Reversing a decision from last year, the City Council this week approved a lending program that offer financing for homeowners and businesses that want to go green.
On Tuesday, the council voted 3-2 in favor of approving a request to join California HERO, one of the property-assessed clean-energy programs, commonly known as PACE programs. The council will discuss approving other PACE programs at its next meeting.
Mayor Cathy Schlicht and Councilman Ed Sachs voted against the proposal.
Residents of cities that are PACE members can get a long-term – typically 15 to 20 years – loan for energy-efficient or renewable improvements, such as installing rooftop solar panels and drought-tolerant landscaping.
What makes the PACE program unique is that loans are attached to the property rather than an individual. The City Council needs to approve the program for residents to get the loans because payments will be collected through property taxes.
“Between the extended drought and rising energy costs, property owners are eager to make the types of investments HERO supports,” stated Blair McNeill, vice president of community development for Renovate America, the company that administers the HERO program, in a news release. “We’re happy to provide an avenue for financing that requires no money down and does not depend on personal credit, bringing efficiency improvements within reach for a broad range of homeowners.”
Last year, three PACE lenders, including HERO, asked Mission Viejo to join their programs. The council, which at the time had three different members than it does currently, denied the request, 3-2.
Proponents say the PACE program allows residents to defer the upfront costs of energy-efficient upgrades while enjoying savings from low energy costs. They can pass on the remaining loans if they decide to sell the property.
As of Tuesday, 338 communities in California, including 24 cities in Orange County cities, have joined the HERO program, said Dustin Reilich, director of municipal development for HERO.
The city would bear no liability if it decides to join the program and can opt out anytime, PACE program representatives said. Only those who take out the loans will be responsible for paying them back, the representatives added.
The program, however, suffered a setback in 2010 when Fannie Mae and Freddie Mac announced they would refuse to buy loans for homes that have PACE liens attached. Representatives from the Orange County Association of Realtors expressed opposition to the program in Tuesday’s meeting, saying the loan could become an issue when people try to sell their house.
Councilman Frank Ury, who put the proposal to join HERO on Tuesday’s agenda, said the city’s role is not to decide how good PACE programs are but to give residents an option.
It was first time the city held its regular City Council meeting on Tuesday. Earlier in the year, the council changed its meeting dates from Monday evenings to the second and fourth Tuesday of the month.
Other business discussed Tuesday
Increased compensation: The City Council voted 3-2 in favor of giving a $100 compensation per meeting for all city board members and commissioners. Some were receiving $100, while others $50, said Mayor Pro Tem Greg Raths, who made the proposal. Schlicht and Sachs, who said the increase could cost the city a few thousand dollars a year, opposed it.
Town center?: The City Council approved city staff to look into development options at the Village shopping center and other properties near the civic center. The council also directed staff to investigate whether the city can provide Internet services for Village businesses.
Contact the writer: tshimura@ocregister.com or 949-445-6497
