The Bay Area Regional Energy Network (BayREN), in partnership with the U.S. Department of Housing and Urban Development (HUD), has developed the Local Government PACE Portal, a "one-stop shop" for local governments interested in allowing property owners to take advantage of PACE financing. This site includes introductory information about PACE (including a list of PACE providers in the nine Bay Area counties), outlines the steps necessary for making PACE available in your jurisdiction, and provides document templates to help staff prepare packets for presentation to local elected leaders.

Bay Area Regional Energy NetworkU.S. Department of Housing and Urban Development

For Local Governments

Administrative burden

PACE is a new and relatively complex financing mechanism that requires both significant expertise for designing the program and ongoing organizational capacity to manage. Existing agency staff need to have the resources to market and conduct outreach to support the PACE program, as well as to be able to administer the requisite government functions such as coordination with the recorder’s office and treasurer/tax collector; these agencies—must be "on board" and ready to integrate PACE assessment financing into their standard processes. Jurisdictions with concerns about capacity and internal coordination may find opting into an existing program more appealing.

Performance measurement and risk mitigation

Although opting into an existing program or programs may be simpler, jurisdictions should still consider the level of control and transparency needed to ensure the program meets expectations and minimizes potential risk.

Performance measurement is crucial for maximizing the effectiveness of any program. Jurisdictions need to identify the specific deliverables, outcomes, and benchmarks they'd like to achieve; identify how success will be measured; and ensure that they will have access to this performance data, whether they are responsible for collecting it or it will come from the PACE program administrator(s).

PACE Providers are well-acquainted with managing risk, but jurisdictions should consider steps to ensure that all of their concerns are explicitly addressed. These may include property owner education and consumer protection as well as fiduciary risk to the municipality itself. Determining whether the PACE program participates in California's PACE Loss Reserve Program, or has some other risk mitigation vehicles in place, is also important.

Regional Collaborative Services Agreement (RCSA) — Best Practices and Consumer Protections

Following in the steps of the efforts of Sonoma and Marin counties, ABAG has entered into a RCSA with PACE providers active in the Bay Area. The RCSA is intended to ensure consistent application of key programmatic elements ("best practices") considered to be critically important for local government partners. These include: consumer protections and disclosures; local government risk mitigation and indemnification; co-marketing complementary energy efficiency programs; contractor and project quality assurance; and performance tracking, data, and reporting.

ABAG has executed the RCSA with Western Riverside Council of Governments (HERO program), PACE Funding Group LLC, Ygrene Energy Fund California LLC, CounterPointe Energy Solutions LLC (AllianceNRG Program), and Figtree. Member jurisdictions can sign an "ABAG Member Acknowledgement Form" to the RCSA in order for these terms to apply to PACE activities in their community, and return the executed Acknowledgment to ABAG. This procedure will result in greater efficiency and help streamline the process for ABAG member jurisdictions.

Local jurisdictions will still need to pass required resolution(s) to join a residential PACE program for their own city or town. While opting into an existing program or programs is simpler than setting up your own Program, you are giving up some control over program activities. With the RCSA, jurisdictions can have confidence that Programs will adhere to high program standards; provide relevant data for local program performance tracking; and are minimizing risk for community members and the local agency.

About the PACE Loss Reserve Program

In 2013, Senate Bill 96 directed the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) to develop the PACE Loss Reserve Program (the Program) to mitigate the potential risk to mortgage lenders associated with residential PACE financing. The $10 million Loss Reserve will make first mortgage lenders whole for any losses in a foreclosure or a forced sale that are attributable to a PACE lien covered under the Program. The goal of the Program is to put first mortgage lenders in the same position they would be in without a PACE lien.

PACE Providers can participate in the Program by applying to CAEATFA and demonstrating that they meet the Program's minimum underwriting criteria. Once a PACE program is enrolled, the Loss Reserve will cover assessments issued by that program for their full terms, or until funds are exhausted. Enrolled PACE programs report their financing activity to CAEATFA semi-annually.

Website: http://www.treasurer.ca.gov/CAEATFA/pace/index.asp