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March 17, 2010 > Union City to join CaliforniaFIRST program

Union City to join CaliforniaFIRST program

By Shavon Walker

Union City Council authorized the city to join the CaliforniaFIRST program, authorized the California Statewide Communities Development Authority to accept applications from property owners, conduct contractual assessment proceedings, and levy those assessments within Union City city limits, as well as any related actions. This took place during their March 9, 2010 meeting.

CaliforniaFIRST is offered by the California Statewide Communities Development Authority (CSCDA). CSCDA is a California joint powers authority (JPA) sponsored by the League of California Cities and the California State Association of Counties. Member agencies include roughly 337 cities, including Union City, and every county in California. The program is designed to make financing for renewable energy, energy-efficiency and water-efficiency improvements easier for property owners in participating cities.

If a property owner wants to participate and meets the requirements, CSCDA will put "contractual assessments" on the property for the amount of the loan. The property owner will repay the financing over time as part of their property assessment bill. By entering into a contract with CSCDA, the property owners show their consent to the assessments.

One reason for the creation of the CaliforniaFIRST program is that property owners must weigh the upfront cost of energy efficient improvements versus the cost savings. Upfront costs can be very expensive and CSCDA hopes the funding program will make property owners less hesitant about making these improvements. Additionally, the owner can pay back the loan at any time (though there may be early redemption penalties).

Normally, when property maintenance and improvements are funded by borrowing funds, the original borrower is liable for full repayment of the loan even if the property is subsequently sold. In the case of CaliforniaFIRST, if the current owner sells the property the new owner assumes the responsibility for loan repayment and as well as deriving the benefits of the improvements.

Union City will also benefit from property owners' participation in this program. There will be a marked reduction in energy and water usage and greenhouse gas emissions. This will help the city meet its environmental stability goals. Property improvements will also create jobs for those qualified to provide energy-efficient improvements.

The program's underwriting criteria requires property owners to have at least 20 percent equity in the property. The reason for this is because the program wants investment on the bond market at a reasonable price. With their mortgage lender's approval, property owners with less than 20 percent equity can still participate in the program. Once the application is approved, the owner will be given a reservation for funding. The owner can then have a qualified installer make the approved improvements and sign an Assessment Contract.

The fiscal impact of this program can vary depending on a number of factors. The fees to cover the program would be $12,500. If all Alameda County jurisdictions join, the fees could drop to $9,250. A State Energy Grant of $16.5M is proposed to be awarded to Sacramento County on behalf of participating jurisdictions in late spring; if this takes place, the amount will cover the fees in total. If the grant is not awarded to Sacramento County, the Energy Efficiency and Conservation Block Grant (EECG) must be modified to pay for validation and fees. If the city decides it no longer wants to participate in the program, it can pass a resolution to rescind the authorization.

For more information, contact Renewable Funding, LLC at (510) 451-7900, or visit

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