HomeMy WebLinkAboutItem 2D: Adoption of Resolution 5035 Authorizing Transfer of Energy Bonds for LCC
CE
ITY OF UGENE
AIS
GENDA TEM UMMARY
Adoption of Resolution 5035 Authorizing Suballocation or Transfer of Qualified
Energy Conservation Bonds for Lane Community College
Meeting Date: June 27, 2011 Agenda Item Number: 2D
Department: Central Services Staff Contact: Sue Cutsogeorge
www.eugene-or.gov Contact Telephone Number: 541-682-5589
ISSUE STATEMENT
The council will consider a resolution that would allow the City to transfer or suballocate its share
of federal Qualified Energy Conservation Bonds (“QECBs”) to Lane Community College for its
Downtown Campus project.
BACKGROUND
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The new Downtown Campus for Lane Community College (LCC), to be located at 10 and
Charnelton, will include a 90,000 square foot, $35 million education building and a $20 million,
75,000 square foot student housing facility. The LEED Platinum education building is intended
to both demonstrate and teach sustainable building strategies. It will house approximately 30
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stateof-theart classrooms and lecture halls that will increase the number of students served
downtown.
The City and Eugene’s Urban Renewal Agency (URA) are supporting the project in several
ways. On May 24, 2010, the council approved an amendment to the Downtown Urban Renewal
Plan with support for the project. The amended plan included an $8 million grant to LCC for the
project. In addition to the grant, the URA also donated the land at 10th Avenue and Olive Street
valued at $1.6 million. The City also approved the transfer of a Recovery Zone Bond allocation
to LCC in order to help the college access a $7,839,000 lower cost bond that will go toward the
housing portion of the project.
The federal government has enacted programs that authorize the issuance of Qualified Energy
Conservation Bonds that may be used by state, local and tribal governments to finance certain
types of energy projects. These bonds are limited and must be issued under a volume cap
allocation from the federal government. The City of Eugene has been allocated approximately
$1.5 million of the QECB volume cap.
QECBs are interest subsidy bonds that can be issued to finance energy efficiency capital
expenditures in public buildings; renewable energy facilities; green community programs;
renewable energy production; various research and development applications; mass commuting
facilities; several types of energy related demonstration projects; and public energy efficiency
education campaigns. No such bonds have been issued in Oregon to date in part because it can
be difficult to develop qualifying projects, and because it may not make sense to issue bonds for
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the small amount of allocation that each jurisdiction has been granted. The City of Eugene does
not currently have any projects that would qualify for or make sense to finance using QECBs.
As part of the Governor’s Cool Schools Initiative, the Oregon Department of Energy (ODOE)
has requested that jurisdictions not utilizing their allocation transfer their unused QECB
allocation back to the State. The State is aggregating these unused allocations to issue the bonds
as the source capital for a Cool Schools Initiative loan program operated under ODOE’s Small
Energy Loan Program. The resulting financial product would be a low interest loan with a
maximum 15-year term.
ODOE’s initial list in March 2011, of potential K-12 school projects that would receive
assistance under the Cool Schools program did not include any schools in Eugene. Given this,
staff worked with local schools and LCC to determine if there would be a use for the City’s
allocation locally rather than giving up this allocation to the state-wide effort. From these
discussions with Eugene and Bethel School Districts, as well as LCC staff, it became clear that
the LCC Downtown Campus project would be the most viable use of Eugene’s allocation given
the project financial gap that exists for high efficiency and renewable energy elements, LCC’s
proposed uses meet the bond program requirements, and LCC expressed the greatest interest in
issuing the bonds given their current bond activity. On June 14, the LCC Board approved a
resolution requesting that the City consider transferring its allocation for use in the Downtown
Campus project. The LCC resolution is included as Attachment A.
The City resolution included as Attachment B would allow the City to transfer its QECB
allocation to LCC to lower the cost of borrowing for some of the sustainable building strategies
included in the project. Specific elements that would qualify for use of these bonds are the solar
and geothermal energy systems to be included in the project. There are many other elements of
the project that include energy conservation elements, and those may also qualify for use of
QECBs if the solar and geothermal systems are deemed not eligible for some reason. The use of
QECBs would allow LCC to borrow funds at a lower cost than would otherwise be available for
financing and further assist LCC in successfully completing this highly important downtown
development project.
RELATED CITY POLICIES
Downtown revitalization and the projects referenced in this material are supported by the
Downtown Plan, the council’s 2009 Vision and Goals, and a number of plans and reports related
to downtown.
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COUNCIL OPTIONS
Council options include:
1.Approve the resolution as presented to allow suballocation or transfer of the QECB
authorization to LCC.
2.Do not approve the resolution.
CITY MANAGER’S RECOMMENDATION
The City Manager recommends approving the resolution.
SUGGESTED MOTION
Move to adopt Resolution 5035 authorizing suballocation or transfer of Qualified Energy
Conservation Bonds for Lane Community College.
ATTACHMENT
A.Resolution 564 of the Lane Community College Board, Request for Qualified Energy
Conservation Bond Allocation
B.A Resolution Authorizing Suballocation or Transfer of Qualified Energy Conservation Bond
Authority for Lane Community College
FOR MORE INFORMATION
Finance Contact: Sue Cutsogeorge, Finance Director
Telephone: 541-682-5589
Staff E-Mail: Sue.L.Cutsogeorge@ci.eugene.or.us
PDD Contact: Ethan Nelson, Waste Prevention & Green Building Program Manager
Telephone: 541-682-5224
Staff E-Mail: Ethan.A.Nelson@ci.eugene.or.us
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ATTACHMENT A
Lane Community College Board of Education
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4000 East 30 Avenue
June 14, 2011
Eugene, Oregon 97405
RESOLUTION NO. 564
Request for Qualified Energy Conservation Bond Allocation
WHEREAS,
Lane Community College seeks to enhance development in downtown
Eugene by constructing an energy efficient, LEED certified Downtown Campus facility;
and
WHEREAS,
Qualified Energy Conservation Bond Authority allows for cost effective
financing of energy features such as geothermal and solar energy development; and
WHEREAS,
the City of Eugene is an QECB-eligible local government that has
received a Qualified Energy Conservation Bond allocation in the amount of
approximately $1.5 Million; and
WHEREAS
, federal law authorizes QECB-eligible governments to sub-allocate
their QECB bond authority allocation for qualifying purposes.
NOW THEREFORE, BE IT RESOLVED
That the Board of Education of Lane Community College requests that the City of
Eugene City Council sub-allocate its available Qualified Energy Conservation Bond
authority to the College to be used for geothermal and solar energy components in the
construction of the Lane Community College Downtown Campus and for other qualified
energy conservation projects at the Downtown Campus.
Adopted by the Board of Education this 14th day of June, 2011.
ATTEST:
Mary Spilde,
College Chair, Lane Community College
President/District Clerk Board of Education
S:\CLIENTS\MEG\AA - LCC\BOARD 07A\MONTHLY BOARD MEETINGS (07A)\RESOLUTIONS\Resolution No. 564.doc
ATTACHMENT B
RESOLUTION NO. ____
A RESOLUTION AUTHORIZING SUBALLOCATION OR
TRANSFER OF QUALIFIED ENERGY CONSERVATION BOND
AUTHORITY FOR LANE COMMUNITY COLLEGE.
The City Council of the City of Eugene, Oregon, finds as follows:
A.
The Energy Improvement and Extension Act of 2008, enacted in October 2008,
authorized the issuance of Qualified Energy Conservation Bonds (QECBs) that may be used by state,
local and tribal governments to finance certain types of energy projects. The American Recovery and
Reinvestment Act of 2009, enacted in February 2009, expanded the allowable bond volume to $3.2
billion. The City of Eugene (the “City”) has been allocated Qualified Energy Conservation Bonds
(“QECBs”) volume cap in an amount estimated to be $1,563,417.
B.
QECBs are interest subsidy bonds that can be issued to finance energy efficiency capital
expenditures in public buildings; renewable energy facilities; green community programs (including
loans and grants to implement such programs); renewable energy production; various research and
development applications; mass commuting facilities that reduce energy consumption; several types of
energy related demonstration projects; and public energy efficiency education campaigns.
C.
The City is permitted pursuant to Section 54D(e) of the Internal Revenue Code of 1986,
as amended, and Internal Revenue Service Notice 2009-29, to use some or all its QECB authority to
issue QECBs, to suballocate some or all of its QECB authority to another issuer for a project that is
within or attributable to the jurisdiction of the City, and/or to reallocate some or all of its QECB
authority to the State of Oregon.
D.
Lane Community College (“LCC”) is developing a state-of-the-art education facility
within the geographical limits of the City that will be LEED Platinum and include many energy
conservation measures.
E.
On June 14, 2011, the LCC Board passed a resolution requesting assistance from the
City in the form of utilization of the City’s QECB authority to allow LCC to achieve a lower financing
rate for energy conservation measures in the new facility.
NOW, THEREFORE,
BE IT RESOLVED by the City Council of the City of Eugene, a municipal corporation of
the State of Oregon, as follows:
Section 1. Qualified Energy Conservation Bond Authority for Lane Community
College
. The City Manager or the person designated by the City Manager to act on behalf of the City
under this resolution may suballocate or transfer to, or otherwise arrange for the use by, LCC of all or
any portion of the City’s QECB authority.
Resolution - Page 1 of 2
Section 2. Delegation
. The City Council hereby authorizes the City Manager and the
person designated by the City Manager to act on behalf of the City under this resolution to take any
actions that are desirable to carry out this resolution.
Section 3. Effective Date.
This resolution shall take effect immediately upon adoption.
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The foregoing Resolution adopted by the City Council on the 27 day of June, 2011.
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Deputy City Recorder
Resolution - Page 2 of 2