ADMINISTRATIVE REPORT
MEETING DATE: October 7, 2026 AGENDA CATEGORY: Hearings TO: Honorable Mayor and City Council
FROM: Daniel R. Maldonado, Assistant Water Director
DATE: September 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
2. Agreement with Willdan Energy Solutions (not to exceed $7,990,188) to implement energy savings efficiency measures 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 the agreement.
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 and Interface Facility with Willdan Energy Solutions (Willdan). The approval of this contract will allow for the construction and implementation of photovoltaic arrays (PV) and battery energy storage (BESS) systems at the Water Resources building. This project includes complete design, engineering, procurement, installation, testing, commissioning, and placement into operations of all systems. These systems will allow the Water Department to realize energy savings that will offset the City’s project cost while 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 firms 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 energy that would have been consumed by the City in the absence of purchasing the energy improvements.
Turnkey project cost for PV and BESS systems, as well as site improvements and contingency, is $7,990,188. This cost has built in contingency and construction allowances which will be credited back to the Water Department upon project completion if unused. Projected project incentives, accounting for both incentives in hand and pending, account for an offset amount of $3,503,415 bringing the Net Capital Cost for the project to an amount of $4,486,773. When factoring in calculated net annual utility savings of $382,732 per year, the generated simple payback period is 9.54 years with a net $6,198,516 in utility savings through 25 years.
In an effort to account for all scenarios, Willdan and staff also calculated the project financials to only include secured incentives and not those pending. This reduced the project incentive amount from $3,503,415 to $1,545,941. This results in a Net Capital cost for the project to $6,444,247. Using the same net annual savings calculation, the simple payback period shifts to 14.65 years. Net utility savings become $4,241,042 over 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 and systems will become property of the City upon project completion.
The contractor will be responsible for providing the necessary training to ensure the systems are operating as optimally as possible. The contract also includes Measurement and Verification (M&V), which describes how energy savings will be measured and verified to prove to City that savings are being realized as estimated. Willdan and its contractor 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 annual savings against projected savings and ensure the guarantees included in the contract are met. Should the actual 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