Many California public agencies such as schools and city governments face similar challenges. Their buildings are aging, operating costs are rising, and funding is limited to address these issues. Post-COVID, construction costs have surged, and utility rates are expected to skyrocket. 

The aging aspect is obvious, but the increase in operating costs may not be. As equipment like heating, ventilation, and air conditioning (HVAC) systems, lighting, and other critical equipment ages, they lose operating efficiency. For HVAC systems, this means working harder and longer to maintain desired temperatures, driving up energy costs. As energy usage rises, per-unit costs are anticipated to increase by nearly 25% within the next two years.

Over time, equipment replacement isn't considered until it completely fails and is irreparable and replacement is the only option. Sometimes, a piecemeal process of replacing equipment (or deferring critical projects altogether) is necessary because of a shortage of available funding — a fundamental challenge for many public agencies. 

When HVAC equipment fails and needs to be replaced quickly, facility teams will often be forced to utilize whatever equipment is available, often at elevated prices. In addition, available equipment will often not deliver optimal performance. 

Why is Government Code 4217 relevant?

Due to a lack of consistency in your system, a piecemeal process of replacing and upgrading equipment can also cause numerous operating issues, making it harder to maintain and operate your buildings the way you want to. Additionally, the total time spent on procurement, requesting funding, handling job walks, and the other numerous tasks involved in the buying process could often be better spent on other work. As many facility directors look for a solution to effectively take care of everything at once, California's Government Code (GC) 4217 offers better options.

This code is not a program or a grant fund, but rather is a procurement code that allows public agencies to enter into purchase agreements that can address a wide range of infrastructure needs. For example, need to upgrade agency-wide HVAC equipment and replace the roofs that the equipment sits on at the same time? GC 4217 can help you do that. Want to replace windows, repair your central plant, and install solar photovoltaics and a battery storage system? GC 4217 can help you procure that as well.

GC 4217 was written to be intentionally broad in order to provide maximum flexibility for agencies to use in a variety of ways.

Some agencies use GC 4217 to purchase power, while others use it as a procurement vehicle to buy design-build retrofit projects with multiple disciplines like HVAC, lighting, roofing, windows, electrical, irrigation, plumbing, and anything else related to necessary operating or utility costs.

GC 4217 also allows agencies to enter into finance agreements to fund these projects, often with resultant cost-savings as a revenue stream to repay the debt obligation. GC 4217 even allows agencies to pick their vendor partner based on their own best value criteria, allowing you to work with your preferred partner without having to default to a low bid.

What does GC 4217 mean for you?

GC 4217 can be useful for your agency if you need a lot of facility upgrades or improvements — and can be an absolute game-changer if you don't have the funding to do them. Not having the resources and funding required to develop a coordinated plan to complete work in a timely manner is a common problem for public agencies. Therefore, it can take years to work through the list and get everything fixed, resulting in the fact that you might have to start over again due to lost time.

This is often a function of the low bid process that is completed using capital expenditure dollars, which are often in short supply. GC 4217 can provide a procurement method to select a partner to design a comprehensive plan to do the work in short order so that you get a lot of work done at once, enabling your equipment to function all together as you need it to and making it much easier to run your buildings.

Most facility directors know that projects which aren't visibly public (e.g., think of a roof replacement versus a newly constructed, state-of-the-art gymnasium) are lower priority for funding simply because most people won't see the impact.

People complain (and rightly so) when a roof is leaking, but nobody comments when a roof isn't leaking because they expect there to be a functional, water-tight roof. Not many people will think about the cost and effort to maintain that functionality. But, a new state-of-the art gymnasium will have people talking and gushing over how great it looks. Few people outside of the facility department want to prioritize spending money on keeping the roof from leaking when that money could be spent on a beautiful new building that showcases the community.

The financial advantage of GC 4217 is that your agency can enter into a financing agreement to fund the work. There is a myriad of financial solutions that you can choose from to meet your needs now over a term period that works best for you, tying in different savings streams, incentives, and grant programs. This prevents you from being restricted to use budget leftovers after the crowd-pleasing projects have been funded.

How to choose the right partner?

When choosing the right company to partner with, first start by thinking outside of the box to address more of your needs. GC 4217 explicitly gives you the latitude to address infrastructure needs beyond simple upgrades for energy conservation purposes.

Ask:

• Are your needs more infrastructure-related (HVAC/roofs/electrical) or more energy-related (lights, solar photovoltaics)? Are you looking for maximum energy/financial savings or the most improvements you can make to your buildings? Which is a stronger driving factor for your agency? 
• Do you have a need for EV charging?
• Do you have a need for replacing ductwork?
• Do you have a need for power resiliency because your buildings are used as emergency shelters during wildfires? 

Answers to these questions and solutions to address these problems can all be procured in the same project using GC 4217.

GC 4217 offers a flexible solution to address multiple infrastructure needs at once. To maximize its benefits, start by evaluating your budget, identifying available capital, and prioritizing key projects. Selecting the right partner is crucial to ensuring long-term operational efficiency. 

When choosing a partner, consider whether a phased approach — completed as budget permits — or a financed single-phase approach better aligns with your goals. Understanding the financial implications and long-term costs will help guide this decision and set your project up for lasting success.