Loading...
HomeMy WebLinkAbout05 - Inclusion of Properties within the City’s Jurisdiction in the CMFA, Property Assessed Clean Energy Program5-1 NEWPORT BEACH City Council Staff Report COUNCIL STAFF REPORT CITY OF March 8, 2016 Agenda Item No. 5 ABSTRACT: The City of Newport Beach is currently a member of the California Municipal Finance Authority (CMFA), a Joint Powers Authority. CMFA along with its current program administrator, Energy Efficient Equity (E3), are offering a Property Assessed Clean Energy (PACE) financing program for residential and commercial property owners in its member territories. The program offers low-cost financing for property owners who wish to improve their properties to generate renewable energy or reduce their energy and water use. The benefit of the PACE programs includes reducing peak energy demand, increasing property values, saving on utility bills, and stimulating building activity. RECOMMENDATION: a) Find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Section 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines; and b) Adopt Resolution No. 2016-38,A Resolution of the City Council of the City of Newport Beach, California, Authorizing the City’s Consent to the Inclusion of Properties within the City’s Jurisdiction in the CMFA PACE Program; Authorizing the California Municipal Finance Authority to Accept Applications from Property Owners, Conduct Contractual Assessment Proceedings and Levy Contractual Assessments within the City. TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM:Kimberly Brandt, Community Development Director - 949-644-3232, kbrandt@newportbeachca.gov PREPARED BY:Seimone Jurjis, Assistant Community Development Director Chief Building Official PHONE:949-644-3282 TITLE: Adopt Resolution for Inclusion of Properties within the City’s Jurisdiction in the California Municipal Finance Authority, Property Assessed Clean Energy Program Adopt Resolution for Inclusion of Properties within the City’s Jurisdiction in the California Municipal Finance Authority, PACE Program March 8, 2016 Page 2 5-2 FUNDING REQUIREMENTS: There is no fiscal impact related to this item. The City will have no administrative responsibilities, marketing obligations, or financial obligations associated with this program. DISCUSSION: The PACE program is an innovative way to finance energy efficiency, water efficiency, and renewable energy upgrades for residential and commercial buildings. Property owners who participate in the program repay the loans through a voluntary contractual assessment collected together with their property taxes. One of the most notable characteristics of PACE programs is the loan is attached to the property rather than belonging to an individual. Therefore, when the owner sells the property, the loan may be paid off during the sale or stay with the property and be paid off by the new owner, who also benefits from the upgrades that were completed. PACE financing enables individuals and businesses to defer the upfront costs of energy efficiency, water efficiency, and renewable energy improvements. PACE loans are paid over a long period of time while energy costs are simultaneously lower, which typically provides the property owner with net savings. PACE overcomes challenges that have hindered adoption of energy efficiency and renewable energy measures for many property owners. Please see Attachment B for a more detailed program description. Staff has determined that participation in this program is a cost-effective means of offering property owners the opportunity to make energy and water efficiency retrofits to their property and create new local jobs. Property owners will repay the financing as a charge on their property tax bill over a period of years. Following are additional PACE program benefits: Supports the development of renewable energy sources, installation of energy and water efficiency improvements, reduction of greenhouse gases, and protection of the environment. Only property owners who voluntarily choose to participate in the program will be subject to assessments. Program financing provides for an affordable method for many property owners to reduce their energy costs and improve their properties. The length of the financing is based on the expected useful life of the improvements. Depending Adopt Resolution for Inclusion of Properties within the City’s Jurisdiction in the California Municipal Finance Authority, PACE Program March 8, 2016 Page 3 5-3 on the lender and the improvements, the term can range from five years to 39 years. Since program financing can be readily transferred upon sale, even owners who are planning to sell have the ability to make responsible and beneficial improvements to their property. While early payment premiums may apply in some circumstances, property owners can choose to pay off the program financing at any time. However, there may be applicable prepayment penalties, and the program administrators review these terms with prospective participants. The City incurs no financial obligations as a result of program participation. If the City Council passes the attached resolution, the City will incur no costs, and no staff time is required for administration or funding of the PACE programs. The City is not obligated to repay the bonds issued by the CMFA or to pay the assessments levied on the participating properties. The City will not incur any cost or involvement, and there are no administrative responsibilities, marketing obligations, or financial exposures to the City. CMFA and its program administrators handle all assessment administration, bond issuance, and bond administration functions. The proposed resolution authorizes the CMFA to accept applications from City property owners for municipal financing of authorized improvements. It also authorizes the CMFA to conduct assessment proceedings and levy assessments against the property of participating owners within the City. The City Council has previously approved participation in four other PACE programs: HERO, Figtree, Ygrene and CaliforniaFirst. Adding the CMFA PACE program, to be administered by E3, provides more options for property owners to choose from. It will not add to or require any additional responsibilities for the City. Adopt Resolution for Inclusion of Properties within the City’s Jurisdiction in the California Municipal Finance Authority, PACE Program March 8, 2016 Page 4 5-4 ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Attachment A – Draft Resolution Attachment B – PACE Program Report and Handbook OHSUSA:759366422.3 Attachment A Resolution - California Municipal Finance Authority 5-5 2 OHSUSA:759366422.3 RESOLUTION NO. 2016 - ______ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORIA, AUTHORIZING THE CITY’S CONSENT TO THE INCLUSION OF PROPERTIES WITHIN THE CITY’S JURISDICTION IN THE CMFA PACE PROGRAM; AUTHORIZING THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY TO ACCEPT APPLICATIONS FROM PROPERTY OWNERS, CONDUCT CONTRACTUAL ASSESSMENT PROCEEDINGS AND LEVY CONTRACTUAL ASSESSMENTS WITHIN THE CITY WHEREAS, the California Municipal Finance Authority (“Authority”) is a joint exercise of powers authority, the members of which include numerous cities and counties in the State of California, including the City of Newport Beach (“City); WHEREAS, the Authority has established its CMFA PACE Program (“Program”) to allow the financing or refinancing of renewable energy, energy efficiency, water efficiency and seismic strengthening improvements, electric vehicle charging infrastructure and such other improvements, infrastructure or other work as may be authorized by law from time to time (collectively, the “Improvements”) through the levy of contractual assessments pursuant to Chapter 29 of Division 7 of the Streets & Highways Code (“Chapter 29”) within counties and cities throughout the State of California that consent to the inclusion of properties within their respective territories in the Program and the issuance of bonds from time to time; WHEREAS, Chapter 29 provides that assessments may be levied under its provisions only with the free and willing consent of the owner or owners of each lot or parcel on which an assessment is levied at the time the assessment is levied; and WHEREAS, the City desires to allow the owners of property (“Participating Property Owners”) within its territory to participate in the Program and to allow the Authority to conduct assessment proceedings under Chapter 29 within its territory and to issue bonds to finance or refinance Improvements; WHEREAS, the territory within which assessments may be levied for the Program shall include all of the territory within the City’s official boundaries; WHEREAS, the Authority will conduct all assessment proceedings under Chapter 29 for the Program and issue any bonds in connection with the Program; and 5-6 3 OHSUSA:759366422.3 WHEREAS, the City will not be responsible for the conduct of any assessment proceedings; the levy of assessments; any required remedial action in the case of delinquencies in such assessment payments; or the issuance, sale, administration repayment or guarantee of any bonds issued in connection with the Program. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Newport Beach as follows: Section 1: The City Council finds and declares that the foregoing recitals are true and correct. Section 2: The City Council finds and declares that properties in the territory of the City will benefit from the availability of the Program within the territory of the City and, pursuant thereto, the conduct of special assessment proceedings by the Authority pursuant to Chapter 29 and the issuance of bonds to finance or refinance Improvements. Section 3: In connection with the Program, the City hereby consents to the conduct of special assessment proceedings by the Authority pursuant to Chapter 29 on any property within the territory of the City and the issuance of bonds to finance or refinance Improvements; provided: (1) The Participating Property Owners, who shall be the legal owners of such property, execute a contract pursuant to Chapter 29 and comply with other applicable provisions of California law in order to accomplish the valid levy of assessments; and (2) The City will not be responsible for the conduct of any assessment proceedings; the levy of assessments; any required remedial action in the case of delinquencies in such assessment payments; or the issuance, sale, administration, repayment or guarantee of any bonds issued in connection with the Program. Section 4: The appropriate officials and staff of the City are hereby authorized and directed to execute and deliver such certificates, requisitions, agreements and related documents as are reasonably required by the Authority to implement the Program. Section 5: The City Council finds the adoption of this resolution is not subject to the California Environmental Quality Act (“CEQA”) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Alternatively, the City Council finds the adoption of this resolution is not a 5-7 4 OHSUSA:759366422.3 project under CEQA Regulation Section 15061(b)(3) because it has no potential for causing a significant effect on the environment. Section 6: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. Section 7: This resolution shall take effect immediately upon its adoption by the City Council and the City Clerk shall certify the vote adopting this resolution. The City Clerk is hereby authorized and directed to transmit a certified copy of this resolution to the Financial Advisor of the Authority at: California Municipal Finance Authority, 2111 Palomar Airport Road, Suite 320, Carlsbad, California 92011, Attn: Travis Cooper. ADOPTED this 8th day of March, 2016. By: ______________________ Diane B. Dixon Mayor ATTEST By: ____________________________ Leilani I. Brown City Clerk 5-8 Attachment B PACE Program Report and Handbook 5-9 CMFA PACE Program Report and Handbook 1 January 16, 2015 PACE Program Report and Handbook 5-10 CMFA PACE Program Report and Handbook 2 January 16, 2015 Contents 1 Introduction ............................................................................................................ 3 2 Future Program Changes ......................................................................................... 4 3 Program Administrators .......................................................................................... 4 4 Contacts ................................................................................................................. 5 5 Program Eligibility Requirements ........................................................................... 5 6 Financing Terms ................................................................................................... 10 7 Quality Control ..................................................................................................... 13 8 Required Documents ............................................................................................. 13 9 General Terms & Conditions ................................................................................. 15 10 Definitions ......................................................................................................... 20 EXHIBIT A - CMFA Boundary Map .......................................................................... 22 EXHIBIT B - Product Eligibility Guidelines ............................................................... 23 EXHIBIT C - Form of Assessment Contract ............................................................... 33 5-11 CMFA PACE Program Report and Handbook 3 January 16, 2015 1 Introduction The California Municipal Finance Authority’s (“CMFA”) Property Assessed Clean Energy (“PACE”) program (the “Program”) is enabled under Assembly Bill 811 (Enabling Legislation), which was approved by the California State Legislature in July 2008. PACE Programs are an innovative way to finance or refinance the installation of distributed generation renewable energy sources, energy efficiency improvements, water efficiency improvements, electric vehicle charging infrastructure, seismic strengthening improvements and such other work to existing commercial and residential buildings. Interested residential and commercial property owners (“Property Owners”) enter into a voluntary assessment to receive up to 100% project financing, which assessment is repaid together with, and collected as part of, their property taxes for up to 39 years. The Program has been established for CMFA members to assist Property Owners in financing eligible improvements. The Program facilitates financing for Property Owners in participating areas by issuing bonds secured by assessments levied on the subject properties (“Assessments”). The Program has engaged multiple program administrators (“Program Administrators”) responsible for administration of the Program. Such Program Administrators will purchase the bonds issued by the CMFA to provide capital for the Program to finance the eligible improvements. Program Administrators work with local contractors that specialize in the installation of distributed generation renewable energy sources, energy efficiency improvements, water efficiency improvements, electric vehicle charging infrastructure, seismic strengthening improvements and such other work; while ensuring fair pricing, controlling quality for consumers, utilizing existing incentive Programs, and complying with local regulations. This CMFA Program Report and Handbook (this “Program Handbook”) outlines the basic design and financing structure of the Program, and constitutes the report required pursuant to Section 5898.22 of Chapter 29 of Part 3 of Division 7 of the California Streets & Highways Code (“Chapter 29”). Separate Program Administrator Procedures Handbooks will provide additional details and information for the Program and each of the Program Administrators. 5-12 CMFA PACE Program Report and Handbook 4 January 16, 2015 2 Maximum Financing Amount for Program The maximum aggregate dollar amount of the principal component of voluntary contractual assessments to be levied under the Program is $50 billion, subject to increase if there is sufficient demand. Applications from Property Owners for financing under the Program will be considered on a first come, first served basis. If the authorized maximum aggregate dollar amount is exceeded, then the last property that caused such authorized maximum aggregate dollar amount to be exceeded will be ineligible for financing under the Program. Once $48 billion of qualified improvements have been financed, applications will receive a time stamp in order to evidence priority. 3 Future Program Changes The CMFA reserves the right to change the Program and its terms at any time; however, any such change will not affect a Property Owner’s existing obligation to pay the contractual Assessment agreed to in an executed Assessment Contract. 4 Program Administrators Program financing is offered to the public through a Public / Private Partnership with one or more Program Administrators. Program Administrators are responsible for originating Program financings while ensuring fair pricing, controlling quality, utilizing existing incentive programs, providing capital, and complying with local regulations. Program Administrators operate independently under the guidelines described in this Program Handbook. Processes and financing rates and terms offered by each Program Administrator may vary subject to the Program Administrator Procedures Handbook. References to Program Administrators in this Program Handbook apply to all Program Administrators engaged by the Program. A list of active Program Administrators is available online at www.cmfa-ca.com/paceprogram/programadministrators. 5-13 CMFA PACE Program Report and Handbook 5 January 16, 2015 5 Contacts 5.1 Program California Municipal Finance Authority (“CMFA”) Phone (760) 930-1333 Fax (760) 683-3390 Email pace@cmfa-ca.com Address 2111 Palomar Airport Rd, Suite 320 Carlsbad, CA 92011 Online www.cmfa-ca.com/paceprogram 5.2 Program Administrators PACE Funding Group Phone (650) 799-4540 Email contact@PACEFunding.com Address 100 Cooper Court Los Gatos, CA 95032 Online www.pacefunding.com Energy Efficient Equity Phone (310) 307-4940 Fax (310) 307-4701 Email contact@energyefficientequity.com Address 10880 Wilshire Blvd Suite 1101 Los Angeles, CA 90024 Online www.energyefficientequity.com 6 Program Eligibility Requirements Financing by the Program is subject to the following Eligibility Requirements. The Eligibility requirements described herein are the minimum requirements to qualify for financing offered by the Program. Program Administrators may at their own discretion require additional criteria to qualify for financing. 5-14 CMFA PACE Program Report and Handbook 6 January 16, 2015 6.1 Properties To be eligible, the subject property must pay property taxes and meet the requirements as set forth below: 6.1.1 Geography The subject property must be located within a county or city that (a) is a member of the CMFA (a boundary map showing the boundaries of the current members and, accordingly, the territory within which the Program is offered is attached as Exhibit A) and (b) is participating in the Program by adopting an authorizing resolution in compliance with applicable law (a current list of cities and counties participating in the CMFA PACE Program can be found at www.cmfa- ca.com/pace). 6.1.2 Property Tax Status The subject property’s taxes must be current for the prior twelve (12) months. 6.1.3 Equity The sum of all debt secured by the subject property and all involuntary liens as described herein must not exceed the subject property’s market value. 6.1.4 Maximum Assessment The amount financed by the Program may not exceed twenty percent (20%) of the subject property’s market value. The total annual property tax and assessments on a subject property may not exceed five percent (5%) of the subject property’s market value, as determined at the time of approval for the Property Owner’s contractual Assessment. 6.1.5 Bankruptcy The subject property must not be an asset in a current bankruptcy proceeding. 6.1.6 Liens The subject property must not have any of the following involuntary Liens with a balance greater than one thousand Dollars ($1,000.00):  Federal Income Tax  State Income Tax  Judgment 5-15 CMFA PACE Program Report and Handbook 7 January 16, 2015  Prohibited liens do not include community facilities district assessments or other financing district liens placed on all properties in that particular financing district.  Any non-mortgage-related debt may be subject to review. Payment Arrangement exception: If any of the above-mentioned liens exist, the Property Owner may provide documentation of a payment arrangement with a term of less than 12 months to satisfy this requirement, provided however that the sum of the lien balance and mortgage balance conforms to the Equity requirements described herein. 6.1.7 New Construction New construction is not eligible unless certificate of occupancy has been obtained. 6.1.8 Mobile & Manufactured Homes Mobile homes and manufactured homes are eligible if the homes are permanently attached to the real property, and if the mobile/manufactured home owner(s) also own the underlying land and pay real property taxes (not DMV fees). 6.1.9 HOA Properties within Homeowners Associations (“HOA”) are eligible, subject to HOA restrictions. It is the Property Owner(s) sole responsibility to ensure that the installed products meet all HOA requirements. The Program and Program Administrators are not responsible for any claims made by an HOA, If a HOA requires a Property Owner to remove and or modify any improvements financed by the Program the Property Owner is still responsible for making Payments as agreed in the Assessment Contract.   6.1.10 Commercial Properties Commercial Properties, defined as (i) a property of which the primary use is not residential or (ii) a property used for multi-family housing with five or more units, are eligible for Program financing provided that (a) the Property Owner must provide written notice of the proposed assessment to any lenders with liens secured by the subject property, and (b) the Property Owner must have an energy audit, water audit or engineering report conducted on the subject property recommending the improvements the property owner is seeking to finance.  5-16 CMFA PACE Program Report and Handbook 8 January 16, 2015 6.2 Property Owners To be eligible, the Property Owner(s) must meet the following criteria: 6.2.1 Owner of Record Applicant(s) must be the owner(s) of record according to the property’s Title records recorded with the Participating County. 6.2.2 Mortgage Status All debt secured by the subject property must be current and not more than sixty days past due for the twelve (12) months prior to application date (or since purchase if owned for less than 12 months). 6.2.3 Bankruptcy Property Owner(s) must not be involved in current bankruptcy proceedings or have filed for bankruptcy during the past three (3) years. 6.2.4 Approval All Owners of record must sign the Required Program Documents as described in the Required Documents sections of this Program Handbook. 6.2.5 Legal Entities If the property is held in a Trust or owned by a legal entity such as a Corporation or LLC, the property is eligible for Program participation provided that the applicant(s) produce documentation from the legal entity granting the applicant(s) the authority to enter into such a transaction. 6.3 Projects The Program offers financing for various distributed generation renewable energy sources, energy efficiency improvements, water efficiency improvements, electric vehicle charging infrastructure, seismic strengthening improvements and such other work that will be permanently fixed to property (the “Eligible Products”). The initial Eligible Products are identified by the initial Product Eligibility Guidelines attached as Exhibit B, and the CMFA may update the Product Eligibility Guidelines and, accordingly, the list of Eligible Products authorized for financing from time to time. The financing of the Eligible Products may be structured through a power purchase agreement or lease, the payments under which may be prepaid in whole or in part, subject to the requirements of Chapter 29. The financing can be used to cover the cost of a project to include but not limited to: products; materials; professional 5-17 CMFA PACE Program Report and Handbook 9 January 16, 2015 installation; analysis; design; drafting; engineering; permitting, inspections and fees. To be eligible the project must meet the following criteria: 6.3.1 Project Approval Prior to installation, the Program Administrator must approve each project. To obtain project approval the contractor must define the project’s scope, products to be installed, permits required, costs, obtain Property Owner consent then submit the proposed project for approval through the Program Administrator’s website. Upon receipt of the project request the Program Administrator will determine the projects eligibility for financing. The projects eligibility for financing may be determined based on A) the use of approved products, or B) a projects capacity to: generate renewable energy; make the property energy efficient; conserve water; charge electric vehicles or construct a seismic improvement. If the Program Administrator determines that the project is eligible for financing, a notice to proceed will be sent to contractor and Property Owner(s). 6.3.2 Approved Products Products must be approved by a Program Administrator, and meet minimum energy production, energy efficiency, water conservation, water efficiency and/or other requirements. Product guidelines and eligibility criteria is attached as Exhibit B and available on the Program website, www.cmfa- ca.com/paceprogram/productguidelines. 6.3.3 No Used Products All products and materials must be new. Used, refurbished or remanufactured products are not eligible for financing. 6.3.4 Permanently Affixed Products must be permanently affixed to the subject property. 6.3.5 Installation A licensed contractor that is approved by the Program Administrator must complete all installations. No self-installations are permitted. Installation costs may include, but are not limited to, energy/water audit costs, appraisals, labor, design, drafting, engineering, permit fees, and inspection charges. 5-18 CMFA PACE Program Report and Handbook 10 January 16, 2015 6.3.6 Installation Warranty Contractors must provide a reasonable warranty as determined by a Program Administrator for all work performed. 6.4 Contractors Only contractors that have been approved by a Program Administrator may complete projects financed by the Program. New contractors may apply to participate in the Program by contacting a Program Administrator and requesting a new contractor application. Upon receiving a completed new contractor application, the Program Administrator will review and determine if the contractor meets the necessary criteria for Program eligibility. A contractor must meet the following minimum criteria to be approved and register with a Program Administrator: 6.4.1 Good Standing Contractor must be in good standing with the California State License Board (“CSLB”). 6.4.2 Qualified to Install Contractors may only perform work for which they have the appropriate CSLB license. 6.4.3 Insured & Bonded Contractors must have general liability and workers compensation insurance and are required to carry a bond that adequately protects the Property Owner for the project costs. 6.5 Third Party Transactions The Program may be used in conjunction with third party transactions including but not limited to Leases and Power Purchase Agreements. 6.6 PACE Assessment Refinancing 7 The Program may be used to refinance existing PACE assessments. Financing Terms, Costs and Fees This section contains the general Fees and Terms of the financing offered by the Program. The costs of issuing bonds and administering the Program will be 5-19 CMFA PACE Program Report and Handbook 11 January 16, 2015 financed through participant application fees, proceeds of the financing, and an administrative component of the contractual Assessments. The Program Administrator may apply additional Terms, Rates and Fees to each Assessment as specified in the financing documents and provided to the Property Owner upon application approval. A form of the Assessment Contract, which specifies the terms and conditions that would be agreed to by a Property Owner and the CMFA, is attached as Exhibit C. 7.1 Minimum Assessment Amount The minimum Assessment amount is five thousand dollars ($5,000). 7.2 Maximum Assessment Amount The maximum residential Assessment amount is two hundred thousand dollars ($200,000). Program Administrators may at their own discretion approve amounts over two hundred thousand dollars ($200,000) on a case-by-case basis. Assessments over two hundred thousand dollars ($200,000) require Lender Notification and an Energy Audit. The maximum residential and nonresidential Assessment amount is also subject to the limitation set forth in Section 6.1.4 of this Program Handbook. 7.3 Maximum Interest Rate Interest rates may be up to the maximum rate allowed by law in the subject property’s jurisdiction. 7.4 Financing of Costs and Fees In addition to financing the eligible improvements, the CMFA will finance the following, which will be included in the Assessments: 7.4.1 Recording Fee The recording fee is a one-time fee used to record the Recording Documents at the county recorder’s office. 7.4.2 Initial Administrative Fee The initial administrative fee is a one-time fee used for expenses associated with administration of the Program and issuance of the bonds, which includes closing fees paid to the CMFA, other entities responsible for program administration and management, fees of issuer and bond counsel to the CMFA, trustee fees, as well as other related costs of issuance of any bond. 5-20 CMFA PACE Program Report and Handbook 12 January 16, 2015 7.4.3 Annual Ongoing Administrative Fee The annual ongoing administrative fee is used for ongoing administrative expenses incurred by the Program in connection with collecting Assessments and the administration and management of the Program. 7.4.4 Reserve Deposit Program Administrators may require property owners to finance a deposit to a reserve fund or account, which would be used to pay debt service on a related series of bonds in the event of contractual Assessment installment delinquencies. The amount of such deposit, if any, will be provided in the Program Administrator Procedures Handbook and/or the financing documents. 7.4.5 Interest Before First Payment (Capitalized Interest) An amount equal to the interest between the Bond Issuance Date and the First Payment Date will be added to the principal balance of the Assessment. 7.4.6 Third Party Expenses Costs, Fees and other expenses associated with third party financings including but not limited to Leases and Power Purchase Agreements. 7.4.7 Refinancing Expenses Costs and expenses associated with refinancing activities, including but not limited to principal repayment, processing fees, accrued interest and prepayment penalties. 7.4.8 Additional Fees Additional fees may be applied to each Assessment as specified in the financing documents and provided to the Property Owner upon application approval. 7.5 Terms The Program offers financing Terms up to thirty-nine (39) years. The financing term may not exceed the “useful life” of the installed Eligible Product. The Program Administrator determines the useful life and maximum financing term offered for each assessment. 7.6 Prepayment Assessments can be prepaid in full at any time and may or may not be subject to a prepayment penalty. Any prepayment penalties will be identified in the Assessment Contract. 5-21 CMFA PACE Program Report and Handbook 13 January 16, 2015 7.7 Repayment Property Owners will repay the Principal, Interest and applicable Fees over the financing term as agreed to and specified in the Assessment Contract. Payment will be billed and paid as a line item on the Property Tax Bill. Failure to repay as agreed will result in additional interest and penalties and may result in foreclosure and sale of the Property. 8 Quality Control Program Administrators may at their own discretion conduct the following quality control procedures to ensure that any projects financed by the Program meet the Program and Program Administrators eligibility requirements: 8.1 Inspection Program Administrator reserves the right to schedule an on-site validation visit to confirm that the approved Eligible Product was fully and permanently installed either before or after loan proceeds have been dispersed. 8.2 Building Permits If Building Permits are required for the Project, cause the Property Owner to furnish a copy of the approved permit. Property Owners are responsible for obtaining any required permits and should speak to their contractor to determine if the Project requires a permit prior to submitting a financing request. If permits are required, finalized permit documentation must be submitted with the Completion Certificate. 9 Required Documents The following documents are required for financing by the program. A set of sample documents can be found on the Program website at www.cmfa-ca .com/paceprogram/sampledocuments. A description of each document is as follows: 9.1 Financing Documents The following individual documents are included in the Financing Documents: 5-22 CMFA PACE Program Report and Handbook 14 January 16, 2015 9.1.1 Application To be submitted at the beginning of the process, used by the Program Administrator to determine eligibility and Approval Amount. 9.1.2 Assessment Contract A contract between the Property Owner(s) and Program to provide financing for approved Projects. The Assessment Contract specifies the terms and conditions that would be agreed to by a Property Owner and the CMFA. A form of Assessment Contract is attached as Exhibit C. 9.1.3 Project Definition A document describing the scope, products and costs of each Project being financed in the Assessment Contract. 9.1.4 Right to Cancel A document that allows the Property Owner to cancel an Assessment prior to start of construction, provided to the Property Owner(s) with the Assessment Contract, submitted with the Assessment contract acknowledging receipt, executed only if the Property Owner decides to cancel. 9.1.5 Completion Certificate A Document signed by the Contractor and Property Owner upon acceptable completion of each Project; submitted to the Program Administrator upon completion of each Project. The Completion Certificate must be submitted with the following documents:  A final invoice from all contractor(s)  A Bill of Sale  If required by the jurisdiction, a signed finalized permit from the appropriate city or county building department for all permitted Eligible Products  If no building permits are required for any of that contractor’s installed Eligible Products, the participating contractor’s Business license for the city or county  Conditional Lien Release 9.2 Recording Documents The following documents are recorded with the participating County as public record. 5-23 CMFA PACE Program Report and Handbook 15 January 16, 2015 9.2.1 Notice of Assessment A notice to be sent with the next annual Property Tax statement sent by County revenue authorities to taxpayers detailing the amount of property tax they owe. 9.2.2 Payment of Contractual Assessment Required A notice to be sent to the Auditor-Controller-Treasurer-Tax Collector describing the assessment and Assessment Contract. 9.3 Additional Documents The Program Administrator may at its own discretion require additional documents for Program financing. 9.4 Public Agency Official The CMFA will, from time to time, authorize certain representatives to execute Assessment Contracts on its behalf. Each member of the Board of Directors of the CMFA is authorized to execute Assessment Contracts. Address: California Municipal Finance Authority 2111 Palomar Airport Road, Suite 320 Carlsbad, CA 92011 Phone: (760) 930-1333 Email: pace@cmfa-ca.com 10 General Terms & Conditions Agree to All Program Terms By execution of the Financing Documents, each executing Property Owner certifies that they have read, understood and agreed to the terms of the Program as outlined in this Program Handbook in addition to the terms of the Assessment Contract. Property Owner also thereby certifies that the Property Owner(s), the property, and the products meet all Program eligibility requirements. Property Owner Representations By submitting an application the Property Owner represents that He or She:  Is the legal Property Owner;  Has the authority to install the approved products on the property;  Has received a copy of this Program Handbook; 5-24 CMFA PACE Program Report and Handbook 16 January 16, 2015  Is authorizing the Program Administrator to obtain Credit information; Inspection The Program and Program Administrators reserve the right to inspect any and all products financed by the Program at any time during installation or Term of the Assessment. Rebates and Incentives Federal, state, or local laws or rebate programs may change at any time. The Program and Program Administrators are not liable for any loss of or change in a rebate or tax credit. Property Owners should consult with their tax advisors and/or accountants as to the applicability of any federal tax credits to their personal tax situation. Tax Matters The Program and Program Administrators do not offer any tax advice or related services. Property Owners should consult with a qualified tax advisor or accountant on any tax matters including whether or not he or she recommends deductions of any part of the Contractual Assessment on tax returns. Program Administrator Policy and Procedures Handbook In Addition to this Program Handbook, each Program Administrator will provide a Program Administrator Procedures Handbook to provide additional details and information about the Program and the Program Administrator, and to help Property Owners Apply for and receive financing. Fraudulent Activity Any misrepresentations made to the Program or Program Administrator by a Property Owner or Contractor at any time is likely to cause the Property Owner and/or the Contractor to be terminated from the Program and may result in legal action. 5-25 CMFA PACE Program Report and Handbook 17 January 16, 2015 Renewable Energy Certificates Renewable Energy Certificates (“RECs”) and all related green attributes associated with every Project that is financed by the Program are assigned to the Program Administrator for the length of the financing term. Marketing Guidelines Use of any trademarks, logos or other branding collateral owned by the CMFA or its Program Administrators requires prior written approval. Collection & Use of Data By submitting a Program application, Property Owner agrees that the Program Administrator may disclose his or her personal information to Program staff, and that the Program Administrator and Program staff may disclose that information to third parties when such disclosure is essential to the conduct of the Program Administrators’ or its member agencies’ business or to provide services to Property Owner, including, but not limited to, where such disclosure is necessary to (i) comply with the law, legal process or regulators, (ii) enable the Program Administrator or the Program staff or third parties to provide services to Property Owner and to otherwise perform their duties, and (iii) obtain and provide credit reporting information. In order to receive funding for this Program and to enable communication regarding the State of California’s rebate program, Property Owner consents to the release of his or her name and contact information to the California Solar Initiative or the utility solar rebate program operated by the local Utility. Property Owner further agrees to the release of his or her name and contact information and the subject property’s utility usage data for twelve (12) months before installation of the improvements and throughout the financing term, from the local utility company to the Program Administrator, Program staff, its grantors, and its designated contractors for the purpose of conducting surveys and evaluating the Program and its impact. In addition, Property Owner understands that the CMFA is a public agency which, in certain circumstances, may have an obligation to release information under the California Public Records Act or pursuant to court order. 5-26 CMFA PACE Program Report and Handbook 18 January 16, 2015 No Endorsement The Program and Program Administrator offer no endorsement of the Contractors, Products, or product claims of economic value, warranty, energy savings, safety or reliability of the products. Prepayments Early pre-payment of the assessment may result in pre-payment penalties as set forth in the Assessment Contract. Defaults on Assessment Payments After written notification, defaults in payment of assessments will result in the initiation of foreclosure proceedings. Releases and Indemnification By submitting a Program application, Property Owner thereby acknowledges that the CMFA has established the Program solely for the purpose of assisting the Property Owners in the CMFA participating jurisdictions with the financing of approved products and that the CMFA, Program Administrators, its member agencies and Program staff, including their officers, directors, employees and agents, have no responsibility of any kind for, and shall have no liability of any kind arising out of, the installation, operation, financing, refinancing or maintenance of the products. Property Owner agrees that Property Owner and his or her successors in interest to the fee simple title in the subject property shall be solely responsible for the installation, operation, financing, refinancing or maintenance of the products. Participation in the Program does not in any way obligate the CMFA, Program Administrators, its member agencies and Program staff, including their officers, directors, employees and agents, to guarantee or ensure the performance of any products. Property Owner thereby acknowledges that the subject property will be responsible for payment of the contractual assessment regardless of whether the products are properly installed or operate as expected. Property Owner also agrees to release, defend, indemnify, and hold harmless the CMFA, Program Administrators, its member agencies and Program staff, including their officers, directors, employees and agents, from and against any claims, actions, demands, costs, damages or lawsuits, including the payment of attorneys’ fees and cost of court, arising out of or in any way connected with his 5-27 CMFA PACE Program Report and Handbook 19 January 16, 2015 or her participation in this Program, including, without limitation, the installation, maintenance or repair of the products or compliance with any applicable federal, state or local laws. Property Owner Is Responsible for Products, Permits and Inspections The Property Owner is solely responsible for all products installed on his or her property, including the selection of any contractor(s), energy auditor(s), or equipment, including manufacturers. Any performance related issues are the responsibility of the Property Owner and the Property Owner’s contractor(s). Neither the CMFA, Program staff, including their officers, directors, employees and agents nor the Program Administrator is responsible for the performance of the products. The CMFA and the Program Administrators disclaim any express or implied warranty of merchantability or fitness for a particular purpose in connection with the Property Owner’s purchase or installation of any Product under the Program. Completion of all city and county permitting and inspections are the responsibility of the Property Owner. The Program Administrator will require a copy of the final approved permit to submit a Completion Certificate. Dispute Resolution Signed Assessment Contract: The parties who have signed an Assessment Contract for the Program shall attempt in good faith to promptly resolve any dispute arising out of or relating to any Assessment Contract under the Program by negotiations between the Program Administrator or his or her designated representative and the Property Owner. Either party must give the other party or parties written notice (sent by certified mail) of any dispute. Within thirty (30) calendar days after delivery of the notice, the Program Administrator, and the Property Owner shall meet at a mutually acceptable time and place, and shall attempt to resolve the dispute. If the matter has not been resolved within thirty (30) calendar days of the first meeting, any party may pursue other remedies, including mediation. All negotiations and any mediation conducted pursuant to this clause are confidential and shall be treated as compromise and settlement negotiations, to which Section 1152.5 of the California Evidence Code shall apply, and Section 1152.5 is incorporated herein by reference. Each party is required to continue to perform 5-28 CMFA PACE Program Report and Handbook 20 January 16, 2015 its obligations under the Assessment Contract pending final resolution of any dispute arising out of or relating to the Assessment Contract. If a meeting and mediation is unsuccessful, the matter will be submitted to arbitration. The parties will mutually select an arbitrator. The arbitration will be decided using so-called “baseball arbitration” or “best last offer” where the arbitrator may only choose one of the final two offers. No Signed Assessment Contract: Property Owners who wish to dispute decision(s) made by the Program or Program Administrator, but who have not signed a formal Assessment Contract, shall use a similar process. Written notice must be sent by certified mail to the Program Administrator at the Address indicated in the Contact section of this Program Handbook. The notice must identify the issue(s) for resolution, the circumstances that surround the issue(s), the section in the Handbook that the issue(s) pertain(s) to, and a timeline of events. Within thirty (30) calendar days after delivery of the notice, the Program Administrator with the Property Owner, and shall attempt to resolve the dispute. The Program Administrator shall render a written decision in 30 calendar days and send that decision to the Property Owner. The decision of the Program Administrator is final. 11 Definitions Application Date The Date that a Program Administrator receives an Application for financing. Closing Date The Date that a fully executed Completion Certificate is submitted to the Program Administrator. Recording Date The Date that that the recordation of the Recording Documents is confirmed by the County. Bond Issuance Date The Date of issuance for the Bond secured by the Assessment. 5-29 CMFA PACE Program Report and Handbook 21 January 16, 2015 First Payment Date The date that the first payment is due for an Assessment. Program Administrator The Program Administrators are responsible for administration of the Program and management of the process to ensure that Assessments are made according to Program eligibility requirements. There are currently two Program Administrators: Energy Efficient Equity and PACE Funding Group. Property Owner A Property Owner is the owner of record as determined by the official County records. A property may be a person or entity. In the case of entity ownership, Property Owner may also be used to describe a required signatory for the Financing Documents. 5-30 CMFA PACE Program Report and Handbook 22 January 16, 2015 EXHIBIT A CMFA Boundary Map 5-31 CMFA PACE Program Report and Handbook 23 January 16, 2015 EXHIBIT B Initial Product Eligibility Guidelines 1 Renewable & Alternative Energy Products 1.1 Solar Photovoltaic Product Type Eligibility Specifications Solar Panel 1. Products must be in compliance with CA-SB1 guidelines. 2. Installation Contractor must have the correct CSLB licensure to install solar systems. 3. System must be grid connected unless the property is not currently connected to the grid. 4. Installed per manufacturer specifications. Solar Inverter 1. Products must be in compliance with CA-SB1 guidelines. 2. Installation Contractor must have the correct CSLB licensure to install solar systems. 3. System must be grid connected unless the property is not currently connected to the grid. 4. Installed per manufacturer specifications. 1.2 Solar Thermal Product Type Eligibility Specifications Solar Water Heating 1. System must have the OG-300 System Certification by the Solar Rating and Certification Corporation (SRCC). 2. System Solar Fraction (SF) must be ≥ 0.5. 3. Installed per manufacturer specifications. Solar Pool Heating 1. Product must have the OG-100 Collector Certification by the Solar Rating and Certification Corporation (SRCC). 2. Installed per manufacturer specs. 5-32 CMFA PACE Program Report and Handbook 24 January 16, 2015 1.3 Alternative Energy Product Type Eligibility Specifications Small Wind Turbine 1. Product must be certified by the Small Wind Certification Council as meeting the requirements of the AWEA Small Wind Turbine Performance and Safety Standard (9.1-2009). 2. Product must be grid connected unless the property is not currently connected to the grid. 3. Installed per manufacturer specs. Advanced Energy Storage System 1. System must meet the eligibility requirements outlined in the current California Self-Generation Incentive Program (SGIP) Handbook. 2. System must be tied to a program eligible Solar PV system. 3. System must be grid connected unless the property is not currently connected to the grid. 4. Installed per manufacturer specs. Electric Vehicle Charging Station 1. Product must be certified as meeting the UL Subject 2594 Standard Testing for Charging Stations. 2. Product must be a Level 2 charger with SAE J1772 standard charging plug. 3. Installed per manufacturer specs. Stationary Fuel Cell Power System 1. System must be certified as meeting the ANSI/CSA America FC1 standard. 2. Installed per manufacturer specs. 1.4 Cogeneration Product Type Eligibility Specifications Micro turbine 1. P.U. Code 216.6 2. Installed per manufacturer specs. Internal Combustion Engine 1. P.U. Code 216.6 2. Installed per manufacturer specs. Fuel Cell 1. P.U. Code 216.6 2. Installed per manufacturer specs. 5-33 CMFA PACE Program Report and Handbook 25 January 16, 2015 2 Energy Efficiency Products 2.1 High-Efficiency Heating Ventilation and Air Conditioning (HVAC) Product Type Eligibility Specifications Air-Source Heat Pump 1. Product must be AHRI Certified. 2. Product must be ENERGY STAR Certified: a. Split: SEER ≥ 14.5 and EER ≥ 12 and HSPF ≥ 8.2. b. Package: SEER ≥ 14 and EER ≥ 11 and HSPF ≥ 8.0. 3. Installed per manufacturer specs. Central Air Conditioner 1. Product must be AHRI Certified 2. Product must be ENERGY STAR Certified: a. Split: SEER ≥ 14.5 and EER ≥ 12. b. Package: SEER ≥ 14 and ≥ EER 11. 3. Installed per manufacturer specs. Furnace 1. Product must be AHRI Certified 2. Product must be ENERGY STAR Certified: AFUE ≥ 90%. 3. Installed per manufacturer specs. Evaporative Cooler 1. Product must be listed in California Energy Commission Appliance Efficiency Database. 2. Must be permanently installed through wall or on the roof; window installed product is not eligible. 3. Installed per manufacturer specs. Boiler 1. Product must be AHRI Certified. 2. Product must be ENERGY STAR Certified: AFUE ≥ 85%. 3. Installed per manufacturer specs. Geothermal Heat Pump 1. 1. Product must be ENERGY STAR Certified: a. Closed Loop Water-to-Air: ≥ 14.1 EER and ≥ 3.3 COP b. Open Loop Water-to-Air: ≥ 16.2 EER and ≥ 3.6 COP c. Closed Loop Water-to-Water: ≥ 15.1 EER and ≥ 3.0 COP d. Open Loop Water-to-Water: ≥ 19.1 EER and ≥ 3.4 COP e. DGX: ≥ 15.0 EER and ≥ 3.5 COP 2. Installed per manufacturer specs. 5-34 CMFA PACE Program Report and Handbook 26 January 16, 2015 Hydronic Radiant Heating 1. System must be powered by a high- efficiency heating source. 2. Installed per manufacturer specs. Mini-Split Air Conditioner 1. Product must be AHRI certified. 2. Efficiency: ≥ 15 SEER. 3. Installed per manufacturer specs. Mini-Split Heat Pump 1. Product must be AHRI certified. 2. Efficiency: ≥ 15 SEER and HSPF ≥ 8.2. 3. Installed per manufacturer specs. Biomass / Wood Stove 1. Product must be certified and listed on the EPA Certified Wood Stoves list. 2. Installed per manufacturer specs. Duct Replacement 1. Duct system leakage: a. Partial Replacement: ≤ 15% total system nominal flow b. Full Replacement: ≤ 6% total system nominal flow 2. Duct Insulation R-Value ≥ R-6. 3. Installed per Title 24, Part 6. Heat/Energy Recovery Ventilator 1. Product must be certified by the Home Ventilation Institute (HVI). 2. Installed per manufacturer specs. Exhaust Ventilation Fixture 1. Product must be ENERGY STAR Certified. 2. Installed per manufacturer specs. Whole House Fan 1. Product must be listed in California Energy Commission Appliance Efficiency Database. 2. Installed per manufacturer specs. Attic Ventilation Fixture 1. Product must have thermostat control. 2. Installed per manufacturer specs. Ceiling Fan 1. Product must be ENERGY STAR Certified. 2. Installed per manufacturer specs. 5-35 CMFA PACE Program Report and Handbook 27 January 16, 2015 2.2 Windows Doors and Skylights Product Type Eligibility Specifications Window 1. Product must be Energy Star or NFRC Certified: a. U-Factor ≤ 0.32 and SHGC ≤ 0.30. 2. Installed per manufacturer specs. 3. Product must meet Title 24 requirements. Door 1. Product must be Energy Star or NFRC Certified: a. Opaque: U-Factor ≤ 0.21 and SHGC = Any b. ≤ 1/2-Lite: U ≤ 0.27 and SHGC ≤ 0.30 c. > 1/2-Lite: U ≤ 0.32 and SHGC ≤ 0.30 2. Installed per manufacturer specs. Skylights and Tubular Day Lighting Device 1. Product must be Energy Star or NFRC Certified: U-Factor ≤ 0.55 and SHGC ≤ 0.30 2. Installed per manufacturer specs. Applied Window Film 1. Product must be NFRC Certified. 2. Installed per manufacturer specs. Exterior Window Shading Device 1. Product must be permanently secured to the property with attachments or fasteners that are not intended for removal. 2. Product must be installed to provide shading to at least one window or door. 3. Other exterior structural products including, but not limited to, sunroom enclosures, exterior decks, balconies, roof overhangs, detached/free-standing arbors, detached/free-standing pergolas, and/or carports are NOT eligible. 4. Interior window shading products including, but not limited to, blinds, shutters, shades, or curtains are NOT eligible. 5. Installed per manufacturer specs. 5-36 CMFA PACE Program Report and Handbook 28 January 16, 2015 2.3 Building Envelope Product Type Eligibility Specifications Cool Wall Coating 1. Product must have solar reflectance ≥ 0.5 as tested by recognized third-party laboratory to ASTM C1549-09 standard. 2. Installed per manufacturer specs. Cool Roof - Prescriptive 1. Product must be ENERGY STAR Qualified: a. Low-Slope Roofs: ≥ 0.5 Aged (3 yrs.) Solar Reflectance b. Steep-Slope Roof: ≥ 0.15 Aged Solar Reflectance 2. Product must meet Title 24, Part 6. 3. Installed per manufacturer specs. Cool Roof - Performance 1. If ENERGY STAR Qualified roofing product is not specified, one of the following cool roof performance measures must also be implemented: a. Install ≥ 1” Air-space between the top of the roof deck to the bottom of the roofing product. b. Insulate attic floor to R-value ≥ 38. c. Seal & Insulate attic HVAC duct work to R-8 and ≤ 6% leakage. d. Install an eligible radiant barrier. e. Insulate roof deck to R-value ≥ 4. f. Install roof construction with thermal mass over a membrane with a weight of at least 25 lb/ft2. 2. Project must comply with CA Title 24 Part 6. Project stakeholder is fully and solely responsible to meet any such additional requirements. Attic Insulation 1. R-value ≥ 38. 2. Installed per manufacturer specs. Wall Insulation 1. R-value ≥ 13 to full framing cavity depth. 2. Installed per manufacturer specs. Under-Floor Insulation 1. R-value ≥ 19 to full joist depth. 2. Installed per manufacturer specs. Radiant Barrier 1. Emissivity ≤ 0.1 and Reflectivity ≥ 0.9. 2. Installed per manufacturer specs. Air Sealing 1. Performed to BPI, ENERGY STAR or ASHRAE 62.2 guidelines. 5-37 CMFA PACE Program Report and Handbook 29 January 16, 2015 2.4 High Efficiency Water Heating Product Type Eligibility Specifications Gas Storage Water Heater 1. Product must be ENERGY STAR Certified. 2. EF ≥ 0.67. 3. Installed per manufacturer specs. Electric Heat Pump Storage Water Heater 1. Product must be ENERGY STAR Certified. 2. EF ≥ 2.0. 3. Installed per manufacturer specs. Gas Tankless Water Heater 1. Product must be ENERGY STAR Certified. 2. EF ≥ 0.82. 3. Installed per manufacturer specs. 2.5 High Efficiency Pool Equipment Product Type Eligibility Specifications Pool Pump and Motor 1. Product must be ENERGY STAR Certified: a. Single Speed Pump: EF ≥ 3.8 for single speed b. Multi/Variable Speed/Flow: EF ≥ 3.8 for most efficient speed. 2. Installed per manufacturer specs. Electric Heat Pump Pool Heater 1. Product must be listed in California Energy Commission Appliance Efficiency Database. 2. COP ≥ 4.5. 3. Installed per manufacturer specs. Gas Pool Heater 1. Product must be listed in California Energy Commission Appliance Efficiency Database. 2. Thermal Efficiency ≥ 83%. 3. Installed per manufacturer specs. Automatic Pool Cover 1. Product must be an automatic pool cover UL certified as meeting ASTM F1346 Standard Performance Specification. 2. Product must be permanently installed on an existing swimming pool. 3. Installed per manufacturer specs. 4. Manual swimming pool covers are not eligible. 5-38 CMFA PACE Program Report and Handbook 30 January 16, 2015 2.6 High Efficiency Lighting Product Type Eligibility Specifications Indoor Lighting Fixture 1. Product must be ENERGY STAR Certified and meet Title 24, Part 6 requirements. 2. Product must be permanently installed. 3. Installed per manufacturer specs. Outdoor Lighting Fixture 1. Product must be ENERGY STAR Certified and meet Title 24, Part 6 requirements. 2. Product must be permanently installed. 3. Installed per manufacturer specs. Lighting Control 1. Product must be listed in the California Energy Commission Appliance Efficiency Database. 2. Eligible control types include: a. Automatic Time-Switch b. Daylight/Photo- Sensor c. Dimmer d. Occupant/Motion/Vacancy Sensor 3. Install per manufacturer specs. 2.7 Indoor Water Efficiency Product Type Eligibility Specifications High- Efficiency Toilet Fixture 1. Product must be listed in the CEC Appliance Efficiency Database. 2. Toilet and urinals fixtures are eligible. 3. Flow rate ≤ 1.28 GPF. 4. Installed per manufacturer specs. High- Efficiency Faucet Fitting 1. Flow rate ≤ 1.5 GPM. 2. Must be permanently installed. 3. Installed per manufacturer specs. High- Efficiency Showerhead 1. Flow ≤ 2.0 GPM. 2. Installed per manufacturer specs. 5-39 CMFA PACE Program Report and Handbook 31 January 16, 2015 Hot Water Delivery System 1. System meets the definition of one of the following water delivery options: a. Dedicated Recirculation Line b. Whole House Manifold System c. Demand-initiated Recirculating System d. Core Plumbing System 2. Installed per manufacturer specs. 2.8 Outdoor Water Efficiency Product Type Eligibility Specifications High- Efficiency Sprinkler Nozzle 1. Product must be on SoCal Water Smart Qualified Sprinkler Nozzle product list. 2. Installed per manufacturer specs. Weather- Based Irrigation Controller 1. Product must be WaterSense Qualified. 2. Installed per manufacturer specs. Drip Irrigation 1. Product installed be installed in turf, garden, planter, or flower bed area. 2. Installed per manufacturer specs. Rainwater Catchment System 1. Sized to hold ≥ 50 gallons at one time. 2. Must be permanently installed. 3. Installed per manufacturer specs. Gray Water System 1. System must meet California Plumbing Code, Chapter 16A. 2. Product must comply with local code and permitting requirements. 3. Eligible system types include: a. Single-Fixture b. Multi-Fixture Simple (≤ 250 GPD) c. Multi-Fixture Complex (> 250 GPD) 4. Installed per manufacturer specs. 5-40 CMFA PACE Program Report and Handbook 32 January 16, 2015 Artificial Turf 1. Product must be water and air permeable. 2. Product must be non-toxic and lead free. 3. Product must be recyclable. 4. Product installation must carry ≥ 10 year warranty. 5. Installed per manufacturer specs.   3 Seismic Improvements Product Type Eligibility Specifications Seismic Improvements 1. Retrofitting or Reconstruction Products to Abate falling hazards 2. Structural Strengthening 3. Improvements resisting seismic force levels 4. Improvements providing safe entry and exit 5-41 CMFA PACE Program Report and Handbook 33 January 16, 2015 EXHIBIT C Form of Assessment Contract 5-42 March 18, 2016 California Municipal Finance Authority Attn: Travis Cooper 2111 Palomar Airport Road, Suite 320 Carlsbad, CA 92011 Re: Resolution No. 2016-38 Dear Mr. Cooper: 100 Civic Center Drive Newport Beach, California 92660 949 644-3005 1 949 644-3039 FAX newportbeachca.gov/cityclerk Enclosed please find your certified copy of Resolution No. 2016-38, A Resolution of the City Council of the City of Newport Beach, California, Authorizing the City's Jurisdiction in the CMFA Pace Program; Authorizing the California Municipal Finance Authority to Accept Applications from Property Owners, Conduct Contractual Assessment Proceedings and Levy Contractual Assessments within the City. If you have any questions or need additional information, please contact Deputy Finance Director Steve Montano at (949) 644-3240. Sincerely, q r i Leilani I. Brown, MMC City Clerk Enclosure cc: Steve Montano, Finance (via email only) Dan Matusiewicz, Finance (via email only) CERTIFIED A A TRUE D CORRECT COPY CITY ERK O THE CITY OF r RT BEACH RESOLUTION NO. 2016-38DATE:1 i•. • .moi.: r. � � �': r'. •'sir' .�.:. WHEREAS, the California Municipal Finance Authority ("Authority") is a joint exercise of powers authority, the members of which include numerous cities and counties in the State of California, including the City of Newport Beach ("City); WHEREAS, the Authority has established its CMFA PACE Program ("Program") to allow the financing or refinancing of renewable energy, energy efficiency, water efficiency and seismic strengthening improvements, electric vehicle charging infrastructure and such other improvements, infrastructure or other work as may be authorized by law from time to time (collectively, the "Improvements") through the levy of contractual assessments pursuant to Chapter 29 of Division 7 of the Streets & Highways Code ("Chapter 29") within counties and cities throughout the State of California that consent to the inclusion of properties within their respective territories in the Program and the issuance of bonds from time to time; WHEREAS, Chapter 29 provides that assessments may be levied under its provisions only with the free and willing consent of the owner or owners of each lot or parcel on which an assessment is levied at the time the assessment is levied; and WHEREAS, the City desires to allow the owners of property ("Participating Property Owners") within its territory to participate in the Program and to allow the Authority to conduct assessment proceedings under Chapter 29 within its territory and to issue bonds to finance or refinance Improvements; WHEREAS, the territory within which assessments may be levied for the Program shall include all of the territory within the City's official boundaries; WHEREAS, the Authority will conduct all assessment proceedings under Chapter 29 for the Program and issue any bonds in connection with the Program; and WHEREAS, the City will not be responsible for the conduct of any assessment proceedings; the levy of assessments; any required remedial action in the case of delinquencies in such assessment payments; or the issuance, sale, administration repayment or guarantee of any bonds issued in connection with the Program. Resolution No, 2016-38 Page 2 of 3 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Newport Beach as follows: Section 1; The City Council finds and declares that the foregoing recitals are true and correct. Section 2: The City Council finds and declares that properties in the territory of the City will benefit from the availability of the Program within the territory of the City and, pursuant thereto, the conduct of special assessment proceedings by the Authority pursuant to Chapter 29 and the issuance of bonds to finance or refinance Improvements. Section 3: In connection with the Program, the City hereby consents to the conduct of special assessment proceedings by the Authority pursuant to Chapter 29 on any property within the territory of the City and the issuance of bonds to finance or refinance Improvements; provided: (1) The Participating Property Owners, who shall be the legal owners of such property, execute a contract pursuant to Chapter 29 and comply with other applicable provisions of California law in order to accomplish the valid levy of assessments; and (2) The City will not be responsible for the conduct of any assessment proceedings; the levy of assessments; any required remedial action in the case of delinquencies in such assessment payments; or the issuance, sale, administration, repayment or guarantee of any bonds issued in connection with the Program. Section 4: The appropriate officials and staff of the City are hereby authorized and directed to execute and deliver such certificates, requisitions, agreements and related documents as are reasonably required by the Authority to implement the Program. Section 5: The City Council finds the adoption of this resolution is not subject to the California Environmental Quality Act (`CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Alternatively, the City Council finds the adoption of this resolution is not a project under CEQA Regulation Section 15061(b)(3) because it has no potential for causing a significant effect on the environment. Resolution No. 2016-38 Page 3 of 3 Section 6: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution; and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. Section 7: This resolution shall take effect immediately upon its adoption by the City Council and the City Clerk shall certify the vote adopting this resolution. The City Clerk is hereby authorized and directed to transmit a certified copy of this resolution to the Financial Advisor of the Authority at: California Municipal Finance Authority, 2111 Palomar Airport Road, Suite 320, Carlsbad, California 92011, Attn: Travis Cooper. ADOPTED this 8 day of March, 2016. lane B. Dixon Mayor ATTEST: '� rf �� �rrj✓j jd(Jji Leiiani 1. Brown City Clerk STATE OF CALIFORNIA } COUNTY OF ORANGE } ss. CITY OF NEWPORT BEACH ; 1, Leilani 1. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; that the foregoing resolution, being Resolution No. 2016-38 was duly and regularly introduced before and adopted by the City Council of said City at a regular meeting of said Council, duly and regularly held on the 8ffi day of March, 2016, and that the same was so passed and adopted by the following vote, to wit: AYES: Council Member Peotter, Council Member Duffield, Council Member Selich, Council Member Curry, Council Member Petros, Mayor Pro Tem Muldoon, Mayor Dixon NAYS: None IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 8th day of March, 2016. Leilani I. Brown, MMC City Clerk Newport Beach, California {Seal}