided Insurance.
long as this Agreement and the Lease
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Agreement remain in effecr, Cusromer shall
maintain in full force and effecr, ar its expense,
with insurers of recognized responsibility
teasonably acceptable to Edison or through a
program of self-insurance ro the extent
specifically petmitted under this Section 8.2 and
reasonably acceptable ro Edison, all covetage on
the Project Site and the Project required by this
Section 8.2. Such insurance shall consist of:
(a) A policy or policies of
insurance against loss or damage to the
Project Site, including the Project, known
as "Property, All Risk" including,
without limitation, equipment and
machinery and the petils of eatthquake
and flood. Such insurance shall be
maintained at and in an amount nor less
than the full replacement value of the
Project Site, including the Project. The
tetm "full replacement value" as used
herein shall mean the cost of repair or
replacement of the Project Site, including
the Project, without deduction for
depteciation; provided, however, that
Cusromer's obligations under this clause
(a) may be satisfied by self-insurance.
(b) Comprehensive General
Liability coverage against claims for
damages including death, personal injury,
bodily injury Ot properry damage arising
from opetations involving the Project Site,
including the Project. Such insurance shall
afford protection with a combined single
limit of not less than $I ,000,000 per
occurrence with respect ro bodily injury,
death or properry damage liability, or such
greater amount as may from time to time
be recommended by Cusromer's risk
management officer ot an independent
insurance consultant retained by Cusromer
for that purpose; provided, however, that
Cusromer's obligations under this clause
(b) may be satisfied by self-insurance.
(c) Worker's Compensation
Insurance issued by a responsible carrier
authorized under the laws of the State of
California ro insure employers against
liability for compensation under the
California Labor Code, or any act enacted
as an amendment or supplement thereto or
in lieu rhereof, such worker's
compensation insurance ro cover all
persons employed by Cusromer at or in
conneCtion wirh rhe Projecr Site and ro
cover full liability for compensation under
any such act; provided, however, that
Cusromer's obligations under this clause
(c) may be satisfied by self-insurance.
(d) Rental interruption insurance
ro cover loss, rotal or partial, of the use of
any parr of the Project Site or the Project
as a result of any of the hazards covered by
the insurance required pursuant ro clause
(a) above, in an amount sufficient at all
times ro pay the rotal rent payable under
the Lease Agreement for a period adequate
to cover the period of repair or
replacement. Such policy shall provide
that the amount payable thereunder shall
nor be less rhan an amount equal to three
years Base Rental (as defined in the Lease
Agreement).
Cusromer shall provide a certificate of
insurance ro Edison naming Edison as rhe sole
named loss payee with respect ro insurance for
damage ro or loss of any of the Project and
naming Edison as an additional insured on all
liability insurance. All such insurance will
provide for at least thirry (30) days prior notice
ro Edison before cancellation or matetial
modification thereof. Cusromer hereby
irrevocably appoints Edison its arrorney-in-fact,
upon and during the continuance of any
Customer Event of Default, to make claims with
respect to, receive payment of, and execute and
endorse all documents, checks or drafts received
in payment for loss or damage ro any of the
Project under any such insurance policy.
Cusromer shall not make any settlements in
respect of any insurance maintained in
accordance with clauses (a) or (d) above without
the wrirren consent of Edison. Earthquake
coverage secured in accordance with clause (a)
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shall be maintained throughout the tetm of the
Lease Agteement unless Customer shall in its
sole discretion determine that such earthquake
coverage is not commercially reasonable.
IX. DEFAULTS
9.1 Default by Customer. The
following will be Customer Events of Default
under this Agreement:
(a) Failure by Customer to make
any Payment ro Edison when due;
(b) Failure of Customer to perform
or comply with any other marerial term or
condition of this Agreement which failure
is nor cured within 30 days of notice of
such failure ro Customer by Edison,
provided that if such failure cannot be
reasonably cured within 30 days, such cure
period shall be extended up to an
additional 30 days as long as Customer is
making good faith efforts to cure the
failure;
(c) Closure of or cessation of
activities by Customer at any Project Site
for any reason prior to receipt by Edison of
all Payments or orher charges due to
Edison under this Agreement, the Lease
Agreement or any orher Projecr
Document;
(d) Failure of any representation or
warranty of Customer in this Agreement
to be true and correct in any material
respect;
(e) Any evenr or change shall
occur which results in a Material Adverse
Effecr;
(f) Cusromer files a voluntary
petition for bankruptcy or any other
arrangement in insolvency proceedings, or
makes an assignment for the benefit of its
creditors, or admits in writing an inability
to pay its debts generally as rhey become
due;
(g) A receiver is appointed for
Customer or any bankruptcy or other
insolvency proceeding is filed against
Customer or any of its property and such
appointment, bankruptcy, or insolvency
proceeding is not terminared within 30
days of such appointment or filing; or
(h) A court having jurisdiction of
the premises shall enter an order or decree
for relief in respect of Customer in an
involuntary case under any applicable
bankruptcy, insolvency or similar law or
for the dissolution or split up of Customer,
which order or decree is not stayed.
9.2 Default by Edison. The following
will be Edison Events of Default under this
Agreement:
(a) Failure of Edison to perform or
comply with any material term or
condition of this Agreement which failure
is not cured within 30 days of written
notice of such failure by Customer to
Edison, provided that if such failure
cannot be reasonably cured within 30
days, such cure period shall be extended
for up to an additional 30 days as long as
Edison is making good fairh effortS to cure
the failure;
(b) Failure of any representation or
warranty of Edison in this Agreement to
be true and correct in any marerial respecr;
(c) Edison files a voluntary
petition for bankruptcy or any other
arrangement in insolvency proceedings, or
makes an assignment for rhe benefit of its
creditors, or admits in writing an inability
to pay its debts generally as they become
due;
(d) A receiver is appointed for
Edison or any bankruptcy or other
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insolvency proceeding is filed against
Edison or any of its propetty and such
appointment, bankruptcy, Ot insolvency
proceeding is not tetminated within 30
days of such appointment Ot filing; Ot
(e) A court having jurisdiction of
the ptemises shall entet an ordet or decree
for relief in respect of Edison in an
involuntary case under any applicable
bankruptcy, insolvency or similar law or
for the dissolution or split up of Edison,
which ordet Ot decree is not stayed.
X REMEDIES UPON DEFAULT
10.1 Remedies Upon Customer
Events of Default. Upon the occutrence of a
Customer Event of Default specified in Section
9.1, without limiting any othet remedies
available to Edison hereunder or at law, Edison
shall have the right, at its option, without any
further demand or notice:
(a) So long as Edison does not
terminate the Lease Agteement or
Customer's right to possession of the
Project, to enforce all of its tights and
remedies hereunder and under the Lease
Agreement, including the right to recover
rental payments as they become due under
the Lease Agreement and any othet rights
available undet Section 1951.4 of the
California Civil Code;
(b) To the extent petmitted by
law, without legal process, terminate this
Agreement and the Lease Agteement by
giving notice declaring termination
(tetmination to be effective upon delivery)
and enter the Project Site and dismantle
and remove any Work without liability to
Customer on an account of such actions;
and
(c) Exercise all remedies available
to it at law or equity or othet appropriate
proceedings, including without limitation,
any remedies available to it under the rules
of the California Public Utilities
Commission governing the payment or
nonpayment of utiliry bills.
In addition, unless and until the Lease
Agreement has been terminated PUtsuant to the
terms hereof, Customer shall be liable for all
unpaid payments and othet amounts due
thereunder before and during the exercise of any
of the fotegoing remedies and for all legal fees,
taxes, governmental charges and othet costs and
expenses incurred by reason of the occurrence of
any Customer Event of Default Ot the exercise of
Edison's remedies with respect thereto.
Notwithstanding any othet provision of this
Agreement or the Lease Agreement to the
contrary, in no event shall Edison have the right
ro acceletate the payment of any Base Rental (as
defined in the Lease Agteement).
Notwithstanding any other provision of
this Agteement or the Lease Agreement, Edison
shall, after payment of its teasonable fees and
expenses, including those of its attorneys, (a)
apply any amounts received from the exercise of
its temedies hereunder aftet a Customer Event of
Default ro the satisfaction of all Base Rental and
Additional Rental (as such terms ate defined in
the Lease Agreement) and all other amounts due
or to become due under any of the Project
Documents, and (b) to the extent any such
moneys remain after all such payments are
made, shall remit such moneys to Customer.
10.2 Remedies Upon Edison Events of
Default.
(a) If an Edison Event of Default
specified in Section 9.2 hereof occurs prior
ro Acceptance and ptior ro commencement
of the installation of the Project, Customer
may terminate this Agreement by giving
written notice theteof to Edison and, upon
such tetmination, Cusromer shall not be
liable ro Edison for any costs incurted by
Edison hereunder.
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(b) If an Edison Event of Defaulc
specified in Section 9.2 hereof occurs prior
to Acceptance but after installation of the
Project has begun, Customer may
terminate this Agreement and the Lease
Agreement by giving written notice
theteof to Edison which notice will be
effective upon delivery and which will
provide for either:
(i) Edison to remove all
Work from the Project Site and,
within a reasonable period of time,
ro restore the Project Site as nearly
as practicable to its condition prior
to the commencement of the
Ptoject, provided such removal and
restoration is reasonably feasible
based upon the amount of the
Work completed; or
(ii) Customer to purchase
the Work theretofore installed at a
price equal to Edison's
nonrecoverable costs incurred to the
date of termination.
(c) If an Edison Event of Default
specified in Section 9.2 hereof occurs
following Acceptance, Customet shall be
entitled to recover any reasonable costs
incurred by Customer directly as a result
of such default.
Edison agrees to pay all coStS or
expenses (including reasonable attorneys' fees)
incurred by Customer in exercising and
enforcing the remedies provided herein upon an
Edison Event of Defaulc.
XI. TERMINATION
Il.I Termination Upon an Event of
Default. This Agreement may be terminated by
either Edison or Customer upon the occurrence
of certain Events of Default in accotdance with
the provisions of Sections 10.1 and 10.2 hereof.
11.2 Termination Prior to
Commencement of Work. In the event, prior
to the delivery of the Project Desctiption and
Lease Agteement to Customer, Edison, as a
result of its further assessments, determines that
the proposed project does nOt meet the
ENVESTSCE program requirements, Edison may
terminare this Agreement. Edison shall give
Customer written notice of any such
termination. Upon such a termination by
Edison, Customet shall have no obligation to
reimbutse Edison for any costs incurred by
Edison under this Agreement. In the event,
upon delivery to Customet of the Project
Description and Lease Agreement, the terms of
either the Project Description or Lease
Agreement are materially different from the
terms set forth in the preliminary proposal
delivered to Customer and are unacceptable to
Customer, Customer may terminate this
Agreement. Customer shall give Edison written
notice of any such termination within 15 days of
receipt of the Project Description and Lease
Agreement. Upon such a termination by
Customer, Edison will prepare and deliver to
Customer a statement of nonrecoverable costs
incurred by Edison to the date of termination
which will be due and payable by Customer
upon delivery of such statement.
1l.3 Termination Prior to
Completion. In the event it becomes apparent
that the Project cannot be complered with
reasonable effort as a result of (a) stoppage of the
Work by order of any court or public authority
through no act or fault of Customer or Edison
(including any employees of either), (b) delays in
obtaining any necessary permits, approvals,
easements or tights-of-way through no fault of
Customer or Edison or (c) resulcing from the
necessity of Customer undertaking any Excluded
Activity, either party may terminate this
Agreement effective upon 15 days prior written
notice to the other party. Upon such a
termination under this Section 11.3, Edison will
prepare and deliver to Customer a statement of
non-recoverable costs incurred by Edison to the
date of termination which will be due from and
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payable by Customet upon delivery of such
statement.
11.4 Termination Upon Force
Majeure. In the event the Project is or any
Work thereon is wholly or partially damaged or
destroyed by Force Majeure priot ro Acceptance,
Cusromer and Edison shall within 30 days
mutually agree ro continue to complete the
Project Ot ro terminate this Agreement. If the
parries cannot reach a mutual agreement within
30 days, either parry may terminate this
Agreement upon 15 days prior written notice to
the orher parry. If Customer and Edison decide
ro complete the Project, they shall enter into any
necessary Amendments to the Project
Documents, including amendments to the
schedule of Payments and schedule for
completion of the Work. If Customer and/or
Edison decide to rerminate rhis Agreement,
Edison will prepare and deliver to Customer a
statement of nonrecoverable costs incurred by
Edison through the date of termination which
will be due from and payable by Customer upon
delivery of such statement.
11.5 Termination Following
Completion. In the event Customer elects to
exercise its option to purchase the Project
pursuant to the Lease Agreement, this
Agreement and the Lease Agreement shall
terminate upon the consummation of such
purchase. In the event there is an abatement of
rental payments pursuant ro Section 6 of the
Lease Agreement as a result of material damage
or destruction to the Project, Customer may
elect either (a) to repair or replace, at Customer's
sole cost and expense, the Project or portions
rhereof so damaged or destroyed in accordance
with the specifications set forrh in the Project
Description, in which case this Agteement and
the Lease Agreement shall continue in full force
and effect or (b) ro pay to Edison an amount
equal ro the Option Purchase Price and, upon
such payment, this Agreement and the Lease
Agreement shall terminate.
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XII. LIMITATION ON DAMAGES
In no event will either parry to this
Agreement be liable to the other party under
any porrion of this Agreemenr or any other
Project Document for any special, indirect,
incidental or consequenrial damages whatsoever
whethet in conttact, tort (including negligence),
sttict liability or otherwise including, but not
limited to, loss of use of or undet utilization of
labot or facilities, loss of revenue or anticipated
profits, Ot claims from any customer of a parry
hereto, resulting from performance Ot
nonperformance of obligations under the Project
Documents or in the event of a suspension of the
Project or termination of this Agreement or the
other Project Documents. In no event will
Edison be liable to Customer for an aggtegate
amount in excess of the aggregate amount of the
Payments payable by Customer undet the Lease
Agteement.
XIII. MISCELLANEOUS
13.1 Public Utilities Commission
Jurisdiction. This Agreement and each other
Project Document shall at all times be subject to
such changes or modifications by the Public
Utilities Commission of the State of California
as said Commission may, from time to time,
direct in the exercise of its jurisdiction.
Customer understands and agrees that Edison
may disclose certain information about the
Project ro said Commission as tequested or
required by said Commission.
13.2 Assignability. Customer may
ttansfet or assign its rights and obligations
under this Agreement and the other Project
Documents to any petson or entity which will
thereaftet own or occupy the Project Site;
provided that such person or entiry is teasonably
acceptable to Edison and agrees in writing to be
bound by all the terms and conditions of, and to
assume all obligations of Customer undet, all of
the Project Documents, such agreement ro be in
form and substance reasonably satisfactory to
Edison.
MUNJ.25~.V4.11I4194
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Cusromer will cooperare in recording a
memorandum of rhis Agreement, in the form
attached heteto as Exhibit E, in the real property
records of the county in which any Project Site is
located ro give future owners or occupants of the
Project Site notice of this Agteement.
13.3 Ownership of Trade Secrets and
Know-How. Cusromer acknowledges and
agrees that any trade secrets, know-how or the
like developed by Edison or its Subcontracrors in
the course of the implementation of the Project
will be the sole propetty of Edison and may be
used by Edison in performing similar ptojects
for itself or others without further permission of
or obligation ro Cusromer.
13.4 Severability. Any provision of any
Project Document which is prohibited by, or
unlawful or unenforceable under, any applicable
law of any jurisdiction will, be ineffective as to
such jurisdiction without invalidating the
remaining provisions of such document;
provided, however, that, ro the extent that the
provisions of any such applicable law can be
waived, they are hereby waived by Customer.
13.5 Effect of Waiver; Remedies
Cumulative. No failure or delay on the part of
any party in the exercise of any power, right or
privilege under any Projecr Document shall
impair such power, right or privilege or be
consttued ro be a waivet of any default or
acquiescence therein, nor shall any single ot
parrial exercise of any such power, right or
privilege preclude other or further exercise
thereof or of any other power, right or ptivilege.
Any waiver, permir, consent or approval of any
breach or defaulr under this Agreement or any
other Project Document or of any provision or
condition hereof or thereof, must be specifically
set forth in an Amendment or Change Order.
All rights and temedies under this Agreement
and the other Project Documents are cumulative
ro, and not exclusive of, any rights or remedies
available hereunder or thereunder, or otherwise
available ar law to the extent not inconsistent
with any of the express provisions of the Project
Documents.
13.6 Marshalling; Payments Set Aside.
Edison shall not be under any obligation to
marshall any assets in favor of Cusromer or any
orher parry or against or in payment of any or all
of the obligations of Customer to Edison under
the obligarions of Customer to Edison under the
Project Documents. To the extent rhat
Customer makes a payment or payments to
Edison, or Edison enforces any security interest
in any collateral, and such paymenr or payments
or the proceeds of such enforcemenr or any part
thereof are subsequently invalidated, declared to
be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any
other party under any bankruptcy law, any state
or federal law, common law or any equirable
cause, then, to the extent of such recovety, the
obligation or part thereof originally intended to
be satisfied, and all liens, tights and remedies
therefor or relared thereto, shall be revised and
continued in full force and effecr as if such
payment or payments had nor been made or
such enforcement had not occurred.
13.7 Notices. All norices, requests,
demands or other communicarions required or
permitted to be given under any of the Project
Documents shall be in wriring and may be
personally served, telecopied, relexed or senr by
United Srares mail and shall be deemed to have
been given when delivered in person, upon
receipt of telecopy or telex or five business days
afrer deposit in rhe United States mail,
registered or certified, postage pre-paid and
propetly addressed to the parties at the addresses
set forth on the signature pages hereof. Any
party may change the address to which norices
are to be addressed by giving rhe other party
written notice in the manner herein set forth.
13.8 Survival. Notwithstanding
completion of the Project or terminarion of the
Projecr or of this Agreement or any other
Project Document, the parties will continue ro
be bound by those provisions of rhis Agreement
which by their narure survive such completion
or termination.
MUNI.2H.V4.1l/4194
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13.9 Applicable Law. This Agreement
will be governed by, and' construed in
accordance with, the laws of the State of
California.
13.10 Final Agreement; Amendments.
This Agreement and all other Project
Documents will become effective upon
execution and delivery by both Edison and
Cusromer. The Project Documents constiture
the full and final understanding between Edison
and Customer with respect to the subject matter
thereof, and merge and supersede all prior
representations and discussions pertaining ro
such subjecr matter including any proposals
theretofore made. Neither the Project
Documents nor the nature and scope of the
Project may be changed in any respect except by
an Amendment or Change Order.
13.11 Article and Section Headings.
Article and Section headings in the Agreement
are for convenience only and will not be
construed as interpretations of text.
f
13.12 Dispute Resolution. In the event
of any dispute, claim or disagreement arising
out of or connected with this Agreement or any
other Project Documents, the parties hereby
agree to negotiate in good faith to resolve such
dispute, claim or disagreement. If the parties are
unable to resolve the disagreement, claim or
dispute within 60 days of wtirten notice of such
dispute, claim or disagreement by one party ro
the other, then the parties agree that such
dispute, claim or disagreemen half- be settled
by arbitration by three arbitra rs (of whom each
party shall appoint one and e two so appointed
shall appoint the third), i accordance with the
Center for Public Res rces, Inc., Rules for
Non-Administered bitration of Business
Disputes, as in efi Ct on January I, 1994:
provided that no unitive damages shall be
awarded in any s ch proceeding and each party
shall bear its wn respective legal fees and
expenses. A j gment upon the award rendered
by the arbi ato"rs may be entered by any court
having j Isdiction thereof. The place of the
arbitrat" n shall be within the County of Los
may (but need not)
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Angeles, State of California or such other place
as the parties may mutually agree.
13.13 Counterparts. This Agreement
may be executed in several counterparts in one
or more separate documents all of which
together shall constitute one and the same
instrument with the same force and effect as
though all of the parties had executed the same
document.
IN WITNESS WHEREOF, the
undersigned being duly authorized and
intending to be legally bound, through their
respective authorized officers or representatives,
subscribe their names ro this instrument as of
the date first written above.
SOUIHERNCALIFORNIAEDISONillMPANY
By:
Pamela A. Bass
Vice President, ENVESTSCE Division
Notice Address:
Southern California Edison Company
ENVESTSCE
6000 N. Irwindale Avenue
Irwindale, California 91702
Attention: Ken Pickrahn
Facsimile: (818) 812-7614
CITY OF SAN BERNARDINO
By:
Tom Minor
Mayor, City of San Bernardino
Notice Address:
City of San Bernardino
City Hall, 300 North D Street
San Bernardino, CA 92418
Attention: Tom Minor
Facsimile: ( )
MUNI.2H.V4.11/4194
Angeles, State of California 0 such other place
as the parries may mutually ~gree.
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13.13 Counterp{rts. This Agreement
may be executed in iveral counterparts in one
13.10 Fin Agreement; Amendments. or more separat!' documents all of which
This Agreemen~ and all other Project rogether shall y!>nstitute one and the same
Documents will ecome effective upon instrument wj{h the same force and effect as
execution and deliver by both Edison and though all afthe parties had executed the same
/
Cusromer. The Project ocuments constirute document/
the full and final understan . ng between Edison /
and Customer with respect to ~e subject matter IN WITNESS WHEREOF, the
thereof, and merge and sup~ede all prior unqersigned being duly authorized and
representations and discussions \ertaining to inj~nding ro be legally bound, through their
such subject matter including any. proposals ,ispective authorized officers or representatives,
theretofore made. Neither the'\Project /subscribe their names to this instrument as of
Documents nor the natute and scop~'\pf the /' the date fitst written above.
Project may be changed in any respect except IJf
an Amendment Ot Change Otder. /
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3.9 Applicable Law. This Agreement
will [j governed by, and construed in
accordanc with, the laws of the State of
California.
13.11 Article and Section Headings.
Article and Section headings in the Agleement
are for convenience only and wily' not be
construed as interpretations of text. i
I
13.12 Dispute ResolutioV: In the event
of any dispute, claim or disag(eement arising
out of or connected with this tgreement or any
other Project Documents, ,be patties heteby
agree ro negotiate in good faith to resolve such
dispute, claim or disagree~ent. If the patties are
unable to resolve rhe <tisagreement, claim or
dispute wirhin 60 days,6f written notice of such
dispute, claim or disllireement by one party to
the ocher, then thi parties agtee that such
dispute, claim or c;lisagreement shall be settled
by arbirrarion by,thtee arbitrarors (of whom each
parry shall appoint one and the rwo so appointed
shall appoint pile third), in accordance with the
Center for ublic Resources, Inc., Rules fot
Non-Adm' istered Arbitration of Business
Disputes as in effeCt on J anuaty I, 1994:
r vide rhat no punitive damages shall be
awatd in any such proceeding and each parry
shall ear its own respective legal fees and
expenses. A judgment upon rhe award rendeted
by rhe arbitrators may be entered by any courr
having jurisdiction thereof. The place of the
arbitrarion shall be within the County of Los
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4
SOUIHERNCALIFORNIAEDISONOOMPANY
ay:
, '. Pamela A. Bass
'Vice President, ENVESTSCE Division
\,
Notice Add s:
Southern Ca . ornia Edison Company
ENVESTSCE
6000 N. Irwind Avenue
Irwindale, Caliform 91702
Artention: Ken Pickr n
Facsimile: (818) 812-7
By:
CITY OF SAN BERNARDI
Tom Minor
Mayor, City of San Bernardino
Notice Address:
Ciry of San Bernardino
City Hall, 300 North D Street
San Bernardino, CA 92418
Arrention: Tom Minor
Facsimile: ( )
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SCHEDULE 5.6
HAZARDOUS MATERIALS
(To be supplied by Customer)
City Hall
Asbestos and PCB ballasts are present.
Contact Facilities Management Dept. for a full report.
Carousel Mall
Asbestos and PCB ballasts are known to be present.
Contact Facilities Management Dept. for a full report.
Feldheym library
Not Appl icable
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SCHEDULE 5.7
AGREEMENTS AFFEcrING PROJEcr SITE
(To be supplied by Customer)
This section is not used.
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EXHIBIT A
DESCRIPTION OF PROJECT SITE
There are rhree Projecr Sites. The three Project
Sites are as follows:
Ciry Hall
300 North D Street
San Bernardino, CA 92418
Carousel Mall Courts
320 E Street
San Bernardino, CA 92418
Main Library
555 W 6th Street
San Bernardino, CA 92418
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EXHIBIT B
FORM OF CERTIFICATE OF ACCEPTANCE
Reference is made to that certain
ENVESTSCE Customer Agreement, dated as of
(the "Customer
Agreement"), by and between Southern
California Edison Company ("Edison") and the
City of San Bernardino ("Customer"). All
capitalized terms used herein withour definition
shall have the meanings given such rerms in the
Customer Agreement. This Certificare is being
delivered pursuant to Secrion 2.2 of the
Customer Agreement. Customer hereby accepts
the Project as substantially complete. Edison
shall complete the items on the Final
Completion List attached to this Certificate in
accordance with the provisions of Section 2.2 of
the Cusromer Agreement.
IN WITNESS WHEREOF, the
undersigned have executed this Certificate this
_ day of
CITY OF SAN BERNARDINO
By:
Tide:
SOUIHERNCAllFORNIAEDISONOOMPANY
By:
Project Manager
MUNI.2HV4.ll/4194
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EXHIBIT C
FORM OF CERTIFICATE OF FINAL COMPLETION
Reference is made ro that cettain
ENVESTSCE Cusromer Agreement, dated as of
_____________ (t he" Customer
Agreement"), by and between Southern
California Edison Company ("Edison") and the
City of San Bernardino ("Customer"), All
capitalized terms used herein without definition
shall have the meanings given such terms in the
Customer Agreement. Customer hereby
acknowledges and agrees that all items listed on
the Final Completion List have been completed
ro Cusromer's satisfaction and Customet hereby
accepts the Project as completed.
Executed this _ day of
CITY OF SAN BERNARDINO
By:
Tide:
MUNI.2'J.V4.11/4194
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EXHIBIT 0
21
FORM OF LEASE AGREEMENT
THIS LEASE AGREEMENT (rhis
" Agreement "), dared as of , is
entered into by and berween SOUTHERN
CALIFORNIA EDISON COMPANY
("Edison") and rhe CITY OF SAN
BERNARDINO ("Customer") in connecrion
wirh rhar cerrain Cusromer Agreement, dared as
of _____________ (rhe "Customer
Agreement"), by and berween Edison and
Cuscomer. All capiralized rerms used herein
wirhour definirion shall have rhe meanings
given such rerms in rhe Cuscomer Agreement.
This is rhe Lease Agreement referenced in,
and entered inro pursuant co, rhe Cusromer
Agreement. Reference is hereby made co rhe
Cuscomer Agreement for a complere srarement
of rhe rerms and conditions under which rhis
Agreement is enrered ineo by rhe parries.
Cusromer and Edison hereby agree as
follows:
I. Lease of Project, Edison hereby
leases rhe Projecr co Cuscomer, and Cusromer
hereby leases rhe Peojecr fcom Edison and agrees
ro pay rhe Base Renral and rhe Addirional
Rental as provided herein for rhe use and
possession of rhe Projecr, all on rhe rerms and
condirions ser forrh herein.
2, Lease Term, The rerm of rhis
Agreement (rhe "Lease Term") shall commence
on rhe dare of Acceprance and end on rhe earliesr
of (a) [inserr dare}, (b) rhe dare of rerminarion of
rhis Agreement in accordance wirh Secrion II. 5
of rhe Cuscomer Agreement and (c) rhe dare on
which Cuseomer has exercised irs oprion co pur-
chase all of Edison's righr, ride and interesr in
rhe Projecr pursuant co Section 13 hereof.
Cuscomer hereby agrees, subjecr co rhe rerms
hereof, co pay eo Edison rhe Base Rental and
Addi rional Rental in rhe amounts, ar rhe rimes
and in rhe manner hereinafrer ser forrh, such
amounts consricuring in rhe aggregare rhe rent
payable under rhis Agreement.
3. Rental Paymenrs,
(a) Base Renral. Cuscomer agrees
ro pay, in legally available funds, Base
Rental in rhe amounrs ser forrh on
Schedule I herero. Such payments will be
billed wirh Cusromer's monthly electric
uriliry bill and shall be due by rhe due
dare reflecred on such bill. The first pay-
ment will be billed on Cusromer's firsr
elecrric uriliry bill following rhe dare of
Acceprance. Payments nor received by rhe
due dare indicared on rhe bill will accrue
rhe same lare payment charges as are ap-
plicable eo Cuseomer's elecrric utiliry bills.
(b) Additional Renral. In addition
ro rhe Base Rental set forrh herein,
Cuscomer agrees co pay as Additional
Rental all of rhe following:
(i) All raxes and assessments
of any narure wharsoever, including
bur nor limired eo excise raxes, ad
valorem raxes, ad valorem and
specific lien special assessmenrs and
gross receiprs raxes, if any, levied
upon rhe Projecr or upon any inter-
esr of Edison rherein or in rhis
Agreemenr as provided in Section
10 hereof;
(ii) Insurance premiums, if
any, on all insurance required
pursuanr co rhe Customer
Agreement; and
(iii) Any other fees, costs or
expenses incurred by Edison in con-
nection with the execution, per-
formance or enforcement of the
Project Documents or any
MUNI.2B.V4.1ll4~
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assignment thereof or any of the
transactions contemplated hereby or
thereby or related to the Project.
Amounts constituting Additional
Rental payable hereunder shall be paid by
Cusromer directly to the petson or person
ro whom such amounts shall be payable,
except as otherwise provided in Section
10 hereof. Cusromer shall pay all such
amounts when due or at such later time as
such amounts may be paid without pen-
alty or, in any other case, within 30 days
after notice in writing from Edison ro
Customer stating the amount of
Additional Rental then due and payable
and the purpose thereof.
4. Consideration. The payments of
Base Rental and Additional Rental under this
Agteement for each fiscal year of Customer
("Fiscal Year") or portion thereof during the
Lease Term shall constitute the rotal rental for
such Fiscal Year or portion thereof and shall be
paid by Cusromer for and in consideration for
the use and possession, and the continued quiet
use and enjoyment, of the Project by Cusromer
for and during such Fiscal Year or portion there-
of. The parties herero have agreed and deter-
mined that such roral annual rental is not in
excess of the roral annual fair rental value of the
Project. In making such determination, consid-
erarion has been given ro the costs of financing
of the Project, the uses and putposes served by
the Project, and the benefits therefrom that will
accrue ro the parries by reason of this Agreement
and the other Project Documents and ro the
general public by reason of Cusromer. s use of the
Project.
5. Budget. Customer hereby cove-
nants ro take such action as may be necessary ro
include all Base Rental and Additional Rental
due hereunder in its annual budgets and ro
make the necessary annual appropriations for all
such Base Rental and Additional Rental, subjecr
ro Section 6 hereof. During the Lease Term,
Cusromer shall annually furnish ro Edison, a
certificate stating that the final budget for such
Fiscal Year contains the annual approptiations
set forth in the preceding sentence. The
covenants on the part of Cusromer herein
contained shall be deemed to be and shall be
consttued ro be ministerial duties imposed by
law and it shall be the ministerial duty of each
and every public official of Customer to take
such actions and ro do such things as are
tequired by law in the performance of such
official duty of such officials ro enable Customer
to carry out and perform rhe covenants and
agreements on the part of the Customer
contained in this Agreement and the other
Project Documents. The obligation of Customer
ro make Base Rental or Additional Rental pay-
ments does not constitute an obligation of
Customer for which Customer is obligated to
levy or pledge any form of taxation or for which
Customer has levied or pledged any fotm of
taxation. The obligarion of Customer to make
Base Rental or Additional Rental payments does
not constiture an indebtedness of Customer, the
Stare of California or any of its political
subdivisions within the meaning of any
constitutional or statutoty debt limitation or
restriction.
6. Rental Abatement. Except to the
extent of (a) amounts, if any, received in respect
of rental interruption insurance and (b) amounts,
if any, otherwise legally available ro Customer
for payments in respect of this Agreement,
rental payments due heteunder shall be subjecr
ro abatement in accordance wirh rhis Secrion 6
during any period in which, by reason of mare-
rial damage or desttuction of the Project or any
portion thereof, there is substantial interference
with the use and possession of the Project or any
portion thereof by Cusromer. The amount of
annual rental abatement shall be such that the
resulting rental payments in any Fiscal Year
during which such interference continues,
excluding any amounts described in clauses (a)
or (b) above, do not exceed the annual fair rental
value of the portions of the Projecr which are
still substantially useable by Cusromer, as
evidenced by a written statement of determina-
tion delivered ro Cusromer by Edison. Such
abatement shall continue for the period com-
MUNt.2'3.V4.1tl4194
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mencing with the date of such damage or
descruction and ending with the restoration of
the Project or poreion thereof ro useable condi-
tion. In the event of such damage or destruction,
this Agreement shall continue in full force and
effect, unless terminated in accordance with
Section 11.5 of the Cusromer Agreement.
7. Ownership. Ownership and title
to the Ptoject shall at all times remain with
Edison. All materials and equipment consti-
tuting the Project shall remain personal
ptoperty whether or not they become affixed or
attached to any real ptoperty. Customer agrees
to obtain any waiver of landlord or mortgagee
necessary to ptotect Edison's interest in the
Project. Customer shall at all times protect and
defend, at its own cost and expense, the
ownership of Edison of the Project against all
claims, liens and legal ptocesses of creditors of
Customer and other persons and keep the
Project free and clear from all such claims, liens
and processes.
Upon termination of this Agreement, all
of Edison's right, title and interest in the
Project, shall be transferred directly to Customer
or, at the option of Customer, to any assignee or
nominee of Customer, in accordance with the
provisions of this Agreement, free and clear of
any interest of Edison.
8. Possession and Use. Customer
shall not, without the prior wricren consent of
Edison, remove the Ptoject or any portions
thereof from the Project Site, pare with posses-
sion or concrol thereof or sell, pledge, moregage
or otherwise encumber the Project or any part
thereof or assign or encumber any interest under
this Agreement, except for assignments made in
accordance with the Customer Agreement.
Customer shall, at its own expense, use the
Project in accordance with all operating manuals
and instructions, shall comply with all laws,
ordinances and regulations relating to its use,
operarion and maintenance, and shall not use the
Project for any illegal purpose. Customer shall,
at its sole cosr and expense, during the Lease
Term, keep and maintain the Project or cause
the same to be kept or maintained, in good
operating order, repair and condition and shall
as promptly as practicable repair or replace any
portion of the Project which is desttoyed or
damaged to such an extent that there is sub-
stantial interference with the use and possession
of the Project or any portion thereof by
Customer which would result in an abatement of
rental payments or any portion thereof pursuant
to Section 6 hereof, whether or not there are
sufficient insurance ptoceeds to pay for such
repair or replacement. Customer shall not make
any alterations, additions or improvements to
the Project without the prior wricren consent of
Edison.
9. Insurance and Risk of Loss. As
long as this Agreement and the Cusromer
Agreement are in effecr, Customer shall assume
all responsibility for loss or damage to the
Ptojecr and shall hold Edison harmless against
the same, Customer shall maintain insurance on
the Project Site and the Project as specified in
the Customer Agreement.
10. Taxes and Orher Governmenral
Charges. Edison and Cusromer contemplate
that the Project will be used for a governmenral
or proprietary purpose of Customer and, there-
fore, the Project will be exempt from all taxes
presently assessed and levied with tespect ro the
Project. Nevertheless, Cusromer hereby agtees to
pay during the Lease Term, as the same respec-
tively become due, all taxes (except for income
or franchise raxes of Edison) and governmenral
charges of any kind wharsoever that may at any
time be lawfully assessed or levied against or
with respect to the Project; provided, however,
that with respect to any governmental charges
that may lawfully be paid in installments over a
period of years, Customer shall be obligated to
pay only such installments as are accrued during
such time as this Agreement is in effect; and
provided further, that Customer may contest in
good faith the validity or application of any tax
or governmental charge in any reasonable man-
ner which does noc, in the opinion of inde-
pendent counsel reasonably acceptable to
Edison, adversely affect the right, title or
MUNI.2~3.V4.11/4l94
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interesr of Edison in and co any portion of the
Pcoject or its rights or interest under this
Agreement or any of the other Project
Documents or subject any por-tion of the
Project co loss or forfeiture. Any such taxes or
charges shall constitute Additional Rental under
Section 3(b) hereof and shall be payable direcdy
CO the entity assessing such raxes or charges;
pcovided, however, rhat if such payments are
required by law CO be paid by Edison, Cuscomer
shall prompdy reimburse Edison, on demand,
for all such payments made by Edison.
II. Uniform Commercial Code
Financing Statements. Cuscomer shall execute
such Uniform Commercial Code financing state-
ments, amendments thereto and continuation
statements as Edison shall request co evidence
Edison's interest in the Project.
12. Edison May Perform. IfCuscomer
fails CO perform any agreement contained herein,
Edison may itself perform, or cause performance
of, such agreement, and the expenses of Edison
incurred in connection therewith shall be pay-
able by Customer and shall constirute
Additional Rental under Section 3(b) hereof.
13. Option to Purchase.
(a) Cuscomer shall have the exclu-
sive right and option, which shall be irre-
vocable during the Lease Term, co pur-
chase all of Edison's right, tide and inter-
est in the Pcoject, but only if Cuscomer is
not in default under any Project
Document and only in the manner pro-
vided in this Section 13.
(b) The option purchase price (the
"Option Purchase Price") for the pur-
chase of all of Edison's righr, tide and
interesr in the Project shall be the applic-
able Option Purchase Price specified in
Schedule II hereco. Cuscomer shall exercise
its option co purchase by giving notice
thereof co Edison not later rhan thirty days
prior co rhe day on which it desires co
purchase all of Edison's right, tide and
interesr in the Project.
(c) Upon payment of the applic-
able Option Purchase Price, Edison shall
execute and deliver co Cuscomer a quit
claim deed conveying to Cuscomer or its
nominee all of Edison's right, tide and
interest in the Project.
14. Conditions to Effectiveness.
Edison's obligations under this Agreement are
subject co the satisfaction as of the date hereof of
rhe following conditions:
(a) Cuscomer shall have delivered
a favorable written opinion, dated the date
hereof, of counsel co Cusromer (which
counsel shall be reasonably satisfactory CO
Edison), with respect co the matters set
forth on Schedule III co this Agreement.
(b) A certificate signed by the
Superintendent or Assisrant
Superintendent of Customer or such other
responsible parties as may be acceptable co
Edison certifying that
(i) all of the representations
and warranties of Customer in the
Cusromer Agreement are true,
correcr and complete as of the dare
hereof as if made on the date hereof,
(ii) there has been no mate-
rial adverse change in Customer's
financial condition or results of
operarions since the most recent
financial statements delivered to
Edison pursuant co the Cuscomer
Agreement,
(iii) Cuscomer has included
all Base Rental and Additional
Rental due hereunder for the
current Fiscal Year in its annual
budget for the current Fiscal Year
and has made the necessary
appropriarions for such amounts,
MUNI.2H.V4.11/4194
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(iv) Customet is not in de-
fault in the petformance of any of
its obligations under the Customer
Agreement.
(c) Customer shall have delivered
to Edison certificates of insurance evidenc-
ing compliance with Section 8.2 of the
Customer Agreement.
(d) Customer shall have delivered
to Edison a Tax and Nonarbitrage
Certificate subsranrially in the form of
Schedule III hereto.
(e) Customer shall have delivered
to Edison all Uniform Commercial Code
Financing Statements requested by Edison
in accordance with Section 11 hereof.
(f) Cusromer shall have executed
such other documents and taken such
orher acrions as Edison may reasonably
request.
15. Tax Matters. In order to maintain
the exclusion from gross income for Federal
income rax purposes of the interest component
of the Base Rental payments, Customer cove-
nants ro comply with each applicable
requirement of Secrion 103 and Sections 141
rhrough 150 of the Internal Revenue Code of
1986, as amended. In furrherance of this
covenant, Cusromer agrees to comply with the
Tax and Nonarbitrage Certificate delivered
pursuant to Section 14 (d) hereof, as such
certificate may be amended from time to time,
as a source of guidance fot compliance with such
provisions.
16. Validity. If for any reason this
Agreement shall be held by a court of competent
jurisdiction ro be void, voidable or unenforce-
able by Edison or by Cusromer, or if for any
reason it is held by such a court thac any of the
covenants and agreements of Customer here-
under or under any of the Project Documents,
including the covenant to pay Base Rental and
Additional Rental hereunder, is unenforceable
for the full term hereof, then and in such event
for and in consideration of the right of Customer
to possess, occupy and use the Project, which
right in such event is hereby granted, this
Agreement shall thereupon become and shall be
deemed to be a lease from year to year under
which the annual Base Rental payments and
Additional Rental payments herein specified
will be paid by Customer.
17. Captions. Captions in this Agreement
are included herein for convenience of reference
only and shall not constitute a parr of this
Agreement for any other purpose or be given
any substantive effect.
18. Governing Law. This Agreement
shall be governed by, and consttued in accord-
ance with, the laws of the State of California.
19. Counterparts. This Agreement
may be executed in one or more counrerparts
and by different parties hereto in separate coun-
terparts, each of which when so executed and
delivered shall be deemed an original, but all
such counterparts together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties
have caused this Agreement to be duly executed
and delivered by their respective officers there-
unto duly authorized as of the date first written
above.
SOUIHERNCALIFORNIAEDISON<DMPANY
By:
Tide:
CITY OF SAN BERNARDINO
By:
Tide:
MUNI.2B.V4.11/4J94
c
J
26
SCHEDULE I
BASE RENTAL PAYMENTS
Payment Date Total Base Rental Principal
Payment Component
Interest
Component
6/1995 $11,375.41 $5,548.93 $5,826.48
7/1995 $11,375.41 $5,582.23 $5,793.19
8/1995 $11,375.41 $5,615.72 $5,759.69
9/1995 $11,375.41 $5,649.41 $5,726.00
10/1995 $11,375.41 $5,683.31 $5,692.10
ll/1995 $11,375.41 $5,717.41 $5,658.00
12/1995 $11,375.41 $5,751.71 $5,623.70
lI1996 $11,375.41 $5,786.22 $5,589.19
2/1996 $11,375.41 $5,820.94 $5,554.47
3/1996 $11,375.41 $5,855.87 $5,519.54
4/1996 $11,375.41 $5,891.00 $5,484.41
5/1996 $11,375.41 $5,926.35 $5,449.06
6/1996 $11,375.41 $5,961.91 $5,413.50
7/1996 $11,375.41 $5,997.68 $5,377.73
8/1996 $11,375.41 $6,033.66 $5,341.75
9/1996 $11,375.41 $6,069.87 $5,305.54
10/1996 $11,375.41 $6,106.29 $5,269.13
11/1996 $11,375.41 $6,142.92 $5,232.49
12/1996 $11,375.41 $6,179.78 $5,195.63
1/1997 $11,375.41 $6,216.86 $5,158.55
2/1997 $11,375.41 $6,254.16 $5,121.25
3/1997 $11,375.41 $6,291.69 $5,083.73
4/1997 $11,375.41 $6,329.44 $5,045.98
5/1997 $11,375.41 $6,367.41 $5,008.00
6/1997 $11,375.41 $6,405.62 $4,969.79
7/1997 $11,375.41 $6,444.05 $4,931.36
8/1997 $11,375.41 $6,482.71 $4,892.70
911997 $11,375.41 $6,521.61 $4,853.80
10/1997 $11,375.41 $6,560.74 $4,814.67
11/1997 $11,375.41 $6,600.11 $4,775.31
12/1997 $11,375.41 $6,639.71 $4,735.71
lII998 $11,375.41 $6,679.54 $4,695.87
2/1998 $11,375.41 $6,719.62 $4,655.79
3/1998 $11,375.41 $6,759.94 $4,615.47
4/1998 $11,375.41 $6,800.50 $4,574.91
5/1998 $11,375.41 $6,841.30 $4,534.11
6/1998 $11,375.41 $6,882.35 $4,493.06
7/1998 $11,375.41 $6,923.64 $4,451.77
8/1998 $11,375.41 $6,965.19 $4,410.23
9/1998 $11,375.41 $7,006.98 $4,368.43
10/1998 $11,375.41 $7,049.02 $4,326.39
11/1998 $11,375.41 $7,091.31 $4,284.10
12/1998 $11,375.41 $7,133.86 $4,241.55
Ml/NI.25}.V4.11/4J94
o
:.)
SCHEDULE I
27
BASE RENTAL PAYMENTS
Paymenc Dace Total Base Rental Principal
Payment Component
Interest
Component
111999 $11,375.41 $7,176.66 $4,198.75
211999 $11,375.41 $7,219.72 $4,155.69
3/1999 $11,375.41 $7,263.04 $4,112.37
4/1999 $11,375.41 $7,306.62 $4,068.79
5/1999 $11,375.41 $7,350.46 $4,024.95
6/1999 $11,375.41 $7,394.56 $3,980.85
7/1999 $11,375.41 $7,438.93 $3,936.48
8/1999 $11,375.41 $7,483.56 $3,891.85
9/1999 $11,375.41 $7,528.47 $3,846.95
1011999 $11,375.41 $7,573.64 $3,801.78
11/1999 $11,375.41 $7,619.08 $3,756.33
1211999 $11,375.41 $7,664.79 $3,710.62
1/2000 $11,375.41 $7,710.78 $3,664.63
2/2000 $11,375.41 $7,757.05 $3,618.37
3/2000 $11,375.41 $7,803.59 $3,571.82
4/2000 $11,375.41 $7,850.41 $3,525.00
5/2000 $11,375.41 $7,897.51 $3.477.90
6/2000 $11,375.41 $7,944.90 $3,430.51
712000 $11,375.41 $7,992.57 $3,382.85
8/2000 $11,375.41 $8,040.52 $3,334.89
9/2000 $11,375.41 $8,088.76 $3,286.65
10/2000 $11,375.41 $8,137.30 $3,238.11
11/2000 $11,375.41 $8,186.12 $3,189.29
12/2000 $11,375.41 $8,235.24 $3,140.17
112001 $11,375.41 $8,284.65 $3,090.76
212001 $11,375.41 $8,334.36 $3,041.05
3/2001 $11,375.41 $8,384.36 $2,991.05
4/2001 $11,375.41 $8,434.67 $2,940.74
5/2001 $11,375.41 $8,485.28 $2,890.13
6/2001 $11,375.41 $8,536.19 $2,839.22
7/2001 $11,375.41 $8,587.41 $2,788.00
812001 $11,375.41 $8,638.93 $2,736.48
9/2001 $11,375.41 $8,690.76 $2,684.65
10/200 1 $11,375.41 $8,742.91 $2,632.50
1112001 $11,375.41 $8,795.37 $2,580.04
12/2001 $11,375.41 $8,848.14 $2,527.27
MUNl.2~3.V4_11f4l94
c
"""\
V
28
SCHEDULE I
BASE RENTAL PAYMENTS
Paymenc Dace Total Base Rental
Principal
Interest
Pavment Comnnnenc Comnnnent
1/2002 $11,375.41 $8,901.23 $2,474.18
2/2002 $11,375.41 $8,954.63 $2,420.78
3/2002 $11,375.41 $9,008.36 $2,367.05
4/2002 $11,375.41 $9,062.41 $2,313.00
5/2002 $11,375.41 $9,116.79 $2,258.62
6/2002 $11,375.41 $9,171.49 $2,203.92
7/2002 $11,375.41 $9,226.52 $2,148.89
8/2002 $11,375.41 $9,281.88 $2,093.54
9/2002 $11,375.41 $9,337.57 $2,037.84
10/2002 $11,375.41 $9,393.59 $1,981.82
11/2002 $11,375.41 $9,449.95 $1,925.46
12/2002 $11.375.41 $9,506.65 $1,868.76
1/2003 $11,375.41 $9,563.69 $1,811.72
2/2003 $11,375.41 $9,621.08 $1,754.34
3/2003 $11,375.41 $9,678.80 $1,696.61
4/2003 $11,375.41 $9,736.88 $1,638.54
5/2003 $11,375.41 $9,795.30 $1,580.11
6/2003 $11,375.41 $9,854.07 $1,521.34
7/2003 $11,375.41 $9,913.19 $1,462.22
8/2003 $11,375.41 $9,972.67 $1,402.74
9/2003 $11,375.41 $10,032.51 $1,342.90
1012003 $11,375.41 $ 10,092.70 $1,282.71
11/2003 $11.375.41 $10,153.26 $1,222.15
12/2003 $11,375.41 $10,214.18 $1,161.23
1/2004 $11,375.41 $10,275.46 $1,Q99.95
2/2004 $11,375.41 $10,337.12 $1,038.29
3/2004 $11.375.41 $10.399.14 $976.27
4/2004 $11,375.41 $10,461.53 $913.88
5/2004 $11,375.41 $10,524.30 $851.11
6/2004 $11,375.41 $10,587.45 $787.96
7/2004 $11,375.41 $10,650.97 $724.44
8/2004 $11.375.41 $10,714.88 $660.53
912004 $11,375.41 $10,779.17 $596.24
10/2004 $11,375.41 $10,843.84 $531.57
11/2004 $11,375.41 $10,908.91 $466.50
12/2004 $11,375.41 $10,974.36 $401.05
1/2005 $11,375.41 $11,040.21 $335.20
212005 $11,375.41 $11,106.45 $268.96
3/2005 $11,375.41 $11,173.09 $202.32
4/2005 $11,375.41 $11,240.13 $135.29
5/2005 $11,375.41 $11,307.57 $67.85
MUNJ.2B,V4.llf4194
,..,"'>,.
"'-
"
'-../
SCHEDULE II
29
OPTION PURCHASE PRICE SCHEDULE
Termination
P 0
Termination
P
avment ate avment
6/1995 $971,080
7/1995 $965,531
8/1995 $959,949
9/1995 $954,333
10/1995 $948,684
1111995 $943,000
12/1995 $937 283
111996 $931,531
2/1996 $925,745
3/1996 $919,924
4/1996 $914,068
511996 $908,177
6/1996 $902,251
7/1996 $896,289
8/1996 $890,291
9/1996 $884,257
1011996 $878,188
1111996 $872,081
1211996 $865 938
111997 $859,759
2/1997 $853,542
3/1997 $847,288
411997 $840,996
511997 $834,666
6/1997 $828,299
7/1997 $821,893
8/1997 $815,449
9/1997 $808,967
10/1997 $802,445
11/1997 $795,884
12/1997 $789,284
111998 $782,645
211998 $775,965
311998 $769,245
4/1998 $762,485
5/1998 $755,685
6/1998 $748,844
7/1998 $741,961
8/1998 $735,038
9/1998 $728,072
10/1998 $721,065
1111998 $714,016
12/1998 $706,925
Termination
Termination
Payment Date Payment
1/1999 $699,791
2/1999 $692,615
3/1999 $685,395
4/1999 $678,132
5/1999 $670,825
611999 $663,475
7/1999 $656,080
8/1999 $648,641
9/1999 $641,158
10/1999 $633,629
1111999 $626,056
12/1999 $618,437
112000 $610,772
2/2000 $603,061
3/2000 $595,304
4/2000 $587,500
5/2000 $579,650
6/2000 $571,752
7/2000 $563,808
8/2000 $555,815
9/2000 $547,774
10/2000 $539,686
1112000 $531,548
12/2000 $523,362
112001 $515,127
2/2001 $506,842
312001 $498,508
4/2001 $490,124
5/2001 $481,689
6/2001 $473,204
7/2001 $464,667
8/2001 $456,080
9/2001 $447,441
10/2001 $438,750
1112001 $430,007
12/2001 $421212
Termination
P 0
Termination
P
avment ate 'avment
112002 $412,364
2/2002 $403,463
3/2002 $394,508
4/2002 $385,500
5/2002 $376,437
6/2002 $367,321
7/2002 $358,149
8/2002 $348,923
9/2002 $339,641
10/2002 $330,303
11/2002 $320,910
12/2002 $311,460
112003 $301,953
2/2003 $292,389
3/2003 $282,768
4/2003 $273,089
5/2003 $263,352
6/2003 $253,557
7/2003 $243,703
8/2003 $233,790
9/2003 $223,817
1012003 $213,785
1112003 $203,692
12/2003 $193 539
112004 $183,325
2/2004 $173,049
3/2004 $162,712
4/2004 $152,313
5/2004 $141,851
6/2004 $131,327
7/2004 $120,740
8/2004 $110,089
9/2004 $99,374
10/2004 $88,595
1112004 $77 ,751
1212004 $66,842
112005 $55,867
2/2005 $44,827
3/2005 $33,721
412005 $22,548
5/2005 $11,308
MUNI.2nv4.11/~
c
30
,-.",
....)
ScHEDULE III
FORM OF OPINION OF COUNSEL
Counsel to Customer sh&llgive IIl1 opinioo
to the etTect of the following:'"
(i) Customer is a city, duly
organized IU1Ci validly existing Wlder the
Constitution and the laws of the State of
Callrornia.
(ii) The Project Ooc:uments have
been duly authorbed, executed and
deJivered by Cwtomer IlIld constitute
legally valid and binding obligations of
CustOmer enfocce@le againat Customer in
accordance with their terms, except as
enforceability may be subject to
banlccuptcy, insolvency, reorgani7.1ltion,
fraudulent conveyance, moracorium Dr
similar laws affecting creditors' rightS
pnen.lly and general principles of equity.
(ill) To the best of my knowledge,
none of the execudon, delivery or
performance of any of the Project
DocumentS (a) violm any macerlallaw or
llIlyorder, judgment or decree of any ,-ourt
ot governmental agency binding on
Customer, (b) violate any material
contract, underraking, agreement, license,
permit or orher instrumentS to which
Customer is a party, or (c) require any
approval or consent of any governmental
agenq' or ocher person, except su.ch
approvals and consents as have been
nbcained.
. All ..pit4/i~'" _ shtJlluw tho ",..."illts ,itIm 111m
_ ill tho C_ 11&._._.4.
(iv) To the b..t of my knowledge,
there i8 no action, suit, claim or
ptoCeeding pending or threatened aaainst
Customer (a) contesting the au.thority of
Cwtomer to enter into or perform its
obligations under any of the Project
Documents, (b) cha11eogiAi the validity of
the Project Docwnenrs or any of the
rransactions referred to therein or
contemplated thereby, (c) seeking to
resrrain Dr enjoin Customer from enwlng
into, or m.J..il\g any paymcnts under, the
Customer Agreement or the Lease
Agreemenr, or (d) which if adversely
determined to Customer would have a
material adverse etTect upon the filW1CW
condition Dr revenues ofCu.smmer.
~.lS,.ftJ1HIM
c
SCHEDULE IV
,.-.,.
...J
~~<J p. 31
FORM OF TAX AND NON ARBITRAGE CERTIFICATE
This Tax and Nonarbirrage Cerrificate is
being executed in connection wirh the execution
of the Lease Agreement, dated as of
(the "Lease "), by and
between the City of San Bernardino
("Customer") and Southern California Edison
Company ("Edison"), pursuant to which
Customer is obligated to make certain Base
Rental payments to Edison (the "Rental
Payments") with respect to the use of the
Project {as referenced in the Lease (the
"Project")}.
I
In Section 15 of the Lease, Customet has
covenanted to comply with all of the
requirements of Sections 103 and 141 through
150 of the Internal Revenue Code of 1986, as
amended (the "Code"), necessary to maintain
the exclusion of the interest with respect to the
Rental Payments from gross income for federal
income tax purposes. The representations and
covenants herein are in addition to such general
covenants in the Lease. The accuracy of the
representations and compliance with the
covenants herein and in the Lease are
essential to the continued tax-exempt status
of the interest with respect to the Rental
Payments. Edison will rely on Customer's
representations and Customer's compliance with
the covenants set forth herein in forming its
conclusion with regard to the exclusion, under
Sections 103 and 141 through 150 of the Code,
of the inrerest with respect to the Renral
Payments from gross income for federal income
tax purposes.
All capitalized terms used in this
certificare and not otherwise herein defined have
the meanings ascribed to them by the Lease. The
definition of any term defined herein shall apply
for all purposes elsewhere herein unless
otherwise specifically provided.
I. PLAN OF FINANCING.
Customer's obligation to make Renral
Payments under the Lease is referred to herein as
the "Lease Obligation". Customer's Lease
Obligation is comprised of principal
components (the "Principal Components") and
interest components (the "Interest
Components"). Customer is undertaking the
Lease Obligation for the purpose of financing its
acquisition of the Projecr. Upon full payment of
all Rental Payments due and payable under the
Lease, all right and title to the Project will
immediately inure to the benefit of the
Customer. The Lease Obligation will run for the
period set forth in the Lease.
II. PRIVATE ACTIVITY RESTRICTIONS.
A. Private Activity Bonds. The Lease
Obligation is intended to avoid classification for
,
purposes of federal income taxation, as a "private
activity bond" as such term is defined in Section
141(a) of the Code, In order to avoid such
classification, the Lease Obligation must fail
either (i) the private business use test, as
described in Section B below, or (ii) the private
loan test, as described in Section C below,
B. Private Business Use Test. In
ordet to fail the private business use test, all of
the conditions set forth in this Section B must
be met. Customer hereby represents and
covenants to Edison that all of the following
conditions are and will continue to be met:
1. General. No more than 10%
of the Project will be used in any trade or
business activity carried on by an person or
entity, including the United States
Government and all of its agencies and
instrumentalities, other than a state or
political subdivision of a state (hereafter,
any such person is referred ro as a
MUNI.2B.V4.11I4194
c
f.32 ~.J
"Nongovernmental Person" and any
such use is' referred to as a
"Nongovernmental Use"). In addition,
no more than 5 % of the proceeds of the
Lease Obligation (or the Project) may be
used in any trade or business activity
carried on by any Nongovernmental
Person where such use is (i)
disproportionate to a related governmental
use or (ii) is unrelated to the governmental
use of the proceeds of the Lease
Obligation. For purposes of the private
business use test, the proceeds of the Lease
Obligation (and the Project) are not
deemed used by any person (including an
industrial customer) who uses the Project
on the same basis as the general public.
However, use by each and every person
using the project on a basis different from
the general public is aggregated in
determining if the thresholds for private
activity bond status are satisfied.
Nongovernmental Use includes, for
example, use as a lessee, the purchase of
output, use as a joint venturer, licensing
the Project to a Nongovernmental Person,
or instances in which benefits are derived
from the leased financed items, such as
having the items satisfy zoning or other
permit requirements in connection with a
trade or business of a Nongovernmental
Person.
2. Management Contracts. No
portion of the Project will be used by any
corporation or other Nongovernmental
Person pursuant to a management or
similar contract unless the requirements of
Revenue Procedure 93-19 are satisfied.
3. Leases, Licenses and Joint
Ventures. With the exception of the
spaces in the parking sttucture which are
currently being used by private business,
Customer will not lease, license, sublease
or sublicense during the period the Lease
Obligation is outstanding, any portion of
the Project, including no additional
private business use of parking spaces, to a
....,,""'
>....I
Nongovernmental Person such that the
Lease Obligation will be considered a
private activity bond. Customer will not
engage in any joint venture with any
Nongovernmental Person, during the
period the Lease Obligation is
outstanding, in which any portion of the
Project will be used by a
Nongovernmental Person.
4. No Nongovernmental Use.
As of the date hereof, Customer does not
anticipate any Nongovernmental Use of
the Project other than as described in the
following:
Customer and Edison agree that a portion
of the parking structure which is part of
this project is being used by private
business. Presently 216 of the 1,172
parking spaces (or 18.4%) are being
reserved for use by private business. The
cost of the facilities being installed in the
parking structure is approximately
$101,000. The 18.4% of this amount
being used for private purpose is
approximately $19,000 which is less than
5% of the total project of $971 ,000.
Therefore, the project fails the private
business use test and will be eligible for
tax exempt financing.
The Customer understands and agrees that
further Nongovernmental Use of any of
the Project (such as by selling or leasing
any portion of the Project or the facilities
in or at which the Project is located) could
cause interest with respect to the Lease
Obligation to fail to be excluded from
gross income for tax purposes. The
Customer agrees that it will not enter into
a sale, lease or other arrangement which
would constitute additional
Nongovernmental Use of any portion of
the Project without (i) obtaining Edison's
agreement that such arrangement will not
adversely affect the tax-exempt status of
the Lease Obligation or (ii) providing
Edison with an opinion of nationally
MUNI.2'lV4.1114194
c
recognized bond counsel to the effect that
such arrangement will not adversely affecr
the tax-exempt status of the Lease
Obligation.
C. Private Loan Test. In order to fail
the private loan test, no more than the lesser of
$5,000,000 or 5% of the Lease Obligation
proceeds may be used (directly or indirectly) to
make or finance loans to a Nongovernmental
Person. Customer hereby tepresents and
covenants to Edison that neither the Project nor
the Lease Obligation will be used, directly or
indirectly, to make or finance any loan to a
Nongovernmental Person.
III. ARBITRAGE
Customer hereby represents and covenants
to Edison as follows:
A. No Unspent Proceeds. Customet
is undertaking the Lease Obligation solely for
the purpose of acquiring the Project. Thus, no
ptoceeds generated by the Lease Obligation will
remain unexpended on the date hereof.
B. Replacement Proceeds of the
LeaSe Obligation. Payments of principal and
interest on the Lease Obligation will be billed
with Customer's monthly electric utility bill
and shall be due by the due date reflected on
such bill. Any amounts set aside or expected to
be used by Customer for purposes of satisfying
its Lease Obligation will constitute
"Replacement Proceeds" of the Lease
Obligation. All such amounts will be spent
within a 12-month period beginning on the date
of deposit (and any amount received from
investment of moneys so set aside will be spent
within a 12-month period beginning on the date
of teceipt), except for a reasonable catty-over
amount not to exceed the greater of 12-months'
earnings on such account or 1/ 12 of annual
payments with respect to the Lease Obligation.
Customer does not expect to create or establish
any othet sinking fund or similar fund with
.~
,..)
~f.33
tespect to the Lease Obligation. The Lease
Obligation does not teplace funds which were
set aside or expected to be used to pay the costs
of the Project.
C. Artifice or Device. The execution
of the Lease Obligation is not and will not be
pare of a transaction or series of transactions
which are an attempt to citcumvent the
provisions of Section 148 of the Code and the
regulations promulgated thereundet, ot undet
any similar provision of prior law, which (i)
enables Customet to exploit the difference
between tax-exempt and taxable interest cates to
gain a material financial advantage and (ii)
increases the butden on the market fot tax-
exempt obligarions.
IV. REPORTING AND RESPONSIBILITY.
A. Information Reporting. Customer
has teviewed the Internal Review Service Form
8038-G attached hereto as Exhibit A, and all
information thereon is correct and complete.
B. Responsibility. The undersigned
and other officers of the Customer are charged
with the tesponsibility for the execution of the
Lease. The undersigned has made due inquiry
with respect to such actions and is fully
informed as to the representations and covenants
ser foreh in this document.
CITY OF SAN BERNARDINO
Date:
By:
Title:
MUNI.2H.V4.11/4194
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_ 8038-0
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Information Return for Tax-Exempt Governmental ObligatIons
~ Unci.. Int."'" R.venu. Code ....lIon 148(.) OMS No. 1545-ono
~ SM "Pl..te In.tru.lIo....
(U.. FomI803I-GC If "'" IIIue price II under .'OO,ooo~
Autho If Amlndld Rltu check h... ~
2 ~. ompIoyorldonllllcallon IlIIInller
:
!Rev. Mev '883)
L'1IIl_ L._. ., 1M T.....,.
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4 RIpOIl n_
G19
I Doll of IIIue
3 Numberlnd .trNl (or P.O. box If meDl. not deliYored to .lrNlIddr_)
I CIty, town. .111., Ind ZIP code
7 Name of ......
I CUSlP Numb<<
check a Iicable box es and enter the Issue rice
'- price
s
o 01ller. Describe (see InstructJons) ~
If obRgaUons are tax or olller revenue anllclpallon bonda, check box ~ 0
If ob aUons are In lIIe form of a leas. or Installment sal. check box ~ 0
Oescrl on of ObI! atIons
MaIU~ dall Inl~ rail
-
lei
...... price
111 final maturity. "
20 enUre Issu. .
Uses of Or! Insl Proceeds of Bond Issue ncludln underwriters' dlscau
Proceeds used tot acaued Interest . . . . . . . . . . . . . .
Issu. prlc. of entre Issu. (ent.r amount from 11n. 20, coklmn (cll.. "
Proceeds used for bond Isausnc. costa Onckdng underwrlters' clscoun1l 23
Proc..da used for credlt enhancement. . . . . . . . .. 24
Proceeds 8IIoceted 10 I8lISOII8bIy required reserve or replacement funcl. 25
Proc.eda used 10 ..fund prior Issues . . . . . . . . . .. 2S
TotalCadd 1In.. 23 through 26). . . . . .. . . . ... ........ ..
Nonr.funcfll eda of 111. Issu. subtract 1In. 27 from 1In. 22 and Illter amount here
Oescrl on of Refunded Bonds com Iete this art onl for rsfundln bonds
28 Enter the remaining weighted averag. maturlty of thl bonda to be refunded . . ~
30 Enter 111. last date on which 111. refunded bonda wID be called. . . . . . . ~
31 Enter the dete(s) 111. r.funded bonds w.... Issued ~
IDI!D Miscellaneous
32 Ent.r 111. amount 01 the state volum. cap aDocat.d to 111. Issu. . . . . . '. . . . . ~
33 Enter 111. amount of 111. bonds designated by the Issuer under section 265(b)(3)(B)(l)(lIO (smaD Isauer
exception). . . . . . . . . . . . . . . . . . . . . . . . . . . . .~
~~
yen
34 Pool.d financlngs:
· Enter lI1e amount of lI1e proceeds of lI1is issllllh.1t are to be used to INke loans to o1her gOYtmmental unlll ~
b If 1II1s Issu. Is a loan made from 111. proc..da of another tax..xemptISlue, check box .. 0 and ent<< 111. name of 111.
Issuer ~ and 111. dati 01 111. Issu. ~
35 If 111. Issuer has .I.cted to a a ena In DIU of r.bat., check box '" . . . ~
Unci. _iii. '" poIjury, 1-... ","I ,_ _nod IN, ,oturn One! lO_nyIng 10_ Ind ..._ta,1nd 10"'" bat 01 my knowIodgI
and W..,. lhey .,. true, correct. Iftd complete. .
Please
SIgn
Here ~
, Sig\a'" '" 011"_ Dal.
For Paperwork ReducUon Act NoUce, a.. page 1 of the lnatrucUonL
~ Typo Of p/Inl.....1nd ...
Co. No, 137731 Foom 8038-0 (Rev. 5-03)
6/1$/93
Published by Tax Managementlnc" a Sub.1d1aJy 01 The Burllu of National AWair., Inc.
'038-G.1
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~EDULE rv
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FORM~F TAX AND NONARBITRAGE CERTIFICATE
"
This ''{ax and Nonarbirrage Certificate is
being executep in connection with the execution
of the Leas~ Agreement, dated as of
, (the "Lease "), by and
between the Gity of San Bernardino
("Customer ") and 'Southern California Edison
Company ("Edisoit:'), pursuant to which
Customer is obligated\to make certain Base
Rental payments to &jison (the "Rental
Payments ") with respect ''{,o the use of the
Ptoject {as referenced in'. the Lease (the
"Project")}. .
In Section 15 of the Lease, C~tomer has
covenanted to comply with al~ of the
requirements of Sections 103 and 141'\hroug
150 of the Internal Revenue Code of 1966,
amended (the "Code"), necessary to mai in
the exclusion of the interest with respect the
Rental Payments from gross income for, ederd.
income tax purposes. The tepresentat,#lOs and "'.
covenants hetein are in addition to sud1 general
covenants in the Lease. The accurkcy of the
representations and compliance with the
covenants herein and in the Lease are
essential to the continued tax-exempt status
of the interest with respect to the Rental
Payments. Edison will rely on Customer's
representations and Customer's compliance with
the covenants set forth herein in forming its
conclusion with regard to the exclusion, under
Sections 103 and 141 through 150 of the Code,
of the interest with respect to the Rental
Payments from gro~ income fot federal income
tax purposes. I
~
I
All cap" alized terms used in this
certificate an not otherwise herein defined have
the meanin ascribed to them by the Lease. The
definition any term defined herein shall apply
for all urposes elsewhete herein unless
otherwi specifically provided.
31
I. PLAN OF FINANCIN
Customer's ob 'gation to make Rental
Payments under th ease is referred to herein as
the "Lease 0 !gation". Customer's Lease
Obligation comptised of principal
components e "Principal Components") and
interest components (the "Interest
Compo. nts"). Customet is undertaking the
Lease ligation fot the purpose of financing its
acq . tion of the Project. Upon full payment of
all ental Payments due and payable under the
L e, all right and title to the Project will
'mmediately inure to the benefit of the
Customer. The Lease Obligation will run for the
period set forth in the Lease.
II. PRIVATE ACTIVITY RESTRICTIONS.
A. Private Activity Bonds. The Lease
Obligation is intended to avoid classification, for
p ses of federal income taxation, as a "ptivate
act! . ty bond" as such term is defined in Section
141(a of the Code. In ordet to avoid such
classific ion, the Lease Obligation must fail
both (i) e private business use test, as
described in ction B below, and (ii) the private
loan test, as de ibed in Section C below.
B. Privat Business Use Test. In
order to fail the priva business use tesr, all of
the conditions set forth' this Section B must
be met. Customer her y represents and
covenants to Edison that a of the following
conditions are and will continu 0 be met:
1. General. No mo than 10%
of the Project will be used in a trade or
business activity carried on by an erson or
entity, including the United tates
Government and all of its agencie and
instrumentalities, othet than a state or
political subdivision of a state (hereafte
any such petson is referred to as a
MUNU~~.V4,1114194
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32
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"Nongovernmental Person" and any
such use is referred to as a
"Nongovernmental Use"). For purposes
o he private business use test, the Project
is n deemed used by any person
(includl an industrial customer) who
uses the P . ect on rhe same basis as the
general publl . However, use by each and
every person u . g the Project on a basis
different from e general public is
aggregated in etermining if the
thresholds for private ~tivity bond status
are satisfied. Nong ernmental Use
includes, for example, us as a lessee, use
as a joint venturer, licensing\the Project ro
a Nongovernmental person, 0\ instances in
which benefits are derived froin the lease
financed items. \
.
\
2. Management Contract~ No
portion of the Project will be used by ilQy
corporation or other Nongovernment~
Person pursuant to a management or
similar contract unless the requirements 0
Revenue Procedure 93-19 are satisfied.
3. Leases, Licenses and
Ventures. Customer will not Ie e, li-
cense, sublease or sublicense du ng the
period the Lease Obliga ion is
outstanding, any portion of the roject to
a Nongovernmental Person s ch that the
Lease Obligation will be on side red a
privare activity bond. Cus mer will not
engage in any joint ve ure with any
Nongovernmental Pers n, during the
period the Lease Obligation is
outsranding, in which ny portion of the
Projecr will b used by a
Nongovernmental Pe son.
4. No N governmental Use.
As of the dare he eof, Customer does not
anticipate any ongovernmental Use of
the Project.
C. Private Loan Test. In order to fail
the private loan test, no more than the lesser of
$5,000,000 or 5% of the Lease Obligation
proceeds may be used (directly or indirectly) to
make or finance loans to a Nongovernmental
Person. Customer hereby represents and
covenants to Edison thar neirher e Project nor
the Lease Obligation will be sed, directly or
indirectly, to make or fin ce any loan to a
Nongovernmental Person.
IlL ARBITRAGE
reby represents and covenants
ws:
A. 0 Unspent Proceeds. Customer
is undert ing the Lease Obligation solely for
the pu ose of acquiring the Project. Thus, no
proce s generated by the Lease Obligation will
rem n unexpended on the date hereof.
B. Replacement Proceeds of the
ease Obligation. Payments of principal and
interest on the Lease Obligation will be billed
~i~h Customer's monthly electric utility bill
ahE' shall be due by the due date reflected on
suc bill. Any amounts set aside or expected to
be us by Customer for purposes of satisfying
its Le se Obligation will constitute
"Replace ent Proceeds" of the Lease
Obligation. II such amounts will be spent
within a 12-m nth period beginning on the date
of deposit (an any amount received from
investment of mo ys so set aside will be spent
within a 12-month riod beginning on the date
of receipt), except fo a reasonable carry-over
amount not to exceed t greater of 12-months'
earnings on such accou or 1/12 of annual
payments with respecr ro r Lease Obligarion.
Customer does not expecr to reate or establish
any other sinking fund or si ilar fund with
respecr ro the Lease Obligatio . The Lease
Obligarion does not replace funds which were
set aside or expected to be used ro p the costs
of the Project.
C. Artifice or Device. The ex cut ion
of the Lease Obligation is not and will or be
part of a transaction or series of transacrions
which are an attempt to circumvent rhe
MlJNI.213.V4.11/4194
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33
provisions of Section 148 of the Code and the
reg tions promulgated thereunder, or under
any si . ar provision of prior law, which (i)
enables stomer ro exploit the difference
between tax- empt and taxable interesr rates co
gain a mateCl financial advantage and (ii)
increases the b~n on the market for tax-
exempt obligations. \
IV. REPORTING AND R PONSIBILlTY.
A. Information Re rting. Customer
has reviewed the Internal Rev w Service Form
8038-G attached heteto as Exh it A, and all
information thereon is correcr and mplete.
\
\
B. Responsibility. The un~rsigned
and other officers of the Cusromer are tharged
with the responsibility for the execution \{the
Lease. The undersigned has made due inqhiry /
with respect to such actions and is fun~/
informed as to the representations and covenants\
set forth in this document. . \
\
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/
;
CITY OF SAN BERNARDINO
Date:
By:
Tide:
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MUNI.2'3.V4.1114194
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34
EXHIBIT A
INTERNAL REVENUE SERVICE FORM 8038-G
(See Attached)
MUNI.2H.V4.11/4J94
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C)
EXHIBIT E
35
FORM OF RECORDING MEMORANDUM
Recording Requested By
And When Recorded Mail To:
Southern California Edison Company
ENVESTSCE
6000 N. Irwindale Avenue
Irwindale, CA 91702
Attention: Ken Pickrahn
MEMORANDUM OF CUSTOMER AGREEMENT
I
THIS MEMORANDUM
CUSTOMER AGREEMENT
"M e m 0 ran dum "), dated
OF
( this
as of
, fot
teferences purposes, is by and between the
CITY OF SAN BERNARDINO
("Customer") and SOU THE R N
CALIFORNIA EDISON COMPANY
("Edison").
Customer is the [owner/lessee] of that
cerrain real property described on Exhibit A
hereto (the "Property..). Edison is a public
urility providing electrical service in the area in
which rhe Properry is located.
Customer and Edison are parries to thar
certain ENVESTSCE Customer Agreement, dated
as of (rhe "Customer
Agreement"), the terms and conditions of
which are hereby incorporated by this reference
and made a part of this Memorandum as if
completely set forth herein. Pursuant to the
Customer Agreement Edison has agreed to
provide energy efficiency solutions to Customer,
as more fully described in the Customer
Agreement, to improve the energy efficiency of
the facilities located on the Property.
The Customer Agreement provides,
among other things, that (a) Customer or any
successors-in-interest occupying the Property
shall pay cerrain payments to Edison for the
energy efficiency solutions installed at the
Property; and (b) the interest of Customer in rhe
Customer Agreemenr may not be assigned to
any person other than one who succeeds to the
interest of Customer in the Property, and then
only if such successor expressly assumes in
wriring for the benefir of Edison all of the
obligations of Customer under the Customer
Agreement. Further, Edison may discontinue
the provision of electricity to the Property if the
payments required by the Cusromer Agreement
are not made within the rime periods prescribed
in rhe Customer Agreement.
The sole purpose of this Memorandum is
to place on notice all persons (including any
person or persons who acquires or intends to
acquire any interest in the Property from
Customer) that Customer is a party to the
Customer Agreement, and that any person
acquiring any interest in the Property from
Customer may only do so upon the terms and
subject to the conditions outlined in the
immediately preceding paragraph of this
Memorandum.
MUNI.2'3.V4.11/41'J4
o
36
o
CAIlFORNIA
[CITY OF SAN BERNARDINO]
By:
Its:
Date:
STATE OF CALIFORNIA
)
) ss.
)
COUNTY OF
I
WITNESS my hand and official seal.
Signatute
(Seal)
[SOUIHERN
QJMPANY]
EDISON
By:
Its:
Date:
STATE OF CALIFORNIA
)
) ss.
)
COUNTY OF
WITNESS my hand and official seal.
Signature
(Seal)
MUNI.2H.V4.ll14J94