HomeMy WebLinkAbout2010/01/05 Item 7TY COUNCIL
STATEMENT
~~ CITY OF
m CHULAVISTA
JANUARY 5, 2010, Item
ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA (1) AUTHORIZING THE CITY OF CHULA
VISTA TO JOIN THE CALIFORNIAFII~ST PROGRAM
ESTABLISHED AND ADMINISTERED BY THE
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY, (2) AUTHORIZING THE
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY, AS PART OF THE
CALIFORNIAFIRST PROGRAM, TO - ACCEPT
APPLICATIONS FROM PROPERTY OWNERS, CONDUCT
CONTRACTUAL ASSESSMENT PROCEEDINGS, AND
LEVY CONTRACTUAL ASSESSMENTS WITHIN THE
TERRITORY OF THE CITY OF CHULA VISTA, (3)
AUTHORIZING RELATED ACTIONS, AND (4)
AUTHORIZING THE CITY MANAGER TO EXECUTE' ALL
DOCUMENTS IN CONJUNCTION WITH PARTICIPATING
IN THE CALIFORNIAFIRST PROGRAM
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AUTHORIZING THE COUNTY OF
SACRAMENTO, AS LEAD COLLABORATIVE ENTITY, TO
APPLY FOR CALIFORNIA ENERGY COMMISSION STATE
ENERGY PROGRAM GRANT FUNDS ON BEHALF OF THE
CITY OF CHULA VISTA, TO ADMINISTER SUCH FUNDS
IF RECEIVED TO IMPLEMENT THE CALIFORNIAFIRST
PROGRAM, AND MAKING CEQA FINDINGS
SUBMITTED BY: DIRECTOR OF CONSERVATION & ENVIRONME
SERVICES ` ( ~ ''~'~
DIRECTOR OF FINANCE~...f ~~
REVIEWED BY: CITY MANAGE
ASSISTANT CITY ANAGER 5
7-1
JANUARY 5, 2010, Item
Page 2 of 6
4/STHS VOTE: YES ~ NO ~X
SUMMARY
As part of the Council-approved climate protection measures, staff has been developing a
community energy and water retrofit program, entitled the Home Upgrade, Carbon
Downgrade program, to assist residents and businesses in reducing energy and water usage
and utility costs. Specifically, staff has been working with California Communities to
establish the statewide CaliforniaFIRST Program which would allow property owners in
participating cities and counties to voluntarily finance renewable energy, energy efficiency,
and water efficiency improvements on their property. If a property owner chooses to
participate, the improvements would be financed by the issuance of bonds by California
Communities which would levy "contractual assessments" on the owner's property to repay
their portion of the bonds. The program set-up fees necessary for city participation will be
covered through either existing budgeted funds or a potential State Energy Program grant in
collaboration with Sacramento County, if awarded.
ENVIRONMENTAL REVIEW
The Environmental Review Coordinator has reviewed the proposed activity for
compliance with the California Environmental Quality Act (CEQA) and has determined
that the activity is not a "Project" as defined under Section 15378 of the State CEQA
Guidelines because the activity involves the creation of funding mechanisms or other
government fiscal activities which do not involve any commitment to a specific project
which .may result in a potentially significant physical impact on the environment.
Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is
not subject to CEQA. Thus, no environmental review is necessary.
RECOMMENDATION
Council conduct the public hearing and adopt the resolutions.
BOARDS/COMMISSION RECOMMENDATION
The Resource Conservation Commission unanimously recommended that City Council
authorize the City's participation in the CaliforniaFIRST program at their December 14,
2009 meeting.
DISCUSSION
Chula Vista has been a regional and national leader in climate protection policies and
programs designed to reduce greenhouse gas or "carbon" emissions. The City has
participated in the United Nations Framework Convention on Climate Change, ICLEI
Cities for Climate Protection Campaign, the California Climate Action Registry, and the
Conference of Mayor's Climate Protection Agreement. Through this involvement, the
City Council has committed the City to reducing its community-wide greenhouse gas
emissions 20% below 1990 levels. Over the past 18 months, the City of Chula Vista has
been implementing seven new carbon-reducing measures which were recommended by
the Climate Change Working Group -comprised of residents, businesses, and community
7-2
JANUARY 5, 2010, Item
Page 3 of 6
group representatives -and were formally approved by the City Council on July 10, 2008.
The measures focus on lowering energy and water consumption, installing renewable
energy systems, promoting alternative fuel vehicle use, and designing pedestrian and
transit-friendly communities.
As part of measures #5 and #7, staff has developed a community energy and water
retrofit program to assist residents and businesses in reducing energy and water usage and
utility costs. The program, entitled the Home Upgrade, Carbon Downgrade program,
will provide streamlined contracting, permitting, and financing for interested community
members to help overcome common implementation barriers such as upfront capital
costs, complicated application processes, and time constraints. The City has allocated
$900,000 of its federal Energy Efficiency & Conservation Block Grants (EECBG) to help
launch the program and fund limited home performance improvements. To greatly
expand the program's potential to implement widespread community retrofit projects and
to significantly reduce citywide carbon emissions, staff has been working to establish a
voluntary special assessment district to provide participants with aproperty-secured
financing option to fund their improvements.
Property-secured financing, commonly called AB811 financing, is emerging as a novel
tool for local governments to facilitate the installation of water conservation, energy
efficiency, and renewable energy upgrades in the community, and allows homeowners to
finance carbon-saving improvements through a voluntary tax assessment on their
property. The resulting utility savings help offset the new assessments. Staff has been
working with the California Statewide Communities Development Authority (California
Communities) to establish a bond option to fund the upfront capital costs of the home and
business retrofit program. California Communities is a joint powers authority sponsored
by the League of California Cities and the California State Association of Counties. The
member agencies of California Communities include all 58 California counties and more
than 400 other local agencies, including the City of Chula Vista
CaliforniaFIRST Program
The CaliforniaFIRST Program is being instituted by California Communities to allow
owners of property in participating cities and counties to finance renewable energy,
energy efficiency, and water efficiency improvements on their property. If a property
owner chooses to participate, the improvements will be financed by the issuance of bonds
by California Communities. California Communities will levy "contractual assessments"
on the owner's property to repay the portion of the bonds issued to finance the
improvements on that property. California Communities has selected Renewable
Funding LLC and RBC Capital Markets to provide administration and financing for the
program.
The "contractual assessment" proceedings will be undertaken by California Communities
pursuant to Chapter 29 of Division 7 of the Streets & Highways Code, which was
amended in 2008 by Assembly Bill 811 and further amended in 2009 by Assembly Bill
474, to allow the financing of renewable energy, energy efficiency, and water efficiency
improvements on private property. Pursuant to Chapter 29, assessments may be levied to
7-3
JANUARY 5, 2010, Item
Page 4 of 6
finance renewable energy, energy efficiency, and water efficiency improvements only
with the free and willing consent of the owner of each lot or parcel on which an
assessment is levied at the time the assessment is levied, and property owners evidence
their consent to the assessments by executing a contract with California Communities.
The benefits to the property owner include:
• Only property owners who choose to participate in the program will have
assessments imposed on their property.
• In today's economic environment, there may not be attractive private enterprise
alternatives for property owners to finance renewable energy/energy
efficiency/water efficiency improvements.
• Even if there were private enterprise alternatives, most private loans are due on
sale of the benefited property, which makes it difficult for property owners to
match the life of the repayment obligation with the useful life of some of the
financed improvements such as large solar photovoltaic (electricity) systems.
Under the CaliforniaFIRST Program, the assessment obligation will transfer with
the property upon sale.
• The property owner can choose to pay off the assessments at any time, subject to
applicable prepayment penalties.
• By virtue of regional aggregation provided by the CaliforniaFIRST Program,
small projects, both residential and commercial, can have access to the municipal
bond market, which may produce a lower borrowing cost.
The benefits to the City of Chula Vista include:
• As in conventional assessment financing, the City of Chula Vista is not obligated
to repay the bonds issued by California Communities or to pay the assessments
levied on the participating properties.
• California Communities handles all assessment administration, bond issuance,
and bond administration functions, thereby not committing significant City staff
time to administer the program.
• The renewable energy/energy efficiency/water efficiency improvements
contribute to reducing citywide carbon emissions from existing building stock, a
sector which represents about 50% of annual greenhouse gas emissions.
• The City of Chula Vista can withdraw from the CaliforniaFIRST Program at any
time by passing a resolution rescinding the authorization, if desired.
7-4
JANUARY 5, 2010, Item
Page 5 of 6
Properly Owner Participation
As previously stated, CaliforniaFIRST is a voluntary program for property owners
interested in financing energy and water-saving improvements at their homes or
businesses. The minimum improvement cost that can be financed is $5,000, while the
maximum amount is dependent on the market value of the property. Participants will be
subject to the fees and interest rate established by the CaliforniaFIRST program.
Application fees for property owners will not exceed $300 and the aggregate interest rate
reflected in the contractual assessment will be determined by California Communities at
the time of debt issuance. The aggregate interest rate will include the interest rate on the
loan, financing costs, capitalized expenses, and an additional administrative fee of no
more than 1 %.
In order for Chula Vista property owners to participate in the CaliforniaFIRST program
and take advantage of the property-secured financing for energy and water-saving
improvements, the City must pay aone-time $20,000 fee to fund a portion of the
program's legal validation and technology set-up costs. To cover these costs, the City is
collaborating with California Communities and other jurisdictions (with County of
Sacramento acting as the Lead Collaborative Entity) to submit a grant proposal to the
California Energy Commission's State Energy Program. If awarded, the $16.5 million
grant would fund initial fees associated with bond issuance, start-up costs for the
participating jurisdictions, an interest rate buy-down, local marketing and outreach, and
overall grant administration to support the launch of the CaliforniaFIRST program. If the
grant is not awarded, the City of Chula Vista would use funds from its appropriated
Energy Efficiency & Conservation Block Grants and existing Conservation &
Environmental Services' departmental budget to cover the one-time $20,000 fee.
The CaliforniaFIRST program would provide critical funding to initiate the Home
Upgrade, Carbon Downgrade program and ultimately complement the City's Measure 5
program bond that City Council has previously targeted for June 2010. The program
bond, which would involve all Chula Vista property owners voting in a general election
to authorize a municipal bond issuance, would allow the City to make significant
investments in public purpose projects which would reduce carbon emissions such as
alternative fuel fleet conversions, building and street light energy efficiency
improvements, expanded renewable energy installations, and WaterSmart landscape
retrofits. The bond would also allow the City to create its own property-secured low-
interest loan program to assist residents and businesses in implementing energy and
water-saving projects. The City's low-interest loan program would assist property owners
with additional energy and water saving measures (ex. frontload clothes washers and
refrigerators) which are not included in the CaliforniaFIRST program because they are
not permanently affixed to the building and whose quick payback (<5 years) may be
more appropriately due upon property sale.
The first proposed resolution authorizes California Communities to accept applications
from owners of property within the City of Chula Vista for municipal financing of
renewable energy, energy efficiency, and water efficiency improvements through the
CaliforniaFIRST Program. It also authorizes California Communities to conduct
7-5
JANUARY 5, 2010, Item
Page6of6
assessment proceedings and levy assessments against the property of participating owners
within Chula Vista boundaries. Finally, it authorizes miscellaneous related actions,
makes certain findings and determinations required by law, authorizes payment of a set-
up fee to cover legal, procedural, and technology costs associated with the
CaliforniaFIRST Program, and authorizes the City Manager to execute all documents in
conjunction with participating in the program. California Communities will undertake a
judicial validation proceeding as part of its initiation of the CaliforniaFIRST Program.
The second proposed resolution authorizes Sacramento County, as fiscal agent selected
by California Communities for the CaliforniaFIRST program, to apply for and accept
State Energy Program grant funding on behalf of the City of Chula Vista.
DECISION MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is
not site specific and consequently the 500 foot rule found in California Code of
Regulations section 18704.2(a)(1) is not applicable to this decision.
CURRENT YEAR FISCAL IMPACT
A one-time $20,000 fee is required for the City of Chula Vista to participate in the
CaliforniaFIRST program which would allow property owners within Chula Vista to
voluntarily finance energy and water-saving improvements at their homes and businesses
and repay the improvement cost through a contractual assessment on their property. The
one-time fee would be funded through existing Energy Efficiency & Conservation Block
Grant and Conservation & Environmental Services Department budgets or through a
State Energy Program grant being submitted in conjunction with California Communities
and Sacramento County. City staff time associated with marketing- the program and
facilitating community participation will be funded through existing Conservation &
Environmental Services Department grant resources.
ONGOING FISCAL IMPACT
There are no ongoing, direct costs associated with the City's participation in the
CaliforniaFIRST program. City staff time associated with supporting the program will be
funded through the Conservation & Environmental Services Department existing annual
budgets. The City is not responsible for any assessment proceedings, the levy or
collection of assessments, remedial action in the case of assessment payment
delinquencies, or the issuance, sale, or administration of bonds in connection with the
CaliforniaFIRST program. The program's implementation would contribute to additional
local employment in the construction, service, and retail sectors as well as generate local
retail sales. Furthermore, it could increase property owners' discretionary income by
decreasing their monthly utility costs to a level below their annual debt service.
ATTACHMENTS
Attachment A - CaliforniaFIRST Program Report
Prepared by: Brendan Reed, Environmental Resource Manager, G~nservation & Environmental Services
7-6
,,.~--~,,,.,~ ATTACHMENT A
~>~
r`
~.
~~~~'~ '~" ~~TI~
..
~' ~ ~" ~3~?It~~
.. _._.. _..._~ ~ : a Markets
O ..
CaliforniaFIRST Program Report
(as of November 24, 2009)
~-~
Table of Contents
I. Introduction .............................................................................................................. 3
A. California Communities ................................................................................................................................. ..3
B. Purpose of the CaliforniaFIRST Program ............................................................................................... ..3
C. Assessment Financing; Contractual Assessments ............................................................................... ..3
D. Purpose of this Program Report ................................................................................................................ ..4
E. Program Administration ................................................................................................................................ ..4
II. Duration .................................................................................................................. . 4
II1. Program Requirements ............................................................................................4
A. Authorized Improvements .............................................................................................................................4
B. Loading Order Process .....................................................................................................................................4
C. Quality Assurance ...............................................................................................................................................5
D. Property Eligibility Criteria ............................................................................................................................5
E. Eligible Costs ........................................................................................................................................................7
F. Eligible Contractors ...........................................................................................................................................7
IV. Financing of the CaliforniaFIRST Program ................................................................8
A. Minimum and Maximum Financing Amounts ........................................................................................8
B. Financing Structure ...........................................................................................................................................8
C. Financing Process ...............................................................................................................................................9
D. Interest Rate ...................................................................................................................................................... 10
E. Administrative Costs ...................................................................................................................................... 10
F. Other Financed Amounts .............................................................................................................................. 10
G. Prepayment ........................................................................................................................................................ 10
V. Public Agency Official ............................................................................................10
VI. Changes to the Report ..........................................................................................10
VII. Appendices and Exhibits ......................................................................................11
2
7-8
I. Introduction
This CaliforniaFIRST Program Report (this "Program Report") outlines the basic design and financing structure of a
property assessed municipal financing program called CaliforniaFIRST (the "CaliforniaFIRST Program") for the
County of (the "County').
A. California Communities
The California Statewide Communities Development Authority ("California Communities") is a statewide joint powers
authority sponsored by the California State Association of Counties and the League of California Cities. California
Communities' mission is to provide local governments access to low-cost financing for projects that provide a tangible
public benefit, contribute to social and economic growth, and improve the overall quality of life in local communities.
B. Purpose of the CaliforniaFIRST Program
California Communities is offering the CaliforniaFIRST program on a statewide basis, and the County is offering the
CaliforniaFIRST Program in the County, to encourage utilization, by the existing building stock, of distributed
generation renewable energy sources, energy efficiency and water efficiency improvements. California Communities
will facilitate a statewide bond pool, which will allow property owners to access competitive interest rates offered by
the public bond markets.
With the passage of AB 32, California set ambitious goals for reducing carbon emissions and building alternative
energy use. The California Public Utilities Commission has set a goal of retrofitting over 13 million residences in the
State to be at least 30% more energy efficient. Many California cities and counties have also set their own
greenhouse gas reduction targets. Similarly, water conservation efforts, including the promotion of water-related
improvements to residential, commercial, industrial, or other real property, are necessary to address the issue of
chronic water shortages in California.
Property owners can help to achieve greenhouse gas reductions and reduce water use and, at the same time, save
money by investing in distributed generation renewable energy sources, energy efficiency, and/or water efficiency
improvements. Yet most people still resist making these improvements. The number one barrier is the large upfront
cost.
Utilities sell power and water to their customers as a simple pay-as-you-go service. Homes and businesses can be
converted to clean energy and reduce water use quickly, but many believe that it can happen only if paying for
distributed generation renewable energy sources, energy efficiency improvements and water efficiency improvements
is more like paying a utility bill. The CaliforniaFIRST Program can make this happen.
C. Assessment Financing; Contractual Assessments
The CaliforniaFIRST Program uses a tool that is widely used by local agencies in California to finance public benefit
projects: land-secured financing. California law has long provided cities and counties with the power to issue bonds
and levy assessments on the County property tax bill to finance public projects such as sewers, parks, and the
undergrounding of utilities.
Chapter 29 of the Improvement Act of 1911, commencing with Section 5898.10 of the Streets & Highways Code of
the State of California ("Chapter 29"), authorizes the levy of "contractual assessments" to finance the installation of
distributed generation renewable energy sources, energy efficiency and water efficiency improvements to be
permanently affixed to residential, commercial, industrial, agricultural, or other real property.
A "contractual assessment" is an assessment that is levied by contract pursuant to Chapter 29. For the
CaliforniaFIRST Program, the assessment contract will be an "Agreement to Pay Assessment and Finance
Improvements" in the form attached to this Program Report as Exhibit A (the "Assessment Contract"). The
Assessment Contract will be executed by each participating property owner and California Communities.
Under the CaliforniaFIRST Program, a contractual assessment lien is placed on each participating property in an
amount necessary to (i) finance the installation of authorized renewable energy, energy efficiency and water
3
7-9
efficiency improvements over a 10-20 year period of time, depending upon the useful life of the financed
improvements and (ii) pay the costs of administering the CaliforniaFIRST Program. The contractual assessments are
paid on the County property tax bill. If the owner sells the property, the repayment obligation remains an obligation of
the property. California Communities will issue bonds payable from the contractual assessments.
The CaliforniaFIRST Program is completely voluntary and property taxes for properties in the County that do not
choose to participate are completely unaffected by the Program.
D. Purpose of this Program Report
This Program Report constitutes the report required pursuant to Section 5898.22 of Chapter 29 for the County's
CaliforniaFIRST Program. The CaliforniaFIRST Program will be offered throughout the entire County as shown on the
boundary map attached as Exhibit B. If a property is located in a city's incorporated territory within the County, a
property may participate in the CaliforniaFIRST Program only after the city has adopted a resolution asking California
Communities to offer the CaliforniaFIRST Program within its boundaries.
E. Program Administration
California Communities will be responsible for implementing the CaliforniaFIRST Program in the County, including
providing assessment administration and issuing the bonds. California Communities has selected Renewable
Funding to administer the CaliforniaFIRST Program. Renewable Funding will review applications and provide
marketing and customer service through its custom websites, email, and toll-free phone number. California
Communities has selected Royal Bank of Canada Capital Markets to serve as the bond underwriter for the
CaliforniaFIRST Program.
The California Center for Sustainable Energy (GCSE) and EcoMotion are program partners. They are participating in
program design and will be involved in providing services to some communities. Other program partners or affiliates
may be added. The program's legal counsel includes Jones Hall (bond counsel to California Communities) and
Orrick, Herrington & Sutcliffe LLP (issuer's counsel and disclosure counsel to California Communities).
II. Duration
The CaliforniaFIRST Program will continue as long as there is sufficient demand.
III. Program Requirements
This Program Report identifies the CaliforniaFIRST Program requirements relating to the types of improvements that
can be financed under the CaliforniaFIRST Program (including the required "loading order"), eligible properties and
financing parameters. Additional requirements are set forth in the CaliforniaFIRST Program Terms, which are
attached as Exhibit C.
A. Authorized Improvements
The CaliforniaFIRST Program offers financing of the installation of those distributed generation renewable energy
sources, energy efficiency and water efficiency improvements listed on Exhibit D (the "Authorized Improvements').
In the pilot stage of the CaliforniaFIRST Program, water efficiency measures are ineligible for financing.
Property owners are responsible for the Authorized Improvements installed on their property. Property owners must
address performance and other system-related issues directly with the installer according to the terms of the contract
with the installer. The CaliforniaFIRST Program is a financing program only. Neither California Communities nor the
administrator is responsible for the system or its performance.
B. Loading Order Process
Based on guidelines established by the California Energy Commission (the "GEC") as part of its competitive grant
program, authorized energy efficiency measures from an approved list or recommended by an energy audit must be
installed before or contemporaneously with renewable energy improvements to be eligible for financing under the
4
7-10
CaliforniaFIRST Program. The CaliforniaFIRST Program will comply with all state and federal requirements for
loading order.
Due to the need for additional market development to meet demand, there are two pathways to meet the loading
order requirement. First, a property owner can obtain a whole house energy audit by a Building Performance
Institute' ("BPI"), Home Performance with Energy Start ("HPwES") or Home Energy Rating System3 ("HERS") II rater.
Energy efficiency measures can be implemented based on the outcome of the audit. Second, a property owner may
install a basic package of standard energy efficiency measures. This "prescriptive path" would include measures
such as air sealing, attic and water heater insulation. This second pathway is currently under development by the
CEC and California Public Utilities Commission (the "CPUC") and is scheduled to be completed by the
CaliforniaFIRST program launch.
C. Quality Assurance
Renewable Energy; Energy Efficiency. The CaliforniaFIRST Program will use the quality assurance protocols of
existing renewable energy programs and pending energy efficiency programs as the basic platform for its quality
assurance and quality control, and adjust requirements as necessary to remain compliant with state and federal
requirements. The CaliforniaFIRST Program will not provide quality assurance beyond the third party services
described below.
Until otherwise indicated by the standards of a CPUC statewide rebate program, energy efficiency projects will be
subject to one of two levels of review depending on whether the project falls under an existing certification program or
if the project is completed without contractor certification.
• 5% of projects reviewed by BPI, HPwES and HERS II raters will be subject to field inspection and review as
part of existing programs and carried out by the Califomia Building Performance Contractors Association
(CBPCA).
• 15% of projects undertaken by licensed contractors that do not have BPI, HPwES or HERSII certification,
and are installing the prescriptive package, will be subject to field inspection and review by CBPCA, and the
contractors will be required to become BPI certified by 01/01/11. These projects are subject to an additional
administrative fee to cover the cost of the quality assurance inspection. This cost is explained in the
Administrative Fees section of this Program Report.
Approximately 14% of solar photovoltaic ("PV") and solar water heating ("SWH") projects will be subject to field
inspection and review within the California Solar Initiative ("CSI") program.
Water Efficiency. A quality assurance procedure for water efficiency installations is currently under development.
Subject to Change. All quality assurance and quality control procedures are subject to review and adjustment based
on applicable state and federal standards.
D. Property Eligibility Criteria
In order to receive financing from the CaliforniaFIRST Program, a property must meet the following requirements:
1 BPI is a global organization that supports the building performance industry through individual and organizational
credentialing and a rigorous quality assurance program. More information on BPI is available here:
http://www.bpi.org/
2 HPwES is a national program from the U.S. Environmental Protection Agency and U.S. Department of Energy,
which offers a comprehensive, whole-house approach to improving energy efficiency and comfort at home. More
information on HPwES is available at the following link,
http://www.energystar.gov/index.cfm?c=home_improvement. h m_improvement_hpwes
3 A HERS II rater is part of the Home Energy Rating System Program, developed by the CEC The CEC developed
the program "to provide reliable information to differentiate the energy efficiency levels among California homes and
to guide investment in cost-effective home energy efficiency measures". More information on HERS is available at
http://www. energy. ca. gov/HERS/.
5
7-11
a. The property to be improved with the Authorized Improvements (the "subject property') must be
located in the boundaries of the CaliforniaFIRST Program. If a property is located in the
unincorporated territory of the County, then it is eligible to participate. If a property is located in a
city's incorporated territory within the County, a property may participate in the CaliforniaFIRST
Program only after the city has adopted a resolution asking California Communities to offer the
CaliforniaFIRST Program within its boundaries.
b. The subject property may be used for residential, commercial or industrial purposes. If the subject
property is used for residential purposes, the property owner(s) do not have to occupy the subject
property as their primary residence.
c. The contractual assessments levied pursuant to an Assessment Contract will constitute a senior
lien on the related property, which means pre-existing private liens, such as purchase money
mortgages, will be subordinate to the contractual assessment lien. Owners of residential properties
(including owners of individual condominiums and townhouses) must, at a minimum, notify their
pre-existing private lenders in writing of the proposed contractual assessment lien, unless
otherwise provided by applicable law. Owners of residential properties will be required to obtain the
consent of their lenders if their mortgage documents required consent. Owners of properties that
are not residential properties (which may include owners of multi-unit residential properties) must
receive written consent from their pre-existing private lenders. Property owners are responsible for
complying with consent if it is required by the mortgage documents. California Communities will
provide property owners with lender notification and consent forms.
d. All owners of the fee simple title to the subject property must sign the Program Documents, as
described in the CalifomiaFIRST Program Terms. Therefore, before submitting an initial
application, applicants must ensure that all owners of the fee simple title to the subject property
wish to participate in the Program on the terms set forth in the CaliforniaFIRST Program Terms.
e. All participating properties will be required to meet local, state and federal program requirements
and guidelines, including those described in "Loading Order Process" above.
f. California Communities reserves the right to waive the energy efficiency audit requirement for
buildings seeking water efficiency improvements only. However, such projects may be required to
provide similar audit or project technical analysis documentation in order to verify the expected
benefits of the project.
g. Property owners will be required to participate in appropriate state incentive programs. For
example, property owners planning to finance the installation of a solar PV system will be required
to participate in the CSI program with respect to the subject property. Property owners will also be
required to participate in similar incentive programs for solar thermal (hot water) systems and home
energy efficiency retrofits.
h. The property owners(s) must agree to participate in surveys and CaliforniaFIRST Program
evaluations directed by California Communities. In addition, property owners will be required to
sign a waiver allowing the CaliforniaFIRST Program to collect utility usage data as appropriate to
comply with state and federal reporting standards.
i. The property owner is highly encouraged to participate in a workshop about or on-line review of the
CaliforniaFIRST Program before deciding whether to participate. All property owners will be
required to read and acknowledge their agreement to the CaliforniaFIRST Program Terms before
applying.
k. California Communities will review all applications to ensure that the proposed Authorized
Improvements, the subject property, the property owners and the contractors meet CaliforniaFIRST
eligibility requirements. At the completion of installation of the Authorized Improvements, property
owners will be required to submit a set of project verification documents. Verification forms may
include but are not limited to a customer sign-off form, final invoices from contractor(s), building
permit(s), and rebate documents before financing is available. Details on the verification
documents can be found in the CaliforniaFIRST Program Terms.
I. The property owner(s) must not have declared bankruptcy in the past 7 years.
6
7-12
The property owners must be current in the payment of all obligations secured by the subject
property, including property taxes, assessments and tax liens, within the past 3 years (or since
ownership commenced, if it has been less than 3 years). California Communities may review
public records, including the County real property records, to verify compliance with this
requirement. Certain allowances may be made for property tax payment delays that do not reflect
financial distress. Commercial properties that are currently appealing a property tax assessment
will be reviewed and eligibility will be determined on a case-by-case basis.
k. There must be no notices of default or foreclosure filed against the subject property within the last 5
years (or since ownership commenced, if less than 5 years). California Communities reserves the
right to deny a reservation and a request for funding to a property owner if any other property it
owns has been subject to foreclosure in the past 5 years. However, a property with a notice of
default or foreclosure may be allowed to participate in the CaliforniaFIRST Program if it receives
consent from the property's current lender(s).
The property owners must not have involuntary liens other than a tax or assessment lien with
respect to which the property owner is current in payment, defaults or judgments applicable to the
subject property in excess of $500. California Communities may review public records, including
the county real property records and court documents, to verify compliance with this requirement.
A property owner with an involuntary lien of greater than $500 may be allowed to participate in the
CaliforniaFIRST Program if it can demonstrate an acceptable reason for the lien, default or
judgment and a path for resolution. A commercial property with an involuntary tenant's lien will be
reviewed and eligibility will be determined on a case-by-case basis.
m. The "private loan to value ratio" must be 80% or less based on (i) private property debt including
mortgages and (ii) the assessed value of the property and/or the average market value of
comparable properties. If the private loan to value ratio is only met with respect to the assessed
value or the average market value of comparable properties, but not both, California Communities
may request additional information before ruling on the application. If the title search does not
provide adequate information to calculate the private loan to value ratio, the property owner will
also be asked to provide a current mortgage statement reflecting the outstanding balance and any
payment delinquencies. Lender consent to participation can allow for waiver of the private loan to
value ratio requirement. This ratio may be adjusted in order to comply with state and federal
requirements.
n. The "public loan to value ratio" must be 10% or less based on (i) the CaliforniaFIRST assessment
and overlapping special assessments and special tax debt and (ii) the assessed value of the
property and average market value of comparable properties. If the public loan to value ratio is
only met with respect to the assessed value or the average market value of comparable properties,
but not both, California Communities may request additional information before ruling on the
application.
o. Because the CaliforniaFIRST Program involves issuance of bonds by California Communities,
California Communities is concerned that property owners who participate in the program will pay
their assessments in full on a timely basis. Therefore, California Communities reserves the right to
request additional information.
E. Eligible Costs
The CaliforniaFIRST program may finance the costs of installing Authorized Improvements, audit costs and
application fees. All local and state rebates must be deducted from the financed amount prior to approval. The
federal Income Tax Credit value may be included in the financed amount.
F. Eligible Contractors
Contractor eligibility is being standardized throughout the country, and the CaliforniaFIRST Program will comply with
applicable state and federal laws.
Renewable Energy; Energy Efficiency. The CaliforniaFIRST Program requires contractors installing energy
efficiency measures to meet the eligibility requirements of the pending CPUC statewide energy efficiency rebate
program. The current draft requirements include BPI certification, HPwES certification, and/or a HERS II rating.
7
7-13
Contractors installing solar PV and/or SWH must meet the eligibility requirements of the CSI. Other renewable
energy technologies must be installed by licensed contractors who qualify for other state rebate programs such as the
Self Generation Incentive Program and/or Emerging Renewables Program.
Water Efficiency. The CaliforniaFIRST Program is currently developing the eligibility criteria for contractors installing
water conservation measures. At a minimum, contractors must be properly licensed and abide by the codes and
standards of the local building department.
IV. Financing of the CaliforniaFIRST Program
A. Minimum and Maximum Financing Amounts
Maximum Financing Amount for the CaliforniaFIRST Program. The maximum aggregate dollar amount of the
principal component of contractual assessments to be levied under the CaliforniaFIRST Program for the County is $1
billion.
Minimum Financing Amount for each Property. The minimum installation cost that can be financed is $5,000
Residential Properties. Residential properties are eligible for financing up to the lesser of (i) $75,000 or (ii) 10% of
the assessed and/or market value of the property. For this purpose, residential properties include detached single-
family homes, duplexes, triplexes, quadplexes, townhouses, twin homes, and multi-family and tenancy in common
properties with up to four units.
Non-residential Properties. Non-residential properties are eligible for financing up to 10% of the assessed and/or
market value of the property. For this purpose, non-residential properties consist of commercial, industrial, large
multi-family, community facilities, and non-profit-owned properties. Large multi-family properties are defined as those
that contain five or more units.
B. Financing Structure
California Communities will finance the installation of Authorized Improvements using three different financing
structures at the County level, as described below. In order to provide the lowest possible interest rates through credit
diversification, California Communities will purchase bonds issued for each county's CaliforniaFIRST program and
issue bonds to the public bond market on a statewide basis.
The CaliforniaFIRST Program may utilize three different bond structures to finance the installation of Authorized
Improvements in the County. In all three cases, bonds will be issued to finance the installation of Authorized
Improvements for a specific list of properties in the County and debt service on the bonds will be secured by and
payable from contractual assessments paid by participating properties in the County. The interest rate on bonds
issued for the CaliforniaFIRST Program will be reflected in the amount of the contractual assessments paid by
property owners.
Microbonds: "Micro-bonds" are bonds issued to finance the installation of Authorized Improvements for one
or a limited number of properties. These bonds will be purchased by Renewable Funding and will be
remarketed by RBC Capital Markets to the public bond market when a significant number of micro-bonds
have been issued. The interest rate on micro-bonds will be set daily or weekly. The interest rate on bonds
issued for the CaliforniaFIRST Program will be reflected in the amount of the contractual assessments paid
by property owners, and, with micro-bonds, the contractual assessments will be fixed for the duration of the
repayment period in the Assessment Contract. Property owners may drop out of the program up to the time
the lien is placed on the home without penalty beyond the cost of the application fee.
- Pooled bond: "Pooled bonds" are bonds issued to finance the installation of Authorized Improvements for a
large group of properties. Pooled bonds will be sold to the market on a quarterly or more frequent basis
depending upon the demand for financing by property owners in the County. In order to facilitate pooled
bond financings, Assessment Contracts will be signed by property owners prior to issuance of the pooled
bonds. The contractual assessments will reflect snot-to-exceed interest rate on the pooled bonds. No bonds
will be issued if the not to exceed interest rate would be exceeded. If a property owner withdraws from the
8
7-14
CaliforniaFIRST program after the Assessment Contract has been signed and/or pooled bonds have been
issued, the property owner must pay the costs associated with removing the lien, including the
administrative, financing, and pre-payment costs.
- Stand-Alone: Large commercial projects may be eligible for astand-alone bond issuance dependent on the
size and type of project. Banks and other financing partners may be utilized to provide funding for these
projects. Under this approach, California Communities will issue a bond and the bank or other financing
partner will purchase the bond.
In the pilot stage of the CaliforniaFIRST program, it is anticipated that both residential and non-residential properties
will utilize the pooled bond approach.
C. Financing Process
The process for property owners to receive financing through the CaliforniaFIRST Program is designed to be
straightforward.
• Education. Property owners visit the dedicated website to: learn about the program, the financing terms
and other details; read the terms and conditions; and find approved contractors and improvements. Property
owners must determine that they will meet the eligibility requirements.
• Application. Property owners apply on-line for a funding reservation from the CaliforniaFIRST Program and
pay anon-refundable application fee. Applications will include a proposed project and contractor bid.
Property owners must electronically agree to the CaliforniaFIRST Program Terms as part of the application.
• Review and Approval. California Communities performs title work to confirm ownership, screens for
unpaid taxes or other delinquent property-based debt, applies loan-to-value metrics, and evaluates the
proposed project. California Communities will approve an application only after confirming that the property
meets the underwriting criteria, loading order process, and other CaliforniaFIRST Program requirements.
• Reservation. If their application is approved, property owners then receive a reservation for funding. In a
micro-bond approach, the property owner then proceeds with installation of the Authorized Improvements
and requests funding when the property has met all the applicable requirements for funding. The property
owner will sign the Assessment Contract and the lien of the contractual assessment will be placed on the
property at this time. In a pooled bond approach, property owners sign the Assessment Contract and the
lien of the contractual assessment will be placed on the property when the funding reservation is approved.
However, property owners must wait to receive a Notice to Proceed before beginning the work on their
property in order to make certain bond issuance is successful. Property owners have at least six months
after receiving the Notice to Proceed to install their renewable energy, energy efficiency or water efficiency
improvements and return to the website to request payment. Residential properties are eligible for
reservation extensions. The fee for reservation extension will be defined in the CaliforniaFIRST Program
Terms.
• Installation. A qualified installer must complete the installation of Authorized Improvements on the property.
See "Eligible Contractors" above.
• Evidence of Compliance; Funding. After the property owner has provided all required documentation and
met all applicable CaliforniaFIRST Program requirements, California Communities will release funds to the
property owner. The property owner must make a funding request and submit all required documents within
a minimum of 180 days of application approval for residential projects and within the determined reservation
period set at application approval for non-residential projects.
• Repayment. The property owner will be expected to pay the contractual assessment installments in the
amounts and at the times specified in the Assessment Contract.
Applications from property owners for financing will be considered based on afirst-come-first-served basis. If a
request from a property owner for financing would cause the CaliforniaFIRST Program to exceed the authorized
amount, then the last property that caused the authorization amount to be exceeded will be ineligible for financing.
All applications receive a time stamp in order to allow for first-come-first-served priority.
9
7-15
D. Interest Rate
Market conditions will determine the interest rate on bonds issued to finance the CaliforniaFIRST Program.
E. Administrative Costs
The costs of administering the CaliforniaFIRST Program will be financed through city/county set-up fees, participant
application fees, and an administrative component of the contractual assessment installments.
Application fees for property owners will not exceed $300. On-going administrative fees will not result in an increase
to the aggregate interest rate reflected in the contractual assessment installments of more than 1 %.
Energy efficiency improvements installed by a contractor without BPI or HPwES certification and without a HERS II
evaluation will be subject to an additional fee to cover increased quality assurance requirements. The anticipated fee
for an energy efficiency improvement installed without BPI, HPwES or HERS II will not exceed $100.
The fee charged by the County for the collection of the contractual assessment installments on the County property
tax bill and the cost of recording the various notices in the real property records will be included in each property's
contractual assessment. California Communities has consulted with the County and determined that the fee charged
by the County for the collection of the contractual assessment installments on the County property tax bill will not
exceed 3% of each annual installment.
F. Other Financed Amounts
The costs of issuing bonds will be financed through the contractual assessments. California Communities estimates
that the costs of issuance will not exceed 5% of the cost of installing the Authorized Improvements.
The contractual assessments may also finance a debt service reserve fund to pay debt service on the bonds in the
event of contractual assessment installment delinquencies. Debt service reserve funds will typically be equal to
approximately 10% of the principal component of the contractual assessment.
In addition, because there is a July 1 deadline for placing the contractual assessments on the County property tax bill,
contractual assessments may also finance the first year's installments if the deadline cannot be met.
G. Prepayment
The assessment may be prepaid, in whole or in part, at any time upon the payment of the unpaid principal component
of the assessment, the accrued but unpaid interest component of the assessment through the prepayment date and a
prepayment premium in the amount set forth in the Assessment Contract. The premium may vary based upon the
timing of the prepayment.
V. Public Agency Official
California Communities will, from time to time, authorize certain representatives to execute Assessment Contracts on
its behalf; the current authorized representative is:
Name: Daniel B. Harrison
Title: Administrative Director
Phone: 916 658-8267
Email: dharrison cacities.or
Address: 1400 K Street, Suite 400
Sacramento, CA 95814
VI. Changes to the Report
10
7-16
California Communities may make changes to this Report and the CaliforniaFIRST Program documents ftom time to
time in its absolute discretion. No such changes will affect the amounts payable by a property owner under an
existing Assessment Contract.
VII. Appendices and Exhibits
Exhibit A: Assessment Contract -Agreement to Pay Assessment and Finance Improvements
Exhibit B: Boundary Map -Territory of contractual assessments (not included)
Exhibit C: Draft CaliforniaFIRST Program Terms (not included)
Exhibit D: Draft CaliforniaFIRST Program Authorized Improvements
11
7-17
EXHIBIT A
AGREEMENT TO PAY ASSESSMENT AND FINANCE IMPROVEMENTS
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY
CALIFORNIAFIRST
(COUNTY OF 1
This AGREEMENT TO PAY ASSESSMENT AND FINANCE IMPROVEMENTS (this
"Agreement") is made and entered into as of this day of , 20_, by and between
the California Statewide Communities Development Authority, a joint exercise of powers
authority (the "Authority"), and the record owner(s) (the "Property Owner") of the fee title to
the real property identified on Exhibit A (the "Property").
RECITALS
WHEREAS, the Authority is a joint exercise of powers authority the members of which
include numerous cities and counties in the State of California; and
WHEREAS, the Authority has established the CaliforniaFIRST program (the
"CaliforniaFIRST Program") to allow the financing of certain renewable energy, energy
efficiency and water efficiency improvements that are permanently fixed to real property (the
"Authorized Improvements") through the levy of contractual assessments pursuant to Chapter
29 of Division 7 of the Streets & Highways Code ("Chapter 29") and the issuance of
improvement bonds under the Improvement Bond Act of 1915 (Streets and Highways Code
Sections 8500 and following) (the "1915 Act") upon the security of the unpaid contractual
assessments; and
WHEREAS, Chapter 29 provides that assessments may be levied under its provisions
only with the free and willing consent of the owner of each lot or parcel on which an assessment
is levied at the time the assessment is levied pursuant to a contract between the property owner
and the public agency; and
WHEREAS, the Authority has conducted the proceedings required by Chapter 29 with
respect to the territory within the boundaries of the County of (the "County"); and
WHEREAS, the Property is located in the boundaries of [the City of (the
"City")][the County], and the [City/County] has consented to (i) owners of property within its
jurisdiction (the "Participating Property Owners") participating in the CaliforniaFIRST Program
and (ii) the Authority conducting assessment proceedings under Chapter 29 and issuing bonds
under the 1915 Act to finance the Authorized Improvements; and
WHEREAS, pursuant to Chapter 29, the Authority and the Property Owner wish to enter
into a contract pursuant to which the Property Owner would agree to pay an assessment in
order to finance the installation on the Property of the Authorized Improvements described in
Exhibit B (the "Improvements") and the Authority would agree to provide financing, all on the
terms set forth in this Agreement;
Jones Hall, A Professional Law Corporation 11-24-09
1
7-18 -
NOW, THEREFORE, in consideration of the foregoing and the material covenants
hereinafter contained, the Property Owner and the Authority formally covenant, agree and bind
themselves and their successors and assigns as follows:
AGREEMENT
Section 1. Purpose. The Property Owner and the Authority are entering into this
Agreement for the purpose of financing the installation of the Improvements identified on Exhibit
B on the Property.
Section 2. The Property. This Agreement relates to the real property identified on
Exhibit A. The Property Owner has supplied to the Authority current evidence of its ownership of
fee title to the Property and possesses all legal authority necessary to execute this Agreement
on behalf of the Property Owner.
Section 3. Agreement to Pay Assessment; Prepayment: Non-Completion
Assessment.
(a) Payment of Initial Assessment. The Property Owner hereby freely and willingly
agrees to pay the initial assessment set forth on Exhibit C (the "Initial Assessment"). Except as
otherwise set forth in this Agreement, the Initial Assessment will be paid in the installments set
forth on Exhibit C.
(b) Payment of Non-Completion Assessment. The Property Owner hereby freely and
willingly agrees to pay the additional assessment (the "Non-Completion Assessment";
together with the Initial Assessment, the "Assessment") identified on Exhibit A in the event that,
following issuance of bonds by the Authority to finance installation of the Improvements, the
Property Owner fails to install the Improvements in compliance with the CaliforniaFIRST
Program rules or otherwise fails to meet the conditions established by the Authority for financing
through the CaliforniaFIRST Program. The Property Owner acknowledges that the purpose of
the Non-Completion Assessment is to provide for redemption of the related bonds. The Property
Owner further acknowledges that the Non-Completion Assessment will be levied in full by the
Authority as set forth in Section 5898.30 of Chapter 29 in the first fiscal year in which the
Authority is able to cause the Non-Completion Assessment to be placed on the County property
tax roll.
(c) Prepayment of the Assessment. The Assessment may be prepaid, in whole or in
part, at any time upon the payment of (a) the whole or a portion of the unpaid principal
component of the Assessment, (b) the accrued but unpaid interest component of the whole or
applicable portion of the unpaid principal component of the Assessment through the prepayment
date, (c) a prepayment premium in the amount set forth on Exhibit A and (d) the reasonable
costs of the Authority related to such prepayment.
(d) Absolute Obligation. The Property Owner hereby agrees that the Assessment will
not be subject to reduction, offset or credit of any kind in the event that the bonds secured
thereby are refunded or for any other reason.
Section 4. Collection of Assessment: Lien. The Assessment, and the interest and
penalties thereon as a result of a delinquency in the payment of any installment of the
Assessment, shad constitute a lien against the Property until they are paid and shall be
collected and shall have the lien priority as set forth in Chapter 29.
2
7-19
The Property Owner acknowledges that if any Assessment installment is not paid when
due, the Authority has the right to have the delinquent installment and its associated penalties
and interest stripped off the secured property tax roll and immediately enforced through a
judicial foreclosure action that could result in a sale of the Property for the payment of the
delinquent installments, associated penalties and interest, and all costs of suit, including
attorneys' fees. The Property Owner acknowledges that, if bonds are sold to finance the
Improvements, the Authority may obligate itself, through a covenant with the owners of the
bonds, to exercise its foreclosure rights with respect to delinquent Assessment installments
under specified circumstances.
Section 5. Financing of the Improvements.
(a) Agreement to Finance Improvements. The Authority hereby agrees to use the
Assessment to finance the Improvements, including the payment of the Authority's reasonable
costs of administering the CaliforniaFIRST Program.
(b) Assessment Installments. The Property Owner agrees to the issuance of bonds
by the Authority to finance the installation of the Improvements. The interest rate used to
calculate the Initial Assessment installments set forth on Exhibit C is identified on Exhibit A. If
the Authority determines in its reasonable discretion that the Initial Assessment installments
may be reduced because the applicable interest rate on the bonds issued to finance installation
of the Improvements is lower than the interest rate specified in Exhibit A, then the Authority may
substitute a revised Exhibit C for the attached Exhibit C, shall provide a copy of such revised
Exhibit C to the Property Owner and shall cause a notice of such revision to be recorded in the
office of the County Recorder.
Section 6. Term. Except as otherwise set forth in this Agreement, this Agreement
shall expire upon the final payment or prepayment of the Assessment.
Section 7. Recordation of Documents. The Property Owner hereby authorizes and
directs the Authority to cause to be recorded in the office of the County Recorder the various
notices and other documents required by Chapter 29 and other applicable laws to be recorded
against the Property.
Section 8. Notice. To the extent required by applicable law, the Property Owner
hereby agrees to provide written notice to any subsequent purchaser of the Property of the
obligation to pay the Assessment pursuant to this Agreement.
Section 9. Waivers, Acknowledgment and Agreement. The Property Owner hereby
waives its right to repeal the Assessment by initiative or any other action, or to file any lawsuit or
other proceeding to challenge the Assessment or any aspect of the proceedings of the Authority
undertaken in connection with the CaliforniaFIRST Program. The Property Owner hereby
agrees that the Property Owner and its successors in interest to fee title in the Property shall be ,
solely responsible for the installation, operation and maintenance of the Improvements. The
Property Owner hereby acknowledges that the Property will be responsible for payment of the
Assessment regardless of whether the Improvements are properly installed, operated or
maintained as expected.
The Property Owner hereby agrees that the Authority is entering into this Agreement
solely for the purpose of assisting the Property Owner with the financing of the installation of the
3
~-20
Improvements, and that the Authority and [the City/County] have no responsibility of any kind
for, and shall have no liability arising out of, the installation, operation, financing, refinancing or
maintenance of the Improvements. Based upon the foregoing, the Property Owner hereby
waives the right to recover from and fully and irrevocably releases the Authority, the
[City/County] and any and all agents, employees, attorneys, representatives and successors
and assigns of the Authority and the [City/County] from any and all losses, liabilities, claims,
damages (including consequential damages), penalties, fines, forfeitures, costs and expenses
(including all reasonable out-of-pocket litigation costs and reasonable attorney's fees), relating
to the subject matter of this Agreement that the Property Owner may now have or hereafter
acquire against the Authority, the [City/County] and any and all agents, employees, attorneys,
representatives and successors and assigns of the Authority or the [City/County].
To the extent that the foregoing waivers and agreements are subject to Section 1542 of
the California Civil Code or similar provisions of other applicable law, it is the intention of the
Property Owner that the foregoing waivers and agreements will be effective as a bar to any and
all losses, liabilities, claims, damages (including consequential damages), penalties, fines,
forfeitures, costs and expenses (including all reasonable out-of-pocket litigation costs and
reasonable attorney's fees), of whatever character, nature and kind, known or unknown,
suspected or unsuspected, and Property Owner agrees to waive any and all rights and benefits
conferred upon the Property Owner by the provisions of Section 1542 of the California Civil
Code or similar provisions of applicable law. Section 1542 reads as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR."
By initialing below, the Property Owner agrees to waive the provisions of Section 1542 in
connection with the matters that are the subject of the foregoing waivers and releases.
Property Owner's Initials:
The waivers, releases and agreements set forth in this Section 9 shall survive
termination of this Agreement.
Section 10. Indemnification. The Property Owner agrees to indemnify, defend,
protect, and hold harmless the Authority, the [City/County] and any and all agents, employees,
attorneys, representatives and successors and assigns of the Authority or the [City/County],
from and against all losses, liabilities, claims, damages (including consequential damages),
penalties, fines, forfeitures, costs and expenses (including all reasonable out-of-pocket litigation
costs and reasonable attorney's fees) and any demands of any nature whatsoever related
directly or indirectly to, or arising out of or in connection with, (i) the Assessment, (ii) the
financing by the Authority of the Improvements, (iii) the Improvements, (iv) or any other fact,
circumstance or event related to the subject matter of this Agreement, regardless of whether
such losses, liabilities, claims, damages (including consequential damages), penalties, fines,
forfeitures, costs and expenses (including all reasonable out-of-pocket litigation costs and
reasonable attorney's fees) accrue before or after the date of this Agreement.
The provisions of this Section 10 shall survive the termination of this Agreement.
7 -~L 1
Section 11. Amendment. Except as set forth in Section 5(b), this Agreement may be
modified only by the written agreement of the Authority and the Property Owner.
Section 12. Binding Effect; Assignment. This Agreement inures to the benefit of and is
binding upon the Authority, the Property Owner and their respective successors and assigns.
The Authority has the right to assign any or all of its rights and obligations under this
Agreement without the consent of the Property Owner. The obligation to pay the Assessment
set forth in this Agreement is an obligation of the Property and no agreement or action of the
Property Owner will be competent to impair in any way the Authority's rights, including, but not
limited to, the right to pursue judicial foreclosure of the Assessment lien or the right to enforce
the collection of the Assessment or any installment thereof against the Property.
Section 13. Exhibits. The Exhibits to this Agreement are incorporated into this
Agreement by this reference as if set forth in their entirety in this Agreement.
Section 14. Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, such holding will not invalidate or render
unenforceable any other provision of this Agreement.
Section 15. Corrective Instruments. The Authority and the Property Owner agree that
they will, from time to time, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, such supplements hereto and such further instruments as may
reasonably be required in order to carry out out the expressed intention of this Agreement.
Section 16. Governing Law; Venue. This Agreement is governed by and construed in
accordance with the laws of the State of California. Any legal action brought under this
Agreement must be instituted in the Superior Court of the County of Sacramento, State of
California; provided, however, actions to foreclose delinquent installments of the Assessment
will be instituted in the superior court of the County or as otherwise provided by law.
Section 17. Counterparts. This Agreement may be executed in several counterparts,
each of which is an original and all of which constitutes one and the same instrument.
5
7-22
IN WITNESS WHEREOF, the Authority and the Property Owner have caused this
Agreement to be executed in their respective names by their duly authorized representatives, all
as of the date first above written.
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY
By:
Its:
The following are the authorized signatories of the Property Owner:
Name:
By: Name:
By:
Its: Its:
Name:
By: Name:
By:
Its: Its:
7-~23
EXHIBIT A
Agreement Number:
Property Owner:
Property (APN/Legal Description):
Prepayment Premium:
Interest Rate Used to Calculate Initial Assessment Installments (prior to issuance of Bonds):
Non-Completion Assessment: An amount equal to % of the Initial Assessment identified on
Exhibit C
A-1
7-24
EXHIBIT B
IMPROVEMENTS
The Improvements are described on the attached documentation.
7-25
EXHIBIT C
SCHEDULE OF INITIAL ASSESSMENT INSTALLMENTS
Fiscal Administrative Total
Year Princi al (a) Interest b Ex enses c a + b + c
i oral mitiai ,assessment:
C-1
7-26
DRAFT
10/26/09
~r
c
v
~V
W
m
a
c
W
Minim um Requirements
~- Rebates and In centives
Air Balancing ~r ~
Air Filtration
Air Sealing 30
Air Barriers
Bathroom fan 10
Air Sealing and Ceiling fan 10
Ventilation Crawlspace Sealing
Duct Sealing and Cleaning 18
30°6 Federal tax
credit up to $1,500
Whole House Fan 20 for advanced air
circulating
Roof 20
Attic 30
Duct 15 Must meet 20091ECC for Federal tax credit of
Insulation Floor 20 Federal tax credit 30°6 of cost up to
Ho[ Water System 13 $1,500
Wall 20
Cogeneration furnace AFUE, EER or SEER rating?
Desu erheaters
Demand Recirculation Pump
Duct I nstallation
Duct Replacement
Ducted Heat Pump 15
Air Source Hea[ Pump (HSPF
8.5, EER 12.5, SEER 15 Split 30% of cost up to
Ductless Heat Pump Syrtems; HSPF 8, EER 12,
SEER 14 Package Systems) for $1,500
Federal tax credit
Evaporative effectiveness of
0.85 or better for Level I, or
Evaporative coolers 15 0.95 or Netter overall system
efficiency for the Level 2
federal tax credit.
Exhaust Fan
Furnace Tune Up
EER 14.1 COP 3.3 closed loop;
EER 16.2 COP 3.6 open loop;
Geothermal Heat Pump EER 15 COP 3.5 direct 30% Of COSt
Spate Heating and expansion for Federal hx
red"t
Cooling Heat Recovery Ventilation System
Central Air Conditioning (EER
13/SEER 16 split syrtems & 30% up t0 $1,500
High Efficiency Air Conditioner 15 EER 12/SEER 14 package for central
systems) for Federal tax w/specifications
redit.
Minimum 90%(oil), 95°b 30°.6 tax rebate up
High Efficiency Furnace 20 (natural gas, propane) AFUE to $1,500 (92%
for Federal tax credit AFUE requirement)
HVAC Zoning
Hyd ronic Air Handler
Hyd ronic Radiator Installation
Mechanical Dampers Installation
Mechanical ventilation and cooling systems
Permanent Exterior Shading Devices
Radiant Barrier Installation
Radiant Heating System Install
Thermostat Installation 11
Weatherization 11
High Efficiency Hot Water Boiler Install Minimum AFUE 90°.6 for
Federal tax credit
Minimum EF 0.82 for natural 30°.6 tax rebate up
Water Heating High Efficiency Water Heater Install 11 gas, and minimum EF 2.o for to $1,500 (EF .82
electric for Federal tax credit. required)
Water Heater - Tankless 20
On demand Recirculation Pump
High Efficiency Lighting Retrofit T8 and TS
7-27
Minim um Requirements
~- Rebates and I ncentives
~. ~
Lighting Lighting (hard wired) 16
Lighting controls, including occupancy sensors
Daylighting Solar Tubelnstallation SO
Exterior Window
Replacement. U factor
Windows, Doors and Window Replacement 20 less than or equal to 30% tax credit up to
Skylights 0.30, SHGC less than or $1,500
e ual to 0.30
Window Film SO
Energy star asphalt and
Reflective Roof
White Roofing
20 metal roofs eligible for 30°6 tax credit up to
cool roof for Federal tax $1,500
credit
Pool Equipment High Efficiency Pool Pump Install 10
Response and Demand Response Controls
Storage Energy Storage Systems (electricity or thermal)
CPUC: CSI-
Thermal
Solar Thermal Installation 15 Must meet CSI 30°6 Federal tax $12.82/therm,
requirements credit
Low Income
$25.64/therm
Solar CPUC: $1.56-
P, R, I
1.9/watt CSI,
$4.75-7.0/watt
~ Solar PV System 2S Must meet CSI 30% Federal tax Solar for Low-
w Requirements credit
v income and
.n Affordable
m
~
Housing
Must be UL listed, SWCC
Wind
Wind Turbine Power Systems
certification when 30% Federal tax CEC: $1.6-
P, R (if applicable), I
credit $2.6/watt
ap licable
30°6 Federal tax
credit up to CEC: $3/watt
Fuel Cell fuel Cell Power Systems $500/O.SkW (must for solar
have 30°6 efficiency thermal fuel
and be at least cells
0.6kW)
Low Flow Showerheads SO
Low flow showers
~
n
Fixtures Toilets: flush a 1.28 gpf or less 20
`w
Urinals: flushing at 0.5 gpf or less
20
.~ Showerheads: flow at 1.5 gpm or less 10
~ aerators: flow ai 1.0 gpm or less 10
~ Landscaping Grey water systems
0/
'u Other measures such as potable water offsets,
w efficiency improvements, irrigation measures,
w process improvements and storm water
3 management improvements shall be Minimum SO
considered on a case-by-case basis in
Other consultation with the CaliforniaFIRSTprogmm.
7-28
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA (1) AUTHORIZING THE CITY OF CHULA VISTA TO JOIN
THE CALIFORNIAFIRST PROGRAM ESTABLISHED AND
ADMINISTERED BY THE CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY, (2) AUTHORIZING
THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT
AUTHORITY, AS PART OF THE CALIFORNIAFIRST PROGRAM, TO
ACCEPT APPLICATIONS FROM PROPERTY OWNERS, CONDUCT
CONTRACTUAL ASSESSMENT PROCEEDINGS, AND LEVY
CONTRACTUAL ASSESSMENTS WITHIN THE TERRITORY OF THE
CITY OF CHULA VISTA, (3) AUTHORIZING RELATED ACTIONS,
AND (4) AUTHORIZING THE CITY MANAGER TO EXECUTE ALL
DOCUMENTS IN CONJUNCTION WITH PARTICIPATING IN THE
CALIFORNIAFIRST PROGRAM
WHEREAS, the California Statewide Communities Development Authority ("California
Communities") is a joint exercise of powers authority whose members include numerous cities
and counties in the State of California, including the City of Chula Vista ("City"); and
WHEREAS, California Communities has established the CaliforniaFIRST program
("CaliforniaFIRST Program") to allow the financing of certain renewable energy, energy
efficiency and water efficiency improvements ("Improvements") through the levy of contractual
assessments pursuant to Chapter 29 of Division 7 of the Streets & Highways Code ("Chapter
29") and the issuance of improvement bonds (the "Bonds") under the Improvement Bond Act of
1915 (Streets and Highways Code Sections 8500 and following) (the "1915 Act") upon the
security of the unpaid contractual assessments; and
WHEREAS, Chapter 29 provides that assessments may be levied under its provisions
only with the free and willing consent of the owner of each lot or parcel on which an assessment
is levied at the time the assessment is levied; and
WHEREAS, the City desires to allow the owners of property within its jurisdiction
("Participating Property Owners") to participate in the CaliforniaFIRST Program which would
provide the Participating Property Owners financing to make certain renewable energy, energy
efficiency, and water efficiency improvements;
WHEREAS, the City further desires to allow California Communities to conduct
assessment proceedings under Chapter 29 and to issue Bonds under the 1915 Act to finance the
Improvements permitted by the CaliforniaFIRST Program; and
1
7-29
WHEREAS, California Communities will conduct assessment proceedings under Chapter
29 and issue Bonds under the 1915 Act to finance Improvements permitted by the
CaliforniaFIRST Program; and
WHEREAS, there has been presented to this meeting a proposed form of Resolution of
Intention (the "ROI") to be adopted by California Communities in connection with such
assessment proceedings, a copy of which is attached hereto as Exhibit A, and the territory within
which assessments may be levied for the CaliforniaFIRST Program shall include all of the
territory within the City's official boundaries of record (the "Proposed Boundaries"); and
WHEREAS, the City will not be responsible for the conduct of any assessment
proceedings; the levy or collection of assessments or any required remedial action in the case of
delinquencies in such assessment payments; or the issuance, sale or administration of the Bonds
or any other bonds issued in connection with the CaliforniaFIRST Program; and
WHEREAS, pursuant to Government Code Section 6586.5, a notice of public hearing has
been published once at least five days prior to the date hereof in a newspaper of general
circulation in the City and a public hearing has been duly conducted by this City Council
concerning the significant public benefits of the CaliforniaFIRST Program and the financing of
the Improvements.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista
as follows:
Section 1. On the date hereof, the City Council held a public hearing and the City
Council hereby finds and declares that the issuance of bonds by California Communities in
connection with the CaliforniaFIRST Program will provide significant public benefits, including
without limitation, savings in effective interest rate, bond preparation, bond underwriting and
bond issuance costs and reductions in effective user charges levied by water and electricity
providers within the boundaries of the City.
Section 2. In connection with the CaliforniaFIRST Program, the City hereby
consents to the conduct of special assessment proceedings by California Communities pursuant
to Chapter 29 on any property within the Proposed Boundaries and the issuance of Bonds under
the 1915 Act; provided, that
(1) Such proceedings are conducted pursuant to one or more Resolutions of
Intention in substantially the form of the ROI.
(2) The Participating Property Owners, who shall be the legal owners of such
property, execute a contract pursuant to Chapter 29 'and comply with other applicable
provisions of California law in order to accomplish the valid levy of assessments.
2
7-30
(3) The City will not be responsible for the conduct of any assessment
proceedings; the levy or collection of assessments or any required remedial action in the
case of delinquencies in such assessment payments; or the issuance, sale or
administration of the Bonds or any other bonds issued in connection with the
CaliforniaFIRST Program.
(4) The issuance of Bonds will occur following receipt of a final judgment in
a validation action filed by California Communities pursuant to Code of Civil Procedure
Section 860 that the Bonds are legal obligations of California Communities.
Section 3. Pursuant to the requirements of Chapter 29, California Communities has
prepared and will update from time to time the "Program Report" for the CaliforniaFIRST
Program (the "Program Report"), and California Communities will undertake assessment
proceedings and the financing of Improvements as set forth in the Program Report.
Section 4. The designated officials and staff of the City are hereby authorized and
directed to make applications for the CaliforniaFIRST program available to all property owners
who wish to finance Improvements; provided, that California Communities shall be responsible
for providing such applications and related materials at its own expense. The City Manager and
his or her designee are further authorized and directed to execute all documents in conjunction
with participating in the CaliforniaFIRST program. The following staff persons, together with
any other staff persons chosen by the City Manager from time to time, are hereby designated as
the contact persons for California Communities in connection with the CaliforniaFIRST
Program: the Conservation & Environmental Services Director and the Environmental
Resource Manager.
Section 5. The appropriate officials and staff of the City are hereby authorized and
directed to execute and deliver such closing certificates, requisitions, agreements and related
documents as are reasonably required by California Communities in accordance with the
Program Report to implement the CaliforniaFIRSTProgram for Participating Property Owners.
Section 6. The appropriate officials and staff of the City are hereby authorized and
directed to pay California Communities a fee in an amount not to exceed $20,000, which
California Communities will use to pay for the costs of implementing the CaliforniaFIRST
Program in the City, including the payment of legal costs incurred in connection with judicial
validation of the CaliforniaFIRST Program. The appropriate officials and staff of the City
and/or the City's collaborative partners are hereby further authorized to acquire grant funding, if
available and awarded to the City and/or its collaborative partners, and to expend such grant
funding to pay the City's costs referenced in this section.
Section 7. The City Council hereby finds that adoption of this Resolution is not a
"project" under the California Environmental Quality Act, because the Resolution involves the
creation of funding mechanisms or other government fiscal activities which do not involve any
commitment to a specific project which may result in a potentially significant physical impact on
the environment, within the meaning of Title 14, California Code of Regulations, Section
15378(b)(4).
3
7-31
Section 8. This Resolution shall take effect immediately upon its adoption. The City
Clerk is hereby authorized and directed to transmit a certified copy of this resolution to the
Secretary of California Communities.
Presented by
Michael T. Meacham
Director of Conservation and
Environmental Services
Approved as in form by
-~
~L
art Miesfeld
City Attorney
4
7-32
EXHIBIT A
FORM OF RESOLUTION DECLARING INTENTION
TO FINANCE INSTALLATION OF
DISTRIBUTED GENERATION RENEWABLE ENERGY SOURCES,
ENERGY EFFICIENCY AND WATER EFFICIENCY IMPROVEMENTS
COUNTY OF
WHEREAS, the California Statewide Communities Development Authority ("California
Communities") is authorized under the authority granted California Communities pursuant to
Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California in
accordance with Chapter 29 of Part 3 of Division 7 of the Streets & Highways Code of the State
of California ("Chapter 29") to authorize assessments to finance the installation of distributed
generation renewable energy sources, energy efficiency and water efficiency improvements that
are permanently fixed to real property ("Authorized Improvements"); and
WHEREAS, Chapter 29 authorizes California Communities to enter into contractual
assessments to finance the installation of Authorized Improvements in the County of (the
"County"); and
WHEREAS, California Communities wishes to declare its intention to establish a
CaliforniaFIRST program (the "CaliforniaFIRST Program") in the County, pursuant to which
California Communities, subject to certain conditions set forth below, would enter into
contractual assessments to finance the installation of Authorized Improvements in the County;
NOW, THEREFORE, BE IT RESOLVED by the California Statewide Communities
Development Authority, as follows:
Section I . Findings. California Communities hereby finds and declares the following:
(a) The above recitals are true and correct.
(b) Energy conservation efforts, including the promotion of energy-related
Authorized Improvements to residential, commercial, industrial, or other real property, are
necessary to address the issue of global climate change and the reduction of greenhouse gas
emissions in the County.
(c) Water conservation efforts, including the promotion of water-related Authorized
Improvements to residential, commercial, industrial, or other real property, are necessary to
address the issue of chronic water shortages in California.
(d) The upfront cost of making residential, commercial, industrial, or other real
property more energy and water efficient, along with the fact that most commercial loans for that
purpose are due on the sale of the property, prevents many property owners from installing
Authorized Improvements.
5
7-33
(e) A public purpose will be served by establishing a contractual assessment program,
to be known as the CaliforniaFIRS7' Program, pursuant to which California Communities will
finance the installation of Authorized Improvements to residential, commercial, industrial, or
other real property in the County.
Section 2. Determination of Public Interest. California Communities hereby determines
that (a) it would be convenient, advantageous, and in the public interest to designate an area,
which shall encompass the entire geographic territory within the boundaries of the County,
within which California Communities and property owners within the County may enter into
contractual assessments to finance the installation of Authorized Improvements pursuant to
Chapter 29 and (b) it is in the public interest for California Communities to finance the
installation of Authorized Improvements in the County pursuant to Chapter 29.
Section 3. Identification of Authorized Improvements. California Communities hereby
declares that it proposes to make contractual assessment financing available to property owners
to finance installation of Authorized Improvements, including but not limited to those
improvements detailed in the Report described in Section 8 below, as that Report may be
amended from time to time.
Section 4. Identification of Boundaries. Contractual assessments may be entered into by
property owners located within the entire geographic territory of the County; provided, however,
that California Communities shall not enter into contractual assessments to finance the installation
of Authorized Improvements with the owner of any property in the County unless requested to do
so first by the County if the property is located in unincorporated territory or a city if the property
is located in incorporated territory and after such city or the County, as applicable, has held a
public hearing pursuant to Section 6586.5 of the Government Code of the State of California. The
form of resolution pursuant to which cities may request California Communities to enter into
contractual assessments to finance the installation of Authorized Improvements is attached as
Exhibit A.
Section 5. Proposed Financing Arran ements. Under Chapter 29, California
Communities may issue bonds pursuant to Chapter 29 that are payable by contractual
assessments and California Communities may advance its own funds to finance work to be
repaid through contractual assessments, and may from time to time sell bonds to reimburse
itself for such advances. Division 10 (commencing with Section 8500) of the Streets &
Highways Code of the State (the "Improvement Bond Act of 1915") shall apply to any bonds
issued pursuant to Chapter 29, insofar as the Improvement Bond Act of 1915 is not in conflict
with Chapter 29.
California Communities shall determine the creditworthiness of a property owner to
participate in the financing of Authorized Improvements based on the criteria developed by the
Program Manager in consultation with the CaliforniaFIRST Program financing team and on
file with the Secretary.
7-~4
In connection with bonds issued under the Improvement Bond Act of 1915 that are
payable from contractual assessments, serial and/or term improvement bonds shall be issued in
such series and shall mature in such principal amounts and at such times (not to exceed 20
years from the second day of September next following their date) and at such rate or rates of
interest (not to exceed the maximum rate permitted by applicable law) as shall be determined
by California Communities at the time of the issuance and sale of the bonds. The provisions of
Part 11.1 of the Improvement Bond Act of 1915 shall apply to the calling of the bonds. It is
the intention of California Communities to create a special reserve fund for the bonds under
Part 16 of the Improvement Bond Act of 1915. California Communities will not advance
available surplus funds from its treasury to cure any deficiency in the redemption fund to be
created with respect to the bonds; provided, however, that this determination shall not prevent
California Communities from, in its sole discretion, so advancing funds. The bonds may be
refunded under Division 11.5 of the California Streets and Highways Code or other applicable
laws permitting refunding of the bonds, upon the conditions specified by and at the
determination of California Communities.
California Communities hereby authorizes the Program Manager, upon consultation
with bond counsel and the CaliforniaFIRST Program underwriter, to provide for the issuance
of bonds payable from contractual assessments.
In connection with the issuance of bonds payable from contractual assessments,
California Communities expects to obligate itself, through a covenant with the owners of the
bonds, to exercise its foreclosure rights with respect to delinquent contractual assessment
installments under specified circumstances.
Section 6. Public Hearin. Pursuant to the Act, California Communities hereby orders that a
public hearing be held before this Commission, at , on , 2010 at
a.m., for the purposes of allowing interested persons to object to or inquire about the
proposed program or any of its particulars. The public hearing may be continued from time to time
as determined by the Commission for a time not exceeding a total of 180 days.
At the time of the hearing, the Report described in Section 8 below shall be summarized and
the Commission shall afford all persons who are present an opportunity to comment upon, object
to, or present evidence with regard to the proposed contractual assessment program, the extent of
the area proposed to be included within the program, the terms and conditions of the draft Contract
described in Section 8 below, or the proposed financing provisions. Following the public hearing,
California Communities may adopt a resolution confirming the Report (the "Resolution
Confirming Report") or may direct the Report's modification in any respect, or may abandon the
proceedings.
The Commission hereby orders the Secretary to publish a notice of public hearing once a
week for two successive weeks. Two publications in a newspaper published once a week or more
often, with at least five days intervening between the respective publication dates not counting
such publication dates, are sufficient. The period of notice will commence upon the first day of
publication and terminate at the end of the fourteenth day. The first publication shall occur not later
than 20 days before the date of the public hearing.
7-~35
Section 7. Notice to Water and Electric Providers. Pursuant to Section 5898.24 of the
Streets & Highways Code, the Commission hereby orders the Secretary to provide written notice
of the proposed contractual assessment program within the County to all water and electric
providers within the boundaries of the County not less than 60 days prior to adoption of the
Resolution Confirming Report.
Section 8. Report. The Commission hereby directs the Program Manager for the
CaliforniaFIRST Program to prepare and file with the Commission a report (the "Report") at or
before the time of the public hearing described in Section 6 above containing all of the following:
(a) A map showing the boundaries of the territory within which contractual
assessments are proposed to be offered, as set forth in Section 4 above.
(b) A draft contract (the "Contract") specifying the terms and conditions that would
be agreed to by California Communities and a property owner within the County. The Contract
may allow property owners to purchase directly the related equipment and materials for the
installation of the Authorized Improvements and to contract directly for the installation of such
Authorized Improvements.
(c) A statement of California Communities' policies concerning contractual
assessments including all of the following:
(I) Identification of types of Authorized Improvements that may be financed
through the use of contractual assessments.
(2) Identification of California Communities official authorized to enter into
contractual assessments on behalf of California Communities.
(3) A maximum aggregate dollar amount of contractual assessments in the
County.
(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.
(d) A plan for raising a capital amount required to pay for work performed pursuant
to contractual assessments. The plan may include amounts to be advanced by California
Communities through funds available to it from any source. The plan may include the sale of a
bond or bonds or other financing relationship pursuant to Section 5898.28 of Chapter 29. The
plan shall include a statement of or method for determining the interest rate and time period
during which contracting property owners would pay any assessment. The plan shall provide for
any reserve fund or funds. The plan shall provide for 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 California Communities.
8
7-36
(e) A report on the results of the consultations with the County Auditor-Controller
described in Section 10 below concerning the additional fees, if any, that will be charged to
California Communities for incorporating the proposed contractual assessments into the
assessments of the general taxes of the County on real property, and a plan for financing the
payment of those fees.
Section 9. Nature of Assessments. Assessments levied pursuant to Chapter 29, and the
interest and any penalties thereon, will constitute a lien against the lots and parcels of land on
which they are made, until they are paid. Unless otherwise directed by California
Communities, the assessments shall be collected in the same manner and at the same time as
the general taxes of the County on real property are payable, and subject to the same penalties
and remedies and lien priorities in the event of delinquency and default.
Section 10. Consultations with County Auditor-Controller. California Communities
hereby directs the Program Manager to enter into consultations with the County Auditor-
Controller in order to reach agreement on what additional fees, if any, will be charged to
California Communities for incorporating the proposed contractual assessments into the
assessments of the general taxes of the County on real property.
Section 11. Preparation of Current Roll of Assessment. Pursuant to Section 5898.24(c),
California Communities hereby designates the Program Manager (or his/her designee) as the
responsible official for annually preparing the current roll of assessment obligations by
assessor's parcel number on property subject to a voluntary contractual assessment.
Section 12. Procedures for Responding to In uiries. The Program Manager shall
establish procedures to promptly respond to inquiries concerning current and future estimated
liability for a voluntary contractual assessment.
Section 13. Professionals Appointed. California Communities hereby appoints Jones Hall,
A Professional Law Corporation, San Francisco, California, as bond counsel to California
Communities in connection with the CaliforniaFIRST Program. The Commission hereby
authorizes and directs an Authorized Signatory of California Communities (as determined from
time to time by the Commission by separate resolution) to enter into appropriate agreements with
such firm for its services to California Communities in connection with the matters addressed in
this Resolution.
Section 14. Set-Up Fees. The County and various cities within the County have advanced
fees to California Communities to pay for certain costs of establishing the CaliforniaFIRST
Program, some or all of which represent State Energy Program (SEP) funds. The Program
Manager is hereby authorized and directed to return to the County and cities, as applicable, any
fees paid to California Communities by the County and cities, as applicable, that do not represent
SEP funds and that California Communities does not use to pay for the costs of establishing the
CaliforniaFIRST Program.
Section 15. Effective Date. This resolution shall take effect immediately upon its
adoption.
9
7-37
************
PASSED AND ADOPTED by the California Statewide Communities Development
Authority this , 2010.
I, the undersigned, the duly appointed, and qualified member of the Commission of the
California Statewide Communities Development Authority, DO HEREBY CERTIFY that the
foregoing resolution was duly adopted by the Commission of said Authority at a duly called
meeting of the Commission of said Authority held in accordance with law on , 2010.
By:
10
7-38
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AUTHORIZING THE COUNTY OF
SACRAMENTO, AS LEAD COLLABORATIVE ENTITY, TO
APPLY FOR CALIFORNIA ENERGY COMMISSION STATE
ENERGY PROGRAM GRANT FUNDS ON BEHALF OF THE
CITY OF CHULA VISTA, TO ADMINISTER SUCH FUNDS IF
RECEIVED TO IMPLEMENT THE CALIFORNIAFIRST
PROGRAM, AND MAKING CEQA FINDINGS
WHEREAS, the City of Chula Vista recognizes that it is in the interest of the regional,
state, and national economy to stimulate the economy, create and retain jobs, reduce fossil fuel
emissions, and reduce total energy usage and improve energy efficiency within our jurisdiction;
and
WHEREAS, State Energy Program (SEP) funds are available through the California
Energy Commission's SEP for grants to eligible local governments for energy efficiency, energy
conservation, renewable energy, and other energy related projects and activities authorized by
the American Recovery and Reinvestment Act of 2009 ("ARRA"); and
WHEREAS, SEP allows cities, counties, or groups of cities and counties in California to
apply for SEP funds on behalf of eligible local governments; and
WHEREAS, the City of Chula Vista is eligible for SEP funding under the California
Energy Commission's SEP; and
WHEREAS, the City of Chula Vista is proposing to collaborate with Sacramento County
to implement the CaliforniaFIRST program for financing energy efficiency, energy conservation,
renewable energy, and other energy related projects and activities authorized by ARRA, as
described in Exhibit A, for the purpose of qualifying for SEP funds from the California Energy
Commission; and
WHEREAS, the City of Chula Vista has considered the applicability of the California
Environmental Quality Act (CEQA) to the approval of the CaliforniaFIRST program for
financing energy efficiency, energy conservation, renewable energy, and other energy related
projects and activities authorized by ARRA as described in Exhibit A.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Chula
Vista as follows:
(1) That the City of Chula Vista authorizes Sacramento County to submit a
collaborative application on its behalf to the California Energy Commission for up to $ 16.5
million in SEP funds for the CaliforniaFIRST program for financing energy efficiency, energy
7-39
conservation, renewable energy, and other energy related projects and activities authorized by
ARRA described in Exhibit A.
(2) If recommended for funding by the California Energy Commission, the City of
Chula Vista authorizes Sacramento County to accept a grant award on its behalf and to enter into
all necessary contracts and agreements, and amendments thereto, on its behalf to implement and
carry out the CaliforniaFIRST program for financing the projects described in Exhibit A.
(3) That the City of Chula Vista finds that the approval of the CaliforniaFIRST
program for financing energy efficiency, energy conservation, renewable energy, and other
energy related projects and activities authorized by ARRA, as described in Exhibit A, is not a
"project" under CEQA, because the program involves the creation of funding mechanisms or
other government fiscal activities which do not involve any commitment to a specific project
which may result in a potentially significant physical impact on the environment, within the
meaning of Title 14, California Code of Regulations, Section 15378(b)(4).
Presented by
Michael T. Meacham
Director of Conservation and
Environmental Services
Approved as in form by
~ C..&
Bart Miesfeld
City Attorney
7-40
Exhibit A
California Energy Commission State Energy Program
CaliforniaFIRST Collaborative Proposal
Summary of Proposal Scope & Budget Framework
Description of Program Proposal
Under the lead applicant, Sacramento County, the 14 counties eligible to participate in the pilot
stage of the CaliforniaFIRST Program are collaborating on a proposal to the California Energy
Commission State Energy Program for a grant of up to $16.5 million. The grant funds will be
used to offset initial fees associated with bond issuance, start-up costs for the 14 counties and all
incorporated cities, an interest rate buy-down, local marketing/education/training/outreach, local
coordination, and grant administration to support the launch of the CaliforniaFIRST municipal
financing program.
CaliforniaFIRST Program County Participants and Proposal Collaborators
/ Alameda / Sacramento / San Mateo / Ventura
/ Fresno / San Benito / Santa Clara / Yolo
/ Kern / San Diego / Santa Cruz
/ Monterey / San Luis Obispo / Solano
Budget Basics
1. CaliforniaFIRST financing costs and fees (~$6M)
Guided by California Communities and the CaliforniaFIRST Program Administrator Renewable
Funding, this program element will:
• buy-down the interest rate on the. initial round(s) of projects financed by the
CaliforniaFIRST Program,
• cover fixed costs associated with initial bond counsel, bond disclosure, fiscal agent and
bond rating,
• cover legal and validation costs, and
• cover the deployment of technology (web portal) to support local programs.
2. Grant/Contract Administration & Steering Committee Liaison: (~$2.OM)
On behalf of the applicant agency, grant/contractor administration duties include gathering
relevant reporting information from all partner jurisdictions and CaliforniaFIRST, financial
oversight and invoicing, contract administration, tracking, monitoring, and oversight of
deliverables. In addition, the grant administrator will serve as the partner liaison between all
participating steering committees to maintain coordination and consistency on the local
marketing efforts between parties as well as provide marketing and contract technical assistance,
training, and advice to participating agencies. The Grant Administrator will also coordinate local
efforts with those programs funded under the California Comprehensive Residential Building
Retrofit Program.
7-41
3. Regional Program Coordination & Marketing: (~$8.SM)
In line with the overall project goals, funding has been budgeted on a regional basis to each of
the six primary program regions in the following amounts, based on total number of Counties:
• Capitol Region (Sacramento/Yolo): $1,800,000
• Central Valley Region (Fresno/Kern): $1,150,000
• Bay Area Region: (Alameda/San Mateo/Santa Clara/Solano): $2,300,000
• North Central Coast Region: (Monterey/Santa Cruz/San Benito): $1,725,000
• South Central Coast Region: (Ventura/San Luis Obispo): $1,150,000
• Southern California Region: (San Diego): $575,000
This final program element serves to provide each region with the resources necessary to help
facilitate the rapid adoption of energy efficiency and renewable energy generation system
installations throughout the target area by connecting property owners to any and all available
on-the-ground or proposed resources, and services, providing a streamlined framework for easy
navigation, reduced out-of-pocket expenses, and overall increased cost effectiveness for both
participants and the program overall. The focus of the program will be to create region-wide (or
county-wide, where appropriate) cooperative project design, implementation, marketing, and
coordination to maximize economies of scale, take advantage of overlapping markets, and
ultimately allow each dollar to go further to benefit all parties.
Financing Costs and Fees
A. Financing Costs
As Program Administrator of the California Communities CaliforniaFIRST Program, Renewable
Funding will coordinate and provide program administration, financing, and legal services to
support a robust statewide municipal financing program. Specific financing costs are
concentrated at the start of the program and result in increased fees to a program participant, and
therefore a higher effective interest rate. In order to lower the interest rate, the SEP funds will be
used to cover bond disclosure counsel, bond rating fees, and a bond fiscal agent. In addition, a
direct interest rate buy-down will be employed to achieve a bond rate that is equivalent to an A-
rated bond, which is likely to be the bond rating later in the program.
B. Set-up Fees
A funding request equivalent to the city and county set-up fees will be included in the proposal.
The costs for initial legal work and validation proceedings will be covered by this request.
Additionally, the costs of establishing county web portals, importing local assessor's data, and
maintaining the website will be part of this funding request.
Suagested Major Marketing Program Coordination & Marketing Program Elements
A. Agency Coordination /Steering Committee Participation
In recognition of the additional coordination time required to get new programs off the ground,
individual counties may elect to include a modest amount of staff time for agency representatives
to participate in the program steering committee and other activities to drive marketing program
7-42
design, educational/marketing material development, form and protocol development, etc. By
investing this time at the onset, we are able to develop aself-sustaining program for the long
term. County agencies (that is, auditor/tax collector/controller) will receive a small percentage,
incorporated into each loan, to cover regular ongoing program administration costs associated
with maintaining the tax roll and collecting annual assessments in years beyond the grant term.
Some jurisdictions may instead wish to contribute this time as project leveraged funds/resources
to increase overall program cost effectiveness based on their individual needs and resources.
Regional partnership may also elect to use a portion of the resources from this program element
toward informal or formalized staff/personnel training within their jurisdictions.
B. Education /Outreach/ Marketing
Successful program adoption requires thoughtful design, convenient procedures, and a robust
program education component to encourage and energize program participation. Achieving this
goal, the project team will create clear, consistent, and thematic program branding imagery,
educational and recruitment tools such as program brochures. The program will be supported by
the CaliforniaFIRST web portal and links to new and existing partner and complementary
websites, frequently asked questions, applications, and/or other program materials. In addition,
the project will engage a wide-stretching network of partners to promote, recruit, and
disseminate program information utilizing existing mechanisms of door-to-door outreach,
community event tabling, workshops and presentations, or other appropriate energy efficiency
and complementary program participation activities. Major elements might include:
/ Outreach Promotional Materials: Brochures, Door-hangers, Postcard Mailers, Bill Inserts,
etc.
/ Program Marketing Advertisements: Print Ads, Radio/TV Ads, PSA Production
/ Promotional Outreach Events, Trade Shows or Community Workshops
/ Homeowner/Business/Contractor/Staff Training Seminars
/ Sustainability Site Signage
/ Green Building and/or LEED Certification Technical Assistance
C. Community Coordinator /Partner Liaison /Supplies
The community coordinator is envisioned to serve as the single point regional program
coordinator to unify, inform, collaborate, and engage all program parties in relation to local
coordination and marketing efforts; respond to public inquiries; facilitate the education, outreach,
marketing, recruitment; and promote program adoption by the target community. In addition the
coordinator is responsible for coordinating with the grant administrator, tracking/reporting
necessary progress and metrics, meeting/exceeding grant milestones and taxgets, incorporating
required complementary program components, and working with CaliforniaFIRST to assure
QA/QC measures are applied to all participating properties. Specific tasks will be driven by the
overall project goals as well as the specific needs of each region and may include:
/ Coordination with Grant Administrator/Steering Committee Liaison
/ Marketing Coordination with CaliforniaFIRST Municipal Finance District
/ Facilitation of local Regional Steering Committee Members and Partners
/ Assist with Implementation Strategy, Documents, Procedures & Protocols Development
/ Guide Promotion, Marketing, Education, Recruitment & Program Information Dissemination
7-43
/ Link Program Participants to Regional Energy Efficiency & Complementary Programs
/ Connect to Concurrent Complementary Workforce Development Training/Graduates
/ Administer Regional Program Budget, Competitive Bidding, Other Program Transparency
Reqs
/ Track and/or compile, Monitor & Evaluate Program Progress, Energy Savings, GHG
Reductions Achieved, Partner Leveraged Funds and Ancillary Environmental Benefits
Sample County Budget
A sample budget based on the above framework is provided below. Please note that these
amounts are subject to change based on the actual needs of each participating jurisdiction as well
as feedback obtained regarding funder and partner thresholds for competitiveness.
Component
Overall Gross Benefit
Per County Net Benefit
Per County
1.CaliforniaFIRST Costs & Fees 39% $ 428,571.43 -
2. Grant Administration & Technical Assistance 10% $ 107,142.86 -
3A.Steering Advisory Committee 10% $ 115,000.00 $ 115,000.00
3B. Education, Outreach, Incentives,
Marketing
23%
$ 258,750.00
$ 258,750.00
3C. Community Coordination 18% $ 201,250.00 $ 201,250.00
Total 100% $1,110, 714.29 $ 575, 000.00
Grant Development Team:
• County of Sacramento-Lead Agency (Applicant), will oversee grant writing, provide final
edits and required signatures, and submit finalized proposal on behalf of entire collaborative
team based on the approved proposed program scope and budget framework
• Ecology Action-Partner Grant Writer (Lead on Marketing), will develop narrative based on
proposed program scope and budget framework, especially as it pertains to local coordination
and marketing project administration, marketing/contract technical assistance, regional
coordination, and marketing, to meet all grant requirements and maximize proposal
competiveness.
Renewable Funding-Partner Grant Writer (Lead on Finance), will develop narrative based
on proposed program scope and budget framework, especially for CaliforniaFIRST Program
finance-related program elements, to meet all grant requirements and maximize proposal
competiveness.
7-44