Tuesday Jul 13 2010
Plug pulled on Placer County’s green loans program but red ink still flows
By: Gus Thomson, Journal Staff Writer
The future’s not so bright for a Placer County loan program set up to help finance greener homes. Not only has the Federal Housing Finance Agency put the fledgling mPower program on ice but the county is facing a loss of half-a-million dollars in startup costs if it doesn’t get off the ground again. Treasurer Jenine Windeshausen told the Board of Supervisors Tuesday that she’s working with the county CEO’s office on how to deal with $500,000 in start-up and administrative costs incurred for the mPower loan program. With mPower revenues predicated on loan repayments and interest from businesses and homeowners for improvements like solar-power systems and energy-efficient windows, the program is bleeding red ink with the immediate prospect of no money coming in. Windeshausen said she and other counties involved in state-authorized Property Assessed Clean Energy (PACE) programs are contacting congressmen and lobbying all the way to the White House in an attempt to find a way to restart the now-stalled loan process. “But if we don’t have a program, the chances are slim that we will be able to recover costs,” Windeshausen said. Programs in Placer County and around the country were stung in May when federally authorized finance companies Fannie Mae and Freddie Mac warned that PACE gives counties a preferred position for payments on defaulted loans. Mpower suffered another blow July 6 when the Federal Housing Finance Agency issued a statement that energy retrofit programs now in 22 states “present significant safety and soundness concerns.” With the statement came word that debt-to-income ratios would be tightened on borrowers in areas with PACE programs – effectively reducing the size of loans that are available. Like other programs, Placer’s loans would be paid back on property tax bills – establishing a lien on property if the money isn’t paid and moving ahead of other lenders. Earlier this year, the county anticipated no problems with setting up the mPower program. In January, supervisors voted to approve a consultant services contract and hire a program manager. Tax Sale Services was contracted for no more than $225,000 to do public records and title searches. Patricia Cole, who had worked 18 years with the Sacramento Municipal Utility District, was hired as program manager for a $68,000 yearly contract. It established an office in Roseville this past spring. On Tuesday, Chairman Kirk Uhler requested another discussion at a future board meeting to further understand how the county will be dealing with the blow to the new program. The county planned to loan $33 million. “The state authorized this and we implemented it but the feds have ground us to a halt,” Uhler said. The board also heard from Assistant County Executive Officer Holly Heinzen, who said relief may come in the form of a new bill that would institute a 30-day “trial program” for county efforts like Placer’s mPower.