1. CaliforniaFIRST Kelley McKanna| 4/1/10

2. PACE: Simple, Effective Tool Property owner repays bond through property tax bill (up to 20 years) Proceeds from PACE bond or other financing provided to property owner to pay for energy project Property owners voluntarily sign-up for financing and install energy projects City or county creates type of land-secured financing district or similar legal mechanism

3. Key Benefits for Cities & Counties Helps meet energy and climate goals Promotes local jobs Tax neutral and no exposure to General Fund

4. Key Benefits for Property Owners Saves money on utility bills Repayment transfers to new owner Not based on personal credit

5. 8.4% jobs increase in construction sector jobs in Sonoma County between January and September 2009

6. CaliforniaFIRST Statewide AB 811 Program 14 Counties Participating in Phase I Now Launching –Alameda; Fresno; Kern; Monterey; Sacramento; San Benito; San Diego; San Luis Obispo; San Mateo; Santa Clara; Santa Cruz; Solano; Ventura; Yolo Phase II Now Open for New Counties

7. CaliforniaFIRST: Program Team CSCDA California Communities - Sponsor Joint Powers Authority formed in 1988 with 500 members cities, counties, and special districts Renewable Funding - Administration Architect of clean energy municipal financing and experience running Pace programs Provides turnkey solutions to implement programs Royal Bank of Canada Capital Markets - Finance Lead underwriter of municipal bonds, with issuance volume of more than $100 billion since 2004 Experience running CSCDA SCIP

8. CaliforniaFIRST: Overview Creates financing district Provides complete admin Provides upfront capital through bond sales Identifies work & chooses contractor Applies for financing $$ Upfront $$ Repaid on tax bill City /County “opts-in” Repays financing on property tax bill Repayment obligation transfers with ownership

9. CaliforniaFIRST: Legal PROGRAM ADOPTION Public NoticeSample Staff ReportResolution to Join PROGRAM FORMATION Formation of the districtLegal validationBond indentureBond, disclosure and issuer’s counsel

10. CaliforniaFIRST: Program Admin DESIGN Stakeholder coordination Design and development of policies and terms Connect to local goals TECHNOLOGY/OPER ATIONS Application processing and approval Develop and maintain web portal Training for local government staff MARKETING Basic marketing services and guidelines Customer service

11. CaliforniaFIRST: Finance BOND ISSUANCE Local ObligationRevenue BondBond Underwriting BOND FINANCE Interim financingBond sale and market placementTax roll preparation

12. Local Responsibilities IDENTIFY A LOCAL POINT OF CONTACT Update meetingsCoordinate with local cities LOCAL CUSTOMER SERVICE Questions from local residents OPTIONAL Develop additional local marketing and outreach Develop and maintain additional policies

13. City/County Program Fees Level 1Level 2Level 3Level 4Level 5 Populationunder 20K21K - 75K75K - 200K201K - 500Kover 500K Legal & Validation Process $7,500 Marketing & Technology Set-Up $2,500$5,000$7,500$12,500$17,500 TOTAL$10,000$12,500$15,000$20,000$25,000 – Total legal fees per county not to exceed $75,000

14. CaliforniaFIRST: Timeline Pilot scheduled to launch in summer 2010 New cities and counties sign up for Round 2 from April to July –Public Notice –Staff Report –Resolution to Join Round 2 estimated launch Fall 2010

15. Eligible Measures –Affixed to property (ie. No appliances) –Energy Efficiency, Renewable Energy, Water Efficiency –Cost-effective” by CEC standards

16. Participation Pathways BPI, HERSII, Equivalent Licensed Contractor

17. Contractor Qualifications –Appropriate State license –Participation in State rebate programs –Agreement to Code of Ethics –Compliance with CEC HERSII requirement (as available and applicable)

18. Eligible Properties Standard –Residential and Multifamily, 4 or less units –Multifamily 5 or more units and Commercial Still under development –Underwriting criteria 10% lien to value ratio 20% equity in property No history of payment delinquency for taxes, foreclosure, bankruptcy, involuntary liens, current in mortgage payments Potential Customization –Most limited of customization options due to need for standardized underwriting criteria in bond rating and sale

19. CaliforniaFIRST Splash Page www.californiafirst.org

20. Kelley McKanna| kelley@renewfund.com | (510) 451-7910 Slides prepared by Renewable Funding