 I'm gonna call the Cheboygan Common Council committee of the whole meeting to Tuesday October 30th meeting Before we do the roll call I just want to welcome Mary rager as part of the committee of the whole Mary is going to be our staff person who is going to help me prepare agendas Get those agendas posted with city clerk Sue Richards Also prepare though prepare the minutes and get those minutes to our city clerk So welcome Mary and appreciate your help Now let's all stand for the Pledge of Allegiance Next I will entertain a motion on the approval of the minutes from the July 31st meeting We have a motion and a second to approve the minutes from the July 31st meeting all in favor Opposed chair votes aye Next we're going to have a public forum Before we get into the I asked for public forum Chief administrative officer Jim a modio asked for a minute to address the committee of the whole You'd like to come up Jim. I attended yesterday an executive committee meeting for the Scedc and it was announced at that meeting that Randy hopper has resigned and The executive committee has accepted it. So I just wanted to make sure that the council knew that Thank you Next we have a public forum on agenda items. Does anybody from the public want to address the committee of the whole Does anybody would anybody like to speak and for the third time what anybody like to speak? Okay The chairman's comments. I want I'd like to call on Alderman Scott versi chairman of the Sustainable Cheboygan task force committee and he will make a few comments and introduce our guests from arch-electric Alderman versi. Thank you, mr. Chairman brief synopsis on why we're here today Arch-electric has been in front of our committee several times and it was actually our initiative to get green if you want us to use that term and use more solar energy with in the city and lower our Energy costs and on multiple different levels Arch-electric eds of the ver is the president of arch-electric and chris mercline are gonna be giving us the presentation tonight The way we've looked at it is we looked at all utility bills through the entire city What we're paying today what we paid in 2008 that was our baseline that we came up with because we didn't have any good numbers up Until then we've made some good headway and the reason why sustainable task force has taken it over is because that's our charge is to get Into the city and see what we can do to make it Better greener and actually use more renewable sources that we didn't have in the past So that's how he's here today. We've seen to I've seen two presentations already from them They've been in front of our committee twice That's why we've had them in front of you to get more input from the alderman This is something that it will be a frontier in the market places having municipalities having this done No other municipality has this so should wagon would be a leader First out first one in the state of Wisconsin, I believe for sure So that to me being a leader is a little bit better than being a follower so if we can become that first leader and using renewable sources and Helping our energy costs. That's one reason why they're here And the biggest thing is we'll get into that is the Savings it's going to do and give us to the city so we can put it in other areas or Whichever we feel fit and at its side so right now I'll invite up Ed Zitherman Zin paper and Chris McLean to give her a presentation While they're coming up. I'm gonna have Mary take the role. I neglected to do that Here not excused Excused not excused not excused Here not excused Not excused I'll just read before we get into the presentation I'll just read the this is for is an item for discussion and possible recommendation of the Common Council Council document number three three point thirteen from the October 1st 2012 meeting RO RO number 161-12-13 by the city clerk Submitting a communication from the sustainable Shavuigan task force Jean client is secretary requesting that the Common Council call a Committee of the whole meeting to receive a presentation from our electric on the proposed solar energy project for city buildings Proceed gentlemen. Thank you. Mr. Chairman. Thank you. Mr. Mercy As indicated my name is Chris Merklin. I'm general manager with our electric I'm a lead accredited professional and a nabsep certified professional and this is Ed Zin the fur president of our electric He's an absep certified installer an iREC master PV trainer a focus and energy compliance agent With a long list of other credentials long story short. We have Great history in the new energy business. We're based in Plymouth, Wisconsin And we stumbled across a financing package that offers a unique opportunity for municipalities with high bond ratings for which the city of Shavuigan qualifies Scott did a great job of summarizing kind of how we got to this point I'll try and be respectful of everybody's time. We'll go fairly fast through our presentation and Hopefully save enough time for questions at the end or if you wanted to if we need to go back in any of the slides Hopefully we'll be able to do that A brief history on arc electric the company was started by Ed in 2003 We started as experienced traditional industrial master electricians shortly thereafter in 2005 was our first solar PV install in 2007 Ed became nabsep certified in 2008. We became focus and energy compliance the agents in 2010 we hired nabsep certified employee number two in 2010 We were also the largest PV installer in Wisconsin per focus and energy. They told us that statistic in 2010 we became iREC Ed became an iREC master PV trainer interesting side note Still to date as far as we're aware There are only nine iREC nine people in the entire country of the United States that hold that credential and ed is one of them In 2011 he hired lead AP 2011 we also hired nabsep certified employees number three four and five 2012 we introduced this cash flow positive program to municipalities and school districts as of today as of today we have over three megawatts of renewable power installed and Hopefully next year we can boast that we've installed their first municipal PV under this instant cash flow positive program Again, I want to be respectful of people's time, but we'll go over the Fundamentals of solar electricity real quickly and then again if there are any questions we can come back to this type of stuff But essentially the sunlight hits a solar module that solar module creates a DC Electricity which a building or your home cannot use That DC electricity is converted into AC with an inverter first and foremost it goes to the distribution panel of that building and that Electricity that's created by the Sun is used by the lights and the TVs and the computers within that facility if by chance The solar system is overproducing more than what the demand of the building is at that time The meter will literally run backwards and aligned to energies territories Which the city of shabuigan is under and it will send that electricity back to the grid The utility company their billing software and their meters are smart enough to recognize that and they will either bill you or credit You the difference at the end of a month A lot of people say solar in Wisconsin really have you seen it outside lately? The truth of the truth of the matter is it actually works quite well in Wisconsin There are a variety of reasons not be willing to talk any one of your ears off offline here But the short story is here's a comparison to Germany who are the world leaders in solar photovoltaics currently and This is a map of solar iridescence or on average How much sunlight do they get in a year as you can see Germany is clearly not a good place for solar But they're still doing it like crazy And if you see Wisconsin there in the orange color not quite as good as Arizona or California of course But still quite good and there are some other technical things regarding temperature where the colder temperature is actually good for solar production And after afterwards would be happy to answer any technical questions that anybody has I don't want to slow down this presentation too much on the technical details though Here are some examples to bring you up to speed with some of the projects that we've done locally here in Wisconsin And some of the terminology that we'll be using in the upper left is a picture of a church down in Port Washington That's what we refer to as a direct roof mount system for obvious reasons and the lower left That's what we call a pole mounted tracker system That's a system that wakes up in the morning facing east and it follows the Sun all day long and it goes to bed in the west Because the longer that a solar panel is perpendicular to the Sun the more efficient it is the more electricity it produces In the upper right is a traditional 25-degree rack mounted system that would go on a flat roof and we installed that before we partnered with a local Wisconsin company that designs and manufacturers custom Racking systems for flat roofs for here in Wisconsin and the lower right you can see that where it's the front edge is lifted off The roof a little bit in the upper right picture You'll notice that the leading edge of the solar module is only a few inches off of the roof Well, there's really no place for the snow to shed and if part of that panel is shaded by the snow The the performance of the system suffers greatly and so a simple solution for a few extra pennies We we keep the manufacturing of that rack right here in Wisconsin And we just lift that front edge off of the the roof 16 or 18 inches and we tilt it a little further to 35 degrees You can't get those types of racks just off the shelf and it's a small thing We're very proud of it our electric that we brought more work here into Wisconsin and the upper left is a Picture of a carport a charging station in the lower left That is another shade structure that we did for a bus company down in the Milwaukee area in the upper right is a Conomwalk bus company that was a 50kw system and in the lower right that is a ground-mount system For a high school down in Jackson Here is a partial list of local solar customers Some of you may recognize and we encourage you to follow up and and see how they feel about their solar now that they've had it Installed in some cases for many years the first of which shouldn't be a stranger to anybody. That's Maywood environmental Center David Coo Cook's a good friend of arc electric and every time I talk to me can't say enough about how the solar is performing and some of the other Energy efficiency upgrades that we've done at that facility Lake Shore Technical College St. Nicholas redevelopment that is the old St. Nicholas Hospital. That's now a senior housing We have a 30 some kw system on their roof JSM communications the FCC church. That's right by Valrath Bowl Ebenezer UCC on Taylor Drive Bondi's quick Mart in in Cleveland Alan cracked farms up in Newton Plymouth utilities We just did two trackers for Plymouth utilities the Kohler company Lakeland construction and Century Acres Those are a few of our local customers This is a Google Sketchup rendering that we did this is the St. Nicholas Hospital building are now senior apartments It was part of the sales process with the developer the owner of that building now They wanted to see what it was going to look like just to show the group What we're capable of if we get that far and there are people concerned with you know The architecture review board and all of that good stuff. We're capable of producing these types of things Here's another example of a project that did not move forward Another example of our capabilities because every site is unique This is Plymouth utilities building as they were just getting in the ground and we started our project We started digging holes and the landscaper said hey wait a second We've got trees going up around here and so this is just a one quick screen snapshot of how we did a fly around and we Programmed into the system how the Sun would go across the horizon at different times of the year and it would cast a shadow And we made sure we helped the Landscapers make sure that of the different species of trees that we're planting that wouldn't interfere with production of the solar modules Monitoring and public relations. This is very important to some of our customers And this this is what we refer to as a dashboard It's a monitoring system that always keeps track of how your solar system is performing What it's doing right now what it did last week what it did last year or for the last 20 years as long as it's been plugged in And later on if we want to we're online here I can go to some of our local customers and we can review how that website works again It's very important to some of our customers that they're able to not only boast this to show this to the rest Of the world that they're green But equally important to keep track of their investment and see if it's really paying off and all this stuff that our electric promised Me is it really coming true? This is a way to you know to keep track of that So a little bit of electricity and electrical billing 101 most people are probably familiar with this So I'm gonna fly through it relatively quick But still it's important to know units of electricity are purchased in kilowatt hours Anybody who gets a utility bill recognizes that aligned energies charges you per kilowatt hour consumed The cost of kilowatt hours are proportional to customer usage small medium large Not everybody pays the same rate and that that's a whole nother discussion But just know that it actually will show that in some of the charts a little later But city hall for instance play it pays a different rate than the transit building across the street And there are reasons for that and aligned energy could really answer that a lot better than we can But just know for for today's purpose is that that is a fact this building is different than that building is different than the police station and so on Solar PV systems are sized in kilowatts KW and so those are two different terms Potential targets for the city of Sheboygan These are things that were brought to us by the task for saying that do not exceed 2008 levels of kilowatt hour usage That's one of their goals and you'll see in a in a future slide that you've done a tremendous job at reducing your consumption so far and 18 by 18 was a term that they used it was a goal that they kind of threw out there for their team I don't want to speak on their behalf, but it was It was portrayed to us that by 2018 they would like to see 18% of all electricity used in Sheboygan should be powered by renewable sources The top group of numbers is the the group that we're going to focus on for today's purposes And these are the kilowatt hour consumption numbers not including the water utility building the water utility accounts or any street lights This these are much smaller numbers and easier to focus on the second set of numbers is a little bit bigger and according to people at the city and Laura at Alliant Energy is a little harder to measure the second group So we'll focus on the top numbers, but you can see back in 2008 You're at 2.8 million and some change kilowatt hours used went up slightly in 2009 and has gone down quite a bit into 2011 So some quick math at the bottom there 2.69 million kilowatt hours times point one eight Which is that 18% which was a goal that was shared with us would be 485,000 kilowatt hours And again now those are the numbers we're going to focus on not that 12 million number from the bottom group there a Summary of the solar financing slash leasing package Which is going to be the biggest question that I'm sure everybody here would like would like answered the financing program is specific to renewable energy projects Specifically solar and wind its investor owned leased to the city of Sheboygan with no penalty options for early purchase of the system Potential users are this financing partner who has approached us said we're targeting municipalities and or school districts with high bond ratings and When we told them we were speaking with the city of Sheboygan that got all excited and said they have double a1 rating They're perfect for our for our program They are capable of very large loan amounts. These are big names in the financial world They're not banks, so they're able to lend under a different set of rules Which is a little bit foreign to me But they speak all kinds of fancy words saying that they're perfect for this kind of thing and this investment although Lower return on their investment is also much lower in risk and diversifying their portfolio They say that's why they're targeting these types of projects. They're also capable of smaller loan amounts They shared with us after we pushed and they all $1.5 million they think they could but that's you know peanuts to these guys So we're using the 1.5 million dollar floor level. That's where they need to be at or above before we really get their attention Very low interest rates three to four percent Of course financing is subject to approval and it may change over time But during our last conversations with them, that's where they were and long term from 15 to 35 years And the whole idea behind behind the entire program is that it's inch instantly cash flow positive to the municipality hypothetical case study for Sheboygan a 335.58 KW solar PV system would produce an estimated 400,000 kilowatt hours in annual production or 399,000 kilowatt hours of production Estimated average utility rate is eleven point eight seven cents and and we're not making these numbers up We were provided with permission from the city of Sheboygan Alliant energy has provided us with all kinds of fun spreadsheets on what this building has used since 2008 through 2011 what the building across the street so on and so forth essentially they gave us Access to every account in any building that spends over five thousand dollars a year And that's what from this point forward all of the statistics that we're sharing with you on the on the dollars and Kilowatt hours that the city of Sheboygan is used. It's not arbitrary or made up These are from spreadsheets that we got from Alliant energies So that the PV system would produce approximately at that rate at eleven point eight seven cents would produce forty seven thousand dollars of Electricity and the payment using their formulas for payment back to the the lease payment would be forty two thousand six hundred and sixty two dollars So quick math tells us that's four thousand seven hundred and forty dollars savings in year number one And of course dependent on financing details The system will be paid for between seventeen and twenty five years cash flow positive every year Case study number one. This is the larger system We're going to continue on that in the future in a future slide I'll have a case study for a little smaller what we'll refer to as a proof of concept project But sticking with the three hundred and thirty five point five eight KW overall system size the option one would be broken up into approximately 13 to 17 separate smaller projects We would target in Higher rate-paying facilities for obvious reasons when the solar system is connected to higher rate-paying buildings That's what that electricity is worth it. It's producing or option number two is installed as a single ground mount system Which we would need to find a lot of space to put that much electricity on and just an interesting side note it would be More than likely be harder to get that through with Alliant energies We're gonna need Alliant energies cooperation to make any of this happen Estimated production again, here's the number of three hundred and ninety nine thousand kilowatt hours and based on the 2011 numbers without the water utilities again, we're focusing on those smaller numbers It represents a fourteen point eight percent in electric usage offset Based on the two thousand numbers. Oh, that's with the larger one We're gonna skip the last couple of bullet points there for all the reasons I mentioned before So cumulative savings using a six percent average annual increase in utility rates now to be fair Alliant energies isn't here to defend themselves, but they have from what I understand put a freeze on prices for the next four years So that's good news for everybody and we have been challenged just another side note They say okay six percent really are electric Are you sure we have been challenged and put on the spot in presentations like this? And so we've been forced to go back and prove it the real number for the Midwest is actually closer to seven percent But we'll stick with a conservative six percent again some years. It's one percent some years It's twelve percent and we've got some interesting numbers that For the city of Sheboygan just since 2008 coming up at any rate after five years twenty six thousand dollars and after forty years of owning the system Assuming six percent average increase over five million dollars saved in electricity Some equivalency comparisons There's always someone in the room that is interested in how many trees are we saving how many gallons of gas on and so forth And we have those numbers these these calculations are based on the EPA's numbers Long story short you'd be saving lots of gallons of gasoline consumed the equivalent of planting all kinds of trees and all that fun stuff and Again, there's usually somebody in the room who's very concerned about that so we'd like to share these charts Now the next couple of slides are the most important in my opinion and this this is my our term the hedge against utility rates now Please pay attention to the numbers here take some notes and we can always come back to this But the next few slides are the most important in my opinion Everything in this proposal again so far has assumed that six percent per year increase in utility rate Services spending five thousand to fifty thousand dollars a year for the city of Sheboygan Annual rates have increased on average of eight point two eight percent from oh eight to eleven And these are facts again based off of spreadsheets that alliant energy provided us So that six percent number is even probably too conservative Specifically City Hall the building we're in has increased more than sixteen percent in Utility rates since 2008 in some cases not always but in some cases if usage goes down Mysteriously the rates go up solar could benefit this situation and this is why I refer to it as a hedge against utility rates For example the water utility accounts the usage went up their usage went up But their rates only increased less than four percent from oh eight to oh eleven because they were using more Hey, you're a good customer. Thanks for using a lot of electricity will give you a little better rate the wastewater utility accounts Which everybody I'm sure is well aware is a real pioneer in their business and they have reduced their usage quite a bit Well because of that congratulations your rates go up thirteen point oh five percent in the same time period That's the foundation of our argument This is a hedge against utility rates in general the city of Sheboygan kilowatt our usage decreased fifteen point eight four percent From oh eight to oh eleven congratulations You guys have done a phenomenal job on exchanging your lights out to more energy efficiency lights and all the other things that the city of Sheboygan Does to its facilities? Well, wait a second. How come you know our cost have only decreased point three four percent one third of one percent? That's how much money you saved for all of the efforts that you put in on energy efficiency So to summarize from oh eight to oh eleven your usage went down almost sixteen percent The rates went up on average eight point two eight percent and all the money you saved was less was a third of one percent And those are based on numbers that aligned energy sent us So here is a second hypothetical case study again people say well, that's a that's a big chunk to chew off You're talking millions of dollars for this even if it is cash flow positive that that's those are some big numbers That might scare some people so we were encouraged to Come up with a proof of concept type project prove to us that this stuff isn't science fiction that it really works So that's what this slide is What we refer to as a 20kw systems very common for for different reasons in our industry a 20k They're slightly less than 20kw is very common for us So a 19.8kw system size estimated to produce 25,000 kilowatt hours per year And in 2011 the electrical usage by the building that we identified for this proof of concept project was What fire station was that ed? 15th Street that would represent a fifty one point three percent offset of their electricity And there would be potential options for again us to own the system and lease it back to the city of Shabuigan Which would be happy to have those conversations, but a lot of these 20kw systems are just Purchased with you know cash because in the long run it would look better for your finances once you get over the hump of your return on investment But we could certainly talk about those things a 30 year lease Frequently asked questions, and then we'll get to the regular questions here pretty quick I promise maintenance a five-year maintenance program is included in this in the big program in the sixth year Maintenance is turned over to the city of Shabuigan, and of course we would like to continue to be your partner And we would go after that maintenance contract Project success requires utility approval. I mentioned that before we're gonna need aligned energies to be on board with this and options to pay system off early without penalty and Of course references and project successes are can be provided in a separate handout at any time We've had a great deal of success in southeastern, Wisconsin Many companies and homeowners that I'm sure many of you know The next steps we'd like to propose a professional services contract with arch electric to perform a solar site survey of the 17 potential Locations that just based off of paperwork and and Google Earth searches from the satellite view We've identified 17 real potential locations that could be good hosts for solar A detailed report and proposal with those recommended solar system designs and financing slash lease package And then finally last but not least discussions on how arch electric can manage this project moving forward There you have it questions Hollerman Hammond Thank you, and Thank you to the committee, you know often times when we're in the middle of our day-to-day routines We don't pay a whole lot of attention to some of these things. So thank you for bringing this up I guess one of the questions I have is You know a system like the one you're outlining hypothetical number one What is the cost of something like that? Of course in the municipality world right now everything comes down the cost and I understand there's a Three-year illustration a positive cash flow to that And secondly is what is a useful life of one of these types of systems? I mean the maintenance contract lasts for five years the leases last for 30 You know, what is the useful life? What can a municipality expect for ongoing maintenance costs on a on an annual basis? After the warranty period is up those types of things. So it's kind of three questions. I just threw at you Sorry, Chris. All right. That's all right. I'll do my best to answer and hopefully Ed can back me up The first question the dollars The overall cost what that what our financing partner would pay arc electric to install this would be again close to 1.5 million in some change The key to make the whole thing work though is is again, though it's a 25 to 35 year term or you say 30 years and low financing So the cost to the city would be Your monthly payment to the financier Which again would be $42,000 now that comes with some with an asterisk The assumption was that our system would produce $47,000 worth of electricity every year Some years are good this past year is fantastic a lot of our customers are we give these proposals to of course every Project that we do we say we estimate this it's going to produce this many dollars for you this year 2012 has been fantastic for our customers. They're enjoying We're anywhere between 15 and in one case in Milwaukee in Brookfield. We are there were 26. Is that the number? Was it that high I can't let's say 26 percent above their their projected Numbers next year might not be so good. It may be more cloudy like this either way the financier is going to expect their $42,000 every year So that was that this the second question was more so maintenance The solar systems for the most part are maintenance free However somewhere in the life cycle you can probably expect to pay for an inverter That's the weak link in a solar in a PV system is the inverter somewhere in that 30 years You're more than likely going to have to buy new inverters and that would be an additional cost to the city And last but not least the life expectancy You're right the lease goes for 30 years These things are expected to go for at least 40 to 50 years NASA has some solar still in outer space on satellites that's you know 50 plus years old and it's still producing electricity and Technology has only gotten better since then did I skip over anything too fast? I'm sorry No, I guess my other question would be just a durability factor You know you obviously you've got a lot of these installed Wisconsin winters can be fairly tough You know guys like me standing or throwing snowballs at them just for giggles You know how what can we expect from broken solar panels? I mean? That's a good fair question And we have I don't know how many thousands of solar panels or solar modules installed around here and To our knowledge there was one there was a baseball that hit one can't beat that And other than that is there there was one on top of Concordia College that we saw that broke And that was kind of a mistake only one broke but of the thousands Yeah, it vandalism is is much more of a problem Then then nature friends for example there you all these panels are you well tested to To take a one inch hailstone at 80 miles an hour and then you know that's a that's a pretty good thing And we've other than the one on top of Concordia University. I don't know if we've ever replaced one just for natural causes and again we have Thousands and thousands of solar modules out there, so it's certainly not impossible vandalism though would be The biggest concern and if their rooftop mounts then that concern drops off quickly Any other questions? I have one Technology Technology of course is rapidly progressing and all different all different kinds of fields. It seems like there's a new iPhone about every three months What if the technology and solar really advances? For example if if solar panels the ones that we would install let's say in five or six years are Obsolete because there's a bigger and better solar panel Are we able to take advantage of that without having to buy an entirely new system? What's going to happen as technology advances? that's a common question and I Guess we're not in no position to guarantee that the next greatest thing isn't right around the corner But there are no indicators of it if you look at the efficiency of solar modules and all of the solar equipment that we that we install It gets better every year One or two or three percent per year is what we're finding and it's been steadily increasing and there are always rumors of oh The next you can paint your building with solar paint, you know, and that's good I don't see that happening the second part of your question. Can you take off the old technology and plop on something new? Maybe Ed wants to tackle that After after my comment here, but once you've made that investment your financial perform Isn't necessarily going to change the money is out there and it's up there on your roof producing electricity for you I wouldn't recommend it would have to be some a Gigantic leap in technology and efficiency in order to make that worthwhile. I guess And again we we live and breathe in this industry We have our finger on the pulse of all the technology and all the sales guys call us a hundred thousand times every week And there are no indicators that the next big thing is right around the corner Thanks, any other questions Alderman Lassard Would you would you use your microphone Alderman Lassard, thank you We're on television, so it's for the people at home my question was in The preparation to move forward you had requested that one of the first steps would be to take a Google map and look at sites for The 17 different areas does your company charge the city to do that? Investigation or is that something you're doing to be able to get this bid is this going to cost us anything for you to Get us that information Yes, yes, but it will be more much more in-depth what we're proposing to do We've already done the Google we've looked at all the buildings in Google and we've even done some quick drive-bys And we've of course looked at the the information that aligned energy sent us But we would propose a Contract be signed with a fee to arch electric to do Detailed on-site analysis for each of the 17 buildings that we've identified we would like to Take a look at the building structure take a look at the electrical on the building And it's going to take an absep certified professional a number of hours to not only be on-site But then take that information back to the office and develop a real-world type of a proposal and a financial performer that would Detail what we would be proposing to Sheboygan Rather than it you know now we're we're not at 30,000 feet anymore We're maybe at 15,000 feet But if there is a sincere interest by the city to pursue this and really learn what is this thing going to look like exactly? We would like to charge a fee for that to bring it down to ground level and drill it drill down into this thing a little deeper And the arena of that We have We were instructed to put together something tonight because that was going to be an obvious question the charge for that will be $5,000 the other questions Alderman Donio So the proposed scope is for solar on 17 buildings I Didn't quite get that from the presentation. Is there a possible a possibility of reducing the scope or? The scope in terms of dollars or number of buildings well, I would assume that would be both Probably not and the reason goes back to the to the financing partner Where they're looking for big big big projects and anything under that 1.5 million dollars They start to lose interest and all of a sudden doesn't make sense for them to go through all of the paperwork and efforts to put to put Something like this together All of them cut. Thank you chairman So in the event that we have the systems on 17 buildings, are we not able then to sell any of these buildings or? If we sell a building is at least transferred or what is the obligation That is a very good question that you raise an interesting point In traditional it if you won't if you own yes, the system would go along with the building But because there's a financing partner that complicates things So that should absolutely be considered by the city before We deem any particular building a good host for one of these systems because you're going to own it for 30 years And then some And after it's paid off and the lease has expired or you again if there are options for early buyouts Which the which our financing partner clearly said there's no penalty, you know, you can cash purchase and buy us out at any time that would We would have to explore that but I would imagine at this point that it would be an option for that particular part of the system To be pulled out and sold with the building, but I'm in no position to promise that I've got a question for Alderman Hammond as chairman of the finance committee and maybe even Mr. Amodio and that is This 1.5 million dollars or whatever the ultimate cost would end up to be would that be Eligible that we could put that into a capital improvements budget and borrow it for example this year We were able to borrow four million dollars that I believe 1.5 percent interest Is that something that could be put into capital improvements and therefore possibly With our borrowing power maybe be able to get a better rate than the three or four percent if rates were at Better than that at that time We can borrow what we can borrow at I forget what the blended rate we had last time was about one and a half Yeah, 157 so, you know, certainly we'd look at that as an option versus three I know that's not gonna make your financing partner very happy, but unless they're willing to come down to a To a level like that, but you know, we can cut the rate in half right now because of our bond rating Well that That's a great idea and if you can do that that we would support that a hundred percent again We certainly don't want to undercut our financing partner, but that goes back to your question again though, too Could we reduce the scope of the project? Absolutely They're the ones who set that 1.5 million dollar mark and if you guys are able to do it at more favorable rates And then you can pick a budget or a system size or an electricity goal and we can design to that Do you have another question? I did we were talking earlier and maybe this is somewhat of a are you were mentioning earlier? Maybe this is somewhat of a mute point. Maybe it all evens out at the end, but We produce excess electricity Doesn't you know is a lion willing to buy that back from the grid or is it just show up as a credit? Yeah, is there a possibility of selling some of that back to Alliance and helping to offset some of our cost structure. Is it just show up as a credit to me as a credit on our on our bill I know in some cases and maybe I'm wrong on this But you know larger groups that have done some of the wind power and some of the larger farms have have been able to sell That back to the grid if they've produced excess To help finance the project Sure sure and that's That can be a complicated question because different utilities have different rules And there were some things that were available in the past that are now locked down But in terms of today and Alliance energies the threshold that we want to stay under I mentioned that 20kw system size before That's an important number because of because of different rules that are in place in our industry and if we stay under that 20kw size per Meter that we're connecting to yes We can sell back to Alliance energies and they'll pay retail rate the exact same rate that That meter is paying to consume electricity. That's exactly what they will pay you for everything you send back to the grid Yes, one once we cross that 20kw threshold Alliance energies is very funny and they and they will not pay you. I don't believe anything I guess the follow-up is how realistic is that? That would be part of that that would be part of the study where we could really drill down and spend some time Determining that which and that would be a big part of how we design these systems. Why is this building only getting 19? 0.9kw when it when its roof could host 50kw that that's part of what we do We would help design the best system financially for the city If that makes sense All of adversity shape two things the first one was back to the financing option The reason why we chose their financing partners because it's not costing us any money That's going out. We are purchasing that that if we're using our lower bond rating lower interest rate That's much better that way, but this way We're using their financing to really see it produce before we go out and spend the money That was my mindset behind there using their financing. Yes, it's a higher interest rate But we can see the proof is in the pudding right so you go three five years down the road It's producing that then we could probably go out and bond at our lower rating Purchase out the panels wipe out the financing partner and now we're ahead. Well, but if it's not producing can we walk away from it? Their financing partners, right? That's the flaw there. Yeah, because if it's not producing, you know We're stuck with this thing at three or four percent and we're gonna have to buy it out anyways Second part sorry building wise As far as buildings we looked at doing some of the smaller buildings so that Potential is more realistic because if we put it on top of like he just he made the point I'm putting on a smaller building kicking back and selling energy back is you know That building is completely a hundred percent sufficient and we're selling it back That's what he's they're gonna look at being able to do that instead of putting it on top of the biggest buildings And not really making a dent so that's the whole point behind having them do their full in-depth survey What we're doing there's something else worth mentioning here. That's important to understand for When we're having these discussions and that is there are two pieces of of this package the financing that that our investor has or a For-profit company can find value and that is a 30% federal tax credit and the second is the value of depreciation of that equipment a Financer or a private company can take advantage of those things from my understanding. I don't think a municipality can and so That's a big chunk of your financial performance. We're all of a sudden it might not make as much sense for you in black and white Mr. Amorio I believe the number was 14 percent 14 point 14 point something if I recall that slide In a lot of cases they would be 20kw or less but in in the case if we were to find a large building where there's no chance We would ever send electricity back to the grid You guys are always consuming way more than 20kw's of electricity in that case One or two of the systems could certainly be SARS sized much larger The key point is that in aligned energies once you cross that 20kw threshold You never want to send electricity back to the grid because they won't pay you a penny for it That's what we would recommend it's typically more cost-effective plus it lowers the vandalism risk any other questions Alderman Bellinger, thank you chairman You mentioned first five years maintenance is included What is the typical maintenance that needs to be done? And secondly, what would be the ongoing charge if we were to partner with you for a yearly maintenance contract? Good question the the maintenance for the first five years is really going to be minimal In fact, I'd like to add to answer that if that's all right. This is much more Maintenance from our perspective in all reality is quite simple because they're mechanical parts in as long as everything's a fixed the building We look for water mitigation if there are direct attachments to any structures We watch performance Specifically through monitoring to ensure that the system is functioning and doing what we said it was going to do And we watch for just the overall performance of each system And we know what the benchmarks are and if we see something slipping for example, we can mitigate that head on early on Most of our failures we've ever seen happen within the first week That's the weak spot of the whole system once we get them through that we call it a burning period We get a week under the belt. They typically operate flawlessly So maintenance is very minimal And to likely charge ongoing do you have an idea what that would be? No, any other questions? Mr. Bevel Over time Very true. Let me just repeat that for the people at home the 30-year lifespan of the system. Is there any Diminishing of their production of the electricity over the 30-year period and the degradation according to the manufacturers Average is about one-third of one percent on an annual basis and we build that into our performer So that as we look at the financial aspect of it. We can see exactly what that's going to do over time Any other questions? We have this item down for a discussion and possible recommendation to the Common Council what any of the older persons? Like to make a recommendation to the Common Council at this time All of them in versey. Thank you, Mr. Chairman Yeah, I'd like to make a recommendation to forward this to the Common Council for consideration of the going through and Continuing on with this survey of our 17 different spots Would you like to refer that to a specific committee for? Consideration I suppose you probably go to finance so that would be Reef refer to finance you have that motion Mary It's got a good idea. We got yeah, it's got to go to council first. Yeah We have a motion and a second Okay, would you call the role plea Alderman Donahue? Just so I understand so the motion is to essentially approve a $5,000 contract to go ahead with the survey As proposed We have a motion and a second Would you call the roll please Mary? Hi Hi Hi Hi motion carries Before I Move any further on the agenda. I just want to remind you all her persons and anybody who may be watching this tonight on television W SCS our cable our cable television station has an open house tonight from five until seven For any of the all her persons that are interested in attending that's out at UW Sheboygan and that would be in on the south door off the parking lot and Then our next meeting date Is to be announced and I will entertain a motion to adjourn I'll move. Okay. We have a motion and a second to adjourn all in favor. I Was chair votes. I we are adjourned. Thank you guys. Thank you, everyone