HomeMy WebLinkAbout5/4/2016 - STAFF REPORTS - 2.F. QpLM SA
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Cq<IFORN�P CITY COUNCIL STAFF REPORT
DATE: May 04, 2016 CONSENT CALENDAR
SUBJECT: Authorization to allow Palm Springs to participate in the CaliforniaFIRST
PACE Program
FROM: David H. Ready, City Manager
BY: Office of Sustainability
SUMMARY:
CaliforniaFIRST operates under AB 811 and is enrolled in the Open PACE program,
which has oversight from the California Statewide Communities Development Authority
(CSCDA). This action requests City Council approval to allow the CaliforniaFIRST
program to operate within the City of Palm Springs, as an additional option available to
Palm Springs residents pursuing financing of energy efficiency improvements on their
real property.
RECOMMENDATION:
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 CALIFORNIA
STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY (CSCDA) OPEN PACE
PROGRAMS; AUTHORIZING THE CSCDA TO ACCEPT APPLICATIONS FROM
PROPERTY OWNERS, CONDUCT CONTRACTUAL ASSESSMENT PROCEEDINGS
AND LEVY CONTRACTUAL ASSESSMENTS WITHIN THE TERRITORY OF THE
CITY; AND AUTHORIZING RELATED ACTIONS."
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. 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 Coachella Valley Association of Governments (CVAG)
have both approved implementation of PACE programs on a city and regional level.
The City of Palm Springs currently has three programs operating within City boundaries
ITEM NO. 2•
City Council Staff Report
May 4, 2016-- Page 2
Resolution for CaliforniaFIRST PACE Program
including HERO, Ygrene and Figtree. CVAG has endorsed these and staff has
developed a consistent process for vetting potential PACE programs.
The CaliforniaFIRST program represents the fourth PACE program considered for
adoption by the City. The first PACE program adopted in the Coachella Valley was
adopted only by the City of Palm Springs in 2012; this program, finalized December
2012 by the City of Palm Springs, is known as the FIGTREE program. Subsequently,
CVAG has provided regional coordination with PACE programs within the Coachella
Valley, and formally vetted two other programs: Ygren and HERO. The City adopted
the Ygrene program on June 5, 2013, and adopted the HERO program on January 15,
2015. Those PACE programs adopted valley wide through CVAG rather than City by
City have proven to be the most successful.
STAFF ANALYSIS:
CaliforniaFIRST is now the third PACE program formally vetted and recommended for
approval by CVAG. The CaliforniaFIRST program gives the City of Palm Springs
another PACE program that provides property owners a choice among multiple pre-
qualified PACE financing providers based on their rates, experience and capital
commitment to the California PACE market. There are currently three approved PACE
providers authorized by CSCDA under the Open PACE' program; CalifomlaFIRST is
one of these approved providers and the CSCDA provides oversight of this program.
CSCDA's function is similar to that provided by CVAG for the CV Upgrade/Ygrene
program and by Western Riverside Council of Governments for the HERO program.
The consumer protection policies and procedures adopted by CVAG are used by
CSCDA for this PACE program and are adopted by CalifomiaFIRST. These are the
same policies used by the City's already implemented PACE programs.
Just as Ygrene is the administrator for the CV Upgrade program, Renew Financial is the
administrator for the CaliforniaFIRST program. Similarly, Renovate America is the
contract administrator for the HERO program. Renew Financial was founded in 2008 by
Cisco DeVries, who brought together a multidisciplinary team of experts in finance,
technology, operations and government policy to innovate the Property Assessed Clean
Energy (PACE) financing model. Renew Financial is an Oakland, California based
company that CVAG will be the designated authority in agreement with Renew
Financial. This provides Renew Financial the ability to be a PACE provider in the
Coachella Valley with CVAG oversight of the CaliforniaFIRST program and consistency
with the policies, procedures and oversight that are currently in place with existing
programs. This agreement allows CVAG to provide oversight 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 and assist the City; and
4) handle property owner or contractor complaints.
' httl)://cscda.org/Open-PACE
2 https://renovateamerica.com/
02
City Council Staff Report
May 4, 2016-- Page 3
Resolution for CaliforniaFIRST PACE Program
Upon adoption of the Resolution, the City will allow CaliforniaFIRST to operate within
the City, with CVAG overseeing its administration by Renew Financial. Pursuant to the
agreement with CVAG and Renew Financial:
1 . Renew Financial will:
a. Provide all administration and financing of the program at no cost to the City. At
this time, the program is anticipated to be available only for residential property
owners.
b. Serve as the program administrator for the CaliforniaFIRST program. And will
participate in the program for the Coachella Valley as conduit issuer of bonds while
coordinating with CVAG.
2. CVAG will provide program oversight including:
a. Review and approve projects submitted by property owners participating in the
CaliforniaFIRST program within the CVAG region.
b. Coordinate with Renew Financial on program marketing and outreach, to ensure
that marketing and outreach is compatible with existing PACE programs and
property owners in the CVAG region are aware of the other PACE programs.
c. Provide Renew Financial with a "local presence" at the CVAG offices.
CaliforniaFIRST is a public/private financing PACE program administered by Renew
Financial. CaliforniaFIRST operates under AB 811 and is enrolled in the Open PACE
program, which has oversight from the CSCDA. The CSCDA was created in 1988,
under California's Joint Exercise of Powers Act, to provide California's local
governments an effective tool for the timely financing of community-based public benefit
projects, such as the Open PACE program. Palm Springs previously became a
member agency of the CSCDA.
Similar to our other three existing PACE programs, the CaliforniaFIRST Program is
offered to allow property owners in participating cities and counties to finance renewable
energy, energy and water efficiency improvements on their property. If a property owner
chooses to participate, the installed improvements will be financed by the issuance of
bonds. The bonds are secured by a voluntary contractual assessment levied on the
owner's property, with no recourse to the local government. Property owners who wish
to participate in the program agree to repay the amount borrowed through the voluntary
contractual assessment collected together with their property taxes.
Some benefits to property owners include cost savings, the payment obligation stays
with the property, and a prepayment option. Potential benefits to the City include
increased local jobs, increase in property values and increase in sales, payroll and
property tax revenue. As in conventional assessment financing, the City is not obligated
to repay bonds or to pay delinquent assessments levied on the participating properties.
For our City to participate in the CaliforniaFIRST program we must adopt the resolution
accompanying this staff report. This enables the CaliforniaFIRST Program to be
available to owners of property within our City to finance renewable energy, energy
efficiency and water efficiency improvements.
03
City Council Staff Report
May 4, 2016-- Page 4
Resolution for CaliforniaFIRST PACE Program
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 CaliforniaFIRST Program.
CaliforniaFIRST Program administrative costs are covered through an initial
administrative fee included in the property owner's voluntary contractual assessment
and an annual admini ve fee which is also collected on the property owner's tax bill.
Pr d by:
Michele C. Mician, MS Marcu L. Fuller, MPA, P.E., P.L.S.
Assistant City Manager/City Engineer
David H. Ready, Es .
City Manager
Attachments:
1. Resolution
2. California FIRST FAQ
3. Consumer Protection Information
4. Participating California FIRST areas
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 CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY (CSCDA)
OPEN PACE PROGRAMS; AUTHORIZING THE CSCDA
TO ACCEPT APPLICATIONS FROM PROPERTY
OWNERS, CONDUCT CONTRACTUAL ASSESSMENT
PROCEEDINGS AND LEVY CONTRACTUAL
ASSESSMENTS WITHIN THE TERRITORY OF THE CITY;
AND AUTHORIZING RELATED ACTIONS
WHEREAS, the California Statewide Communities Development Authority (the
"Authority") is a joint exercise of powers authority, the members of which include
numerous cities and counties in the State of California, including the City of Palm
Springs; and
WHEREAS, the Authority is implementing Property Assessed Clean Energy (PACE)
programs, which it has designated CSCDA Open PACE, consisting of CSCDA Open
PACE programs each administered by a separate program administrator (collectively
with any successors, assigns, replacements or additions, the `Programs"), to allow the
financing or refinancing of renewable energy, energy efficiency, water efficiency and
seismic strengthening improvements, electric vehicle charging infrastructure and such
other improvements, infrastructure or other work as may be authorized by law from time
to time (collectively, the "Improvements') through the levy of contractual assessments
pursuant to Chapter 29 of Division 7 of the Streets & Highways Code ("Chapter 29")
within counties and cities throughout the State of California that consent to the inclusion
of properties within their respective territories in the Programs and the issuance of
bonds from time to time; and
WHEREAS, the program administrators currently active in administering Programs are
the AllianceNRG Program (presently consisting of Deutsche Bank Securities Inc.,
CounterPointe Energy Solutions LLC and Leidos Engineering, LLC), PACE Funding
LLC and Renewable Funding LLC, and the Authority will notify the City of Palm Springs
in advance of any additions or changes; and
WHEREAS, Chapter 29 provides that assessments may be levied under its provisions
only with the free and willing consent of the owner or owners of each lot or parcel on
which an assessment is levied at the time the assessment is levied; and
WHEREAS, the City of Palm Springs desires to allow the owners of property
(`Participating Property Owners") within its territory to participate in the Programs and to
allow the Authority to conduct assessment proceedings under Chapter 29 within its
territory and to issue bonds to finance or refinance Improvements; and
06
WHEREAS, the territory within which assessments may be levied for the Programs
shall include all of the territory within the City of Palm Springs official boundaries; and
WHEREAS, the Authority will conduct all assessment proceedings under Chapter 29 for
the Programs and issue any bonds issued in connection with the Programs; and
WHEREAS, 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 or administration of
any bonds issued in connection with the Programs;
NOW, THEREFORE THE CITY COUNCIL DETERMINES, RESOLVES AND
APPROVES AS FOLLOWS:
Section 1. This City Council hereby finds and declares that properties in the
territory of the City will benefit from the availability of the Programs within the territory of
the City and, pursuant thereto, the conduct of special assessment proceedings by the
Authority pursuant to Chapter 29 and the issuance of bonds to finance or refinance
Improvements.
Section 2. In connection with the Programs, the City hereby consents to the
conduct of special assessment proceedings by the Authority pursuant to Chapter 29 on
any property within the territory of the City and the issuance of bonds to finance or
refinance Improvements; provided, that:
(1) The Participating Property Owners, who shall be the legal owners
of such property, execute a contract pursuant to Chapter 29 and comply with
other applicable provisions of California law in order to accomplish the valid levy
of assessments; and
(2) 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 or
administration of any bonds issued in connection with the Programs.
Section 3. The appropriate officials and staff of the City are hereby authorized
and directed to make applications for the Programs available to all property owners who
wish to finance or refinance Improvements; provided, that the Authority shall be
responsible for providing such applications and related materials at its own expense.
The following staff persons, together with any other staff persons chosen by the City
Manager of the City from time to time, are hereby designated as the contact persons for
the Authority in connection with the Programs: Sustainability Manager.
07
Section 4. The appropriate officials and staff of the City are hereby authorized
and directed to execute and deliver such certificates, requisitions, agreements and
related documents as are reasonably required by the Authority to implement the
Programs.
Section 5. The City Council hereby finds that adoption of this Resolution is not
a "project' under the California Environmental Quality Act, because the Resolution 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).
Section 6. This Resolution shall take effect once it is adopted only for a
program administrator who has entered into an administration agreement with the
Coachella Valley Association of Governments (CVAG) and provides the City a fully
executed copy of such agreement with CVAG. The City Clerk is hereby authorized and
directed to transmit a certified copy of this resolution to the Secretary of the Authority at:
Secretary of the Board, California Statewide Communities Development Authority, 1400
K Street, Sacramento, CA 95814.
Adopted this 4th day of May, 2016.
CITY OF PALM SPRINGS
David H. Ready
City Manager
ATTEST:
James Thompson
City Clerk
08
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 May 4, 2016, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
James Thompson, City Clerk
City of Palm Springs, California
09
ATTACHMENT 2
10
„ CaLifocrniaFIRST ”
EFFICIEN FINANCING
EQUENTLY ASKED
UESTIONS
CaliforniaFIRST is a government-supported PACE (Property Assessed Clean Energy) financing
program that provides upfront funding for home energy efficiency, renewable energy and water
saving improvements. With CaliforniaFIRST PACE financing, there's no out-of-pocket cost, and
you repay on your property tax bill over the course of up to 25 years.
1 . What is CaliforniaFIRST?
CaliforniaFIRST is a Property Assessed Clean Energy(PACE) financing program for residential
and commercial properties. CaliforniaFIRST allows property owners to finance the installation of
energy and water improvements on homes or businesses without putting any money down.
Property owners pay back the funds that were used to finance their home improvement project
as a line item on their property tax bill.
CaliforniaFIRST is a public/private partnership, administered by Renew Financial. The program is
sponsored by the California Statewide Community Development Authority(CSCDA).
2. How do I know if my city or county is participating in
CaliforniaFIRST?
CaliforniaFIRST is available to more than 13 million Californians in cities and counties across the
state, from San Diego to Humboldt and El Dorado to Monterey. See the CaliforniaFIRST website
fora list of all participating jurisdictions.
CaliforniaFIRST may only accept financing applications from property owners located in
jurisdictions that have opted in to the program. Local governments around the state can join
CaliforniaFIRST by passing a simple "opt-in" resolution.
Give us a call if you have questions about getting your city or county involved in the program.
3. How is CaliforniaFIRST different from traditional financing?
CaliforniaFIRST is financed through assessments collected on the property tax bill, and the
assessment obligation is almost always assumed by the new owner when the property is sold.
For additional information, please visit . or call 844-589-7953
Page 1 1
Calif rni NFIRSTEFFICIE '"
Y FANCING
MEQUENTLY ASKED
UESTIONS
4. Does CaliforniaFIRST use taxpayer dollars to fund projects or
administer the program?
No. CaliforniaFIRST uses private capital to fund every project. Costs to administer the program
are paid by program participants through fees that are rolled into each project's financing.
County tax assessors and tax collectors incur small costs to place each PACE assessment on the
tax rolls and to collect and distribute the PACE assessment payments. Counties are reimbursed
for these costs through the above-mentioned fees. Cities do not incur any costs as a result of
opting in to the program.
5. What are the benefits?
CaliforniaRRST solves many of the financial hurdles facing property owners wanting to install
energy and water improvements:
Competitive, fixed interest rates (which are effectively even more competitive when
homeowners are eligible to deduct the interest portion of the PACE payments from their
taxes)
Up to a 25-year payback term
Decreased utility bills from reduced electricity and water usage
Qualifying for financing does not consider FICO score
The PACE lien payment obligation usually transfers to the new owner if the property is sold
6. Is this a voluntary program?
Yes. Utilizing CaliforniaFIRST financing is completely voluntary. Properties and property owners
that don't participate remain unaffected.
7. How do I qualify for financing?
Qualifying for CaliforniaFIRST financing is primarily based on:
The property's estimated market value;
The amount of the property owner's equity in the property;
The property owner's recent mortgage and property tax payment history; and
The dollar value of the proposed renewable energy and energy- and water-saving
improvements.
Qualifying is not based on FICO score.
For additional . . please visit californiafirst.orgor call 844-589-7953
Page 2 12
s
CallifocrniaF FINANCING
EFFICIENF2EQUENTLYASKED
QUESTIONS
8. How much money can I borrow?
The minimum amount that can be financed is $5,000. The maximum financing amount is 15% of
the property value, but may not exceed $200,000.
9. What are the interest rates?
As of March 25, 2015, our interest rates are:
RepayYears to
5 6.75%
10 7.59%
15 7.99%
20 8,29%
25 8.39%
Consult with your contractor to confirm if interest rates have changed.
10. How is the length of the repayment period determined?
Repayment periods can be 5, 10, 15, 20 or 25 years, depending on your preference and are
limited by the expected useful life of the most costly product of the project's California FIRST-
financed improvements.
11 . How does repayment work?
As a property owner applying to California FIRST, you will agree to the levy by CSCDA of a
"contractual assessment' on your property. You will receive funds to pay the up-front costs of
installing the approved improvements. The PACE assessment will appear as a new line item on
your property tax bill.
For additional information, please visit californiafirst.org or call 844-589-7953 13
Page 3
„ CaLL�focrniaFIRST'”
FINANCING
F*EQUENTLY ASKED
UESTIONS
12. Are there any penalties for prepayment of the PACE
assessment?
There are no penalties for paying all or a portion of the PACE assessment early. Please see
Question 19 below for additional information.
13. What happens when I sell my property?
As part of the property record, the assessment will be disclosed at the time of property sale, and
the remaining unpaid balance of the financed amount may be transferred to the new property
owner.
14. Can CaliforniaFIRST finance solar leases or Power Purchase
Agreements (PPAs)?
Yes, pre-paid solar leases and PPAs can be financed through CaliforniaFIRST.
15. Do I need to complete an energy audit of my home?
No, but it is encouraged. In certain cases you may want to have a qualified auditor evaluate your
home to determine the most cost-effective measures to reduce the home's energy use.
The costs of an energy assessment can be financed with CaliforniaFIRST financing.
16. Is there an application fee?
No, there is no fee to apply for CaliforniaFIRST.
17. Why do you need my Social Security Number on the
application?
As part of the application, CaliforniaFIRST requests a credit bureau report for each homeowner.
FICO score is NOT used as part of the application, but other elements of the credit report such
as mortgage payment history are necessary to determine maximum financing amounts.
For additional . . please visit californiafirst.org
Page 4 4
t �
CaLifocrniaF FINANCING its
EQUENTLY ASKED
QUESTIONS
18. Can I use any contractor?
In order to participate, contractors must be registered with CaliforniaFIRST. As long as contractors
meet program requirements, they can quickly and easily register by visiting californiafirst.org/
contractor.
All participating contractors must have a valid and active contractor's license with the Contractors
State License Board.
19. How are tax credits, rebates and other incentives incorporated
into California FIRST financing?
We encourage you to pursue available Federal Investment Tax Credits (ITCs), utility rebates and any
other incentives. All or a portion of total incentives may be subtracted from the amount financed
under the program; however, it is not required that the financed amount be reduced by the
estimated value of the incentives.
Once you receive your rebates and tax credits, those funds may be used to pay down the PACE
assessment balance; the balance would then be re-amortized, resulting in lower annual PACE
assessment payments.
20. Is the interest on the PACE assessment payment tax deductible?
The interest portion of payments made under the CaliforniaFIRST Assessment Contract may be
deductible for income tax purposes.
The interest portion will vary from year to year, and any tax savings will depend on your tax bracket
and other variables. Consult with your tax advisor to determine if, and to what extent,you may
deduct the interest component of payments made under the Assessment Contract.
21 . Who do I contact with additional questions?
CaliforniaFIRST staff are available 8 am to 9 pm Monday to Friday and 9 am to 6 pm Saturday to
answer additional questions. We can also be reached vie email at info@californiafirst.org or by
phone at 844-589-7953.
RENEW
ca0mm n iaFlassadministereabyRenewFir,ancial. - FINANCIAL..
Californ,,FlRSr is sponsored by the Californla Statewide Communiti s Development Aulholity(CSCCA)
a joint powers authority co-sponsored by the Californla State Association of Counties and the League of
California Cities.
c.Renew Fin—ial.miFor additional information, please visit californiafirst.org or call 844-589-7953 _
15
Page 5
ATTACHMENT 3
16
CSCDA
Open PACE Consumer Protection Policies
Version 1.0
(Residential PACE Program)
November 30, 2015
17
OVERVIEW
Property assessed clean energy ("PACE')programs enable an unprecedented range of
homeowners to access energy efficiency, renewable energy, and water efficiency measures that
improve the financial,functional and environmental aspects of home ownership. Improvements
such as these make homes less costly to operate and more comfortable to live in, while
simultaneously reducing energy and water consumption. Without PACE Programs many
homeowners would have no, or costly, access to such benefits.
PACE Programs ("PACE Programs"or the `Program'), including the government authority
sponsoring and administering them ("Authority", Program Administrator"or "Administrator')
and, where applicable, the entity or entities who help implement them ("Partner'), deliver tools
and resources that enable homeowners to make smart, informed and responsible choices
regarding such measures ("Measures'). Appropriate use ofsuch tools is the responsibility of all
Programs, which means that care needs to be taken with homeowners before, during and after
origination of Program financing. In other words, consumer protections that serve homeowners
must be a core value of'the Program, the Authority and the Partner. In this document,
"Partner"refers to the government authority in all cases where the Program does not include a
third party non-government partner.
The baseline consumer protection policies of the Program cover the following areas. (i) Risk, (ii)
Disclosures and Documentation, (iii) Financing Terms, (iv) Operations, (v) Post-Funding
Support, (vi)Data Security, (vii) Privacy, (viii) Marketing and Communications, (ix) Protected
Classes, (x) Contractors, (xi)Eligible Products, (xii) Pricing, (xiii) Reporting, (xiv) Closing &
Funding and(xv) Examination. These Policies provide homeowners with a greater level of
consumer protection than any other form of financing. They also guide the Program's
implementation, enabling the transformation of its potential into tangible benefits for
homeowners.
I8
1. RISK
Policy Summary: The Program blends traditional credit risk considerations together with statutory
requirements and legislative policy to develop risk criteria that are fitted to the Program. These
criteria take into account the unique risk profile that this form offtnancing presents to enable
qualifying homeowners to access it. While this process will exclude unqualified homeowners and
properties, special consideration has been given to developing inclusive standards. These criteria
examine four key attributes of every financed project: (i) the real property on which the
improvements will be installed("Property" or `Properties'), (ii) the encumbrances presently
recorded against the Property, (iii) the nature of the improvements to be installed,- and(iv) the
homeowner's mortgage and property tax payment history.
1.1. Properties. Consistent with foundational considerations, it is the policy of the Program to
make the Program available to the entirety of the existing residential housing stock in
political boundaries of the Program. Properties for which this form of financing is not
available include: (i) commercial properties (including residential properties comprising four
(4) or more units), (ii) new properties under construction and(iii) tax exempt properties
(properties not subject to levy), such as tribal, non-profit or state-owned residential
properties. If requested in good faith by the homeowner applying for the Program, the
Partner is responsible for completing a"second look" eligibility review of all applications
related to properties initially determined to be excluded, re-examining the specific attributes
of the Property in question and confirming or modifying the original determination.
1.2. Encumbrances. The encumbrance profile of Properties is an important element of the
decisioning process for Program participation. The Program is designed to harness unused
financing capacity of homes in which eligible improvements are installed. Such financing is
inappropriate if it burdens Properties and their owners too greatly. Accordingly, Properties
eligible for Program financing will have the following attributes:
1.2.1. All mortgage-related debt on the Property may not exceed 90% of the Property's fair
market value ("FMV"), or assessed value if market value data is unavailable or
unreliable, at the time of initial approval;
1.2.2. Reliability of the Program FMV model should be verified through an accepted and
regular audit process, sampling appraisal data as a means of measurement and
verification;
1.2.3. The financing may not exceed (i) fifteen percent(15%) of the FMV of the Property,
up to the first seven hundred thousand dollars ($700,000) of the Property's FMV, and
(ii) ten percent (10%) of the remaining value of the Property above seven hundred
thousand dollars ($700,000);
1.2.4. The total mortgage-related debt on the underlying Property plus Program financing
19
may not exceed the FMV of the Property; and
1.2.5. The total amount of any annual property taxes and assessments shall not exceed five
percent (5%) of the Property's FMV, determined at the time Program financing is
approved.
1.3. Eligible Improvements. The Program provides financing for a broad range of eligible
products and projects permanently-affixed to the Property, the details of which are set forth
in Section 11 below. The Program is not available to finance ineligible products and
projects, which comprise everything not specified in Section 11. While the Program is
responsible for confirming compliance with the Section 11 requirements, it is not
responsible for determining post-installation energy performance, savings or efficacy of
such products or projects. The Program relies on U.S. Department of Energy, the
Environmental Protection Agency and other government agencies in determining what
constitutes an Eligible Improvement.
1.4. Homeowners. PACE Program assessments appear as line items on property tax bills and
homeowners repay their financing when they pay their property tax bills. The mortgage and
property tax payment history of homeowners of record thus is an important decisioning
element of Program eligibility criteria. Accordingly, at the time of application, homeowners
eligible for Program financing will have status and payment histories that are consistent with
the following:
1.4.1. The Applicants are the owners of record;
1.4.2. Property tax payments for the assessed Property are current. Additionally, the
homeowner must certify that there is no more than one late payment for the shorter of
(i) the previous three years, or (ii) since the present homeowner acquired the
Property;
1.4.3. Homeowner(s) are current on all mortgage debt, and have been late on such payments
no more than once (30 days maximum) during the 12-month period preceding
funding;
1.4.4. No homeowner applicant has had any active bankruptcies within the last 7 years;
provided, however, that this criterion can be met if a homeowner's bankruptcy was
discharged between two and seven years before the application date, and the
homeowner(s) have had no payments (mortgage and non-mortgage) past due for more
than 60 days in the most recent 24 months; and
1.4.5. Homeowner(s) have no involuntary lien(s) recorded against the Property in excess of
$1,000.
20
2. DISCLOSURES cob DOCUMENTATION
Policy Summary: The documentation of the Program gives it shape, integrity and enforceability.
Program participation documentation embodies principles key to the Program such as clarity,
fairness, compliance, disclosure, knowledge and completeness. A reader who has spent time
with the documentation should develop an unambiguous understanding of each and every right,
risk and obligation associated with the Program's financing product. PACE is a new form of
financing that, while sharing some features of traditional financing presents new considerations
for homeowners. Disclosures covering Program ftnancing's unique repayment cycle (annual or
semiannual) and the Federal Housing Finance Authority announcement regarding payoff of
Program financing at the time ofsale or refinance are among the new considerations. Best
practices counsel the Program to disclose traditional financing terms (e.g., interest rates,
financing term,payment amounts) as well. In the end, a homeowner who understands the
Program's disclosures will be informed and have a clear understanding of the Programs
traditional and non-traditional features.
2.1. Document timing. Before commencement of any Program-financed project, a
homeowner needs to: (i) submit an application; (ii) receive approval of the Measures
from the Partner; and (iii) execute documentation covering the terms described in this
Section and in the Disclosures summarized in this Section. Following construction of
the Measures, a homeowner needs to: (i) execute an acknowledgement that the
installation of the Measures has been completed satisfactorily; and (ii) receive a final
summary of costs and payments. Delivery to, and execution of all such documentation
by, the homeowner is the responsibility of the Partner.
2.2. Terms. Terms that are fundamental to the Program and that need to be reflected in its
documents comprise: (i) the amount financed, fees and capitalized interest included, (ii)
the repayment process and schedule, (iii) the payment amounts, (iv) a term that does not
exceed the useful life of the improvements, (v) the rate of interest charged, (vi) a rate of
interest that is fixed (not variable), (vii) a payment schedule that fully amortizes the
amount financed, (viii) the nature of the lien created upon recordation, (ix) the specific
improvements to be installed, (x) the 3-day right to cancel the financing, (xi) the right to
withhold approval of payment until the project is complete, and(xii) Section 5899.2
rights for solar lease improvements. It is the responsibility of the Partner to prepare,
deliver and arrange for execution of documents reflecting such terms.
2.3. Disclosures Policies. Disclosures heighten homeowner's awareness of key program
financing terms and risks that appear in the Program terms and documentation. It is the
policy of the Program that Partners confirm delivery to, and receipt by, homeowners of
21
these disclosures, and obtain written acknowledgement that homeowners have read and
understand them. The following comprise the key disclosures of the Program provided
by Partners in a financing summary in the form attached hereto as Attachment A.
Disclosures Description
Term of financing The maximum time period of the financing
Amount financed The total amount financed, including fees and capitalized
interest
Annual payment amount The amount due each year, even if paid in semi-annual
installments or through impound payments
Annual interest rate/APR The effective interest rate after taking into account all fees and
capitalized interest
Improvements financed The Measures installed
FHFA risks The risk that the homeowner may need to pay off the PACE
assessment at the time of sale or refinance
Right to cancel The 3-day right to rescind the financing
Prepayment The right to prepay the Program financing without penalty
The following comprise additional key disclosures of the Program provided by Partners.
Disclosures Description
Program overview A document or section of a document that provides a
comprehensive summary of the Program, including a summary
of a homeowner's rights and obligations
Property tax repayment process Payment of a homeowner's property tax bill that will include a
line item related to the installed Measures
Tax benefits Benefits associated with the purchase of certain Measures and
the annual payments related to them.
Privacy A notice describing the privacy policies of the Program
Federal disclosures Those appearing in the Program application
Foreclosure The foreclosure process in the event of a homeowner default
22
2.4 Confirmation of Terms. For all Program financing applications associated with
contractors that are either new to the Program or are on a Partner's "watch list" (i.e. those
contractors that are not"Top Rated Contractors" defined below), it is the policy of the Program
that such Partner confirm live by telephone with the homeowner applicant each Program
financing term listed in (b)-(g) of this Section 2.4 below. These confirmation requirements do
not apply to contractors who have reached the Partner's top rating category (the "Top Rated
Contractors"). For Top Rated Contractors, it is the policy of the Program that the Partner
conduct randomized calls to homeowners to confirm financing terms.
Notwithstanding the above, irrespective of the contractor with whom the Program financing is
associated, it is the policy of the Program that the Partners confirm live by telephone for each
applicant who is over 64 years old the Program financing terms listed in (a)-(g) of this Section
2.4 below, and any other special categories of homeowners as designated by the Program. For
avoidance of doubt, for homeowners over 64 years old, a voiccmail message does not satisfy the
requirement of Program financing term confirmation under this Section 2.4.
When confirming terms of a Program financing with a homeowner, the Partners will request the
homeowner to describe generally the improvement(s) being financed using the Program
financing, and will ascertain that the homeowner understands:
(a) The reason for the specific improvement(s) being obtained by such homeowner.
(b) His or her total estimated annual payment.
(c) The date his or her first tax payment will be due.
(d) The term of the Program financing.
(e) Any additional fees (including recording fees) that will be charged to him or her.
(f) That payments for the Program financing will be added to his or her property tax bill and
will cause the property tax bill to increase.
(g) That he or she may make payments on the Program financing either directly to the county
assessor's office or through his or her mortgage impound account.
23
3. FUNDING
Policy Summary: PACE is a new.form of financing that, while sharing some features of
traditional financing,presents new considerations for financing capital sources and structures,
Best practices counsel the Program to proactively solicit feedbackfrom Program stakeholders
and homeowners and incorporate learnings into policy improvements which benefit
homeowners.
Interest Rates. It is the policy of the Program that the Partner offers fixed simple interest rates,
and payments that fully amortize the obligation. Variable interest rates or negative amortization
financing terms are not permitted.
Sustainable fundingsource.ource. It is the policy of the Program that Partners establish a sustainable
source of capital for funding PACE financed projects separate from the Authority's general fund
or budget and have access to capital markets to ensure funding of qualified projects is available
on a consistent basis. A Partner must demonstrate the capacity to fund assessments that the
Administrator anticipates originating through such Partner over the six (6) month period
immediately following the Administrator's review of such Partners' financial statements.
Subordination. The Program is not required but may offer the capability to accommodate
homebuyers and homeowners by offering subordination of certain rights of its PACE assessment
lien to the lien of a mortgage or deed of trust. The subordination may provide the lien under a
mortgage or deed of trust with senior rights such that the lender will be induced to make a loan
on a PACE-assessed property. The subordination option may be made available to homebuyers
and homeowners in accordance with policy agreed upon by the Authority and the Partner.
Contractor fees. It is the policy of the Program that Partners can only charge fees to contractors
offering Program financing as long as Partners (i) clearly and conspicuously disclose such fees to
homeowners and(ii) require that contractors absorb such obligations and not pass such fees on to
homeowners.
24
4. OPERATIONS
Policy Summary: Operations delivers the Program to homeowners. Operations commercializes,
productizes and draws on the work completed in a broad range of disciplines by the Partner or
its Partner, such as sales, training, risk, contractor engagement, municipal engagement,
accounting,finance, legal, capital markets, compliance, business development, marketing,
government affairs and corporate development. While each operating unit incorporates
thoughtful and highly effective consumer protections in the work it produces, Operations is the
gatekeeper responsible fbr assuring that the Program has the people, processes, tools and
technology necessary to deliver to homeowners the Program.financing product, as well as the
consumer protections described in these Policies.
Operational consumer protection policies. It is the policy of the Program that the Administrator
and its Partner develop and provide people, processes, tools and technology necessary to support
the consumer protection measures described in detail elsewhere in this policy, including: (i) risk
and underwriting processes; (ii) terms and documentation delivery systems; (iii) documentation,
maintenance and retrieval processes; (iv) disclosure development, delivery and acknowledgment
receipt; (v)post-funding support for homeowners and other stakeholders such as real estate
professionals; (vi) data security measures, (vii) privacy policy development and protections;
(viii) marketing and communication oversight; (ix) protected class data and communication
processes; (x) contractor management and engagement; (xi) eligible product database and/or list
development and maintenance; (xii) implementation of the maximum financing amounts; (xiii)
key metrics reporting; (xiv) closing and funding processes (including the ability to fulfill
financing obligations); (xv) examination data production; and (xvi) implementation of
procedures to identify and prohibit conflicts of interest within and associated with the Program.
25
5. POST-FUNDING HOMEOWNER SUPPORT
Policy Summary: A public/private partnership is at the core of the Program. This partnership
carries with it elevated consumer protection responsibilities that apply to the Program with as
much significance during the post funding period as they do during the time of application and
origination. Establishing and operating an executive office responsible for customer care that
responds to inquiries, complaints, contractor and workmanship concerns,product performance
questions and related matters for the lifecycle of the improvements financed is fundamental to the
consumer protections that the Program provides.
5.1. Proactive Engagement. It is the policy of the Program that the Partner and its Partner
proactively to monitor and test the consumer protections delivered to homeowners, and
to request feedback from homeowners and contractors to identify areas in need of
improvement.
5.2. Onboarding. It is the policy of the Program that Partners develop and implement a post-
installation onboarding procedure to reinforce key characteristics of the Program, such
as those highlighted in the Program disclosures.
5.3. Payments. It is the policy of the Program that the Partner have disclosures and resources
in place to resolve homeowner questions regarding matters such as impound account
catch up payments, payment timing inquires and payment amount reconciliation. It is
also the policy of the Program that the Partner implement procedures for responding to
requests for partial or full prepayment of their PACE property tax assessment in a timely
and complete manner.
5.4. Inquiries and complaints. It is the policy of the Program that the Partner receive,
manage, track, timely resolve, and report on all inquiries and complaints from
homeowners. This policy contemplates development of a team with the skills necessary
to perform inspections, meet with homeowners and contractors, investigate matters, and
mediate resolutions with homeowners and contractors. The Partner must proactively
work to resolve inquiries and complaints in a reasonable and timely manner and in
accordance with the Program guidelines and must make communication for homeowners
available during regular business hours by phone, email and facsimile communication.
5.5. Real estate transactions. It is the policy of the Program that the Partner develop
capabilities to assist homeowners who are refinancing or selling their Properties. The
Partner must support real estate professionals providing services to refinance and sales
transactions for properties with PACE assessments.
26 j
6. DATA SECURITY
Policy Summary: Trust is fundamental to any financing relationship, and Program financing is
no exception. The public/private partnership at the center-of the Program, as well as the
confidential relationship homeowners have with the Program Partner mandate that any market-
ready Program be in robust compliance with sturdy cyber-security standards, and in particular
develop secure and tested processes that protect homeowner personal identifiable information at
points of potential vulnerability, especially during the application process.
6.1. Information systems. It is the policy of the Program that the Partner develop and comply
with secure and tested processes to protect the personal identifiable information of the
homeowner described in Section 7 below. Such secure and tested processes should, at a
minimum, include:
6.1.1. A cyber-security policy and protocol that, at a minimum, requires data encryption
"during transmission" and "at rest," and compliance with sturdy cyber-security
standards.
6.1.2. The Partner is responsible for controlling access to information, based upon,job
function and need-to-know criteria.
6.1.3. The Partner is responsible for taking security measures that protect the security
and confidentiality of consumer records and information in proportion to the
sensitivity of the information, including, without limitation, requiring all
computers and other devices containing any confidential consumer information to
have all drives encrypted with industry standard encryption software.
6.1.4. The Partner is responsible for monitoring and logging all remote access to its
systems, whether through VPN or other means.
6.1.5. Data security policies are subject to auditing and penetration testing conducted by
an independent auditor hired by the Authority at least annually and any time a
change is made that may have any potential impact on the servers, security
policies or user rights.
6.1.6 The Partner is responsible for ensuring minimum viable configurations are in
place on all servers. All firewalls should have continuous logging enabled. In
addition, access control lists and audited server configurations should be used to
ensure that data security is maintained.
6.2. Personnel.
6.2.1. The Partner is responsible for informing and enforcing the compliance with the
Program's data privacy and security policies on the part of every employee,
contractor, vendor, agent, service provider, representative, and associate who is
exposed to personal identifiable information of homeowners.
27
6.2.2. The Partner is responsible for implementing protections and controls to prevent
unauthorized copying, disclosure, or other misuse of sensitive consumer
information.
Pie
28
7. PRIVACY
Policy Summary: The trusting and confidential relationship that exists between homeowners and
Program extends to the Partner's use of homeowner data. Compliance with the Gramm- Leach-
Bliley Act as well as the establishment of clear opt-in and opt-out protocols for information
sharing are the pillars of the Program's privacy policy. More broadly, Program must protect and
manage sensitive consumer information, must respect the privacy of all homeowners, and must
implement robust controls to prevent unauthorized collection, use and disclosure of'such
information.
The following summarizes the Program's privacy policy:
7.1. Privacy policy. The Program obtains sensitive consumer information from homeowners
as part of the application process for Program participation or through other homeowner
touch points with the Program. It is the policy of the Program that the Partner develops
and delivers to homeowners who apply for the Program or who otherwise provide
personal identifiable information (e.g., full name, home address, social security numbers,
date of birth,) a privacy policy that complies with state and federal law (e.g., the
Gramm-Leach-Bliley Act) and, in particular, prohibits sharing with third parties personal
identifying information of homeowners without the homeowners'express authorization
except where expressly permitted by state and federal law. Such privacy policy will
cover(i) the sources from which sensitive consumer information is obtained, (ii) the
Partner's use of sensitive consumer information, and (iii) a mechanism by which a
consumer may opt-out of sharing information. The Partner will deliver to homeowners
any updates to such privacy policies.
7.2. Application process. It is the policy of the Program that all personal identifying
information provided by a homeowner to the Partner during the application process is
provided directly by the homeowner to the Partner. The Partners will establish processes
and controls to ensure that personal identifiable information of a homeowner is obtained
directly from such homeowner(or his verifiable legal representative or attorney in fact)
and not from a contractor or other third party.
P,q, c ; 3 ,>r>>
29
8. MARKETING & COMMUNICATIONS
Policy Summary: Clear, informative, truthful, balanced, transparent and complete
communications are essential for the Program. The stakeholders of any Program include
(without limitation) homeowners, contractors, the Authority, government officials and staff,
investors,finance partners, real estate professionals and lenders. Communications, acts and
practices that mislead stakeholders add ineligible expense to PACE financing or to the Program,
abuse stakeholders, and otherwise fail to meet the core communication standards of
appropriateness_for the Program and are not acceptable.
8.1. Prohibited practices. It is the policy of the Program to prohibit practices that are or
could appear to be unfair, deceptive, abusive, and/or misleading, that violate laws or
regulations, that provide tax advice, that are inappropriate, incomplete or are inconsistent
with the Program's purpose (e.g., use of check facsimiles to dramatize the amount of
PACE Program financing available or presented as if a negotiable instrument).
Marketing practices that are likely to add unnecessary expense to a homeowner(e.g.,
paying consumers for applications), that unlawfully use sensitive consumer data or that
violate any other law or regulation (including, for example, practices related to
telemarketing) are prohibited.
8.2. Permitted practices. It is the policy of the Program to adhere to all legal and regulatory
requirements (e.g., telemarketing) pertaining to its advertising and marketing efforts. On
the basis of providing clear and concise communication to consumers, any practice that
promotes informed decisioning on the part of homeowners and is not prohibited as
described in section 8.1 above is permitted. The Partner is responsible for developing,
delivering to and enforcing marketing guidelines for the Program's Registered
Contractors. Any marketing materials that fall outside of marketing guidelines
established must be approved by the Partner to ensure that they are not unfair, deceptive,
abusive and/or misleading.
8.3. Tax advice. It is the policy of the Program that no Partner, contractor or third party (who
is not a tax expert) may provide tax advice to consumers regarding their Program
financing which includes making affirmative statements or claims as to the tax
deductibility of the payments. Homeowners are encouraged to seek the advice of an
expert regarding tax matters related to the Program. The Program shall monitor and test
the sales practices of employees and contractors to confirm adherence to the policy set
forth in this Section 8.3.
8.4. Payments in Exchange for Financing. It is the policy of the Program that no Partner,
contractor or Affiliated Individual may provide a direct cash payment or other thing of
value to a homeowner explicitly in exchange for such homeowner's selecting Program
30
financing. For avoidance of doubt, the limitations provided in this Section 8.4 are not
intended to prevent the Program from offering to homeowners, contractors or Affiliated
Individuals promotions that are not explicitly part of the exchange referred to in the
preceding sentence.
31
9. PROTECTED CLASSES
Policv Summary: It is the Partner's responsibility to ensure compliance with all state and
federal laws that cover individuals in protected classes (e.g., race, religion, color, marital status,
sex, national origin, citizenship,presence of children, disability, gender, age and/or sexual
preference because an applicant receives income from a public assistance program, or because
an applicant has in good faith exercised any right under the Consumer Credit Protection Act.)
Heightened protections for homeowners over 64 years old, such as confirming understanding of
financing terms and project specifications, is a focus of the Program. The Partner is responsible
for protecting against intended and unintended non-compliance with such standards, and in
particular,for providing legally unbiased access to, and decisioning of, requests for Program
financing.
9.1. General. It is the policy of the Program that controls be designed to monitor and test
compliance with all state and federal laws covering homeowners in protected classes.
9.2. Elders. It is the responsibility of the Partner to develop and implement a program that
validates elder homeowner(i.e., homeowners over 64 years old) understanding of the
eligible improvement project for which they are seeking Program financing, including
the terms of such financing.
9.3 Financing Access and Decisionine. It is the responsibility of the Partner to provide
legally unbiased access to, and decisioning of, requests for Program participation.
Pu_a I W ,
32
10.CONTRACTOR REQUIREMENTS
Policv Summary: Contractors and their sales persons are one of the primary means through which
homeowners become aware of Program participation options. Contractors and their salespersons
enter into contracts with the Partner, and register with all relevant state and local licensing boards
and agencies. Contractors are required to follow a code of conduct, maintain policies of insurance,
post bonds,follow marketing requirements, complete training courses, among other similar
obligations, all of which are designed to assure positive and productive homeowner interaction with
the Program.
10.1. Policies. It is the policy of the Program that all contractors who sell, install, or manage
subcontractors who install, eligible improvements will have executed and that all such
contractors and all employees, entities, owners, partners, principals, independent
contractors, third party agents or other person who perform any services for the
contractor in connection with a Program financing(collectively, the"Affiliated
Individuals") meet the requirements of the Program's Contractor Participation
Agreement, which include:
10.1.1. Compliance with the current Registered Contractor code of conduct, a sample of
which is attached hereto as Attachment B or other code of conduct that embodies
the principles outlined in Attachment B;
10.1.2. Maintenance of an active license, and be in good standing, with the California
Contractor State License Board ("CSLB"), including compliance with the CSLB
(or equivalent agency or program) insurance and bonding requirements;
10.1.3. Execution of the Program's Contractor Participation Agreement only by a person
who is listed as an Responsible Managing Owner("RMO"), Responsible
Managing Employee ("RME"), Responsible Managing Manager ("RMG") ,
Responsible Managing Member ("RMM"), sole owner or qualifying partner with
the CSLB and who is authorized to act on behalf of, and who is responsible for
the actions of, a Registered Contractor (a"Qualifying Individual");
10.1.4. Oversight and management of employees, independent contractors and
subcontractors who provide services to Registered Contractors accessing the
Program;
10.1.5. Meeting all other state and local licensing, training and permitting requirements;
10.1.6. Compliance with the Program's marketing policies; and
10.1.7. Ensuring all Affiliated Individuals register with the Program.
10.2. New Contractors. Regarding Registered Contractors new to the Program, it is the
policy that the Partner:
33
10.2.1. Has a specified probationary period (i.e., place the new Registered Contractors on
a watch list) until the new Registered Contractors have completed the required
number of Measures;
10.2.2. Has procedures in place, during the Registered Contractor probationary period, to
provide additional quality assurance steps for Measures completed by the
Registered Contractors on the watch list; and
10.2.3. Has procedures in place to review Registered Contractor work to confirm
satisfactory completion of projects conducted during the probationary period for
which Program financing is used.
10.3 Contractor Management. It is the policy that the Partner implement contractor
management systems and procedures that manage and track contractor training and
compliance violations on an individual and company basis.
10.4 Contractor Training. It is the policy of the Program that each Partner make
available contractor training regarding, at a minimum, the following: (i) the
applicable contractor code of conduct terms as required by the Program, (ii)
protected classes, including, without limitation, elder protection, and (iii) other
consumer protection measures as required by the Program.
10.5 Remedial Action. Partners warn, suspend or terminate a Registered Contractor
and/or Affiliated Individual from the Program based on violations of the Contractor
Participation Agreement. The Program does not accept Program applications
processed by suspended or terminated contractors and/or associated representatives.
34
I I.ELIGIBLE PRODUCTS
Policy Summary: The Program enables and encourages homeowners to install Measures on their
homes which are designed but not guaranteed to save water or energy. The Program is responsible
,for implementing practices and controls (e.g., eligible product databases and product confirmation
processes) ensuring that financing is used only for eligible Measures, and that it is not provided for
ineligible ones. Program product eligibility criteria ensure that property owners are financing
improvements which are industry recognized for achieving higher levels of home energy or water
efficiency. While the Program is responsible for confirming compliance with the initial capacities of
such products, it is not responsible_for determining post-installation energy performance, savings or
efficacy ofsuch Measures.
11.1. Policies. Consistent with the objectives of the PACE enabling legislation, it is the
policy of the Program through consultation with the Partner and the Authority to:
11.1.1. Establish, and maintain an eligible products database and/or list, documenting the
associated eligibility specifications for each product that conform to the
requirements outlined in Attachment C hereto;
11.1.2. Define a process for adding or modifying the eligible product database;
11.1.3. Ensure that eligible product energy efficiency/water efficiency/energy generation
(as applicable)performance standards are calibrated and verified using
performance criteria that the U.S. Department of Energy, U.S. Environmental
Protection Agency, the California Energy Commission and/or other federal and
state agencies or other reputable third parties has established;
11.1.4. Use credible third party sources to determine the useful life of the product, which
will be used to set the maximum term for the Program's financing; and
11.1.5. Require that the product is permanently affixed to the Property.
11.2. Procedures. It is the policy of the Program that the Partner establish procedures
confirming that the homeowner applying for Program financing intends to install
eligible products, and that at the time of funding such improvements have been
installed.
11.3. Ineligible Products.
11.3.1. Financing of ineligible products under the Program is prohibited.
11.3.2. Products that are not included on the eligible products list or in the eligible
products database can be submitted for review by the Program, if a homeowner
has a good faith reason to believe they should have been included.
P,[[� ie ,r2,
35
12.MAXIMUM FINANCING AMOUNT
Policy Summary: Many homeowners cannot readily access price information regarding the
installation of energy efficiency, renewable energy and water conservation improvements for
their homes, and cost often is a key economic consideration. While the Program does not set
price controls, it implements a maximum financing amount ("MFA)procedure based upon the
fair market value of the Measures. The MFA sets the ceiling for amounts that can be financed.
The Program's maximum financing amount policies provide as follows:
12.1. It is the policy of the Program to develop maximum financing amounts based on
market data and the Partner's experience, but not to set pricing for installation of
eligible products and projects. In evaluating project pricing, the Partner takes into
account regional factors that may contribute to the pricing of improvements.
12.2. It is the policy of the Program that each Partner will, at a minimum, establish an
MFA for each product type (e.g. for central air conditioners, solar PV systems, solar
thermal systems and artificial turf).
12.3. Within each MFA, there is a low to high range of justifiable pricing, depending on
the particular product within a product type (e.g. there may be different types of
central air conditioners, solar PV systems, solar thermal systems and artificial turf).
It is the policy of the Program that each Partner will establish product/project
attribute related pricing rules that dictate what pricing within such low to high MFA
range is justified.
12.4. It is the policy of the Program that each Partner establish processes and systems for
purposes of enforcing the MFA rules (as described in Section 12.3) for every
project.
12.5. A product may only be funded for an amount that is greater than the MFA for such
product if the amount exceeding the MFA is justified by reasonable standards that
are validated and documented through processes and systems acceptable to the
Authority.
36
13.REPORTING
Policy Summary: Reporting the economic and environmental results of Program participation is
essential far the Program, Partners, elected officials, environmental agencies, the investment
community, the real estate and mortgage industry and many other stakeholders. Metrics such as
economic stimulus dollars invested, greenhouse gas reduction, the number of Measures_funded,
the amounts funded, renewable energy production and energy savings serve this need. The
Partner is responsible for producing, on a quarterly basis, a key metrics report.
13.1. Reporting categories. It is the policy of the Program that Program statistics
reporting and estimated impact metrics in the following categories be developed and
reported quarterly to the Authority: (i) number of projects funded, (ii) project
amount funded, (iii) estimated amount of energy savings, (iv) estimated amount of
renewable energy produced, (v) estimated amount of water savings, (vi) estimated
amount of greenhouse gas emissions reductions, and(vii) estimated number of jobs
created.
13.2. Reporting standards. It is the policy of the Program that all data collected for the
quarterly metrics reports be developed and collected using standardized, third party
verified methodologies. The methodologies and supporting assumptions and/or
sources must be made available to the Authority by the Partner. It is the
responsibility of the Partner to develop reports consistent with each of categories
listed above and to test and verify the data collection and reporting methods and
models used. All reports shall include only aggregate data, excluding any sensitive
customer information.
13.3 Participation in CAEATFA. Residential PACE programs operating in California
must participate in the PACE Reserve program of the California Alternative Energy
and Advanced Transportation Authority. Accordingly, the Programs must report bi-
annually on program activity to CAEATFA.
1"8L'C 21 oI ?
37
14.CLOSING & FUNDING
Policy Summary: The Program provides limited purpose_financing to homeowners, and not
general purpose financing that is common among traditional sources offinancing. The Program
has front-end(e.g., eligible product call-in requirements) and pre funding (e.g., completion
certificates and permits)procedures designed to confirm that theirfinancing dollars are used for
permissible purposes. A policy requiring such procedures is essential to protecting the integrity
of the Program.
14.1. Installation Completion Sign-off. It is the policy of the Program to confirm, before
funding, that the eligible products financed are installed, operational and in a
condition that is acceptable to the homeowner and the contractor, and to require that
the homeowner and the contractor attest to such by signing a document stating that
all products have been installed to the homeowner's satisfaction and in accordance
with product specifications. It is the responsibility of the Partner to confirm any
such document is signed within the maximum allowable installation time as
specified by the Program
14.2. Permits. It is the policy of the Program for homeowners seeking Program financing
to obtain required permits for the installation of Measures and provide verification
thereof upon request.
14.3. Funding. It is the policy of the Program to disburse funds only for projects that are
complete.
14.4. Recording. It is the policy of the Program to record the Notice of Assessment and
Payment of Contractual Assessment Required documentation in a manner consistent
with state law.
14.5. Asset verification. It is the policy of the Program to confirm that product(s) listed
on the Completion Certificate and for which Program financing has been provided
have been installed and that the Partner develop and implement a randomized onsite
inspection protocol acceptable to the Authority.
it
38
ATTACHMENT 4
39
v. 4/13/16
E ac�EocrniaF cRST
FINANING
PARTICIPATING COUNTIES AND CITIES
Alameda Imperial Napa(cunt.) San Diego(cont.) Santa Clara(coot.)
• Alameda • Unincorp.County Unincorp,County • Lemon Grove • Saratoga
• Albany Kern Nevada National City • Sunnyvale
• Berkeley Arvin Nevada City Oceanside Santa Cruz
• Dublin Bakersfield Orange Poway Capitola
• Emeryville Ridgecrest Aliso Viejo San Diego Santa Cruz
• Fremont Shafter Anaheim San Marcos Scotts Valley
• Hayward • Taft Brea Santee Watsonville
• Livermore Wasco • Buena Park • Solana Beach Unincorp.County
• Newark Unincorp.County Costa Mesa Vista Shasta
• Oakland Kings • Fountain Valley • Unincorp.County • Anderson
• Piedmont Hanford • Garden Grove San Francisco • Unincorp.County
• Pleasanton Lake Huntington Beach • San Francisco Solano
• San Leandro • Clearlake La Habra San Joaquin Benicia
• Union City Los Angeles Laguna Beach Lodi • Dixon
• Unincorp.County See page 2 for the list of Laguna Hills Manteca • Fairfield
Amador eligible areas in JA County Lake Forest Stockton Suisun City
• lone Madera Mission Viejo Tracy Vacaville
Butte Madera Newport Beach Unincorp.County Vallejo
• Chico Unincorp.County San Clemente San Luis Obispo Unincorp.County
• Oroville Marin • Santa Ana • Arroyo Grande Sonoma
• Unincorp.County Belvedere Westminster Atascadero Cloverdale
Contra Costa Corte Madera Riverside El Paso De Robles Healdsburg
• Antioch • Fairfax • Beaumont • Grover Beach • Petaluma
• Brentwood • Larkspur Moreno Valley • Morro Bay • Rohnert Park
• Clayton • Mill Valley • Palm Desert • San Luis Obispo • Sebastopol
• Concord • Novato • San Jacinto • Unincorp.County • Sonoma
• Danville • Ross Unincorp.County San Mateo Windsor
• El Cerrito • San Anselmo Sacramento • Atherton Unincorp.County
• Hercules • San Rafael • Citrus Heights Belmont Stanislaus
• Lafayette • Sausalito Elk Grove Brisbane Modesto
• Martinez • Tiburon Galt Burlingame Turlock
• Moraaa Unincorp.County Rancho Cordova Colma Waterford
• Oakley Mendocino • Sacramento • Daly City Sutter
• Pinole Fort Bragg Unincorp.County East Palo Alto Live Oak
• Pittsburg Point Arena San Benito Foster City Yuba City
• Pleasant Hill Ukiah • Hollister Half Moon Bay Tulare
• Richmond Unincorp.County San Juan Bautista Hillsborough Porterville
• San Pablo Merced Unincorp.County • Menlo Park • Tulare
• San Ramon • Los Banos San Bernardino • Millbrae • Visalia
• Walnut Creek • Unincorp.County Big Bear Lake Pacifica • Unincorp.County
EI Dorado Mono Chino Portola Valley Ventura
• Placerville Unincorp.County • Chino Hills Redwood City • Camarillo
• South Lake Tahoe Monterey • Colton • San Bruno • Fillmore
• Unincorp.County • Carmel-By-The-Sea • Fontana • San Carlos • Moorpark
Fresno Del Rey Oaks • Hesperia • San Mateo • Ojai
• Clovis • Gonzales • Highland • South San Francisco • Oxnard
• Firebaugh • Greenfield • Montclair Woodside • Port Hueneme
• Fowler • King City • Ontario Unincorp.County • San Buenaventura
• Fresno • Marina • Rancho Cucamonga Santa Clara Santa Paula
• Huron • Monterey Redlands • Campbell • Simi Valley
• Kerman • Pacific Grove Rialto • Cupertino • Thousand Oaks
• Kingsburg Salinas Unincorp.County Gilroy Unincorp.County
• Orange Cove • Sand City San Diego • Los Altos Yolo
• Reedley Seaside Carlsbad Los Altos Hills Davis
• San Joaquin Soledad Chula Vista Los Gatos West Sacramento
• Sanger Unincorp.County Coronado Milpitas Winters
• Selma Napa Del Mar Monte Serena Woodland
• Unincorp.County American Canyon El Cajon Morgan Hill Unincorp.County
Humboldt Calistoga Encinitas Mountain View Yuba
• Arcata Napa • Escondido Palo Alto Unincorp.County
• Eureka St.Helena Imperial Beach San lose
• Unincorp.County Yountville La Mesa • Santa Clara 40
„ CalifocrniaFIRST
v. 4/13/16
PARTICIPATING COMMUNITIES WITH LOS ANGELES COUNTY
• Agoura Hills Duarte Los Angeles Santa Fe Springs
• Alhambra El Monte • Lynwood Santa Monica
• Arcadia El Segundo Malibu Sierra Madre
• Artesia Gardena • Manhattan Beach Signal Hill
• Avalon Glendale Monrovia South El Monte
• Azusa Glendora Montebello South Gate
• Baldwin Park Hawaiian Gardens Monterey Park South Pasadena
Bell Hawthorne Norwalk Temple City
Bell Gardens Hermosa Beach Palmdale Torrance
Bellflower Hidden Hills • Palos Verdes Estates Walnut
Beverly Hills Huntington Park Paramount West Covina
• Bradbury Industry Pasadena West Hollywood
Burbank Inglewood • Pico Rivera Westlake Village
• Calabasas Irwindale Pomona Whittier
Carson • La Canada-Flintridge Rancho Palos Verdes Unincorporated County
Cerritos La Habra Heights Redondo Beach
Claremont • La Mirada Rolling Hills
• Commerce La Verne Rolling Hills Estates
• Compton La Puente Rosemead
Covina • Lakewood San Dimas
Cudahy Lancaster San Fernando
Culver City Lawndale San Gabriel
Diamond Bar • Lomita San Marino
Downey Long Beach Santa Clarita
41
CaLifoc niaFIRST
v-41113/1.E as
PARTICIPATING COUNTIES AND CITIES
Alameda Imperial Napa(cont.) San Diego(cont.) Santa Clara(cont.)
• Alameda • Unincorp.County Unincorp.County Lemon Grove Saratoga
• Albany Kern Nevada National City • Sunnyvale
• Berkeley Arvin Nevada City Oceanside Santa Cruz
• Dublin • Bakersfield Orange Poway • Capitola
• Emeryville • Ridgecrest • Aliso Viejo • San Diego • Santa Cruz
• Fremont Shafter Anaheim • San Marcos Scotts Valley
• Hayward Taft Brea • Santee • Watsonville
• Livermore Wasco Buena Park • Solana Beach • Unincorp.County
• Newark • Unincorp.County • Costa Mesa • Vista Shasta
• Oakland Kings Fountain Valley Unincorp.County • Anderson
• Piedmont • Hanford • Garden Grove San Francisco • Unincorp.County
• Pleasanton Lake Huntington Beach • San Francisco Solano
• San Leandro Clearlake La Habra San Joaquin Benicia
• Union City Los Angeles Laguna Beach Lodi Dixon
• Unincorp.County See page l for the list of Laguna Hills Manteca Fairfield
Amador eligible areas in LA County • Lake Forest Stockton Suisun City
lone Madera • Mission Viejo Tracy Vacaville
Butte Madera • Newport Beach Unincorp.County Vallejo
• Chico • Unincorp.County • San Clemente San Luis Obispo Unincorp.County
• Oroville Marin Santa Ana Arroyo Grande Sonoma
• Unincorp.County • Belvedere Westminster • Atascadero • Cloverdale
Contra Costa • Corte Madera Riverside • El Paso De Robles Healdsburg
• Antioch • Fairfax Beaumont • Grover Beach Petaluma
• Brentwood • Larkspur Moreno Valley • Morro Bay Rohnert Park
• Clayton • Mill Valley Palm Desert • San Luis Obispo • Sebastopol
• Concord Novato San Jacinto Unincorp.County Sonoma
• Danville • Ross Unincorp.County San Mateo Windsor
• El Cerrito • San Anselmo Sacramento Atherton Unincorp.County
• Hercules • San Rafael • Citrus Heights • Belmont Stanislaus
• Lafayette • Sausalito Elk Grove Brisbane Modesto
• Martinez • Tiburon • Galt • Burlingame • Turlock
• Moraaa • Unincorp.County Rancho Cordova • Colma Waterford
• Oakley Mendocino • Sacramento Daly City Sutter
• Pinole Fort Bragg Unincorp.County • East Palo Alto Live Oak
• Pittsburg Point Arena San Benito Foster City Yuba City
• Pleasant Hill Ukiah Hollister Half Moon Bay Tulare
• Richmond Unincorp.County San Juan Bautista • Hillsborough Porterville
• San Pablo Merced • Unincorp.County • Menlo Park • Tulare
• San Ramon • Los Banos San Bernardino • Millbrae • Visalia
• Walnut Creek Unincorp.County Big Bear Lake Pacifica Unincorp.County
El Dorado Mono • Chino • Portola Valley Ventura
• Placerville • Unincorp.County • Chino Hills • Redwood City • Camarillo
• South Lake Tahoe Monterey Colton San Bruno Fillmore
• Unincorp.County • Carmel-By-The-Sea Fontana San Carlos Moorpark
Fresno • Del Rey Oaks Hesperia • San Mateo • Ojai
• Clovis Gonzales Highland South San Francisco Oxnard
• Firebaugh • Greenfield Montclair Woodside Port Hueneme
• Fowler • King City Ontario Unincorp.County San Buenaventura
• Fresno Marina Rancho Cucamonga Santa Clara • Santa Paula
• Huron Monterey Redlands Campbell Simi Valley
• Kerman • Pacific Grove Rialto Cupertino Thousand Oaks
• Kingsburg • Salinas Unincorp.County Gilroy Unincorp.County
• Orange Cove • Sand City San Diego Los Altos Yolo
• Reedley • Seaside • Carlsbad Los Altos Hills • Davis
• San Joaquin Soledad • Chula Vista • Los Gatos West Sacramento
• Sanger • Unincorp.County • Coronado Milpitas Winters
• Selma Napa • Del Mar Monte Serene Woodland
• Unincorp.County American Canyon • El Cajon Morgan Hill Unincorp.County
Humboldt • Calistoga • Encinitas Mountain View Yuba
• Arcata • Napa • Escondido Palo Alto Unincorp.County
• Eureka • St. Helena • Imperial Beach • San Jose
• Unincorp.County • Yountville La Mesa • Santa Clara
42
CaliforniaFIRST
V-a/ta/:C EFFICIENCY FINANCING
PARTICIPATING COMMUNITIES WITH LOS ANGELES COUNTY
• Agoura Hills Duarte Los Angeles Santa Fe Springs
• Alhambra El Monte Lynwood Santa Monica
• Arcadia El Segundo Malibu • Sierra Madre
• Artesia Gardena Manhattan Beach Signal Hill
• Avalon • Glendale Monrovia South El Monte
• Azusa Glendora Montebello South Gate
Baldwin Park • Hawaiian Gardens Monterey Park South Pasadena
• Bell Hawthorne Norwalk Temple City
• Bell Gardens Hermosa Beach Palmdale Torrance
Bellflower • Hidden Hills Palos Verdes Estates Walnut
• Beverly Hills Huntington Park Paramount West Covina
• Bradbury • Industry Pasadena West Hollywood
Burbank Inglewood Pico Rivera • Westlake Village
• Calabasas Irwindale Pomona Whittier
• Carson • La Canada-Flintridge • Rancho Palos Verdes Unincorporated County
• Cerritos La Habra Heights Redondo Beach
• Claremont • La Mirada Rolling Hills
• Commerce La Verne Rolling Hills Estates
• Compton La Puente Rosemead
• Covina • Lakewood San Dimas
• Cudahy Lancaster San Fernando
• Culver City Lawndale San Gabriel
Diamond Bar • Lomita • San Marino
• Downey Long Beach Santa Clarita
43