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Page 3 of 5 <br />Energy Services Agreement <br />As part of the RFQ award, the City would enter into an Energy Services Agreement (ESA) with <br />Climatec. The ESA establishes program intent and defines a structured step-by-step process <br />for conducting citywide assessments and developing an Energy Infrastructure Modernization <br />Program to meet the City’s objectives. Program development will be conducted in two phases: <br />Preliminary Assessment (PA) and Detailed Assessment (DA), as outlined in the ESA. This <br />ESA authorizes assessment and program development only; implementation would require <br />future City Council action to approve an ESA amendment with a not-to-exceed amount and a <br />savings guarantee. <br />Preliminary Assessment (PA) <br />After approval of the ESA Climatec will complete a baseline analysis of the City’s utility <br />consumption and conduct citywide engineering site assessments of energy, gas, and water <br />infrastructure. The site assessments will support the City’s Asset Management Plan by <br />evaluating asset age, condition, efficiency ratings, and modernization needs. <br />Services include engineering assessments of HVAC systems, LED lighting, building <br />automation systems, building envelope, solar and battery storage, electric vehicle charging <br />infrastructure, irrigation systems, and water/wastewater systems. Climatec will develop <br />inventory databases and needs matrices, prepare aerial layouts for renewable energy <br />installations, and develop funding options and pro formas in collaboration with staff based on <br />the City's needs and preferences. <br />PA findings will be presented to the City Council for direction on desired program scope and <br />funding parameters. <br />Detailed Assessment (DA) <br />After the City Council confirms the desired program scope, Climatec will complete a DA, <br />including in-depth engineering site assessments and due diligence to finalize a not-to-exceed <br />price, savings projections, detailed scope of work, and technical specifications. Following <br />completion of the DA and confirmation of the funding plan, the ESA would be amended to <br />include implementation terms and scope details. A future City Council action item to consider <br />authorizing an ESA amendment for implementation is anticipated to occur by June 30, 2027. <br />Funding <br />A funding plan will be developed for the project. Funding plan objectives are: <br />Lower utility and maintenance costs <br />Reduce General Fund and Capital Improvement Program (CIP) budget pressure <br />Generate a net positive return for the General Fund <br />The Program will prioritize funding sources outside the General Fund, including but not limited <br />to: <br />Inflation Reduction Act incentives <br />Municipal lease-purchase financing <br />State and federal grants <br />Docusign Envelope ID: 2116ABC8-4A4A-8B43-82A0-6C965050EDC5