FOR COUNCIL MEETING OF: AGENDA ITEM NO:

July 25, 2011 4.3 (c)

TO: THRU: FROM:

SUBJECT:

UPDATE TO THE ENERGY EFFICIENCY AND CONSERVATION STRATEGY (EECS) ACTIVITIES AND FUNDING DISTRIBUTION

Issue:
Should City Council amend the City's Energy Efficiency and Conservation Strategy (EECS) to alter the Lighting Loan program and add a new project at Riverfront Park to utilize Energy Efficiency and Conservation Block Grant funding?

Recommendation:
That City Council amend the City's Energy Efficiency and Conservation Strategy (EECS) to alter the Lighting Loan program and add a new project at Riverfront Park to utilize Energy Efficiency and Conservation Block Grant (EECBG) funding.

Background:
The EECBG Program is funded through the American Reinvestment and Recovery Act. Its purpose is to assist eligible entities in creating and implementing strategies that reduce fossil fuel emissions in a manner that is environmentally sustainable and, to the maximum extent practicable, maximize benefits for local and regional communities; reduce the total energy use of the eligible entities; and improve energy efficiency in the building sector, the transportation sector, and other appropriate sectors. In May 2009, Council approved the City's application to the United States Department of Energy (DOE) for $1,521,200 in EECBG funding. In August 2009, the City received the initial $250,000 award for development of an energy strategy with goals, projects and programs, which were eligible for the remaining grant funds. In December 2009, staff submitted the City of Salem's EECS, along with a set of projects to be completed with the grant and incentive funds available. The Lighting Loan program is one of nine approved projects submitted within the EECS to fund an interest rate reduction program for qualified loanees through a local financial

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institution. The program is designed to provide up-front financing for lighting upgrades in existing commercial buildings. To-date, there have been no successful applicants. Pursuant to the terms of the EECBG, the City is permitted to amend the EECS to discontinue projects, alter project scopes, and add new projects to expend awarded funds by August 31, 2012. Staff recommends that the EECS be amended to reduce the funding associated with the Lighting Loan program and move these funds to a new project to complete light fixture upgrades at Riverfront Park to improve the visibility on the pedestrian walkway, improve safety, and reduce operating costs. This project was chosen because it can be completed in a short time period, will not be affected by lengthy equipment delivery delays, requires limited staff labor, meets the grant's energy reduction guidelines, and creates a visible community impact. This change will ensure that the City is able to use the awarded funding by the August 2012 deadline.
Facts and Findings:

The purpose of the Lighting Loan program is to utilize funding provided through the EECBG to fill a gap in currently available funding for energy efficiency projects within the community. The components of this program are summarized as follows: 1. In November 2010, the City of Salem established a relationship with West Coast Bank (the Bank) to review applicants and administer loans. The City deposited $120,000 of available funding in a non-interest bearing account at the Bank. 2. Marketing, promotional materials, and events provided by the City, the Bank, and local utility providers targeted small business owners and tenants, who may not have access to current programs or have the up-front capital to complete lighting upgrades. 3. Loan costs will be repaid with energy savings over time and leveraged with existing financial programs available through the Energy Trust of Oregon, local electric utilities, and state and federal tax incentives. 4. To-date, the program has no successful applicants. However, recently staff has received interest from two local merchants. The grant award stipulates that all funding be committed within 18 months of the award date or February 28, 2011. All awarded funding must be spent on approved projects within 36 months of the award date or August 31, 2012. At that time all undrawn funds will be ineligible for expenditure reimbursement and therefore forfeited. Since the Lighting Loan program is not progressing as anticipated, the City must make a change or risk returning any unused funds of the $120,000 to the DOE. To avoid this, staff must amend the existing EECS and the Grant Award to transfer the funding into an existing program or establish a new project pending DOE approval.

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Staff recommends that the City use $100,000 of the funds to replace the 96 existing light fixtures at the Riverfront Park pedestrian walkway. The remaining $20,000 will be available for the Lighting Loan Program. Staff will increase marketing efforts so that the business community is aware that funding is still available, but on a first come, first served basis. The Riverfront Park Project will include the following: 1. Each of the Holophane 100 watt Sodium Acorn lights will be replaced with 58 watt Holophane Post Top LED lights for a total material and labor cost of approximately $129,000. 2. Project expenses will be leveraged with energy efficiency incentives from Salem Electric and the Energy Trust of Oregon for an anticipated amount of $28,000. 3. The City will benefit from the sale of the old fixtures for an approximate revenue of $10,000 to be used against project expenditures. 4. The City will experience expected annual energy savings of approximately $2,100 in electricity consumption. 5. The City will save $25,320 in maintenance costs at the park by avoiding the need to replace the bulbs every three years since LED technology will remain maintenance free for eighteen years. 6. The City will be also avoid costly recabling expenses at Riverfront Park due to an overburdened circuit switch that must be addressed, but can be prevented with the completion of this project.
Next Steps:

To finalize the above changes, staff will submit documentation to the DOE to amend the existing Grant Award documentation. The process will commence as follows: 1. Complete an Activity Sheet and Budget Justification on the new Riverfront Park Project and amend the existing Activity Sheet and Budget Justification for the Lighting Loan Program. This process will be complete by July 29, 2011. 2. Submit documentation to the City's DOE Contract Officers, Regional and Federal representatives and address questions during the approval process from DOE representatives. This process will be complete by August 31, 2011. 3. Once accepted, the DOE will send a new Grant Award to the City for the City Manager to sign. This will likely occur by September 15, 2011.

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4. Upon approval, staff will request that $100,000 of the funds at West Coast Bank be transferred to the City to cover project expenses associated with the Riverfront Park Project. This process will be complete by September 30, 2011. 5. Work will begin on the Riverfront Park Lighting Upgrade Project by October 1, 2011 with an estimated completion date of December 16, 2011.

Attachment: Energy Efficiency and Conservation Strategy (EECS) Wards: All Prepared by: Tiffany Corbett, Management Analyst

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Attachment D Energy Efficiency & Conservation Strategy for Units of Local Governments & Indian Tribes
As detailed in Part 1 of this announcement, all applicants must submit an Energy Efficiency and Conservation Strategy (EECS). Units of local government and Indian tribes have the option of submitting the EECS no later than 120 days after the effective date of the award or at the time of application. Units of local government and Indian tribes who chose to submit the EECS at the time of application shall use the format contained in Attachment D. This form should be saved in a file named "UIC-Strategy.pdf" and click on "Add Optional Other Attachment" to attach.

Grantee: DUNS #:

City of Salem, Oregon 79977534

Date: 12/04/2009 (mm/dd/yyyy) Program Contact Email: risaac@cityofsalem.net

1. Describe your government's proposed Energy Efficiency and Conservation Strategy. Provide a concise summary of your measureable goals and objectives, which should be aligned with the defined purposes and eligible activities of the EECBG Program. These goals and objectives should be comprehensive and maximize benefits community-wide. Provide a schedule or timetable for major milestones. If your government has an existing energy, climate, or other related strategy please describe how these strategies relate to each other.
The City of Salem's proposed Energy Efficiency and Conservation Strategy includes actions the City can take to reduce energy savings and greenhouse gas emissions in its own facilities and community-wide. The community component of the Strategy
aims to improve energy efficiency and conservation in the industrial, commercial, transportation 1 and residential sectors, and

to promote sustainable industry and jobs and related activities as appropriate. Several goals and objectives have been identified to achieve the Strategy, including: Goal #1 - Improve Energy Efficiency in Buildings city-wide
Objective: Provide financial assistance to improve energy efficiency

Performance Measure: reduce energy consumption in 15 buildings per year resulting in a savings of 2 KW/ per year for $1000 Major Milestones: June 1, 2010: Establish Revolving Loan Program; July 30, 2010; Issue the first loan by Dec. 1, 2010. Goal #2 - Create and Support a Viable and Diverse Transportation Network that Focuses on Moving People
Objectives: Develop infrastructure to strengthen transportation options; increase access to transportation options to raise awareness

Performance Measure: Increase bicycle and pedestrian trips by employees for targeted businesses by 20 %; identify 15 Electric Vehicle Charging Stations Major Milestones: May 1, 2010: Identify locations for EV charging infrastructure; June 1, 2010: Identify targeted business or area for bicycle/ pedestrian support facility; Dec., 2010: start construction of support facility; October, 2011: complete construi Goal #3 - Increase Energy Efficiency in City facilities Objective: Lead efforts to improve energy efficiency in City facilities through HVAC, lighting, and building envelope
improvements; monitor and maintain building systems to ensure maximum performance

Performance Measure: reduce greenhouse gas emissions by 2 tons per $1,000 spent on projects; reduce energy consumption by 2 kW/ year for $1 spent on projects Major Milestones:
Goal #4 - Create sense of commitment and awareness for energy savings measures community-wide

Objective: Develop marketing and educational outreach plan and materials to promote programs and projects Performance Measure: receive 5,000 visits per year to the website; print and distribute 500 copies of Community Energy Strategy. Major Milestones: May 2010: distribute final Community Energy Strategy report; August 2010:complete website; D

2. Describe your government's proposed implementation plan for the use of EECBG Program funds to assist you in achieving the goals and objectives outlined in the strategy describe in question #1. Your description should include a summary of the activities submitted on your activity worksheets, and how each activity supports one or more of your strategy's goals/objectives. Activities will include the following: Develop and capitalize a revolving loan fund or grant program for energy efficiency upgrades in residential and commercial buildings This activity supports the "increase energy efficiency in buildings city-wide" goal by providing funding for energy improvements for existing buildings with proven energy needs (energy audit information will be required before funding is allocated). Develop a community-wide plan for electric vehicle charging infrastructure; integrate connections to other modes where possible This activity supports the "create and support a viable and diverse transportation network" goal by investing in infrastructure for alternative vehicles and by strengthening a multi-modal transportation system by locating infrastructure near to transit, rail, and bike/ ped networks where possible Fund support facilities for bike/ ped commuters (showers, lockers, storage) This activity supports the "create and support a viable and diverse transportation network" goal by expanding facilities for
non-vehicle commuters

Develop marketing plan and materials to promote energy savings programs/ projects; develop website to serve as
clearinghouse of information about energy programs, projects, policies, and incentives; conduct ongoing outreach activities

including annual forum or workshop series; complete and conduct outreach for a final Energy Strategy Report
This activity supports the 11 Create sense of commitment and awareness for energy savings measures community-wide" goal by

making information transparent, offering ways to help change behavior with incentives and education, and completing a report that communicates to the general public the goals/ activities of the Strategy Perform HVAC upgrades and retrofits in existing City buildings Perform upgrades to lighting systems and controls Perform upgrades to windowsr and insulation in City buildings
Create a Resource Conservation Management Program which includes energy tracking, waste management, preventative maintenance scheduling, asset replacement planning, savings reinvestment, and Department "green teams"

All of the above activities support the "increase energy efficiency in City buildings" goal by targeting specific building components and systems with improvements and developing a system to track and monitor performance of energy use
overtime.

3. Describe how your government is taking into account the proposed implementation plans and activities for use of funds by adjacent units of local government that are grant recipients under the Program (response not mandatory for Indian Tribes). The City of Salem is working in partnership with other local governments and agencies to share information and resources in the implementation of energy and resource conservation management projects and strategies region-wide. Knowledge and resources are being leveraged, and value is being provided to those entities which lacked the ability to progress on their own. Through this process, common goals and activities are being accomplished which reduce the duplication of efforts in our EECBG projects and programs. The City is partnering with the following entities: Marion County, Salem-Keizer School Transit, adjoining cities, the State Legislative Action Committee, and is working closely with the State Department of Energy and the Energy Trust of Oregon.

4. Describe how your government will coordinate and share information with the state in which you are located regarding activities carried out with grant funds to maximize energy efficiency and conservation benefits (response not mandatory for Indian Tribes). City of Salem will work closely with area partners to share information about programs and projects contained in the Strategy by completing the following: - developing a web site to track and monitor performance - completing quarterly reports with progress on actions, with distribution via email and print where possible -engaging Oregon Department of Energy, Oregon Department of Transportation, and Oregon Department of Environmental Quality (all with offices based in Salem) in ongoing dialogue about programs and projects; City of Salem staff are already in contact with representatives from these agencies on a regular basis and have solicited feedback from agency staff on many of the program activities outlined herein. - sharing information to be posted in state publications, including publications distributed by Department of Administrative Services, Marion County (Earthwise), and the Govenor's Office

5. Describe how this plan has been designed to ensure that it sustains benefits beyond the EECBG funding period. Several efforts have been made to ensure the plan is sustained beyond the funding period, and leveraging funds and expertise (technical) was included as one of the criteria by which projects in the Strategy were selected. Additional efforts include: - involving community stakeholders and implementation partners in the creation of the Strategy - identifying strategies that can build upon existing projects or momentum, and involve partnership with other organizations (team approach to implementation) - leveraging resources across the community, including university students and research, industry, and aligning programs/ projects with existing programs where possible

6. The President has made it clear that every taxpayer dollar spent on our economic recovery must be subject to unprecedented levels of transparency and accountability. Describe the auditing or monitoring procedures currently in place or that will be in place (by what date), to ensure funds are used for authorized purposes and every step is taken to prevent instances of fraud, waste, error, and abuse. Every effort will be made to ensure Strategy activities are transparent and that progress is measurable and reported on a regular (quarterly) basis via web and print media. Examples include: -developing a City website devoted soley to Energy Strategy activities (currently the City has an ARRA project webpage which contains regular updates about activities) - including information about activities in print media (newsletters, newspaper, and agency/ partner communication) - publishing a quarterly and annual report, with press releases to draw attention to the information - hosting an annual community event/ forum, to share progress and solicit feedback on the Strategy