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HomeMy WebLinkAbout2010-10-13 10-343 ORDINANCECOUNCIL ACTION Item No. A3 3 Date: October 13, 2010 Item/Subject: ORDINANCE, Adding Chapter 221, Property Assessed Clean Energy, to the Code of the City of Bangor Responsible Department: Legal Commentary: This ordinance would establish a PACE (Property Assessed Clean Energy) program in the City of Bangor. The ordinance is required to allow Bangor citizens the opportunity to obtain PACE loans for the purpose of making their homes more energy efficient. As stated in information previously provided to the Council approximately 50 communities are in process of approving ordinances to allow a PACE program. Efficiency Maine is hopeful that many of these ordinances will be approved in time for their citizens to take advantage of the PACE funding before this winter. Once the ordinance is in place, the City can contract with Efficiency Maine Trust to administer the program. A separate Council Order will deal with that contract. The Government Operations Committee recommends approval of this ordinance. Department Head Manager's Comments: City Manager Associated Information: Budget Approval: Finance Director Legal Approval: Solicitor Introduced for Passage —7First Reading Referral 10 343 Assigned to Councilor - Gratwi.ck October 13, 2010 CITY OF BANGOR (TITLE.) Ordinance, Adding Chapter 221, Property Assessed Clean Energy, to the Code of the City of Bangor WHEREAS, the 124th Maine Legislature has enacted Public Law 2009, Chapter 591, "An Act to Increase the Affordability of Clean Energy for Homeowners and Businesses," also known as "the Property Assessed Clean Energy Act" or "the PACE Act"; WHEREAS, that Act authorizes a municipality that has adopted a Property Assessed Clean Energy ("PACE'S Ordinance to establish a PACE program so that owners of qualifying property can access financing for energy saving improvements to their properties located in the City/Town, financed by funds awarded to the Efficiency Maine Trust under the Federal Energy Efficiency and Conservation Block Grant (EECBG) Program and by other funds available for this purpose, and to enter into a contract with the Trust to administer functions of its PACE program; and WHEREAS, the City wishes to establish a PACE program: NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT, The Code of the City of Bangor be amended as follows, by adding the following: § 221-1. Purpose. By and through this Chapter, the City of Bangor declares as its public purpose the establishment of a municipal program to enable its citizens to participate in a Property Assessed Clean Energy ("PACED program so that owners of qualifying property can access financing for energy saving improvements to their properties located in the City. The City declares its purpose and the provisions of this Chapter to be in conformity with federal and State laws. § 221-2. Enabling legislation. The City enacts this Chapter/Ordinance pursuant to Public Law 2009, Chapter 591 of the 124th Maine State Legislature -- "An Act To Increase the Affordability of Clean Energy for Homeowners and Businesses," also known as "the Property Assessed Clean Energy Act" or "the PACE Act" (codified at 35-A M.R.S.A. § 10151, et seq.). § 221-3. Title. This Chapter shall be known and may be cited as "the City of Bangor Property Assessed Clean Energy (PACE) Ordinance" (the "Ordinance). § 221-4. Definitions. IP `'43 Except as specifically defined below, words and phrases used in this Chapter shall have their customary meanings; as used in this Chapter, the following words and phrases shall have the meanings indicated: CITY -- The City of Bangor. ENERGY SAVING IMPROVEMENT -- An improvement to qualifying property that is new and permanently affixed to qualifying property and that: A. Will result in increased energy efficiency and substantially reduced energy use and: (1) Meets or exceeds applicable United States Environmental Protection Agency and United States Department of Energy Energy Star program or similar energy efficiency standards established or approved by the Trust; or (2) Involves air sealing, insulating, and other energy efficiency improvements of residential, commercial or industrial property in a manner approved by the Trust; or B. Involves a renewable energy installation or an electric thermal storage system that meets or exceeds standards established or approved by the trust. PACE AGREEMENT -- An agreement between the owner of qualifying property and the Trust that authorizes the creation of a PACE mortgage on qualifying property and that is approved in writing by all owners of the qualifying property at the time of the agreement, other than mortgage holders. PACE ASSESSMENT -- An assessment made against qualifying property to repay a PACE loan. PACE DISTRICT -- The area within which the City establishes a PACE program hereunder, which is all that area within the City's boundaries. PACE LOAN -- A loan, secured by a PACE mortgage, made to the owner(s) of a qualifying property pursuant to a PACE program to fund energy saving improvements. PACE MORTGAGE -- A mortgage securing a loan made pursuant to a PACE program to fund energy saving improvements on qualifying property. PACE PROGRAM -- A program established under State statute by the Trust or a municipality under which property owners can finance energy savings improvements on qualifying property. QUALIFYING PROPERTY -- Real property located in the PACE district of the City. RENEWABLE ENERGY INSTALLATION -- A fixture, product, system, device or interacting group of devices installed behind the meter at a qualifying property, or on contiguous property under common ownership, that produces energy or heat from renewable sources, including, but not limited to, photovoltaic systems, solar thermal systems, biomass systems, landfill gas to energy systems, geothermal systems, wind systems, wood pdet systems and any other systems eligible for funding under federal Qualified Energy Conservation Bonds or federal Clean Renewable Energy Bonds. TRUST -- The Efficiency Marne Trust established in 35-A M.R.S.A. § 10103 and/or its agent(s), if any. § 221-5. PACE program. 1k' ' 43 k. r A. Establishment; funding. The City hereby establishes a PACE program allowing owners of qualifying property located in the PACE district who so choose to access financing for energy saving improvements to their property through PACE loans administered by the Trust or its agent. PACE ban funds are available from the Trust in municipalities that 1) adopt a PACE Ordinance, 2) adopt and implement a local public outreach and education plan, 3) enter into a PACE administration contract with the Trust to establish the terms and conditions of the Trust's administration of the municipality's PACE program, and 4) agree to assist and cooperate with the Trust in its administration of the municipality's PACE program. B. Amendment to PACE program. In addition, the City may from time to time amend this Ordinance to use any other funding sources made available to it or appropriated by it for the express purpose of its PACE program, and the City shall be responsible for administration of loans made from those other funding sources. § 221-6. Conformity with the requirements of the trust. Standards adopted; rules promulgated; model documents. If the Trust adopts standards, promulgates rules, or establishes model documents subsequent to the City's adoption of this Ordinance and those standards, rules or model documents substantially conflict with this Ordinance, and the City desires to continue its participation in the PACE Program, the City shall take necessary steps to conform this Ordinance and its PACE program to those standards, rules, or model documents. Should the City terminate its participation in the PACE program, those PACE Loans already secured by PACE Mortgages as of the date of termination of the City's Pace administration contract with the Trust shall continue to be administered by the Trust. Should the City so elect, said PACE loans shall be administered by the Trust under the standards, rules, and model documents prevailing before the standards, rules, and model documents substantially conflicting with this Ordinance were adopted. § 221-7. Program administration. A. PACE Administration Contract. Pursuant to 35-A M.R.S.A. §10154(2)(A)(2) and (B), the City will enter into a PACE administration contract with the Trust to administer the functions of the PACE program for the City. The PACE administration contract with the Trust will establish the administration of the PACE program including, without limitation, that: (1) The Trust will enter into PACE agreements with owners of qualifying property in the City's PACE district; (2) The Trust, or its agent, will create and record a Notice of the PACE agreement in the appropriate County Registry of Deeds to create a PACE mortgage; (3) The Trust, or its agent, will disburse the PACE loan to the property owner; (4) The Trust, or its agent, will send PACE assessment statements with payment deadlines to the property owner; (5) The Trust, or its agent, will be responsible for collection of the PACE assessments; (6) The Trust, or its agent, will record any lien, if needed, due to nonpayment of the assessment; (7) The City, or the Trust or its agent on behalf of the City, promptly shall record the discharges of PACE mortgages upon full payment of the PACE ban. 10 t143 B. Adoption of Education and Outreach Program. In conjunction with adopting this Ordinance, the City shall adopt and implement an education and outreach program so that citizens of the City are made aware of home energy saving opportunities, including the opportunity to finance energy saving improvements with a PACE loan. C. Assistance and Cooperation. The City will assist and cooperate with the Trust in its administration of the City's PACE program. D. Assessments Not a Tax. PACE assessments do not constitute a tax but may be assessed and collected by the Trust in any manner determined by the Trust and consistent with applicable law. § 221-8. Termination. Should the City desire to terminate its participation in the PACE program, it shall do so by Council Order. The PACE loans in existence at the time of termination shall continue in existence as outlined in § 221-6 above. § 221-9. Municipal liability. A. Notwithstanding any other provision of law to the contrary, municipal officers and municipal officials, including, without limitation, tax assessors and tax collectors, are not personally liable to the Trust or to any other person for claims, of whatever kind or nature, under or related to a PACE program, including, without limitation, claims for or related to uncollected PACE assessments. B. Other than the fulfillment of its obligations specified in a PACE administration contract with the Trust entered into under Article VI, §1(A) above, the City has no liability to a property owner for or related to energy savings improvements financed under a PACE program. IN CITY COUNCIL October 13, 2010 First Reading C;lk oel-I --I CITY CLERK IN CITY COUNCIL October 25, 2010 Motion Nade and Seconded for Passage Vote: 8-0 Councilors Voting Yes: Bronson, Gratwick, Nealley, Palmer, Stone, Weston, & Wheeler Councilors Voting No: None Councilors Absent: Blanchette & Hawes Passed CITY CLERK cl/y —- ORDTNANCE (T1TL$J Adding Chapter 221, Property As -a smA rlpan Energy, to the Code of ('i tv nf Bangor Ana ed - toCouncilor Iga Treasury Department David W. Little Tax Collector/Deputy Treasurer To: Members of the Government Operations Committee From: David Little, Tax Collector/Deputy Treasurer Date: September 28, 2010 Re: PACE Program 11- 343 73 Harlow Street Bangor, Maine 04401 Tel: (207) 992-4290 Fax: (207) 945-4422 Email: david.little@bangormaine.gov Attached for your consideration is an ordinance which would authorize the establishment of a PACE (Property Assessed Clean Energy) program in the City of Bangor. This ordinance is required to allow Bangor citizens the opportunity to obtain PACE loans for the purpose of making their homes more energy efficient. City staff recommends approval to move the ordinance to the full Council and with contracting with Efficiency Maine Trust to administer the program. Committee members may have heard that a Maine community recently voted against placing the PACE program on their upcoming ballot. The questions raised related to mortgage foreclosure short sales and taxpayers applying for loans that they could not afford. We do not feel either of these concerns should prevent approval in Bangor. The PACE program is required by law to establish a reserve to cover losses that may occur. In the event of a mortgage short sale (the sale price is not adequate to pay the existing first mortgage) the reserve would kick in and cover any loss on the PACE loan. If a property is sold with delinquent PACE payments due the new owner would be except to pay only the past due payments to catch the loan up and then move forward. The PACE loan does not get called or accelerated. The affordability of the loans is built into the program. In addition to the due diligence and underwriting standards that will be performed during the loan application process to determine ability to pay, the loans themselves are meant to be "self -funding". The PACE requirements state that the money saved from the energy efficiency improvements must be sufficient to cover the cost of the loan. Therefore if the calculated energy savings are accurate and the taxpayer applies those savings to the loan they should have no real additional costs. As stated in previous information provided to the Council approximately 50 communities are in process of approving ordinances to allow a PACE program. Efficiency Maine is hopeful that many of these ordinances will be approved in time for their citizens to take advantage of the PACE funding before this winter. Dana Fischer from Efficiency Maine Trust will be in the local area and has agreed to attend the meeting and answer any additional questions the Committee may have.