NEWS UPDATE: The Fort Bragg City Council has voted to “Opt In” to participate in Property Assessed Clean Energy Financing through both the Mendocino County/Ygrene Energy program expected to start in 2015, and also the CaliforniaFirst PACE program.
Fort Bragg was the final incorporated city in Mendocino County to opt in to the PACE program that the Mendocino County Board of Supervisors approved in early 2014. Now that all five incorporated cities have opted in, the Mendocino County/Ygrene Energy program will be available countywide.
AGENDA ITEM SUMMARY [excerpt from Council packet]
“Property Assessed Clean Energy (PACE) programs are authorized for cities and counties by state legislation enacted in 2008 and 2011. The authorizing legislation, Assembly Bill 811 (2008) and Senate Bill 555 (2011), enables cities and counties to form PACE programs to finance permanent installations of renewable energy, efficiency, and conservation improvements and water conservation improvements on residential or commercial property, through creation of PACE financing districts. Participation in the program by property owners is voluntary, and financed improvements are repaid through payment assessment or special taxes on owners’ property tax bills over a period of time.
PACE financing addresses two financial challenges for installation of capital-intensive energy efficiency and renewable energy projects and water conservation projects: 1) PACE finances the high up-front costs of installation, and 2) PACE allows the property owner to avoid a situation where theses high up-front costs would not be recovered upon sale of the property as a proportional share of the costs are passed along to the subsequent property owner in the form of the prorated financing/tax obligation.
By joining the PACE program, the City would enable a new financing mechanism for residents and businesses who wish to install energy efficiency and energy generation systems in their homes and business. PACE is a mechanism to finance energy efficiency improvements through a supplemental bi-annual property tax assessment. PACE financing is bound to the property rather than the individual or business and can transfer with a change in ownership in the same fashion as a property tax. Eligibility is based primarily on property value and equity (a minimum of 15 percent is required), rather than credit score. Traditional lending sources (such as banks) also provide competitive interest rates for these activities, however they also rely on personal credit score.
Potential PACE “turnkey” partners include the County’s preferred provider Ygrene and the State’s preferred provider CaliforniaFIRST. These turnkey operators fund administer, advertise and operate their programs with limited support from City staff. They are compensated for performing these activities through the interest rate spread between the cost of funds and the interest rate they charge to property owners who obtain financing from the program. Both operators run programs in a wide variety of cities and counties in the state.
1. Adopt City Council Resolution Granting Consent to Inclusion of Land within the Territorial Jurisdiction of the City in the County of Mendocino Community Facilities District 2013-1 (Clean Energy).”