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7 2.1 GRF Case Example Summary The impact of GRFs in catalyzing investment into energy and resource efficiency projects is most robustly represented within higher education, where the financing model has been imple- mented most frequently. Three of the four GRF case examples included in this report come from institutions of higher education: Harvard University, Denison University, and Lane Community College. The final example profiles the city of Santa Barbara, a municipality that has developed a GRF and also manages a local airport. Airport perspectives are profiled for Hartsfield-Jackson Atlanta International Airport (ATL) (the busiest airport in the United States) and for smaller airports within the Virginia Department of Aviation. A summary of lessons learned is provided herein and a more detailed discussion of each case example can be found in Appendix C. Higher Education and Municipalities The case examples of established GRFs can offer multiple valuable lessons for airports that are considering the GRF model. For example, Harvardâs experience in setting up a GRF shows that starting with a smaller fund and proving its value can provide a low-risk pathway for creating a large fund over time. Denison demonstrates that it is possible to get a successful GRF operating without initially having tracking and measurement systems in placeâestimates for these effi- ciency projects can be relied on to plan repayments in advance of more robust metering systems. Lane teaches institutions the importance of initially setting up clear fund guidelines and sepa- rating the GRF account from other budgets to ensure that funds are protected from budgetary pressure over time. Santa Barbara reinforces the fact that a backlog of energy efficiency projects represents a perfect opportunity to establish a GRF, and that even the initial attention to detail required to set up the fund can lead to significant utility savings (as the city found a better rate structure and used the resulting $60,000 in savings to capitalize its GRF). Airports Understanding early exploration of the GRF model in airports can also provide useful lessons. At ATL, the challenge in setting up what may be the first airport GRF has been finding enough funding for projects of sufficient size that are worth tracking and revolving savings. Fund cham- pions have pursued unconventional sources of seed capital, identifying several potential sources. These include rebates from the state utility, savings from efficiency projects financed by the cityâs revolving fund, a voluntary charge for travelers, and even revenue generated by airport land management. With the investment of the modest capital raised to date into a relatively small project, the savings are currently too small to justify tracking them. More funding will be needed to establish the airportâs GRF. ATLâs experience demonstrates that even with available sustainability staff committed to the GRF concept, creativity and perseverance may be necessary to generate initial funding for the GRF. It also demonstrates that the strategy of starting with a C H A P T E R 2 Where Are GRFs Already Working?
8 Revolving Funds for Sustainability Projects at Airports smaller GRF to demonstrate the concept must simultaneously ensure that the GRF can finance projects of sufficient scale with savings that merit tracking. If the GRF is too small, it may give the impression that the model doesnât provide sufficient benefit to warrant expansion. Although it is not a traditional GRF, the Virginia Airports Revolving Fund (VARF) provides useful insight on how a state-level variation on the GRF concept could work for smaller airports. The Virginia Department of Aviation established the VARF, and though it is not dedicated to financing sustainability projects, the fund does provide loans to Virginia airports for various projects. These loans must be repaid. The airports have a level of familiarity with the revolving fund model and its ability to operate over time, as well as a potential source of seed funding for establishing their own airport-managed GRFs. State-level revolving funds exist across the United States, and to the extent that they can be utilized by airports, they can serve both as an educational and an early financing role for airports looking to establish their own GRF. The administrative requirements are more manageable when centralized out of a single office for multiple facilities. While GRFs are relatively new to airports, they have been deployed at colleges and universities since the early 2000s. Cities have also implemented GRFs. Because each institution has unique characteristics and organizational structures, it is essential to recognize which GRF features to adapt to work for each airport. While higher education has found value in establishing indepen- dent GRFs, it may be more efficient for smaller airports to participate in a statewide system that is centrally administered (similar to the one in Virginia). The research team suggests reviewing the detailed case examples provided in Appendix C for additional information.
