H1. Res. of Intent 6114, C-Pace ProgramCITY OF City of Kalispell
201 1" Ave E. P.O. Box 1997
KALISPELL Kalispell, Montana 59903-1997
(406) 758-7000 Fax (406)7757
REPORT TO: Mayor Johnson and Kalispell City Council
FROM: Doug Russell, City Manager
SUBJECT: Resolution of Intent for C-PACE program
MEETING DATE: December 19. 2022
BACKGROUND: The State of Montana has enacted a Commercial Property Assessed
Capital Enhancement Act of Montana (C-PACE) which allows a local governing body to
designate a district where owners of private commercial, industrial or multi -family housing can
make eligible Energy Conservation Project improvements and repay the costs through
assessments on the property over time to limit the up front cost, theoretically allowing the energy
savings to pay for the installation and equipment costs over the time horizon.
At the work session on December 12, Council heard a presentation from the Executive Director
of the program and advised staff to move forward with the process of creating a district for the
municipal limits of Kalispell. The first process is to pass a resolution of intent setting a date for a
public hearing.
Attached to this memo are the materials from the work session and a Resolution of Intent setting
January 3 as the date for a public hearing.
FISCAL IMPACT: This program has no fiscal impact on the City of Kalispell as the program
establishes an avenue for private facility owners to work with private lenders through an
assessment placed on the annual property tax bills for projects that take advantage of the
program.
RECOMMENDATION: It is recommended that the City Council pass Resolution 6114, a
resolution of intent to establish a C-PACE district within the Kalispell city limits and setting a
date for a public hearing.
ATTACHMENTS:
Resolution 6114
C-PACE Information Sheet
Sample Presentation
RESOLUTION NO.6114
A RESOLUTION CALLING FOR A PUBLIC HEARING ON THE PROPOSED
ESTABLISHMENT OF A COMMERCIAL PROPERTY ASSESSED CAPITAL
ENHANCEMENT (C-PACE) PROGRAM IN KALISPELL, MONTANA.
WHEREAS, in 2021, the Montana Legislature enacted the Commercial Property Assessed
Capital Enhancement Act of Montana, Montana Code Annotated, Title 90, Chapter
4, Part 13 (the "PACE Act"), which allows municipalities to designate a district
within which an authorized local government official and the record owners of a
privately owned commercial or industrial facility, covered multifamily housing
accommodation as defined in § 49-2-305(6), MCA, or agricultural property
("Eligible Properties") may enter into written contracts to impose assessments on
the property to repay the financing by the owners of Energy Conservation Projects
as defined in § 90-4-1302(5), MCA; and
WHEREAS, the installation or modification by property owners of qualified Energy
Conservation Projects in the City of Kalispell will further the goals of increasing
economic efficiency and energy conservation without cost to the public; and
WHEREAS, the City Council finds that financing Energy Conservation Projects through
contractual assessments ("PACE financing") furthers essential government
purposes, including but not limited to, economic development, reducing energy
consumption and costs, and conserving natural resources; and
WHEREAS, the PACE Act designates the Montana Facility Finance Authority ("MFFA") as
state-wide administrator of projects utilizing PACE financing; and
WHEREAS, the City Council, subject to the public hearing scheduled as provided below, finds
that it is convenient and advantageous to establish a program under the PACE Act
and designate the entire geographic area within the City of Kalispell's jurisdiction
as a district within which a designated City of Kalispell representative and the
record owners of qualified real property may enter into PACE financing
arrangements.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
KALISPELL AS FOLLOWS:
SECTION 1. The City of Kalispell intends to make contractual assessments to repay
PACE financing for qualified Energy Conservation Projects available to
owners of Eligible Properties. The program is to be called Kalispell
Commercial Property Assessed Capital Enhancement ("Kalispell PACE").
SECTION 2. The following two types of projects are qualified projects for PACE
financing that may be subject to such contractual assessments:
1. "Energy Conservation Measures" means a permanent cost-effective energy
improvement fixed to real property, including new construction, and intended to
decrease energy or water consumption and demand, including a product, device, or
interacting group of products or devices on the customer's side of the meter that
uses energy technology to generate electricity, provide thermal energy, or regulate
temperature. The exemplary list of energy conservation measures codified at § 90-
4-1302(4), MCA, is incorporated by refence herein.
2. "Renewable Energy System" means a fixture, product, device, or interacting group
of fixtures, products, or devices on the customer's side of the meter that uses one or
more forms of renewable energy to generate electricity or to reduce the use of
nonrenewable energy. The term includes a biomass stove but does not include an
incinerator or a digester. "Renewable Energy" has the meaning provided in § 15-
24-3102, MCA.
SECTION 3. The boundaries of the entire geographic area within the City of Kalispell's
jurisdiction are the boundaries of the district where PACE financing and
assessments can occur.
SECTION 4. Financing for qualified projects under the PACE program will be provided
by qualified third -party lenders chosen by the owners. Such lenders will
execute written contracts with the City of Kalispell's representative to
service the assessments, as required by the PACE Act. The contracts will
provide for the lenders to determine the financial ability of owners to fulfill
the financial obligations to be repaid through assessments, advance the
funds to owners on such terms as are agreed between the lenders and the
owners for the installation or modification of qualified projects, and service
the debt secured by the assessments, directly or through a servicer, by
collecting payments from the owners pursuant to contracts executed
between the lenders and the owners. The lender contracts will provide that
the City of Kalispell will maintain and continue the assessments for the
benefit of such lenders and enforce the assessment lien for the benefit of a
lender in the event of a default by an owner. The City of Kalispell will not,
at this time, provide financing of any sort for the PACE program.
SECTION 5. The MFFA will serve as an independent third -party Program Administrator
on the behalf of the City of Kalispell pursuant to its Montana Commercial
Property Assessed Capital Enhancements Program Guidelines available for
inspection at www.lastbestpace.com (hereinafter the "MFFA CPACE
Program Guidelines"). The MFFA CPACE Program Guidelines are
incorporated in this resolution and made a part hereof for all purposes.
SECTION 6. On January 3, 2023, at 7:00 p.m., in the Council Chambers in the Kalispell
City Hall, the City Council will conduct a public hearing on the proposed
PACE program.
SECTION 7. The City Clerk is hereby authorized and directed to publish a copy of the
Notice of the Public Hearing in substantially the form attached hereto as
Exhibit "A" (which is hereby incorporated herein and made a part hereof)
twice in The Daily Interlake, the official newspaper of the City and
published in Flathead County, Montana.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF
THE CITY OF KALISPELL, THIS 19TH DAY OF DECEMBER 2022.
ATTEST:
Aimee Brunckhorst, CMC
City Clerk
Mark Johnson
Mayor
CITY OF KALISPELL, MONTANA
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that the City Council (the "Council") of the City of
Kalispell, Montana (the "City") will hold a public hearing on the proposed establishment of a
Commercial Property Assessed Capital Enhancement ("C-PACE") district where owners of
private commercial, industrial or multi -family housing can make eligible Energy Conservation
Project improvements and repay the costs through assessments on the property over time, on
January 3, 2023, at 7:00 p.m., in the Council Chambers in the Kalispell City Hall, 201 1st Avenue
East, Kalispell, Montana.
The proposed district establishes an avenue for private facility owners to work with private
lenders through an assessment placed on the annual property tax bills for projects that take
advantage of the program.
On January 3, 2023, at 7:00 pm in the City Hall Council Chambers, 201 First Avenue East,
Kalispell, the Kalispell City Council will hold a public hearing regarding the proposed establishment
of the C-PACE district. The proposed program can be viewed on the City's website at
www.kalispell.com/679/Council-Public-Hearings or in the office of the City Clerk at 201 First Avenue
East, Kalispell.
Any person wishing to address the proposed amendments may appear at this hearing and make
oral statements or present same in writing. Written comments may also be submitted for council
consideration by delivering the same to the City Clerk at 201 First Avenue East, Kalispell, MT 59901,
or by email to publiccomment@kalispell.com prior to the hearing.
For additional information please contact the City Clerk at (406) 758-7756.
Aimee Brunckhorst, CMC
City Clerk
Publish: December 25, 2022
January 1, 2023
�r
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VP
Last Best
PACE
MONTANA C-PACE FINANCING
Commercial Property Assessed Capital Enhancement "C-PACE"
provides building owners with a way to finance energy and
water efficiency improvements as well as renewable energy
generation. A wide range of improvements are eligible for
C-PACE financing allowing it to finance up to 35% of new
construction projects and 100% of retrofit projects.
C-PACE is an attractive alternative to higher -interest and
shorter -term debt and allows for a building owner to put in high -
efficiency systems at no net cost.
To learn more about Montana
C-PACE visit the website:
www.LastBestPACE.com
or contact the MFFA at Mffa@mt.gov
HOW DOES IT WORK?
Now that Montana has enabled C-PACE, property owners can
apply for a C-PACE loan with a capital provider to fund energy
savings improvements, renewable energy systems, or water
conservation equipment. The C-PACE loan is repaid annually
through a special payment that is collected by the county as
part of the real estate tax bill for that property.
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