STAFF REPORT
Operations Committee, November 5, 2009

Appropriation of Energy Efficiency and Conservation Block Grant Funds (AD10-006)
Consideration of appropriating funding to accounts for expenditure on energy efficiency and conservation
Speaker:  Ms. Lana Hygh

From:  Benjamin T. Shivar, Town Manager
Prepared by:  Lana Hygh, Assistant to the Town Manager
Approved by:  Benjamin T. Shivar, Town Manager
Approved by:  Michael J. Bajorek, Assistant Town Manager

Executive Summary:  The Town received $1,166,800 in Energy Efficiency and Conservation Block Grant funds.  Staff recommends appropriating these funds for expenditure on energy efficiency and conservation projects and for the sustainability manager position.

Discussion:  The American Recovery and Reinvestment Act of 2009 (ARRA) was signed by President Obama on February 17, 2009.  This $787 billion stimulus package included $3.2 billion for the Energy Efficiency and Conservation Block Grant program (EECBG).  This program was created in December 2007, but was not funded until the ARRA.  The Town of Cary was eligible for an allocation of $1,166,800.  The Town’s application and strategy were approved on September 23 and the funds have been received.  To make these funds available for expenditure on energy efficiency and conservation projects, they must first be recognized and appropriated by Council.  To help execute the program, specific capital projects and a new division in the town manager’s office have been established.

Fiscal Impact:  The grant funding will be available for energy efficiency and conservation projects within the Town of Cary.  The salary of the sustainability manager will initially be funded by grant funds until the total expenditure reaches the grant administrative cap of 10% ($116,680).  Based on the anticipated hiring salary of $65,000 annually, this salary funding portion of the grant will last approximately 21 ½ months.  After this time, the Town will be responsible for funding the salary of the position.  All benefits, supplies, and equipment for this position are the Town’s responsibility.  These costs are expected to total approximately $18,790 per year for benefits and $5,000 per year for operating expenses related to supporting this position.

Staff Recommendation:  Staff recommends:

• Recognizing $1,050,120 in EECBG grant funding and appropriating these funds to the revenue account 069-0000-334-1013 for expenditure as necessary within the following capital projects:
 
        GG1087     EECBG-Emissions Inventory                 $  25,000
        GG1088     EECBG-Energy Audit & Improvements     470,120
        GG1089     EECBG-Alternative Fuel Vehicles            100,000
        GG1090     EECBG-LED Street Lighting                     35,000
        GG1091     EECBG-Brooks Park Field Lighting         400,000
        GG1092     EECBG-Charging Stations                        20,000

• Recognizing $116,680 in EECBG grant revenue and appropriating the same amount to the permanent salary account within the administration department of 010-4240-511.02-01.  It is expected that the hiring salary for this position will be approximately $65,000 per year.  Since this position is expected to be hired January 1, 2010, significantly less than this amount will be needed in FY2010.  All remaining funds at the end of FY2010 will be rolled over to the FY2011 budget, and likewise to the FY2012  budget for permanent salary expenditures provided through the grant.

• Appropriating $9,319 (FICA=$2,466; Retirement = $1,570; 401/K = $1,612; Health Insurance = $3,671) to the benefits accounts for this position corresponding to an anticipated hire date of January 1, 2010.  This increase will be offset by a reduction in the interest expense appropriation in the general fund by $9,319 that is available due to lower than expected variable rate interest expense thus far this year.

• Appropriating $5,000 to the operating and maintenance accounts for expenses related to this position (furniture and equipment = $1,925; phone = $420; supplies = $1,240; training and travel = $500; contracted services = $915).  This increase will be offset by a reduction in the interest expense appropriation in the general fund by $5,000 that is available due to lower than expected variable rate interest expense thus far this year.

• Staff further recommends that Council provide authority to staff to reallocate funding between these projects and operating accounts as costs and programs become more definitive.