City Council Meeting Date: May 7th, 2024
To: Honorable Mayor & City Council
From: Risi Karim, Assistant to the City Administrator
Title
Annual Report of Carbon Reduction Fund (2023).
Body
Action Requested:
City Council receives the Annual Report of the Carbon Reduction Fund (2023).
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 $24,000 and $25,000. The total amount collected in one calendar year is not to exceed $100,000.
In 2023 the Carbon Reduction Fund received $94,459.33 in revenue from franchise fees
Budget balance and expenditures for 2023 are listed below:
2023 Beginning Budget Balance - $131,964.10
2023 Expenditures
Professional Services
$10,018.25 Sustainable Building Policy- CEE/LHB
$27,280 District Energy Study - Ever Green Energy
$20,000 City Hall Charging Station Infrastructure - Guth Electric, INC
$ 900 City Attorney Services - Flaherty & Hood
Programs & Public Services
$500 Northfield Earth Day Sponsorship
$2,281.80 Printing & Marketing Material - By All Means Graphic
(Green Book, EE Rebate Post Card, No Mow May Signage)
Transfer Out
$5,611.11 HRA rebate reimbursement - Residential Energy Efficiency
$66,591.17 Total Expense
$94,459.33 Total Revenue
$169,570.83* 2023 End Balance
*End balance includes $9,738.87 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.
In 2023, the City commissioned a District Energy study facilitated by Ever Green Energy. A District Energy system is a centralized heating and/or cooling network that provides thermal energy to multiple buildings or facilities within a geographic area, such as a neighborhood, campus, or downtown district. The system is designed to distribute hot water, steam, or chilled water to individual buildings through a network of underground pipes, eliminating the need for each building to have its own separate heating and cooling equipment. As planning for the downtown riverfront redevelopment continue, staff sees this as a momentous opportunity to explore integrating a district energy system alongside the redevelopment
As part of the City’s Climate Action Plan, the City has begun the transition of city fleet into electric and/or hybrid vehicles. Infrastructure at City Hall has been installed to accommodate up to 8 charging station for future city owned EV’s. Though permits have been acquired for 8 EV chargers only 1 has been installed, more will come online in the coming years as City vehicles are transitioned to all electric and or hybrid. The charging stations however, will be for City owned vehicles only and not open to the public.
Other Related Expenses to come from the CRF:
• Funds are reserved annually to process rebate applications through the Energy Efficiency Program (HRA). These funds are paid by the HRA budget and reimbursed by the Carbon Reduction Fund.
• Tree planting/maintenance expenses. Funds may be used to provide some match or enhance the amount of work that can be done with current tree planting grant or to support work around Emerald Ash Borer management.
• Modeling and planning for clean energy transition options with Nokomis Energy.
• Sustainable Building Policy technical service provider through LHB. LHB provides assistance to guide developers, builders and City staff.
• Education and marketing of the Carbon Reduction Fund and Energy Efficiency Rebates
• Reserve fund set aside for electric charging stations and electric vehicle fleet transition.
• Sponsorship of Northfields Earth Day event & activities
Alternative Options:
N/A
Financial Impacts:
N/A
Tentative Timelines:
N/A