SJVCEO_10_BoardMinutes_09-09-10

Q3 Board Meeting Minutes September 9, 2010 Fresno, California

Board Members (alternates): Daniel Abdella Bill Delain Frank Ferral Steve Geil Carole Goldsmith Gary Hanson Tom Jordan Margarita Matoian Roger McNeil Don Pauley Bill Pfanner (Joy Warren) Colby Wells Jeff Wright

I.

Guests: Peter Weber Staff: Paul Johnson Cynthia Downing Courtney Kalashian Mike Nemeth Sandy Nax Maureen Hoff

Welcome and Introductions Don Pauley Don Pauley called the third quarter meeting of 2010 to order at 10:00 a.m. Introductions of directors, guests, and staff followed.

Don acknowledged Margarita Matoian as a new pending member of the board, replacing Mark Stout as the CAPSJV work group Air Quality slot. The group welcomed Margarita.

II.

Approval of June 24 Meeting Minutes Gary Hanson The minutes of the second quarter board of directors meeting from June 24 were accepted as presented on a motion made by Frank Ferral, seconded by Joy Warren, and unanimously approved by the board.

III.

Approval of Financial Statements Cynthia Downing Cynthia Downing reviewed the provided financial documents. She asked the board to take notice of the Account Receivable (A/R) of $110,000, and that this is the number for the financial statements ending August 31—the A/R list has only grown in the month since this report. Other items Cynthia called out on the Balance Sheet included expenses incurred for submitting grants and the suspense account for the WIA grant. She explained that staff has learned that reimbursement grants often run behind, and some as much as 12‐18 months behind severely affecting cash flow. Accounts Payable (A/P) are primarily for Paul’s consulting services and PESC staffing services.

Steve Geil asked why payment on invoices is taking so long. Cynthia explained that her company, PESC has been providing huge cash flow to make the SJVCEO viable. She went on to explain that when she was presented with the 2010‐12 San Joaquin Valley Partnership Agreement for VIEW it specified a 30 day payment on invoices, and she was reassured that there would not be long periods of time without repayment. However, there have been major delays with both utilities, at the worst

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September 9, 2010

being five months overdue on payments. Cynthia said that PESC and PESC’s SJVCEO have been increasingly concerned about these delays and working within their abilities to pursue payment.

Cynthia continued that there are more concerns than just VIEW. All current SJVCEO work projects are under the reimbursement plan. This requires the organization to incur cost and then submit for payment. For the EECBG small [the San Joaquin Clean Energy Partnership (CEP)] staff submitted application for over $6 million on January 12, 2010 and since then staff has been hired and an incredible amount of work has been done on the direction of the CEC, and now Cynthia is concerned that the SJVCEO will not be reimbursed. If the CEC does not reimburse the SJVCEO then PESC will not recover the money laid out for staff. Cynthia continued, explaining to the board that there have been repeated conversations at all levels—between PESC and SJVCEO, between SJVCEO and CEC, between PESC, SJVCEO, SJVAPCD and CEC—and nothing has been resolved.

Paul commented that PESC has judiciously put in invoices to SJVCEO and SJVCEO staff has sent in reimbursement requests, but there has been a processing lag in the two utilities. He continued that this is a painful reality, but we are doing things to address and realize that this is a significant issue.

Cynthia responded that at some point, from PESC’s standpoint, if it is not possible to address the issues soon PESC management will have to do something about it, because they can no longer continue to be as generous. Jeff Wright asked for further explanation of the invoicing process.

Cynthia explained the timeline in the VIEW contract, and that submitted invoices are supposed to be reviewed within ten days of receipt. There is a very tedious process involved in the review because these are Public Goods Charge Fund dollars. Courtney Kalashian commented that on average, one revision takes four to seven hours to complete and the entire submission takes up to twenty hours per month because of the minutia required in reporting. Gary Hanson commented that this is a bit of an awkward discussion to have with our utility board members at the table. He asked if there was anything the board could do to help. Don explained that he has reviewed the numbers and will be making calls as the Treasurer of the organization to both utilities to alert them that they are in violation of our contract. He said that if that were not successful then he would ask the board to step in.

Colby Wells explained to the board that he and Bill Delain are not involved with the payment process, and are fully behind the SJVCEO board. Bill Delain said that he and Courtney had the chance this morning to review the unpaid invoices, and that there is no question on totals or accuracy, it is at an entirely different level of review. Don commented that once the two utilities are caught up on payment that the board can then address the A/R due to reimbursement grants and will work to accelerate payment. Paul told the board that one of the strategies would be to submit a letter. Steve said it would be worth traveling to southern California to hold face‐to‐face meetings to show how critical this is to our organization; it is not fair to PESC to bear this burden.

In respect of time, Don identified the three pressing issues: 1) standardization 2) payment of undisputed amounts, and 3) meeting face‐to‐face with both SCE and SCG. With no further discussion a motion was made by Steve Geil and seconded by Frank Ferral to note and file the financial reports, and unanimously approved by the board

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IV.

September 9, 2010

Report/Discussion on Current Projects Don Pauley Courtney reminded the board that staff sends out a weekly update to all board members on Friday afternoons, and those wanting the details on the day‐to‐day could reference those reports. Today, staff wanted the opportunity for comment and feedback from the board.

A.

EECBG Large. Mike Nemeth reported that there is not a great deal of movement on the EECBG Large cities—Ceres and Delano. The City of Delano specifically has had a hard time getting going. The City has laid off nearly 50% of their staff, and Phil Newhouse, who is heading up the RFP/bid process is being forced to take the three months of vacation he has saved up, so moving through the City channels is a challenge.

B. Clean Energy Partnership. Mike reported there is a CEC kick‐off meeting at the Air District today that he and Sandy will attend. He and Sandy expect the CEC to explain what will happen next, and when they do, Mike and Sandy are ready to go! He said if SJVCEO gets the green light and the two contracts are fully executed the organization would be able to start billing against the grant. Tom Jordan explained that there are two agreements with the CEC that were supposed to be complete in April, but the air district has just gotten them back.

One agreement needs one more signature, which should happen by next week. The second agreement should be following a few weeks behind.

C. VIEW Partnership. Courtney informed the board that Maureen Hoff came on in March to help with administration and marketing, and it has been a huge relief to have her on the team. Courtney’s time, as she reported, has been devoted to the strategic plan—using the EPA portfolio manager to load government facilities and provide a benchmark for our jurisdictions. Currently, the deliverable of focus is on developing a processes and procedures document that will spell out the steps of how to benchmark.

Courtney went on to explain that the focus of the VIEW Partnership has changed. Previously we had focused on community outreach, but now we will be turning most of our attention to reduction of use in government facilities. The key, as we see it, is determining how to get the jurisdictions to be proud of what they are doing. We want them to “show and tell” their EE projects, and take pride in what they are doing. To help facilitate that sense of pride Courtney said she and Maureen will be working to develop an inter‐jurisdictional competition to generate savings, and use the benchmarking as a way to track progress.

In the first quarter of 2011, the SCE Small Business Direct Install program will come through to provide energy efficiency retrofit to small businesses.

As Courtney reported, the partnership has succeeded in achieving our kWh savings goals for the 2010‐12 program cycle! Additionally, the partnership has just realized the first gas savings. Our relationship with the jurisdictions is strong, and they have been very good friends to the organization.

Don asked Courtney if she would like to attend the City Managers Association meeting on October 20th in Kingsburg and speak about VIEW. Courtney thanked Don for the invitation and happily accepted.

D. WIA. Courtney reported that the contract for work was recently signed, and that she and Carole had recently added a meeting with the other WIA team leaders. The SJVCEO staff

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allotment time is being used to assist and publicize the other team efforts, and in the development of a web page add‐on to the SJVCEO site.

E. Fresno Regional Comprehensive Residential Retrofit. Paul credited Pete Weber with bringing this grant to the SJVCEO. Pete explained that most of the implementation work has to be completed within the city itself, with a piece going to Bakersfield. Originally, there was $150,000 over two years for SJVCEO work, but recent figures have shown it a bit higher.

Paul said the good news is that it has been approved. It was confirmed that this too is a reimbursable grant.

Courtney asked the board to reference agenda attachment #3—an Excel look at current SJVCEO financial obligations for the whole organization and then separately broken out by project. She noted that SJVCEO does bill both Ceres and Delano on a quarterly basis, and that they are good at turning around payment, but we understand that good on payment for a city is still some time off even when invoices are submitted in a timely fashion. Work done on the CEP has not yet been invoiced because the agreements are not yet in place. Courtney explained that all work completed to date has been on the PESC payroll. Cynthia clarified that SJVCEO has two staff members (as required by the EECBG/CEP agreement) that have been on the PESC payroll for nine and a half months working on the CEP and at the direction of the CEC. Because of continued delays, inability to get signed contracts‐‐whatever issues continue to come up‐‐ the possible date that SJVCEO will be allowed to bill keeps getting pushed back. Continuing, Cynthia went on to explain that even once the SJVCEO is able to seek reimbursement it will not resolve the outlay of salaries from PESC to the employees for the last nine and a half months. PESC and SJVCEO will need to review options for the EECBG/CEP contract as well as the VIEW contract.

Gary asked how the jurisdictions are responding to this. Cynthia answered the CEC and DOE have required exceptional amounts of work since the application went in on January 12, 2010; much of that work required interaction with the jurisdictions, including taking photos of every building named in the application. Tom agreed that the process has been horrendous. Gary rephrased and asked if the project is in a situation where the relationship has been strained with the jurisdictions. Mike responded, no—they still like us!

Early departure by Mike Nemeth and Sandy Nax to attend CEC kick‐off meeting.

Courtney continued the discussion regarding jurisdiction opinions of the CEP efforts and pointed to the air conditioning debacle of the summer as a perfect point. Due to program delays five of our partner jurisdictions had to replace AC units on that had been slated for replacement on their EECBG application. Now the jurisdictions that replaced units will not be reimbursed for those funds, and they will either have to find new approved projects for their allotment for forgo the money for their city.

Steve noted a point of clarification that the strained relationship is not between the jurisdictions and the SJVCEO, but rather the SJVCEO and payment of work to PESC. Steve moved to the chair as to how the board can rectify this.

Cynthia commented that SJVCEO collaborated with the Air District for the small EECBG jurisdictions so we could submit applications on their behalf. As an example of what is happening, she said she was unsure she would even be reimbursed for sending Mike and sandy

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to the CEC kick‐off meeting this afternoon! Don told the rest of the board that the small jurisdictions would not have gone after the EECBG money if not for the assistance of the SJVCEO and the generosity of PESC. He said there is no small town in the Central Valley that could have done this on its own. Don went on to explain that the small cities are well aware of what is going on, but he does not think that they are aware of the impact. Don said that the organization needs to start looking at foundation funding to help fund administrative costs and he volunteered to take time with Cynthia and Courtney to identify some foundations to approach for funding. Cynthia thanked Don, and commented that one of the other issues when we pursue funding is we need assistance from all of the cities in our request otherwise is comes across as one more non‐profit asking for money.

Steve requested that the conversation come back that there be an assurance from the SJVCEO to repay PESC and alleviate the financial drain. Steve said he felt there should be an actual commitment. Gary suggested that the executive committee could sit down and see what options are available. Don agreed that if a committee were needed then one would be formed.

Don said he is committed to getting SJVCEO and PESC out of this whole. Cynthia thanked the board and said that we are blessed that the business has been in the position to be able to support the organization as it has.

V.

Report on Grants a. DOE/CEC (pending). Paul reported on his travels to Sacramento in the spring and this came from an invitation from the CEC to apply for a competitive and reimbursable grant. He explained that it was a huge proposal that went to the DOE on June 1st for a multi‐family retrofit program throughout the Valley. Paul said we should learn the fate of the award later this month. The CEC is the lead applicant and SJVCEO would be the chief subcontractor.

Pete commented that it is a significant grant at $5 million, but it leverages other funding from additional sources. He said it is important is we are not treated fairly to make our voices heard because this is the only application that was submitted by the State of California and it was done exclusively with the SJVCEO. Pete said that it was a really well done proposal but his main concern is that the initial criteria are for a state that has not done much in the way of energy efficiency. Our application focused on the Central Valley.

Don offered his compliments on the application because multi‐family are some of the most inefficient users and it would help toward energy efficiency.

Bill asked how many jobs would be generated with this. An exact number was not known, but it was expected to be huge. Paul and Gary will follow up for details. b. Unrestricted funding. Cynthia reported that there is nothing new, but she would like to work with Don and the executive committee on a strategic effort. Don agreed to a meeting for the following week.

VI.

Other Business Don Pauley a. REACON update. Paul formally introduced Frank and the Greater Stockton Chamber project.

Frank explained the basics of REACON – help businesses reduce costs thru environmental stewardship. Valley CAN is giving partial funding to what they are doing today. REACON is a private/public partnership; they hold monthly education meetings, green zone workshops,

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and work in marketing green practices. Businesses, city, county, state, and federal agencies can participate. They get their funding from grants, chamber general fund, and in‐kind support. A PowerPoint presentation followed.

LUNCH

b. Request from VIEW partner jurisdictions. Bill Delain and Courtney explained the SCE grant opportunity that is available to partner cities to do strategic planning. This is the second stage, and no VIEW partner submitted an application for the first stage. The jurisdictions find the application process daunting with limited staff. The VIEW partners do have projects in mind that they would like to apply for, and have asked the SJVCEO to consider submitting applications on their behalf. The application work is not reimbursable, but cost recovery can be included in the grant proposal. After much discussion, the board determined it would be best to slow down and wait for the receivables to catch up so that we are in a position to move forward.

c. Departure of Rollie Smith. Paul announced that Rollie is leaving HUD and is going back to Washington DC. He joked that change is the one constant we can all expect! He went on to acknowledge that Rollie has been integral to organization and we will miss him. He will be stepping down from the board and Paul would like to do something for him – a plaque or something to thanks. d. CEC Kick‐off meeting update. Mike an Sandy returned from the CEC kick‐off meeting at the Air District and reported that the meeting included other cites too so it content was not geared toward the Partnership.

Mike said that Lisa Van de Water, of the Air District asked is the SJVCEO needs to meet Davis Bacon once we are a subcontractor and they answer had to be determined. The CEC expects that once they have the SJVCEO subcontract there will be a two to three day turnaround of approval and execution. Cynthia posed that perhaps we could discuss this with the Air District. She has kept extensive records of all communications regarding guidance that SJVCEO staff has been given and there is no hope that we are any closer to being in a position to bill than before. Paul recommended that we keep the team focused on the goals. Cynthia requested a meeting between her, Paul and Pat Perez (CEC) as soon as possible.

Don commented that there needs to be a sit down with local officials after the election to build advocates who can open doors. e. High‐speed rail. Steve asked if the organization has a stance on this. Courtney remembered that Paul has written a letter of support, perhaps in 2008 and left the meeting to find it in the SJVCEO correspondence files. Courtney returned with the signed letter on behalf of the organization and Steve was quite pleased and asked use a quote in the promotional efforts.

VII.

Next Steps and Action Items Don Pauley The next board meeting is scheduled for Thursday December 9 and will be held at the Modesto Irrigation District.

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VIII.

September 9, 2010

Adjourn

With no further business, the fourth quarter meeting of the SJVCEO board of directors adjourned at 12:55p.m.

Meeting minutes were recorded by Maureen Hoff and submitted by Gary Hanson, Secretary _____________________________________

__________________

Gary Hanson, Secretary Board of Directors, San Joaquin Valley Clean Energy Organization

Date

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