Phillip Kash, RES/CON 2017 Principal March 7 th , 2017 1
At HR&A, we empower urban communities to address pressing challenges by leveraging urban assets to create value. | 2
HR& A’s Resilience Practice uses three unique approaches Strategic Planning Implementation Capacity Building and Policy
We work on resilience projects across the country and the world. Minot, ND New York State Springfield, MA Boston, MA State of Connecticut New York City State of State of New Jersey State of Iowa California State of Virginia Nashville, TN Los Angeles, CA Shelby County, TN Tulsa, OK Atlanta, GA State of El Paso, TX International Project Louisiana Austin, TX Locations: New Orleans, LA Nairobi, Kenya Cape Town, South Africa Bangkok, Thailand Surat, India Paris, France
Most resilience projects have a funding gap. Total Development Cost GAP Sewage Authority Bond FUNDING SOURCES
The traditional approach is to focus on “innovative” financing. Total Development Cost Green Bond GAP EPA Grant PPP Sewage Authority Bond FINANCING TOOLS FUNDING SOURCES
But, funding comes from the benefits generated by the project. Direct Revenues Sales proceeds, rent payments, etc. Total Development Cost Indirect Revenues Green Bond Property value increases, higher sales tax proceeds, etc. Efficiency Gains GAP EPA Grant Utility savings, decreased wear and tear, etc. Avoided Losses PPP Reduced property repair costs, business down time, Sewage Authority Non-Monetary etc. Bond Benefits Access to open space, reduced crime, etc. FINANCING TOOLS BENEFITS FUNDING SOURCES
Identify and organize benefits that can be converted to funding. Direct Revenues Sales proceeds, rent payments, etc. Indirect Revenues Ease of Financing Property value increases, higher sales tax proceeds, etc. Efficiency Gains Utility savings, decreased wear and tear, etc. Avoided Losses Reduced property repair costs, business down time, Non-Monetary etc. Benefits Access to open space, reduced crime, etc. FINANCING TOOLS BENEFITS FUNDING SOURCES
Match benefits with the appropriate financing tools. Direct Revenues Ground Lease Sales proceeds, rent payments, etc. Indirect Revenues TIF District Property value increases, higher sales tax proceeds, etc. Efficiency Gains Performance Agreement Utility savings, decreased wear and tear, etc. Avoided Losses Resilience Bond Reduced property repair costs, business down time, Non-Monetary etc. Tax Credit Benefits Access to open space, reduced crime, etc. FINANCING TOOLS BENEFITS FUNDING SOURCES
Not all financing tools are worth pursuing. Direct Revenues Ground Lease Sales proceeds, rent payments, etc. Indirect Revenues TIF District Qualities Property value increases, - Large higher sales tax proceeds, etc. - Measurable Efficiency Gains Performance Agreement - Predictable Utility savings, decreased - Proven wear and tear, etc. - Capable Avoided Losses Resilience Bond Reduced property repair costs, business down time, Non-Monetary etc. Tax Credit Benefits Access to open space, reduced crime, etc. FINANCING TOOLS BENEFITS FUNDING SOURCES
Revise the project to increase the benefits that can be financed. Direct Revenues Sales proceeds, rent payments, etc. Total Development Cost Indirect Revenues TIF District Property value increases, higher sales tax proceeds, etc. GAP Efficiency Gains Performance Agreement Utility savings, decreased wear and tear, etc. Avoided Losses Reduced property repair Sewage Authority costs, business down time, Bond Non-Monetary etc. Tax Credit Benefits FINANCING TOOLS BENEFITS FUNDING SOURCES
Phillip Kash, RES/CON 2017 Principal March 7 th , 2017 12
Funding Resilience March 7, 2017 Res/Con – New Orleans, LA David Lessinger City of New Orleans Office of Resilience & Sustainability
Gentilly Resilience District: Urban Water Activities Parks & Playgrounds Vacant Lots Streets & Corridors Open Spaces Home & Property Improvements
Pursuing the Resilience Dividend Reduced risk of flooding and subsidence Neighborhood beautification & economic development Recreation & health Environmental awareness
Workforce Development • Train and prepare unemployed individuals to build NDRC-funded projects Develop increasingly vital skills in water • infrastructure development and management
Investing in resilience without additional funds • Budgeting for resilience in mind: using the funding you already have • Institutionalizing resilience thinking across the bureaucracy Cross-departmental and agency coordination to reduce duplicative • efforts and drive efficiencies
nola.gov/resilience David Lessinger @resilientnola dalessinger@nola.gov
Monetizing the Benefits of Hydroelectric Power Springfield, Massachusetts
Monetizing Resilience Benefits • As communities look to implement successful forward looking resilient projects in their community must consider key factors: • Utilizing current assets in a community to create projects which revitalize antiquated infrastructure with forward resilience retrofits. • Identifying projects with a dual impact including a possible revenue stream to fund long term maintenance and/or future resilient projects. • Defining the benefits of projects at the onset, and identifying how to monetize benefits to achieve long term resilience success.
Watershops Pond Dam Water Shops Armory Dam c. 1880 Overview of Spillway, Catwalk, Slide Gates and Intake Structures from Roof of Downstream Mill c. 2015
Watershops Pond Dam • $4.7 million in CDBG-NDR funding will restore hydroelectric power to the Watershops Pond Dam. The restored hydropower will have the potential to • generate 707,000 kWh during an average year and will be capable of functioning independent of the grid. Electricity produced by the hydropower project will offset • the current electricity demand of the Brookings School, located about 800 feet to the north of the project site. The use of the energy will create an annual avoided • energy costs – the product of the total cost of energy per kilowatt hour and the amount consumed onsite. This results in a municipality savings which can be used to • invest in future resilience based projects.
Estimated Savings Average Annual Energy Production (kWh) 707,000 Average Energy Consumed On-Site (kWh) 424,200 Average Energy Sold to Utility (kWh) 282,800 Avoided Cost of Energy $84,800 Income from Sale of Energy $17,000 Est. Annual Value of Energy $101,800
Estimated Savings By selecting a project which creates an annual cost savings at the municipality level, the City has the opportunity continue resilient investments by: • Investing the savings into additional resilient activities that will directly benefit the vulnerable populations. • Investing the savings to cover the long-term O&M of the dam itself, thereby ensuring it continues to generate benefits and the funding/savings needed to sustain itself.
Hydroelectric Power Restored Cost Savings invested in Resilience Projects Hydroelectric Power Generated Brookings School Monetized Annual daily energy offset Avoided Energy Cost Savings Uninterrupted power for Brooking School Emergency Shelter
MyStrongHome: A specialized mitigation finance company March 7, 2017
MyStrongHome is a new type of company that combines insurance, specialty finance and mitigation construction to manage climate risk Construction Insurance Finance
MSH builds resilience to hurricanes & extreme weather, particularly for the Southeast and Gulf More and more Insurance rates are Cost-effective people, and property, painfully high in many mitigation measures are at risk from coastal communities. exist but are unused hurricanes and due to costs, friction in extreme weather. the process and uncertain payback.
Our business model • “One stop shop” retrofit provided AT LOW OR NO COST MyStrongHome to homeowner > reduces losses 36%-70% fortifies houses • Construction certified by the Insurance Institute for Business and Home Safety (IBHS) through the against hurricanes FORTIFIED program Mitigation reduces • MSH partners with insurance partner/s to insure loss & insurance mitigated homes costs • Insurance re-priced for lower risk of mitigated homes Insurance savings • After amortization, savings passed to customer used to repay MSH • MSH registered as premium finance company with for the mitigation power of attorney to collect new premium + upgrades construction payment in order to ‘twin’ obligations
Basic MyStrongHome financing Model
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