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AGENDA ITEM NO. 9.
CITY OF HAWTHORNE City Council AGENDA BILL For the meeting of 07/08/2025 Originating Department: City Attorney |
City Manager:
Department Head:
SUBJECT:
RESOLUTION NO. 8546 - RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HAWTHORNE, CALIFORNIA TO APPROVE THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY (“CSCDA”) OPEN PACE PROGRAM.
RECOMMENDED MOTION:
Staff recommends that the City Council adopt Resolution No. 8546 approving the CSCDA Open PACE Program.
DISCUSSION:
State law authorizes contract assessment districts in charter and general law counties to provide financing for renewable energy, energy efficiency, and water conservation (among other measures with a communal sustainability or resiliency benefit) improvements to qualified property owners. A property owner voluntarily enters into a contractual agreement with one of the Joint Power Authority (JPA) assessment districts in which they reside to access financing (based on the available equity in their property) by securing a lien on their property and re-pay it as a special tax or assessment on their property tax bill. This financing mechanism is referred to as Property Assessed Clean Energy (PACE).
PACE offers an alternative to traditional means of financing property improvements such as paying cash, taking a home equity line of credit (HELOC), or using credit cards. PACE financing eligibility is primarily based on property equity and ability to pay, rather than the credit worthiness of the applicant. PACE financing has fixed term interest rates with terms generally longer than those of other private and/or unsecured loans, but equal to the average useful life of the improvement being undertaken. Some other advantages of PACE financing include 100% financing for eligible improvements, and the reliability of pre-approved, vetted, trained and strictly monitored contractors. Participation in PACE financing is voluntary.
Because the capital for PACE financing is from private sources and the transactions are between program administrators and building owners, the City will incur no cost or risk associated with program activities. The City is not required or expected to provide administrative support or marketing for the programs, which are conducted by the program administrators. However, many jurisdictions throughout the state have found that partnering in outreach and marketing can enhance the efficacy of the program. The City is not obliged to repay bonds issued by the JPA or assessments levied on the participating properties.
Enabling the City of Hawthorne’s PACE availability by approving licensed program administrators will create a competitive marketplace that provides a variety of financing options with more favorable terms to home and business owners. Doing so may also incentivize more property owners to undertake improvements, resulting in the creation of more renewable energy and local jobs, reduction in energy use, greenhouse gas emissions and water consumption, among other improvement categories.
In order to provide Hawthorne property owners with a variety of trusted PACE finance options, the Council is asked to consider admitting licensed PACE providers by adopting a resolution approving CSCDA Open PACE Program to operate in the City.
The City of Hawthorne is already a member of CSCDA and has been since 2001 (City resolution 6691 – October 8).
Additional legislation expanded projects eligible for financing to include water efficiency improvements, electric vehicle charging stations, seismic improvements, and wildfire resiliency.
Additional laws also expand the original legislation and provide for additional consumer protection, such as the right to cancel PACE financing within three business days of execution (five days for those persons 65 years and older), recorded telephone calls to residential consumers to confirm the key terms of the agreement, and state oversight, among other things.
PACE in Los Angeles County
Over 14,500 homes have been transformed, leading to the installation of 46 megawatts of solar energy. This initiative has successfully abated 715,000 tons of carbon emissions and conserved an astonishing 1.97 billion gallons of water, all while generating $643 million in utility bill savings for participants. Furthermore, the PACE improvements have spurred economic growth by creating 6,343 jobs for small businesses engaged in these impactful projects. Below are the 48 LA County cities that’ve joined CSCDA’s Open-PACE program:
Agoura Hills, Alhambra, Arcadia, Baldwin Park, Bell, Claremont, Commerce, Cudahy, Duarte, El Monte, Gardena, Glendale, Glendora, Inglewood, La Canada Flintridge, La Puente, La Verne, Lancaster, Long Beach, Los Angeles, Lynwood, Montebello, Monterey Park, Norwalk, Palmdale, Paramount, Redondo Beach, Santa Fe Springs, Santa Monica, Torrance, Walnut, West Covina, West Hollywood
PACE offers an alternative to traditional means of financing property improvements such as paying cash, taking a home equity line of credit (HELOC), or using credit cards. PACE financing eligibility is primarily based on property equity and ability to pay, rather than the credit worthiness of the applicant. PACE financing has fixed term interest rates with terms generally longer than those of other private and/or unsecured loans, but equal to the average useful life of the improvement being undertaken. Some other advantages of PACE financing include 100% financing for eligible improvements, and the reliability of pre-approved, vetted, trained and strictly monitored contractors. Participation in PACE financing is voluntary.
Because the capital for PACE financing is from private sources and the transactions are between program administrators and building owners, the City will incur no cost or risk associated with program activities. The City is not required or expected to provide administrative support or marketing for the programs, which are conducted by the program administrators. However, many jurisdictions throughout the state have found that partnering in outreach and marketing can enhance the efficacy of the program. The City is not obliged to repay bonds issued by the JPA or assessments levied on the participating properties.
Enabling the City of Hawthorne’s PACE availability by approving licensed program administrators will create a competitive marketplace that provides a variety of financing options with more favorable terms to home and business owners. Doing so may also incentivize more property owners to undertake improvements, resulting in the creation of more renewable energy and local jobs, reduction in energy use, greenhouse gas emissions and water consumption, among other improvement categories.
In order to provide Hawthorne property owners with a variety of trusted PACE finance options, the Council is asked to consider admitting licensed PACE providers by adopting a resolution approving CSCDA Open PACE Program to operate in the City.
The City of Hawthorne is already a member of CSCDA and has been since 2001 (City resolution 6691 – October 8).
Additional legislation expanded projects eligible for financing to include water efficiency improvements, electric vehicle charging stations, seismic improvements, and wildfire resiliency.
Additional laws also expand the original legislation and provide for additional consumer protection, such as the right to cancel PACE financing within three business days of execution (five days for those persons 65 years and older), recorded telephone calls to residential consumers to confirm the key terms of the agreement, and state oversight, among other things.
PACE in Los Angeles County
Over 14,500 homes have been transformed, leading to the installation of 46 megawatts of solar energy. This initiative has successfully abated 715,000 tons of carbon emissions and conserved an astonishing 1.97 billion gallons of water, all while generating $643 million in utility bill savings for participants. Furthermore, the PACE improvements have spurred economic growth by creating 6,343 jobs for small businesses engaged in these impactful projects. Below are the 48 LA County cities that’ve joined CSCDA’s Open-PACE program:
Agoura Hills, Alhambra, Arcadia, Baldwin Park, Bell, Claremont, Commerce, Cudahy, Duarte, El Monte, Gardena, Glendale, Glendora, Inglewood, La Canada Flintridge, La Puente, La Verne, Lancaster, Long Beach, Los Angeles, Lynwood, Montebello, Monterey Park, Norwalk, Palmdale, Paramount, Redondo Beach, Santa Fe Springs, Santa Monica, Torrance, Walnut, West Covina, West Hollywood
ECONOMIC DEVELOPMENT STRATEGIC PLAN:
Not Applicable.
FISCAL IMPACT:
None. Adoption of the resolution and actions contained herein will not result in any costs to the City. All costs of marketing, financial, and program administration are borne by the program administrators and covered with private capital.
NOTICING PROCEDURE:
72 hours posted notice pursuant to the Raplh M. Brown Act.