Kern County supervisors will take action Tuesday afternoon on a touchy subject.
The controversial PACE program, which funds clean energy upgrades for residential and commercial property, is expected to be eliminated in unincorporated Kern County.
On June 13, after a long and contentious hearing about the program, the Kern County Board of Supervisors voted 4-1 to proceed with termination of the Property Assessed Clean Energy program in county jurisdictions.
Only Supervisor Leticia Perez voted “No,” saying she didn’t feel she had enough information for a good decision.
But the majority of board directed staff in the County Administrative Office to draft resolutions that would close down PACE authorization and bring those resolutions to them at a future meeting.
Tuesday is that future meeting.
In the last few months, the PACE program has been targeted by an aggressive opposition campaign at both the County of Kern and City of Bakersfield levels.
While city leaders are still debating the idea, Kern County is making a decision.
Local Realtors have spearheaded that opposition, claiming that the contractors who pitch PACE loans to the public and the nine companies that administer them here in Kern County have used deceptive marketing to convince people to buy in.
The PACE loans are making it impossible for people to sell their homes and wreaking havoc on the real estate market, they claim.
PACE supporters and administrators have countered that Realtors are engaging in an anti-competitive crusade to scuttle a great program that gives homeowners a chance to install energy-saving, cost-cutting improvements on their homes.
Killing the program would cost jobs and hurt small businesses that install solar panels, upgrade air conditioning systems and make other home improvements.
The debate centers on the way that a PACE loan is funded.
It is a federal program that allows companies to market energy-efficiency loans to property owners and, by partnering with local governments, repay the loan through an increase in property taxes.
The problem, some homeowners have said, is that the tax debt trumps the mortgage on the home. And the loan stays with the home.
Realtors say that makes it impossible to refinance a home or – in some cases – sell the home. People have been stuck in homes they can no longer afford but cannot sell.
That issue, supervisors ruled on June 13, was what made the PACE program unsupportable.
"The super-lien issue is the fundamental flaw, " Supervisor Mike Maggard said at the June meeting.
And supervisors didn’t like the fact that some homeowners felt they’d been scammed by the roofing, solar and air conditioning companies that marketed the PACE program to Kern County residents.
"This is not a public war. This is about policy. This is about the public good, " Supervisor Mick Gleason said. "We' re allowing people with poor credit rating to qualify for a loan they otherwise can' t afford. I think there' s a problem with the idea of this PACE stuff."
PACE administrators argued that most of the poor practices were isolated to certain contractors. Relationships with those contractors have been terminated, they said, and new state legislation has been drafted to protect consumers.
But supervisors didn’t go for it.
On Tuesday, county staff said, companies that run PACE in Kern County are expected to make one last ditch effort to change supervisors’ minds.
County Legislative and Policy Analyst Thomas Brown said he was not expecting too many fireworks.
But, he said, there is some indication that PACE supporters were hoping the supervisors would at least consider keeping the commercial PACE program in effect even if residential PACE was eliminated.
But at this time, Brown said, the county is going to proceed with the direction the majority of the board gave staff and eliminate the entire PACE program, both commercial and residential.