CaliforniaFIRST
Kelley McKanna| 4/1/10
PACE: Simple, Effective Tool
City or county
creates type of
land-secured
financing district
or similar legal
mechanism
Property owners
voluntarily sign-up
for financing and
install energy
projects
Proceeds from
PACE
bond or other
financing provided
to property owner
to pay for energy
project
Property owner
repays bond
through property
tax bill
(up to 20 years)
Key Benefits for Cities & Counties
Helps meet
energy and
climate goals
Tax neutral and
no exposure to
General Fund
Promotes
local jobs
Key Benefits for Property Owners
Saves money
on utility bills
Not based on
personal credit
Repayment
transfers to
new owner
8.4%
jobs increase in
construction sector
jobs in Sonoma
County between
January and
September 2009
CaliforniaFIRST
Statewide AB 811 Program
14 Counties Participating in Phase I
Now Launching
– Alameda; Fresno; Kern; Monterey; Sacramento;
San Benito; San Diego; San Luis Obispo; San
Mateo; Santa Clara; Santa Cruz; Solano;
Ventura; Yolo
Phase II Now Open for New Counties
CaliforniaFIRST: Program Team
CSCDA California Communities - Sponsor
•Joint Powers Authority formed in 1988 with 500 members cities,
counties, and special districts
Renewable Funding - Administration
•Architect of clean energy municipal financing and experience running
Pace programs
•Provides turnkey solutions to implement programs
Royal Bank of Canada Capital Markets - Finance
•Lead underwriter of municipal bonds, with issuance volume of more
than $100 billion since 2004
•Experience running CSCDA SCIP
CaliforniaFIRST: Overview
City /County
“opts-in”
$$ Upfront
• Creates financing
district
• Provides complete
admin
• Provides upfront capital
through bond sales
• Identifies work &
chooses contractor
$$ Repaid
on tax bill
• Applies for financing
• Repays financing on
property tax bill
• Repayment obligation
transfers with ownership
CaliforniaFIRST: Legal
PROGRAM ADOPTION
PROGRAM FORMATION
Public Notice
Formation of the district
Sample Staff Report
Legal validation
Resolution to Join
Bond indenture
Bond, disclosure and issuer’s counsel
CaliforniaFIRST: Program Admin
DESIGN
TECHNOLOGY/OPER
ATIONS
MARKETING
Stakeholder coordination
Application processing and
approval
Basic marketing services
and guidelines
Design and development of
policies and terms
Develop and maintain web
portal
Customer service
Connect to local goals
Training for local
government staff
CaliforniaFIRST: Finance
BOND ISSUANCE
BOND FINANCE
Local Obligation
Interim financing
Revenue Bond
Bond sale and market placement
Bond Underwriting
Tax roll preparation
Local Responsibilities
IDENTIFY A LOCAL
POINT OF CONTACT
LOCAL CUSTOMER
SERVICE
OPTIONAL
Update meetings
Questions from local
residents
Develop additional local
marketing and outreach
Coordinate with local cities
Develop and maintain
additional policies
City/County Program Fees
Level 1
Level 2
Level 3
Level 4
Level 5
Population
under 20K
21K - 75K
75K - 200K
201K - 500K
over 500K
Legal & Validation
Process
$7,500
$7,500
$7,500
$7,500
$7,500
Marketing &
Technology Set-Up
$2,500
$5,000
$7,500
$12,500
$17,500
TOTAL
$10,000
$12,500
$15,000
$20,000
$25,000
– Total legal fees per county not to exceed $75,000
CaliforniaFIRST: Timeline
Pilot scheduled to launch in summer 2010
New cities and counties sign up for Round 2 from April
to July
– Public Notice
– Staff Report
– Resolution to Join
Round 2 estimated launch Fall 2010
Eligible Measures
– Affixed to property (ie. No appliances)
– Energy Efficiency, Renewable Energy, Water
Efficiency
– Cost-effective” by CEC standards
Participation Pathways
Homeowner
Licensed
Contractor
Basic
Package
Performance
Audit
PV
Other EE
Measures
BPI,
HERSII,
Equivalent
Contractor Qualifications
– Appropriate State license
– Participation in State rebate programs
– Agreement to Code of Ethics
– Compliance with CEC HERSII requirement (as
available and applicable)
Eligible Properties
Standard
– Residential and Multifamily, 4 or less units
– Multifamily 5 or more units and Commercial
Still under development
– Underwriting criteria
10% lien to value ratio
20% equity in property
No history of payment delinquency for taxes, foreclosure,
bankruptcy, involuntary liens, current in mortgage payments
Potential Customization
– Most limited of customization options due to need for standardized
underwriting criteria in bond rating and sale
CaliforniaFIRST Splash Page
www.californiafirst.org
Slides prepared by Renewable Funding
Kelley McKanna| kelley@renewfund.com | (510) 451-7910