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HomeMy WebLinkAbout7.3 Municipal Financ Dist PtnrshpG~~C~ OF DUB~G /// 19 Chi= =7I~,,82 ~`\7/I 1~!/ll 04LIFOR~~ STAFF REPORT CITY CLERK DUBLIN CITY COUNCIL File # ^©,3^©-0~ DATE: December 15, 2009 TO: Honorable Mayor and City Councilmembers FROM: Joni Pattillo, City Manager SUBJEC Municipal Financing District Partnership Prepared By: Roger Bradley, Administrative Analyst EXECUTIVE SUMMARY: The City Council will consider adopting a resolution indicating that the City of Dublin intends to partner with the County of Alameda and the City of Piedmont in a municipal financing district. The City Council will also consider directing Staff to prepare a future report outlining participation in the CaliforniaFIRST municipal financing district program. FINANCIAL IMPACT: Participation in the CaliforniaFIRST municipal financing district would cost the City no more than $12,500 to set up the financing district, although this would have to be paid with General Fund revenues. If all jurisdictions within the County participate, the City's cost of setup would be reduced to $9,250. Grant opportunities are being sought regionally to completely fund the cost of district setup. RECOMMENDATION: Staff recommends that the City Council adopt the resolution to assert collaboration with the County of Alameda and City of Piedmont in a Municipal Financing Program using Energy Efficiency Block Grant (EECBG) Program funds and direct Staff to prepare a Staff Report for the City Council to consider participation in the CaliforniaFIRST municipal financing district program. Submitt d By Administrative Analyst Assistant City Manager Page 1 of 4 ITEM NO. 7• ~~ DESCRIPTION: At the September 1, 2009 City Council meeting, Staff was directed by the City Council to keep abreast of efforts taking place within the County and State to provide Property Assessed Clean Energy (PACE) programs. PACE programs are designed to provide California residents and businesses with alternative energy solutions that reduce greenhouse gas emissions by relying on clean and renewable sources, or in other words, do not rely on oil for energy production. As a result, Staff has been following recent developments to create a pilot financing district by California Communities, which also runs the Statewide Community Infrastructure Program (SCIP) of which both the City and Dublin San Ramon Services District are members. Alameda County intends to be a part of this pilot program, and it has taken the lead in coordinating with Staff from the various cities within the County to determine interest for broader participation. Background on Municipal Financing Programs for Energy Efficiency & Renewables Under Assembly Bill 811 (2008), cities, counties, or groups of cities and counties in California can create municipal financing programs that will allow property owners to voluntarily enter into contractual assessments to finance the installation of energy efficiency or renewable energy improvements that are permanently fixed to the property. Assembly Bill 474 (2009) added water efficiency improvements to the financing program. In this type of municipal financing program, property owners repay assessments through their property taxes. Property owners benefit from reduced electric bills, increased comfort, and access to a source of capital with minimal upfront cost. A municipal financing program structure removes property owners' concerns about not owning the property long enough to receive the full benefit of the improvements because, when the property is sold, the next owner assumes the payments along with the benefits. Municipal financing programs encourage widespread adoption of energy efficiency and renewable energy measures in the community, which will be vital to obtaining the City's and State's environmental goals. In addition, quality local green jobs and businesses will result from increasing the demand for energy efficiency improvements by making these services readily to property owners. Municipal Financing District in Alameda County through California Communities Because of the level of interest in municipal financing districts and the benefits of centralizing bond issuance and bond administration, astatewide municipal financing program is being initiated by California Communities, a statewide joint powers authority sponsored by the League of California Cities and the California State Association of Counties. California Communities, via the CaliforniaFIRST program, will create assessment districts in California counties, handle bond issuance and bond administration functions, accept and review applications, conduct assessment proceedings and levy assessments, and execute the judicial validation proceedings. Fourteen counties across California, including Alameda County, were selected to participate in the launch of the CaliforniaFIRST pilot program. In order for Alameda County to participate, the County and at least one other jurisdiction need to adopt a resolution to participate before January 18, 2010. Alameda County adopted a resolution to join CaliforniaFIRST on December 1, 2009, and the City of Piedmont adopted a resolution on December 7, 2009. All other jurisdictions that wish to participate will need to adopt a resolution by March 31, 2010 to join the CaliforniaFIRST pilot program. The pilot is expected to launch in summer 2010 and will involve Page 2 of 4 an estimated $25 million bond issuance for projects including residential, commercial, and multifamily building types. The CaliforniaFIRST program would provide the City and its residents with an effective and complete program as well as a near-term implementation date. In addition, its programs will be provided at minimal or no cost to the City because: (1) program administration is concentrated at the county (or lead agency) level and (2) potential grant funds (State Energy Program "SEP" Grants) received by the lead agencies (or their grant application partners) will reduce or eliminate the cost to the City for participation. Minimal City staff time will be necessary to coordinate development and implementation of the Countywide program and to review and process required contracts and documents related to the City's participation. There is a financial cost to the City of setting up or validating the financing district as well as a marketing technology fee. (The total cost will depend on the number of jurisdictions that decide to participate within the County.) If all jurisdictions participate, the cost to the City would be $9,250. If jurisdictions join individually, the most the City would have to pay is $12,500. If the City Council has interest in being a part of this pilot program, Staff will present a resolution for participation at the January 19, 2010 City Council meeting. Benefits of participation include: • As in conventional assessment financing, the City is not obligated to repay the bonds issued by California Communities or to pay the assessments levied on the participating properties. • California Communities handles all assessment administration, bond issuance and bond administration functions. • A participating city can provide financing of renewable energy, energy efficiency and water efficiency improvements to property owners- thereby meeting its political and environmental goals -while committing virtually no staff time to administer the program. Significance of County's Municipal Financing Program to Dublin Building on the Alameda County Climate Protection Project and January 2009 Climate Forum (which Dublin co-hosted), Alameda County jurisdictions are working cooperatively to form a Countywide municipal financing district through California FIRST. Jurisdictions are aiming to benefit from the efficiencies of centralization and economies of scale by centralizing program administration at the County level, which would relieve Staffing burdens for the City. In addition, Alameda County is setting aside Energy Efficiency & Conservation Block Grant (EECBG) funds to provide a customer service mechanism to complement the CaliforniaFIRST program. An enhanced customer service model is needed because the CaliforniaFIRST program's web- based tools are designed for relatively sophisticated property owners to use. For example, property owners will need to assess their eligibility against underwriting criteria, arrange for an energy audit, obtain contractor bids, and present a completed project proposal. In order to maximize participation, an enhanced customer service program would assist property owners who request and need more detailed assistance. By funding staff time and development of materials with EECBG funds, the County will develop the capacity to provide information to potential participants, assist property owners who need help preparing their financing application, and train staff responsible for building permits. While these activities will be funded only for unincorporated areas of Alameda County with the EECBG funds, they create a program that can be built on by other funding sources, such as a related State Energy Program grant which would bring $800,000 to the County to expand this Page 3 of 4 model Countywide. The State Energy Program grant money is being sought through a regional collaboration of Counties, led by Sacramento County. If awarded, a customer service model would be established Countywide and Dublin's cost of setting up a financing district would be fully funded. Alameda County and City of Piedmont EECBG Application Requirement Through the American Recovery and Reinvestment Act of 2009 (ARRA), Congress appropriated $3.2 billion of funding for the EECBG Program. The City of Dublin received $186,700 in EECBG direct formula grants. The State of California also received an allocation of $49.6 million in EECBG funds, at least 60 percent of which it must pass on to cities and counties within the State that are ineligible for direct formula grants from the DOE. The California Energy Commission (CEC) is responsible for administering the State's share of EECBG funding within California and is currently soliciting applications from small cities and counties for funding under this program. The CEC requires that applicants, who wish to use any portion of their funds for municipal financing programs, include with their application a resolution confirming partnership with a jurisdiction which received direct EECBG funds from the U.S. Department of Energy. The intent is to enable small cities, which could not independently do so, to partner with larger jurisdictions in a municipal financing program to ensure success of the use of the funds. The County of Alameda and the City of Piedmont are each applying for CEC-administered EECBG funds to be used to support municipal financing programs, and they are seeking support from a large jurisdiction that can certify that it: (1) received EECBG funds directly from the U.S. Department of Energy (DOE) and (2) is collaborating with the applying jurisdiction(s) on a municipal financing program. The City of Dublin meets the qualifications required by the CEC, and Staff is recommending that the City Council adopt a resolution of support and partnership to aid them in using their EECBG funding to participate in the CaliforniaFIRST program. The City's support of these applications benefits the City as follows: 1) The County's EECBG funds will be used to develop a model for customer service which could be expanded to serve Dublin residents and 2) the County's ability to demonstrate commitment to municipal financing program development by using EECBG funds for this purpose increases the likelihood of our region's receiving other funds that could increase the access of Dublin residents to municipal financing. The County of Alameda and City of Piedmont can both be included in the same resolution. NOTICING REQUIREMENTS/PUBLIC OUTREACH: None ATTACHMENTS: 1) Resolution authorizing partnership with the County of Alameda and the City of Piedmont in a municipal financing district. Page 4 of 4 ~ ~~I RESOLUTION NO. XX - 09 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN *********** PARTNERING WITH THE COUNTY OF ALAMEDA AND THE CITY OF PIEDMONT IN A MUNICIPAL FINANCING DISTRICT WHEREAS, the City of Dublin plans to participate in the implementation of a municipal financing program with the goal of providing energy efficiency project funding; and WHEREAS, one or more small cities and counties receiving Energy Efficiency and Conservation Block Grant (EECBG) funds from the California Energy Commission have indicated interest in participating in a joint municipal financing program for our combined jurisdictions; and WHEREAS, the City of Dublin is a large jurisdiction as determined by the U.S. Department of Energy under the EECBG grant program; and WHEREAS, small jurisdictions participating in a municipal financing program with their EECBG grant allocation must partner with a large jurisdiction as a requirement of the California Energy Commission's EECBG funding solicitation; and WHEREAS, the City of Dublin is familiar with the requirements and constraints of the EECBG Program, and will comply with its requirements; NOW, THEREFORE, the City Council of the City of Dublin does RESOLVE to partner with the County of Alameda and the City of Piedmont to utilize EECBG program funding to implement a joint municipal finance program, with the goal of providing energy efficiency project funding in our combined jurisdictions. PASSED, APPROVED AND ADOPTED this 15th day of December, 2009, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: City Clerk Mayor ATTACHMENT 1