Meeting Date: April 16, 2025
To: Members of the Environmental Quality Commission
From: Risi Karim, Assistant to the City Administrator
Title
Annual Report of Carbon Reduction Fund (2024).
Body
Action Requested:
Commission receives the Annual Report of the Carbon Reduction Fund (2024).
Summary Report:
The Carbon Reduction Fund was started in 2021 to assist with implementation of items outlined in the Climate Action Plan related to carbon based fuel sources. The Carbon Reduction Fund allocates a certain percentage of the City Franchise Fee Program, a program in which Xcel Energy collects monthly payments from utility subscribers and provides those payments to the City, which is used to fund Capital Improvement Projects.
The City of Northfield collects quarterly payments from Xcel Energy and deposits a portion of those dollars into the Carbon Reduction Fund. The amounts of these quarterly payments are dependent on the franchise fees but are generally between $10,000 and $25,000. The total amount collected in one calendar year is not to exceed $100,000.
In 2024 the Carbon Reduction Fund received $99,705.06 in revenue from franchise fees
Budget balance and expenditures for 2024 are listed below:
2024 Beginning Budget Balance - $169,570.83
2024 Expenditures
Professional Services
$3,719.75 Sustainable Building Policy- CEE/LHB
$19,920 District Energy Study - Ever Green Energy
$ 999 Shred Right- City Wide Shred Event (Earth Day)
Programs & Public Services
$500 Northfield Earth Day Sponsorship
$3,500 River Bend Nature Center, INC- Master Recycler/Compost Program
$135* Polish Delegation Visitor Luncheon
$260 Printing & Marketing Material - By All Means Graphic
(Green Book, EE Rebate Post Card, No Mow May Signage)
* The City was reimbursed $260 toward the total luncheon cost of $395.97.
Transfer Out
$11,171 HRA rebate reimbursement - Residential Energy Efficiency
$40,205.72 Total Expense
$99,705.06 Total Revenue
$243,110.75* 2024 End Balance
*End balance includes $14,557.38 revenue earned from market investment and interest
The Climate Action Plan highlights project options that would best align with the city’s goal to reach 100% carbon-free electricity by 2030 and creating a 100% carbon-free community by 2040. In order to fund some of the strategies in the Climate Action Plan, especially those focused on carbon sequestration, the Carbon Reduction Fund allows for an alternative source of revenue for projects without additional burden on the general operating fund.
Other Related Expenses to come from the CRF:
• Energy Efficiency Processing: $10,000 is reserved annually to process rebate applications through the Energy Efficiency Program (HRA). These funds are covered by the HRA budget and reimbursed by the Carbon Reduction Fund.
• Climate Champion Program: Beginning in 2025, $15,000 will be allocated annually for the Climate Champion Program for Northfield businesses. These funds are provided by the EDA and reimbursed by the Carbon Reduction Fund.
• Tree Planting & Maintenance: Funds may be used to supplement existing tree planting grants, enhance ongoing projects, or support Emerald Ash Borer management efforts.
• NPSD Geothermal Feasibility Study: The City Council authorized $25,000 from the Carbon Reduction Fund to support the Northfield School District’s study on the feasibility of a geothermal system for Northfield High School.
• Solar Rooftop Project: The NCRC solar rooftop project faces a potential funding shortfall due to uncertainty around federal tax credits. The City may need to cover the 40% funding gap, estimated at $48,000.
• Sustainable Building Policy Support: LHB provides technical assistance to developers, builders, and City staff to implement the Sustainable Building Policy.
• Education & Marketing: Funds support outreach efforts for the Carbon Reduction Fund and Energy Efficiency Rebates.
• Electric Vehicle & Charging Infrastructure: $40,000 is set aside for a Level 2 or 3 charging station at the new Ice Arena and to support the City’s transition to an electric vehicle fleet.
• Earth Day Sponsorship: Funds support Northfield’s Earth Day event and related activities.
• Rice County Habitat for Humanity Weatherization Program: The City will provide financial assistance of $150 per household to support up to 32 households, with a total budget of $5,000. This initiative enhances energy efficiency and home safety for Northfield residents.
Alternative Options:
N/A
Financial Impacts:
N/A
Tentative Timelines:
N/A