HomeMy WebLinkAboutItem 8.3 PACE ,
•
So 1\ ` STAFF REPORT CITY CLERK
•107 CITY COUNCIL File #470-50
CQOo- 30
DATE: March 20, 2012 !o OD—
TO: Honorable Mayor and City Councilmembers
FROM: Joni Pattillo, City Manager&61,_, r a
SUBJECT: Adoption of Resolution Authorizing Participation in the California Property
Assessed Clean Energy (PACE) Program
Prepared by Hazel L. Wetherford, Economic Development Analyst
EXECUTIVE SUMMARY:
The City Council established a Fiscal Year 2011-2012 Strategic Initiative to "continue to develop
economic incentives for retail, office, restaurants, and industrial users." Staff is seeking City
Council authorization to participate in the California Property Assessed Clean Energy (PACE)
Program as part of the City's continued efforts to support small business and economic
development activities in Dublin.
FINANCIAL IMPACT:
OThere is not a direct cost impact to the City, as the costs for the program are paid by the
participants. There may be indirect costs associated with making materials and information
about the program available. The City will receive a cost recovery fee equal to 2% of the
assessment as a program fee.
RECOMMENDATION:
Staff recommends that the City Council adopt the resolution authorizing the City of Dublin to join
the California PACE Program; Authorizing the California Enterprise Development Authority to
conduct contractual assessment proceedings and levy contractual assessments within the
territory of the City of Dublin; and Authorizing related actions.
y
- �� Submitted By Reviewed By
Economic Development Director Assistant City Manager
DESCRIPTION:
One of the City Council's FY 2011/12 Strategic Initiatives for Economic Development is to
continue to develop economic incentives for retail, office, restaurants, and industrial users. On
July 21, 2008, the Governor signed into law AB 811, which became effective immediately as an
emergency measure. AB 811 authorizes counties to establish a program to enter into
contractual assessment agreements with property owners to finance the installation of
distributed generation renewable energy sources or energy efficiency improvements that are
Page 1 of 3 ITEM NO S.3
permanently fixed to real property. Specifically, an AB 811 program allows counties to make
assessment financing available to property owners for the purchase and installation of such
improvements. Property owners enter into an agreement to repay the financing through an
assessment on their property. The assessments are recorded as a lien against the subject
property, entered in the County property tax roll and are collected on the property owner's tax
bills at the same time and in the same manner as property taxes.
The California Enterprise Development Authority (CEDA), a joint powers authority formed by the
California Association for Local Economic Development (CALED), is offering the California
Property Assessed Clean Energy (California PACE) Program. CALED was formed in 1980 and
has grown to over 700 members, representing cities, counties, state and federal agencies,
economic development corporations, and the private sector. The City of Dublin is a current
member of both CALED and CEDA.
Staff has determined that participation in the California PACE Program is a cost effective means
of offering property owners the opportunity to make energy and water efficiency retrofits to their
property. In many cases, the savings realized far exceed payment obligations required for the
financing. CEDA is expected to issue limited obligation bonds, notes or other forms of
indebtedness to fund the projects. Property owners will repay the financing as a line item
charge on their property tax bill over a period of years.
Participation in the program is completely voluntary to property owners. The California PACE
Program is available to commercial property owners as well as certain residential properties
which are not subject to Federal Housing Finance Agency (FHFA) guidelines. Examples of
energy and water saving property improvements include high efficiency air conditioners, dual-
pane windows, renewable energy -such as solar photovoltaic panel systems, insulation, cool
roofs, and other such permanently installed energy efficient improvements.
The California PACE Program has funded retrofit projects through the issuance of bonds in
other jurisdictions such as the City of Palm Springs and the City of Fresno. The indebtedness
will be issued by CEDA and secured solely by the assessment revenues from the liens on
participating properties. The City's revenues and funds will not be pledged to the payment of
the bonds. All ongoing administration and coordination will be managed by CEDA.
Highlights of this program include:
• No credit or general obligation risk.
• Immediate job creation.
• Greenhouse gas reductions/energy independence. Assist in meeting action plan goals
and AB 32 requirements.
• Property owners get access to financing options for energy efficiency, water efficiency
and renewable energy improvements through CEDA, thereby helping City meet its local
environmental economic development goals without committing staff time to design,
implement and administer the program.
Staff presented this Program to the Economic Development Ad-Hoc Committee on January 23,
2012. This Program falls under the Committee's purview to explore new incentives to promote
the City's economic development efforts. The Committee is recommending the Program and is
requesting that the full City Council consider authorizing the participation in the Program.
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Should the City Council decide to participate in the PACE Program, Staff will reach out to the
Dublin Chamber to help market its availability, as well as use the monthly Dublin Business News
Update and the City's website to distribute information regarding the Program.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
None.
ATTACHMENTS: 1. Resolution Authorizing the City of Dublin to join the California PACE
Program; Authorizing the California Enterprise Development
Authority to Conduct Contractual Assessment Proceedings and Levy
Contractual Assessments within the Territory of the City of Dublin;
and Authorizing related actions (CEDA Sample Resolution attached
as Exhibit A to the Resolution; Agreement attached as Exhibit B to
the Resolution).
Page 3 of 3
RESOLUTION NO. -12
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
AUTHORIZING THE CITY OF DUBLIN TO JOIN THE CALIFORNIA PACE PROGRAM;
AUTHORIZING THE CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY TO
CONDUCT CONTRACTUAL ASSESSMENT PROCEEDINGS AND LEVY CONTRACTUAL
ASSESSMENTS WITHIN THE TERRITORY OF THE CITY OF DUBLIN; AND AUTHORIZING
RELATED ACTIONS
WHEREAS, the City Council established a Fiscal Year 2011-2012 Strategic Initiative to
continue to develop economic incentives for retail, office, restaurants, and industrial users; and
WHEREAS, the California Enterprise Development Authority ("CEDA") is a joint exercise
of powers authority the members of which include numerous cities and counties in the State of
California, including the City OF Dublin (the "City"); and
WHEREAS, CEDA has established the California PACE program ("California PACE") to
allow the financing of certain renewable energy, energy efficiency and water efficiency
improvements (the "Improvements") through the levy of contractual assessments pursuant to
Chapter 29 of Division 7 of the Streets & Highways Code ("Chapter 29") and the issuance of
improvement bonds (the "Bonds") under the Improvement Bond Act of 1915 (Streets and
Highways Code Sections 8500 et seq.) (the "1915 Act") upon the security of the unpaid
contractual assessments; and
WHEREAS, Chapter 29 provides that assessments may be levied under its provisions
only with the free and willing consent of the owner of each lot or parcel on which an assessment
is levied at the time the assessment is levied; and
WHEREAS, the City desires to allow the owners of property within its jurisdiction
("Participating Property Owners") to participate in California PACE and to allow CEDA to
conduct assessment proceedings under Chapter 29 and to issue Bonds under the 1915 Act to
finance the Improvements; and
WHEREAS, CEDA will conduct assessment proceedings under Chapter 29 and issue
Bonds under the 1915 Act to finance Improvements; and
WHEREAS, the City Council has been presented with a proposed form of Resolution of
Intention ("the ROI"), a copy of which is attached hereto as Exhibit A, to be utilized by CEDA in
connection with such assessment proceedings; and
WHEREAS, the territory within which assessments may be levied for California PACE
shall be coterminous with the City's official boundaries of record ("the Proposed Boundaries") at
the time of the adoption of the ROI.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Dublin, as
follows:
Section 1. On the date hereof, the City Council hereby finds and determines that the issuance of
bonds by CEDA in connection with California PACE will provide significant public benefits,
including without limitation, savings in effective interest rate, bond preparation, bond
underwriting and bond issuance costs and reductions in effective user charges levied by water
and electricity providers within the boundaries of the City.
Section 2. The City Council hereby authorizes CEDA to, pursuant to Chapter 29 and with
respect to any property within the Proposed Boundaries, conduct assessment proceedings, levy
assessments, pursue remedies in the event of delinquencies and issue bonds or other forms of
indebtedness to finance the Improvements in connection with the California PACE Program,
provided that:
(1) Such proceedings are conducted pursuant to one or more Resolutions of Intention in
substantially the form of the ROI;
(2) The Participating Property Owners, who shall be the legal owners of such property,
voluntarily execute a contract pursuant to Chapter 29 and comply with other
applicable provisions of California law in order to accomplish the valid levy of
assessments; and
(3) The City will not be responsible for the conduct of any assessment proceedings; the
levy of assessments or any required remedial action in the case of delinquencies in
such assessment payments; or the issuance, sale or administration of the Bonds or
any other bonds issued in connection with California PACE.
Section 3. Pursuant to the requirements of Chapter 29, CEDA has prepared and will update
from time to time the "Program Report" for California PACE (the "Program Report"), and CEDA
will undertake assessment proceedings and the financing of Improvements as set forth in the
Program Report.
Section 4. The City Manager or her designee is hereby authorized and directed to make
applications for California PACE available to all property owners who wish to finance
Improvements.
Section 5. The City Manager or her designee is hereby authorized and directed to execute and
deliver such closing certificates, requisitions, agreements and related documents as are
reasonably required by CEDA in accordance with the Program Report to implement California
PACE for Participating Property Owners.
Section 6. The City Council hereby finds that adoption of this Resolution is not a "project" under
the California Environmental Quality Act ("CEQA"), because the Resolution does not involve any
commitment to a specific project which may result in a potentially significant physical impact on
the environment, as contemplated by Title 14, California Code of Regulations, Section
15378(b)(4).
Section 7. This Resolution shall take effect immediately upon its adoption. The City Clerk is
hereby authorized and directed to transmit a certified copy of this resolution to the Secretary of
CEDA.
Section 8. Services related to the formation and administration of the assessment district will be
provided by CEDA at no cost to the City per the AB811 Services Agreement attached hereto as
Exhibit B.
Section 9. The City Manager is authorized to execute the Agreement attached hereto as Exhibit
B substantially in the form attached hereto and to undertake such further action as may be
necessary and desirable to carry out the intent of this Resolution.
PASSED, APPROVED AND ADOPTED this 20th day of March, 2012, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
City Clerk
Mayor
Exhibit A to the Resolution
FORM OF RESOLUTION DECLARING INTENTION TO FINANCE
INSTALLATION OF DISTRIBUTED GENERATION RENEWABLE ENERGY
SOURCES, ENERGY EFFICIENCY AND WATER EFFICIENCY
IMPROVEMENTS
CITY OF
WHEREAS, the California Enterprise Development Authority ("CEDA") is authorized under the
authority granted CEDA pursuant to Chapter 5 of Division 7 of Title 1 of the Government Code of the
State of California in accordance with Chapter 29 of Part 3 of Division 7 of the Streets & Highways Code
of the State of California ("Chapter 29") to authorize assessments to finance the installation of distributed
generation renewable energy sources, energy efficiency and water efficiency improvements that are
permanently fixed to real property ("Authorized Improvements"); and
WHEREAS, Chapter 29 authorizes CEDA to enter into contractual assessments to finance the
installation of Authorized Improvements in the City of (the "City"); and
WHEREAS, CEDA wishes to declare its intention to establish a California PACE program ("California
PACE") in the City, pursuant to which CEDA, subject to certain conditions set forth below, would enter
into contractual assessments to finance the installation of Authorized Improvements in the City.
NOW, THEREFORE, BE IT RESOLVED by the California Enterprise Development Authority, as
follows:
Section 1. Findings. CEDA hereby finds and declares the following:
(a) The above recitals are tnie and correct.
(b) Energy conservation efforts, including the promotion of energy-related Authorized
Improvements to residential, commercial, industrial, or other real property, are necessary to
address the issue of global climate change and the reduction of greenhouse gas emissions in
the City.
(c) Water conservation efforts, including the promotion of water-related Authorized
Improvements to residential, commercial, industrial, or other real property, are necessary to
address the issue of chronic water shortages in California.
(d) The upfront cost of malting residential, commercial, industrial, or other real property more
energy and water efficient, along with the fact that most commercial loans for that purpose are
due on the sale of the property, prevents many property owners from installing Authorized
Improvements.
(e) A public purpose will be served by establishing a contractual assessment program, to be known as
California PACE, pursuant to which CEDA will finance the installation of Authorized
Improvements to residential, commercial, industrial, or other real property in the City.
Section 2. Determination of Public Interest. CEDA hereby determines that (a) it world be convenient,
advantageous, and in the public interest to designate an area, which shall encompass the entire geographic
territory within the boundaries of the City, within which CEDA and property owners within the City may enter
into contractual assessments to finance the installation of Authorized Improvements pursuant to Chapter 29
and (b) it is in the public interest for CEDA to finance the installation of Authorized Improvements in the City
pursuant to Chapter 29.
Section 3. Identification of Authorized Improvements. CEDA hereby declares that it proposes to make
contractual assessment financing available to property owners to finance installation of Authorized
Improvements, including but not limited to those improvements detailed in the Report described in Section 8
below, as that Report may be amended from time to time.
Section 4. Identification of Boundaries. Contractual assessments may be entered into by property owners
located within the entire geographic territory of the City; provided, however, that CEDA shall not enter into
contractual assessments to finance the installation of Authorized Improvements with the owner of any property
in the City unless requested to do so first by the City.
Section 5. Proposed Financing Arrangements. Under Chapter 29, CEDA may issue bonds, notes or other
forms of indebtedness pursuant to Chapter 29 that are payable by contractual assessments. Division 10
(commencing with Section 8500) of the Streets & Highways Code of the State (the "Improvement Bond Act of
1915") shall apply to any indebtedness issued pursuant to Chapter 29, insofar as the Improvement Bond Act
of 1915 is not in conflict with Chapter 29. The creditworthiness of a property owner to participate in the
financing of Authorized Improvements will be based on the criteria developed by the Program Administrator
in consultation with the California PACE financing team as on file with the Clerk. In connection with
indebtedness issued under the Improvement Bond Act of 1915 that are payable from contractual
assessments, serial and/or term improvement bonds or other indebtedness shall be issued in such series
and shall mature in such principal amounts and at such times (not to exceed 20 years from the second day
of September next following their date) and at such rate or rates of interest (not to exceed the maximum
rate pernutted by applicable law) as shall be determined by CEDA at the time of the issuance and sale of
the indebtedness. The provisions of Part 11.1 of the Improvement Bond Act of 1915 shall apply to the
calling of the bonds. It is the intention of CEDA to create a special reserve fiend for the bonds under Part
16 of the Improvement Bond Act of 1915. CEDA will not advance available surplus fiends from its
treasury to cure any deficiency in the redemption fund to be created with respect to the indebtedness;
provided, however, that this deternunation shall not prevent CEDA from, in its sole discretion, so
advancing funds. The bonds may be refiinded under Division 11.5 of the California Streets and Highways
Code or other applicable laws permitting refiinding, upon the conditions specified by and at the
deternunation of CEDA.
CEDA hereby authorizes the Program Administrator, after consultation with bond counsel and the
California PACE underwriter, to provide for the issuance of bonds, notes or other forms of indebtedness
pernutted by Chapter 29 payable from contractual assessments.
In connection with the issuance of bonds payable from contractual assessments, CEDA expects to
obligate itself, through a covenant with the owners of the bonds, to exercise its foreclosure rights with
respect to delinquent contractual assessment installments under specified circumstances.
Section 6. Public Hearing. Pursuant to the Act, CEDA hereby orders that a public hearing be held
before this Board, at on 20 at ,for the purposes of allowing
interested persons to object to or inquire about the proposed program or any of its particulars. The public
hearing may be continued from time to time as deternned by the Board for a time not exceeding a total
of 180 days.
At the time of the hearing, the Report described in Section 8 below shall be summarized and the
Commission shall afford all persons who are present an opportunity to comment upon, object tq or
present evidence with regard to the proposed contractual assessment program, the extent of the area
proposed to be included within the program, the terms and conditions of the draft Contract described in
Section 8 below, or the proposed financing provisions. Following the public hearing, CEDA may adopt a
resolution confirming the Report (the "Resolution Confirming Report") or may direct the Report's
modification in any respect, or may abandon the proceedings.
The Board hereby orders the Clerk to publish a notice of public hearing once a week for two successive
weeks. Two publications in a newspaper published once a week or more often, with at least five days
intervening between the respective publication dates not counting such publication dates, are sufficient.
The period of notice will commence upon the first day of publication and ternunate at the end of the
fourteenth day. The first publication shall occur not later than 20 days before the date of the public
hearing.
Section 7. Notice to Water and Electric Providers. Pursuant to Section 5898.24 of the Streets &
Highways Code, written notice of the proposed contractual assessment program within the City to all
water and electric providers within the boundaries of the City has been provided.
Section 8. Report. The Commission hereby directs the Program Adnunistrator for California PACE to
prepare and file with the Commission a report (the "Report") at or before the time of the public hearing
described in Section 6 above containing all of the following:
a) A map showing the boundaries of the territory within which contractual assessments are proposed
to be offered, as set forth in Section 4 above.
b) A draft contract (the "Contract") specifying the terms and conditions of the agreement between
CEDA and a property owner within the City.
c) A statement of CEDA's policies concerning contractual assessments including all of the
following:
(1) Identification of types of Authorized Improvements that may be financed through the use of
contractual assessments.
(2) Identification of CEDA official authorized to enter into contractual assessments on behalf of
CEDA.
(3) A maximum aggregate dollar amount of contractual assessments in the City.
(4) A method for setting requests from property owners for financing through contractual
assessments in priority order in the event that requests appear likely to exceed the
authorization amount.
d) A plan for raising a capital amount required to pay for work performed in connection with
contractual assessments. The plan may include the sale of a bond or bonds or other financing
relationship pursuant to Section 5898.28 of Chapter 29. The plan (i) shall include a statement of,
or method for deternuning, the interest rate and time period during which contracting property
owners would pay any assessment(ii) shall provide for any reserve fund or fiends and (iii) shall
provide for the apportionment of all or any portion of the costs incidental to financing,
adnunistration, and collection of the contractual assessment program among the consenting
property owners and CEDA.
e) A report on the results of the consultations with the County Auditor-Controller described in
Section 10 below concerning the additional fees, if any, that will be charged to CEDA for
incorporating the proposed contractual assessments into the assessments of the general taxes of the
County on real property, and a plan for financing the payment of those fees.
Section 9. Nature of Assessments. Assessments levied pursuant to Chapter 29, and the interest and any
penalties thereon, will constitute a lien against the lots and parcels of land on which they are made, until
they are paid. Unless otherwise directed by CEDA, the assessments shall be collected in the same manner
and at the same time as the general taxes of the County on real property are payable, and subject to the
same penalties and remedies and lien priorities in the event of delinquency and default.
Section 10. Consultations with County Auditor-Controller. CEDA hereby directs the Program
Administrator to enter into consultations with the County Auditor-Controller in order to reach agreement
on what additional fees, if any, will be charged to CEDA for incorporating the proposed contractual
assessments into the assessments of the general taxes of the County on real property.
Section 11. Preparation of Current Roll of Assessment. Pursuant to Section 5898.24(c), CEDA hereby
designates the Program Administrator (or his/her designee) as the responsible party for annually preparing
the current roll of assessment obligations by assessor's parcel number on property subject to a voluntary
contractual assessment.
Section 12. Procedures for Responding to Inquiries. The Program Adnnistrator shall establish
procedures to promptly respond to inquiries concerning current and fiiture estimated liability for a
voluntary contractual assessment.
Section 13. Professionals Appointed. CEDA hereby appoints A Professional Law
Corporation, as bond counsel and disclosure counsel to CEDA in
connection with California PACE. The Commission hereby authorizes and directs an Authorized
Signatory of CEDA (as deternuned from time to time by the Commission by separate resolution) to enter
into appropriate agreements with such firm for its services to CEDA in connection with the matters
addressed in this Resolution.
Section 14. Effective Date. This resolution shall take effect immediately upon its adoption.
PASSED AND ADOPTED by the California Enterprise Development Authority this
,20
I, the undersigned, the duly appointed, and qualified member of the Commission of the California
Enterprise Development Authority, DO HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Commission of said Authority at a duly called meeting of the Commission of said
Authority held in accordance with law on ,20
By:
Member
Exhibit B to the Resolution
A~ 8~ ~ SE~4 VICES A G~2EEMENT
The California Enterprise Development Authority (CEDA) has contracted with the firm of FIGtree
Energy Resource Company (:E':1Gt1°ee) to provide AB 811 formation and administration services to
participating member agencies.
SC~~E ~~' SE~4 VICES (No Cost Services}
C'al~fornia property Assessed Clean Energy (California ~AC~') ~rogrcun.
FIGtree will provide CEDA and the City of Dublin (the "City") formation and administration services in
connection with the California PACE program. These services will be provided at no cost to the City.
These services include, but are not limited to the following:
~X~~~T~~SOFl~C~. First and foremost, Fl:tz°rt:e will act as the "expert resource" for the City and is
available to answer questions and advise the City on particular issues involving energy districts(s)
established per California Streets and Highways Code beginning with Sections 5898.10 (originally
approved under Assembly Bill 811 - AB811}.
DATA Co~~ECT~oN. :E"It~°ee will gather and review data pertinent to the formation of the Property
Assessed Clean Energy (California PACE} District. I"I~~tr~;~; will maintain and periodically update a
database of all parcels within the district and relevant parcel information.
ANiVfTAir ASSESS~VI~IVT ~0~~. F9I:[$tre~° will calculate the annual assessment for each parcel and
submit the amount for each parcel to the County AuditorlController inthe format and medium required.
FD~MAT~~1V TACK iQET~~T. f+'IC~~tree will prepare the energy district formation Report as required
by Section 5898.22 of the California Streets and Highway Code.
RESO~~TT~o1VS. F"IC~tt°e~A will prepare the required resolutions to be adopted by the City.
UT~L~TYIVOT~C~S. 1~'Itree will prepare and send the required notices that must be transmitted to the
local utility companies.
ANNEIA~ IIEPORT. ~"I[stree will provide a comprehensive Annual Report that will show a detailed
listing of the amounts submitted to the assessment roll, details of delinquent assessments, paid off parcels
and release of liens.
Additional Services
The team at FICtr~;e is readily available to assist the City in its endeavors to promote PACE
financing to its property owners. lw'iCBtx'~:e can assist from organizing workshops to property
owners and contractors to preparing marketing materials.
FI(~free ~n~z'g~ I~.es~~ur¢°e C"t~ party 9915 Mira Mesa Blvd, Suite 130., San Diego, CEl 92131
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In the event that City would like to engage F'lC~tr~~ to perform additional services above and
beyond the no cost Scope of Services, the additional services authorized by the City will be
billed at this rate or the then applicable hourly rate.
Title Hourly Rate
Executive $ 270
Senior Consultant 225
Analyst 125
ClericallSupport 55
ANNUAL ASS~SSM~NT CAST ~~C~ V~~4 ~
In order to be able to provide AB811 services to the City at no cost, revenues will be derived
under the California PACE program from multiple sources. one such source is the Annual
Assessment Cost Recovery (the "Cost Recovery").
The Cost Recovery is the revenue collected annually on the properly tax rolls in the amount of
five percent (5%) of the annual assessment amount due by the property owner. The City
acknowledges that Cost Recovery collected on an annual basis will be apportioned to the
following parties as follows:
COST RECOVERY SCHEDULE:
Partici atin A en 5% Cost Reco~e
CEDA 0.75°fo
C1 2.00%
I~ I t_~ts'ee 2.25 °fo
+itree Ener e. rce Co any City of Dublin
Mahesh Shah
Toni Pattillo
CED f 1 City Manager f 1
Title Date Title Date
~7.#~~~ ~~tt;rg~ k~5~1&I'~Q; C.°rng~~tt~ 9915 Mira Mesa Bled, Suite 130., San Diego, CA 92131
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