PACE 101

Ohio’s PACE Laws (Bricker) Ohio PACE Market Development Outline Ohio’s PACE Laws (Bricker) Ohio PACE Market Development First Programs (AED) Program Development (Summit County) Program Implementation (Taussig)

OHIO PACE LAWS

Ohio PACE Laws Alternative energy improvements (H.B. 1, 2009) PACE Statutes – ORC 1710, HB 1, SB 232 Alternative energy improvements (H.B. 1, 2009) Solar photovoltaic (PV) and thermal Energy efficiency improvements (S.B. 232, 2010) HVAC Lighting Roofs, windows, insulation Wind Geothermal Biomass

OHIO PACE MARKET DEVELOPMENT

Ohio PACE Market Development Ohio PACE Financing Totals $109,956,354 in Ohio PACE 56 Financings Over 100 Projects 16 ESID Districts

Ohio PACE Market Development Ohio PACE Financing Totals

Ohio PACE Market Development Ohio PACE Programs

FIRST PROGRAMS

First Programs Formed in 2010 Regional Effort Northeast Ohio Advanced Energy District (AED) Formed in 2010 Regional Effort Cleveland and First Ring Suburbs, organized by First Suburbs Initial effort for residential projects, shifted to commercial

First Programs PACE Program Map in Cuyahoga County Bedford Cleveland Garfield Heights Shaker Heights Bedford Heights Cleveland Heights Lakewood Solon Berea East Cleveland Maple Heights South Euclid Brook Park Euclid Parma University Heights Brooklyn Fairview Park Parma Heights Warrensville Heights

PROGRAM DEVELOPMENT

County of Summit, Ohio Jason D. Dodson, Esq., Chief of Staff Current Efforts to Develop and Expand the Akron-Summit County Energy Special Improvement District

About the Akron-Summit County ESID In 2017, The Development Finance Authority of Summit County (DFA), the City of Akron and the City of Akron partnered together to create an Energy Special Improvement District (ESID). The District was initially created in association with a project in the City of Akron. To expand the district beyond Akron, the County adopted innovative legislation  to provide businesses, non- profits and governments an additional incentive to make energy-efficient building improvements. The legislation authorized a cooperative agreement with the DFA and the Northeast Ohio Public Energy Council (NOPEC) to take steps to expand the Akron-Summit County Energy Special Improvement District (ESID) throughout the County using assessment projects on public assets. As the ESID expands into additional communities, entities including businesses, non-profits and governments will be eligible to fund PACE-eligible projects, without being delayed by the process to create a new ESID as part of the project.

Mechanics of Expanding the Akron-Summit County ESID The County and/or its communities act as petitioners to expand the ESID. PACE-eligible improvement are made to a public asset/infrastructure, for the dual purpose of expanding the ESID and operational savings which benefit taxpayers. Much of the expansion is accomplished using the County’s sanitary sewer infrastructure (pump stations, treatment plants) that are found in many communities throughout the County. Typically smaller lighting projects. DFA funds the loans for the projects, which are repaid through the assessment in a 1-2 year frame. Project costs start at $500 and can be as high as $2,000. In communities where the County does not have sewer assts, the community has acted as the petitioner. Typical projects are lighting upgrades to public park properties or external lighting at public facilities between $5,000-$10,000. DFA funds the loans, which are repaid through the assessment in 2-3 years.

Demonstrable Results from Expanding the Akron-Summit County ESID ESID initially created in Akron - Cascade Plaza DFA Bond Fund deal closed for $5.6M. ESID expanded to Bath Township - Crystal Clinic DFA Bond Fund deal closed for $4.1M. ESID expanded to Barberton - Akron Rubber Development Lab (ARDL) DFA Bond Fund deal will close by September 26th for $2.5M. Because the County and its communities are taking the lead to create and expand the ESID, private company energy efficiency projects are easier to expedite and implement. Expansion has paved the way for NOPEC to more easily deploy smaller ESID-based lending tools.

Current Status of Expansion ESID has been expanded to 7 communities, and legislation currently in 1 community. Anticipate expansion in Phase III and IV communities over next 6 months +/-. Requirement that ESID expand into contiguous political subdivision somewhat slows expansion.

PROGRAM IMPLEMENTATION

Andrea Roess, Managing Director Property Assessed Clean Energy (PACE) Implementation and Lessons Learned September 26, 2018 Andrea Roess, Managing Director (800) 969-4382

Implementation Overview

Annual Tasks following Funding You have started a PACE program… Now what do you do?

Annual Tasks following Funding Servicing Options Each program Administrator brings their own servicer Public agency provides servicing function to all Programs (could be internal or consultant) Annual Assessment Collection Many PACE programs require annual assessments to be collected on County Property Tax Bill Other PACE programs use direct billing to property owners Annual Assessment Includes: Interest Principal Administrative Expenses

Annual Tasks following Funding Respond to property owner questions Monitor delinquencies, timely payment of interest and principal, reporting Calculate payoffs, record notice of cancellation Coordination with Trustee Direct funds received to the correct account Coordinate payments to bond holders or assessment owners Other reporting: Statistics of new bonds issued, payoffs, etc. Current year levy Status of delinquencies State reporting requirements

Lessons Learned

Lessons Learned – Case Studies Commercial Program Case Study #1 Missed regularly scheduled bond payments due to delinquencies In the future, programs should fund sufficient reserves to meet bond payment obligations Public agency ultimately offered delinquent property owner the option to pay PACE assessment separately from tax bill Commercial Program Case Study #2 New program with only one funded parcel Initial program development costs are high when there are fewer parcels in the program As the program grows and additional parcels are added, we can achieve significant economies of scale Larger programs result in lower average administrative costs per parcel

Lessons Learned – Case Studies Commercial Program Case Study #3 Documents were prepared and recorded based on incorrect origination data from program administrator Document review is critical during the origination process Origination data and documents should be verified by multiple parties in order to avoid delays in funding and levy errors Commercial Program Case Study #4 Close coordination with team has resulted in successful transactions Team engaged in weekly status calls where issues were identified

Lessons Learned Other considerations to be aware of: Education of property owners, contractors, mortgage companies, and realtors We receive numerous several calls from interested parties who are confused about their PACE lien (i.e., what happens when the property is sold, how to impound/escrow accounts work with PACE lien, etc.) Keep in mind all of the County departments that you will be working with Most programs will correspond with the governing boards to obtain program approval Other County departments, including the Treasurer/Tax Collector, Auditor, and Recorder offices, may also be involved

PACE 101