REPORT TO COUNCIL
SUBJECT
Title
Approve Actions Related to Providing Administrative Support to the Silicon Valley Clean Energy Authority and Budget Modification No. 31, and Find that Action is Exempt from CEQA Pursuant to CEQA Guidelines Sections 15378(b)(4) and 15378(b)(5)
Report
BACKGROUND
On December 15, 2015, the Sunnyvale City Council unanimously approved the actions required to form and participate in the Silicon Valley Clean Energy Authority (SVCEA). The Authority, once established, will operate a Community Choice Energy (CCE) program to pool the electricity demand within the twelve participating jurisdictions to directly procure or generate electrical power supplies on behalf of their residents and businesses.
The December 2015 report to Council detailed the next steps for forming SVCEA and the early operational steps to develop and launch a CCE program. The report discussed that early staffing of SVCEA would come from a mix of consultant support and local agency staff. As part of the December report, staff was directed to return to Council with a proposal to provide interim project and/or staffing support to SVCEA via a separate services agreement.
EXISTING POLICY
Climate Action Plan, Provide a Sustainable Energy Portfolio (EP), Reduction Measure EP-1.1: Create or join a community choice aggregation (CCA) program to take control of power generation for city residents and businesses
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” with the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines sections 15378(b)(4) and (5) in that it is a governmental fiscal, organizational or administrative activity that will not result in direct or indirect changes in the environment.
DISCUSSION
The existing CCE programs in California have launched by leveraging local member agency staff and consultant support in the early months and bringing on permanent staff as the CCE agency develops its operating model, processes, and capacity. This transitional support has typically been provided by the single agency that sponsored and led initiation of the CCE agency. For SVCEA, it was a multi-jurisdictional partnership (among Sunnyvale, Cupertino, Mountain View, and the County of Santa Clara) that sponsored the formation of SVCEA. Similarly, these agencies are envisioned to contribute to early transitional support for SVCEA.
Executive staff members from the sponsoring agencies have convened to identify the functional needs of SVCEA during the transitional period and the support to be provided by the sponsoring agencies. Principal leadership of SVCEA will be provided by a Chief Executive Officer. This position will be a contract, interim position in the early months with the Board of Directors determining the timing and approach for recruiting a permanent CEO. The other transitional functions and contributing resources are summarized below:
|
Function |
Resources |
|
Leadership |
Interim CEO via contract |
|
Operations and Planning |
City of Sunnyvale and consultant support |
|
Communications and Stakeholder Engagement |
City of Cupertino and consultant support |
|
Legal Services |
Consultant support |
|
Technical Services |
Consultant support |
|
Finance and Accounting |
City of Sunnyvale (fiscal agent) City of Mountain View (financing planning) |
|
Human Resources |
City of Cupertino |
|
Board of Director Meeting Host |
County of Santa Clara Clerk services (part-time via contract or member agency) |
|
Regulatory Advocacy |
Interim CEO with consultant support and partnering with other CCE programs. |
Sunnyvale is proposed to continue to provide key operational and financial management support similar to what it has provided during the previous phase of partnership. Finance staff would serve as Treasurer for SVCEA and provide accounting services including receiving deposits, disbursing funds and paying invoices, and tracking budget and expenditures. Environmental Services staff would serve as operational support including coordination of Board packets, drafting consultant services scopes, developing initial work plans, developing administrative protocols, and leading coordination across functions. Office space for two personnel (including the CEO) is being made temporarily available at ESD’s space at the Sunnyvale Office Center. In addition, ESD would coordinate with other departments as needed to provide limited, broad spectrum support such as email, telecommunications, meeting clerk services, and advice on administrative matters. The agreement will be for a term of six months with an option to extend the term for up to one year, and the scope will include flexibility so that services can adjust as SVCEA’s leadership and operation evolves.
The inaugural meeting of the Board of Directors is scheduled for April 13, 2016, with the first agenda packet to be distributed on April 8. The administrative services agreement between SVCEA and the City of Sunnyvale is among the agreements to be presented for Board consideration at the April meeting.
FISCAL IMPACT
There is no fiscal impact to this recommendation. Services provided to SVCEA by the City of Sunnyvale are to be on a cost-recovery basis with reimbursement anticipated to occur monthly. Impacts to staffing resources will continue to be absorbed, with ESD continuing to make this program a top priority and balancing other sustainability and regulatory program priorities accordingly.
The initial operating budget for SVCEA is $2.05M which is being funded by contributions from the member agencies as required by and outlined in the SVCEA Joint Powers Agreement Exhibit E (Attachment 1 to this report). Sunnyvale’s share of those contributions for future work is $350,000. This is in addition to the $170,000 that Sunnyvale contributed to the four-agency sponsoring partnership that conducted the early feasibility phase work to establish SVCEA. This included $20,000 for the preliminary assessment and $150,000 for the completion of Phase 1 - the Technical Study phase. The total $520,000 contributed by Sunnyvale is reimbursable by SVCEA should a CCE program be launched; the term of reimbursement is within four years.
In addition, staff is recommending Budget Modification No. 31 to complete appropriation of funds for the previous phase and next phase of start-up of SVCEA. The FY 2015/16 Budget includes $600,000 in Project 830990 - Community Choice Aggregation, which accounts for Sunnyvale’s $150,000 share of the earlier Phase 1 start-up costs and $350,000 for JPA. An additional appropriation is needed to expend both Sunnyvale’s and the three sponsoring partner’s contributions to the earlier feasibility work, totaling $600,000 for Phase 1 (managed within the General Fund) and $2.05M for SVCEA start-up (managed as a separate Agency Fund). Budget Modification No. 31 has been prepared to complete this second appropriation action.
Budget Modification No. 31
Fiscal Year 2015/16
|
|
Current |
Increase (Decrease) |
Revised |
|
General Fund |
|
|
|
|
Revenues: |
|
|
|
|
Contributions from Partner Agencies for Phase 1 |
$0 |
$450,000 |
$450,000 |
|
Expenditures: |
|
|
|
|
Project 830990 - Community Choice Aggregation (for Phase 1) |
$612,680 |
($150,000) |
$465,680 |
|
New Project - Community Choice Energy Phase I |
$0 |
$600,000 |
$600,000 |
|
Project 830990 - Community Choice Aggregation (for Sunnyvale Share of SVCEA Start-up) |
$465,680 |
($350,000) |
$115,680 |
|
Silicon Valley Clean Energy Agency Fund |
|
|
|
|
Revenues |
|
|
|
|
Contributions from Partner Agencies for start-up |
$0 |
$1,700,000 |
$1,700,000 |
|
Sunnyvale share for Start-up |
$0 |
$350,000 |
$350,000 |
|
Expenditures |
|
|
|
|
New Project - Silicon Valley Clean Energy Agency Start-up |
$0 |
$2,050,000 |
$2,050,000 |
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, at the Sunnyvale Senior Center, Community Center and Department of Public Safety; and by making the agenda and report available at the Sunnyvale Public Library, the Office of the City Clerk and on the City's website.
STAFF RECOMMENDATION
Recommendation
1) Authorize the City Manager to negotiate and execute a services agreement with the Silicon Valley Clean Energy Authority to provide staffing and administrative support; and 2) Approve Budget Modification No. 31 to support funding the earlier feasibility phase and the start-up of SVCEA.
This action will facilitate Sunnyvale’s support of the successful launch of the Silicon Valley Clean Energy Authority.
Prepared by: Melody Tovar, Regulatory Programs Division Manager
Reviewed by: John Stufflebean, Director, Environmental Services
Reviewed by: Timothy J. Kirby, Acting Director, Finance
Reviewed by: Kent Steffens, Assistant City Manager
Approved by: Deanna J. Santana, City Manager
ATTACHMENT
1. SVCEA JPA Agreement Exhibit E - Funding of Initial Costs