Bakersfield City Council committee hears debate over PACE program

Supporters and opponents of the PACE program sit in on a City Council meeting discussing the future of the program in Kern County. (KBAK/KBFX/Alberto Garcia)

For nearly two hours, a packed house of both supporters and opponents gave a Bakersfield City Council committee an earful about the so-called PACE program. The Budget and Finance Committee listened and asked questions, but ended up voting to send the hot button issue to the full council without making any recommendation of their own.

PACE is the Property Assessed Clean Energy program that lets home-owners put the cost for things like solar panel systems or energy improvements on their property tax bills.

Some speakers said that has caused them a lot of problems, others say it's been a real help.

Bert Alton said he was faced with huge medical bills after his wife's death, and struggling with big utility bills. He got energy-efficient upgrades with the HERO program under PACE.

"If it hadn't been for the HERO program, I probably wouldn't have the windows and doors that I have right now," Alton told the committee with emotion. He urged them to save the programs.

But, Margaret Smith said her experience has been a nightmare.

"It adds approximately $3,000 a year to our taxes, and by the end of the contract in 15 years with the HERO interest, we'll be paying $50,000 on the contract," she said. Smith said the savings she was promised just didn't happen.

As a real estate appraiser, Gary Crabtree worries about people who put the costs of the home improvements on their property taxes.

"The properties are going to be virtually unsaleable," he warned, "If you're going to obtain the PACE loan on your property, you better be planning to live there for 15 or 20 years, because you're not going to be able to sell it." The cost of repaying the project ends up as a lien on the property.

Eyewitness News has been told that because PACE liens are tied to the property, they can be transferred when the home is sold.

Opponents say home-owners aren't given enough information about the process when they sign up, and they can end up with big problems.

But, supporters say the PACE programs can give home-owners more options to get improvements that will save them money.

Ken Greer with Banner Air says he does some of the work under PACE, and the energy-saving upgrades lower power bills.

"It definitely helped these people say in their homes," he argued.

And as a real estate agent, Sharon Dickey says she's seen the same with some neighbors. "They couldn’t have resolved their issues of a leaky roof and outrageous utility bills without this program," she said.

Another company that does projects under PACE, stressed it adds to the local economy.

"My company alone went from 8 employees to 30 just because of PACE," Don Lanier said from Northwest Exteriors. He worries he'd have to lay off half his staff if the program here ends.

Under the program, the city had to approve the contractors who could participate, and they've done that with five "providers."

Bakersfield City Manager Alan Tandy said the committee could consider several recommendations: continue the program, continue it for a certain number of years, terminate the approval for the "providers," send the issue to the full council with no recommendation, or ask for another committee meeting on PACE.

Tandy also told the committee that since 2014, 2,706 projects had been completed with PACE.

From the Bakersfield Association of Realtors, Sheri Anthes urged the committee to pull the plug on PACE.

"Bring to a halt this program, that in its current state is doing more harm than good," she said. "It's our position that most of these improvements do not add value and often are misrepresented."

Councilman Willie Rivera asked if the city could make changes to the programs, and Tandy said under PACE local jurisdictions have no enforcement tools. He said the city can only authorize it to exist or not.

Councilman Ken Weir said he thinks the program is "poor public policy," and he made the motion to have the full council look at the issue.

Councilman Andrae Gonzales said the committee didn't have a good option at this point.

"We're put in a position of either continuing a program that has some flaws, or kill a program that benefits many home-owners, as was demonstrated this morning," he said.

Rivera asked that when the issue goes to the full council that city staff provide more information on how the PACE programs are being handled in the Los Angeles area, and what's being done with the regulations at the state and federal levels.

All three councilmembers voted to send the issue to the full council, and City Manager Alan Tandy said that would probably happen in the next 30 or 60 days.

Both the supporters and opponents said they accept the delay in a city decision.

"I think this is what we anticipated," Sheri Anthes said from the real estate group, "It's probably not what we hoped for, but I'm glad the conversation is continuing." She said it's important to have more input from the community.

And Ben Dominguez said he thinks the city has a tough decision ahead. His company, Oasis Air Conditioning, had done a "couple hundred" projects with PACE, Dominguez said. And, he thinks home-owners get another opportunity to get energy improvements with the PACE programs.

"I believe with some better regulations it could stay and it could work," he said.

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