FAIRBORN – Fairborn City Council will soon be considering legislation that would designate the entire city as an Energy Special Improvement District (ESID).
Assistant City Manager Michael Gebhart presented the ESID proposal to Mayor Dan Kirkpatrick, Deputy Mayor Paul Keller and city council members during the June 12 work session and noted that clean energy financing is another economic development and redevelopment tool that the city could profit from at this time.
By creating an ESID, property owners of non-residential properties, such as commercial, manufacturing, logistics, healthcare, educational, non-profits and governmental, would be able to use Property Assessed Clean Energy (PACE) financing for energy efficiency and alternative energy improvements to existing buildings. These improvements would include the replacement of lighting, HVAC units, boilers, chillers, air handlers, windows, doors, roofs, insulation, elevators, solar panels, geothermal/renewable energy and water conservation upgrades.
Gebhart said the PACE financing method is similar to a loan with a term length and interest rate. However, unlike a loan, the repayment is tied to the property and not the property owner. Therefore, a property owner can finance up to 100 percent of the upfront expenses of the energy improvements. The PACE repayment would then be spread over the lifespan of the improvements so that the savings generated from the energy upgrades would be greater than the annual repayment.
“The amount borrowed is repaid through a special assessment placed on the property owner’s property tax bill,” Gebhart said. “Since the loaned money is tied to the property tax bill instead of the borrower’s credit, it does not count as debt.”
Once city council approves a resolution to designate the city as an ESID, council members would establish a governing body, known as the ESID Board. Gebhart said the primary purpose of the board would be to review and approve PACE applications submitted by property owners and their lending sources.
“We would like to designate the Fairborn Development Corporation (FDC) to act as the ESID board,” said Gebhart. “The FDC board members would address the ESID projects on an as-needed basis.”
He also noted that any property owner interested in participating in the voluntary program would first select a PACE energy consulting firm that would perform an energy audit. Once the energy audit is completed, the property owner would explore different financing options and then submit an application to the ESID Board for approval. If the application is approved, the project moves forward, and the county auditor places the assessment on the borrower’s property tax bill.
“The city does not provide any of the financing, neither does the ESID board,” Gebhart said. “Essentially, there are six lenders throughout the country that specialize in these programs.”
Gebhart also told council members that an ESID board must be in place before the city can move forward with the PACE financing program.
“The next step for us, if council is agreeable, is to approach the FDC and ask them if they would serve as the ESID board,” said Gebhart. “If they agree to it, we will then start the process and move on to writing up the legislation.”
Linda Collins is a freelance reporter for Greene County News.