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10 - Property Assessed Clean Energy ProgramItem No. 10 Memorandum TO: Mayor, Mayor Pro -Tem & City Council Grayson Path, City Manager FROM: Stephanie H. Harris, City Attorney SUBJECT: APPROVAL OF PROFESSIONAL SERVICES AGREEMENT WITH THE TEXAS PACE AUTHORITY TO ADMINISTER THE CITY'S PROPERTY ASSESSED CLEAN ENERGY (PACE) PROGRAM DATE: August 23, 2021 BACKGROUND: Over the last three meetings, Council has established a Property Assessed Clean Energy (PACE) program which is available to any qualifying developer within the city limits. Administering that program can be burdensome to local governments; consequently organizations such as the Texas PACE Authority offer their services, at no cost to the local government, to administer such programs. The Texas PACE Authority is a non-profit agency that offers such services to local governments. STATUS OF ISSUE: Administration desires to enter into the accompanying professional services agreement with the Texas PACE Authority. The Texas PACE Authority has been very helpful in assisting me with setting up the program to this point. Again, these services will be funded by fees charged to applicants for the program and are at no cost to the city. RECOMMENDATION: Approve the Professional Services Agreement between the City of Paris, Texas and the Texas Property Assessed Clean Energy Authority and authorize the City Manager to execute same. PROFESSIONAL SERVICES AGREEMENT BY AND BETWEEN THE CITY OF PARIS, TEXAS AND TEXAS PROPERTY ASSESSED CLEAN ENERGY AUTHORITY THIS AGREEMENT is made and entered by and between the City of Paris, Texas, hereinafter referred to as "Local Government", and TEXAS PROPERTY ASSESSED CLEAN ENERGY (PACE) AUTHORITY (dba Texas PACE Authority), a Texas non-profit business association, hereinafter referred to as "Services Provider" to be effective from and after the date as provided herein. WITNESSETH: WHEREAS, the City Council of Local Government desires to engage the services of a qualified consultant to administer a Texas Property Assessed Clean Energy program for Local Government pursuant to the Property Assessed Clean Energy Act ("PACE Act"), Texas Local Government Code Chapter 399, and serve as Authorized Representative pursuant to Tex. Local Gov't Code §399.006(b), hereinafter referred to as the "Program"; and WHEREAS, Services Provider desires to render such services for Local Government upon the terms and conditions provided herein — NOW, THEREFORE, for and in consideration of the covenants contained herein, and for the mutual benefits to be obtained hereby, the parties hereto agree as follows: I. ENGAGEMENT Local Government hereby agrees to retain Services Provider to serve as administrator of Local Government's Program and Services Provider agrees to perform such services in accordance with the terms and conditions of this Agreement. II. SCOPE OF SERVICES The parties agree that Services Provider shall perform such services as are further described in Exhibit "A" hereto (collectively "Scope of Services"). The parties understand and agree that deviations or modifications in the Scope of Services may be authorized from time to time by Local Government but said authorization must be made in writing. III. TERM OF AGREEMENT The initial term of this Agreement shall commence upon the complete execution of the Agreement by Local Government and Services Provider. Notwithstanding the termination of this Agreement, Services Provider shall be permitted to continue PROFESSIONAL SERVICES AGREEMENT PAGE 1 administration of any third -party agreements under the Program commenced prior to termination of this Agreement, and to recover any compensation due Services Provider for services performed in accordance with Section IV of this Agreement. IV. COMPENSATION AND EXPENSES Services Provider shall be paid for performance of the Scope of Services set forth in Exhibit "A", in accordance with the compensation schedule set forth in Exhibit "B" hereto. Services Provider is entitled to payment in accordance with Exhibit "B"; however, Local Government shall have no obligation to pay Services Provider for performance of the Scope of Services. All payments to Services Provider shall be made by participants in the Program in accordance with the PACE Act V. INSURANCE Services Provider agrees to meet all insurance requirements, and to require all consultants who perform work for Services Provider to meet all insurance requirements, as set forth in Exhibit "C" to this Agreement. VI. INDEMNIFICATION SERVICES PROVIDER AGREES TO INDEMNIFY AND HOLD LOCAL GOVERMENT AND ITS RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES, HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS, JUDGMENTS, FINES, PENALTIES, COSTS AND EXPENSES FOR PERSONAL INJURY (INCLUDING DEATH), PROPERTY DAMAGE OR OTHER HARM OR VIOLATIONS FOR WHICH RECOVERY OF DAMAGES, FINES, OR PENALTIES IS SOUGHT FROM LOCAL GOVERNMENT ARISING OUT OF OR OCCASIONED BY SERVICES PROVIDER'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT, VIOLATIONS OF LAW BY SERVICES PROVIDER, OR BY ANY NEGLIGENT, GROSSLY NEGLIGENT, INTENTIONAL, OR STRICTLY LIABLE ACT OR OMISSION OF THE SERVICES PROVIDER, ITS OFFICERS, AGENTS, EMPLOYEES, INVITEES, SUBCONTRACTORS, OR SUB -SUBCONTRACTORS AND THEIR RESPECTIVE OFFICERS, AGENTS, OR REPRESENTATIVES, OR ANY OTHER PERSONS OR ENTITIES FOR WHICH THE SERVICES PROVIDER IS LEGALLY RESPONSIBLE IN THE PERFORMANCE OF THIS AGREEMENT. THE INDEMNITY PROVIDED FOR IN THIS PARAGRAPH SHALL NOT APPLY TO ANY LIABILITY TO THE EXTENT RESULTING FROM THE NEGLIGENCE OF LOCAL GOVERNMENT, AND ITS OFFICERS, AGENTS, EMPLOYEES OR SEPARATE CONTRACTORS. LOCAL GOVERNMENT DOES NOT WAIVE ANY GOVERNMENTAL IMMUNITY OR OTHER DEFENSES AVAILABLE TO IT UNDER TEXAS OR FEDERAL LAW. THE PROVISIONS OF THIS PARAGRAPH ARE SOLELY FOR THE BENEFIT OF THE PARTIES HERETO AND ARE NOT INTENDED TO CREATE OR GRANT ANY RIGHTS, CONTRACTUAL OR OTHERWISE, TO ANY OTHER PERSON OR ENTITY. PROFESSIONAL SERVICES AGREEMENT PAGE 2 VII. INDEPENDENT CONTRACTOR Services Provider covenants and agrees that it is an independent contractor and not an officer, agent, servant or employee of Local Government; that it shall have exclusive control of and exclusive right to control the details of the work performed hereunder and all persons performing same, and shall be responsible for the acts and omissions of its officers, agents, employees, contractors, subcontractors and consultants; that the doctrine of respondeat superior shall not apply as between Local Government and Services Provider, its officers, agents, employees, contractors, subcontractors and consultants, and nothing herein shall be construed as creating a partnership or joint enterprise between Local Government and Services Provider. VIII. ASSIGNMENT AND SUBLETTING Services Provider agrees that this Agreement shall not be assigned without the prior written consent of Local Government, except to an Affiliate of Services Provider. Affiliate shall mean (1) any corporation or other entity controlling, controlled by, or under common control with (directly or indirectly) Services Provider, including, without limitation, any parent corporation controlling Services Provider or any subsidiary that Services Provider controls; (2) the surviving corporation resulting from the merger or consolidation of Services Provider; or (3) any person or entity which acquires all of the assets of Services Provider as a going concern. Services Provider shall be permitted to enter into subcontracts for performance of portions of the Scope of Services; however, Services Provider shall not subcontract the entirety of the Scope of Services to a single subcontractor without Local Government's consent. Services Provider further agrees that the assignment or subletting of any portion or feature of the work or materials required in the performance of this Agreement shall not relieve the Services Provider from its full obligations to Local Government as provided by this Agreement. IX. AUDITS AND RECORDS Services Provider agrees that Local Government or its duly authorized representatives shall, until the expiration of three (3) years after termination under this Agreement, have access to and the right to examine and photocopy any and all books, documents, papers and records of Services Provider which are directly pertinent to the services to be performed under this Agreement for the purposes of making audits, examinations, excerpts, and transcriptions. Services Provider agrees that Local Government shall have access during normal working hours to all necessary Services Provider's facilities and shall be provided adequate and appropriate work space in order to conduct audits in compliance with the provisions of this section. Local Government shall give Services Provider reasonable advance notice of intended audits. X. CONTRACT TERMINATION The parties agree that Local Government and Services Provider shall have the right to terminate this Agreement upon thirty (30) days written notice to Services PROFESSIONAL SERVICES AGREEMENT PAGE 3 Provider. In the event of such termination, Services Provider shall deliver to Local Government all finished or unfinished documents, data, studies, surveys, drawings, maps, models, reports, photographs or other items prepared by Services Provider in connection with this Agreement. In the event of termination by Local Government, Services Provider shall be compensated in accordance with Section III of this Agreement with respect to any third party agreements under administration by Services Provider at the time of termination. XI. COMPLETE AGREEMENT This Agreement, including the Exhibits lettered "A" through "C", constitute the entire agreement by and between the parties regarding the subject matter hereof and supersedes all prior or contemporaneous written or oral understandings. This Agreement may only be amended, supplemented, modified or canceled by a duly executed written instrument. XII. AMENDMENTS (Added) Amendments to this agreement may be made at any time upon agreement by Local Government and Services Provider. XII1. MAILING OF NOTICES Unless instructed otherwise in writing, Services Provider agrees that all notices or communications to Local Government permitted or required under this Agreement shall be addressed to Local Government at the following address: City of Paris, Texas Attn: City Manager P.O. Box 9037 Paris, Texas 75461-9037 Local Government agrees that all notices or communications to Services Provider permitted or required under this Agreement shall be addressed to Services Provider at the following address: Texas Property Assessed Clean Energy Authority Attn: Charlene Heydinger PO Box 200368 Austin TX 78720-0368 All notices or communications required to be given in writing by one party or the other shall be considered as having been given to the addressee on the date such notice or communication is posted by the sending party. PROFESSIONAL SERVICES AGREEMENT PAGE 4 XIV. AUTHORITY TO SIGN The undersigned officers and/or agents of the parties hereto are the properly authorized officials and have the necessary authority to execute this Agreement on behalf of the parties hereto. XV. MISCELLANEOUS A. This is a contract for the purchase of personal or professional services and is therefore exempt from any competitive bidding requirements of Local Government. B. Paragraph Headings: The paragraph headings contained herein are for convenience only and are not intended to define or limit the scope of any provision in this Agreement. C. Agreement Interpretation: This is a negotiated Agreement, should any part be in dispute, the parties agree that the terms of the Agreement shall not be construed more favorably for either party. D. Venue/Governing Law: The parties agree that the laws of the State of Texas shall govern this Agreement, and that it is performable in Lamar County, Texas. Exclusive venue shall lie in Lamar County, Texas. E. Successors and Assigns: Local Government and Services Provider and their partners, successors, subcontractors, executors, legal representatives, and administrators are hereby bound to the terms and conditions of this Agreement. F. Severability: In the event a term, condition, or provision of this Agreement is determined to be void, unenforceable, or unlawful by a court of competent jurisdiction, then that term, condition, or provision, shall be deleted and the remainder of the Agreement shall remain in full force and effect. G. Effective Date: This Agreement shall be effective from and after the date of execution by the last signatory hereto as evidenced below. SIGNED on the date indicated below. PROFESSIONAL SERVICES AGREEMENT PAGE 5 DATE: APPROVED AS TO FORM: Stephanie H. Harris, City Attorney DATE: CITY OF PARIS, TEXAS BY: Name: Grayson Path Title: City Manager TEXAS PROPERTY ASSESSED CLEAN ENERGY AUTHORITY BY: Name: Charlene Heydinger Title: president PROFESSIONAL SERVICES AGREEMENT PAGE 6 Exhibit "A" Scope of Services The Services Provider will perform the following services in the administration of the Program: Community Outr _ ch Maintain a website and database; Respond to inquiries from property owners, vendors, contractors, consultants, and the general public; Publish the Technical Standards Manual on the Program website; List interested, qualified lenders on the Program website or link to another neutral non- profit directory of lenders to enable property owners to identify potential sources of private third -party financing; Arrange for training of contractors and independent third -party reviewers on how to apply for PACE financing and comply with the PACE -in -a -Box Technical Standards Manual; and Establish quality assurance measures. Maintain uniform documents. Periodic updates to the standard form documents will be necessary as the program evolves, incorporating best practices and standardizing the PACE documents across various PACE programs. The Authorized Representative will be tasked with maintaining the form documents and making technical and conforming updates as necessary so long as the changes are consistent with the resolution to establish the PACE program and the Texas PACE Act. A lication and AQgroval Process Publish a Project Application Form based on PACE -in -a -Box model application form on the Program website; Review submitted Application forms for administrative completeness and notify the applicants of any missing information; Maintain the confidentiality of confidential owner information; Maintain the PACE application process, including: • Draft and distribute the PACE application, as well as accept and review the property owner's completed application; • If the project meets eligibility requirements, provide written indication that the project meets PACE standards at this stage (subject to verification of all requirements at closing). PROFESSIONAL SERVICES AGREEMENT PAGE 7 • Inform the property owner of his or her responsibilities in the process, including hiring a third -party reviewer, obtaining a lender, determining final project scope and completing and submitting a closing verification package. • Conduct a Pre -Closing Verification, which will confirm the statutorily required eligibility requirements of the owner including that the property owner: o Is the legal property owner of the benefited property; o Is current on mortgage and tax payments; o Is not insolvent or the subject of bankruptcy proceedings; o Holds a title to the property to be subject to a PACE assessment that is not in dispute; and o Has consent of any pre-existing mortgagee to the proposed PACE assessment through a written contract. Require independent third -party verification of expected energy or water savings resulting from a project (provided by engineer or consultant retained by applicant), according to the PACE -in -a -Box Technical Standards Manual. This review will include a: • Site visit, Report stating the savings (energy, demand, and/or water) and expected project life are reasonable and in compliance with PACE in a Box program guidelines; and • Letter from the ITPR certifying that he/she has no financial interest in the project and is an independent reviewer. Require independent third -party verification, according to the PACE -in -a -Box Technical Services Manual, that the period of an assessment does not exceed the expected life of the improvements or thoroughly review waiver application and justification (provided by engineer or consultant retained by applicant); Require lender to confirm in writing its determination, based on underwriting factors established by the lender, that the owner has demonstrated the financial ability to repay the financial obligations to be repaid through assessment. Require the owner to notify the holder of any mortgage lien on the property of the owner's intention to participate in the Program and obtain the lienholder's written consent prior to the imposition of the PACE assessment; Review and finalize the terms of every Owner Contract and Lender Contract prior to execution; The Contract must contain: • Amount of the assessment; • The legal description of the property; • The name of the property owner; and • A reference to the statutory assessment lien provided under the PACE Act. Collect and retain owner application fees as compensation for administrative services; PROFESSIONAL SERVICES AGREEMENT PAGE 8 Perform closing verification reviews and schedule assessment transaction closings when all requirements are met. Such closing verification must include: • The report conducted by a qualified independent third -party reviewer of water or energy baseline conditions and the projected water or energy savings attributable to the project; • Such financial information about the owner and the property as the lender chosen by the owner deems necessary to determine that the owner has demonstrated the financial ability to fulfill the financial obligations to be paid through assessments; and All other information required by the Services Provider. Coordinate and take part in assessment transaction closings. Execute contracts under the Program as authorized on behalf of Local Government. Arrange for recordation of a Notice of Contractual Assessment Lien for each approved project in the Official Public Records of the county where the project is located; The Notice must contain: • Amount of the assessment; • The legal description of the property; The name of the property owner; and • A reference to the statutory assessment lien provided under the PACE Act Require independent post -closing third -party verification (by engineer or consultant retained by Applicant) that each project was properly completed and is operating as intended; and Collect and retain administration fees collected by lenders from owners that receive PACE financing. Management and Re ortin Manage communications with lenders regarding assessment servicing, payment, and default; Upon notification by a lender of an owner's default in payment of an assessment and the lender's compliance with the requirements of the Lender Contract on collection after default, notify the Local Government to enforce the assessment lien in accordance with law and the agreements between the parties; Receive and store owner reports on energy and water savings; Maintain the form contracts and make technical and conforming updates as necessary so long as the changes are consistent with the resolution to establish the PACE program and the statute. At the request of property owners, prepare annual notices of assessment to be issued by Local Government to the owners, stating the total amount of the payments due on each PROFESSIONAL SERVICES AGREEMENT PAGE 9 assessment in the coming calendar year according to the owner contract and the financing documents; Determine the amounts of the application and administration fees to be paid by owners; Produce annual report on Texas PACE financing usage and the resulting energy and water savings enabled through PACE Assessments. PROFESSIONAL SERVICES AGREEMENT PAGE 10 Exhibit "B" Compensation and Fees Service Provider shall determine the amounts of the uniform application and administration fees to be paid by property Owners participating in the Program. Such fees will not exceed the fees below: An application fee of thegreaterof o $2,000.00; or o Amounting to M 1 % of the total project cost of the first $5 million a plus 0.5% of the marginal amount above $5 million and $20 million, and 0.25% of the marginal amount above $20 million to be paid as follows: $500.00 per project at the time of application submittal; the balance of the full remaining application fee paid at closing; and A recurring administration fee of 0.08% of the outstanding principal balance, which amount shall be collected by lender and paid to the Services Provider as provided in the Owner Contract and the financing documents. This fee can also be capitalized and paid at closing. If paid under a negotiated regular schedule to the lender by the property owner, the lender shall pay this fee to Services Provider at the time of each payment by the property owner in accordance with the financing documents. • No amounts shall be due by Local Government to Services Provider. PROFESSIONAL SERVICES AGREEMENT PAGE 11 Exhibit "C" Insurance Requirements COVERAGE LIMIT OF LIABILITY Employer's Liability $500,000 per occurrence Bodily Injury and Property Damage, General Liability Combined Limits of $500,000 each Occurrence, and $1,000,000 aggregate PROFESSIONAL SERVICES AGREEMENT PAGE 12