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354 tax credit system. Mr. Kroll advised that his reason for changing recommendations <br />355 to this investor structure was that the initial investor could not get an IRS letter of <br />356 ruling for that previous option and required purchase of the array by the city, <br />357 thereby making him uncomfortable continuing with that recommendation for the <br />358 city. Since that would have prevented an investor from participating in the <br />359 charitable donation requirement, the option to purchase was removed; while in this <br />360 scenario if the city remains satisfied with the PPA arrangements, it didn't have to <br />361 buy the system or could choose to do so at any time. Under the original scenario, <br />362 Mr. Kroll noted that tax credits would expire before a charitable donor was found, <br />363 causing the entire deal to evaporate and numbers revert to a typical finance <br />364 situation. <br />365 uull <br />366 Mr. Kroll expressed his personal disappointment that the first creative investment <br />367 model he presented could not work; but stated his preference that he could fully vet <br />368 an investor, and until he received that Letter of Intent and was able to fully review <br />369 the initial investor's numbers, he had not been able to determine that they were not <br />370 lining up as well as initially projected and leaving considerable obscurity. <br />371 Therefore, Mr. Kroll advised that he wasn't comfortable presenting it to the city, <br />372 and this latest scenario was the best traditional financing option he cod find, and <br />373 would still provide the city with 18-20% power savings from what they" re currently <br />374 paying to Xcel Energy now versus leveraging their cash flow. Mr. Kroll noted that <br />375 this investor had a national presence with a solid history and long-term foundation <br />376 of investment assets. °��ii�lllllll� <br />377 <br />378 Contingent upon the City Attorney's review of the co act, Member Cihacek stated <br />379 his support for the financial basis and positive cash ow in year-one as presented; <br />380 and also stated he was more comfortable with the risk in this relationship, as well <br />381 as a longer lifespan and stronger representation of the purchase price to overall <br />382 savings. Member Cihacek suggested the city retain the PPA agreement until its end <br />383 and then get rid of the system. <br />384 <br />385 Motion <br />386 Member Cihacek moved, Member Wozniak seconded, directing staff and legal <br />387 counsel to proceed with negotiations with Sundial Solar for a Power Purchase <br />388 Agreement (as drafted in Attachment A) with Sundial Solar, with the final <br />389 terms and conditions of that contract brought back to the PWETC for their <br />390 review and final recommendation to the City Council. <br />391 <br />392 Discussion ensued on next steps intended in the motion, including legal review by <br />393 the City Attorney, engineering to establish final numbers, and more discussion with <br />394 Xcel Energy to gain a true understanding of the current rate structure for the OVAL. <br />395 <br />396 Mr. Kroll noted that he had spoken to the City's Environmental Engineer Ryan <br />397 Johnson about the current rate schedule the city has with Xcel for the OVAL and <br />398 them not currently being met. Mr. Kroll advised that if the city did not meet those <br />399 rate considerations in the next 6-9 month period at demand load limits, the discount <br />Page 9 of 18 <br />