When Kern County supervisors voted last week to terminate the Property Assessed Clean Energy program in unincorporated Kern County, their action raised another critical question:
Will the Bakersfield City Council follow the county's lead by killing PACE loans in the city? Or will the council leave the program in place?
On Wednesday, the council will consider the same questions the county addressed, including whether it is in the public interest to allow private energy improvement loans to be placed on tax bills for collection by a government agency.
"Ultimately, city staff joins the Chamber of Commerce, Association of Realtors, KernTax, and the county Board of Supervisors in recommending against allowing the PACE programs," City Manager Alan Tandy wrote in his administrative report to the council.
Despite those odds, local contractors who do the work and the companies that administer the loans will not go down without a fight. Millions of dollars in profits are at stake, and so are local jobs, proponents argue.
PACE is great program that gives homeowners a chance to install energy-saving, cost-cutting improvements on their homes, they say.
Killing the program would potentially cost hundreds of local jobs and hurt small businesses that install solar panels, upgrade air conditioning systems, install roofing and make other energy-saving home improvements, PACE supporters argue.
The federal program 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.
Realtors, who have led the charge against PACE, say it's harder to refinance a home or in some cases sell a home when the property has the tax assessment attached.
But Matt Bevens, director of market communications for Renovate Americas' HERO Program, argued that buyers do not have to assume the assessment.
"It is part of the negotiation with the seller," he said in an email. "The options during a real estate transaction are the seller pays off the assessment; the buyer assumes the assessment; the buyer and seller negotiate a partial payoff by the seller and a partial assumption by the buyer because the improvements often improve the value and comfort of a home."
Bevens and other proponents note that the HERO Program has beefed up consumer protections for property owners who choose a PACE loan. And pending legislation at the state level is expected to make those and other protections mandatory for all PACE providers.
The city’s Budget and Finance Committee held a hearing May 30 on PACE and the five providers who were authorized by the city to offer their programs within Bakersfield. But the issue proved to be a tough one, and the committee sent the issue back to the full Council without a recommendation.
On Wednesday, the council may not have that luxury.