Chevron Sharon Gitles Uslan MBA, CSBO, LEED AP Senior Manager Chevron Energy Solutions

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1 Sharon Gitles Uslan MBA, CSBO, LEED AP Senior Manager Chevron Energy Solutions

2 Positive Cash Flow in Challenging Times HOW?

3 Common Financial & Facilities Challenges Ways to Challenges Address Rising Operations Cost Aging Facilities Deferred Maintenance Lack of Capital Difficulty passing referenda Code & Regulation Comfort Issues Inadequate in-house staffing or training Changing/rising demand Programmatic changes The Solution 1 Traditional Low Bid Procurement 2 In-House ILCS 805 Art. V - Public Community College Act

4 Advantages of this Approach Traditional project 110 ILCS 805 Art. V Big District funds at risk/spent before scope, cost & funding are finalized Total price unknown until project is completed 1. Nothing spent/risked until all details are known (funding, savings, cost, scope, timing etc) 2. Guaranteed investment is known before proceeding with agreement Who is accountable for the project? 3. Financial powerhouse is accountable for ALL aspects of the project -- Start-to-Finish What if there are change orders after you finance? What is the message to the community? How do you minimize risk in a low-bid situation? What professionals do you hire and when? (architects, engineers, construction managers, etc)? Sends message that you are spending taxpayer dollars Tax increase, referenda, capital required? 4. No change orders 5. Qualified Provider accountable for securing competent contractors & local worker participation 6. One agreement (negotiated procurement) 7. Conservation project sends a green message to the community - about saving taxpayer dollars 8. Tap into financial resources that are otherwise unavailable

5 Advantages of this Approach In-House project 110 ILCS 805 Art. V Ties up/drains valuable, scarce internal resources Financial powerhouse is accountable for ALL aspects of the project -- Start-to-Finish Limited experience with the newest technologies Experts at hand every step of the process Savings not guaranteed Savings guaranteed over 20 years No financial accountability Qualified Provider accountable for the financial results No accountability for results/delivery Qualified Provider accountable for quality, timeline etc. No accountability to your Board Qualified Provider accountable to your Board and Community No flexibility in financing Could enable you to tap into flexible financial solutions that are otherwise unavailable

6 Enables You to Leverage the IL Negotiated Procurement Vehicle (110 ILCS 805/Art. V) Public Community College Act provides you with the ability to negotiate with a Qualified Provider to modernize your facilities 1. Qualified Provider must provide a financial justification for the project 2. Qualified Provider must lay out the timeline for the procurement 3. Qualified Provider must guarantee the performance & financials over 20 years

7 2 Types of Qualified Providers Product Manufacturers Sell long term service contracts Sell products Sell proprietary technology Displace local workforce Vendor Neutral Providers Focused on solving problems and bringing value No strings attached

8 How to Unlock 3 Cost Centers in Your Existing Budget A. Utility expenditure i. Electric ii. iii. Gas Water B. Repair & maintenance C. Long term operational i. Planned future needs ii. Unplanned future needs

9 $ MODEL YOUR FUTURE REPLACEMENT COST/RISK BUILDING ENVELOPE FLOORING SECURITY Un-Budgeted Without Chevron Project Budgeted Without Chevron OTHER Project PLUMBING HVAC Years Budgeted with Chevron Project Chevron 2005 Chevron Energy Solutions

10 Long Term Operational Cost Mean Expected Useful Life* A. Temperature Controls / EMS 20 B. Boilers 25 C. Lighting 15 D. Windows 20 E. Unit Vents / ppg 20 F. Bathrooms 18 G. Electrical 15 H. Roofing 20 I. Plumbing 20 J. Other tbd * Source ASHRAE

11 Proven Process of Modernization Feasibility endorsed * Verification of Value meeting Financial FORMAL PROCESS Technical Political * Board Action recommended Red text = Board Action required

12 Start with a feasibility Would a performance-based project add value for you? Determine the potential to improve facilities & generate efficiencies with NO need for a tax increase or referendum CHEVRON could do this at no cost to your college

13 Sharon Gitles Uslan MBA, CSBO, LEED AP Senior Manager Chevron Energy Solutions

Briefing to the Dallas City Council s Budget, Finance and Audit Committee June 18, 2012

Briefing to the Dallas City Council s Budget, Finance and Audit Committee June 18, 2012 Energy Conservation is largely based on behavioral practices to use [energy] in a more efficient manner it is essential