REPORT TO COUNCIL
SUBJECT
Title
Authorize the City Manager to (1) Execute the Memorandum of Agreement with Silicon Valley Clean Energy for the Environmental Protection Agency (EPA) Climate Pollution Reduction Grant Public Facility Resilience Implementation Program in Substantially the Same Format as Attached, and (2) Approve Project Scope Revisions Necessitated by Project Funding, Budget or Bid Changes and Submit Scope Change Requests to the EPA as Needed During Implementation of the Grant
Report
BACKGROUND
Approval is requested to authorize the City Manager to execute the Memorandum of Agreement with Silicon Valley Clean Energy for the Public Facility Resilience Implementation Program (PFRIP) through the Environmental Protection Agency’s (EPA) Climate Pollution Reduction Grant (CPRG) for design and construction of publicly owned and operated fuel-switching, electric vehicle (EV) charging, and solar/battery storage projects in Santa Clara County, CA.
The Biden-Harris Administration and Congress established the $5 billion CPRG program administered through the EPA as part of the 2022 Inflation Reduction Act (IRA) to enable states, municipalities, tribes and territories to work together as coalitions. Coalitions are expected to develop plans to reduce greenhouse gases (GHG) and implement ambitious measures regionally that will achieve significant cumulative GHG reductions and protect communities, especially vulnerable communities, from the harmful impacts of climate change.
Sunnyvale is a member of the PFRIP coalition with the Cities of San José, Morgan Hill, Mountain View, and Cupertino, in collaboration with the San Francisco Bay Area Planning and Urban Research Association (SPUR) and Prospect Silicon Valley. The coalition is led by Silicon Valley Clean Energy (SVCE). The coalition’s EPA grant application, titled Public Facility Resiliency Implementation Project, is requesting $ 49.9 Million to implement GHG reduction measures at 62 critical and community-serving public facilities that are all within EPA-defined disadvantaged communities. SVCE (as the coalition lead) must submit the Memorandum of Agreement (MOA) signed by all coalition members by July 1, 2024, to complete the grant application. The MOA describes the roles and responsibilities of each coalition member in implementing the proposed GHG measures, including related equity analysis, performance evaluation, community engagement and workforce development activities, and fulfilling all reporting requirements for the grant performance period. SVCE will establish the Public Facility Resiliency Fund (Fund) and ensure timely distribution of the Fund to the coalition’s members.
In general, each coalition member City will be responsible for leading the design, construction, and maintenance of the GHG reduction measures proposed for their respective jurisdictions. Each coalition member City will also take an active role in planning and implementing the project equity analysis, performance evaluation, community engagement and workforce development activities, and fulfilling all reporting requirements for activities that take place in its jurisdiction. SPUR, a non-profit public policy organization, will support each municipality by leading the equity analysis, community engagement and GHG reduction performance analyses for the coalition. SPUR will support community engagement by developing surveys and interviewing residents who are served by these facilities, facility staff members, heat pump and microgrid installers, and other key people engaged in the projects.
Prospect Silicon Valley, a nonprofit organization focused on supporting innovative startups in the transportation, energy and infrastructure sectors, will lead the design parameters, performance evaluation and workforce development activities for the coalition. Prospect Silicon Valley will develop Training Modules and Apprenticeship Programs to offer to city staff and community members.
Final Performance Reports will be submitted by the end of the five-year grant term, currently identified as September 30, 2029.
EXISTING POLICY
General Plan
Chapter 2: Community Vision - Citywide Vision Goals
• Vision: It is the aspiration of the people of Sunnyvale to build upon the attributes which the City currently enjoys, so that Sunnyvale of the future will become … A regional leader in environmental sustainability … advocating to reduce dependence on non-renewable resources by providing greater transportation options, reducing waste, protecting our natural resources, and promoting alternative energy usage and research. We take environmental preservation and protection seriously and consider how each action will affect Sunnyvale for future generations.
• Citywide Vision Goal III, Environmental Sustainability: To promote environmental sustainability and remediation in the planning and development of the City, in the design and operation of public and private buildings, in the transportation system, in the use of potable water and in the recycling of waste.
Chapter 3: Land Use and Transportation
• Goal LT-2: Environmentally Sustainable Land Use and Transportation Planning and Development - Support the sustainable vision by incorporating sustainable features into land use and transportation decisions and practices.
o Greenhouse Gas Reduction Policy LT-2.2 Reduce greenhouse gas emissions that affect climate and the environment through land use and transportation planning and development.
Climate Action Playbook
Strategy 2: Decarbonizing Buildings
• Play 2.2: Support electrification of existing buildings
o Move 2.E: Eliminate non-electric sources of power in municipal buildings upon rebuild or significant remodel. Natural gas use is the largest source of GHG emissions in Sunnyvale’s building sector. Transitioning towards all-electric buildings far outweighs GHG reductions achieved through simply improving building efficiency. Thus, when feasible, existing buildings must transition to all-electric while simultaneously ensuring that newly constructed buildings are all-electric to begin with. The Lakewood Library and Fire Station 2 are the next buildings up for remodel for City Facilities. Lakewood Library’s will have an all-electric building design and the Library is anticipated to start construction in late 2023. Fire Station 2 is in starting design consultant procurement and the scope requires it to be all-electric.
ENVIRONMENTAL REVIEW
The grant application includes two electrification projects in Sunnyvale, at Fire Station 2 and the Cleanwater Center. If the grant is awarded, the City will complete CEQA review for each as follows:
The City Council awarded a design contract for Fire Station 2 in December 2023 (RTC 23-1056). The project scope included designing for the solar and all-electric elements included in the PFRIP grant application, as well as assessment of CEQA needs and CEQA exemption documentation if appropriate. If the assessment concludes that an Initial Study (IS) and/or Mitigated Negative Declaration (MND) are appropriate, that environmental review work was included in the project scope as an optional service. The CEQA determination will be brought to the City Council for approval prior to starting final design.
On August 23, 2016, the City Council certified the Program Environmental Impact Report for the Sunnyvale Water Pollution Control Plant Master Plan (Master Plan PEIR). The project design includes most of the components proposed for funding through the PFRIP grant application. The current design does not include solar panels, but it is designed to be “solar ready” so that panels could be added later if funding became available. Therefore, no new impacts that were not previously analyzed in the Master Plan PEIR are anticipated from implementing the elements proposed to be funded by the PFRIP project.
DISCUSSION
The total amount requested in the grant application is $49,999,997 with $3,606,777 million allocated for projects in Sunnyvale, supporting the electrification of Fire Station 2 and the Cleanwater Center. At Fire Station 2, $1,992,672 is budgeted for the solar plus battery backup storage for microgrid systems, electric heating, ventilation and air conditioning (HVAC) systems, electric heat pump water heaters, induction cooktops and electric vehicle charging station to support future electric fire equipment. For the Cleanwater Center, $1,340,100 is budgeted for the installation of solar panels, plus the electrification of the administration building. Across both projects, $274,005 of the funding will reimburse staff time for grant administration. The grant administration reimbursements are intended to offset staff time for the ESD staff coordinating the grant reports, check-ins and reimbursement requests as well as the DPW staff time gathering information and data for the reports and reimbursement requests. The staff time estimates are based on previous experience with grant reporting in the two departments.
EPA requires all coalition members to sign the MOA by June 30, 2024. SVCE (as the coalition lead) will submit the final signed MOA by July 1, 2024. The EPA anticipates announcing its selection decisions by July 2024 and tentatively plans to issue awards by October 2024. The MOA provides documentation that the PFRIP coalition members have consulted with each other and are committed to fulfilling their respective roles and responsibilities to successfully implement the GHG reduction measures described in the application.
The purpose of this MOA is to establish:
• The obligations and responsibilities of each Party for the management and operation of the PFRIP.
• Agreed upon roles, responsibilities, and commitments made by each Party to ensure PFRIP success aligned with overall PFRIP goals, objectives, and target outputs.
• An operating model for the Parties.
• How the collaboration and partnerships associated with the Parties will benefit the PFRIP (as described in Exhibit A).
• The resources each Party will contribute to the PRFIP (as described in Exhibit B).
The EPA has the right to respond to the signed MOA with more stringent project requirements and amendments. If this occurs, SVCE and the PFRIP coalition members are prepared to assess the feedback, negotiation and execution information, and determine the best course of action as a coalition.
If awarded, the PFRIP Workplan is expected to initiate with a grant award by October 1, 2024, and complete five years later by September 30, 2029. If changes in the project scope, timelines, budgets, and/or project costs occur during implementation of the grant, the coalition members may submit a request to the EPA to modify the scope, timeline, costs, etc. Staff also requests Council’s authorization for the City Manger to approve project changes and execute such change requests if the grant is awarded.
FISCAL IMPACT
There is no local match required for this grant and the grant is reimbursement-based. The EPA will fully fund grant awards at the start of the grant period. Funds from the EPA will be awarded to SVCE. SVCE will establish the Public Facility Resiliency Fund (Fund) ensuring timely project reimbursement and distribution of the Fund to the Coalition’s members for use in the PFRIP.
The City does run some risk of cost overruns and increased project costs for Federal requirements applied to the project. While the grant doesn’t require a local match it does not guarantee full reimbursement for the building features included in the grant. These building features were selected to reduce energy consumption and should result in long-term savings to the City, so in staff’s view, the benefits of the grant outweigh the risks.
Staff will come back to Council with a budget modification to accept the funds (anticipated to be $3,606,777), if and when awarded.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
Additional public contact was made by requesting letters of support from Sunnyvale Neighborhood Associations adjacent to the two Sunnyvale projects, the Santa Clara County Fire Chiefs’ Association, Leadership Sunnyvale and the Sunnyvale Downtown Association.
RECOMMENDATION
Recommendation
Authorize the City Manager to (1) Execute the Memorandum of Agreement with Silicon Valley Clean Energy for the Environmental Protection Agency (EPA) Climate Pollution Reduction Grant Public Facility Resilience Implementation Program in substantially the same format as attached, and (2) Approve Project Scope Revisions necessitated by Project Funding, Budget or Bid Changes and Submit Scope Change Requests to the EPA as needed during implementation of the grant.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $250 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
A check or “Y” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract
___ Labor or personal employment contract
_x_ General policy and legislative actions
Staff
Prepared by: Christina Raby, Environmental Engineering Coordinator
Reviewed by: Ramana Chinnakotla, Director, Environmental Services
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. EPA Climate Pollution Reduction Grant Application for the Public Facility Resiliency Implementation Project (PFRIP)
2. PFRIP MOA
3. Exhibit A - Grant Narrative
4. Exhibit B - Consolidated Budget