Fresno Adopts State PACE Program
FRESNO, Calif. — As part of the city’s Sustainable Fresno program, an energy efficiency push initiated in 2009, the city has opted into the California Property Assessed Clean Energy program, known as California PACE.
The program stems from the passage of State Assembly Bill 811, which authorized all cities and counties in California to designate areas where property owners can voluntarily have their properties assessed for low-interest loans to finance renewable and efficient energy improvements permanently fixed to their property.
The bill was signed into law in July of 2008 by Gov. Arnold Schwarzenegger and allows cities to buy into the regional program rather than having to set it up themselves.
While the city of Fresno was considering the program previously, they halted the process when a lawsuit filed in July of 2010 by the State of California, Sonoma and Placer Counties, the Sierra Club and the City of Palm Desert alleged unfair business practices and a violation of the National Environmental Policy Act by the Federal Housing Finance Agency, according to the complaint.
However, since commercial properties were not impacted by the case, the city set about putting the program in place around August of last year, said Joseph Oldham, sustainability manager for the city of Fresno.
“It seemed like a really good fit — we did some research and there was already a program in place in Tulare,” Oldham said. “We contacted them and wanted to get more information and decided to move forward to form a district.”
The program is administered and operated by Public Finance Solutions and Engineering, a San Diego, Calif.-based consulting firm.
California’s PACE program launched formally on January 25, 2010, with the authorization of a $95 million bond to finance an energy retrofit program, said Michael Chapin, President and CEO of Public Finance Solutions and Engineering.
Since January, the firm has been forming special assessment districts within member cities that want to take part.
The district boundary for Fresno includes the entire city, Oldham said. As a member city, property owners can finance energy efficiency and water conservation projects, which are repaid through their property tax bills.
“It’s kind of a way for property owners to be able to save out-of-pocket money, and put capital in the market,” Chapin said. “Cities and counties have been trying to find a way to make use of that law, and California is probably the most successful because they’re signing on new cities and are active.”
The program offers a number of different benefits to cities, he said.
“From a city’s perspective, immediately you can look at some of the environmental benefits,” Chapin said. “When you talk about solars and photovoltaics and adding nonrenewable resources — it puts less strain on cities, no black outs, and it reduces the carbon footprint (by) going green, using less energy, less waste,” Chapin said.
PACE also benefits cities aesthetically by providing commercial property owners the capital to improve their sites through repairs like redoing windows or doors, which help increase property values.
The program also creates jobs, especially to contractors who have been out of work due to the housing downturn, Chapin said.
Many contractors are now looking for jobs in the renewable industry after President Barack Obama passed the American Recovery and Reinvestment Act that allocated funds toward green technology, green growth and solar subsidies, he said.
“When you start looking at all the measures in green technology, there are tons of contractors waiting to get into the field, but where do they get the money to do [those projects]?,” Chapin said. “Creating and keeping jobs is huge — all the sales tax revenue and everything done locally stays locally.”
Sales tax and revenue for installations, permit fees, and technology all create a stimulus for the city to put into the local economy and keeps people in work without requiring money or good credit from the city, he said.
“It’s a no cost program to them, so it’s a win-win for anyone who participates whether you’re a property owner or contractor or local government.”
A city is able to opt in to the program by passing a resolution stating they can and will participate, Chapin said.
Oldham echoed Chapin, calling the program a win-win for everyone.
PACE gives all business property owners an equal opportunity to participate since there are no income criteria and no business size limitation, and allows any business property owner to have an assessment done on a purely voluntary basis, he said.
“Our primary goal is to see increased business opportunities for our local contractors and improved business performance,” he said. “By lowering energy costs it improves their bottom line.”
The environmental benefits of energy reduction and improved water efficiency are huge for Fresno, Oldham said.
“It’s certainly a big deal in the San Joaquin Valley, to do anything we can do to tie in to water conservation.”
The County of Fresno is also evaluating the program for potential adoption, according to Oldham.
“They’re interested in doing a similar thing in the county area and since we’re the largest jurisdiction in the county and the largest in the valley, it seemed appropriate for us to take the lead,” Oldham said.
Fresno is the seventh city in the state to adopt the program, joining the Palm Springs, Tulare, Adlelanto, Woodlake, Calipatria and Farmersville.
With a population of more than 500,000, Fresno is the largest city so far to join the California PACE program, according to a city statement.
Currently, 23 other states have similar legislation on their books.
“We’re very happy that we were able to do this, it was supported 100 percent by our city council,” Oldham said. “We’re working very hard to get this program launched and hopefully we’ll get a lot of businesses to participate.”
Oldham reports that there have been no challenges so far, and that the city is currently working with PG&E and other partners to get the word out to business owners and contractors to take advantage of the program.