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Item 2.
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| City Council Work Session | |
| Date: | 10/03/2022 |
| Title: | Commercial Property Assessed Capital Enhancement (CPACE) Financing |
| Presented by: | Andy Zoeller, Finance Director |
| Department: | Finance |
| Presentation: | Yes |
| Legal Review | Not Applicable |
RECOMMENDATION
A presentation from the Montana Facility Finance Authority will be provided to Council. No recommendation is being provided for the work session. After hearing the information, City Council may direct staff to bring forward a resolution at a future meeting.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
The State of Montana Facility Finance Authority (MFFA) will present to City Council information on the Montana Commercial Property Assessed Capital Enhancement (CPACE) Financing program.
Montana Code 90-4-1306 authorizes counties and municipalities to make CPACE financing available in local communities. The program is administered by the State of Montana Facility Finance Authority.
The CPACE program makes energy efficient upgrades and renewable energy investments more attainable to commercial building owners. Montana CPACE can cover up to 100% of eligible project costs. Payments are repaid through a special property tax assessment with terms up to 30 years, or the useful life of the improvements. Projects greater than $75,000 may be eligible for CPACE.
In order for commercial property owners to become eligible for CPACE financing through the Montana Facility Finance Authority, the local government must establish a C-PACE district within its boundaries. Commercial building owners evaluate and select projects that reduce energy costs. The building owners secure financing from a bank or other financial institution. The local government adds the assessment to the annual tax bill and the building owner pays the assessment for up to 20 years, while recognizing savings from the improvement.
Neither credit exposure, dedication of general funds, nor allocation from city budget is required for local governments to implement CPACE. The MFFA establishes uniform standards, documents and best practices across the state. The MFFA serves as a single point of access for stakeholders to access CPACE financing. Serving as an agent of CPACE, MFFA maintains and enforces comprehensive program guidelines to ensure each CPACE project meets the requirements of CPACE statute and program goals, and certifies that repayments occur according to contract.
Montana Code 90-4-1306 authorizes counties and municipalities to make CPACE financing available in local communities. The program is administered by the State of Montana Facility Finance Authority.
The CPACE program makes energy efficient upgrades and renewable energy investments more attainable to commercial building owners. Montana CPACE can cover up to 100% of eligible project costs. Payments are repaid through a special property tax assessment with terms up to 30 years, or the useful life of the improvements. Projects greater than $75,000 may be eligible for CPACE.
In order for commercial property owners to become eligible for CPACE financing through the Montana Facility Finance Authority, the local government must establish a C-PACE district within its boundaries. Commercial building owners evaluate and select projects that reduce energy costs. The building owners secure financing from a bank or other financial institution. The local government adds the assessment to the annual tax bill and the building owner pays the assessment for up to 20 years, while recognizing savings from the improvement.
Neither credit exposure, dedication of general funds, nor allocation from city budget is required for local governments to implement CPACE. The MFFA establishes uniform standards, documents and best practices across the state. The MFFA serves as a single point of access for stakeholders to access CPACE financing. Serving as an agent of CPACE, MFFA maintains and enforces comprehensive program guidelines to ensure each CPACE project meets the requirements of CPACE statute and program goals, and certifies that repayments occur according to contract.
ALTERNATIVES
After hearing the information provided by the State of Montana Facility Finance Authority, City Council may:
- Request additional information;
- Direct staff to bring forward a resolution to a future council meeting; or;
- Direct staff to delay bringing forward a resolution
FISCAL EFFECTS
There is no financial impact on the City of Billings related to the CPACE program, other than some minimal administrative duties.