HomeMy WebLinkAbout9/8/2010 - STAFF REPORTS - 2.Q. �aFPALMS�R
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" CITY COUNCIL STAFF REPORT
C pRroNA'
DATE: September 8, 2010 CONSENT
SUBJECT: PROPOSED ADOPTION OF A RESOLUTION IN SUPPORT OF
CONGRESSIONAL ACTION REGARDING PROPERTY ASSESSED
CLEAN ENERGY (PACE) PROGRAM.
FROM: David H. Ready, City Manager
BY: Michele Mician, Manager, Office of Sustainability
SUMMARY:
The Federal Housing Finance Agency (FHFA) recently issued a statement that has
impacted residential Property Assessed Clean Energy (PACE) Programs across the
country. In response, PACEnow, a national coalition of PACE advocates and
stakeholders, has launched a campaign to engage local government partners across
the country, calling for immediate congressional action to approve legislation allowing
PACE to continue.
RECOMMENDATION:
Staff recommends that City Council
1) Approve the Resolution in support of immediate congressional action to authorize
legislation allowing Property Assessed Clean Energy(PACE) Programs.
2) Authorize the Office of Sustainability to file the Resolution with PACE Now.
STAFF ANALYSIS:
On May 5, 2010, Fannie Mae and Freddie Mac issued Lender Letters that stated "PACE
loans generally have automatic first lien priority over previously recorded mortgages.
The terms of the Fannie Mae/Freddie Mac Uniform Security Instruments prohibit loans
that have senior lien status to a mortgage." Fannie Mae and Freddie Mac are regulated
by the Federal Housing Finance Agency (FHFA). Subsequent to the housing crisis, both
agencies were placed in federal conservatorship under FHFA and the U.S. Treasury.
While the letters did not direct lenders or servicers to take action, this statement
indicated that PACE participants could be in violation of their existing mortgage
ITEM NO,�.
City Council Staff Report
PACE Congressional Support Resolution
September 8, 2010
contracts. These statements attracted significant attention including that of Senators,
Members of Congress, Governors, and others.
On Friday, July 2, 2010, the House Committee on Energy and Commerce Chair Henry
Waxman and Committee on Financial Services Chair Barney Frank issued a letter to
Secretaries Geithner and Chu and Director De Marco of FHFA requesting clarification
and support for PACE programs across the country.
On July 6, 2010, the FHFA posted a statement reaffirming that a senior PACE lien is in
violation of any Fannie Mae or Freddie Mac mortgage contract. A nationwide PACE
coalition is working to take legislative action that will correct this issue. The coalition
has asked all jurisdictions to sign letters to their congressional representatives and pass
resolutions in support of PACE.
FISCAL IMPACT:
There is no direct fiscal impact associated with the adoption of this resolution.
� Michele MicA6, Manager, Tom Wilso
dNoffice of Sustainability Assistant City Manager
David H. Ready, Ci ger
Attachments:
1) Resolution No. in support of immediate congressional action to authorize
legislation allowing Property Assessed Clean Energy(PACE) Programs.
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS, CALIFORNIA IN SUPPORT OF IMMEDIATE
CONGRESSIONAL ACTION TO AUTHORIZE LEGISLATION
ALLOWING PROPERTY ASSESSED CLEAN ENERGY
PROGRAMS
WHEREAS, utility bills represent a major cost of operating costs for home and
business owners;
WHEREAS, persistent unemployment, particularly in the construction industry,
continues to burden our families and communities;
WHEREAS, residential and commercial buildings consume nearly 40% of all
electricity and are responsible for 40% of U.S. annual carbon dioxide emissions;
WHEREAS, investing in cost-effective energy efficiency and renewable energy
improvements to homes and businesses can save energy, cut utility bills, create
thousands of local jobs, reduce reliance on fossil fuels, and reduce greenhouse gas
emissions;
WHEREAS, the upfront cost and potentially long payback periods prevent
property owners from making otherwise cost-effective clean energy improvements;
WHEREAS, Property Assessed Clean Energy (PACE) financing programs are an
innovative local government solution to help property owners finance energy efficiency
and renewable energy improvements — such as energy efficient boilers, upgraded
insulation, new windows, solar installations, etc. — to their homes and businesses;
WHEREAS, twenty-two states have passed laws enabling local governments to
develop PACE programs.
WHEREAS, White House and the U.S. Department of Energy strongly support
PACE, have dedicated $150 million to develop local PACE programs and issued
guidelines to ensure that PACE programs meet safety and soundness requirements and
adequately protect both bond buyers and property owners; and,
WHEREAS, despite PACE's great promise, the Federal Housing Finance Agency
(FHFA) and the Office of the Comptroller of the Currency (OCC) on July 6th issued
administrative rulings that negatively impacted the PACE programs nationwide.
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY
RESOLVE AS FOLLOWS:
SECTION 1. That the City of Palm Springs urges the State of California
congressional delegation to support legislation that restores the promise of PACE.
Resolution No.
Page 2
ADOPTED THIS 8TH DAY OF SEPTEMBER, 2010
David H. Ready, City Manager
ATTEST:
James Thompson, 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 ,
by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
James Thompson, City Clerk
City of Palm Springs, California