SUPPLEMENTAL REPORTS & COMMUNICATIONS
Office of the City Clerk
City Council of the City of Napa
Regular Meeting
March 3rd, 2026
SUBMITTED PRIOR TO THE CITY COUNCIL MEETING
AFTERNOON SESSION
7. ADMINISTRATIVE REPORTS:
7.A. Facilities Energy Efficiency & Solar Project
• Presentation from Staff.
7.B. Lake Hennessey & Milliken Reservoir Watershed Sampling & Monitoring • Presentation from Staff.
7.C. Fiscal Year 2025/26 Mid-Year Report
• Presentation from Staff.
Facilities Energy
Efficiency and
Solar Project
March 3, 2026
7.A.
Project Description
City staff have been working
with OPTERRA Energy
Services to evaluate
energy-efficiency, solar, and
battery storage opportunities
across City facilities, and
preliminary assessments
indicate meaningful upgrade
potential at up to eleven sites.
Staff are finalizing project scope
and financing options and will
return to Council with a full
proposal.
Benefits of the Proposed Project
Energy & Cost Savings
• Lower energy use through high- efficiency equipment
• Reduced utility bills across City facilities
• Decreased maintenance costs by replacing end-of- life systems Clean Energy & Resilience
• On-site solar generation to offset grid demand
• Long- term operational resilience through modernized infrastructure Climate Action Progress
• Lower greenhouse gas emissions aligned with Council climate goals • Supports 2025–2027 climate action focus area
• Demonstrates leadership alongside regional agencies implementing similar projects Financial Advantages
• Federal incentives available through July 2026
• Tax-exempt lease purchase financing to spread costs over time • Utility savings help offset project cost
Community Benefits
• Community Engagement
• Workforce
About OPTERRA Energy Services
We partner with public institutions to build safer, healthier, and more resilient communities through efficient facilities and infrastructure.
CALIFORNIA
– Offices in Oakland (HQ), Sacramento and San Jose
– Comprehensive Energy Partners: Solar PV , Battery Storage, EV Charging, Microgrids/Resiliency, Energy Efficiency, Capital Improvements, Water & Wastewater process improvements
– Best In Class in California
o Over 300 MW
o 180+ personnel dedicated to public sector
o Over 50 years in operation
– $2.5 billion in energy costs saved
– 3 million tons of GHG emissions reduced
– Turnkey provider allowing for seamless development & implementation – Projects perform at over 105% over guarantee
Nearby Partnerships to
City of Napa
• City of American
Canyon
• City of Benicia
• City of Concord
• City of Hercules
• City of Suisun City
• City of Vacaville
• Contra Costa County
• Solano County
© OPTERRA Energy Services - City of Napa
Summary of Work completed
Solar PV and BESS
assessments, locations and
sizing
HVAC inventory, condition
assessments and prioritization
Building-Associated lighting
audits and inventory Utility bill analysis
Sub-contractor RFP for
competitive pricing on all
scopes of work
© OPTERRA Energy Services - City of Napa
- Broad retrofit and re-lamping opportunities
across 10 sites to full LED conversion
- Opportunity to incorporate sensors and
dimming capabilities
Benefits:
– Savings in energy cost
– Longer life of system
– Substantial reduction in maintenance cost
– LEDs do not contain mercury
– Provides a more uniform distribution of
luminance throughout the field
– Significantly reduces light spill, glare, and
light pollution
Improving occupant comfort (LED lighting)
BEFORE AFTER
© OPTERRA Energy Services - City of Napa
– City impacted by emergency replacements
and unplanned costs causing disturbance to
normal city operations
– 10 sites show potential for mechanical
upgrades, where units are either passed end of
life or posing risk of failure.
– Proposed scopes include: HVAC upgrades,
boiler replacements and water heater
replacements
– Benefits:
o Increased energy savings
o Improved comfort
o Reduced maintenance
o Planned vs. emergency replacement
Improving occupant comfort (mechanical upgrades)
© OPTERRA Energy Services - City of Napa
Hedging against rising energy costs
© OPTERRA Energy Services - City of Napa
– City currently spends $1.8M in electricity
bills
– Opterra investigating energy bill reduction
through solar PV and battery energy
storage systems (BESS)
– Benefits
o City to benefit up to $1.8M in Federal
Solar Tax Credits by meeting July 3
rd
deadline
o Guaranteed savings
o Foundation for future resiliency
infrastructure
CITY OF NAPA
ENERGY EFFICIENCY PROJECTS
FINANCING OVERVIEW
March 2026
10 Executive Summary
Opterra (an Energy Services Company, or ESCO) is evaluating citywide energy efficiency to advance Napa’s climate and sustainability objectives, stabilize long-term energy costs, and renew aging infrastructure
Locations throughout the City are
under consideration for a variety
of improvements:
Solar
LED Lighting
Mechanical Upgrades
BESS
Project cost is still being
negotiated, but current estimates
are in the $13-15 million range
City has engaged NHA Advisors, LLC
(City’s Municipal Advisor) to assist
with evaluating financing options
and secure additional funding
11 General Financing Options
Under CA Govt Code Section 4217.10 et seq, the City may enter into a sole- sourced agreement with an ESCO, provided the project results in net savings, after all costs Financing these improvements is done under a separate agreement from the ESCO Services Agreement
Generally, the debt service on the financing escalates at a rate similar to the assumed savings escalation for the project
Equipment Lease (TELPA) Lease Revenue Bonds Revenue Bonds Security Secured by the equipment
itself
Secured by a real asset of the
City through a lease-lease-
back structure
Secured by net revenues of a
utility fund
Term
Typically capped at 20 years,
but depends on useful life of
equipment
Up to 30-years Up to 30-years
Key Covenants City will annually appropriate
funds to make payments
City will make annual lease
payments to a financing
authority
City will raise utility rates as
needed to maintain debt
service coverage
Overview of Potential Financing Structures
12 Equipment Lease Financing Structure
Equipment leases are commonly used
for this type of financing
Often done as a direct placement with a
regional or national bank (i.e. “private
placement”)
UCC-1 filing with CA Secretary of State
evidences Bank’s interest in the
Typically structured with ascending
annual lease payments
Escalation often is similar to or less than
the annual savings escalation
Even though it is called an equipment
lease, the City owns the equipment at
maturity of the lease
In the event of non-appropriation or non-
payment the bank takes re-possession of
the equipment
Example of Equipment Lease Structure
20-Years, 5% escalation
Equipment Lease Payments
Net Savings
represented by the gap
between gross savings
and lease payments
13 Net Revenue Pledge Financing Structure
Only applicable to project components related to Enterprise Fund operations Secured by a covenant that the raise water and/or sewer rates as needed to maintain a debt service coverage
Can be issued on parity or subordinate to outstanding enterprise fund bonds If issued on parity basis, debt must comply with covenants on outstanding debt Potential for a slightly lower interest rate, given stronger security (vs Equipment Lease)
Standard Net Revenue Calculation
𝐍𝐍𝐍𝐍𝐍𝐍 𝐑𝐑𝐍𝐍𝐑𝐑𝐍𝐍𝐑𝐑𝐑𝐑𝐍𝐍𝐑𝐑 = Gross Revenues − Operating Costs 𝐃𝐃𝐍𝐍𝐃𝐃𝐍𝐍 𝐒𝐒𝐍𝐍𝐒𝐒𝐑𝐑𝐒𝐒𝐒𝐒𝐍𝐍 = Principal + Interest Repayments 𝐃𝐃𝐍𝐍𝐃𝐃𝐍𝐍 𝐒𝐒𝐍𝐍𝐒𝐒𝐑𝐑𝐒𝐒𝐒𝐒𝐍𝐍 𝐂𝐂𝐂𝐂𝐑𝐑𝐍𝐍𝐒𝐒𝐂𝐂𝐂𝐂𝐍𝐍 = Net Revenues Debt Service
* Operating Costs exclude depreciation and intangible
expenses and replacement and capital expenses
14 Financing Process Overview
April 21
• City Council considers
both Agreements
Early May
• Close Financing &
funds delivered
July 4, 2026
• Deadline to Start the
project and retain IRA
ITC Eligibility
March 3
• Introduce City Council
to Project and
Financing Plan
Mid-March
• Bank RFP Process
• Select Winning Bank
Late March – Early
April
• Finalize Financing
Agreement and Energy
Services Agreement
Recommended Action
Receive a presentation on a potential Facilities Energy Efficiency and Solar Project and give direction to staff to move forward with financing to be approved by Council at a subsequent date.
Watershed
Sampling
and
Monitoring
Presentation
Council Chambers
March 3, 2026
7.B.
Watershed Sampling and
Monitoring
• A joint venture between the City of Napa, Napa
County, and Napa Resource Conservation
District (RCD)
• Goal of monitoring inflow to drinking water
reservoirs to protect the source waters
– establish baseline data as land use changes occur
within the watersheds
– detect water quality anomalies which may impact the
reservoirs and drinking water safety
– forecast water quality conditions in wet & dry years
– identify areas of concern so they can be addressed
through BMP modification
– inform potential necessary improvements to the
corresponding water treatment plants
Project Development
Proposed
project in
Milliken
Watershed
raised concern
over land use
change in
pristine
watershed with
minimal water
treatment
2011
Discussions
for
monitoring
the
watersheds
begun
2017–2019
treatment
Joint City &
County
presentation to
Council on
current
sampling and
proposed new
Watershed
Master Plan
Project & MOU
March 19,
2019
City & County
enter into
MOU for
Water Quality
Monitoring
November
19, 2019
Project & MOU
Project & MOU
First limited
sampling
event
occurred
December
10, 2019
First multi-
agency
training &
sampling
events
January 28-
29, 2020
Project was
paused due
to COVID-19
Social
Distancing
restrictions
March 2020
Project
resumed with
COVID PPE &
policies in
place
February
23, 2021
Consistent
sampling
events
2022-
present
Multi-Agency Coordination
• City of Napa staff
• Provide annual sample collection training
• S et sample collection events & dates
• Coordinate with the sub-laboratory for sample containers & data reports, verify/prepare coolers and reporting documentation • Determine the number of locations to be collected for each event (Flow based)
• Collect samples at limited & open access locations
• Verify & process data into the City’s database
• Provide data to Napa County & one participating property owner • Napa County Staff & RCD Staff
• Attend trainings
• Collect samples at open access locations
Sampling Events
Each Event
• 27 established locations
• Occurs on the last
Wednesday of the month
• Occurs when 10 or more
locations have flowing
water
• Involves all three
agencies
• Collects ≈10 liters of
water from each location
• 141 individual analytes
for each location
Event Averages
• 17 samples collected per
event
• 4 sample collection
groups per event
• 48 hours of work per
event
• 7 separate events occur
each year
Pre Sampling
Event Tasks
• Confirm the number of
sample locations with
flowing water
• Order sample containers
• Confirm sampling event to
County and RCD
participants
• Pick up, label, and sort
containers
• Prepare all required
documentation (COCs,
route maps, field logbooks)
• Morning of the Event
• Calibrate field analysis
equipment/meters
• Collate all sampling
equipment from storage
and stage for individual
agency pick up
• Fill up and transport ice
bags for sample
preservation.
Sampling Locations
Sampling Location
Comparison
Dry Winter Conditions
Wet Winter Conditions
Custom
Sampling
Equipment
Designed and built by City
staff to enhance the safety,
accessibility, uniformity, and
speed of sample collection.
Tested with equipment
blanks to verify sample
results are not altered with
design.
Field Analysis
Instrumentation
Used for analysis which
must be made in the field at
the time of sample
collection.
Analytes include:
Temperature
Dissolved Oxygen
pH
Sample Containers
Includes:
Unpreserved Plastics VOAs Sterile Containers
Amber Glass Acidic Containers Specialty Containers
Sampling Events
Sampling Events
Sampling Events
Post Sampling
Event Tasks
• Delivering samples to
sub-laboratory
• Processing field
logbooks and COCs
• Sampling equipment
cleaning, maintenance,
and repair, if needed
• Data entry and report &
invoice processing
• Minor data analysis
Findings To Date
• Distinct water profiles for each watershed
– 3 main contributing creeks (Hennessey)
– 1 main contributing creek for Milliken with uniform profile • Relatively stable water profiles
• Low level, transient detections of pesticides, herbicides, roadway contaminants, and plasticizers in the Hennessey Watershed
• Persistent detections of PFOA & PFAS compounds in
upper Conn Creek
• Used in post-LNU fire water quality monitoring for robust assessment of potential fire impacts
Findings
To Date
•Detected 6 times at 5 locationsbis(2-Ethylhexyl) phthalate – plasticizer
•Detected 1 time at 1 location
diethylphthalate
– plasticizer
•Detected 1 time at 1 location
Phenol
– plastics and consumer
products
•Detected 3 times at 3 locations
Indeno (1,2,3-cd)pyrene
– combustion emission
•Detected 1 time at 1 location
Dibenzo(a,h)anthracene
– combustion emission
•Detected 2 times at 2 locations
Benzo(g,h,i)perylene
– road tar byproduct
•Detected 1 time at 1 location
Fluorene
– road tar byproduct
•Detected 1 time at 1 location
2,4,6-Trichlorophenol
- pesticide
•Detected 1 time at 1 location
Naphthalene
– pesticide
•Detected 1 time at 1 location
Phenanthrene
– pesticide
Transient hits of 10 unregulated
compounds in 9 locations from 2020
- 2025.
No consecutive hits from one event
to the next event
(no demonstrated persistence > 30
days).
Potential Sources of
Contaminants
Conductivity in Raw Waters
Conductivity in Raw Waters
Total Organic Carbon in Raw Waters
Total Organic Carbon in Raw Waters
Total Organic Carbon in Raw Waters
Total PFOA & PFAS Compounds in Raw Waters
Total PFOA & PFAS Compounds in Raw Waters
Watershed Master Plan
Project Summary
• Impeded Start in 2020 / Functional Start
in 2021
• 41 Sampling Events to date
• 680+ Individual Samples Collected
• Data justifies continued, ongoing
monitoring for contaminants
• Continued collaboration between the City,
County, and RCD is key to continued
success
Future Plans
• Monitor incoming water quality to
optimize watershed & reservoir
management, invasive species suitability,
and potential watershed & water
treatment responses
• Continue sampling events to calibrate the
model for wet versus dry water year
comparisons – more data needed to
establish patterns
• Utilize the data collected so far to inform
BAT decisions for the Hennessey Water
Treatment Plant upgrade
An ounce of prevention is worth a
pound of cure.
Comments & Questions
Mid-Year Report
FY 2025/26
7.C.
FINANCIAL STATUS
Fiscal Year 2025/26
• General Fund
• Measure G
• Non-Recurring General Fund
• CIP Project Fund
• Enterprise Funds
GENERAL FUND
FY 2025/26 Budget to Actual
as of December 31, 2025
FY 2025/26 Revenue
Budget Actual YTD %
Property Tax 48.83 17.21 35.3%
Sales Tax 46.08 15.84 34.4%
Transient Occupancy Tax 29.73 14.26 48.0% Business License Tax 6.19 2.26 36.6% Charges for Services 7.58 5.00 66.0% Licenses and Permits 3.49 1.89 54.0% Other Operating Revenues 18.03 4.32 24.0% Non-Operating Revenues 4.25 4.25 100.0% Total Operating Revenue 164.19 65.03 39.6% Recommended Revenue FY26
Adjustments
Net impact: increase of $1.36 million
Adopted Proposed Adjustment
Property Tax 53.08 53.26 0.18
Sales Tax 23.71 23.07 (0.64)
Sales Tax - Measure G 22.37 22.37 - Transient Occupancy Tax 29.73 31.52 1.79 Business License Tax 6.19 5.45 (0.74) Other Taxes 2.74 2.85 0.11 Licenses and Permits 3.49 3.49 - Charges for Services 7.58 7.82 0.24 Intergovernmental 1.00 1.00 - Investment Earnings 3.11 3.31 0.20 Miscellaneous / Other Revenues 0.28 0.50 0.22 Transfers In 10.90 10.90 -
FY 2025/26 Expenditures
Budget Actual YTD %
Salaries & Wages & Benefits 97.90 49.63 50.7% Materials & Supplies & Services 29.08 11.31 38.9% Other Expenditures (Includes
Transfers to Reserves) 45.74 7.18 15.7% Total Operating Expenditures 172.72 68.13 39.4% Recommended Expenditure
FY 26 Adjustments
(FY 25 Unassigned Fund Balance)
Net Impact: Increase of $8.93 million
Adjustment
Section 115 Trust 3.50
Harvest Recreational Site Demolition & Planning 5.00
Reserves True Up 0.43
Recommended Expenditure FY26
Adjustments
Net Impact: Increase of $0.91 million
Adjustment
Asset Forfeiture Revenue for Equipment 0.20
Budget Correction - Dispatch Cost Allocation (0.05)
CIP Facilities Reserves Increase 0.71
Mid-Year - Staffing Plan Adjustments 0.05
FY 2025/26
Operating Position
FY 2025/26
Adjusted
Budget
FY 2025/26
Proposed
Budget
General Fund ($ in millions)
Total Revenues 164.19 165.5
Operating Expenditures 172.7 182.6
Contributions to CIP Reserves 1.4 1.5
Contributions to General Fund Reserves 1.6 2.0
Initial Net Position (10.1) (20.5)
Fund Balance for Carryforwards 8.8 17.7
Projected Net Position 0.3 0.7
FY 2025/26
Reserve Balances
Target Balance
at Year-End
after
Adjustments Current Balance
Operating (5%) 6.99 6.49
Emergency (14%) 19.58 18.16
Contingency (1%) 1.40 1.30
Total 27.97 25.95
2.02 27.97
Budgeted Contributions to Reserves
Estimated General Fund Reserves at
Fiscal Year-End
Staffing Plan Adjustments
• Community & Resources Development
- Delete 1 Secretary
- Add 1 Administrative Assistant (0 FTE)
• Public Works
- Delete 1 Senior Engineering Aide
- Add 1 Administrative Assistant (0 FTE)
• Utilities
- Delete 1 Management analyst I/II
- Add 1 Materials Diversion Analyst (0 FTE)
• Parks and Recreation Services
- Delete 1 Park Maintenance Worker I/II
- Add 1 Park Maintenance Worker III
- Add 1 Maintenance Laborer (Limited-Term) (1FTE)
MEASURE G
Measure G
FY 2025/26 Budget to Actual
as of December 31, 2025
Recommended Adjustments
• Measure G Revenue:
– 200K in investment earnings
• Measure G Expenditures:
– None
NON-RECURRING
GENERAL FUND
Recommended Adjustments
General Fund Non-Recurring – Revenues
• Increase Transfers In by $5.0 million for Harvest Recreational Site Demolition & Planning
• Increase Transfers In by $0.2 million of asset forfeiture revenue for equipment
• Increase $0.2 million for Mid-Year adjustments
General Fund Non-Recurring - Expenditures
• Increase $5.0 million for Harvest Recreational Site Demolition & Planning • Increase $0.2 million of asset forfeiture revenue for equipment • Budget Correction
– Decrease $0.07 million of City’s match for a project
– Increase $0.05 million of dispatch cost allocation
FY 2025/26 NR General Fund
FY 2025/26
Adjusted
Budget
FY 2025/26
Proposed
Budget
FY 2025/26
Actuals
Beginning Fund Balance 10.3 10.3 10.3
Revenues
- Others 8.7 14.1 0.6
- Land Acquisition (Harvest Middle School) 20.1 20.1 20.1 Expenditures
- Others 11.2 16.4 1.8
- Land Acquisition (Harvest Middle School) 24.1 24.1 24.1 Projected Ending Fund Balance 3.8 3.9 5.2
CIP PROJECT FUND
FY 2025/26 CIP Reserves
• CIP Facilities Reserve:
– $5.3 million in budgeted projects
– $8.1 million fund balance
• CIP General Reserve:
– $6.9 million in budgeted projects
– $3.3 million fund balance
• Recommended Adjustment
– Increase General Fund Contribution to CIP
General Reserves by 0.5% to 1.0% of General
Fund expenditures
ENTERPRISE FUNDS
Enterprise Funds -
Solid Waste/Recycling
47.4 52.8
21.6 26.4
0 10
20 30
40 50
60 Operating Revenues Operating Expenditures
Millions
SWR - Operating Fund
Budgeted Actual
Enterprise Funds – Water
47.9 48.1
24.0 12.6
0 10
20 30
40 50
60 Operating Revenues Operating Expenditures
Millions
Water - Operating Fund
Budgeted Actual
Recommended Adjustments
• Solid Waste & Recycling – Operating Revenue
– $5.5 million increase to Refuse Collection
Charges
– $1.4 million increase to Material Sales
• Solid Waste & Recycling – Operating Expenditures
– $0.2 million decrease for contractor services
– $0.3 million decrease for organics cost
– $0.3 million increase for Transfer Station Disposal
Fees
– $1.2 million increase for contractual payment of
CRV containers
Recommended Expenditure Adjustments
• Solid Waste & Recycling – Nonrecurring Expenditures
– $0.2 million increase due to excess sales tax for
Anaerobic Digestion Equipment
– $0.2 million increase for Permit and CEQA EIR
Preparation
OTHER FUNDS
Other Recommended Adjustments
• Internal Service Funds
– $3.5 million transfer in from the General Fund
for the Section 115 Trust
– $3.5 million contribution expense to the
Section 115 Trust
Other Recommended Adjustments
• Special Revenue Funds
– $0.09 million revenue increase for Traffic Safety Fund – $1.5 million revenue decrease for the Red Light Camera Fund – $0.4 million expenditure decrease for the Red Light Camera Fund for contract
– $0.2 million revenue increase for the Measure F Fund for TOT Requested Action
Move to:
– Receive the City’s Mid-Year Financial
Report
– Adopt a Resolution
• Amending the City Staffing Plan and
• Approving Revenue and Expenditure
Adjustments as documented in Budget
Amendment 5P9