DISCUSSION
City of San Bernardino
Request for Council Action
Date: September 3, 2025
To: Honorable Mayor and City Council Members
From: Lynn Merrill, Director of Public Works;
Eric Levitt, City Manager
Department: Public Works
Subject: Adopt Resolution No. 2025-366 Approving a Letter of Authorization Agreement for the City Facility Energy
Infrastructure Assessment Program with Alliance Building Solutions to Conduct a Comprehensive and No Cost
Assessment of City Facilities for Potential Energy
Conservation Measures Retrofit, and Finding This Action Exempt from the California Environmental Quality Act. (All Wards)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2025-366 of the Mayor and City Council of the City of San Bernardino, California, executing a Letter of Authorization Agreement for a City Facility Energy Infrastructure Assessment Program with Alliance Building Solutions (ABS) to conduct a comprehensive and no cost assessment of City facilities for potential energy conservation measures retrofit.
Executive Summary
The proposed program allows the City to take advantage of a state process that allows cities and counties to bypass the typical processes used to design, develop and construct energy improvements within municipal facilities. These typical processes would include releasing a solicitation for performing an assessment of the current infrastructure and then issuing a design-build procurement that would implement the assessment recommendations. Both processes would require the City to expend funds to perform. In this approach, Phase One of the process involves the authorization of Alliance Building Solutions to perform a no-cost assessment of City facilities for potential energy conservation measure retrofits. Upon completion of the assessment, ABS will provide a presentation and recommendations for retrofit approaches which will reduce the City’s energy and water demands if implemented.
Background
Due to budgetary constraints over the last 15 years, City staff has not been able to adequately address needed facility improvements relating to infrastructure upgrades and energy efficiency projects to reduce City-Wide energy costs. In 2018 staff was approached by Alliance Building Solutions (ABS) who presented a program to complete a City-Wide energy infrastructure assessment at no cost to the City. The program relates to identifying energy efficiency opportunities, energy cost reduction measures, and related facility improvements including but not limited to the following:
interior and exterior lighting, heating ventilation and air-conditioning (HVAC), system controls & energy management systems (EMS), cool roofing, solar photovoltaic (PV) energy, battery storage, and smart technology initiatives. Currently, public agencies are highly incentivized to implement renewable energy systems, with the Inflation Reduction Act Investment Tax Credit (ITC) allowing agencies to secure up to a 50% rebate on the total cost of renewable energy systems. This makes it one of the most financially advantageous times to install solar and battery storage.
ABS stands as an industry leader within the energy sector working with public agencies throughout the municipal and educational sectors, specializing in performance contracting to implement effective energy efficiency projects throughout the state. ABS has implemented successful and effective energy efficiency projects with surrounding Cities including but not limited to: San Bernardino County, City of Fontana, City of Rialto, West Valley Water District, and City of Upland. Currently, ABS has completed a 1st phase of work with San Bernardino County and is in the development process of a 2nd and 3rd phase that will equate to over $113M in projects to be completed. ABS has been selected as the long-term energy partner for all associated energy efficiency work throughout County facilities.
Staff was approached in February 2024 to consider entering into a similar evaluation program with ABS; however, due to management changes over the last year, this project was delayed for consideration by the City Council until now.
Discussion
The proposed program allow the City to take advantage of a state process which was codified in the California Government Code, 4217.10, et. seq., which allows cities and counties to bypass the typical processes used to design, develop and construct energy improvements within municipal facilities. These typical processes would include preparing and releasing a solicitation for performing an energy assessment of the current infrastructure and then issuing a design-build procurement that would implement the assessment recommendations. Both processes would require the City to expend funds to perform and would add up to an additional two years to the process.
In this approach, the City can directly engage with a qualified provider such as ABS at no cost to perform a complete and detailed analysis of potential energy and water conservation savings throughout the City’s facilities in approximately 9 months.
These analyses are typically performed by the qualified provider at no cost to the municipality, but create a detailed, multiyear assessment of the opportunities for energy and water conservation opportunities. Upon completion of the analysis, the City then may consider entering into an agreement with the service provider to implement the identified conservation features. The service provider will develop a third-party financing arrangement in which the identified energy and water conservation savings are subsequently used to fund the financing agreement. In typical situations, the municipal facility experiences a lower cost for utilities and water, the savings are amortized over a long period of time, up to 25-years. This approach has been successfully used to implement and expand the use of solar photovoltaic systems within municipal governments.
The Letter of Authorization (LOA) agreement enables ABS to move forward with evaluating the feasibility of an energy efficiency program for the City including:
infrastructure modernization, energy conservation, and sustainability efforts. ABS will work with maintenance/facility staff and the utility provider to collect all needed information relating to the City facility specifications, current energy usage baseline data, and relevant facility and deferred maintenance needs information stated within the City’s Capital Improvement Plan. The ABS team will complete facility site assessments and report back to staff on recommendations and identified energy savings opportunities. Through the assessment ABS will provide the City with the following services:
Conduct facility site walks with ABS team of industry experts Coordinate with utility provider to receive energy usage interval data, identify available rebates/incentives, and will provide all documentation/planning submission requirements on behalf of the City
Develop facility energy baselines and current energy usage analysis for facility benchmarking
Provide all necessary engineering and project management services Compile existing facility equipment inventory specification reports Identify energy savings opportunities, project scope recommendations, strategic efficiency measures, and coordinate with all equipment manufacturers and points of contact
Calculation of estimated energy savings and development of financial cash flow specifications
Delivering of full-service financing capabilities for project funding, including identification of appropriate funding vehicles and the securing of funds Providing all project procurement services
Development of project implementation schedule
This assessment will aim to provide the City with turnkey planning and development services for energy efficiency projects addressing capital needs, to be funded through realized energy savings guaranteed by ABS. Following the assessment findings and recommendations provided to staff, ABS will then finalize a first phase of energy efficiency projects to present to the Council for approval of the procurement (via California Government Code 4217.10 et seq.,) and implementation of the program.
ABS has identified the following buildings to be assessed; additional sites may be added as mutually agreed: 201 Buildings (Building A & B), 201 North E Street; Rowe Library, 108 E Marshall Blvd; Villasenor Library, 525 N. Mt Vernon; Dorothy Ingraham Library,1505 W Highland Ave; City Yard (Corporation Yard), 234 S Mountain View; Rudy C. Hernandez Community Center, 220 N. Lugo; Perris Hill Park Senior Center, 780 E 21st St; 5th Street Senior Center, 600 5th Street; Delman Heights Center, 2969 N. Flores St; and, Old City Hall,300 North D Street.
It is important to note that, if the City does enter into this Agreement with ABS, then the City would be precluded from entering into a similar agreement with any other firm for a period of 18 months, and that the data and study generated by ABS would remain their work product in the event that the City does not proceed with the procurement.
2021-2025 Strategic Targets and Goals
This project aligns with the City’s Fiscal Year 2021-2025 Strategic Targets and Goals, Goal 1- Increased Financial & Operational Capacity - Create an asset management plan. This project would improve the energy efficiency of the City’s assets by identifying the City’s opportunities to conserve natural resources, and to assist in upgrading the City’s assets by replacing outdated energy technologies.
Fiscal Impact
The initial Letter of Authorization has no fiscal impact to the City. ABS will conduct the initial analysis and provide the information to the City at no cost. Potential future savings in energy and water costs may be identified upon completion of the analysis.
In Fiscal Year 2025-26, the City has budgeted $4,200,000 for electrical, $350,000 for natural gas and $3,000,000 for water, for a total of $7,550,000 for utilities. Savings for this program could result in a 20% or more reduction in utility costs, depending on savings identified and implemented.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2025-366 of the Mayor and City Council of the City of San Bernardino, California, executing a Letter of Authorization Agreement for a City Facility Energy Infrastructure Assessment Program with Alliance Building Solutions (ABS) to conduct a comprehensive and no cost assessment of City facilities for potential energy conservation measures retrofit.
Attachments
Attachment 1 - ABS Proposal Overview
Attachment 2 – Resolution No. 2025 - 366
Ward:
All Wards
Synopsis of Previous Council Actions:
None.