Title
Resolution to Approve Change Order No. 1 to the Contract with Melink Solar, LLC for Solar Installations at the Water Recovery Facility to Cover Additional Project Costs of up to $27,441.70, to Include the ARPA Addendum, and to Extend the Time for Completion by 12 Months (Total Contract amount: $2,258,171.70)
Memorandum
In November of 2023, City Council approved four construction contracts with Melink Solar, LLC for solar installations at designated sites in the City (R-23-423). All four contracts were eligible to be funded with American Rescue Plan Act (ARPA) funds that the City had designated for solar installations on City facilities. However, because ARPA funding comes with specific reporting requirements, City staff decided at the time that it would be best to apply all the designated ARPA funds to only the largest of the four contracts (Wheeler Service Center), rather than spreading the funding over many contracts. Thus, the contract for installation of solar systems at the City's Water Recovery Facility did not originally include the ARPA Addendum with the provisions that are required for contracts that are funded - wholly or partially - by ARPA funds, because none of the designated ARPA funding was originally allocated to this contract.
However, as staff learned more about the Direct Pay Provision authorized under the Inflation Reduction Act, it became clear that the choice to apply all the ARPA funding to only the Wheeler Service Center contract meant the City was going to lose the possibility of getting $899,004.00 returned as reimbursement from the federal government. Pursuant to the Direct Pay Provision, local governments are eligible to receive up to a 30% reimbursement for renewable energy projects. The caveat is that a local government cannot make money on a project. For example, if the City proceeded with applying all the ARPA funding to only the Wheeler Service Center (Wheeler) contract, and then claimed the 30% Direct Pay rebate, the City...
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