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Home My WebLink About0365.093· ... - June 24, 15193 Honorable City Council Palo Alto, California 10 ReS9lution Authcrizing FC'rm~_t.l.9n of and Authcrity To JQ_i..!l_uthg Financing Authority fQl; Resource Efficiency of ~i.fornia (FARE- lclU.l Members of the Council: This staff report presents the ~ork of staff with the California Municipal Utilities Association (CMUA) in forming FARE Cal and requests authorization for the Mayor to execute the Joint Powers Agreement on behalf of Pale Alto. Background 'I'he importance of demand-side oriented projects and programs has increased over t~e last several years. To support such activities by smaller members, the CHUA Board of Governors directed an evaluation establishing a joint action agency specifically for joint financing of projects. The r~sult was FARE Cal, a joint action agency designed to be a multi-faceted organization whose purpose is to assist electric, gas, steam, water and wastewater utilities in the dev'!?-lop:tnent and implementation of resource effiCiency programs. The organization viII facilitate coordination of demand-side ~anag2m€nt, conservation ~nd recycled ~ater projects i~formation, experience, and program accomplishments, joint studies, a~alyses and marketing, It will also assist with jOint purchasing, ~ontractinq, planning and traininq~ The JPA ~il1 provide a way to fina~ce and capitalize demand-side management, conservation and recycled ~ater projects and thereby avo~d the need to pay for such projects in the year costs are incurr~d~ This places them on a more equal footing .... ith traditional supply and reso'.Jrce development projects, 'Which typically are financed long term and paid for over their useful lives~ Program and project criteria will be e5~ablish~d by the Board of ClUh365:93 ~ ..• .. , '-" ,:.:-: ........ .>:, .. '0"" ',' ,. '-eo, .. ~.~~> :~t~ ~ -,.--.;-", ....... ' " - Directors to preserve the tax-exempt stat'us ar.d ~ssure that project economics a~e feasible, Any utility in the State of Californ.ia that is eligib]e for CMUA membership (although membership is not !equiredj may utiliz2 the s~rvices of FARE Cal. As a member, Palo Alto vill hav~ the option to participate in selected FAP£ Cal Projects that ~ould benefit th~ proqram prepared by staff. All participation "'"ill ir;cluae the Utility AdviSOTj CO~~is5ion and Co~ncil approval. There ",ill be t .... ·o types of financing made available. The first is project finarJcing, loI'here a proj eet or grollp of proj eets for ~hich a revenue stream may be pledgej as security for the debt. The second is pooled financing, .... hich ... ould be secured by sj'stelIJ 'revenues from the. participat.ing utility in proportion to its share of the debt issued. This latter method is typically expected to be used ·" .. here proj ects or programs accrue their benefits from avoidance of costs. As proposed, E'ARE Cal ..... ill have broad powers to maet the service and .financinq needs of its members. Some of the .servi~e opportunities available through the organization have. been !",oted above, ~hile other services and activities will eoerge as new members join and participate in FARE Cal. Clearly, cost-saving ben-efits can be achieved by joir.tly, rather than individlJall}', developing, i~plementing and marketing resource efficiency programs. Economies of scale can likewise be realized through jointly purchasing equi~ment for these programs~ While such service functions are of pri~ary importance to FARE Cal, the initial focus of the organization is on financing demand-sic.e management, conservation and recycled 'Water proje.cts O~ progra;;us. Advantages of this financing approach include~ Projects that ~ould have been too small to finance independently can be financed as part of a group. By grouping projects, the costs of issuance can be minimized. Programs th.u.t ,",ould othendsc be paid out during the year of expenditure c~n be capitalized and financed to spread the costs over the life of the program. Market accept.ance of funding these re..a.ource efficiency activities under this approach can be increased through joint education of the financial markets. Issues dealing 'With tax exemption I equipment on the customer side of the meter, private use, and legal considerations can be dealt with jointly, to establish financing criteria ~hich protect the tax-exempt status of the agency's debt. CM1H3i5:93 2 L ,--, ,",'-. . - - A list of typical p~ojects is attached to this report . Reccnmendatioll s~aff ha~ supported the development of this concept and suppo!."ts the city's further participate in FARE Cd! as a dernonstraticn of the City's commitnent to the concepts suppot"ted by the organization. Therefore, st~ff recommends that Council apprQve the attached resolution authorizing formation of a joint powers authority and execl!tio::-. by the Mayor of a joint powers agreement. Respectfully submitted, , , ..r'o ,l , " RICHARD L. YOUNG Deputy Director of Utilities ('!I~ ;/ E;WJ:; J. ::J:K Interim Director of Utilities ~.'}~ ~~j ~~~:; Attachments: Resolution Typi:::::al Project Types for F.~ Cal Financing cc: Util itie:s Advisory commission CKR:H5:93 3 - "', Electric utility ,: Efficiency improvements in utility owned generation, transmission and distri~uticn facilities Loa~ Mcnagernent systems or facilities Time-oi-use meters and controls Energy storage systems control systems Conservation products for use en customEr premises Valley filling programs Program design and imple~entation Schnol curriculum Adv2rtising and public education CUstomer audits High technology applicsticns Rebates, discounts, grants Appliance and W/AC efficiency-focused replacement programs Emergency generation purchase Electric vehicle programs Efficient lighting prograns Solar pool c~vers Tree planting Building standards and design assistance Low temperature grain drying Process steam use 1 - " .. Ur utility Residential water conse~Jation programs Low-flush toilets Fool and ~atering timers Public and school education programs Commercial and industrial water conservation equipment for installation on custoIDer premises Leak testing and repair programs Irrigation systems Ditch lining and e~cl05ure Pump testing and repair water delivery and recovery system Conservation rate development and implementation Water meters for unmetered service areas Computerized irrigation scheduling Rec::lamatioll Reclaimed distribution facilities Water treat~ent facilities CUstomer imp~ovements required to acceptJutili~e reclaimed water Feasibility, cost allocation and rate design studies 2 - - ·r Jll'iI RESDLUTIO!li N(:. RESOUTrION OF THE COtJ'"NCJL OF THE-----CITY OF PALO ALTO Ar.JTHQ:RIZING THF: FORMA.TI~JN OF' A JOINT POWERS h'C.1'THORITY AND EX~C'UTION ~..ND DELIVERY OF A JO!.!'lrr POWERS AGREEMENT CREATING THE FINj'l ... ~CING AUTHORITY FOR P.ESOURCE FFFICIENCY OF C.~LIFOR..''HA ""-nEREM, the City of PalQ Alto a.na o~r·er public ager.cies propos'!: to form a joint pow~rs autho:::ity pUI"SUant to J-.rticle 1 of Chapter ~ of Division '7 of Tit.l>:: 1 of the: Goverr .. '1\ent Code of the State of California, to be kno\\oTl. as the FiI1a.:--.cing Authcri ty tor ReSOUIce Efficiency of California ("FARE Cal~l, in order tb.at FARE Cal may, in connectior. ..... ith reSOLlr-ce €'fficier~cy pro:;ra:r...::: and facili t j es, E-xr:-,rcise the powers provided to such an aur:::.hor"i ty un·jer the Gover~ent Code; NOW,. T:'-lEREFORE, the Council 0: th~ City of &:'alo P"lca does RESOLVE as follows: SECTION 1. T~"".e Counci 1 authorizes the Ci ty Manager an.:i her designated representatives to participate in the oz-ga::c.izatior: a:r.:.d administration of a joint powers autno:=-ity, ..... hich shall be know::l. as the Financing Authority for ReSO'JTCe r:fficier..cy of Caliio:u-.ia. Pursuant. there-to, the Council tJereby approves anj aut.horizes the Mayor to execute the contract entitled. "Joint Powers J'..greE:-!'i"',ent Creating Financing Authority For Resource Effici.ency of califcrnia" in subst.a.nt.ially the forrt'. on file 'II'::'th t-he City Cle.t:i<. SEC.-'T.lOrLl.. The !'o1ayo:r. the City M.;mager. the City Clerk, the City Attorney. and any other representative of the City Mana..ger, are authorized and directed to tiike all actio:J.s and do all things necessary or desirable hereunder with ::--espect to the formation -and administration of" the joint powers authority. including, but not lirr,ited to, '(he .<:xeclltia:J. ar.d delivery of dEy and all agreemer;ts. certificates, and o::.her d8C.l..'T,e:::ts, which they, or an)' 0: the:n, may deem neces~a!"y or desirable. an:j EGt inconsis:ent with the purpose of this resolution. SECTION 3. The Council finds that the hereunder :is r~ot a project und<er Lhe California Q'-J.ality Act and. therefore, no ~nvi:rcnmental imp.act necessa:cy. INTRODUCED AND PASSE~.': AYES, NOES: ABSENT ABSTENTICNS: 1 action takr:::l Er:viron..1'TIental assess:nent is A?PROVED; City Clerk APPP.0'11'"ED AS TO FCR.."'1: Senior Asst. Ci ty ft.ttorney----- .2irectcr of Utilitie-s-- 2 :L -