Energy Efficiency Finance Solutions The MUSH Market Municipal - - PowerPoint PPT Presentation

This material is confidential and proprietary to Saulsbury Hill Financial, LLC.

Energy Efficiency Finance Solutions

• The MUSH Market
• Municipal University School & Hospital
• A short intro…
• Bundled Solutions
• MUSH
• Commercial
• Market Diversity
• Solutions & Customers

June 2, 2015 David J. Clamage SAULSBURY HILL FINANCIAL

Asset Classes The finance community in and around the BUILDING ENERGY equation embraces the full library of ECMs and FIMs and not just in Performance Contracting

• EMS and BAS
• Controls
• Mechanical
• Chillers, Boilers and their infrastructure
• Building Envelope
• Lighting

…and more! Energy Efficiency Finance Solutions

This material is confidential and proprietary to Saulsbury Hill Financial, LLC.

Government Finance: Colorado Specific

TELP

• Tax Exempt Lease Purchase
• Low Interest Rates
• Nominally Unsecured
• Colorado Approved

Government Finance: Colorado Specific

Know the laws of the land!

Important Concepts

• Non-appropriation

If the monies allocated to a project, debt, lease, etc. are no longer available due to a budget contraction, non-appropriation – termination - is their right! Government Finance: Colorado Specific

Key Benefits

• Low Tax-Exempt Interest Rates
• No voter requirement
• Special accounting treatment
• Cash flow matching
• Prepayable
• $1 Purchase Option
• Administratively efficient

Government Finance: Colorado Specific

Conduit Finance for Non-Profits

“They might be non-profit but, they’re not tax-exempt”

• Tax Exempt
• The concept of tax-exemption for the interest income a lender/lessor

receives from a financing is reserved for state and local governments

• The Conduit is the Alternative for a 501(c)(3)
• A non-recourse lease or loan to a government or authority
• A sub-lease or loan to the non-profit
• Two Sets of Documents
• Three Sets of Attorneys
• Two Public Hearings
• 2% Fee Cap

Conduit Finance for Non-Profits

Conduit Lease: Flow Chart Vendors & Suppliers

Lessor

Government Lessee 501(c)(3) Lessee

Sale

• f

Equipment Non-recourse tax-exempt lease, note or bond Sub-lease, note or bond with matching1 terms

1: Sub-financing is the “full faith and credit” of the non-profit.

This material is confidential and proprietary to Saulsbury Hill Financial, LLC.

Commercial Real Estate

Primary Challenges

• SPE Structure
• Capital Stack
• Commingling
• Retained Earnings
• Mortgagee Waiver
• RAROC as Unsecured
• Securitized Pools, i.e. CMBS
• Split Incentive
• “NNN” vs. BOMA “Green” Lease

This material is confidential and proprietary to Saulsbury Hill Financial, LLC.

Commercial Real Estate

Solutions

• PACE
• Single Tenant/User Property
• Credit Enhancement
• Mortgage
• Owner Capital

This material is confidential and proprietary to Saulsbury Hill Financial, LLC.

What is PACE?

Commercial Real Estate

 For owner occupied properties or single tenant, there are solutions tailored to the project under $100,000

Smaller Projects

 Terms as long as 7 years  All tax benefits for the property owner or tenant  $1 End of Term Purchase Option  Rebates and other local incentives can be applied to the project  No requirement for a mortgagee waiver  Our criteria is simple:

• Time in business > 5 years
• Good bank, credit and trade references
• Stable business, industry and local economy

Commercial Real Estate

 For commercial and industrial property owners – as well as properties in many

• ther classes, there are highly refined solutions driven by the project at hand

and the good credit of the property.

Larger Projects

 Terms to 10 years  All tax benefits for the property owner or tenant  $1 End of Term Purchase Option  Rebates and other local incentives can be applied to the project  No requirement for a mortgagee waiver  Our criteria is simple:

• A solid credit is the owner and/or occupant of the

property.

• This includes cash flow and balance sheet analysis
• Bank, credit and trade references
• The kind of financing or lease of the facility.

The Private Market – Colleges & Education

 In the Non-Profit Market solutions are:

 Conduit Financing

• > $2 Million and why

 Commercial Financing

• All sizes

This is an important market and examples in Denver could include the University of Denver, Denver Country Day or Graland Academy and many more. The key – as with all lending – is credit and customer:

• Are they credit worthy – for the non-profits our online tools cover about 90% of the market
• What type of entity are they 501(c)(3) vs. For Profit

501(c)(3) and For Profit

• This is a big market!

…like ke huge! e!

HOAs and Condominiums

Some basics

A. 50 Units or more B. “B” or better buildings in “B” or better neighborhoods C. 5 Years of history D. Professionally Managed E. Owner occupied v. Rentals

• Except Resorts

HOAs and Condominiums

• Some things not so basic
• A. Terms to 15 Years!
• B. Most everything can be financed
• All equipment
• Installation
• Engineering
• C. Great rates today
• 5% to 7%
• $100,000 can be as low as $871 per month

HOAs and Condominiums

Energy Improvement Districts

Some IMPORTANT Resources http://www.dsireusa.org/

Some IMPORTANT Resources

http://www.naseo.org/

Business and Economic Thoughts

Interest Rates

• The common notions of inflation and Keynesian Economics isn’t applying

Crystal Ball

• Beware of and prepare for the Black Swans

The Oil Patch

• In 2014 we had ~ 75 rigs in operation in Colorado…today we have 39

Is BASEL in Switzerland or In Your Business?

Off Balance Sheet

Is this a unicorn or reality?

• FASB Rules
• Service Agreements
• Shared Savings
• PACE
• EITF 01-08

…and other jargon and acronyms!

It’s all about COMMUNICATION!

Questions?

• Off Balance Sheet
• PPAs
• Shared Savings
• 501(c)(3)’s
• Operating Leases
• Interest Rates
• Credit
• The weather

Thank you!

David J. Clamage 303-880-4033 x102 Davidc@saulhill.com