HomeMy WebLinkAboutAB 1873 - Property Assessed Clean Energy BondsREQUEST:
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CONTENTS:
Recommendation
CITY OF PALM DESERT
OFFICE OF THE CITY MANAGER
STAFF REPORT
RATIFICATION OF LEGISLATIVE OPINION LETTER
Gary Rosenblum, Risk Manager
June 24, 2010
Legislative Opinion Letter for AB 1873 (Huffman) Property Assessed
Clean Energy Bonds
By Minute Motion: 1) Ratify a legislative support letter dated June 1, 2010,
for AB 1873, signed by the City Manager; and 2) Authorize the Mayor to sign
a legislative support letter for AB 1873.
Background
The Palm Desert Legislative Review Committee did not have an opportunity to review AB
1873 before it was amended on May 28, 2010, to provide support for Property Assessed
Clean Energy (PACE) Bonds. On June 1, 2010, the City received an urgent request to
provide support to this pending legislation as it was being reviewed at a critical time in the
Assembly. Palm Desert is an early adopter of PACE bonds and supports all legislative
efforts to expand and improve their uses. The letter was drafted and mailed to the
appropriate Assembly members on June 1, 2010. Staff respectfully requests ratification of
the AB1873 approval letter and direct staff to prepare a letter for the Mayor's signature
signifying City Council's approval.
Fiscal Analysis
There is no direct fiscal impact of this legislation on the City, but positive indirect effects on
our local economy and on CALPERS.
Submitted By:
Gary Rosenblum, Risk Manager
Approval:
. Wohlmuth, City Manager
CITYCOUNCIL ACTION
APPROVED V- DENIED
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Original on File with City Clerk's1Office
June 24, 2010
The Honorable Brian Nestande
State Capital Building, Room 4153
Sacramento, California 95814
Dear Assembly Member Nestande:
On behalf of the City of Palm Desert, I would like to register our support with regard to
AB 1873 (Huffman) relative to Property Assessed Clean Energy (PACE) bonds.
Contractual assessments allow local governments to make loans to homeowners for
energy and water efficiency improvements to their residences. This bill will make
contractual assessments more attractive to local governments and homeowners by
reducing the cost of such loans.
The City of Palm Desert has witnessed a direct economic benefit associated with PACE
financing and the passing of AB 811 (Levine). AB 811, as you will recall, authorized
cities to provide up -front financing to property owners to install solar/renewable energy -
generating devices, or make specified energy efficiency improvements, to their
properties through a system of contractual assessments.
PACE financing not only promotes the State's sustainability goals and objectives; it
empowers homeowners and small business owners throughout the State of California.
Before PACE loans became available, energy cost saving investments were too
expensive and homeowners and business owners were captive to ever increasing
energy costs. With the favorable financing provided under PACE programs, property
owners can reduce their future exposure to ever increasing energy and water costs,
freeing funds for more productive uses.
As an early adopter of PACE financing, the City of Palm Desert enabled 233 of its
residents to make $6.5 million in investments to reduce energy costs. These
homeowners and business people realize that ultimately inflation will return forcing
energy and water costs to continue their historical climb. Further, while jobs are scarce
in the current economy, jobs saved by PACE funded projects have been one of the few
bright spots within our local construction industry.
AB 1873 Support Letter
June 24, 2010
Page 2 of 2
CaIPERS is also currently challenged by low interest rates on its fixed income portfolio
and high risk and volatility on its equity portfolio. Authorizing CaIPERS to invest in
PACE bonds originating in California enables them to invest in secure senior liens at
higher interest rates than are available in the market. Further, this investment will
expand availability of PACE funding for homeowners and small businesses at lower
interest rates than they can secure for such projects. Therefore, AB 1873 presents a
mutually beneficial scenario for CaIPERS and California tax payers.
I will place my support letter on the June 24, 2010, City Council meeting for ratification
of my support and seek Council concurrence after which the City will send a follow-up
letter of support.
Again, the City of Palm Desert strongly supports AB 1873. Thank you for your continued
efforts in advocating AB 1873, as it now goes before the Senate for consideration, AB
1873 provides not only environmental benefits to California, but enacts a positive
significant impact to our State and local economy.
Sincerely,
CINDY FINERTY
MAYOR
JMW/CF/Imw
cc: City Council Members
Joe A. Gonsalves & Sons