Law Approved To Establish Framework For An Energy Loan Program

MAYVILLE — Energy efficiency upgrades to commercial properties and multi-family homes could be eligible for substantial financing, if legislators approve a local law at Wednesday’s meeting.

Members of the County Legislature’s Planning and Economic Development Committee passed a local law last week to establish framework for an energy loan program. Qualified owners who install energy efficiency measures would be able to get 100 percent financing through Energize NY Property Assessed Clean Energy (PACE), which works in conjunction with NYSERDA.

The Energy Improvement Corporation, a local development corporation that’s focused on energy efficiency and renewable energy, would act on behalf of the county to provide financing to qualified property owners that would in turn be paid through charges on their real property tax bills. Funds provided would not exceed the lesser of 10 percent of the appraised value of the real property.

Joseph DelSindaco, PACE advisor to the EIC, explained the program and the financing mechanism to committee members before they made a decision to proceed. He told legislators there’s an energy issue in New York.

“There’s over $10 billion a year that we feel is wasted in New York state by people paying more for energy than they need to,” he said. “One of the challenges we’ve learned over the years is that people want to upgrade their facilities and utilize nonrenewables when they can. The need is to provide long-term, low-cost financing, and we find that’s critical.”

Some energy efficiency projects that qualify for PACE financing include lighting installation, oil to gas conversions and installing energy efficient windows. On the renewable side, solar thermal systems, geothermal and wind turbines qualify for financing.

In order for commercial properties to receive PACE financing, the county would need to be a member of the Energy Improvement Corporation. Property owners who are eligible for PACE financing must have three-plus years of timely property tax payments and no history of bankruptcy over the past seven years. DelSindaco said 100 percent financing with no capital required by property owners is the major benefit that PACE provides. No public money is utilized, he said.

“We’ve seen so many instances in energy efficiency where some investments that provide a relatively long payback just get left alone because there’s nothing available to help finance it,” he said. “In conjunction with NYSERDA and its consultant, they go in and look at every possible opportunity to make a building more efficient. Even if the payback is out a few years, there’s financing available. The savings are greater than the amount of debt they’re taking on.”

In the event a property owner can’t pay back the funding they were given, DelSindaco said a municipality is protected with a loss fund that they would be able to tap into.

Jim Caflisch, county real property tax director, relayed several concerns to the committee. He said the office is becoming a loan collection agency.

“I have concerns about that because what is the next loan we’ll have to monitor? From the number of loans that I’ve reached out around the state, there’s not many that occur,” he said. “But these are needles in a hay stack. We are going to have to monitor them separately. It’s not like an automated charge like you do special districts regularly. I would only hope we don’t miss (any charge) because small issues become big issues.”

With the county’s two-year foreclosure process, the county would have to guarantee three years of the PACE payment if a property owner cannot pay it back, Caflisch said.

“It takes two years before we foreclose. When it gets to foreclosure, we would add the third year in,” he said. “That’s another administrative issue we have to work through and figure out how we do that through our system.”

Legislators came to a consensus that the program would benefit Chautauqua County. Chairman George Borrello, R-Hanover, said program benefits outweigh the risk. Legislator Terry Niebel, R-Sheridan, said he likes the concept but has concern about the county’s potential liability. Legislator Mark Odell, R-Brocton, said there’s vetting regarding the credit worthiness of an applicant as well as pre-engineering and post inspections to ensure the project is built to design.

The local law will be considered at Wednesday’s meeting of the County Legislature.