Commission Meeting Minutes
Minutes of the October 19, 2020 4:45 P.M. Commission Meeting
The special meeting of the Lady Lake Town Commission was held in the Commission Chambers at Lady Lake Town Hall, 409 Fennell Blvd., Lady Lake, Florida with Mayor Pro Tem Ruth Kussard presiding. The meeting convened at 4:45 p.m.
A. Call to Order
Mayor Pro Tem Ruth Kussard
B. Roll Call
|Vincent (Three)||YES arrived 4:53 p.m.|
Thad Carroll, Interim Town Manager/Growth Management; Wendy Then, Senior Planner; and Nancy Slaton, Interim Town Clerk
C. Public Comment
Mayor Pro Tem Kussard asked if anyone had any comments. There were no comments.
D. New Business
1. Conceptual Presentation and Discussion of the Property Assessed Clean Energy (PACE) Program and its Application, Features, and Benefits for the Town of Lady Lake (Thad Carroll)
Growth Management Director Thad Carroll presented the background summary for this agenda item (on file in the Clerk’s Office). He turned the presentation over to Darren Azdell of OutsideIn Architecture of Brooksville, FL.
Mr. Azdell stated this program is a vehicle from the Department of Energy for financing clean energy improvements at a lower interest rate for homeowners, existing businesses, and for new developments.
Mr. Ryan Bartkus of the Florida Development Finance Corporation (FDFC) in Winter Springs, FL, introduced himself. He presented an overview of the program. He stated that his corporation was created as a special finance authority with the purpose of economic development, and PACE is one of the opportunities used for this activity. He noted that this is private funding; no funding is needed by the Town and the repayment method is through an assessment services agreement with the tax collector and property appraiser. He stated consumer protections are in place for homeowners. The Town would need to adopt a resolution to put this program in place. After his presentation, Mr. Bartkus asked if there were any questions.
Commissioner Hannan asked how contractors and residents would be notified of the existence of this program. He asked if there are references available from users of the program.
Mr. Bartkus replied that marketing may be done by PACE through a website and providers themselves could work with contractors in the market to explain the program as a tool for financing options. He gave an example of an air conditioning contractor giving a resident information on the PACE program as a financing option for a repair or replacement. Mr. Bartkus stated he could provide feedback from property owners who have used the program.
Mr. Shay Harold of PACE Equity stated he can also provide case studies, although they would mainly be for commercial projects.
Mayor Pro Tem Kussard clarified that this program is not a loan and PACE financing is provided through private capital. She asked the source of the private capital and what the interest rate would be.
Mr. Harold stated that his company is a funding provider that raised a $2 billion fund from private investors. He stated that a local project is currently being financed for 30 years at approximately 6.1% without a personal guarantee attached.
Commissioner Kussard asked if the rate is different for each project.
Mr. Bartkus replied that it is. He stated that residential financing is normally for amounts between $5,000 to $20,000, and commercial financing averages $5 million to $15 million.
Commissioner Kussard asked that a sample scenario be explained. She then asked how much involvement is required by the Town.
Mr. Bartkus replied that there is involvement by the property appraiser and the tax collector through interlocal agreements, although not by the Town.
Commissioner Kussard asked who keeps track of what is owed by the property owner and if there is an option to pay interest only for a period of time.
Mr. Bartkus replied that tracking would most likely be by the tax collector. He stated there is no interest only payment option other than capitalized interest for perhaps 18 months to two years on commercial property only; not allowed for residential.
Commissioner Kussard asked if there would be a tax lien that would need to be paid off if the property owners were to sell their home. She stated the program could be confusing for some senior residents.
Mr. Bartkus replied that there are options available depending on the lender. On the residential side, government loans such as Fannie Mae require the lien to be paid off if the property were to be refinanced. The majority of tax liens are paid off for residential homes that were sold. He stated the tax lien may be transferred to the new owner on the commercial side if the senior lender gives consent. He stated the Commission could consider moving forward with the program for the commercial side to begin with if they were comfortable with it.
Commission Holden clarified that this funding is not a loan and that there is a debt attached to the property. He asked if they intended to make money on the debt. He stated it seems it would essentially be a hidden loan.
Mr. Bartkus confirmed that it would be a tax assessment on the property and would not be a personal loan to the property owner. He stated there would be no program if there was not the intent to make money.
Mr. Harold reiterated that this program is funding for projects, particularly commercial projects, and does not show up as a loan on balance sheets. The assessment would be shown as an expense item on a balance sheet rather than a long term debt.
Commissioner Hannan asked if this could be compared to a mechanic’s lien.
Mr. Bartkus stated that a contractor could put a lien on the home if they were not paid, but the repayment is being made through the property tax. He reiterated that it would not be a personal loan; it would be an assessment on the property. He stated they would not foreclose on the property, but there would be a lien amount.
Commissioner Hannan asked when the PACE Program started. He stated he would like to see a couple of case studies.
Mr. Bartkus replied that it started in California about 15 years ago, and the program has been in Florida for about 10 years ago. He stated he would be happy to provide information on PACE projects.
Mayor Pro Tem Kussard asked how many years it would take to pay off the assessment for the funding. She stated it should not take 30 years to pay off funding of $25,000.
Mr. Bartkus replied that it would depend on what the funding was used for; funding for a solar system could go out 25 to 30 years because that would be the effective useful life of that product. A new heating and air conditioning system for residential could be for a ten or 15 year term.
Mr. Azdell summarized how this program could benefit the community. He stated that this is a program to allow for lower interest or lower cost financing for “build better” projects that have less impact on the infrastructure.
Commissioner Holden and Mayor Pro Tem Kussard stated they were leery of the program.
Mr. Carroll stated the presenters would be happy for the Commission to move forward with the Town looking at a resolution for the commercial side, and perhaps consider the residential side at a later date.
It was the consensus of the Commissioners to move forward with only the commercial side of the program as presented, by a vote of 3 to 1 (Vincent).
Mr. Carroll stated that staff will proceed with getting a resolution together for the Commission’s consideration. Documentation of case studies will be gathered in the meantime and will be forwarded to the Commissioners for review.
There being no further business, the meeting was adjourned at 5:29 p.m.
s/ Nancy Slaton, Interim Town Clerk
s/ Ruth Kussard, Mayor Pro Tem
Minutes transcribed by Nancy Slaton, Interim Town Clerk