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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
County Manager’s Office
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DATE:
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July 20, 2010
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BOARD MEETING DATE:
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July 27, 2010
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SPECIAL NOTICE/HEARING:
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None
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VOTE REQUIRED:
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Majority
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TO:
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Honorable Board of Supervisors
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FROM:
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Peggy Jensen, Deputy County Manager
Danielle Lee, Energy Upgrade Program Manager
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SUBJECT:
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Support of both Property Assessed Clean Energy financing and the development of alternative financing options for residential energy upgrades.
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RECOMMENDATION:
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Adopt a resolution authorizing the President of the Board of Supervisors to send letters to our state and federal legislative delegations and the California Energy Commission in support of both Property Assessed Clean Energy financing and the development of alternative financing options for residential energy upgrades.
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BACKGROUND:
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San Mateo County is participating in two pilot projects, Retrofit Bay Area and CaliforniaFIRST, to encourage homeowners to retrofit their homes for energy efficiency. These projects, collectively referred to as Energy Upgrade San Mateo County, include an outreach and education campaign, workforce development initiatives, policy support and the establishment of a Property Assessed Clean Energy (PACE) financing district. Energy Upgrade San Mateo County is funded by stimulus funds channeled through a combination of State Energy Program (SEP) grants from the California Energy Commission (CEC) and Energy Efficiency and Conservation Block Grant (EECBG) funds. The program has a total budget of $1,665,000.
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Over the past year, the Federal Housing Finance Agency (FHFA) has conducted an evaluation of PACE financing, a tool for financing energy efficiency retrofits identified for adoption by Energy Upgrade San Mateo County and already in use nationwide. On July 6, 2010 the FHFA released a statement (attached) determining that senior PACE liens are in violation of their standard mortgage contracts because they pose unusual and difficult risk management challenges. As a result of the FHFA statement, most PACE programs throughout the country have been placed on hold pending resolution of this issue.
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DISCUSSION:
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The FHFA statement resulted in multiple responses at the state and federal level. In Congress, House Resolution 5766, the PACE Assessment Protection Act of 2010, has been introduced and is currently under review by the House Committee on Financial Services. In California, State Attorney General Brown has filed a lawsuit to overturn the FHFA findings. Additionally, in response to Department of Energy guidance, the CEC is scheduled to consider either cancelling the SEP funding allocated for Municipal Financing Programs or amending the SEP program guidelines to allow the use of alternate financing mechanisms in addition to PACE.
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Energy Upgrade staff presented an update to the Environmental Quality Committee regarding the FHFA action and subsequent response at its July committee meeting. In recognition of the valuable role that financing can play in supporting the energy retrofit market in San Mateo County, the Environmental Quality Committee has recommended supporting both the federal legislative process and the allowance of alternate financing mechanisms at the state level. Accordingly, Energy Upgrade staff received direction from the Environmental Quality Committee to bring this issue to the Board of Supervisors to consider sending letters to the County’s state and federal legislative delegations and the CEC in support of both PACE financing and the development of alternative financing options for residential energy upgrades.
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Approval of this Resolution contributes to the Shared Vision 2025 outcome of an Environmentally Conscious Community by supporting the energy retrofit market in San Mateo County. Energy retrofits help to protect our natural resources by creating local green jobs and reducing greenhouse gas emissions by lowering energy consumption.
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The memo and resolution have been reviewed as to form by County Counsel.
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FISCAL IMPACT:
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Successful resolution of this issue will ensure that the $380,000 in stimulus funds already allocated to the County for the development of Municipal Financing Programs are dispersed by the CEC.
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Attachment: Federal Housing Finance Agency Statement on Certain Energy Retrofit Loan Programs
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