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HomeMy WebLinkAboutApprove Resolution 4497, Creation fo Bozeman Business Energy ProgramPage 1 of 3 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Natalie Meyer, Sustainability Coordinator Brit Fontenot, Director of Economic Development SUBJECT: Resolution 4497 Authorizing the Creation of the Bozeman Business Energy Program and re-directing funds formerly allocated to the Big Sky Energy Revolving Loan Fund. MEETING DATE: December 16, 2013 AGENDA ITEM TYPE: Action RECOMMENDED MOTION: I move to approve Commission Resolution No. 4497, authorizing the Creation of Bozeman Business Energy Program and re-direct funds formerly allocated to the Big Sky Energy Revolving Loan Fund. BACKGROUND: The Northern Rocky Mountain Resource Conservation and Development (the “RC&D”) is a non-profit rural development organization incorporated in the State of Montana on September 5, 2001. The RC&D serves as a catalyst to empower rural communities to develop and conserve natural resources and enhance economic prosperity. In general, RC&D’s are a blend of private enterprise and government in a nonprofit public/private partnership. Program activities are initiated and directed by a volunteer Council consisting of local representatives of government, business, development organizations, non-profit organizations, conservation districts, and individuals. Unfortunately for the clients they serve, the RC&D is dissolving and operations ceasing with assets being returned to the funding organizations from which they came, see ATTACHMENT 1. Since 2008, the City of Bozeman and the RC&D have maintained a contractual relationship for the management of the Big Sky Energy Revolving Loan Fund (“RLF”), see ATTACHMENTS 2 AND 3. The Big Sky Energy RLF was funded with dollars collected from the City’s Big Box Economic Development Fund and intended to incentivize the completion of energy related projects. The only example of a Big Sky Energy RLF funded project is the solar hot water system on the roof of the Buggy Bath carwash located on East Main Street. The Big Sky Energy RLF program never reached its maximum potential due to the relatively small loan 246 Page 2 of 3 amounts available for projects, competitive interest rates from other organizations and the relative ease of securing traditional bank financing. In the years since its inception the Big Sky Energy RLF has funded one project, which has since completed repayment of the loaned amount to the revolving loan fund. Currently there are no outstanding loans on the Big Sky Energy RLF. Due to the dissolution of the RC&D the Big Sky Energy RLF dollars, originally capitalized at a $60,000, are being returned to the City as required by the original funding agreement. The City of Bozeman through the combined efforts of the Offices of Sustainability and Economic Development seek to re-establish a program aimed at incentivizing local businesses to upgrade systems for energy efficiency and long term cost savings. The proposal is to capitalize the proposed Bozeman Business Energy Program with the funds formerly allocated to the Big Sky Energy RLF. The new Bozeman Business Energy Program will be a membership-based program that offers educational resources, workshops, and public recognition to businesses that are interested in reducing their monthly utility bill and their environmental impact through building energy efficiency and conservation. Members will pay $50 per year to support ongoing programming and marketing. As part of the Bozeman Business Energy Program, a Bozeman Business Incentive Fund will be created to encourage investment in energy conservation, energy efficiency, and renewable energy. A one-time incentive of $500 to $1,500 will be available to member businesses that have completed a free NorthWestern Energy Appraisal (or other pre-approved energy audit program) and wish to implement the projects recommended in the Energy Appraisal. Renewable energy systems will be considered after all other reasonable conservation and efficiency strategies have been implemented. To encourage local investment, all applicants will be required to contribute 66 percent of the total project cost (2:1 match requirement). In contrast to the Big Sky Energy RLF, the funds disbursed to local businesses will not be paid back. Incentives will be awarded on a first-come, first-serve basis to qualifying businesses or non-profits that rent or own a building located in districts zoned for commercial uses. Applicants will submit an application prior to completing the energy project, receive approval, complete the project, and be reimbursed after they submit invoices and sign a statement of completion. The Bozeman Business Energy Program will be supported by a new half-time sustainability employee and overseen by the Offices of Sustainability and Economic Development. The Bozeman Business Energy Program details are outlined in Resolution 4497, see ATTACHMENT 4. On November 7, 2013 staff presented the Bozeman Business Energy Program to the Economic Development Council (“EDC”) for feedback and support. On November 20, 2013, staff presented the Bozeman Business Energy Program to the Bozeman Climate Partners Working Group. Both groups voted unanimously to recommend approval of the program to the City Commission. It should be noted that the State of Montana, through the Department of Environmental Quality currently administers the Alternative Energy Loan Program, the purpose of which “is to provide a financing option to Montana homeowners, small businesses, non-profits and government entities to install alternative energy systems”. While not identical to the Big Sky Energy RLF, the State program offers businesses the opportunity to utilize the revolving loan fund to assist in the completion of energy related upgrades and retrofits. 247 Page 3 of 3 UNRESOLVED ISSUES: None ALTERNATIVES: As proposed by the City Commission. FISCAL EFFECTS: The City will receive the approximately $56,300, returned from the Big Sky Energy RLF. As Bozeman Business Incentive Fund applications are approved, and after proper documentation is presented, incentives of $500 to $1,500 will be disbursed. It is expected that anywhere from 37 to 113 incentives could be approved before the Fund is depleted. In the future, grant and foundation funds will be sought to recapitalize the Bozeman Business Incentive Fund. Attachments: 1. December 3, 2013 letter from the Northern Rocky Mountain RC&D terminating the agreement with the City of Bozeman and returning the funds previously allocated to the Big Sky Energy Revolving Loan Fund; and 2. Materials from the August 11, 2008 City Commission meeting authorizing the creation of the Big Sky Energy Revolving Loan Fund, capitalized at $60,000, from allocation of Big Box Economic Development funds; 3. Funding Agreement between the City of Bozeman and the Northern Rocky Mountain RC&D, executed on November 14, 2008; and 4. Resolution 4497, authorizing the Bozeman Business Energy Program re-directing funds formerly allocated to the Big Sky Energy Revolving Loan Fund. Report compiled on: 12-4-13 248 An Equal Opportunity Provider and Employer Northern Rocky Mountain Resource, Conservation & Development PO Box 1105, Livingston, MT 59047 Phone: (406) 222-7227 info@nrmrcd.org www.nrmrcd.org December 3rd, 2013 City of Bozeman P.O. Box 1230 Bozeman, MT 59715 RE: Big Sky RLF – Fund Closeout Dear Brit Fontenot and Natalie Meyers, It is my purpose is to inform you of the close out of the Big Sky Revolving Loan Fund as part of the dissolution of the Northern Rocky Mountain RC&D. In 2008, the City of Bozeman granted NRM RC&D $60,000 which was split into $55,000 of seed money for the RLF and $5,000 administrative start-up costs. We have successfully processed one loan, the Buggy Car Wash’s solar hot water system, for $20,000. The outstanding Buggy Car Wash loan was successfully paid off in June of 2013. All loan documents will be held with the RC&D for a minimum of 3 years. To successfully close out the Big Sky RLF, the Northern Rocky Mountain RC&D would like to terminate our Agreement with the City of Bozeman and return remaining RLF funding to the City of Bozeman. The remaining RLF funding is approximately $56,300, including interest income, in addition to approximately $4,300 of unspent administration costs, totaling approximately $60,600.00. Exact amounts will need to be issued by our accountant who will be making 2013 yearend adjustments with an expected completion date of January 15, 2014. All accounting costs will be billed to the remaining $4,300 of unspent administration costs. Again, we thank you for understanding our status, and we look forward to a successful closeout of the Big Sky RLF with the City of Bozeman. Sincerely, Jon Shafer Executive Director cc: Brit Fontenot Natalie Meyers John Venhuizen 249 250 251 252 254 255 256 257 258 259 260 261 262 263 264 265 266 268 269 270 271 272 273 274 275 276 277 278 280 281 282 283 284 285 286 288 289 290 291 292 293 294 1 COMMISSION RESOLUTION NO. 4497 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, CREATING THE BOZEMAN BUSINESS ENERGY PROGRAM AND THE BOZEMAN BUSINESS INCENTIVE FUND FOR BUSINESSES LOCATED IN THE CITY OF BOZEMAN, COUNTY OF GALLATIN, STATE OF MONTANA, TO PROMOTE COST SAVINGS, ENERGY EFFICIENCY AND RENEWABLE ENERGY IN COMMERCIAL BUILDINGS. WHEREAS, the City of Bozeman and its citizens support efforts to strengthen the economic vitality of Bozeman and the surrounding area; and WHEREAS, the City of Bozeman’s Economic Development Plan prioritizes leveraging “local, state and federal economic development resources to enhance economic growth in Bozeman”; and WHEREAS, the City of Bozeman’s Economic Development Plan calls for utilizing incentives or inducements to encourage business investment and development in desired areas; and WHEREAS, the Bozeman City Commission identified economic development and sustainability as high priorities; and WHEREAS, the Bozeman Business Energy Program represents the nexus between economic development and sustainability; and WHEREAS, in November 2006, the Bozeman City Commission signed the Mayor’s Climate Protection Agreement to reduce greenhouse gas emissions; and 296 2 WHEREAS, the Bozeman City Commission has adopted a Municipal Climate Action Plan and Community Climate Action Plan to guide our greenhouse gas emissions reduction efforts; and WHEREAS, the Community Climate Action Plan supports the utilization of NorthWestern Energy’s rebate program; and WHEREAS, on August 11, 2008, the Bozeman City Commission capitalized $60,000 of the Big Sky Energy Revolving Loan Fund using funds obtained through the City of Bozeman’s Development Impacts Fund (Big Box Fund); and WHEREAS, on October 20, 2008, the Bozeman City Commission approved a funding agreement with the Northern Rocky Mountain Resource Conservation & Development Council to administer the Big Sky Energy Revolving Loan Fund; and WHEREAS, the Big Sky Energy Revolving Loan Fund has been underutilized with one loan completed since inception, which has been re-paid in full; and WHEREAS, the Northern Rocky Mountain Resource Conservation & Development Council is dissolving and is returning the Big Sky Energy Revolving Loan Fund balance of $56,300 to the City of Bozeman; and WHEREAS, the Big Sky Energy Revolving Loan Fund will be dissolved and replaced with the Bozeman Business Incentive Fund incentivizing energy efficiency, energy conservation, and renewable energy and increasing local business competitiveness by reducing energy costs, and supporting robust infill and redevelopment policies. 297 3 NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, that: Section 1 The Big Sky Energy Revolving Loan Fund (RLF) and the associated program is hereby disolved. Section 2 To satisfy the original intent of the “Big Sky Energy RLF” to help finance energy efficiency, energy conservation, and renewable energy production among businesses located within the City of Bozeman, the Bozeman Business Energy Program is hereby established and the Bozeman Business Incentive Fund is hereby created. The Bozeman Business Energy Program offers public recognition of energy conservation efforts and educational opportunities. As part of the Bozeman Business Energy Program, the Bozeman Business Incentive Fund will provide financial assistance to businesses seeking to complete energy efficiency and renewable energy projects. Applicants participating in the Bozeman Business Energy Program will pay a $50 per year membership fee in support of ongoing programming and marketing of the Program. Applicants must own or lease a commercial building in districts zoned for commercial uses (R- O, B-1, B-2, B-3, M-1, M-2, BP, UMU and HMU) and complete a NorthWestern Energy Appraisal or have an energy audit completed by a pre-approved energy auditor. Only projects recommended in the NorthWestern Energy appraisal or independent audit will be approved for funding. Funds are restricted to qualified purchases and services, including: equipment, energy conservation measures, and installation costs. A one-time incentive in the amount of $500 to 298 4 $1,500 will be available to businesses or non-profit organizations that own or rent commercial buildings in districts zoned for commercial uses. To encourage local investment, all applicants will be required to contribute 66 percent of the total project cost (2:1 match requirement). Incentives will be provided to eligible applicants on a first-come, first-served basis until the Bozeman Business Incentive Fund is depleted. The Bozeman Business Energy Program will continue to offer ongoing programming and marketing for member businesses. The Incentive is a grant, not a loan. There is no obligation to repay the Incentive. An application form will be developed by the City Manager’s Office and the program marketed to local businesses. The City Manager, or designee, will have authority to approve incentive applications. The approved expenditures will be included in the Expenditure Approval List (“EAL”) on Consent Agendas of the Bozeman City Commission. Businesses will be reimbursed after submitting invoices and a statement of completion signed by the applicant and contractor. Additionally, the City reserves the right to complete a visual inspection of the finished project. Businesses are required to adhere to the quote requirements outlined in the “Documentation and Selection of Vendors” section of the City of Bozeman’s Purchasing Policy and projects must be completed by NorthWestern Energy approved contractors. PASSED AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 16th day of December, 2013. ___________________________________ SEAN A. BECKER Mayor 299 5 ATTEST: ________________________________________ STACY ULMEN, CMC City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney 300