Item 4.4 - Authorizing Memorandum of Understanding Between City and Poway Unified School District APPROVED •
City of Poway APPROVED AS AMENDED ❑
(SEE MINUTES)
'" te--- a DENIED ❑
F4,• � COUNCIL AGENDA REPORT REMOVED ❑
THE
CONTINUED
RESOLUTION NO.
DATE: February 21, 2017
TO: Honorable Mayor and Members of the City Council
FROM: Robert Manis, Director of Development Services M
CONTACT: Christine Pawlik, Conservation Administr for
(858) 668-4605, cpawlikApoway.orq
SUBJECT: Memorandum of Understanding Between City of Poway
and Poway Unified School District
Summary:
In April 2016, Council set aside funding for energy efficient systems to reduce costs at
City facilities. The Memorandum of Understanding (MOU) between the City of Poway
and the Poway Unified School District (PUSD) allows for the design and construction of
a carport mounted photovoltaic (PV) system on PUSD-owned property to offset electrical
charges at the Poway Center for Performing Arts (PCPA).
Recommended Action:
It is recommended that the City Council authorize the City Manager to execute an MOU
between the City and PUSD in a form satisfactory to the City Attorney.
Discussion:
During a Council workshop in April, 2016, the City Council expressed an interest in
pursuing alternative energy projects as a way to generate savings in the City's operating
budget. A comprehensive review of the City's energy costs identified two sites as most
desirable for a PV system. The PCPA is one of the City's biggest energy users, does not
currently have a PV system, has a large area of land (parking lot) available, and a PV
system would be mutually beneficial to both the City and PUSD, making it a logical choice
for a PV system.
Currently, the City and PUSD share the use and expense of the PCPA and the associated
parking area located west of the PCPA and north of Titan Way. A Joint-Use Agreement
(JUA) between the City and PUSD divides utility (gas and electricity) costs at the PCPA
with the City paying 65% and PUSD paying 35%. This percentage is based on historical
use of the facility.
The City solicited bids to design and build a carport mounted PV system in the PCPA
parking lot. The City, with the help of a consultant who specializes in evaluating PV
systems, conducted an economic analysis of the bids and identified the bid that provides
the highest benefit per solar kilowatt hour. Under the preferred bid, the City would enter
into a power purchase agreement (PPA) with the contractor. The contractor would own
1 of 6 February 21, 2017, Item #11.
Memorandum of Understanding Between City of Poway and Poway Unified School
District
February 21, 2017
Page 2
and maintain the system (with an option for the City to purchase the system at a future
date). The PV system would produce renewable energy to offset electricity costs at the
PCPA. During the 2015 calendar year, electrical charges totaled $154,885 (PUSD paid
$54,210 and the City paid $100,675). The PV system could result in approximately
$125,804 of savings per year.
Because PUSD owns the parking lot, the City needs PUSD approval to construct and
maintain a PV system in the lot. In exchange for such approval, staff recommends PUSD
receive a portion of the savings expected to be generated by the PV system. The existing
JUA is currently under review for comprehensive amendment, but until such time as the
amendment can be approved, the MOU shall set forth the terms and understanding
between the City and PUSD for the PV system. Timing for the PV system at PCPA is
critical and cannot wait for the more comprehensive update of the JUA. The window of
opportunity for construction is summer 2017 and if the window is missed, the bid process
must start over again. Ultimately, the MOU terms would be incorporated into the JUA
Amendment.
Staff has reached a tentative agreement for the terms of the MOU with PUSD subject to
Council and PUSD Board approval. The PUSD Board agreed to authorize the
Superintendent to approve the MOU and amend the JUA, accordingly. The terms
stipulate that the PUSD portion of the electrical charges at the PCPA will be reduced from
35% to zero in exchange for PUSD allowing the City to install the PV system in the parking
lot. The City shall be responsible for all electrical charges at the PCPA and will also
receive all bill credits generated by the PV system. The PV system will not generate all of
the electricity necessary to operate the PCPA. Based on expected production and the
2015 calendar year charges, the City would pay approximately $29,081, a savings of
$71,594. PUSD will still pay its proportionate share of the gas bill at the PCPA.
Staff is seeking Council authorization for the City Manager to execute an MOU in a form
satisfactory to the City Attorney. For the carport mounted PV system to be constructed
during the 2017 PUSD summer recess, an agreement must be reached as soon as
possible.
A recommendation to award the design and construction of the PV system and enter into
a PPA will be presented to City Council under a separate agenda item.
Environmental Review:
This item is not subject to California Environmental Quality Act review.
Fiscal Impact:
Approval of this item will relieve PUSD of financial obligations for the electrical bills at the
PCPA and places the responsibility for costs and benefits of the PV system solely on the
City. Although the City will pay the entire electrical bill, the amount to be paid is estimated
to be significantly lower than before the PV system.
2 of 6 February 21, 2017, Item #'y r
Memorandum of Understanding Between City of Poway and Poway Unified School
District
February 21, 2017
Page 3
The associated Award of Contract for the Carport Mounted Photovoltaic System —
PCPA/PUSD Parking Lot, Bid No. 17-008 will generate significant electrical savings at
the PCPA for both the City and PUSD. Fiscal impact will be evaluated with the Council
action to award the contract.
Public Notification:
Poway Unified School District via email.
Attachments:
A. Memorandum of Understanding.
Reviewed/Approved By: Reviewed By: Approv-d By:
i i jr
Wendy Kaserman Morgan Foley Tina M. White
Assistant City Manager City Attorney City Manager
3 of 6 February 21, 2017, Item #
MEMORANDUM OF UNDERSTANDING
Between
City of Poway
13325 Civic Center Drive
Poway, CA 92064
and
Poway Unified School District.*
15250 Avenue of e
San Diego, 92128
itiOY
wok
This Memorandum of Understanding (the "MOU") sets forth t m ms and understanding between the
CITY of Poway(the "CITY") and the Poway Unified School District(the "PUSD") until such time as the CITY
and PUSD amend the Joint-Use Agreement (the "JUA") at the Poway Center for Performing Arts (the
"PCPA"), specifically for supplemental use of the shared parking lot located west of the PCPA, north of
Titan Way.
Background:
Currently,the CITY and PUSD share the use and expenses of the PCPA and the associated parking area as
set forth in that certain JUA by and between the City and PUSD,dated May 22, 1990,and modified March
16, 2016. The land containing the PCPA and parking lot is owned by PUSD while the PCPA building is
owned by the CITY. The electric meter attached to the PCPA is the CITY's meter. The CITY has received
bid proposals to build a carport mounted photovoltaic (PV) system in the parking lot to offset electricity
costs at the PCPA. Construction for the s
� system is scheduled to occur during the PUSD summer 2017
recess.
Purpose:
The CITY wishes to amend the JUA with PUSD in an effort to install and maintain a carport mounted
photovoltaic("PV")system in the PUSD parking lot. The collaboration will provide mutual benefit to both
parties by providing covered parking and monetary savings through renewable energy generation and use
at the PCPA facility. Under the current JUA,the CITY is required to pay 65% and PUSD is required to pay
35% of utility (electrical and gas) charges for the PCPA. In exchange for allowing the CITY to use PUSD's
parking area, the PUSD cost share of the PCPA electrical charges only will be reduced to zero for the life
of the PV system.The CITY's commodity electrical charges at the PCPA would be offset by the PV system's
energy generation. The estimated useful life of the PV system is 25 years.
Page 1 of 3
4 of 6 Attachment A February 21, 2017 Item # 4.4
Memorandum of Understanding Between City of Poway and Poway Unified School District
February 21, 2017
Page 2
PUSD will grant an easement to the City to allow for construction and maintenance of the PV system, if
necessary. PUSD will retain access to the City owned parking lot south of Titan Way. The City will continue
to provide routine maintenance and scheduled sealing and striping of the City lot.
Funding:
Funding for the construction, permits, environmental, and Department of State Architect approvals,
commissioning, interconnection,and maintenance for the PV system shall be the sole responsibility of the
CITY. Subject to approval by the Poway City Council,the CITY will enter,into a power purchase agreement
(the "PPA") with the successful bidder as determined through a CITY issued request for bids, with an
option for the CITY to purchase the system at a future date The amended JUA will include terms that
stipulate that the CITY shall be responsible for all electrical charges at the PCPA and will also receive all
bill credits generated by the PV system. If the CITY decides to purchase the system,the terms of this MOU
and consequently the amended JUA shall be evaluated and possibly modified by mutual agreement
between the CITY and PUSD.
Duration: °
This MOU is for an indefinite period of time but in no even -r than 25 years. It may be modified by
mutual consent of authorized officials from the CITY and PUS Milk his MOU shall become effective upon
signature by the authorized officials from the CITY and PUSD an.14'• ill remain in effect until modified by
mutual consent of the parties,terminated by one oft 0 rties, or the terms and conditions of this
MOU are incorporated into any �rrendment to the JUA.``kk.
n %absence of mutual agreement by the
authorized officials from the CITY andPUSD,this MOU shall terminate at the end of the estimated 25-year
PV system life. The CITY and PUSD shall continue to evaluate, negotiate,and finalize the terms of the JUA
to include the PV system in the PCPA parkin yarea described in this MOU.
Contact information: .
City of Poway
Tina White
City Manager
13325 Civic Center[Yrive..
Poway,CA 92064
(858) 668-4501
Poway Unified School District
Superintendent
15250 Avenue of Science
San Diego, CA 92128
(858) 521-2800
Page 2 of 3
5 of 6 February 21, 2017 Item # 4.4
Memorandum of Understanding Between City of Poway and Poway Unified School District
February 21, 2017
Page 3
City of Poway, Tina White,City Manager Date
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Poway Unified School District ''''-'4,,,,, Date
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Page 3 of 3
6 of 6 February 21, 2017 Item # 4.4