LAKEPORT, Calif. – Citing concerns for property owners, the Lakeport City Council on Tuesday night passed on a proposal to adopt a program for funding energy and water upgrades to commercial properties.
The council took no action to adopt the staff-recommended motion to adopt the program, which caused the proposal to die for lack of a motion.
Mark Akaba, who is acting as the city's engineer on an interim basis, took the proposed resolution authorizing the Property Assessed Clean Energy – or PACE – program to the council.
The California Enterprise Development Authority, or CEDA, program was proposed to be offered through Figtree Energy Financing.
“Currently, a multitude of cities and counties are participating in the program,” including the city of Clearlake and the county of Lake,” Akaba said.
Improvements such as solar, water and energy upgrades are funded through bond sales, which are in turn secured by assessments – or liens – levied on the properties, according to Akaba's report.
The assessments on the properties can be passed to the new property owner at the time of sale, he explained.
The resolution proposed to be completely nonexclusive, which would have allowed other PACE programs to operate within the city.
Mayor Kenny Parlet asked Akaba to describe projects that would fit into the program.
Akaba replied that solar power and energy conservation for commercial properties would qualify. He said there also are residential PACE programs but the one offered by Figtree was focusing on commercial properties and hadn't yet implemented a residential version.
Mayor Pro Tem Martin Scheel questioned if the city would have oversight capability, explaining that one of his big concerns was that Figtree could advertise itself as the only available program.
“Are there any provisions through CEDA that prevent that from happening?” Scheel said.
Akaba said he didn't know, explaining that Figtree emphasizes that its program is nonexclusive.
doesn't know
“Did Figtree approach us?” asked Scheel.
Akaba said the company approached City Manager Margaret Silveira. Silveira added that it had been some time since the contact initially was made.
Councilwoman Stacey Mattina asked if there were any Figtree representatives present. Akaba said no, explaining that Figtree is based in San Diego.
Mattina, who is a Realtor, said the program has “major red flags,” in particular, the liens that attach to property taxes.
She said major mortgage lenders Fannie Mae and Freddie Mac won't make loans when such PACE program liens are in effect, and have even threatened to recall loans when similar assessments are added to properties.
With those two lenders behind 90 percent of the loans made in Lake County, Mattina said she could see the assessments causing problems in the future.
She said she didn't know of anyone for whom the program would offer a huge benefit, but she knew of many who could be negatively impacted by it.
Mattina said legislation is being crafted to require such assessments to be junior financing in order to protect homeowners.
She noted that the assessments are “a lot different from a loan” because they are attached to property tax, and she questioned the benefit. “I would never put that on my property.”
Rather than taking action Tuesday, Mattina suggested the city wait and see what Fannie Mae and Freddie Mac will do about such programs. “I don't think we're missing out by not having the program right now.”
Silveira suggested the council approve the program for commercial properties only, but Mattina said there are other programs to assist with upgrades.
Mattina said she was concerned that property owners wouldn't look at all the options. “I don't know that it's the best thing for them.” She also noted that such programs had come to a halt a few years ago due to the concerns they raised.
Scheel suggested that the council could reconsider adopting such a program at a future time if a number of contractors approached the city and wanted to offer it.
“This just makes me feel uneasy,” he said.
Akaba noted that, in discussions with officials from the city of Clearlake and the county of Lake, the program isn't used often.
The council thanked Akaba for his work on the report but ultimately chose not to take staff's recommendation to approve the program.
Also on Tuesday, the council honored the winners of the city's inaugural Halloween coloring contest for local elementary school students, presented Finance Director Dan Buffalo with the Government Finance Officers Association's Distinguished Budget Award, approved reclassifying the utilities superintendent position to a slightly higher salary step in anticipation of an upcoming recruitment, and authorized amendments to the USDA water and sewer system projects.
Parlet said there was no action to report out of the hourlong closed session that preceded the regular meeting, during which the council had discussed labor and property negotiations, and potential litigation involving Steve Brookes, the former city attorney.
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Lakeport City Council decides against adopting PACE energy program
- Elizabeth Larson
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