191463

Ordinance

Adopt the Portland Clean Energy Community Benefits Fund Climate Investment Plan in effect through October 31, 2028

Passed

The City of Portland ordains:

Section 1. The Council finds:

  1. The Bureau of Planning and Sustainability (BPS) shapes Portland’s future and advances climate protection for a more prosperous, healthy, equitable, and resilient city now and for future generations.
  2. Frontline communities in Portland and worldwide – including Black and Indigenous people, communities of color, immigrants, refugees, low-income individuals, labor and workers, people living with disabilities, youth, and individuals experiencing homelessness – are often the communities least responsible for contributing to climate change, yet frontline communities are disproportionately affected by climate change impacts and will continue to bear a disproportionate burden.
  3. Portland’s historically racist land use policies and discriminatory real estate, planning, and infrastructure investment practices mean frontline communities may experience significantly higher ambient temperatures, higher utility bills, poorer air quality, and greater risk to health than predominantly white or affluent neighborhoods.
  4. Low-income populations and communities of color have been historically underserved by clean energy programs and investments and underrepresented in decision making on climate policy.
  5. To meet Portland’s climate action goals there is an urgent need to fund and accelerate greenhouse gas emissions reductions and sequestration, especially within low-income communities and communities of color.
  6. In November 2018, Portland voters created the Portland Clean Energy Community Benefits Fund (PCEF) program, which invests in community-originated climate action projects that advance racial and social justice (Ballot Measure 26-201). City Council codified non-taxation elements of Ballot Measure 26-201 in Portland City Code Chapter 7.07.
  7. Ballot Measure 26-201 is the first time a Portland environmental ballot measure was led by communities on the frontlines of climate change, including low-income communities and communities of color. The ballot initiative’s success was the result of community organizing, frontline advocacy and volunteer efforts throughout Portland.
  8. The purpose of PCEF is to provide a consistent, long-term funding source and oversight structure to invest in climate action projects that align with Portland’s climate action goals and that support environmental justice and environmental, social, and economic benefits for all Portlanders, including the development of a diverse and well-trained workforce and contractor pool to perform work that reduces or sequesters greenhouse gases.
  9. In 2020, City Council declared that a human-made climate emergency threatens our city, our region, our state, our nation, humanity, and the natural world, and that such an emergency calls for an immediate mobilization effort initiating greater action, resources, and collaboration that prioritizes frontline communities to restore a safe climate (Resolution No. 37494, as amended “Climate Emergency Declaration”).
  10. In its Climate Emergency Declaration, City Council also resolved to advance climate justice and climate action initiatives that are led by the community, especially frontline communities and youth from frontline communities, and accelerate investments in projects that benefit these communities in ways that are restorative, reparative, and build present and future well-being and wealth.
  11. In March 2022, the City Auditor released audit findings related to the PCEF program’s start-up phase and recommended that City Council adopt guidance on climate goals, capacity-building, and oversight elements, as well as clarification on the limits of administrative expenses.
  12. Commissioner Rubio, the PCEF Committee, and BPS staff responded to the audit with commitments to define performance metrics, establish performance goals, develop recommendations to Council offering clear strategic direction on climate goals, options to amend program budgeting requirements and PCEF’s limit on administrative expenses, and continue to assess the PCEF Committee’s governance structure.
  13. In July 2022, City Council adopted the Climate Emergency Workplan to implement its Climate Emergency Declaration (Resolution No. 37585).
  14. In October 2022, City Council amended the PCEF code to strengthen and streamline the PCEF program based on insight from early program implementation and audit recommendations. The amendment broadened eligible funding recipients and funding areas and required the development of a 5-year Climate Investment Plan (CIP) to direct PCEF’s investments (Ordinance No. 191046, the CIP is defined in PCC 7.07.030(D)).
  15. The CIP outlines PCEF’s planned investments to ensure funding decisions will have a lasting impact on Portland’s greenhouse gas emissions and frontline communities.
  16. From December 2022 through July 2023, BPS staff worked with the PCEF Committee to develop the inaugural CIP.  Development involved extensive community outreach, public workshops, and focused roundtable sessions to gather input from subject matter experts and community members. BPS staff received over 1,000 unique comments across the community visioning and public comment periods. 
  17. The CIP guides investment of $750 million between 2023 and 2028. The CIP serves to outline performance measures and goals, educate community members, and provide certainty to businesses, nonprofit organizations, government, and residents who are critical to PCEF’s success. It includes 16 strategic programs, the Tree Canopy Maintenance Reserve, and allocations for community responsive grants in accordance with PCC Chapter 7.07. The CIP also allocates $1.3 million ($260,000 annually) to the Mini Grant program to fund low-risk (less than $5k each) climate change-related projects. The CIP supports actions identified in the Climate Emergency Workplan.
  18. An ECONorthwest study commissioned by PCEF found that completing all clean energy and green infrastructure projects benefiting PCEF priority populations would require approximately $18 billion and take over 120 years. ECONorthwest concluded it would cost approximately $49 billion to complete all clean energy and green infrastructure projects identified in the study.
  19. In July 2023, the City Auditor found that PCEF has made clear progress to address issues identified in the 2022 audit. Two out of six recommendations had been implemented, with four others in progress and on track. City Council’s adoption of the CIP, with its clear and measurable performance goals, will address the remaining recommendations.
  20. On July 20, 2023, the PCEF Committee unanimously recommended the CIP to City Council for adoption.

NOW, THEREFORE, the Council directs:

  1. BPS will implement the CIP, as shown in Exhibit A. The CIP is in effect through October 31, 2028.
  2. BPS staff will prepare competitive procurement and grant solicitations in accordance with City Code to implement the CIP.
  3. The BPS Director is authorized to negotiate, execute, and amend interagency agreements to implement the CIP.
  4. The BPS Director is authorized to execute grant agreements, with individual grants capped at $5,000 and for a total amount not to exceed $1,300,000, for grants that meet the objectives of the Mini Grant program described in the CIP.
  5. Notwithstanding PCC Subsection 7.07.060 C., limited-purpose grant agreements equal to $5,000 or less do not have to include terms related to renewable energy products, workforce and contractor equity agreements, or family wage standards.
  6. If funding adjustments are recommended by the PCEF Committee, the BPS Director is authorized to amend funding allocations within the CIP, including related scopes of work, provided those amendments reflect the PCEF Committee’s recommendations and distribute no more than 10% of a given program’s allocation while maintaining the overall allocations of funds across funding categories. This authorization allows for minor adjustments based on program needs while preserving the funding allocations and CIP intent across funding categories. If PCEF funding projections increase, funding adjustments may include an increase in the total allocation of funds in the CIP, up to 10% of $750 million. The minimum funding category allocations are as follows:
  • Energy efficiency and renewable energy: $474 million
  • Transportation decarbonization: $128 million
  • Green infrastructure: $70 million
  • Climate jobs, workforce, and contractor development: $41 million
  • Regenerative agriculture: $20 million
  • Organizational capacity building projects: $15 million
  • Other projects that reduce or sequester greenhouse gases: $2 million

Section 2. This ordinance is in full force and effect on October 31, 2023.

An ordinance when passed by the Council shall be signed by the Auditor. It shall be carefully filed and preserved in the custody of the Auditor (City Charter Chapter 2 Article 1 Section 2-122)

Passed by Council

Auditor of the City of Portland
Simone Rede

Impact Statement

Purpose of Proposed Legislation and Background Information

Portland voters passed the Portland Clean Energy Community Benefits Fund (PCEF) in November 2018. Subsequently in 2019, City Council seated the PCEF Committee, a cohort of nine volunteers that reflect the racial, ethnic, and economic diversity of our city and makes recommendations to the Mayor and City Council.

The purpose of PCEF is to provide a consistent, long-term funding source and oversight structure to invest in climate action projects, in alignment with the City’s climate action goals, that support environmental justice and environmental, social, and economic benefits for all Portlanders, including the development of a diverse and well-trained workforce and contractor pool to perform work that reduces or sequesters greenhouse gases (GHGs).

From 2020 through 2023, PCEF has awarded community responsive grants, launched the Cooling Portland program, and started implementation of the two fast-tracked programs, as directed by City Council. The creation of the Climate Investment Plan (CIP) leveraged deep community engagement and lessons learned from developing and implementing multiple requests for proposals (RFP) soliciting over 300 applications and awarding and managing over 110 grants totaling over $145 million.

In October 2022, City Council amended the PCEF code to strengthen and streamline the PCEF program based on insight from early program implementation and audit recommendations. The amendment broadened eligible funding recipients and funding areas and required the development of a 5-year CIP to direct PCEF’s investments.

The CIP is grounded in climate research, deep community engagement, and multiple rounds of input from residents, businesses, subject matter experts, government partners, and community organizations to ensure the proposed solutions address the needs of Portland residents most impacted by a rapidly changing climate. All programs are evaluated with PCEF’s equity + climate framework, which considers benefits to frontline communities, community leadership, implementation feasibility, GHG emissions reductions, and accountability. The CIP serves to outline performance measures and goals, educate community members, and provide certainty to businesses, nonprofit organizations, government, and residents who are critical to PCEF’s success. 

The programs in the CIP leverage existing and projected additional funding sources focused on climate action, including from Energy Trust of Oregon, Oregon Department of Energy, utilities, and federal incentives. Coordination with these programs will bring maximum benefit to Portlanders, lower emissions, and make our communities more energy efficient and climate resilient.  The design and framework of the CIP is in strong alignment with City goals outlined in the Climate Emergency Workplan, the 100% Renewable Energy resolution, Prosper Portland’s Advance Portland, as well as State of Oregon goals for 100% Clean Energy.

The funding category allocations the CIP are as follows:

  • Energy efficiency and renewable energy, $474 million;
  • Transportation decarbonization, $128 million;
  • Green infrastructure, $70 million;
  • Climate jobs, workforce, and contractor development, $41 million;
  • Regenerative agriculture, $20 million;
  • Capacity building, $15 million;
  • Other projects that reduce or sequester greenhouse gases, $2 million.

The ordinance directs BPS to implement grant and contract solicitations to deploy the programs outlined in the CIP. The BPS Director is authorized to amend the budget allocations within the Climate Investment Plan, including related scopes of work, as recommended by the PCEF Committee, provided those amendments distribute no more than 10% of a given programs’ allocation while maintaining the overall allocations of funds across funding categories.

Financial and Budgetary Impacts

The CIP directs the allocation of $750 million over a 5-year period into 16 strategic programs, the Tree Canopy Maintenance Reserve, and community responsive grants in accordance with PCC Chapter 7.07. The funding is secured from the collection of the Clean Energy Surcharge by the Portland Revenue Bureau, as authorized in PCC Chapter 7.07.035. The amount is inclusive of revenue already collected as well as projected revenues generated during the FY 2023-2028 period.

Several strategic programs in the CIP will be implemented in collaboration with other City bureaus, requiring the development of Interagency Agreements (IAAs) or Intergovernmental Agreements (IGAs) to transfer funding. The following bureaus will engage in program delivery through IAAs in the following amounts as a part of CIP-defined strategic programs and support functions.

  • Portland Housing Bureau:
    • $60 million; SP 1: Clean energy in regulated multifamily affordable housing
  • Portland Parks and Recreation:
    • $40 million; SP 8: Equitable Tree Canopy
    • $5 million; Tree canopy maintenance reserve            
  • Portland Bureau of Transportation:
    • $25 million; SP 7: Equitable clean transportation access
    • $5 million; SP 12: 82nd Avenue street tree expansion (also involving PP&R)
  • Prosper Portland:
    • $2.5 million; SP 11: 82nd Avenue climate infrastructure and community resilience grant program
  • Multiple bureaus:
    • $20 million; SP 15: Federal climate and equity funding opportunities

Supplemental IAA funding to support PBOT staff providing review and technical assistance for transportation decarbonization-related community responsive grants is also planned. Additional roles and responsibilities for these and other bureaus may arise in the development of other strategic programs in the CIP and will be funded through IAAs authorized by Bureau Directors.

City bureaus will additionally be eligible to receive direct funding or administer the following programs defined within the CIP:

  • Community responsive grants - climate jobs, workforce development, and contractor support ($30 million)
  • SP 4: Clean energy in small commercial buildings ($25 million)
  • SP 6: Comprehensive e-bike access and support ($20 million)
  • SP 14: Access to fair and flexible capital ($45 million)

The implementation of the CIP will also require significant contracting solicitations through competitive Requests for Proposals (RFPs), and deployment of community responsive grant solicitations. RFPs for contracted roles in CIP strategic programs will be coordinated in partnership with Procurement Services staff from Office of Management and Finance. Solicitations for community responsive grants will be conducted with BPS staff. Contracts amounts over $1 million and grants over $5,000 will have subsequent City Council action as part of program implementation.

BPS staff will administer the implementation of the CIP with both existing authorized and budgeted positions and additional positions that will be requested in the FY 2024-25 budget.

Community Impacts and Community Involvement

The investments and programs outlined in the CIP are responsive to community needs, informed by significant community input, and include evaluation of disparities in past programs focused on climate action. The PCEF Committee guiding principles informed the CIP development and an equity + climate framework was used in evaluating strategic program opportunities, ensuring that the following values were elevated in design and implementation:

  • Benefits to frontline communities. Will the program create clear, significant, and measurable benefit to frontline communities?
  • Community leadership. Are there meaningful opportunities for community members to participate in decision making and/or provide leadership in program implementation? Does the program invest in building capacity within communities most impacted?
  • Implementation feasibility. Can the program be realistically implemented at scale with existing City staff, partners, or contractors over five years?
  • Climate impact: GHG reductions. Will the program result in meaningful and measurable GHG reductions/sequestration?
  •  Accountability. Do accountability mechanisms exist to ensure that communities of color, low-income populations, people with disabilities, and other vulnerable communities benefit from the strategic program? Is this program additional to existing or planned efforts?

The development and refinement of the CIP reflects thousands of hours of staff and community members’ time spent in visioning sessions, roundtable discussions, public input events, and info sessions. Over 120 community members and subject matter experts, including small business and City bureau staff, provided input to the development of the CIP through topic-specific roundtable discussions. There were a total of 25 roundtable meetings on the following topics:

  • Low-carbon 82nd Avenue
  • Access to fair and flexible capital
  • Building upgrades for community severe weather response
  • Clean energy in regulated multifamily affordable housing
  • Clean energy in unregulated multifamily housing
  • Clean energy improvements in single-family homes
  • Clean energy in small commercial buildings
  • Climate-friendly public schools
  • Equitable tree canopy
  • Organizational capacity building
  • Regenerative agriculture
  • Transportation decarbonization

The CIP development process also included review by a panel of frontline community members and a panel of youth, with over 20 community members participating in feedback and review on elements of access, community benefit, and intergenerational equity. A list of all participants in roundtables and panels is included in the CIP (Exhibit A).

During the CIP development process, there were 5 in-person public workshops and 4 virtual online information and visioning sessions held from January through June 2023. Two drafts of the CIP were released for public comment, a preliminary draft CIP on March 14, 2023, and a full draft CIP on May 16, 2023. Following those drafts, formal public comment periods were opened for feedback.

BPS staff received input through in-person events, online surveys, and letters written by community members, City bureaus, elected officials, nonprofit organizations, and local businesses. In total, BPS staff received over 1,000 unique comments through the public input process.

All public input was categorized into spreadsheets and narrative documents. Comments were considered during each stage of CIP development, with modifications made based on the equity + climate framework. Summaries of changes were provided at each step to the PCEF Committee and made available for public review. The CIP reflects the priorities and needs articulated through that process and delivers benefits and opportunities that prioritize Portland’s frontline communities.

Collectively, strategic programs focused on housing will make energy-related improvements in the homes and apartments of over 7,200 Portland households, reducing their energy use and making their dwellings healthier, more comfortable, and affordable. Low-income Portlanders are prioritized throughout these programs, with strategies to ensure that benefits go to historically under-resourced communities that have not previously benefited from climate action opportunities.

Investments in green infrastructure and urban tree canopy are distributed throughout the City with particular focus on areas with historical underinvestment. Strategic Program 8, Equitable Tree Canopy, will focus on planting and 5-year establishment of trees on public and private property in areas of low existing canopy, urban heat islands, and greater PCEF priority populations. The Tree Canopy Maintenance Reserve will create an income-qualified program available citywide for homeowners to pay for necessary tree pruning and care, extending the life of those trees and maintaining the value of the City’s tree canopy.

There are some targeted investments in geographically specific communities, with SP 11 and 12 focused on improvements around 82nd Avenue, including street tree planting and establishment along the corridor and support for climate resilience and infrastructure for local businesses.

Workforce and contractor-related programs and allocations within the CIP are intended to grow and diversify the number of workers and businesses that produce goods or services that reduce or sequester GHGs with a focus on individuals who have been historically marginalized in the workforce. These investments will be critical given funding available from the Inflation Reduction Act, among other non-PCEF funding streams.

Community responsive grants continue to provide funding for creative and innovative climate solutions by nonprofit organizations. Funds will prioritize proposals demonstrating climate expertise and experience serving frontline communities

At least two advisory workgroups will be created to provide ongoing stakeholder input and subject matter expertise to guide implementation. Workgroups for the Equitable Tree Canopy and Transportation Decarbonization will provide input on relevant topics related to the CIP.

See the CIP, as shown in Exhibit A, for additional details on community benefits in different strategic programs and community responsive grant opportunities.

100% Renewable Goal

The strategic programs and community responsive grants outlined in the CIP will help Portland residents, nonprofits, and businesses implement projects that reduce energy use and generate renewable energy, in direct support of the City’s 100% renewable energy goal. In particular, SP 1, 2, 3, and 4 will provide resources for energy efficiency improvements in single-family residential homes, multifamily properties, and small commercial businesses throughout the City, with additional opportunities for on-site solar generation. SP 5 will focus on energy resilience for buildings used during severe weather events, providing solar energy generation with battery backup, and energy efficiency upgrades. 

Community responsive grant solicitations will include opportunities for energy efficiency and renewable energy generation, including onsite solar as well as community solar projects that can collectively serve residential, commercial and nonprofit utility customers. These solar generation projects at various scales all contribute to the element of the City’s 100% renewable energy goal associated with obtaining 2% of community-wide energy needs (including transportation, heating, and electricity) from community-based renewable infrastructure by 2035.

These investments will result in lowering community-wide electricity use and producing local renewable energy helping reduce demand on the grid, providing greater systemwide resilience, and lowering peak loads for utilities that are making their own investments towards a 100% emissions-free system.

Additionally, SP 6, 7, and 13 focuses on transportation decarbonization to support the 100% renewable energy goal through electrification of transportation, mode shift away from fossil fuel powered vehicles, and greater access to public transportation options. SP 15 will allow City bureaus and partners to leverage federal funding for making energy improvements to public buildings, electrifying vehicle fleets, generating renewable energy, and other opportunities that reduce emissions in City operations. Similarly, SP 16 provides public schools resources to reduce energy use in their facilities, reduce fossil fuel consumption, and address needs for more efficient HVAC systems.

The CIP goals and investments related to workforce and contractor development are also strongly aligned with the 100% renewable goals related to prioritizing resources to train and hire people historically underrepresented and marginalized in the renewable energy and energy efficiency field, such as people of color and women.

Budget Office Financial Impact Analysis

The Climate Investment Plan (CIP) defines and directs the allocation of $750 million over a five-year period. This resource comes from the Clean Energy Surcharge and is collected by the Portland Revenue Bureau. The allocated $750 million includes revenues already collected (currently $210.7 million set aside in contingency) and projected revenues over the next four years. PCEF revenue is largely dependent on economic factors outside of the bureau’s control, the bureau provided conservative revenue estimates with modest confidence based on historical revenue collections in their five-year plan. The bureau estimated the FY 2022-23 revenues to be 20 percent higher than FY 2023-24 as the fund collects revenues from prior fiscal years in the current fiscal year, and this behavior is slated to end in FY 2022-23. The bureau then estimates revenue to come in at $110 million in FY 2024-25 as recessionary factors are projected to lighten up per the Revenue Division’s recommendation. Starting in FY 2025-26, they project a modest two percent growth in revenue from FY 2025-28. Given consumer behavior change post-pandemic and factoring year over year inflation, the projected tax revenue estimates and the projected beginning fund balances are likely understated. This analysis is reflective of the last updated five-year revenue projection for the FY 2022-23 budget process and an updated revenue projection will be included in the FY 2024-25 budget development process. 
 
The changes proposed in the ordinance include a developed five-year CIP which includes funding allocations and measurable program goals and/or outcomes for PCEF’s current community responsive grants programs and new strategic programs. This change differs from the initial code outlining that projects must fit within pre-determined funding allocations (E.g., 40-60% of funding goes to renewable energy and energy efficiency programs, 10-15% go to regenerative agriculture and green infrastructure projects). 

The funding category allocations of $750 million defined by the CIP were developed in collaboration with the PCEF committee and community stakeholders over the past year. They are as follows: 

  • Energy efficiency and renewable energy, $474 million (63%); 

  • Transportation decarbonization, $128 million (17%); 

  • Green infrastructure, $70 million (9%); 

  • Climate jobs, workforce, and contractor development, $41 million (5%); 

  • Regenerative agriculture, $20 million (3%); 

  • Capacity building, $15 million (2%); 

  • Other projects that reduce or sequester greenhouse gases, $2 million (0.3%). 

The funding can be further broken out as follows: 

  • $563.8 million for Strategic Programs – these are “targeted programs designed with input from community members and subject matter experts … and may be implemented through partnerships with nonprofit organizations, government entities, or businesses.” 

  • $181.2 million for Community Responsive Grants – these are awarded for “projects designed and implemented by community-based organizations;” 

  • $5 million for the Tree Canopy Maintenance Reserve – this is funding for long-term maintenance of the tree canopy to sequester carbon emissions. 

Council approved code changes in October 2022 that initiated the CIP process and notably expanded who can receive funding and provides clear guidance about the eligible organizations and businesses that can apply for roles that implement the initiatives. Prior to the change, Community Based Organizations (CBOs) and non-profits were the sole eligible recipients of PCEF resources. Under the amended code, CBOs and non-profits are still eligible to receive PCEF funding, but the ordinance allows funds to be distributed through grants and contracts, allows government entities to be eligible grant and contract recipients, and allows for-profit businesses to be eligible contract recipients to help administer programs.  

Several strategic programs in the CIP will be implemented in collaboration with other City bureaus, requiring the development of Interagency Agreements (IAAs) or Intergovernmental Agreements (IGAs) to transfer funding. The following bureaus will engage in program delivery through IAAs in the following amounts as a part of CIP-defined strategic programs and support functions (see Exhibit 1 for more information about all CIP strategic programs (SP)). 

  • Portland Housing Bureau: 

  • $60 million; SP 1: Clean energy in regulated multifamily affordable housing 

  • Portland Parks and Recreation: 

  • $40 million; SP 8: Equitable Tree Canopy 

  • $5 million; Tree canopy maintenance reserve             

  • Portland Bureau of Transportation: 

  • $25 million; SP 7: Equitable clean transportation access 

  • $5 million; SP 12: 82nd Avenue street tree expansion (also involving PP&R) 

  • Prosper Portland: 

  • $2.5 million; SP 11: 82nd Avenue climate infrastructure and community resilience grant program 

  • Multiple bureaus: 

  • $20 million; SP 15: Federal climate and equity funding opportunities 

If the CIP is adopted, the program will solicit applications and staff will weigh the merits of each project both independently and in aggregate for specific SPs as it looks to steward available resources in each CIP category. City bureaus would additionally be eligible to receive direct funding or administer the following programs defined within the CIP:  

  • Community responsive grants - climate jobs, workforce development, and contractor support ($30 million) 

  • SP 4: Clean energy in small commercial buildings ($25 million) 

  • SP 6: Comprehensive e-bike access and support ($20 million) 

  • SP 14: Access to fair and flexible capital ($45 million) 

Agenda Items

Passed to second reading

Passed to second reading September 27, 2023 at 9:30 a.m.

818 Regular Agenda in September 27, 2023 Council Agenda

Passed

  • Commissioner Rene Gonzalez Yea
  • Commissioner Mingus Mapps Yea
  • Commissioner Carmen Rubio Yea
  • Commissioner Dan Ryan Yea
  • Mayor Ted Wheeler Yea

Contact

Requested Agenda Type

Regular

Date and Time Information

Requested Council Date