HomeMy WebLinkAboutAgenda Report - December 17, 2014 C-17AGENDA ITEM C-17
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AGENDA TITLE:
MEETING DATE:
PREPARED BY:
Adopt Resolution Authorizing the City of Lodito Join the CaliforniaFlRST Property
Assessed Clean Energy (PACE) Program
December 17,2014
Electric Utility Director
RECOMMENDED ACTION Adopt a resolution authorizing the City of Lodi to join the
CaliforniaFlRST Property Assessed Clean Energy (PACE) Program
BACKGROUND INFORMATION: ln July 2008, the Governor signed Assembly Bill (AB) 811 into law
which authorized cities and counties to establish PACE programs 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 permanently fixed to real property. An AB 811 program allows municipalities to
make assessment financing available to property owners for the purchase and installation of such
improvements. Property owners repay the financing through an assessment on their properties. The
assessments are recorded as a lien against the subject property, entered in the county 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 CaliforniaFlRST PACE Program has been established by the California Statewide Communities
Development Authority (California Communities) to allow owners of property in participating cities and
counties to finance a variety of improvements authorized by Chapter 29 of Division 7 of the Streets &
Highways Code, as amended ("Chapter 29"), including, but not limited to, renewable energy, energy
efficiency and water efficiency improvements and seismic strengthening improvements. California
Communities is a joint powers authority sponsored by the League of California Cities and the California
State Association of Counties. The member agencies of California Communities include 57 counties and
more than 400 other local agencies throughout California, including the City of Lodi. While the HERO
PACE Program is California's leading residential PACE provider, CaliforniaFlRST is the second largest
residential PACE provider and also operates a commercial PACE Program in California.
lf a property owner chooses to pafticipate, the improvements will be financed by the issuance of bonds
by California Communities. California Communities will levy contractual assessments on the owner's
property to repay the portion of the bonds issued to finance the improvements on that property. California
Communities has selected Renewable Funding LLC to provide administration and financing for the
program.
The contractual assessment proceedings will be undertaken by California Communities pursuant to
Chapter 29, to allow the financing of the improvements on private property that are authorized by Chapter
29. Pursuant to Chapter 29, assessments may be levied to finance improvements 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 property owners evidence their consent to the assessments by executing a
contract with California Communities. Only property owners who choose to participate in the program will
APPROVED:
phen , City Manager
Adopt Resolution Authorizing the City of Lodi to Join the CaliforniaFlRST Property Assessed Clean Energy (PACE) Program
December 17,2014
Page 2 of 2
have assessments imposed on their property. Under California law, the assessment obligation transfers
with the property upon sale.
The City is not obligated to repay the bonds issued by California Communities or to pay the assessments
levied on the participating properties. California Communities handles all assessment administration,
bond issuance and bond administration functions. This program allows for financing of Chapter 29-
authorized improvements to property owners through the CaliforniaFlRST Program without the
commitment of staff and resources to administer the program.
The proposed resolution authorizes California Communities to accept applications from owners of
property within the City's jurisdiction for municipal financing of authorized improvements through the
CaliforniaFlRST Program. lt also authorizes California Communities to conduct assessment proceedings
and levy assessments against the property of participating owners within the incorporated territory of the
City. Any jurisdiction can withdraw from the CaliforniaFlRST Program at any time by passing a resolution
rescinding the authorization.
Certain mortgage providers - such as Fannie Mae and Freddie Mac - may require that the assessment
be paid off at the time the property is refinanced or sold, because they do not purchase properties with
PACE liens on them. Some lenders have concerns with PACE assessments being the superior lien (with
the lender's lien being subordinate). ln order to ease these concerns, the California Alternative Energy
and Transportation Financing Authority approved a $10 million dollar loss reserve program that will
reimburse the first mortgage lender for the PACE payments made while in possession of the property
during foreclosure. The property taxes for properties in the City that do not choose to participate will not
be affected by the Program.
The CaliforniaFlRST Program is not an exclusive obligation so the City retains the ability to participate in
any available PACE programs. As the CaliforniaFlRST Program has completed its statewide validation
process, it will be available to Lodi property owners following adoption of the proposed resolution.
FISCAL IMPACT There is no financial impact to the City of Lodi associated with the
participation in the CaliforniaFlRST Program.
FUNDING AVAILABLE: Not applicable.
Kirkley
Electric Utility Director
PREPARED BY:
EAI(/MC/lst
Melissa Cadek, Rates & Resources Manager
RESOLUTION NO. 2014-235
ARESoLUTIoNoFTHELoDICITYcoUNcILAUTHoRIZING
THE CITY OF LODI TO JOIN THE CALIFORNIAFIRST
PRoPERTYASSESSEDCLEANENERGY(PACE)PRoGRAM
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WHEREAS, the California Statewide Communities Development Authority ("California
Communities") is a joint exercise of powers authority the members of which include numerous
cities and counties ¡ñ tne State of California, including the City of Lodi ("City"); and
WHEREAS, California Communities has established the CaliforniaFlRST Program
(,,CaliforniaFlRST program") and will provide financing for certain improvements authorized by
òrrapter 2g of Divisio-n z of ttre Streets & Highways Code ("Chapter 29"), including, but not
limitàd to, renewable energy, energy efficiency and water efficiency improvements and seismic
strengthening improvemeñis ("lm[iovements;') through the levy of contractual assessments
pursùant to óhapter 2g of Division 7 of the Streets & Highways Code ("Chapter 29") and the
issu"nc" of improvement bonds ("Bonds") under the lmprovement Bond Act of 1915 (Streets &
Hitn*"yr Cod'e Sections BS00 and following) ("1915 Act") upon the security of the unpaid
contractual assessments; and
WHEREAS, Chapter 29 provides that assessments may be levied ylder its provisions
only with the free and wiiling conbent of the owner of each lot or parcel on which an assessment
is lèvied at the time the assessment is levied; and
WHEREAS, the City desires to allow the owners of property ("Participating Property
Owners,') within the incorporated territory of the City to participate in the CaliforniaFlRST
program and to allow California Communities to conduct assessment proceedings under
CnJpter 2g within the incorporated territory of the City and to issue Bonds under the 1915 Act to
finance the lmprovements; and
WHEREAS, California Communities will conduct assessment proceedings under
Chapter 29 and issue Bonds under the 1915 Act to finance lmprovements; and
WHEREAS, the City will not be responsible for the conduct of any assessment
proceedings; the levy or collection of assessments or any required remedial action in the case
of delinquéncies in ðuch assessment payments; or the ìssuance, sale or administration of the
Bonds or any other bonds issued in connection with the CaliforniaFlRST Program.
NOW, THEREFORE, BE lT RESOLVED that the Lodi city council:
Section 1. Finds and declares that properties in the City's incorporated area will
benefit from the availability of the CaliforniaFlRST Program within the incorporated territory of
the City and, pursuant thåreto, the conduct of special assessment proceedings by California
Commúnities pursuant to Chapte r 29 and the issuance of Bonds under the 1915 Act'
Section 2. Consents to the conduct of special assessment proceedings by California
Commqnities pursuant to Chapter 29 on any property within its jurisdiction and the issuance of
Bonds under the 1g15 Act as it relates to the CaliforniaFlRST Program; 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
þrovisions of California law in order to accomplish the valid levy of assessments'
(2) The city will not be responsible for the conduct of any assessment
proceedings; the levy or collection of assessments or any required remedial action in the
case of deiinqu"nói". in such assessment payments; or the issuance' sale or
administration of the Bonds or any other bonds issued in connection with the
CaliforniaFl RST Program.
(3) The issuance of Bonds will occur following receipt of a final judgment in a
validation action filed by California Communities pursuant to Code of Civil Procedure
Section g60 that the Bonds are legal obligations of California Communities.
Section 3. pursuant to the requireme-nts of Chapter 29, California Communities has
prepared and will update from time to time the "Program Report" for the californiaFlRST
Program ("Program' Report"), and california communities will undertake assessment
proðeeOingi anð tne finanbing óf lmprovements as set forth in the Program Report'
Section 4. The appropriate officials and staff of the City are authorized, but not
requ¡red, to mã-ke applicationå toi tn" californiaFlRST program available to all property owners
who wish to finance i*prou"r"nts; provided, that Californla Communities shall be responsible
for providing such applications and related materials at its own expense'
Section 5. The appropriate officials and staff of the City are hereby authorized to
execute and deliver such cfäiini certificates, requisitions, agreements and.related documents
as are reasonably required ny iatitornia Communities in accordance with the Program Report
to implement the
'CalifärniaFtnst erogram for Participating Property Owners'
Section 6. The City Council hereby finds that adoption of this_Resolution is not a
,,pro¡ecfl uñdelthe Californiã Environmental Quality Act, because the Resolution does not
involve any commitment to a specific project wtriótr may result in .a. potentially significant
physical impact on the environment, as contemplated by Title 14, California Code of
Regulations, Section 1 5378(bX4).
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 California Communities.
Dated: December 17 ,2014
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I hereby certify that Resolution No. 2014-235 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held December 17 ,2014, by the following vote:
AyES: couNclL MEMBERS - Chandler, Kuehne, Mounce, Nakanishi, and
NOES:
ABSENT:
ABSTAIN
Mayor Johnson
COUNCIL MEMBERS - None
COUNCIL MEMBERS - None
COUNCIL MEMBERS - None
Ñtlnt û-
NI
City Clerk
2014-235
BISON