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January 13, 2010 > Program to fund energy efficiency improvements

Program to fund energy efficiency improvements

By Dustin Findley

Council adopted a resolution on January 5 authorizing the City to join the California Communities' California First program. California Communities is a joint powers authority between the League of California Cities and the California Counties Association.

They are sponsoring this program to allow residential property owners in individual cities to finance renewable energy and energy efficiency improvements on their properties.

Unlike traditional bonds, a formation of a district and a vote is not required. This would allow, if the City chooses to participate, an individual property owner to choose whether or not to participate.

California Communities will finance improvements through a bond issue and will levy assessments on the individual property owner based on the amount of energy efficiency work. It is authorized by two recent actions in the Assembly that amended the Streets and Highway Code, Assembly Bill (AB) 811 and AB 474.

Milpitas property owners will be able to work with California Communities to establish what can be done to make their homes more energy efficient, after an "energy audit." Improvements would range from weather stripping, caulking, solar panel installation and window replacement.

Obtaining a loan to finance energy efficiency improvements through California First may be cheaper than other loan products on the open market. Borrowers repay the loan as part of the property's assessment which will remain attached to the property if the previous owner vacates.

The City is not obligated to repay any bonds or assessments and this will not have any effect on the City's bonding capacity.

California Communities is applying to the State of California for the cost of bond administration. Participating cities will not have to pay the one-time participation fee upfront. They will know in a few months if it will be covered. If it is not, a budget appropriation of approximately $15,000 would be required if the City chose to participate.

California First requires minimal administration by staff and allows the City to meet environmental goals.

Staff will research "pre-payment penalties" as mentioned in California First information and ways to inform the public about the program, including advertisements in utility bills which are of minimal cost to the City.

The first step is for a property owner to commission an energy audit from PG&E or third-party consultant.

Chris Schroeder, the City's Purchasing Agent, explained that the minimum funding amount under the program is $5,000. The program's cost is offset by the energy savings homeowners realize through retrofits or addition of solar panels.

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