City Council Agenda and Packet 2023 10 10 SP

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SUBJECT: RESOLUTION NO. 48, SERIES 2023 DATE: OCTOBER 10, 2023 PAGE 3 OF 7 Staff recommends fleet vehicle electrification be implemented through vehicle replacement schedules and when sufficient EV charging infrastructure is installed at the associated facility. Additionally, Parks, Recreation and Open Space equipment electrification is recommended to be implemented through equipment replacement schedules and as technology allows. The mid and long term plan recommendations will likely leverage technology advancements and costs for these improvements can likely be built into annual building equipment replacement Capital Improvement Plan (CIP) requests. Near Term Implementation Options Colorado Energy Office's Energy Performance Contracting (EPC) EPC is a state -managed Colorado Energy Office model for financing and implementing energy -related capital improvement upgrades for public buildings. Energy Service Companies (ESCO) are pre -qualified through the State to assist local governments with implementation of decarbonization projects. Through the program's contract, the project's utility savings are guaranteed. If a project does not realize the utility savings, the ESCO is responsible for the shortfall. EPC allows for flexibility in project funding with the ability for jurisdictions to combine multiple funding avenues such as grants, utility savings, capital and third party financing. Since EPC is a state -led program, many state agencies (CEO, DOLA) prioritize EPC projects for grant funding. This program has been used for over 200 projects in the state of Colorado with many nearby cities implementing EPC projects such as Lafayette, Erie, Boulder, Westminster, Arvada, Broomfield and Thornton. Based on Council feedback, staff researched options for near term Plan implementation and the options are outlined below. 1. Implement the near term recommendations through the City's current budget process. There is currently $4,822,500 budgeted in the 2023-2027 CIP for building equipment replacements and municipal electrification. This option would allow the City to implement the Plan as funding allows, however the budgeted amount would only allow the City to implement building electrification recommendations at the five facility sites and would not fund EV charging, energy efficiency or onsite renewable energy. 2. Implement the near term recommendations through EPC without onsite renewable energy. This option includes an EPC and does not include the additional costs of onsite solar. Although the removal of solar decreases the loan amount, this option does not realize utility cost savings, as a majority of the utility cost savings are due to onsite solar. Additionally, grant funding may not be available if renewable energy is not included in the project's scope. CITY COUNCIL COMMUNICATION 5