REPORT TO THE CITY COUNCIL
December 3, 2015
FROM: JENNIFER CLARK, Director
Development and Resource Management
THROUGH: DANIEL ZACK, Assistant Director
Development and Resource Management
BY: JOSE R GONZALEZ, Energy Program Administrator
Sustainable Fresno Division, Development and Resource Management
SUBJECT
Title
***RESOLUTION - Consenting to the inclusion of properties within the City of Fresno (the “City”) In the California Municipal Finance Authority (“CMFA”) Property Assessed Clean Energy (“PACE”) Program: (CMFA PACE Program); authorizing the CMFA to accept applications from property owners, conduct contractual assessment proceedings and levy contractual assessments within the City of Fresno; and authorizing related actions
Body
RECOMMENDATION
It is recommended that the City Council adopt a resolution related to the City’s participation in the California Municipal Finance Authority (“CMFA”) Property Assessed Clean Energy (“PACE”) Program:
1) Authorizing the CMFA to accept applications from property owners, conduct contractual assessment proceedings and levy contractual assessments within the City and authorizing related actions; and
2) Authorizing the Mayor or City Manager, or designee thereof, to execute all documents and take any actions necessary and appropriate to carry out the intent of this resolution.
EXECUTIVE SUMMARY
Staff has determined that participation in this program is a cost effective means of offering property owners the opportunity to make energy and water efficiency retrofits to their property and create new local jobs. Property owners will repay the financing as a charge on their property tax bill over a period of years.
The proposed Resolution authorizes the CMFA to accept applications from owners of property within the City for municipal financing of authorized improvements through the CMFA Program. It also authorizes the CMFA to conduct assessment proceedings and levy assessments against the property of participating owners within the incorporated territory of the City.
BACKGROUND
The City of Fresno is currently a member of the California Municipal Finance Authority (“CMFA”). The CMFA is a Joint Powers Authority formed to assist local governments, non-profit organizations and businesses by promoting economic, cultural and community development, with the financing of economic development and charitable activities throughout California. With respect to the City, it is expected that that a portion of the issuance fee will be granted by the CMFA to the general fund of the City and a similar amount will be donated to local charities located within the City. To date, over 200 municipalities, including the City of Fresno, have become members of the CMFA.
As part of its economic and community development, the CMFA along with its current Program Administrator, Energy Efficient Equity (“E3”), are offering PACE financing for residential and commercial property owners in its member territories. In addition, the E3 program will include a repurchase agreement to ensure property owners are protected from financial loss in the case of fraud. The CMFA is expected to issue limited obligation bonds, notes or other forms of indebtedness to fund the projects.
PACE is an innovative way to finance energy efficiency, water efficiency, and renewable energy upgrades for residential and commercial buildings. Property owners who participate in the program repay the loans through a voluntary contractual assessment collected together with their property taxes. One of the most notable characteristics of PACE programs is that the loan is attached to the property rather than belonging to an individual. Therefore, when the owner sells the property, the loan may be paid off during the sale or stay with the property and be paid off by the new owner, who also benefits from the upgrades that were completed.
PACE financing enables individuals and businesses to defer the upfront costs of energy efficiency, water efficiency and renewable energy improvements. PACE loans are paid over a long period of time while energy costs are simultaneously lower, which typically provides the property owner with net savings. PACE overcomes challenges that have hindered adoption of energy efficiency and renewable energy measures for many property owners.
ENVIRONMENTAL FINDINGS
By the definition provided in the California Environmental Quality Act (CEQA) Guidelines Section 15378, this item does not qualify as a “project” for the purposes of CEQA
LOCAL PREFERENCE
Local preference was not implemented because this item does not include a competitive bid.
FISCAL IMPACT
There are no negative impacts to the General Fund from this project. All costs associated with these agreements will be paid for with funding from Pacific Gas and Electric Company and the California Public Utilities Commission. The Master Service Agreement with PG&E is a reimbursement based program and funding is available in December 31, 2015.
Attachment:
Proposed Resolution to join the CMFA PACE Program