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HomeMy WebLinkAboutAB 1873 - Property Assessed Clean Energy BondsREQUEST: SUBMITTED BY: DATE: 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 RECEIVED OTHER MEETING DATE C/ C� AYFS• hellSt" {Pl ju cri, -At lly, ai(:if /I(r fv NOES: AI (" rye ABSENT: J11 )Ple, ABSTAIN: AI Oh P VERIFIED BY: i <' lia 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