To: Honorable Chair and Commissioners
From: Steve Potter, Executive Director
Prepared By: Stephanie Gaul, Housing Manager
TITLE:
Title
Laurel Manor Energy Resiliency Project
LABEL
RECOMMENDED ACTION:
Recommendationle
Adopt a resolution (1) authorizing the Executive Director or their designee to apply for, accept, and sign all necessary documents related to energy efficiency and solar incentives for the Laurel Manor Energy Resiliency Project; (2) to enter into and record a deed restriction of Laurel Manor associated with energy incentives; and (3) to approve a budget adjustment for the Laurel Manor Energy Resiliency Project as documented in budget adjustment 2P03.
Body
DISCUSSION:
Laurel Manor, a 50-unit multifamily complex, was purchased by the Housing Authority of the City of Napa (“the Housing Authority”) in 1982. Since 1982, the Housing Authority has been operating the property as affordable housing for seniors. The purchase of Laurel Manor was originally approved by voter referendum in 1979 which authorized the acquisition and continued operation of the property as low-rent housing for the elderly and disabled.
Laurel Manor has been maintained as quality affordable housing for more than 40 years and was most recently renovated in 2012. To finance the 2012 rehabilitation, the City of Napa (“City”) loaned the Housing Authority funds from the Community Development Block Grant (CDBG) program. The CDBG funding required a 20-year deed restriction to be placed on the property which is set to expire on March 13, 2033.
The Housing Authority has been working in partnership with City staff to explore energy efficiency and decarbonization measures at Laurel Manor to improve comfort and safety of residents and take advantage of current incentive opportunities. Because City Council has identified climate action as a focus area in recent years, the Housing Authority has explored this opportunity as a model project for affordable multifamily properties in Napa.
For the past year, City and Housing Authority staff have worked extensively with Association for Energy Affordability (AEA), a non-profit providing technical assistance to property owners in all areas of energy efficiency in buildings. During the technical assistance period, a scope of opportunity was determined for the Laurel Manor site. At this time, suggested updates to the property include:
• Roof replacement and installation of solar with capacity to serve the entire property
• Replacing gas furnace and air conditioner with an electric ductless mini-split air conditioner and heat pump in each unit
• Replacing gas water heater with an electric heat pump water heater in each unit
• Updating or adding insulation in the attic and knee-wall of each unit
• Replacing range hood with a vent hood in each unit
• Replacing bathroom fans with bathroom fans with exhaust in each unit
• Replacing water fixtures to low-flow fixtures in each unit
• Replacing incandescent and compact fluorescent lights with LED lights throughout the property including in each unit
• Air sealing as needed in each unit
The scope of work was determined by surveys of existing conditions, including site visits, as well as the opportunity to take advantage of available energy incentives. The estimated cost for all upgrades listed above is approximately $2.5M. AEA has identified approximately $1.03M in available incentives for the proposed scope of rehabilitation work. This results in a net cost of $1.47M, or $29,429 per unit. Incentives will be utilized from MCE Clean Energy’s Multifamily Energy Savings (MFES) program, and California’s Low Income Weatherization Program (LIWP) and Solar on Multifamily Affordable Housing (SOMAH) programs. Staff have begun the process of applying for each incentive so that funds can be reserved for this project with each funding agency.
The incentives available must be utilized by June 1, 2026. If approved, the project is expected to be put to bid in October 2025 with award in December 2025. Construction is expected to begin in February 2026 and completion is expected in spring 2026. During the anticipated construction for the property improvements, individual households will not be displaced overnight but will be disrupted during the daytime with the expected duration of work on each unit to be two to four days. Staff is working with the property manager to ensure the least disruption to each tenant and offering alternative access to rest, relief, and meal space.
Once the project is completed, basic modeling shows that tenants are estimated to save $178 in annual utility costs from the upgrades of mechanical systems and insulation. The solar photovoltaic system is expected to offset 100% of site consumption which would significantly reduce tenant’s remaining electric costs.
The total estimated cost of the project to the Housing Authority is $1.5M, including contingency. A budget adjustment will be required and an associated action by the City to amend the Capital Improvement Program is required. If any of the incentive opportunities do not materialize during the project predevelopment process, the project will not move forward.
As a condition of the incentives, the Housing Authority will be required to deed restrict the property for 10 years after the receipt of incentives. The deed restriction will not change the affordability makeup of the property in any way, rather will mirror the deed restriction that has been in place since 2013.
FINANCIAL IMPACTS:
The total estimated cost of the project is $2.5M with $1.03M in incentives available. Expected net cost to the Housing Authority, after incentives are received, is $1.5M. The incentives will be paid directly to the contractor and will not flow through the Housing Authority. There is currently $72,501 in contingency budgeted for Laurel Manor. An additional $1,427,499 of fund balance will be required. The proposed action would require a budget adjustment of $1,500,000 in the Laurel Manor fund (84112500-82300) and a subsequent amendment to the City’s Capital Improvement Program. The Laurel Manor fund has an unaudited fund balance of $2.0M as of June 30, 2025.
CEQA:
The Executive Director has determined that the Recommended Action described in this Agenda Report is not in-and-of-itself a “project”) pursuant to CEQA Guidelines Section 15378 since it does not result in a physical change in the environment. However, the Recommended Action is a part of a larger “project” that will be subject to environmental review in accordance with CEQA at the earliest feasible time prior to approval consistent with CEQA guidelines 15004 and 15352. The larger project is a future capital improvement project and staff plans to bring back a CEQA analysis of the project prior to approval of a contract.
DOCUMENTS ATTACHED:
ATCH 1 - Resolution
EX A - Budget Adjustment 2P03
NOTIFICATION:
AEA was notified of this agenda item.