City Council
MEETING DATE: 1/28/2015
TITLE:
Title
Resolution - Associate Membership in WRCOG for the California Hero Program
End
FROM:
Pat Milos, Community Development Director
RECOMMENDATION:
Recommendation
Staff recommends that the City Council adopt a resolution approving an Amendment to the WRCOG Joint Powers Agreement to add the City as an Associate Member in order to authorize the City's participation in the California HERO Program, which will enable property owners to finance permanently fixed renewable energy, energy and water efficiency improvements and electric vehicle charging infrastructure on their properties.
Body
BACKGROUND:
Assembly Bill (AB) 811 was signed into law on July 21, 2008, and AB 474, effective January 1, 2010, amended Chapter 29 of Part 3 of Division 7 of the Streets & Highways Code of the State of California ("Chapter 29") and authorizes a legislative body to designate an area within which authorized public officials and free and willing property owners may enter into voluntary contractual assessments to finance the installation of distributed generation renewable energy sources, energy efficiency, and/or water conservation improvements that are permanently fixed to real property, as specified. The financing for these improvements has come to be known as PACE, which stands for Property Assessed Clean Energy.
In April 2013, the Coachella Valley Association of Governments (CVAG) Executive Committee directed staff to initiate a Regional Property Assessed Clean Energy program for member agencies. At the time the decision to offer a PACE program was made, the Executive Committee directed staff to explore the option of encouraging competition by offering PACE programs provided by both Ygrene Energy Fund and the HERO program. The CVAG Executive Committee established criteria for any PACE program, including that CVAG have its own stand-alone HERO program and that the CVAG Executive Committee would have the lead in making changes to the program. At the time, representatives of the California HERO program indicated they could not meet the requirements set forth by the Executive Committee. CVAG worked with Ygrene Energy Fund to launch the Clean Energy CV Upgrade program in December 2013 offering residential and commercial property owners financing for energy efficiency, renewable energy, and water conservation upgrades.
Recently, several CVAG member agencies, including Indio and Desert Hot Springs, have joined the California HERO program. CVAG staff was approached by representatives of Renovate America who indicated a willingness to meet the conditions laid out by the CVAG Executive Committee in 2013. CVAG has worked with Renovate America and the Western Riverside Council of Governments (WRCOG) on an agreement that, in CVAG staff's opinion, substantially meets the conditions described by the Executive Committee to provide the HERO program to CVAG member agencies, with CVAG as the responsible agency for program oversight and direction. At their December 1, 2014 meeting, the CVAG Executive Committee approved an agreement between CVAG, Renovate America and the Western Riverside Council of Governments to provide for a HERO program for residential property owners in the Coachella and Palo Verde Valleys. Under this agreement:
-Renovate America will provide all administration and financing of the program at no cost to the City. At this time, the program is anticipated to be available only for residential property owners.
CVAG will provide program oversight including:
-Review and approve projects submitted by property owners participating in the California HERO program within the CVAG region.
-Adopt resolutions and approve documents authorizing the California HERO program;
-Assist member agencies with the process of adoption of resolutions and/or other actions necessary to participate in the California HERO program.
-Coordinate with Renovate America on program marketing and outreach, to ensure that such marketing and outreach is compatible with the existing CV Upgrade program and property owners in the CVAG region are aware of the options for PACE programs, including the Ygrene Energy Fund CV Upgrade program and the HERO program.
-Provide Renovate America with a "local presence" at the CVAG offices. This can be accomplished with Renovate America employees or representatives or by training CVAG staff.
The Western Riverside Council of Governments is the program administrator for the California HERO program. WRCOG will participate in the HERO program for the Coachella Valley as conduit issuer of bonds and will coordinate with CVAG and Renovate America as needed.
The HERO Program (for PACE financing) has been very successful in Western Riverside County, since its launch in late 2011; the Program has funded over $370 million in projects. To date, 209 jurisdictions in California have approved the HERO Program for their residents.
DISCUSSION:
The California HERO Program is being offered to allow property owners in participating cities and counties to finance renewable energy, energy and water efficiency improvements, and electric vehicle charging infrastructure on their property. If a property owner chooses to participate, the installed improvements will be financed by the issuance of bonds by a joint powers authority, the Western Riverside Council of Governments. The bonds are secured by a voluntary contractual assessment levied on such owner's property, with no recourse to the local government or other participating jurisdictions. Participation in the program is 100% voluntary. Property owners who wish to participate in the program agree to repay the amount borrowed through the voluntary contractual assessment collected together with their property taxes. This financing is available for eligible improvements on both residential and non-residential properties.
The benefits to the property owner include:
Eligibility - In today's economic environment, alternatives for property owners to finance renewable energy/energy efficiency/water efficiency improvements or electric vehicle charging infrastructure may not be available. As such many property owners do not have financing options available that would provide funding for improvements that lower their utility bills.
Savings - Energy prices continue to rise and selecting in energy efficient, water efficient and renewable energy improvements reduces utility bills.
100% voluntary - Property owners can choose to participate in the program at their discretion. Improvements and properties must meet eligibility criteria in order to qualify for financing.
Payment obligation stays with the property - Under Chapter 29, a voluntary contractual assessment stays with the property upon transfer of ownership. Certain residential conforming mortgage providers will, however, require the assessment be paid off at the time the property is refinanced or sold.
Prepayment option - The property owner can choose to pay off the assessments at any time, subject to applicable prepayment penalties.
Customer oriented program - Part of the success of the program is the prompt customer service. Committed funding partners provide funding promptly upon project completion resulting in both property owner and contactor satisfaction.
The benefits to the City include:
Increase local jobs.
An increase in property values (energy efficient homes and buildings are worth more money).
An increase in sales, payroll and property tax revenue
As in conventional assessment financing, the City is not obligated to repay the bonds or to pay any delinquent assessments levied on the participating properties.
All California HERO Program and assessment administration, bond issuance and bond administration functions are handled by California HERO. Little, if any, City staff time is needed to participate in the California HERO Program.
The standard procedure for all cities and counties to participate in the California HERO program is to adopt the form of a resolution accompanying this staff report. Resolution _____ enables the California HERO Program to be available to owners of property within our City to finance renewable energy, energy efficiency and water efficiency improvements and electric vehicle charging infrastructure. The resolution also identifies that the City is a member of CVAG and CVAG has contracted with WRCOG and Renovate America, Inc. to provide the California HERO program to its member agencies, whereby portions of the administration of the California HERO Program in Eastern Riverside County shall be delegated to CVAG. The resolution also approves an amendment to the WRCOG Joint Powers Agreement (see Exhibit "A") to add the City as an Associate Member in order to enable the California HERO Program to be offered to the owners of property located within the City who wish to participate in the California HERO Program. Once interested jurisdictions have approved a resolution, a validation process will need to be completed.
FISCAL IMPACT:
There is no negative fiscal impact to the City's general fund by consenting to the inclusion of properties within the City limits in the California HERO Program. All California HERO Program administrative costs are covered through an initial administrative fee included in the property owner's voluntary contractual assessment and an annual administrative fee which is also collected on the property owner's tax bill.
ATTACHMENTS:
1. Resolution for HERO program