Work Session WS

Milwaukie City Council

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MILWAUKIE CITY COUNCIL WORK SESSION

AGENDA

APRIL 19, 2016

City Hall Conference Room 10722 SE Main Street www.milwaukieoregon.gov

A light dinner will be served. Page #

1. 4:00 p.m. Solarizing Opportunities in Milwaukie 1 Staff: Clare Fuchs, Sustainability Director 2. 4:30 p.m. Milwaukie Arts Committee Update 38 Staff: Mitch Nieman, Assistant to the City Manager

artMOB Members

3. 5:00 p.m. Quarterly Budget Committee Report – Review 2nd Quarter Report 45

Staff: Casey Camors, Finance Director Budget Committee Members

4. 5:30 p.m. Enterprise Zone Overview, Expansion, and Electronic Commerce Overlay Discussion

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Staff: Alma Flores, Community Development Director

5. 5:45 p.m. Adjourn

Meeting Information

The time listed for each item is approximate; the actual time each item is considered may change due to the length of time devoted to the previous item. The Council may vote in Work Session on non-legislative issues.

Executive Sessions: The Milwaukie City Council may meet in executive session immediately following adjournment pursuant to ORS 192.660(2). All Executive Session discussions are confidential and those present may disclose nothing. Representatives of the news media are allowed to attend Executive Sessions as provided by ORS

192.660(3) but must not disclose any information discussed. Executive Sessions may not be held for the purpose of taking final actions or making final decisions. Executive Sessions are closed to the public.

For assistance/service per the Americans with Disabilities Act (ADA), please dial TDD 503-786-7555 During meetings the Council asks that all pagers and cell phones be set on silent mode or turned off.

Page 1 of 3 – Staff Report

MILWAUKIE CITY COUNCIL STAFF REPORT

Agenda Item: Meeting Date:

To: Mayor and City Council

Through: Bill Monahan, City Manager

Subject: “Solarize” Goal and Residential Program

From: Clare Fuchs, Sustainability Director

Date: April 19, 2016

ACTION REQUESTED

Adopt a resolution setting a goal to triple the amount of solar energy produced in the City of

Milwaukie by 2021. Authorize staff to promote and facilitate a residential solar program

modeled after the “Solarize” format for interested citizens.

HISTORY OF PRIOR ACTIONS AND DISCUSSIONS

City Council Study Session February 18, 2016: staff was directed to ascertain the volunteer

capacity and staff workload impact for a residential solar program.

BACKGROUND

I. History

A. “Solarize” started in the Mount Tabor neighborhood in Southeast Portland in 2009 by

Stephanie Stewart, Southeast Uplift, and The Energy Trust of Oregon with

assistance from the City of Portland. That first program produced 300 interested

parties and 120 installations.

B. The term “Solarize” is trademarked by Stephanie Stewart and the City of Portland.

Staff should be able to obtain use of the trademark by request if Milwaukie’s potential

program is reviewed by the City of Portland.

C. The “solarize” method caught on to other neighborhoods and 400 installations were

made in 2010. The program lasted until 2012 and is still available today in Portland.

The cost of solar has declined greatly since 2011, but this program can make solar

even more affordable for Milwaukians.

II. Overview

A. “Solarize” converts solar interest into action by creating temporary cost reductions

and community support to go solar. Tripling Milwaukie’s solar capacity from 732.93

kilowatts to 2.2 megawatts in five years can be achieved with 489 rooftops at only 3

kilowatts produced per home. That is a very conservative estimate and less than 8%

of Milwaukie’s single family rooftops.

B. Up Front Cost – Volume purchase and eliminating marketing costs can lower the

cost of the solar installation up to 30%. The “solarize” community group can show

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Page 2 of 3 – Staff Report

the entire package of tax credits, incentives, and financing. Having these items

presented by the community for the community makes customers more comfortable.

C. Streamlining - One to three solar vendors and bank or credit union lenders are

already chosen by the community group through a competitive bidding process.

Classes and community members are available to answer questions. This reduces

confusion and complexity.

D. Customer Inertia – Typically there are a couple months in which interested parties

can sign up and then installations also happen in an approximately four month

window. This limited time to receive reduced prices and support helps interest turn

to purchase. The typical solar installation outside this program can take up to two

years; this also provides a participatory incentive.

III. Community Promotion and Outreach

The first couple months would involve recruiting volunteers and creating a campaign.

A. Potential outreach methods – e-mail, news releases, flyers; Milwaukie Pilot, web site,

Facebook, and twitter; presentations at neighborhood associations.

B. Campaign creation – automatic website sign-ups and database creation.

C. Classes / question and answer sessions – These can be held throughout the

approximately nine month program to help educate potential customers.

D. Estimated hours – The “Solarize Guidebook” states that one person will be needed

to allocate approximately 490 hours over a 9-month period. That can be a City staff

member or a paid intern. Additionally, the program will need approximately 460

other volunteer hours.

IV. Additional Options

A. Providing weatherization hot leads for citizens that don’t want to or cannot afford to

go solar. This can include weather stripping, air duct sealing, or insulation.

B. Providing community solar purchase options for those who want to invest in solar,

but rent or don’t have a suitable roof.

C. An apprenticeship program for chosen installation vendors to help create jobs in the

community.

D. Charging $0.10-$0.25 per watt to defray program administration, website, database,

outreach, and inspections. This can be rolled into contract price so that the customer

only needs to write one check.

E. Program could be used to spur additional solar purchase opportunities for multi-

family, commercial, industrial, and additional single family rooftop opportunities down

the road. Later programs for all land use sectors will make reaching the solar goal

even easier.

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Page 3 of 3 – Staff Report

CONCURRENCE

Milwaukie Members of Environment Oregon; Samantha Vandagriff, Building Official

FISCAL IMPACTS

Monetary outlay for this program is not to exceed $5,000. Staff, non-profit partners, or

volunteers will apply for grants attempt to offset this cost. The program also has a precedent of

charging a small fee on top of solar panels to fund personnel costs such as administration and

inspections.

WORK LOAD IMPACTS

The methodology for this approach is to obtain enough citizens who are willing to volunteer their

time so as to require less assistance from staff for a full-scale residential “Solarize” program.

Staff will need approximately 460 volunteer hours over the course of 9 months. Additional

volunteers and/or interns can be utilized for promotion, research, application, and administration

of grants. The project will need one dedicated project manager, who can expect to spend an

average of 54 hours a month on the project. All of these assumptions are based on the average

“Solarize” program. Milwaukie’s needs and program popularity could vary.

Samantha Vandagriff, Building Official, states that most all solar installations will be,

“prescriptive,” so the planning review can be done with either Building Division staff member.

The structural inspections will take Ms. Vandagriff about 10 minutes, while Clackamas County

still performs our electrical inspections. Ms. Vandagriff anticipates an acceptable workload

based on these factors and the average program popularity.

ALTERNATIVES

Approve, modify, or deny the resolution.

ATTACHMENTS

1. Resolution

2. The Solarize Guidebook

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Page 1 of 2 – Resolution No.

CITY OF MILWAUKIE “Dogwood City of the West”

Resolution No.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MILWAUKIE, OREGON, AUTHORIZING THE ESTABLISHMENT OF A “SOLARIZE” PROGRAM AND SETTING SOLAR ENERGY GOALS.

WHEREAS, the Oregon Climate Change Research Institute identifies several environmental

hazards expected to occur in Oregon as a result of climate change, including increased occurrences and intensity of extreme weather like floods and droughts, reduced winter

snowpack, rising sea levels, rising air and water temperatures, and ocean acidification; and

WHEREAS, solar power is one of the cleanest sources of energy with which to power homes,

businesses and cars to reduce the carbon footprint of Milwaukie and help mitigate the effects of

climate change; and

WHEREAS, the cost of solar has dropped by more than 50% since 2011; and

WHEREAS the solar industry employs 3,000 people statewide and grew at a rate of 24 percent

last year while nationally the solar industry grew at a rate of 34 percent; and

WHEREAS there is currently 732.93 kW of solar capacity installed within Milwaukie; and

WHEREAS local governments can play an active role in making solar more accessible and

affordable for residents by passing pro-solar policies and participating in educational and

promotional activities; and

WHEREAS the U.S Department of Energy identifies four key benefits of municipal solar

installations, including 1) clarifying the role solar energy will play in achieving the community’s

broader environmental, climate change, or sustainability goals, 2) creates momentum for a solar

program with stakeholders working toward common goals, 3) guides the strategy for increasing

solar installations in a community, and 4) enables leaders to track progress against a published

target

Now, Therefore, be it Resolved that the City Council in recognition of the environmental and

economic benefits of solar energy set a target of tripling installed solar capacity to 2.2 MW in

Milwaukie by the year 2021. This goal equates to “solarizing” less than 8% of Milwaukie single

family homes in 5 years if only a residential program is executed.

Be it Further Resolved that in order to assist the City in meeting this goal, City Council

directs city staff to facilitate and run a “Solarize” program, aimed at streamlining the process and reducing the upfront cost of residential solar installations for Milwaukie residents. This program will be initiated within six months of the effective date of this resolution.

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Page 2 of 2 – Resolution No.

Introduced and adopted by the City Council on _________.

This resolution is effective on _________.

Mark Gamba, Mayor

ATTEST:

APPROVED AS TO FORM: Jordan Ramis PC

Pat DuVal, City Recorder City Attorney

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THE SOLARIZE GUIDEBOOK:A community guide to collective purchasing of residential PV systems

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ACKNOWLEDGEMENTS This guide is an updated version of the original The Solarize Guidebook, published in February 2011 (see www.nrel.gov/docs/fy11osti/50440.pdf), which was developed for the National Renewable Energy Laboratory and the City of Portland. The original Solarize campaigns were initiated and replicated by Portland’s Neighborhood Coalition network with help from the Energy Trust of Oregon, City of Portland, and Solar Oregon.

AUTHORS Linda Irvine, Alexandra Sawyer and Jennifer Grove, Northwest Sustainable Energy for Economic Development (Northwest SEED). Northwest SEED is solely responsible for errors and omissions.

CONTRIBUTORS Lee Rahr, Portland Bureau of Planning and Sustainability Lizzie Rubado, Energy Trust of Oregon Andy Brydges, Elizabeth Kennedy, and Elizabeth Youngblood, Massachusetts Clean Energy Center Duane Peterson, Vermont Public Interest Research Group

Hilary Lovelace, AmeriCorps Volunteer with Solarize Pendleton Jessie Denver, GroupEnergy Dave Llorens, One Block Off The Grid Siobhan Foley, California Center for Sustainable Energy

SPONSORS DOE SunShot Initiative This guidebook was made possible through funding from the U.S. Department of Energy SunShot Initiative and Solar America Communities program. www.energy.gov/sunshot

City of Portland, Bureau of Planning and Sustainability (BPS)

BPS develops programs that provide environmental, economic and social benefits to Portland residents, businesses, and government. The BPS took a management role in several Solarize campaigns and funded replication efforts. www.portlandonline.com/bps/solar

Energy Trust of Oregon Energy Trust of Oregon is an independent nonprofit organization dedicated to helping utility customers benefit from saving energy and tapping renewable resources. Energy Trust created the program blueprint for the first Solarize Portland campaign and provided technical support, incentives, and program evaluation. www.energytrust.org

Solar Now! Campaign Solar Now! connects Oregonians with the resources they need to choose solar energy. Partners are Solar Oregon, Oregon Department of Energy, Energy Trust of Oregon and City of Portland Bureau of Planning and Sustainability. They have conducted events to catalyze solar since 2007. www.solarnoworegon.org

Prepared for NREL Subcontract No. AGG-2-22125-01.

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TABLE OF CONTENTS INTRODUCTION ....................................................................................................................................................... 3

BACKGROUND AND OVERVIEW OF MODEL ............................................................................................................ 4

SOLARIZE 1.0 ........................................................................................................................................................... 8

CASE STUDIES ........................................................................................................................................................ 10

GENERAL LESSONS AND CONSIDERATIONS .......................................................................................................... 16

PLANNING A SOLARIZE CAMPAIGN ....................................................................................................................... 20

ADDITIONAL RESOURCES AND REFERENCES ......................................................................................................... 27

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The first “Solarize” campaign started as a grassroots effort to help residents of Portland, Oregon, overcome the financial and logistical barriers to installing solar power. What began in one neighborhood as “Solarize Southeast!” quickly caught on with residents across the city. With support from the U.S. Department of Energy’s (DOE) Solar America Communities program, the City of Portland Bureau of Planning and Sustainability partnered with neighborhood coalition offices, Solar Oregon (the state American Solar Energy Society chapter) and Energy Trust of Oregon to provide community organizing, technical assistance, project management, and rebates in a wildly popular grassroots-driven program. After three years of Solarize campaigns, Portland has added over 1.7 MW of distributed photovoltaics (PV) and established a strong, steady solar installation economy.

Since the publication of the first Solarize Guidebook in 2011, dozens of communities, companies and contractors across the U.S. have launched their own versions of a neighborhood collective purchasing program. With installed costs for behind-the-meter (distributed) solar dropping 17% in 2010 and continuing to fall in 2011,1 the residential PV market in the U.S. is poised to continue expansion and Solarize campaigns can accelerate this growth.

Purpose This guidebook is intended to be a roadmap for project planners and solar advocates who want to create their own successful Solarize campaigns. It describes the key elements of the Solarize Portland campaigns and variations from projects across the country, along with lessons learned and planning templates.

The guidebook is funded by the DOE SunShot Initiative, a collaborative national initiative to make solar energy cost competitive with other forms of energy by the end of the decade.

Source: Energy Trust of Oregon and Solar Oregon

1 Tracking the Sun IV: The Installed Cost of Photovoltaics in the U.S. from 1998 – 2010, Lawrence Berkeley National Laboratory, Jan. 2011, p. 1. http://eetd.lbl.gov/ea/ems/reports/lbnl-5047e.pdf.

INTRODUCTION

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The First Solarize Campaign The first Solarize campaign began with local Portland residents who wanted to install solar power, but didn’t know where to start. They imagined that if they could organize a group of neighbors to “go solar” together, they could collectively make an informed purchase and negotiate a volume discount. They turned to the local neighborhood coalition, Southeast Uplift, for assistance. Southeast Uplift approached Energy Trust of Oregon for technical and program planning support. By coincidence, Energy Trust had developed a solar PV volume purchasing program and was eager to test the model. With community volunteers, neighborhood association staff, and Energy Trust support and rebates, the first Solarize campaign was born.

Within six months of starting their campaign, Solarize Southeast had signed up more than 300 residents and installed solar on 130 homes. The 130 installations added 350 kilowatts of new PV capacity to Portland and created 18 professional-wage jobs for site assessors, engineers, project managers, journeyman electricians, and roofers.2

Annual Portland Residential PV Installations

0

100

200

300

400

500

600

2003 2004 2005 2006 2007 2008 2009 2010 2011

Solarize

Independent

The neighborhood collective purchase concept spread quickly. With support from a DOE Solar America Communities grant,3 the City of Portland’s Bureau of Planning and Sustainability helped other community

2 Eighteen full-time permanent jobs were created by three solar installation firms (2010 self-reported numbers).

3 The SAC grant has supported a half-time employee for two years. Additional City staff provided technical and management assistance. Portland has also provided sub-recipient grant funding to eight communities in Oregon totaling $47,000 with the intent of replicating the successes of Solarize Portland across the state.

BACKGROUND AND OVERVIEW OF MODEL

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organizations take Solarize Portland to their neighborhoods, eventually completing projects that encompassed every neighborhood in the City. Taken together, these follow-on projects produced another 400 Solarize installations in 2010, increasing total PV installations almost 400% over the previous year. In 2011, the number of Solarize campaigns and installations fell, but overall, PV installations in Portland remained high, with an increasing number of non-Solarize installations. The recent introduction of solar lease and Power Purchase Agreement (PPA) options has proven very attractive. As the Solarize campaigns wrap up, these financing options are creating new demand, building a strong, steady solar market in the Portland metropolitan area. (Examples of these third-party ownership models are discussed in General Lessons and Considerations: Financing.) Although Solarize installations trended down in 2011 due to fewer campaigns and the introduction of the solar lease and PPA, independent installations have ramped up considerably following the market kick-start provided by Solarize.

Overcoming Market Barriers Although the volunteer organizers of the first campaign did not set out to transform the market, their program design resulted in spectacular market growth. The Solarize model tackles three major market barriers: cost, complexity, and customer inertia.

High Upfront Cost Residential solar installations have high upfront costs. Before the first Solarize campaign launched, the upfront cost for a 3-kW system in the Portland market was approximately $27,000. By presenting a full package of federal and state tax credits and utility cash incentives, the Solarize campaign showed that the final costs were much lower than the initial sticker price. Contractor savings on marketing and lead generation drove costs down by an additional 30 to 35%.4 A typical 3 kW installation in the first Solarize project cost only about $2,000 after tax credits and incentives.

Complexity For many, a solar purchase seems a daunting and complex decision, involving choices about technical issues such as inverter efficiency, PV modules, and optimal array tilt. Even choosing between contractors can be an overwhelming task for those not technically inclined. Every aspect of the Solarize program was designed to provide actionable information while reducing complexity. A committee of neighbors pre-selected the contractor through a competitive bidding process and negotiated the cost. Workshops and Q&A sessions focused on the practical steps to making a purchase. The program reduced a dizzying array of technical choices to one simple question for participants: yes or no?

Customer Inertia The sales cycle for solar is usually more than two years from first inquiry to installation. The Solarize project overcame customer inertia to get installations in three to six months. By presenting a highly competitive price in a limited-time offering, the campaign motivated customers to act. In addition, the spirit of group endeavor afforded safety in numbers, so that participants didn’t feel that they were making the decision on their own.

4 Estimate based on conversations with contractors in the Portland area in 2010.

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"Thanks to the community outreach, we saved 30% on marketing!"

Rob LaVigne, Solar City

This chart shows the 2011 pricing for a typical Solarize Portland project.

3 kW PV System Cost Notes

Total System Cost Before Incentives $18,000 $6.00/watt5 Energy Trust of Oregon Cash Incentive ($5,250) $1.75/watt Out of Pocket $12,750 Federal Tax Credit – 30% ($3,825) Calculated after Energy Trust incentive Oregon Residential Tax Credit ($6,000) $2.10/DC watt; taken over 4 years Final Cost After 4 Years $2,925 Essential Elements of the Solarize Model In Portland, each successive Solarize campaign looked slightly different, reflecting the different priorities and goals of each neighborhood, but there were some common elements that led to success: competitive contractor selection, community-led outreach with a trusted community partner, and a limited-time offering.

Competitive Contractor Selection Selecting the contractor(s) through a competitive process led by community volunteers is essential on several fronts. First, it affords homeowners the simplicity of a pre-selected contractor while building confidence that the contractor was selected from a range of options. Second, it provides a transparent process that builds customer and contractor trust. Although the criteria for selection may vary from campaign to campaign, they should reflect the particular values of the community, whether they are creating local jobs or driving prices down. By having a competitive process with clear criteria, the project organizers can justify their choice while sending a clear market message about customer and community values.

Community-Led Outreach and Education Another element of a successful campaign is community-led outreach supported by a trusted local organization. In Portland, neighbors distributed fliers, built and updated the program website, and spoke at workshops, delivering a direct appeal from one friend to another to join the campaign. The volunteers were supported by a Neighborhood Coalition, which had a long history of helping people and a high level of community trust. Harnessing community power in this way has many benefits: The community becomes invested in the success of the project, the scope and scale of the outreach is amplified, and neighbors are more responsive to the appeals. Community-led outreach also allows the contractor to save on marketing costs because the company does not need to spend as much time generating leads. With neighborhood volunteers generating hot leads, the contractor can focus on site assessments and installations.

Limited-Time Offer Nothing motivates people like a deadline. A Solarize campaign is a limited-time offer, creating a sense of urgency among residents who don’t want to miss a good deal. The limited-time offer also keeps the

5 Avg. U.S. residential price: $6.24 from U.S. Solar Market Insight Reports, Q32011 Full Report, SEIA/GTM Research, p. 28.

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“Our mission is community- building. The Solarize project allowed people to get their hands on something and work together to make great things happen.” Tim

O’Neal, Sustainability Coordinator, SE Uplift

program true to its market transformation goals: to jump-start the solar market and then step aside. Some contractors may object to the perceived “monopoly” awarded to those selected for the project. The limited-time offer may help mitigate this contractor concern. In fact, a successful Solarize campaign can also increase business for non-Solarize installers. Installation numbers from Energy Trust demonstrate that Portland actually experienced an increase in non-Solarize installations during the Solarize campaigns.

Community Feedback Spurs Innovation and Improvement The first neighborhood collective purchasing effort in Southeast Portland was an unprecedented success, resulting in 130 new residential PV systems in six months. Although the community response was overwhelmingly positive, there were some lessons learned. A formal program evaluation commissioned by Energy Trust showed that project organizers were unprepared for the volume of customer interest. The neighborhood coalition office struggled to process customer information manually. In addition, organizers held enrollee information until the end of the enrollment period, and then gave the leads to the contractor in one batch. While this allowed the contractor to know the final price (which depended on the volume of sign-ups) before contacting the customers, it meant that the contractor received all 300 sign-ups at once. Customer follow-up time suffered, and the contractor faced boom and bust cycles. The number one suggestion for future programs, expressed by 42% of respondents, was that contractor follow-up could be faster. Project organizers took several steps to improve contractor response times, including:

• Developing an electronic process to automate data collection and reporting. This allowed the project organizers and the contractors to quickly see the status of every enrollee, track follow-up time, and improve customer service.

• Processing leads on a rolling basis. Rather than wait for the final enrollment numbers, organizers began site assessments, sales, and installations for subsequent projects before the end of enrollment. Not only did this build enthusiasm for the project by showing immediate results, but it also helped the contractor spread the work over a longer period, providing stability.

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The Basic Program A basic neighborhood collective purchase program is designed to lead the customer through a simple process, from awareness to installation, over the course of six months. The process includes:

• Awareness: The grassroots campaign is advertised in fliers, emails, neighborhood newsletters, blogs, local events, and by word of mouth. Earned media from TV, radio, and newspapers can also boost awareness.

• Education: Workshops and Q&A sessions are offered throughout the community to allow all interested neighbors a chance to ask questions in a supportive environment and to detail the steps for participation.

• Enrollment: Residents are enrolled in the program through an online registration page. A short questionnaire at this time can help enrollees self-screen for solar suitability.

• Site Assessment: The installation contractor provides site assessments and bids to all enrollees.

• Decision: The customer decides whether to accept the contractor’s bid at the Solarize program price. If using descending price tiers, the contractor may ask the customer to accept the current price tier, with the guarantee of a discount on their final invoice if volume targets are met. The intent is to offer few variables, so the customer’s decision can be a simple “yes” or “no.”

• Installation: The contractor installs the system and helps the customer through the paperwork for the cash incentives and any state and federal tax credits.

The Partners A successful Solarize campaign requires the coordinated efforts of many community players. Sample campaign partners may include:

• Trusted Nonprofit: A community-based organization with an established history can provide credibility and institutional support. For example, in Portland, staff members from the Neighborhood Coalition offices devoted a portion of their time to manage the campaigns. They played a crucial role in managing volunteers and reaching out to involve other supporting partners.

• Technical Advisor: Every campaign needs a technical advisor to help evaluate the potential solar contractors and ensure quality control. In Portland, in addition to providing the template for program design, Energy Trust created a Request for Proposals (RFP) and presented the technical tax credit and financing workshops. On the back end, Energy Trust verified that each installation met its solar requirements before issuing cash incentives.

• Project Organizer: An organization with institutional access can serve as the project organizer, helping to coordinate the outreach and education, contractor follow-up, and overall project timeline. In Portland, the City played this role. In addition, the City provided technical support on the RFP and created a streamlined online process for solar permitting, with a one-day turnaround on prescriptive path systems, while the City’s Bureau of Development Services inspected all systems.

SOLARIZE 1.0

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• Solar Industry Organization: A local chapter of the American Solar Energy Society (ASES), the Solar Energy Industries Association (SEIA), or a nonprofit solar industry organization can be a valuable partner. In Portland, the ASES chapter, Solar Oregon, created a database for capturing enrollees and monitored customer progress. In addition, they provided staff and volunteer Solar Ambassadors to present and offer testimonials at workshops. Other campaigns have coordinated with a local SEIA chapter to ensure that contractors know of the opportunity and have a place to discuss issues of market fairness.

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Every successful Solarize effort is tailored to the unique features of the local market and reflects its particular community values. Indeed, allowing for this expression of values is what makes the Solarize model so attractive and empowering for participants. The following case studies offer an overview of local variations and lessons learned. These include prominent examples of everything from grassroots community-led campaigns to innovative commercially-led campaigns.

Solarize Portland: Building a Local Solar Economy

Campaigns: Six campaigns, in Southeast (2), Northeast, Southwest, North, Northwest Installations: 560 homes Total Installed Capacity: 1.7 MW

The Solarize Portland campaigns of 2009 through 2011 revolutionized the market for solar, driving down market prices by more than 30% across the board and generating over 50 permanent green jobs for site assessors, engineers, project managers, journeyman electricians and roofers. In 2011, the market was revolutionized once more with the entry of the solar lease and prepaid PPA options, which have subsequently been used in well over half of new PV installations. As the City looks beyond 2011, the local Solarize campaigns are winding down, but independent solar installations are increasing and the City continues to support replication efforts across the State of Oregon.

The Portland campaigns supported enduring and sustainable market growth in several ways:

1. Encouraging local contractors to respond to the RFP through a partnership or awarding the contract to two companies to split the jobs.

2. Limiting the duration of campaigns, so that the market would not be tapped out, but rather, primed for further activity.

3. Providing technical assistance to ensure that the selected contractors provided maximum benefit to the local community through local hiring, sourcing, and job training.

In addition, the citizen volunteers who were empowered to select solar installers on behalf of their neighbors chose to “share the wealth”: the Portland campaigns ultimately tapped three different solar contractors and numerous local subcontractors.

Lessons and Considerations:

• Contractor Memorandum of Understanding (MOU) promotes local hiring: Northeast Coalition of Neighborhoods signed an MOU requiring the installation contractor to coordinate with three community-based pre-apprenticeship programs that train people to enter the construction trades. The contractor ultimately hired eight of the 18 hires from these programs in the Northeast neighborhood.

• Using small contractors: Small contractors need support to develop customer service mechanisms such as a customer tracking database. In addition, contractors are independent businesses and do not generally partner with one another. Rather than ask for collaboration, the RFP committee might decide to award half the jobs to one contractor and half to another, as they did in Salem, Oregon.

CASE STUDIES

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• Using local manufacturers: Project organizers in Southwest Portland wanted to “buy local.”6 The contractor suggested using panels and inverters made in Oregon. While customers were offered an option to purchase out-of-state components (because the locally manufactured products were more expensive), almost all chose the locally manufactured products, magnifying the economic impact of the program in Oregon.

• Rising solar awareness fuels broad growth: Although some contractors were concerned that they would suffer loss of market share when they were not selected as “Solarize” installers, the data from Portland show that non-Solarize installations also increased significantly during the Solarize campaigns. Not only did Solarize build awareness of solar energy as an option, but it also stoked demand and provided a publicly respected benchmark price, accelerating customer decision-making across the board.

For more information: Lee Rahr, City of Portland, lee.rahr@portlandoregon.gov

Solarize Washington: Simplifying Complex Pricing

Campaigns: 2 complete (Queen Anne, Magnolia), 2 in progress (Northeast Seattle, Stanwood/Camano) Installations: 56 Total Installed Capacity: 237 kW

Seattle-based nonprofit Northwest Sustainable Energy for Economic Development (Northwest SEED) launched a Solarize program for Washington residents in early 2011. Northwest SEED works with membership-based community groups to organize Solarize campaigns neighborhood-by-neighborhood. The organization has completed two successful campaigns and began two more in 2012. Due to the structure of the Washington State Renewable Energy Production Incentive, solar systems manufactured in-state achieve a much quicker payback than solar systems manufactured out of state, despite their higher upfront cost. Selected installers offer both options to Solarize participants, adding complexity to the choice, but numbers indicate that contractors are framing the choice to match their preference at the point of sale. In addition, after the success of the first campaign, contractors are confident enough to offer a low flat price from the first sale, dispensing with participation-based pricing tiers.

As demand for Solarize campaigns has grown, Northwest SEED has begun to issue a Call for Partners to competitively select neighborhoods as hosts for upcoming Solarize campaigns. In addition, several local utilities have seen the success of Solarize Washington campaigns and are now offering support to expand the program.

Lessons and Considerations:

• Nonprofit-led campaigns: As a nonprofit organization, Northwest SEED faced funding challenges in moving Solarize Washington forward. Initially the organization relied heavily on foundation grants to support the program. As grant funding wanes, Northwest SEED is partnering with local utilities to provide ongoing support to Solarize campaigns. Learning from other Solarize efforts around the nation, Northwest SEED may incorporate a lead-generation fee to help create a more predictable, stable funding source for future campaigns.

6 Although Portland defined “local” as “Made in Oregon,” other campaigns may define “local” as “made in the region” or “made in the USA.” Regardless of the definition, the desire to “buy local” can influence customer choices and boost the “local” economy.

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• Contractor-led projects: Following the lead of Solarize Washington, several similar “Solarize” efforts have sprung up around the state. In large part, these efforts are led by local installers and thus do not utilize the grassroots organizing central to a traditional Solarize program. Some of these campaigns have been held in towns not already hosting a Solarize campaign, while others advertise “rock bottom prices” to compete with ongoing efforts in Solarize communities. Although these campaigns deviate from the established Solarize model, they do demonstrate the market-expanding effect that Solarize programs can have on the local solar industry.

For more information: Alexandra Sawyer, Northwest SEED, alex@nwseed.org, (206) 457-5403

Solarize Massachusetts: Spurring Competitive Installations

Campaigns: 4 (Harvard, Winchester, Hatfield, Scituate) Installations: 162 Total Installed Capacity: 829 kW

Massachusetts Clean Energy Center (MassCEC) launched the Solarize Massachusetts (Solarize Mass) program in 2011 in an effort to expand the state’s solar PV market beyond traditional early adopters. Working with the Massachusetts Department of Energy Resources, MassCEC identified four “Green Communities” to pilot the Solarize Mass program. To help spur grassroots marketing and activism around the program, MassCEC provided each community with an outreach toolkit – complete with a banner, yard signs, bumper stickers, templates, and other marketing materials – and framed the program as a competition to achieve widespread solar adoption. Though not the largest community in terms of population, the town of Harvard ultimately succeeded in installing the most systems and Solarizing an impressive 4% of total residences. Participants were able to choose between a direct ownership and a leasing ownership model, both with four tiers of pricing based on the number of people who contract to install solar. Although uptake of owned vs. leased solar installations varied by town, offering both options ultimately made the solar market more accessible for all.

Lessons and Considerations:

• Each community is different: MassCEC had a unique opportunity to learn from pilot projects that took place simultaneously in four distinct communities. Although each town selected for participation had been pre-designated as a “Green Community,” each was unique in size and demographics. MassCEC provided the towns with the same outreach toolkit and found that the efficacy of the outreach tools varied significantly from town to town. While the Solarize model can be streamlined and standardized to a certain extent, it is ultimately a dynamic program that must be customized to fit the character of the community it is serving.

• Steep pricing tiers are motivational: Solarize Massachusetts featured a tiered pricing structure for each of its four pilot campaigns. Communities selected different installers, so pricing tiers differed between communities. In Harvard, the installer offered aggressive pricing tiers with sizable savings from tier to tier. This translated into momentum for community members to get their neighbors to participate—more participation meant substantial price savings for all. MassCEC learned that communities want early wins and demonstrable opportunities to save and showed aggressive price reductions based on group pricing are one way to accomplish this.

For more information: Elizabeth Kennedy, MassCEC, ekennedy@masscec.com, (617) 315-9321

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Vermont Solar Communities (Solar PV): Creating a For-Profit Spinoff

Campaigns: 10 (Waterbury 2, Williston 2, Charlotte 2, Hinesburg 2, Shelburne 2) Installations: 60 solar PV Total Installed Capacity: 300 kW

Vermont Public Interest Research Group (VPIRG) created VPIRG Energy to orchestrate solar group purchasing. Beginning in 2010, VPIRG Energy launched its Solar Communities program in three rounds—the first round offering only solar PV and subsequent rounds offering either solar PV or solar hot water. As an established membership-based organization, VPIRG had a pool of members from which to draw participants, so the Solar Communities effort required less organizing by local community groups than a traditional Solarize campaign might. Local community members with solar installations were particularly effective in organizing house parties to publicize the Solar Communities program and increase awareness about solar. VPIRG Energy recouped its operational and program costs through a $0.25 per watt lead-generation fee paid from the installer to VPIRG Energy at the time of system installation. The co-directors of VPIRG Energy concluded their campaigns and launched a new residential solar enterprise in 2012. SunCommon is a for-profit company that offers homeowners a solar lease for no money down.

Lessons and Considerations:

• Sticking with one installer: Although VPIRG Energy performed a competitive selection process for the first iteration of Solar Communities, it opted to use the same installer again for subsequent iterations of the program instead of issuing an RFP. This alienated some smaller local contractors, who felt that they were blocked from participating in the expanding solar markets in the four pilot communities. Concerned installers asserted themselves as solar designers, not simply “wrench turners,” and wanted the opportunity to be included to the fullest extent possible.

• Using a lead-generation fee: To cover costs associated with program administration, lead generation, and marketing, VPIRG Energy collected a $0.25 per watt fee (approximately 5% of the installed price) from the contractor upon close of sale. After refining the sales process to ensure cash flow, the fee was high enough to help VPIRG recoup costs while low enough to preserve the program price advantage.7

Vermont Solar Communities (Solar Hot Water)

Campaigns: 2 (Montpelier, Addison County) Installations: 175 to date

Following the first round of its Solar Communities program, VPIRG Energy expanded beyond PV to pilot two solar hot water campaigns. These programs followed many aspects of the Solarize model and used a local company for manufacture and installation of solar hot water systems. Solar Communities that offered solar hot water were ultimately more successful than those that offered solar PV in terms of final participation numbers. This could be attributed to several factors, including lower upfront cost, the opportunity to purchase locally manufactured systems, and an impending incentive drawback that spurred action.

For more information: Colleen Thomas, Colleen@vpirg.org, (802) 223-8421

7 Presumably, as costs for solar PV continue to fall, customer acquisition costs and lead generation fees will fall.

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One Block Off the Grid Campaigns: 20 communities in 11 states Installations: 1,500 Total Installed Capacity: 8 MW

One Block Off the Grid (1BOG) is a San Francisco-based for-profit company that aims to figuratively take city blocks “off the grid” through solar installations en masse. 1BOG establishes programs in target cities with promising solar markets and aims to address three major barriers to widespread solar energy implementation: 1) high cost, 2) confusing process, and 3) lack of trust between potential customers and installers. 1BOG’s city-based programs feature ongoing solar campaigns that run for three months at a time. The group recently launched several new Web tools with the intention of making solar simple and accessible. 1BOG’s US Solar Markets Map (www.1bog.org/nation) showcases solar PV demand by county and assigns state solar policy “grades,” while its solar estimating tool (www.1bog.org/solar-estimate) allows customers to use mapping technology to see what a solar system might mean for their home.

Lessons and Considerations:

• Using a per-watt fee: To finance their business model, 1BOG charges a $0.25 per watt installed fee to the chosen contractor. This adds approximately $1,250 to the price of a 5 kilowatt system, about 5% of the overall system cost. The customer never “sees” this fee, because it is built into the flat-rate price offered by the contractor.

• Remote solar site assessment: 1BOG recently developed a program to design solar systems remotely though Web-based mapping technology. Using this technology, the organization is able to offer similar services as one might receive in a traditional site evaluation, but cut down on time by performing the evaluation over the phone. Using this technology, 1BOG allows customers to sign contracts remotely, thus creating efficiencies in the solar installation timeline.

For More Information: 1BOG, www.1bog.org/

Reduce then Produce: Home Performance Before Solar

Campaigns: 1 (San Diego) Installations: 7 (in addition to 11 home-performance upgrades)

The San Diego-based California Center for Sustainable Energy (CCSE) administers the California Solar Initiative rebates in the San Diego area and works with home performance contractors under the Energy Upgrade California program. In summer 2011, CCSE launched “Reduce then Produce,” a pilot program to integrate the two efforts. Homeowners were required to get a Home Energy Rating System (HERS) rating of 100 or lower, or get a home assessment and conduct an upgrade before going solar. Rebates were available for both the HERS rating and the energy upgrades. GroupEnergy (see GroupEnergy: Workplace Campaigns for Employers and Employees) guided the RFP for solar PV, selecting two installers. CCSE invited a pool of 30 qualified home-performance contractors to join the program, and 13 ultimately signed on. Although participation in the pilot was light, program managers are eager to refine the program design and try again.

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Lessons and Considerations:

• Home Performance Contractors Want Solar Business: It is relatively common, at least in strong solar markets like San Diego, to find home-performance contractors who offer holistic solutions including solar PV. Because the campaign used pre-selected solar contractors, the home-performance contractors did not embrace the program as strongly as they might have. Using a single contractor for both the home performance and the solar installation might increase contractor enthusiasm and sales.

• Homeowners Want Recognition of Their Home-Performance Efforts: By requiring homeowners to prove home performance (through a rating or upgrade implementation) before going solar, the program engendered resistance in homeowners who felt that they had already improved home performance. Program managers suggest that a more appealing approach is “Reduce AND Produce,” encouraging homeowners to do both, but allowing homeowners to self-certify that they have improved home performance. Especially in the relatively mild climate of San Diego, home-performance improvements may not return enough savings to risk losing the solar opportunity.

For more information: Siobhan Foley, California Center for Sustainable Energy, Siobhan.foley@energycenter.org

GroupEnergy: Workplace Campaigns for Employers and Employees

Campaigns: Multiple corporate and government clients Installations: NA Total Installed Capacity: NA

Founded in July 2011, GroupEnergy delivers collaborative procurement programs to make residential and commercial clean energy solutions simple, social, and cost effective. GroupEnergy designs and administers procurement programs to pool the buying power of an organization’s workforce, securing lower purchase pricing and attractive terms for residential solar and energy efficiency improvements. This new employee engagement tool streamlines the process of researching and choosing the right vendors to help participants lower their utility bills and generate renewable energy. Employers see increased employee engagement in their corporate social responsibility and sustainability initiatives, while helping their community achieve its greenhouse gas reduction goals.

Each GroupEnergy campaign includes a competitive RFP process to evaluate and select vendors. As of early 2012, multiple campaigns had completed vendor evaluation and launched enrollment. GroupEnergy can work either directly with a large employer, or deliver partnership programs through an umbrella nonprofit or government organization. Current GroupEnergy clients include Adobe's Green Team, Bank of America, the Bay Area Climate Collaborative SunShares program, Genentech, and ICLEI - Local Governments for Sustainability USA. Under ICLEI, GroupEnergy is administering “Energy Benefits,” a new clean energy procurement program offered to member communities as a tool for achieving climate action goals. Energy Benefits offers residential solar and energy efficiency solutions, as well as commercial facility solar aggregation on behalf of employer organizations. With its nationwide reach, GroupEnergy is reducing soft costs, securing favorable pricing and leveraging the workplace to bring solar to new markets.

For More Information: Jessie Denver, GroupEnergy, info@mygroupenergy.com

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“Solarize Southwest was perhaps the single most satisfying project I’ve worked on at SW

Neighborhoods. The shared experience of residents attending workshops together and installing solar

energy equipment at the same time helped to create a strong sense of community amongst those who

participated, and helped us fulfill our mission to the community: to empower citizen action to improve and maintain the livability of southwest neighborhoods.”

Leonard Gard, Project Coordinator, Southwest Neighborhoods, Inc.

The following lessons and considerations are based on the feedback from all of the Solarize campaigns in this guidebook.

Tap the Grassroots

Solarize campaigns are successful because they tap the grassroots to design and market the program. In a positive feedback loop, the process of creating and deploying the program builds community pride that encourages higher levels of participation in the community.

Involve the Community in Decision Making The RFP process is an opportunity for the community to create an empowering statement of values. With guidance from technical experts, volunteers craft the contractor selection criteria and exercise choice in the selection of the installer(s).

Use Community-Based Marketing Solarize is a classic example of community-based social marketing: Information reaches people through face-to-face encounters with friends and neighbors, house parties, and other social interactions. Although the campaign uses the Web as well as traditional media, the thrust of the marketing appeal is personal. In contrast to a plea from the government or the utility, the appeal comes directly from a friend or neighbor.

Collaborate with a Trusted Local Organization and Assign a Project Manager A successful campaign collaborates with a trusted local organization that has a history of helping people. In Portland, the Neighborhood Coalition offices served this role. In Washington, it was Northwest SEED, and in Vermont, it was VPIRG that was the trusted organization. Local organizations provide “third-party validation,” which instills trust in the program. Regardless of the organization, each campaign had a dedicated project manager to orchestrate the effort.

Plan for Success The first Solarize Portland effort set a goal of 25 installations. When 350 residents signed up, the manual process of entering enrollee information into a spreadsheet quickly became untenable, and the contractor realized that it needed a customer service plan to keep in touch with customers over the several months that they would have to wait to get through the installation queue.

Project organizers should plan for success and put efficient systems in place for capturing enrollment information, sharing information with contractors, and following up with customers. Consider selecting more than one contractor, so that no single contractor is overwhelmed with jobs.

Support Contractor Systems Smaller contractors in particular may need support to build their customer relationship management systems to handle a program of regular follow-ups to keep warm leads “warm” until they can reach

GENERAL LESSONS AND CONSIDERATIONS

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the customer. Project organizers can help contractors by ensuring that they have thought through their customer service plan, requiring specific plans in the RFP response.

Make Contractors Responsible for Site Assessments The early Solarize campaigns offered an optional free site assessment in which Energy Trust helped residents determine their homes’ suitability for solar and consider energy efficiency options. Although attractive in principle, in practice, offering these third-party reviews created a bottleneck, slowing the installation process as contractors had to wait for the reviewers to complete their assessment before meeting with the homeowner. The first program evaluation showed that homeowners who requested the optional site assessment actually installed solar at a lower rate than those who did not (possibly because they were requested by homeowners who suspected that their home was unsuitable.) In any case, the contractor must ultimately visit the home to advise on the system size and sign the contract, so the site assessments can be part of the contractor’s plan.

Pricing Considerations To what extent is the success of Solarize due to low prices? Campaign results suggest that prices and incentives vary widely from market to market, and project organizers should consider several points when designing the price of the offer.

Absolute Price Is Less Important Than the Perception of a Good Deal In general, most people don’t know what a solar installation is supposed to cost, so they have no price yardstick to evaluate the program offering. More important than getting a good deal is the assurance that they are not getting a bad deal. As long as a consistent price is set for everyone, and it is demonstrably less expensive than the “going rate” for individual solar installations, people perceive the cost as “a good deal.” In fact, many RFP committees selected final bids that were not the lowest price, but the best value, providing a reasonable price for high-quality service.

Fixed Price vs. Descending Price: Pros and Cons The Solarize campaigns in Portland and Massachusetts effectively used a descending price scale to encourage higher participation. While a descending price can motivate early enrollees to recruit others, it also adds complexity: it delays the time when the final price is determined, so the contractor cannot quote a final price to early enrollees. Contractors might quote the highest price and collect payment in several installments, with a contract clause that the final installment will be adjusted to reflect the final price. However, organizers might consider fixed-flat pricing from the start and use other means to encourage recruiting. For example, contractors might pledge to donate a system to a local organization if the installations reach a certain goal. Others may offer a rebate at the end of the program to all participants based on the total solar capacity installed.

Another argument for fixed pricing is that the contractor’s ability to offer a lower price does not depend as much on the savings on volume purchases of equipment as it does on the savings in time and effort in marketing. Larger contractors often have access to volume equipment pricing even without the group purchase, so their savings are more likely to be realized in the community-run sales and marketing. They can commit to their lowest price knowing that the grassroots community-based social marketing effort will bring them hot leads with a high conversion rate.

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Third-party prepaid and lease solar PV options have provided more choice for homeowners, with lower

costs. Nine out of 10 homeowners choose these programs over standard purchase options.

Financing By offering some form of program financing, Solarize campaigns are able to tap a larger market for PV. Options vary from state to state, but some combination of the following should be considered.

Municipal Loans The City of Pendleton, Oregon, offered zero-interest loans of $9,000 to Solarize participants. Funds were borrowed from an existing wastewater treatment facility rate stabilization fund, with loan repayment structured over four years: 50% paid back the first year and the remainder paid back over three years. The loans were secured by a lien against the property through a Local Improvement District. The City used property tax revenue to make up the lost interest on the rate stabilization fund, so that when the loans are fully repaid, the fund will be exactly where it would have been without the program. These funds bridged the gap between the customers’ payments to the contractor and their receipt of state and federal tax incentives. Ultimately, 63% of residential participants took advantage of the loan. Sixty-four homeowners and several small businesses used $775,000 in loans. One year later, none of the loans are in default, and the City has recovered 50% of what it loaned out and is on track for 100% recovery of the loan fund. The loans have given such a boost to solar in the area that Solarize Pendleton’s selected installer, Livelight Energy, has opened a permanent office in the rural area.

For more information: City of Pendleton, http://solarizependleton.com/main/replication/

Bank or Credit Union Loans As the residential solar market continues to expand, lenders are beginning to realize the value of tapping this market. For example, Portland-based Umpqua Bank offers “Greenstreet” lending, a menu including a home equity line of credit, home equity loan, or unsecured loan to homeowners who are improving energy efficiency or going solar. The rates are competitive, and the loans have the added advantage of no fees and a lender that understands the value of connecting with green neighborhood initiatives. Credit Unions may also offer special loans for members or employees who are going solar, as the San Jose Credit Union did for its employees in 2010.

Solar Leases or PPAs In certain markets (depending on eligibility for state and utility incentives and the ability to legally offer third-party financing solutions), companies may offer customers the option to lease panels rather than make a direct purchase. In Portland, when state tax rules changed to allow homeowners to take the state tax credit regardless of ownership, two large solar companies, SunRun and SolarCity, introduced financing alternatives to direct ownership. SunRun partners offer a “Prepaid PPA” in which the customer pays $6,000 up front for a 3.24-kW system and recoups the payment over the next four years as a state tax credit. Customers receive 20 years of electricity from the panels on their roof, with maintenance and warranties covered by their installer. Solar City offers a 15-year solar lease, with no upfront payment, for as little as $20 a month.

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Utility Loans Until recently, there have been few utilities offering loans for going solar, and no overlap between solar loans and Solarize campaigns. Now, in Washington, Snohomish County Public Utility District No. 1 offers its Solar Express loan and rebate program in conjunction with a Solarize campaign. Under Washington law, Snohomish can claim double credit toward meeting the requirements of the state Renewable Portfolio Standard because the kilowatts installed are distributed renewable generation.

Program Funding Considerations Deploying a Solarize campaign costs money. Despite harnessing volunteer labor for everything from planning to marketing to contractor selection, a successful campaign will need the oversight of a project manager and will incur costs for marketing materials, database administration, and communications. The Portland campaigns relied on the staff at the neighborhood coalitions, as well as paid staff from Energy Trust and City of Portland, who were supported in part by a federal grant. Communities without paid neighborhood staff or grants should consider other options for funding.

Collect a Per-Watt Fee Project organizers could consider building a small per-watt fee into the contractor’s scope of work, which is then passed on to the customer. The contractor can still offer a competitive price, because it is saving money on marketing, while the program establishes a source of funding for everything from staff time to outreach materials. Organizers might still need seed funding to launch the project until the installations and fees begin to flow.

Create a Buyer’s Co-Op Salem Creative Network adopted a co-op model to fund its Solarize efforts, charging program participants a fee of $0.10 per watt (e.g., $250 for a 2.5-kW system) to join the co-op. The fee was intended to cover program management, database administration, and outreach. The co-op fees supported the campaign organizing staff for about a month. It may be more palatable to customers to have the co-op fee rolled into the contractor fee, so that they only write one check.

Leverage Contractor Marketing Dollars and Expertise As noted, the community-led marketing campaign saves contractors money. In return, the selected contractors may have marketing materials and expertise that they can share with the campaign. For example, in Pendleton, Oregon, the contractor provided yard signs and marketing fliers, rented a booth at the farmer’s market, and covered other incidental marketing costs. In Seattle, installers have provided financial assistance with everything from door hangers to bus and radio advertisements.

Secure Local Utility Program Funds Electric utilities may be interested in supporting the labor costs and/or the rebates for a Solarize campaign as a way of delivering a popular customer service. The campaigns provide outreach and education about energy and build a constituency that interacts more closely with the utility. In addition, utilities may be able to claim Renewable Energy Credits (RECs) from programs that they sponsor. For example, in Washington, utilities that incentivize solar PV can double count that production toward meeting their Renewable Portfolio Standard.

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The following section describes the steps to carry out a successful Solarize campaign.

Step 1a: Develop Partnerships and Initiate Planning (Months 1 – 3) A successful campaign begins with strong planning and partnerships. The institutional project organizer should enlist key allies and support starting with a primary project manager (one very dedicated individual who will oversee all the moving parts). Usually, the initial campaign organizing involves these players:

• Primary project manager (institutional project lead)

• Community organizer or volunteer coordinator (may be a neighborhood volunteer)

• Technical support lead (a solar specialist, such as utility or city staff)

These project players collaborate to build the project work plan and timeline, identifying all the tasks, responsible parties, and community partners. Potential community allies include:

• American Solar Energy Society chapter

• Local nonprofit

• City government

• Local utility

• Neighborhood coalitions or associations

• Local manufacturer of solar equipment

• Churches

• Rotary or other service clubs

• Credit union or local bank

PLANNING A SOLARIZE CAMPAIGN

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Sample Project Timeline

Sample Roles in a Solarize Campaign The following chart shows sample roles and responsibilities in a typical Solarize campaign. The Project organizer is an essential role and could be a neighborhood coalition, a municipality, a local ASES chapter, or any organization with the capacity to devote a half-time person to leading the charge.

Project Manager Volunteers Contractor Utility/Municipality

Planning Manage program; provide resources

Provide ideas Provide tech support; provide resources

Volunteer Recruitment

Recruit & organize committees

Advise committees

Request for Proposal (RFP)

Issue RFP; advise on RFP and contractor selection

Draft RFP; select contractor

Respond to RFP Advise on RFP

Outreach Manage outreach campaign; create and print fliers; lead workshops

Build website; distribute fliers, outreach materials; schedule workshops; identify venues

Teach nuts and bolts and Q&A session

Provide workshop curriculum; teach workshops

Enrollment Compile database of enrollees; engage customers

Recruit neighbors Conduct preliminary assessment and schedule site assessments

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"The RFP process was extremely important for our committee. We learned more about the contractors than we ever could as individual

customers, and we communicated our values to the contractors." Todd Farris, Volunteer Program Manager, Solarize Southwest

Project Manager Volunteers Contractor Utility/Municipality

Site Assessments

Track contractor turnaround time and signed contracts

Conduct site assessments with homeowners; prepare bids

Installations Track contractor turnaround time and customer experience

Execute contracts; install systems; complete paperwork

Streamline solar permitting process; inspect installations; interconnect systems

Celebration! Issue press release; promote, evaluate and replicate

Plan and/or host party

Plan and/or host party

Evaluate

Step 1b: Build Database and Customer Interface (Months 1 – 3) A customer service database is essential for contractors and project organizers to track customer follow-up, schedule installations, and capture project results. The project organizer should provide the database structure and protocols to the contractor. Some contractors may have their own customer relationship management (CRM) software, but they should also update the database supplied by the program. This way, the contractor’s process is transparent to the project organizer, and if there are delays in implementation, the project organizer can see these and plan accordingly. Solar Oregon has developed a database for use with Solarize projects and is available on contract to build, manage, and administer a customized database for a reasonable fee. Other Solarize projects have used CRM software such as Salesforce to manage customer enrollment. The project organizer, as the agent of public trust, must be sensitive to the privacy of participants, and take care not to disclose information beyond the program or misuse information submitted by participants.

Step 2: Volunteer Recruitment (Months 1 – 2) One of the first tasks of the primary project manager is to host a meeting to recruit core volunteers. The core volunteers can be organized into two committees:

• Outreach committee: Manage the communication and outreach to all neighbors. Members should be media savvy and should get articles in the newspaper, build a website, and recruit neighbors.

• RFP committee: Write the RFP, review contractor submittals, interview, and select a contractor. Members should include at least one solar professional or tradesperson and preferably non-voting technical support from the institutional sponsor (e.g., city or neighborhood coalition).

The neighborhood recruitment meeting should be advertised in neighborhood papers, discussed personally with neighborhood association chairs/community groups, and talked about widely. These volunteers will be the core group to initiate the Solarize effort.

Step 3: Request for Proposal Process (Months 2 – 3) Writing the RFP and creating the RFP scoring rubric is a chance for community members

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to express their values. The volunteer committee, acting as the agent of public trust, is creating a defensible, open process to select the contractor. Usually, at least one solar professional or person with solar expertise supports the committee. It is important to have a clear method of scoring the proposals and to communicate this to the bidders. It is best to use a low number of points (three to five) for each desired category, so that score variations are significant.

The RFP should be issued widely. Contractors should have several weeks to respond, and all questions and answers should be posted to a public website, where all bidders see the same information. After proposals are received, the committee members begin evaluation. Even where the project receives many excellent proposals, it is best to interview only the top two or three contractors as a courtesy to the volunteers and contractors.

After contractor selection is announced, the committee may receive inquiries from contractors who were not selected. If they have followed the RFP evaluation criteria, the response is simple: “The committee scored the applicants and chose the one or two that scored the highest on the rubric.” Committee members should keep conversations positive and not try to justify why the committee chose one contractor over another.

Step 4: Outreach and Education (Months 4 – 6) Once the contractor is selected, outreach becomes a focus. The outreach committee creates or adapts materials – fliers, buttons, stickers, yard signs, and a website to help spread the word. Elements of the outreach campaign can include:

Website A program website serves as a central location for updates on the campaign, a calendar of events, and a place to enroll. It is essential for volunteers to direct people to the website for timely information. Having a dedicated volunteer to update the website regularly helps build and maintain program momentum.

Print Materials A colorful campaign logo and photo on a flier help lend legitimacy and spread the word. Fliers, posters, door hangers, and other print materials should be distributed widely.

Blogs and Emails Electronic media provide an affordable and convenient way to increase the outreach of the campaign. The outreach committee should submit information to neighborhood blogs, write letters in their neighborhood newsletters, and send emails to friends, neighbors, and family members encouraging them to join the campaign.

Workshops All interested homeowners are strongly encouraged to attend at least one workshop. A contractor representative should attend each workshop to answer questions. This will provide technical support to workshop presenters, while building a relationship of trust between the contractor and the homeowners. The group setting is important, to build trust and neighborhood cohesion while encouraging attendees to enroll in the program.

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Basic Workshop This is an introductory, one-hour workshop, held at multiple locations throughout the community. The basic workshop explains how the project works, the benefits of collective purchasing, solar PV technology, financing and incentives, and how to participate.

Technical Q&A Sessions If participants want additional, in-depth information, organizers may consider holding technical Q&A sessions. These informal, open-format sessions allow potential participants to get their questions answered in a friendly and educational environment. Sessions could focus on a topic presented by subject matter experts:

• Cash incentives, tax credits and financing (Presenter: financing partner/utility)

• Net metering (Presenter: utility)

• Technical nuts and bolts (Presenter: contractor)

Solar Ambassadors A successful campaign will enlist the support of solar champions who already have solar on their homes. For example, Solar Oregon organizes a program of Solar Ambassadors, local residents who have gone solar. These supporters are strong advocates and positive examples for homeowners considering a solar purchase. Ambassadors can attend or present at workshops, providing an important validation to others looking to install solar.

Step 5: Customer Enrollment (Months 4 – 6) The enrollment period, usually three months, should run concurrently with outreach and education. Kick off with a press release and a high-profile community event, perhaps at a farmer’s market or other public venue. Ideally, enrollment occurs online, and participants enter their data directly into a database. Programs may make a provision for participants to register by phone if they have no Internet access, and a project organizer could enter this customer data into the Web interface. The online enrollment process should generate an auto-reply email, alerting the customer of the date on which their information will be given to the installation contractor, and telling them to expect a call within two weeks (or the agreed upon turnaround time). At this point, the leads are hot and the sooner the contractor can act, the more likely the leads will convert to installations.

Throughout the enrollment period, the outreach committee volunteers drive people to the website through various avenues that suit their own comfort level: hosting coffees, going door to door, sending emails, posting fliers on public message boards, or submitting articles to the local press. As the enrollment period draws to a close, the media may take interest, if they haven’t already. It is best to invite media early on, so that they can help get the word out, rather than generate a lot of interest after the enrollment has closed.

Step 6: Site Assessments (Months 4 – 8) As soon as people begin enrolling, the project organizer can begin passing participant information to the contractor. Although several Solarize campaigns waited until the end of enrollment to pass the leads to the contractor, passing leads as participants enroll will help even out the contractor workload and improve the follow-up time. The contractor may use mapping software to screen out any obviously ineligible participants (e.g., those with heavy shading) and then schedule an appointment to meet with the customer for a more

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After the installations were complete, the homeowners came together for a walking tour of neighborhood homes and a celebratory picnic. Another Portland neighborhood

held its celebration at the local brewpub.

detailed evaluation and system sizing. If all goes well, the customer and contractor sign a contract for installation.

Step 7: Installations (Months 5 – 9) The contractor is responsible for installations, but the project manager should monitor the customer database to ensure that installations are occurring within an appropriate time frame. At this phase, the contractor should be updating the customer database as customers are contacted and systems installed. All customers should continue to get periodic messages from the program, offering updates on the status of the program. In Portland, the project manager coordinated weekly or twice-monthly team meetings to discuss installation statistics, and address and issues or concerns that arose. Meetings built a strong team atmosphere and gave the City, neighborhood leads, and the contractor opportunities for increased project cooperation and correction, when needed.

Some Portland participants expressed frustration with long waiting periods between enrollment and installation. This is typical in a volume purchasing program, but can be alleviated in part by choosing more than one contractor and/or releasing names to the contractor as soon as homeowners enroll.

Step 8: Celebrate and Reflect (Month 9) It is important to acknowledge the hard work of everyone who supported the program and celebrate the community effort. The contractor and/or manufacturer may be willing to sponsor a public celebration. The media will want to attend, and the positive energy generated by the celebration can help fuel the next project in the next neighborhood. Equally important is reflection and evaluation. Project organizers can continue to build public trust by listening to feedback in order to improve future programs.

Sample Budget

Although every program will vary by location and population size, this sample budget provides a starting point for project planners.

Labor Hours Project

Organizer Volunteers Contractor Utility Total

Project Management 250 250 RFP Committee 40 80 Outreach Committee 70 50 Workshop Design and Delivery 100 50 20 10 Site Assessments * Installations * Celebration and Evaluation 30 30 20

Total Hours 490 460 40 10 1,000 Materials Expenses Collateral (fliers, yard signs, etc.)

$1,000 $1,000

Advertising $150 Database Development $2,000

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Labor Hours Project

Organizer Volunteers Contractor Utility Total

Workshop Venue Rental $400 Speaker Fees $300 Booth Rental for Events $100 Web Hosting/Domain Name $200 Celebration Event $200 $300

Total Materials $4,350 $0 $1,300 $0 $5,650

*Contractor hours for site assessments and installations will vary by number of participants and are not shown here because they are not unique to a Solarize campaign.

The budget above reflects a possible scenario for a project lead, volunteers, and program partners. Of course, labor costs will vary widely, depending on how much of the labor is volunteer based.

Some communities have successfully leveraged AmeriCorps or other service-learning volunteers to serve key program roles, while others have used volunteers primarily in outreach and the RFP process. In some municipalities, the existing staff in the office of neighborhoods or the office of energy or sustainability can take on the project lead hours as part of a special campaign.

As with labor, the materials budget will vary widely, depending on the media market and the amount of outreach materials that can be donated. The budget does not suggest a source for program funding. Each program planner will have to consider options discussed elsewhere in this guide, including grants, volunteer contributions, or a fee assessed on each installation.

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Collective purchasing programs from across the United States

• GroupEnergy launched multiple collective purchasing programs for the workplace in early 2012. www.mygroupenergy.com

• “Lighten Our Load” was developed for Columbia Sportswear by Energy Trust of Oregon in 2008. www.energytrust.org

• MadiSUN Group Solar Program serves residential and commercial customers in Madison, Wisconsin. http://www.cityofmadison.com/sustainability/city/madisun/

• Make Mine Solar is a collective hot water purchasing program, based in Minneapolis, Minnesota. www.mnrenewables.org/MakeMineSolar

• One Block Off the Grid is active in 20 cities nationwide, supporting volume purchasing for residential customers. www.1bog.org/

• Reduce then Produce was an integrated home performance and solar program based in San Diego, from the California Center for Sustainable Energy.

• San Jose Employee Solar Group Buy was offered to City employees and retirees in 2010. The program became the model for the SunShares Program of the Bay Area Climate Collaborative. http://baclimate.org/impact/sunshares.html

• Solar Beaverton offers PV, hot water, and even EV charging stations in a group purchase format. http://www.beavertonoregon.gov/index.aspx?NID=412

• Solarize Eugene: The Resource Innovation Group won a utility grant for Solarize Eugene 2012, addressing PV and hot water.http://solarenergydesign.com/solar-electric-systems/solarize-eugene/

• Solarize Pendleton: The City of Pendleton, Oregon, offered zero-interest loans to finance solar installations and created program replication materials http://solarizependleton.com/main/replication/

• Solarize Portland: With over six campaigns and 560 installations, Portland leads the way and helps other cities run Solarize campaigns. http://www.portlandonline.com/bps/index.cfm?c=51902

• Solarize Salem: The Salem Creative Network organized a co-op to help fund its PV and hot water campaigns. http://solarizesalem.org/

• Solarize Santa Barbara: More than 49 neighbors went solar through a program from Community Environmental Council. http://www.cecsb.org/solarize-santa-barbara

• Solarize Washington: A series of residential PV campaigns from Northwest SEED began in 2011. www.solarizewa.org

• Solarize Massachusetts: Massachusetts Clean Energy Center (MassCEC) in partnership with Green Communities Division of the Massachusetts Dept of Energy Resources ran campaigns in four cities. http://www.masscec.com/index.cfm/cdid/12093/pid/11159

• VPIRG Energy ran successful “Solar Communities” programs for PV and hot water across Vermont. The co-directors of VPIRG Energy have subsequently launched SunCommon. http://suncommon.com/

ADDITIONAL RESOURCES AND REFERENCES

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Publications Solar Powering Your Community: A Guide for Local Governments. U.S. Department of Energy, 2011. The second edition of this guide includes case studies and lessons learned from Solar America Cities. www.solaramericacommunities.energy.gov/resources/guide_for_local_governments

Solarize Portland: Community Empowerment through Collective Purchasing. Lizzie Rubado, Energy Trust of Oregon, August 2010. This paper provides more details on the success of Solarize Portland. www.energytrust.org/About/policy-and-reports/Reports.aspx

Evaluation of Energy Trust of Oregon’s Solar Programs: Solarize Southeast Portland and Solar Energy Review. The Cadmus Group, November 2010. The evaluation contains detailed customer feedback and participation profiles for the first Solarize project. www.solarizewa.org/files/cadmus-report-eto-solar-programs

Smart Solar Marketing Strategies. L. Rosoff and M. Sinclair, Clean Energy Group 2009. The report offers valuable lessons in marketing solar. www.statesadvancingsolar.org/resource-center/smart-solar-marketing-strategies

Peer Effects in the Diffusion of Solar Photovoltaic Panels. Bryan Bollinger, NYU Stern School of Business and Kenneth Gillingham, Yale School of Forestry & Environmental Studies, December 2011. This paper analyzes the spread of solar PV in communities. http://people.stern.nyu.edu/bbolling/index_files/BollingerGillingham_PeerEffectsSolar.pdf

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NOTICE This report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States government or any agency thereof.

Available electronically at http://www.osti.gov/bridge

Available for a processing fee to Available for sale to the public, in paper, from: U.S. Department of Energy U.S. Department of Commerce and its contractors, in paper, from: National Technical Information Service U.S. Department of Energy 5285 Port Royal Road Office of Scientific and Technical Information Springfield, VA 22161 P.O. Box 62 phone: 800.553.6847 Oak Ridge, TN 37831-0062 fax: 703.605.6900 phone: 865.576.8401 email: orders@ntis.fedworld.gov fax: 865.576.5728 online ordering: http://www.ntis.gov/help/ordermethods.aspx email: mailto:reports@adonis.osti.gov

Printed on paper containing at least 50% wastepaper, including 10% post consumer waste. Prepared for the National Renewable Energy Laboratory (NREL), a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy; NREL is operated by the Alliance for Sustainable Energy, LLC. DOE/GO-102012-3578 • May 2012

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Printed with a renewable-source ink on paper containing at least 50% wastepaper, including 10% post consumer waste.

For more information, visit: energy.gov/sunshot

Prepared for the National Renewable Energy Laboratory (NREL), a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy; NREL is operated by the Alliance for Sustainable Energy, LLC.

DOE/GO-102012-3578 • May 2012

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Page 1 of 1 – Staff Report

MILWAUKIE CITY COUNCIL STAFF REPORT

Agenda Item: Meeting Date:

To: Mayor and City Council

Through: Bill Monahan, City Manager

Subject: Milwaukie Arts Committee Annual Update

From: Mitch Nieman, Asst. to City Manager

Date: April 19, 2016

ACTION REQUESTED

Receive and file an annual update from the Milwaukie Arts Committee (artMOB)

HISTORY OF PRIOR ACTIONS AND DISCUSSION

April 21, 2015: Members of the Arts Committee met with City Council to discuss their annual

work plans and program strategies.

BACKGROUND

The Milwaukie Arts Committee was created and appointed by City Council in the spring of 2008.

The Committee quickly adopted the name “artMOB,” which is an acronym for “Milwaukie on

board with the arts.” The name also represents values of the City’s founding members. artMOB

works to connect artists with resources and to find projects in the City to institute an art voice.

The seven-person volunteer committee encourages businesses to attract artists and promote

art, and raises awareness of the importance of art and culture in the broader community.

The purpose of this update is to provide City Council with the Committee’s strategic plan,

upcoming receptions, and to showcase an initial draft of the “Art in Public Places” ordinance.

The ordinance will come before Council for a more in-depth review at a subsequent meeting.

However, as a precursor, the Committee would appreciate having Council’s input on sections

that are highlighted in yellow. Those sections have been discussed with community

development staff, but will eventually need Council’s input to move the ordinance to the next

level.

FISCAL IMPACTS

There is no cost to the City to receive an annual update from artMOB. There is no line item

appropriation in the City’s adopted FY 15-16 Biennium Budget, or in its proposed FY 17-18

Biennium for administration of the Committee.

ATTACHMENTS

1. 2015 – 2017 Strategic Plan

2. City Hall Artists’ Series 2016 Schedule

3. Art in Public Places (Percent for Art) Draft Ordinance

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2015-2017

Strategic Plan

Goal 1: Define committee member roles and responsibilities

o Adopt biennial goals

o Work to find special projects in the City to institute an art voice

Goal 2: Raise awareness of artMOB in the broader community, engaging key leaders and artists

o Maintain web and social media presence with fresh content that is cross-promoted

o Develop partnerships with other artists and arts organizations in the area

Goal 3: Establish Milwaukie’s identity as a center and incubator for arts and culture

o Support development of an arts innovation hub (iHub) in North Industrial Area

o Select and curate art installations in the City Hall Sculpture Garden

o Solicit businesses and neighborhood associations to sponsor arts projects and programs

o Extend the Sculpture Garden to other areas of the City (east of HWY 224)

o Research and apply for grants

o Survey community regarding arts and culture desires and patronage

o Partner with businesses and the Milwaukie Downtown Business Association on First Friday events

o Curate monthly artists’ series at City Hall and in downtown businesses

Goal 4: Establish a sustainable funding stream for citywide arts projects and programs

o Develop and champion an “Art in Public Places” Ordinance for adoption by City Council

o Collect commissions from artists’ series to support ongoing events and promotions

o Connect artists to businesses for cross-promotional development opportunities

Revision: 04/19/2016

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2016

Artists’ Series - City Hall

Jan/Feb - Chris Haberman - mixed media

Feb/March - Nanette Wallace - mixed media

March/April - Denise Baker - Americana en Havana Cuba

April/May - Comic Book Illustrator in association with Free Comic Book day on May 7

May/June - Chinese Sister City Art of Fuzhou - Ellen Sawo at City Hall (and various locations)

June/July - Art to End Alzheimer's local senior citizens and Willamette View art program

July/Aug - Theodore Holdt

Aug/Sept - Sculpture Garden Artists (past and present)

Sept/Oct - Gothic Group Show in association with Joe Calkins

Oct/Nov - TBD

Nov/Dec - TBD

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City of Milwaukie Art in Public Places (Percent for Art) Ordinance April 19, 2016 PURPOSE Artistic and cultural resources are essential to the quality of life of a community. Public art contributes to the economic vitality of a region by improving the quality of the built environment and fostering a positive community identity. Historically, artists have helped shape great civic projects, from federal monuments to community development projects of local government agencies and special districts. Art in Public Places for the City of Milwaukie integrates art into public capital improvement projects and public and private development projects, which enhances Milwaukie’s visual environment for those who live here now and for generations to come. GOALS Art in Public Places goals involve:

Enhance the quality of life of Milwaukie residents through implementation of public art projects;

Expand economic vitality of the City through increased property values and new cultural tourism opportunities;

Provide access to artistic experiences for Milwaukie residents; and

Acknowledge skills and creativity of artists, which are key to the livability of the community. ART IN PUBLIC PLACES Art in Public Places identifies three sources of funding available for public art projects in Milwaukie:

Budget appropriations from City Council from General Funds or other funds as deemed appropriate;

Fees assessed as part of eligible public capital projects, funded wholly or in part by the City of Milwaukie; and

Fees assessed as part of eligible public or private commercial, mixed use, institutional or industrial development projects.

Public capital projects shall allocate 1.5% of eligible project costs for the design, construction, integration, acquisition, delivery and conservation of public art as part of their project, or shall contribute 1% of eligible project costs to the City’s Public Art Fund, unless otherwise ordered by City Council or restricted based on the funding source. Property owners or real estate developers shall allocate 1.5% of eligible project costs to implement a public art project as part of a public or private commercial, mixed use, institutional or industrial development project, or shall contribute 1% of eligible project costs to the City’s Public Art Fund. Eligible public capital projects include any new public building or facility and any expansion, remodel, or rehabilitation projects of an existing public facility, paid for wholly or in part by funds appropriated by the City or by any other public entity for which City Council is the governing body, with the exception of:

Property, open space, and rights of way acquisition

New or expansion, remodel, or rehabilitation projects under $300,000

Streets and paving

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Underground utility projects

Water, sewer or storm water distribution and facility projects

Portable trailers

Technical equipment or structures acquired at a set price through a purchase order (prefab) Eligible project costs used to calculate the public art allocation for public capital projects means the engineer, architect, or designer’s estimate of cost of construction at the time of project bid approval by City Council. If use of all, or a portion, of a project’s funding is prohibited by the funding source for the purposes of public art, the public art allocation will reflect only that portion of the funding that is eligible for the public art allocation. Eligible commercial, mixed use, institutional or industrial development projects include any new building or facility and any expansion or refurbishment of an existing facility, with the exception of:

Property or open space acquisition

New or expansion, remodel, or rehabilitation projects under $300,000

Streets and paving

Underground utility projects

Water, sewer or storm water distribution and facility projects

Portable trailers

Technical equipment or structures acquired at a set price through a purchase order (prefab)

Equipment or apparatus accessory to the use of the space

Public or subsidized housing, non-profit development

Mixed use housing with eight or fewer units

Re-roofs

Fire life safety improvements

Projects that meet ANSI-approved green building certifications Eligible project costs used to calculate the public art allocation for commercial, mixed use, institutional or industrial development projects means the total valuation of construction and improvements (less exemptions) as determined by the Building Official at the time of building permit issuance and approval. If use of all, or a portion, of a project’s funding is prohibited by the funding source for the purposes of the public art program, the public art allocation will reflect only that portion of the funding that is eligible for the public art allocation. Public art allocations will be collected by the Community Development Department through the Building Department and deposited into a “Public Art Fund,” maintained by the City Manager’s Office and Finance Department. The public art allocation on any given public capital or public and private development project will not exceed $100,000. This cap shall be reviewed by City Council every five years.

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PUBLIC ART Public art means artistic and cultural facilities, temporary or permanent objects and amenities, whether created before or after the adoption of this ordinance, such as:

Sculpture: Free standing, wall supported or suspended, kinetic, electronic or mechanical in material or combination of materials;

Murals or portable paintings

Earthworks, neon, glass, mosaics, photographs, prints, calligraphy, any combination of forms of media, including sound, film, holographic, and video systems, hybrids of any media and new genres;

Standardized fixtures, such as grates, street lights, signage, and other design enhancements as rendered by an artist for unique or limited editions;

Exhibit/Performance Space: Public gallery/exhibition space, public performance spaces, public artistic studio spaces, and public art education facilities; and

Similar facilities and amenities as determined by City Council;

Restoration of City-owned artworks, and restoration or replication of original decorative ornamentation and Public Art as part of the rehabilitation of the City’s historic, cultural and architectural landmarks;

Performing Arts: Theatre, dance, music and performance art;

Literary Art: Poetry readings and storytelling;

Media Art: Film and video, screenings and installations;

Education: Lectures, presentations and training in and about arts and culture;

Special events: Parades, festivals and celebrations; and

Similar arts services as approved by City Council; and

Strategic or master planning of arts in the City. Allowable public art project costs: The 1.5% or 1% public art allocation or allocation from City Council may be used to fund the following:

Purchase or design and fabrication of public art

Fees and travel expenses for artist services and/or for artist finalists

Transportation and installation of public art

Preservation, conservation, documentation, insurance, identification plaques, community workshops and other reasonable expenses associated with the initiation, development and completion of public art projects

Development and adoption of a Public Art Master Plan Public art allocations shall not be expended for directional elements, signage, mass produced objects, reproductions, or for architectural elements, landscape architecture or gardening, except as they relate directly to an artist's concept for a Public Art Project or for the preservation or conservation of City artworks.

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IMPLEMENTATION OF PUBLIC ART PROJECTS City Staff will administer the Public Art Fund and Art in Public Places Program. The Office of the City Manager and Community Development Department will coordinate integration and delivery of public art components in capital or refurbishment projects with city staff, ensuring that selected artists are fully integrated into the project design process for all capital or refurbishment projects with a public art component. GUIDELINES Artist Solicitation, Selection and Management Artists shall be solicited by City Staff and Milwaukie Arts Committee through a competitive Call to Artists (RFQ or RFP) or by invitation. Artists may be selected through a competitive process including interviews, proposals, or submission of professional materials; or they may be directly selected. A Selection Committee will be established by City Staff and Milwaukie Arts Committee for each project. The Selection Committee shall determine the scope, direction, and particular needs of the project. The Selection Committee is solely responsible for artist selection, review of design, execution, placement and acceptance of Works of Art, and shall communicate such progress to City Council. Representation on a Selection Committee will include:

Project architect, engineer, or project manager of given public capital project

Constituent representative (i.e., user of the facility being built or renovated)

Two representatives of Milwaukie Arts Committee

Two professional artists

One Community Development Department representative

One Neighborhood District Association representative from respective neighborhood

One member of City Council City staff will manage selected artists. This includes executing a contract with an artist; managing the artist through the Selection Committee review process; and overseeing fabrication and installation of artworks. City staff will report regularly to Milwaukie Arts Committee and City Council on artist’s progress. Other guidelines to be established post ordinance adoption

Review and development of public artworks

Gifts and loans (accessioning and deaccessioning)

Relocation or modification to artworks

Maintenance and conservation

Citywide public arts master planning

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BUDGET COMMITTEE MEETING AGENDA

April 19, 2016 at 5:00 p.m.

City Hall

1. Call to order and introductions

2. Approval of prior meeting minutes

3. Review of quarterly financial report for the second quarter ended December 31, 2015

and discussion

4. Supplemental Budget Discussion

5. Vote to recommend Supplemental Budget to Council

6. Adjourn

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CITY OF MILWAUKIE BUDGET COMMITTEE MEETING

September 15, 2015

Chair Stoll called the meeting to order at 5:10 p.m. Committee members and staff introductions were done. Members Present: Lisa Batey (via phone), Jesse Boumann, Scott Churchill, Milo Denham, Mark Gamba, Michael Osborne, Ronn Palmer, Wilda Parks, Karin Power and Jon Stoll Excused: None Staff Present: Casey Camors, Bonnie Dennis, Pat DuVal, Bill Monahan and Gary Parkin Approval of prior meeting minutes Mrs. Power requested her titled be changed from Ms. to Mrs. in the May 28, 2015 minutes. It was moved by Ronn Palmer and seconded by Councilor Parks to approve the May 28, 2015 meeting minutes with the change. Motion passed unanimously. Appoint citizen member of the Budget Committee to the Audit Committee Ms. Camors explained the history of the Audit Committee and their audit process responsibilities. Mr. Osborne asked the name of the current auditors. Ms. Camors responded Talbot, Korvola & Warwick LLP. Mr. Boumann offered to serve on the Audit Committee and gave a brief history of his finance background. Chair Stoll made a motion to appoint Mr. Boumann to the Audit Committee. Mr. Denham seconded the motion. Motion passed unanimously. Quarterly Financial Report for June 30, 2015 Review and Discussion Ms. Camors reminded the Committee these are preliminary numbers since the audit will not be completed until the end of November. The Comprehensive Annual Financial Report will be issued in early December. Mayor Gamba asked about property tax real market value versus assessed value; he read the median home cost in Milwaukie is higher than Southeast Portland, and if this is true, why isn’t the graph real market value estimate higher. Ms. Camors will check with the County Assessor about expectations of the real market value; she clarified that real market value will not impact property tax revenues. Mr. Churchill added real market value does not affect the budget. Mrs. Power stated Ms. Camors will find out more detail from the County Assessor. Ms. Camors added it takes the Assessor some time to gather the information into their logs for each property. Ms. Camors started with the overall City funds summary; some projects that were budgeted for FY 2015 have been rolled over to FY 2016.

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Mr. Osbourne asked if the project rolls over or the funds roll over. Ms. Camors responded the projects are allotted money for each budget year; the requirements are over a two year period, which does not require the City to rebudget for projects within the biennium. A fair amount of the savings seen in FY 2015 was due to projects rolling over into FY 2016. Ms. Camors continued with the General Fund; intergovernmental revenue is lower due to timing of Riverfront’s final completion. Fines & Forfeitures are low due to photo radar. Expenditure category variances are primarily due to capital outlay. Code Enforcement is over budget due to unforeseen litigation and staff will be coming back to the Committee for a possible supplemental budget. Non-departmental is over budget due to the issuance of debt, which is not a budget law violation. Police Administration is over budget due to the increased utilization of the police background investigator. Mr. Churchill asked if the Police Administration expenses will continue to increase. Ms. Camors responded yes, due to staffing challenges. Mr. Churchill asked if there are any other foreseen areas that might be over budget in the future. Ms. Camors responded Information Technology might have supplemental requests but nothing substantial. Mr. Churchill asked if accruals will affect the report. Ms. Camors responded accruals have been accounted for in this preliminary report. She continued with the Debt Service fund, which is looking good. The Library Fund’s district revenue was more than budgeted; overall the fund looks good. Chair Stoll asked why there was an increase in the revenue. Mr. Churchill responded due to collections. Mr. Monahan added with the economy improving, there has been more development; it has been discussed to set aside the additional revenue for the library expansion. Ms. Camors continued with the Building Inspection Fund; effective July 1, 2015 the City Council adopted new rates. FY 2015 ended a little better than expected. The Street Surface Maintenance Program portion of the Transportation Fund looks good; specific project details are located at the back of the quarterly report. The State Gas Tax portion of the Transportation Fund, intergovernmental revenue, FILOC revenues and capital outlay are low compared to the budget; these three areas are connected. Ms. Batey understands why the numbers are down but does not understand how the three areas are connected. Ms. Camors responded capital projects have many funding components as some of the money comes from the City, other agencies, and FILOC money. Both revenue and expenses are low because the projects were not completed by the end of FY 2015. Ms. Batey asked if Riverfront Park is included in intergovernmental other. Ms. Camors answered no; this is 17th Avenue, Multi-Use Trail and a few other projects listed in the Projects Status Report. Mr. Churchill added it is a good point to clarify the variances. Ms. Camors continued with the Water Fund; revenues continue to be higher than expected due to a dry year. Mr. Churchill stated miscellaneous revenue is ahead of schedule.

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Ms. Camors clarified that miscellaneous revenue is behind but fees and charges are higher than expected. Mayor Gamba asked what is included in miscellaneous revenue. Ms. Camors responded that it includes water tower rental income and recovered expenditures. She continued with the Wastewater Fund, overall the Fund looks good. The Stormwater Fund looks good; capital outlay has a huge variance due to the projects. The SDC Fund overall looks good. Review of Updated Five-Year Financial Forecast Ms. Camors reminded the Committee these figures are preliminary, unaudited figures. She reviewed the report format for the new members. Mr. Boumann asked if there is a cheat sheet on the assumptions for the report. Ms. Camors responded the assumptions are listed on each page; she can provide additional detail as report review continues. Mr. Churchill clarified this report does not include the PERS adjustment. Ms. Camors answered yes. She started with a summary of all City funds; overall it looks pretty good, the numbers adjust year-to-year due to many factors. A forecast is built on assumptions and is a long-term planning tool. Mr. Churchill stated fund balance is climbing and decreasing. Ms. Batey asked why the beginning balance is so much higher this year. Ms. Camors responded that it is due to capital projects not being completed in FY 2015 and rolling over to FY 2016; also the issuance of debt will affect the balance. She directed the Committee to the project list for detail. Mayor Gamba asked about the assumptions used for taxes; 3% rise in taxes, assuming no new development. Ms. Camors responded the forecast uses only known facts in estimating revenue. Mr. Denham asked if the City will really use all the capital outlay funds budgeted. Ms. Camors stated it depends if the projects are done; historically the City has underspent funds. Mr. Osbourne asked if the City is taking in funds one year and if the expenses are not incurred until the next fiscal year, then are the projects being pushed out. Ms. Camors responded that grant funded projects usually require the City to expend the funds first and then submit for reimbursement. Mr. Churchill stated beginning fund balance is dramatically dropping off by FY 2020. Mayor Gamba would like to see this same sheet from four years ago; to see how it is tracking. Ms. Camors responded the information is located in previous budget documents, which are located on the City’s website. Expenditures included capital outlay; overall the year ended on a good note. Fund balance will decrease over time if all factors stay the same. Mr. Churchill mentioned photo radar numbers. Ms. Camors responded the numbers compensate for the staffing element. Mr. Boumann asked why the significant drop in photo radar.

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Ms. Camors responded it was due to staffing and deployment of the van. Mayor Gamba clarified an officer must be present in the van. Mr. Monahan added there have been retirements and to bring an officer on the force takes time due to training. Chair Stoll would like a better explanation of photo radar numbers. Ms. Camors stated when the budget process starts the forecast will be updated with more refined amounts. Mayor Gamba asked to have the forecasts from four years ago available for their next meeting. Ms. Camors continued with the Debt Service fund; it is building up reserves. The Building Inspection Fund includes the rate increases adopted July 1st; the fee increases will allow this fund to survive. Mr. Churchill asked about the beginning balance and if the Fund is stable. Mr. Boumann asked what was the percentage increase. Ms. Camors responded overall 25% off all services. She continued with the Library Fund, the district revenue increase is included. The increase in district revenue has been bookmarked as expenditure for the Library task force. Mayor Gamba asked where the money came from for the consultants. Mr. Monahan responded it was through the supplemental budget. Ms. Camors continued with the Transportation Fund. Mr. Churchill asked if vehicle replacement really needs that much money. Ms. Camors responded that number will most likely change. She continued with the Water Fund; she mentioned three years ago this fund was in really bad shape. She recommends looking at this fiscal policy and how much should be placed in reserves. Mr. Boumann asked what amount other cities hold in reserve. Ms. Camors responded many cities hold 25%; she is researching best practices of water funds. Based on current weather patterns it should be increased. Mr. Churchill heard citizens talking about the Water Fund loaning other funds money. Ms. Camors responded that during her tenure there have been no such loans. Mayor Gamba stated the volatility mainly takes place during the summer, winter use is fairly constant; what percentage of the income budget comes from the summer months. Ms. Camors will research and get him an answer. Mr. Denham asked what was the cause of violability during the period FY 2010 through FY 2012. Ms. Camors responded these were extremely wet years. Mayor Gamba added there are future significant water capital outlay projects, such as water tower painting. Ms. Camors also added there are a lot of deferred maintenance projects. Ms. Batey stated she could follow up with the regional water providers who might have information.

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Chair Stoll stated it is troubling to have rates climbing every year and reserves increasing as well; he asked if this was a reasonable number. Ms. Camors stated this is why she is bringing up the issues; rates are set in the master plan. With a review of the impacts, these rate increases might not come to fruition, this is something the CUAB and Council will need to review. Mr. Osborne asked if the wish list of capital projects put on hold are incorporated into this forecast. Mr. Churchill stated capital projects should be reviewed before rates are looked at. Ms. Camors stated she will work with CUAB during the budget process and that quite a few factors affect the fund balance. Mr. Parkin stated there is a list of maintenance projects in the master plan that need to be caught up; the CUAB reviews this process. Additionally, the prior year water rate increase was decreased before final adoption due to the increase in revenue and ending fund balance. Mayor Gamba stated this meeting is going over time. Ms. Camors continued with the Wastewater Fund, stating that the Fund is good and stable. The Stormwater Fund is also stable. The SDC Fund is good. Mr. Churchill mentioned the Stormwater fund balance decreases. Ms. Camors responded that she will be tracking this balance. Ms. Camors mentioned in preparation for the upcoming budget, in February, she will begin to meet with members individually to explain the budget process. In early March, there will be budget process training, which will include the legal aspects of the process. In early April, the official budget process will begin. Adjourn It was moved by Mayor Gamba and seconded by Mrs. Power to adjourn the Budget Committee meeting at 6:15 p.m. Respectfully submitted, ____________________________________ Judy Serio, Accountant

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Page 1 of 2 – Budget Committee Joint Session

MILWAUKIE CITY COUNCIL STAFF REPORT

Agenda Item: Meeting Date:

To: Mayor and City Council

Through: Bill Monahan, City Manager

Subject: Budget Committee Joint Session

From: Casey Camors

Date: April 7, 2016

ACTION REQUESTED Quarterly Report Presentation and review of quarterly financial report for informational purposes only.

Supplemental Budget Discuss supplemental budget and recommend revised appropriations for the 2015-2016 Biennium Budget to the City Council for adoption. HISTORY OF PRIOR ACTIONS AND DISCUSSIONS June 2014 – The City Council adopted the Budget Committee approved 2015-2016 Biennium Budget.

December 2015 – The Budget Committee recommended, and the City Council adopted a supplemental budget revising appropriations for the 2017-2018 biennium.

The Budget Committee reviews the quarterly financial report most quarters.

BACKGROUND Quarterly Report

The City of Milwaukie Finance Department prepares an annual financial report (Comprehensive Annual Financial Report), five-year financial forecasts and four quarterly financial reports each fiscal year. The quarterly financial reports are prepared for the Budget Review Board and City Council, collectively referred to as the City’s Budget Committee, to inform them of the financial results for the quarter ended and year-to-date. These reports are prepared by the Finance Department and significant budget-to-actual variance are identified and explained.

The City of Milwaukie quarterly financial report through the second quarter ended December 31, 2015 includes:

• Executive Summary with Quarterly Highlights

• Budget-to-Actual comparisons for all City Funds and Departments

• Project Status Report for all projected included in the City’s fiscal year 2015-2020 Capital Improvement Plan (CIP)

City-wide resources at December 31, 2015 total $20,409,000 (excluding fund balance carryover of $18,014,000) as compared to total year-to-date City-wide requirements of $17,771,000 resulting in an increase to unappropriated ending fund balance of $2,638,000.

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Page 2 of 2 – Budget Committee Joint Session

Supplemental Budget Oregon Revised Statute 294 allows for supplemental budget adjustments when a condition arises which was not known at the time the budget was adopted. A supplemental budget that adjusts fund expenditures by 10 percent or less may be adopted at a regularly scheduled meeting of the City Council and does not require a public hearing. The City’s budget for the 2015-2016 biennium totaling $95,661,000 was adopted by Council on June 17, 2014. A supplemental budget was adopted in December of 2014 revising appropriations and modifying the City’s budget for the 2015-2016 biennium to $95,701,000. Since the biennial budget was adopted, certain conditions and situations have arisen that necessitate changes in financial planning. These adjustments are presented in the attached draft Supplemental Budget Adoption Resolution and significant conditions are as follows: General Fund:

• Funding for the new Sustainability Director position in the City Manager’s Office. • Funding for emergency temporary repair to the Kellogg Creek Bridge in the Community

Development Department. • Funding for legal costs related to unanticipated litigation in the Code Enforcement

Department. • Funding for additional background investigator salaries due to attrition in the Police

Department. Building Inspections Fund:

• Funding for permit costs paid to the County due to moving the permitting process for some permits in-house.

The attached draft resolution makes the appropriate budget appropriation adjustments as itemized above. CONCURRENCE N/A

FISCAL IMPACTS Supplemental Budget All additional budget authority requested would be funded by transferring unused funds from other City departments or offset by new revenues identified. Based on the supplemental budget, neither General Fund Contingency nor Fund Balance would be affected by the supplemental budget. WORK LOAD IMPACTS N/A

ALTERNATIVES Supplemental Budget Do not recommend, or recommend only in part, the draft supplemental budget resolution. ATTACHMENTS 1. Quarterly Financial Report for the second quarter ended December 31, 2015 2. Supplemental Budget Adoption Resolution

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Reporting financial resultsfor the second quarter ended

December 31, 2015

Milwaukie FinanceWS53

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Executive Summary  

 

We are pleased to offer this preliminary financial report of City operations for your review. This report  covers  financial  operations  through  the  second  quarter  ended  December  31,  2015 relating to the fiscal year ending June 30, 2016.   

 FINANCIAL STATEMENTS FOR QUARTER ENDED DECEMBER 31, 2015 Our auditors completed their annual audit fieldwork and issued their opinion for submission to the  Secretary  of  State  –  Audits Division  before  the December  31,  2015  filing  deadline.  The Comprehensive  Annual  Financial  Report  (CAFR)  is  available  for  review  at www.milwaukieoregon.gov.  The City’s Popular Annual Financial Report (PAFR) was also completed and is available online at www.milwaukieoregon.gov/finance. Popular Annual Financial Reports are specifically designed to be  readily accessible and easily understandable  to  the general public and other  interested parties without a background in public finance. 

 QUARTERLY HIGHLIGHTS This  financial  report  summarizes  the  financial  results  for  the  second  quarter  of  fiscal  year ending June 30, 2016 (year‐to‐date) and highlights certain topics of interest.  Summary of Beginning Fund Balances Beginning fund balances represent the amount of funds available to fund capital projects and operations until property taxes begin to be received  in November.   During the budget process we  estimated  that  beginning  fund  balances  on  July  1,  2015  for  all  funds  would  total $10,785,000. In our financial statements for June 30, 2015, audited ending fund balances for all funds  came  in  higher  at  $18,014,000.   Much  of  this  variance  is  due  to  projects  that were delayed into the second year of the biennium.  Second Quarter Financial Results The General Fund and Library Fund are dependent upon property taxes and distributions from the  Library District of Clackamas County.   At December 31, 2015, 92% of budgeted property taxes  for the biennium were received by the end of quarter.   Overall, General Fund revenues are on target and expenditures are below budget at 93%.   Three departments  in the General Fund  are  over  budget  at  the  end  of  this  second  quarter;  two  of which  should  be  adjusted through a supplemental budget process.  The Debt  Service  Fund  is  strong  and  stable with  revenues  at  113%  of  budget  (due  again  to property  taxes) and expenditures at 94% of budget.   At year end, we expect  this  fund  to be right in line with budget.  The Building Inspection Fund  is beginning to recover from the  lull  in revenue production, with total revenue at 120% of expectation at the end of the first quarter.  Substantial fee increases 

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were implemented to ensure this fund’s self‐supporting nature. Expenditures are slightly low at 95% due  to  the Building Official position being vacant  for  two months during  the prior year.  The Building Inspection department recently brought some previously outsourced permitting in house.   This change will create a change  in how we account for the  issuance of these permits and will therefore, necessitate a supplemental budget adjustment.  The  Library  Fund  receives  distributions  from  the  Library District  of Clackamas County  in  the third and fourth quarters and therefore, the Library Fund  is reflecting no distribution to date. The Library Fund did however receive a majority of its property taxes bringing overall revenue figures to 103% of budget.   Library expenditures are right on target at 95%, without regard to District capital funds budgeted for use.  The Transportation Fund  is broken out  into two distinct departments, separating  its two main functions. These two functions are the Street Surface Maintenance program and the State Gas Tax program.    State gas tax is 104% of budget and local gas tax is 98% of budget.  Street Surface Maintenance revenues are  low at 82% due  to  the  timing of  the PGE privilege payment.   Expenditures are above budget (126% of budget) due to capital project timing. We expect these expenditures to even out during the remainder of the year.  State Gas  Tax  revenues  and  expenditures  are  at  57%  and  55%  respectively.    State Gas  Tax figures are low due to capital project timing.  In this report, ending fund balance for State Gas Tax  recovers  from  the  prior  quarter  where  it  dipped  below  zero  as  franchise  fees  and intergovernmental revenues were received during the current quarter.     Water Fund revenues are at 121% of budget and expenditures at 84% of budget.    In the  first few quarters of  the  year we expect  to  see much higher  revenues  in  the Water  Fund due  to seasonal  impacts on water consumption.   We do not anticipate that revenues will continue to trend at 121% though we do expect that the fund will remain healthy.   The Wastewater Fund  is stable, with revenues at 104% of budget and expenditures at 93% of budget.    A  primary  expenditure  in  the  Wastewater  Fund  is  the  payment  for  wastewater treatment to Water Environmental Services, of which only five payments had been made by the date of this report, resulting  in  lower expenditures than anticipated.   These expenditures will likely catch up by year‐end.  The Stormwater Fund has been accumulating fund balance to help pay for future projects.  The City completed a rate analysis  in fiscal year 2015 and new rates were  implemented to ensure the  future health of the stormwater system.   Revenues appear  low due to  intergovernmental revenues for an uncompleted project; however revenues are steady and healthy. Expenditures are equally below budget due  to various  incomplete projects at  the end of  the quarter.   We expect this fund to remain solid.  SDC Fund projects have been started and revenues are higher than anticipated at 151%.  

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Property Tax Bills Mailed out by County Clackamas County mailed out property  tax bills during  the  second quarter. Although market values have dropped over  the  last couple of years,  this  five‐year downward  trend has  turned around. Understanding  that every  individual property  is different, at  least  in  total,  the City’s real market  and  assessed  values  increased  in  FY  2016.    In  a  letter  received  from Clackamas County in March, the County anticipates that the City’s Assessed Values will increase by 3.5‐4% for fiscal year 2016:  

  

 INTERNATIONAL AWARDS RECEIVED FOR FINANCE DOCUMENTS Comprehensive Annual Financial Reporting Award. For the fourth time since  the  early  nineties,  the  City  received  the  Certificate  of Achievement  for  Excellence  in  Financial  Reporting  award  from  the Government  Finance Officers Association  (GFOA).  In order  to  receive this  award,  a  government  unit must  publish  an  easily  readable  and efficiently  organized  CAFR  whose  contents  conform  to  program standards and satisfy both accounting principles generally accepted  in the United States of America and applicable legal requirements.   

 Popular Annual Financial Reporting Award. For the fourth time the City  received  an  Award  for  Outstanding  Achievement  in  Popular Annual Financial Reporting  from  the GFOA.  In order  to  receive  this award, a government unit must publish a Popular Annual Financial Report, whose contents conform to program standards of creativity, presentation, understandability, and reader appeal.    

 $‐

 $500,000

 $1,000,000

 $1,500,000

 $2,000,000

 $2,500,000

 $3,000,000

Thousands

Assessed Value

Market Value

City of Milwaukie Real Market Value vs. Assessed Value

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Distinguished  Budget  Presentation  Award.  The  City  also  received  the  Distinguished  Budget Presentation Award for its biennium 2015‐2016 budget document from the GFOA. This award is the  highest  form  of  recognition  in  governmental  budgeting.  Its  attainment  represents  a significant accomplishment by a governmental entity,  its  financial  staff, and  its management. This  international award program was established  in 1984 to encourage exemplary budgetary practices and to provide peer recognition for government finance officers who prepare budget documents. They rate a budget's proficiency in four major categories: as a policy document, an operations guide, a financial plan, and a communications device.  These  awards  are prestigious national  awards  that  recognizes  conformance with  the highest standards for preparation of state and local government financial reports.    We value your trust and promise to ensure fiscal integrity in all that we do. As you review this quarterly report, I welcome your questions, comments, and any suggestions you may have. As always, the best method of contact is by email at:  HUcamorsc@milwaukieoregon.orgUH.  Respectfully,  

           Casey Camors, CPA CMA CPFO CGMA         Finance Director, City of Milwaukie           April 8, 2016  

WS57

City of Milwaukie, Oregon

Quarterly Financial Report

Budget‐to‐Actual

Through the second quarter ended December 31, 2015

All City Funds

Beginning Ending

Fund Balance Fund Balance Change

as of as of in Fund

July 1, 2015 Revenues Expenditures December 31, 2015 Balance

1 General Fund 5,779,705$       10,338,314$    7,808,035$        8,309,984$                    2,530,279$      1

2 Debt Service Fund 100,460            257,248            80,811                276,897                         176,437           

3 Building Inspection Fund 136,852            193,363            145,747              184,468                         47,616             

4 Library Fund 745,774            894,714            1,193,481          447,007                         (298,767)           1

5 Transportation Fund 2,015,959         1,307,076         2,402,687          920,348                         (1,095,611)       2

6 Water Fund 1,700,005         2,232,259         1,095,672          2,836,592                      1,136,587         3

7 Wastewater Fund 2,716,486         3,684,587         3,339,878          3,061,195                      344,709            3

8 Stormwater Fund 3,390,816         1,476,165         1,604,675          3,262,306                      (128,510)           3

9 Systems Development Charges Fund

Transportation SDC Department 278,795            9,880                 99,811                188,864                         (89,931)             4

Water SDC Department 174,517            1,503                 ‐                       176,020                         1,503                

Wastewater SDC Department 775,256            11,478               ‐                       786,734                         11,478             

Stormwater SDC Department 199,572            2,507                 ‐                       202,079                         2,507                

Systems Development Charges Fund 1,428,140         25,368               99,811                1,353,697                      (74,443)            

Totals 18,014,197$    20,409,094$    17,770,797$     20,652,494$                 2,638,297$     

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3

4

Revenues were higher than anticipated and many of the budgeted capital projects will either begin in FY2016 or be completed in FY2016.

In SDC funds, it is typical to see large spend downs in any given year.

The majority of property tax revenues are received in November, and as such, at the end of September is it typical to see expenditures out pacing revenues.

Capital projects completed early in the year outpaced revenues however, this was to be expected.

Year‐to‐Date

through December 31, 2015

Fund

 $‐ $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000

Thousands

Ending Fund Balances

City of Milwaukie, Oregon

Second Quarter Financial Report for FY 2016 (through December 31, 2015) Page: 5 of 19

WS58

City of Milwaukie, Oregon

Quarterly Financial Report

Budget‐to‐Actual

Through the second quarter ended December 31, 2015

General Fund  

Biennial Flexible FY 2015 FY 2016 Total Biennium

Revenue Budget Biennial Budget Actual YTD Actual To‐Date Actual Variance

Property taxes 13,480,000$    9,904,500$          6,324,360$    6,103,512$    12,427,872$         2,523,372$    125%1

Franchise fees 3,239,000         2,414,000            1,553,084      133,944          1,687,028              (726,972)        70%2

Intergovernmental 3,755,000         3,149,000            2,113,316      1,006,541      3,119,857              (29,143)          99%

Licenses and permits 775,000            585,000               441,051          222,614          663,665                  78,665            113%

Fines and forfeitures 3,066,000         2,292,000            1,192,530      521,602          1,714,132              (577,868)        75%3

Miscellaneous 333,000            258,500               229,150          115,101          344,251                  85,751            133%

24,648,000      18,603,000          11,853,491    8,103,314      19,956,805           1,353,805      107%

Other financing sources 5,000,000         5,000,000            5,012,894      ‐                   5,012,894              12,894            100%

Transfers 8,890,000         6,655,000            4,420,000      2,235,000      6,655,000              ‐                   100%

Total revenue 38,538,000      30,258,000          21,286,385    10,338,314    31,624,699           1,366,699      105%

Expenditures

City Council 169,000            135,000               65,682            48,934            114,616                  20,384            85%

City Manager  1,509,000         1,126,000            673,303          423,734          1,097,037              28,963            97%

Community Development  4,033,000         3,660,500            3,206,925      296,523          3,503,448              157,052          96%4

Public Works Administration 1,198,000         890,500               466,029          300,390          766,419                  124,081          86%5

Engineering Services 1,190,000         880,500               490,565          231,277          721,842                  158,658          82%6

Facilities Management 2,493,000         1,985,500            1,246,887      466,278          1,713,165              272,335          86%7

Finance 1,904,000         1,439,000            826,224          446,219          1,272,443              166,557          88%8

Fleet Services 2,297,000         1,845,000            1,054,219      326,744          1,380,963              464,037          75%9

Human Resources 640,000            478,500               279,103          146,126          425,229                  53,271            89%

Information Technology 2,296,000         1,744,000            1,049,669      558,072          1,607,741              136,259          92%10

Municipal Court 755,000            561,000               337,594          185,413          523,007                  37,993            93%

Planning Services 1,295,000         953,000               498,631          245,583          744,214                  208,786          78%11

Code Enforcement 343,000            255,000               178,814          121,938          300,752                  (45,752)          118%12

Public Access Studio 186,000            137,500               78,174            12,605            90,779                    46,721            66%

Records and Information Management 874,000            653,000               384,186          201,683          585,869                  67,131            90%

Non‐Departmental 5,758,000         5,004,000            4,663,578      466,023          5,129,601              (125,601)        103%13

Police Administration 1,072,000         798,500               537,020          279,324          816,344                  (17,844)          102%14

Police Field Services 11,508,000      8,546,000            5,212,560      2,907,857      8,120,417              425,583          95%15

Police Support Services 688,000            509,000               296,992          143,312          440,304                  68,696            87%

 

Total expenditures 40,208,000      31,601,500          21,546,155    7,808,035      29,354,190           2,247,310      93%

Revenue over (under) expenditures (1,670,000)       (1,343,500)           (259,770)        2,530,279      2,270,509              3,614,009     

Beginning fund balance 5,293,000         5,293,000            6,039,475      5,779,705      5,779,705              486,705         

Ending fund balance 3,623,000$      3,949,500$          5,779,705$    8,309,984$    8,050,214$           4,100,714$   

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

General liability insurance premiums are paid up front during the year and are expected to smooth out over the course of FY 2017.

Due to staffing changes, the Police Department utilized the background investigator more than anticipated.  As a result, this department will require a supplemental budget adjustment.

Code Enforcement has incurred significant costs related to pending litigation.  A supplemental budget will be done to supply Code Enforcement with sufficient funding.

% of        

Budget

Franchise fees are typically received later in the year and prior year receipts were 2% lower than anticipated.

Photo radar and traffic fines are significantly less than expected due to staffing adaptations and modifications to photo radar van deployment.

Community Development experienced personnel vacancies in FY2015 and expenditures related to the Moving Forward Milwaukie project that were not made in FY2015 are anticipated 

to be made in FY2016.Public Works Admin experienced personnel vacancies and delayed capital outlay expenditures in FY2015.  The capital component is expected to catch up in FY2016.

Engineering experienced personnel vacancies in FY2015. 

Capital outlay expenditures were delayed in FY2015 and have not yet caught up in FY2016.

Capital outlay expenditures slated for FY2015 were delayed but are expected to catch up in FY2016.  Additionally, the department experienced changes in employee benefits reducing 

spending.

In FY2015, Fleet experienced personnel vacancies, fuel, oil, and fleet repair costs were lower than anticipated, and capital outlay expenditures were delayed until FY2016.

Information Techology experienced personnel vacancies in FY2015 and in FY2016.

Planning experienced personnel vacancies in FY2015.  Additionally, urban renewal and comprehensive plan projects have yet to begin. In FY2016 we anticipate the use of the remaining 

budgeted funds.

Property taxes are predominately received in November of each year and therefore, the majority was received this quarter.

During 2015, the Police Department experienced several retirements and vacancies.  Additionally, costs related to photo radar were much lower than anticipated due to a change in the 

unit's deployment.  LOCOM payments have yet to be made in FY2016.

City of Milwaukie, Oregon

Second Quarter Financial Report for FY 2016 (through December 31, 2015) Page: 6 of 19

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City of Milwaukie, Oregon

Quarterly Financial Report

Budget‐to‐Actual

Through the second quarter ended December 31, 2015

Debt Service Fund 

Biennial Flexible FY 2015 FY 2016 Total Biennium

Revenue Budget Biennial Budget Actual YTD Actual To‐Date Actual Variance

Property taxes 486,000$          484,000               320,250$       240,224$       560,474$               76,474$          116%1

Intergovernmental 169,000            103,000               85,195            17,024            102,219                  (781)                99%

Total revenue 655,000            587,000               405,445          257,248          662,693                  75,693            113%

Expenditures

Debt service 655,000            410,700               304,985          80,811            385,796                  24,904            94%

Total expenditures 655,000            410,700               304,985          80,811            385,796                  24,904            94%

Revenue over (under) expenditures ‐                     176,300               100,460          176,437          276,897                  100,597         

Beginning fund balance ‐                     ‐                         ‐                   100,460          ‐                          ‐                  

Ending fund balance ‐$                   176,300$             100,460$       276,897$       276,897$               100,597$      

1 First year property tax collections for debt service were required to create fund balance to ensure ongoing health of the Debt Service Fund.

Building Inspection Fund 

Biennial Flexible FY 2015 FY 2016 Total Biennium

Revenue Budget Biennial Budget Actual YTD Actual To‐Date Actual Variance

Fees and charges 468,000$          343,000               225,775$       192,866$       418,641$               75,641$          122%1

Intergovernmental ‐                     3,000                     522                  497                  1,019                      497                  0%

Miscellaneous 5,000                3,500                     1,426              ‐                   1,426                      (2,074)             41%

Total revenue 473,000            349,500               227,723          193,363          421,086                  74,064            120%

Expenditures

Personnel services 451,000            333,500               193,886          118,715          312,601                  20,899            94%2

Materials and services 25,000              19,000                   16,932            2,032              18,964                    36                    100%3

Transfers 100,000            75,000                   50,000            25,000            75,000                    ‐                   100%

Total expenditures 576,000            427,500               260,818          145,747          406,565                  20,935            95%

Revenue over (under) expenditures (103,000)          (78,000)                (33,095)          47,616            14,521                    94,999           

Beginning fund balance 147,000            147,000               169,947          136,852          136,852                  (10,148)         

Ending fund balance 44,000$            69,000$               136,852$       184,468$       151,373$               84,851$         

1 Building permit volume increased more than anticipated in FY2016.

2 The Building Official position was vacant for two months during FY2015.

3 Due to a change in the handling of permits (moved in‐house) accounting will need to be modified creating a need for a supplemental budget.

% of        

Budget

% of        

Budget

City of Milwaukie, Oregon

Second Quarter Financial Report for FY 2016 (through December 31, 2015) Page: 7 of 19

WS60

City of Milwaukie, Oregon

Quarterly Financial Report

Budget‐to‐Actual

Through the second quarter ended December 31, 2015

Library Fund 

Biennial Flexible FY 2015 FY 2016 Total Biennium

Revenue Budget Biennial Budget Actual YTD Actual To‐Date Actual Variance

Intergovernmental revenue 3,022,000$      1,845,500            1,530,775$    5,568$            1,536,343$           (309,157)$      83%1

Intergovernmental revenue ‐ capital  1,000,000         ‐                         ‐                   ‐                   ‐                          ‐                   ‐2

Fines 126,000            94,500.00            59,910            28,209            88,119                    (6,381)             93%

Miscellaneous 4,000                9,000                     22,266            5,478              27,744                    18,744            308%

Allocation of general property taxes 1,884,000         1,413,000            942,000          855,459          1,797,459              384,459          127%3

Total revenue 6,036,000         3,362,000            2,554,951      894,714          3,449,665              87,665            103%

Expenditures

Personnel services 3,266,000         2,423,500            1,471,717      756,082          2,227,799              195,701          92%4

Materials and services 374,000            280,500               178,273          97,399            275,672                  4,828              98%

Transfers 1,380,000         1,040,000            700,000          340,000          1,040,000              ‐                   100%

Capital outlay 1,000,000         10,000                   10,000            ‐                   10,000                    ‐                   100%2

Total expenditures 6,020,000         3,754,000            2,359,990      1,193,481      3,553,471              200,529          95%

Revenue over (under) expenditures 16,000              (392,000)              194,961          (298,767)        (103,806)                288,194         

Beginning fund balance 422,000            422,000               550,813          745,774          745,774                  323,774         

Ending fund balance 438,000$          30,000$               745,774$       447,007$       641,968$               611,968$      

1

2

3

4

% of        

Budget

Property taxes are predominately received in November of each year and therefore, the majority was received this quarter.

Library District revenues are received in the third quarter of each fiscal year, and therefore have not yet been received for FY2016.

Appropriate uses for these funds are not anticipated until the next biennium.  The funds will be distributed to the City when an appropriate project is slated for construction.

Medical benefits were much lower than anticpated due to enrollment changes in FY2015. Workers' compensation was lower than anticipated. 

City of Milwaukie, Oregon

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WS61

City of Milwaukie, Oregon

Quarterly Financial Report

Budget‐to‐Actual

Through the second quarter ended December 31, 2015

Transportation Fund ‐ in Total

Biennial Flexible FY 2015 FY 2016 Total Biennium

Revenue Budget Biennial Budget Actual YTD Actual To‐Date Actual Variance

Dedicated to St/Surf Maintenance Program:

Fees (from street maintenance fee) 1,232,000$      924,000$             621,826$       312,034$       933,860$               9,860$            101%

Franchise fees (from 1.5% privilege tax) 647,000            647,000               314,819          ‐                   314,819                  (332,181)        49%1

Intergovernmental (from local gas tax) 352,000            248,750               167,638          75,244            242,882                  (5,868)             98%

2,231,000         1,819,750            1,104,283      387,278          1,491,561              (328,189)        82%

Dedicated to State Gas Tax Program:

Intergovernmental (from state gas tax) 2,373,000         1,673,000            1,183,631      553,726          1,737,357              64,357            104%

Intergovernmental (other) 3,295,000         3,295,000            655,735          ‐                   655,735                  (2,639,265)     20%3

Franchise fees (from utility funds) 1,368,000         1,010,000            700,000          358,000          1,058,000              48,000            105%

Miscellaneous 100,000            100,000               12,952            8,072              21,024                    (78,976)          21%4

Total revenue 9,367,000         7,897,750            3,656,601      1,307,076      4,963,677              (2,934,073)     63%

Expenditures

Personnel services 981,000            727,500               388,772          205,634          594,406                  133,094          82%5

Materials and services 911,000            680,000               358,207          156,143          514,350                  165,650          76%5

Debt service ‐                     ‐                         ‐                   ‐                   ‐                          ‐                   ‐

Transfers 1,890,000         1,427,500            965,000          462,500          1,427,500              ‐                   100%

Capital outlay 5,645,000         4,987,500            1,387,312      1,578,410      2,965,722              2,021,778      59%2, 3

Total expenditures 9,427,000         7,822,500            3,099,291      2,402,687      5,501,978              2,320,522      70%

Revenue over (under) expenditures (60,000)             75,250                   557,310          (1,095,611)     (538,301)                (613,551)       

Beginning fund balance 1,364,000         1,364,000            1,458,649      2,015,959      2,015,959              651,959         

Ending net available fund balance 1,304,000$      1,439,250$          2,015,959$    920,348$       1,477,658$           38,408$         

1 PGE privilege taxes are received in the third quarter of the fiscal year, and therefore have not yet been received for FY2016.

2 Contractual services were less than anticipated in FY2015 but are expected to catch up in FY2016.

3 Intergovernmental revenues are comprised of reimbursement grants.  These may not be received uniformily through out the year based on when the related capital project is completed.

4 FILOC funds are slated to be used in the 17th Avenue project which had not concluded as of the end of the FY2016 first quarter.

5 Management continues to try to save in this department due to funding issues.  Savings were realized in personnel services, and materials and services.

% of        

Budget

City of Milwaukie, Oregon

Second Quarter Financial Report for FY 2016 (through December 31, 2015) Page: 9 of 19

WS62

City of Milwaukie, Oregon

Quarterly Financial Report

Budget‐to‐Actual

Through the second quarter ended December 31, 2015

Street Surface Maintenance Program

Biennial Flexible FY 2015 FY 2016 Total Biennium

Revenue Budget Biennial Budget Actual YTD Actual To‐Date Actual Variance

Fees (from street maintenance fee) 1,232,000$      924,000               621,826$       312,034$       933,860$               9,860$            101%

Franchise fees (from 1.5% privilege tax) 647,000            647,000               314,819          ‐                   314,819                  (332,181)        49%1

Intergovernmental (from local gas tax) 352,000            248,750               167,638          75,244            242,882                  (5,868)             98%

Total revenue 2,231,000         1,819,750            1,104,283      387,278          1,491,561              (328,189)        82%

Expenditures

Materials and services 141,000            105,500               13,345            7,094              20,439                    85,061            19%

Transfers 378,000            285,500               193,000          93,000            286,000                  (500)                100%

Capital outlay 2,000,000         1,342,500            511,341          1,365,347      1,876,688              (534,188)        140%2

Total expenditures 2,519,000         1,733,500            717,686          1,465,441      2,183,127              (449,627)        126%

Revenue over (under) expenditures (288,000)          86,250                   386,597          (1,078,163)     (691,566)                (777,816)       

Beginning fund balance 1,499,000         1,499,000            1,539,018      1,925,615      1,925,615              426,615         

Ending net available fund balance 1,211,000$      1,585,250$          1,925,615$    847,452$       1,234,049$           (351,201)$     

State Gas Tax Program

Biennial Flexible FY 2015 FY 2016 Total Biennium

Revenue Budget Biennial Budget Actual YTD Actual To‐Date Actual Variance

Intergovernmental (from state gas tax) 2,373,000$      1,673,000            1,183,631$    553,726$       1,737,357$           64,357$          104%

Intergovernmental (other) 3,295,000         3,295,000            655,735          ‐                   655,735                  (2,639,265)     20%3

Franchise fees (from utility funds) 1,368,000         1,010,000            700,000          358,000          1,058,000              48,000            105%

Fee in Lieu of Construction 100,000            100,000               ‐                   ‐                   ‐                          (100,000)        ‐4

Miscellaneous ‐                     ‐                         12,952            8,072              21,024                    21,024            100%

Total revenue 7,136,000         6,078,000            2,552,318      919,798          3,472,116              (2,605,884)     57%

Expenditures

Personnel services 981,000            727,500               388,772          205,634          594,406                  133,094          82%5

Materials and services 770,000            574,500               344,862          149,049          493,911                  80,589            86%5

Transfers 1,512,000         1,142,000            772,000          369,500          1,141,500              500                  100%

Capital outlay 3,645,000         3,645,000            875,971          213,063          1,089,034              2,555,966      30%3

Total expenditures 6,908,000         6,089,000            2,381,605      937,246          3,318,851              2,770,149      55%

Revenue over (under) expenditures 228,000            (11,000)                170,713          (17,448)          153,265                  164,265         

Beginning fund balance (135,000)          (135,000)              (80,369)          90,344            90,344                    225,344         

Ending net available fund balance 93,000$            (146,000)$            90,344$          72,896$          243,609$               389,609$      

1 PGE privilege taxes are received in the third quarter of the fiscal year, and therefore have not yet been received for FY2016.

2 Contractual services were less than anticipated in FY2015 but are expected to catch up in FY2016.

3

4 FILOC funds are slated to be used in the 17th Avenue project which had not concluded as of the end of the FY2016 first quarter.

5 Management continues to try to save in this department due to funding issues.  Savings were realized in personnel services, and materials and services.

Intergovernmental revenues are comprised of reimbursement grants.  These may not be received uniformily through out the year based on when the related capital project is 

completed.

% of        

Budget

% of        

Budget

City of Milwaukie, Oregon

Second Quarter Financial Report for FY 2016 (through December 31, 2015) Page: 10 of 19

WS63

City of Milwaukie, Oregon

Quarterly Financial Report

Budget‐to‐Actual

Through the second quarter ended December 31, 2015

Water Fund 

Biennial Flexible FY 2015 FY 2016 Total Biennium

Revenue Budget Biennial Budget Actual YTD Actual To‐Date Actual Variance

Fees and charges 6,452,000$      4,771,000            3,629,208$    2,179,840      5,809,048              1,038,048      122%1

Miscellaneous 196,000            146,500               69,029            52,419            121,448                  (25,052)          83%

Total revenue 6,648,000         4,917,500            3,698,237      2,232,259      5,930,496              1,012,996      121%

Expenditures

Personnel services 1,277,000         947,000               575,415          299,282          874,697                  72,303            92%

Materials and services 1,584,000         1,172,500            774,589          338,890          1,113,479              59,021            95%

Transfers 1,830,000         1,372,500            915,000          457,500          1,372,500              ‐                   100%

Capital outlay 1,522,000         1,116,000            514,151          ‐                   514,151                  601,849          46%2

Total expenditures 6,213,000         4,608,000            2,779,155      1,095,672      3,874,827              733,173          84%

Revenue over (under) expenditures 435,000            309,500               919,082          1,136,587      2,055,669              1,746,169     

Beginning fund balance 395,000            395,000               780,923          1,700,005      1,700,005              1,305,005     

Ending fund balance 830,000$          704,500$             1,700,005$    2,836,592$    3,755,674$           3,051,174$   

1

2

% of        

Budget

The Water Fund experienced higher usage in FY2015 due to the dry winter and hot summer, accompanied with higher rates.  This trend continues in FY2016.

Projects slated for FY2016 have not yet been completed.  See project status report for further information.

City of Milwaukie, Oregon

Second Quarter Financial Report for FY 2016 (through December 31, 2015) Page: 11 of 19

WS64

City of Milwaukie, Oregon

Quarterly Financial Report

Budget‐to‐Actual

Through the second quarter ended December 31, 2015

Wastewater Fund 

Biennial Flexible FY 2015 FY 2016 Total Biennium

Revenue Budget Biennial Budget Actual YTD Actual To‐Date Actual Variance

Fees and charges 13,836,000$    10,284,500          6,939,074$    3,643,336$    10,582,410$         297,910$       103%1

Miscellaneous 8,000                6,000                     4,757              1,145              5,902                      (98)                   98%

Proceeds from reimbursement district 30,000              20,000                   75,508            40,106            115,614                  95,614            578%2

Total revenue 13,874,000      10,310,500          7,019,339      3,684,587      10,703,926           393,426          104%

Expenditures

Personnel services 937,000            695,000               413,934          220,417          634,351                  60,649            91%

Materials and services 9,743,000         7,260,500            4,568,268      1,965,149      6,533,417              727,083          90%3

Debt service 220,000            165,000               104,416          48,229            152,645                  12,355            93%

Transfers 1,820,000         1,352,500            885,000          467,500          1,352,500              ‐                   100%

Capital outlay 1,709,000         1,257,500            649,394          638,583          1,287,977              (30,477)          102%

Total expenditures 14,429,000      10,730,500          6,621,012      3,339,878      9,960,890              769,610          93%

Revenue over (under) expenditures (555,000)          (420,000)              398,327          344,709          743,036                  1,163,036     

Beginning fund balance 2,196,000         2,196,000            2,318,159      2,716,486      2,716,486              520,486         

Ending fund balance 1,641,000$      1,776,000$          2,716,486$    3,061,195$    3,459,522$           1,683,522$   

1

2

3 Treatement payments to WES are a month behind.  Rents and leases and facilities repairs were less than anticipated. 

% of        

Budget

Wastewater Fund revenues were higher than anticipated due to usage.

Payments on reimbursement district accounts were higher than anticipated in FY2015 due to the housing market sales.

City of Milwaukie, Oregon

Second Quarter Financial Report for FY 2016 (through December 31, 2015) Page: 12 of 19

WS65

City of Milwaukie, Oregon

Quarterly Financial Report

Budget‐to‐Actual

Through the second quarter ended December 31, 2015

Stormwater Fund 

Biennial Flexible FY 2015 FY 2016 Total Biennium

Revenue Budget Biennial Budget Actual YTD Actual To‐Date Actual Variance

Fees and charges 5,481,000$      4,029,500            2,571,866$    1,473,740$    4,045,606$           16,106$          100%

Intergovernmental 1,004,000         ‐                         ‐                   ‐                   ‐                          ‐                   0%1

Miscellaneous 20,000              6,000                     9,016              2,425              11,441                    5,441              191%

Total revenue 6,505,000         4,035,500            2,580,882      1,476,165      4,057,047              21,547            101%

Expenditures

Personnel services 1,375,000         1,017,500            483,480          235,425          718,905                  298,595          71%2

Materials and services 852,000            631,500               322,575          173,594          496,169                  135,331          79%3

Transfers 1,870,000         1,387,500            905,000          482,500          1,387,500              ‐                   100%

Capital outlay 4,547,000         4,547,000            7,020              713,156          720,176                  3,826,824      16%1,4

Total expenditures 8,644,000         7,583,500            1,718,075      1,604,675      3,322,750              4,260,750      44%

Revenue over (under) expenditures (2,139,000)       (3,548,000)           862,807          (128,510)        734,297                  4,282,297     

Beginning fund balance 2,392,000         2,392,000            2,528,009      3,390,816      3,390,816              998,816         

Ending fund balance 253,000$          (1,156,000)$         3,390,816$    3,262,306$    4,125,113$           5,281,113$   

1 The project applicable to this grant has been delayed.

2 One budgeted position was not filled during FY2015 and another was filled later than originally anticipated.

3 Contractual and professional services were less than anticipated during FY2015.

4 Capital projects have not been completed at the end of the first quarter. See project status report for further information.

% of        

Budget

City of Milwaukie, Oregon

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WS66

City of Milwaukie, Oregon

Quarterly Financial Report

Budget‐to‐Actual

Through the second quarter ended December 31, 2015

Systems Development Charges Fund 

Biennial Flexible FY 2015 FY 2016 Total Biennium

Revenue Budget Biennial Budget Actual YTD Actual To‐Date Actual Variance

System development charges 78,000$            63,500                   70,493$          25,248$          95,741$                 32,241$          151%1

Miscellaneous ‐                     ‐                         241                  120                  361                         361                  100%

Total revenue 78,000              63,500                   70,734            25,368            96,102                    32,602            151%

Expenditures

Capital outlay 430,000            430,000               35,383            99,811            135,194                  294,806          31%2

Total expenditures 430,000            430,000               35,383            99,811            135,194                  294,806          31%

Revenue over (under) expenditures (352,000)          (366,500)              35,351            (74,443)          (39,092)                   327,408         

Beginning fund balance 1,318,000         1,318,000            1,392,789      1,428,140      1,428,140              110,140         

Ending fund balance 966,000$          951,500$             1,428,140$    1,353,697$    1,389,048$           437,548$      

1 Wastewater and transportation SDC's are higher than anticipated.

2 Projects for the biennium have not yet been completed.

% of        

Budget

City of Milwaukie, Oregon

Second Quarter Financial Report for FY 2016 (through December 31, 2015) Page: 14 of 19

WS67

City of Milwaukie, Oregon

Quarterly Financial Report

Project Status Report

Through the second quarter ended December 31, 2015

Project Status Report

FY15 Annual FY16 Annual Total BN Total BN

Budget Budget Budget Actual Variance Project Status

General Fund

Portland‐Milwaukie Light Rail (PMLR) D06 ‐$                          ‐$                          ‐$                          3,975$                   ‐$                        3,975$                      (3,975)$                    0% Project soon to be completed.

Park Bridge (Emergency) D22 ‐                            ‐                            ‐                            ‐                         722                          722                           (722)                          0% Project has just started and was not budgeted.

HVAC Intake Relocation ‐ Johnson Creek Building ‐ Facilities F ‐                            15,000                      15,000                      ‐                         ‐                          ‐                            15,000                      ‐ Canceled per Gary and Willie 

Replace Emergency Generator at Public Safety Building ‐ Facilities F08 45,000                      ‐                            45,000                      ‐                         ‐                          ‐                            45,000                      ‐ Planned completion by June 30, 2016.

Bertman House Exterior Structural Repairs ‐ Facilities F12 10,000                      ‐                            10,000                      ‐                         ‐                          ‐                            10,000                      ‐ Preparing to bid for project start in late May or early 

June.

Bertman House Exterior Paint ‐ Facilities F13 10,000                      ‐                            10,000                      ‐                         ‐                          ‐                            10,000                      ‐ Preparing to bid for project start in late May or early 

June.

Brick Mortar Repair at City Hall ‐ Facilities F14 30,000                      ‐                            30,000                      ‐                         ‐                          ‐                            30,000                      ‐ Going to bid 4/25/16 with an estimated May project 

start.

Re‐roof Public Safety Building ‐ Facilities F15 350,000                    ‐                            350,000                    346,462                 1,490                      347,952                    2,048                        99% Project substantially complete.

Seal Brick on Public Safety Building ‐ Facilities F16 30,000                      ‐                            30,000                      ‐                         ‐                          ‐                            30,000                      ‐ Going to bid 4/25/16 with an estimated May project 

start.

Replace Caulking Windows and Doors at Public Safety Building ‐ F F17 17,000                      ‐                            17,000                      ‐                         ‐                          ‐                            17,000                      ‐ Going to bid 4/25/16 with an estimated May project 

start.

Removal of Oil Tank Bertman House ‐ Facilities F18 ‐                            10,000                      10,000                      ‐                         ‐                          ‐                            10,000                      ‐ Estimated May 1st project completion.

Replacement of Main Air Handler at the Library ‐ Facilities F19 ‐                            20,000                      20,000                      ‐                         ‐                          ‐                            20,000                      ‐ Looking to complete with ESCO work.

EOC Configuration ‐ Public Safety Building ‐ Facilities F20 ‐                            10,000                      10,000                      2,553                     ‐                          2,553                        7,447                        26% Estimated project completion of June 30th.

Incode Version X Upgrade FI5 ‐                            90,000                      90,000                      ‐                         12,283                    12,283                      77,717                      14% Implementation underway, project scheduled for 

completion Q3.

CMMS Upgrade ‐ Public Works G01 80,000                      ‐                            80,000                      30,908                   25,714                    56,622                      23,378                      71% Implementation underway, training started, project 

scheduled to complete Q4.

Computer Refresh ‐ IT I02 45,000                      ‐                            45,000                      50,567                   ‐                          50,567                      (5,567)                       112% Completed in FY2015.

Server Virtualization Capacity Expansion ‐ IT I03 ‐                            37,000                      37,000                      ‐                         ‐                          ‐                            37,000                      ‐ All systems targeted for the virtual environment 

completed as of September 1, 2015. System hardware 

scheduled for upgrade by July 2016.

Enterprise Backup Solution ‐ IT I04 51,000                      ‐                            51,000                      31,658                   ‐                          31,658                      19,342                      62% Project completed.

Enterprise WiFi Installation ‐ IT I05 38,000                      ‐                            38,000                      32,163                   ‐                          32,163                      5,837                        85% Project completed and expansion in Pond House also 

completed.

Network File Storage Capacity Expansion ‐ IT I06 ‐                            15,000                      15,000                      ‐                         ‐                          ‐                            15,000                      ‐ Project completed.

VOIP Upgrade I08 32,000                      ‐                            32,000                      52,800                   ‐                          52,800                      (20,800)                    165% Project completed.

Fleet Vehicle Purchases from Reserve ‐ Streets K01 100,000                    14,000                      114,000                    97,290                   ‐                          97,290                      16,710                      85% Vehicles have been purchased, left over funds will be 

distributed back to utility funds in FY16.

Fleet Vehicle Purchases from Reserve ‐ Water K02 166,000                    149,000                    315,000                    78,188                   ‐                          78,188                      236,812                    25% Vehicles have been purchased, left over funds will be 

distributed back to utility funds in FY16.

Fleet Vehicle Purchases from Reserve ‐ Wastewater K03 143,000                    ‐                            143,000                    81,380                   ‐                          81,380                      61,620                      57% Vehicles have been purchased, left over funds will be 

distributed back to utility funds in FY16.

Fleet Vehicle Purchases from Reserve ‐ Stormwater K04 227,000                    ‐                            227,000                    212,225                 ‐                          212,225                    14,775                      93% This amount was for the Vactor only and it was 

purchased in FY15. Project Completed

Tool Boxes and Tire Machine ‐ Fleet K05 17,000                      ‐                            17,000                      15,965                   ‐                          15,965                      1,035                        94% Project completed.

Fuel Pumps and Software ‐ Fleet K05 35,000                      ‐                            35,000                      ‐                         38,362                    38,362                      (3,362)                       110% Project completed.

Brake Lathe ‐ Fleet K05 ‐                            16,000                      16,000                      ‐                         ‐                          ‐                            16,000                      ‐ Project completed

General Fund Department Vehicles ‐ Fleet K05 ‐                            45,000                      45,000                      ‐                         ‐                          ‐                            45,000                      ‐ TV Van is on order.

Library Video Security L06 ‐                            ‐                            ‐                            6,269                     ‐                          6,269                        (6,269)                       0% Complete in FY2015.

Riverfront Construction Q07 2,271,000                21,000                      2,292,000                2,592,560              2,496                      2,595,056                (303,056)                  113% Project complete.

Public Access Studio Equipment Replacement V01 44,000                      52,000                      96,000                      41,819                   ‐                          41,819                      54,181                      44% Project completed and paid in Q3.

Police Vehicle Replacement Z09 100,000                    100,000                    200,000                                      91,084                     55,520  146,604                    53,396                      73% Two vehicles purchased.

Total General Fund Capital Projects 3,841,000$             594,000$                 4,435,000$             3,767,866$           136,587$               3,904,453$             530,547$                 88%

Biennium‐to‐Date through December 31, 2015

Project Number  FY15 YTD Actual    FY16 YTD Actual 

% of     

Budget

City of Milwaukie, Oregon

Second Quarter Financial Report for FY 2015 (through December 31, 2015)

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City of Milwaukie, Oregon

Quarterly Financial Report

Project Status Report

Through the second quarter ended December 31, 2015

Project Status Report

FY15 Annual FY16 Annual Total BN Total BN

Budget Budget Budget Actual Variance Project Status

Biennium‐to‐Date through December 31, 2015

Project Number  FY15 YTD Actual    FY16 YTD Actual 

% of     

Budget

Library Fund

Library Expansion L03 ‐$                          1,000,000$              1,000,000$              ‐$                       ‐$                        ‐$                          1,000,000$              ‐ The Library Expansion Task Force (LETF) resumed 

monthly meetings on February 4, 2015.  

Library Video Security L06 ‐                            ‐                            ‐                            10,000                   ‐                          10,000                      (10,000)                    0% Project completed.

Total Library Fund Capital Projects ‐$                         1,000,000$             1,000,000$             10,000$                ‐$                       10,000$                   990,000$                 1%

Transportation Fund

    State Gas Tax

Lake Road Multimodal Improvements T02 ‐$                          ‐$                          ‐$                          3,291$                   837$                       4,128$                      (4,128)$                    0% Project completed

School Zone Implementation T04 ‐                            ‐                            ‐                            13,403                   ‐                          13,403                      (13,403)                    0% Project completed with lightrail project.

17th Avenue Multi‐Use Trail T05 3,170,000                ‐                            3,170,000                593,334                 46,112                    639,446                    2,530,554                20% Project is administered by ODOT. Project has been 

awarded with construction anticipated to begin in April 

2016.

Adams Street Connector T07/D13 375,000                    ‐                            375,000                    265,943                 166,114                  432,057                    (57,057)                    115% Project substantially complete with minor corrective 

work in progress.

Transportation Vehicle Purchases T31 ‐                            50,000                      50,000                      ‐                         ‐                          ‐                            50,000                      ‐ Will not purchase (duplicate of T32,T33)

Asphalt Grinder & Trench Paver Machines T32, T33 ‐                            50,000                      50,000                      ‐                         ‐                          ‐                            50,000                      ‐ PO issued March 2016 for purchase.

    Total State Gas Tax Projects 3,545,000$              100,000$                 3,645,000$              875,971$               213,063$                1,089,034$              2,555,966$              30%

City of Milwaukie, Oregon

Second Quarter Financial Report for FY 2015 (through December 31, 2015)

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City of Milwaukie, Oregon

Quarterly Financial Report

Project Status Report

Through the second quarter ended December 31, 2015

Project Status Report

FY15 Annual FY16 Annual Total BN Total BN

Budget Budget Budget Actual Variance Project Status

Biennium‐to‐Date through December 31, 2015

Project Number  FY15 YTD Actual    FY16 YTD Actual 

% of     

Budget

   Street Surface Maintenance Program

SSMP Preventative Maintenance S04 65,000$                    65,000$                    130,000$                 147$                      101,267$                101,414$                 28,586$                    78% Project complete.

SSMP Paving S10/S11 550,000                    1,250,000                1,800,000                511,195                 1,264,080               1,775,275                24,725                      99% Project complete.

Crack Seal Machine S12 70,000                      ‐                            70,000                      ‐                         ‐                          ‐                            70,000                      ‐ Purchased in FY14. Funding will be needed for project 

S10.

    Total Street Surface Maintenance Program Projects 685,000$                 1,315,000$              2,000,000$              511,342$               1,365,347$            1,876,689$              123,311$                 94%

Total Transportation Fund Capital Projects 4,230,000$             1,415,000$             5,645,000$             1,387,313$           1,578,410$            2,965,723$             2,679,277$             53%

Water Fund

Water Well No. 2 Storage Tank Maintenance W10 150,000$                 ‐$                          150,000$                 ‐$                       ‐$                        ‐$                          150,000$                 ‐ Scope change‐ this project will complete with ESCO in 

Q1 FY17.

Water Well No. 6  Storage Tank Maintenance W14 400,000                    400,000                    ‐                         ‐                          ‐                            400,000                    ‐ Project moved to FY 2018.

McBrod Ave Water System Improvements W27 ‐                            ‐                            ‐                            ‐                         ‐                          ‐                            ‐                            0% Project is scheduled for early FY 2017.

Wood Avenue Service Line Transfer W32 10,000                      10,000                      ‐                         ‐                          ‐                            10,000                      ‐ Project moved to FY 2017.

Monroe Street Water System Improvements W34 195,000                    ‐                            195,000                    199,452                 ‐                          199,452                    (4,452)                       102% Project complete.

Water Production Preventative Maintenance W35 40,000                      52,000                      92,000                      ‐                         ‐                          ‐                            92,000                      ‐ Ongoing maintenance ‐ expediture shown is for W27 

(McBrod project spent on 17th).

17th Avenue Water System Improvements W37 315,000                    ‐                            315,000                    314,699                 ‐                          314,699                    301                           100% Project complete.

Main Street Water System Improvements W38 ‐                            160,000                    160,000                    ‐                         ‐                          ‐                            160,000                    ‐ Project moved to FY 2017.

Riverway Water System Improvements W39 ‐                            75,000                      75,000                      ‐                         ‐                          ‐                            75,000                      ‐ Project moved to FY 2017.

Wood Court Water System Improvements W40 ‐                            75,000                      75,000                      ‐                         ‐                          ‐                            75,000                      ‐ Project moved to FY 2017.

Monroe Water System Improvements (Abandon) W41 ‐                            50,000                      50,000                      ‐                         ‐                          ‐                            50,000                      ‐ Project moved to FY 2017.

Total Water Fund Capital Projects 710,000$                 812,000$                 1,522,000$             514,151$              ‐$                       514,151$                 1,007,849$             34%

City of Milwaukie, Oregon

Second Quarter Financial Report for FY 2015 (through December 31, 2015)

Page: 17 of 19

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City of Milwaukie, Oregon

Quarterly Financial Report

Project Status Report

Through the second quarter ended December 31, 2015

Project Status Report

FY15 Annual FY16 Annual Total BN Total BN

Budget Budget Budget Actual Variance Project Status

Biennium‐to‐Date through December 31, 2015

Project Number  FY15 YTD Actual    FY16 YTD Actual 

% of     

Budget

Wastewater Fund

Wastewater Main Repair Program X07 100,000$                 100,000$                 200,000$                 ‐$                       ‐$                        ‐$                          200,000$                 ‐ Funding for both years will be combined into a single 

construction contract for late Spring of 2016. The 

project will be surveyed and design by in‐house staff.

Lift Station Wet Well Lining X09/X13 15,000                      15,000                      30,000                      27,818                   ‐                          27,818                      2,182                        93% Project complete.

Clay Pipe Replacement X10 640,000                    540,000                    1,180,000                592,576                 638,583                  1,231,159                (51,159)                    104% Project currently under construction. Staff expects 

completion in October 2016.

Manhole Replacement/Rehabilitation Program X11 50,000                      50,000                      100,000                    ‐                         ‐                          ‐                            100,000                    ‐ Funding for this program will be combined with Project 

X07.

Transporter and Camera Replacement X14 ‐                            29,000                      29,000                      29,000                   ‐                          29,000                      ‐                            100% Project complete.

Wastewater Vehicle Purchases X15 1,000                        169,000                    170,000                    ‐                         ‐                          ‐                            170,000                    ‐ In various stages of purchasing.

Total Wastewater Fund Capital Projects 806,000$                 903,000$                 1,709,000$             649,394$              638,583$               1,287,977$             421,023$                 75%

Stormwater Fund

Kellogg Creek Dam Removal and HWY 99E Underpass Y04 ‐$                          1,004,000$              1,004,000$              ‐$                       ‐$                        ‐$                          1,004,000$              ‐ This project has been postponed. The City and ODOT 

need to determine when or if this money will be spent.

Stanley Avenue Pipe Replacement Y05 1,200,000                1,200,000                7,020                     713,156                  720,176                    479,824                    60% Project complete.

Stormwater Transporter and Camera Replacement Y07 ‐                            43,000                      43,000                      ‐                         ‐                          ‐                            43,000                      ‐ PO's issued. Purchase complete by June 30, 2016.

36th Avenue Stormwater Improvements  Y08 105,000                    ‐                            105,000                    ‐                         ‐                          ‐                            105,000                    ‐ Work on this project is scheduled for Fall 2015 through 

June 2016.

47th Avenue and Llewellyn Street Y09 160,000                    ‐                            160,000                    ‐                         ‐                          ‐                            160,000                    ‐ Work on this project is scheduled for Fall 2015 through 

June 2016.

55th Avenue and Monroe Street Stormwater Improvements Y10 25,000                      25,000                      ‐                         ‐                          ‐                            25,000                      ‐ Work on this project is scheduled for Fall 2015 through 

June 2016.

Meek Street Pipe Installation Y11 ‐                            1,550,000                1,550,000                ‐                         ‐                          ‐                            1,550,000                ‐ Work on this project is scheduled for Fall 2015 through 

June 2016.

Stormwater Vehicle Replacements Y12 228,000                    209,000                    437,000                    ‐                         ‐                          ‐                            437,000                    ‐ PO's issued. Purchase complete by June 30, 2016.

Upgrade TV Van Computer ‐                            23,000                      23,000                      ‐                         ‐                          ‐                            23,000                      ‐ PO's issued. Purchase complete by June 30, 2016.

Total Stormwater Fund Capital Projects 1,718,000$             2,829,000$             4,547,000$             7,020$                  713,156$               720,176$                 3,826,824$             60%

City of Milwaukie, Oregon

Second Quarter Financial Report for FY 2015 (through December 31, 2015)

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WS71

City of Milwaukie, Oregon

Quarterly Financial Report

Project Status Report

Through the second quarter ended December 31, 2015

Project Status Report

FY15 Annual FY16 Annual Total BN Total BN

Budget Budget Budget Actual Variance Project Status

Biennium‐to‐Date through December 31, 2015

Project Number  FY15 YTD Actual    FY16 YTD Actual 

% of     

Budget

SDC Fund

Portland‐Milwaukie Light Rail D06 20,000$                    ‐$                          20,000$                    ‐$                       ‐$                        ‐$                          20,000$                    ‐ Project complete.

17th Avenue Multi‐Use Trail ‐ Streets T05 20,000                      ‐                            20,000                      ‐                         ‐                          ‐                            20,000                      ‐ Project has been advertised and awarded. Construction 

set to begin early Summer 2016 and scheduled for 

completion late 2016.

17th Avenue Multi‐Use Trail ‐ Stormwater T05 100,000                    ‐                            100,000                    16,432                   30,139                    46,571                      53,429                      47% Project has been advertised and awarded. Construction 

scheduled to begin early summer 2016.

Kellogg Multi‐Use Bridge ‐ Streets T08 200,000                    ‐                            200,000                    18,951                   40,377                    59,328                      140,672                    30% Project complete.

McBrod Ave Water System Improvements ‐ Water W27 90,000                      90,000                      ‐                         ‐                          ‐                            90,000                      ‐ Project scheduled for early 2017.

Realignment 22nd & McLoughlin Blvd T34 ‐                            ‐                            ‐                            ‐                         29,295                    29,295                      (29,295)                    0% Project complete.

Total SDC Fund Capital Projects 430,000$                 ‐$                         430,000$                 35,383$                99,811$                 135,194$                 294,806$                 31%

Total  11,735,000$            7,553,000$              19,288,000$            6,371,127$           3,166,547$            9,537,674$              9,750,326$             

City of Milwaukie, Oregon

Second Quarter Financial Report for FY 2015 (through December 31, 2015)

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Milwaukie FinanceWS73

CITY OF MILWAUKIE “Dogwood City of the West”

Resolution No.

Adopted Revised DifferenceGeneral FundResources:

Intergovernmental 3,755,000 3,855,000 100,000$

Requirements:City CouncilCity Manager 1,509,000 1,559,000 50,000$ Community Development 4,033,000 4,203,000 170,000 Engineering Services 1,190,000 1,100,000 (90,000) Facilities Management 2,493,000 2,453,000 (40,000) Finance 1,904,000 1,864,000 (40,000) Fleet Services 2,297,000 2,237,000 (60,000) Code Enforcement 343,000 490,000 147,000 Records and Information Management 874,000 837,000 (37,000) Police Administration 1,072,000 1,112,000 40,000 Police Field Services 11,508,000 11,468,000 (40,000)

100,000$

Adopted Revised DifferenceBuilding Inspection Fund:Resources:

Fees & Charges 473,000$ 498,000$ 25,000$

Requirements:Materials & Services 25,000 50,000 25,000$

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MILWAUKIE, OREGON, ADJUSTING THE BUDGET FOR THE 2015-2016 BIENNIUM BY ADOPTING THIS SUPPLEMENTAL BUDGET AND REVISING APPROPRIATIONS

WHEREAS, certain conditions and situations have arisen since the initial adoption of the 2015-2016 bienniumbudget that necessitate changes in financial planning; and

WHEREAS, a Budget Committee meeting to discuss the supplemental budget adjustments was held on April19, 2016; and

THEREFORE, the supplemental budget adjustments for the 2015-2016 biennium and for the purposes shownbelow are hereby appropriated as follows:

Page 1 of 2 ‐ Resolution No.  WS74

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF MILWAUKIE, OREGONTHAT:

1.

2.

Introduced and adopted by the City Council on April 19, 2016.

This resolution shall be deemed effective upon adoption.

______________________________Mark Gamba, Mayor

Attest: Approved as to form:Jordan Ramis, PC

_______________________________ ______________________________Pat DuVal, City Recorder City Attorney

The budget appropriations adjustments itemized in this Resolution are hereby approved.

The additional requirements were not anticipated at the time of the budget preparation for the 2015-2016 biennium.

Page 2 of 2 ‐ Resolution No. WS75

Page 1 of 3 – Staff Report

MILWAUKIE CITY COUNCIL STAFF REPORT

Agenda Item: Meeting Date:

To: Mayor and City Council

Through: Bill Monahan, City Manager

Subject: Enterprise Zone Overview, Expansion, and

Electronic Commerce overlay Discussion From: Alma Flores, Community Development Director

Cindy Hagen, Business Development Manager and Enterprise Zone Manager, Clackamas County

Date: April 7, 2016

ACTION REQUESTED To listen to a presentation on the North Urban Clackamas County Enterprise Zone, a request to expand the zone to include central Milwaukie and the downtown and a future application for an electronic commerce overlay designation.

HISTORY OF PRIOR ACTIONS AND DISCUSSIONS The North Urban Clackamas County Enterprise Zone was established in 2008 to provide the enterprise zone tool to the cities of Milwaukie and Happy Valley.

On April 1, 2008 the city council approved a resolution in support of a co-sponsored application with Clackamas County for designation of the Milwaukie/North Clackamas County Enterprise zone.

On April 2, 2008 the city entered into an IGA with Clackamas County to jointly sponsor the designation of Milwaukie as part of the North Urban Clackamas County Enterprise Zone and for the county to provide zone management services.

BACKGROUND Enterprise Zones are part of a State-initiated tax-abatement program available to businesses looking to locate or expand in a designated zone. Qualified businesses may be eligible to receive exemption from local property taxes on new investments including building construction and improvements, machinery, and equipment, for a period of three to five years.

Standard Incentives available to eligible businesses:

• Construction-in-Process Enterprise Zone Exemption - For up to two years before qualified property is placed in service, it can be exempt from local taxes.

• Three to five consecutive years of full relief from property taxes on qualified property, after it is in service.

• Additional local incentives may be available.

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Three-year exemption:

• increase full-time, permanent employment by 10%

• pay employees at least 150% of the State minimum wage (benefits may be used to reach pay level)

• maintain minimum employment level during exemption period

• enter into a first-course agreement with local job training providers

• pay an application fee of 0.1% of the proposed total investment

Five-year exemption:

Businesses should meet the three-year exemption criteria as well as:

• compensation of new workers must be at or above 150% of the County average wage (benefits may be used to reach this pay level)

• local approval by written agreement with the local zone sponsor (City of Milwaukie)

Since its creation in 1998, the North Urban Clackamas County Enterprise Zone has seen a total investment of $200,616,075 resulting in the creation of 4,294 jobs. In the 2014-2015 property tax year, the assessed value of investments by businesses in the program was $37,753,905. This includes Milwaukie businesses Alpine Foods and Pacific Scientific OECO LLC.

The Community Development Director would like the city council to consider an expansion of the tool into Central Milwaukie and the downtown in order to offer the opportunity to existing eligible businesses or for consideration by a new development with an eligible business. Keep in mind that the tax abatement is only for the eligible new investment of an eligible business. Another consideration is a future application to the state for designation as an electronic commerce zone. An electronic commerce (e-commerce) zone overlay designation would be an added benefit to our existing enterprise zone areas—the e-commerce designation allows for a property tax abatement as well as a state income tax credit of 25 percent (25%) up to a maximum amount of $2 million and lowers the threshold for personal property machinery and equipment to $1000:

"Electronic commerce" is defined as engaging predominantly in transactions via the internet or an internet-based computer platform. These transactions can include taking orders, closing sales, making purchases, providing customer service or undertaking other activities that serve the business's overall purpose, even if retail in nature.

CONCURRENCE City Manager concurs.

FISCAL IMPACTS The fiscal impact would be limited to the new investment portion of the enterprise zone applicant and only for the eligible portion of the new investment up to 5 years. The enterprise zone is already in place.

WORK LOAD IMPACTS Administration of the Enterprise Zone program is handled by the Enterprise Zone Manager at

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Clackamas County, through the Economic Development division; however, each city is responsible for some portions of the application process. The work impact could be 5-10 hours when an application is received and if the expansion occurs, it could be 5-10 hours a week of dedicated time over 2 months.

ALTERNATIVES Not to expand the existing Enterprise Zone program or consider an electronic commerce zone.

ATTACHMENTS 1. Overview of the Enterprise Zone Program 2. Map of the current North Clackamas Enterprise Zone 3. Map of the expanded area under consideration 4. Electronic Commerce program flyer

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En

terp

rise Z

on

es ENTERPRISE

ZONES

Three- to five-

year tax

abatement

for new

investment and

equipment

Clackamas County & City of

Milwaukie economic

development staff market and

manage the Milwaukie

Enterprise Zone to encourage

investment through property

tax exemption for new or

expanding non-retail

businesses that strive to hire

local and create above

minimum wage jobs.

County Contact: Zone Manager Cindy Hagen CindyHag@co.clackamas.or.us 503-742-4328

Or City of Milwaukie Alma Flores floresa@milwaukieoregon.gov 503-786-7652

Enterprise Zones are designed to encourage business investment through property tax relief in specific areas throughout the state. When locating or expanding into an Enterprise Zone, eligible businesses (generally non-retail) receive an exemption from the property taxes assessed on new investment, including building improvements, construction, machinery and equipment, for a period of three to five years.

Standard incentives are available to eligible businesses locating in an enterprise zone, subject to authorization timely filings, and employment criteria.

Standard incentives include:

Construction-in-Process Enterprise Zone Exemption—up to two years before qualified property is placed in service, it can be exempt from local taxes. For most authorized businesses this provides broader benefit than the regular exemption for commercial facilities under construction.

Three to five consecutive years of property tax exemption on qualified property, after it is in service.

ATTACHMENT 1

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APPLICATION

Businesses or developers interested in locating or expanding in Enterprise Zones within Milwaukie

can obtain the State application online at http://www.oregon.com/gov/dor/PTD/docs/303-029.pdf or

from the Zone Manager at

Clackamas County,

Cindy Hagen

CindyHag@co.clackamas.or.us

503-742-4328

For additional incentives, please contact:

Alma Flores

Community Development Director

Phone: 503-786-7652

Fax: 503-774-8236

floresa@MilwaukieOregon.gov

BUSINESS ELIGIBILITY

Prior to building construction/improvements or machinery/equipment installation begin on-site, the

Zone Manager must receive and approve an Application for Authorization, which contains pertinent

process information.

Eligible businesses include manufacturers, processors, shippers, and a variety of operations that

serve other organizations, as well as call centers and headquarter-type facilities. Hotel/resort

businesses are not eligible in the Milwaukie Enterprise Zone; nor are retail, construction, financial,

or other defined businesses.

CRITERIA FOR QUALIFYING PROJECTS For the standard, three-year enterprise zone exemption, the business should meet the following criteria:

Increase full-time permanent employment by 10%

Pay employees at least 150% of the State minimum wage (benefits can be used to reach this pay level)

Maintain minimum employment level during the exemption period

Enter into a first-source hiring agreement with local job training providers

Pay an application fee of 0.1% of the proposed total investment.

Criteria for the extended five-year exemption the business should meet all criteria for the three-year enterprise zone exemption as well as the following:

Compensation of new workers must be at or above 150% of the County average wage (benefits can be used to reach this pay level)

There must be local approval by written agreement with the local zone sponsor

The Company must meet any additional requirements that the local zone sponsor may reasonably request.

En

terp

ris

e Z

on

es

QUALIFIED PROPERTY

A new building/structure, structural modifications or additions, or newly installed machinery and

equipment qualify for exemption. Nonqualified items include land, previously used property value,

and miscellaneous personal items.

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ATTACHMENT 2

j ~I

Eligible Tax Abatement Enterprise Zones

KING

MONROE

Milwaukie Planning Dept. Data: City of Milwaukie GIS;

Metro RLIS Date: 7/2/2015

Author: Planning Staff

2015 Enterprise Zones

-- Major Streets

D North Clackamas Enterprise Zones

1:1 Light Rail Station

++ MAX Light Rail

D Milwaukie City Limit

1 inch= 2,188 feet fi) 0 460920 1,840 2, 760 3,680 - • Feet

The information depicted on this map is for general reference only. The City of Milwaukie does not accept any responsibility for errors, omissions or positional accuracy. There are no warranties, expressed or implied, including the warranty of merchantability or fitness for a particular purpose, accompanying this product.

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Data Sources: City of Milwaukie GIS, Clackamas County GIS, Metro Data Resource Center

Date: Thursday, March 10, 2016

The information depicted on this map is for general reference only.The City of Milwaukie cannotaccept any responsibility for errors, omissions or positional accuracy. There are no warranties,

expressed or implied, including the warranty of merchantability or fitness for a particularpurpose, accompanying this product. However, notification of errors would be appreciated.

GIS CoordinatorCity of Milwaukie

6101 SE Johnson Creek Blvd.Milwaukie, OR 97206

(503) 786-7498

ProposedNorth Clackamas Urban Ezone

0 21Miles

City of Milwaukie

Proposed Ezone Amendment 0.2 sq ml

North Clackamas Ezone 5.1 sq ml

ATTACHMENT 3

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Oregon Enterprise ZonesElectronic Commerce ZonesSeveral of Oregon’s nearly 70 enterprise zones have received special status to further encourage electronic commerce or “e-commerce” investments.

“Electronic commerce” is defined as engaging predominantly in transactions via the internet or an internet-based computer platform. These transactions can include taking orders, closing sales, making purchases, providing customer service or undertaking other activities that serve the business’s overall purpose, even if retail in nature.

A significant feature of these designations is that qualifying businesses may receive a credit against the business’s annual state income or corporate excise tax liability.

BUSINESS OREGON 775 Summer St, NE, Suite 200 Salem, OR 97301503-986-0123

Business Oregon is an agency of the state of Oregon

www.oregon4biz.com

State Income Tax CreditThe credit equals 25 percent of the investment cost made in capital assets used in electronic-commerce operations inside that enterprise zone. To make the investment means to have incurred the financial liability or commitment for the asset in that income tax year. Capital assets are property used in the business, the cost of which may be depreciated for federal income tax purposes, even if the assets end up being expensed. (Use of this credit does not affect the deducation or basis of such expenses or assets.) The annual maximum credit amount is $2 million per year. Unused tax credit amounts may be carried forward over the next five years. The credit is claimed directly on corporate or individual tax returns, and while there is no additional form required, the taxpayer must maintain records of purchased assets and other relevant information, such as timely qualification for the property tax abatement on assets that also qualify for it, but otherwise, such qualified property and what is used for the income tax credit do not need to correspond entirely.

To obtain this state tax credit, the business’s e-commerce investment (in terms of incurring the cost or financial liability) needs to be made between the income tax year when application is made for local enterprise zone authorization and the one beginning before the end of the

www.oregon4biz.com

three- to five-year period of the standard exemption from local property taxes. This tax credit sunsets by law, such that the business also must make the investment no later than in its income tax year that begins during 2017.

Local Property Tax AbatementIn an e-commerce enterprise zone, “being engaged in electronic commerce” is itself an eligible activity for the standard property tax abatement. Although, such an operation would likely qualify in any enterprise zone for other reasons—for example, by satisfying the definition of an eligible administrative or call center.

In a designated e-commerce area, however, the newly installed personal property, machinery and equipment that qualifies for exemption is more broadly defined. Usually, such property that costs less than $50,000 per item qualifies only if used in the production of tangible goods. In the case of an e-commerce enterprise zone or city, using it for electronic commerce alone suffices for the exemption. The exemption does not cover any personal property item costing less than $1,000 or any vehicle, and all other enterprise zone criteria and procedures apply.

Qualified new investments also will include those for operations that support or ensue from the e-commerce activity—for example, shipping and storage facilities to fulfill orders mostly arising from e-commerce.

ATTACHMENT 4

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