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.
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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.
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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.
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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.