Proposition 39: Investments in Energy Efficiency for Schools Capitol Advisors Group, LLC CASBO Annual Conference Kevin Gordon, President – Capitol Advisors Brad Chapman, Climatec, Inc. Bill McGuire, Superintendent St. Helena Unified School District

An Overview Prop 39 on the Ballot – What Voters Approved The Governor’s Proposal The Legislative Analyst’s Perspective SB 39 – Senator Kevin DeLeon AB 39 – Assembly Member Nancy Skinner The Education Community Response Outlook for the May Revision & Beyond www.capitoladvisors.org

Prop 39 – As Approved by Voters Passed by voters last November Raises more than $1 billion annually in Corporate income tax revenue by moving to single sales tax factor for most businesses. For first five years, half the revenue required to fund Clean Energy Job Creation Fund An estimated $450 the first year and $550 for each of the next four years is dedicated for this purpose. Improve energy efficiency and expand alt energy. K-14 Public Schools, CSU and UC and other “public buildings” Public-Private partnerships and workforce raining related to energy Appropriate only to agencies with expertise in managing energy projects and programs Coordinated with CEC and CPUC to avoid duplication and leverage existing energy efficiency and alternative energy efforts. www.capitoladvisors.org

Existing Programs More than a dozen existing programs managed by multiple agencies including CEC, CPUC, and by public and Investor- owned utilities. California has spent almost $15 billion over the past 10-15 years on these efforts. www.capitoladvisors.org

The Governor’s Proposal Significantly departs from ballot measure in implementation approach Counts all revenue from Prop 39 toward Prop 98 minimum guarantee, including funds spent on energy projects Focus energy funding exclusively on K-14 schools. $400.5 Million for K-12 schools $49.5 Million for Community Colleges www.capitoladvisors.org

The Governor’s Proposal Funding administered through CDE for K-12 and Chancellor’s Office for CCs. These agencies would issue guidelines for prioritizing the use of funds by LEAs. CDE and Chancellor’s Office required to “consult” with CEC and CPUC on guidelines. Budget provides a permanent full time position at CDE for coordination. Allocates funding on an ADA basis $67 for K-12 $45 for Community Colleges Report due to CDE and Chancellor on expenditures. www.capitoladvisors.org

The Governor’s Proposal Funds may be used for uses consistent with the state’s loading order policies, including: Construction or modernization of buildings in a manner that uses less energy Purchasing energy efficient equipment Undertaking renewable energy projects such as installation of solar panels and geothermal heat pumps www.capitoladvisors.org

The Legislative Analyst’s View Questions Treatment of Proposition 39 Revenues Varies from LAOs longstanding view of Proposition 98. Assert potential for greater manipulation of the minimum guarantee. Questions Allocation Method - Limited Benefit Excludes many eligible projects. Fails to account for energy consumption differences. Allocates funding inefficiently. May not guarantee return on investment. Does not account for significant past investments in K– 14 facilities. Fails to sufficiently leverage existing programs and experience. www.capitoladvisors.org

The Senate Bill - SB 39 Senator Kevin DeLeon & Senate President Pro- Tem Darrell Steinberg “Clean Energy Employment and Student Advancement Act” Follows emphasis on education but allows funds for both K-12 and higher ed. institutions Vests the Office of Public School Construction and State Allocation Board with administrative role They shall “consult” with Energy Commission and PUC Competitive grant-based, and need-based approaches www.capitoladvisors.org

The Assembly Version - AB 39 Assembly Member Skinner and Assembly Speaker John Perez “California Clean Energy Jobs Act” K-12, Higher Ed, “Other public buildings,” Public-Private Partnerships, Job creation and workforce development agencies Vests the Energy Commission with administrative authority “In consultation with Superintendent of Public Instruction” Grant, loan based approaches www.capitoladvisors.org

The Education Community Perspective Governor’s approach preferable Per ADA funding with fewest strings possible Grant writing expertise not required As little bureaucracy as possible Keeps Energy Commission and PUC in consultative roles only. Job related provisions should be linked to the energy work directly, not a fund to simply be directed to workforce development generally. All proposals have end of project reporting and bill language related to Citizens Oversight Board. www.capitoladvisors.org

Outlook for the May Revision Governor’s influence never stronger Education focus is politically defensible Per ADA approach is unfortunately vulnerable Both bills & LAO reject this approach Small school districts argument is double edged Almost every district can use these funds for some form of energy efficiency. Local control versus biggest possible projects www.capitoladvisors.org

Energy Efficiency Efforts That Likely Fit Reducing overall energy load first Real state-of-the-art energy efficient infrastructure Education on efficiency measures everyone can take Renewable focus comes next Solar projects – What helps and what doesn’t Leveraging every resource Public Utilities Investor Owned Utilities (IOUs) Bond Augmentation Data proven results for accountability process www.capitoladvisors.org