DEPARTMENT: Facilities Management
FILE TYPE: Consent Action
TITLE
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Authorization To Execute And Deliver A Master Equipment Lease/Purchase Agreement And Equipment Schedule No. 01 Thereto For The Acquisition, Financing And Leasing Of Certain Equipment For The Public Benefit
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RESOLUTION
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WHEREAS, Dakota County (the “County”), a county duly organized and existing as a political subdivision, municipal corporation or similar public entity of the State of Minnesota, is authorized by the laws of the State of Minnesota to acquire, finance and lease personal property (tangible and intangible) for the benefit of the County and its inhabitants and to enter into contracts with respect thereto; and
WHEREAS, the Board of Commissioners of the County (the “Board”) has determined that a need exists for the acquisition, financing and leasing of certain equipment consisting of energy savings improvements and equipment listed in Scope of Work (the “Scope of Work”) set forth as Exhibit A3.0 to that certain Guaranteed Energy Savings Agreement (“McKinstry Agreement”) made by and between County and McKinstry Essention, LLC, which constitutes personal property necessary for the County to perform essential governmental functions (collectively, the “Equipment”) on the terms herein provided; and
WHEREAS, in order to acquire such Equipment, the County proposes to enter into that certain Master Equipment Lease/Purchase Agreement (the “Agreement”) with Banc of America Public Capital Corp (or one of its affiliates), as lessor (the “Lessor”), substantially in the proposed form presented to the Board at this meeting, and separate Equipment Schedule No. 01 thereto substantially in the form attached to the Agreement (County is referred to as “Lessee” in the Agreement and related documents); and
WHEREAS, the Board deems it for the benefit of the County and for the efficient and effective administration thereof to enter into the Agreement and Equipment Schedule No. 01 thereunder and the other documentation relating thereto from time to time as provided in the Agreement for the acquisition, financing and leasing of the Equipment to be therein described on the terms and conditions therein and herein provided.
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the County as follows:
Section 1. Findings and Determinations. It is hereby found and determined that the terms of the Agreement (including the form of Equipment Schedule No. 01 and the form of Payment Schedule, both attached thereto), in the form presented to the Board at this meeting, are in the best interests of the County for the acquisition financing and leasing of the Equipment.
Section 2. Authorization to Execute. The Board hereby authorizes the execution of the Agreement (including the form of Equipment Schedule No. 01 and the form of Payment Schedule, ) by the County Manager or Finance Director (the “Authorized Officials”), with review by the County Attorney’s Office, in substantially the forms presented at this meeting, with such insertions, omissions and changes as shall be approved by the Authorized Officials, executing (in writing or electronically) the same, the execution of such documents being conclusive evidence of such approval; and the County Manager or Finance Director is hereby authorized and directed to execute (in writing or electronically) the Agreement and any related Exhibits attached thereto and to deliver the Agreement (including such Exhibits) to the respective parties thereto. The Authorized Officials are each hereby authorized and directed to sign and deliver on behalf of the County the Agreement, Equipment Schedule No. 01 thereto under which a separate Lease (as defined in the Agreement) is created, the Payment Schedule attached thereto, any related Escrow Agreement and any related exhibits attached thereto if and when required; provided, however, that, without further authorization from the Board, (a) the aggregate principal component of Rental Payments under all Leases entered into pursuant to the Agreement shall not exceed $2,831,374.00; (b) the maximum term under any Lease entered into pursuant to the Agreement shall not exceed twenty years; and (c) the maximum interest rate used to determine the interest component of Rental Payments under the Lease shall not exceed the lesser of the maximum rate permitted by law or 4.419 percent (4.419%)] per annum. The Authorized Officials may execute (in writing or electronically) and deliver Leases to the Lessor on behalf of the County pursuant to the Agreement on such terms and conditions as they shall determine are in the best interests of the County up to the maximum aggregate principal component, maximum term and maximum interest rate provided above. The foregoing authorization shall remain in effect for a period of two years from the date hereof during which the Authorized Officials are authorized to execute (in writing or electronically) and deliver Leases pursuant to the Agreement on the terms and conditions herein provided and to be provided in such Lease.
Section 3. Other Actions Authorized. The officers and employees of the County shall take all action necessary or reasonably required by the parties to the Agreement to carry out, give effect to and consummate the transactions contemplated thereby (including the execution (in writing or electronically) and delivery of Final Acceptance Certificates, Escrow Agreements, Disbursement Requests and any tax certificate and agreement, as contemplated in the Agreement) and to take all action necessary in conformity therewith, including, without limitation, the execution (in writing or electronically) and delivery of any closing and other documents required to be delivered in connection with the Agreement and the Lease.
Section 4. No General Liability. Nothing contained in this Resolution, the Agreement, the Lease, any Escrow Agreement nor any other instrument shall be construed with respect to the County as incurring a pecuniary liability or charge upon the general credit of the County or against its taxing power, nor shall the breach of any agreement contained in this Resolution, the Agreement, the Lease, any Escrow Agreement or any other instrument or document executed in connection therewith impose any pecuniary liability upon the County or any charge upon its general credit or against its taxing power, except to the extent that the Rental Payments payable under the Lease entered into pursuant to the Agreement are limited obligations of the County, subject to annual appropriation, as provided in the Agreement.
Section 5. Appointment of Authorized County Representatives. The Finance Director and Facilities Management Director of the County are each hereby designated to act as authorized representatives of the County for purposes of the Lease and related Escrow Agreement until such time as the Board shall designate any other or different authorized representative for purposes of the Agreement and any Lease or Escrow Agreement.
Section 6. Severability. If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution.
Section 7. Repealer. All bylaws, orders and resolutions or parts thereof, inconsistent herewith, are hereby repealed to the extent only of such inconsistency with respect to this Resolution. This repealer shall not be construed as reviving any bylaw, order, resolution or ordinance or part thereof.
Section 8. Effective Date. This Resolution shall be effective immediately upon its approval and adoption.
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BACKGROUND
The Energy Improvements Project Phase Two with McKinstry Essention, LLC (McKinstry) was approved by Resolution No. 26-170 (April 21, 2026). The project includes rooftop solar at five sites, mechanical upgrades at three buildings, water conservation measures at 16 buildings, and building envelope sealing at 19 buildings. The energy savings from the project are guaranteed by McKinstry and are outlined in the Attachment: Financial Schedule.
The contract between the County and McKinstry will be administratively amended to reflect the increased annual guaranteed energy savings to align with the Master Equipment Lease Purchase Agreement terms. The previously guaranteed energy savings in year one was $107,686 and will be amended to $115,629. The savings increase by 4.9 percent each year of the 20-year contract.
The project Tax-Exempt Lease Purchase loan was solicited to multiple lending institutions, and the most favorable rates were from Banc of America Public Capital Corp. The summary of all responses is include in the Attachment: Financing RFP Summary. This action allows the County to formally enter into the lending and related agreements with Banc of America Public Capital Corp.
The energy savings guaranteed by McKinstry is intended to cover the financing costs associated with the project. In the event McKinstry’s guaranty fails, in whole or in part, the County will remain obligated to Banc of America Public Capital Corp subject to the terms of the agreements.
RECOMMENDATION
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Staff recommends execution of the Master Equipment Lease Purchase Agreement and related agreements with Banc of America Public Capital Corp. for the Energy Improvements Project Phase Two.
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FINANCIAL AND STAFFING IMPACTS
The Facilities 2026- 2030 Adopted Capital Improvement Program includes a project for Energy Efficiency Improvements and a levy budget of $250,000, which is the only County funding for this project. The County provides $250,000 in capital and will finance the balance of the project with the energy savings over the 20-year term guaranteed to cover the cost of the investment per Minn. Stat. § 471.345, Sub. 13.
The guaranteed savings are tracked in an annual Measurement and Verification program based on the Department of Energy Federal Guidelines. The savings will be documented annually in reductions to the County water, electricity, and natural gas bills compared to the baseline year prior to project implementation.
In addition to the guaranteed energy savings, the project anticipates receipt of utility rebates in the amount of $17,486 and Inflation Reduction Act Investment Tax Credit Direct Pay incentives of $588,105. Both will be used for the repayment of the loan upon receipt. The Tax-Exempt Lease Purchase loan with the Banc of America will be in the amount of $2,831,374 for a total project cost of $3,081,374.
PREVIOUS BOARD ACTION
26-170; 04/21/26
ATTACHMENTS
Attachment: Master Equipment Lease Purchase Agreement
Attachment: Financial Schedule
Attachment: Financing RFP Summary
CONTACT
Department Director: Mike Lexvold
Author: Mike Lexvold