By JOHN HOFHEIMER
Leader senior staff writer
The Pulaski County Quorum Court has established a creative funding mechanism that allows commercial property owners to borrow money to improve energy efficiency, install renewable energy or promote water conservation improvements on their property through a new Energy Improvement District Board, according to County Judge Barry Hyde.
An ordinance approved this week establishes a seven-member board to oversee PACE, Property Assessed Clean Energy district, and Hyde’s been busy trying to get the cities to buy in.
The program is not for residential housing, according to County Attorney Amanda Mitchell, because two of the largest lenders in the nation — Fanny Mae (Federal National Mortgage Association,) and Freddy Mac (Federal Home Loan Mortgage Corporation) — won’t accept it.
The funding mechanism could be through the sale of bonds, private funds or public funds, according Mitchell.
Hyde or his designate will sit on that board. He’ll nominate and the quorum court will approve qualified people for the other six seats.
Fayetteville has a PACE program, a turnkey operation which is both funded and administered by a third party, according to Mitchell.
The state General Assembly passed a law in 2013 to allow formation of such districts.
Mitchell said Little Rock and North Little Rock seem to be on board and Hyde has reached out to the mayors of Sherwood and Jacksonville, even though it appears that the county has the authority to implement the program throughout, even in incorporated areas.
“I met with the county judge, and he’s wanting to come out in a couple of weeks to see about getting the city involved,” said Jacksonville Mayor Gary Fletcher. “I think it has a lot of merit. It saves money, and it’s a green initiative, reducing the businesses’ carbon footprint.”
“He’s going to come to our Rotary meeting April 15 to talk about it,” said Sherwood Mayor Virginia Hillman. “It sounds like it could be a good thing for us,” she said. “I need to get some more information.”
“This ordinance is a job creator,” says Hyde. “Pulaski County is leading the way with smart options for developers and property owners by creating the state’s largest PACE district. PACE financing will provide a practical way to save energy, reduce emissions and improve air quality while adding to the value of property. Through PACE, Pulaski County is demonstrating its commitment to renewable energy development, energy efficiency and the creation of local jobs.”
A commercial enterprise anywhere in Pulaski County, not just the unincorporated areas, could apply for money — $25,000 or more — to make their building or enterprise more energy efficient or renewable or to conserve water.
A properly set up deal would essentially be free to the property owner because the loan payments would be less than the amount saved by a new, more efficient system.
PACE is an innovative financing program that allows property owners to borrow 100 percent of project costs and pay for them through a special assessment on their annual property tax bill.
The board or its designate would check to see that the payment on the borrowed money would not exceed the money saved for the project and that the enterprise’s cash flow was sufficient.
Once a property owner decides to make a qualified improvement to his property, a PACE loan will pay for 100 percent of the project and a PACE lien will be added to the property assessment.
PACE liens will be paid on an annual basis with property taxes until the loan is satisfied.
The U.S. Energy Department estimates that, if all businesses and institutions in this county took advantage of the cost-effective upgrades, the country’s average annual energy use could be reduced by 25 percent.
“Through job creation and lower energy bills, every dollar invested will produce a positive return in savings,” according to the judge’s office.
A recent joint-study released by the Georgia Institute of Technology and Duke University estimated the creation of nearly 11,000 new Arkansas jobs in the next 15 years and $1.7 billion in total energy savings.
Arkansas residents spent $3.2 billion on electricity in 2007 alone.
The program should be up and running by this fall, Mitchell said.
