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File Number: 16-252 <br />PACE in the City of San Leandro <br />In January 2010, in response to AB 811 and in conjunction with the other cities in Alameda <br />County, San Leandro’s City Council adopted a resolution authorizing the City to join the <br />California Statewide Communities Development Authority, a joint powers authority, and opted <br />in to participate in the CaliforniaFIRST PACE Program. CaliforniaFIRST is currently the only <br />PACE program offered in San Leandro. It has been providing energy efficiency financing in <br />San Leandro to commercial properties since 2012 and to residential properties since <br />September 2014. To date, there are a total of 72 CaliforniaFIRST residential upgrade projects <br />in San Leandro that have received a total of $4,616,045 in funding, resulting in lifetime <br />savings of 160 kWh of electricity and 373,897 gallons of water; and 2,390 tons of greenhouse <br />gas emission reductions. <br />Analysis <br />PACE programs provide an additional means of financing to make environmentally <br />sustainable property improvements more affordable and accessible to property owners. PACE <br />financing provides capital for renewable energy systems and a range of energy and water <br />efficiency improvements to buildings. Some PACE programs also include seismic upgrades <br />as an eligible improvement. The offerings differ from traditional home equity loans or lines of <br />credit in that eligibility is based on property equity rather than the credit worthiness of the <br />applicant. Some advantages to PACE financing include 100% financing for eligible <br />improvements, a repayment period of up to twenty years, and the reliability of pre-approved <br />contractors. <br />PACE also differs from traditional financing in its repayment structure. Debt obligations run <br />with the property rather than the applicant, since the repayment is generated from the utility <br />savings associated with the improvements. Thus, whoever owns the building is responsible for <br />repayment per the conditions of the agreement with the program administrator. Terms vary by <br />program, but are generally considered in line with market rate options for similar <br />improvements. As with other forms of private lending, all transactions are voluntary and no <br />property owner is required to participate in any program. <br />Benefits of PACE Programs <br />When the country’s first PACE program launched in Berkeley in 2008, it was a new and <br />untested financing mechanism. At that time, a handful of municipalities launched self-funded <br />PACE programs. Since then, over 30 states have passed PACE-enabling legislation and <br />private financing companies have entered the market by partnering with joint powers <br />authorities to establish and finance PACE programs. <br />Creating a competitive marketplace provides a variety of options for home and business <br />owners to finance improvement projects based on finance terms, conditions of approval, and <br />eligible measures offered by the different programs. Additionally, authorizing multiple <br />providers ensures that financing will remain available if one or more providers cease to <br />operate in San Leandro. Finally, it is anticipated that there will be increased economic activity <br />as a result of each new provider operating locally. <br />Supporting an expanded PACE marketplace helps to implement the City of San Leandro <br />Page 3 City of San Leandro Printed on 6/1/2016