Opening of Proposals - RFQ VPA Energy Savings Contract - Siemens - Part 2

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VENUES, PARKS & ARTS RFQ SIEMENS li.�ernu�1�-�orL: fe. FUNDING SOURCES AND BORROWINGCAPABILITIES SIEMENS INDUSTRY, INC. HAS ASSISTED MANY OF OUR CUSTOMERS IN SECURING CREATIVE FINANCING ALTERNATIVES TO MEET THEIR EVER CHANGING BUSINESS NEEDS AND THE FLUCTUATIONS IN THE WORLD'S FINANCIAL MARKETS. SIEMENS HAS THE CAPACITY TO PROVIDE BOTH FIRST PARTY FUNDING AS WELL AS THIRD PARTY FUNDING. WE WILL WORK WITH YOU THROUGH THE QUALIFICATION PROCESS TO DETERMINE THE BEST OVERALL VALUE TO YOUR ORGANIZATION. FINANCIAL PTICONTRACTS WE FIND THAT OUR CUSTOMERS' NEEDS VARY GREATLY, AND WE OFFER SUPPORT FROM PROVIDING A COMPETITIVE SOURCE OF FUNDING, ALL THE WAY TO OUTSOURCING THE CUSTOMERS' ENTIRE CENTRAL BUILDING SYSTEMS. THE METHOD OF FINANCING FOR THE PERFORMANCE CONTRACT FOLLOWS THE CHARACTERISTICS OF THE EQUIPMENT AND THE BUSINESS NEEDS OF OUR CUSTOMERS, OCCASIONALLY, MULTIPLE FINANCING OPTIONS CAN BE USED TO MEET THOSE NEEDS. FOLLOWING ARE DESCRIPTIONS OF AVAILABLE FINANCIAL STRUCTURES FOR YOUR CONSIDERATION: • TAX-EXEMPT MUNICIPAL CAPITAL LEASES - HAVE TRADITIONALLY BEEN THE PREFERRED METHOD OF FUNDING PERFORMANCE CONTRACTS. THE PUBLIC ENTITY WOULD RETAIN TITLE TO THE EQUIPMENT FOR ACCOUNTING PURPOSES, TAX-EXEMPT LEASE PURCHASE CONTRACTS FREQUENTLY INCLUDE NON -APPROPRIATION PROVISIONS THAT ALLOW THE PUBLIC ENTITY TO CANCEL THE CONTRACT IF THE FUNDS ARE NOT MADE AVAILABLE FOR LEASE PAYMENTS. IF INVOKED, THE PUBLIC ENTITY IS REQUIRED TO RETURN ALL OF THE EQUIPMENT TO THE LESSOR. • TAX-EXEMPT GENERAL OBLIGATION BONDS - WHEN THE FINANCING NEEDS FOR A PROJECT EXCEED $10,000,000, A TAX-EXEMPT BOND SHOULD BE ANALYZEDTO DETERMINE IFTHIS STRUCTURE CAN REDUCETHE OVERALLCOST OF BORROWING FOR YOU. UNLIKE TAX-EXEMPT LEASES, THERE CAN BE SIGNIFICANT UNDERWRITING FEES REQUIRED TO ISSUE A BOND. THESE FEES CAN BE PROHIBITIVELY EXPENSIVE FOR SMALLER PROJECTS. BOND UNDERWRITING CAN TAKE UP TO 6 MONTHS AND THE CUSTOMER WILL ASSUME THE RISKS OF INTEREST RATE FLUCTUATIONS DURING THE UNDERWRITING PERIOD. • TAX-EXEMPT REVENUE BONDS - HAVE THE SAME CHARACTERISTICS AS GENERAL OBLIGATION BONDS EXCEPT THAT LOCAL LEGISLATION MUST CONSIDER THE "SAVINGS" GENERATED FROM AN ENERGY CONSERVATION PROJECT AS "REVENUES," THEREBY ALLOWING THE PROJECT TO BE FUNDED BY A REVENUE BOND. WITHOUT THAT DESIGNATION, REVENUE BONDS ARE AN UNLIKELY FUNDING OPTION, FOR EXAMPLE, REVENUE BONDS CAN BE USED WHEN THE UNDERLYING ASSETS BELONG TO AN ENTERPRISE FUND. • CERTIFICATE OF OBLIGATION (COS)OR CERTIFICATE OF PARTICIPATION (COPS) - THE UNDERLYING STRUCTURE OF A CO OR COP CAN BE EITHER A TAX-EXEMPT LEASE PURCHASE OR A TAX-EXEMPT BOND. FUNDING IS PROVIDED BY MULTIPLE SOURCES. TYPICALLY, COS ARE MANAGED BY AN INTERMEDIARY OR A TRUSTEE AND CAN BE ECONOMICALLY DESIRABLE FOR LARGER PROJECTS. THE BORROWER WILL MAKE PAYMENTS TO AN ADMINISTRATIVE TRUSTEE WHO PRORATES THE PAYMENTS TO EACH FUNDING SOURCE. • QUALIFIED ENERGY CONSERVATION BONDS (QECBS) - FEDERALLY SUBSIDIZED BONDS WHICH CAN BE ISSUED BY STATE AND LOCAL AUTHORITIES TO FINANCE ENERGY CONSERVATION PROGRAMS AND CAPITAL IMPROVEMENTS. THE BONDS ARE TAXABLE, BUT THE U.S. TREASURY PAYS THE ISSUER A CASH SUBSIDY CONCURRENT WITH THE INTEREST PAYMENTS DUE BONDHOLDERS. THE SUBSIDY IS FIXED AT 70% OF THE QUALIFIED TAX BOND RATE PUBLISHED ON THE DATE OF BOND ISSUANCE. THE CITY WOULD BE RESPONSIBLE FOR REPAYMENT OF THE PRINCIPAL, AS WELL AS THE DIFFERENCE BETWEEN THE COUPON RATE AND THE INTEREST SUBSIDY CONTRIBUTION FROM THE TREASURY. EACH STATE DETERMINES HOW QECBS ALLOCATIONS ARE AWARDED. PROPRIETARY & CONFIDENTIAL O SIEMENS INDUSTRY, INC., ALL RIGHTS RESERVED GUARANTEED ENERGY SAVINGS CONTRACT: DEPT. OF VENUES, PARKS & ARTS 4