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HomeMy WebLinkAboutDirection - Energy Independence America ProgramCITY OF PALM DESERT OFFICE OF THE CITY MANAGER STAFF REPORT REQUEST: Provide Direction to Staff on Energy Independence America Program SUBMITTED BY: John M. Wohlmuth, City Manager DATE: July 14, 2011 CONTENTS: E-mail from Ted Flanigan dated June 23, 2011 August 14, 2011 Staff Report April 14, 2011 City Council Meeting Minutes Recommendation By Minute Motion, receive and file this status report on the Energy Independence America work effort and provide direction to staff. Background On April 14, 2011, the City Council authorized staff to negotiate a contract with EcoMotion to initiate a PACE Solution Strategy and lobby effort in an amount not to exceed $25,000. Staff met with Mr. Ted Flanigan of EcoMotion on a couple of occasions to discuss an agreement and scope of work. Through these meetings and subsequent staff work, an agreement and scope of work was prepared and sent to EcoMotion for execution. On June 23, 2011, Mr. Flanigan sent an e-mail (attached) bowing out of this agreement. Richards Watson and Gershon (RDA legal counsel) has volunteered to provide legal work to initiate a non-profit for this purpose and has prepared some work products. The non-profit has tentatively been named Energy Independence America. Staff Report Energy Independence America July 14, 2011 Page No. 2 Given the news about EcoMotion bowing out of this agreement, staff has a couple of options for the City to move forward if Council desires. These are: 1. Search for another consultant or possibly another non-profit to perform the scope of work. 2. Wait and see what Sonoma County, California, and Boulder County, Colorado would be willing to contribute, so we mutually decide on a process and perhaps a consultant. 3. Provide the RWG work products to a third party to finalize the establishment of a 501(c)4. In Mr. Flanigan's e-mail, he suggested Mr. Ferguson could perform this work. However, it is illegal for the City of Palm Desert to compensate Mr. Ferguson for this work due to the PDMC requiring a two-year waiting period and state law requiring a one-year waiting period since leaving the City. Fiscal Analysis At this point, the City will not spend the $25,000 without coming back to the Council with an agreement. CITY COUNCILAON APPROVED DENIED Submitted By: RECEIVED OTHER MEETING DATE _ AYES: a71.. NOES: tM;.W uth Manager ABSENT: ABSTAIN: 11I1'RiFIED BY: kk t3s•iciw l on File with City r' Office Paul S. C'oK, Dir ctor of Finance * M-inute Motion, receive and file the report on the Energy ndependence America Program and direct staff to wait and see what participation may be forthcoming from some of the other U.S. local government energy programs (e.g. Sonoma County, Calif., Boulder, Colo.,_Babylon, NY), and if they wish to contribute toward this effort. 4-0 (Benson ABSENT) Wohlmuth, John From: Ted Flanigan [tlanigan@ecomotion.us] Sent: Thursday, June 23, 2011 9:50 AM To: Wohlmuth, John; McCarthy, Justin; Alvarez, Martin Cc: 'Russell Flanigan'; vnicols@ecomotion.us Subject: Energy Indepence America Dear John, Justin, and Martin Good morning. Do hope and trust that this note finds you well. The purpose of this note is to let you know, that after extensive consideration and deliberations, EcoMotion has decided not to pursue the management of Energy Independence America. We thank the City Council for awarding a contract to EcoMotion for this task, and its leadership in the matter at hand, and we thank the City staff for developing an appropriate scope of work and preparing a contract for signature, but for a number of reasons, we have decided not to move forward with Energy Independence America. As you know, Jim Ferguson and I have had highly successful trips to Sonoma County and Boulder County, Colorado. While the development of EIA is highly promising, EcoMotion's officers and I have determined that the management partnership may not be effective. Thus we bow out. Given Jim's legislative, legal, and local government background, he is the logical man to lead the Energy Independence America charge. Given the power of PACE and my admiration of Palm Desert's efforts, I will be on the EIA sidelines cheering loudly. While I hand over the campaign/trade association management role, EcoMotion believes that PACE is the essential tool to enable distributed generation and maximum efficiency. I'll be happy to discuss this over the phone or in person if you like. I ask for your understanding. Best, Ted Ted Flanigan President EcoMotion -- Business Greening Solutions 15375 Barranca Parkway, F-104 Irvine, CA 92618 Office direct: (949) 450-7155 Office fax: (949) 450-7165 Mobile: (949) 292-7314 www.ecomotion.us Contract No. C30730 CITY OF PALM DESERT OFFICE OF THE CITY MANAGER STAFF REPORT REQUEST: AUTHORIZE STAFF TO NEGOTIATE A CONTRACT WITH ECOMOTION TO INITIATE A PACE SOLUTIONS STRATEGY AND NATIONAL LOBBYNG EFFORT SUBMITTED BY: John M. Wohlmuth, City Manager DATE: April 14, 2011 CONTENTS: EcoMotion Letter & PACE Solutions Work Plan Palm Desert Accord Resolution Recommendation By Minute Motion: 1. Authorize staff to negotiate and sign a contract with EcoMotion to initiate a PACE Solutions strategy and lobby effort in an amount not to exceed $25,000; and 2. Appropriate $25,000 from the General Fund Unobligated Reserve to support EcoMotion's creation of an appropriate entity to lobby the Executive and Legislative Branch to find a resolution to the Federal Housing Finance Agency (FHFA) position on AB 811/PACE loans for energy improvements. Executive Summary Approval of this item will authorize the City Manager to execute a contract with EcoMotion, and funding up to $25,000 for the formation of a PACE Solutions Organization. This entity will work strategically and collectively with other interested government agencies to lobby the executive and legislative branches of the federal government to reverse the FHFA road blocks that prevent the City's EIP and other PACE programs from operating at full strength. Staff Report Negotiate a Contract with EcoMotion for Lobbying April 14, 2011 Page 2 of 4 Background On July 21, 2008, the Governor signed into law AB 811, which amended Chapter 29 of Part 3 of Division 7 of the California Streets and Highways Code. The bill authorized cities and counties to establish a program to enter into contractual assessment agreements with property owners to finance the installation of distributed generation renewable energy sources or energy efficiency improvements that are permanently fixed to real property. On August 28, 2008, the City Council approved Resolution No. 08-89, which established the City's Energy Independence Program (EIP). Since the inception of the EIP, the program has assisted 250 property owners with energy efficiency upgrades and installation of renewable energy projects. To date, a total of $5.5M has been funded for EIP projects. The EIP, coupled with the Palm Desert Energy Partnership have reduced energy consumption by 100 million kwh. This current energy savings is equivalent to removing 10,000 homes from the energy grid. The EIP and Energy Partnership have also assisted the City in meeting its' AB 32 green house gas reduction requirements by eliminating 36,400 metric tons of green house gases (equal to removing 7,100 cars from the roads). Since the approval of AB 811 and the City's Energy Independence Program in 2008, several California cities and counties have adopted AB 811 programs. In Sonoma County, over 1,600 EIP projects have been completed and over $43M has been funded for commercial and residential renewable energy and energy efficiency upgrades. AB 811 legislation has expanded across the nation and 25 states have adopted similar legislation. AB 811 is now referred to as PACE (Property Assessed Clean Energy) financing at the national level. Prior to the FHFA statement of July 2010, many states indicated a strong interest to implement energy independence programs. FHFA Statements: On July 6, 2010, the FHFA issued a guidance statement to Fannie Mae and Freddie Mac (the "July 2010 FHFA Statement") that: 1. Expresses its concerns that the absence of robust underwriting standards to protect homeowners among priority lien PACE programs across the nation raises mortgage safety and soundness concerns for the mortgage lender. 2. Although allowing a waiver for homeowners who prior to July 6, 2010, obtained a PACE -like loan (such as a loan under the EIP), directs Fannie Mae and Freddie Mac as of July 6, 2010, to tighten certain mortgage lending underwriting criteria in PACE jurisdictions, and to enforce the provisions of their Uniform Security Instruments prohibiting a property owner from incurring a senior lien on the property (such as an assessment under the EIP) without the consent of the mortgage lender. Staff Report Negotiate a Contract with EcoMotion for Lobbying April 14, 2011 Page 3 of 4 Based on the statement issued by the FHFA, the City's EIP was placed on hold on July 14, 2010. On August 26, 2010, the City Council directed staff to re -launch the EIP with a provision that an additional disclosure be provided to participating property owners regarding the recent statements released by the FHFA. The City's EIP is up and running but the demand has significantly decreased due to the statements released. AB 811/PACE Solutions Conference: At the October 2010 Energy Subcommittee meeting, staff was directed to look into the feasibility of hosting an AB 811 (PACE) Conference in Palm Desert. The purpose and goals of the conference include, but are not limited to: • Providing a forum to discuss the recent statements issued by the FHFA and implications that have occurred to PACE programs such as the City's EIP. • Develop solutions to address the FHFA concerns. • Develop a uniform position to lobby for federal legislation to address the FHFA concerns with PACE programs. On March 3-4, 2011, the City of Palm Desert hosted an AB 811/PACE Solutions Conference at the University of California Riverside, Palm Desert Graduate Center. The conference was a great success and attended by 120 municipal, state, private and national stakeholders of AB 811/PACE. As a result of the conference, the attendees signed the Palm Desert Accord Resolution (see attached). The Palm Desert Accord calls for the PACE community to align and unite its' efforts to supporting the ongoing judicial, legislative, and executive movements to overturn the FHFA road blocks to PACE programs. Many private and public agencies attending the conference urged the formation of a single entity to drive a coordinated and comprehensive lobbying effort of find a solution to the FHFA issue, and to bring PACE back to the legislative and executive forefront. A proposal by EcoMotion has been provided and evaluated that would initiate the formation of an entity or coalition that would unify local and national efforts to lobby the Executive and Legislature branches to overturn the FHFA decision. This lobbying effort is necessary to drive an expeditious resolution to the road blocks that many PACE programs face today. The thought of initiating this "Energy Independence America" lobbying effort is that this process could be more expeditious than the judicial lawsuit (brought forward by the City of Palm Desert and other entities) against the FHFA, which may not be heard in court until the middle of 2012. If the formation of a lobbying organization is successful, it could be supported by public and private entities wishing to promote the establishment of PACE programs. In addition, this centralized entity would be an ideal conduit for sharing information and criteria that would promote PACE programs nationwide. Staff Report Negotiate a Contract with EcoMotion for Lobbying April 14, 2011 Page 4 of 4 Please find attached a letter from EcoMotion requesting $50,000 from the City for organizing startup funds and a draft work plan from EcoMotion. Although a comprehensive PACE solutions strategy could entail approximately $240,000 over a six-month period, the City's continued leadership and foresight in participating in this solution could leverage other public entities to participate in this important effort. EcoMotion is well recognized and experienced in the energy policy arena and a good option to get the stakeholders together and discuss the establishment of the entity framework. If EcoMotion is utilized to form this entity/organization, it is my recommendation to turn the process over to the newly created entity once the complete mission and framework is established. Therefore, if the City Council chooses to support this effort, staff recommends contributing $25,000 to lobby the Federal Executive and Legislative branches to remove the FHFA road blocks. If this effort is successful, perhaps the City Council could consider supporting future funding. Richards, Watson and Gershon law offices has agreed to assist with the formation of the appropriate entity pro bono. Other local governments, such as Sonoma County, have tentatively agreed to financially support such an effort. Fiscal Analysis The City Council approved $63,175 seed funding from Redevelopment funds for the PACE Solutions Conference. The conference revenues totaled $43,560 with $31,000 coming from sponsorships and $12,560 from registration fees. The net conference expense to Redevelopment was $19,479. If the Council were to fund EcoMotion or another entity to lobby or establish a stakeholder's organization, Redevelopment funds cannot be utilized. An appropriation of $25,000 from the General Fund Unobligated Reserve would be required. Prepared and Submitted B i artin Alvarez, Red velopment Manager ( 3� Paul S. Gibson, Director of Finance Approval: o n M. Wohimuth, City Manager * App o d staff recommendations, fully unde s nding that with approval of the $25, it is very likely EcoMotion will funding to support this effort, and such Department Head: 11 , ACM for Redevelopment APPROVED -�.DENIED RECEIVED OTHER AYES: NOES: _ ABSENT: NQW ABSTAIN: NiMC- VERIFIED BY: Original on Fite rvit Ci Ile k's OMe& need to return tote ty ounc or additional a request would be viewed favorably. 5-0 ECOMotion — Business Greening Solutions 15375 Barranca Parkway F-104 • Irvine Calffomia 92618 • i9491450 7151 • ww EcoMotion us March 21, 2011 Dear Palm Desert Officials: The purpose of this letter is to officially request funding for the continuation of PACE Solutions. As you know, the PACE Solutions conference hosted by the City of Palm Desert and managed by EcoMotion, was by all accounts a great success. More importantly, it catalyzed an important movement toward solutions. Participants are eager to work strategically and collectively to resurrect PACE - Residential to its full potential, specifically to overturn the FHFA roadblock. This is a great opportunity for all, and for the City of Palm Desert and the other local governments that are being approached to fund PACE Solutions Energy Independence America. This project extends the value of the PACE Solutions conference. And the Immediate task — of reversing the FHFA — focuses our activities. The tripartite work plan strategically addresses executive, legislative, and judicial fronts. At this time, EcoMotion is seeking $240,000 of funding to initiate the project and to fund its work for a six-month Phase One. Initial funding is being sought from founding local governments — Palm Desert and Sonoma County, Palm Springs may also contribute — with outreach to California's utilities that have shown leadership in this area. We request $50,000 from the City of Palm Desert to launch this work. Phase Two funding will be sought from a variety of sources including foundations, utilities, product suppliers, contractors, banks, financial advisors, etc. This could be as much as $1— 2 million, depending on the focus of the initiative at that time. Your funding has the potential to leverage major change, and to bring success back to Palm Desert and its citizens. Born in Palm Desert, AB 811 and now PACE have great potential in Palm Desert when unbridled from federal regulators absorbed in "willful Ignorance." We envision tens of millions of dollars of local investments in Palm Desert, and many times that In lifecycle energy savings. PACE Residential can potentially bring hundreds of jobs to Palm Desert while meeting energy and climate protection goals. Home owners can cut their energy costs by tens of millions of dollars. The City's funding will help assure this. It has been EcoMotion's great honor to work with and for the City of Palm Desert, and we kook forward to continuing this important work. Palm Desert's local leadership is of national importance. Thank you for your consideration of this request. Sincerely, Ted Flanigan President ECOMotion — Business Greening Solutions 15375 Barranca Parkway F-104 • Irvine California 92618 • (9491450 7151 • www.EcoMotion.us PACE Solutions - Energy Independence America Work Plan Lest edited on March 21, 2011 Outline Mission Education, Outreach, and Action Information hub State coordinators and networks The Tripartite Initiative Executive Bipartisan support for legislation Judicial tracking, briefs, and data Timeline and Methodology Phase One: Six months Phase Two: 1.5 years Budget Requirements Funding Sources Resources and Unique Qualifications Mission PACE Solutions - Energy Independence America has an immediate mission: It is an organization developed by local governments to overturn the FHFA "decision" and to return PACE to its original AB 811 intent and authority. The initiative and concerted effort outlined herein will be strategic and multi -faceted It begins with limited funding and grows as warranted to succeed. PACE Solutions - Energy Independence America aims to secure our energy future, providing environmental and economic benefits. PACE Solutions is about making our communities energy independent of conventional power sources and replacing them with energy efficiency and local, clean and sustainable renewable energy resources. Education, Outreach, and Action PACE Solutions builds on the successful PACE Solutions conference held March 3 — 4, 2011 in Palm Desert. The conference brought together PACE advocates and leaders from across the country, 125-strong, to discuss ways of resurrecting PACE from its current FHFA roadblock. Solutions were discussed — financing, underwriting, subordinating, legal, legislative, executive — and all left energized to work collectively to take action to support PACE. This document reflects that desire for action and adopts many of the tactics suggested by conference participants. It is a rational, multifaceted work plan for a national education and outreach initiative led by local governments. Information Hub PACE Solutions will work to build and inform our network. We will do so through a web site, a -news, social media, and other forms of communication. These may include letters to the editor and publications such as those of the League of Cities and Association of Counties. Web site will have FAQs, You Tube clips, as well as Power Point slides for advocates' use to spread the message of energy independence and jobs. Establishing the Hub for Outreach and Action Headquarters Fully staffed State rally and national conference coordination Phones, inbound and outbound e-malls, tweets, etc. Mailings, direct and virtual Web site Home page with status The Value of PACE as a Local Government Tool Assessment Financing 101, 201 FAQ Power Point presentations YouTube library Links to PACE Now and others Constituent namete-mail collection for network database Judicial suits, etc. e-News Monthly PACE Program highlights Legislative news Calls to Action Thus far, there have been two PACE Solutions conferences and participants hope that they are annual. They have presented cutting -edge programs and professionals. This year's conference drew together a network of dedicated professionals who are too often working in silos. They are looking for means to take concerted action. PACE Solutions will continue the "tradition" of annual conference in the desert. Throughout, PACE Solutions is about education and outreach, guiding network members to useful information and action as necessary. State Coordinators An equally ambitious is to build a network of state coordinators and networks in support of PACE. With 24 states having passed (or using) enabling legislation, PACE Solutions' goal is to recruit 24 state coordinators building statewide networks in 24 states. There may be other states that have attempted legislation, and where advocates are eager to do so. We assume that this may be the case in another dozen states, raising the potential number of state coordinators and networks to 36. National Outreach, Education, and Action • State coordinators • Statewide PACE supporter networks ■ National meeting of coordinators (2) We will be looking for pockets of PACE support. EcoMotion has already found a dozen of these in preparation for PACE Solutions 2011. As part of this scope of work, PACE Solutions will find these pockets and build a network of coordinators. We will then support the coordinators as needed to garner their legislative and communities support. The Tripartite Initiative The immediate mission is to reverse the FHFA "decision" that has blocked the development of residential PACE programs. Since we cannot predict where our success will be realized, PACE Solutions has a three -fold work plan: We will be using a tripartite implementation plan involving executive, legislative, and judicial efforts. 1. Executive The most immediate and timely effort involves the executive branch. Vice President Joe Biden was a staunch advocate of PACE. The DOE had flagged PACE for stimulus funding for local governments. The FHFA proclamation ran counter to this direction and enthusiasm. PACE Solutions will continue to promote PACE to the executive branch, demanding There is a unique opportunity to raise awareness about PACE in the upcoming presidential campaign. PACE Solutions will seek an early win by trying to raise the issue in early electoral college states. 2. Legislative PACE Solutions will provide bipartisan support for PACE legislation and will work with PACE Now and others to do so. PACE Solutions will suggest legislative language, and then recruit representative and senate support for legislation that clears the way for PACE Residential. As bills are introduced, they will be tracked and supported through committees and the Congress. 3. Judicial PACE Solutions will track and provide network support for lawsuits that seek to protect local rights to define public benefits and PACE assessments in particular. PACE Solutions will work to provide Amicus briefs in the FHFA lawsuits, presenting a coordinated set of briefs that lay out arguments in favor of PACE. Timeline and Methodology PACE Solutions is on a fast timeline. We do not know where success will come from — executive, legislative, or judicial — but we do know that we have to work diligently to assure success. The sooner the better: Then we can all get back to work designing and implementing programs to reap their multiple consumer and societal benefits. Initially, the project will be managed by EcoMotion. An advisory board will be established, as well as an executive committee of funders. Ultimately, the project will be formed into a non- profit trade association or similar structure best positioned to receive contributions. PACE Solutions • Local government executive committee • Management • Advisory board • Stable of local government spokespersons The project has two relevant time frames: 1. First is a ramp -up period. 2. Second is a full-scale, potentially 1.5 year campaign to overturn the FHFA. Phase One Six Months (April - September) Immediate Implementation Establish education and outreach mechanisms Logo, image Web site 4 e-News Press release Tripartite action Executive Strategy development Implementation, focus on presidential campaign Legislative, bipartisan support Work with SBA; Commerce Committee members Judicial Support for litigation as needed Coordinate filing of Amicus Briefs by local governments Management Refine mission given PACE Status Raise PACE Solutions funds as needed given PACE Status Phase Two October 2011— December 2012 Full -Scale Implementation Establish 24-36 state activities Coordinators, networks Develop handbooks for coordinators Execute rallies in key state Fundralsing (offer commissions for coordinators) Continued and expanded outreach and awareness Targeting key states and constituents e-News, special stakeholder editions Web enhancements Social media Executive efforts Working with early primary states Hitting the ground in key states Working on the big ticket states Legislative Track developments with PACE Now Develop bipartisan support for legislation Track and support as legislation goes through committees and Congress Judicial Work with key members of banking and energy committees Track lawsuits Provide data Support litigants with expert testimony Management Develop appropriate legal structure for PACE Solutions Richards Watson Gershon to establish entity to manage initiative Refocus energy independence mission as PACE is resolved Revise staffing and organizational design to manage new mission(s) Budget The strategy for PACE Solutions is to build on its local government roots. Funding will initially come from local governments that will guide the genesis of the initiative. Requirements The budget to operate PACE Solutions during Phase One is $40,000 per month, $240,000 for the six-month Phase One period. Labor accounts for 75% of the budget; operating expenses dominated by travel costs are 25%. The need for Phase Two, and its funding, is unknown. If a full PR campaign is required to build public support for PACE, it could cost $1-2 million. Funding Sources The list of potential funding sources is long. Many boats will rise if PACE residential is restored. The key stakeholders are: • Local governments o Cities o Counties • Serving utilities o Electric o Gas o Water • Banks and mortgage lenders • Law firms and bondsmen • Financial advisors • Contractors and product suppliers o Solar o HVAC o Windows o Insulation, etc. • Third party program implementers Resources and Unique Qualifications EcoMotion brings a unique skill set to the management of this initiative. Our team worked for both Palm Desert and Sonoma County in the development of their energy independence programs. We have tracked progress, held two national conferences, and have built a network of PACE advocates coast to coast. We have an organization that can continue to carry the ball until a legal entity can be established. Let's help local governments work together to build on the PACE Solutions momentum and bring back PACE Residential's massive potential, to leverage multiple benefits many times over. PALM DESERT ACCORD & RESOLUTION MARCH 4, 2011 WHEREAS, on July 21, 2008 California Governor Arnold Schwarzenegger signed into law a bill sponsored by the City of Palm Desert, Assembly Bill 811, allowing property owners to declare their independence from traditional production and delivery mechanisms of energy into their homes and the payment therefore; and WHEREAS, on August 28, 2008, the City of Palm Desert, California became the first local government in America to craft and offer an "AB 811" program to its residents as part of its overall Energy Independence campaign to reduce energy consumption by 30 percent and to promote rooftop solar energy; and WHEREAS, Assembly Bill 811 allows homeowners to finance energy efficiency and distributed energy systems in their homes through their local governments and repay these obligations over time from savings on their utility bills among other things; and WHEREAS, the genius of Assembly Bill 811 is that it allows these benefits to homeowners, while increasing equity in their homes, improving the security interests of their lenders, reducing the carbon footprint within their communities, helping manage demand response within their state and reducing our national dependence on foreign oil, all at no cost to taxpayers; and WHEREAS, the popularity of Assembly Bill 811. known nationally as "Property Assessed Clean Energy" or "PACE" programs, has caused the following 24 states and the District of Columbia to adopt this legislative scheme: California Maine Nevada Ohio Colorado Maryland New Hampshire Oklahoma Florida Massachusetts New Mexico Oregon Georgia Michigan New York Vermont Illinois Minnesota North Carolina Virginia Louisiana Missouri Texas Wisconsin District of Columbia WHEREAS, PACE takes its name in part from the security mechanism of the legislative scheme whereby the repayment of the local government loans are secured by "liens" on their property tax bills sent by the local government; and WHEREAS, on July 6, 2010 the Federal Housing Finance Agency (FHFA) issued a Statement calling on States and local governments to "pause" PACE programs and directing Fannie Mae, Freddie Mac and the Federal Home Loan Banks to prohibit any homeowner with senior PACE liens from participating in their programs;" and WHEREAS, the impact of the FHFA ruling was to cause most PACE programs to suspend lending operations and to cause California and numerous local governments and organizations to file suit in federal court against FHFA (State of California, the City of Palm Desert, County of Sonoma, and County of Placer, California, the Sierra Club, National Resources Defense Council, Town of Babylon, New York, County of Leon, Florida); and WHEREAS, the impact of the FHFA ruling was to incite Congressional action with the introduction of bills seeking to reverse the FHFA ruling and clarify the role of PACE in federally backed loans and other debt instruments; and WHEREAS, numerous attempts have been made to the FHFA, the Department of Energy, the Federal Reserve and other political subdivisions of the current Administration to remedy the situation set forth in the recitals to this Accord and Resolution, all to no avail; and WHEREAS, in recognition of the ongoing judicial, legislative and executive efforts to establish a national priority of the Energy Independence objectives of Assembly Bill 811 and PACE those so aligned and mutually interested in this objective have convened the "PACE Solutions: Bringing AB 811 Home conference in Palm Desert, California on March 3`a and 4', 2011. Now, THEREFORE, BE IT RESOLVED by the participants, presenters, delegates, representatives and supporters of the PACE Solutions conference that our National elected and appointed leaders adopt and/or recognize as their highest priority. ENERGY INDEPENDENCE NOW BE IT FURTHER RESOLVED that those same leaders, whether in the executive, legislative or judicial branches of the federal government, recognize and respect the legislative scheme set forth in Assembly Bill 811 and PACE and further provide equal dignity to energy efficiency and distributive generation financing assessments to that of other public assessments which have been recognized by the federal government for over 100 years. AND, BE IT FURTHER RESOLVED that the Secretary of this conference be instructed to transmit a certified copy of this Accord & Resolution to United States President Barack Obama, House of Representative Speaker John Boehner and Senate Majority Leader Harry Reid and those identified on the service list attached hereto as Exhibit "A". I HEREBY CERTIFY THAT the foregoing Accord & Reso t as duly adopted by acclamation at the PACE Solutions: Bringing AB 811, Home c fer nce in Palm Desert, California held on March 3`d and 4"'. 2011. / 501 Ted Flan a Note: Signatures in support of the Palm Desert Accord are being collected and will he instrumental in pressing legislators for support of PACE at the national level. Forward supporting sgnalures via email to: Virginia Nicoll, EcoMotion i nicoLcra eranr�ftinn. ws. Please use the subject line: Support, for Palm Desert Accord Name l itle 4 ffilialion/Organizution Stale MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 14, 2011 D. REQUEST FOR AUTHORIZATION FOR STAFF TO NEGOTIATE A CONTRACT WITH ECOMOTION TO INITIATE A PACE (PROPERTY ASSESSED CLEAN ENERGY) STRATEGY AND NATIONAL LOBBYING EFFORT (CONTRACT NO. 73 ). Redevelopment Manager Martin Alvarez stated the City Council requested staff return with a report on the AB 811/PACE Conference, but before addressing it, he provided a brief history on AB 811, where it's been, and where it was headed. In 2008, the California Legislation adopted AB 811, which was a monumental effort in reducing energy consumption across the state, and the City of Palm Desert was the first in the nation to implement an Energy Independence Program (IEP). To date, there have been more than 250 participants and have funded more than $5 million in energy efficiency upgrades and in renewal energy projects. Many cities and counties within California have also implemented AB 811 programs, and 25 states have now implemented similar AB 811 legislation, which is now referred to as PACE (Property Assessed Clean Energy Financing). In July 2010, the Federal Housing Finance Agency (FHFA) issued some statements that significantly impacted PACE and AB 811 programs. They challenged the seniority of the lien position on the mortgages that were in place on residential properties and hindered the implementation of programs going forward. While the City chose not to prohibit the EIP program from going forward, other states and cities put their program on hold. In the fall of 2010, the City Council approved staff to proceed with a second AB 811/PACE Conference, which was held on March 3-4, 2011; the aim and goal were to try to affect some legislative solutions to the FHFA roadblocks. The Conference was a great success with 120 participants from public and private sectors. Discussions included FHFA statements and implications to PACE programs, development of strategies on how to resolve FHFA roadblocks, and as a result of the Conference, there was a unified effort and a Palm Desert Accord was adopted. The Palm Desert Accord was a call to action by all the entities involved in PACE and energy independent programs. The consensus was to lobby on a national level to bring forward change on the legislative front, executive branches of government and also on the judicial side. From the efforts and strategies developed from the AB 811 Conference, a proposal is before the City Council to form an entity that would be the leader and hub to promote PACE and lobby for the removal of the FHFA roadblocks. If Palm Desert chooses to participate in the formation of this entity, which would be nonprofit, it will be formed and monitored by the participants in this organization. The effort would be to initiate an "Energy Independence America" lobbying effort to remove the mentioned roadblocks. The proposal before the City Council is a request for $25,000 to form this entity; originally the request was for $50,000. He noted Legal Counsel Richards, Watson & Gershon will provide pro bono work to assist with the formation of this entity. Staff recommended participation at $25,000 to move forward with the formation of this lobbying entity. He offered to answer any questions. 9 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 14, 2011 Councilmember Finerty asked what was the reasoning for reducing the amount to $25,000 from the requested $50,000, knowing that Palm Desert is, has been, and wished to continue to be the leader. Mr. Alvarez responded it was an effort to get momentum going. He said a future request could be made to the City Council once the entity is formed, but agreed an additional $25,000 could be considered at this time to promote and show other entities that Palm Desert was a leader and was moving forward. Councilmember Finerty stated she didn't think $25,000 was enough of a statement from the city that has lead this effort. She said PACE is set up in 25 states with 12 more pending, and if Palm Desert didn't continue to lead along with key players by showing they are putting money where their mouth is, it will lose contributors such as utility and key people that were at the Conference that showed interest in getting on board. She said this was a fight worth fighting, because it will change the lives of Americans throughout the Country who struggle with too much heat or too much cold. As the leader in the energy arena, and with what's going on in the middle east, another solution for dependence on foreign oil had to be found. She said PACE or AB 811 clearly opens the door to giving people the energy independence they deserve. She said the staff report was well written and points were well covered, but she was disappointed with the funding amount. Mayor Benson agreed with Councilmember Finerty, stating $64,000 was approved for the Conference and it only cost $20,000. She said if Council didn't approve the $50,000 amount, perhaps it will approve the remaining $43,000 from the Conference to go toward this contract, which would be closer to the mark. She said there would be a salary savings cost by not hiring someone full time, especially during the City's hiring freeze. She didn't want Palm Desert to lose its number one place and agreed that if Palm Desert will go forward with this, it needed to continue to be the leader. She believed the additional funding of $25,000 could be found, and it may only be $10,000 that was needed if it applied the difference between the amount allocated for the Conference versus what was actually used. Councilmember Hamik asked if this funding request was to lobby and further the efforts of the lawsuit already in place. Mr. Alvarez answered yes. Councilmember Finerty disagreed, stating it was to further the efforts in a tripod fashion. She said it was well and fine to have a judicial approach, but the judge has stated it may go to trial in June 2012; pushing the case further back. What seemed to be strategically the best, because there was an election in 2012, is to go out and talk to the people that are in a position to make a difference. Those people are in critical states electorally and already have PACE programs or want to start one, but the FHFA threw a whammy 10 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 14, 2011 in it. She said Joe Biden agreed PACE was great, but then you have the Department of Energy afraid to speak out and the Obama Administration not wanting to cross Al Pollard because of bad loans. She said the actual default was actually less than 1 percent on AB 811 loans, which was far less than any other group of loans. The real meat and potatoes are to fight it in the legislative and executive branch, because of political pressure next year. Councilman Kroonen stated the item before the City Council was a recommendation for $25,000, which he would be happy to move to approve to get the discussion going, and if someone came along to amend the motion that might be appropriate. Councilman Kroonen moved to, by Minute Motion: 1) Authorize staff to negotiate and sign a contract with EcoMotion to initiate a PACE Solutions strategy and lobbying effort in an amount not to exceed $25,000; 2) appropriate $25,000 from the General Fund Unobligated Reserve to support EcoMotion's creation of an appropriate entity to lobby the Executive and Legislative Branches of the Federal Government to find a resolution to the Federal Housing Finance Agency (FHFA) position on AB 811/PACE loans for energy improvements. Motion was seconded by Finerty. Councilmember Finerty requested an amendment to the motion, to increase the funding with the difference of what was previously authorized for the AB 811/PACE Conference versus what was actually spent, which was $43,560. Motion to amend died for lack of a second. Mayor Pro Tem Spiegel said he thought a total of $50,000 had already been spent. Mr. Alvarez responded a total of $20,000 of RDA funds was spent on the Conference. Responding to question, Mr. Wohlmuth said he would be traveling to Oakland for the City's lawsuit against the FHFA, where he will more likely find out the case will not be heard until June 2012 or later, because that's the information he had received from the attorneys. Councilmember Finerty stated the court appointed mediation was just a hoop the City was being asked to jump through because it filed a lawsuit, but she didn't believe a meaningful resolution would result from it. Mayor Pro Tem Spiegel stated he felt the City kept throwing money at this and nothing was going to happen. Councilmember Finerty disagreed, because the work plan went into great details that included State Coordinators, outreach programs, educational efforts, meetings with legislators from Congress in key electoral states, which 11 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 14, 2011 is where the fight needed to be fought. Further responding, she said the City filed a lawsuit and obviously it needed to be defended, but she didn't believe meaningful resolution would come from the judicial mediation, because it's already being delayed. She knew what political pressure can do in an election year and there are key states that have adopted this program and are ready to go, like Colorado, Florida, Georgia, Illinois, and Louisiana. She said Florida and other key electoral states is where the emphasis needs to be. She said a meaningful resolution would be to lessen its dependence on foreign oil, which everyone says they want, but no one wants to do the logical thing to effect the change. She said AB 811 was and is the vehicle to affect change, and Palm Desert started it and it should also be the leader to bring it to a full conclusion. Mr. Wohlmuth stated the thought behind staffs recommendation was to approve $25,000 to get this started and then maybe another $25,000 once there is an established entity that can carry the mission forward. He said Richards, Watson & Gershon will be working pro bono in setting up a structure for a 501 C4 lobbying type of nonprofit organization. The real work is to set up the organization with the stakeholders, who perhaps will ultimately be the board of directors, and getting their IRS status. Once this is established, this organization will ask for further funds from Palm Desert. -... Mayor Pro Tern Spiegel stated his concern was that there would be no bottom at the end of the barrel Councilmember Finerty stated that in order to have a meaningful start up with identified key players who are willing to contribute money, i.e., Sonoma County, Palm Desert needed to maintain its position as the leader. She would hate for another city and/or county to take over the leadership position after all the hard work put in by Carlos Ortega and Jim Ferguson to get AB 811 passed on an urgency measure, which was a near impossibility, and to lose its key position would be a sad day in Palm Desert. She reiterated the difference in the amount requested was $18,560. Mayor Pro Tern Spiegel agreed to only approve $25,000 at this time. Councilmember Finerty said that since Council had already approved $63,175 for the Conference and knew it would be getting money back, it was not like she was requesting anything more. Councilmember Harnik stated everyone understood the importance of renewable energy, but disagreed that Palm Desert must have the lead position in this as long as the job gets done and not worry about who gets the credit. She agreed the City should pursue this and get it done whether it was through the lawsuit or lobbying efforts, but the emphasis should be on cutting back on energy consumption. 12 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 14, 2011 Councilmember Finerty responded it was not about getting credit, but about getting the job done, which required Palm Desert in the leadership role. She said every city and county across the nation had the ability to come up with something like AB 811, get it passed on an urgency measure, get the governor to sign it within a six -months period, but no one else did except Palm Desert, which is the position she didn't want to lose. She said Palm Desert had the wherewithal to get the job done, and it was not about taking credit, but affecting change, not only for Palm Desert, but across the nation. Councilmember Harnik said she understood everything that got accomplished with the Govemor's signature as stated, but the Council was now considering PACE, which she agreed the City should go forward with, but she too, couldn't support more than $25,000. Mayor Benson asked the City Manager if he had spoken with EcoMotion that if they received the $25,000 now to get the organization formed, another $25,000 would come later. Mr. Wohlmuth answered yes, stating he informed them about his recommendation to the City Council; however, he suspected it will cost a lot more than $25,000 to set up this organization with board of directors, etc. He didn't know where the other funds will be coming from as he tried to get a hold of Rod Dole from Sonoma County, but his staff indicated they had something similar to Palm Desert's charitable contributions or legislative committee that he'll be discussing with their county. At this time, he wasn't sure anyone else had funded. Councilmember Hamik asked if there was any possibility that Palm Desert will contribute $25,000 and not have anyone else jump in. Mr. Wohlmuth said he believed Sonoma County will participate, but he didn't know the amount. Councilmember Finerty stated perhaps Mr. Ted Flannigan from EcoMotion, who has been talking to people across the country might want to respond to the question. MR. TED FLANNIGAN, EcoMotion, thanked the City Council for the opportunity to put on the PACE Solutions Conference and to continue with it. At the Conference, it became clear that someone needed to galvanize all these states that had created this enabling legislation, and it was Palm Desert that put forth this Conference. In response to the question, it was decided the best thing to do was to form this organization with the leading local governments being Palm Desert and Sonoma County before it went out to other counties and cities and prior to reaching out to the market players and contractors. It is believed that one of the issues in Washington is that 13 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 14, 2011 the industry lead by renewable funding has given PACE a little bit of a bad name, and it now needed local govemment to have a real stake in the game and be the ones leading the charge. At the present time, there was no definitive commitment for funding from anyone, because the work plan is to begin with Palm Desert with a verbal assurance from Rod Dole that Sonoma County will get on board. Then Placer County, Los Angeles County, and counties will be pursued followed by the utilities and the broader industry. The goal is to get the job done and reverse the FHFA position, and they are prepared to raise between $1- to $2 million in order to do that. The first phase of the work plan is a six -months effort at a rate of $40,000 to launch the strategy to be in touch with all the other 24 states, and the District of Columbia, and concurrently, putting together the legal structure to establish the organization. He disagreed with the statement that the only thing EcoMotion would be doing with the $25,000 was establishing the legal structure. In fact, what he hoped to do was start the following morning on the overall strategy and overall campaign, because the judicial track was at least 1 '/2 years out. He said the best chance is to link in with the presidential primaries and presidential election. As the organizer, he asked for the full $50,000, because two things need to be accomplished, which was to establish a legal organization, but more importantly he had to keep this campaign going to keep the momentum. He noted he was thrilled that Richards, Watson & Gershon was willing to work pro bono. Further responding, he said Edison gave every indication they will be on board, because he met with Edison folks in San Francisco the previous week and they offered up their lobbyist. He said President of the Public Utilities Commission Mike Peevey was aware of the PACE Solution efforts, and he supports it. He believed Mr. Peevey will reach out to all the utilities and get their support. He said strategically what distinguished this effort from others is that it's lead by local government, which makes it government to government as opposed to industry to government. Councilman Kroonen stated he will continue with his motion for approval of $25,000, recognizing this was not the last time the Council will hear a request for funding. He was hesitant to vary when there was a printed agenda, which had been duly and appropriately circulated in conformance with the Brown Act and other public disclosure requirements. He said the Council had varied about 200% from the item as printed on the public agenda. Councilman Kroonen restated his previous motion for approval Mayor Pro Tern Spiegel said there was no reason why Mr. Flannigan couldn't come back to the City Council to share what was accomplished. Councilman Kroonen stated if Mr. Flannigan found that $25,000 from the City of Palm Desert was the difference for success, there would be willing ears on the Council. He was proud of the tradition, groundwork, and pioneering 14 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 14, 2011 work that had been done on this front, but for the reasons he stated, he was not comfortable approving more than $25,000 at this time. Councilmember Finerty stated her revised amendment would be that the City Council understood full well that EcoMotion may need to return for additional funding, because this was an enormous task that will make a huge difference in the lives of people across the nation. She said the Council will recognize that by approving $25,000, there is a likelihood that EcoMotion will return for more funding and it will be viewed favorably. Mayor Pro Tern Spiegel asked for confirmation that EcoMotion will report on what they've accomplished for the $25,000. Councilmember Finerty agreed, stating she was such an advocate for measuring results. Mayor Benson seconded the motion. Mayor Pro Tern Spiegel called for the vote to approve staff recommendation, with the full understanding that with approval of the $25,000 it is very likely EcoMotion will need to return to the City Council for additional funding to support this effort, and such a request would be viewed favorably, and the motion carried on a 5-0 vote. E. REQUEST FOR AWARD OF CONTRACT TO OFF MADISON AVE. FOR ONLINE MARKETING SERVICES FOR THE REMAINDER OF FISCAL YEAR 2010-2011 AND FOR FISCAL YEAR 2011-2012 (CONTRACT NO. C30740). Mayor Benson asked what was the amount of the contract. Visitor Center Manager Donna Gomez responded there was not an exact amount, but the retainer was $75,000 a year. Further responding, she said for the remainder of the year it would be $6,250 a month. She said this contract went before the Marketing Committee and was approved unanimously. There was a total of seven proposals and staff narrowed it down and took the top two to the Marketing Committee where the agencies made their presentation. She said the unanimous recommendation was to stay with Off Madison Ave. Councilmember Finerty noticed the staff report did not include the name of the companies and the bid amounts. The only information provided was on Off Madison Ave., which the City has worked with for years. She appreciated the fact that there was some measuring going on as indicated toward the back of the staff report, but questioned who else bid and what the amounts of the proposals were. Ms. Gomez responded the decision was not made solely on price and several considerations came into play, as far as creative and tracking ability. She said the other top agencies were comparable in pricing, and SAESHE, 15