The CaliforniaFIRST Program is a property assessed clean energy (PACE) finance program being developed by the California Statewide Communities Development Authority (California Communities), a Joint Powers Authority co-sponsored by the League of California Cities and the California State Association of Counties. PACE programs allow property owners in participating cities to finance the installation of energy and water improvements on their home or business and pay the amount back as a line item on their property tax bill.
Pursuant to Assembly Bill 811, the State of California’s Clean Energy Municipal Financing Law signed into law last year, property owners may finance energy efficiency and renewable energy projects that are permanently affixed to the property. Recent legislation, Assembly Bill 474, expanded the Program’s reach to include the financing of water efficiency projects. Eligible projects under the CaliforniaFIRST Program may include, but are not limited to, air sealing, wall and roof insulation, energy efficient windows, tankless water heaters, solar electricity and low-flow toilets.
CaliforniaFIRST is designed to eliminate the two chief barriers to clean energy and energy/water efficiency installations: the large upfront cost of the project and the concern of not benefiting from the improvements if a property is subsequently sold. As the projects will be financed via traditional municipal bonds, secured by a lien on the participating real property, the bond proceeds are used to fund projects and the out-of-pocket cost to property owner is drastically reduced. Property owners then repay the debt service on the bond in fixed payments as a contractual assessment on their property tax bill. The assessment transfers with the sale of a property to the new owner, ensuring that the party benefiting from the improvements is responsible for payments on the debt.
CaliforniaFIRST also relieves local agencies of the responsibilities associated with forming and administering assessment districts. Once a city passes a resolution authorizing California Communities to create the assessment districts in its jurisdiction, California Communities and the rest of the CaliforniaFIRST team, including Renewable Funding and the Royal Bank of Canada Capital Markets, will handle the formation of the assessment districts and all legal, financial and administrative aspects of the program. This allows a city to provide financing with the least impact to staff time and also provides for a more efficient model as California Communities can aggregate the demand from multiple jurisdictions. This aggregation should result in reduced issuance costs due to economies of scale and should make this type of financing available in jurisdictions that might otherwise not have had sufficient demand to make a program financially viable.
California Communities is currently working with a group of pilot
agencies to launch the initial stage of the Program. The legal
and procedural steps for the pilot round of jurisdictions are
estimated to be complete in the late spring or early summer of
2010. Provided the legal validation and pilot development stage
is successful, California Communities anticipates expanding the
CaliforniaFIRST to additional interested cities in the second
half of 2010.
For more information on CaliforniaFIRST, please contact Terrence Murphy of California Communities at (925) 933-9229 x223 or email@example.com.