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SARATOGA CITY COUNCIL
MEETING DATE: November 18, 2009 AGENDA ITEM:
DEPARTMENT: City Manager’s Office CITY MANAGER: Dave Anderson
PREPARED BY: Crystal Morrow DIRECTOR: Barbara Powell
Administrative Analyst II Assistant City Manager
SUBJECT: CaliforniaFIRST Letter of Commitment
RECOMMENDED ACTION:
Accept report and approve CaliforniaFIRST letter of commitment.
BACKGROUND:
CaliforniaFIRST:
CaliforniaFIRST is a turnkey property assessed clean energy (PACE) program that was developed
by the California Statewide Communities Development Authority (California Communities), a
joint powers authority. The program will be administered by Renewable Funding LLC, which has
also managed PACE programs for the City of Berkeley and Boulder County in Colorado.
Additionally, Renewable Funding will soon be launching a new PACE program in San Francisco.
Municipalities can “opt in” to the CaliforniaFIRST program to allow property owners to finance
clean energy projects through bonds that are issued by California Communities. Bonds are then
repaid through the property taxes of participating property owners over a 10-20 year period.
CaliforniaFIRST is a voluntary program and only affects property owners that choose to
participate in the program.
To participate in CaliforniaFIRST, municipalities pay a onetime start up fee. In turn, California
Communities handles all administration of CaliforniaFIRST. The cost for Saratoga to opt in to the
CaliforniaFIRST program is $12,500.
CaliforniaFIRST Pilot Program:
Before CaliforniaFIRST is rolled out on a statewide basis, it will first be tested in pilot counties
and cities throughout the State. The pilot program will be launched sometime between spring and
early summer 2010. The statewide program would then become active late summer 2010.
The pilot program will allow CaliforniaFIRST to be implemented in phases and also improve the
program’s bond rating before being introduced statewide. If Santa Clara County participates in
the CaliforniaFIRST pilot program, Saratoga will also be eligible to be part of the pilot program.
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State Energy Program – Municipal Financing Program Grant:
As part of the American Recovery and Reinvestment Act, the State of California has received
$226 million for the State Energy Program (SEP). Of this money, $95 million will be used to fund
an Energy Efficiency Program that will provide grants to qualified organizations for residential
building retrofit, municipal and commercial retrofit, and municipal financing programs. The
State’s SEP funds are being administered by the California Energy Commission.
Renewable Funding and California Communities have been working with Sacramento County to
prepare an SEP municipal financing program grant application to cover the costs of program
financing, local coordination, and marketing for all municipalities participating in the pilot
CaliforniaFIRST program. If the grant is awarded to Sacramento County it would cover the City
of Saratoga’s start up costs to participate in the CaliforniaFIRST program.
Next Steps:
The California Energy Commission is requiring that all of the cities that intend to participate in the
CaliforniaFIRST pilot program submit a letter of commitment. The letter of commitment fulfills
two purposes. First, it authorizes Sacramento County to act as the lead agency in submitting the
SEP grant application for CaliforniaFIRST pilot program participants. Second, it will verify the
amount of SEP funds needed for the CaliforniaFIRST pilot program. Renewable Funding has
indicated that the letter of commitment is non-binding.
Following submission of the letter of commitment, pilot counties and cities will need to adopt a
resolution to join the CaliforniaFIRST program by January 18, 2010. This resolution will
authorize CaliforniaFIRST to accept applications from property owners, conduct contractual
assessment proceedings, and levy contractual assessments within the jurisdiction. Pilot
municipalities can note in the resolution that participation in the CaliforniaFIRST pilot program is
contingent upon SEP funds being awarded to cover the start up costs of CaliforniaFIRST pilot
jurisdictions.
FISCAL IMPACTS:
There are no fiscal impacts associated with authorizing signature of the letter of commitment. If
the City should decide to move forward in the CaliforniaFIRST pilot program then the cost of
participation for Saratoga will be $12,500.
However, this cost may be covered by Sacramento County’s SEP grant for municipal financing
and the City can decide to make participation in the CaliforniaFIRST pilot program dependent
upon the award of SEP municipal financing funds for the CaliforniaFIRST pilot program.
Alternatively, the Council may decide to use Council Contingency Funds to cover the cost of
opting in to the CaliforniaFIRST pilot program if SEP monies are not awarded to the program.
CONSEQUENCES OF NOT FOLLOWING THE RECOMMENDED ACTIONS:
The City will not submit a letter of commitment to CaliforniaFIRST and will not be included in
the pilot program.
ALTERNATIVE ACTION(S):
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N/A
FOLLOW UP ACTION(S):
Implement Council direction.
ADVERTISING, NOTICING AND PUBLIC CONTACT:
Nothing additional.
ATTACHMENTS:
Attachment A: Letter of Commitment for CaliforniaFIRST program