HomeMy WebLinkAboutAgenda Report - July 15, 2015 C-17AGENDA ITEM Cw,17
(DCITY OF LODI
COUNCILCOMMUNICATION
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AGENDA TITLE: Adopt Resolution Authorizing the City of Lodi to Join the California Statewide
Communities Development Authority (CSCDA) Open Property Assessed Clean
Energy (PACE) Program
MEETING DATE: July 15, 2015
PREPARED BY: Business Development Manager
RECOMMENDED ACTION- Adopt resolution authorizing the City of Lodi to join the California
Statewide Communities Development Authority (CSCDA) Open
Property Assessed Clean Energy (PACE) Program.
BACKGROUND INFORMATION: In 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 Open PACE Program has been established by the League of California Cities and the California
Statewide Communities Development Authority (CSCDA) to allow owners of residential and commercial
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 and water efficiency improvements, seismic strengthening
improvements and electric vehicle charging infrastructure. CSCDA is a joint exercise of powers authority
sponsored by the League of California Cities and the California State Association of Counties. The
member agencies include 56 counties and more than 500 local agencies throughout California, including
the City of Lodi.
If a property owner chooses to participate, the improvements will be financed by the issuance of bonds
by CSCDA. CSCDA will levy contractual assessments on the owner's property to repay the portion of the
bonds issued to finance the improvements on that property. CSCDA has selected AllianceNRG Program
(presently consisting of Deutsche Bank Securities, Inc.; CounterPointe Energy Solutions, LLC; and
Leidos Engineering, LLC) and Renewable Funding, LLC, to provide administration and financing for the
program.
The contractual assessment proceedings will be undertaken by CSCDA pursuant to Chapter 29, to allow
the financing of the improvements on private property that are authorized by Chapter 29. Pursuant to
APPROVED:
ephen Schwaba ity Manager
Adopt Resolution Authorizing the City of Lodi to Join the California Statewide Communities Development Authority
(CSCDA) Open Property Assessed Clean Energy (PACE) Program
July 15, 2015
Page 2 of 2
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 CSCDA.
Only property owners who choose to participate in the program will 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 CSCDA or to pay the assessments levied on the
participating properties. CSCDA 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 Open PACE Program without the commitment of staff and resources to
administer the program.
The proposed resolution authorizes CSCDA to accept applications from owners of property within the
City's jurisdiction for municipal financing of authorized improvements through the Open PACE Program.
It also authorizes CSCDA to conduct assessment proceedings and levy assessments against the
property of participating owners within the incorporated territory of the City. As with previously -adopted
PACE programs, a jurisdiction can withdraw from the Open PACE 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). In 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 CSCDA Open PACE Program is not an exclusive obligation, so the City retains the ability to
participate in any available PACE programs.
FISCAL IMPACT: Not applicable.
FUNDING AVAILABLE: Not applicable.
AM -am er6crer )
Business Development Manager
RESOLUTION NO. 2015-111
A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING
THE CITY OF LODI TO JOIN THE CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY (CSCDA) OPEN
PROPERTY ASSESSED CLEAN ENERGY (PACE) PROGRAM
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WHEREAS, the California Statewide Communities Development Authority ("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 Lodi ("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 Deutsche Bank Securities, Inc.;
CounterPointe Energy Solutions, LLC; and Leidos Engineering, LLC) and Renewable Funding,
LLC, and the Authority will notify the City in advance of any additions or changes; and
WHEREAS, Chapter 29 provides that assessments may be levied under its provisions
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
WHEREAS, the City desires to allow the owners of property ("Participating Property
Owners") within the incorporated area of the City to participate in the Programs and to allow the
Authority to conduct assessment proceedings under Chapter 29 within the incorporated territory
of the City and to issue Bonds under the 1915 Act to finance or refinance the 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 or collection of assessments or�any required remedial action in the case
of delinquencies in such assessment payments; or the issuance, sale or administration of any
other bonds issued in connection with the Programs.
NOW, THEREFORE, BE IT 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 Programs within the incorporated 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, hereby consents to the conduct of
special assessment proceedings by the Authority pursuant to Chapter 29 on any property within
its jurisdiction 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 or collection of assessments or any required remedial action in the case
of delinquencies in such assessment payments; or the issuance, sale or
administration of the Bonds or any other bonds issued in connection with the
Programs.
Section 3. The appropriate officials and staff of the City are authorized, but not
required, 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.
Section 4. The appropriate officials and staff of the City are hereby authorized 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, California, 95814.
Dated: July 15, 2015
I hereby certify that Resolution No. 2015-111 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held July 15, 2015, by the following vote:
AYES: COUNCIL MEMBERS — Chandler, Kuehne, Mounce, Nakanishi, and
Mayor Johnson
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
'
,YENNIFERLD - FERRAIOLO
City Clerk
2015-111