(1)    Definitions. In this section:

      (a)    “Energy conservation measure” means a facility alteration or training, service, or operations program designed to reduce energy consumption or operating costs, conserve water resources, improve metering accuracy, or ensure state or local building code compliance.

      (b)    “Local governmental unit” has the meaning given in s. 19.42 (7u).

      (bg)    “Operational savings” means savings from costs eliminated or avoided as a result of installing equipment or providing services.

      (c)    “Performance contract” means a contract for the evaluation and recommendation of energy conservation and facility improvement measures, and for the implementation of these measures.

      (d)    “Qualified provider” means a person, other than a local governmental unit, who is experienced in the design, implementation and installation of energy conservation and facility improvement measures and who has the ability to provide labor and material payment and performance bonds equal to the maximum amount of any payments due under a performance contract entered into by the person.

   (2)   Authorization; report.

      (a)   

         1.    Except as provided under subd. 2., any local governmental unit may, in accordance with this section, enter into a performance contract with a qualified provider to reduce energy or operating costs, realize operational savings, conserve water resources, ensure state or local building code compliance, or enhance the protection of property of the local governmental unit.

         2.    A performance contract with a qualified provider under this section may not allow a local governmental unit to increase the square footage of a facility unless the increase is necessary to make mechanical, electrical, or plumbing improvements in order to achieve reductions in energy consumption or to conserve water resources.

      (b)    Prior to entering into a performance contract for the implementation of any energy conservation or facility improvement measure, a local governmental unit shall obtain a report from a qualified provider containing recommendations concerning the amount the local governmental unit should spend on energy conservation and facility improvement measures. The report shall contain estimates of all costs of installation, modifications, or remodeling, including costs of design, engineering, maintenance, repairs and financing. In addition, the report shall contain a guarantee specifying a minimum amount by which energy or operating costs of the local governmental unit will be reduced or energy or water metering accuracy will be improved, if the installation, modification or remodeling is performed by that qualified provider.

      (c)    If, after review of the report under par. (b), the local governmental unit finds that the amount it would spend on the energy conservation and facility improvement measures recommended in the report is not likely to exceed the amount to be saved in energy and operation costs, or the benefits to be obtained by improved metering accuracy, over the remaining useful life of the facility to which the measures apply, the local governmental unit may enter into the contract.

   (3)   Notice. Notwithstanding ss. 27.065 (5) (a), 30.32, 38.18, 43.17 (9) (a), 59.52 (29) (a), 59.70 (11), 60.47 (2) to (4), 60.77 (6) (a), 61.54, 61.57, 62.15 (1), 62.155, 66.0131 (2), 66.0923 (10), 66.0925 (10), 66.0927 (11), 66.1333 (5) (a) 2., 200.11 (5) (d) and 200.47 (2), before entering into a performance contract under this section, a local governmental unit shall solicit bids or competitive sealed proposals from qualified providers. A local governmental unit may only enter into a performance contract with a qualified provider if the contract is awarded by the governing body of the local governmental unit and if the qualified provider agrees to sign the performance contract and all contracts with subcontractors, including subcontractors who provide billing services under the performance contract. The governing body shall give at least 10 days’ notice of the meeting at which the body intends to award a performance contract. The notice shall include a statement of the intent of the governing body to award the performance contract, the names of all potential parties to the proposed performance contract, and a description of the energy conservation and facility improvement measures included in the performance contract and an explanation of how these measures will generate operational savings sufficient to pay for the cost of the measures. At the meeting, the governing body shall review and evaluate the bids or proposals submitted by all qualified providers and may award the performance contract to the qualified provider that best meets the needs of the local governmental unit, which need not be the lowest cost provider.

   (4)   Installment payment and lease-purchase agreements. A local governmental unit may enter into an installment payment contract or lease-purchase agreement for the purchase and installation of energy conservation or facility improvement measures.

   (5)   Payment schedule; savings. Each performance contract shall provide that all payments to a qualified provider, except obligations on termination of the contract before its expiration, shall be made no later than the date on which the contract expires. Energy savings shall be guaranteed by the qualified provider for the entire term of the performance contract and may not be guaranteed by a third party. Unless otherwise agreed by the parties, every performance contract shall assume an annual increase of 3 percent in the cost of relevant utility services incurred by the local governmental unit.

   (6)   Terms of contracts. A performance contract may extend beyond the fiscal year in which it becomes effective, subject to appropriation of moneys, if required by law, for costs incurred in future fiscal years.

   (7)   Allocation of obligations. Subject to appropriations as provided in sub. (6), each local governmental unit shall allocate sufficient moneys for each fiscal year to make payment of any amounts payable by the local governmental unit under performance contracts during that fiscal year.

   (8)   Bonds. Each qualified provider under a performance contract shall provide labor and material payment and performance bonds in an amount equivalent to the maximum amount of any payments due under the contract, including payments for work performed by other persons that is necessary to achieve the required guaranteed energy or operational savings.

   (9)   Use of moneys. Unless otherwise provided by law or ordinance, if a local governmental unit has funding designated for operating and capital expenditures, the local governmental unit may use moneys designated for operating or capital expenditures to make payments under any performance contract, including installment payments or payments under lease-purchase agreements.

   (10)   Monitoring; reports. During the entire term of each performance contract, the qualified provider entering into the contract shall monitor the reductions in energy consumption and cost savings attributable to the energy conservation and facility improvement measures installed under the contract, and shall periodically prepare and provide a report to the local governmental unit entering into the contract documenting the reductions in energy consumption and cost savings to the local governmental unit.

   (11)   Energy conservation measures. Energy conservation measures under this section may include the following:

      (a)    Insulation of a building structure or systems within a building.

      (b)    Storm windows or doors, caulking or weather stripping, multiglazed windows or doors, heat-absorbing or heat-reflective glazed and coated window or door systems, additional glazing, reductions in glass area, or other window and door system modifications that reduce energy consumption.

      (c)    Automated or computerized energy control and facility management systems or computerized maintenance management systems.

      (d)    Heating, ventilating or air conditioning system modifications or replacements.

      (e)    Replacement or modification of lighting fixtures to increase the energy efficiency of the lighting system without increasing the overall illumination of a facility, unless an increase in illumination is necessary to conform to the applicable state or local building code for the lighting system after the proposed modifications are made.

      (f)    Energy recovery systems.

      (g)    Utility management systems and services.

      (h)    Cogeneration systems that produce steam or forms of energy such as heat, as well as electricity, for use primarily within a building or complex of buildings.

      (i)    Life safety improvements or systems required to comply with the federal Americans with Disabilities Act.

      (ig)    Replacement or improvement of energy or water metering systems.

      (im)    Measures to improve indoor or outdoor water conservation, including measures related to water recycling and reuse, and systems or equipment that implement those measures.

      (ir)    Measures to improve indoor air quality to meet applicable state and local building code requirements.

      (j)    Any other facility improvement measure that is designed to provide long-term energy or operating cost reductions or compliance with state or local building codes.