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VII.2. Resolution Conditionally Approving Memorandum of Agreement Regarding the Climate Pollution Reduction Grant; Larson CITY OF HOPKINS City Council Report 2024-077 To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Mikala Larson, Sustainability Specialist Date: June 11, 2024 Subject: Resolution Conditionally Approving Memorandum of Agreement Regarding the Climate Pollution Reduction Grant _____________________________________________________________________ RECOMMENDED ACTION MOTION TO conditionally approve Memorandum of Agreement regarding the Climate Pollution Reduction grant OVERVIEW The City of Hopkins, as part of a coalition of cities with the City of Minneapolis as the lead applicant, submitted a grant application to the EPA’s Climate Pollution Reduction Grant to propose a Twin Cities Commercial Energy Efficiency (TCEE) program. If awarded, the program would create additional resources to decarbonize commercial buildings in our community through electrification. As the lead applicant, the City of Minneapolis would disburse funds to coalition partners to administer this program. The City of Hopkins has an existing green cost share program, the Hopkins Climate Solutions Fund, which allows for a seamless flow of funds from the proposed TCEE to eligible commercial entities, scaling up efforts in these program areas. A response from EPA on the status of the funding award is expected in June 2024. The cities and organizations in the coalition must sign and submit a Memorandum of Agreement to the EPA by July 1, 2024. The City of Hopkins’ legal team reviewed the draft Memorandum of Agreement and provided comments. City staff included information on this program during the May 7, 2024 Sustainability Update to City Council. SUPPORTING INFORMATION • Resolution • Memorandum of Agreement • Project Narrative • Letter of Intent Engineering CITY OF HOPKINS HENNEPIN COUNTY, MINNESOTA RESOLUTION 2024-041 RESOLUTION CONDITIONALLY APPROVING MEMORANDUM OF AGREEMENT REGARDING THE CLIMATE POLLUTION REDUCTION GRANT WHEREAS, the City of Minneapolis has recently proposed that the City of Hopkins (the “City”) enter into a Memorandum of Agreement Regarding the Climate Pollution Reduction Grant (the “Agreement”); and WHEREAS, other prospective parties to the Agreement include the Cities of Minneapolis, Saint Paul, Bloomington, Burnsville, Eagan, Eden Prairie, Edina, Hopkins, Inver Grove Heights, Richfield, Roseville, Saint Louis Park, as well as the Midway Chamber of Commerce, the African Economic Development Solutions, the Lake Street Council, and Energy Smart (the “Prospective Parties”); and WHEREAS, under the Agreement, the City of Minneapolis would apply to the United States Environmental Protection Agency for a Climate Pollution Reduction Grant (the “Grant”) for funding similar to its current Green Cost Share Program; and WHEREAS, under the Agreement, the Prospective Parties would form a coalition of local governments and nonprofits from the Twin Cities Metropolitan Area to distribute the Grant funding to eligible businesses, property owners, nonprofits and government organizations for commercial energy efficiency improvements and projects (the “Project”); and WHEREAS, the Agreement and the Project are detailed more extensively in a Project Narrative provided to the City Council; and WHEREAS, the Agreement and the Project Narrative has been reviewed by the City Attorney, who has provided comments to City staff about finalizing and executing the Agreement; and WHEREAS, Minneapolis has provided a deadline for the execution of the Agreement of July 1, 2024; and WHEREAS, the City has cancelled its second meeting during June 2024 and does not meet again until Tuesday, June 9, 2024, which is after the deadline for the Grant; and WHEREAS, given the impending deadline, the City Attorney and City staff recommend that the City Council provide conditional approval of the Agreement as stated below; and NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Hopkins hereby approves the Agreement subject to the following conditions: 1. That the above recitals are incorporated into this Resolution as findings as if fully set forth herein. 2. City staff and consultants are hereby authorized and directed to take any other actions deemed reasonable and necessary to carry out the intent of this Resolution. 3. The Mayor and the City Manager are hereby authorized and directed to execute and deliver the Agreement. All of the provisions of the Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Agreement shall be substantially in the forms on file with the City, which are hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the Mayor and the City Manager, in their discretion, shall determine, and the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determination. Adopted by the City Council of the City of Hopkins this 11th day of June, 2024. By:___________________________ Patrick Hanlon, Mayor ATTEST: _______________________________ Amy Domeier, City Clerk 1 MEMORANDUM OF AGREEMENT BETWEEN THE CITY OF MINNEAPOLIS, MINNESOTA, THE CITY OF ST. PAUL , MINNESOTA, THE CITY OF BLOOMINGTON, MINNESOTA, THE CITY OF BURNSVILLE, MINNESOTA, THE CITY OF EAGAN, MINNESOTA, THE CITY OF EDEN PRAIRIE, MINNESOTA, THE CITY OF EDINA, MINNESOTA, THE CITY OF HOPKINS, MINNESOTA, THE CITY OF INVER GROVE HEIGHTS, MINNESOTA, THE CITY OF RICHFIELD, MINNESOTA, THE CITY OF ROSEVILLE, MINNESOTA, THE CITY OF ST. LOUIS PARK, MINNESOTA, THE MIDWAY CHAMBER OF COMMERCE, THE AFRICAN ECONOMIC DEVELOPMENT SOLUTIONS, THE LAKE STREET COUNCIL, AND ENERGY SMART 2 REGARDING THE CLIMATE POLLUTION REDUCTION GRANT TWIN CITIES COMMERCIAL ENERGY EFFICIENCY COLLABORATION 3 PREAMBLE WHEREAS, the Minnesota Cities of Minneapolis, St. Paul, Bloomington, Burnsville, Eagan, Eden Prairie, Edina, Hopkins, Inver Grove Heights, Richfield, Roseville and St. Louis Park, the Midway Chamber of Commerce, the African Economic Development Solutions, the Lake Street Council, and Energy Smart seek to form a coalition of local governments and nonprofits from the Twin Cities Metropolitan area to provide grant funding to eligible businesses, property owners, nonprofits and government organizations through a program built on the foundation of success Minneapolis has had with the Minneapolis Green Cost Share program; and WHEREAS, with the funding made available through the Climate Pollution Reduction Grant recently awarded to several Minnesota units of government the participating Minnesota cities that are parties to this agreement will expand the Green Cost Share program to those parties by providing program dollars to support Green Cost Share programs in those cities; and WHEREAS, the Minnesota Cities of Minneapolis, St. Paul, Bloomington, Burnsville, Eagan, Eden Prairie, Edina, Hopkins, Inver Grove Heights, Richfield, Roseville and St. Louis Park are authorized to work cooperatively pursuant to the authority contained in Minnesota Statutes § 471.59, commonly known as the Joint Powers Act. NOW, THEREFORE, the Minnesota Cities of Minneapolis, St. Paul, Bloomington, Burnsville, Eagan, Eden Prairie, Edina, Hopkins, Inver Grove Heights, Richfield, Roseville and St. Louis Park enter into this Memorandum of Agreement and agree as follows: I. SCOPE OF THIS MEMORANDUM OF AGREEMENT The parties to this Memorandum of Agreement (“MOA” or “Agreement”) agree: a. That the City of Minneapolis will cooperate with the other parties to provide grant funding to establish commercial energy efficiency efforts such as Green Cost Share Programs or to provide existing Green Cost Share programmatic assistance through funding received from the United States Environmental Protection Agency Climate Pollution Reduction Grant. b. To work cooperatively with existing implementation partners of City of Minneapolis including Energy Smart, the Lake Street Council, African Economic Development Solutions and the Midway Chamber of Commerce. c. To actively promote the program to business and property owners in their community. d. To collaborate with Black, Indigenous, People of Color and Immigrant (BIPOCI) community organizations to help promote the opportunities. e. To participate in four annual meetings of this coalition. 4 f. To s hare information with local, state, and federal program staff as part of program development and to improve programming and results over time. g. To educate eligible commercial participants on all other details of this collaboration by providing the program details contained in the Project Narrative of the CPRG Twin Cities Commercial Energy Efficiency Collaboration (attached as Exhibit A). Exhibit A is for reference only and is not part of the parties’ agreement herein. II. PARTICIPATING PARTIES’ RESPONSIBILITIES The Minnesota cities that are parties to this Agreement agree that they are accountable to the City of Minneapolis and accept full responsibility for effectively carrying out the full scope of work and the proper financial management of the program. III. GOVERNMENT DATA The parties acknowledge that this Agreement, as well as any data created, collected, stored, or maintained under the terms of this Agreement, are “Government Data” within the meaning of the Minnesota Government Data Practices Act (MGDPA) (Minnesota Statutes chapter 13). The civil remedies of Minn. Stat. §13.08 apply to the release of the data governed by the MGDPA. IV. CONTACTS The primary contacts of each party to this Agreement are: City of Minneapolis: Patrick Hanlon Deputy Commissioner: Sustainability, Healthy Homes, and Environment Patrick.Hanlon@minneapolismn.gov 612-716-0873 City of Saint Paul: Russ Stark Chief Resilience Officer Russ.stark@ci.stpaul.mn 651-324-2807 City of Bloomington: Emma Struss Sustainability Coordinator estruss@Bloomingtonmn.gov 952-563-4862 5 City of Burnsville: Bridget Rathsack Sustainability Coordinator Bridget.Rathsack@burnsvillemn.gov 952-895-4524 City of Eagan: Gillian Catano Sustainability Coordinator gcatano@cityofeagan.com 651-675-5518 City of Eden Prairie: Jennifer Fierce Sustainability Coordinator jfierce@edenprairie.org (952) 949-8313 City of Edina: Marisa Bayer Sustainability Manager MBayer@EdinaMN.gov 952-826-1621 City of Hopkins: Mikala Larson Sustainability Specialist mlarson@hopkinsmn.com 952-548-6368 City of Inver Grove Heights: Ally Sutherland Environmental Specialist asutherland@ighmn.gov 651-604-8511 City of Richfield: Rachel Lindholm Sustainability Specialist rlindholm@richfieldmn.gov 612-861-9188 6 City of Roseville: Noelle Bakken Sustainability Specialist Noelle.bakken@cityofroseville.com 651-792-7057 City of St. Louis Park: Emily Ziring Sustainability Manager EZiring@stlouisparkmn.gov 952-924-2191 The Midway Chamber of Commerce: Chad Kulas Executive Director chad@midwaychamber.com 651-646-2636 The African Economic Development Solutions: Dr. Gene Gelgelu Founder, President, CEO ggelgelu@aeds-mn.org 651-646-9411 x.101 The Lake Street Council: Matt Kazinka Senior Strategic Initiatives Manager mkazinka@lakestreetcouncil.org 612-823-0096 Energy Smart: Patrick Deal Program Manager pdeal@mnchamber.com 651-292-3902 The parties agree that if there is a change regarding the information in this section, the party making the change will notify the other party in writing of such change. V. RESOLUTION OF DISAGREEMENTS Should disagreement arise on the interpretation of the provisions of this MOA, or amendments and/or revisions thereto, that cannot be resolved at the operating level, the area(s) of disagreement shall be stated in writing by each party and presented to the other parties for 7 consideration. If agreement on interpretation is not reached within thirty (30) days, the parties shall forward the written presentation of the disagreement to their respective higher officials for appropriate resolution. VI. LIABILITY Each party agrees that it will be responsible for its own acts and the results thereof to the extent authorized by law and shall not be responsible for the acts of the other party and the results thereof. Subject to the limitations of Minnesota Statutes sections 466.01 to 466.15 and other applicable law, every municipality is subject to liability for its torts and those of its officers, employees and agents acting within the scope of their employment or duties whether arising out of a governmental or proprietary function, in accordance with Minn. Stat. §466.02. VII. EFFECTIVE DATE OF THE AGREEMENT AND AGREEMENT AMENDMENT This Agreement will become effective for each respective party when that party signs the Agreement. This Agreement may be amended only by written agreement of all the parties. VIII. TERMINATION OF AGREEMENT This agreement will terminate upon written notice of the final close out report that the City of Minneapolis will submit to the parties or seven (7) years from the effective date of this Memorandum of Agreement. The foregoing notwithstanding, any party may withdraw from this agreement upon ninety (90) days notice to the other parties. BY THEIR SIGNATURES, THE UNDERSIGNED REPRESENT THAT THEY HAVE THE AUTHORITY TO BIND THE PARTIES THEY REPRESENT. (Official Signature Blocks of Each City Pursuant to their Contracting and Procurement Policies) THE CITY OF MINNEAPOLIS, MINNESOTA THE CITY OF SAINT PAUL, MINNESOTA THE CITY OF BLOOMINGTON, MINNESOTA THE CITY OF BURNSVILLE, MINNESOTA THE CITY OF EAGAN, MINNESOTA THE CITY OF EDEN PRAIRIE, MINNESOTA 8 _____________________________ Public Works Director, City of Eden Prairie THE CITY OF EDINA, MINNESOTA THE CITY OF HOPKINS, MINNESOTA THE CITY OF INVER GROVE HEIGHTS, MINNESOTA THE CITY OF RICHFIELD, MINNESOTA THE CITY OF ROSEVILLE, MINNESOTA THE CITY OF ST. LOUIS PARK, MINNESOTA THE MIDWAY CHAMBER OF COMMERCE THE AFRICAN ECONOMIC DEVELOPMENT SOLUTIONS THE LAKE STREET COUNCIL ENERGY SMART Page 1 of 17 Project Narrative of the CPRG Twin Cities Commercial Energy Efficiency Collaboration City of Minneapolis – Lead Applicant Project Summary and Approach: The City of Minneapolis will lead a coalition of local governments from the Twin Cities Metropolitan area to provide grant funding to eligible businesses, property owners, nonprofits and government organizations through a program built on the foundation of success Minneapolis has had with the Minneapolis Green Cost Share program. Minneapolis has been operating a Green Cost Share Program since 2013 and has recently scaled up its program with local funding. However, Minneapolis is one of only a few of cities in the Twin Cities Metropolitan area that have a program to assist business and property owners with energy efficiency and renewable energy investments. With the help of the CPRG grant we will be able to provide an already tested and true program to 11 other cities in the metropolitan area. These cities have committed local dollars to hire sustainability staff but do not have substantial program dollars to support an independent cost share program of their own. This grant will provide program dollars to those cities that have started a cost share program, help establish a cost share program in St. Paul and provide a turnkey program to other cities who would like to participate but are but are not interested in starting their own cost share program. Project Partners: The City of Minneapolis will partner with the cities of Bloomington, Burnsville, Eagan, Eden Prairie, Edina, Hopkins, Inver Grove Heights, Richfield, Roseville, St. Louis Park and St. Paul, Minnesota. These cities have existing sustainability staff and would participate by reaching out to local business and property owners in their community. Our implementations partners include Energy Smart, the Lake Street Council, the African Economic Development Solutions, and the Midway Chamber of Commerce. Bloomington, Burnsville, Eden Prairie, Eagan, Inver Grove Heights, Richfield, and Roseville would like to have a turnkey Commercial Energy Efficiency program in their city that would bring the benefits of an incentive program to their community without the expense of hiring new staff, developing a standalone program, and securing program funding. Edina, Hopkins, and St. Louis Park, already have a cost share program and the staff to manage it but have limited program dollars. These cities would receive the audit and utility rebate technical assistance from Energy Smart but review and distribute their own cost share funding. St. Paul will use funding to increase their climate staff capacity which will help them continue (leverage?) incentive funding with local or other dollars after the CPRG grant funds have been fully expended. With new staff in place St. Paul would also manage, review, and distribute funds while receiving technical assistance support from Energy Smart and other partners. Cities will participate in the proposed work through active engagement in developing and refining programming to effectively deliver on the purpose of ensuring low-income and disadvantaged communities are centered and prioritized in the work of decarbonizing business, industrial? (see below), nonprofit and government-owned properties in the participating cities. At a minimum, this means the coalition cities will: • Actively promote the program to business and property owners in their community Page 2 of 17 • Collaborate with Black, Indigenous, People of Color and Immigrant (BIPOCI) community organizations to help promote the opportunities • Participate in the four annual convenings • Share information from the communities we serve to local, state, and federal program staff as part of program development and to improve programming and results over time • Contribute in specific ways that emerge out of the development of the proposed work and make sense for our organization • Commit to signing on to a MOA with Minneapolis no later than July 1, 2024 How the Program will Work – Ensuring Benefits to J40 Designated Communities Funding received from a CPRG grant will be placed in a pool of funding that will be available on a first come, first served basis. The fund will set aside 50% of the funding for EJ communities to ensure we meet and surpass the Justice 40 (J40) requirements. The funds will flow from the EPA to the City of Minneapolis, who will then distribute funds based on how the MOUs have been established. For cities receiving the turnkey services funding will flow to Energy Smart who will conduct the energy audits and disburse the funds to the contractors and/or property owners. Minneapolis will disburse program funds directly to cities that have an operating cost share program as well as to Minneapolis property owners. To receive funding eligible commercial participants sign up for a free energy audit with Energy Smart, a program sponsored by the Minnesota Chamber of Commerce with funding from energy utilities, to assess lighting, HVAC, insulation and renewable energy options. Other partners include local business associations such as the Lake Street Council. After the assessment, participants will receive a customized report with recommendations on how to save energy, costs, and emissions. The recommendations will also include estimates on utility rebates, federal grants and tax credits and the additional Cost Share grants. Energy Smart staff will assist with finding a contractor and reviewing bids as well as completing and submitting all grant and rebate paperwork once the project(s) are complete. To be eligible the property must: • Be in the participating cities of Bloomington, Burnsville, Eagan, Eden Prairie, Edina, Hopkins, Inver Grove Heights, Minneapolis, Richfield, Roseville, St. Louis Park and St. Paul, Minnesota • Fall into one of the following categories o Business Commercial o Industrial o Nonprofit Commercial o Government-owned (mentioned above)? Eligible Improvements The energy efficiency project must: • Qualify for an Xcel or CenterPoint utility rebate, or other local utility serving the participating city. • Electrify a piece of gas equipment Page 3 of 17 • Grants, matches and rebates cannot exceed total project cost. • If the request is more than $5,000 for LED lighting, the project must include a non-lighting component, sensors, or controls. The match is based on the total cost of the project and the incentive category for which the project qualifies: Category Maximum match from CPRG funding Base 20% up to $20,000 Environmental Justice* 30% up to $30,000 Energy benchmarked building 25% up to $75,000 Eligibility for base incentive: Any eligible commercial property located in the participating city’s boundaries. Environmental Justice category • See definition from EPA CPRG NOFA Energy benchmarked Building Commercial and multifamily residential buildings greater than 50,000 square feet under a city or state Energy Benchmarking ordinance. Equipment guidelines Equipment must meet the recommended minimum efficiency guidelines, unless otherwise recommended by a utility energy audit partner. Recommended minimum energy efficiency guidelines Terms AFUE - Annual fuel utilization efficiency ECM - Electronically commutated motor EER - Energy efficiency ratio EF - Energy factor HSFP - Heating seasonal performance factor IEER - Integrated energy efficiency ratio SEER - Seasonal energy efficiency rating UEF - Uniform energy factor Page 4 of 17 Efficiency Measures Boiler: 91% AFUE Furnace: 96% AFUE or higher ECM motor Gas water heater tank < 75,000 BTU: .68 UEF Gas water heater tank > 75,000 BTU: 88% efficient Gas water heater tankless: .87 UEF Heat pump water heater: 3.5 EF Attic/roof insulation - pitch roof: R-49 and air sealing Attic/roof insulation - flat roof: Evaluated case by case Wall insulation: Minimum of R-11 Attic joist insulation: Minimum of R-10 Ventilation - bathroom exhaust: Multispeed with ECM motor Air source heat pumps: (SEER, EER, HSFP) Central: 16 SEER (10.5 EER), HSFP 9.5 Non-ducted: 16 SEER (9.0 EER), HSFP 10.6 Air source heat pumps: (SEER2, EER2, HSFP2) Central: 15.2 SEER2 (10 EER2), HSFP2 8.1 Non-ducted: 16 SEER2 (9.0 EER2), HSFP2 9.5 Rooftop Unit <5.4 Tons: 15 SEER or greater Rooftop Unit >5.4 Tons: 12 EER and 13 IEER or greater How our GHG Reduction Proposal Supports the MPCA PCAP? The Twin Cities Commercial Energy Efficiency (TCCEE) Program matches with goal 3.2 on the MPCA PCAP which states “Reduce greenhouse gas emissions from commercial and public buildings by promoting energy efficiency, renewable energy, electrification, and lower-carbon design, materials, and fuels.” It goes on to describe how to achieve this goal: “Accelerate commercial and public building decarbonization through energy efficiency, renewable energy, and electrification; expand and improve district heating and cooling; implement local geothermal networks to reduce greenhouse gas emissions; and support workforce development, especially in LIDACs. Buildings include, but are not limited to schools, government buildings, commercial properties, small business districts” . Our program will focus on action 3.2.1 from the PCAP to “Decarbonize existing commercial and public buildings by combining Page 5 of 17 multiple technologies and approaches including: energy efficiency, energy recovery, energy storage, renewable energy, and electrification. Eligible activities include, but are not limited to energy audits, energy efficiency upgrades, HVAC and electrical upgrades, solar panels, and battery installations, transitioning to low-temperature water heating systems, local geothermal networks, and district heating and cooling systems.” TCCEE incentives will help accelerate the transition to a more electrified and low carbon future for commercial properties throughout the metropolitan area with 50% of the funding dedicated to LIDAC and J40 designated communities. Supporting CPRG Program Goals The City of Minneapolis has been managing the Green Cost Share Program for the last 10 years and has achieved significant GHG reductions. The Green Cost Share program is a local incentive program to prevent climate change and reduce air pollution in the City of Minneapolis. Through this program the city offers matching funds to participants when completing a solar, energy efficiency, or air pollution reduction project. Over the last 10 years the program has funded 1,071 projects that have saved 172,412 Million Btus and 16,074 metric tons of carbon dioxide. Our goal over the next four years of TCCEE is to double the annual number of projects completed, with at least 50% of them in EJ communities, and dramatically scale up the cumulative GHG reductions throughout the Twin Cities. With Minneapolis’ experience with our own EJ communities known as Green Zones we have developed new ways to reach out to and connect with BIPOCI community members and organizations. We will Page 6 of 17 build upon the relationships we developed during our outreach efforts as part of the Minneapolis Climate Equity Plan and described later in this narrative. This means that our EJ communities will see the greatest benefits resulting from a reduction in CAPS, HAPS and GHG emissions. The results show that our Green Cost Share program and the Energy Smart audit and technical assistance have and will continue to maximize the leverage of local, state, federal and utility rebates, and incentives. The CPRG funding is anticipated to leverage 3 to 1 these other funding services meaning that $8 million in CPRG direct program investments will leverage an additional $24 million in other investments. Starting in 2024, the City of Minneapolis committed $10 million in local funding to a Climate Legacy Initiative to support implementation of the Minneapolis Climate Equity Plan. With the EPA supporting our collation we can help our 11 other city partners do the same. This program would be the first of its kind in Minnesota to “scale up” a successful commercial efficiency program across the 12 local jurisdictions representing more than 1.2 million people. As a result of already having a program in place and a relationship with Energy Smart and our local utilities we believe we can accelerate the program implementation starting in the fall of 2024 and invest the full CPRG funding over a four-year period rather than five years, starting in late 2024. This means this grant will accelerated and increase the magnitude of near-term GHG reductions. Minneapolis currently has Energy Smart and the Lake Street Council under a 3-year master contract that will allow us to immediately start serving our local city partners. Minneapolis has also invested heavily in outreach to our BIPOCI business members since the murder of George Floyd and the following civil unrest that destroyed more than a thousand buildings, many of which were on and around East Lake Street. The Minneapolis Lake Street business district was heavily damaged and was home to the 3rd police precinct that was gutted by fire on the third day of unrest. The City of Minneapolis looked to partners such as the Lake Street Council for help in planning a new future for Lake Street. We are proposing to incorporate best practices and training led by the Lake Street Council into our TCCEE program so that our local partners can learn from our efforts to reach BIPOCI businesses, churches, and nonprofits in their community to take advantage of this opportunity. Demonstration of Funding Need Energy Smart completed 393 energy consultations in 2021, 40% or 139 resulted in a project that had documented savings within the next 24 months. Energy Smart has been increasing its number energy consultations in local Minnesota EJ communities 1 going from 46% in 2021 to 64% of total energy consultations in 2023. However, it has been challenging to get business to finance and move forward with energy efficiency recommendations. Over the last five years Energy Smart has recorded that utility rebates, business energy grants and the current local funding covers only 32% of the upgrade costs. We believe that by providing additional grant match of 20% and 30% for EJ based projects we can increase the project match to 50% to 60% . Additional funding from the recently approved IRA tax credits will also make these programs viable for almost everyone we audit. If we are not able to get a property owner to move forward with the recommendations, we forfeit all the upfront investment in the energy consultation/audit and follow up. By getting a higher conversion rate we save time and money. 1 MN Pollution Control Agency Environmental Justice Areas of Concern Page 7 of 17 It not only uses funding more efficiently it uses staff resources more efficiently. With a tight labor market finding skilled professionals to work in this field is challenging. Increasing the project conversion rate reduces unproductive staff time and leads to more action and less time completing audits that are not acted on. The City of Minneapolis has been exploring numerous opportunities for additional funding including the creation in 2023 of the Climate Legacy Initiative of $10 million that is used across the enterprise and the community to implement actions listed in the 2023 Minneapolis Climate Equity Plan. Of this, less than 20% is used to support businesses through the existing Minneapolis Green Cost Share program. We need to be able to double this with the help of CPRG to have hope we can achieve our local climate goals to reduce GHG emissions for our community by 75% by 2030 and carbon neutral by 2050. Three cities in our coalition have setup commercial cost share grant programs and have allocated small amounts of local funding to help two – six businesses annually. There is capacity to do more in these cities, but they do not have the local sources to scale the effort to truly be effective. St. Paul, the capital city of Minnesota is beautiful and filled with state government offices that do not pay property taxes. With a tax base less than half the size of Minneapolis, St. Paul has not had the budget to invest in a commercial cost share program. But they do have great leadership and want to use this opportunity to build additional capacity and show results so there will be a case to continue the support after the CPRG grant funding has ended. Funding for commercial energy efficiency cost share grants have not been available from state or federal sources in the past. None of the cities in the coalition have applied for federal or state grant funding for a program like this. Over the last year Minneapolis has applied for three federal grant opportunities to support our commercial energy efficiency green cost share program. Unfortunately, we were not awarded any funding through those processes. Those grants were the NOAA Climate Resilience Regional Challenge, Department of Commerce Recompete Pilot Program, and the Department of Energy’s Buildings Upgrade Prize. Transformative Impact The most significant transformative impact will be the collaborative engagement with BIPOCI community-based organizations. There has never been a collaborative effort to coordinated across the metro area to engage non-climate community-based organizations. These organizations have constituents that reach across city boundaries and are trusted members of their communities and can help us reach and engage with their communities’ elders, business, and property owners about the benefits of this program. The second transformative impact of this grant is the extensive collaboration among the cities. This funding has the potential to solidify the relationship and coordination with a dozen cities across the metro. It is our belief, that his grant, if funded, would lead to many collaborations with our BIPOCI and local city partners that will lead to even more significant GHG reductions in the future. Impact of GHG Reduction Measures Page 8 of 17 In this proposal the anticipated number and type of projects as well as emission reductions are derived from real-time data from the City of Minneapolis Green Cost Share Program from 2021 – 2023. This timely and post-pandemic data is the most relevant and replicable to predict GHG reduction projects in the near future. From this period, 330 greenhouse gas emission reduction projects included on-site solar installation or energy efficiency improvements were implemented. GHG emission reductions were calculated using total average annual kWh saved and eGrid emission factors. Solar projects were given a 25-year lifespan with a .5% annual degradation factor. This proposal will seek to replicate the success of the Minneapolis Green Cost Share Program with two important distinctions. First, it will allocate 50% of total project costs to LIDAC communities to directly address environmental justice and climate vulnerability issues. This allocation will be supported by increasing capacity of community liaisons to introduce businesses to energy efficiency resources and information with culturally centric approaches. Second, it will serve as a model to replicate and expand the Green Business Cost Share Program across participating metro coalition members. This will occur by expanding the accessibility of free business energy audits in cities that currently do not offer them, and increase public dollars directed toward GHG emission reduction projects for cities that have a cost share program established, but have insufficient funding to meet the magnitude of necessary emission reduction from commercial buildings to achieve city, metro, and statewide climate goals. The Twin Cities Commercial Energy Efficiency Program Proposal will provide additional capacity for Minneapolis and St. Paul to coordinate the execution and management of this contract with all financial and reporting responsibilities. It increases capacity for Energy Smart to expand their free business energy assessment services to offer approximately 529 reports to cities that are unable to currently provide these services. With an estimated 60% assessment-to-project conversion rate, 317 projects are anticipated from these audits. This proposal also creates additional capacity for communications and outreach in community-based organizations in low-income and disadvantaged communities while also documenting lessons learned and creating engagement materials for other cities interested in replicating EJ-centered outreach. With a conservative estimate of a 40% assessment-to-project conversion rate for 794 audits in LIDAC and environmental justice communities, 318 projects are anticipated from these audits. An estimated 635 total GHG-reducing projects are anticipated from this funding: 69 on-site solar projects and 566 energy efficiency projects. For 2025 – 2030, projects estimates are: • 69 solar projects o Dollars spent: $1,594,200 o GHG reduced: 3,049.25 tons at $523/ton • 566 energy efficiency projects o Dollars spent: $6,376,800 o GHG reduced: 10,159.28 tons at $628/ton • Total: $603/ton; 13.33 tons of combined SO2 (3.99 tons) and NOx (9.34 tons) reduced For 2025 – 2050, projects estimates are: • 69 solar projects o Dollars spent: $1,594,200 o GHG reduced: 10,336.62 tons at $154.23/ton Page 9 of 17 • 566 energy efficiency projects o Dollars spent: $6,376,800 o GHG reduced: 20,125.11 tons at $316.86/ton • Total: $262/ton; 30.8 tons of combined SO2 (9.24 tons) and NOx (21.56 tons) reduced Detailed technical analysis is provided in the technical calculations appendix. 3. Environmental results Outputs Total Number of Energy Audits performed @ 60% project conversion rate 529 Number of audits performed in EJ communities @ 40% project conversion rate 794 Number of projects funded 635 Number of staff hired 4 Number of BIPOCI CBOs partnered with 5 Number of residents trained 25 Number of training workshops held 8 Outcomes Annual GHG savings 2025-2050 1,218.47 tons Reduction in cumulative metric tons of GHG emissions: 2025-2030 and 2025 - 2050 2025-2030: 13,208.53 tons 2025-2050: 30,461.73 tons Reduction in annual amount of CAP and HAP emissions in 2030 2.67 tons Reduction in annual amount of CAP and HAP emissions in low income and disadvantaged communities in 2030 1.33 tons Number of annual and cumulative costs savings for participants Annual Individual Savings: $2,885.48 (24,861.7 median project kWh saved @ $0.1158/kWh) Annual Total Savings (635 businesses): $1.83 million (15,822,783 kWh @ $0.1158/kWh) Cumulative Individual Savings: $57,709.60 (@ 20yrs) Cumulative Total Savings (635 businesses): $36,645,565.43 Page 10 of 17 Number of annual and cumulative costs savings for participants in LIDAC communities Annual Individual Savings: $1,442.74 (24,861.7 median project kWh saved @ $0.1158/kWh) Annual Total Savings (318 businesses): $916,139 million (7,911,391 kWh @ $0.1158/kWh) Cumulative Individual Savings: $28,854.8 (@ 20yrs) Cumulative Total Savings (318 businesses): $18,322,782.72 Private dollars invested per dollar of CPRG $23,913,000 (other funds leveraged with 25% program coverage) Performance Measures and Plan The performance measures will be administered by Energy Smart and the City of Minneapolis. Both organizations have a history of managing similar programs. Energy Smart has more than 16 years of experience performing commercial energy audits and utilizing utility rebates and other incentives on behalf of property owners. The City has more than 10 years of experience managing the Green Cost Share program as well as millions in federal and state grants. The City has a AAA bond rating and a 2024 annual budget of $1.7 Billion. Information will be gathered from Energy Smart and our local government sponsors and uploaded to a page on our Green Cost Share Website with a specific standalone dashboard for this grant. This will allow us to update progress at least semi-annually and will be what we use as the basis for our reports to the EPA. A screen shot of the Green Cost Share EJ and J40 communities dashboard is shown below. Page 11 of 17 Authorities, Implementation Timeline and Milestones The City of Minneapolis will function as the contract manager and be responsible for reporting progress semi-annually to the EPA and coordinate the collection of results from all partners. We will also use our existing infrastructure to pay grants to participants and manage all invoicing and budget between partners and the EPA. Energy Smart brings 16 years of local business energy efficiency program experience to this proposal. They will be a program implementer and administrator by performing energy consultations and technical assistance for small to medium-sized businesses and managing a turn-key grant process for businesses in smaller coalition municipalities. Energy Smart is committed to providing accessible and equitable services for businesses to improve their facilities, save on energy costs, and reduce air pollutants. A letter of Commitment and staff bios are included in the application. Lake Street Council (LSC) is a small nonprofit organization that fosters the economic vitality of Lake Street, in Minneapolis, MN, a key business and cultural corridor in south Minneapolis. They amplify Lake Street's vibrancy to create a thriving and livable commercial corridor by connecting business owners and entrepreneurs from communities of color and historically disinvested communities to vital resources, training, and opportunities. As advisors, troubleshooters, and bridge builders, LSC support entrepreneurs to increase their economic potential while making meaningful contributions to Lake Street. Since 2015, our organization has tested and implemented outreach and engagement strategies for helping hundreds of small, BIPOC and immigrant-owned businesses access energy assessments and technical assistance through our partner Energy Smart. They utilize their position in the community as a trusted source of advice and support to help build pathways for small businesses to explore and take advantage of clean energy opportunities. A letter of Commitment and staff bios are included in the application. Page 12 of 17 The City of St. Paul will conduct extensive outreach to Saint Paul businesses, with a focus on smaller businesses located in Low-Income and Disadvantaged census tracts, to encourage utilization of grant funds to pursue renewable energy, electrification and decarbonization projects. The City of Saint Paul has a long history of delivering programs that benefit local businesses as well as programs targeting greenhouse gas reductions and energy efficiency. St. Paul will also use staff funding to establish the City’s first St. Paul Cost Share program that they plan will continue on after the CPRG grant period. A letter of Commitment and staff bio are included in the application. African Economic Development Solutions (AEDS) will participate in the proposed work by actively engaging in the development and refinement of programming and strategies to effectively deliver energy efficiency, electrification, and decarbonization services to businesses, with a strong emphasis on those located in disadvantaged communities. A letter of Commitment is included in the application. Cities of Edina, Hopkins and St. Louis Park will administer the distribution of grant funds as they have staff and resources to do this at no cost to the grant. They are interested in growing their programs with the support of the CPRG grant. This is an example of the work these three cities will perform as part of the grant implementation: Edina has years of experience delivering incentives for commercial efficiency, like providing free ASHRAE Level 1 Audits and matching utility rebates for equipment maintenance and replacement. The coalition proposal will allow Edina to scale up our citywide efforts as we work to decrease building energy emissions and achieve our Climate Action Plan goals. As part of the coalition, we will promote energy efficiency and building electrification opportunities for commercial buildings; and administer cost-share funds for buildings located in the city of Edina. Cities of Bloomington, Burnsville, Eagan, Eden Prairie, Inver Grove Heights, Richfield, Roseville will utilize Energy Smart’s turnkey services to manage the energy audits and cost share distribution and reporting on behalf of the cities. Minneapolis will contract with Energy Smart to disburse funds to Energy Smart on behalf of property owners in these communities. Here is an example of the work these three cities will perform as part of the grant implementation: In 2018, Bloomington adopted a goal to reduce energy- related greenhouse gas emissions by 75% by 2035 (from a 2016 baseline). We know that commercial energy use contributes a significant amount of greenhouse gas emissions to our overall total. This opportunity will allow us to scale up our citywide efforts to meet our emission reduction goals. A letter of Intent from our city collaborators and a letter of commitment from our implementation partners as well as staff bios are included in the appendix of this application. Timeline for Twin Cities Commercial Energy Efficiency Grant Milestones Date Responsible Party Collaborate with State MPCA to draft and execute MOUs with collaboration partners and submit by July 1 April-June 2024 City of Minneapolis and partner cities Ongoing Quarterly CPRG Partners meeting May, August, December, March City of Minneapolis and partners Page 13 of 17 Execute contracts with EPA, Energy Smart, LSC July - Sept 2024 City of Minneapolis Begin staff recruitment and hiring Oct - Dec 2024 Minneapolis, St. Paul, Energy Smart Begin planning for outreach, engagement, and communications Nov - Feb 2025 LSC, all partner cities, AEDS, Chamber of Commerce Program outreach Launch Feb 2025 LSC, all partner cities, AEDS, Chamber of Commerce Deliver first semi-annual report to EPA April 1, 2025 Minneapolis, St. Paul, Energy Smart - assumes an October 2024 start date to the grant Launch new CPRG Dashboard webpage May 1, 2025 City of Minneapolis Launch BIPOCI partners outreach June, 2025 LSC, all partner cities, AEDS, Chamber of Commerce Public and Semi-Public Engagement with all stakeholders June - Sept 2025 All partners Green Careers Job training ongoing City of Minneapolis and career training partners Ongoing quarterly partners meeting and semi-annual reporting to EPA 2025-2028 All Partners 4. Low Income and Disadvantaged Communities Community Benefits and Engagement In summer of 2023, the City of Minneapolis completed its Climate Equity Plan. A replacement of the 2013 Climate Action Plan, this document is the foundation of City of Minneapolis’ greenhouse gas reduction efforts over the next 10 years. At the core of this document is centering equity and elevating voices of low-income and disadvantaged communities that have historically been underinvested and underserved. Outreach, engagement, and listening sessions began in February of 2022 and community input was incorporated into the creation, revising, and finalizing of the climate goals within the document. Voices from Black, Indigenous, and People of Color communities as well as immigrant, (BIPOCI) elderly, young, and differently-abled were intentionally centered. Listening sessions with cultural groups included: Hmong Community, Lao Assistance Center, Little Earth of United Tribes Community, Native American Community, One Family One Community, Climate Generations – A Polar Explorer Will Steger Youth Initiative , Latinx Churches, several Somalian, and Oromo Community facilitators and organizers. Page 14 of 17 In addition, Minneapolis designated in 2017 two Environmental Justice Communities known as Green Zones; communities that have been deeply affected by pollution as well as racial, political, and economic marginalization. Located in North and South Minneapolis, these communities were in the 90th percentile of vulnerability characteristics that include air quality, brownfield sites, housing characteristics, food access, vegetation, health outcomes, race, language spoken, unemployment, education, and income. EPA priority LIDAC census tracts also overlay with these boundaries. Within the Climate Equity Plan, the Buildings & Industry category sets ambitious goals to achieve 75% GHG reduction by 2030. These are goals based on the C40 Cities and United Nations supported Race to Zero. Our efforts to center equity in this work include: • Provide access to no-cost energy audits to all building owners, small and large. • Develop a program model with equity-based criteria for qualifying buildings utilizing City resources • Expand the Green Cost Share Program to incentivize commercial buildings to increase efficiency and on-site renewable energy • Advocate for and educate business and residents about Federal, State, and local resources to reduce energy use and improve air quality both outdoors and indoors Leading the way in community engagement and relationship building, Lake Street Council and Energy Smart have been working together to provide free energy assessments for BIPOC and immigrant-owned businesses along the Lake Street cultural corridor since 2015. As a first point of contact, Lake Street Council is a trusted and well-respected organization within the Lake Street business community. After introducing and familiarizing business owners with free resources as well as the benefits of energy efficiency, a Lake Street Council representative refers the business to Energy Smart, which then provides a free energy assessment and assistance leveraging technical and financial resources to complete identified projects. The City of Minneapolis Green Cost Share provides further financial incentives for projects at a prioritized environmental justice match. LIDAC Continual Engagement: This proposal will replicate the model created by Lake Street Council, allowing for staff capacity and engagement within multiple community organizations to engage local BIPOC businesses in culturally relevant ways. In addition, these partnerships will provide additional insight into effective engagement strategies with other business and cultural communities on an ongoing basis, allowing for adaptive program management to tailor resources to business community needs. In addition to expanding this community-centric engagement model in Minneapolis, this effort will help inform coalition partners’ approaches to the needs of cultural communities within their jurisdictions. Sharing materials and lessons learned from programmatic expansion will allow partners to build on pre- existing expertise, utilize resources that can be tailored to specific communities, and clearly exhibit the business demand to leverage additional public resources to support a sustainable and long-term continuation of this effort. CJEST Census Tracts and EPA EJScreen Census Block Group IDs – See Attachment Job Quality and Training Page 15 of 17 The City of Minneapolis has two primary paths for workforce and green careers development. The first is the Minneapolis Employment and Training (MET) programs through the City of Minneapolis Department of Community Planning and Economic Development (CPED). MET works with community-based partners to help residents find and keep jobs with an emphasis on low-income adults, laid-off workers, and youth. MET is the administrative team to the Minneapolis Workforce Development Board, which guides the design of local workforce in coordination with 15 other workforce boards designated by the Governor across the state of Minnesota. Workforce initiatives include career counseling, computer lab access, resume-writing help, skills assessment and training, and free jobseeker workshops across a variety of fields, including manufacturing, construction, and administrative/professional services. In addition, the City’s Health department also offers career preparation for climate-specific fields. Through the Green Careers Explorations Program (GCEP), the City partners with public schools, nonprofits, government, and the energy sector to connect youth with training and certification for green careers like solar and heat pump installation. Participants complete an industry certification or credentialing program, get on-the-job experience, meet, and network with clean energy professionals, and earn money from employers. Contractors are rewarded for participating in these programs by scoring higher on City requests for proposals on publicly resourced initiatives. In this way, career ladders are supported holistically from community engagement all the way through job placement with thriving wages supported by funded programs. Past Performance with Federal Grants Project Title: Minneapolis Enhanced Air Quality Monitoring Assistance Agreement Number: Grant Number (FAIN) 00E03365 Brief Description: The purpose of this competitively ARP selected grant is to conduct ambient air monitoring of pollutants of greatest concern in communities with environmental and health outcome disparities stemming from pollution and the COVID-19 pandemic. The Minneapolis Health Department (MHD) will collaborate with community members from Green Zones environmental justice neighborhoods, community based organizations, residents, and educators to: 1) monitor for exposures to VOCs and other pollutants from industrial and residential activities as well as traffic, 2) develop air quality curriculum, outreach materials, and hands on activities with air sensors as well as understanding and interpreting air sensor data, and 3) increase understanding of hyper local air pollution sources and strategies to mitigate air pollution in environmental justice communities These are on-going programs and have successfully submitted adequate and timely reports towards outputs and outcomes successfully achieved. Contact: Juan Morales, EPA Project Manager 77 West Jackson Blvd. AR-18J Chicago, IL Morales.juan@epa.gov 312-886-6036 Project Title: HUD Lead Hazard Control and Healthy Homes Grant Assistance agreement Number: Instrument Number: MNLHD0437-20 Page 16 of 17 Brief Description: This funding is used to detect and remove lead and other harmful pollution from low-income homes in Minneapolis. These are on-going programs and have successfully submitted adequate and timely reports towards outputs and outcomes successfully achieved. Contact: Virginia Jackson HUD Technical Representative Virginia.L.Jackson@hud.gov 202-402-4897 Project Title: Minneapolis Public Health Infrastructure Program Agreement Number: Award Number 1NE11OE000027-01-00 Brief Description: This grant is being used to strengthen the Public Health workforce by looking at retention and diversification. Additionally, it is being used to strengthen our Public Health Foundational Capabilities such as communications. These are on-going programs and have successfully submitted adequate and timely reports towards outputs and outcomes successfully achieved. Contact: Kristin Loncorich Health and Human Services Program Officer uik5@cdc.gov 770-488-2742 Staff Expertise Kim Havey has been the Director of Sustainability in the Sustainability, Healthy Homes, and Environment division of the Minneapolis Health Department for the last six years. He is responsible for the development of policy and programs that support the City’s Climate Equity Goals and elevates racial and environmental justice initiatives. With an education and twenty years of experience in urban planning and the environment, Kim leverages the resources of the community and city to create a more resilient, equitable and healthy community through public policy and collaboration with local utilities, community residents, business, and government. Kim has a master’s degree in Urban Planning from the University of MN – Twin Cities and a Bachelor of Business Administration in Real Estate and Finance from the University of WI-Madison. For the last three years Kim has been a President Joe Biden appointee to the White House Environmental Justice Advisory Council (WHEJAC). Russ Stark is the Chief Resilience Officer for the City of Saint Paul working in Mayor Melvin Carter’s Office, where he leads the City’s climate and sustainability work. Previously, Russ served for 10 years on the Saint Paul City Council including three years as Council President. Prior to his public service, he worked at nonprofits focused on community development, environmental advocacy, and improved transportation options, including early planning for what is now the Green Line LRT. Russ has a Bachelor’s in Political Science from Swarthmore College and a Master of Urban Affairs and Public Policy from the University of Delaware. Patrick Deal first began working with Energy Smart in February of 2017. As a graduate of Saint John’s University with a BA in Environmental Studies, Patrick learned field research firsthand by completing fellowships in Colorado, the Bahamas and China. After graduating, Patrick conducted diagnostic Page 17 of 17 residential energy audits throughout the Twin Cities metro. Enthusiastic about energy conservation and field investigation, Patrick joined Energy Smart and has helped hundreds of Minnesota Businesses identify ways to reduce energy consumption. Matt Kazinka’ s work at the Lake Steet Council centers on making communities more sustainable and welcoming to everyone. He is developed programs to help small businesses and community organizations access financial and technical resources that will help them create less waste and use less energy. He has also participated in collaborative efforts to improve transit, biking, and walking infrastructure in small business districts like Lake Street in Minneapolis. All the other participating cities have at least one staff person dedicated to sustainability in their city. They will help with the program management and outreach. Additional bios are included as an attachment. City of Hopkins 1010 First Street South  Hopkins, MN 55343-3435  Phone: 952-548-6300  Fax: 952-935-1834 Web address: www.hopkinsmn.com March 25th, 2024 Commissioner Damon Chaplin Minneapolis Health Department 505 4th avenue South, Suite 520 Minneapolis, MN 55415 Dear Commissioner Chaplin, I write to confirm that the City of Hopkins intends to participate in the coalition proposal on Twin Cities Commercial Energy Efficiency (TCEE) being submitted by the City of Minneapolis, as a City partner for the proposal. As part of the coalition, we will deliver programming to help eligible commercial entities in our community take part in the program to decarbonize commercial buildings through electrification. The City hired a sustainability staff member in January 2024, and the City of Hopkins has an established green cost share program, the Hopkins Climate Solutions Fund (HCSF), that connects Hopkins commercial properties and residents with incentives for energy efficiency and decarbonization. Our existing program enables a seamless flow of funds from the proposed TCEE to eligible commercial entities, scaling up efforts in these program areas. We will work with the lead applicant, City of Minneapolis, and other coalition partners to meet any deadlines for the proposal. Sincerely, Mayor Patrick Hanlon Partnering with the Community to Enhance the Quality of Life  Inspire  Educate  Involve  Communicate 