County learns more about Property Assessed Clean Energy plan
Published Jan. 30, 2020
CENTREVILLE — The St. Joseph County Board of Commissioners heard from Bali Kumar, chief executive officer of Lean and Green Michigan, an energy finance company, about their Property Assessed Clean Energy (PACE) financing program during the board’s Executive Committee meeting Wednesday.
The plan was briefly discussed during the board’s previous meeting on Jan. 21, where a resolution passed to explore creating a PACE district in St. Joseph County. During that meeting, commissioners asked to hear more about the program during their next Executive Committee meeting.
In a PowerPoint Presentation to the commissioners, Kumar said PACE financing is a long-term financing mechanism available to commercial and industrial property owners to make their buildings more energy efficient, as part of the Property Assessed Clean Energy Act of 2010 in Michigan. The program is currently servicing 43 local governments, 25 counties and 18 cities and townships, representing 71 percent of the population of Michigan. The program has helped finance 24 projects over the past several years.
Kumar said Lean and Green, the statewide administrator for PACE financing, is looking to create a PACE district in the county because there is a property owner in Fabius Township that is looking to build an assisted living and memory care facility, and wants to include PACE financing for their building.
“The whole point of PACE is to allow people to access financing that’s cash flow-positive,” Kumar said. “I was looking at the energy audit the property owner got done for the project, and it looked like with about $1 million extra investment into the property, he’ll reap about $3 million in savings from energy savings, depreciation, finance savings and operations and maintenance savings.”
The types of properties that are eligible for PACE financing include commercial and industrial properties, such as hotels, hospitals and restaurants; multifamily housing; agricultural properties, such as wineries and farms; and nonprofits, such as houses of worship, private schools and cooperatives. Projects that would qualify for PACE financing include retrofits, “gut rehabs,” new construction and refinancing any of those projects. Qualifying upgrades for financing include energy efficiency upgrades, such as lighting, HVAC, windows and roofing; water efficiency upgrades, such as low-flow toilets and sinks; and renewables, such as solar and wind energy.
“The way we run our program is to be a free economic development tool for the local governments that we operate the program on behalf of,” Kumar said. “It’s an interesting backdoor into building sustainable buildings.”
Kumar also talked with commissioners about how the projects get financed—up to 25 years with no upfront costs—and how much they have worked with the property owner to make sure the project is eligible. Kumar also noted they encourage those constructing buildings to build not just to code, but above code.
“Our construction policy is basically encouraging people to build above code, which is interesting because I’ve heard developers say they don’t even build to code because they can get away with it,” Kumar said. “But we say, no, you must not only build to code, but above code.”
After Kumar’s presentation, commissioners asked questions of Kumar about the program. First District Commissioner Allen Balog asked what effect the program would have on taxes collected, and Kumar said the PACE assessment doesn’t have to get collected by the county treasurer.
“What I haven’t done a study on is what happens to the property value,” Kumar said. “If you have a property, and it has a value of $100,000 and then it gets all these upgrades, and then it goes up to $200,000, presumably their property taxes go up because their property’s more valuable. I haven’t done a study of that, but I presume that better buildings pull in more property tax revenue,” Kumar said.
Kumar said he personally hasn’t talked with the Fabius Township planning commission yet, but presumed the property owner has, because the property owner “should have been pulling permits in order to pull out this project.” He added he intends to bring representatives of the property owner to the next county commission meeting to speak about the project.
Fourth District Commissioner Dan Czajkowski asked why a PACE district has to cover the entire county and not just the area the building is being placed.
“The property owner can’t access PACE financing if they’re not in a PACE district,” Kumar said. County Administrator Teresa Doehring added the PACE statute says that at the county level, a district has to be approved.
Fifth District Commissioner Ken Malone said he didn’t see any downside to having PACE financing available.
“It’s a great tool that somebody can tap into that doesn’t burden our already-burdened staff,” Malone said. “I don’t see any downsides showing up this point in time, so I think we should move forward and have a public meeting.”
There will be a public hearing on creating a PACE district in St. Joseph County during the next county commission meeting on Tuesday, Feb. 4 at 5 p.m. at the St. Joseph County Historical Courthouse in Centreville.
More information on PACE financing can be found at www.leanandgreenmi.com.
In other business…
- The commissioners added to a future agenda requests for exceptions to the hiring freeze for an Animal Control support assistant, a secretary at the Michigan State University Extension, and a Family Division caseworker.
- The commissioners added to a future agenda a 2020 agreement with the MSU Extension for their services.
- The commissioners added to a future agenda a budget amendment to change software for the county’s Register of Deeds department.
- The commissioners added to a future agenda a request to amend the child care fund budget for the local Department of Health and Human Services.
Robert Tomlinson can be reached at 279-7488 ext. 23 or email@example.com.