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HomeMy WebLinkAbout02/02/2010, C5 - PARTICIPATION IN STATE ENERGY PROGRAM GRANT FOR ENERGY EFFICIENCIES council M°OWDW 2-2-10 j acEnaa wpont 1�N..6. Cs CITY OF SAN LUIS OBISPO FROM: Bill Statler, Director of Finance& Information Technology Debbie Malicoat. Finance Manager SUBJECT: PARTICIPATION IN STATE ENERGY PROGRAM GRANT FOR ENERGY EFFICIENCIES RECOMMENDATION Adopt a resolution authorizing Sacramento County, as the lead collaborative entity, to apply for funds on behalf of the City of San Luis Obispo for energy efficiency and conservation activities.. DISCUSSION Overview As the Council is aware, the City is.participating in a statewide pilot program that would allow residents and businesses to finance energy improvement projects through the formation of an energy financing district in compliance with Assembly Bill (AB) 811. The California Energy Commission's State Energy Program (SEP) provides grants to eligible governments for energy efficiency, energy conservation, renewable energy and other energy related projects and activities authorized by the American Recovery and Reinvestment Act of 2009 (ARRA). As part of the statewide pilot program, participating agencies are applying for SEP grants to help offset the costs of program start-up, including marketing and legal fees. The County of Sacramento has volunteered to be the lead agency in applying for the grant funding. The City of San Luis Obispo would collaborate with the County of San Luis Obispo's action to join Sacramento in implementing the program for the purpose of qualifying for SEP funds. Background On December 1, 2009, the Council approved participation in the CaliforniaFIRST energy efficiency improvement financing pilot program. The program is a collaboration of 14 counties and many of the incorporated cities within those counties to provide a statewide program pursuant to AB 811. The program provides several benefits to residents and businesses wishing to implement energy conservation and efficiency projects. As identified in the December 2009 staff report, an application for SEP funds was under consideration to help offset some of the costs of the CaliforniaFIRST program. SEP funds are available to eligible local governments through the California Energy Commission for energy efficiency, energy conservation, renewable energy and other energy related projects and activities authorized under ARRA. Sacramento County is taking the lead in applying for SEP grant funding for the CaliforniaFIRST program and each participating city or county will need to collaborate with Sacramento County for purposes of receiving these grant funds. 4 cs- � Participation in SEP Grant Application Page 2 When the December 2009 report was prepared, the final details of the documents that would be required to implement this step were still under development. Since then, the documents have been finalized and are now ready for participating agencies to adopt. Participation requires Council adoption of a resolution that authorizes Sacramento County, as the lead collaborative entity, to apply for funds on behalf of the City of San Luis Obispo through the City's participation with the County of San Luis Obispo. CONCURRENCES The Department of Community Development concurs with this recommendation. FISCAL IMPACT There is no fiscal impact to the City. SEP funds will be used to offset CaliforniaFIRST program start-up costs. If SEP funds are not received, these costs will be absorbed as part of the financing charged to individuals participating in the program in the form of higher borrowing costs. While this will not result in a direct impact to cities and counties, it could negatively impact the level of participation if the cost to finance energy improvements is higher. ALTERNATIVES The City could choose not to participate in the program. This is not recommended as any grant funds used to offset the program costs makes the program_ more affordable to City residents and businesses. ATTACHMENT Resolution approving participation in the SEP grant application T:\Council Agenda Reportffft nce&R CAR\Finance120 I MCaliforniaFint SEP 2-2-10.doc ATTACHMENT RESOLUTION NO. (2010 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO AUTHORIZING THE LEAD COLLABORATIVE ENTITY TO APPLY FOR FUNDS ON BEHALF OF THE CITY OF SAN LUIS OBISPO WHEREAS, the City of San Luis Obispo recognizes that it is in the interest of the regional, state, and national economy to stimulate the economy; create and retain jobs; reduce fossil fuel emissions; and reduce total energy usage and improve energy efficiency within our jurisdiction; and WHEREAS, State Energy Program (SEP) funds are available through the California Energy Commission's SEP for grants to eligible local governments for energy efficiency, energy conservation, renewable energy, and other energy related projects and activities authorized by the American Recovery and Reinvestment Act of 2009 (ARRA); and WHEREAS, SEP allows for cities, counties, or groups of cities and counties in California to apply for SEP funds on behalf of eligible local governments; and WHEREAS, the City of San Lui's Obispo is eligible for SEP funding under the California Energy Commission's SEP; and WHEREAS, the City of San Luis Obispo is proposing to collaborate with Sacramento County to implement a program for financing the energy efficiency, energy conservation, renewable energy, and other energy related projects and activities authorized by ARRA, which program is described in Exhibit A for the purpose of qualifying for SEP funds from the California Energy Commission; and WHEREAS, the City of San Luis Obispo has considered the application of the California Environmental Quality Act (CEQA) to the approval of the program for financing energy efficiency, energy conservation, renewable energy, and other energy related projects and activities authorized by ARRA described in Exhibit A. NOW, THEREFORE, BE IT RESOLVED, that in compliance with CEQA, the City of San Luis Obispo finds that the approval of the program for financing energy efficiency, energy conservation, renewable energy, and other energy related projects and activities authorized by ARRA described in Exhibit A is not a "project" under CEQA, because the program does not involve any commitment to a specific project which may result in a potentially significant physical impact on the environment, as contemplated by Title 14, California Code of Regulations, Section 15378(b)(4)). BE IT FURTHER RESOLVED, that the—City of San Luis Obispo authorizes Sacramento County to submit a collaborative application on its behalf to the California Energy Commission for up to $16,500,000 in SEP funds for the program for financing energy efficiency, energy conservation, renewable energy, and other energy related projects and activities authorized by ARRA described in Exhibit A. R ATTACHMENT Resolution No. (20 10 Series) Page 2 BE IT FURTHER RESOLVED, if recommended for funding by the California Energy Commission, the City of San Luis Obispo authorizes Sacramento County to accept a grant award on its behalf and to enter into all necessary contracts and agreements, and amendments thereto, on its behalf to implement and carry out the program for financing the projects described in Exhibit A. Upon motion of seconded by and on the following vote: AYES: NOES: ABSENT: the foregoing resolution was adopted this of 2010. Mayor David F. Romero ATTEST: Elaina Cano City Clerk APPROVED AS TO FORM: jity istine Dietrick Attorney W �� ATTACHMENT EXHIBIT A California Energy Commission State Energy Program CalifomiaFIRST Collaborative Proposal Summary of Proposal Scope &Budget Framework Description of Program Proposal Under the lead applicant, Sacramento County, the 14 counties eligible to participate in the pilot stage of the CalifomiaFIRST Program are collaborating on a proposal to the California Energy Commission State Energy Program for a grant of up to $16.5 million. The grant funds will be used to offset initial fees associated with bond issuance, start-up costs for the 14 counties and all incorporated cities, an interest rate buy-down, local marketing/education/training/outreach, local coordination, and grant administration to support the launch of the CalifomiaFIRST municipal financing program. CaliforniaFIRST Program County Participants and Proposal Collaborators ✓ Alameda ✓ Sacramento ✓ San Mateo ✓ Ventura ✓ Fresno ✓ San Benito ✓ Santa Clara ✓ Yolo ✓ Kern ✓ San Diego ✓ Santa Cruz ✓ Monterey ✓ San Luis Obispo ✓ Solano Budget Basics 1. CaliforniaFIRST financing costs and fees (46M) Guided by California Communities and the CalifomiaFIRST Program Administrator Renewable Funding, this program element will: • buy-down the interest rate on the initial round(s) of projects financed by the CalifomiaFIRST Program, • cover fixed costs associated with initial bond counsel, bond disclosure, fiscal agent and bond rating, • cover legal and validation costs, and • cover the deployment of technology(web portal)to support local programs. 2. Grant/Contract Administration & Steering Committee Liaison: (42.0M) On behalf of the applicant agency, grant/contractor administration duties include gathering relevant reporting information from all partner jurisdictions and CalifomiaFIRST, financial oversight and invoicing, contract administration, tracking, monitoring, and oversight of deliverables. In addition, the grant administrator will serve as the partner liaison between all participating steering committees to maintain coordination and consistency on the local marketing efforts between parties as well as provide marketing and contract technical assistance, training, and advice to participating agencies. The Grant Administrator will also coordinate local efforts with those programs funded under the California Comprehensive Residential Building Retrofit Program. 0s-5 ATTACHMENT EXHIBIT A 3. Regional Program Coordination & Marketing: (—$8.5M) In line with the overall project goals, funding has been budgeted on a regional basis to each of the six primary program regions in the following amounts,based on total number of Counties: • Capitol Region (Sacramento/Yolo): $1,800,000 • Central Valley Region(Fresno/Kern): $1,150,000 • Bay Area Region: (Alameda/San Mateo/Santa Clara/Solano): $2,300,000 • North Central Coast Region: (Monterey/Santa Cruz/San Benito): $1,725,000 • South Central Coast Region: (Ventura/San Luis Obispo): $1,150,000 • Southern California Region: (San Diego): $575,000 This final program element serves to provide each region with the resources necessary to help facilitate the rapid adoption of energy efficiency and renewable energy generation system installations throughout the target area by connecting property owners to any and all available on- the-ground or proposed resources, and services, providing a streamlined framework for easy navigation, reduced out-of-pocket expenses, and overall increased cost effectiveness for both participants and the program overall. The focus of the program will be to create region-wide (or county-wide, where appropriate) cooperative project design, implementation, marketing, and coordination to maximize economies of scale, take advantage of overlapping markets, and ultimately allow each dollar to go further to benefit all parties. Financing Costs and Fees A. Financing Costs As Program Administrator of the California Communities CaliforniaFIRST Program, Renewable Funding will coordinate and provide program administration, financing, and legal services to support a robust statewide municipal financing program. Specific financing costs are concentrated at the start of the program and result in increased fees to a program participant, and therefore a higher effective interest rate. In order to lower the interest rate, the SEP funds will be used to cover bond disclosure counsel, bond rating fees, and a bond fiscal agent. In addition, a direct interest rate buy-down will be employed to achieve a bond rate that is equivalent to an A- rated bond, which is likely to be the bond rating later in the program. B. Set-up Fees A funding request equivalent to the city and county set-up fees will be included in the proposal. The costs for initial legal work and validation proceedings will be covered by this request. Additionally, the costs of establishing county web portals, importing local assessor's data, and maintaining the website will be part of this funding request. C 6�, ATTACHMENT EXHIBIT A Suggested Maior Marketing Program Coordination & Marketing Program Elements A. Agency Coordination /Steering Committee Participation In recognition of the additional coordination time required to get new programs off the ground, individual counties may elect to include a modest amount of staff time for agency representatives to participate in the program steering committee and other activities to drive marketing program design, educational/marketing material development, form and protocol development, etc. By investing this time at the onset, we are able to develop a self-sustaining program for the long term. County agencies (that is, auditor/tax collector/controller) will receive a small percentage, incorporated into each loan, to cover regular ongoing program administration costs associated with maintaining the tax roll and collecting annual assessments in years beyond the grant tern. Some jurisdictions may instead wish to contribute this time as project leveraged funds/resources to increase overall program cost effectiveness based on their individual needs and resources. Regional partnership may also elect to use a portion of the resources from this program element toward informal or formalized staff/personnel training within their jurisdictions. B. Education/Outreach/Marketing Successful program adoption requires thoughtful design, convenient procedures, and a robust program education component to encourage and energize program participation. Achieving this goal, the project team will create clear, consistent, and thematic program branding imagery, educational and recruitment tools such as program brochures. The program will be supported by the CaliforniaFIRST web portal and links to new and existing partner and complementary websites, frequently asked questions, applications, and/or other program materials. In addition, the project will engage a wide-stretching network of partners to promote,recruit, and disseminate program information utilizing existing mechanisms of door-to-door outreach, community event tabling, workshops and presentations, or other appropriate energy efficiency and complementary program participation activities. Major elements might include: • Outreach Promotional Materials: Brochures, Door-hangers, Postcard Mailers,Bill Inserts, etc. • Program Marketing Advertisements: Print Ads, Radio/TV Ads, PSA Production • Promotional Outreach Events, Trade Shows or Community Workshops • Homeowner/Business/Contractor/Staff Training Seminars • Sustainability Site Signage • Green Building and/or LEED Certification Technical Assistance C. Community Coordinator/Partner Liaison/Supplies The community coordinator is envisioned to serve as the single point regional program coordinator to unify, inform, collaborate, and engage all program parties in relation to local coordination and marketing efforts; respond to public inquiries; facilitate the education, outreach, marketing, recruitment; and promote program adoption by the target community. In addition the coordinator is responsible for coordinating with the grant administrator, tracking/reporting necessary progress and metrics, meeting/exceeding grant milestones and targets, incorporating required complementary program components, and working with CaliforniaFIRST to assure 2 ATTACHMENT EXHIBIT A QA/QC measures are applied to all participating properties. Specific tasks will be driven by the overall project goals as well as the specific needs of each region and may include: • Coordination with Grant Administrator/Steering Committee Liaison • Marketing Coordination with CaliforniaFIRST Municipal Finance District e Facilitation of local Regional Steering Committee Members and Partners • Assist with Implementation Strategy, Documents, Procedures&Protocols Development • Guide Promotion, Marketing,Education, Recruitment&Program Information Dissemination • Link Program Participants to Regional Energy Efficiency& Complementary Programs • Connect to Concurrent Complementary Workforce Development Training/Graduates • Administer Regional Program Budget, Competitive Bidding, Other Program Transparency Reqs • Track and/or compile, Monitor & Evaluate Program Progress, Energy Savings, GHG Reductions Achieved, Partner Leveraged Funds and Ancillary Environmental Benefits Sample County Budget A sample budget based on the above framework is provided below. Please note that these amounts are subject to change based on the actual needs of each participating jurisdiction as well as feedback obtained regarding funder and partner thresholds for competitiveness. % Gross Benefit Net Benefit Component Overall Per County Per Coun 1.CaliforniaFIRST Costs & Fees 39% $ 428,571.43 - 2. Grant Administration & Technical Assistance 10% $ 107,142.86 - 3A.Steering Advisory Committee 10% $ 115,000.00 $ 115,000.00 3B. Education, Outreach, Incentives, Marketing 23% $ 258,750.00 $ 258,750.00 3C. Cornrnunity Coordination 18% $ 201,250.00 $ 201,250.00 Total 100% $1,110,714.29 $575,000.00 Grant Development Team: • County of Sacramento—Lead Agency(Applicant), will oversee grant writing, provide final edits and required signatures, and submit finalized proposal on behalf of entire collaborative team based on the approved proposed program scope and budget framework • Ecology Action—Partner Grant Writer (Lead on Marketing), will develop narrative based on proposed program scope and budget framework, especially as it pertains to local coordination and marketing project administration, marketing/contract technical assistance, regional coordination, and marketing, to meet all grant requirements and maximize proposal competiveness. • Renewable Funding—Partner Grant Writer (Lead on Finance), will develop narrative based on proposed program scope and budget framework, especially for CalifomiaFIRST Program finance-related program elements, to meet all grant requirements and maximize proposal competiveness. r �D`00/