FERRISBURGH — Ferrisburgh selectmen last week tabled the town’s Property-Assessed Clean Energy (PACE) program, a month after giving the green light to a home energy-efficiency loan program that was narrowly approved by town voters in March 2012.
Selectboard chairwoman Loretta Lawrence said board members were once again uncertain about the town’s responsibilities and potential liability in backing the program, which requires towns to treat loans for home energy efficiency improvements as liens on the properties.
“We’re still not happy with the paperwork,” Lawrence said. “They’re not handling the liens, the title.”
But town energy committee head Bob McNary believes the selectboard just doesn’t like or want PACE, which residents backed by just one vote, 50-49, at the 2012 town meeting.
“It’s obvious the selectboard is not in favor of this program,” he said.
The liens are critical to PACE. With the town’s theoretical tax collection powers behind the loans, banks — in the case of Vermont homes, the National Bank of Middlebury — are then willing to make long-term loans of up to 20 years.
Payments on the loans can therefore be so low that savings on energy improvements — insulation, alternative energy installations like solar panels, or more efficient heating or hot-water systems, for example — can offset the loan payments, PACE program advocates say.
The paperwork in question are contracts between the Vermont Energy Efficiency Corp. (VEIC) and Efficiency Vermont, which is part of VEIC and will administer the program; the National Bank of Middlebury, which will underwrite it statewide; the Opportunities Credit Union, which Efficiency Vermont administrators said will handle paperwork; and the towns that must agree to hold the liens.
Those liens will run with homes in transactions unless dealt with at the point of sale. In case of a default towns are protected by the penalties they can collect for late payments, by an annual $50 fee collected on each loan, and from a $1 million “loan loss reserve fund” created by the Legislature for that purpose. The Legislature authorized the statewide residential PACE program; nationwide, it is more typically used for commercial improvements.
Lawrence said some of the contracts involved changed between Sept. 3, when selectboard members backed the program after a year-and-a-half of waiting for state officials to work out the details, and Oct. 1, when the board tabled it.
Lawrence said town office workers would have to look up deeds and liens for property owners and their representatives, and the selectboard is worried that Ferrisburgh will be held responsible if mistakes are made.
“They send the paperwork back to the towns to make sure their deeds are in good standing,” she said. “Our clerks … would have to check out the deeds like they would for a title search.”
But McNary said he has reviewed the contracts, and they specifically hold towns harmless for any mistakes. McNary also said the contracts are essentially unchanged since September, and that the selectboard refused to let him look at the town attorney’s review of the contracts.
“The requirements really haven’t changed,” McNary said. “I offered to sit down with the selectboard and go over it line by line and was basically rebuffed.”
Lawrence did not agree with McNary’s contention the board opposes PACE, although she said the board has reservations.
“We’re not overly excited, but I wouldn’t say we’re not in favor of it,” Lawrence said. “We want to make sure it’s the right thing to do.”
Efficiency Vermont PACE program director Lani Malapan, who met with the selectboard on Sept. 1, said she agreed more with Lawrence than McNary on the opposition question.
Malapan said Ferrisburgh can opt to sign up for PACE at any point. The first round of signups is going on now, but another round will occur early next year.
“They are considering it. They are looking over the paperwork,” Malapan said. “I just think there are some things they are not 100 percent comfortable with … I wouldn’t say they have closed the door 100 percent on it.”
Malapan agreed more with McNary about the contract issue. She was asked if there were any significant changes.
“No, I don’t think so,” she said. “It was really just to capture what OCU (Opportunities Credit Union) would be doing in the process.”
Malapan said 45 towns have voted to become PACE districts, including Middlebury, Ripton, Monkton, Weybridge and Cornwall in Middlebury. Of those, 11 have already signed contracts with VEIC, Opportunities Credit and the National Bank for the first round of PACE loans, including Cornwall.
Ferrisburgh wants to see how things work in those latter towns before committing, she said.
“They have some concerns with the process and want to see how some of the other towns go through it before they decide what to do,” Malapan said.
Lawrence agreed Ferrisburgh would monitor the process elsewhere.
“I would agree it’s a wait-and-see thing,” she said. “We’ll definitely check into it next spring. There will definitely be another round.”
Lawrence was asked if that meant Ferrisburgh would approve the program if it were shown to work well elsewhere. She replied that no one has yet to apply in Ferrisburgh for a PACE loan.
“It’s possible we’d move forward,” she said. “People haven’t come forward.”
McNary, who said a typical PACE loan might run from $5,000 to $8,500, stressed that the PACE program would not be ideal for everyone. It does carry a high interest rate, 7.25 percent, although he said if payments were lower than savings some might choose to pay that rate over a longer term, especially if it also meant saving energy dollars and improving their property.
And McNary said some people, although they might prefer a simpler approach, such as a home equity loan, might find a PACE loan more affordable.
Essentially, McNary said he sees Ferrisburgh residents being left without a choice.
“This is what it boils down to to me,” he said, “that people are being denied an opportunity here.”
Andy Kirkaldy may be reached at [email protected].