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HomeMy WebLinkAboutResolution 2011-9 - Declaring Intention to Amend Energy Independence Program ReportCITY OF PALM DESERT STAFF REPORT REQUEST: ADOPT CITY COUNCIL RESOLUTION 2011-9 DECLARING THE INTENTION TO AMEND THE ENERGY INDEPENDENCE PROGRAM (EIP) REPORT AND ADMINISTRATIVE GUIDELINES AND SETTING A PUBLIC HEARING THEREON SUBMITTED BY: Martin Alvarez, Redevelopment Manager DATE: February 24, 2011 CONTENTS: Resolution No. 2nLi -9 Recommendation By Minute Motion: Waive further reading and adopt Resolution NO. 2011-9 a Resolution of the City Council of the City of Palm Desert Declaring its intention to amend the Energy Independence Program Report and Administrative Guidelines prepared pursuant to Section 5898.22 of the California Streets and Highways Code and Setting Public Hearing Thereon. Backaround On July 21, 2008, the Governor signed into law AB 811, which amended Chapter 29 of Part 3 of Division 7 of the California Streets and Highways Code (as amended, the "Act"). The bill authorized cities and counties to establish a program to enter into contractual assessment agreements with property owners to finance the installation of distributed generation renewable energy sources or energy efficiency improvements that are permanently fixed to real property. On August 28, 2008, the City Council approved Resolution No. 08-89, which established the City's Energy Independence Program Report and Administrative Guidelines (the "EIP Report") prepared pursuant to Section 5898.22 of the California Streets and Highways Code. The City Council has made amendments to the EIP Report twice since its adoption, June 25, 2009 and January 14, 2010. AB 44: Assembly Bill No. 44, Chapter 564 of Statutes of 2010 ("AB 44"), effective January 1, 2011, added Section 5898.15 to the California Streets and Highways Code. Section 5898.15 provides that the City shall not permit a property owner to participate in EIP on or after January 1 2011 if the owner's participation would result in the total amount of any annual Property taxes and assessments exceeding five percent of the property's market value, as determined at the time of approval of the owner's contractual assessment. AB 44 also P6401-0001 \ 1328277v 1.doc Staff Report Intention to Amend EIP Report February 24, 2011 Page 2 of 2 added Section 5898.23 to the California Streets and Highways Code, which provides that the report required pursuant to Streets and Highways Code Section 5898.22 in order to establish a contractual assessment program under the Act shall include safeguards that will be used to ensure that the requirements of Section 5898.15 are met. To comply with the new requirement added by Section 5898.15, the Office of Energy Management has already implemented the Section 5898.15 requirement to any property owners applying for EIP financing on or after January 1, 2011. Although the EIP Report was adopted before the adoption and effectiveness of AB 44, staff recommends that the EIP Report be amended to expressly state the requirement imposed by Streets and Highways Code Section 5898.15 and to set forth the method for verifying compliance with the requirement, which will assist property owners' and City staff's evaluations of EIP applications. Proposed Amendments to EIP and EIP Report: As ordered in the attached resolution, the Redevelopment Manager will work with staff to prepare amendments to the EIP Report, and will place the EIP Report on file with the City Clerk to be available for review prior to the March 24, 2011 public hearing. The proposed amendments to the EIP Report will be reviewed by the Energy Subcommittee for its recommendation to the City Council prior to the March 24, 2011, City Council meeting. Future Actions: Following the public hearing on March 24, 2011, the City Council will consider a resolution approving the amendments to the EIP Report. Fiscal Analysis There is no fiscal impact associated with this request. Submitted By: 7 artin Alvarez, Re evelopment Mgr. aul S. Gibson, Director of Finance Wohlmuth, City Manager !_d:An\AAn.11n I-- - n....- CID . --- Department Head: sti McCarthy, Aafordevelopment CO CILAAPPR VED RECEIVED„ OTHER MEETWIG DA .., AYES: NOES: ABSENT: ABSTAIN: VERIFIED BY: Original on File with 's Office RESOLUTION NO. 2011-9 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT DECLARING ITS INTENTON TO AMEND ENERGY INDEPENDENCE PROGRAM REPORT AND ADMINISTRATIVE GUIDELINES PREPARED PURSUANT TO SECTION 5898.22 OF THE CALIFORNIA STREETS AND HIGHWAYS CODE AND SETTING A PUBLIC HEARING THEREON WHEREAS, pursuant to Chapter 29 of Part 3 of Division 7 of the California Streets and Highways Code (the "Act"), the City Council established its Energy Independence Program (the "Program" or "EIP") to assist property owners with the cost of installing distributed generation renewable energy sources or making energy efficient improvements that are permanently fixed to their property; and WHEREAS, in connection with the Program and as required by the Act, the Director of the City's Office of Energy Management prepared a report (the "Report") in accordance with Section 5898.22 of the Act; and WHEREAS, the Report contains (a) a map showing the boundaries of the territory within which the Program is proposed to be offered, (b) a draft application for participation in the Program, (c) a draft contract (the "Contract") specifying the terms and conditions that would be agreed to by a property owner and the City for participation in the Program, (d) a statement of city policies concerning contractual assessments including: (1) identification of types of facilities, distributed generation renewable energy sources, or energy efficiency improvements that may be financed through the use of contractual assessments, (2) identification of a City official authorized to enter into contractual assessments on behalf of the City, (3) a maximum aggregate dollar amount of contractual assessments, (4) a method for setting requests from property owners for financing through contractual assessments in priority order in the event that requests appear likely to exceed the authorization amount, (e) a plan for raising a capital amount required to pay for work performed pursuant to contractual assessments, (f) a statement of or method for determining the interest rate and time period during which contracting property owners would pay any assessment, (g) the establishment of any reserve fund or funds, (h) the apportionment of all or any portion of the costs incidental to financing, administration, and collection of the contractual assessment program among the consenting property owners and the City, and (i) a report on the results of the consultations with the County Auditor -Controller's office; and WHEREAS, on August 28, 2008, the City Council approved the Report and established the Program following a full and fair public hearing at which interested persons were afforded the opportunity to object to, inquire about or provide evidence with regard to the proposed Program or any of its particulars; and WHEREAS, on June 25, 2009, the City Council approved amendments to the Report following a full and fair public hearing at which interested persons were afforded the opportunity to object to, inquire about or provide evidence with regard to the proposed amendments to the -1- Ufen 1_nnn 1 \ 111 Q7'I1.,l ,4„ Program or any of its particulars, including without limitation amendments (i) to require documentation of consent by a preexisting lender for any Program loan that is $30,000 or more, (ii) to establish $100,000 as the maximum amount of any Program loan, and (iii) to require fifty percent of funds available for Program loans to be reserved for energy efficiency upgrades and retrofits; and WHEREAS, on January 14, 2010, the City Council approved amendments to the Report following a full and fair public hearing at which interested persons were afforded the opportunity to object to, inquire about or provide evidence with regard to the proposed amendments to the Program or any of its particulars, including without limitation amendments (i) to clarify the City's right of access to the project, (ii) to clarify the City's right to inspect property owners' books and records, (iii) to require certain annual certification from property owners, (iv) to require that property owners maintain property insurance covering the HIP improvement and provide evidence of such insurance prior to entering into the EIP Contract, (v) to require a minimum value -to -lien ratio, and (vi) to require a nexus between the repayment term and the reasonably expected useful life expectancy of the EIP improvements; and WHEREAS, Assembly Bill No. 44, Chapter 564 of Statutes of 2010 ("AB 44"), effective January 1, 2011, added Section 5898.15 to the California Streets and Highways Code, which provides that the City shall not permit a property owner to participate in EIP on or after January 1, 2011 if the owner's participation would result in the total amount of any annual property taxes and assessments exceeding 5 percent of the property's market value, as determined at the time of approval of the owner's contractual assessment; and WHEREAS, the Office of Energy Management has already implemented the requirements of Section 5898.15 of the California Streets and Highways Code with respect to any property owners applying for EIP financing on or after January 1, 2011; and WHEREAS, AB 44 also added Section 5898.23 to the California Streets and Highways Code, which provides that the report required pursuant to Streets and Highways Code Section 5898.22 in order to establish a contractual assessment program under the Act shall include safeguards that will be used to ensure that the requirements of Section 5898.15 are met; and WHEREAS, although the Report for the EIP was adopted prior to the adoption and effectiveness of AB 44, the City Council has determined that the best interests of the community and the EIP would be served by amending the Report to expressly state the requirement imposed by Streets and Highways Code Section 5898.15 and to set forth the method for verifying compliance with such requirement; and WHEREAS, the City Council now desires to further amend the Report to expressly state the requirement imposed by Streets and Highways Code Section 5898.15 and to set forth the method for verifying compliance with such requirement. -2- n.�.w.,un�N�., NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT HEREBY FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS: Section 1. The City Council hereby directs the Redevelopment Manager to prepare and file at or before the time of the public hearing described in Section 2 hereof with the City Council proposed amendments to the Report as described in the Recitals hereto. Section 2. The City Council hereby calls a public hearing to be held on March 24, 2011 at 4:00 p.m., or as soon thereafter as feasible, in the Council Chambers, 73 -5 10 Fred Waring Drive, Palm Desert, California, on the proposed amendments to the Report. At the public hearing all interested persons may appear and hear and be heard and object to or inquire about the proposed amendments to the Report. Section 3. The City Clerk is hereby directed to provide notice of the public hearing by publishing this Resolution once a week for two weeks, pursuant to Section 6066 of the California Government Code, in the Desert Sun and the first publication shall not occur later than 20 days before the date of such hearing. PASSED, APPROVED AND ADOPTED this 24th day of February, 2011, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: Rachelle D. Klassen, City Clerk Jean M. Benson, Mayor -3- r_.\.AnuenM�n Ah.nro+\9M �\ChK CnnnAn\Donn In �.nnn1 CIC Onnnw Ann..