HomeMy WebLinkAboutItem 4.3 - 1278 Consideration of Dublin’s Participation in
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STAFF REPORT
CITY COUNCIL
DATE: January 10, 2017
TO: Honorable Mayor and City Councilmembers
FROM:
Christopher L. Foss, City Manager
SUBJECT:
Participation in the California Statewide Communities Development
Authority (CSCDA) Open Property Assessed Clean Energy (PACE)
Program
Prepared by: Shannan Young, Environmental Coordinator
EXECUTIVE SUMMARY:
The California Statewide Communities Development Authority (CSCDA) is
implementing Property Assessed Clean Energy (PACE) under the provisio ns of Chapter
29 of Division 7 of the Streets & Highways Code (commonly referred to as AB 811) on
behalf of its member counties and cities. AB811 authorizes a legislative body to
designate an area within which authorized public officials (including a JPA like CSCDA)
and free and willing property owners may enter into voluntary contractual assessments
to finance the installation of renewable energy, energy efficiency, water efficiency,
seismic strengthening improvements; and electric vehicle charging infras tructure affixed
to real property. CSCDA’s Commissioners pre-qualified and appointed several PACE
Administrators to manage the CSCDA Open PACE program in order to offer members
turn-key PACE solutions that provide residential and commercial property owners
choice among prequalified PACE financing providers. The City Council will consider
authorizing Open PACE Programs in Dublin.
STAFF RECOMMENDATION:
Adopt the Resolution Consenting to the Inclusion of Properties within the Territory of
the City of Dublin in the CSCDA Open PACE Programs; Authorizing the California
Statewide Communities Development Authority to Accept Applications from Property
Owners, Conduct Contractual Assessment Proceedings and Levy Contractual
Assessments within the Territory of the City of Dublin; and Authorizing Related Actions.
FINANCIAL IMPACT:
There is no negative fiscal impact to the General Fund by consenting to the inclusion of
properties within the City limits in CSCDA Open PACE. All CSCDA Open PACE
administrative costs are covered through an initial administrative fee included in the
property owner’s voluntary contractual assessment and an annual administrative fee,
which is also collected on the property owner’s tax bill.
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DESCRIPTION:
Under the Improvement Act of 1911 (California Streets and Highways Code Division 7),
cities, counties, and special districts may create or join special tax districts through
which property owners agree to special assessments. Under amendments included in
AB 811 (2008), a residential or commercial property owner can access special financing
(up to 15% of their property’s value) through a special tax district for permanent
renewable energy, energy efficiency, and water efficiency improvements to existing
structures. The property owner voluntarily enters into a contractual agreement with the
special tax district in which they reside to access financing that is secured by a lien on
their property and repaid as a special assessment on their property tax bill. This means
that the property owner pays th e special tax at the same time and in the same manner
as other property taxes and assessments. This financing approach is referred to as
Property Assessed Clean Energy (PACE), and programs that facilitate this form of
financing are referred to as PACE programs.
CSCDA Open PACE is being offered to allow property owners in participating cities
and counties to finance renewable energy, energy water efficiency improvements,
seismic improvements and electric vehicle charging infrastructure on their property.
Participation in the assessment is 100% voluntary by the property owner. The
improvements installed on the owner’s property are financed by the issuance of bonds
by CSCDA. The bonds are secured by a voluntary contractual assessment levied on
the owner’s property. Property owners who wish to participate in PACE agree to repay
the money through the voluntary contractual assessment collected with property taxes.
The voluntary contractual assessments will be levied by CSCDA and collected in
annual installments through the applicable county secured property tax bill.
PACE offers an advantage to some property owners over other financing options,
including the following:
• Some homeowners that would like to implement energy efficiency and water
conservation improvements might not be eligible for a Home Equity Line of
Credit (HELOC) due to their credit rating or debt-to-income ratio;
• Some homeowners who are eligible for or already have a HELOC might want
to reserve their HELOC for an emergency or other expenses, an d therefore
might not want to use it for energy efficiency or water conservation
improvements;
• HELOC interest rates are typically variable, whereas PACE assessment
interest rates are fixed for the entire term of the assessment;
• A HELOC’s term might be limited to one shorter than the useful life of the
improvement, and therefore shorter than the term of PACE financing, which
might result in un-affordable payments for the property owner;
• Whereas most private loans are due upon the sale of the benefited property,
the PACE obligation transfers with the property upon sale; and
• For commercial property owners, PACE financing is available to some
borrowers that might not meet traditional lending requirements, such as a
minimum number of years in operation or years of audited financial
statements.
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Besides the financial advantages that PACE might provide to some property owners,
PACE programs that operate under the CSCDA Open PACE initiative also offer control
advantages for the improvements. Most PACE program s have some built in protections
safeguarding property owners working with contractors on PACE-related projects.
CSCDA launched the most stringent consumer protection policies in the nation in
December 2015. For example, Open PACE programs only allow property owners to work
with contractors that have met the program’s screening criteria, which usually includes
that the contractors are licensed, bonded, and insured and in good standing with the
California Contractors State License Board. In addition, PACE pr ograms usually restrict
contractors to installing eligible products, provide a fair pricing guarantee, require that
contractors obtain all required permits, provide a dispute resolution mechanism, and only
pay contractors for work once it has been completed to the satisfaction of the property
owner.
Currently the CSCDA Open PACE initiative encompasses California First (already
authorized to finance PACE projects in Dublin by earlier Resolution), PACE Funding
Group LLC, Alliance NRG, Spruce Finance and Clea nFund Commercial PACE Capital.
In order for Dublin property owners to be eligible to access PACE financing through
CSCDA Open PACE, the City would need to authorize the special tax district to serve as
a provider of PACE financing to its property owners. Participating jurisdictions can
withdraw from the special tax districts or PACE programs at any time by passing a
resolution rescinding the authorization.
Launched by CSCDA in 2015, by November 1, 2016 the initiative had been adopted by
146 municipalities in 34 of the California Counties. The following Alameda County
municipalities currently participate in CSCDA Open PACE: Albany, Berkeley, Piedmont,
Hayward, Oakland, Union City, Newark, San Leandro, Fremont and Alameda County.
A Resolution to authorize an Open PACE program in Dublin is provided in Attachment 1.
The City is already a member of the California Statewide Communities Development
Authority (CSCDA), and has been since August 5, 2003. CSCDA (and not the City)
would be responsible for entering into voluntary contractual assessment agreements with
participating property owners, levying the voluntary contractual assessments, issuing
bonds to finance the Improvements and taking remedial actions in the event of
delinquent assessment payments.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
None required.
ATTACHMENTS:
1. Resolution Consenting to the Inclusion of Properties within the Territory of the City of
Dublin in the CSCDA Open PACE Programs
RESOLUTION NO. xx-17
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
***********
CONSENTING TO THE INCLUSION OF PROPERTIES WITHIN THE TERRITORY
OF THE CITY OF DUBLIN IN THE CSCDA OPEN PACE PROGRAMS;
AUTHORIZING THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT
AUTHORITY TO ACCEPT APPLICATIONS FROM PROPERTY OWNERS,
CONDUCT CONTRACTUAL ASSESSMENT PROCEEDINGS AND LEVY
CONTRACTUAL ASSESSMENTS WITHIN THE TERRITORY OF THE CITY OF
DUBLIN; AND AUTHORIZING RELATED ACTIONS
WHEREAS, the California Statewide Communities Development Authority (the
Authority) 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, the Authority is implementing Property Assessed Clean Energy (PACE)
programs, which it has designated CSCDA Open PACE, consisting of CSCDA Open PACE
programs each administered by a separate program administrator (collectively with any
successors, assigns, replacements or additions, the “Programs”), to allow the financing or
refinancing of renewable energy, energy efficiency, water efficiency and seismic strengthening
improvements, electric vehicle charging infrastructure and such other improvements,
infrastructure or other work as may be authorized by law from time to time (collectively, the
“Improvements”) through the levy of contractual assessments pursuant to Chapter 29 of Division
7 of the Streets & Highways Code (Chapter 29) within counties and cities throughout the State of
California that consent to the inclusion of properties within their respective territories in the
Programs and the issuance of bonds from time to time; and
WHEREAS, the program administrators currently active in administering Programs are
the AllianceNRG Program (presently consisting of CounterPointe Energy Solutions LLC and
Leidos Engineering, LLC), PACE Funding LLC, Renewable Funding LLC, CleanFund
Commercial PACE Capital and Spruce Finance; and
WHEREAS, Chapter 29 provides that assessments may be levied under its provisions
only with the free and willing consent of the owner or owners 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 (Participating Property
Owners) within its territory to participate in the Programs and to allow the Authority to conduct
assessment proceedings under Chapter 29 within its territory and to issue bonds to finance or
refinance Improvements; and
WHEREAS, the territory within which assessments may be levied for the Programs shall
include all of the territory within the City’s official boundaries; and
WHEREAS, the Authority will conduct all assessment proceedings under Chapter 29 for
the Programs and issue any bonds issued in connection with the Programs; and
WHEREAS, the City will not be responsible for the conduct of any assessment
proceedings; the levy of assessments; any required remedial action in the case of delinquencies
in such assessment payments; or the issuance, sale or administration of any bonds issued in
connection with the Programs;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Dublin
as follows:
Section 1. This City Council hereby finds and declares that properties in the territory
of the City will benefit from the availability of the Programs within the territory of the City and,
pursuant thereto, the conduct of special assessment proceedings by the Authority pursuant to
Chapter 29 and the issuance of bonds to finance or refinance Improvements.
Section 2. In connection with the Programs, the City hereby consents to the conduct
of special assessment proceedings by the Authority pursuant to Chapter 29 on any property
within the territory of the City and the issuance of bonds to finance or refinance Improvements;
provided, that
(1) The Participating Property Owners, who shall be the legal owners of such
property, 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
(2) The City will not be responsible for the conduct of any assessment
proceedings; the levy of assessments; any required remedial action in the case of
delinquencies in such assessment payments; or the issuance, sale or administration of any
bonds issued in connection with the Programs.
Section 3. The appropriate officials and staff of the City are hereby authorized and
directed to make applications for the Programs available to all property owners who wish to
finance or refinance Improvements; provided, that the Authority shall be responsible for
providing such applications and related materials at its own expense. The following staff
persons, together with any other staff persons chosen by the City Manager of the City from time
to time, are hereby designated as the contact persons for the Authority in connection with the
Programs: Environmental Coordinator.
Section 4. The appropriate officials and staff of the City are hereby authorized and
directed to execute and deliver such certificates, requisitions, agreements and related documents
as are reasonably required by the Authority to implement the Programs.
Section 5. The City Council hereby finds that adoption of this Resolution is not a
“project” under the California Environmental Quality Act, 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 6. 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 the Authority at: Secretary of the Board, California Statewide Communities
Development Authority, 1400 K Street, Sacramento, CA 95814.
PASSED AND ADOPTED this 10th day of January, 2017 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
___________________________________
Mayor
ATTEST:
_________________________________
City Clerk