COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

DATE:

December 1, 2009

BOARD MEETING DATE:

December 15, 2009

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

David Boesch, County Manager

Peggy Jensen, Deputy County Manager

SUBJECT:

Executive Summary

CaliforniaFIRST program, a statewide renewable energy, energy efficiency and water conservation improvement financing district sponsored by the California Statewide Communities Development Authority (“California Communities”).

RECOMMENDATION:

(a) Conduct a public hearing to take testimony regarding the CaliforniaFIRST (CAFirst) program, and bonds to be issued by California Communities, and

(b) Adopt a resolution making certain findings and authorizing certain matters necessary to participate in the CaliforniaFIRST Program; authorizing the County of San Mateo to join the CaliforniaFIRST program; authorizing the California Statewide Communities Development Authority to accept applications from property owners; conduct contractual assessment proceedings and levy contractual assessments within the territory of San Mateo County; and authorizing related actions.

BACKGROUND:

San Mateo has taken a number of steps to reduce county and community CO₂ emissions. The Board has adopted the Cool Counties Declaration and under the sponsorship of Supervisor Mark Church has initiated the Solar San Mateo initiative. At the request of the Environmental Quality Committee, staff have explored the development of a residential energy action program (REAP), similar to those implemented by Sonoma County and the City of Berkeley, which enable property owners to finance energy improvements through assessments collected on the property tax bill.

CAFirst will establish a statewide AB 811 financing district that offers a financing option to individual property owners making renewable energy, energy efficiency and water efficiency improvements. The AB 811 loans are repaid through property tax assessments. The assessments are only levied on properties whose owners have voluntarily chosen to participate in the CAFirst program. Participating residents must execute a contract with California Communities, which has selected Renewable Funding LLC and RBC Capital Markets to provide administration and financing for the program.

Fourteen counties and a number of cities have submitted letters of intent to participate in CAFirst. Participation in CAFirst requires each participating jurisdiction (city or county) to submit a letter of intent and adopt a resolution of intention to join CAFirst. In San Mateo County, 18 of the 20 cities have submitted letters of intent and the other two cities are considering participating.

DISCUSSION:

The CAFirst pilot program will offer residents of the unincorporated area a financing option for environmental improvements to their properties. The program is voluntary, assessments stay with the property and the loan is not due upon the sale of the property but can be repaid at any time, subject to a prepayment penalty. As a statewide program, CAFirst will aggregate many small projects into a single large municipal bond, which may result in lower borrowing rates.

Participation in CAFirst creates no County financial obligation to either repay the bonds or the assessments levied on the participating properties and has no associated county operating costs. California Communities handles all assessment administration, bond issuance and bond administration functions. California Communities will undertake a judicial validation proceeding in San Mateo County as part of its initiation of the CAFirst Program.

The resolution to join authorizes payment of a set-up fee to cover legal, procedural, and technology costs associated with the CaliforniaFIRST Program. The set-up fee for San Mateo County is $12,500, which will be paid through an anticipated State Energy Program grant or with federal stimulus block grant (EECBG) funds. If at any point the County chooses to withdraw from the CAFirst program, the Board can adopt a resolution rescinding the authorization to participate.

This memo and the associated resolution have been reviewed and approved as to form by County Counsel.

Participation in the CaliforniaFIRST program promotes the County 2025 Vision of an Environmentally Conscious Community by offering residents of the unincorporated area a property tax assessment financing option for renewable energy, energy efficiency and water conservation improvements to their properties.

FISCAL IMPACT:

There is no direct net county cost associated with participating in the CaliforniaFIRST program. Indirect costs include staff time, including County Counsel hours for the review and processing of participation documents, and attending program development meetings.