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January 14, 2025
ITEM TITLE
Grant Award, Appropriation, and Authorization: Accept and Appropriate Grant Funds from the U.S.
Department of Energy, Add a Conservation Specialist II, Waive the Competitive Process, and Authorize City Manager to Execute Agreements to Implement the Grant
Report Number: 25-0006
Location: No specific geographic location
Department: Public Works - Conservation
G.C. § 84308: Yes
Environmental Notice : The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines. Therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Pursuant to Title 10, Part 1021.410(a) of the Code of Federal Regulations and the Department of Energy Environmental Guidelines, the activity is Categorical Exclusions under the National Environmental Policy Act (NEPA).
Recommended Action
Adopt resolutions: (A) Accepting $10,000,000 of “Assistance for the Adoption of the Latest and Zero Building Energy Codes” in grant funds from the U.S. Department of Energy, authorizing the City Manager or Director of Public Works to serve as the “Authorized Officer” to execute any necessary documents to secure the grant, amending the authorized position count in the Public Works Department to add 1.0 FTE Conservation Specialist II, and amending the fiscal year 2024-25 budget to appropriate funds for these purposes (4/5 Vote Required); and (B) Adopt a resolution to waive the competitive bidding requirements and authorize the City Manager to negotiate and enter into agreements with NORESCO and Mile3 Web Development to implement the “Foundation and Framework for Equitable Building Performance Program”.
SUMMARY
In April 2024, the City of Chula Vista, in partnership with NORESCO, Mile3 Web Design, Elevate, and Emerald Cities Collaborative, submitted an “Assistance for the Adoption of the Latest and Zero Building Energy Codes” funding application to the U.S. Department of Energy (“DOE”) State and Community Energy Programs Office (“SCEP”). In December 2024, the City received notification of award for the program in the amount of $10,000,000 to implement a project called “Foundation and Framework for Equitable Building Performance P a g e | 2
Program”. This item seeks to formally accept the grant funds, authorize the City Manager to negotiate and execute the corresponding agreements, add 1.0 FTE Conservation Specialist II to help deliver program goals, and appropriate funds accordingly.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and the National Environmental Policy Act ( NEPA). The activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it is not for a site -specific project and will not result in a direct or indirect physical change in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Pursuant to Title 10, Part 1021.410(a) of the Code of Federal Regulations and the Department of Energy Environmental Guidelines, the activity is Categorical Exclusions under NEPA. Thus, no further environmental review is necessary.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
Chula Vista City Council adopted Municipal Code 15.26.050, otherwise known as the Building Energy Saving Ordinance (“the Ordinance”), on March 2, 2021, in support of the City’s 2017 Climate Action Plan. The Ordinance supports the City’s goal of reducing greenhouse gas emissions from existing buildings by 50% by 2045. To comply, owners of multifamily, commercial, and industrial buildings 20,000 square feet and larger must report their energy use data annually . Low-performing buildings must perform energy audits, retro - commissioning, and address cost -effective building upgrades over time. Approximately 800 covered buildings within the City are subject to Ordinance requirements. This Ordinance is considered a Building Performance Standard ( “BPS”) and a small cohort of jurisdictions across the country have similar requirements, including Boston, MA; Montgomery County, MD; Washington, D.C.; Denver, CO; Cambridge, MA; Seattle, WA; and St. Louis, MO; among others, with many jurisdictions with BPS policies in development.
The City of Chula Vista is an inaugural member of the National Building Performance Standards Coalition, launched by President Biden in January 2022.
Implementation of Chula Vista’s Ordinance began on January 1, 2022, and required building owners to report their building’s 2021 energy use by May 20, 2022. This process is repeated yearly – owners of buildings must report the previous year’s energy use by May 20 annually. Since development of the Ordinance, staff have been researchi ng ways to provide support and resources to building owners to lessen the burden of compliance. Securing long-term funding is vital for the success and maximum impact of the Ordinance.
On December 18, 2023, the DOE released a funding opportunity for a nine-year initiative entitled “Assistance for the Adoption of the Latest and Zero Building Energy Codes”. The specific goals listed in the funding notice were in close alignment with the existing Building Energy Saving Ordinance, and as such, staff from the City’s Conservation section worked with potential external project partners to propose pathways and program design features this funding could support related to Ordinance implementation. On April 24, 2024, the City of Chula Vista, in partnership with NO RESCO, Mile3 Web Design, Elevate, and Emerald Cities Collaborative, submitted a funding application to the DOE’s State and Community Energy Programs Office (SCEP). In P a g e | 3
December 2024, the City received notification of award in the amount of $10,000,000 to i mplement the “Foundation and Framework for Equitable Building Performance Program”.
The third year of Ordinance implementation has just concluded, and as the program is just in the energy benchmarking phase, the only current requirement for building owners is annual energy reporting on the free Energy Star Portfolio Manager platform. The compliance rate at the end of 2024 was approximately 45% and securing long -term funding will allow capacity building to help better implement the Ordinance and provide out reach to building owners about the requirements and resources. The existing Ordinance requires audits and retro -commissioning for low -performing buildings in 2026 and potential upgrades to buildings by 2031 to meet performance targets. City staff have learned from other jurisdictions nationwide that data quality plays a key role in the successful implementation of a BPS and with funding from the DOE, staff plans to require and provide no -cost, third party data verification for all buildings every five yea rs, preceding the performance target years. Staff plans to return to City Council later this year to update the Ordinance to extend timelines, require no-cost data verification, and to refine other minor details.
City staff expects a substantially increased effort for the implementation of building performance aspects in the coming years as the Ordinance requirements move beyond the benchmarking only phase. Grant funds will allow staff to develop programs that support data quality and verification to ensu re that covered buildings perform as reported and contribute toward the City’s climate goals. Data verification will allow building owners to know their data is accurate before the BPS requirements take place in future years and will ensure that only buildings that are truly under-performing will be required to undergo audits and retro- commissioning. DOE funding is critical for developing programs to support building owners and the community, particularly frontline communities, with incentives, tools, resources, and training to successfully comply with the Ordinance. Importantly, DOE funding will enable the City to build and operate an equity framework and workforce development program that will not only support building compliance, but benefit the local community as a whole, which is something that is not currently covered with existing General Fund resources. Over $2.8 million is designated to directly support owners of buildings 20,000 square feet and larger in Chula Vista through no-cost, third-party data verification services and incentives for energy audits and retro -commissioning for equity priority buildings over the nine -year grant. Per grant requirements, funds may not be utilized for improvements or building upgrades identified in audits. Staff will continue to seek grant opportunities that allow for building improvements.
End of project goals includes the following:
• 100% Ordinance compliance rate by 2033
• At least 21% energy reduction in 30 years
• 20% reduction in greenhouse gas (GHG) emissions by 2033 • Workforce development program designed based upon the results of the workforce gap analysis • At least 40% of benefits for data verification and building audits will take place in communities most in need
• Substantial improvement in Chula Vista bui lding stock including energy efficient buildings and overall Energy Use Intensity reductions
• The Benchmarking Portal and associated map feature will be a regular tool for tenants seeking rental propert ies or buyers interested in purchasing buildings 20,000 square feet or larger, creating a market transformation toward high-performance buildings
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Long-term funding is ideal to ensure continuity in implementation, community connections, data verification, workforce development, measuring progress, and enforcement. To date, the City of Chula Vista has relied on the General Fund to cover staff time and improvement of the online Benchmarking Portal. The City currently receives in -kind support for this project through San Diego Gas and Electric’s Codes and Standards team for some program planning, marketing, and outreach services. Previous Local Government Partnership funds covered consultant time to work with City staff on policy research, Ordinance development, and design and launch of the Benchmarking Portal. This nine-year grant is needed to support additional technical policy development activities including stakeholder engagement, workforce development planning, and incentive program design and implement ation. This program will leverage a unique opportunity to create a workforce pipeline to meet the supply and demand of building upgrades while strengthening the number and diversity of skilled workers and contractors within the emerging energy efficiency industry. This grant funding will also support a portion of the existing Environmental Sustainability Manager’s staff time to lead all aspects of this program over the full grant term and will also support the ongoing work and hosting of the Benchmarking Portal.
Approval of this funding will include the addition of one full-time equivalent (1.0 FTE) Conservation Specialist II position for the duration of the nine -year grant term. This capacity building will be a critical component as the team develops new resources, designs, and implements incentive programs, creates a data verification program, provides additional technical support, and ensures an equity focus for prioritizing buildings. As this Ordinance has long-term requirements that wi ll likely need to be updated in later years and will continue beyond the nine years of this grant term, staff will pursue additional funding sources for this position beyond the grant performance period.
The City of Chula Vista will serve as the lead tech nical organization and the administrator of the funds and will work closely with the DOE staff over the nine -year grant term in meeting grant deliverables including conducting community outreach, providing technical assistance, developing and deploying a d ata verification program, managing building energy audit and retro -commissioning incentives for qualified buildings, measuring compliance, and enforcing the Ordinance. In addition, City staff will manage the agreements with Mile3 Web Design and NORESCO. M ile3 will provide continued refinement of the benchmarking portal to support a database of covered buildings, contacts, data map, and energy audit report tracking. NORESCO will manage contracts with Elevate and Emerald Cities Collaborative and together, w ill provide support for creation of an equity framework to enhance support for under -resourced building owners, development of an existing buildings roadmap to achieve climate goals, workforce development programs to engage and enhance training capacity of communities that have been historically marginalized, and materials and resources to enable successful compliance from building owners. Project partners are uniquely qualified to support this program, and their experience includes the following:
Mile3 Web Design has over 20 years of experience in creating webtools, working with local agencies, optimizing database performance, developing custom solutions for clients, and web applications and has been collaborating with the City to support Sustainability programs for over five years. NORESCO has been helping clients for 40 years to adapt to and mitigate the impacts of climate change by decarbonizing, modernizing, and electrifying aging infrastructure to be more sustainable, and resilient and they understand building owners’ experience of planning, financing, and implementing energy upgrades. NORESCO has been collaborating with the City for over three years.
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Elevate is a nonprofit that designs and implements energy efficiency, solar, building decarbonization, clean water, and workforce development programs that lower costs, protect the environment, and ensure that program benefits reach those who need them most. Emerald Cities Collaborative is a national nonprofit that centers and collaborates with frontline communities, especially communities of color, to ensure that they are at the forefront of decision making, that they benefit from the economic opportunities of the transition to clean energy, and to drive climate investments back to those communities.
Pursuant to Municipal Code Section 2.56.070(B)(3) , City Council has the ability to waive the competitive bidding requirements if they are impractical and the City’s interest s would be materially better served by applying a different purchasing procedure approved by the Purchasing Agent. Staff recommends that City Council waive the competitive bidding requirements and award contracts to Mile3 Web Development and NORESCO for services related to this project . Mile3 Web Development and NORESCO have partnered with the City for this grant proposal, are included in the grant’s Statement of Program Objectives (SOPO) that the City completed in partnership with the DOE over the last several months and have completed the required pre-award documentation with the DOE. For these reasons, Staff recommends that Council waive the competitive bidding requirements and authorize the award of contracts to Mile3 Web Development and NORESCO in order to implement the grant program.
A summary of the budget is found in Table 1 and specific deliverables for partners will be included in the associated agreements.
Table 1:
Department of Energy Grant Summary
Organization Program Budget
City of Chula Vista $7,197,219
Mile3 Web Development $243,819
NORESCO $1,230,360
Elevate $375,000
Emerald Cities Collaborative $953,602
Total $10,000,000
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The proposed budget per fiscal year is summarized in Table 2.
Table 2: Proposed Budget Per Fiscal Year
Description FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 Total Personnel
Costs 219,552 439,104 439,104 464,583 490,063 490,063 511,221 532,380 532,380 266,190 4,384,639 Supplies &
Services 168,901 337,802 1,840,690 1,095,573 350,456 350,323 484,345 618,367 245,937 122,969 5,615,361 Total
Expenditures 388,453 776,905 2,279,793 1,560,156 840,518 840,386 995,566 1,150,747 778,317 389,159 10,000,000
Critical success factors that will be enacted in partnership with Mile3, NORESCO, Elevate, and Emerald Cities Collaborative over the next nine years of the program include:
• Creation of an existing buildings roadmap to achieve climate goals • Development of a data verification program to ensure accurate building energy reporting • Equity framework to enhance support for under-resourced building owners including incentives for energy audits and retro-commissioning for qualified buildings • Materials and resources to enable successful compliance from building owners • Workforce development programs to engage and enhance training capacity of communities that have been historically marginalized
• Benchmarking portal to support database of covered buildings, contacts, data map, and audit report tracking
• Right-sized City staff team to successful ly manage the program, provide technical assistance, measure compliance, and enforce the Ordinance
Through this action, staff is seeking Council’s approval for the following:
Accept the $10,000,000 in funds awarded by the DOE;
Amend the fiscal year 2024 -25 budget by appropriating funds to the Public Works section of the Federal Grant Fund;
Add 1.0 FTE Conservation Specialist II to the Public Works Department to be offset by grant revenue and amend the authorized position count in the department; Authorize the City Manager or Director of Public Works to serve as the “Authorized Officer” to execute any necessary documents to obtain the grant;
Authorize the City Manager or Director of Public Works to negotiate and enter into agreem ents between the City, Mile3 Web Development, and NORESCO, all of which are necessary to implement and administer the program;
Waive the competitive bidding requirements pursuant to Municipal Code Section 2.56.070(B)(3).
These actions are necessary to implement and administer the program.
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DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
Cost associated with staff time to coordinate with the Department of Energy on award negotiation, program planning, and program implementation are included within the Sustainability budget.
Approval of this resolution will result in the:
Acceptance of $10.0 million in grant revenues from the United States Department of Energy Creation of project PWP003 DOE Equitable Bldg Performance Prog Addition of 1.0 FTE Conservation Specialist II to the Public Works Department/Sustainability section and amendment of the authorized position count in the department.
Further, Staff is requesting the proposed budgetary adjustments reflected in the tables below:
Appropriation of $388,453 to the Other Expenses Category of the Public Works section of the Federal Grants Fund to be offset by grant funds.
OTHER FUNDS
Fund Other
Expenses Revenues Net Cost
Federal Grants Fund (PWP003) $ 388,453 $ (388,453) $ - TOTAL $ 388,453 $ (388,453) $ -
Appropriation of $50,768 to the Personnel Services Category of the Public Works Department to be fully revenue offset by grant funds.
GENERAL FUND
Department Personnel
Services Revenues Net Cost
Public Works $ 50,768 $ (50,768) $ - TOTAL $ 50,768 $ (50,768) $ -
All program costs will be offset by funding from the Department of Energy grant.
ONGOING FISCAL IMPACT
All costs associated with the administration of the associated Department of Energy Grant Agreement and funded activities are covered by the grant funds, resulting in no net fiscal impact to the General Fund. Ongoing P a g e | 8
funding for this project will be incorporated as part of the annual budget development process in future fiscal years.
As this Ordinance has long-term requirements that will likely need to be updated in later years and will continue beyond the nine years of this grant te rm, staff will pursue additional funding sources for th e new Conservation Specialist II position beyond the grant performance period and if no additional resources can be secured, the General Fund may need to cover this expense starting in January 2034.
Staff Contact: Coleen Wisniewski, Environmental Sustainability Manager Angelica Aguilar, Assistant Director of Public Works