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SUBJECT: COMMUNITY ENERGY DISCUSSION <br />DATE: MARCH 9, 2021 Page 5 of 13 <br />PROPOSED LANGUAGE FOR FUNDING: <br />A Climate Action Tax could provide a funding source to advance the transition, develop <br />and provide residents and commercial entities support in this transition and remove <br />barriers to climate action. Proposed language for the tax may include: <br />• Funding to address impacts of climate change and achieve the City's climate <br />action goals, including 75% of residential and commercial and industrial electric <br />needs from carbon -free sources by 2030 <br />• Include language for other sustainability-related initiatives and programs and for <br />other general purposes of the City <br />• Start collecting in January 1, 2022 (disposable bag tax also goes into effect on <br />this date) <br />• Sunset 5 years with the potential for voter approved extension alongside the <br />adoption of new climate action goals <br />FUNDING ALTERNATIVES: <br />Staff has developed three funding scenarios based on various levels of funding that a <br />Climate Action Tax could generate. <br />Scenario <br />Funding Level <br />Use of Revenue <br />Option A <br />$400,000 annually <br />Expanded programming/ <br />resources <br />Option B <br />$700,000 annually <br />Expanded programming/ <br />resources and partial REC <br />purchase <br />Option C <br />$1,000,000 annually <br />Further expanded <br />programming/resources and <br />partial REC purchase <br />The table below identifies the various sources of revenue that can be used to fund these <br />scenarios. <br />Source <br />Collection Method <br />Pros <br />Cons <br />Existing City <br />-Use General Fund to <br />-No additional <br />-May not be feasible <br />Revenue <br />cover annual expense <br />cost for residents <br />due to COVID fiscal <br />instead of adopting a <br />or businesses <br />impacts and <br />Climate Action Tax <br />uncertainty around <br />future revenues <br />-Lacks long-term <br />funding plan <br />CITY COUNCIL COMMUNICATION <br />7 <br />