Risk & Rewards
PACE financing is offered to cities and counties by Figtree (the program administrator) along with Willdan (the assessment administrator), CEDA (the joint powers authority and issuer of bonds) and Lewis, Brisbois, Bisgaard & Smith (Bond Counsel).
Is there a risk to our city or county if we adopt this PACE program?
To answer that, it's important that you understand the fundamentals of a PACE (Property Assessed Clean Energy) program. Understanding the risks of municipal debt financing and municipal debt supported programs is critical in shaping the role of government involvement in private sector activities.
Here are some of the key differences between PACE financing and other city/county bond financed debt.
Voluntary, NOT Mandatory
PACE financing is completely voluntary and is simply authorized by a resolution passed by a municipal agency. Only properties whose owner(s) has voluntarily applied and received PACE financing will be levied an assessment; no other property owners will be affected.
Program Goals
The PACE financing program was established to help property owners install permanently affixed energy saving equipment and products on their property. The primary goal of the program is environmental - to lower energy and water consumption. The green attributes of the PACE improvements will help count towards AB32 and green house gas reduction goals set for municipalities.
Program Benefits
PACE program benefits include reduced emissions, lower energy costs to property owners and job creation. From the local contractor to the building inspector, PACE is a stimulus program that spurs local economic growth and protects/creates jobs.
It's an Assessment, NOT a Tax
Unlike taxes that can fluctuate based on valuation of the property, or other property characteristics, the PACE assessment is applied as a fixed charge, or assessment, to the annual property tax bill. The borrower (property owner) pays the fixed dollar amount to the county tax collector, as property taxes are normally paid.
Property Based, NOT City Pledged
PACE Financing takes the improved property as the sole collateral for repayment in the event of default (if the property taxes are unpaid). The participating city/county is NOT required to pledge general fund monies, or guarantee any repayment of the PACE assessment. In fact, the participating agencies are even reimbursed for any staff costs incurred in supporting the PACE program.
Investment of Time
An interested city or county will need to meet with a Figtree Energy Resource Company executive (the program administrator) to review the program. In some cases the program must be modified to meet the needs of the city of county. The time and effort to understand and make modifications seldom exceeds 5 hours of meeting time (a combination of face-to-face and phone). Other than the cost of time, a city or county will not be charged any consulting fees for exploring the opportunity to offer a PACE program within its jurisdiction.
No Cost Program
The PACE program offered by Figtree and CEDA is cost free for a city or county. Figtree (the program administrator) along with Willdan (the assessment administrator), CEDA (the joint powers authority and issuer of bonds) and Lewis, Brisbois, Bisgaard & Smith (Bond Counsel) provide all the program services without charging the participating agency any money.
