Title
Resolution to Authorize a Subgrant Agreement with ICLEI - Local Governments for Sustainability U.S.A., Inc., Accept Associated Grant Funds, and Appropriate Grant Funds to the Office of Sustainability and Innovations Major Grants Budget ($250,000.00) (8 Votes Required)
Memorandum
Attached for review and consideration is a resolution to authorize acceptance and appropriation of grant funding from ICLEI - Local Governments for Sustainability U.S.A., Inc. (ICLEI USA) to support market-readiness activities for the Ann Arbor Sustainable Energy Utility (SEU). This grant award is entitled “National Clean Investment Fund Second-Tier Subgrant Agreement,” and the funds for this award are from an encumbered award from the National Greenhouse Gas Reduction Fund that ICLEI USA and the Coalition for Green Capital secured earlier this year.
In early 2025, the Office of Sustainability and Innovations prepared a grant application to ICLEI USA to support market-building activities to help prepare the newly created Ann Arbor SEU for launch. Specifically, the successfully submitted grant application included costs to support the following:
• Staff time needed to initiate foundational elements of the SEU, including funding for the new Executive Director, Director of the Office of Sustainability and Innovations, Chief Financial Officer, finance staff, legal staff, and a few others.
• Preliminary engagement with a rate firm to help identify key sensitivities related to SEU market-readiness.
• Additional legal assistance to help with drafting sample easements and contracts the SEU will use with future customers.
• The development of a public-private partnership plan, inclusive of extensive engagement with key stakeholders, that outlines necessary action items and key steps needed to secure market support to fully launch the SEU.
In July 2025, the City was informed that it is one of 52 communities across the country selected to receive an award of $250,000.00 through the National Clean Investment Fund. All funds secured through this grant award must be spent by early 2026. And, because the City won this initial award, the City is eligible to apply for an additional $2,000,000.00 to further support the creation of the SEU. This additional grant application will be due at the end of calendar year 2025 and will be completed by the SEU Executive Director in coordination with the Office of Sustainability and Innovations. For now, however, the Office of Sustainability and Innovations is requesting City Council’s approval to enter into a subgrant agreement with ICLEI USA, as well as authorization to receive and appropriate the $250,000.00 awarded through this grant.
Budget/Fiscal Impact: Once authorized, receipt of this funding will help cover some of the start-up costs associated with launching the Ann Arbor Sustainable Energy Utility.
Staff
Prepared by: Missy Stults, Sustainability and Innovations Director
Reviewed by: Kim Hoenerhoff, Financial Analyst
Marti Praschan, Chief Financial Officer
Valerie Jackson, Assistant City Attorney
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, The Ann Arbor Sustainable Energy Utility was authorized by the voters in November 2024 and formally created on April 17, 2025 via the Sustainable Energy Utility Ordinance;
Whereas, In early 2025, the City’s Office of Sustainability and Innovations applied for a $250,000.00 grant from ICLEI - Local Governments for Sustainability U.S.A., Inc. to support market-building activities related to launching the Ann Arbor Sustainable Energy Utility;
Whereas, The City’s grant application was selected for funding in the amount of $250,000.00;
Whereas, To access this grant funding, the City must enter into a National Clean Investment Fund Second-Tier Subgrant Agreement with ICLEI - Local Governments for Sustainability U.S.A., Inc.; and
Whereas, This grant funding will support some of the initial start-up costs associated with creating the Ann Arbor Sustainable Energy Utility and help the Sustainable Energy Utility move closer to market-readiness and formal launch;
RESOLVED, That City Council accept a subgrant award of $250,000.00 from ICLEI - Local Governments for Sustainability U.S.A., Inc. and appropriate $250,000.00 to the Office of Sustainability and Innovations Major Grants budget;
RESOLVED, That City Council authorize the City to enter into a National Clean Investment Fund Second-Tier Subgrant Agreement with ICLEI - Local Governments for Sustainability U.S.A., Inc.;
RESOLVED, That any remaining funding in the FY26 expenditure budget related to this subgrant award be carried forward without regard to fiscal year; and
RESOLVED, That the City Administrator is authorized to take all appropriate actions to implement this resolution.