2021-011 - Evidencing the City's Intent to Establish a PACE Program for the CityRESOLUTION NO. 2021-011
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS
EVIDENCING THE CITY'S INTENT TO ESTABLISH A PACE PROGRAM
FOR THE CITY, MAKING OTHER FINDINGS AND PROVISIONS
RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE.
WHEREAS, The 83rd Regular Session of the Texas Legislature enacted the Property
Assessed Clean Energy Act, Texas Local Government Code Chapter 399 (the "PACE Act'),
which allows the governing body of a local government, including City of Paris, Texas (the
"City"), to designate an area of the territory of the local government as a region within which
an authorized representative of the local government ("Authorized Representative") and the
record owners of commercial, industrial, and large multifamily residential (5 or more
dwelling units) real property may enter into written contracts to impose assessments on the
property to repay the financing by the owners of permanent improvements fixed to the
property intended to decrease water or energy consumption or demand; and
WHEREAS, the installation or modification by property owners of qualified energy or
water saving improvements to commercial, industrial, agricultural, and large multifamily
residential real property in the City will further the goals of energy and water conservation
without cost to the public; and
WHEREAS, the City Council finds that financing energy and water conserving projects
through contractual assessments ("PACE financing'l furthers essential government
purposes, including but not limited to, economic development, reducing energy "
consumption and costs, and conserving water resources; and
WHEREAS, the City Council, subject to the public hearing scheduled as provided
below, at which the public may comment on the proposed program and the report issued
contemporaneously with this resolution, finds that it is convenient and advantageous to (i)
establish a pilot program under the PACE Act in connection with the Paris Lakes Medical
Center ("Pilot Project") and (ii) expand the program beyond the Pilot Project whereby the
Authorized Representative and the record owners of qualified real property may enter into
PACE financing arrangements:
THEREFORE, be it resolved by the City Council of the City of Paris, Texas that:
Section 1. The Recitals to this Resolution are true and correct and are
incorporated into this Order for all purposes.
Section 2. City hereby adopts this Resolution of Intent and finds that financing
qualified projects through contractual assessments pursuant to the PACE Act is a valid public
purpose.
Section 3. City intends to make contractual assessments to repay PACE financing
for qualified energy or water conserving projects available to owners of commercial,
industrial, agricultural, and large multifamily residential real property. The program is to be
called "City of Paris, Texas Property Assessed Clean Energy Program," ("PACE program'.
Section 4. The following types of projects are qualified projects for PACE
financing that may be subject to such contractual assessments: Projects that (a) involve the
installation or modification of a permanent improvement fixed to privately owned
commercial, industrial, or agricultural real property or residential real property with five (5)
or more dwelling units, and (b) are intended to decrease energy or water consumption or
demand, including a product, device, or interacting group of products or devices on the
customer's side of the meter that uses energy technology to generate electricity, provide
thermal energy, or regulate temperature.
An assessment may not be imposed to repay the financing of facilities for
undeveloped lots or lots undergoing development at the time of the assessment or the
purchase or installation of products or devices not permanently fixed to real property.
Section S. The boundaries of the entire geographic area within City's jurisdiction
are the boundaries of the region where PACE financing and assessments can occur.
Section 6. Financing for qualified projects under the PACE program will be
provided by qualified third -party lenders chosen by the owners. Such lenders may execute
written contracts with the Authorized Representative to service the assessments, as
required by the PACE Act. The contracts will provide for the lenders to determine the
financial ability of owners to fulfill the financial obligations to be repaid through
assessments, advance the funds to owners on such terms as are agreed between the lenders
and the owners for the installation or modification of qualified projects, and service the debt
secured by the assessments, directly or through a servicer, by collecting payments from the
owners pursuant to contracts executed between the lenders and the owners. The lender
contracts will provide that City will maintain and continue the assessments for the benefit of
such lenders and enforce the assessment lien for the benefit of a lender in the event of a
default by an owner. City will not, at this time, provide financing of any sort for the PACE
program.
Section 7. For the Pilot Project, City will work with the lender for the Pilot Project
to handle administrative requirements. After the Pilot Project is established, City may
contract with a qualified organization to be the independent third -party program
administrator.
Section 8. The report on the proposed PACE program prepared as provided by
Tex. Local Gov't Code Sec. 399.009, is available for public inspection on the Internet website
of City (www.paristexas.gov) and in the office of the City at 150 1St St. SE, Paris, Texas 75460
and is incorporated in this resolution and made a part hereof for all purposes.
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Section 9. The City Council will hold a public hearing on the proposed PACE
program and report on March 22, 2021 at 5:30 p.m. in the City Council Chamber located at
107 E. Kaufman Street, Paris, Texas 75460.
PASSED AND APPROVED this 22nd day of February, 2021.
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nice Ellis, City Clerk
APPROVED AT TO FORM:
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Steph nie H. Harris, City Attorney
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REPORT FOR PROPOSED PACE PROGRAM
REPORT REQUIRED BY TEXAS LOCAL GOVERNMENT CODE SECTION 399.009
FOR PROPOSED THE CITY OF PARIS, TX
PROPERTY ASSESSED CLEAN ENERGY (PACE) PROGRAM
This Report is adopted by the City Council for the City of Paris, Texas ("City") Property
Assessed Clean Energy (PACE) Program (the "PACE Program ") in accordance with the
requirements of the Property Assessed Clean Energy Act (the "P,4CEAct") as set forth in Texas
Local Government Code Chapter 399.
City and its constituents benefit when existing buildings are modified and new buildings
on developed lots are built with new technology and equipment that increases energy efficiency
and reduces water consumption. As described in this Report, City is establishing the commercial
PACE Program to encourage private sector investment in energy efficiency and water
conservation. The PACE Program will be offered to property owners on a strictly voluntary basis
and will minimize the use of any public fiends or resources.
Authorized under the PACE Act enacted in 2013, the PACE Program is an innovative
financing program that enables private sector owners of privately owned commercial, industrial,
and multifamily residential properties with five or more dwelling units to obtain low-cost,
long-term loans to pay for water conservation, energy -efficiency improvements, and renewable
energy retrofits. PACE loans provide up to 100% financing of all project costs, with little or no
up -front out-of-pocket cost to the owner. The 2015 legislative session streamlined the process.
Loans made under the PACE Program will be secured by assessments on the property that
are voluntarily imposed by the owner. Assessments may be amortized over the projected life of
the improvements. The annual utility cost savings derived from improvements financed with
PACE loans are intended to exceed the amount of the annual assessment payments. When
successful, these improvements are able to generate positive cash flow upon installation because
the debt service will be less than the savings.
PACE assessments are tied to the property and follow title from one owner to the next.
Each owner is responsible only for payment of the assessments accruing during its period of
ownership. When the property is sold, the payment obligation for the remaining balance of the
assessment is transferred automatically to the next owner. As a result, the program will help
property owners overcome market barriers which often discourage investment in energy efficiency
and water conservation improvements.
City intends to begin its PACE Program with a pilot project in connection with the
development of the Paris Lakes Medical Center (the "Pilot Project'). The Pilot Project is expected
to include a new five -story, 114 -bed hospital containing approximately 198,000 square feet of
space featuring (a) a surgical suite with six operating rooms supported by an 18 -bed prep and post -
anesthesia care unit, (b) 80 medical/surgical patient beds, (c) a cardiac catheterization lab suite
with two catheterization labs supported by 18 preparation and recovery rooms, and 14 critical
cardiac, coronary, or cardiovascular unit beds, (d) an eight -bed critical care unit, and (e) an imaging
suite with radio fluoroscopy, CT, MRI, ultrasound, EKG, PFT, and nuclear medicine. The hospital
will feature the latest, state-of-the-art medical technology and equipment, all private suites with
upscale room accommodations including custom flooring and trim, flat screen televisions, private
baths, wireless internet and room service dining. The overall design concept will emphasize an
atmosphere of hospitality, nurturing and safety throughout the hospital. Patient room design will
provide distinct areas to accommodate patients' families and staff with an overall emphasis on
safety. Staff areas are designed to allow for quick and easy access to patients throughout the
hospital. The hospital is to be built on a developed lot in accordance with the requirements of the
PACE Act.
Additionally, City intends to establish infrastructure to broaden the PACE Program to other
property owners within its boundaries, which may include delegation of authority and
responsibility for administering the PACE Program to a qualified, third party administrator, which
will further the goal of implementation the PACE Program on terms in a manner that minimizes
the use of public funds or resources.
SECTION 1. ELIGIBLE PROPERTIES.
"Eligible Properties" include commercial, industrial, and multifamily residential
properties with five or more dwelling units. Government, residential properties encompassing less
than five units, and undeveloped property and property undergoing development at the time of the
assessment are not Eligible Properties.
The City PACE Program is a strictly voluntary program. While initially focused on the
Pilot Project, City intends for financing under the PACE Program to eventually be available to all
private -sector owners of Eligible Properties located within the City PACE Program.
SECTION 2. QUALIFIED IMPROVEMENTS.
PACE financing may be used to pay for permanent improvements intended to decrease
water or energy consumption or demand, including a product, device, or interacting group of
products or devices on the customer's side of the meter that use energy technology to generate
electricity, provide thermal energy, or regulate temperature ("Qualified Improvements") to Eligible
Properties. Under the PACE Act, products or devices that are not permanently fixed to real
property are not considered to be Qualified Improvements.
Typical examples of qualified improvements include:
• HVAC upgrades;
• High efficiency chillers, boilers, and furnaces;
• High efficiency water heating systems;
• Energy management systems and controls;
• Renewable energy systems; Mechanical system modernization;
• High efficiency lighting upgrades;
• Building enclosure/envelope improvements;
• Water conservation systems;
• Combustion and burner upgrades;
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• Fuel switching;
• Heat recovery and steam traps;
• Wastewater recovery and reuse systems;
• Systems to capture and use alternate, on-site sources of water (A/C condensate, rainwater,
• reverse osmosis reject water, foundation drain water, etc.);
• On-site improvements to accommodate the use of municipally reclaimed water;
• Water management systems and controls (indoor and outdoor);
• Switching from water cooled systems to air or geothermal cooled systems; and
• High efficiency irrigation equipment
SECTION 3. BENEFITS OF PACE TO PROPERTY OWNERS.
The PACE Program will enable owners of Eligible Properties to overcome traditional
barriers to capital investments in energy efficiency and water conservation improvements, such as
unattractive returns on investment, split incentives between landlords and tenants, and uncertainty
of recouping the investment upon sale of the property.
By financing Qualified Improvements through the program, property owners may achieve
utility cost savings that exceed the amount of the assessment and reduce their exposure to utility
price volatility. As a result, the value of the property will be enhanced, and the owner will only
be obligated to pay the assessment installments that accrue during its period of ownership of the
property. Additionally, by investing in energy efficiency and water conservation with PACE
financing, property owners may also qualify for various rebate, tax credit, and incentive programs
offered by utility providers and state or federal governmental authorities to encourage these types
of investments.
SECTION 4. BENEFITS OF PACE TO THE CITY.
The City has a large contingent of aging building stock, some of which is 100 years old or
older, most of which would benefit greatly from eligible improvements and the benefits that PACE
has to offer. Moreover, to the extent that new buildings meeting the eligibility requirements of the
PACE Act can be made more energy and water efficient, the City benefits in the ways highlighted
below.
Among other things, projects financed through PACE will:
• Enable property owners and occupants to save substantial amounts in utility costs
• Reduce demand on the electricity grid
• Mitigate greenhouse gas emissions associated with energy generation
• Enhance the value and efficiency of existing buildings
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• Boost the local economy by creating new job opportunities for laborers and new
business opportunities for contractors, engineers, commercial lenders, professionals,
and equipment vendors and manufactures
• Increase business retention and expansion in the PACE region by enabling cost
effective energy and water saving updates to existing property
• Improve productivity through optimized energy usage
• Support the State's water conservation plan
• Better enable City to meet its water conservation goals
By creating new investment opportunities, PACE will stimulate employment growth and
economic development in City. Improvements financed through PACE will reduce energy and
water consumption, thereby helping the local water utility, local energy, and other utility providers
and their customers achieve critical energy and water conservation goals. For communities facing
potential nonattainment levels under the Clean Air Act, PACE provides a very real opportunity to
dramatically reduce building energy consumption and the emissions associated with energy
generation. PACE Programs will also improve the quality of the County's commercial and
industrial building stock. The benefits of PACE for City are magnified by the fact that PACE
Programs can be established with minimal support from the local government and, once
established, can be self-sustaining.
City intends for the PACE Program to be self-sustaining because it will be primarily funded
by fees paid by the lenders and/or property owners in connection with the projects. Furthermore,
because the PACE Program is tax neutral, it achieves all of the benefits listed in this Report without
imposing a burden on City's general fund.
The 84th Texas Legislature added a provision that explicitly shields City and its employees
from liability resulting from administering a PACE Program.1
SECTION S. THE BENEFITS OF PACE TO LENDERS.
PACE loans are attractive to lenders because they are very secure investments. Like a
property tax lien, the assessment lien securing the PACE loan has priority over other liens on the
property. Therefore, the risk of loss from non-payment of a PACE loan is low compared to most
other types of loans. PACE assessments provide lenders with an attractive new product to assist
existing and new customers in addressing an almost universal pent-up demand for needed
commercial and industrial property equipment modernization. In order to protect the interests of
holders of existing mortgage loans on the property, the PACE Act requires their written consent
to the PACE assessment as a condition to obtaining a PACE loan.
ITX. Local Gov't Code §399.019.
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SECTION 6. THE BENEFITS OF PACE TO CONTRACTORS, ENGINEERS, AND MANUFACTURERS.
PACE loans provide attractive sources of financing for water and energy saving retrofits
and upgrades, thereby encouraging property owners to make substantial investments in existing
commercial and industrial buildings. As a result, PACE will unlock business opportunities for
contractors, engineers, and manufacturers throughout the commercial and industrial sectors.
SECTION %. ADMINISTRATION OF THE PACE PROGRAM.
Under the PACE Act, the establishment and operation of the program are considered to be
governmental functions. The PACE Act further authorizes City to enter into a contract with a third
party to provide administrative services for the PACE Program (the "Program Administrator ").
For the Pilot Project, Grayson Path, City Manager (or his successor or designee), is
designated as the initial "Authorized Representative" of the City for the PACE Program, and will
have the authority to enter into written contracts on behalf of City with property owners and lenders
in connection with the PACE Program. City will require the lender for the Pilot Project to agree
to handle all ongoing administrative requirements of City with respect to the Pilot Project.
Going forward, City may delegate administration of the PACE Program to a qualified
organization that can administer the program at no cost to City ("Program Administrator"). The
Program Administrator will be funded by transaction fees paid by the parties, charitable grants or
other sources of revenue. The Program Administrator will not receive compensation or
reimbursement from City. City may contract with the Program Administrator to provide
administrative services. City may designate the Program Administrator as the Authorized
Representative of City with the authority to enter into written contracts on behalf of City with
property owners and lenders in connection with the PACE Program, which will Ru-ther reduce
administrative burdens on City staff.
SECTION 8. ELIGIBLE LENDERS.
The PACE Act does not set criteria for financial institutions or investors to be PACE
lenders. City will follow best practices of other PACE Programs by recommending that lenders
be:
• Any federally insured depository institution such as a bank, savings bank, savings and
loan association and federal or state credit union;
• Any insurance company authorized to conduct business in one or more states;
• Any registered investment company, registered business development company, or a
Small Business;
• Small business investment company;
• Any publicly traded entity; or
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• Any private entity that:
0 Has a minimum net worth of $5 million; and
Has at least three years' experience in business or industrial lending or commercial
real estate lending (including multifamily lending), or has a lending officer that has
at least three years' experience in business or industrial lending or commercial real
estate lending; and
0 Can provide independent certification as to availability of funds; and
All lenders must have the ability to carry out, either directly or through a servicer, the
bookkeeping and customer service work necessary to manage the assessment accounts.
Any lender can participate in the PACE Program as long as it is a financially stable entity
with the ability to carry out, either directly or through a servicer, the bookkeeping and customer
service work necessary to manage the assessment accounts. The property owner, not City,
Authorized Representative, or the Program Administrator, selects the lender.
The Authorized Representative, or the Program Administrator, as applicable, will not
guarantee or imply that funding will automatically be provided from a third -party lender, imply or
create any approval, endorsement or certification of, or responsibility for, any lender; or create any
type of express or implied favoritism for any eligible lender.
SECTION 9. REQUIRED COMPONENTS OF THE PACE PROGRAM.
As required under Section 399.009 of the PACE Act, the following describes all aspects of
the PACE Program:
(a) Map of Region. A map of the boundaries of the region included in the
program is attached to this Report as Exhibit 1. The region encompasses the City limits..
(b) Form Contract with Owner. A form contract between City and the record
owner of the Eligible Property is attached as Exhibit 2. It specifies the terms of the
assessment under the PACE Program and the financing to be provided by an eligible lender
of the property owner's choosing.
(c) Form Contract with Lender. A form contract between City and the eligible
lender chosen by a property owner is attached to this Report as Exhibit 3. It specifies the
financing and servicing of the debt through assessments.
(d) Qualified Improvement. The following types of projects are qualified
improvements that may be subject to contractual assessments under the PACE Program:
Projects that (1) involve the installation or modification of a permanent
improvement fixed to privately owned commercial, industrial or residential real
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property with five (5) or more dwelling units;2 and (2) are intended to decrease
energy or water consumption or demand by installing a product, device, or
interacting group of products or devices on the customer's side of the meter that
uses energy technology to generate electricity, provide thermal energy, or regulate
temperature.3
A sample list of potential Qualified Improvements appears in Section 2 above.
The PACE Program may not be used to finance improvements to undeveloped lots
or lots undergoing development at the time of the assessment, or for the purchase or
installation of products or devices not permanently fixed to real property.4
(e) Authorized Representative. For the Pilot Project, Grayson Path, City
Manager (or his successor or designee), is designated as the "Authorized Representative"
authorized to enter into written contracts on behalf of City with property owners and
lenders. For future PACE projects, City may designate a Program Administrator as the
"Authorized Representative," and may delegate all or some official administrative
responsibilities, like the execution of individual contracts with property owner and lenders,
to the Program Administrator.5 This relationship will be monitored and maintained by the
City Manager, or his/her designee.
(f) Plans for Insuring Sufficient Capital. Lenders will extend loans to finance
Qualified Improvements. Financing documents executed between owners and lenders will
impose a contractual assessment on Eligible Property to repay the owner's financing of the
Qualified Improvements. The lenders will ensure that property owners demonstrate the
financial ability to fulfill the financial obligations to be repaid through contractual
assessments.
(g) No Use of Bonds or Public Funds. City does not intend to issue bonds or
use any other public monies to fund PACE projects. Property owners will obtain all
financing from the eligible lenders they choose.
(h) Limit on Length of Loan. One of the statutory requirements for a PACE
loan is that the assessment payment period cannot exceed the useful life of the Qualified
Improvement that is the basis for the loan and assessment. As part of the application
process, the property owners will submit a third -party review showing the water or energy
baseline conditions and the projected water or energy savings. This review will aid the
2 TX. Local Gov't Code §399.002(5).
3 TX. Local Gov't Code §399.002(3).
4 TX. Local Gov't Code §399.004.
5 HB 3187 was signed into law on June 16, 2015. It authorizes City to delegate administration of the Pace
program to a third -party "representative".
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Authorized Representative in making a determination that the period of the requested
assessment does not exceed the useful life of the Qualified Improvement.
(i) Application Process.
(1) Pilot Project. For the Pilot Project, the initial Authorized
Representative will work together with the lender and property owner for the Pilot Project
to establish that the Pilot Project is eligible for PACE Financing under Texas law. City
will use the Pilot Project to gain better understanding of such eligibility requirements and
to set expectations and requirements for the future expansion of the PACE Program
contemplated in this report.
(2) Expansion Projects. Once access to the PACE Program has been
expanded as contemplated in this report, the City anticipates instituting an application
process substantially as described below. The Authorized Representative and/or Program
Administrator will accept applications from property owners seeking to finance Qualified
Improvements under the program. Each application must be accompanied by any required
application fees and must include:
(A) A description of the specific Qualified Improvements to be
installed or modified on the property,
(B) A description of the specific real property to which the qualified
improvements will be permanently fixed, and
(C) The total amount of financing, including any transaction costs, to
be repaid through assessments.
Based on this information, the Authorized Representative may issue a
preliminary letter indicating that, subject to verification of all requirements at closing, the
proposed project appears to meet program requirements. Based on this preliminary letter,
the property owner may initiate an independent third -party review of the project and
submit the project to eligible lenders for approval of financing.
Once the above processes are completed, the property owner will submit
the application to the Authorized Representative to obtain preliminary approval. The
property owner is expected to produce the following documentation prior to closing on the
PACE loan:
(A) A Report conducted by a qualified, independent third party,
showing water or energy baseline conditions and the projected
water or energy savings, or the amount of renewable energy
generated attributable to the project;
(B) Such financial information about the owner and the property as the
lender chosen by the owner deems necessary to determine that the
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owner has demonstrated the financial ability to fulfill the financial
obligations to be paid through assessments; and
(C) All other information required by the Authorized Representative.
0) Financial Eligibility Requirements. The Authorized Representative will
determine whether the owner, the property and the improvements are eligible for financing
under the program. The eligible lender chosen by the owner will determine whether the
owner has demonstrated the financial ability to repay the financial obligations to be
collected through contractual assessments. The statutory method6 for ensuring such a
demonstration of financial ability must be based on appropriate underwriting factors,
including the following:
(1) verification that the person requesting to participate in the program
is the legal record owner of the benefitted property,
(2) the applicant is current on mortgage and property tax payments,
(3) the applicant is not insolvent or in bankruptcy proceedings,
(4) the title of the benefitted property is not in dispute; and
(5) there is an appropriate ratio of the amount of the assessment to the
assessed value of the property.
(k) Mortgage Holder Notice and Consent. As a condition to the execution of a
written contract between the Authorized Representative and the property owner imposing
an assessment under the program, the holder of any mortgage lien on the property must be
given notice of the owner's intention to participate in the program on or before the 30th
day before the date the contract is executed, and the owner must obtain the written consent
of all mortgage holders.?
(1) Imposition of Assessment. The Authorized Representative will enter into a
written contract with the property owner, only after:
(1) The property owner delivers to the Authorized Representative
written consent of all mortgage lien holders;
(2) The Authorized Representative's determination that the owner and
the property are eligible to participate in the program, that the proposed
improvements are reasonably likely to decrease energy or water consumption or
TX. Local Gov't Code §399.009(b).
TX. Local Gov't Code §399.010.
(7) Q
demand, and that the period of the requested assessment does not exceed the useful
life of the Qualified Improvements; and
(3) The eligible lender notifies the Authorized Representative that the
owner has demonstrated the financial ability to fulfill the financial obligations to
be repaid through contractual assessments.
The contract will impose a contractual assessment on the owner's Eligible Property
to repay the lender's financing of the Qualified Improvements. The eligible lender will file
"A Notice of Contractual Assessment Lien," in substantially the form in Exhibit 4 attached
hereto in the Official Public Records of Lamar County, depending on where the Eligible
Property is located, as notice to the public of the assessment, from the date of filing. The
contract and the notice must contain the amount of the assessment, the legal description of
the property, the name of the property owner, and a reference to the statutory assessment
lien provided under the PACE Act.
(m) Collection of Assessments. The execution of the written contract between
the Authorized Representative and the property owner and recording of the Notice of
Contractual Assessment Lien incorporate the terms of the financing documents executed
between the property owner and with the lender to repay the financing secured by the
assessment. The third -party lender will advance financing to the owner, and the terms for
repayment will be such terms as are agreed between the lender and the owner. Under the
form lender contract attached as Exhibit 3, the lender or a designated servicer will agree to
service the debt secured by the assessment.
With funds from the lender, the property owner can purchase directly the equipment
and materials for the Qualified Improvement and contract directly, including through lease,
power purchase agreement, or other service contract, for the installation or modification of
the Qualified Improvements. Alternatively, the lender may make progress payments to the
property owner as the Qualified Improvement is installed.
The lender will receive the owner's assessment payments to repay the debt and
remit to the Authorized Representative any administrative fees. The lender will have the
right to assign or transfer the right to receive the installments of the debt secured by the
assessment, provided all of the following conditions are met:
(1) The assignment or transfer is made to an eligible lender, as defined
above; and
(2) The property owner and the Authorized Representative are notified
in writing of the assignment or transfer and the address to which payment of the
future installments should be mailed at least 30 days before the next installment is
due according to the schedule for repayment of the debt; and
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(3) The assignee or transferee of the right to receive the payments
executes an explicit written assumption of all of lender's obligations under the
lender contract.
(n) Verification Review. After a Qualified Improvement is completed, the
Authorized Representative will require the property owner to provide verification by a
qualified independent third -party reviewer that the Qualified Improvement was properly
completed and is operating as intended.8 The verification report conclusively establishes
that the improvement is a Qualified Improvement and the project is qualified under the
PACE Program.
(o) Marketing and Education Services. City may subsequently enter into
agreements with one or more other local governments or non-profit organizations that
promote energy and water conservation and/or economic development to provide
marketing and education services for the PACE Program.
(p) Quality Assurance and Antifraud Measures. The Authorized
Representative will institute quality assurance and antifraud measures for the Program.
The Authorized Representative will review each PACE application for completeness and
supporting documents through independent review and verification procedures. The
application and required attachments will identify and supply the information necessary to
ensure that the property owner, the property itself, and the proposed project all satisfy
PACE Program underwriting and technical standard requirements. Measures will be put
in place to provide safeguards, including a review of the energy and water savings baseline
and certification of compliance with the technical standards manual from an independent
third -party reviewer (ITPR), who must be a registered professional engineer, before the
project can proceed. This review will include a site visit, report, and a letter from the ITPR
certifying that he or she has no financial interest in the project and is an independent
reviewer. After the construction of the project is complete, an ITPR will conduct a final
site inspection and determine whether the project was completed and is operating properly.
The reviewer's certification will also include a statement that the reviewer is qualified and
has no financial interest in the project.
(q) Delinquency. Under the terms of the form lender contract attached as
Exhibit 3, if a property owner fails to pay an agreed installment when due on the PACE
assessment, the lender will agree to take at least the following steps to collect the delinquent
installment:
(1) Mail to the owner a written notice of delinquency and demand for
payment by both certified mail (return receipt requested) and first-class mail, and
TX. Local Gov't Code §399.011.
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(2) Mail to the owner a second notice of delinquency and demand for
payment by both certified mail (return receipt requested) and first class mail, at
least 30 days after the date of the first notice if the delinquency is continuing.
If the owner fails to cure the delinquency within 30 days after mailing the second
notice of delinquency, the lender may notify the Authorized Representative of the owner's
default. Pursuant to Texas Local Government Code Section 399.014(c), the Authorized
Representative will initiate steps for City to enforce the assessment lien in the same manner
as a property tax lien against real property may be enforced, to the extent the enforcement
is consistent with Section 50, Article XVI, of the Texas Constitution. Delinquent
installments will incur penalties and interest in the same manner and at the same rate as
delinquent property taxes, according to Texas Local Government Code
Section 399.014(d), and such statutory penalties and interest will be due to City to offset
the cost of collection.
In no event will the total amount of interest on the Assessment, including statutory
interest payable to City and contractual interest payable to the lender under the financing
documents, exceed the maximum amount or rate of nonusurious interest that may be
contracted for, charged, or collected under Texas law (the "usury limit"). If the total
amount of interest payable to City and the lender exceeds the usury limit, the interest
payable to City will be reduced, and any interest in excess of the usury limit will be credited
to the amount payable to City or refunded. If City files suit to enforce collection, City may
also recover costs and expenses, including attorney's fees, in a suit to collect a delinquent
installment of an assessment in the same manner and at the same rate as in suit to collect a
delinquent property tax. If a delinquent installment of an assessment is collected after the
filing of a suit, City will remit to the lender the net amount of the delinquent installments
and contractual interest collected and remit to the Authorized Representative the amount
of any administrative fees collected but will retain any statutory penalties, interest, and
attorney's fees collected.
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EXHIBIT 1
MAP OF CITY/COUNTY PACE REGION
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EXHIBIT 2
FORM OWNER CONTRACT
IF]
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EXHIBIT 3
FORM LENDER CONTRACT
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EXHIBIT 4
FORM NOTICE OF CONTRACTUAL ASSESSMENT LIEN
PURSUANT TO PROPERTY ASSESSED CLEAN ENERGY ACT