Wednesday, April 16, 2014

Massive Mello-Roos planned

“Chief Administrative Office requesting Board direction regarding a Property Assessed Clean Energy (PACE) program in conjunction with Ygrene Energy Fund.” That was the May 14 agenda item for the El Dorado County Board of Supervisors. With the support of the Builders Exchange and big-name contractor Carter-Kelly, it’s no wonder the CAO is pushing this scheme before the county Bond Screening Committee has met and made a carefully studied recommendation.

Property Assessed Clean Energy is a fancy name for having home improvements financed through a third party contracting with the county and then put the loan on the county’s property tax rolls. The primary improvements to be financed are solar installations, but it would include other energy efficiency improvements such as new window, furnaces and insulation.

It is a worthy goal, getting more solar installations, et cetera. That is something that is already happening, however. In 2012, the county issued solar electrical and plumbing permits for a total value of $6.95 million. In the first quarter of 2013, permits totaled $2.65 million. The total for five quarters is $9.6 million. That’s a lot of solar installation without the benefit of a complicated county program.

What’s complicated about it? Two words: Mello-Roos. Bonds for the PACE program would be financed through a Mello-Roos Community Facilities District. There would be hearings. There would be Proposition 218 hearings in which a majority could file formal protests and scuttle it. Good luck with that, especially with a countywide Mellos-Roos that includes South Lake Tahoe.

The real problem with putting home improvements on the tax roll comes when some homeowner can’t afford the higher taxes and the county sells the home at a tax auction.

Don’t think it won’t happen, and bet on it that the Board of Supervisors will get blamed for the Mello-Roos district. Smart home buyers already ask if a home has Mello-Roos bonds. Mello-Roos taxes on top of property taxes and home owners association dues can be a deal breaker. If this PACE program goes, Realtors will have to disclose the 20-year loan added to the tax bill. It will not add much resale value to a house as home buyers are going to be reluctant to take on that higher tax bill.

What’s more, any home financed by Fannie Mae or Freddie Mac, whether directly or by a mortgage-backed security after the bank sold the loan to one of these two, cannot receive a loan that goes on the tax rolls. Sonoma County already lost that case in the U.S. Ninth Circuit Court of Appeals March 19. The Federal Housing Finance Authority will not allow a property assessed financing program. Putting home improvement costs on the property tax bills makes them senior to the government-backed loans. The government-sponsored enterprises will not allow that.

Fannie and Freddie control half of the mortgages in Sonoma County, according to the Santa Rosa Press Democrat. Figure El Dorado County has a similar percentage.

And finally, the county administrator is seeking a sole-source deal with one outfit. We call that crony capitalism. There are other companies that do the same thing.

Further, PG&E  has a list of incentives and financial resources for solar photovoltaic programs, including the California Solar Initiative program. None of these PG&E-listed programs go on the tax rolls or mess with the Federal Housing Finance Authority.

We don’t need another Mello-Roos district, especially a massive one like this. And putting home improvement loans on the tax roll is asking for trouble.

Mountain Democrat


Discussion | 18 comments

  • Phil VeerkampMay 18, 2013 - 10:20 pm

    A tax penalty for home improvements? NO F'ing way!!! Go "green" and pay more property taxes? I don't think so.

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  • EvelynMay 19, 2013 - 6:37 am

    The video of the BOS meeting recording discussion of this particular agenda item (#25) is HERE.

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  • EvelynMay 19, 2013 - 8:18 am

    "Economic insanity: Obama spends $11 million to create each 'green' job" - HERE

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  • Phil VeerkampMay 19, 2013 - 9:09 am

    Thank you, Evelyn for the BOS link. I wish to second, third and fourth Sue Taylor's skepticism on this tax laundering/incentive proposal for green programs. At an intuitive level, this will not be revenue neutral to the County, you or me. If you want solar pay for it yourself. Carter-Kelly, knock on doors other than the BOS.

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  • Sue TaylorMay 19, 2013 - 11:30 am

    Thanks Phil.. I was trying to say I can't believe that the County is even "courting" this. The information I read to the Board was straight out of Ygrene's documents. Right now the County is actively working with this company to impose this CSD on us. The program also calls for the County to lobby for Ygrene's program. From Ygrene's document: "Ygrene creates a completely localized program at the District level. We collaborate with County staff to tailor the program in order to most effectively market to the local community.” The Ygrene representative claimed it does not cost the County anything. I guess they think staff time and implementation has no cost. If you think this is crazy you should watch #26.

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  • EvelynMay 19, 2013 - 11:43 am

    Ygrene's Action Plans: HERE . . .

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  • EvelynMay 19, 2013 - 11:44 am

    . . . and HERE

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  • EvelynMay 19, 2013 - 11:52 am

    Observers/skeptics like myself consider Ygrene a done deal with the County. But if you'd like there to be ANY chance of stopping it, come to the Board of Supervisors meeting (June 11th???). Speak up. Say why it should be opposed.

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  • Ernie LouisMay 20, 2013 - 3:20 pm

    Mello-Roos in El Dorado County? If you want to be a Vacant new built home, just add the cost of EID, PG&E, Commute, and Mello-Roos. Where are the Local Realtors? Ernie Louis.

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  • NancyMay 21, 2013 - 1:18 am

    Another reason to move out of this darn state.

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  • NancyMay 21, 2013 - 10:15 am

    The county wide Melo Roos is about most ludicrous idea I've ever heard of. Why is the BOS even talking about it? This will severely harm home values, discourage people from moving to El Dorado County, and send many folks like myself running for the CA border. Every time I come to the Mountain Democrat website I read about another planned disaster in the making to be considered on by the county BOS. Why are they hell-bent on ruining our quality of living?

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  • Dink LaneMay 21, 2013 - 10:30 am

    When I listened to the arguments FOR Prop 13, they said "This will stop all those big ADMINISTRATION Costs." I laugh till my sides hurt.... Administration has NOT taken a cut yet .... They have pushed the cuts ON Public Health & Safety. They have taken the CUTS.... Who is going to vote for ADMINISTRATION cuts?... But we continue to fight to take on TAX-Increases for FIRE, POLICE and Schools (even highways)..... Now the county is trying to come up with HOMES FOR THE ELDERLY (which we all will be some day).... Think about these elderly people on a fixed income paying $200 to $300 a month for electricity..... Do we really think Oil/Natural gas prices are going to go DOWN or at least Stay the same????.... (Don't make me laugh again... my sides are still sore).... What should the BoS do? Stop kicking the can down the road.... Come up with Common Sense solutions... (Oh by the way, did our Administration costs come down yet? Ha, Ha, Ha....)

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  • francescaduchamp@att.netMay 21, 2013 - 12:43 pm

    This is happening all over the country...people here are just now really seeing it--five years this county will be bankrupt--if it continues. This movement has been here for awhile--started in main cities first across the United States-the last to go are the rural areas...READ

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  • Dink LaneMay 21, 2013 - 1:03 pm

    Adams & Jefferson were VERY concerned about the "Aristocrats" undermining the country's laws....... Because these Aristocrats (Wealth Corporations) DO NOT SPEAK FOR THE PEOPLE.... If you want to read something on line.... Read their letters ( ..... We need to think of the PEOPLE/taxpayer/CITIZEN.... BEFORE Corporate interests..... This country was built to GET AWAY FROM WEALTHY MONARCHS....Who expect the people (peasants) to support the country and them...

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  • Christopher SanchezSeptember 10, 2013 - 8:20 pm

    No one would force you to make these energy upgrades. People who couldn't afford new windows, insulation, solar, or new HVAC, could afford these improvements if we had a PACE program. This would bring jobs to our county, and the energy improvements would pay for themselves. If you don't want to participate in this program then don't. Please don't prohibit others from participating. I thought people in the foothills stood for freedom. Why would you not allow your neighbors to finance improvements however they choose too?

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  • EvelynOctober 02, 2013 - 7:52 am


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  • Fran DuchampOctober 02, 2013 - 8:29 am

    Evelyn, someone dear to me now-- out of Sac--is paying fees already on what I call "using the sun."

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  • Fran DuchampOctober 02, 2013 - 8:34 am

    California Bill Would Expand Solar, Add Monthly Power Fee

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