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BOARD STANDING COMMITTEES - 11032014 - Internal Ops Cte Min
INTERNAL OPERATIONS COMMITTEE November 3, 2014 10:30 A.M. 651 Pine Street, Room 101, Martinez Supervisor Karen Mitchoff, Chair Supervisor Candace Andersen, Vice Chair Agenda Items: Items may be taken out of order based on the business of the day and preference of the Committee 1.Introductions 2.Public comment on any item under the jurisdiction of the Committee and not on this agenda (speakers may be limited to three minutes). 3. CONSIDER approving the Record of Action for the September 8, 2014 Internal Operations Committee meeting. (Julie DiMaggio Enea, IOC Staff) 4. CONSIDER approving nomination of Jack Bean for appointment to the Business # 2 Alternate - Industrial Association seat on the Hazardous Materials Commission. (Michael Kent, Hazardous Materials Ombudsman) 5. CONSIDER report from the Conservation and Development Department on the establishment of Property Assessed Clean Energy (PACE) financing districts in Contra Costa County. (Jason Crapo, Conservation and Development Department) 6.The next meeting is currently scheduled for December 1, 2014. 7.Adjourn The Internal Operations Committee will provide reasonable accommodations for persons with disabilities planning to attend Internal Operations Committee meetings. Contact the staff person listed below at least 72 hours before the meeting. Any disclosable public records related to an open session item on a regular meeting agenda and distributed by the County to a majority of members of the Internal Operations Committee less than 96 hours prior to that meeting are available for public inspection at 651 Pine Street, 10th floor, during normal business hours. Public comment may be submitted via electronic mail on agenda items at least one full work day prior to the published meeting time. For Additional Information Contact: Julie DiMaggio Enea, Committee Staff Phone (925) 335-1077, Fax (925) 646-1353 julie.enea@cao.cccounty.us INTERNAL OPERATIONS COMMITTEE 3. Meeting Date:11/03/2014 Subject:RECORD OF ACTION FOR SEPTEMBER 8, 2014 IOC MEETING Submitted For: David Twa, County Administrator Department:County Administrator Referral No.: N/A Referral Name: RECORD OF ACTION Presenter: Julie DiMaggio Enea, IOC Staff Contact: Julie DiMaggio Enea (925) 335-1077 Referral History: County Ordinance requires that each County body keep a record of its meetings. Though the record need not be verbatim, it must accurately reflect the agenda and the decisions made in the meeting. Referral Update: Attached for the Committee's consideration is the Record of Action for its September 8, 2014 meeting. Recommendation(s)/Next Step(s): Staff recommends approval of the Record of Action for the September 8, 2014 IOC meeting. Fiscal Impact (if any): None. Attachments Record of Action for September 8, 2014 IOC Meeting INTERNAL OPERATIONS COMMITTEE RECORD OF ACTION FOR September 8, 2014 10:30 A.M. 651 Pine Street, Room 101, Martinez Supervisor Karen Mitchoff, Chair Supervisor Candace Andersen, Vice Chair Present: Karen Mitchoff, Chair Candace Andersen, Vice Chair Staff Present:Julie DiMaggio Enea, Staff Attendees: Joe Doser, Environmental Health Tom Geiger, Assistant County Counsel David Gould, PW Purchasing Services 1.Introductions 2.Public comment on any item under the jurisdiction of the Committee and not on this agenda (speakers may be limited to three minutes). No public comment was offered. 3.Staff recommends approval of the Record of Action for the August 4, 2014 IOC meeting. The Record of Action for the August 4, 2014 meeting was approved as presented. AYE: Chair Karen Mitchoff, Vice Chair Candace Andersen Passed 4.CONSENT to suspend further work on the development of a waste hauler ordinance until the update of the Environmental Health Division's fee schedule is completed, as requested by the Health Services Department. The Committee agreed to suspend further consideration of the waste hauler ordinance referral for 60 days to permit the Environmental Health to complete the update of its fee schedule, at the conclusion of which Environmental Health will report back to the Committee on the status of the waste hauler ordinance. Environmental Health staff validated that the County is coordinating its fees and permitting requirements with other local solid waste authorities. County Counsel clarified that the issue that is complicating the development of a waste hauler ordinance is the enforcement element of the ordinance. Staff expressed its intent to hold a discussion involving Environmental Health, the Sheriff, and County Counsel to discuss the best method for enforcement of the ordinance. AYE: Chair Karen Mitchoff, Vice Chair Candace Andersen Passed 5.ACCEPT annual report prepared by the Public Works Department on the County's Local Bid Preference Program. The Committee accepted the Local Bid Preference Program Annual Report and directed Public Works staff to schedule a brief presentation of the report at a future Board of Supervisors meeting. Supervisor Mitchoff specifically requested that the report identify what is the economic multiplier effect of reinvesting County dollars in locally provided services and to what extent sales tax dollars are going to out-of-county/state corporate headquarters vs. intra-county businesses. AYE: Chair Karen Mitchoff, Vice Chair Candace Andersen Passed 6.The next meeting is currently scheduled for October 6, 2014. The Committee rescheduled the October 6 meeting 9:30 a.m. AYE: Chair Karen Mitchoff, Vice Chair Candace Andersen Passed 7.Adjourn For Additional Information Contact: Julie DiMaggio Enea, Committee Staff Phone (925) 335-1077, Fax (925) 646-1353 julie.enea@cao.cccounty.us INTERNAL OPERATIONS COMMITTEE 4. Meeting Date:11/03/2014 Subject:NOMINATION TO THE HAZARDOUS MATERIALS COMMISSION Submitted For: William Walker, M.D., Health Services Director Department:Health Services Referral No.: IOC 14/5 Referral Name: Advisory Body Recruitment Presenter: Michael Kent, Hazmat Ombudsman Contact: Michael Kent 925.313-6587 Referral History: In 2013, IOC reviewed Board Resolution Nos. 2011/497 and 2011/498, which stipulate that applicants for At Large/Non Agency-Specific seats on specified bodies are to be interviewed by a Board Committee. The IOC made a determination that it would conduct interviews for At Large seats on the following bodies: Retirement Board, Fire Advisory Commission, Integrated Pest Management Advisory Committee, Planning Commission, Treasury Oversight Board, Airport Land Use Commission, Aviation Advisory Committee and the Fish & Wildlife Committee; and that screening and nomination fill At Large seats on all other eligible bodies would be delegated each body or a subcommittee thereof. Referral Update: In March 2014, the Board of Supervisors approved the reassignment of Business #2 Industrial Association Alternate seat incumbent Matt Buell to the Business #2 Industrial Association regular seat, thereby vacating the Alternate seat. The Hazardous Materials Commission now nominates Jack Bean for appointment to the Alternate seat to complete the unexpired term ending on December 31, 2017. Recommendation(s)/Next Step(s): APPROVE nomination of Jack Bean for appointment to the Business # 2 Alternate - Industrial Association seat on the Hazardous Materials Commission to complete the unexpired term ending on December 31, 2017. Fiscal Impact (if any): No fiscal impact. Attachments HMC Transmittal for Jack Bean Nomination Letter of Nomination from IACCC Candidate Application_Jack Bean_HazMat Cte Members: George Smith, Chair, Rick Alcaraz, Don Bristol, Matthew Buell, Henry Clark, Lara DeLaney, Frank Gordon, Fred Glueck, Steven Linsley, Jim Payne, Ralph Sattler, Leslie Stewart, Don Tatzin 597 Center Ave., Suite 200 Martinez, CA 94501 (925) 313-6712 CONTRA COSTA COUNTY HAZARDOUS MATERIALS COMMISSION September 19, 2014 MEMO To: Internal Operations Committee From: Michael Kent, Executive Assistant to the Hazardous Materials Commission Re: Appointment Recommendations to the Hazardous Materials Commission The Hazardous Materials Commission was established in 1986 to advise the Board, County Staff and the mayor’s council members, and staffs of the cities within the County, on issues related to the development, approval and administration of the County Hazardous Waste Management Plan. Specifically, the Board charged the Commission with drafting a Hazardous Materials Storage and Transportation Plan and Ordinance, coordinating the implementation of the Hazardous Materials Release Response Plan and inventory program, and to analyze and develop recommendations regarding hazards materials issues with consideration to broad public input, and report back to the Board on Board referrals. The bylaws of the Commission provide that the Business Seat #2 Alternate be nominated by the Industrial Association, screened by the Internal Operations Committee and appointed by the Board of Supervisors. This seat was declared vacant by the Board of Supervisors and posted by the Clerk of the Board for 10 days on March 25, 2014 (Item C.26). The Industrial Associate had nominated Jack Bean to fill this seat. Their letter of nomination and Mr. Bean’s application are attached. INTERNAL OPERATIONS COMMITTEE 5. Meeting Date:11/03/2014 Subject:UPDATE ON PROPERTY ASSESSED CLEAN ENERGY (PACE) FINANCING DISTRICTS Submitted For: John Kopchik, Interim Director, Conservation & Development Department Department:Conservation & Development Referral No.: IOC 14/19 Referral Name: PACE Financing Districts Presenter: Jason Crapo, County Building Official Contact: Jason Crapo (925) 674-7722 Referral History: California law allows cities, counties, and other authorized public agencies to establish voluntary financing districts to facilitate energy and water efficiency improvements to existing residential and commercial properties. Such financing is commonly referred to as Property Assessed Clean Energy (PACE) financing. Once established, property owners within the boundaries of such a district can opt to borrow funds from the district to make energy efficiency improvements, and repay the funds in installments on their property tax bill. PACE financing districts represent a form of lending activity that can generate both environmental and economic benefits to County residents. However, the extent of these benefits is uncertain because PACE financing is relatively new and the degree to which it might be utilized by property owners is unknown. Furthermore, because of regulatory intervention by the federal government to discourage the use of PACE financing, such programs carry potential risks and costs. Therefore, the County should carefully review the design of such programs before authorizing them to become operational. On June 22, 2010, the Board of Supervisors adopted Resolution No. 2010/331 authorizing the formation of a PACE financing district for the CalforniaFIRST program, a partnership between a private financial services firm called Renewable Funding and the joint powers authority, California Statewide Communities Development Authority (CSCDA), of which Contra Costa County is a member. CSCDA is a public agency having the legal authority to establish a PACE financing district within the County. Shortly thereafter, however, the Federal Housing Finance Agency (FHFA) issued a statement advising Fannie Mae and Freddie Mac to avoid buying mortgages with PACE assessments and hinted at more drastic actions, such as finding PACE homeowners in default under their mortgages. These actions stalled the development of residential PACE programs throughout most of the State. Many developments related to clean energy financing have occurred since the Board's resolution to join CaliforniaFIRST in 2010. These developments, which are discussed throughout this report, include: regulatory intervention by the federal government with consequential prohibitions and prospective negative actions, lawsuits challenging this federal intervention, in which the federal government's right to intervene was upheld, changes to State law expanding the authority to form and operate such financing districts, the establishment of a State-funded loan loss reserve for PACE loans, the emergence of additional firms proposing to operate Clean Energy Financing Districts within the county, and the emergence of conventional financing specifically for energy retrofit projects. In light of the rapidly changing landscape of developments in energy retrofit financing, the Board of Supervisors, on August 14, 2012, referred to the IOC a re-evaluation of establishing PACE financing districts within the county. The matter was taken up by the IOC in December 2012, but as new information became available regarding legal and federal regulatory issues, Supervisor Mitchoff, who introduced the matter to the Board for study, decided to withdraw her committee referral. Resolution in 2013 of the lawsuit filed by the State of California et al vs. FHFA, in favor of the FHFA, and also the establishment by the State of a loan loss reserve for PACE loans, have revived interest in offering PACE lending as an option to residential property owners within the county. The Board on September 9, 2014 referred PACE district financing to the IOC for further study and recommendation, to consider recent developments on this issue. District Formation and Property Owner Participation State law allows for the formation of a PACE district either under the Improvement Act of 1911 as amended by AB 811 or the Mello-Roos Community Facilities Districts Act of 1982 as amended by SB 555, for the purpose of financing energy or water efficiency improvements to existing residential and commercial properties. Once established, the district would raise capital either through selling bonds or securing financing from banks or other lenders. The raised capital would be made available to finance energy efficiency improvements on private property. If the County were to establish a PACE district, property owners within the district boundary could voluntarily opt into the district by entering into a contract with the County. By entering into such a contract, a property owner would be able to borrow funds from the district to construct energy or water efficiency improvements. The loan would be repaid in installments collected on property tax bills. If the property owner were to default on the loan, the County would have the authority to foreclose on the property to collect the outstanding balance. Demand for PACE Financing Uncertain PACE financing benefits property owners by providing an additional source of capital to fund energy efficiency improvements. Such lending activity also has the potential to produce indirect public benefits that are consistent with County policy objectives. Improved energy efficiency on private property reduces greenhouse gas emissions and the associated negative impacts of climate change, consistent with the County’s Climate Action Plan. Construction of energy and water efficiency improvements on private property also stimulates the local economy, expanding employment and increasing tax revenue for the County. However, the extent to which PACE financing may generate public and private benefits within the County is unknown. PACE is a relatively new financial product, and the market for the services offered by PACE districts is still evolving. Furthermore, these districts will be in competition with other established forms of energy efficiency financing, such as equipment leasing and other established forms of energy efficiency financing, such as equipment leasing and conventional bank lending, that offer competitive financing terms (see examples in Attachments F and G). As the housing market recovers and home owners gain equity in their property, more will qualify for conventional financing, such as an equity line of credit. In light of the uncertain public demand for PACE financing, and the sensitivity of the free market, which is beginning to respond with competitive conventional financing options that do not conflict with FHFA regulations, the County should be judicious in expending its resources to form and operate a PACE program. Federal Intervention to Regulate Residential PACE In 2010, soon after the County adopted a resolution to participate in CaliforniaFIRST, the FHFA intervened and took the position that PACE financing represents a form of lending that is detrimental to the mortgage industry, and directed Fannie Mae and Freddie Mac to restrict their purchase of mortgages where PACE districts exist (Attachment A). Fannie Mae and Freddie Mac subsequently stopped purchasing mortgages for properties that had been opted into PACE districts (Attachment B). The federal government’s assertion that PACE financing has an adverse impact on mortgage lenders results from the senior position the PACE lien has over other debts on the property, such as a mortgage or other forms of private lending. The federal government argues that the senior position of a PACE lien undermines the credit value of other debt on a property, such as a mortgage. FHFA’s actions have created negative financial impacts for property owners with PACE loans. Due to FHFA’s actions and resulting decisions by Fannie Mae and Freddie Mac to cease purchases of mortgages for properties with PACE liens, home owners often have been required to pay off their PACE loans in order to obtain new mortgage financing on their property, as is typically necessary to sell a home or refinance an existing mortgage. For residential properties, this requirement countervails one of the primary features of PACE financing, which is that the loan obligation attaches to the property rather than the initiating property owner. Referral Update: Since our last report in December 2012, several new developments have occurred. State and Federal Officials in Continuing Disagreement Regarding PACE Shortly after FHFA intervened to regulate residential PACE lending in 2010, the State of California and several local jurisdictions, including Sonoma County, litigated against the federal government over its regulatory intervention into this area, arguing that FHFA had not followed the required rulemaking process for establishing such regulation. The State ultimately lost this lawsuit in federal court in 2013. Failing to overturn FHFA’s position in court, the State has subsequently attempted to address FHFA’s concerns regarding the negative impacts of PACE on the mortgage industry by establishing a PACE Loss Reserve Program to insure mortgage lenders against financial losses resulting from PACE liens (Attachment C). The creation of California’s Loss Reserve Program has resulted in renewed interest in residential PACE lending throughout the state. This program represents a positive step by the State to provide appropriate regulation of the emerging PACE industry to ensure basic standards of lending criteria and program effectiveness are being achieved. However, despite these efforts, FHFA remains opposed to residential PACE lending and continues to prevent Fannie Mae and Freddie Mac from purchasing mortgages on properties with a PACE lien. This position was reiterated in a recent letter from the Director of FHFA to Governor Brown (Attachment D). The ongoing dispute between the State of California and FHFA places local jurisdictions that implement residential PACE programs and consumers who subordinate their mortgage loan with a PACE loan at risk of potential negative action by FHFA. The magnitude of this risk is unknown. However, FHFA’s General Counsel has recently sent letters to county counsels in California, such as the County Counsel for Santa Clara County (Attachment E) requesting that counties participating in PACE disclose the potential adverse implications of PACE loans to property owners. City Participation in PACE Programs Most of the PACE lenders do not require formation of a county PACE financing district as a prerequisite for city participation. CalforniaFirst recently announced that in early 2015 it will, likewise, offer individual cities the option to participate in CaliforniaFirst without participation by the county in which the city is located. Free Market is Responding For both the lease and purchase of solar panels for residential properties, other types of private financing are emerging that will be in direct competition with PACE financing (Attachment F). While qualifying for PACE financing is easier than conventional financing, the interest rates for PACE financing are generally 1-2% higher than comparable conventional financing and are repaid in fewer installments and possibly over longer periods of time. For illustration, a comparison of a $25,000 loan under both PACE and conventional financing is shown below: PACE Conventional Loan Amount $25,000 $25,000 Loan Period in Years 20 20 # Payments per Year 2 12 Annual Percentage Rate 7 5 Total Interest Cost $21,827.28 $14,597.34 Recommendation(s)/Next Step(s): The potentially significant environmental and economic benefits of PACE financing suggest the County may want to consider participating in such programs. However, ongoing efforts by FHFA to discourage mortgage lending on residential properties with PACE loans requires that the County act prudently in considering the formation and operation of PACE financing districts. Should the Board decide to permit PACE financing within the county unincorporated area, each proposal to form a PACE district should be evaluated by County staff to ensure the benefits of PACE financing can be made available while also protecting the interests of the County and the public. Factors such as a PACE program's participation in the State's Loss Reserve Program, disclosure of potential negative impacts to participating property owners resulting from federal regulatory action, and agreement to release the County from liability associated with operation of the program should all be considered as preferred program elements. To this end, we recommend that entities interested in forming PACE financing districts within the To this end, we recommend that entities interested in forming PACE financing districts within the unincorporated area of the county submit an application with their proposal to the Department of Conservation and Development (DCD), which will serve as the central point of contact for applicants and would work closely with other County departments, including County Counsel, the County Auditor-Controller and the County Treasurer Tax-Collector, in the review of applications. DCD proposes to collect an initial deposit of $5,000 from each applicant to pay for County staff time and other costs incurred by the County to review an application. Any portion of this deposit not spent will be returned to the applicant at the conclusion of the application process. Staff will then make appropriate recommendations to the Board of Supervisors once review of an application is completed. Fiscal Impact (if any): None at this time, as this report is informational. The staff recommendation anticipates that should the Board want to implement a PACE program(s), County costs would be covered by application review fees. Attachments Attachment A FHFA Statement Attachment B Fannie Mae Statement Attachment C Program Summary Attachment D Letter to Gov. Brown Attachment E_FHFA Letter to Santa Clara County Counsel Attachment F_SolarCity news article 10-8-14 Attachment G EMPower Program Federal Housing Finance Agency Constitution Center 400 7th Street, S.W. Washington, D.C. 20024 Telephone: (202) 649-3800 Facsimile: (202) 649-1071 www.fhfa.gov August 20, 2014 Orry P. Korb County Counsel Office of County Counsel for County of Santa Clara 70 West Heading Street, East Wing, 9th Floor San Jose, CA 95110-1770 RE: PACE Lending Dear Mr. Korb: The Federal Housing Finance Agency has been advised that a number of communities in Cahfornia, including yours, recendy announced plans to move forward with programs to approve Property Assessed Clean Energy (PACE) loans with a first Hen on residential properties. Consequendy, I am writing to remind you that Fannie Mae and Freddie Mac do not purchase mortgages for either home sales or re-financings that are encumbered with first Hen PACE (or similar program) loans. This pohcy has been in place since 2010 and was reaffirmed by FHFA in 2014. The Federal Home Loan Banks, which also are regulated by FHFA, have been directed to protect their interests in the coUateral they accept for advances, which could become subject to PACE encumberances. FHFA urges your community to inform potential borrowers of the pohcies of Fannie Mae and Freddie Mac and to provide them the web addresses that homeowners can utilize to determine whether their loan is currendy held or guaranteed by one of the Enterprises. These websites are https://knowyouroptions.com/loanlookup for Fannie Mae and for Freddie Mac https: / / ww3.freddiemac.com/loanlookup /?intcmp=LLT-HPstepl. Thank you for your attention in this matter. If you have any questions, you may contact me direcdy at 202 649 3050. With aU.best wishes, I am Sincerely, General Counsel By Jonathan Fahey0 COMMENTSAssociated PressPOSTED: 10/08/2014 08:57:08 AM PDT | UPDATED: NAN YEARS AGO(/portlet/article/html/imageDisplay.jsp?contentItemRelationshipId=6295122)In this undated photo provided by SolarCity, workers install solar panels on the roof of a home. SolarCity will begin offering loansto homeowners for rooftop solar systems, a move that analysts say could reshape the market for rooftop solar and propel its rapidadoption. (AP Photo/Courtesy SolarCity) ( Uncredited )NEW YORK -- SolarCity will begin offering loans to homeownersfor solar systems, a move that industry analysts say could reshapethe market for rooftop solar and propel its rapid adoption.Most current rooftop solar deals involve a lease or an agreement tobuy power over a period of time, but the company owns the panels.San Mateo-based SolarCity's loan will allow customers to own theirsystems and still pay less for electricity, a simpler and cheaperprospect."The value proposition is becoming clearer and less complicated for consumers," says PatrickJobin, an analyst at Credit Suisse. "Solar is going mainstream."Other solar companies have begun to offer loans in recent months, but SolarCity is the nation'sbiggest installer, and its loan has a twist that may convince reluctant customers to sign up: Thecustomer pays the loan back based only on the electricity that the panels produce.The growth of rooftop solar has been propelled by financing schemes that allow customers to havesolar panels installed for little or no money down. The solar company installs the system, andAlternative energy, cleantechand related topics.(http://www.mercurynews.com/green-energy)SolarCity to offer solar loans to homeowners, which could juice market - ContraCostaTimes.com http://www.contracostatimes.com/business/ci_26686359/solarcity-offer-solar-loans-homeowne...2 of 610/9/2014 12:31 PM Advertisementcustomers either lease it or enter an agreement to pay for the power over a 20-year period. Thecombined price that customers pay to the solar company and the electric utility is less than whatthe customer paid for power without solar panels.Those plans were rolled out in 2007 and 2008by SunRun, SolarCity, Sungevity and others.Last year, two-thirds of all solar systems wereinstalled under those types of plans, accordingto Shayle Kann, senior vice president of GTMResearch, an analysis and consulting firm.But they are more confusing than a loan andsome states do not allow third-party ownershipof solar panels.Lyndon Rive, SolarCity's CEO, said in aninterview that many customers say they'drather own, but then sign up for a lease becauseit has been the only way to get a system without high upfront costs."Ownership is an important factor for our customers," he says.The company can offer the loans now because it has better access to financing, it can predict theperformance of panels well, and it has decreased installation costs dramatically, Rive says.The loans will be offered at 4.5 percent over 30 years. But customers won't pay a fixed amountevery month. Instead, they will pay only for the power the panels produce. If the panels producemore in given month, customers will pay their loan off faster. But because the solar power ischeaper than power from the electric utility, it means the customer's monthly electricity cost wouldfall further.If the panels produce less, the customer pays less to SolarCity, and, in theory, will not have to paythe loan off in full. But SolarCity is confident that it can predict the output of the panels over 30years well enough to ensure the loan will be repaid."It takes the production risk of the system off the customer's plate and puts it on Solar City's,"Kann says.Another important factor that could make these loans more attractive is how the federal tax creditfor solar will be handled.With a solar lease, the credit of 30 percent of the cost of the system goes to the solar company orits financiers. With a loan, it goes to the customer. Assuming the customer uses the tax credit,$9,000 for a $30,000 system, to help pay down the loan, customer power prices would fallsignificantly.For example, Rive calculates that a California solar loan customer would pay the equivalent of 16cents per kilowatt-hour in the first year, but then the equivalent of 11 to 12 cents in the second yearand beyond if the tax credit is used to pay down the loan. The average electricity rate for aCalifornia residential customer this year through July was 15.9 cents per kilowatt-hour, accordingto the Energy Department.Rive says he expects that by the middle of next year more than half of SolarCity customers willchose to go with a loan instead of a lease.Search by keyword or ZipWalnut Creek Local Guide(http://mylocal.contracostatimes.com/)Featured BusinessesCarpet One Livermore(http://mylocal.contracostatimes.com/livermore-CA/house-and-home/home-furnishings/Carpet-One-Livermore-925-455-9210)Able Hearth & Home(http://mylocal.contracostatimes.com/antioch-CA/house-and-home/household-appliances/Able-Hearth-and-Home-925-586-0378)Wilson Property Mgmt(http://mylocal.contracostatimes.com/pleasanton-CA/business-services/management-services/Wilson-Property-Mgmt-925-462-1101)City of Sacramento(http://mylocal.contracostatimes.com/sacramento-CA/community/government-office/City-of-Sacramento-916-264-5011)st. 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Here's Why.The Motley FoolSocial Security: HowTo Get $1,000 More aMonthMoneynewsControversial "SkinnyPill" Sweeps theNationFit Mom DailyHow New iPads areSelling for Under $40Lifefactopia0 Comments SolarCity to offer solar loans to homeowners, which could juice market - ContraCostaTimes.com http://www.contracostatimes.com/business/ci_26686359/solarcity-offer-solar-loans-homeowne...5 of 610/9/2014 12:31 PM Copyright © 2014 Contra Costa TimesCopyright (http://www.contracostatimes.com/copyright)Privacy Policy (http://www.contracostatimes.com/portlet/layout/html/privacypolicy/privacypolicy.jsp?siteId=571)Site Map (http://www.contracostatimes.com/site-map)MNG Corporate (http://www.medianewsgroup.com/Pages/default.aspx)(http://www.contracostatimes.com) Sponsored bySolarCity to offer solar loans to homeowners, which could juice market - ContraCostaTimes.com http://www.contracostatimes.com/business/ci_26686359/solarcity-offer-solar-loans-homeowne...6 of 610/9/2014 12:31 PM emPower Central Coast Program Information This program was initially developed by the County of Santa Barbara to help homeowners countywide overcome obstacles to making energy saving improvements to their homes. Now they are also partnering with the Counties of San Luis Obispo and Ventura to offer program services throughout the Tri County region. By making home upgrade projects easier and more affordable through incentives, financing, qualified contractors and expert energy advice, emPower helps homeowners be more comfortable in their homes and lower utility bills. There are several important aspects of this program: · Free Energy Coach home consultation and assistance throughout your upgrade · Utility rebates up to $6,500 to lower project costs · Lower interest, longer term unsecured loans by local credit unions* o Rates starting at 5.90% (fixed, vary based on creditworthiness) o Loan size $1,000-$25,000 o Terms up to 15 years o No equity or collateral required o No pre-payment penalties (can use pre-payment for one-time reamortization) o No closing costs or fees o Approval time in 1 day or less · Directory of qualified contractors with advanced skills to get results · Friendly customer service to answer questions and suggest other useful resources (i.e. tax credits, income qualified programs) · Community workshops and educational events to help the community learn how energy improvements can help them An Opportunity to Prove a Concept and Scale Up By spreading out upfront costs, credit enhancement financing programs help address a key obstacle homeowners face when considering energy upgrades to their home. Programs like emPower allow more homeowners to take advantage of the many benefits of home performance, thereby accelerating progress towards important local, State and national goals related to energy and green economic growth. While effective, CE programs were not designed as a permanent solution, but rather a first step in phased approach to market transformation. These programs provide a safer opportunity for otherwise hesitant lenders to enter a new market. The experience gained by a sufficient sampling size of participating lenders will produce data that can inform the future of energy efficiency financing. It is hoped that this data will prove that energy efficiency loans are under demand, can result in real energy savings and low default rates, and can therefore perform better than conventional asset classes. If this occurs, it is expected that lenders will no longer need government enticement or subsidy to continue offering energy efficiency financing at favorable terms and rates for consumers, and that other primary lenders will enter the market, spurring natural and healthy competition. It is also expected that secondary markets will become comfortable purchasing energy efficiency loan assets, which is key to scalability. CE programs have begun to ignite an otherwise stalled market, but it is unlikely that government funds will be available to enhance private credit for every home upgrade in the nation. It is the job of early programs to prove market viability and set the stage for the private sector to offer lasting, attractive, mainstream products without subsidy. If revenue streams are identified, local govs can continue to serve as important leaders and partners in comprehensive program delivery. Appropriate Roles Support Sustainable Market Transformation Lenders lend private capital, service loans, hold and transfer CE funds, collect required documentation and track loan performance. The lending partnership offers a valuable opportunity for lenders to do something positive for their local community, create new lines of business, and gain the credibility through County partnership. Local government identifies lenders, establishes local, customized lending partnership agreement to make the most of public funds, develops effective procedures, and administers critical program delivery functions including customer service, contractor recruitment, training and management, driving demand through extensive outreach and education, and free on-site advising through expert Energy Coaches. The County, as a neutral public agency with a community mission, is well positioned to be a trusted messenger. It also has the proximity to adequately implement a new program. Working with local lenders keeps the investment circulating in the local economy, creating additional stimulus. Contractors complete sales, perform testing and install upgrades. Participating contractors enjoy the credibility of County and utility program qualification and marketing to drive demand their way, meaning more work and more local jobs. Utilities determine appropriate energy efficiency measures and metrics, administer quality control and project verification, and pay a rebate to homeowners based on savings. More Than Just a Loan It is important to note that effective financing programs involve far more than just financing products. Loan products must be connected to programmatic infrastructure that can establish eligible measures, verify projects, calculate energy and loan data, and drive demand through marketing and contractor engagement efforts. A Better Financing Option for Homeowners Through a partnership with CoastHills Federal Credit Union and Ventura County Credit Union, emPower gives homeowners an affordable way to overcome the upfront cost of energy –saving home improvements. This local partnership provides more attractive terms and rates than otherwise available in the current unsecured financing market. Long terms: Up to 15 years, with no prepayment penalty Low rates: Starting at 3.90% Accessibility: Must have over 590 FICO and meet underwriting criteria. Homeowners can access up to $25,000 in financing. Convenience: Unsecured products are quick and easy, with 20 minute pre-approval available 24- 7. Participating contractors steward the process, built to be streamlined with utility rebates. Real outcomes: Energy measurement and project verification enables good choices and real savings. Leveraging Private Resources In 2011, the County dedicated $1 million in federal stimulus grant funds to a loan loss reserve (LLR) available to cover 90% of a default loss, up to 5% of the loan portfolio. In exchange, lending partners agreed to facilitate up to $20M in unsecured loans for County residents at longer terms and lower rates. In 2014, the program received additional stimulus and ratepayer dollars and expanded the program to Ventura and San Luis Obispo Counties, while piloting an interest rate buy down. The program currently has $3M in credit enhancements (CE) available to support up to $56M in emPower loans. Utility incentive programs also add tremendous value through utility rebates and project verification. Big community impact with little public investment By offering $3M in credit enhancements to local credit unions for home energy financing, Santa Barbara County created tens of millions of dollars in value for Santa Barbara, Ventura and San Luis Obispo Counties, while achieving lasting outcomes for homeowners, the local economy and environment. Why does a local credit enhancement (CE) financing program make sense? emPowering a Lasting Energy Improvement Market With Credit Enhancements and Credit Unions Program Background •County program designed to help owners and builders overcome obstacles to improving existing buildings –County awarded ARRA funding in 2010, program launched in Nov 2011 –Expanded to Ventura and SLO Counties in 2014 with ARRA and IOU funding •Goal: to lower energy use and create jobs •Vision: a sustainable energy improvement market that can support efficient, safe and comfortable buildings throughout the Central Coast region Program Background: Homeowner Services Incentives up to $6,500 Qualified contractors Low-interest unsecured loans Personalized customer support Community education Onsite expert energy advice Program Background: Contractor Services Tool lending library Trainings and enrollment Personalized support and input Exposure and lead generation Mentorship Retrofit rewards Getting Started •First, let emPower’s Energy Coach and Participating Contractors help you select the best qualifying upgrades for your home •The emPower advantage: •An Energy Coach site visit is free •Participating Contractors are specially trained in home efficiency •Participating Contractors handle all paperwork •Eligible upgrades are qualified for incentives and financing ELIGIBLE UPGRADE OPTIONS DETAILS UTILITY INCENTIVES Whole House. Install 3 or more measures. Opt to add solar PV. Up to $2,500 Whole House. Install 2 or more measures. Opt to add solar PV. Up to $4,500 $6,500 Use sun’s warmth to heat water. Opt to add solar PV. Up to $2,719 30% tax credit Select one or more measures: hvac, insulation, or water heating Varies by measure Program Background: Financing •Rebates aren’t always enough to achieve affordability •Loans must be affordable, accessible and convenient •Credit enhancements engage lenders in making home energy loans –County offers loan loss reserve and interest rate buy down –Selected CoastHills and Ventura County Credit Union (leveraging private capital 20:1) $56M $2.8M Program Background: Financing Attributes emPower loan HELOC/Refi Other unsecured Loan Type Unsecured Secured Unsecured Starting rate 3.90% (fixed)3-6% variable 13-30% Loan size $1,000 - 25000 90% Loan to Value $5-15,000 Term 15 years 5- 30 years 5 or less Collateral None required Home None required Equity required No Yes No Closing costs No Maybe No Fees 0 Yes Maybe Prepayment penalties No Maybe Maybe Approval time 1 day or less 3+ weeks 1 day or less Minimum FICO 590 varies varies Program Background: Financing Combining rebates and low-cost local financing make home energy improvements affordable Recent Program Enhancements •Tri-County expansion (SLO and Ventura) = 315,000 sf homes •Interest buy down to SB County residents (starting at 3.9%) •Progress payment option •Prepayment reamortization option •New Eligible Energy Efficiency Measures Home Upgrade Loan Success Story Ortega family from Santa Maria Issues in the home: •House was freezing or boiling hot •Starting to smell mold and see dry rot •Air and water coming in through doors •Leaking, single paned windows didn’t close Obstacles: •Traditional financing had high interest rates and short terms, or tightened lending restrictions End results: •Received $3,000 utility incentive •31.5% model annual energy savings = $351 monthly cost savings •Paying $225/month with emPower Home Upgrade Loan •Could tackle a larger project instead of “micky mouse” patches and repairs: -Whole House Air Sealing - Roof & Attic Insulation -Wall Insulation - Sealed & Insulated HVAC Duct System - Energy Efficient Windows - Insulated How Water Pipes “All the things we upgraded pointed toward energy efficiency but also solved practical problems. We are believers now. Our home is comfortable instead of being an oven where you just want to escape. So many homes in our area could use the exact same types of upgrades. It’s really a quality of life issue.” Lessons Learned •Financing alone is not a silver bullet •Credit Unions are a good fit •Market is transforming, but lenders still need subsidy •Project eligibility is key to volume (i.e. solar only, single measures), but funding constraints limit •Must measure energy saving to demonstrate program outcomes •Build ongoing relationships with lenders and contractors •Contractor cash flow and capacity are still a challenge •Don’t sell loans, solve problems Make Your Home More Comfortable & Energy Efficient with emPower This Program is funded by California utility ratepayers and administered by Southern California Gas Company, Southern California Edison and Pacific Gas & Electric under the auspices of the California Public Utilities Commission. Incentives & Financing for Home Energy Upgrades ELIGIBLE UPGRADE OPTIONS DETAILS ELIGIBLE MEASURES INCENTIVES Home Upgrade Whole house. Install 3 or more measures eligible through Home Energy Upgrade program. Point-based incentive. Opt to add solar PV. HVAC, Water Heaters, Windows, Cool Roofs, Insulation, Air Sealing $1,000–$2,500 Advanced Home Upgrade Whole house. Install 2 or more measures eligible through Home Energy Upgrade Program. Incentive based on % of modeled energy usaage reduced. Opt to add solar PV. HVAC, Water Heaters, Windows, Cool Roofs, Insulation, Air Sealing $1,500–$6,500 Solar Water Heating Upgrade Install a solar water heater system eligible through the California Solar Initiatives Solar Thermal program. Opt to add solar PV. CSI-Thermal Approved Solar Water Heating System Up to $2,719 30% tax credit Simple Start Upgrade Select one or more energy efficiency measures eligible for utility rebates. HVAC, Water Heaters and Insulation Varies by measure/utility From small improvements to complete home energy upgrades, single-family homeowners can choose from the following upgrade options. Benefits of upgrading include: saving energy and resources, a more comfortable home, and improved indoor air quality. These upgrade options qualify for incentives from your utility provider and low-cost financing through the emPower program: To learn more visit emPowerSBC.org or call (805) 568-3566 Starting at For SB COUNTY RESIDENTS 3.9%Limited time only! LOW-INTEREST LOANS See reverse for details... Contact emPower at (805) 568-3566 or visit www.emPowerSBC.org • Interest rates start at 3.9%* • Financing amounts: $1,000-$25,000 • Up to 15-year term • Type of loan: unsecured • No home equity or collateral required • No prepayment penalties, fees or closing costs • Single-family detached home • Property located in Santa Barbara, San Luis Obispo or Ventura County • Work must be performed by an emPower participating contractor to install an eligible home upgrade project (see reverse for eligible upgrade options) emPower Financing Details Eligibility Requirements Interest rates starting at3.9%* Flexible Financing for Your Energy Efficiency Upgrades Easy, Affordable, Accessible You’ve picked your upgrades and know you’ll get incentives to reduce the overall cost of your project. But you’re struggling to find an affordable way to pay for the rest. emPower low-interest rate financing is specifically designed to help, so you can start your home upgrade project today! Lending Partners Contact us to get started today!• Find an emPower participating contractor • Get a free Energy Coach site visit How to Make Home Energy Upgrades with emPower 1 2 3 4 Choose Your Upgrades Contractor Helps You Apply for Utility Incentives and Financing (if needed) Install Upgrades Receive Funds and Enjoy the Benefits! *Limited time! (Rates usually start at 5.9%) Summation of some of the key program outcomes through Sept 2014 (Tri-County Expansion just took place in July 2014)