2018 Green Bonds Report

East Bay Regional Park District

$30 million in Measure WW Green Bonds issued November 2017

April 2019

Photographic Guide to East Bay Wildflowers by Wilde Legard (retired EBRPD Botanist) Introduction Green Bonds is a term used to denote bond issues, the proceeds of which are expected to be used on projects that reduce greenhouse gases, mitigate climate change, or provide other environmental benefits. The purpose of the designation is to provide opportunities for investors who wish to focus on these environmental and social goals. The East Bay Regional Park District issued its first green bonds in November 2017. This report provides a detailed accounting of Measure WW Green Bond proceeds in 2018. The report also quantifies current and expected future benefits of projects undertaken with these funds.

Overview of EBRPD Mission and Sustainability Goals With the growing awareness of the effects of human activity on our changing climate, the District increasingly desires to provide strategic resources to build resilient communities. Parks can provide the resiliency necessary to help combat climate change in a number of ways: forests and grasslands act as an atmospheric carbon sink, through carbon stored in the biomass and soil; wetlands sequester carbon in biomass and in their soils, as well as help filter pollution and mitigate storm surges along the shoreline; wildfire hazard reduction reduces the amount of carbon released into the atmosphere; shoreline improvements protect critical habitats from rising sea levels; while trails for pedestrians and bicycles reduce the amount of automobile miles traveled.

The East Bay Regional Park District provides a diversified open space land and water system of 73 parks, preserving and protecting over 122,000 acres of parkland in the San Francisco Bay Area ‐‐ including 150+ miles of active transportation trails, 55 miles of shoreline, 54,000 acres of grasslands, 45,000 acres of woodlands, and 2,500 acres of wetlands ‐‐ all of which perform an increasingly critical role in sequestering carbon, reducing carbon emissions, protecting wildlife, and mitigating climate change effects. The District’s Green Bond program is the natural extension of the District’s long‐stated mission to preserve a rich heritage of natural and cultural resources.

Overview of the Park District’s Green Bonds In November 2017, the District issued $30 million in Measure WW Green Bonds, to be used for green Project Types, as described below:

Project Type Green Bond Project Type Description Property acquired for inclusion in parks owned and managed by the District. This activity generally maintains land Acquisition in its natural condition, providing carbon sequestration as well as preventing the higher climate impacts of development. Other land is acquired to create wildlife corridors. Habitat Projects that improve habitat for plants and animals. Sea Level Project that improve the shore land to mitigate or respond to rising sea‐levels. Trails Creation trails providing alternatives to the use of automobiles and thereby helping to reduce greenhouse gases.

Summary of 2018 Green Bond Expenditures Green Bond spending in 2018 was $6.2 million, or 21% of the total $30 million issuance. Summarized 2018 expenditures by green Project Type are provided in the table below. Total Green Bond expenditures through December 31, 2018 were $10.1 million, or 34% of the original $30 million.

Category 2018 Green Bond Expenditure Acquisition $4,870,769 Habitat 522,689 Sea Level 200,151 Trails 598,978 Grand Total $6,192,581

Green Bond Framework As part of its first Green Bond issuance, the District issued its Green Bond Framework (November 1, 2017; Link to Green Bond Framework). The District’s Green Bond Framework aligns with Green Bond Principals and includes four core components: Use of proceeds, Process for project evaluation and selection, Management of Green Bond proceeds, and Reporting. This report addresses each component related to the Measure WW Green Bonds. Although third‐party criteria for “Nature Based Asset Green Bonds” have yet to be fully established, the District wishes to show leadership in this sector by reporting on the use and management of bond proceeds as well as conformance with applicable Climate Bond requirements as presented in the Climate Bonds Standard 3.0 (Draft).

Use of Proceeds Projects eligible for Green Bond funding are selected based on their direct climate or positive environmental impact and support of the District’s environmental goals. Eligible projects must provide benefit in one of the following categories: land acquisition projects, both new properties and the expansion of existing parks; restoration of habitat for wildlife; shoreline protection against sea level rise; or establishment and improvement of trails for transportation. These projects also fall in the following eligible green project categories as defined in The Green Bond Principles (2018):  Environmentally sustainable management of living natural resources and land use;  Terrestrial and aquatic biodiversity conservation;  Sustainable water and wastewater management; and  Clean (non‐motorized) transportation.

The District’s Green Bond Framework specifies that expenditures for recreational improvements such as boat launches, camping, visitor centers, parking and restrooms are excluded for Green Bond funding.

Project Evaluation and Selection Voters’ approval of the District’s $500 million Measure WW Bond in 2008 included allocation of bond funds to specific projects. With the 2017 Measure WW Green Bond issuance, an additional layer of tracking and reporting was developed in the four Green Bond categories: Acquisition, Habitat, Sea Level, and Trails. Existing projects were reviewed by project management staff to determine Green Bond‐eligibility, based on the Green Bond Framework criteria. All new Measure WW eligible projects are evaluated for green‐bond eligibility based on the Green Bond Framework, prior to being established in the financial software system.

Management of Proceeds Green Bond proceeds, held by US Bank as Trustee, were invested as authorized under the Fiscal Agent Agreement, consistent with the District’s Investment Policy. The District advances funds for project expenditures from its own monies. Quarterly, the District seeks reimbursement from the Trustee for project expenditures. As described in the section above, Green Bond eligible projects have been identified in the District’s financial system and can be tracked by category type (Acquisition, Habitat, Sea Level, and Trails). Financial reports developed for Green Bond expenditure tracking are used for Trustee reimbursements. As part of the bond requisition format, the District’s Chief Finance Officer certifies expenditures as eligible for reimbursement per the Green Bond Framework criteria.

Reporting The District has committed to annual reporting on use of proceeds until the Green Bonds are fully deployed, and to post its Green Bond reports as a voluntary disclosure on its web site (http://www.ebparks.org/climatesmart.htm) and a summary on the Electronic Municipal Market Access (EMMA) website https://emma.msrb.org/MarketActivity/ContinuingDisclosureDetails/ The District has also committed to engage with the firm First Environment, to serve as a second‐party external reviewer, to provide an assessment that that District is conforming to Post‐Issuance Requirements of the Climate Bonds Standard, and that a sample of nominated projects continue align with the Green Bond Framework.

This report provides an accounting for expenditures made to‐date and will quantify the carbon sequestered or other climate benefit already obtained, or expected to be obtained from the project following completion.

2018 Projects In‐Progress Using Green Bond Funds The following projects utilized Green Bond funds in 2018 and are not yet completed. Project completion percentage is reported based on the total project budget.

Percent Total % Exp. Green Green Bond Total Project complete Project Name / Description Location Expenditure from Bond Type Expenditure Budget based on To‐Date GB budget Build Golden Gate Trail San Francisco Bay Trail Trail $265,090 $2,725,672 $10,174,200 27% 10% Dredge Ponds and Repair Levees Hayward Shoreline Habitat 251,878 410,633 679,816 60% 61%

Develop Lonetree Trail San Francisco Bay Trail Trail 238,601 384,969 2,931,090 13% 62% Improve Access & Restore Habitat Bay Point Shoreline Sea Level 147,156 874,656 1,628,825 54% 17% Improve Access and Habitat Coyote Hills Habitat 113,640 372,521 678,800 55% 31% Restore Beach Alameda Point Habitat 96,286 255,691 263,303 97% 38% USA ‐ Concord Naval Weapons Station Acquisition Concord Hills Acquisition 91,216 534,296 590,000 91% 17% Build Ridge Trail Bay Area Ridge Trail Trail 74,408 168,874 700,000 24% 44% Extend Bay Trail Point Molate Trail 62,303 715,601 1,590,760 45% 9% Restore Albany Beach McLaughlin Eastshore Habitat 60,885 6,764,693 7,744,954 87% 1% BNSF Dornan Drive Acquisition Miller‐Knox Acquisition 55,860 80,764 125,000 65% 69% Restore Dotson (Breuner) Marsh Point Pinole Sea Level 52,995 13,278,313 14,120,874 94% 0.4% MEC Land Holdings Inc San Francisco Bay Trail Acquisition 40,043 3,538,689 3,642,036 97% 1%

2018 Projects In‐Progress Using Green Bond Funds – Continued

Percent Total Total % Exp. Green Green Bond complete Location Expenditure Project from Project Name / Description Bond Type Expenditure based on To‐Date Budget GB budget Mt Zion Enterprises Inc. San Francisco Bay Trail Acquisition $24,365 $76,279 $124,000 62% 32% Oakland Army Gateway Regional Base/Eastshore Shoreline Park Acquisition 20,927 130,927 210,000 62% 16% Antioch Unified School District/Moller Ranch Black Diamond Acquisition 20,073 422,645 447,033 95% 5% BBG KRG Inc. Vargas Plateau Acquisition 14,406 29,406 50,000 59% 49% Develop Trail to Mt. Diablo Tassajara Creek Trail Trail 6,575 12,360 150,000 8% 53% Develop Marsh Creek Trail Marsh Creek Trail Trail 4,695 4,695 275,000 2% 100% Build Carquinez Scenic Trail Carquinez Strait Trail 2,798 6,257,400 6,270,447 100% 0% Develop Martinez Bay Trail San Francisco Bay Trail Trail 1,127 1,127 285,000 0.4% 100% Develop Pocket Park San Francisco Bay Trail Trail 87 87 100,000 0.1% 100% Develop Oakland Shore Bay Trail San Francisco Bay Trail Trail 50 50 200,000 0.1% 100% Preliminary Land Acquisition Multiple locations Acquisition 15,142 113,399 218,425 52% 7% Gosselin‐Rollins Doolan Canyon Acquisition ‐12,969* 103,744 195,400 53% USA‐GSA Crown Beach Acquisition ‐14,295* 2,961,209 2,961,209 100% Construct Pinole Shores San Francisco Bay Trail Trail ‐94,907* 13,036,676 13,493,298 97% * negative values are coding corrections from prior year. Additional green bond expenditures will be incurred over the life of the project.

Summary of Projects Completed in 2018 Using Green Bond Funding

This table summarizes projects completed in 2018 using green bond funds. The following pages provide details of each project completed in 2018, including environmental and social benefits, as well as annual expected carbon sequestration value. Percent 2018 Green Total Total % Exp. Green Bond complete Location Bond Expenditure Project from Project Name / Description Type based on Expenditure To‐Date Budget GB budget

Albanese‐Lorimer Property Redwood Acquisition $1,611,360 $1,631,460 $1,651,200 99% 99%

Grove Acquisition Doolan Canyon Acquisition 1,041,124 1,041,124 1,054,300 99% 100%

Heiser Acquisition Round Valley Acquisition 1,020,311 1,020,311 1,025,470 99% 100%

Anthony Gruenfeldt Acquisition Chabot Acquisition 596,033 596,033 599,145 99% 100%

Roddy Tour Way Acquisition Deer Valley Acquisition 219,840 2,211,310 2,216,640 100% 10%

Lucas Acquisition Deer Valley Acquisition 92,083 754,524 761,000 99% 12%

East Bay Build Trail Coliseum to 85th Greenway Trail Trails 38,145 810,000 810,000 100% 5%

Base Closure and Acquisition Point Molate Acquisition 23,710 293,710 310,000 95% 8%

Byron Vernal Casey Acquisition Pools Acquisition 11,540 2,455,540 2,455,540 100% 0.5%

Albanese‐Lorimer Property, Redwood

Project Environmental Social Other Other metric Area Benefits Benefits metric Potential Riparian 1.83 Protect Carbon trail corridor acres wildlife habitat sequestration alignment protection Total Project Budget: $1,651,200

Green Bond Expenditures: $1,611,360

Description of project significance: • Eliminates a private party parcel inside Redwood Regional Park, the majority of which will be restored to wildlands and open space. • Serves to further protect surrounding habitat and open space values.

• Protected land from development.

• Protects rare native trout habitat within Redwood Creek watershed. Removes private inholding

Expected carbon sequestration value: 1.83 acres of upland forest = approximately 8.45 tons of CO2 sequestered annually.

Grove Acquisition, Doolan Canyon

Project Environmental Social Other Other metric Area Benefits Benefits metric Protect Potential Avoid 160.0 wildlife habitat recreational Carbon conversion acres and prevent trail sequestration of range‐ development opportunity land Total Project Budget: $1,054,300

Green Bond Expenditures: $1,041,124

Description of acquisition significance:  Preserves the headwaters of Cottonwood Creek  Protects rare and sensitive species habitat  Helps preserve an important wildlife corridor

Expected carbon sequestration value: 160.0 acres of rangeland/ grassland = approx. 199.46 tons of CO2 sequestered annually.

Heiser Acquisition, Round Valley Regional Park

Project Environmental Social Other ROUND VALLEY REGIONAL PRESERVE Other metric Heiser Property Area Benefits Benefits metric 9.24 acres Protect Avoid Potential 9.24 wildlife habitat Carbon conversion interpretive acres and prevent sequestration of range‐ opportunity development land Total Project Budget: $1,025,470

Green Bond Expenditures: $1,020,311

Description of acquisition significance:  Removes private inholding between Round Valley and Marsh Creek State Park  Protects Marsh Creek corridor within Round Valley  Potential to interpret East County homesteading and agricultural history

Expected carbon sequestration value: 9.24 acres of rangeland / grassland = 11.52 tons of CO2 sequestered annually.

Gruenfeldt, Anthony Chabot Regional Park Project Environmental Social Other Other metric Area Benefits Benefits metric Protect Potential Riparian 0.44 wildlife habitat Carbon trail corridor acres and prevent sequestration opportunity protection development Total Project Budget: $599,145

Green Bond Expenditures: $596,033

Description of acquisition significance:  Eliminates one of the few remaining private land holdings in Redwood Canyon and complete the open‐ space adjacent to our parklands  Protects the Redwood Creek watershed  Provides foraging and nesting habitat

Expected carbon sequestration value: 0.44 acres of upland forest 2 = 2.03 tons of CO sequestered annually.

Roddy Tour Way, Deer Valley Regional Park Project Environmental Social Other Other metric Area Benefits Benefits metric Create wildlife Potential Avoid 230 habitat and recreational Carbon conversion acres prevent trail sequestration of range‐ development opportunity land Total Project Budget: $2,216,640

Green Bond Expenditures: $219,840

Description of acquisition significance:

 Protects surrounding parkland habitat and open space  opportunities to create and restore habitat  potential regional trail connections

Expected carbon sequestration value: 230 acres of rangeland / grassland = 286.72 tons of CO2 sequestered annually.

Lucas Acquisition, Deer Valley Regional Park Project Environmental Social Other Other metric Area Benefits Benefits metric Protect Potential Avoid 71.99 wildlife habitat recreational Carbon conversion acres and prevent trail sequestration of range‐ development opportunity land Total Project Budget: $761,000

Green Bond Expenditures: $92,083

Description of acquisition significance:

 Expand the boundary of the existing park.  Provide foraging and nesting habitat for raptors.  Preserve existing Briones Valley landscape.

Expected carbon sequestration value: 71.99 acres of rangeland / grassland = 89.74 tons of CO2 sequestered annually.

Build Trail ‐ Coliseum to 85th

Project Environmental Social Other metric Area Benefits Benefits Reduce vehicle miles 0.5 Recreational Carbon driven by connecting miles use sequestration Greenway Trail Total Project Budget: $810,000

Green Bond Expenditures: $38,145

Description of project significance:

 Construction of one‐half mile of Class 1 Bike Lane, of the total 12 mile East Bay Greenway project.  Connecting 180,000 residents and students in adjacent Oakland, San Leandro, Hayward.  New traffic signals and crosswalks, lighting and fencing to ensure safety for pedestrians and bikers.

Expected carbon sequestration value not yet quantifiable (no trail count available). Studies show that bike paths increase the use of bikes for commuting by as much as 135%.

Base Closure / Acquisition – Point Molate Project Environmental Other Social Benefits Area Benefits metric Reduce vehicle miles Health benefit Emergency 2 miles driven by connecting to trail users access Bay Trail Total Project Budget: $310,000

Green Bond Expenditures: $23,710

Description of project significance:  Acquisition will allow for completion of an additional two miles of the SF Bay Trail.  Connect to bike/pedestrian path on Richmond‐San Rafael Bridge, expected to be used by 2,400 residents for commuting and recreational purposes. Expected carbon sequestration value: Not yet quantifiable. Studies have shown 40% of trail users use bike paths for commuting purposes.

Casey Acquisition – Byron Vernal Pools Project Environmental Social Other metric Area Benefits Benefits Habitat for rare Potential 320 Carbon species; restore parkland acres sequestration alkali wetlands expansion Total Project Budget: $2,455,540

Green Bond Expenditures: $11,540

Description of project significance:

 Vernal pool habitat supporting California tiger salamander, California red legged frog, vernal pool fairy shrimp, western burrowing owl, and tricolored blackbird.  Restores alkali wetlands in eastern Contra Costa County.  Potential to expand the eastern boundary of Byron Vernal Pools Regional Preserve.  Expected carbon sequestration value: 320 acres of rangeland / grassland = 398.92 tons of CO2 sequestered annually.

For further information:

Climate Bonds Standard: https://standard.climatebonds.net/overview

East Bay Regional Park District website: http://www.ebparks.org/

East Bay Parks’ Economic Analysis Impact Report: https://www.ebparks.org/economics.htm

East Bay Parks’ Carbon Sequestration Study: http://www.ebparks.org/civicax/filebank/blobdload.aspx?blobid=30277

East Bay Parks’ Climate Smart Initiative: http://www.ebparks.org/climatesmart.htm

East Contra Costa County Habitat Conservation District Annual Report 2017: http://www.co.contra‐ costa.ca.us/depart/cd/water/HCP/documents/Annual%20Reports%20and%20YIRs/2017_Annual%20Report.pdf

East Bay Parks’ Trails for Transportation: https://www.ebparks.org/parks/trails/default.htm

East Bay Parks’ Climate Change Strategy: http://www.ebparks.org/civicax/filebank/blobdload.aspx?blobid=28056

Moody’s Investors Service GB1 Green Bond Assessment: https://www.moodys.com/research/Moodys‐assigns‐Green‐Bond‐ Assessment‐GBA‐of‐GB1‐to‐East‐‐PR_904306136

Moody’s Investors Service Aaa Bond Rating for East Bay Parks: https://www.moodys.com/research/Moodys‐assigns‐Aaa‐to‐ EBRPD‐CAs‐800M‐2017A‐GOs‐Election‐‐PR_904292232