Keeping the lights on at city hall is costing taxpayers struggling with their own household budgets more money than it should, and now there is a way to fix that, say leaders of a new Emerald Cities collaboration.
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View full sizeSeven Hills city service director Stewart Lovece and Emerald Cities Cleveland director Shanelle Smith check planning documents for $1.9 million energy efficiency upgrades of municipal buildings. CLEVELAND, Ohio -- Big-ticket energy efficiency and renewable energy projects have become planning nightmares for many cash-strapped small city governments reluctant to raise taxes or take on construction debt.
Now an unusual collaboration of unions, nonprofits, private companies and county government is offering suburban cities here a low-risk way to modernize, slash utility bills and pay for the projects with the savings.
Retrofits for ENergy Efficiency Works, or RENEW, is a creation of the Cleveland chapter of Emerald Cities, a national green building collaboration of unions and non-profits, Beachwood-based Public Finance & Energy Advisors, Cuyahoga County government the Cleveland-Cuyahoga County Port Authority, and COSE, the small business arm of the Greater Cleveland Growth Association.
RENEW is offering cities the engineering and financial expertise to retrofit aging municipal properties with high-tech lighting, heating and cooling equipment and the latest in high-efficiency insulation, windows and doors.
Solar panel arrays and geothermal equipment are also among the options in projects designed to slash utility bills.
This past week RENEW announced its first project -- $1.9 million in efficiency upgrades to suburban Seven Hills municipal buildings, along with an unusual, double-sided solar panel array over a new white roof on city hall.
"We are looking to do energy efficiency retrofits, create a pathway for disadvantaged into the construction trades, create a cash flow for local governments and reduce carbon dioxide emissions," said Shanelle Smith, director of the Emerald Cities Cleveland chapter.
Emerald Cities has offices in nine other cities, but Cleveland has the only RENEW project, Smith said.
Seven Hills is the first of what Smith hopes will be up to a dozen suburban projects this year. The Cleveland-Cuyahoga County Port Authority is working with the Ohio Development Services Agency to provide financing for energy efficiency and energy conservation projects.
RENEW hopes to assist suburban cities in which earlier federally funded energy audits determined millions of dollars in efficiency upgrades were needed.
"The audits determined that 40 percent of the operating costs of some of these municipal buildings went to utility bills," said Kevin Warner, a Washington, DC-based vice president for Investments at Emerald Cities Collaborative.
"That's a challenging problems for small cities that don't have in-house expertise. Any engineering support on staff is very general. These projects require a special set of skills," he said.
"Small government and schools don't have anybody on their side," Warner added. "That's what we heard from mayors, city managers and finance directors when we did focus groups around the county."
Eric Small, managing director of Public Finance & Energy Advisors, said the process his company has designed for the municipal projects incorporates competitive bidding, transparency and accountability.
"We are an independent adviser, registered with the Securities and Exchange Commission. We coordinated the technical assistance and financing of this project, Small said of the Seven Hills upgrades
The company works with Spectrum Energy Consultants to bring engineering expertise to help a city select the best "bundle" of energy efficiency upgrades, said Small.
"At outset, we recommend to clients they used independent engineering consultants as well," Small added. "They select an engineering firm. We work with them in the process. So they get an independent view."
Then the city should issue an RFP, or request for proposals, to choose a contractor, he said.
Financing of these projects will depend on what each city wants to do, said Small.
Seven Hills did not want to add to its bonded debt and instead asked for a lease-purchase arrangement.
"Working with counsel, Squire Sanders, we put together a lease purchase structure that has been shared with banks and other institutional investors," he explained.
"Financing has to fit in with a city's requirements, in terms of structure and the savings ratio," said Small.
"The savings have to cover the costs. And savings that have been identified by the contractor and an independent auditor are sustainable savings," he explained.
As if that were not enough to convince fiscally nervous municipal governments, the efficiency performance upgrades are guaranteed, he said, insured by an AA-rated insurer.