HomeMy WebLinkAboutAgenda Report - August 17, 2011 C-10AGENDA ITEM ',A
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AGENDATITLE: Adopt Resolution In Support of the Property Assessed Clean Energy (PACE)
Protection Act of 2011
MEETING DATE: August 17,2011
PREPARED BY: Community Development Department
RECOMMENDED ACTION: Adopt resolution in support of the Property Assessed Clean Energy
(PACE) Protection Act of 2011.
BACKGROUND INFORMATION: Property Assessed Clean Energy (PACE) is a bipartisan local
government initiative that allows property owners to finance energy -
efficiency and renewable -energy projects for their homes and
commercial buildings. Interested property owners opt -in to receive financing for improvements that is
repaid through an assessment on their property taxes for up to 20 years. PACE financing spreads the
cost of energy improvements such as weather sealing, insulation, energy efficient boilers and cooling
systems, new windows, and solar installations over the expected life of the measures and allows for the
repayment obligation to transfer automatically to the next property owner if the property is sold.
PACE emerged in 2008 with a pilot program in California and quickly caught the attention of communities
around the country. In just two years, enabling legislation was passed in 23 states and is being
considered in nearly 20 more. Early California programs in Sonoma County and Palm Desertwere soon
followed by ones in Boulder County, Colo. and in Babylon, N.Y.
Federal overreach, in a challenge to state and local government rights, has brought PACE to a standstill
today despite its great promise. Like all municipal assessments, PACE assessments in arrears have a
senior lien to mortgage payments in the event of a default. Recognizing this, PACE advocates began a
dialogue in 2008 with Fannie Mae, Freddie Mac, and their regulator, the Federal Housing Finance
Agency (FHFA) to find ways to address their concerns. Broad safeguards were developed as program
guidelines by a working group that included the U.S. Department of Energy to ensure that PACE
programs would be beneficial to building owners, municipalities, and mortgage lenders.
Notwithstanding these measures, on July 6, 2010, the FHFA issued a statement that directed Fannie
Mae and Freddie Mac not to underwrite mortgages for properties with a PACE assessment. It further
directed mortgage lenders to redline communities with PACE programs by tightening lending standards.
Before programs were stopped by the Federal Housing Finance Agency (FHFA), Fannie Mae, and
Freddie Mac, over 2,000 homes and commercial buildings had used PACE to finance efficiency and
renewable -energy projects.
„
PACE ProtectionAct of 2011
August 17,2011
Page 2 of 2
The PACE Assessment Protection Act of 2011 (HR 2599) was introduced on July 20,201 1 in the House
d Representatives by Congresswoman Nan Hayworth (R-N.Y.) and Congressmen Dan Lungren (R -
Calif.) and Mike Thompson (D -Calif.), with the intent to prevent Fannie Mae, Freddie Mac, and other
Federal residential and commercial mortgage lending regulators from adopting policies that contravene
established state and local property assessed clean energy laws.
We are asking the City Council to support this federal legislation.
FISCAL IMPACT: Not applicable.
FUNDING AVAILABLE: Not applicable.
nradt tartlam
Community Development Director
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J:\Community DevelopmentlCouncil Communications\2011\8-17PACE.doc
RESOLUTION NO. 2011-133
A RESOLUTION OF THE LODI CITY COUNCIL IN SUPPORT OF
THE PROPERTY ASSESSED CLEAN ENERGY (PACE)
ASSESSMENT PROTECTION ACT OF 2011
WHEREAS, utility bills represent a major cost for home and business owners; and
WHEREAS, persistent unemployment, particularly in the construction industry,
continues to burden our families and communities; and
WHEREAS, reliance on foreign energy sources continues to threaten America's
economic recovery; and
WHEREAS, investing in cost-effective energy efficiency and renewable energy
improvements to homes and businesses can cut utility bills, create thousands of local jobs,
and reduce reliance on foreign energy sources; and
WHEREAS, the upfront cost and potentially long payback periods prevent property
owners from making otherwise cost-effective clean energy improvements; and
WHEREAS, Property Assessed Clean Energy (PACE) financing programs are an
innovative, voluntary local government solution that requires no general taxes or public
funding to help property owners finance energy efficiency and renewable energy
improvements — such as energy efficient boilers, upgraded insulation, new windows, solar
installations, etc., to their homes and businesses; and
WHEREAS, twenty-seven states and the District of Columbia have passed laws
enabling local governments to develop PACE programs; and
WHEREAS, despite PACE's great promise, the Federal Housing Finance Agency
and the Office of the Comptroller of the Currency on July 6, 2010, issued unwarranted
statements that immediately forced certain existing PACE programs to halt operations and
froze the development of hundreds of other PACE programs nationwide.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council urges
Representative Jerry McNerney to support the PACE Assessment Protection Act of 2011
(H.R. 2599) to restore the promise of PACE.
Dated: August 17, 2011
I hereby certify that Resolution No. 2011-133 was passed and adopted by the Lodi
City Council in a regular meeting held August 17, 2011, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
COUNCIL MEMBERS — Hansen, Katzakian, Mounce, Nakanishi, and
MayorJohnson
COUNCIL MEMBERS—None
COUNCIL MEMBERS—None
COUNCIL MEMBERS— None
2011-133
&JOHL
City Clerk