03-04-11 BPU RPT 05 - Laserfiche WebLink

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WATER EHf RG!' LIFE RIVERSIDE PUBLIC UTILITIES Board Memorandum PUBLIC U T I L I T I E 5 BOARD OF PUBLIC UTILITIES DATE: March 4, 2011 ITEM NO: 5 SUBJECT: SEIZING OUR DESTINY - APPROVAL TO PARTICIPATE IN THE ENERGY EFFICIENCY AND WATER CONSERVATION LOAN PROGRAM FOR WESTERN RIVERSIDE COUNTY ISSUE: Approval is requested for participation in the Energy Efficiency and Water Conservation Loan Program for Western Riverside County to help property owners finance solar installations, energy efficiency and water efficient improvements through a loan and voluntary assessment that is paid through their individual property tax bills. The program is administered by the Western Riverside Council of Governments ("WRCOG"). RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: 1. Approve participation in the Energy Efficiency and Water Conservation Loan Program for Western Riverside County; 2. Adopt a Resolution consenting to the inclusion of properties within the City of Riverside into the Energy Efficiency and Water Conservation Loan Program and its jurisdictional boundaries; and 3. Approve the Implementation Agreement with WRCOG foradministration of the Energy Efficiency and Water Conservation Loan Program, BACKGROUND: In 2010,the City established the Energy High Efficiency Loan Program (E-HELP)to allow the City to provide low-interest loans to property owners for installing energy efficiency and renewable generation measures on their properties.The new,special tax district would be citywide but would apply only to those property owners who chose to "opt-in" to the program in order to borrow money for the installation of these energy efficiency measures. However, the Federal Housing and Financing Authority (FHFA) issued a statement, as the overseeing governmental entity of Fannie Mae and Freddy Mac,stating they would not recognize the seniority of the loans financed under programs like the City's. Accordingly, the City halted the E-HELP program pending resolution of this issue. Recently, WRCOG obtained funding from Renovate America and approached the City about participating in its program that would allow residents and commercial entities to borrow money for the installation of renewable energy as well as energy and water efficiency measures. To address the issue pertaining to Fannie Mae and Freddy Mac,WRCOG has issued a disclaimer for their residential programs warning of the issue for all potential participants to address the concern of the FHFA's proclamation. The disclaimer states, "Before completing a Program Application, a property owner should carefully review any mortgage agreement(s) or other security instrument(s) which affect the Property or to which the property owner is a party. Entering into a program assessment contract without the consent of the owner's existing lender(s) could constitute an event of default under such agreements or security instruments. Defaulting under an