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Agenda-Item-Number-3-Support-of-SB-252-Public-retirement-systems-fossil-fuels-divestment

Sebastopol City Council
July 18, 2023

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Agenda-Item-Number-3-Support-of-SB-252-Public-retirement-systems-fossil-fuels-divestment
Meeting
July 18, 2023
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Sebastopol City Council
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Text extracted from the city's file for reading and search. Open the original on www.cityofsebastopol.gov. That file is the official record.

CITY OF SEBASTOPOL

CITY COUNCIL

AGENDA ITEM
Meeting Date: July 18, 2023
To: Honorable Mayor and City Councilmembers
From: Climate Action Committee / Kari Svanstrom, Planning Director Subject: Consider a Letter of Support for SB 252
Recommendation : Authorize the Mayor to sign the letter of support for SB252 Funding: Currently Budgeted: _______ Yes _______ No ___X__ N/A Net General Fund Cost: $0
INTRODUCTION/PURPOSE:

This item is for City Council to Discuss and Consider Authorizing the Mayor to prepare and send a Letter of Support for SB 252 to Governor Gavin Newsom and Senator Mike McGuire.

BACKGROUND:

SB 252, as amended, would prohibit the boards of the Public Employees’ Retirement System and the State Teachers’ Retirement System from making new investments or renewing existing investments of public employee retirement funds in a fossil fuel company, as defined. The bill would require the boards to liquidate investments in a fossil fuel company on or before July 1, 2031. The bill would temporarily suspend the above-described liquidation provision upon a good faith determination by the board that certain conditions materially impact normal market mechanisms for pricing assets, as specified, and would make this suspension provision inoperative on January 1, 2035. The bill would provide that it does not require a board to take any action unless the board determines in good faith that the action is consistent with the board’s fiduciary responsibilities established in the California Constitution.

DISCUSSION:

At it’s April 11th, 2023 meeting, the Climate Action Committee (CAC) voted to recommend the City Council consider a letter of support.

GOALS:

This action supports the following City Council Goals:

Goal 2.2.5. Continue the City of Sebastopol’s commitment to the reduction of Green House Gas Emissions.
and General Plan Actions:

Goal COS 9: Promote Conservation of Energy and Other Natural Resources Policy COS 9-7: Promote efforts and programs, including increased access to clean technologies such as electric vehicles and charging stations, to encourage residents, businesses, and local organizations to use clean energy sources to supplant dirty technologies.

Agenda item Number: 3 Agenda item Number:3
City Council Packet of July 18, 2023

Page 1 of 8 ends

PUBLIC COMMENT:

As of the writing of this staff report, the City has not received any public comment. However, if staff receives public comment from interested parties following the publication and distribution of this staff report. Such comments will be provided to the City Council as supplemental materials before or at the meeting. In addition, public comments may be offered during the public comment portion of the agenda item.

PUBLIC NOTICE:

This item was noticed in accordance with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours prior to schedule meeting date.

FISCAL IMPACT:

There is no direct fiscal impact associated with the recommended action tonight.

RECOMMENDATION:

Authorize the Mayor to sign the letter of support
Attachments:

Letter of Support
Legislative Language

Agenda item Number: 3 Agenda item Number:3
City Council Packet of July 18, 2023

Page 2 of 8 ends

1 RESOLUTION NUMBER: -2023

CITY OF SEBASTOPOL

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEBASTOPOL IN SUPPORT OF FOSSIL FUEL

DIVESTMENT FROM PUBLIC EMPLOYEE PENSION FUNDS
WHEREAS, the City of Sebastopol completed a comprehensive General Plan update with adoption of a new General Plan on November 15, 2016, and adopted an Updated Housing Element on January 3, 2023; and
WHEREAS, pursuant to the California Environmental Quality Act (CEQA, codified at Public Resources Code § 21000 et seq.) and the State CEQA Guidelines (14 CCR, § 15000 et seq.), on November 15, 2016, the City Council certified and adopted an Environmental Impact Report (EIR) for the Sebastopol General Plan (the “Project”; State Clearinghouse No. 2016032001); and
WHEREAS, anthropogenic climate change, through rising sea levels, drought, heat waves, extreme precipitation events and increased wildfires is observably affecting human wellbeing, ecosystems and biodiversity; and
WHEREAS, climate change is an issue of environmental justice, disproportionately affects Indigenous communities, communities of color, and low income communities due to historical oppression, inadequate political power and access to resources for prevention and relief; and WHEREAS, the International Panel on Climate Change concluded in 2018 that we have 12 years to make dramatic cuts in the use of fossil fuels (coal, oil, gas and tar sands) if we are to keep warming to 1.5o C and avoid more catastrophic change; and WHEREAS, the fossil fuel industry is the single most powerful obstacle to addressing climate change, using its immense lobbying power in Washington, D.C. and Sacramento to block climate legislation; and
WHEREAS, fossil fuel companies' own scientists knew as early as the 1970s that their products were causing climate change, but the companies kept it secret; and WHEREAS, to effectively address climate change, most fossil fuel reserves must remain in the ground, never to be used. Such reserves held as investments are liable to become stranded assets. This makes fossil fuel stocks a risky investment; and WHEREAS, a Corporate Knights study found that if CalPERS and CalSTRS had divested in 2010, by 2019 their assets would have increased by $11.9 and $5.5 billion, respectively; and, WHEREAS, independent studies by financial consulting firms BlackRock and Meketa have found that divestment reduces risk and improves rather than weakens investment returns; and Agenda item Number: 3 Agenda item Number:3
City Council Packet of July 18, 2023

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2 WHEREAS, divestment from specific segments or business operations by CalPERS and CalSTRS is already standard practice and is specifically allowed by the California Constitution; and WHEREAS, the “engagement” strategy preferred by CalPERS and CalSTRS has been largely ineffective in moving fossil fuel companies away from fossil fuel exploration, extraction and distribution; and
WHEREAS, divestment means selling directly held or commingled assets including fossil fuel public equities and corporate bonds; and,
WHEREAS, SB 252, introduced by State Senator Lena Gonzalez, will help meet the State’s climate action goals by prohibiting CalPERS and CalSTRS from investing in fossil fuel companies and to divest from such companies by 2030, and,
WHEREAS, the City Council held a duly noticed public meeting to consider the item on July 18, 2023, and heard public comment; and,
WHEREAS, the City Council finds that the proposed State legislation is consistent with the following General Plan Goals, Policies and Actions:

Goal 2.2.5. Continue the City of Sebastopol’s commitment to the reduction of Green House Gas Emissions.

Goal COS 9: Promote Conservation of Energy and Other Natural Resources Policy COS 9-7: Promote efforts and programs, including increased access to clean technologies such as electric vehicles and charging stations, to encourage residents, businesses, and local organizations to use clean energy sources to supplant dirty technologies. And, WHEREAS, the proposed Project is consistent with adopted Climate Action Framework goals regarding reduction of Greenhouse Gases.

NOW, THEREFORE, BE IT RESOLVED that the City of Sebastopol City Council hereby adopts a Resolution calling upon CalPERS and CalSTRS to divest its holdings in fossil fuel companies immediately. Upon passage, a copy of this resolution will be sent to CalPERS and CalSTRS requesting that the City of Sebastopol, CA. be listed as an official supporter of fossil fuel divestment, by the following vote:

VOTE:

Ayes:

Noes:

Abstain:

Absent:

APPROVED: _______________________________________
Mayor Neysa Hinton
Agenda item Number: 3 Agenda item Number:3
City Council Packet of July 18, 2023

Page 4 of 8 ends

3 ATTEST: ______________________________________________________________________ Mary Gourley, Assistant City Manager/City Clerk, MMC
APPROVED AS TO FORM: __________________________________________________ Larry McLaughlin, City Attorney
Agenda item Number: 3 Agenda item Number:3
City Council Packet of July 18, 2023

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Agenda item Number: 3 Agenda item Number:3
City Council Packet of July 18, 2023

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<@?47?0M@5?B0474M7?=D0@<<387?=D074>2@A77=D0?7=75?890<3?4=05=0B7=8?3M7B03:0=FMB3C3=3@:0-B/0@<0Y7863@:0gR`IHTD0@?08@:6?58603:C7=647:6045:5;7?= =95220@?045A05605:A063470=F=653:0MA0?75=@:0@<05:A0B783=3@:06@0?7=6?386D0?7BF87D0@?072343:56703:C7=647:6=0>F?=F5:606@0Y7863@:=0gR`IHTD0gR`IHgD gR`IHgOD0gR`IHgRD05:B0gR`IHgTH -M/0P93=0=7863@:0=95220?7453:03:07<<7860@:2A0F:6320Y7863@:0gR`IHgO03=0?7>7527BD05:B05=0@<069560B56703=0?7>7527BH Agenda item Number: 3 Agenda item Number:3 City Council Packet of July 18, 2023

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City Council Packet of July 18, 2023

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