Property Assessed Clean Energy PACE

Transcription

1 Property Assessed Clean Energy PACE

2 PACE Finance tool allowing for up-front private capital for building improvements facilitating clean energy improvements. Building related energy systems Mechanical systems Renewable energy systems (solar, thermal and photovoltaic)

3 Portion of energy project is paid back by special assessment Up to 20% of the appraised value of the property can be assessed. Many projects qualify for energy rebates in addition to the assessments. Assessments are biannual for a term of up to 15 years. Term is set relative to project payback term.

4 PACE assessments are requested by property owners, are not forced upon a property owner to pay for public improvements.

5 Minnesota Statute 429 Minnesota Statutes, Chapter 429 statutorily authorizes cities to finance public improvements through special assessments. Specifically for energy improvement programs, 429 allows cities to finance cost-effective energy improvements to certain single family, multifamily residential dwellings, or commercial or industrial dwellings through revenue bonds funded by special assessments.

6 Why statute matters: The State allows municipalities to issue Revenue Bonds to place assessments on individual properties. Problem: Revenue Bond process is time consuming, complicated and expensive. Projects less than $1 million are often not cost justified. Solution: If one entity can issue revenue bonds on behalf of all participating parties, economies of scale make sense.

7 The Saint Paul Port Authority Created first program to administer PACE Authorized issuance of $10 million in Taxable revenue bonds. Created a means of providing capital to early adopters of PACE financing. Individual municipalities can buy into the pool by entering an agreement with SPPA SPPA issues bonds in tranches covering all projects by all participants.

8 City of Minneapolis Entered into a Joint Powers Agreement with SPPA December 20, Designates SPPA as entity responsible for implementing and administering the program. City of Minneapolis is responsible for collecting special assessments necessary to pay debt service.

9 City of Minneapolis Charter City of Minneapolis has a charter specific to public purpose assessments where an assessment is being enforced for the good of a public purpose. It requires: A public hearing will be conducted. A public hearing notice will be published not less than 21 days before the public hearing is held. A public hearing notice will be mailed at least 14 days prior to the set date. The property owner has a right to appeal by serving a notice to the mayor or city clerk within 30 days after council adopts the assessment.

10 Why the charter matters: The charter was written for public works where an assessment is imposed on an individual property owner. Problem: The Charter adds an additional 30 days to the approval process which can delay the construction/purchase. Solution: The City of Minneapolis requests a waiver from individuals requesting an assessment waiving right to appeal.

11 How to apply for PACE in Minneapolis Apply directly to SPPA Pete Klein (651) Once feasibility and eligibility has been determined, projects will be forwarded to Minneapolis with: A signed application A waiver Bids and/or estimates of work being performed Acknowledgement of mortgage lien holder

12 City of Minneapolis (CPED) drafts public approval timeline (sample): Monday, March 9 Complete application to CPED Saturday, March 14 Public Hearing Notice published Wednesday, March 25 Agenda setting Tuesday, April 7 Community Development Committee holds public hearing and authorizes assessment Friday, April 17 Full City Council Approves resolution Tuesday, April 28 certified copy of the resolution can be obtained Waiver stops the clock on appeal process on April 17 th. Third party lenders need a resolution.

13 Assessment placed by Hennepin County By December 1 st of each calendar year, the City must submit to Hennepin County by project: A special assessment rate card A special assessment certification number Amortization Schedule Individual levy numbers Assessments are sent to Minneapolis twice annually, and remitted to the SPPA.

14 Longfellow Market 3815 East Lake Street Lighting, equipment $270,000 5 years

15 Elliot Park Lifesciences (Excelen) th Ave S Chilled water distribution system, insulation, reduction of heat with new controller $219, years

16 Miller Investments (Crankshaft Supply) 2726 Washington Ave North Installation of solar array Project cost $179,845 Rebate 59,850 2% Loan finance *28, CEE Loan *28, Owner s equity 63,570. Assessment amount * $56,425 9 years

17 Greenway Office st Avenue South Solar array $506,730 Rebate 304,080 Equity 103,150 Assessment *100, years

18 Other finance tools: SPPA Trillion BTU Program Center for Energy and Environment City of Minneapolis 2% Loan

19 Contact: Becky Shaw City of Minneapolis Community Planning and Economic Development 105 Fifth Avenue South 200 Minneapolis, MN Office: