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HomeMy WebLinkAboutEnergy Services Program - PRELIMINARYSouthold Town Board - Letter Board Meeting of May 5, 2009 RESOLUTION 2009-370 ADOPTED Item # 5.29 DOC ID: 4989 THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION NO. 2009-370 WAS ADOPTED AT THE REGULAR MEETING OF THE SOUTItOLD TOWN BOARD ON MAY 5, 2009: RESOLVED that the Town Board of the Town of Southold hereby authorizes and directs Supervisor Scott A. Russell to execute an Energy Services Program agreement betWeen the Power Authority of the State of New York and the Town of Southold to reduce energy costs and/or to realize significant environmental benefits, subject to approval of the Town Attorney. Elizabeth A. Neville Southold Town Clerk RESULT: ADOPTED [UNANIMOUS] MOVER: William Ruland, Councilman SECONDER: Vincent Orlando, Councilman AYES-' Ruland, Orlando, Krupski Jr., Wickham, Evans, Russell Generated May 7, 2009 Page 35 MARTIN D. FINNEGAN · TOWN ATTORNEY martin.finnegan@town.southold.ny.us JENNIFER ANDALORO ASSISTANT TOWN ATTORNEY jennifer.andaloro@town.southold.ny.us LORI M. HULSE ASSISTANT TOWN ATTORNEY lori.hulse@town.southold.ny.us SCOTT A. RUSSELL Supervisor Town Hall Annex, 54375 Route 25 P.O. Box 1179 Southold, New York 11971-0959 Telephone (631) 765-1939 Facsimile (631) 765-6639 OFFICE OF THE TOWN ATTORNEY TOWN OF SOUTHOLD Date: Subject: MEMORANDUM To: Ms. Sandi Berliner ,~,, 2 7 2009 From: Lynne Krauza Secretary to the Town Attorney August 26, 2009 Energy Services Program Agreement Please be advised that Lori has reviewed and approved the attached Agreement in connection with the referenced matter. A copy of the resolution authorizing Scott to sign this document is also enclosed. In this regard, kindly have Scott sign and date both counterparts where indicated and return them to me for processing. Thank you for your attention. If you have any questions, please do not hesitate to call me. /Ik Enclosures j cc: Ms. Elizabeth A. Neville, Town Clerk (w/encls.) ENERGY SERVICES PROGRAM AGREEMENT BETWEEN POWER AUTHORITY OF THE STATE OF NEW YORK AND TOWN OF SOUTHOLD , ' Statewide JanuaP/2009 ENERGY SERVICES PROGRAM AGREEMENT This Agreement ("Agreement"), dated and effective this __ day of _, 200_, is entered into by and between POWER AUTHORITY OF THE STATE OF NEW YORK, a corporate municipal instrumentality of the State of New York with offices located at 123 Main Street, White Plains, New York 10601 ("AUTHORITY") and Town of $outhol_,0a municipal corpora- with offices located at 53095 Main Rd., gOB 1~79, Southold, NY tion 11971-0959 ("CUSTOMER"). This Agreement describes the general terms and conditions under which CUSTOMER agrees to participate in energy services and/or clean energy technologies projects ("Projects") to be implemented at facilities owned or operated by CUSTOMER. The Projects will be undertaken as port of the AUTHORITY's Energy Services Program ("ESP"). The Projects are intended to reduce energy costs and/or to realize significant environmental benefits at certain agreed-upon institutions and facilities (each, a "Facility" and collectively, "Facilities") operated by CUSTOMER. [Article I follows] Article I Definitions The following defihitions shall apply for all purposes of this Agreement: "Authority Cost of Money" refers to the weighted average annual rate of interest paid by AUTHORITY on the applicable portion of its outstanding debt in the prior calendar year, plus associated fees. Currently, this debt consists of tax-exempt or taxable commercial paper. These fees can include fees associated with the commercial paper revolving credit, fees associated with remarketing the commercial paper, fees associated with the purchase of an interest rate cap(s), and the allocable portion of fees incurred by AUTHORITY in the prior calendar year for the services performed by AUTHORITY's commercial paper issuing and paying agents. Fees, including surcharge for credit lines and remarketing, maybe revised if substitute lines of credit or remarketing arrangements are obtained by AUTHORITY to reflect charges under such substitute lines of credit and remarketing arrangements. Other funding sources may be used at the discretion of AUTHORITY. Such sources may include fixed or variable rate instruments. In such cases, the weighted average interest rate~ discussed in the previous paragraph, shall include the interest rate contribution of such debt instruments outstanding in the prior calendar year and appropriate fees. If fixed rate debt has been issued as the sole source of financing for a specific project, then the actual rate plus associated fees corresponding to that fixed rate instrument will be applied for the duration of the project's repayment period. Authority Cost of Money will be adjusted annually on January 1 for the succeeding 12 month period based upon the weighted average annual rate of interest paid by AUTHORITY on its applicable outstanding debt during the preceding 12 month time period. "Authorized Representative" means an individual designated by the AUTHORITY to coordinate a Project on behalf of AUTHORITY and to communicate with CUSTOMER concerning such Project. "Change Order" shall mean a modification to the Customer Installation Commitment, setting forth agreed-upon additions, deletions or revisions to the Work. "Contractor(s)" are firms with which AUTHORITY may enter into agreements to provide program management and implementation services for selected Facilities. AUTHORITY reserves the right under this Agreement to act as its own Contractor; in such instances, any reference in the Agreement to "Contractor" will mean "AUTHORITY." The Contractor (including AUTHORITY if acting as Contractor) will receive a fee for providing these services. These fees will be detailed in each Customer Installation Commitment. "Customer Installation Commitment" or "CIC" refers to the work order signed by AUTHORITY and CUSTOMER which sets forth the terms under which a Project will proceed. The CIC is more fully discussed in Article II, Section (a)(3). "Customer's Authorized Representative" means the individual designated by CUSTOMER to coordinate a Project on behalf of CUSTOMER and to assist AUTHORITY, the Contractors an~d Subcontractors with the implementation of the Project in the Facility. "Design" shall have the meaning set forth in Article II, Section (a)(2). "Elig~ility Criterion" shall have the meaning set forth in Article III. "Facility Audit" shall have the meaning set forth in Article II, Section (a)(1). "Feasibility Report" shall have the meaning set forth in Article II, Section (a)(1). 3 "Final Customer Installation Commitment" or "Final CIC" shall have the meaning set forth in Article II, Section (a)(8). ',Financing" refers to CUSTOMER's exercise of the option for AUTHORITY to provide funds as set forth in the CIC to cover the Customer's Repayment Obligation. These funds will be recovered by AUTHORITY from CUSTOMER through the imposition of agreed-upon monthly payments ("Monthly Bill Payments") or in lump sum amount(s). The Monthly Bill Payments are designed to amortize the Customer's Repayment Obligation funded by AUTHORITY over a period mutually agreed to by AUTHORITY and CUSTOMER, but not to exceed twenty years. "Repayment Obligation" refers to the Total Installed Cost of implementing Projects in CUSTOMER Facilities as identified in the CIC and the Final CIC, provided, however, that if the Project is terminated by CUSTOMER prior to execution of the CIC, the Repayment Obligation shall be the costs to provide the Facility Audit, Feasibility Report and/or Design to the date of termination; and provided further, that the costs o f the Facility Audit and/or Feasibility Report shall be waived if Project activity ceases prior to commencement of the Design Phase, as set forth in Article II, Section (a)(1). "Subcontractor(s)" refers to the qualified installation finns retained by the Contractor(s) to perform all or part of the Work. "Total Installed Cost" is the sum of all of the costs of a Project as set forth in the CIC including: (1) material cost; (2) labor cost; (3) construction comingency (usually calculated as a percent of material cost and labor cost, any unexpended portion of which will be eliminated from the calculation of the Final CIC upon Project completion); (4) material handling cost; (5) Waste disposal cost; (6) Contractor fees for Facility Audit, Facility Design and construction management; (7) AUTHORITY program costs; (8) interest during construction at the Authority Cost of Money, adjusted on a monthly basis; and (9) approved Change Orders. "Waste" refers to waste PCBs (as defined by the United States Environmental Protection Agency ("USEPA") in 40 CFR Part 761) and hazardous waste (as defined by the USEPA in 40 CFR Part 261 and the New York State Department of Environmental Conservation ("NYS DEC") in 6 NYCRR Part 371) as well as other material regulated for purposes of release, reuse, disposal, or recycling (e.g. CFCs, ethylene glycol, mercury, oil, asbestos) which form a part of the equipment removed from CUSTOMER Facilities due to implementing the Work. Disposal of such Waste shall be conducted in accordance with the provisions set forth in Article II, Section (a)(5). "Work" or "ESP Work" shall mean the services performed for CUSTOMER for a selected CUSTOMER Facility pursuant to this Agreement. The scope of Work shall be described in the CIC. [Article II follows] Article II Implementation (a) Authority Iaiplemented Work The ESP is a turn-key program involving the design and installation of Projects through the services of qualified installation Contractors or Subcontractors under the direct management of the AUTHORITY or the AUTHORITY's Contractor(s). Tm-key services include Facility Audit and Feasibility Report, Facility Design, construction management, equipment procurement, installation, disposal of Waste, and Financing. Each Project implemented is unique, but a set of generic steps will be followed. Each Project will have a CIC and a Final CIC. The CIC will supplement this Agreement with Project-specific technical and financial terms. ESP Work is a multistage effort consisting of: (1) Facility Audit and/or Feas~ility Report AUTHORITY will contact Customer's Authorized Representative and the appropriate Facility manager tO schedule an audit of the Facility. The Facility Audit will consist of the identification of opportunities for implementing ESP measures. The scope of the Facility Audit will be as agreed to by AUTHORITY and CUSTOMER. The Facility Audit shall also include an analysis of whether hazardous materials and Waste are likely to be present or generated as a result ofimplementing ESP measures. The AUTHORiTY/Contractor will conduct a feas~ility study and prepare a written Feasibility Report. The Feas~ility Report will include an estimate of Project costs and tentative financing terms being contemplated by AUTHORITY. If the Project involves energy efficiency measures, the Feasibility Report will include estimates of the potential energy savings and savings in life-cycle cost, as applicable, that CUSTOMER can expect through installation of one or more recommended energy efficiency measures. If, after analysis of the Feas~ility Report by AUTHORITY and CUSTOMER, it is detemdned that the Project either (1) does not meet the Eligibility Criterion, or (2) is not appropriate at such Facility, activity there will cease. If Project 6 activity ceases, the costs of the Facility Audit and the Feas~ility Report shall be waived. Alternatively, should CUSTOMER wish to proceed into the next phase (the "Design Phfise"), a written request must be forwarded to AUTHORITY. (2). Design Once the CUSTOMER's written request to proceed to the Design Phase is received, and provided that AUTHORITY concurs that the Project should go forward into this phase, AUTHORITY or Contractor shall prepare a Facility Design~ The Design shall include fieldwork and development necessary to produce the documents, technical specificationsi and drawings required for the proper execution of the construction project. All Facility Design(s) will specify equipment approved by AUTHORITY and CUSTOMER. AUTHORITY reserves the right to modify Designs that do not meet the Eligibility Criterion: CUSTOMER will be asked to review all aspects of the Design and specifications. Where deemed appropriate by AUTHORITY and CUSTOMER, the Contractor will arrange for demonstration installations (i.e., the installation of sample equipment) of selected measures in CUSTOMER's Facility. It is CUSTOMER's responsibility to determine that the proposed Design meets the CUSTOMER's needs. i. If CUSTOMER terminates the Project during or atter the Design Phase, but prior to execution of the CIC, CUSTOMER will be obligated to pay for the costs of the Facility Audit, Feasibility Report, and the Design to the date of termination. ii. If CUSTOMER continues with the Project through Design completion, and CUSTOMER, with AUTHORITY concurrence, determines to go forward with the Project into the implementation phase, the parties shall execute a CIC. AUTHORITY's costs for the Facility Audit, Feasibility Report, and the Design work will be carried forward into, and become part of the Total Installed Cost of the Project, as reflected in the CIC. iii. By agreement of the parties, in lieu of proceeding from the Facility Audit to the Design Phase, AUTHORITY may proceed directly to a CIC which shall provide for a Facility Design. The CIC shall include, in the Total Installed Cost of the Project, the costs of the Work performed to the date of its execution. (3) Customer Installation Commitment or CIC After AUTHORITY and CUSTOMER agree to the specifications, the Contractor will competitively bid the equipment procurement and material installation work. The resulting final Facility Design, specifications,, bid prices, and their applicable terms and conditions, Total Installed Cost (which shall also include the Work descn'bed in subsections (1) and (2) above), and CUSTOMER's related Repayment Obligation to AUTHORITY for the Project will constitute the CIC. The CIC will be executed by AUTHORITY and CUSTOMER before any installation work commences. At the conclusion of the Project Work, the CIC shall be superseded by the Final CIC. (4) Installation The Contractor may retain the services of qualified Subcontractors to make all approved installations. AUTHORITY will provide the Contractor with guidelines regarding the competitive sohc~tat~on of the services of Subcontractors for CUSTOME s Facilities. The services of Subcomractors and equipment procurement will be obtained through a competitive bid process conducted by the Contractor with AUTHORITY oversight and approval, or by AUTHORITY directly. CUSTOMER shall provide the Contractor with such assistance as may be reasonably required for the Contractor to obtain all permits, licenses and authorizations necessary to conduct installations in accordance with all applicable State and local building, fire and electrical codes and standards applicable to the Facility. AUTHORITY will ensure that the Contractor will be required to (i) obtain approval from AUTHORITY of the type and manufacturer of equipment installed; (ii) manage the construction effort; and (iii) assure the quality, neatness, and completeness of the Work. AUTHORITY will requke that the Contractor adheres to the Facility Design as set forth in the CIC and minimizes any interference with the normal operations of CUSTOMER's Facility. (5) Hazardous Materials and Disposal o f Waste The AUTHORITY shall ensure that Contractor and/or 'Subcontractor(s) (as applicable) shall be responsible for thoroughly cleaning the job site, including the removal of Waste generated as a result of a Project. Such removal may involve the management, transportation and disposal of Waste. Any hazardous materials, including but not limited to Waste, which are encountered in a Project shall be handled, transported and disposed of in accordance with applicable local, State and Federal laws and regulations, as well as AUTHORITY's policies and procedures. CUSTOMER acknowledges that, in accordance with USEPA and NYS DEC regulations, it is, and remains the Generator of, and holds title to, any Waste encountered during Work performed pursuant to'this Agreement. Hazardous Waste Generator Identification Numbers may need to be obtained from the USEPA for each Facility ~om which AUTHORITY removes Waste. CUSTOMER authorizes AUTHORITY, where required by USEPA and/or NYS DEC regulations, to apply in the name of CUSTOMER for Hazardous Waste Generator Identification Numbers in order to dispose of Waste pursuant to this Agreement and to act as the contact party for such applications. A representative of CUSTOMER must sign such applications when requested by AUTHORITY. CUSTOMER also authorizes AUTHORITY, where required by USEPA and/or NYS DEC regulations, to prepare, in the name of CUSTOMER, any manifests or other forms required for the disposal of the Waste generated pursuant to activities under this Agreement. A representative of CUSTOMER shall sign any manifests or other shipping records required to ship Waste offsite for disposal. AUTHORITY shall advise CUSTOMER (whenever possible, in advance of removal) where material determined to be Waste has been encountered which must be disposed of pursuant to USEPA and NYS DEC regulations. AUTHORITY shall keep CUSTOMER fully informed of AUTHORITY's activities in its behalf and shall provide CUSTOMER with copies of all applications and other materials provided or received in connection with actions taken pursuant to this authorization. The direct costs of Waste disposal will be included in the Final CIC. Any costs to AUTHORITY relating to the Project that may arise subsequent to the time the Final CIC is executed (or deemed executed) under present or future laws or regulations due to pollution, clean-up or otherwise at the site of disposal shall be home by CUSTOMER. If, however, such costs are due to the negligence of the AUTHORITY or its CONTRACTOR, CUSTOMER shall not be responsible. AUTHORITY shall use reasonable diligence in overseeing the removal and disposal of Waste, shall maintain complete and accurate records thereof, and shall make those records available to CUSTOMER upon request. Notwithstanding the forgoing, CUSTOMER shall have the option of disposing of Waste generated as a result of a Project at its own expense. In addition, any existing equipment determined by CUSTOMER to be useful to CUSTOMER may, at CUSTOMER's request, be retained by CUSTOMER and shall be the sole responsibility of CUSTOMER. To the extent permitted by law, CUSTOMER shall, at its sole cost and expense, defend and hold harmless AUTHORITY against any loss, liability (including, without limitation, judgments, attomey's fees, court costs, penalties or fines), or expenses of any type (including, but not limited to, required corrective actions) which AUTHORITY incurs because of injury to, or death of any person, or on account of damage to property, or any other claim arising out of, in connection with, or as a consequence of(a) the disposition or use of retained equipment by CUSTOMER or anyone for whose acts CUSTOMER may be liable, and (b) any cleanup costs associated with any site where Waste is disposed of or comes to be situated including, but not limited to, response and remedial costs. (6) Changes Any party to the CIC may at any time by written notice to the other party request additions, deletions or revisions to the Work ("Change(s)") described in the executed CIC. If AUTHORITY determines that such Change affects the cost, safety, energy savings, time of performance or any other terms of the CIC, it shall provide CUSTOMER with a written · analysis of the effects of the proposed Change and the parties shall negotiate a Change Order to the CIC. No Change Order shall take effect until it is approved by AUTHORITY and CUSTOMER. In the event of a dispute over a request for a Change, the Work may proceed in accordance with the scope of Work as set forth in the CIC (as revised by agreed-upon Change Orders), or the matter may be treated under the provisions of Article V, Section P. (7) Final Inspection Report Upon completion of the Work, CUSTOMER and AUTHORITY (or their duly authorized representatives) shall promptly inspect the entire Facility, or applicable portions thereof. AUTHORITY or its Contractors will certify that the Work has been satisfactorily completed according to the provisions of this Agreement, the CIC, and all State and local building, fire and electrical codes and standards applicable to the Facility. AUTHORITY and CUSTOMER shall jointly sign the Final Inspection Report. The execution of the Final Inspection Report shall not be unreasonably withheld by either party, and the parties shall endeavor to fully execute such report within sixty (60) days of Project completion. (8) Final Customer Installation Commitment ("Final CIC") Following completion of installation and receipt of all invoices associated with the Project, AUTHORITY will generate an updated, or Final CIC, which will include all Change Orders agreed to by AUTHORITY and CUSTOMER. The Final CIC shall revise the Total Installed Cost set forth in the CIC on the basis of actual costs. The Final CIC shall describe the Project-specific technical and financial terms for the Work completed at the Facility, Customer's Repayment Obligation, and the final repayment terms. AUTHORITY and CUSTOMER shall execute the Final CIC. If CUSTOMER does not execute the Final CIC within ninety (90) days, the Final CIC shall be "deemed executed" unless CUSTOMER disputes such Final CIC in writing within such ninety (90) day period. If CUSTOMER disputes the Final CIC, then the parties shall endeavor to resolve the dispute as expeditiously as possible. (9) Additional CUSTOMER Obligations In addition to the respons~ilities identified above, CUSTOMER will cooperate with AUTHORITY and its Contractors and Subcontractors to facilitate the installation of equipment. Customer's Authorized Representative will accompany AUTHORITY and its Contractors to CUSTOMER Facilities to ensure proper access. In addition, CUSTOMER will review equipment specifications and completed installations. CUSTOMER will review and approve, as may be required, any corrective or restoration work resulting from improper work by the Contractor. CUSTOMER will not be charged for such corrective or restorative work. CUSTOMER will also review and approve the savings and financing arrangements contained in the CIC. (b) Customer Implemented Work As an alternative to AUTHORITY Implemented Work described in Article II, Section a, CUSTOMER has the option of itself'implementing Projects that meet the AUTHORITY's Elig~ility Criteria in CUSTOMER facilities as Customer Implemented Work. If this option is chosen, AUTHORITY will serve the role of advisor or supervisor (as applicable) over such Customer.Implemented energy service project. AUTHORITY may offer full Project financing to 12 CUSTOMER. AUTHORITY will work with CUSTOMER fi.om Design through construction to help CUSTOMER to make the most cost-effective equipment choices and to realize the greatest greenhouse gas reductions. AUTHORITY will review and approve CUSTOMER's Project design package which will be included in a CIC. CUSTOMER will provide AUTHORITY with a complete breakdown of the Total Installed Cost of Customer ImPlemented Work, as well as detailed system design and equipment specifications prior to implementation of the work. AUTHORITY reserves the right to modify designs that do not meet iis Elig~ility Criterion. The specific details of the work to be performed and financing terms will be contained in the CIC and shall be comparable to those offered for Authority Implemented Work. The CIC will also specify the AUTHORITY's program costs. AUTHORITY reserves the right to substitute a modified version of its standard CIC if appropriate for a particular Project. The CIC will be fully executed by AUTHORITY and CUSTOMER. CUSTOMER may be required to provide for activities including, but not limited to: Facility Audit, Customized System Design, equipment procurement, installation services, construction management, quality assurance and Waste Disposal. In addition, CUSTOMER will be responsble for hiring qualified contractors or subcontractors and obtaining all necessary permits, licenses and authorizations so that installations are conducted in accordance with all applicable State or local building, fire and electrical codes and standards. CUSTOMER will require its contractors and subcontractors to obtain and maintain the same policies and limits of insurance as required of the AUTHORITY's Contractors pursuant to Article V, Section G of the Agreement. Such policies shall name the AUTHORITY, CUSTOMER, and the State of New York as additional insureds. CUSTOMER shall also require its contractors to provide the same indemnity provision as provided in Article V, Section F. AUTHORITY will not guarantee or warrant any equipment or work performed by CUSTOMER's 3_3 contractor(s) and will bear no responsibility for defective products. The term "Contractor" includes CUSTOMER if acting as its own contractor. AUTHORITY reserves the right to conduct periodic inspections of CUSTOMER Implemented Work during the construction period. Such inspections will be coordinated through the CUSTOMER. A Final Inspection Report and Final CIC shall be jointly executed by CUSTOMER and AUTHORITY as descn~bed in Article II (a)(7) and (8) except that CUSTOMER will certify that the work has been satisfactorily completed according to the provisions of this Agreement, the CIC and all State and local building, fire and electrical codes and standards applicable to the Facility. As appropriate, AUTHORITY will pay CUSTOMER progress payments against agreed upon milestones as set forth in the Project CIC. The sum of such progress payments shall equal the Total Installed Cost of the ESP Project, including AUTHORITY program costs. AUTHORITY program costs will be detailed in each CIC agreement. CUSTOMER's obligation to repay the AUTHORITY commences once the CIC has been executed, as further described in Article IV. [Article III follows] Article Ill Eligibility, Criterion Eligibility Criterion All Energy Services Program Projects must meet AUTHORITY's established Elig~ility Criterion as stated below. Projects will be undertaken on an individual basis in CUSTOMER's Facilities as deemed feasible and advisable by AUTHORITY and mutually agreed to by AUTHORITY and CUSTOMER. A Project'will not proceed unless it also satisfies AUTHORITY requirements related to reduction in overall primary energy costs, energy conservation, and/or results in significant environmental benefits. For all Projects, the following Eligibility Criterion shall apply: A Project will not be implemented unless any amounts advanced by AUTHORITY are recovered by AUTHORITY within twenty (20) years ("Cost Effectiveness Criterion"). AUTHORITY reserves the right to modify this Elig~ility Criterion from time to time to meet the continuing requirements of its Energy Services Program. [Article IV follows] 15 Article IV Recovery of Costs / Repayment Obligation The CUSTOMER Repayment Obligation will vary for each CUSTOMER Facility; however, the following general terms and conditions shall apply throughout the term of this Agreement: (1) Proiect Cost Ifa CIC has been executed, AUTHORITY shall initially pay for all components of the Total Installed Cost to implement ESP measures at the selected CUSTOMER Facility. CUSTOMER's Repayment Obligation shall be calculated based on the Total Installed Cost specified in the Final CIC, which shall reflect the final cost for the Project. (2) Lump Sum or Monthly Bill Payment Ifa CIC has been. executed, CUSTOMER will repay its Repayment Obligation either by paying (i) lump sum mount(s), or (ii) Monthly Bill Payment(s) to AUTHORITY for a stipulated period not to exceed 20 years. Ifa CIC has not been executed, CUSTOMER will repay its Repayment Obligation in a lump sum mount. (3) Interest Rate The Monthly Bill Payment (if applicable) shall be based upon an interest rate determined in accordance with the Authority Cost of Money, which shall be applied only to the outstanding principal amount. The precise amount and term of this installment method of repayment shall be provided in the Final CIC. (4) Annual Adlustments to Monthly Payment Any adjustment to the Monthly Bill Payment attn'butable to a changed interest rate shall be determined as of January 1 for the succeeding twelve (12) month period and shall be effective starting with the regular bill for the month of January. 3_6 (5) Option to Pay Lump Sum Ifa CIC has been executed and CUSTOMER elects the Monthly Bill Payment method of repayment, CUSTOMER shall have the option to Prepay any part of the outstanding principal amount of its Repayment Obligation, plus accrued interest to the time of repayment, at any time during the term of the repayment schedule without further interest on such prepaid amounts. B. Billing (1) 'a. If a CIC has been executed, repayment shall start in the next full billing period following CUSTOMER's signing of the Final Inspection Report. Billing will initially be set at the projected cost for the Work (as specified in the CIC, as revised by agreed-upon Change Orders). If CUSTOMER does not sign the Final Inspection Report, the Final Inspection Report shall be deemed signed for the purposes of commencement of billing sixty (60) days aRer its submittal to CUSTOMER, unless CUSTOMER disputes the Final Inspection Report in writing within this sixty (60) day period. If CUSTOMER disputes the Final Inspection Report, then the parties shall endeavor to resolve the dispute as expeditiously hs possible. The final Monthly Bill Payment or lump sum amount(s) will be recalculated in the Final CIC to reflect the final CUSTOMER Repayment Obligation based on the final Total Installed Cost for the Project. Appropriate adjustments will be made to account for payments made by CUSTOMER based on the initial amount specified in the CIC (as revised). If CUSTOMER disputes any amounts in the Final CIC, AUTHORITY may bill CUSTOMER for any undisputed amounts. In the event the Work is terminated before completion, AUTHORITY shall issue a Final CIC as provided in Article V, Section N. Billing shall commence in the next full billing period following issuance of the Final CIC. b. If the parties have not executed a CIC and CUSTOMER is obligated to pay AUTHORITY for the Facility Audit, Feasibility Report and/or Design as set forth in Article II, Section (a)(2)(i), then AUTHORITY shall submit its invoice to CUSTOMER for services rendered as provided in such Section, and CUSTOMER shall remit its payment to AUTHORITY in a lump sum payment. Payment shall be made within thirty (30) days of receipt of AUTHORITY's invoice. Any amount due and unpaid on its due date shall be subject to a late payment charge as set forth in Section B(2), below. (2) CUSTOMER shall make payment to the AUTHORITY within 30 days of receiPt of the Monthly Bill or the AUTHORITY's invoice for lump sum payment, as applicable. Any amount due and unpaid on its due date shall be subject to a late payment charge computed daily on such unpaid amount, and compounded as of the date of submission of each subsequent bill until paid, at an annual rate equal to 12%. Upon mutual agreement of the parties, the Monthly Bill Payment may be paid to AUTHORITY by use of an electronic transfer or other agreed-upon method. C. Repayment Obligation Upon Termination of Proiect (1) The following incidents shall be deemed to terminate a Project: closure of the Facility for which project Work is being performed; abandonment; material damage; destruction; reduction or elimination of energy savings due to removal, by-passing or alteration of equipment or due to any unforeseen event; discovery of asbestos or other haZardous material in CUSTOMER's Facility that impedes the execution of the Work. (2) Customer's Repayment Obligation shall continue notwithstanding the termination of a Project or termination of this Agreement and shall include interest on any outstanding balance of principal up to the date of final repayment. Unless AUTHORITY can establish 18 that extended payments after Project termination would impair the tax exempt status of AUTHOPdTY's debt obligations, CUSTOMER shall have the right to meet its Repayment Obligation through a Monthly Bill Payment. However, in the event that the tax exempt status of AUTHORITY's debt obligations becomes impaired at the time of termination, the outstanding principal balance will become immediately due and payable by a lump sum payment as set forth in Article V, Section X. ("Cessation of Ellg~ole Use"). [Article V follows] 19 Article V Other Provisions Authorized Representatives CUSTOMER's Authorized Representative shall coordinate each Project on behalf of CUSTOMER and assist AUTHORITY, the Contractors and Subcontractors, with the implementation of Projects in the selected Facilities of CUSTOMER. AUTHORITY's Authorized Representative shall coordinate each Project on behalf of AUTHORITY and communicate with CUSTOMER. B. Reporting and Inspection (1) AUTHORITY shall keep CUSTOMER informed as to the progress of the Work and shall provide CUSTOMER with periodic reports of all activities by the Contractors and Subcontractors at CUSTOMER Facilities. AUTHORITY and its Contractors shall meet with representatives of CUSTOMER upon reasonable notice to discuss any matters conceming the Projects. (2) CUSTOMER and its designated representative may observe and inspect all Work in any of CUSTOMER's Facilities and shall have the right to attend all Project job meetings. Contractor's Warranty Requirements AUTHORITY's agreements with Contractors shall provide that (a) any defective workmanship identified within one (1) year after completion of installation at CUSTOMER's Facility shall be promptly replaced and/or reperformed by Contractor and/or Subcontractor at no additional expense to CUSTOMER, and (b) Manufacturer's warranties for equipment installed at CUSTOMER's Facilities shall be assigned to CUSTOMER. Projected Energy Savings (Applicable to Energy Efficiency Projects) AUTHORITY and its Contractors shall use their best efforts to prepare accurate engineering estimates. After energy efficiency Work is completed in CUSTOMER's 20 Facility, it is the intent and expectation of the parties that CUSTOMER's annual energy charges for that Facility shall not increase above the pre-installation level except due to changes in rates or increases in usage not related to the implementation of the ESP Work. CUSTOMER is responsible for providing AUTHORITY with accurate information concerning hours of operation of its Facility. CUSTOMER understands that the projected energy savings are based upon such CUSTOMER input. It is CUSTOMER's sole responsibility to ensure that the expected energy savings meet CUSTOMER's satisfaction at the time the CIC for a Project is executed. Uncontrollable Forces No party shall be responsible for delays or failures in performance resulting t~om occurrences beyond its reasonable control including, but not limited to, acts of God, strikes, walkouts, acts of war, government regulations, fire, malfunctions in coi:nmunication lines or computer hardware, power failures, shipping or delivery delays or other events caused by those not party to this Agreement. In the event AUTHORITY or the Contractors or Subcontractors are unable to fulfill any obligations hereunder by reason of such uncontrollable forces, CUSTOMER shall be notified in writing and the completion dates described_in the CIC shall be extended by the amount of additional time reasonably necessary to complete the Work. (1) Damage AUTHORITY's agreements with the Contractors shall include a provision that all damage, direct or indirect, of whatever nature resulting from the performance of the Work or resulting to the Work during its progress, from whatever cause, including omissions and supervisory acts of AUTHORITY, CUSTOMER and the State of New York, shall be borne by the Contractor, and all Work performed shall be solely at the Contractor's risk until the Work has been finally inspected and accepted by AUTHORITY. The Contractor, however, shall not be respons~le for damages resulting from willful acts of officials or employees of AUTHORITY or CUSTOMER. 21 (2) AUTHORITY's agreements with the Contractors shall include a provision that to the extent permitted by law, the Contractor shall assume the entire responsibility and liability for and defense of, and pay and indemnify, AUTHORITY~ CUSTOMER, and the State of New York (where a Project undertaken for CUSTOMER is located on property of New York State), against any loss, damage, expense or liability and will hold each of them harmless fi.om and pay any loss, damage, cost or expense (including without limitation, judgments, attomey's fees, and court costs) which AUTHORITY, CUSTOMER or the State of New York incur because of injury to or death of any person or on account of damage to property, or any claim arising out of, in connection with, or as a consequence of, the performance of the Work and/or any act or omission of the Contractor or any of its Subcontractors, employees, agents or anyone directly or indirectly employed by the Contractor or anyone for whose acts the Contractor may be liable. (1) Insurance AUTHORITY's Agreements with the Contractors shall provide that the Contractor or Subcontractors shall obtain and maintain policies of insurance for workers' compensation (inclusive of New York State disability benefits) and employer's liability coverage. In addition, all Contractors and Subcontractors shall provide a commercial general liability insurance policy, including Contractual Liability and Products/Completed Operations Liability coverages in the sum of not less than Two Million Dollars ($2,000,000) per occurrence for bodily injury and not less than Two Million Dollars ($2,000,000) for damage to property. Such policies shall name AUTHORITY, the State of New York (where a Project is undertaken on property of New York State) and CUSTOMER as additional insureds to the policy. Contractors and Subcontractors shall provide Automobile Liability .,coverage with a minimum limit of $1,000,000 per accident. If required, professional liability insurance with a minimum limit of $1,000,000 and Pollution Liability, including coverage for asbestos abatement, with minimum limits of $1,000,000 per occurrence will be obtained. The form and sufficiency of each insurance policy required to be obtained hereunder by the Contractor or Subcontractor shall be subject to approval by AUTHORITY. In the event of 22 (2) (3) any alleged AUTHORITY liability to C,USTOMER (other than liability arising out of any act or any failure to act where AUTHORITY is acting as Contractor), CUSTOMER shall first pursue and exhaust all remedies in law against the Contractors and Subcontractors and under the insurance carried by the Contractors and Subcontractors before making any claim or taking any action against AUTHORITY. AUTHORITY shall hold all Certificates of Insurance and, if requested, a Certificate of Insurance will be submitted to CUSTOMER along with the CIC. With specific regard to the ESP equipment, for so long as any portion of CUSTOMER's Repayment Obligation remains unpaid, CUSTOMER shall procure an all risk policy of insurance which will insure the equipment for full replacement cost value against loss while the equipment is in CUSTOMER's care, custody and contiol. The insurance policy shall name AUTHORITY and the State of New York as additional insureds and loss payees, and shall contain a full waiver of subrogation against AUTHORITY, its agents Contractors, Subcontractors and the State of New York. CUSTOMER shall also procure a Commercial General Liability insurance policy with minimum limits of $5,000,000 per occurrence for bodily injury and property damage naming AUTHORITY and the State of New York as additional insureds. In lieu of obtaining all risk and commercial general liability insurance, CUSTOMER may, at its option and with AUTHORITY's approval, which shall not be unreasonably withheld, elect to self insure against risk of loss. The decision to self insure will not relieve CUSTOMER of any of the obligations imposed herein and will afford AUTHORITY the protection against loss and rights it would have received if CUSTOMER had obtained such policies of insurance. Limitation o f Liability AUTHORITY shall not be liable to CUSTOMER in contract, in tort or otherwise for any injury to persons or damage to, or loss of property or equipment, loss of profits or revenue, loss of use of equipment or power systems, cost of capital, cost of purchased or replacement power or temporary equipment (including additional expenses incurred in using existing 23 facilities), indirect, incidental, or consequential damages whatsoever arising from this Agreement. Nothing in this Section (H) shall be construed as limiting the liability ora Contractor or Subcontractor to AUTHORITY or CUSTOMER in connection with the performance o f such Contractor's or Subcontractor's work on CUSTOMER's premises. Claims By Third Parties No provision of this Agreement shall, directly or indirectly, create or give to any third party, including Contractors and Subcontractors, any claim or right of action against AUTHORITY or CUSTOMER. (i) (2) (3) Permitting and Facility Access AUTHORITY shall ensure that the Contractors and Subcontractors shall obtain, maintain and pay for all permits, licenses and authorizations required to perform the Work in CUSTOMER's Facilities and that they will fully comply with all applicable local, State and Federal laws, guidelines and regulations, including applicable local, State and Federal building, fire and electrical codes and standards. AUTHORITY shall ensure that the Contractors and Subcontractors shall comply with regulations governing access to and performance of the Work in the selected CUSTOMER Facilities and shall perform such Work in such a manner as not to unreasonably interfere with CUSTOMER's business there. AUTHORITY shall also ensure that Contractors and Subcontractors shall comply wi[h CUSTOMER's operational and safety requirements, which in certain instances may require substantial supervision and control-over the site by CUSTOMER. Any costs associated with such supervision and control by CUSTOMER will be to CUSTOMER?s account. Maintenance by CUSTOMER CUSTOMER shall be resPonsible for all damage to all Project materials, supplies and equipment of every description and all Work performed at CUSTOMER's site unless caused by AUTHORITY or its Contractors or Subcontractors. 24 AUTHORITY will provide CUSTOMER with information regarding the maintenance of ESP installations and recommendations for appropriate replacement equipment to be used in those installations to facilitate proper usage and, if applicable, energy savings at CUSTOMER's Facilities. After the Project installations are completed, CUSTOMER shall use reasonable efforts to see that such maintenance and materials instructions are followed at its Facilities. While any portion of the Customer's Repayment Obligation remains outstanding, AUTHORITY may, upon reasonable notice to CUSTOMER, audit installations in CUSTOMER's Facilities to evaluate compliance with such maintenance and materials instructions. Lo Unforeseen Circumstances or Conditions In the event that unknown circumstances or conditions at CUSTOMER's Facility are discovered alter the CIC is executed, which circumstances or conditions increase the Total Installed Cost of the Project installation at that Facility, Work at the Facility shall be immediately suspended until AUTHORITY and CUSTOMER mutually determine whether and how the Work shall be completed. Upon mutual agreement, the CIC may be revised by a Change Order to incorporate necessary changes in the scope of Work and/or the Total Installed Cost. In the event that a Projec~ is terminated pursuant to this Section, AUTHORITY shall issue a Final CIC as provided in Section N of this Article V, and payment will commence in the next full billing period following the issuance of the Final CIC. Suspension of Work CUSTOMER may direct AUTHORITY to suspend the Work at any CUSTOMER Facility by written notice to AUTHORITY. AUTHORITY, the Contractors and Subcontractors, shall thereupon cease Work at that Facility as soon as practicable and secure the site. In the event that any installation costs shall be increased due to such suspension, CUSTOMER shall assume such increased costs in full as part of its Repayment Obligation and a Change 25 Order to the CIC for that CUSTOMER Facility will be executed accordingly. In the event Work is suspended by CUSTOMER for more than ninety (90) days, AUTHORITY may terminate Work at that Facility and AUTHORITY shall issue a Final CIC as provided in Section N of this Article V, and payment will commence in the next full billing period following the issuance of the Final CIC. Project Termination or Cancellation In the event that a Project is canceled or terminated in whole or in part subsequent to execution ofa CIC but prior to completion, AUTHORITY shall issue a Final CIC covering all costs incurred for the terminated portion(s) of the Work (plus Wind-up costs, if any), and payment shall commence in the next full billing period following the issuance of the Final CIC. Ownership of Installed Materials All Project materials and equipment installed in CUSTOMER's Facilities by the Comractor or Subcontractors shall be the property of CUSTOMER and shall be new unless otherwise stated in the CIC. As long as CUSTOMER's Repayment Obligation remains outstanding, (a) CUSTOMER will keep the equipment fi.ce fi.om any and all liens, claims, encumbrances, and the like; (b) CUSTOMER will not grant a security interest in the equipment to any party without the prior written consent of AUTHORITY; (c) the equipment will remain at the Facility site as designated in a CIC; (d) CUSTOMER will not sell, offer for sale, transfer, or dispose of the equipment without notice to AUTHORITY; (e) CUSTOMER will not use or permit any person to use the equipment in a manner prohi~bited by law, in violation of any policy of insurance, or in a manner which would void any manufacturer's warranty;, and (0 CUSTOMER agrees to maintain the equipment in good order and repair at all times and will not waste or destroy the equipment or any part of it. P. Disputes 26 In the event of any dispute regarding ESP Work at any CUSTOMER Facility, Work there may be suspended by mutual agreement between AUTHORITY and CUSTOMER until the matter is resolved to the mutual satisfaction of the parties. In the event the parties are unable to resolve any such dispute after good faith efforts, the Work at that Facility shall terminate and AUTHORITY shall issue a Final CIC as provided in Section N of this Article V. Billing shall commence in the next full billing period following issuance of the Final CIC. Termination of Agreement Unless otherwise provided in this Agreement, either AUTHORITY or CUSTOMER may terminate this Agreement at any time upon one hundred twenty (120) days' prior written notice to the other party. Those provisions of this Agreement meant to survive termination, including, but not limited to, those provisions concerning Waste, limitations of liability and hold harmless and repayment shall survive termination. (1) Notices Notices hereunder to any party shall be given by certified mail, return receipt requested, or such other method as the parties may mutually agree upon. Such notice shall be effective upon receipt at the addresses specified below: To AUTHORITY: Vice President of Procurement New York Power Authority 123 Main street White Plains, NY 10601 Proprietary Information To CUSTOMER: Mark Terry, Principal Planner Phillip Beltz, Deputy Supervisor Town of Southold P.O. Box 1179 Southold, NY ~1971-0959 Unless and until CUSTOMER has repaid its Repayment Obligation, the audit data, evalmttions, Facility Design and other information produced by the AUTHORITY/Contractors in the implementation of the Work at CUSTOMER's Facilities shall be the property of AUTHORITY. CUSTOMER shall have the right to use any such proprietary information for the maintenance of Project installations in its Facilities. Upon 27 (2) payment in full by CUSTOMER, this information shall become the property of CUSTOMER. Any information identified as confidential which is exchanged by AUTHORITY and CUSTOMER shall be duly protected by the recipient to the extent permitted by law. It is understood that the Public Officers Law and other statutes and regulations regarding Freedom of Information may require the disclosure o finformation in certain situations. Nor}waiver The failure of any party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver nor deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Assignment This Agreement may not be assigned, transferred nor conveyed by CUSTOMER without the prior written 'consent of AUTHORITY. Any attempted assignment, transfer or conveyance without such consent shall be void. Governing Law - Venue This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to any choice or conflict of laws provision or role that would cause the application of the laws of any jurisdiction other than New York. Any action at law, or in equity, for the enforcement of this Agreement shall be instituted only in the courts of the State of New York located in Albany County. 28 Limitation on Work in Certain Premises Without the express written consent of AUTHORITY, no Work of any kind shall be performed in any premises of CUSTOMER used for private business use within the meaning of Section 141 (b) of the U.S: Internal Revenue Code of 1986, as amended. Cessation of Eligble Use In the event that while Customer's Repayment Obligation for a Project in a Facility remains outstanding (a) the Facility is sold or leased to, or ownership or control of such Facility is transferred to, an entity whose ownership of; lease interest in, or control over such Facility would impair the tax exempt status of AUTHORITY's debt obligations, or (b) the Facility is utilized in a manner different from that contemplated by the parties at the time the Final CIC is executed or deemed executed and such new use would impair the tax exempt status of AUTHORITY's debt obligations, then any outstanding principal amount of CUSTOMER's Repayment Obligation shall immediately become due and owing by CUSTOMER. Entire Agreement This Agreement constitutes the entire agreement between AUTHORITY and CUSTOMER concerning the subject matter hereof, and supersedes all prior negotiations, representations, contracts and Agreements. This Agreement may be amended only in writing signed by AUTHORITY and CUSTOMER. Notwithstanding the foregoing, however, in the event CUSTOMER has previously executed a High Efficiency Lighting Program ("HELP") Cost Recovery Agreement with AUTHORITY, then any HELP projects undertaken at CUSTOMER facilities pursuant to such HELP agreement(s) shall be governed by those agreements and any executed CICs and/or Final CICs related thereto. Energy Performance Contracts The following provision is applicable to "agencies" or "municipalities" as defined in Section 9-102 of the New York Energy Law. "This contract shall be deemed executory only to the 29 extent of the monies appropriated and available for the purpose of the contract, and no liability on account therefore shall be incurred beyond the amount of such monies. It is understood that neither this contract nor any representation by any public employee or officer creates any legal or moral obligation to request, appropriate or make available monies for the purpose of this contract." IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first written above. POWER AUTHORITY OF THE STATE OF NEW YORK By: Name: Angelo Esposito Title: Senior Vice President Energy Services & Technology Date: TOWN OF SOUTHOLD Name: Scott A. Russell T~le: Supervisor Date: ~ - (~O ? 3O