Title
Approval to Enter into Multi-year Revenue Agreement with Urban Offsets for Tree Planting (Ordinance S-44499)
Description
Request to authorize the City Manager, or his designee, to enter into a Verified Emission Reductions Purchase Agreement ("VERPA") with Urban Offsets, Inc. under which the City would receive a recurring annual payment of $17,792.19 in exchange for planting and maintaining 137 trees over the anticipated project life of 40 years. The contract value is $88,960.95 over the initial five-year term of the agreement, but could extend up to a maximum contract value of $711,687.60 if the contract is renewed after the initial term to the anticipated project life of 40 years. Further request authorization for the City Treasurer to receive funds related to this item.
Report
Summary
The agreement with Urban Offsets, Inc., a for-profit startup business located in Greensboro, North Carolina, supports an initiative to plant and grow healthy trees in the City of Phoenix with the intent of selling the associated carbon credits over the life of the project. The agreement is a new revenue model that not only covers the cost of tree planting, but ongoing maintenance throughout the life of the project, making it scaleable to other potential tree planting projects in the future. It also supports the Tree and Shade Master Plan's ambition to increase the tree and shade canopy Citywide. The revenue received by the City would be used to plant and maintain the trees and conduct annual inventories in support of the annual carbon credit verification.
Financial Impact
As part of the agreement, the City will be required to cover the initial cost to plant and maintain the trees; however, the annual revenue from the sale of the carbon offsets will be used to fully recover those costs as well as potentially provide funds for planting and maintenace of additional trees. Staff would place the annual revenues into a "tree fund" as a means to track, reconcile and recover tree planting and maintenance costs spanning several fiscal years.
Location
The exact location of the trees to be planted is yet to be confirmed, although the initial buyer of the offsets, not disclosed as part of the agreement, requested that the trees be planted in low-income neighborhoods, ideally near the Garfield District.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Managers Karen Peters and Deanna Jonovich, the Office of Sustainability and the Parks and Recreation Department.