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HomeMy WebLinkAbout7/5/2017 - STAFF REPORTS - 1.M. �OF pALM siOf iy u a CQ40:w,it P+ CITY COUNCIL STAFF REPORT DATE: July 5, 2017 CONSENT CALENDAR SUBJECT: Authorization to allow Palm Springs to participate in the Ygrene Statewide PACE Program FROM: David H. Ready, City Manager BY: Marcus L. Fuller, Assistant City Manager SUMMARY: This action would allow the City to opt into the Ygreen statewide PACE Program administered under the Golden State Finance Authority, a Joint Powers Authority that allows cities to opt in as a non-voting Associate Member through affirmative action by the City Council. This action is consistent with action taken on April 24, 2017, by the Coachella Valley Association of Governments ("CVAG") Executive Committee, to transition from the existing CVAG administered CV Upgrade PACE Program through its vendor, Ygrene, to Ygrene's statewide PACE Program. RECOMMENDATION: 1. Adopt Resolution No. , "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, CONSENTING TO THE INCLUSION OF PROPERTIES WITHIN THE TERRITORY OF THE CITY IN THE GOLDEN STATE FINANCE AUTHORITY COMMUNITY FACILITIES DISTRICT TO FINANCE RENEWABLE ENERGY IMPROVEMENTS, ENERGY EFFICIENCY AND WATER CONSERVATION IMPROVEMENTS, SEISMIC IMPROVEMENTS, AND ELECTRIC VEHICLE CHARGING INFRASTRUCTURE AND APPROVING ASSOCIATE MEMBERSHIP IN THE JOINT EXERCISE OF POWERS AUTHORITY RELATED THERETO;" 2. Adopt Resolution No. , "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, CONSENTING TO THE INCLUSION OF PROPERTIES WITHIN THE TERRITORY OF THE CITY IN THE GOLDEN STATE FINANCE AUTHORITY COMMUNITY FACILITIES DISTRICT TO FINANCE RENEWABLE ENERGY GENERATION, ENERGY AND WATER EFFICIENCY IMPROVEMENTS, SEISMIC IMPROVEMENTS, AND ELECTRIC VEHICLE ITEM NO. City Council Staff Report July 5, 2017 - Page 2 Ygrene Statewide PACE Program CHARGING INFRASTRUCTURE AND APPROVING ASSOCIATE MEMBERSHIP IN THE JOINT EXERCISE OF POWERS AUTHORITY RELATED THERETO;" and 3. Authorize the City Manager to execute all necessary documents. BACKGROUND: Assembly Bill (AB) 811 was signed into law on July 21, 2008, and AB 474, effective January 1 , 2010, amended Chapter 29 of Part 3 of Division 7 of the Streets & Highways Code of the State of California ("Chapter 29") and authorizes a legislative body to designate an area within which authorized public officials and willing property owners may enter into voluntary contractual assessment programs known as Property Assessed Clean Energy (PACE) programs through an Assessment District. A companion legislation, Senate Bill (SB) 555 was signed into law on October 5, 2011, amended Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California ("Chapter 2.5") and authorizes a legislative body to designate an area within which authorized public officials and willing property owners may enter into PACE programs through a Mello-Roos Community Facilities District. The intention of these laws was to provide flexibility with financing of PACE programs by individual property owners. PACE programs are intended to finance the installation of distributed generation renewable energy sources, energy efficiency, and/or water conservation improvements that are permanently fixed to real property. The City of Palm Springs and CVAG have both approved implementation of PACE programs on a city and regional level. The City of Palm Springs currently has four programs operating within City boundaries including HERO, Ygrene, Figtree, and California First. CVAG has endorsed these and CVAG's staff has developed a consistent process for vetting potential PACE programs. The CV Upgrade PACE program was introduced to the Coachella Valley in November 2013 after Ygrene was selected by CVAG in a competitive bid process. After their ramp- up began, they grew remarkably fast and have continued to grow at an impressive pace. They have completed over 2,000 projects amounting to over $46 million in the Coachella and Palo Verde Valleys. Following on their success here, Ygrene launched their statewide Ygrene Works program in late 2015, teaming up with the Golden State Finance Authority ("GSFA"). According to GSFA's September 2016 Annual Report Ygrene Works has more than 11,000 completed contracts for more than $306 million in energy efficiency, renewable energy and water saving improvements. There are 8.8 million residential housing units served under the statewide program. 02 City Council Staff Report July 5, 2017 - Page 3 Ygrene Statewide PACE Program GSFA is a California joint powers authority that was organized in 1993. According to their website, GSFA has helped more than 65,800 individuals and families purchase a home. GSFA has gifted over $128 million in down payment assistance grants and helped over 16,500 homeowners to make energy efficiency upgrades to their properties. CVAG staff will continue to be the point of contact for all things associated with the Ygrene PACE Program and act as mediator, should any issues arise between property owners and contractors or PACE providers in the Coachella and Palo Verde Valleys. CVAG has developed a standardized agreement with PACE vendors, including Ygrene, that allow for CVAG to provide oversight on behalf of the City to: 1) minimize issues that may arise from the operation of multiple programs simultaneously in the Coachella Valley; 2) assist with marketing and outreach; 3) coordinate with City staff; and 4) assist in resolving any property owner or contractor complaints. The agreement also provides for a participation fee associated with CVAG's role in working with these providers to implement a regional PACE program. In order to implement the CVAG approved transition of the existing CVAG administered CV Upgrade PACE Program through its vendor, Ygrene, to Ygrene's statewide PACE Program through GSFA, it is necessary to adopt two Resolutions, opting into GSFA via its Assessment District financing through AB 811 and its Community Facilities District financing through SIB 555. ENVIRONMENTAL IMPACT: This action is not considered a "project" under the California Environmental Quality Act, because the action does not involve any commitment to a specific project which may result in a potentially significant physical impact on the environment, as contemplated by Title 14, California Code of Regulations, Section 15378(b)(4). Therefore no negative environmental impact is noted. FISCAL IMPACT: No negative fiscal impact to the City of Palm Springs will be incurred by consenting to the inclusion of properties within the City limits in the Ygrene statewide PACE Program financed through GSFA. Ygrene PACE Program administrative costs are covered through an initial administrative fee included in the property owner's voluntary contractual assessment and an annual administrative fee which is also collected on the property owner's tax bill. 03 City Council Staff Report July 5, 2017 - Page 4 Ygrene Statewide PACE Program SUBMITTED: nit�v L Marcus L. Fuller, MPA, P.E., .L.S. Edward Z. Kotkin Assistant City Manager City Attorney David H. Ready, Esq., Ph City Manager Attachments: 1. Resolutions (2) 04 ATTACHMENT 1 05 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, CONSENTING TO THE INCLUSION OF PROPERTIES WITHIN THE TERRITORY OF THE CITY IN THE GOLDEN STATE FINANCE AUTHORITY COMMUNITY FACILITIES DISTRICT TO FINANCE RENEWABLE ENERGY IMPROVEMENTS, ENERGY EFFICIENCY AND WATER CONSERVATION IMPROVEMENTS, SEISMIC IMPROVEMENTS, AND ELECTRIC VEHICLE CHARGING INFRASTRUCTURE AND APPROVING ASSOCIATE MEMBERSHIP IN THE JOINT EXERCISE OF POWERS AUTHORITY RELATED THERETO WHEREAS, the Golden State Finance Authority is a joint powers authority, (the "Authority") established pursuant to Chapter 5 of Division 7, Title 1, of the Government Code of the State of California (Section 6500 and following) and the Joint Powers Agreement entered into on July 1, 1993, as amended to date (the "Authority JPA"); a copy of the Authority JPA (without the signature pages) is attached hereto as Exhibit A; and WHEREAS, the Authority has amended the Authority JPA to formally change its name from California Home Finance Authority to Golden State Finance Authority; and WHEREAS, the Authority has established a Community Facilities District, CHFA No. 2014-1 (Clean Energy) (the "Authority CFD Program") in accordance with the Mello- Roos Community Facilities Act, set forth in sections 53311 through 53368.3 of the California Government Code (the "Act") and particularly in accordance with sections 53313.5(I) and 53328.1(a) (the "District'); and WHEREAS, the purpose of the Authority CFD Program is to finance or refinance (including the payment of interest) the acquisition, installation, and improvement of energy efficiency, water conservation, seismic improvements, renewable energy and electric vehicle charging infrastructure improvements permanently affixed to private or publicly-owned real property (the "Authorized Improvements"); and WHEREAS, the City of Palm Springs (the "City') is a member of the Coachella Valley Association of Governments ("CVAG"), also a joint powers authority; and WHEREAS, the City and other CVAG member jurisdictions have previously entered into an Implementation Agreement authorizing CVAG to implement, manage and administer Regional PACE Programs (as defined in said Implementation Agreement) within the jurisdictional boundaries of the CVAG member jurisdictions; and 06 Resolution No. Page 2 WHEREAS, CVAG proposes to enter into one or more Administration Agreements with program administrators currently active in the Authority CFD Program to provide the Regional PACE Programs to CVAG member agencies, whereby portions of the administration of the Authority CFD Program in Eastern Riverside County shall be delegated to CVAG (the "Administration Agreements"); and WHEREAS, the City is committed to development of renewable energy generation and energy efficiency improvements, reduction of greenhouse gases, and protection of the environment; and WHEREAS, in the Act, the Legislature has authorized a parcel within the territory of the District to annex to the District and be subject to the special tax levy of the District only (i) if the city or county within which the parcel is located has consented, by the adoption of a resolution by the applicable city council or county board of supervisors, to the inclusion of parcels within its boundaries in the District and (ii) with the unanimous written approval of the owner or owners of the parcel when it is annexed (the "Unanimous Approval Agreement"), which, as provided in section 53329.6 of the Act, shall constitute the election required by the California Constitution; and WHEREAS, the City has determined that it is in the public interest and for the public benefit that the City become a Member of the Authority so that property owners within the City's territory may participate in any Regional PACE Programs implemented by CVAG pursuant to any Administration Agreements by and between CVAG and Authority program administrators; and WHEREAS, the Authority has established the District, as permitted by the Act and the Authority JPA, and the City, desires to become an Associate Member of the Authority JPA by acknowledgement of the Authority JPA Agreement, to participate in any of the Regional PACE Programs for which CVAG has entered into an Administration Agreement with an Authority CFD Program administrator, and to assist property owners within the incorporated area of the City to participate in such Regional PACE Programs; and WHEREAS, the City will not be responsible for the conduct of any special tax proceedings, the levy and collection of special taxes, or any required remedial action in the case of delinquencies in the payment of any special taxes in connection with the District. NOW, THEREFORE, BE IT RESOLVED THAT: Section 1. This City Council finds and declares that properties in the City's incorporated area will be benefited by the availability of the Authority CFD Program to finance the installation of the Authorized Improvements. Section 2. In connection with the Regional PACE Programs, and subject to the terms of the Administration Agreements, this City Council consents to inclusion in the 07 Resolution No. Page 3 Authority CFD Program of all of the properties in the incorporated area within the City and to the Authorized Improvements, upon the request of and execution of the Unanimous Approval Agreement by the owners of such properties when such properties are annexed, in compliance with the laws, rules and regulations applicable to such program; and to the assumption of jurisdiction thereover by Authority for the purposes thereof. Section 3. Consistent with the recitals above, and subject to the terms of the Administration Agreements, the consent of this City Council constitutes assent to the assumption of jurisdiction by Authority for said purposes and authorizes Authority, upon satisfaction of the conditions imposed in this resolution, to take each and every step required for or suitable for financing the Authorized Improvements; provided, however, that the City will not be responsible for the conduct of any assessment or special tax proceedings; the levy of assessments or special taxes; any required remedial action in the case of delinquencies in such assessment or special tax payments; or the issuance, sale, administration, repayment or guarantee of any bonds or other debt issued in connection with the Authority CFD Program. Section 4. This City Council hereby approves joining the JPA as an Associate Member and authorizes the execution by appropriate City officials of any necessary documents to effectuate such membership and implementation of the Authority CFD Program, including, but not limited to the JPA Addendum attached hereto as Exhibit B and incorporated herein by reference. Section 5. City staff is authorized and directed to coordinate with Authority staff to facilitate operation of the Authority CFD Program within the City consistent with the terms of any Administration Agreements by and between CVAG and an Authority CFD Program administrator, and report back periodically to this City Council on the success of such program. Section 6. This Resolution shall take effect once it is adopted only for an Authority CFD Program administrator who has entered into an Administration Agreement with CVAG and provides the City a fully executed copy of such agreement. The City Clerk is directed to send a certified copy of this resolution to the Secretary of the Authority. ae Resolution No. Page 4 Adopted this 5th day of July, 2017. CITY OF PALM SPRINGS David H. Ready City Manager ATTEST: Kathleen D. Hart, Interim City Clerk CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on July 5, 2017, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Kathleen D. Hart, Interim City Clerk City of Palm Springs, California 09 Resolution No. Page 5 EXHIBIT A FOLLOWS THIS PAGE GOLDEN STATE FINANCE AUTHORITY AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT (Original date July 1, 1993 and as last amended and restated May 5, 2015) THIS AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT ("Agreement") is entered into by and among die counties listed on Attachment 1 hereof and incorporated herein by reference. All such counties are referred to herein as "Members" with the respective powers,privileges and restrictions provided herein. RECITALS A. WHEREAS, the California Rural Home Mortgage Finance Authority ("CRHMFA") was created by a Joint Exercise of Powers Agreement dated July 1, 1993 pursuant to the Joint Exercise of Powers Act (commencing with Article 1 of Chapter 5 of Division 7 of Tide I of the Government Code of the State of California (die "Act"). By Resolution 2003-02, adopted on January 15, 2003, the name of die authority was clianged to CRHMFA Homebuyers Fund. On December I0, 2014, the name of the authority was clialWd to California Home Finance Authority. Tine most recent amendment to the Joint Exercise of Powers Agreement was on December 10, 2014.. B. WHEREAS, the Members of California Home Finance Authority desire to update, reaffirm, clarify and revise certain provisions of the joint powers agreenhent, including die renaming of the joint powers authority, as set forth herein, C. WHEREAS, die Members are each empowered by law to finance die construction, acquisition, improvement and rehabilitation of real property. D. WHEREAS, by this Agreement, the Members desire to create and establish a joint powers authority to exercise their respective powers for die purpose of financing die construction, acquisition,improvement and rehabilitation of real property within die jurisdiction of the Authority as authorized by the Act. NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Members individually and collectively agree as follows: 1. Definitions Unless the context otherwise requires, die following terms shall for purposes of this Agreement have tlhe meanings specified below: 'Act"means die Joint Exercise of Powers Act, comunencnng with Article 1 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, including die Marks-Roos Local Bond Pooling Act of 1985, as amended. � 1 'Agreement"means this Joint Exercise of Powers Agreement, as die same now exists or as it may from time to time be amended as provided herein. 'Associate Member' means a county, city or other public agency which is not a voting member of die Rural County Representatives of California, a California nonprofit corporation ("RCRC"), widi legal power and authority similar to that of the Members, admitted pursuant to paragrapb 4.d. below to associate membership herein by vote of die Board. "Audit Committee"means a committee made up of die Executive Committee. 'Authority' means Golden State Finance Audiority (GSFA) formerly known as California Horne Finance Authority ("CIF"), or CRHMFA Homebuyers Fund or California Rural Home Mortgage Finance Authority. "Board'means the governing board of(lie Authority as described in Section 7 below. Bonds' means bonds, notes, warrants, leases, certificates of participation, installment purchase agreements, loan agreements and other securities or obligations issued by die Authority, or financing agreements entered into by the Authority pursuant to die Act and any other obligation within die meaning of the term "Bonds"under die Act. 'Delegate' means the Supervisor designated by the governing board of each Member to serve on the Board of die Authority. "Executive Committers"means die Executive Comhnittee of the Board established pursuant to Section 10 liercof. "Member' means any county which is a member of RCRC, has executed this Agreement and has become a member of the Authority. "Obligations'means bonds, notes, warrants, leases, certificates of parficipauon, installment purchase agreements, loan agreements and other securities or obligations issued by the Auiliority, or financing agreements entered into by the Authority pursuant to die Act and any other financial or legal obligation of the Auiliority under die Act. "Program" or "Project" means any work, improvement, program, project or service undertaken by the Authority. 'Rural County Representatives of California' or "RCRC' means the nonprofit entity incorporated under that name in the State of California. "Supervisor'means an elected County Supervisor from an RCRC member county. 12 2. Purpose 11he purpose of the Authority is to provide financing for die acquisition, construction, improvement and rehabilitation of real property in accordance with applicable provisions of law for die benefit of residents and communities. In pursuit of this purpose, this Agreement provides for the joint exercise of powers common to any of its Members and Associate Members as provided herein, or otherwise authorized by the Act and other applicable laws, including assisting in financing as authorized herein,jointly exercised in die manner set forth herein. 3. Principal Place of Business The principal office of the Authority shall be 1215 K Street, Suite 1650, Sacramento, California 95814. 4. Creation of Authority;Addition of Members or Associate Members a. The Authority is hereby created pursuant to the Act. As provided in the Act, die Authority shall be a public entity separate and distinct from the Members or Associate Members. b. The Authority will cause a notice of this Agreement or any amendment hereto to be prepared and tiled wide lite office of the Secretary of State of California in a timely fashion in the manner set fords in Section 6503.3 of the Act. C. A county dial is a member of RCRC may petition to become a member of the Authority by submitting to the Board a resolution or evidence of other formal action taken by its governing body adopting this Agreement. The Board shall review die petition for membership and shall vote to approve or disapprove the petition. If die petition is approved by a majority of the Board, such county shall immediately become a Member of the Authority. it. Ain Associate Member huay be added to die Authority upon the aflimna6ve approval of its respective governing board and pursuant to action by die Authority Board upon such terms and conditions, and will, such rights, privileges and responsibilities, as may be established from time to time by the Board. Such terns and conditions, and rights, privileges and responsibilities may vary among the Associate Members. Associate Members shall be entitled to participate in one or more programs of the Authority as determined by the Board, but shall not be voting members of the Board. The Executive Director of die Authority shall enforce the terms and conditions for prospective Associate Members to the Authority as provided by resolution of die Board and as amended from time to time by die Board. Changes in die terns and conditions for Associate Membership by the Board will not constitute an amendment of this Agreement. 5. Term and Termination of Powers This Agreement shall become effective from the date hereof until the earlier of the time when all Bonds and any interest thereon shall have been paid in full, or provision for such payment shall have been made,or when die Authority shall no longer own or hold any interest in a 13 public capital improvement or program. The Authority shall continue to exercise die powers herein conferred upon it until tennination of this Agreement, except that if ally Bonds are issued and delivered, in no event shall the exercise of the powers herein granted be terminated until all Bonds so issued and delivered and the merest thereon shall have been paid or provision for such payment shall have been made and any other debt incurred with respect to any other financing program established or administered by the Authority has been repaid in full and is no longer outstanding. 6. Powers;Restriction upon Exercise a. To effectuate its purpose, die Authority shall have the power to exercise any and all powers of the Members or of a joint powers authority under the Act and other applicable provisions of law, subject, however, to the conditions and restrictions herein contained. Each Member or Associate Member may also separately exercise any and all such powers. The lowers of the Authority are limited to those of a general law county. b. The Authority may adopt,from tune to time, such resolutions,guidelines, rules and regulations for the conduct of its meetings and die activities of the Authority as it deems necessary or desirable to accomplish its purpose. C. Tile Authority shall have the power to finance the construction, acquisition, improvement and rehabilitation of real property, including the power to purchase, with tic amounts received or to be received by it pursuant to a bond purchase agreement, bonds issued by any of its Members or Associate Members and other local agencies at public or negotiated sale, for the purpose set Forth herein aid in accordance with the Act. All or any part of such bonds so purchased may be field by die Authority or resold to public or private purchasers al public or negotiated sale_ The Authority shall set uhy other terns and conditions of any purchase or sale contemplated herein as it deems necessary or convenient and in furtherance of the Act. 'fie Authority may issue or cause to be issued Bonds or other indebtedness, and pledge any of its property or revenues as security to the extent pennitted by resolution of the Board under any applicable provision of law. The Authority may issue Bonds in accordance with the Act in order to raise hinds necessary to effectuate its purpose hereunder and may enter into agreements to secure such Bonds. The Authority may issue other forms of indebtedness auhorized by tlhe Act, and to secure such debt, to further such purpose. 'llne Authority may utilize other forms of capital, including, but not limited to, die Authority's internal resources, capital markets and other forms of private capital investment authorized by the Act. d. The Authority is hereby authorized to do all acts necessary for the exercise of its powers, including, but not limited to: (1) executing contracts, (2) employing agents,consultants and employees, (3) acquiring, constructing or providing for maintenance and operation of any building,work or improvement, (4) acquiring, holding or disposing of real or personal property wherever 14 located,including property subject to mortgage, (5) incurring debts,liabilities or obligations, (6) receiving gifts, contributions and donations of property, funds, services and any other forms of assistance from persons, finis, corporations or governmental entities, (7) suing and being sued in its own name, and litigating or stilling any suits or claims, (8) doing any and all things necessary or convenient to die exercise of its specific powers and to accomplishing its purpose (9) establishing and/or administering districts to finance and refinance the acquisition, installation and improvement of energy efficiency, water conservation and renewable energy improvements to or on real property and in buildings. The Authority may enter into one or more agreements, including without 1nnitation, participation agreements and implementation agreements to implement such programs. C. Subject to the applicable provisions of any indenture or resolution providing for die investment of monies held thereunder, the Authority shall have die power to invest any of its funds as the Board deems advisable,in the same manner and upon the same conditions as local agencies pursuant to Section 53601 of the Government Code of the State of California. f. All property, equipment, supplies, funds and records of die Authority shall be owned by die Authority, except as may be prodded otherwise herein or by resolution of die Board. g. Pursuant to the provisions of Section 6508.1 of die Act, the debts, liabilities and obligations of the Authority shall not be debts, liabilities and obligations of the Members or Associate Members, Any Bonds, together with any interest and premium thereon, shall not constitute debts, liabilities or obligations of any Member. The Members or Associate Members hereby agree that any such Bonds issued by the Authority shall not constitute general obligations of die Authority but shall be payable solely from the moneys pledged to die repayment of principal or interest on such Bonds under the terns of the resolution, indenture, trust, agreement or other instrument pursuant to which such Bonds are issued. Neither the Members or Associate Members nor the Authority shall be obligated to pay the principal of or premium, if any, or interest on the Bonds, or other costs incidental thereto, except from the revenues and funds pledged ticrefor, and neither the faidi and credit nor the taxing power of the Members or Associate Members or die Authority shall be pledged to the payiuent, of die principal of or premium, if any, or interest on (lie Bonds, nor shall the Members or Associate Members of the Authority be obligated in any mariner to make any appropriation for such payment. No covenant or agreement contained in any Bond shall be deenned to be a covenant or agreement of any Delegate, or any officer, agent or employee of the Authority in an individual capacity, and neither the Board nor any officer thereof executing die Bonds or any document related thereto sliAl be liable personally on any Bond or be subject to any personal liability or accountability by reason of the issuance of any Bonds. 15 7. Governing Board a. The Board shall consist of the number of Delegates equal to one representative from each Member. b. 'I'lie governing body of each Member shall appoint one of its Supervisors to serve as a Delegate on die Board. A Member's appointment of its Delegate shall be delivered in writing (which may be by electronic mail) to die Authority and shall be effective until he or she is replaced by such governing body or no longer a Supervisor; any vacancy shall be filled by the governing body of the Member in die same manner provided in this paragraph b.. C. The governing body of each Member of the Board shall appoint a Supervisor as an alternate to serve on die Board in the absence of the Delegate; die alternate may exercise all the Fights and privileges of die Delegate, including the right to be counted in constituting a quorum, to participate in die proceedings of die Board, and to vote upon any and all matters. No alternate may have more than one vote at any meeting of the Board, and any Member''s designation of an alternate shall be delivered in writing (which may be by electronic mail) to die Authority and shall be effective until such alternate is replaced by his or her governing body or is no longer a Supervisor, unless otherwise specified in such appointment. Any vacancy shall be filled by the governing body of die Member in the same manner provided in this paragraph c.. d. Any person who is not a member of the governing body of a Member and who attends a meeting on behalf"of such Member may not vole or be counted toward a quorum but may, at the discretion of die Chair, participate in open meetings he or she attends. C. Each Associate Member may designate a non-voting representative to die Board who may not be counted toward a quorum but who may attend open meetings, propose agenda items and otherwise participate in Board Meetings. f. Delegates shall not receive compensation for serving as Delegates, but may claim and receive reimbursement for expenses actually incurred in connection with such service pursuant to rules approved by the Board and subject to die availability of funds. g. The Board shall have the power, by resolution, to die extent permitted by the Act or any other applicable law, to exercise any powers of the Authority and to delegate any of its functions to die Executive Committee or one or more Delegates, officers or agents of die Authority, and to cause any authorized Delegate, officer or agent to take any actions and execute any documents for and in die name and on behalf of die Board or the Authority. h. The Board may establish other comnrittees as it deems necessary for any lawful purpose; such committees are advisory only and may not act or purport to act on behalf of die Board or the Authority. i. The Board shall develop, or cause to be developed, mid review, modify as necessary, mid adopt each Program. 1.6 8. Meetings of the Board a. ']'lie Board shall meet at least once amorally, but may meet more frequently upon call of any officer or as provided by resolution ofthe Board. b. Meetings of Hie Board shall be called,noticed, held and conducted pursuant to the provisions of die Ralph M. Brown Act, Chapter 9 (coimnencing with Section 54950) of Part I of Division 2 of Title 5 of the Government Code of the Slate of California. C. The Secretary of die Authority shall cause ininutes of all meetings of die Board to be taken and distributed to each Member as soon as possible after each meeting. d. The lesser of twelve (12) Delegates or a majority of die number of current Delegates shall constitute a quorum for transacting business at any meeting of the Board, except that less than a quorum may act to adjourn a meeting. Each Delegate shall have one vole. e. Meetings may be held at any location designated in notice properly given for a meeting and may be conducted by telephonic or similar means in any manner otherwise allowed by law. 9. Officers; Duties; Official Bonds a. The Board shall elect a chair and vice chair from among die Delegates at die Board's annual meeting who shall serve a term of one (1) year or until their respective successor is elected, The chair shall conduct the meetings of die Board and perforn such other duties as may be specified by resolution of the Board. The vice chair shall perform such duties in due absence or in die event of the unavailability of the chair. b. The Board shall contract annually with RCRC to administer die Agreement and to provide administrative services to die Authority, and the President and Chief Executive Officer of RCRC shall serve ex oBl o as Executive Director, Secretary, Treasurer, and Auditor of the Authority. As chief- executive of the Authority, the Executive Director is authorized to execute contracts and other obligations of the Authority, unless prior Board approval is required by a third party, by law or by Board specification, and to perform other duties specified by the Board. The Executive Director may appoint such other officers as may be required for the orderly conduct of die Authority's business and affairs who shall serve at the pleasure of die Executive Director. Subject to die applicable provisions of any indenture or resolution providing for a trustee or other fiscal agent, die Executive Director, as Treasurer, is designated as the custodian of die Authority's funds, from whatever source, and, as such, shall have die powers, duties and responsibilities specified in Section 6505.5 of the Act. The Executive Director, as Auditor, shall have the powers, duties and responsibilities specified in Section 6505.5 of the Act. C. The Legislative Advocate for die Authority shall be die Rural County Representatives of California. " 17 d. The Treasurer and Auditor are public officers who have charge of, handle, or have access to all property of the Authority, and a bond for such officer in the amount of at least one hundred thousand dollars ($100,000.00) shall he obtained at the expense of the Authority and filed with the Executive Director. Such bond may secure the faithful performance of such officer's duties with respect to another public office if such bond in al least the same amount specifically mentions the office of die Authority as required herein, The "Treasurer and Auditor shall cause periodic independent audits to be made of die Authority's books by a certified public accountant, or public accountant, in compliance with Section 6505 of the Act. C. The business of the Authority shall be conducted under the supervision of the Executive Director by RCRC personnel. 10. Executive Committee of the Authority a. Composition The Authority shall appoint no fewer than nine (9) and no more than eleven (11) members of its Board to serve on an Executive Conunittec. The Chair and Vice Chair of die Authority shall serve on die Executive Committee. b. Powers and Limitations The Executive Conunittee shall act in an advisory capacity and make recommendations to the Authority Board. Duties will include, but not be limited to, review of the quarterly and annual budgets, service as die Audit Committee for the Authority, periodically review this Agreement; and complete any other tasks as may be assigned by the Board. The Executive Committee shall be subject to all limitations imposed by this Agreement, other applicable law,and resolutions of the Board. C. Quorum A majority of the Executive Committee shall constitute a quorum for transacting business of die Executive Committee. 11. Disposition of Assets Upon termination of this Agreement, all remaining assets and liabilities of the Authority shall be distributed to die respective Members in such manner as shall be determined by die Board and in accordance with the law, 12. Agreement Not Exclusive; Operation in Jurisdiction of Member This Agreement shall not be exclusive, and each Member expressly reserves its rights to carry out other public capital improvements and programs as provided for by law and to issue other obligations for those purposes. This Agreement shall not be deemed to upend or alter the 18 terms of other agreements among the Members or associate Members. 13. Conflict of Interest Code The Authority sbaIl by resolution adopt a Conflict of Interest.Code as required by law. 14. Contributions and Advances Contributions or advances of public funds and of personnel, equipment or property may he made to the Authority by any Member, Associate Member or any other public agency to further lire purpose of this Agreement. Payment of public funds may be made to defray the cost of any contribution. Any advance may be made subject to repayment, and in that case shall be repaid in die manner agreed upon by the advancing Member, Associate Member or other public agency and die Authority at die time of making the advance. 15. Fiscal Year;Accounts;Reports;Annual Budget;Administrative Expenses a. Tlie fiscal year of the Authority sliall be the period from January I of each year to and including the following December 31, except for any partial fiscal year resulting from a change in accounting based on a diflerent fiscal year previously. b. Prior to the beginning of each fiscal year, die Board shall adopt a budget for die succeeding fiscal year. C. 'flue Authority shall establish and maintain such funds and accounts as may be required by generally accepted accounting principles. The books and records of the Authority arc public records and shall be open to inspection at all reasonable times by each Member and its representatives. d. '17ie Auditor shall either make, or contract %idr a certified public accountant or public accountant to make, an annual audit of the accounts and records of die Authority. Tlie minimum requirements of the audit shall be those prescribed by tie State Controller for special districts under Section 26909 of die Government Code of the State of California, and shall conform to generally accepted auditing standards. When air audit of accounts and records is made by a certified public accountant or public accountant, a report thereof shall be filed as a public record with each Member (and also with (lie auditor of Sacramento County as die county in which die Authority's office is located) within 12 months after the end of the fiscal year. e. In any year in wbiclh die annual budget of die Audhority does not exceed five thousand dollars ($5,000.00), tire Board may, upon unannnous approval of the Board, replace the annual audit with an ensuing one-year period, but in no event for a period longer than two fiscal years. 19 16. Duties of Members or Associate Members;Breach If any Member or Associate Member shall default in performing any covenant contained herein, such default shall not excuse that Member or Associate Member from fulfilling its other obligations hereunder, and such defaulting Member or Associate Member shall remain liable for the performance of all covenants hereof. Each Member or Associate Member hereby declares that this Agreement is entered into for die benefit of the Authority created hereby, and each Member or Associate Member hereby grants to the Authority the right to enforce, by whatever lawful means die Authority deems appropriate, all of die obligations of' each of die parties hereunder. Each and all of the remedies given to the Authority hereunder or by any law now or hereafter enacled are cumulative, and the exercise of one right or remedy shall not impair die right of the Authority to any or all other remedies. 17. Indemnification To (lie full extent permitted by law, die board may authorize indemnification by the Authority of any person who is or was a Board Delegate, alternate, officer, consultant, employee or other agent of die Authority, and who was or is a party or is threatened to be made a party to a proceeding by reason of the lace that such person is or was such a Delegate, alternate, officer, consultant, employee or other agent of the Authority. Such indemnification may be made against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with. such proceeding, if such person acted in good faith and in a manner such person reasonably believed to be in die best uricrests of the Authority mid, in the case of a criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful and, in die case of an action by or in the right of die Authority, acted with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. 18. Immunities All of die privileges and immunities from liabilities, exemptions from law, ordinances and rules, all pension, relief, disability, workers' compensation and other benefits which apply to the activity of officers, agents or employees of any of the Members or Associate Members when performing their respective functions, shall apply to them to the same degree and extent while cngaged,as Delegates or otherwise as an officer, agent or other representative of die Authority or while engaged in the performance of any of their functions or duties under the provisions of this Agreement. 19. Amendment This Agreement may be amended by tine adoption of lire amendment by the governing bodies of a majority of de Members. The amendment shall become effective on die first day of die month following the last required member agency approval. An anendrrhent may be initiated by the Board, upon approval by a majority of the Board. Any proposed amendment, including the text of the proposed change, shall be given by the Board to each Member's Delegate for presentation mid action by each Members board within 60 days, which tine may be extended by 20 the Board. The list of Members, Attachment 1, may be updated to reflect new and/or withdrawn Members without requiring formal anhendnhent of the Agreement by the Authority Board of Directors. 20. Withdrawal of Member or Associate Member If' a Member withdraws as member of RCRC, its membership in (lie Authority shall automatically tenninate. A Member or associate Member may withdraw from this Agreement upon written notice to the Board; provided however, that no such withdrawal shall result in die dissolution of die Authority as long as any Bonds or other obligations of die Authority remain outstanding. Any such withdrawal shall become effective thirty (30) days after a resolution adopted by die Members governing body which authorizes withdrawal is received by die Authority. Nothvidistanding die foregoing, any termination of membership or withdrawal from the Authority shall not operate to relieve any terminated or withdrawing Member or Associate Member from Obligations incurred by such terminated or withdrawing Member or Associate Member prior to (lie time of its termination or withdrawal. 21. Miscellaneous a. Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. b. Construction. T11e section headings herein are for convenience only and are not to be construed as modifying or governing die language in the section referred to. C. Approvals. Wherever in this Agreement any consent or approval is required, the saline shall not.be unreasonably withheld. d. Jurisdiction; Venue. This Agreement is made in the State of California, under die Constitution and laws of such State and is to be so construed; any action to enforce or uricrpret its terms shall be brought in Sacramento County, California. e. Integration. ']'his Agreement is the complete and exclusive statement of die agreement among the parties hereto, and it supersedes and merges all prior proposals, understandings, and other agreernents, whether oral, written, or implied in conduct., between and among the parties relating to the subject matter of this Agreement. f. Successors;Assignment Tbis Agreement shall be binding upon mid shall inure to the benefit of the successors of die panties hereto. Except to the extent expressly provided herein, no Member may assign any right or obligation hereunder without the consent of die Board. g. Severability. Should any part, tern or provision of this Agreement be decided by die courts to be illegal or in conflict widh any law of die State of California, or otherwise be 21 rendered unenforceable or ineffectual, the validity of the remaining parts, terms or provisions hereof shall not be affected thereby. The parties hereto have caused this Agreement to be executed and attested by their properly authorized officers. AS ADOPTED BY THE MEMBERS: Originally dated July 1, 1993 Amended and restated December 10, 1998 Amended and restated February 18, 1999 Amended and restated September 18, 2002 Amended and restated January 28, 2004 Amended and restated December 10, 2014 Amended and restated May 5, 2015 [SIGNATURES ONFOLLOWING PAGES] 22 ATTACHMENT 1 GOLDEN STATE FINANCE AUTHORITY MEMBERS As of May 5. 2015 Alpine County Amador County Butte County Calaveras County Colusa County Del Norte County El Dorado County Glenn County Humboldt County Imperial County Inyo County Lake County Lassen County Madera County Mariposa County Mendocino County Merced County Modoc Comity Mono County Napa County Nevada County Placer County Plumas County San Benito County Shasta County Sierra County Siskiyou County Sutter County Tehama County Trinity County "ruolmune County Yolo County Yuba County 23 SIGNATURE PAGE FOR NEW ASSOCIATE MEMBERS NAME OF COUNTY OR CITY: Dated: By: Name: Title: Attest: By [Clerk of the Board Supervisors or City Clerk] 24 Resolution No. Page 6 Exhibit B JPA Addendum GOLDEN STATE FINANCE AUTHORITY AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT (Original date July 1, 1993 and as last amended and restated May 5, 2015) SIGNATURE PAGE WITH ASSOCIATE MEMBERSHIP TERMS AND CONDITIONS FOR CITY OF ("JPA Addendum") The City of Palm Springs ("City') hereby agrees to become an Associate Member of the Authority expressly subject to the following: 1. The City joins the Authority as an Associate Member solely for the purpose of enabling the Authority to make its property-assessed clean energy (PACE) Programs (the "Authority PACE Programs")' available to properties within the jurisdictional boundaries of the City, as further set forth in Resolution No. and adopted by the City Council of the City on July 5, 2017, ("Resolutions'). 2. Notwithstanding Section 4(d) of the Amended and Restated Joint Exercise of Powers Agreement entered into on July 1, 1993, as amended to date ("Agreement"), no terms and conditions established by the Board, and not contained in the Agreement as of the date of City's execution of this JPA Addendum, shall be binding on the City unless and until approved, in writing, by the City Manager of the City ("City Manager"). Further, notwithstanding Section 19 of the Agreement, no amendment to the Agreement which impacts the City, as an Associate Member, shall be binding on the City unless approved in writing by the City Manager. 3. For clarification, and pursuant to Section 6(g) of the Agreement, any Bonds, together with any interest and premiums thereon, shall not constitute debts, liabilities or Obligations of the City. 4. The Agreement shall not be exclusive, and the City expressly reserves its rights to carry out other public capital improvements and programs as provided for by law and to issue other obligations for those purposes. 5. The right of the City to withdraw from the Authority, which withdrawal shall become effective thirty (30) days after a resolution adopted by the City Council of the City is received by the Authority, except that the City Manager may terminate the Authority's rights and authorizations as set forth in the Resolutions. 1 The Authority PACE Programs are(i)a financing program authorized under Chapter 29 of the Improvement Bond Act of 1911, being Division 7 of the California Streets and Highways Code; and (ii) a financing program authorized under the Mello-Roos Community Facilities Act, set forth in sections 53311 through 53368.3 of the California Government Code, and particularly in accordance with Sections 53313.5(I)and 53328.1(a). 25 Resolution No. Page 7 6. Section 4(d) of the Agreement authorizes the Board to add an Associate Member by an affirmative vote of the Board with such rights, privileges, and responsibilities established from time to time by the Board. Accordingly, through the affirmative vote of the Board to add City as an Associate Member, the Authority hereby agrees to such the terms and conditions contained in this JPA Addendum and the Resolutions; provided, no future change to the Agreement shall be effective without compliance with paragraph 2 of this Addendum. 7. By its signature below, the Authority agrees to be bound by this JPA Addendum, and it further agrees that the Authority shall not challenge, in a court of law or otherwise, the validity, legality, and enforceability of this JPA Addendum. [Signatures on following page] 26 Resolution No. Page 8 GOLDEN STATE FINANCE AUTHORITY AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT (Original date July 1, 1993 and as last amended and restated May 5, 2015) SIGNATURE PAGE FOR NEW ASSOCIATE MEMBERS WITH ASSOCIATE MEMBERSHIP TERMS AND CONDITIONS FOR CITY OF PALM SPRINGS (continued) CITY OF PALM SPRINGS By: Dated: David H. Ready, City Manager ATTEST: REVIEWED AS TO FORM : By: By: Kathleen D. Hart, Edward Z. Kotkin, Interim City Clerk City Attorney ACKNOWLEDGED AND AGREED: By: Name: Golden State Finance Authority 1215 K Street, Suite 1650 Sacramento, CA 95814 e2671.00W 27 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, CONSENTING TO THE INCLUSION OF PROPERTIES WITHIN THE TERRITORY OF THE CITY IN THE GOLDEN STATE FINANCE AUTHORITY COMMUNITY FACILITIES DISTRICT TO FINANCE RENEWABLE ENERGY GENERATION, ENERGY AND WATER EFFICIENCY IMPROVEMENTS, SEISMIC IMPROVEMENTS, AND ELECTRIC VEHICLE CHARGING INFRASTRUCTURE AND APPROVING ASSOCIATE MEMBERSHIP IN THE JOINT EXERCISE OF POWERS AUTHORITY RELATED THERETO WHEREAS, the Golden State Finance Authority ("Authority") is a joint exercise of powers authority established pursuant to Chapter 5 of Division 7, Title 1 of the Government Code of the State of California (Section 6500 and following) (the "Act') and the Joint Power Agreement entered into on July 1 , 1993, as amended from time to time (the "Authority JPA"); a copy of the Authority JPA (without the signature pages) is attached hereto as Exhibit A; and WHEREAS, the Authority has amended the Authority JPA to formally change its name from California Home Finance Authority to Golden State Finance Authority; and WHEREAS, Authority has established a property-assessed clean energy ("PACE") Program (the "Authority PACE Program") to provide for the financing of renewable energy generation, energy and water efficiency improvements, seismic improvements, and electric vehicle charging infrastructure (the "Improvements") pursuant to Chapter 29 of the Improvement Bond Act of 1911, being Division 7 of the California Streets and Highways Code ("Chapter 29") within counties and cities throughout the State of California that elect to participate in such program; and WHEREAS, City of Palm Springs (the "City") is committed to development of renewable energy generation and energy and water efficiency improvements, reduction of greenhouse gases, and protection of the environment; and WHEREAS, in Chapter 29, the Legislature has authorized cities and counties to assist property owners in financing the cost of installing Improvements through a voluntary contractual assessment program; and WHEREAS, the City is a member of the Coachella Valley Association of Governments ("CVAG"), also a joint powers authority; and WHEREAS, the City and other CVAG member jurisdictions have previously entered into an Implementation Agreement authorizing CVAG to implement, manage and administer 2A Resolution No. Page 2 Regional PACE Programs (as defined in said Implementation Agreement) within the jurisdictional boundaries of the CVAG member jurisdictions; and WHEREAS, CVAG proposes to enter into one or more Administration Agreements with program administrators currently active in the Authority PACE Program to provide Regional PACE programs to CVAG member agencies, whereby portions of the administration of the Authority PACE Program in Eastern Riverside County shall be delegated to CVAG (the "Administration Agreements"); and WHEREAS, installation of such Improvements by property owners within the jurisdictional boundaries of the counties and cities that are participating in the Regional PACE Programs would promote the purposes cited above; and WHEREAS, the City has determined that it is in the public interest and for the public benefit that the City become an Associate Member of the Authority so that property owners within the City's territory may participate in any Regional PACE Program implemented by CVAG pursuant to any Administration Agreement by and between CVAG and Authority PACE Program administrators; and WHEREAS, Authority has established the Authority PACE Program, which is such a voluntary contractual assessment program, as permitted by the Act, the Authority JPA, originally made and entered into July 1, 1993, as amended to date, and the City, desires to become an Associate Member of the JPA by acknowledgement of the Authority JPA Agreement, to participate in any Regional PACE Program for which CVAG has entered into an Administration Agreement with an Authority PACE Program administrator, and to assist property owners within the jurisdiction of the City to participate in such Regional PACE Program; and WHEREAS, the City will not be responsible for the conduct of any assessment proceedings; the levy and collection of assessments or any required remedial action in the case of delinquencies in the payment of any assessments or the issuance, sale or administration of any bonds issued in connection with the Authority PACE Program. NOW, THEREFORE, BE IT RESOLVED THAT: Section 1. This City Council finds and declares that properties in the City's incorporated area will be benefited by the availability of the Authority PACE Program to finance the installation of the Improvements. Section 2. In connection with the Regional PACE Programs, and subject to the terms of the Administration Agreements, this City Council consents to inclusion in the Authority PACE Program of all of the properties in the jurisdictional boundaries of the City and to the Improvements, upon the request by and voluntary agreement of owners of such properties, in compliance with the laws, rules and regulations applicable to such program; and to the assumption of jurisdiction thereover by Authority for the purposes thereof. 29 Resolution No. Page 3 Section 3. Consistent with the recitals above, and subject to the terms of the Administration Agreements, the consent of this City Council constitutes assent to the assumption of jurisdiction by Authority for said purposes and authorizes Authority, upon satisfaction of the conditions imposed in this resolution, to take each and every step required for or suitable for financing the Improvements, including the levying, collecting and enforcement of the contractual assessments to finance the Improvements and the issuance and enforcement of bonds to represent such contractual assessments; provided, however, that the City will not be responsible for the conduct of any assessment proceedings; the levy of assessments; any required remedial action in the case of delinquencies in such assessment payments; or the issuance, sale, administration, repayment or guarantee of any bonds issued in connection with the Authority PACE Program. Section 4. This City Council hereby approves joining the JPA as an Associate Member and authorizes the execution by appropriate City officials of any necessary documents to effectuate such membership and implementation of the Authority PACE Program, including, but not limited to the JPA Addendum attached hereto as Exhibit B and incorporated herein by reference. Section 5. City staff is authorized and directed to coordinate with Authority staff to facilitate operation of the Authority PACE Program within the City consistent with the terms of any Administration Agreement by and between CVAG and an Authority PACE Program administrator, and report back periodically to this City Council on the success of such program. Section 6. This Resolution shall take effect immediately once it is adopted only for an Authority PACE Program administrator who has entered into an Administration Agreement with CVAG and provides the City a fully executed copy of such agreement. The City Clerk is directed to send a certified copy of this resolution to the Secretary of the Authority. Adopted this 5th day of July, 2017. CITY OF PALM SPRINGS David H. Ready City Manager ATTEST: Kathleen D. Hart, Interim City Clerk 30 Resolution No. Page 4 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on July 5, 2017, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Kathleen D. Hart, Interim City Clerk City of Palm Springs, California 31 Resolution No. Page 5 EXHIBIT A FOLLOWS THIS PAGE 32 GOLDEN STATE FINANCE AUTHORITY AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT (Original date July 1, 1993 and as last amended and restated May 5, 2015) THIS AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT ("Agreement") is entered into by and among tie counties listed on Attachment 1 hereof and incorporated herein by reference. U] such counties are referred to herein as "Members" with the respective powers, privileges and restrictions provided herein. RECITALS A. WHEREAS, the California Rural Home Mortgage Finance Authority ("CRHMFA") was created by a Joint Exercise of Powers Agreement dated July 1, 1993 pursuant to the Joint Exercise of Powers Act (commencing with Article 1 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the "Act"). By Resolution 2003-02, adopted on January 15, 2003, the name of the authority was changed to CRHMFA Homebuyers Fund. On December 10, 2014, the name of the authority was changed to California Home Finance Authority. The most recent amendment to the Joint. Exercise of Powers Agreement was on December 10, 2014.. B. WHEREAS, the Members of California Home Finance Authority desire to update, reaffirm,clarify and revise certain provisions of the joint powers agreement, including die renaming of the joint powers authority, as set forth herein. C. WHEREAS, the Members are each empowered by law to finance the construction, acquisition,improvement and rehabilitation of real property. D. WHEREAS, by this Agreement, the Members desire to ereate and establish a joint powers authority to exercise their respective powers for the purpose of financing the construction, acquisition,improvement and rehabilitation of real property within the jurisdiction of the Authority as authorized by the Act. NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Members individually and collectively agree as follows: I. Definitions Unless the context otherwise requires, the following terms shall for purposes of this Agreement have the meanings specified below: 'Act"means dre Joint Exercise of Powers Act, commencing with Article 1 of Chapter 5 of Division 7 of Tide 1 of the Government Code of tine State of California, including lie Marks-Roos Local Bond Pooling Act of ]9$5, as amended. 31 'Agreement"means this Joint Exercise of Powers Agreement, as die same now exists or as it may from time to time be amended as provided herein. 'Associate Member' means a county, city or other public agency which is not a voting member of the Rural County Representatives of California, a California nonprofit corporation ("RCRC"), with legal power and authority similar to that of the Mehubers; admitted pursuant to paragraph 4.d. below to associate membership herein by vote of tie Board. "Audit Committee"means a committee made up of die Executive Committee. 'Authority' means Golden State Finance Authority (GSFA) formerly known as California Home Finance Authority ("CHF"), or CRHMFA Homebuyers Fund or California Rural Home Mortgage Finance Authority. "Board'means die governing board of the Authority as described in Section 7 below. "Bonds' means bonds, notes, warrants, leases, certificates of participation, installment purchase agreements, loan agreements and other securities or obligations issued by the Authority, or financing agreements entered into by the Authority pursuant to die Act and any other obligation widiin dine meaning of tie term "Bonds"under die Act. 'Delegate" means the Supervisor designated by the governing board of each Member to serve on die Board of the Authority. "Executive Committee'means die Executive Committee of die Board established pursuant To Section 10liereof. 'Membee means any county which is a member of RCRC, has executed this Agreement and has become a member of the Audhority. "Obligations" means bonds, notes, warrants, leases, certificates of participation, installment purchase agreements, loan agreements and odier securities or obligations issued by the Authority, or financing agreements entered into by die Authority pursuant to die Act and any other financial or legal obligation of die Authority under dhc Act. "Program" or "Project" means any work, iinprovenhent, program, project or service undertaken by die Authority. 'Rural County Representatives of California" or "RCRC" means the nonprofit entity incorporated under that name in the Slate of California. "Supervisor" means an elected County Supervisor from an RCRC member county. 34 2. Purpose Tlie purpose of die Authority is to provide financing for die acquisition, construction, improvement and rehabilitation of real property in accordance with applicable provisions of law for the benefit of residents and communities. In pursuit of this purpose, this Agreement provides for the joint exercise of powers common to any of' its Members and Associate Members as provided herein, or otherwise authorized by the .'act and other applicable laws, including assisting in financing as authorized herein,jointly exercised in die manner set forth herein. 3. Principal Place of Business The principal office of die Authority shall be 1215 K Street, Suite 1650, Sacranento, California 95814. b. Creation of Authority;Addition of Members or Associate Members a. The Authority is hereby created pursuant to the Act. As provided in the Act, the Authority shall be a public entity separate and distinct from the Members or Associate Members. b. The Authority will cause a notice of this Agreement or any amendment hereto to be prepared and filed with die office of the Secretary of State of California in a timely fashion in the manner set.forth in Section 6503.3 of the Act. C. A county that is a member of RCRC may petition to become a member of Ilse Authority by subinitting to the Board a resolution or evidence of other fornnal action taken by its governing body adopting this Agreement. The Board shall review tine petition for membership and shall vote to approve or disapprove the petition. If die petition is approved by a majority of the Board, such county shall immediately become a Member of the Authority, d. An Associate Member may be added to the Authority upon the aflinnative approval of its respective governing board and pursuant to action by die authority Board upon such terms and conditions, and with such rights, privileges and responsibilities, as may be established from time to time by the Board. Such terns and conditions, and rights, privileges and responsibilities may vary among the Associate Members. Associate Members shall be entitled to participate in one or more prograins of the Authority as detcrinined by the Board, but shall not be voting members of the Board. The Executive Director of the Audrority shall enforce die terms and conditions for prospective Associate Members to the Authority as provided by resolution of die Board and as amended from tine to time by the Board. Changes in the terns and conditions for Associate Membership by the Board will not constitute an amendment of this Agreement. S. Term and Termination of Powers This Agreement shall become effective from the date hereof wntil the earlier of the time when all Bonds and any interest thereon shall have been paid in full, or provision for such payment shall have been made, or when the ,'authority shall no longer own or hold any interest in a 35 public capital improvement or program. The Authority shall continue to exercise the powers herein conferred upon it until termination of this Agreement, except that if any Bonds are issued and delivered, in no event shall the exercise of the powers herein granted be terminated until all Bonds so issued and delivered and the interest thereon sliall have been paid or provision for such payment shall have been made and any other debt incurred with respect to any other fuiancing program established or administered by the Authority has been repaid in full and is no longer outstanding. 6. Powers;Restriedon upon Exercise a. To effectuate its purpose, the Authority shall have the power to exercise any and all powers of the Members or of a joint powers authority under die Act and other applicable provisions of law, subject, however, to die conditions and restrictions herein contained. Each Member or Associate Member may also separately exercise any and all such powers. The powers of die Authority are limited to those of a general law county. b. The Authority may adopt, from time to time, such resolutions, guidelines, rules and regulations for die conduct of its meetings and the activities of die Authority as it deems necessary or desirable to accomplish its purpose. C. The Authority shall have the power to finance the construction, acquisition, improvement and rehabilitation of real property, including the power to purchase, with die ahnounts received or to be received by it pursuant to a bond purchase agreement, bonds issued by any of its Members or Associate Members and other local agencies at public or negotiated sale, for die purpose set Forth herein and in accordance with the Act All or any part of such bonds so purchased may be field by die Authority or resold to public or private purchasers at public or negotiated sale. The Authority shall set any other terms and conditions of any purchase or sale contemplated herein as it deems necessary or convenient and in furtlherance of die Act. The Authority may issue or cause to be issued Bonds or other indebtedness, and pledge any of its property or revenues as security to die extent permitted by resolution of die Board wider any applicable provision of law. The Authority may issue Bonds in accordance with the Act in order to raise funds necessary to effectuate its purpose hereunder and may enter into agreements to secure such Bonds. The Authority may issue other forms of indebtedness authorized by the Act, and to secure such debt, to further such purpose. 'file Authority may utilize other forms of capital, including, but not linhited to, die Audhority s internal resources, capital markets and other forms of private capital investment authorized by the Act. d. The Authority is hereby authorized to do all acts necessary for die exercise of its powers, including, but not limited to: (1) executing contracts, (2) employing agents,consultants and employees, (3) acquiring, constructing or providing for maintenance and operation of any building,work or improvement, (4) acquiring, holding or disposing of real or personal property wherever 36 .located,including property subject to mortgage, (5) incurring debts,liabilities or obligations, (6) receiving gifts, contributions and donations of property, funds, services and any other fornis of assistance from persons, fimis, corporations or governmental entities, (7) suing and being sued in its own name, and litigating or settling any suits or claims, (8) doing any and all things necessary or convenient to tie exercise of its specific powers and to accomplishing its purpose (9) establishing and/or administering districts to finance and refinance the acquisition, installation and improvement of energy efficiency, water conservation and renewable energy improvements to or on real property and in buildings. The Authority may enter into one or more agreements, including without limitation, participation agreements and implementation agreements to implement such programs. e. Subject to (lie applicable provisions of any indenture or resolution providing for the investment of monies held thereunder, the Authority shall have die power to invest any of its funds as tie Board deems advisable,in Elie same manner and upon die same conditions as local agencies pursuant to Section 53601 of die Government Code of the State of California. f. All properly, equipment, supplies, finds and records of the Authority shall be owned by the Authority, except as may be provided otherwise herein or by resolution of die Board. g. Pursuant to the provisions of Section 6508.1 of the Act, the debts, liabilities and obligations of the Authority shall not be debts, liabilities and obligations of the Members or Associate Members. Any Bonds, together with any interest and premium thereon, shall not constitute debts, liabilities or obligations of any Member. The Members or Associate Members hereby agree that any such Bonds issued by the Authority shall not constitute general obligations of the Authority but shall be payable solely from the moneys pledged to the repayment of principal or interest on such Bonds under the terns of the resolution, indenture, trust, agreement or other instrument pursuant to which such Bonds are issued. Neither the Members or Associate Members nor the Authority shall be obligated to pay the principal of or premium, if any, or interest on die Bonds, or other costs incidental thereto, except from [lie revenues and funds pledged therefor, and neither the faith and credit nor the taxing power of the Members or Associate Members or the Authority shall be pledged to the payment of die principal of or premium, if any, or interest on the Bonds, nor shall the Members or Associate Members of die Authority be obligated in any mariner to make any appropriation for such payment. No covenant or agreement contained in any Bond shall be deemed to be a covenant or agreement of any Delegate, or any officer, agent or employee of the Authority in all individual capacity, and neither the Board nor any officer thereof executing the Bonds or any document related thereto shall be liable personally on any Bond or be subject to any personal liability or accountability by reason of file issuance of any Bonds. 37 7. Governing Board a. The Board shall consist of the number of Delegates equal to one representative from each Member. b. The governing body of each Member shall appoint one of its Supervisors to serve as a Delegate on the Board. A Member's appointment of its Delegate shall be delivered in writing (which may be by electronic mail) to die Authority and shall be effective until he or she is replaced by such govening body or no longer a Supervisor; any vacancy shall be filled by tie governing body of die Member in die same manner prodded in this paragraph b.. C. The governing body of each Member of the Board shall appoint a Supervisor as an alternate to serve on die Board in die absence of the Delegate; die alternate may exercise all the rights and privileges of the Delegate, including tie right to be counted in constituting a quoruln, to participate in the proceedings of die Board, and to vote upon any and all matters. No alternate may have more than one vote at any meeting of die Board, and any Member's designation of an alternate shall be delivered in writing (which may be by electronic mail) to die Authority and shall be effective until such alternate is replaced by this or her governing body or is no longer a Supervisor, unless otherwise specified in such appointment. Any vacancy shall be filled by die governing body of the Member in the same manner prodded in this paragraph c.. d. Any person who is not a member of the governing body of a Member and who attends a meeting on behalf of such Member may not vote or be counted toward a quorum but may,at die discretion of die Chair, participate in open meetings he or she attends. C. Lach Associate Member may designate a non-voting representative to die Board who may not be counted toward a quorum but who may attend open meetings, propose agenda items and otherwise participate in Board Meetings. f. Delegates shall not receive compensation for serving as Delegates, but may claim and receive reimbursement for expenses actually incurred in connection with such service pursuant to rules approved by the Board and subject to die availability of funds. g. The Board shall have die power, by resolution, to die extent permitted by die Act or any other applicable law, to exercise any powers of the Authorityand to delegate an of it s 6 Y functions to die Executive Comnnittee or one or more Delegates, officers or agents of the Authority, and to cause any authorized Delegate, oflicer or agent to take any actions and execute any documents for and in die naive all(] on behalf of the Board or the Authority. h. The Board may cstablish'other committees as it deems necessary for any lawful purpose; such committees arc advisory only and may not act or purport to act on behalf of the Board or die Authority. i. Tlie Board shall develop, or cause to be developed, and review, modify as necessary, mid adopt each Program. 38 8. Meetings of the Board a. The Board shall meet at leas( once annually, but may nee( more frequently upon call of any officer or as provided by resolution of the Board. b. Meetings of die Board shall he called,noticed, held and conducted pursuant to the provisions of the Ralph M. Brown Act, Chapter 9 (commencing with Section 54950) of Part I of Division 2 of Tide 5 of the Government Code of the State of California. C. The Secretary of die Authority shall cause minutes of all meetings of the Board to be taken and distributed to each Member as soon as possible after each meeting. d. The lesser of twelve (12) Delegates or a maiority of the number of current Delegates shall constitute a quorum for transacting business at any meeting of die Board, except that less than a quorum may act to adjourn a meeting. Each Delegate shall have one vote. e. Meetings may be held at any location designated in notice properly given for a meeting and may be conducted by telephonic or similar means in any manner otherwise allowed by law. 9. Officers; Duties; Official Bonds a. The Board shall elect a chair mid vice chair from among die Delegates at die Board's annual hneeting who shall serve a term of one (1) year or until their respective successor is elected. The char shall conduct the meetings or die Board and perform such other duties as may be specified by resolution of die Board. The vice chair shhall perform such duties in the absence or in die event of the unavailability of the chair. b. The Board sliall contract annually widh RCRC to administer the Agreement and to provide administrative services to the Authority, and the President and Chief Executive Officer of RCRC shall serve cx olTcio as Executive Director, Secretory, Treasurer, and Auditor of the Authority. As chief executive of the Authority, the Executive Director is authorized to execute contracts and other obligations of the Authority, unless prior Board approval is required by a turd party, by law or by Board specification, and to perform other duties specified by the Board, The Executive Director may appoint such other officers as may be required for the orderly conduct of die Authority's business and affairs who shall serve at the pleasure of the Executive Director. Subject to die applicable provisions of any indenture or resolution providing for a trustee or other fiscal agent, the Executive Director, as Treasurer, is designated as die custodian of die Authority's funds, from whatever source, and, as such, shhall have die powers, duties and responsibilities specified in Section 6505.5 of the Act. The Executive Director, as Auditor, shall have the powers, dudes and responsibilities specified in Section 6505.5 of the Act. C. The Legislative Advocate for the Authority shall be the Rural County Representatives of California, 39 d. The Treasurer and Auditor are public oflicers who have charge of, handle, or have access to all property of die Authority, and a bond for such officer in die amount of at least one hundred thousand dollars ($100,000.00) shall be obtained at the expense of die Authority and filed with the Executive Director. Such bond may secure the faithful performance of such officer's duties with respect to another public otlice if such bond in at least the same amount specifically mentions the office of die Authority as required herein. The Treasurer and Auditor shall cause periodic independent audits to be made of the Authority's books by a certified public accountant, or public accountant; in compliance with Section 6505 of the Act. C. The business of die Authority shall be conducted under the supervision of the Executive Director by RCRC personnel. 10. Executive Committee of the Authority a. Commosition Tlhe Authority shall appoint no fewer than nine (9) and no more than eleven (11) members of its Board to serve on an Executive Committee. The Chair and Vice Chair of die Authority shall serve on the Executive Committee. b. Powers and Limitations The Executive Conmhittee shall act in an advisory capacity and make recommendations to die Audiority Board. Duties will include, but not be limited to, review of die quarterly and annual budgets, service as die Audit Committee for the Authority, periodically review this Agreement; and complete any olhcr tasks as may be assigned by the Board. Tlhe Executive Committee shall be subject to all linhitalions imposed by this Agreement, other applicable law,and resolutions of the Board. C. Quorum A majority of die Executive Committee shall constitute a quorum for transacting business of die Executive Coirunittee. 11. Disposition ofAsset>s Upon termination of this Agreement, all remaining assets and liabilities of the Authority shall be distributed to die respective Members in such manner as sliall be determined by die Board and in accordance with the law. 12. Agreement Not Exclusive; Operation in Jurisdiction of Member This Agreement sliall not be exclusive, and each Member expressly reserves its rights to carry out Other public capital improvements and programs as provided for by law and to issue other obligations for those purposes. 11his Agreement shall not be deemed to anhend or alter the 40 terns of other agreements among the Members or Associate Members. 13. Conflict of Interest Mode The Authority shall by resolution adopt a Conflict of Interest Code as required by law. 14. Contributions and Advances Contributions or advances of public funds and of personnel, equipment or property may be made to the Authority by any Member, Associate Member or any other public agency to further the purpose of this Agreement. Payment of public funds may be made to defray the cost of any contribution. Any advance may be made subject to repayment, and in that case shall be repaid in die manner agreed upon by the advancing Member, Associate Member or other public agency and the Authority at the time of making die advance. 15. Fiscal Year;Accounts;Reports;Annual Budget;Administrative Expenses a. The fiscal year of the Authority shall be the period from January I of each year to and including the following December 31, except for any partial fiscal year resulting from a change in accounting based on a different fiscal year previously. b. Prior to die beginning of each fiscal year, the Board shall adopt a budget for die succeeding fiscal year. C. 'rhe Authority shall establish and maintain such funds and accounts as may be required by generally accepted accounting principles. The books and records of the Authority are public records and sliall be open to inspection at all reasonable times by each Member and its representatives. d. 'fhe Auditor shall either make, or contract Aith a certified public accountant or public accountant to make, an annual audit of the accounts and records of the Authority. The minimum requirement.-, of the audit shall be those prescribed by the State Controller for special districts under Section 26909 of die Government Code of the State of California, and shall conform to generally accepted auditing standards. When an audit of accounts and records is made by a certified public accountant or public accountant, a report thereof shall be riled as it public record with each Member (and also with the auditor of Sacramento County as Cie county in which the Authority's office is located) within 12 months after the end of the fiscal year. e. In any year in which the annual budget of die Authority does not exceed five thousand dollars (85,000.00), the Board may, upon unanimous approval of the Board, replace the annual audit with an ensuing one-year period, but in no event I'or a period longer than two fiscal years. 41 16. Duties of Members or Associate Members; Breach If any Member or Associate Member shall default in performing any covenant contained herein, such default shall not excuse that Member or Associate Member from fulfilling its other obligations hereunder, and such defaulting Member or Associate Member sliall remain liable for the performance of all covenants hereof' Lach Member or Associate Member hereby declares that this Agreement is entered into for the benefit of the Authority created hereby, and each Member or Associate Member hereby grants to the Authority the right to enforce, by whatever lawful means die Authority deems appropriate, all of the obligations of each of the parties hereunder. Each and all of the remedies given to the Authority hereunder or by any law now or hereafter enacted are cumulative, and the exercise ol'one right or remedy shall not impair die right of die Authority to any or all other remedies. 17. Indemnification To the full extent permitted by law, the Board may authorize indemnification by tine Authority of any person who is or was a Board Delegate,alternate, officer, consultant,employee or other agent of the Authority, and who was or is a party or is threatened to be made a party to a proceeding by reason of the fact that such person is or was such a Delegate, alternate, officer, consultant, employee or other agent of the Authority. Such indemnification may be made against expenses, judgments, lines, settlements and other amounts actually and reasonably incurred in connection with such proceeding, if such person acted in good faitlh and in a manner such person reasonably believed to be in the best interests of the Audhority and, in the case of a criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful and,in the case of an action by or in (he right of the Authority, acted with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. 18. Immunities All of the privileges and immunities from liabilities, exemptions from law, ordinances and rules, all pension, relief, disability, workers' compensation and other benefits which apply to the activity of officers, agents or employees of any of the Members or Associate ]Members when perfonning their respective functions, shall apply to them to tine same degree and extent while cngaged.as Delegates or otherwise as an officer, agent or other representative of tine Authority or while engaged in the performance of any of tlheir functions or duties under the provisions of this Agreement 19. Amendment This Agreement may be amended by the adoption of die amendment by the governing bodies of a majority of the Members. The amendment shall become effective on die first day of the month following the last required member agency approval. An amendment may be initiated by (he Board, upon approval by a majority of the Board. Any proposed amendment,including the text of Ilse proposed change, shall be given by die Board to each Member's Delegate for presentation and action by each Member's board within 60 days, which tine may be extended by 42 the Board. The list of Members, Attachment 1, may be updated to reflect new and/or withdrawn Members without requiring formal atnendnrcrrt of the Agreement by the Authority Board of Directors. 20. Withdrawal of Member or Associate Member If a Member withdraws as member of RCRC, its membership in the Authority shall automatically terminate. A Member or Associate Member may withdraw from this Agreement upon written notice to the Board; provided however, that no such withdrawal shall result in the dissolution of the Authority as long as any Bonds or other obligations of the Authority remain ouLstanding. Any such withdrawal_shall become effective thirty (30) days after a resolution adopted by die '.Members governing body which authorizes withdrawal is received by the Authority. Notwithstanding the foregoing, any termination of membership or withdrawal from the Authority shall not operate to relieve any terminated or withdrawing Member or Associate Member from Obligations incurred by such terminated or withdrawing Member or Associate Member prior to the time of its termination or withdrawal. 21. Miscellaneous a. Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. b. Construction. lnrc section headings herein are for convenience only and are not to be construed as modifying or governing the language in the section referred to. C. Approvals. N"icrever in this Agreement any consent or approval is required, the same shall not.be unreasonably withheld. d. Jurisdiction;Venue. This Agreement is made in the State of California, under the Constitution and laws of such State and is to be so construed; any action to enforce or interpret its terns shall be brought in Sacramento County, California. C. Integration. 111is Agreement is the complete and exclusive statement of the agreement among the parties hereto, and it supersedes and merges all prior proposals, understandings, and other agreements, whether oral, written, or implied in conduct, between and among die parties relating to the subject matter of this Agreement. 1'. Successors; Assignment, 11is Agreement shall be binding upon and shall inure to the benefit of the successors of die parties hereto. Except to the extent expressly provided licrein, no Member may assign any right or obligation hereunder without the consent of die Board. g. Severability. Should any part, tern or provision of this Agreement be decided by die courts to be illegal or in conflict with any law of the State of California, or otherwise be 43 rendered unenforceable or ineffectual, the validity of the remaining parts, terns or provisions hereof shall not be affected dhereby. The parties hereto have caused this Agreement to be executed and attested by their properly authorized officers. AS ADOPTED BY THE MEMBERS: Originally dazed July 1, 1993 Amended and restated December 10, 1998 Amended and restated February 18, 1999 Amended and restated September 18, 2002 Amended and restated January 28, 2004 Amended and restated December 10, 2014 Amended and restated May 5, 2015 [SIGNA%Z'RE5 ONFOLL0WING PALLS] 44 ATTACHMENT 1 GOLDEN STATE FINANCE AUTHORITY MEMBERS As of May 5.2015 Alpine County Amador Count}' Butte County Calaveras County Colusa County Del Norte County El Dorado County Glenn County Humboldt County Imperial County Inyo County Lake County Lassen County Madera County Mariposa County Mendocino County Merced County Modoc Count}, Mono County Napa County Nevada County Placer County Plumas County San Benito County Shasta County Sierra County Siskiyou County Sutter County Tehama County Trinity County Tuolumne County Yolo County Yuba County 45 SIGNATURE PAGE FOR NEW ASSOCIATE MEMBERS NAME OF COUNTY OR CITY: Dated: By: Name: Title: Attest: By [Clerk of the Board Supervisors or City Clerk] 49 Resolution No. Page 6 Exhibit B JPA Addendum GOLDEN STATE FINANCE AUTHORITY AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT (Original date July 1, 1993 and as last amended and restated May 5, 2015) SIGNATURE PAGE WITH ASSOCIATE MEMBERSHIP TERMS AND CONDITIONS FOR CITY OF ("JPA Addendum") The City of Palm Springs ("City') hereby agrees to become an Associate Member of the Authority expressly subject to the following: 1. The City joins the Authority as an Associate Member solely for the purpose of enabling the Authority to make its property-assessed clean energy (PACE) Programs (the "Authority PACE Programs")' available to properties within the jurisdictional boundaries of the City, as further set forth in Resolution No. and adopted by the City Council of the City on July 5, 2017, ("Resolutions"). 2. Notwithstanding Section 4(d) of the Amended and Restated Joint Exercise of Powers Agreement entered into on July 1 , 1993, as amended to date ("Agreement"), no terms and conditions established by the Board, and not contained in the Agreement as of the date of City's execution of this JPA Addendum, shall be binding on the City unless and until approved, in writing, by the City Manager of the City ("City Manager"). Further, notwithstanding Section 19 of the Agreement, no amendment to the Agreement which impacts the City, as an Associate Member, shall be binding on the City unless approved in writing by the City Manager. 3. For clarification, and pursuant to Section 6(g) of the Agreement, any Bonds, together with any interest and premiums thereon, shall not constitute debts, liabilities or Obligations of the City. 4. The Agreement shall not be exclusive, and the City expressly reserves its rights to carry out other public capital improvements and programs as provided for by law and to issue other obligations for those purposes. 5. The right of the City to withdraw from the Authority, which withdrawal shall become effective thirty (30) days after a resolution adopted by the City Council of the City is received by the Authority, except that the City Manager may terminate the Authority's rights and authorizations as set forth in the Resolutions. 1 The Authority PACE Programs are(i)a financing program authorized under Chapter 29 of the Improvement Bond Act of 1911, being Division 7 of the California Streets and Highways Code; and (ii) a financing program authorized under the Mello-Roos Community Facilities Act, set forth in sections 53311 through 53368.3 of the California Government Code, and particularly in accordance with Sections 53313.5(I)and 53328.1(a). 47 Resolution No. Page 7 6. Section 4(d) of the Agreement authorizes the Board to add an Associate Member by an affirmative vote of the Board with such rights, privileges, and responsibilities established from time to time by the Board. Accordingly, through the affirmative vote of the Board to add City as an Associate Member, the Authority hereby agrees to such the terms and conditions contained in this JPA Addendum and the Resolutions; provided; no future change to the Agreement shall be effective without compliance with paragraph 2 of this Addendum. 7. By its signature below, the Authority agrees to be bound by this JPA Addendum, and it further agrees that the Authority shall not challenge, in a court of law or otherwise, the validity, legality, and enforceability of this JPA Addendum. [Signatures on following page] 48 Resolution No. Page 8 . GOLDEN STATE FINANCE AUTHORITY AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT (Original date July 1, 1993 and as last amended and restated May 5, 2015) SIGNATURE PAGE FOR NEW ASSOCIATE MEMBERS WITH ASSOCIATE MEMBERSHIP TERMS AND CONDITIONS FOR CITY OF PALM SPRINGS (continued) CITY OF PALM SPRINGS By: Dated: David H. Ready, City Manager ATTEST: REVIEWED AS TO FORM: By: By: Kathleen D. Hart, Edward Z. Kotkin, Interim City Clerk City Attorney ACKNOWLEDGED AND AGREED: By: Name: Golden State Finance Authority 1215 K Street, Suite 1650 Sacramento, CA 95814 82671.0000 41 RENOVATE AN OPEN LETTER TO HERO COMMUNITIES Doing something new is never easy.But if you're committed to learning lessons along the way,you continuously get better. The idea behind HERO is simple.We want to help homeowners invest in their homes to save energy or water, or to make their most valuable investment—their home—safer and more resilient to extreme weather.Our company,Renovate America,allows only efficiency-rated products,monitors contractor performance,and stands by homeowners from start to finish. The contractors we work with agree not to be paid until the project is done to the homeowner's satisfaction.A property's eligibility is primarily based on equity in the home and the homeowner's tax and mortgage payment history,and financing is repaid through a new line item on the local property taxes. It's called PACE,or Property Assessed Clean Energy. Simple ideas aren't always simple to implement.Just over five years ago,the first homeowner used HERO financing for an energy-efficient home improvement.Since then,Renovate America has helped 90,000 homeowners make improvements to their homes.We have worked to improve the process for contractors,the accountability to local governments,and most importantly,the experience for every homeowner. We want you to understand what we've learned and done along the way.And that we're not done yet. Every year,one in six homeowners replaces a system or product in their home that affects energy consumption. Too often,they don't choose the product most likely to save energy or water or reduce carbon emissions-a product that can often help pay for itself over time.Or they want to go solar,and need a way to pay for it. HERO is working to lower energy and water consumption.Last year,the Lawrence Berkeley National Laboratory reported that,in 2014,46%of financing volume'in home improvements that affect energy consumption was made by Renovate America's HERO program and one Massachusetts government program. HERO homeowners will save an estimated$3.6 billion in lower utility bills and more than 8 billion gallons of water. The investment research firm Morningstar issued a positive verdict on how PACE is working in the marketplace with a recent report:"Morningstar views PACE as a beneficial program that offers corporations and consumers the opportunity to affordably implement energy-efficiency and renewable-energy upgrades,"allowing homeowners to make improvements that"bolster property values and lead to tax and utility savings." HERO is helping to improve homes.A peer-reviewed study'published in the Journal of Structured Finance in 2016 found"the net impact of PACE on resale value of a home,after taking into account the cost of improvements, ranges from$199 to$8,882."That means homeowners recovered at least 100%of the cost when they sold their home.The study compares that to other popular home improvements, such as kitchen and bathrooms,and cites prior studies showing they recover only 58%to 66%of their cost when the home is sold. HERO is creating local jobs.In five years,we estimate we've created more than 18,000 jobs and$3.7 billion in economic impact in the communities we serve. https://emR[bl.gov/sites/all/files/ibn l-1005754.pdf htLp://www.iijournaLs.com/doi/abs/10.3905/jsf.2016.21.4.006 RENOVATE MERICA Here's how HERO helps.Let's say it's 103 degrees outside and your air conditioning has given up.What options do you have in terms of new systems?How do you know which contractors are above board?We created an instantly accessible database of more than a million performance-rated products.That's for the planet.We set up a first-ever daily interface with the California Contractors State License Board to check contractor licenses.We've declined to do business with more than 1,900 contractors based on licensure checks alone.We brought new tech tools to the underwriting system to try to get you and contractors in your home an accurate read on whether you and your home are eligible for HERO financing within minutes. To help homeowners understand the terms of the financing,we put in place a disclosure form modeled after the federal Consumer Financial Protection Bureau's"Know-Before-You-Owe"mortgage disclosure.We also require homeowners to do a live,recorded phone call with us 100%of the time before they can sign financing documents— so we can go over the key terms. For seniors,we ask extra questions and provide additional review of those calls.We have an elder advocate monitoring to help make sure financing and projects only move ahead if homeowners age 65 and up have been clearly communicated their obligation. We strive to offer more than financing—we strive to offer peace of mind.We offer investigative and dispute resolution services if you're not happy with the job your contractor did. When HERO homeowners want to sell or refinance,we're still here.We have a group called HERO Property Advisors standing by to help you,your agent,and your lender make the most of the energy-or water-saving upgrades and work with lenders. In 2017,we set new interest rate options.When the new rates are offered by a contractor,they will lower financing costs quite a bit. We are asking for more oversight. Not what you normally hear a business say. We joined with others in the PACE industry to establish new national standards informed by the U.S.Department of Energy's best practices for PACE. We're asking state legislators in California to enact into law many of these requirements,building on the disclosure requirements they made law last year.We are working on how underwriting should include income considerations. We are working with national consumer advocacy organizations to make the case for federal regulation. We're serious about consumer protection. We brought big data to home improvement.We brought a new level of data rigor and objective evaluation to our contractors.We stopped doing business with 55 contractors with poor records in the last six months as a result of this new Contractor Quality Scoring system.That's out of a pool of about 500 contractors active with the program in a given month.Good contractors don't have a lot of complaints.Those are the ones we help you find.Those who do have complaints,and don't work to fix them,are suspended or terminated. There's really nothing else like this in home improvement. RENOVATEAMERICA' We are aligning our own team to this promise.Like most businesses,we give bonuses based on performance. We're shifting the focus from volume to quality.We are now tying employee incentive pay directly to our Contractor Quality Scorecard.It's about creating a pool of home improvement pros who care about happy homeowners. We also brought on new leadership to the teams that work most closely with contractors. What if we made homeowners the ones who knock on a contractor's door,instead of the other way around? We'll be launching a new version of renovateamerica.com soon,and the idea is to help and inspire people to make the right home improvement that will save the most on utilities and add the most value to their home.We will give homeowners a new digital platform to find the highest-rated contractors in their area,energy-saving ideas and information,and financing options. If you've read this far,you care. Be assured,we get it.We know the idea of PACE is a good one;success for homeowners lies in how well it's done. To that end,the American Council for an Energy Efficient Economy notes'in a recent commentary that"the PACE industry is voluntarily adopting more stringent standards than traditional home improvement loans." With HERO,we only exist in a community because local governments decide to make the power of PACE financing available.We welcome scrutiny,and we want to know what more we can be doing. Thank you. JP McNeill CEO 3 http://-aceee.org/blog/2017/03/what-wall-street-journal-got-wrong RENOVATE AN OPEN LETTER TO HERO COMMUNITIES Doing something new is never easy. But if you're committed to learning lessons along the way,you continuously get better. The idea behind HERO is simple.We want to help homeowners invest in their homes to save energy or water, or to make their most valuable investment—their home—safer and more resilient to extreme weather.Our company,Renovate America,allows only efficiency-rated products,monitors contractor performance,and stands by homeowners from start to finish. The contractors we work with agree not to be paid until the project is done to the homeowner's satisfaction.A property's eligibility is primarily based on equity in the home and the homeowner's tax and mortgage payment history,and financing is repaid through a new line item on the local property taxes. It's called PACE,or Property Assessed Clean Energy. Simple ideas aren't always simple to implement.Just over five years ago,the first homeowner used HERO financing for an energy-efficient home improvement.Since then,Renovate America has helped 90,000 homeowners make improvements to their homes.We have worked to improve the process for contractors,the accountability to local governments,and most importantly,the experience for every homeowner. We want you to understand what we've learned and done along the way.And that we're not done yet. Every year,one in six homeowners replaces a system or product in their home that affects energy consumption. Too often,they don't choose the product most likely to save energy or water or reduce carbon emissions-a product that can often help pay for itself over time.Or they want to go solar,and need a way to pay for it. HERO is working to lower energy and water consumption.Last year,the Lawrence Berkeley National Laboratory reported that,in 2014,46%of financing volume'in home improvements that affect energy consumption was made by Renovate America's HERO program and one Massachusetts government program. HERO homeowners will save an estimated$3.6 billion in lower utility bills and more than 8 billion gallons of water. The investment research firm Morningstar issued a positive verdict on how PACE is working in the marketplace with a recent report:"Morningstar views PACE as a beneficial program that offers corporations and consumers the opportunity to affordably,implement energy-efficiency and renewable-energy upgrades,"allowing homeowners to make improvements that"bolster property values and lead to tax and utility savings." HERO is helping to improve homes.A peer-reviewed study'published in the Journal of Structured Finance in 2016 found"the net impact of PACE on resale value of a home,after taking into account the cost of improvements, ranges from$199 to$8,882"That means homeowners recovered at least 100%of the cost when they sold their home.The study compares that to other popular home improvements,such as kitchen and bathrooms,and cites prior studies showing they recover only 58%to 66%of their cost when the home is sold. HERO is creating local jobs.In five years,we estimate we've created more than 18,000 jobs and$3.7 billion in economic impact in the communities we serve. https://ern p.lb l.gov/sites/all/files/ibn t-1005754.pdf http://www.iijournat5.com/doi/abs/10.3905/jsf.2016.21.4.006 RENOVATEAMERICA Here's how HERO helps.Let's say it's 103 degrees outside and your air conditioning has given up.What options do you have in terms of new systems?How do you know which contractors are above board?We created an instantly accessible database of more than a million performance-rated products.That's for the planet.We set up a first-ever daily interface with the California Contractors State License Board to check contractor licenses.We've declined to do business with more than 1,900 contractors based on licensure checks alone.We brought new tech tools to the underwriting system to try to get you and contractors in your home an accurate read on whether you and your home are eligible for HERO financing within minutes. To help homeowners understand the terms of the financing,we put in place a disclosure form modeled after the federal Consumer Financial Protection Bureau's"Know-Before-You-Owe"mortgage disclosure.We also require homeowners to do a live,recorded phone call with us 100%of the time before they can sign financing documents— so we can go over the key terms. For seniors,we ask extra questions and provide additional review of those calls.We have an elder advocate monitoring to help make sure financing and projects only move ahead if homeowners age 65 and up have been clearly communicated their obligation. We strive to offer more than financing—we strive to offer peace of mind.We offer investigative and dispute resolution services if you're not happy with the job your contractor did. When HERO homeowners want to sell or refinance,we're still here.We have a group called HERO Property Advisors standing by to help you,your agent,and your lender make the most of the energy-or water-saving upgrades and work with lenders. In 2027,we set new interest rate options.When the new rates are offered by a contractor,they will lower financing costs quite a bit. We are asking for more oversight. Not what you normally hear a business say. We joined with others in the PACE industry to establish new national standards informed by the U.S.Department of Energy's best practices for PACE. We're asking state legislators in California to enact into law many of these requirements,building on the disclosure requirements they made law last year.We are working on how underwriting should include income considerations. We are working with national consumer advocacy organizations to make the case for federal regulation. We're serious about consumer protection. We brought big data to home improvement.We brought a new level of data rigor and objective evaluation to our contractors.We stopped doing business with 55 contractors with poor records in the last six months as a result of this new Contractor Quality Scoring system.That's out of a pool of about 500 contractors active with the program in a given month.Good contractors don't have a lot of complaints.Those are the ones we help you find.Those who do have complaints,and don't work to fix them,are suspended or terminated. There's really nothing else like this in home improvement. RENOVATEAMERICA' We are aligning our own team to this promise.Like most businesses,we give bonuses based on performance. We're shifting the focus from volume to quality.We are now tying employee incentive pay directly to our Contractor Quality Scorecard. It's about creating a pool of home improvement pros who care about happy homeowners. We also brought on new leadership to the teams that work most closely with contractors. What if we made homeowners the ones who knock on a contractor's door,instead of the other way around? We'll be launching a new version of renovateamerica.com soon,and the idea is to help and inspire people to make the right home improvement that will save the most on utilities and add the most value to their home.We will give homeowners a new digital platform to find the highest-rated contractors in their area,energy-saving ideas and information,and financing options. If you've read this far,you care. Be assured,we get it.We know the idea of PACE is a good one;success for homeowners lies in how well it's done. To that end,the American Council for an Energy Efficient Economy notes3 in a recent commentary that"the PACE industry is voluntarily adopting more stringent standards than traditional home improvement loans." With HERO,we only exist in a community because local governments decide to make the power of PACE financing available.We welcome scrutiny,and we want to know what more we can be doing. Thank you. JP McNeill CEO 3 http://aceee.org/blog/2017/03/what-wall-street-journal-got-wrong r - �k RENOVATEAMERICA March 27, 2017 The Honorable Mike McGuire Chair, Committee on Governance and Finance California State Senate State Capitol, Room 408 Sacramento, CA 95814 RE: SB 242 (Skinner) Property Assessed Clean Energy (PACE) Programs --- SUPPORT Dear Chairman McGuire: On behalf of Renovate America, I write to express our overall support for SB 242 (Skinner). Renovate America, headquartered in San Diego, is the leading provider of Property Assessed Clean Energy financing for energy and water efficiency home improvements in the United States. Our Home Energy Renovation Opportunity (HERO) Program provides local governments with a comprehensive residential PACE financing solution that also includes robust consumer protections, business automation software, and ongoing access to private capital in support of these important policy objectives. HERO is offered in partnership with the Western Riverside Council of Governments (WRCOG), the San Bernardino Associated Governments (SANBAG), and Los Angeles County in over 440 cities and counties across the State, and has financed more than $2.23 billion across more than 90,000 homes. Through PACE, property owners may enter into an agreement with their participating local government authority to finance the installation of energy-efficient, water-efficient, and/or renewable energy systems permanently affixed to their property. Because the types of upgrades being made to the home will yield a public benefit in the form of reduced greenhouse gas emissions and/or water consumption, the local government authority capitalizes the eligible improvement through the issuance of a revenue bond secured by a voluntary assessment lien on the property. This form of financing is an extension of the special districts and the special assessment power which local governments use across the state to finance other improvements to the public infrastructure such as parks, roads and sewers. We fully support the goal of ensuring that PACE programs are implemented in a manner which reflect best practices and that PACE program administrators and contractors abide by standards which honor the integrity of the public-private partnership at the heart of PACE. We thank Senator Skinner for her leadership in this regard and look 1 16620 W Bernardo Dr.,San Diego,CA 92127 1877,747.4889 , renovateamenca.corn RENOVATEAMERICA forward to working with her and with the legislature in the weeks and months ahead on this critical legislation. Sincerely, Ad A. Matusiak Executive Vice President cc: Senator Janet Nguyen Members, Senate Committee on Governance and Finance Jimmy MacDonald, Consultant, Senate Government & Finance Committee Ryan Eisberg, Consultant, Assembly Republican Caucus 2 16620 W Bernardo Dr..San Diego,CA 92127 1 877.747.4889 1 renova[eamerica.com VIRGO ABS Research Clearing the Air —Addressing Three Misconceptions of PACE February 2017 Authors: Phoebe Xu I Senior Vice President I phoebe.xu(@morningstar.com 1+1 646 560-4562 Stephanie K. Mah I Director of Research I steohanie.mah(@morningstar.com 1+1 646 560-4571 Brian Sandler I Associate Vice President I brian.sandler(@morninastar.com 1 +1 646 560-4557 Analytical Manager: Brian Grow I Managing Director I brian.grow(@morninastar.com I+ 1 646 560-4513 Morningstar Perspective As financing of energy-efficient projects through property assessments becomes more widespread, concerns and misconceptions regarding its use and oversight have become more common. Morningstar Credit Ratings, LLC explores three misconceptions we have heard from market participants regarding the residential property assessed clean energy sector. First,we note that a PACE assessment is an asset-based obligation, rather than a mortgage loan, so lien-to-value ratio, more than an individual's credit score, is a more appropriate risk indicator.At their core, PACE obligations and mortgage loans are distinct,and PACE assessments should be subject to different credit analysis.Second,we believe that a PACE assessment does not materially increase the risk to the underlying mortgage, even though the total lien-to-value ratio may increase. Lastly,we address the level of industry oversight amid concerns regarding the possibility of inappropriate financing.There are two tiers of oversight,with state and local governments specifying eligible projects and standardizing practices, as well as industry-initiated internal controls aimed at enhancing consumer protections. Misconception #1: Not Using FICO is Worrisome Lien-to-value ratio is the key credit-risk consideration,because PACE lending is tied to the asset and not to the creditworthiness of the property owner;thus, leverage ratios are more relevant risk indicators than borrowers'FICO scores.An expectation to see FICO scores in residential PACE eligibility criteria may exist because of the similarities between PACE assessments and mortgage loans. Clearing the Air—Addressing Three Misconceptions of PACE I February 20171 www.morningstarcreditratings.com 1+1 B00 2W1665 Indeed, both share the same collateral,the same obligation to pay,and the ultimate consequence of property loss if the contractual obligation is not met. However,a critical difference is that the obligation to pay a PACE assessment remains with the land, not the homeowner. Originators may consider three types of leverage ratios when underwriting PACE assessments on the property:the PACE lien to the property's market value,annual tax and assessment to the property's market value,and combined mortgage loan and PACE assessment to the property's value. PACE programs generally originate assessments with low leverage ratios,as owners with more equity in their properties have more incentive to pay their obligations.For example,the assets in HERO Funding 2016-4 had a weighted average PACE lien-to-value ratio of 6.68%and a weighted average combined lien-to-value ratio of 62.74%. Combined lien- to-value is the ratio of the mortgage loan and PACE assessment to the property's market value. The primary risk in PACE securitizations is liquidity.When property owners fail to pay PACE assessments,cash flow to the deal could be disrupted. Liquidity risk is mainly associated with the timing and amount of recoveries.While FICO scores are not part of the underwriting criteria for most PACE programs,major originators collect borrower FICO data.To estimate mortgage defaults in PACE securitizations, Morningstar considers each borrower's FICO score, mortgage balance,and combined lien-to-value ratio,as mortgage defaults may disrupt payments on PACE obligations. Morningstar has not observed any major PACE originators pursuing originations to borrowers with weaker credit.Indeed, borrowers associated with GoodGreen 2016-1 Trust,rated by Morningstar in November, had a weighted average FICO score above 700. Besides,a FICO score reflects only the current homeowner's creditworthiness,and the score may materially change when property ownership changes. PACE assessments typically have a term of 15 to 30 years,and over that period multiple property owners may be required to make PACE payments because the PACE obligation remains outstanding until paid in full.For this reason, PACE is called an assessment or special tax rather than a loan.When analyzing PACE securitizations,Morningstar assumes each assessment will go through multiple default cycles to address the potential deterioration of a FICO score and the possible liquidity interruptions when property ownership changes. In addition, Morningstar may review historical weighted average lien-to-value ratio and the weighted average FICO score of property owners included in an originator's PACE portfolio to identify any trends and may compare them against those of peer PACE originator portfolios. 2 ArKr 02017 Morningstar Credit Ratings,LLC.All Rights Reserved.Morningstar Credit Ratings,LLC is a wholly owned subsidiary of Morningstar,Inc. MnRNINGSi�r�and is registered with the U.S.Securities and Exchange Commission as a nationally recognized statistical rating organization(NRSR0).Morningstar and the Morningstar logo are either trademarks or service marks of Morningstar,Inc. Clearing the Air—Addressing Three Misconceptions of PACE I February 20171 www.morningstarcreditratings.com 1+1 800 299.1665 Misconception#2: PACE Sharply Increases Risk to the Underlying Mortgage While a PACE assessment raises a property's lien-to-value ratio, any increased risk to the underlying mortgage is likely minimal.The PACE assessment is usually small in proportion to the mortgage,and the improvements that PACE finances often enhance the property's value and contribute to cost savings. While most PACE assessments enjoy priority of payment over the mortgage lender,the magnitude of any loss to the lender is likely to be limited.When a property owner defaults on a PACE payment, only the overdue amount,and not the entire balance, is due. This outstanding delinquent PACE amount has priority of payment over a mortgage loan.As noted,the remaining PACE obligation passes through to the subsequent property owner when a property is sold. In addition,if there is a mortgage on the property,the mortgage servicer is likely to advance PACE payments so the lender can control the disposition of the property to protect its interest. As mentioned,residential PACE obligations are relatively small compared with mortgage loan balances and home values.For an average PACE assessment of$20,000 with a 15-year original term and an 8.5%interest rate,the PACE payment is roughly$200 per month,which can be similar to the existing monthly property tax payment.The PACE payment is only about 14a/o of an average monthly mortgage payment of$1,398 for a 30-year mortgage with a balance of$276,000 and a 4.5%interest rate. While a PACE assessment increases a borrower's debt, Morningstar believes these financed improvements often increase a property's resale value. Moreover,the cost savings from such enhancements can partially offset a homeowner's debt burden. Property owners often achieve cost savings such as lower energy and water bills from PACE-financed improvements and savings from the tax- deductible interest portion of PACE payments. Misconception#3: Industry Lacks Oversight Government oversight of PACE programs offers various consumers protections.While private companies administer most PACE programs,local governments typically set guidelines and policies,including eligibility criteria,fee structures,and interest rates. California and Florida,two of only three states that currently offer residential PACE financing, have had courts validate their programs. Morningstar believes that the PACE program's oversight by government authorities and the evolving consumer-disclosure framework will increase transparency and consumer protection. For example, Gov.Jerry Brown signed Assembly Bill 2693(PACE Preservation and Consumer Protections Act)into California law.The law,effective Jan. 1, 2017,introduced more safeguards, including providing consumers with complete financing terms in advance of signing any documents,full disclosure that an owner 3 ©2017 Morningstar Credit Ratings,U-C.All Rights Reserved.Morningstar Credit Ratings,LLC is a wholly owned subsidiary of Morningstar,Inc. ��\R ulu��(�R and is registered with the U.S.Securities and Exchange Commission as a nationally recognized statistical rating organization(NRSR0).Morningstar � Jr N Il RA I and the Morningstar logo are either trademarks or service marks of Morningstar,Inc. Clearing the Air—Addressing Three Misconceptions of PACE I February 20171 www.mofningstarcieditratings.com 1+1800 299.1665 maybe required by the mortgage lender to fully payoff the PACE assessment before refinancing or selling the property,and allowing homeowners to cancel the contract within three business days of signing.Separately,the Department of Energy in November published best practice guidelines for residential PACE programs,which outline procedures for state and local governments as well as originators to follow. Likewise,the guidelines suggest a"more rigorous"approach to protect consumers, including verbal confirmation of PACE terms with property owners. In addition,the industry has sought to enhance consumer protection. PACENation,the industry association,recommended consumer- protection policies before the PACE Preservation and Consumer Protections Act became law in California.Originators have taken voluntary measures, such as requirement of consumer calls to verify their understanding of the key financing terms,to address consumer-disclosure concerns. Morningstar views government authorities and the industry working together to improve consumer protections as credit positives. The Federal Housing Finance Agency,the independent regulator of Fannie Mae, Freddie Mac,and the Federal Home Loan Bank System,has expressed concerns over PACE's supersenior lien position to mortgage loans. It is possible that the FHFA policy of a property being free and clear of any liens other than a Fannie Mae or Freddie Mac mortgage loan to obtain financing may result in an owner having to fully pay the PACE obligation for the prospective buyer to get funding. In Morningstar's view, FHFA's policy has limited impact on the property's marketability,because owners have the option to repay the PACE assessment when selling their properties. The Department of Housing and Urban Development last year issued a letter offering guidance fpr financing properties with PACE assessments.Such properties are eligible for financing from the Federal Housing Administration(the agency that insures mortgage loans from approved banks)if certain requirements are met.Financing is considered for properties where the PACE assessment functions in a similar fashion to property taxes and the full PACE obligation cannot have a lien status superior to the mortgage obligation. Under this scenario,the PACE lien is not senior to the mortgage and remains with the property. Future PACE payments need to be escrowed.Home buyers of properties with PACE assessments will be responsible for outstanding balances. The FHA stated that this guidance will safeguard it from risk."Lenders must escrow payments for PACE assessment so FHA should never be at risk of losing collateral in a tax sale.FHA is also protected as its appraisal policy requires that appraisals take into account the PACE assessment and the value of the improvements,"the FHA wrote in a prepared statement in July 2016. a ©2017 Morningstar Credit Ratings,LLC.All Rights Reserved.Morningstar Credit Ratings,LLC is a wholly owned subsidiary of Morningstar,Inc. AA^�1`I � � and is registered with the U.S.Securities and Exchange Commission as a nationally recognized statistical rating organization iNRSROi.Morningstar MRNI1f n and the Morningstar logo are either trademarks or service marks of Morningstar,Inc. Clearing the Air—Addressing Three Misconceptions of PACE I February 20171 www.morningstarcreditratings.com 1+1800 299-1655 Morningstar views this clarification as a positive development,because it mitigates concerns about having to pay the entire PACE obligation prior to a home sale.Thus,homeowners will be more receptive to making home improvements and enhancements under a PACE program. Industry Overview State-run PACE programs are designed to finance improvements that promote energy renewal and energy and water conservation including lighting,heating and air-conditioning improvements, roofing,piping,and solar panels,to name a few. Instead of incuring significant up-front costs, property owners may spread the payments over a longer period,ranging from five to 30 years.According to PACENation an industry trade group,19 states and Washington D.C.have active commercial programs. Meanwhile,only California, Florida,and Missouri offer residential programs. Nonetheless,residential PACE financing has skyrocketed over the past few years,with PACENation reporting the cumulative level reaching$3.40 billion at year-end 2016, eclipsing commercial PACE,which totaled approximately$335 million. Cumulative R-Pace Financing 2010-2016 $3,500 $3,000 , CN $2,500 , O $2,000 CT ,C 'y ¢1,500 O ra C LL $1,000 f 500 fo r ry 2010 2011 2012 2013 2014 2015 2016 R-residential Source:PACENation 5 ©2017 Morningstar Credit Ratings,U.C.All Rights Reserved.Morningstar Credit Ratings,LLC is a wholly owned subsidiary of Morningstar,Inc. AA^D1II�rAQ and is registered with the U.S.Securities and Exchange Commission as a nationally recognized statistical rating organization INRSR01.Morningstar M Jnn u MU 1 and the Morningstar logo are either trademarks or service marks of Morningstar,Inc. Clearing the Air—Addressing Three Misconceptions of PACE I February 20171 www,morningstarcreditratings.com 1+1 800 299.1665 Cumulative R-Pace Dollars Securitized* (By$ Funded) 2,000,000.000 i,soo,000,000 w YN, l,000,000,000 C A 8 500,000,000 0 Apr'14 Jul'14 OR'14 2015 Apr'15 Jul'15 Ott'15 2016 Apr'16 0 HERO ftogr EYgi ne W.k, NCarifomlaFIRST 'Ygrene's securitization included a portion of commercial projects as well as residential projects. R-residential Source:PACENation Originators, including Renovate America, Inc.,Ygrene Energy Fund, Inc.,and Renew Financial, have sponsored more than$1.57 billion in PACE securitizations in 2016.The growing appetite for PACE bonds is evidenced by Renovate America's successful completion in September of the largest securitization to date,totaling$320.2 million.Morningstar estimates PACE issuance this year will be about$2 billion. The majority of PACE securitizations have comprised residential PACE assessments.However,Ygrene Energy's GoodGreen 2016-1 Trust was the first to contain both residential and commercial PACE assessments,albeit with commercial assessments representing only about 4.8%.The underlying assets were more geographically diverse, as assessments were from California and Florida,whereas other PACE securitizations typically have had assessments from one state. In the Ygrene transaction, California assessments, known as special taxes in the state,accounted for the bulk,at 82.3%of the portfolio,while assets from Florida represented 17.7%. Compared with other securitizations across structured finance, PACE transactions have been more geographically concentrated. Morningstar views PACE as a beneficial program that offers corporations and consumers the opportunity to affordably implement energy-efficiency and energy-renewable upgrades. In analyzing PACE securitizations, Morningstar considers total leverage a key risk factor,and we believe that a PACE assessment does not materially increase the risk to the underlying mortgage,as energy efficiency improvements should bolster property values and lead to tax and utility savings.As recognition of the nuances in this asset-based obligation becomes widespread,acceptance should fuel future growth. 6 ^ ©2017 Morningstar Credit Ratings,U.C.All Rights Reserved.Morningstar Credit Ratings,LLC is a wholly owned subsidiary of Morningstar,Inc. Ml JRNIN� ►Y Ain{1� and is registered with the U.S.Securities and Exchange Commission as a nationally recognized statistical rating organization(NRSROi.Morningstar and the Morningstar logo are either trademarks or service marks of Morningstar,Inc. Clearing the Air—Addressing Three Misconceptions of PACE I February 20171 www.mofningstarcreditratings.com 1+1 800 299-1665 DISCLAIMER The content and analysis contained herein are solely statements of opinion and not statements of fact,legal advice or recommendations to purchase, hold,or sell an securities or make an other investment decisions. NO WARRANTY, EXPRESS OR P Y Y IMPLIED,AS TO THE ACCURACY,TIMELINESS,COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MORNINGSTAR IN ANY FORM OR MANNER WHATSOEVER. To reprint,translate, or use the data or information other than as provided herein,contact Vanessa Sussman(+ 1 646 560-4541)or by email to:vanessa.sussman(@morninastar.com. 7 ©2017 Morningstar Credit Ratings,LLC.All Rights Reserved.Morningstar Credit Ratings,LLC is a wholly owned subsidiary of Morningstar,Inc. MC�RNINGSia�and is registered with the U.S.Securities and Exchange Commission as a nationally recognized statistical rating organization iNRSROi.Morningstar and the Morningstar logo are either trademarks or service marks of Morningstar,Inc. �= hero Improving Home Improvement t_ ,gyp The first thing we learned when we launched the As the leader in PACE financing,we engaged our HERO®Program in California is that people needed more than government partners to help develop industry-wide financing.They needed better control of the process as they consumer safeguard policies for PACE programs as set forth made an investment in their homes to save energy or water. in California law, PACENation policy and the Department of Energy best practices. Our first step to empowering homeowners was to guarantee I contractors wouldn't be paid until the homeowner signed Today,we're seeing the positive impacts on our local off that the project was done to their satisfaction. Next, economies and the environment start to add up. Consumer we set up a daily check on contractor licenses and offered safeguards are at the heart of all of those gains. dispute resolution support. HERO IN THE CITY OF PALM SPRINGS Environmentpl HERO in Impact Palm Springs Energy Saved(kWh-e) 37.6M yy.. Water Saved(gal) 14.01M r • Emissions Reduced(ton) 10.7K Impact Economic •® Homes Improved 188 Local Jobs Created 43 Amount Funded $5.11M Local Economic Stimulus $8.86M -impacts are projections based on lifetime of installed products ail Increasing Value BUILDING TRUST HERO helps homeowners lower utility bills in the short term, but we've seen early data'that shows HERO may have a positive effect on home values. Additionally, recent market data shows HERO homes in the Inland Empire of By offering innovative financing California often spent fewer days on the market.These homes had competitive with industry-leading consumer sales prices and list-to-sale price ratios as compared to the larger market during safeguards, HERO is helping the same timeframe. homeowners feel confident making energy-efficient, renewable energy and water- HERO Home Sates MLS Market saving home improvements. In fact, four out of five homeowners choose HERO AVERAGE SALES PRICES 2016 for their PACE project. We have a support team available WOO( to help both contractors and homeowners seven days a week. $375.000 $350,000 $325,000 $300,000 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec )Xn NA 9 4 of HERO customers AVERAGE DAYS ON MARKET 2016 agree they would use HERO again 90 in the future' 80 70 60 50 40 30 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec k7 8 of homeowners are likely AVERAGE LIST-TO-SALE PRICE RATIO 2016 to recommend their HERO contractor to a friend or relative' 104% 100% ■ ss^„ 97% 907 g7% Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov D,. of funded projects are completed without dispute' r PACE Industry-Leading Consumer Safeguards Renovate America is the leader in implementing comprehensive consumer safeguards. This provides assurance to local communities that PACE programs are protecting homeowners and delivering on public-private partnership responsibilities. Po PACE Industry Compliance (U Offering Ongoing Protection Everyone Agrees to the Rules. Every contractor registered Homeowners Get the Final Say. Guaranteed. We work with HERO has agreed to follow our guidelines, which only with contractors who have agreed not to be paid until includes our PACE industry-leading consumer safeguards the homeowner has signed off that the project has been that help protect homeowners throughout their projects. completed to their satisfaction. If the homeowner isn't satisfied,we're not satisfied. Qualified Products on Every Job.California PACE law requires financing to be applied toward a single purpose: improving a Dispute Resolution Support. Unlike many other financing home with products that are certified to be energy efficient options,we help homeowners and contractors resolve or water efficient. Products installed in a HERO project disputes. are required to meet local, state or federal efficiency or performance standards. Selling and Refinancing Support.Our HERO Property Advisors are available to answer questions about a Underwriting Criteria.We have a tech-enabled system homeowner's assessment throughout sale or refinance that can give same-day approvals—but to verify that transactions with their home. When homeowners sell or homeowners satisfy our underwriting standards. refinance, responsibility for the remaining assessment may be able to transfer to the new owner or the new mortgage.The FHA and VA have issued clear guidance in 614 Providing Homeowner Clarity support of PACE assessments remaining on the property Clear Disclosures.We show all the costs and terms in a when a home is sold and an FHA-/VA-secured mortgage simple, clear form modeled after the"Know Before You is used by the purchaser. Owe"form homebuyers see when they purchase a home. Contractor Quality Rating.We work with hundreds Terms Confirmed by Phone.We conduct recorded calls of contractors on a regular basis. We now have a with homeowners to confirm the products being installed, data-driven Contractor Quality Rating system to track as well as details of the PACE assessment. customer satisfaction, how quickly contractors resolve complaints and how serious any quality issues are. Senior Safeguards.We take extra steps with seniors Excellent contractors get referrals from us. Those who 65+ and help guide them through the process. are unable to maintain good ratings are removed from our program. HERO Success Stories Teresa & John Simon .. Through HERO, the Simons upgraded to a two-zone heating and t \ cooling system powered by home solar.The couple works from home, and are now able to have their respective workspaces at the �I temperatures they prefer—with an electricity bill they both like a lot better.And no wonder their electricity bill went from around $400 each month to just$70 per month. Mauzy Heating, Air & Solar r�+ Since they've started working with the HERO Program, Mauzy r Heating,Air 6 Solar has increased their business and added 121 jobs in _ San Diego County. Mauzy Heating,Air Et Solar President Matt Mauzy says, "HERO is a game-changer for our customers because they are able to make these energy-efficient upgrades and live a more comfortable lifestyle." Helping communities thrive, one home at a time. Renovate America is on a mission to help homeowners across the country make their homes more comfortable and efficient. Through award-winning programs like HERO, Renovate America offers an innovative way for homeowners to make energy- efficient and water-saving upgrades—with peace of mind throughout the entire process. U.S GREEN BUILDING COUNCIL . U.S.ENVIRONMENTAL PROTECTION AGENCY Best Residential Partnership U.S. Climate Leadership Award URBAN LAND INSTITUTE for Innovative Partnership Best of the Best CLIMATE CHANGE BUSINESS JOURNAL Business Achievement Award qY - OFFICE OF SCIENCE AND TECHNOLOGY POLICY 2016 White House Water Summit GLOBAL CLEAN TECH Global Clean Tech 100 Renovate America ©2017 Renovate America,Inc.4/1 Palm Springs Hornes 06/10/2015 49,346 06/10/2015-07/05/2017 192 Improved HERO Launch Date Housing Count Report Range Improvements Type Total Installed Bill Savings Energy 273 $6.30M ,.,,. Solar 106 $7.44M Water 11 $133K ate Ser� �sF ,, ; ••,. Lifetime Impact •a . Applications Submitted 504 Applications Approved 375 Funded Amount $5.26M Palm Desert Economic Stimulus $9.10M Jobs Created 45 Energy Saved 38.7M kWh IL Emissions Reduced 11.0K tons Water Saved 14.OM gal Learn how these numbers are calculated at https://www heroeov.com/faa Industry-leading Consumer Safeguards HERO offers homeowners peace of mind throughout their project. Mhero Homeowners Get the Final Say. Guaranteed. Everyone Agrees to the Rules. Clear Disclosures. We work only with contractors Every contractor registered Terms Confirmed by Phone. who have agreed not to be paid with HERO has agreed to follow We show all the costs and We conduct recorded calls until the homeowner has our guidelines, which includes terms in a simple clear form �,vith homeowners to confirm modeled after the Know the roducts bein installed,signed off that the project has our industry-leading consumer Before You Owe" form p g been completed to their safeguards that help protect homebuyers now see when cost and full details of the satisfaction. If the homeowner homeowners and contractors they purchase a house. PACE assessment. isn't satisfied, we're not every step of the way. satisfied. J J J Ongoing Support. Certified Products on Every Unlike many other financing lob. Senior Safeguards options, we help homeowners Products installed in a HERO We take extra steps with and contractors resolve project are required to meet Seniors 65 and over and, at disputes, and we are available local, state, or federal their request, help guide to answer questions when the efficiency or performance them through the process. home is refinanced or sold. standards.