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Home My WebLink About2010/04/20 Item 9 CITY COUNCIL AGENDA STATEMENT APRIL 20, 2010, Item~ ITEM TITLE: AN ORDINANCE OF THE CITY OF CHULA VISTA AMENDING CHAPTER 20 OF THE CHULA VISTA MUNICIPAL CODE TO CONFORM TO NEW PROPERTY ASSESSED CLEAN ENERGY (PACE) RETROFIT PROGRAMS AUTHORIZED UNDER CALIFORNIA ASSEMBLY BILLS 811 AND 474 SUBMITTED BY: DIRECTOR OF CONSERVATION SERVICES CITY MANAGER ~ ASSIST ANT CIT; ~ANAGER s r & ENVIRONMENTAL \<.9 REVIEWED BY: 4/5THS VOTE: YES D NO 0 SUMMARY As part of the Council-approved climate protection measures, staff has been developing a community energy and water retrofit program to assist residents and businesses in reducing their utility usage and costs. As authorized by California Assembly Bills 811 and 474, the program would allow property-owners to voluntarilv finance these retrofit improvements through a tax assessment on their property which is generally offset by the resulting utility cost savings. The proposed ordinance would clarify under Section 20.08 of the Chula Vista Municipal Code that residential or commercial property-owners within Chula Vista could finance the installation of energy efficiency, water conservation, and renewable energy improvements through a voluntary property assessment typically referred to as "Property-Assessed Clean Energy" (PACE). The proposed ordinance would also add "Water" in Chapter 20's title to more accurately reflect the scope and content of the Chula Vista Municipal Code section. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed project for compliance with the California Environmental Quality Act (CEQA) and has determined that the project qualifies for a Class 8 categorical exemption pursuant to Section 15308 [Actions by Regulatory Agencies for Protection of the Environment] of the State CEQA Guidelines because the proposal seeks to implement strategies aimed at reducing energy use, encourage water conservation, and lower fossil fuel emissions. Thus, no further environmental review is necessary. 9-1 r> APRIL 20, 2010, Item~ Page 2 of3 RECOMMENDATION City Council place the ordinance on first reading. BOARDS/COMMISSION RECOMMENDATION The Resource Conservation Commission provided feedback on the draft ordinance and unanimously recommended City Council approval of the ordinance at their March 22, 2010 meeting. DISCUSSION As part of Council-approved climate protection measures (#5 and #7), staff has been developing a community energy and water retrofit program to assist residents and businesses in reducing their 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. 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 assessment district to provide participants with a property-secured financing option to fund their improvements. Property-secured financing, commonly referred to as "Property Assessed Clean Energy" (PACE), was authorized under California Assembly Bill 811 (Contractual Assessments: Energy Efficiency Improvements) and Assembly Bill 474 (Contractual Assessments: Water Efficiency Improvements). PACE programs allow property-owners to finance carbon-saving improvements through a voluntary tax assessment on their property and the resulting utility savings are used to help offset the new assessments. Only property owners who choose to participate in the program have assessments imposed on their property and the assessment obligation transfers with the property upon sale (because the new owner continues to benefit from the efficiency improvements). Under Chapter 20.08 of the Chula Vista Municipal Code, the City established a right to create a municipal solar utility in which residents ("Lessee") of Chula Vista who lease solar energy devices from third-parties enrolled in the utility program would be able to obtain certain tax credits. CVMC Section 20.08.060(a) also added that "no person may take or use the primary residence of a lessee as a security for any lease payment or other indebtedness incurred through the lease arrangement." The proposed ordinance would clarify that Section 20.08.060(a) does not prohibit residential or commercial property- owners from voluntarily enrolling in authorized PACE programs to finance the installation of energy efficiency, water conservation, and renewable energy improvements at their properties within Chula Vista. The proposed ordinance would also add "water" in Chapter 20's title to more accurately reflect the scope and content of the Chula Vista Municipal Code section. 9-2 APRlL 20,2010, Item---=:L Page 3 of 3 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 I 8704.2(a)(l) is not applicable to this decision. CURRENT YEAR FISCAL IMPACT Because the ordinance is intended to merely clarify a Chula Vista Municipal Code section, it does not create any fiscal impact to the City in the current year. ONGOING FISCAL IMPACT The proposed ordinance does not directly create any ongoing fiscal impact to the City. Any future City-sponsored PACE program would be funded through either participating property-owners' tax assessments or other external sources such as Energy Efficiency & Conservation Block Grants or the California Public Utilities Commission/San Diego Gas & Electric Local Government Partnership. Prepared by: Brendan Reed, Environmental Resource Manager, Conservation & Environmental Services 9-3 ORDINANCE NO. AN ORDINANCE OF THE CITY OF CHULA VISTA AMENDING CHAPTER 20 OF THE CHULA VISTA MUNICIPAL CODE TO CONFORM TO NEW PROPERTY ASSESSED CLEAN ENERGY RETROFIT PROGRAMS AUTHORIZED UNDER CALIFORNIA ASSEMBLY BILLS 811 AND 474 The City Council of the City of Chula Vista does ordain as follows: SECTION I. That the title of Chapter 20 of the Chula Vista Municipal Code IS hereby amended to read as follows: Title 20 ENERGY & WATER CONSERVATION SECTION II. That Chapter 20.08 of the Chula Vista Municipal Code is hereby amended to read as follows: Chapter 20.08 MUNICIPAL SOLAR UTILlTY* Sections: 20.08.010 Purpose. 20.08.020 Practices and procedures - Established. 20.08.030 Definitions. 20.08.040 Pennit required. 20.08.050 Regulatory framework. 20.08.060 Consumer protection measures. 20.08.070 Violations. * For other municipal utilities, see CVMC Title 13. 20.08.010 Purpose. The purpose of this chapter is to grant the right to establish a municipal solar utility. Notwithstanding the foregoing, nothing in this chapter shall preclude a residential or commercial propertv owner from voluntarilv participating in programs established pursuant to California Assemblv Bill 811 (Contractual Assessments: Energv Efficiencv Improvements) or Assembly Bill 474 (Contractual Assessments: Water Efficiencv Improvements) commonly referred to as Propertv Assessed Clean Energv (PACE) or similar programs. These programs, authorized bv federal. state, and/or local agencies. are created to provide free and willing propertv owners with the option of funding energv and water efficiency and renewable energv propertv improvements with third-partv financing that is secured bv the propertv and repaid through a surcharge placed on the improved property's tax roles. Tvpicallv. these programs are designed so that the debt service is offset bv the resulting energv and water cost savings generated bv the proiect improvements and the financing period does not exceed the proiected life of the improvements. 9-4 The welfare of Chula Vista residents has been jeopardized in the past by shortages of natural gas, petroleum, propane and electric power. The shortage of available energy supplies will continue during the coming decade unless measures are established to conserve the energy available for the economy and the residents ofChula Vista. It is declared to be the policy of the City to encourage and promote the use of solar energy in order to prevent or reduce an adverse impact upon the economy of Chula Vista and in order to' prevent interruption of employment of the residents of Chula Vista in commerce and industry and in order to prevent injury to the health and welfare of the residents of Chula Vista due to the shortage and high cost of energy in their homes and places of work. It is also declared the policy of Chula Vista to improve the economics of solar energy use by facilitating the leasing of solar energy devices. This policy is premised on a finding that the initial cost of purchasing and installing a solar energy device is the primary economic barrier to expanded solar energy use. California law currently provides that taxpayers who lease a solar energy system from a municipal utility or from any lessor granted a permit from a municipal solar utility shall receive a tax credit for the first three years of operation or until the solar tax credit allowance terminates, whichever occurs first. Upon the establishment of the Chula Vista municipal solar utility, residents of Chula Vista who lease solar energy devices through such utility should be able to obtain tax credits. However, as legal title to such solar energy devices is held by a person other than the resident- user, the latter is particularly susceptible to harm caused by consumer deception, safety hazards and the interruption of service. To help prevent such harm from occurring and to promote the economic feasibility of solar energy use within the City, leasehold interests in solar energy devices may be marketed within the City's jurisdiction by complying with the provisions of this chapter and any rules and regulations promulgated by the City Manager to implement any provisions of this chapter. Persons not participating in the municipal solar utility are not subject to any of the procedures and provisions of this chapter. (Ord. 2012 9 I, 1982). SECTION Ill. EFFECTIVE DATE This Ordinance will take effect 30 days after its final adoption. Presented by: Approved as to form by: Michael Meacham Director of Conservation & Env. Servo 9-5