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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Page 12 Siemens Financial Services
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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Page 13 Siemens Financial Services
Cash (Capital Budget) Bank Loans Bonds
Traditional Sources of Funding
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Page 14 Siemens Financial Services
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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Page 15 Siemens Financial Services
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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Page 16 Siemens Financial Services
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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Page 17 Siemens Financial Services
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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Page 18 Siemens Financial Services
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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Page 19 Siemens Financial Services
Simplified Documentation Low Rates, commensurate with Bonds, Reduced timeframe (
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Page 20 Siemens Financial Services
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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Page 21 Siemens Financial Services
Contacting Siemens Financial Services
Gene Rogero
Vice President, Public andInstitutional Finance
Siemens Financial Services, Inc.1100 Riverside DriveWatkinsville, GA 30677
office: (706) 769-6864
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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,
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,
Cheryl St. Pierre-Sleboda, Vice President for Finance and Administration, Anna Maria College,