A communication transmitted from Louis A. DePasquale, City Manager, relative to the creation of a new municipal Renewable Energy and Greenhouse Gas (“GHG”) Reduction Revolving Fund (“Revolving Fund”) to serve the City of Cambridge’s (“City”) municipal energy aggregation, and adoption of the proposed new ordinance, Chapter 3.24, entitled “Departmental Revolving Funds.”

1 Chapter 3.24 – DEPARTMENTAL REVOLVING FUNDS Section 3.24.010 – Purpose. This chapter establishes and authorizes revolving funds for use by the City and its departments, agencies and offices in connection with the operation of programs or activities that generate fees, charges or other receipts to support all or some of the expenses of those programs or activities. These revolving funds are established under and governed by General Laws Chapter 44, § 53E½ and this chapter. Section 3.24.020 – Expenditure Limitations. A City department or agency head or officer may incur liabilities against and spend monies from a revolving fund established and authorized by this chapter without appropriation subject to the following limitations: A. Fringe benefits of full-time employees whose salaries or wages are paid from an established and authorized revolving fund shall also be paid from that fund. B. No liability shall be incurred in excess of the available balance of the fund. C. The total amount spent during a fiscal year shall not exceed the amount authorized by the City Council on or before July 1 of that fiscal year, or any increased amount of that authorization that is later approved during that fiscal year by the City Manager and City Council. Section 3.24.030 – Interest. Interest earned on monies credited to a revolving fund established by this chapter shall be credited to the City’s general fund. Section 3.24.040 – Procedures and Reports. Except as provided in General Laws Chapter 44, § 53E½ and this chapter, the laws, charter provisions, ordinances, rules, regulations, policies or procedures that govern the receipt and custody of City monies and the expenditure and payment of City funds shall apply to the use of a revolving fund established and authorized by this chapter. The City Treasurer shall include a statement on the collections credited to each such fund, the encumbrances and expenditures charged to that fund and the balance available for expenditure in the regular report the City Manager provides the department, agency or officer on appropriations made for its use. Section 3.24.050 – No Supersession or Replacement. For avoidance of doubt, revolving funds operated by City departments, agencies or offices pursuant to a law, regulation or order other than General Laws Chapter 44, § 53E½ shall not be superseded or replaced by this chapter.

2 Section 3.24.060 – Termination of Revolving Fund. Pursuant to General Laws Chapter 44, § 53E½, upon the termination of a revolving fund, the balance in that fund at the end of that fiscal year shall revert to surplus revenue at the close of the fiscal year. Section 3.24.070 – Authorized Revolving Funds. A. Municipal Aggregation Operational Adder Fund. 1. Fund Name. There shall be a separate fund called the “Municipal Aggregation Operational Adder Fund” for use by the Community Development Department. 2. Definitions Applicable to this Subsection. a. “Aggregation Plan” shall mean the Cambridge Municipal Electricity Aggregation Plan that was approved by the Massachusetts Department of Public Utilities on June 2, 2017, and as may be amended by the City and approved by the Massachusetts Department of Public Utilities from time to time. b.“Aggregation Program” shall mean the Cambridge Municipal Electricity Aggregation Program, which was established on June 2, 2017 by order of the Massachusetts Department of Public Utilities, and as may be amended by the City and approved by the Massachusetts Department of Public Utilities from time to time. c. “Operational Adder” shall mean a charge that the City may elect to include in the price paid by Cambridge ratepayers who participate in the Aggregation Program for electricity to fund the operational costs of the Aggregation Program and/or to support “Renewable Energy” (as defined, below) and/or “Greenhouse Gas Mitigation” (as defined, below) projects that create benefits for Cambridge ratepayers who participate in the Aggregation Program. d.“Renewable Energy” shall mean, as defined in General Laws Chapter 164, § 1, (i) resources whose common characteristic is that they are nondepletable or are naturally replenishable but flow-limited; or (ii) existing or emerging non-fossil fuel energy sources or technologies, which have significant potential for commercialization in New England and New York, and shall include the following: solar photovoltaic or solar thermal electric energy; wind energy; ocean thermal, wave, or tidal energy; geothermal; fuel cells; landfill gas; waste-to-energy which is a component of conventional municipal solid waste plant technology in commercial use; naturally flowing water and hydroelectric; and low emission advanced biomass power conversion technologies using such fuels such as wood, by-

3 products or waste from agricultural crops, food or animals, energy crops, biogas, liquid biofuel including but not limited to biodiesel, organic refuse- derived fuel, or algae; provided, however, that Renewable Energy supplies shall not include coal, oil, natural gas except when used in fuel cells, and nuclear power. e. “Greenhouse Gas Mitigation” shall mean any investment or activity that measurably reduces or avoids greenhouse emissions. 3. Revenues. Subject to certification by the City Auditor that the revenue source described in this paragraph was not used in computing the prior fiscal year’s tax levy, the City Treasurer shall establish the Municipal Aggregation Operational Adder Fund as a separate account of the City and credit to this fund all Operational Adders that are assessed to electricity ratepayers in Cambridge who participate in the Aggregation Program and are received by the City Treasurer. 4. Purpose and Expenditures. During each fiscal year, the department head of the Community Development Department or his/her designee within the Community Development Department may, as approved by the City Manager, incur liabilities against and spend monies from the Municipal Aggregation Operational Adder Fund in accordance with the Aggregation Plan. Salaries and wages of employees shall be paid from the annual budget appropriation of the Community Development Department and shall not be paid from this revolving fund. 5. Fiscal Years. The Municipal Aggregation Operational Adder Fund shall operate for fiscal years that begin on or after July 1, 2019.