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An ordinance approving a Solar Services Agreement between the Metropolitan Government of Nashville and Davidson County, acting by and through the Department of General Services, and Cherry Street Asset Management Holdings, LLC for the design, construction, operation, management, and administration services related to photovoltaic solar facilities located at the Southeast Police Precinct.
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WHEREAS, renewable energy sources are inexhaustible, and free of climate-warming pollution that is harmful to human and environmental health; and,
WHEREAS, Metropolitan Code of Laws Section 2.32.080 sets forth renewable energy portfolio standards to power Metropolitan General Government operations, with the Metropolitan Government required to utilize 100% tier-one renewable energy sources by 2041, not less than 10% of which must be from solar; and,
WHEREAS, the Metropolitan Government of Nashville and Davidson County awarded three indefinite delivery/indefinite quantity (“IDIQ”) contracts, including Contract No. 6559759 to Cherry Street Asset Management Holdings, LLC, to finance, design, procure, install, own, lease, operate, and maintain solar photovoltaic installations on properties owned by the Metropolitan Government; and,
WHEREAS, pursuant to Contract No. 6559759, the Metropolitan Government, acting by and through the Department of General Services, selected Cherry Street Asset Management Holdings, LLC to enter into a Solar Services Agreement for the design, construction, operation, management, and administration services related to the photovoltaic solar facility, (the “System”), located at the Southeast Police Precinct; and,
WHEREAS, the term of the Solar Services Agreement is thirty (30) years, calculated from the date at which Cherry Street Asset Management Holdings, LLC gives General Services written notice that the System is mechanically complete and capable of providing electric energy to the delivery point; and,
WHERAS, in order to construct the System, pursuant to the Solar Services Agreement, the Metropolitan Government must agree to license a portion of the premises where the System will be located to Cherry Street Asset Management Holdings, LLC; and,
WHEREAS, Section 4.12.160 of the Metropolitan Code of Laws limits the term of contracts for supplies to sixty (60) months, unless otherwise authorized by the Metropolitan Council; and,
WHEREAS, it is to the benefit of the citizens of The Metropolitan Government of Nashville and Davidson County that this Solar Services Agreement be approved.
NOW, THEREFORE, BE IT ENACTED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1. That the Solar Services Agreement between the Metropolitan Government of Nashville and Davidson County, acting by and through the Department of General Services, and Cherry Street Asset Management Holdings, LLC for the design, construction, operation, management, and administration services related to photovoltaic solar facilities located at the Southeast Police Precinct, attached hereto and incorporated herein, is hereby approved, and the Metropolitan Mayor is authorized to execute the same.
Section 2. That the Director of Public Property Administration, or his designee, is authorized to execute the Memorandum of Solar Lease with License, attached hereto as Exhibit 5 to the Solar Services Agreement, and incorporated herein, in the form attached hereto or in substantially similar form.
Section 3. That any amendments to this Solar Services Agreement shall be approved by resolution of the Metropolitan Council receiving twenty-one (21) affirmative votes.
Section 4. This Ordinance shall take effect from and after its passage, the welfare of the Metropolitan Government of Nashville and Davidson County requiring it.
Agenda Analysis
Analysis
This ordinance approves a Solar Services Agreement between the Metropolitan Department of General Services and Cherry Street Asset Management Holdings, LLC (“Cherry Street”), for the design, construction, operation, management, and administration services related to photovoltaic solar facilities located at the Southeast Police Precinct.
Metropolitan Code of Laws Section 2.32.080 sets forth renewable energy portfolio standards to power Metropolitan General Government operations, with the Metropolitan Government required to utilize 100% tier-one renewable energy sources by 2041, not less than 10% of which must be from solar. To assist in the achievement of these standards, the Metropolitan Government has awarded three indefinite delivery/indefinite quantity contracts to finance, design, procure, install, own, lease, operate, and maintain solar photovoltaic installations on properties owned by the Metropolitan Government. One such contract has been awarded to Cherry Street, which will be used for a photovoltaic solar facility located at the Southeast Police Precinct.
Section 4.12.160 of the Metropolitan Code of Laws limits the term of contracts for supplies or services to 60 months, unless otherwise authorized by the Metropolitan Council. The contract under consideration would be for a term of 30 years.
Pursuant to the terms of the Solar Services Agreement (“Services Agreement”), Metro would pay a monthly fee of $1,524 to Cherry Street for the term of the agreement. There are no additional charges or fees for the performance of the Services Agreement. The term of the contract is 30 years from the Commercial Operation Date, which is anticipated to be July 14, 2025. Metro may terminate the agreement upon 30 days’ notice to Cherry Street. If the Services Agreement is terminated early, Metro would be responsible for a termination payment to Cherry Street in the amount of the remaining cumulative unpaid monthly fee over the term post-termination, as listed in Exhibit 4. The estimated annual energy production from the roof-mounted photovoltaic solar facility in the first year is 169,234 kWh.
Metro would also agree to grant a license for a portion of the premises where the photovoltaic solar facility will be located to Cherry Street. The form of the Memorandum of Solar Lease with License is attached to the Services Agreement as Exhibit 5. The term of the license would continue for the duration of the Services Agreement, including any renewals, and terminate 120 days after the termination of the Agreement. Metro would agree that Cherry Street is the owner of the photovoltaic solar facility. Further, Cherry Street guarantees to Metro certain solar energy production output as set forth in Exhibit 9 to the Agreement. Through Contract Year 20, Cherry Street guarantees that the actual annual production of the system on a weather-adjusted basis will meet or exceed 90% of the expected annual production, as shown on Exhibit 8 to the Agreement. During Contract Years 20 through 30, Cherry Street guarantees that the actual annual production of the system on a weather-adjusted basis will meet or exceed 80% of the expected annual production, as shown on Exhibit 8 to the Agreement. If there is a production shortfall at the end of any contract year, Cherry Street will pay Metro an amount equal to the shortfall multiplied by the payment rate for the contract year. If there is a production exceedance at the end of any contract year, the amount will be carried forward to the next contract year and credited against any future production shortfall.
Amendments to this agreement may be approved by a resolution of the Metropolitan Council receiving 21 affirmative votes.
Fiscal Note: Metro will pay a monthly fee of $1,524 to Cherry Street Asset Management Holdings, LLC for the use of the photovoltaic solar facility located at the Southeast Police Precinct.