ADMINISTRATIVE REPORT
MEETING DATE: August 5, 2026 AGENDA CATEGORY: Hearings TO: Honorable Mayor and City Council
FROM: Kristina Budak, Water Director
DATE: July 21, 2026
SUBJECT: Public Hearing to Present Findings and Consider Adoption of Energy Savings Performance Contract with Willdan Energy Solutions:
1. Resolution making findings authorizing entering into an energy savings performance contract for efficiency and infrastructure improvements projects
2. Agreement with Willdan Energy Solutions (not to exceed $9,212,625) to implement energy savings efficiency measures, or other operating cost saving measures and equipment, as well as energy generation measures
(Ward 5)
RECOMMENDATION:
Staff recommend opening the public hearing, taking public testimony, adoption of the resolution and approval of contract.
BACKGROUND:
Staff are recommending adoption of findings and approval of Energy Savings Performance Contract (ESPC), by resolution, for energy-related improvements to the Water Resources Administrative Building with Willdan Energy Solutions (Willdan). The approval of this contract will allow for the construction and implementation of photovoltaic (PV), battery energy storage (BESS), and electric vehicle (EV) charging systems at the Water Resources building. This project includes complete design, engineering, procurement, installation, testing, commissioning, and placement into operation of all systems. These systems will allow the Water Department to realize energy and energy-related cost savings that will offset the City’s project cost while also advancing energy efficiency and reliable infrastructure.
Multi-Phase Investment Grade Audit and Energy Savings Performance Contract On July 31, 2024, the Public Works Department issued a Request for Qualifications (RFQ) for qualified Energy Services Companies (ESCOs) to execute an Investment Grade Audit (IGA) and identify, develop, and potentially implement Energy Efficiency Capital Improvement Projects using the Design-Build method throughout the city’s facilities. This multi-phase, turnkey energy efficiency program includes:
Energy auditing and benchmarking
Design, Engineering, and permitting
Construction and implementation
Performance monitoring and ongoing services
Eight proposals were received. A selection committee, using RFQ -defined criteria—including approach, experience, references, qualifications, and overall proposal quality —shortlisted three firms: ENGIE Services U.S. Inc., Noresco LLC, and Willdan. These fir ms participated in Oral Appraisal Interviews on October 24, 2024. Willdan received the highest score (91.25) and was selected to proceed.
Phase 1, Preliminary Investment Grade Audit Analysis, and Phase 2, Detailed Investment Grade Audit, of the engagement for the PV and BESS systems at 1000 Buena Vista Road have been completed by Willdan.
The results of these findings are available in the attached Project IGA Report. In line with the requirements of California Government Code (GC) Section 4217.10 to 4217.18, the findings in this report show that the anticipated cost to the City to implement these energy -related improvements will be less than the anticipated marginal cost to the City for electrical or other energy that would have been consumed by the City in the absence of purchasing the energy improvements.
Turnkey project cost for all PV, BESS, and EV charging systems, as well as site improvements and contingency, is $9,212,625. Willdan and staff mutually agree that a 5% contingency as well as allowances for poor soil conditions is appropriate for the project and has been built into the turnkey project cost. Any unused contingency and allowance funds will be credited back to the Department upon project completion. Projected project incentives, accounting for both incentives in hand and pending, account for an offset amount of $ 3,670,624 bringing the Net Capital Cost to the City to an amount of $5,542,001.
When factoring in the calculated net annual Utility, Fuel, and operations and maintenance savings of $414,403, the generated simple payback period is 1 3.37 years with a net $8,397,498 in utility and operational savings through 25 years.
In an effort to account for all scenarios, Willdan and staff also calculated the project numbers to only include secured incentives and not those pending . This altered the project incentives figure from $3,670,624 to $1,683,150. This shifts the Net Capital Cost to the City to an amount of $7,529,475. Using the same net annual savings calculation, the simple payback period a djusts to 18.17 years. Willdan calculates that the project will achieve a net $6,410,024 in utility and operational savings through 25 years in this scenario. Both scenarios project a simple payback period that is less than the weighted expected useful life of the equipment (25 years) and are in compliance with GC 4217. As required by California GC Section 4217.12, the City Council, by Resolution, may authorize City to enter into this ESPC if the Council determines it is in the best interests of City to do so.
If approved, all new equipment, materials and systems will become property of the City upon project completion. The contractor will be responsible for providing the necessary training at no additional charge to ensure the systems are operating as optimally as possible. The contract also includes a Measurement and Verification (M&V) section. This describes how energy savings will be measured and verified to prove to City that savings have been attained as originally estimated. Willdan and its contra ctor will be responsible for monthly tracking and monitoring of the systems’ performance within the guarantee period to generate savings reports for City. This will allow staff to track actual savings against calculated savings and ensure the guarantees included as part of this contract are met. Should the actual total energy savings not be demonstrated during the M&V period, Willdan guarantees to compensate City for the difference.
FISCAL IMPACT:
The energy savings performance contract and project have no impact to the General Fund. Sufficient funds are budgeted in the Water Department’s Capital Improvement Budget within the Domestic Water fund.
COUNCIL GOAL:
Innovative and Efficient City Government
ATTACHMENTS:
1. Resolution to Adopt Required Findings and Execute Energy Savings Performance Contract
2. Energy Savings Performance Contract
3. Final Project IGA Report