City Council Agenda

CITY COUNCIL WORK SESSION AGENDA December 12, 2022, at 7:00 p.m. City Hall Council Chambers, 201 First Avenue East The public can participate in person in the council chambers or via videoconferencing. Register to join the video conference at: https://us02web.zoom.us/j/81590846067?pwd=YldRQUhKNGRzOUIwNE1IYTFlakl2UT09. Please see the bottom of the agenda for instructions to watch the meeting live. A. CALL TO ORDER B. DISCUSSION 1. Presentation on the State of Montana Commercial Property Assessed Capital Enhancement Act of Montana (C-PACE) Program C. PUBLIC COMMENT Persons wishing to address the council are asked to do so at this time. Public comment can be provided in person, verbally during the online meeting, or via email to publiccomment@kalispell.com D. CITY MANAGER, COUNCIL, AND MAYOR REPORTS E. ADJOURNMENT UPCOMING SCHEDULE / FOR YOUR INFORMATION Next Regular Meeting – December 19, 2022, at 7:00 p.m. – Council Chambers City Offices Closed – December 26, 2022 – Christmas Holiday Next Work Session – January 9, 2023, at 7:00 p.m. – Council Chambers To provide public comment live, remotely, please register for the video conference through zoom and use the raise hand feature to indicate you would like to provide public comment. See the top of the agenda for the zoom link. Watch City Council sessions live or later on Charter Cable Channel 190 or online at https://www.kalispell.com/480/Meeting-Videos. The City does not discriminate on the basis of disability in its programs, services, activities, and employment practices. Accessible parking is available at the rear entrance to City Hall off of the alley, where there is an accessible entrance, and accessible restrooms are available. Auxiliary aids are also available. For questions about disability accommodations please contact the City Clerk at 406-758-7756. Page 1 of 1  City of Kalispell 201 1st Ave E. P.O. Box 1997 Kalispell, Montana 59903-1997 (406) 758-7000 Fax (406)7757 REPORT TO: Mayor Johnson and Kalispell City Council FROM: Doug Russell, City Manager SUBJECT: Presentation on C-PACE program MEETING DATE: December 12, 2022 BACKGROUND: The State of Montana has enacted a Commercial Property Assessed Capital Enhancement Act of Montana (C-PACE) which allows a local governing body to designate a district where owners of private commercial, industrial or multi-family housing can make eligible Energy Conservation Project improvements and repay the costs through assessments on the property over time to limit the up front cost, theoretically allowing the energy savings to pay for the installation and equipment costs over the time horizon. I am including a document related to the State of Montana’s C-PACE program. I am also providing a sample presentation that was provided to another local government in Montana. In order to participate in the program, a district has to be created by a local government entity. Council has previously identified an interest in hearing more about this program. As such, on Monday night, Adam Gill, the Executive Director of the Montana Facility Finance Authority will join the meeting to provide a presentation on the program and answer questions from the Council. ATTACHMENTS: C-PACE Information Sheet Sample Presentation  Eligible Improvements • High efficiency heating, ventilating and air conditioning (“HVAC“) systems • Solar energy systems • High efficiency chillers, boilers, and furnaces • High efficiency water heating systems • Energy management systems and controls • Distributed generation MONTANA C-PACE FINANCING systems • High efficiency lighting system upgrades • Building enclosure and Commercial Property Assessed Capital Enhancement “C-PACE” envelope improvements provides building owners with a way to finance energy and • Water conservation and water efficiency improvements as well as renewable energy wastewater recovery and generation. A wide range of improvements are eligible for reuse systems C-PACE financing allowing it to finance up to 35% of new • Combustion and burner construction projects and 100% of retrofit projects. upgrades • Heat recovery and steam C-PACE is an attractive alternative to higher-interest and traps shorter-term debt and allows for a building owner to put in high- • Water management systems efficiency systems at no net cost. and controls (“indoor and outdoor”) • High efficiency irrigation To learn more about Montana equipment C-PACE visit the website: www.LastBestPACE.com Eligible Properties or contact the MFFA at Mffa@mt.gov • Commercial • Industrial • Agricultural • Multifamily (4+ units) HOW DOES IT WORK? • Mixed-Use Now that Montana has enabled C-PACE, property owners can apply for a C-PACE loan with a capital provider to fund energy Project Types savings improvements, renewable energy systems, or water conservation equipment. The C-PACE loan is repaid annually • New Construction through a special payment that is collected by the county as • Retrofit part of the real estate tax bill for that property. • Retroactive (placed in service within last 3 years)  Montana Facility Finance Authority Adam Gill Executive Director Seth Lutter Associate Director Monica Birlut Accountant ** Slide material provided by C-PACE Alliance** C-PACE Process Building owner Local government completes energy Owner completes C- establishes C-PACE audit to find savings PACE application District opportunities Project design Owner negotiates MFFA approves submitted for financing with lender project independent review Owner pays C-PACE loan closes Owner uses energy contractors to and assessment is savings to repay complete recorded assessment improvements 10  Yellowstone County Class 4b County Mills County Schools Local Schools City Mills Taxable Value 1.87% 1.87% 1.87% 1.87% Mills 142.937 43.051 245.018 160.795 100,000 $ 227.20 $ 68.43 $ 389.46 $ 255.58 250,000 $ 568.00 $ 171.07 $ 973.64 $ 638.96 500,000 $ 1,135.99 $ 342.15 $ 1,947.28 $ 1,277.92 1,000,000 $ 2,271.98 $ 684.30 $ 3,894.56 $ 2,555.84 2,500,000 $ 5,679.96 $ 1,710.74 $ 9,736.40 $ 6,389.59 5,000,000 $ 11,359.92 $ 3,421.48 $ 19,472.81 $ 12,779.18 20-Year Revenue Projection County Mills County Schools Local Schools City Mills 100,000 $ 2,385.58 $ 718.51 $ 4,089.29 $ 2,683.63 250,000 $ 5,963.96 $ 1,796.28 $ 10,223.22 $ 6,709.07 500,000 $ 11,927.91 $ 3,592.55 $ 20,446.45 $ 13,418.14 1,000,000 $ 23,855.83 $ 7,185.10 $ 40,892.89 $ 26,836.28 2,500,000 $ 59,639.57 $ 17,962.76 $ 102,232.23 $ 67,090.71 5,000,000 $ 119,279.14 $ 35,925.52 $ 204,464.46 $ 134,181.42 Source: MT Dept of Revenue Biennial Property Tax Report 2019-2020 Revenues assume that the property value increase is no more than 85% of the C-PACE financing amount 11  Headwaters Utility District – Broadwater County • 200-acre development park at Montana’s busiest intersection • Property being developed by Bridger Brewing and will include a 60,000 bb/yr brewery and pub • Prior development hampered by need for a wastewater system • Worked with Dividend Finance • Membrane bioreactor system • Up to $5.5M in two tranches will clean sewage and sell it back as grey water. • Expected project savings of $10 million • Estimated County tax revenue of over $75,000 in first year • Financing enables growth of the entire development 13  www.LastBestPACE.com Adam Gill Executive Director adamgill@mt.gov 406-444-0259 Seth Lutter Associate Director seth.lutter@mt.gov 406-444-5435 15