HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/21/2018 - FIRST READING OF ORDINANCE NO. 106, 2018, APPROPRIAgenda Item 11
Item # 11 Page 1
AGENDA ITEM SUMMARY August 21, 2018
City Council
STAFF
John Phelan, Energy Services Manager
Sean Carpenter, Climate Economy Advisor
Cyril Vidergar, Legal
SUBJECT
First Reading of Ordinance No. 106, 2018, Appropriating Unanticipated Grant Revenue from the Colorado
Energy Office in the Light and Power Fund for the HOME Efficiency Loan Program/On-Bill Financing Program.
EXECUTIVE SUMMARY
The purpose of this item is to appropriate $200,000 in grant revenues from the Colorado Energy Office in the
Fort Collins Utilities Light and Power fund for the purposes of developing and capitalizing Utilities On-Bill
Financing (OBF) program. The program will provide utility bill serviced loans for energy efficiency and
renewable energy, with a focus on efficiency in rental properties for low- to moderate-income households.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
Bloomberg Mayors Challenge
In February 2018, Fort Collins was one of 35 Champion Cities selected from 320 applications as part of the
2018 U.S. Mayors Challenge, which provides grants and technical assistance to city leaders who are solving
urgent problems in their communities. As part of being selected as one of the Champion Cities, Bloomberg
awarded Fort Collins a $100,000 grant to develop a program that would improve the energy efficiency of low-
to moderate-income rental households.
Mayor Wade Troxell selected the theme of “Climate Economy” as the innovative idea for the Bloomberg
competition. The Climate Economy refers to the notion that economic prosperity can occur without high carbon
emissions.
In Fort Collins, nearly 50% of low- to moderate-income residents live in rental housing, much of which is
inefficient and contributes to health and economic disparities in the community. The City’s proposed
Bloomberg project is to develop public-private partnerships that help catalyze the renovation of thousands of
single- and multi-family rental properties. The strategy includes helping property owners finance these
improvements through their utility bills, known as on-bill financing (OBF).
Bloomberg Philanthropies works in over 120 countries around the world to ensure better, longer lives for the
greatest number of people. The organization focuses on five key areas for creating lasting change: Arts,
Education, Environment, Government Innovation, and Public Health. In 2016, Bloomberg Philanthropies
distributed $600 million. For more information, go to www.bloomberg.org.
Agenda Item 11
Item # 11 Page 2
On-Bill Financing 2.0
The City of Fort Collins 2013 - 2016 on-bill financing program successfully demonstrated the feasibility of a
Utility department-managed, private sector-driven strategy to reduce carbon emissions through residential
energy efficiency building upgrades, in collaboration with external partners including contractors, equipment
suppliers and area homeowners. In late 2016, the City transitioned from the successful on-bill financing
methodology to a 3rd party commercial model. Although the new structure aligns with City and Utilities current
financial requirements, the 3rd party financing program has failed to achieve acceptable results. In order to
achieve community energy and climate goals, as adopted by City Council, a “reboot” and upgrade of the
original approach is required - On-Bill Finance 2.0. The OBF2.0 reboot will:
• Materially contribute to the City’s energy and climate objectives, particularly the 2030 goals. Research
and analysis contained herein indicates that OBF2.0 will be a critical factor in Fort Collins likelihood of
achieving CAP goals;
• As a part of the Bloomberg Mayors’ Challenge, OBF 2.0 will focus on expanding equitable participation
of low and moderate income (LMI) households in energy efficiency and renewable energy programs;
• Establish a scalable public private partnership (PPP) social impact model that incents the private
sector and residents to upgrade aging building stock in an affordable, cost effective manner;
• Spur the start, strengthening and/or expansion of new and existing energy efficiency related
businesses and jobs in Fort Collins.
• Obtain non-recourse, private-sector debt capital to fund new energy efficiency loans for homes and
businesses.
• Benefit utility ratepayers by promoting and increasing energy conservation and efficiency, and likely
reducing the need for additional resources to provide utility resources.
CITY FINANCIAL IMPACTS
The funds have been received and entered into the appropriate Utilities account. While the CEO grant is not
restricted to use for LMI households, the funds will be used as a part of the Bloomberg Mayors’ Challenge with
a focus on serving these households. The appropriation of these funds will enable Utilities to continue to move
forward with the initial phases of the OBF 2.0. While no matching funds are required for this grant, staff will be
supporting a CEO project to develop an OBF toolkit which CEO will then offer to other Colorado communities.
OBF 2.0 will require additional capital funds to scale over time. In addition to this grant, the Colorado Energy
Office (CEO) has agreed to provide $800,000 through a low interest loan in support of the capitalization of
OBF. Additional third-party, private-sector capital sources will be added, resulting in a sustainable financial
model. Any such future additions to the OBF 2.0 program will be brought to Council for consideration as
appropriate.
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ORDINANCE NO. 106, 2018
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING UNANTICIPATED GRANT REVENUE FROM THE COLORADO
ENERGY OFFICE IN THE LIGHT AND POWER FUND FOR THE HOME
EFFICIENCY LOAN PROGRAM/ON-BILL FINANCING PROGRAM
WHEREAS, under Ordinance No. 033, 2012, the City established a Home Efficiency
Loan Program, also known as On-Bill Utility Financing (OBF), which enabled Fort Collins
Utilities to offer financing and on-bill servicing of customer loans for energy efficiency, water
efficiency and renewable energy upgrade projects; and
WHEREAS, between 2013 through 2016, OBF provided low-cost financing for energy
efficiency, solar photovoltaic, and water conservation improvements, in support of Utilities’
efficiency and conservation efforts, and policy goals from Plan Fort Collins, the Climate Action
Plan, Energy Policy and Water Conservation Plan; and
WHEREAS, in 2016, the City transitioned the funding methodology for OBF to a third-
party commercial model relying on an outside financing partner; and
WHEREAS, the rate of OBF residential customer energy efficiency building upgrades
under the third-party commercial loan model has lagged below levels required to achieve City
energy and climate policy goals; and
WHEREAS, in February 2018, the City was selected as a Champion City as part of the
2018 Bloomberg Philanthropies U.S. Mayors' Challenge competition; and
WHEREAS, in conjunction with selection as a Champion City, Bloomberg
Philanthropies awarded the City a $100,000 grant to develop a program to improve energy
efficiency of low- to moderate-income rental households, which was appropriated in Ordinance
No. 082, 2018; and
WHEREAS, this item is to appropriate the Colorado Energy Office grant awarded to the
City of $200,000 to provide capital for a loan program to improve energy efficiency and
renewable energy for Fort Collins households; and
WHEREAS, Utility Services staff and the City Manager recommend appropriating the
Colorado Energy Office grant to continue the OBF program to increase participation by low- and
moderate-income households in energy efficiency and renewable energy programs, and thereby
increase the City’s progress toward its 2030 energy and climate objectives; and
WHEREAS, Article V, Section 9, of the City Charter permits the City Council to make
supplemental appropriations by ordinance at any time during the fiscal year, provided that the
total amount of such supplemental appropriations, in combination with all previous
appropriations for that fiscal year, does not exceed the current estimate of actual and anticipated
revenues to be received during the fiscal year; and
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WHEREAS, the City Manager has recommended the appropriation described herein and
determined that this appropriation is available and previously unappropriated from the Electric
Utility Light and Power Fund and will not cause the total amount appropriated in the Light and
Power Fund to exceed the current estimate of actual and anticipated revenues to be received in
that fund during any fiscal year; and
WHEREAS, Article XII, Section 6 of the City Charter permits the City Council to
approve expenditure of utility funds for renewals, replacements, extraordinary repairs, extension,
improvements, enlargements and betterments of each Utility enterprise or other specific utility
purpose determined by Council to be beneficial to the ratepayers of such Utilities; and
WHEREAS, the City Council has determined it is desirable to enhance the program
incentives and financing options for new Home Efficiency Loan Program/OBF loans and provide
flexibility in the administration of those loans, in furtherance of the conservation benefits
available to ratepayers through the OBF program, as required by Article XII, Section 6 of the
City Charter.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That, for the reasons stated above, the City Council hereby finds and
determines that applying the Colorado Energy Office grant to enhance the program incentives
and financing options for the Home Efficiency Loan Program/OBF program, as described herein,
will be for the betterment of the affected Utilities and serve utility purposes beneficial to the
ratepayers of those Utilities by 08promoting and increasing energy and water conservation and
efficiency and reducing the need for additional resources to provide such utility services.
Section 3. That there is hereby appropriated for expenditure from unanticipated grant
revenue in the Light and Power Fund the sum of TWO HUNDRED THOUSAND DOLLARS
($200,000) for the purposes of developing and capitalizing the OBF program.
Introduced, considered favorably on first reading, and ordered published this 21st day of
August, A.D. 2018, and to be presented for final passage on the 4th day of September, A.D.
2018.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
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Passed and adopted on final reading on the 4th day of September, A.D. 2018.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk