HomeMy WebLinkAboutAgenda Bill 4B 09/21/2009A W0
CITY OF PETALUMA, CALIFORNIA e
AGE ILL, septem~e~ 2 ~ , 2009
Asenda `I'atle: Discussion and Possible Adoption of a Resolution 1Vleetin~ Date: Sept. 21, 2009
Authorizing a Preliminary Budget for Preparation of an Energy Efficiency
and Conservation Strategy for the Use of the Energy Efficiency and Nleetin~ 'Tune: 7:00 P1VI
Conservation Block Grant Funds Allocated to the City of Petaluma by the
U:S. Department of Energy
Category: ^ Presentation ^ Appointments ^ Consent ^ Public Hearing ^ Unfinished Business ^ New Business
Department: Direct r: Contact Person: Phone Number:
Public Works Vince t arengo Larry Zimmer 776-3674
.Total Cost of Proposal or Projec . ~ Name of Fund:
$.54,040 (not to exceed) for consultant. Energy Efficiency and Conservation Block Grant
$25,000 for staff time Since grant will pay on a reimbursement basis, up-
front costs will be paid from PW CIP Fund
Amount Budgeted: $120,000 of the $514,000 EECBG Account Number:
allocation is allowed for the preparation of the "Strategy" 3160
Current Fund Balance:
$12,645:, 801
Recommendation: It is recommended tlnaf the City Council take the following action:
Adopt a resolution authorizing a preliminary budget for preparation of an Energy Efficiency and Conservation
Strategy for the use of the Energy Efficiency and Conservation Block Grant funds allocated to the City of
Petaluma by the U.S. Department of Energy:
1. ^ First reading of Ordinance approved:unanimously; or with unanimous vote to allow posting prior to second reading
2. ^ First reading of Ordinance approved:without unanimous vote: Ordinance has been published/posted prior to second
reading; see Attachment
3. ^ Other action requiring special notice: Notice has been given, see Attachment
Summary Statement:
Included in the American Recovery and Reinvestment Act of 2009 (ARRA) is the Department of Energy's
Energy Efficiency and Conservation Block Grant Program (EECBG). The City of Petaluma is entitled by
formula to $514;000 of EECBG funds. The first step in obtaining authorization to expend these funds is to
prepare.an energy improvement "Strategy". The Strategy would evaluate and compile a prioritized list of all of
the potential energy improvements,.then make a recommendation as to which would result in the largest savings
in energy costs, while fully utilizing all of the block grant funds to install. the improvements. In order to ensure
proper and efficient use of the funds, staff proposes to hire: an energy ;efficiency consultant to analyze potential
projects and to prioritize those projects in order to maximize energy savings for the City of Petaluma.
Attachments to Agenda Packet: Ytem:
1. Resolution
Reviewed b Fi ance Directors Reviewed by City Attorney: A roved b Ci Dana er:
'
~ e: Date: Date: , ~S
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CI'T'Y OF. PETAI;iJ1VIA, CALIFORNIA
SEPTEMBER ZI, 2009
AGENDA REPORT
FOR
DISCUSSION ANI) POSSIBLE ADOPTION OF A RESOLUTION AUTHORIZING A
PRELIMINARY BUDGET FOR PREPARATION OF AN ENERGY EFFICIENCY AND
CONSERVATION STRATEGY FOR THE USE DF ENERGY EFFICIENCY AND
CONSERVA`T'ION BLOCK GRANT FUNDS ALLOCATED TO THE'CITY OF PETALUMA BY
`T'HE U S. DEPARTMENT'OF ENERGY
1. RECOMMENDATION:
Adopt a resolution authorizing a preliminary budget for preparation of an Energy Efficiency
and Conservation Strategy for the use of the Energy Efficiency and Conservation Block
Grant funds.allocated to the City of Petaluma by the U.S. Department of Energy.
2. BACKGROUND'
Included in the American .Recovery and Reinvestment Act of 2009 (ARR11) is the
Department of Energy's Energy Efficiency acid Conservation Block Grant Program
(EECBG). The City of Petaluma is .entitled by formula to $514,000 of EECBG funds. In
:order to receive this. money, the City of Petaluma is required to submit an application. There
pare two parts to the application; 'the .standard 'federal forms, and the Energy Efficiency and
:Conservation .Strategy (EEGs or Strategy); both of which can be submitted together.
.However, for those agencies that need technical assistance (a consultant), or more time to
formulate a Strategy, it is .also acceptable to include in the initial application, a request. for
funding to prepare the Strategy.
The City's faci ites are in .need of energy efficiency improvements; and the list of possible:.
'improvements is long. The block grant funding is not. nearly enough to complete all of the
projects required. to make a'll City buildings 'energy efficient. Therefore; staff will be
recommending projects that have a favorable, and swift return on investment. so that energy
-reductions can be captured to achieve budget .savings and/or possibly redeployed on
.additional efficiency projects ..after. the term of the EECBG. Th'e focus of the energy
eff'cieney consultant would be to evaluate individual. projects, establish an energy us'e
benchmark, determine 'energy swings, rebates, return on investment, and project payback
terms;. and then compile a prioritized list of projects that will fully utilize the block grant
funds.
No plans or specifications will be required as part of the consultant's work. The consultant's
final product will be the Strategy,. including a prioritized list of recommended projects, and a.
cost estimate for each implementation measure; acceptable for submittal to the Department. of
Energy.
The City submitted an initial application on June 23, 2009, requesting `funding to prepare a
' Strategy. Once the initial application is awarded, the final Strategy must be submitted to the
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DOE within 120 days, at which time we will receive the balance of our entitled funding. The
money would then be used to implement the projects and/or programs, as detailed in the
Strategy.. The Department of Energy is currently reviewing applications, so it is not known
at this time exactly when the City will be: able to execute the contract with the selected
consultant. :Once the City receives notice that the grant has been approved, .staff would like
to issue a notice to proceed for the consultant ~to start work immediately to prepare the
Strategy.
3. )DISCUSSION;
The intention of the EECBG, as emphasized by the DOE, is to use the funds to leverage other
funds or to create additional funds for future projects, in turn creating more jobs. To that end,
it is staff's intent to use as much of the available funds as possible to complete projects with
the shortest return on investment. and to capture energy savings that could be used to complete
additional energy efficiency :projects in the future. Since the goal is to maximize the use of
the relatively small amount of funds, staff considered. bypassing the use of a consultant to
provide an analysis. and recommendation, and to use ..all of the funds for implementation.
However, staff is recommending moving forward with the consultant analysis for several
reasons: first, staff: does not have the technical expertise to assess which projects would
produce the greatest savings; secondly, this analysis can be used for future projects if
additional funding becomes available; and lastly, an impartial recommendation will provide
justification that the projects. selected for implementation best adhere to the intent of the
Recovery Act and were not selected for any other reason.
Staff proposes to .hire a consultant using the EECBG funds to validate ABAG and PG&E
audit report calculations and provide more in-depth calculations for the projects selected for
implementation. The consultant would also provide .a detailed scope of work for each project,
to be included in the Strategy, identify possible rebates, verify energy savings, and identify the
priority order based on the shortest return on investment.
Within 120 days of EECBG acceptance of application, and prior to submittal to the DOE, staff
will return to Council to present the Strategy. EECBG funds received must be obligated by
City Council to a specific project or program within 18 months of the DOE award date to the
City:. All EECBG funds must be spent within 36 months of that award date. The savings .in
this Energy Efficiency Fund would be specifically used for future projects that would result in
further :energy,.efficiency, or green house gas reduction .projects. As with any project; each
would be presented- to Council for approval prior to any expenditure.
The County of Sonoma has. requested. that all .agencies contribute 10% of their-EECBG funds
toward .creafion of a countywide building retrofit program. The County has been submitting
grant :applications to supplement the design and implementation of such a regional structure,
in order to attract more funding in the future, since future funding from the state and federal
government will go to regional partnership programs. It is the County's intent that the
building retrofit program will have a proportionate presence in all areas of the County. Staff
recommends supporting this worthwhile .program, since Petaluma's contribution of $51,400
will assure the City's future participation, and consequently, a share of future grants that may
be received.
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4, h'INANCIAL IMPACTS:
The EECBG of $514,000 will pay for development of both the energy consultant's Strategy
and the recommended list of implementations. The consultant has proposed a cost. of $54,040
to research potential projects, 'and provide -the calculations needed to prepare awell-thought-
out Strategy. This cost must be initially fronted by the City, but will be reimbursed by the
grant.. City staff will not issue a notice to proceed to the consultant or spend any funds for this
proje¢t~ until it has received notice from the Department of Energy that the City has been
authorized to expend the grant funds.
Once the consultant has prepared the energy strategy,, with the list of recommended energy
improvements, staff will return to the City Council to present, discuss and request approval of
the list of improvements and the budget to construct the improvements.
Proposed Pro'ect Costs
Consultant $54,040
Staff' $25;000
Count Buildin Retrofit $51;,400
Other Im lementation Measures $383;560
Tofal EECBG Funds $514,000
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RESOLiJTION
AiTTIIORIZING A PRELI>~1ARX ~~TDGET FOIZ PREI'AI~ATION OF AN ENERGY
EFI+'ICIENCY AND CONSERVATION STRATEGY F'OR TIIE iJSE OF ENERGY
EFFICIENCY AND C®NSERVATION BLOCK GRANT'I+'IJ1~1DS ALLOCATED TO TIIE CITY
®F PETAI,iJ1VIA >BY TIDE IJ.S. DEPARTIVI}I;N`)<' OF ENERGY
WIIEREAS, the City has been allocated $514,000 of Energy Efficiency and Conservation Block
Grant (EECBG) Funding; and
VVIIEREAS, in order to qualify for EECBG funds, an Energy Efficiency and Conservation
Strategy (Strategy) must be submitted, which provides specific energy efficiency measures which can be
implemented within the grant funds; and
WIIEREAS, staff submitted the required application to the Department of Energy (D.O.E.)
requesting approval ofup to $120,000 of EECBG funds to prepare the Strategy; and
WIIEREAS, to optimize use of EECBG grant funds, staff recommends hiring a consultant to
prepare the energy Strategy that compares the energy efficiency of various types of improvements, their
cost to install, and savings in energy costs; and
WIIEREAS, a Request for Proposals was advertised publicly and four proposals were received;
and
WI~REAS, proposals were analyzed, consultants were interviewed, and staff .selected Cogent
Energy as the firm best qualified to complete the work; and
WIIEREAS, a notice to proceed will not be issued to the energy efficiency consultant. until the
City receives notice of award of the grant approving the use of the EECBG funds.
NOW, T)E~1~FO, ~E;IT RESOLVED as follows:
1. Approves a preliminary budget of $79,040 generally comprised of an amount not to
exceed $54,040 for a professional services agreement with Cogent Energy and up to $25,000 for
staff support to jointly prepare an EECS (Strategy) to identify the most effective use of U.S.
D.O.E. EECBG grant funds allocated to the City in the total sum of $514,000.
2. Once the Strategy is prepared, staff will return to the City Council for direction and approval of
the budget to implement the, energy measures.
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