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Agenda 07/09/2019 Item #16A20 (Resolution - PACE)07/09/2019 EXECUTIVE SUMMARY Recommendation to repeal and replace Resolution No. 2017-130 by establishing a new Property Assessment Clean Energy (PACE) program within the unincorporated areas of Collier County for commercial, industrial, and commercial multifamily properties, approve a standard form membership agreement with PACE providers, and authorize the County Manager to execute the standard form membership agreement with PACE providers. _____________________________________________________________________________________ OBJECTIVE: To establish a new Property Assessment Clean Energy (PACE) program within the unincorporated areas of Collier County for commercial, industrial, and commercial multifamily properties only. CONSIDERATIONS: In 2017, by Resolution No. 2017-130, the Board of County Commissioners adopted a Resolution establishing the Property Assessment Clean Energy (PACE) program within the unincorporated areas of Collier County for residential, commercial and industrial properties. Since that time, by Resolution Nos. 2017-127, 2017-128, 2017-129, and 2017-153, four PACE providers had entered into the standard membership agreement and were operating a PACE program within Collier County. As a result of potential abuses by PACE contractors, this item was discussed by the Board on March 12, 2019, March 26, 2019, June 11, 2019, and June 25, 2019. At the June 25, 2019 Board meeting, the Board voted to remove all residential single family detached, single family attached, and townhouse structures from the PACE program and instructed the County Manager to bring back a resolution and standard membership agreement for a commercial, industrial, and commercial multifamily structures. The purpose of the PACE Program is to facilitate the financing of qualifying improvements in accordance with Section 163.08, Florida Statutes, for County property owners within unincorporated Collier County. This new Resolution provides for limitations by structures types and excludes single family detached, single family attached, a nd townhouse structures, as defined by the Florida Building Code, Residential, from participating in the PACE Program. The proposed Standard Membership Agreements are virtually identical with those the Board previously approved, with the only substantive change being the removal of residential single family detached, single family attached, and townhouse structures. Staff continues to recommend a multiple Pace Provider platform where more than one Pace Provider can serve the same geographical area of uninc orporated Collier County, as it allows property owners to determine which program is best suited to their needs. Attached, as part of this item, is the standardized form membership agreement that sets forth the terms and conditions for the Collier County PACE program. Executed standard membership agreements shall be approved by the County Manager or designee for each PACE Provider that will offer PACE financing in Collier County. Comparable to the original PACE Program, standard form membership agreements may need to be revised slightly to address differences in the terms of the existing interlocal agreements for each Pace Provider, while keeping the substance of the membership agreement the same where there is no conflict between the standard form membership agreement and the existing interlocal agreement. FISCAL IMPACT: It is the responsibility of PACE Provider and a Third-Party Administrator to secure the private financing necessary for the implementation of the program, and they are responsible for recovering any losses in the event of defaults on the assessments. They cover the costs of collecting the assessments and administrative costs through their fees and interest rates. GROWTH MANAGEMENT IMPACT: There is no Growth Management Impact associated with this action. 16.A.20 Packet Pg. 720 07/09/2019 LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, is approved as to form and legality, and requires majority vote for approval. -JAK RECOMMENDATION: That the Board of County Commissioners repeals and replaces Resolution No. 2017-130 by establishing a new Property Assessment Clean Energy (PACE) program within the unincorporated areas of Collier County for commercial, industrial, and commercial multifamily properties, approves a standard form membership agreement with PACE program, and authorizes the County Manager to execute the standard form membership agreement with PACE providers. Prepared by: James French, Deputy Department Head, Growth Management Department ATTACHMENT(S) 1. Resolution w-Exhibit A-Membership Agreement(PDF) 2. PACE (PDF) 16.A.20 Packet Pg. 721 07/09/2019 COLLIER COUNTY Board of County Commissioners Item Number: 16.A.20 Doc ID: 9522 Item Summary: Recommendation to repeal and replace Resolution No. 2017-130 by establishing a new Property Assessment Clean Energy (PACE) program within the unincorporated areas of Collier County for commercial, industrial, and commercial multifamily properties, approve a standard form membership agreement with PACE providers, and authorize the County Manager to execute the standard form membership agreement with PACE providers. Meeting Date: 07/09/2019 Prepared by: Title: Operations Analyst – Growth Management Operations & Regulatory Management Name: Judy Puig 07/02/2019 1:50 PM Submitted by: Title: Division Director - Operations Support – Growth Management Operations & Regulatory Management Name: Kenneth Kovensky 07/02/2019 1:50 PM Approved By: Review: Office of Management and Budget MaryJo Brock Level 3 OMB Gatekeeper Review Skipped 07/02/2019 12:36 PM County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 07/02/2019 3:10 PM County Manager's Office Leo E. Ochs Level 4 County Manager Review Completed 07/02/2019 3:17 PM Board of County Commissioners MaryJo Brock Meeting Pending 07/09/2019 9:00 AM 16.A.20 Packet Pg. 722 16.A.20.a Packet Pg. 723 Attachment: Resolution w-Exhibit A-Membership Agreement (9522 : PACE Program) 16.A.20.a Packet Pg. 724 Attachment: Resolution w-Exhibit A-Membership Agreement (9522 : PACE Program) Pace Standard Agreement 7/09/2019 1 “EXHIBIT A” STANDARD MEMBERSHIP AGREEMENT BETWEEN ___________________________________ AND COLLIER COUNTY This Agreement (“the Agreement") is entered into this______ day of____ , 2019 by and between the ___________________________, a public body corporate and politic (the "Authority") created as a separate legal entity pursuant to Section 163.01(7), Florida Statutes, and Collier County, a political subdivision of the State of Florida (the "County" or “Collier County”) (collectively, the "Parties") for the purpose of providing a Property Assessed Clean Energy ("PACE") program within Unincorporated Collier County. NOW, THEREFORE, in consideration of the terms and conditions, promises and covenants hereinafter set forth, the Parties agree as follows: 1. Purpose. The purpose of this Agreement is to facilitate the financing of qualifying improvements through a PACE program, in accordance with Section 163.08, Florida Statutes, for County property owners within Unincorporated Collier County, including commercial, industrial and, commercial multifamily properties. 2. Qualifying Improvements. The Authority may provide "Qualifying Improvements" to real property within Unincorporated Collier County, in accordance with Section 163.08, Florida Statutes, and subject to the terms of this Agreement, as well as applicable federal, state, and County law. 3. Financing Agreement. Before extending any financing or subjecting any participating real property within the County, to the non-ad valorem special assessment authorized therein, the Authority shall, on a non-exclusive basis pursuant to the Section 163.08, Florida Statutes and this Agreement, enter into a Financing Agreement with properly owner(s) within Unincorporated Collier County who qualify for financing through the Authority. This Financing Agreement shall include a thorough explanation of the PACE financing process and specify at what point in the process the special assessment will be added to the property's owner's property taxes (after completion of the project(s), permit approval, and approval by the property owner). 4. Assessment by Authority. The Parties acknowledge and agree that the non-ad valorem assessments arising from a property owner's voluntary participation in the PACE Program are imposed by the Authority and not by the County. 5. Agreements with Tax Collector and Property Appraiser. This Agreement shall be subject to the express condition precedent that Authority enter into separate agreement(s) with the tax collector and the property appraiser which shall provide for the assessment and collection of any non-ad valorem special assessments imposed by the Authority and establish Cost Recovery Reimbursements to the Collier County Tax Collector and Collier County Property Appraiser (if any) to be charged for the collection and/or handling of those non-ad valorem assessments. Additionally, the Parties agree that the Property Appraiser's and Tax Collector’s assessment, collection, and distribution of any such non-ad valorem assessments imposed by the Authority are purely ministerial acts. 16.A.20.a Packet Pg. 725 Attachment: Resolution w-Exhibit A-Membership Agreement (9522 : PACE Program) Pace Standard Agreement 7/09/2019 2 6. Non-Exclusive. The Program is non-exclusive, meaning the County specifically reserves the right to authorize other entities to provide a similar program under Section 163.08, Florida Statutes; or create its own program under Section 163.08; Florida Statutes. 7. Boundaries of for Program. For purposes of the PACE Program authorized by this Agreement, the boundaries of the Authority shall include the legal boundaries of Unincorporated Collier County, which boundaries may be limited, expanded, or more specifically designated from time to time by the County by providing written notice to the Authority. 8. Properties. Within the Unincorporated area of Collier County, commercial, industrial, and commercial multifamily properties may be eligible. Residential single family detached, single family attached, and townhouse structures, as defined by the Florida Building Code, Residential, are not eligible for the PACE program within the unincorporated area of Collier County. 9. PACE program guidelines and other materials. All PACE materials for use within Unincorporated Collier County, or otherwise related to this Agreement, including but not limited to program guidelines, rules, consumer agreements, consumer financing agreements, and promotional materials, shall be fully consistent with the Collier County Land Development Code, Collier County Code of Laws and Ordinances, and Collier County resolutions, all of which may be amended from time to time, and with this Agreement and applicable federal and state laws. The Authority acknowledges and agrees that PACE materials for use within Unincorporated Collier County, or otherwise related to this Agreement, shall be modified accordingly and reviewed on a continuing basis for consistency with applicable County, state and federal laws. It shall be the obligation of the Authority to establish and maintain such consistency. County shall provide written notice to the Authority of any proposed legislative changes to the PACE program via electronic transmission or US Mail no later than five (5) days prior to the public hearing on the proposed legislative changes. 10. Local program Guidelines. The Parties agree that the County may in the future implement its own local program guidelines or affirmatively modify the program guidelines to be utilized in Unincorporated Collier County. If the County decides to exercise these rights, it shall give sixty (60) days written notice to the Authority. Any such local program guidelines can be amended and changed only by resolution of the Board of County Commissioners. The County may adopt more restrictive guidelines than those of the Authority. Notwithstanding anything stated herein to the contrary, the PACE materials, including the Authority's program guidelines, shall be fully consistent with applicable County, state and federal laws. 11. Disclosures. The PACE materials, including but not limited to the Financing Agreement with the property owner, consumer agreement, and program guidelines, shall clearly disclose, in plain language, the fixed interest rate to be charged, including points, as well as any and all fees or penalties, that may be separately charged to the property owner, including prepayment penalties for commercial, industrial, and commercial multifamily properties, and potential late fees. To the extent that additional fees are not specifically disclosed in a written agreement with the property owner, the subsequent charging or collecting of any such additional fees by the Authority or its agents, administrators, or subcontractors shall be prohibited. The Authority shall place the following sentence or similar language (without the County's logo) on all customer communications and agreements: 16.A.20.a Packet Pg. 726 Attachment: Resolution w-Exhibit A-Membership Agreement (9522 : PACE Program) Pace Standard Agreement 7/09/2019 3 Please be aware that Collier County government is not operating or administering the PACE program in any way. All contractual PACE agreements are between property owners and the Authority, a non-County entity. All questions and concerns about this PACE Program should therefore be addressed to: [Authority contact / remedy information]. 12. Consumer Assistance. In order to assist those persons who may have difficulty reading or understanding the PACE materials, such as the Financing Agreement, program guidelines and other consumer agreements, the Authority shall provide optional one-on-one assistance regarding the Authority Program, program terms, program process, program documents, and all other pertinent information. Information regarding this option for personal assistance shall be printed in English, Spanish, and Haitian Creole on PACE promotional materials. 13. Disclosures related to lenders. While the Authority will provide required forms for lender notification, the Authority shall make clear that the ultimate responsibility for addressing issues with existing lenders remains with property owners. A statement to this effect should be placed in the PACE materials, including all agreements with the property owner. In addition, the PACE materials, including all agreements with the property owners, shall include a statement that strongly urges the property owner to increase monthly escrow immediately after financing is released. 14. Administrative Fees. The County may impose administrative fees to cover the County's administrative costs related to this Agreement. Such administrative fees may be established by the Collier County Board of County Commissioners, by separate action, and shall be charged to the Authority. The County shall provide written notice to the Authority of any proposed legislative changes to the PACE program via electronic transmission or US Mail no later than five (5) days prior to the public hearing on the proposed legislative changes. 15. Responsibilities of the Authority. The Authority shall be solely responsible for all matters associated with origination, funding, financing, and administration of each of the Authority's authorized non-ad valorem assessments, including responding to any complaints or inquiries by participants, tax certificate holders, lenders or others relating to the special assessments, the financing agreements, the qualifying improvements, or any other aspect of the Program. 16. Survival of Assessments. During the term of this Agreement, the Authority may, on a non- exclusive basis, levy voluntary non-ad valorem special assessments on participating properties within the boundaries of Unincorporated Collier County to help finance the costs of Qualifying Improvements for those individual properties. Those properties receiving financing for Qualifying Improvements shall be assessed from time to time, in accordance with Section 163.08, Florida Statutes, and other applicable law. Notwithstanding termination of this Agreement or notice of a change in boundaries by County as provided for herein, those properties that have received financing for Qualifying Improvements shall continue to be a part of the Authority, until such time that all outstanding debt has been satisfied. 17. Term. This Agreement shall remain in full force and effect from the date of its execution by both Parties. Any Party may terminate this Agreement for convenience upon ninety (90) days prior written notice (“Termination Notice"). Beginning on the date the Authority receives a Termination Notice from the County ("Termination Date"), the Authority shall not approve any new applications affecting property within the legal boundaries of the Unincorporated Collier County referenced in the Termination Notice. Notwithstanding termination of this Agreement, however, 16.A.20.a Packet Pg. 727 Attachment: Resolution w-Exhibit A-Membership Agreement (9522 : PACE Program) Pace Standard Agreement 7/09/2019 4 property owners whose, applications were approved prior to the Termination Date, and who received funding through the Program, shall continue to be a part of the Authority, for the sole purpose of paying their outstanding debt, until such time that all outstanding debt has been satisfied. 18. Kick-Back Policy. PACE programs shall have and shall strictly enforce anti-kickback policies and procedures that prohibit direct financial or other monetary incentives to contractors in exchange for or related to such contractor being awarded work under a PACE program, excepting payment for the contractor's installation of eligible improvements. 19. Termination for cause. In the event that Collier County determines that the Authority has violated any of the terms of this Agreement, the County shall terminate this Agreement for cause via written notice to the Authority. 20. Consent. This Agreement, together with the resolution by the Collier County Board of County Commissioners approving this Agreement, shall be considered the Parties consent to authorize the Authority within Unincorporated Collier County, as required by Section 163.08, Florida Statutes. 21. County Coordinator. The County Manager or his/her designee shall serve as the County's primary point of contact and coordinator. 22. County Responsibility. Collier County shall have no responsibility for the payment of Authority fees or the Authority’s third party administrator fees, of any kind, including but not limited to termination fees, Opt-in fee, maintenance fee, or Opt-out fees. In the event that fees become due, the Authority shall pay any and all associated costs within 30 calendar days. If Authority membership is required, County shall also be a non-voting member of the Authority. 23. Carbon or Similar Credits. In the event that the Financing Agreement or any other PACE agreement with the property owner provides for transfer of any carbon or similar mitigation credits derived from Qualifying improvements to the Authority, any such carbon or similar mitigation credits derived from Unincorporated Collier County, shall be shared in equal parts between the Authority and Collier County. 24. Contingency Plans. In the event that Florida's PACE statute is found to be unlawful, struck down by a court, or if the PACE assessments are determined by a court to not be special assessments, the Authority agrees and acknowledges that Collier County may not be able to place PACE assessments on the tax rolls or collect PACE assessments, and that such a determination shall be made in the sole discretion of Collier County. 25. Bonds. The Authority is not authorized to issue bonds, or any other form of debt, on behalf of Collier County. To the extent that the Authority issues bonds under its own authority in connection with this Agreement, the pledge will be based on the PACE assessments, and the County shall not be obligated in any way. For any such bonds, the bond disclosure document, if any, shall include references to the fact that Collier County is not an obligated party. 26. Opinion of Bond Counsel. Prior to the effective date of this Agreement, the Authority shall deliver to the County an "Opinion of Bond Counsel" stating that, based on counsel's review of the bond validation judgment and the underlying bond documents, the Program's structure complies with the bond validation judgment and the underlying bond documents. The Authority acknowledges 16.A.20.a Packet Pg. 728 Attachment: Resolution w-Exhibit A-Membership Agreement (9522 : PACE Program) Pace Standard Agreement 7/09/2019 5 that the County is relying on the Opinion of Bond Counsel in its decision to execute this Agreement. 27. Resale or Refinancing of a Property. The Authority recognizes that some lenders may require full repayment of the Program's non-ad valorem assessments upon resale or refinancing of a property. The Authority agrees to provide written disclosure of this matter in all PACE materials, including, but not limited to, the Financing Agreement with the property owner, consumer agreement, program guidelines, and promotional materials. 28. Agents of Authority. The Authority shall ensure that its agents, administrators, subcontractors, successors, and assigns are, at all times, in compliance with the terms of this Agreement and applicable County, state and federal laws. County shall provide written notice to the Authority of any proposed legislative changes to the PACE program via electronic transmission or US Mail no later than five (5) days prior to the public hearing on the proposed legislative changes. 29. Notices. Any notices to be given hereunder shall be in writing and shall be deemed to have been given if sent by hand delivery, recognized overnight courier (such as Federal Express), or by written certified U.S. mail, with return receipt requested, addressed to the Party for whom it is intended, at the place specified. For the present, the Parties designate the following as the respective places for notice purposes: If to the Authority: (Insert contact information) If to County: County Manager 3299 Tamiami Trail East, Suite 202 Naples, FL 34112 With a copy to: County Attorney 3299 Tamiami Trail East, Suite 800 Naples, FL 34112 30. Amendments. No modification, amendment or alteration in the terms or conditions contained herein shall be effective unless contained in a written document prepared with the same or similar formality as this agreement and executed by the Collier County Board of County Commissioners and the Authority. 31. Joint Effort. This Agreement has been a joint effort of the Parties hereto and the resulting document shall not, solely as a matter of judicial construction, be construed more severely against one of the Parties than the other. 32. Merger. This Agreement represents the final and complete understanding of the Parties regarding the subject matter hereof and supersedes all prior and contemporaneous negotiations, correspondence, agreements, or understandings applicable to the matters contained herein; and the Parties agree that there are no commitments, agreements, or understandings concerning the subject matter of this Agreement that are not contained in this document. Accordingly, the Parties 16.A.20.a Packet Pg. 729 Attachment: Resolution w-Exhibit A-Membership Agreement (9522 : PACE Program) Pace Standard Agreement 7/09/2019 6 agree that no deviation from the terms hereof shall be predicated upon any prior representations or agreements, whether oral or written. 33. Assignment. The respective obligations of the Parties set forth in this Agreement shall not be assigned, in whole or in part, without the written consent of the other Party hereto. 34. Third-Party Beneficiaries. Neither the County nor the Authority intends to directly or substantially benefit a third party by this Agreement. Therefore, the Parties acknowledge that there are no third party beneficiaries to this Agreement and that no third party shall be entitled to assert a right or claim against either of them based upon this Agreement. 35. Records. The Parties shall each maintain their own respective records and documents associated with this Agreement in accordance with the requirements for records retention set forth in Chapter 119, Florida Statutes. 36. Severability. In the event a portion of this Agreement is found to be unenforceable by a court of competent jurisdiction, that part shall be deemed severed from this Agreement and the remaining provisions of this Agreement shall remain in full force and effect. 37. Administrator Indemnification. Any and all administrators of the Authority shall be required to execute a separate indemnification agreement with the County. The Authority acknowledges and agrees that as of the execution of this Agreement, ___________________________ is the only administrator for the Authority, and that ______________________________________ has executed the separate indemnification agreement with Collier County for the benefit of the County. If the Authority changes its administrator, the Authority shall ensure that any and all administrators also provide the County with a separate indemnification agreement, on a form to be approved by the County Attorney's Office, within 10 business days of assuming administrative responsibilities for the Authority. 38. Effective Date. This Agreement shall become effective upon the execution by both Parties hereto. 39. Law, Jurisdiction, and Venue. This Agreement shall be interpreted and construed in accordance with and governed by the laws of the state of Florida. The Parties agree that the exclusive venue for any lawsuit arising from, related to, or in connection with this Agreement shall be in the state courts of the Twentieth Judicial Circuit in and for Collier County, Florida, the United States District Court for the Middle District of Florida or United States Bankruptcy Court for the Middle District of Florida, as appropriate. 40. Indemnification. To the maximum extent permitted by Florida law, the Authority shall indemnify and hold harmless Collier County, its officers, agents and employees from any and all claims, liabilities, damages, losses, costs, and causes of action which may arise out of an act, omission, including, but not limited to, reasonable attorneys’ fees and paralegals’ fees, to the extent caused by the negligence, recklessness, or intentionally wrongful conduct of the Authority or any of its agents, officers, servants, employees, contractors, patrons, guests, clients, licensees, invitees, or any persons acting under the direction, control, or supervision of the Authority in the performance of this Agreement. This indemnification obligation shall not be construed to negate, abridge or reduce any other rights or remedies which otherwise may be available to an indemnified party or person described in this paragraph. The Authority shall pay all claims and losses of any nature whatsoever in connection therewith and shall defend all suits in the name of Collier County and shall pay all costs (including attorney’s fees) and judgments which may issue 16.A.20.a Packet Pg. 730 Attachment: Resolution w-Exhibit A-Membership Agreement (9522 : PACE Program) Pace Standard Agreement 7/09/2019 7 thereon. This Indemnification shall survive the termination and/or expiration of this Agreement. This section does not pertain to any incident arising from the sole negligence of Collier County. The foregoing indemnification shall not constitute a waiver of sovereign immunity beyond the limits set forth in Section 768.28, Florida Statutes. This Section shall survive the expiration of termination of this agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. Attest COLLIER COUNTY, FLORIDA Dwight E. Brock, Clerk By: __________________________ By: __________________________ ______________________________ ______________________________ Witness Name _______________________________ ______________________________ Name and Title Title ____________________________ By: __________________________ _____________________________ Name _____________________________ Title Approved as to form and legality: _____________________________ 16.A.20.a Packet Pg. 731 Attachment: Resolution w-Exhibit A-Membership Agreement (9522 : PACE Program) Pace Standard Agreement 7/09/2019 8 16.A.20.a Packet Pg. 732 Attachment: Resolution w-Exhibit A-Membership Agreement (9522 : PACE Program) Florida Building Code, Commercial Apartment/Condo 310.1 Residential Group R. Residential Group R includes, among others, the use of a building or structure, or a portion thereof,for sleeping purposes when not classified as an Institutional Group I or when not regulated by the Florida Building Code, Residential. 310.4 Residential Group R-2. Residential Group R-2 occupancies containing sleeping units or more than two dwelling units where the occupants are primarily permanent in nature Apartment/Condo Units side by side on 1 parcelMultistory residential 16.A.20.b Packet Pg. 733 Attachment: PACE (9522 : PACE Program) Florida Building Code, Residential Single family Detached: Duplex, single family attached: The provisions of the Florida Building Code, Residential shall apply to the construction, alteration, movement, enlargement, replacement, repair, equipment, use and occupancy, location, removal and demolition of detached one-and two-family dwellings and townhouses not more than three stories above grade plane in height with a separate means of egress and their accessory structures not more than three stories above grade plane in height To wn House, Single Family Attached: Separate parcels, own the land beneath home 16.A.20.b Packet Pg. 734 Attachment: PACE (9522 : PACE Program)