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How Do I Pay for This?

By Ed Somers
November 19, 2007


In a discussion moderated by Syracuse Mayor Matthew Driscoll, mayors and private'sector leaders discussed how to find the resources to bring ideas to fruition in the areas of climate protection and sustainable growth.

Driscoll said that with tight city finances and high energy costs, mayors must be creative and look within existing budgets for opportunities to fund sustainable investments. Syracuse spent about $2 million on management control systems for city-owned facilities and plants, which has saved over $5 million annually for the city to reinvest back into city operations and the school district.

He also encouraged mayors to work with state agencies, as he did on traffic light signalization and switching to a Light Emitting Diode (LED) system, which has saved both energy and maintenance costs. And, he stressed, state transportation agencies must be convinced to allocate resources in a way that reduces climate emissions.

Driscoll said that mayors with access to utility systems and enterprise funds can tap into them and use part of the revenue streams for energy efficiency. And, he emphasized that the USCM-championed Energy Block Grant could be a major asset in leveraging both city and private'sector investment in climate protection.

Starting Small

Anchorage Mayor Mark Begich said being from Alaska – with its economic dependence on fossil fuel production – he had serious concern about engaging on climate protection. So he had to start with small initiatives and talk about the positive economics and tax savings of climate protection in order to build community consensus.

Assessing a $45 per ton landfill charge, the city hired its first reusable resource coordinator and two interns, and gave grants to community organizations. This led to a number of projects including installation of LED lights at the town square park and an improved cardboard recycling program for business accomplished by a simple retrofit of dumpsters that encourages compaction. The city also programmed city computers to switch into sleep mode and saved $84,000 a year.

Success on smaller projects built community and private'sector support for larger energy efficiency initiatives focused on public building projects already underway including a museum and a new convention center. The city also used its inner-loan fund to invest in a city hall retrofit, which pays dividends back to the city based on energy savings. Anchorage will use this same mechanism to pay for more LED lights.

Begich stressed partnering with youth groups has been extremely important to increasing community support for sustainable projects, and helping launch a green jobs initiative.

Public-Private Partnerships

Redmond (WA) Mayor Rosemarie Ives focused on how her city built a new green city hall by contracting with a non-profit agency who then worked with a private developer on a lease/leaseback agreement. Bonds were sold to pay for the project as a “design/build” in which the city gave up some control but was able to raise enough capital to build green. Seventy-five percent of construction and demolition materials were recycled, with long term annual energy savings of 20 percent.

Redmond also has a $90 per employee head tax, which replaced a standard business and occupancy tax. The city uses a major portion of the head tax to pay for transportation trip reduction strategies.

McKinstry CEO Dean Allen reminded the mayors that 42 percent of CO2 emissions in America come from buildings, and that there are 10 billion square feet of public building space in local governments across the country. According to Allen, a 25 percent energy savings in these buildings would result in $4 billion in cost savings, $30 billion in renewal projects in cities, and the creation of 200,000 jobs.

McKinstry Vice President Ash Awad echoed Mayor Ives’ call for integrated design/build projects instead of standard design then low-bid construction operations which hamper efforts to maximize energy efficiency.

Awad said that there is money available from smart developers to help retrofit and build new buildings, and that investment bankers will offer lower interest rates for high performance buildings. In addition, Awad said that utilities will offer incentives in most states for building or retrofitting buildings green because it is less expensive than the utility building new power plants or finding new water supplies.

Transit-Oriented Development

Scott Bernstein, President of the Center for Neighborhood Technology, said that for cities to meet the goal of an 80 percent reduction in climate emissions by 2050, they must adopt a “no town left behind” strategy that focuses not just on how buildings are built, but on where they are built and how transit is integrated into the projects.

Mixed-use development can be encouraged by city zoning laws and the use of tax increment financing. Bernstein said that by 1902, every city of 5,000 or more had an electric street car system, because implementation was systematized and encouraged by local governments. “Good urban form really does produce a reduction in travel demand,” Bernstein said, adding that “vehicle miles traveled reductions are just as important as improving vehicle efficiency.”

Bernstein encouraged the mayors to study how the cost of living outside the range of public transportation systems can actually offset any housing savings in their communities, and in fact raise the cost of living for the average family.

He said that cities can finance public transportation investment in street cars and fixed rails against the property value increases that can be proven to come from such investments.