Loading...
HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/30/2016 - CLIMATE ACTION PLAN PROGRESSDATE: STAFF: August 30, 2016 Lindsay Ex, Environmental Program Manager Jeff Mihelich, Deputy City Manager Mike Beckstead, Chief Financial Officer WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION Climate Action Plan Progress. EXECUTIVE SUMMARY The purpose of this work session is as follows:  Highlight the branding of the implementation of the Climate Action Plan as the City moves from planning into implementation;  Review the elements of the Road to 2020 draft plan to achieve the 2020 goals of a 20% reduction in greenhouse gas emissions below 2005 levels;  Overview of the vetting process to provide rigorous cost-benefit information for identifying most cost effective pathway to 2020 and, through this vetting, share examples how the initiatives benefit families, small businesses, and all community members;  Illustrate how the City has creatively funded residential energy efficiency (evolution of on-bill financing from City-funded to 3rd party funded) and the scalability of these funding models as other programs mature and are vetted;  Describe how other communities are funding climate-related work; and  Review the overall next steps, including the process for finalizing the 2020 roadmap, including messaging and engagement strategies around climate action. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Does Council have feedback on the branding process? 2. Does the outline for the February Work Session meet Council’s expectations? BACKGROUND / DISCUSSION In 2015, City Council unanimously adopted updated community greenhouse gas goals:  20% below 2005 levels by 2020,  80% below 2005 by 2030, and  Carbon neutrality by the year 2050. Branding the Implementation of the Climate Action Plan As the City has developed messaging and engagement strategies to help reach our 2020 goals, staff has heard from the community that more diverse messaging is needed to best engage the community - e.g., one person might be interested in low-cost measures such as energy efficiency, another is interested in environmental impacts, and yet another may be focused on health related outcomes such as cleaner air for their family. While messaging has been focused in the last several years on the development of the Climate Action Plan, the messaging team is now turning to branding the implementation plan. Implementation will include more targeted and focused messages on specific actions people can take to help the community reach its goals for 2020 and beyond. Many of these actions build upon the things residents and businesses are already doing, such as engaging in City rebate programs, practicing conservation, using energy August 30, 2016 Page 2 and water efficiently, utilizing our great public transit systems and recycling to minimize waste. It is these types of actions that reduce operating costs, utility bills, provide increased comfort in homes and where we work, and these actions also benefit the 2020 goals. Until a formal branding effort can be developed, the City has developed the slogan “Road to 2020: Forging an Efficient Future.” This messaging is designed and intended to be more inclusive in an effort reach a broader group of residents and businesses. The messaging team will also engage the public to get feedback on messaging to further develop messages that resonate with people and their neighbors and connects them to opportunities to get involved. This engagement has already begun during the August 24th event at the Lincoln Center with Former Governor Bill Ritter, Mayor Wade Troxell, and City Manager Darin Atteberry. In addition, staff is meeting with the project’s Community Advisory Committee whose members bring a triple bottom line perspective to this work, as well numerous boards, commissions, and stakeholder groups in the coming months to refine this branding. Beyond the community engagement, when staff was conducting the research associated with how other communities fund their climate-related work (more information below), staff also asked these communities how they brand their efforts. Of the fourteen communities, 6 use the phrase “Climate Action Plan.” Other names include Community Climate Action Plan, Climate Protection Plan, Sustainability Management Plan, and Environmental Action Plan (see Attachment 2 for a full list of communities and name selected). The outcome of branding discussions with the community and final branding is anticipated to be shared with Council and the community during the February 28, 2017 Work Session. Road to 2020 and Initiative Vetting. At the March 2016 Work Session related to the Road to 2020 (see Attachment 1), staff presented Council with 31 initiatives in five strategy areas that had been initially modeled to create an initial roadmap to the 2020 goals, see the table below. Strategy Area Estimated 2020 Impact Example Initiatives Benefits to Residents, Families and Businesses Energy Efficiency 50% Energy Efficiency in Businesses and Homes Increased comfort, lower home and business utility bills, decreased environmental impact; green energy jobs Road to Zero Waste 25% Community Recycling Ordinance, Municipal Biomass Burner Reduced waste, better utilization of materials consumed Clean Energy 19% Community Solar Gardens, Rooftop Solar Incentives Allows all residents to access clean energy, regardless of ownership status; lower home and business utility bills; stable long-term pricing for businesses and residents; green energy jobs Multi-modal Transportation and Development 13% Bicycle Network and Ridership Improvements, Transit System Expansion Improved health, increased sense of safety while choosing cleaner transportation options; supports all residents access to healthy and sustainable lifestyles, including underserved populations and all ages August 30, 2016 Page 3 Impact indicated the 31 initiatives could surpass the 2020 goals Since this Work Session, all 31 initiatives have undergone or will undergo a thorough modeling and vetting process by the end of 2016 to inform decision-making, prioritization and financing options for specific projects and programs. Teams initially complete an analysis of their initiative in a template, and then the Finance Mechanisms committee meets to review assumptions and calculations for completeness and reasonability. Based on their assessment, they will come to consensus and provide a confidence grade (High/Medium/Low) based on the following considerations: Confidence Grade Grade Definition High Substantial vetting; contains detailed breakdown of all major costs and benefits, with clear links on what drives benefits. Includes consideration to sensitivity of key variables over time. Can be validated vs. external benchmarks. Medium Moderate vetting; contains reasonable detail on breakdown of major costs and benefits. Justifies linkage and scale of benefits. Substantiated with internal data. Low First pass vetting; includes required data, but can be issued a low rating due to insufficient detail on the breakdown of one or more major costs or benefits, poor linkage between cost and benefit, or oversimplified assumptions (such as flat costs in perpetuity). The vetting process is iterative. After the first review and grading, each initiative template will be returned to the working group with specific feedback. Once this feedback is addressed, the initiative can be revised and reviewed again to increase the assessed confidence level. For each initiative, the template will include details on project information, costs, and benefits:  Project Information o Definition o Objectives o Deliverables o Value Proposition o Alternatives Analysis o Keys to Success o Pilot/Proof of Concept o Market and Policy Analysis  Annual Costs (to the Administrator, e.g., the City, and the Participants, e.g., the Private Sector) o Overhead Costs o Incentive Costs o Installation Costs o Maintenance Costs  Annual Benefits (to the Administrator, e.g., the City, and the Participants, e.g., the Private Sector) o Reduction in Carbon Emissions by Resource Type o Resource Cost Savings o Savings in Carbon Emission Costs For common assumptions that are used across many initiatives (i.e., forecasted electric rates, population growth), a list of core variables is included and will automatically populate. This ensures consistency in individual initiative estimates and projections. August 30, 2016 Page 4 Based on above inputs, the template then automatically aggregates costs and benefits, discounts to present values, and calculates the cost/benefit ratio and cost per GHG. Once initiative vetting is complete, all of the initiatives will be combined into the model and scenarios will be run to assess the most cost effective pathway to 2020. These pathways will be presented to City Council at the February 28, 2017 Work Session. Specific examples, and the associated benefits that these initiatives provide to families and small businesses, will be highlighted during the Work Session presentation. Alignment with the Budget Process The Road to 2020 strategic plan identifies strategies to reach the 2020 goals, and, in many cases, the identified programs and services have been in place for decades. As the City has a long history of ensuring its core community services are sustainable, many of those programs and services are aligned with the climate action goals originally established in 1999. Through the 2017-2018 biennial budget process, 60 budget offers in the City Manager’s Recommended Budget (equaling $161.3 million) are tied to the City’s Strategic Plan objective of reducing emissions. A majority of the offers ($157.7 million, or 97.8 percent of the total costs) are existing core services or enhancements associated with those services. Only $3 million of offers in the recommended budget are new requests or are scaling up existing services to meet the community goals. Here is the full breakdown of the budget offers that impact the 2020 goals, which will be considered by City Council this fall:  $157.7 million (97.8 percent) to provide existing core City services that also benefit the goals. Examples include the power the City purchases from Platte River Power Authority and the City’s FC Moves and Transfort Bus Services that advance multi-modal transportation options, such as bicycle commuting and mass transportation.  $2.2 million (1.3 percent) to scale up existing programs toward goals, such as energy efficiency and community solar programs.  $800,000 (0.5 percent) to fund new programs to directly impact the goals, such as a pilot program to leverage private sector investment in innovative approaches, or support services such as community engagement and improved technology.  $600,000 (0.4 percent) to help the City organization to lead by example and achieve its own carbon reduction goals, which mirror the community goals. See Attachment 3 for specific offers and how they align with the 2017-2018 Recommended Budget. Staff is currently analyzing how the recommended budget does (or does not) put the City on track to reach the 2020 goals. For more information on the City’s budget process, go to fcgov.com/budget. The City Manager’s Recommended Budget will be available for public review beginning September 5. Example of Innovative Finance Mechanism to Support Energy Efficiency and Scalability Potential In addition to investments made through the City’s budget, the City recognizes that private sector investment, partnerships and innovative finance mechanisms will all play a role in helping to achieve the goals. The City is currently planning for the transition of the on-bill financing (known as HELP or Home Energy Loan Program) to private sector funding. Initiated in 2013, over 75 loans have been completed to date, used primarily for home efficiency upgrades and with a few solar and water projects. The energy loans, taken as a group, are estimated to be saving 10% of the carbon emissions of these homes. This equates to 1.2 tons avoided per household and 72 annual tons per year. The improvements are also providing utility bill savings, comfort improvements and health and safety benefits. The approved outstanding loan balance of $1.6M is expected to be met in the 4th quarter of 2016. As discussed with Council Finance Committee on August 15, staff is proposing to transition to a 3rd party loan model in partnership with Elevations Credit Union as quickly as possible. The logic for this transition is that meeting Energy Policy and carbon reduction goals is going to require unprecedented scale for the efficiency August 30, 2016 Page 5 upgrades of Fort Collins building stock. This, in turn, will facilitate needed investment. Over the course of the next 15-25 years, there could be thousands of home efficiency upgrades and renewable energy systems. Assuming three to four thousand homes invested $10,000 (the average loan amount) over the next five years, this equates to $30-45M in investment. The current model of using Utilities reserve funds has reached the limits of its ability to seed fund the on-bill financing loan program. While the Utilities may be able to borrow additional funds and re-loan to customers under the current model, this approach would in turn put limits on potential borrowing for other Utilities capital needs. What the City has accomplished is the demonstration of interest and demand for home efficiency financing. This transition of the program to utilize 3rd party capital will allow for the scaling of the efficiency programs in alignment with the Energy Policy and Road to 2020 goals. This model can be utilized for the other climate-related initiatives as well, where the City can provide initial funding capital, develop and pilot a successful program, and then transition to 3rd party capital to achieve the scale necessary to meet the overall goals. Peer Cities Research During the public hearings regarding the funding of the various Road to 2020 initiatives, e.g., business energy efficiency incentives, Councilmembers requested additional information on how other communities are approaching the implementation of their carbon reduction goals. More specifically, the following questions were researched by staff:  Did other communities put their climate goals to a vote? If yes, what were the outcomes and how was it worded on the ballot?  How have other cities funded their climate work? Were new revenue sources created, e.g., taxes or fees, and if so, what was the source and scale of these funds? To answer these questions, staff interviewed and researched fourteen cities across the country. The cities were chosen for having plans that associated with their carbon reduction goals and possessing one or more of the following characteristics:  Listed as a national or statewide peer to the City to Fort Collins  Relative population size to Fort Collins  Presence of a university  Geographic dispersion with a focus on representing each geographic area of the country. Public Voting on Goals or Funding In general, very few cities have put either their goals or creation of funding sources to a public vote. While no Colorado communities put their goals to a vote, two communities have put funding of the implementation to a vote - Boulder and Carbondale. Boulder’s vote included a tax on light and power consumption assessed by kWh usage, which passed in 2005 and renewed in 2010 and 2015 for five year increments. The most recent renewal was passed with 82% of voters approving the continuation of the tax. This tax generates approximately $1.8M annually. Carbondale’s vote, using a similar structure, did not pass in April 2015. 61% of voters voted “no” on the tax. Nationally, Berkeley, California put their goals to a vote and the vote passed with an 81% approval. While staff is only aware of Boulder and Carbondale putting the funding of their climate work to a vote, two other places have votes on their ballots this cycle, e.g., San Diego has a 0.5% tax for 40 years focused on transportation funding specifically (not climate work as a whole) that will generate up to $18B over the lifecycle of the tax if approved. In addition to San Diego, the State of Washington will be voting on a revenue-neutral carbon tax in the November election; revenue neutral means that it is a tax assessed on energy producers and collected at the state level for energy produced above specific emission levels, with the potential to receive a corporate tax credit on emission reductions initiatives. August 30, 2016 Page 6 During this research, staff became increasingly aware of this notion of funding climate work, either via a carbon tax or another revenue source, as an emerging trend. Notably, most of the carbon costing discussions are occurring at a statewide level and are focused on finding revenue-neutral solutions, similar to Washington’s ballot initiative. Attachment 4 includes a full report out of the 14 cities used in the study, as well as 3 additional cities and one state (Carbondale, CO; San Diego, CA; Seattle, WA; and the State of Washington) that have held a vote on either climate action goal approval or are in the process of creating a funding source or tax. Sources and Scale of Funding From speaking with the fourteen communities, staff found a variety of ways in which communities are funding their carbon reduction goals. In general, communities utilized general funds, enterprise funds, grants, public/private partnerships, and other taxes and fees to support their work. Three of these cities’ funding sources are highlighted below, and Attachment 5 lists the full breakdown of these cities and what the primary and secondary revenue sources are and what projects are funded from each source.  Kansas City, MO - this city leans heavily on grants, bonds, and partnerships with the private sector to fund a variety of sustainability-focused projects with co-benefits to core services such as stormwater, multi-modal transit, and bike infrastructure.  Boulder, CO - This is the only city that staff identified where voters approved a carbon tax assessed on light and power utility bills. This tax provides $1.8 million a year for climate action-related projects such as a city-administered grant program to businesses, a system-wide decarbonization strategy, and an expanded energy efficiency program for rental housing (around 50% of Boulder’s total housing stock).  Asheville, NC - Many of Asheville’s ongoing municipal climate action-related projects are funded through their “Green Revolving Fund” which generates approximately $400,000 annually from the cost savings associated with citywide LED streetlight replacement (similar to the City of Fort Collins’ Waste Innovation Fund). In addition, Asheville also dedicates a portion of their Capital Improvement Plan (CIP) to a separate “Green CIP” which focuses on municipal energy efficiency, equipment replacement, and fuel switching for the municipal fleet. Next Steps In preparation for the February 27, 2017 Work Session, staff’s next steps are as follows:  Complete the vetting of the 31 initiatives, as indicated above, and compile these initiatives into scenarios to achieve the 2020 goals.  Develop and publish online a Road to 2020 Dashboard that tracks the City’s progress toward the goals.  Engage the community in the development of the branding discussion to identify which messages and phrases resonate most with the community and inspire action.  The City is also evaluating how it can achieve its own greenhouse gas reduction goals, with a similar focus on the 2020 goal to reduce municipal emissions 20% below 2005 by 2020. ATTACHMENTS 1. March 10, 2016 Work Session Summary (PDF) 2. Peer Cities Research - Branding of Climate-Related Work by Cities (PDF) 3. Road to 2020 - Budget Alignment (PDF) 4. Peer Cities Research - Voting Associated with Climate-Related Efforts (PDF) 5. Peer Cities Research - Funding Associated with Climate-Related Efforts (PDF) 6. Powerpoint presentation (PDF) ATTACHMENT 1 Climate Action Branding by City City Program Name Change in Name? Rationale for name? Ann Arbor, MI CAP N Desire to combat climate action "head on" Asheville, NC Sustainability Management Plan N More focus on the local level, not too much focus on the broader climate Aspen, CO Canary Initiative N Be the "Canary in the Coal Mine" for climate action Austin, TX Community Climate Action Plan N Highlight everyday actions that citizens can do to make Austin sustainable. Highlights a partnership between the City and its residents Berkeley, CA Climate Action Plan and Resiliency Plan N Name of old plan and plan name for the "100 Resilient Cities Initiative" Boulder, CO Boulder's Climate Commitment Y Name change allows for a broader focus on energy production, natural resources, and preserving urban, agricultural, and natural ecosystems Burlington, VT CAP N Most used name from US Compact of Mayors Denver, CO CAP N Plan named in conjunction with a locally-focused climate adaption plan. CAP is a broader document for the City Eugene, OR Climate Recovery Plan Y Pressure from environmental groups to focus more on the environmental aspects of climate action Kansas City, MO Climate Protection Plan Y Pressure from environmental groups to focus more on the environmental aspects of climate action Palo Alto, CA CAP N Currently in process of updating new Climate Action, have not discussed any changes Portland, OR CAP N 4th Climate related plan. Has moved from “Carbon Dioxide Reduction plan” to “Global Warming Action Plan” to “Climate Action Plan”. Desire to focus on the elements of action, adaption, and preparation. Santa Barbara, CA CAP N Most common name for plans used among member cities of the U.S. Compact of Mayors Tacoma, WA Environmental Action Plan N Focus locally on what Tacoma can do locally in terms of action ATTACHMENT 2 Overview: Where the money goes: Budget Offers: How do offers impact the goals? Existing Services - $157.7m The Road to 2020 is a series of goals and actions set in place to keep our City healthy, vibrant, and resilient now and far into the future. The goals will guide the community toward a future that promotes economic, social and environmental health. We want to grow an efficient economy that creates jobs and sparks innovation! Working toward our goals is about more than greenhouse gases; it’s also about saving money, reducing air pollution and creating/maintaining a safer and livable community long-term. These are just some of the programs that are being considered 16-2058 Auxiliary aids and services are available for persons with disabilities. 1 offers - $380k Example: Pilot Projects and Innovation Fund ($380K) 6 offers - $450K Examples: City Energy Project Matching Funds ($50k) or Travel Behavior Survey ($100K) 5 offers - $2.1M Examples: Energy Services ($950K) or Community Solar ($250K) 14 offers related to these goals 2 offers - $150K Examples: 0.5 FTE Road to Zero Waste Support ($47K) or 1.0 FTE Energy Services Energy ($100K) DRIVEN Brand new or something we would not have done without the goals ACCELERATED Scaling up existing programs and/or doing something differently because of the goals MOTIVATION IMPACT 97.8% 0.5% 1.3% 0.4% Scaling Up Existing Programs - $2.2m City Internal Improvements Toward Goals - $600k New Programs Toward Goals - $800k DIRECT Offer directly and quantifiably reduces GHG ENABLING ENERGY EFFICIENCY Some strategies with key budget offers that are under consideration: MISSION: Advance mechanisms of energy efficiency retrofits to the entire existing building stock that are effective, safe & affordable. 26.17 City Energy Project-Matching Funds for Fort Collins Participation • Leverage City investments with matching philantropic dollars to expand & build upon existing Energy Efficiency programs 6.76 Light and Power Energy Services • Accelerate existing programs to improve comfort & decrease cost • Leverage City investments by 3-5 times & support local economy KEY OFFERS BENEFITS/EXPECTED OUTCOMES TRANSPORTATION MISSION: Optimize transportation by planning, designing, & developing to reduce dependency on single occupancy, fossil-fuel vehicles while improving traffic flow & reducing polution. ROAD TO ZERO WASTE MISSION: Develop viable solutions to reduce, divert, recycle, & compost the community’s waste & the beneficial use of its byproducts. 26.11 Road to Zero Waste Program Support • Leadership in regional “wasteshed” planning • Exploration of waste-to-energy technology of it KEY OFFERS BENEFITS/EXPECTED OUTCOMES INNOVATION MISSION: Engaging our community & demonstrate the effectiveness of specific innovations in order to achieve the 2020 goals, create economic opportunities & build new partnerships. 26.8 Pilot Projects and Innovation Fund • Engages private, academic & public sector to innovate around technical, social, policy & financial solutions to achieve the 2020 goals KEY OFFERS BENEFITS/EXPECTED OUTCOMES 3.7 Low Stress Bike Route Design Construction • Increase bike commuting, safety and confidence of cyclists • Reduce the vehicle miles traveled & air pollution 3.23 Travel Behavior Survey • Optimize tracking of vehicle miles traveled to best understand which transportation investments have the most impact KEY OFFERS BENEFITS/EXPECTED OUTCOMES CLEAN ENERGY MISSION: Foster rapid adoption of alternative & clean sources of energy including solar projects & promotion of other alternative energy sources such as geothermal, combined heat & power, etc. 5.26 Electric Distributed Battery Pilot Program • Explore utility-scale energy storage & logistics of adding storage • Balance reliability with transition to cleaner energy sources 6.79 Renewable Non-residential Solar Rebates • Increases upfront rebates for midsize non- residential solar systems, thus increasing customer choices 6.80 Renewable Community Solar Rebates • Encourage participation in community solar projects • Provide an economical alternative to rooftop solar KEY OFFERS BENEFITS/EXPECTED OUTCOMES Communities and Voting for Climate-related Work City Public Vote Explored Public Vote Taken? Funding Attached to Vote? Vote Passed? Ann Arbor, MI N N N Approved by City Council Asheville, NC N N N Approved by City Council Aspen, CO N N N Approved by City Council Austin, TX N N N Approved by City Council Berkeley, CA Y Y N Y, 82% approval (Measure M) Boulder, CO Y Y Y, assessed on light and power utility usage  $0.0049/kWh for residential accounts  $0.0009/kWh for commercial accounts  $0.0003/kWh for industrial accounts Y, 81% approval (Initiative 202)  Average cost per capita is $8-$11/ year  Generates ~$1.8M/year Burlington, VT N N N Approved by City Council Carbondale, CO Y Y Y, assessed on light and power utility usage  $0.008 per kWh for residential light and power  $0.035 per therm for residential of natural gas  $0.0029 for commercial accounts light and power  $$0.02 per therm for commercial natural gas N, concerns that the tax would put additional burden on low income households and was an extra burden on all ratepayers  Average cost per capita ~$60- 84/year residential and ~$120- 360/year commercial  Estimated to generate $350K/year Denver, CO N N N Approved by the mayor’s office Eugene, OR* Y* N N Approved by City Council Kansas City, MO N N N Approved by City Council Palo Alto, CA N N N Approved by City Council Portland, OR* Y* N N Approved by City Council San Diego, CA Y Pending Y, 0.5% sales tax increase for 40 years for $18 Billion in transportation projects Will vote November, 2016 Santa Barbara, CA N N N Approved by City Council Seattle, WA* Y Pending Y, both public transit funding and statewide carbon tax on the November ballot Will vote November, 2016 State of Washington Y Pending N, Revenue neutral tax Will vote November, 2016 Tacoma, WA* Y Pending N, Revenue neutral tax (Statewide) Will vote November, 2016 (Initiative-732) *Vote explored is a state-wide carbon neutral tax ATTACHMENT 4 Communities and Funding for Climate-related Work (Dollar amount listed when available. Self-reported data) City Primary Revenue Source(s) Major Programs Funded Secondary Revenue Source(s) Other Programs Funded Ann Arbor, MI General Fund Revenue, grants, and PACE financing  Energy efficiency rebates  Increasing availability of renewable power Asheville, NC Green Revolving Fund ($400K/year)  Energy efficiency rebates  Fleet conversion to CNG and more efficient fuel sources  Residential solid waste program  Support for low-income populations through expanded local agriculture  Community solar program  Grants  Green Capital Improvement Program or CIP (~$1M/year)  Commercial energy efficiency rebates  Green Infrastructure projects  LED Replacement  Improved composting equipment Aspen, CO Mix between general fund, enterprise fund and the Renewable Energy Management Program (~$13M/year split between Aspen and Pitkin County)  Electric vehicle program expansion  REC purchases  Expanded transit networks  Commercial green building program  Grants  Landfill enterprise fund revenues (follow-up)  City composting and recycling program  Commercial energy efficiency programs  Energy efficiency rebates Austin, TX Grants and Enterprise Fund revenues (one DOE grant provides $2.5M/year)  Energy efficiency rebates  Public outreach  REC purchases  Expanded bike infrastructure City Primary Revenue Source(s) Major Programs Funded Secondary Revenue Source(s) Other Programs Funded Burlington, VT Light and Power Enterprise Fund  Energy efficiency rebates  On-bill financing  Grants  Renewable Energy creation (biomass burning)  Regional transportation networks Denver, CO Environmental Health Enterprise Fund (~$7-9M/year)  Energy efficiency rebates  Urban agriculture  EV fleet conversions  TIF District creation (~$380K/year)  Private sector partnerships  PACE financing  Grants (ARRA)  Green infrastructure Eugene, OR Grants  Expansion of multi-modal transit  Energy efficiency rebates  REC purchases  Complete streets pilot programs  Transportation and multi-modal transit (including low-stress bike lanes)  Private sector partnerships  Partnership with the Oregon energy trust  Green building incentives  Energy efficient affordable housing projects Kansas City, MO Grants and city capital operating funds ($14.3M/year, $30.6 per capita)  Energy efficiency rebates  Municipal facility energy efficiency upgrades  Green infrastructure  Community gardens  Outreach to low-income populations through bus expansion, infrastructure and urban agriculture  GO Bonds ($200M/year for projects with co-benefits to climate action)  TDD District creation ($20M+)  PACE Financing  Private sector partnerships ($30- 1 Road to 2020: Forging our Efficient Future Jeff Mihelich, Mike Beckstead, Lindsay Ex August 30, 2016 ATTACHMENT 6 Questions for City Council 1. Does Council have feedback on the branding process? 2. Does the outline for the February Work Session meet Council’s expectations? 2 Outline • Branding – Road to 2020 • Road to 2020 • Budget Alignment • Initiative Vetting • Funding Energy Efficiency and Scaling Up • Research on Funding Climate-related Work • Next Steps 3 Transitioning CAP 4 Bridging Language ROAD paints the picture that this is a journey we are on together, while 2020 keeps our next goal in sight. FORGING is an actionable word that depicts building something and feels like unchartered territory. OUR reminds us that this is for our community here in Fort Collins. EFFICIENT covers all things from energy consumption to waste management and economic spending. FUTURE reinforces that this is long-term planning, that Fort Collins is forward- thinking and that the efforts made will impact us today and tomorrow. 5 Community Engagement 6 • August 4 (& Sept 29) – Community Advisory Committee • August 5 – Planning and Zoning Board • August 24 – Lincoln Center Event with Former Gov. Ritter • August 25 – Energy Board Work Session • August 30 – City Council Work Session • Additional Boards, Stakeholder Groups TBD Actions to Outcomes 7 8 Road to 2020: Budget Alignment • 90 Offers – $161M (2017) § Most are core services (98%) § Remaining 2% or $3.6M § $2.2M – Scaling Up Existing Programs (5 offers) § $800K – New Programs (7 offers) § $600K – Internal City Improvements to Lead by Example (3 offers) Iterative Process 9 Initiative Vetting 10 Template Submission Finance Feedback Revisions Finance Mechanisms Grading Model Aggregates Data • One model houses all initiative data • Costs • Benefits • Cost Effectiveness • Project Information • In Process – co-benefits, e.g., ozone • Iterative vetting process refines assumptions • Core variables • Teams enter assumptions • Finance mechanisms team assesses confidence level Initiative: Bicycle Network 11 Improve bicycling conditions & increase bike ridership to 10% • Low stress network • Reduction in Vehicle Miles Travelled (VMT) drives GHG reduction • Aligned with community culture • Requires consistent participation for GHG benefit $6M infrastructure costs No required 3rd party investment Modest ROI Improves health and air quality Moderate carbon reductions Participants save $15/Month on their fuel costs Initiative: Community Solar 12 Provides incentive for community solar projects • Clean power option for residents beyond rooftop solar • Significant community interest • Leverages municipal investment • Clear and automatic GHG benefit $1M incentive costs $2.6M 3rd party investment Balanced ROI Benefits families Moderate carbon reductions Participants save $28/Month on their utility bills Long-Term Funding Strategies 13 Funding Options: • City Debt/Cash • Utility Rates/Debt • Taxes/Fees • Public Private Partnerships • Private Debt & Grants City Bonds City Green Bonds Establish Green Bank Considerations: • Funding follows the Project • Projects need positive cash flow to support investment • Project Maturity & Vetting • City Debt & Rate Capacity • Peer Cities Research • Examples: • On-Bill Financing On-Bill Financing: How It Works Loans for residential efficiency upgrades: 1. Audit identifies opportunities 2. Homeowner/contractors define scope 3. Utilities qualifies project 4. 3rd party qualifies customer for loan 5. Project complete, loan closed 6. Paid thru utilities bill 7. Utilities maintains loan/absorbs loan losses 14 On-Bill Financing: Results 15 • Currently $1.6M funding approved • Energy Efficiency is an important initiative within overall energy goals • Will require significant capital to achieve goals • 3,000 homes @ $12k per loan = $36M • Beyond the capacity of the City • Staff issued RFP to solicit 3rd party capital to allow program to scale up as needed On-Bill Financing: Elevations Example Elevations Credit Union Provides 3rd Party Capital and: • Provides loan/closing support • Sets interest rate (2.75% to 9.125%) • Reduces fees • Loan service TBD - Utility bill or Elevations • No loan default risk to the City • Project eligibility process remains the same 16 Example - City Provides Initial Funding Capital, Develops a Successful Program and then Transitions to 3rd Party Capital to Achieve Scale Peer Cities Research 17 Palo Alto 80% by 2030 Asheville 2% annual reduction 80% by 2050 Boulder 20% by 2020 43.5% by 2030 81% by 2050 Fort Collins: 20% by 2020 80% by 2030 Carbon neutral by 2050 Kansas City 30% by 2020 80% by 2050 Austin 40% by 2030 Carbon neutral by 2050 Smaller Similar Population Larger Denver 80% by 2050 Aspen 30% by 2020 80% by 2050 Peer Research: Public Voting 18 Public Votes Already Occurred • Goals: • Berkeley (passed, 81%) • Funding: • Boulder (passed, 82%) - Tax on light and power consumption, ~$1.8M annually • Carbondale (failed, 61%) - Electricity and gas surcharge, about $350K would have been generated annually Public Votes Pending (Nov. Ballot) • Goals: N/A • Funding: • San Diego - 0.5% tax for 40 years, up to $18B generated for transportation projects • State of Washington - Revenue neutral tax assessed at the state level (credits for emission reduction initiatives) Peer Research: Financing Mechanisms Funding Source City Taxes, Fees, and Credits (i.e. carbon tax) Enterprise Fund Revenue Pooled Entity Resources (i.e. PACE financing) Special District Funding (i.e. TIF Districts) Grant Funds Bonds Asheville, NC Aspen, CO Austin, TX Boulder, CO Denver, CO Kansas City, MO Palo Alto, CA = Primary revenue source (if applicable) = Other revenue sources 19 Peer Cities Research – Considerations for Fort Collins • Kansas City, MO • Boulder, CO • Asheville, NC 20 Next Steps • Innovate FC Competition – Sept 28 • February 2016 Work Session: • Full vetting of all 31 initiatives and scenarios to 2020 developed • Road to 2020 Dashboard • Outcome of branding process 21 Questions for City Council 22 1. Does Council have feedback on the branding process? 2. Does the outline for the February Work Session meet Council’s expectations? 23 Road to 2020: Forging our Efficient Future Jeff Mihelich, Mike Beckstead, Lindsay Ex August 30, 2016 $50M)  Utility pass-throughs ($100K/year)  Stormwater system overhaul  Bike infrastructure  Bike share program  Multi-modal transit (KC Streetcar)  ROI buy-down program  Transit-oriented development Palo Alto, CA Mix between general fund, enterprise fund and secondary sources  Community solar program  Natural gas offset purchases  Water system infrastructure, education, and incentives  Anaerobic digester facility  EV and CNG fleet conversion  Multi-modal transportation  Urban food systems  Green energy tariffs ($100K/year)  PACE financing  Grants  On-bill financing  Feed-in-energy tariffs  REC purchases  Energy efficiency rebates Portland, OR Enterprise Fund Revenues, general fund dollars, and grants  Green Infrastructure  LED light installation  Solar programs  Creating non-profit spin-off groups  REC Purchases  Local Improvement Districts  Grants  Partnership with the Oregon energy trust  Home weatherization programs  Energy efficiency rebate programs Santa Barbara, CA Grants  Climate Action Planning  Scientific research consultations  Energy efficiency rebates  Municipal facility upgrades Tacoma, WA Enterprise Fund Revenue  REC purchases  Outreach to low-income populations  Energy efficiency rebates  General fund dollars  Grants  Increased availability of renewable power  Green Infrastructure  PACE financing  Private sector partnerships  GO Bonds  Green building certification fees  Energy efficiency rebates  Warehouse to Energy Efficiency Loans  Green building program and design workshops Berkeley, CA Mix between general fund, enterprise fund, CIP funds and secondary sources  Energy efficiency rebates  Buy local programming  Commercial recycling program  Commercial electric vehicle program  Zero waste initiatives  Fuel switching program for municipal fleet  Green infrastructure projects  Greywater incentives  Community engagement  Composting programs  Bike share program  GO bonds  PACE financing  Grants (Among others, the 100 resilient cities initiative provides around $1M for resiliency planning, staff, and resource support.)  Green Energy Building fees  Green business certification program  Resiliency planning  Green infrastructure/building  Support for low income energy efficiency programs  Community solar program  LED streetlights  EV infrastructure Boulder, CO Carbon Tax ($1.8M a year)  Energy efficiency rebates  System-wide decarbonization strategy  Natural gas replacement  Public engagement  Boulder Energy Challenge grants  Energy smart advisor program  SmartRegs program for rental housing  Local carbon offset fund  GO bonds  Grants (one grant provides ~$1M/year for resiliency work)  Resiliency planning  Municipal energy efficiency upgrades ATTACHMENT 5 Offer does not directly reduce emissions, but supports that effort 2020 Road to 2020 BUDGET ALIGNMENT Forging Our Efficient Future through the Budgeting for Outcome process; a majority of the programs that are being considered in the budget process are existing programs that are being scaled up or are offers that are not driven or accelerated by these goals, yet benefit them. ATTACHMENT 3 Water and Land Use 2% Carbon Sequestration (storage of carbon) in open lands and in urban forests Open lands and forested urban environment improves air quality and sense of place Estimated 2020 109% Initial Modeling