October 6, 2008
BY Jeff Quackenbush
link to the article
STAFF REPORTER
SANTA ROSA, Sept. 16, 2008 – The Sonoma County Board of Supervisors this morning voted unanimously to move forward with a plan to create opt-in assessment-based financing for energy-efficiency and renewable energy projects on existing commercial and residential properties, with all the supervisors and several groups of stakeholders advocating prompt action. However, county officials warned that county finances are too tight to undertake the proposal without a more detailed business plan.
Some supervisors, a representative of local governments and advocates for solar power and climate protection pushed for a rapid rollout of the loan program countywide. Assembly Bill 811, signed in July, allows local governments to form assessment districts that allow property owners to decide whether to enter a contract with the governing authority of the district to pay for an energy-related project permanently attached to the property. Loans would be attached to the property as an assessment and would remain even if the property were sold.
Speakers before the board this morning suggested as many property owners as possible be able to access the financing as quickly as possible to reduce energy-related emissions of gases attributed to climate change, take advantage of state and federal grant programs that look for local matching funds and prevent the steep falloff in photovoltaic system installations seen in Berkeley between the announcement late last year of a similar funding mechanism for private projects and still-pending implementation.
Jake Mackenzie, Rohnert Park mayor and chairman of the Sonoma County Mayors and Councilmembers Association, told the supervisors he plans to put participation in the county’s AB 811 program on the group’s Oct. 16 agenda.
“We as signatories in the Climate Protection Campaign, we’re ready to go,” he said.
The county and its nine municipalities signed onto the campaign to reduce greenhouse gas emissions by 25 percent below 1990 levels by 2015.
Anne Hancock, executive director and co-founder of the campaign, told the supervisors that AB 811 financing, with enough speed and countywide scale, would be a key part of the group’s forthcoming Community Climate Action Plan, which would create a comprehensive set of tools for financing projects that would meet the campaign goal.
“We need to move rapidly and think big,” she said.
Barry Cogbill, of REC Solar’s Petaluma office and chairman of the vendor subcommittee of the recently launched Solar Sonoma County initiative, told the supervisors that timing of the rollout of the AB 811 program will be critical. He said the city of Berkeley in October 2007 announced a funding mechanism similar to AB 811 and still is working on implementing financing. Yet in that time solar system installations dropped about 40 percent from an average of 15 a month before the announcement to nine monthly afterward.
He noted that solar installations in Santa Rosa average 9.2 systems a month and warned the supervisors not to cause a similar dropoff in local installations that would prompt installers to look to other locations, such as Palm Desert, the model city which voted Aug. 28 to launch AB 811 financing, or Ventura County, which decided Sept. 9 to create a countywide AB 811 district.
County Administrative Officer Bob Deis emphasized the need for a more detailed economic analysis of the proposed assessment district charter and the recommended phased launch because of scant county funds available to cover administrative and interim lower-interest financing for initial projects before funding mechanisms such as private-activity bonds are feasible.
A detailed economic analysis of the proposed program is scheduled to be ready in November for the board to consider next steps. The proposed timeline includes taking applications from property owners in December in pilot project areas and starting to issue loans by the end of January. Pilot project areas are the industrial parks along Eighth Street East south of Sonoma and Airport Business Center business park near the Sonoma County airport.
Meanwhile, real estate developer and entrepreneur Alan Strachan told the board that his Green Energy Loan program already aligned five banks – Sonoma, First Community, Exchange, North Coast and Summit State – willing to provide home-equity loans for sustainable energy projects, and that could be adjusted to fund AB 811 projects.
After the board of supervisors workshop today, Mr. Strachan said he is going back to the banks to see if they would extend lines of credit to the county and any city that joined the AB 811 district to fund private projects. If they’re interested, he’ll approach the mayors and councilmembers group in October and the county about an alternative way to finance projects.
Mr. Strachan said because AB 811 loans are secured by property-tax assessments, there can be a higher level of protection for lenders than with traditional lines of credit. He asserted that bank loans could be less expensive for borrowers than financing connected to the bond market.
Also, since energy-related remodeling can involve many of the trades in home building, propelling AB 811 financing could help employ more contractors, according to Mr. Strachan.
“This is the best chance on the horizon to get the economy going,” he said.
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