Slides Financing Campus Retrofits

8/6/2019 Slides Financing Campus Retrofits

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www.presidentsclimatecommitment.org (c) 2007 Presidents Climate Commitment. All rights reserved.

Financing Options for Total Campus RetrofitsDecember 8, 2010

Steve Hoiberg, Higher Education Marketing Manager, Siemens Industry Inc., Building Technologies Division

Gene Rogero, Vice President, Public & Institutional Markets, Siemens Financial Services

Lisa Schoonerman, Account Executive, Energy and Environmental Services, Siemens Industry Inc., Building

Technologies Division

Arah Schuur, Director, Energy Efficiency Building Retrofit Program, Clinton Climate Initiative

Cheryl St. Pierre-Sleboda, Vice President for Finance and Administration, Anna Maria College


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ContentsIntroduction

Arah Schuur, Clinton Climate Initiative

Siemens Financial Services in Higher EducationGene Rogero, Vice President, Public and Institutional Markets,Siemens Financial Services

Case Study: Anna Maria College (AMC)

Cheryl St.Pierre-Sleboda, Vice President for Finance andAdministration, Anna Maria College

Q&A


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The ACUPCC and

CCI


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The Clinton Climate Initiative (CCI)Mission: Make a difference in the fight against climate changein practical, measurable & significant ways:

projects not targets, high impact, large scale, replicable

Projects to demonstrate success Work with schools on large-scale energyefficiency retrofits

Deliver significant campus GHG reductions Champion leaders in sustainability

Develop replicable models Test contracting and financing models that

help schools overcome obstacles Work with industry partners to tailor existing

and develop new solutions Push best practices into the marketplace to

achieve scale


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CCI serves as apro bono adviser, providing financialanalysis and technical assistance to schools in designingand implementing a building retrofit project.

Facilitate project development and implementation Connect schools with implementation, financial and other partners Provide technical assistance Ensure that best practices are followed Provide access to supplier partners and product discounts Share best practice examples at each stage of project Measure and share results

CHAMPION ACTUAL REDUCTIONS IN GHG EMISSIONS

Role of CCI


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ACUPCC & CCI: Getting to Carbon Neutral

CCI and Second Nature partner to support GHGreduction programs in ACUPCC institutions:

2009: created a best practices toolkit for energy performancecontracting (EPC) as a resource for signatories

2010: supporting campus energy efficiency projects with ACUPCCsignatories

2011: working together on realistic, replicable tools andresources for signatories to finance sustainability

GOAL: Accelerate campus energy efficiency as asignificant, measurable way to reduce carbon footprint


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WHITE OR GREEN ROOFS

SOLAR-CONTROL WINDOW FILMS

ENERGY EFFICIENT LIGHTING

ENERGY EFFICIENT HEATINGAND COOLING SYSTEMS

INSULATION AND FENESTRATION

EFFICIENT / RENEWABLE GENERATION

OPERATIONAL IMPROVEMENTS

What is a Campus Retrofit?

OUTDOOR LIGHTING EFFICIENCY


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Deliver carbon and sustainability commitments

Existing buildings use an average of 25% more energy than newbuildings

LEED for Existing Buildings focuses on energy, water conservation Students are demanding green, LEED, high-performing space and

new buildings are providing this

Capture wasted energy & money

There is excess energy and savings trappedin existing buildings,typically 20 50%

Reduce energy use & lower operating expenses Energy efficiency retrofits offer low-risk, high-return investment Upgrade/renew aging infrastructure, address deferred maintenance Improve facility comfort & performance

Benefits of Total Campus Retrofits


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Retrocommissioning

BMS systems

Geothermal conditioning

Get LEED certified

Replace chiller

Solar panels

Ice storage

Focus on energy

Green roof

Change behavior

Continuous commissioning

Zero energy

Holistic repositioning

Change light bulbs

Window film

White roof

benchmark

Recladding

Deep rejuvenation

recommissioning

DO THE PERFECT

THING?

DO NOTHING

DO

SOMETHING!


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Find your champion and assemble your projectteam

Assess your opportunities and yourconstraints

Establish your goals: environmental, economic,academic, etc.

Talk to other institutions and check out otherprojects

Call CCI!

Getting Started on a Total Campus Retrofit


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Page 11 Siemens Financial Services

Solutions for Higher Education

Financing Options for Energy

Performance Contracting Projects

Copyright Siemens AG 2008. All rights reserved.


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Financing Solutions forEnergy ConservationProjects

Introduction

Contents

Traditional Sources of Capital Alternative Sources of Capital Pros & Cons for each Overview of tax exempt financing Benefits of tax exempt financing Structure of a Conduit

Financing Contacting SFS


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Cash (Capital Budget) Bank Loans Bonds

Traditional Sources of Funding


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Pros & Cons of Traditional Funding

CashPro: Lowest overall cost.Con: Limited availability, reserved for other capital improvements Bank LoansPro: Convenient, centralized source of Capital. Local interest.Con: Potentially limited availability. Limits ability to borrow in the future.

Traditional Banks may be unfamiliar with EPC / collateral.

BondsPro: Lower overall cost. Can be used to fund various Capital projects.Con: Limited availability, depending on the market. Lengthy, time-consuming

process. Term may not match useful life of asset. May limit future borrowing.


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Federal Stimulus Funds (Dept ofEducation / Dept of Energy)

State Revolving Funds Tax-Exempt (Conduit) Lease/

Purchase Financing

Private-Placement Bonds Adjustable Rate Low-Floaters Operating Leases & PPAs

Alternative Sources of Funding


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Pros & Cons of Alternative Sources ofFunding

Federal Stimulus FundsPro: Lower overall cost.Con: Limited availability. Lengthy, time-consuming process. State Revolving FundsPro: Lower overall cost. Some programs offered are specific to EPC-

type projects.Con: Limited availability. Lengthy, time-consuming process. College

may need to meet other requirements set-forth by the State.

Private Placement Bonds

Pro: Good alternative to traditional, public offering. Limitedcompetition.

Con: Average overall cost. Availability based upon lenders currentcredit underwriting requirements (borrower may need to obtain rating).


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Pros & Cons of Alternative Sources ofFunding

Adjustable Rate Instruments Low FloatersPro: Lower overall costCon: Interest Rate Risk, Re-fi Risk

Operating Leases / Power Purchase Agreements PPAsPro: Off-Balance Sheet Financing. Shift in Asset Ownership RiskCon: Highest Cost of Ownership. Very limited availability specialized

products. Lengthy, time-consuming process. Asset may never beowned college may become locked into transaction indefinitely.


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Characteristics of a Tax-Exempt Lease/Purchase Financing

T-E Lease/Purchase Financing provides both the construction financing andpermanent financing in a single structure Interest Rates are fixed, upfront.

No upfront capital required Debt service doesnt start until project iscompleted / savings are being generated.

Installment payment contract with nominal purchase option upon maturity($1.00 buyout)

Lessee has title to the equipment up front; Lender takes a security interest inthe equipment only no other collateral is required

Level or Escalated Payment Structures - to meet guaranteed energy savings /cash-flow requirements.

Master Lease Agreement allows for multiple fundings (schedule) with theability to add schedules for future phases, regardless of size.

Ability to include legal fees, engineering costs and other related expenses inthe total amount financed.


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Simplified Documentation Low Rates, commensurate with Bonds, Reduced timeframe (


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Structure of Tax-Exempt Conduit

Financing for 501(c)3 Colleges/Universities

Tax-ExemptLease

Agreement

Lender

Sub-Lease Agreement

Siemens BuildingTechnologies

Higher-Ed Authority

or County

GovernmentCollege / Univ.

Lease

Payments


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Contacting Siemens Financial Services

Gene Rogero

Vice President, Public andInstitutional Finance

Siemens Financial Services, Inc.1100 Riverside DriveWatkinsville, GA 30677

office: (706) 769-6864

[email protected]


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Location: Paxton, Massachusetts Enrollment: 1,600 grad and undergrad Residential Population: 600

Campus: 198 acres Square Footage: 242,000 square feet; 63,000

under construction Age of Infrastructure: 1960s and 1970s Annual Operating Budget: $25M Endowment: $4M


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Signatory of Presidents climate commitmentPrevious experience with retrofitsIn need of a comprehensive solutionReplace aging equipmentWould work well with concurrent retrofit project No change ordersTurnkey project


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New lighting upgrade and controls Sealing building envelopes Water conservation

Network management for heating controls Decreasing dependency on # 2 fuel oil Decreasing AMCs carbon footprint Upgrade of selected equipment Reduces some of the facilities capital actionplan repairs Improved comfort levels in all buildings


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One year warranty on all new installedequipment.

Additional warranty on other new equipmenti.e. bulbs, ballasts and lighting controls


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Upgrading selected equipment. Lower maintenance calls on upgraded

equipment.

A cost savings to maintenance budget i.e.purchasing new lights, ballasts, and newelectric motors


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Selection of companyFinancing decisions/challengesSelection of Facility Improvement Measures(FIMs)


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Energy savings guarantee program All savings 100% realized by the college and

not shared with Siemens

Concept of budget neutral No up front costs Assist in baseline data for GHG inventory Quarterly data collection Local office and the Siemens name


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Capital lease/purchase Tax exempt financing, Tax-exempt bonds

can be sold in the capital markets or directly

to bank or another financial institution. MassDevelopment - staff works with

nonprofit organizations, both large andsmall, to provide financing solutions for real

estate and equipment projects. 15 year versus 10 year Critical FIMs


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1. Lighting Retrofits and lighting controls 2. Building Envelope 3. Water Conservation 4. Pipe Insulation 5. Network Energy Management 6. Domestic Hot Water Boiler Replacement in Madonna Hall 7. Domestic Hot Water Boiler Replacement in Fuller Activities

Center 8. Domestic Hot Water Boiler Replacement in Miriam Hall 9. Premium Efficiency Motor Drive Upgrade Campus Center 10. Variable Frequency Drive Installation Campus Center 11. Energy Management System (limited) 12. Vending Machine Controls 13. Cooler Controls


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1. Lighting Retrofits and lighting controls 2. Building Envelope 3. Water Conservation 4. Pipe Insulation 5. Network Energy Management 6. Domestic Hot Water Boiler Replacement in

Madonna Hall 7. Premium Efficiency Motor Drive Upgrade 8. Variable Frequency Drive Installation 9. Vending Machine Controls 10. Cooler Controls


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1. Lighting Retrofits and lighting controls 2. Building Envelope 3. Water Conservation 4. Pipe Insulation 5. Network Energy Management 6. Domestic Hot Water Boiler Replacement in

Madonna Hall 7. Premium Efficiency Motor Drive Upgrade 8. Variable Frequency Drive Installation 9. Energy Management System (limited) 10. Vending Machine Controls 11. Cooler Controls


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www.presidentsclimatecommitment.org (c) 2007 Presidents Climate Commitment. All rights reserved.

Q&ASteve Hoiberg, Higher Education Marketing Manager, Siemens Industry Inc., Building Technologies

Division, [email protected]

Gene Rogero, Vice President, Public & Institutional Markets, Siemens Financial Services,

[email protected]

Lisa Schoonerman, Account Executive, Energy and Environmental Services, Siemens Industry Inc.,

Building Technologies Division, [email protected]

Arah Schuur, Director, Energy Efficiency Building Retrofit Program, Clinton Climate Initiative,

[email protected]

Cheryl St. Pierre-Sleboda, Vice President for Finance and Administration, Anna Maria College,

[email protected]

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Slides Financing Campus Retrofits

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