May 8, 2017 DATE: Mayor and City Council Members TO: Community Development Director FROM:

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1 CONSENT CALENDAR Agenda Item No.: 7d CC Mtg.: 05/23/2017 DATE: TO: FROM: SUBJECT: May 8, 2017 Mayor and City Council Members Community Development Director RESOLUTION NO A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOLSOM CONSENTING TO THE INCLUSION OF PROPERTIES WITHIN THE CITY IN THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY OPEN PACE PROGRAMS; AUTHORIZING THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY TO ACCEPT APPLICATIONS FROM PROPERTY OWNERS, CONDUCT CONTRACTUAL ASSESSMENT PROCEEDINGS AND LEVY CONTRACTUAL ASSESSMENTS WITHIN THE TERRITORY OF THE CITY; AND AUTHORIZING RELATED ACTIONS BACKGROUND Property Assessed Clean Energy (PACE) is a financing mechanism that allows property owners to finance eliegible energy and water efficiency, and renewable energy projects, by adding the cost as an assessment to the property tax bill. Under State law (Assembly Bill 811 and Senate Bill 555) cities, counties and other entities, such as JPAs are allowed to establish PACE programs in which a residential or commercial property owner can access special financing (up to 15% of the their property's' value) through a special taxing district for the acquisition, installation and improvement of permanently affixed energy and water efficient products, renewable energy systems improvements, and electric vehicle charging infrastructure on their property. The improvements are paid for as an assessment or special tax on the property itself In the majority of instances, PACE loans are overseen by Joint Power Authorities (JPAs) who administers their PACE program through one or more program administrators. The administrators market the PACE programs, process the loan agreements with property owners and place the assements on the tax rolls. The JPAs offer PACE programs to their members, after being authorized by official resolutions of the member agencies. The JPAs provide all assessment administration, bond issuance, and bond administration functions for their PACE programs. The City of Folsom currently offers PACE financing to its citizens through the mpower Folsom program. The mpower program prides itself on its exceptional customer service and consumer protections. The program employs specialists that have experience in building, planning and construction to work directly with the property owners. As of April 2017, the mpower Folsom program has provided funding for more than 71 energy efficiency and water Staff Report Page No. 1 of 30

2 improvement projects totaling over $3.5 million. Since the City Council's authorization of the mpower Program in December of 2013, a number of other PACE programs have become available to residents and businesses in California through existing JPAs and many of the PACE administrators have shown an interest in expanding their programs to Folsom. As of the date of this staff report, however, only California Municipal Finance Authority (CMFA) WA and its' PACE administrator OnPACE Energy Solutions, LLC ("OnPACE") have provided all documentation requested by staff indicating that they are in a position to comply with all of the terms of the City's PACE administrative agreement. ANALYSIS The City of Folsom is committed to promoting energy efficiency, water conservation and renewable energy to further the City's goal in the reduction of greenhouse gas emissions. As such, the City promotes PACE financing programs and recognizes the additional benefits these programs provide in terms of reduced utility costs to property owners, job creation and environmental benefits. Furthermore, the City supports the open market PACE concept and has a great interest in pursuing negotiations with PACE providers that are willing and/or able comply with all of the terms of the City's PACE administrative agreement. In order to safeguard consumer and City interests and provides consistency amongst PACE providers that operate in the City of Folsom, all PACE providers wishing to operate their program in the City of Folsom shall enter into the City's PACE Agreement for the establishment and operation of their PACE Program in the City. This Agreement establishes the terms and conditions and mutual understandings between the City and participating PACE providers. Furthermore, this Agreement includes performance, project, and disclosure requirements consistent with today's PACE legislation, reporting requirements, participating contractor standards, and environmental benefit sharing provisions. As indicated in the background section of this report, the CMFA WA and its PACE administrator, OnPACE have provided all documentation indicating that they are in a position to comply with all of the terms of the aforementioned PACE Agreement. The CMFA is a Joint Powers Authority formed to assist local governments, non-profit organizations and businesses by promoting economic, cultural and community development, with the financing of economic development and charitable activities throughout California. To date, over 250 municipalities have become members of the CMFA. The City of Folsom became a member of the CMFA in April of 2012 (Resolution No. 8975). As part of its economic and community development, the CMFA along with its current Program Administrators, Energy Efficient Equity, Inc.; BlueFlame PACE Services LLC; OnPACE Energy Solutions, LLC; and Structured Finance Associates, LLC; offer PACE financing for residential and commercial property owners in its member territories. The CMFA is expected to issue limited obligation bonds, notes or other forms of indebtedness to fund the projects. As referenced above, OnPACE is one of several PACE administrator facilitated by the CMFA. OnPACE provides PACE financing for clean energy, specializing in non-profit companies and small businesses and is currently working with a local business owner, Simon Property Group, Staff Report Page No. 2 of 30

3 Inc. ("Simon"). As a nationwide leader with regards to pursuing sustainable facilities, Simon is pursuing PACE financing in order to make LED lighting retrofits, water faucet replacements and irrigation upgrades at their Folsom Premium Outlets located at Folsom Boulevard. This is one of several Simon outlet malls in California (and Texas) where Simon is planning to utilize OnPACE financing for energy and water efficiency upgrades. The total proposed assessment for the Folsom project is approximately $650,000 and all labor will be bid out to local contractors. Simon has utilized several different PACE programs for its national sustainable facility upgrades and has determined that the CMFA model is exceptional in terms of its low-cost and its straightforward and uniform best practices administration of its PACE programs. It is worth noting that Simon is not proposing to use the mpower Folsom program because the desire is to provide consistency with its other locations that are utilizing OnPACE. In order for Simon to utilize OnPACE as a source of financing for the proposed Folsom Premium Outlet energy efficiency upgrades, the City Council must first approve the proposed Resolution (attached as Attachment 1) which authorizes the CMFA to accept applications from owners of property within the City for municipal financing of authorized improvements through the CMFA Program. Also, it is important to point out that time is of the essence regarding this approval, as the CMFA bonds for the project financing are scheduled to close on May 31, The City is already a member of the CMFA WA. The proposed resolution authorizes CMFA to operate its PACE programs in the City of Folsom under a standard agreement with the City. ENVIRONMENTAL REVIEW This action by the City Council is exempt from environmental review pursuant to Section 15061(b)(3) (Review for Exemption) of the California Environmental Quality Act. FISCAL IMPACT There is no direct fiscal impact to the City's general fund incurred by consenting to the inclusion of properties with the City limits in the PACE Programs. The City is not obligated to repay the bonds issued by CMFA or to pay the assessments levied on the participating properties. The City will have no administrative responsibilities, marketing obligations, or financial obligations associated with the CMFA PACE programs. The Board of Directors of the California Foundation for Stronger Communities, a California non-profit public benefit corporation (the "Foundation"), acts as the Board of Directors for the CMFA. Through its conduit issuance activities, the CMFA shares a portion of the issuance fees it receives with its member communities and donates a portion of these issuance fees to the Foundation for the support of local charities. With respect to the City, CMFA has indicated that a portion of the issuance fee will be granted to the City's general fund. Such grant may be used for any lawful purpose of the City. Additionally, a similar amount will be donated by the CMFA to a non-profit organization in the City. Staff Report Page No. 3 of 30

4 ATTACHED REFERENCE MATERIAL I. Resolution No A Resolution of the City Council of the City of Folsom Consenting to the Inclusion of Properties Within the City in the California Municipal Finance Authority Open Pace Programs; Authorizing the California Municipal Finance Authority to Accept Applications From Property Owners, Conduct Contractual Assessment Proceedings and Levy Contractual Assessments Within the Territory of the City; and Authorizing Related Actions 2. Standard City Agreement for Property Assessed Clean Energy Programs in the City of Folsom 3. Support Letter Provided by Simon Property Group, Inc. RECOMMENDATION/CITY COUNCIL ACTION Approve Resolution No A Resolution of the City Council of the City of Folsom Consenting to the Inclusion of Properties Within the City in the California Municipal Finance Authority Open Pace Programs; Authorizing the California Municipal Finance Authority to Accept Applications From Property Owners, Conduct Contractual Assessment Proceedings and Levy Contractual Assessments Within the Territory of the City; and Authorizing Related Actions spectfully Submitted,, ik) David E. Miller, AICP Community Development Director Staff Report Page No. 4 of 30

5 ATTACHMENT #1 Resolution No A Resolution of the City Council of the City of Folsom Consenting to the Inclusion of Properties Within the City in the California Municipal Finance Authority Open Pace Programs; Authorizing the California Municipal Finance Authority to Accept Applications From Property Owners, Conduct Contractual Assessment Proceedings and Levy Contractual Assessments Within the Territory of the City; and Authorizing Related Actions Staff Report Page No. 5 of 30

6 RESOLUTION NO RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOLSOM CONSENTING TO THE INCLUSION OF PROPERTIES WITHIN THE CITY IN THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY OPEN PACE PROGRAMS; AUTHORIZING THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY TO ACCEPT APPLICATIONS FROM PROPERTY OWNERS, CONDUCT CONTRACTUAL ASSESSMENT PROCEEDINGS AND LEVY CONTRACTUAL ASSESSMENTS WITHIN THE TERRITORY OF THE CITY; AND AUTHORIZING RELATED ACTIONS WHEREAS, the California Municipal Finance Authority (the "Authority") is a joint exercise of powers authority, the members of which include numerous cities and counties in the State of California, including the City of Folsom (the "City); and WHEREAS, the Authority is implementing Property Assessed Clean Energy (PACE) programs, which it has designated CMFA Open PACE, consisting of CMFA Open PACE programs each administered by a separate program administrator (collectively with any successors, assigns, replacements or additions, the "Programs"), to allow the financing or refinancing of renewable energy, energy efficiency, water efficiency and seismic strengthening improvements, electric vehicle charging infrastructure and such other improvements, infrastructure or other work as may be authorized by law from time to time (collectively, the "Improvements") through the levy of contractual assessments pursuant to Chapter 29 of Division 7 of the Streets & Highways Code ("Chapter 29") within counties and cities throughout the State of California that consent to the inclusion of properties within their respective territories in the Programs and the issuance of bonds from time to time; and WHEREAS, the program administrators currently active in administering Programs are Energy Efficient Equity, Inc.; BlueFlame PACE Services LLC; OnPACE Energy Solutions, LLC; and Structured Finance Associates, LLC; and the Authority will notify the City in advance of any additions or changes, and notwithstanding any provision to the contrary, only those program administrators who enter into a standard agreement with the City under the terms and conditions approved by the City Attorney shall be allowed to offer the Programs in the City; and WHEREAS, Chapter 29 provides that assessments may be levied under its provisions only with the free and willing consent of the owner or owners of each lot or parcel on which an assessment is levied at the time the assessment is levied; and WHEREAS, the Authority is offering the Programs in the City on a non-exclusive basis, recognizing that the City has the right, and that the City reserves all rights, to grant permission to other providers who offer the same or similar programs in the City; and Resolution No Page 1 of 3 Staff Report Page No. 6 of 30

7 WHEREAS, the City desires to allow the owners of property ("Participating Property Owners") within its territory to participate in the Programs and to allow the Authority to conduct assessment proceedings under Chapter 29 within its territory and to issue bonds to finance or refinance Improvements under the terms and conditions of an agreement to be approved by the City Attorney consistent with this Resolution; and WHEREAS, the territory within which assessments may be levied for the Programs shall include all of the territory within the City boundaries; and WHEREAS, the Authority will conduct all assessment proceedings under Chapter 29 for the Programs and issue any bonds issued in connection with the Programs; and WHEREAS, the City will not be responsible for the conduct or the cost of any assessment proceedings; the levy of assessments; the administration expenses, any required remedial action in the case of delinquencies in such assessment payments; or the issuance, sale, administration repayment or guarantee of any bonds issued in connection with the Programs. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Folsom as follows: Section I. The foregoing recitals are true and correct. Section 2. Properties in the territory of the City will benefit from the availability of the Programs within the territory of the City, the conduct of special assessment proceedings by the Authority pursuant to Chapter 29 and the issuance of bonds to finance or refinance Improvements. Section 3. In connection with the Programs, the City hereby consents to the conduct of special assessment proceedings by the Authority pursuant to Chapter 29 on any property within the territory of the City and the issuance of bonds to finance or refinance Improvements, provided that: (1) The Participating Property Owners, who shall be the legal owners of such property, execute a contract pursuant to Chapter 29 and comply with other applicable provisions of California law in order to accomplish the valid levy of assessments; and (2) The City will not be responsible for the conduct or the cost of any assessment proceedings; the levy of assessments; the administration expenses, any required remedial action in the case of delinquencies in such assessment payments; or the issuance, sale, administration, repayment or guarantee of any bonds issued in connection with the Programs; and (3) Notwithstanding any provision to the contrary, only program administrators who have entered into a standard agreement with the City under the terms and conditions approved by the City Attorney shall be allowed to offer the Programs in the City; and Resolution No, 9927 Page 2 of 3 Staff Report Page No. 7 of 30

8 (4) The permission for the Programs to be offered and operated in the City is granted on a non-exclusive basis, and the City reserves all rights to grant permission to other providers to offer same or similar programs in the City. Section 4. The appropriate officials and staff of the City are hereby authorized to make the Programs available to all property owners in the City who wish to finance or refinance Improvements; provided, that the Authority shall be responsible for providing such applications and related materials at its own expense. The Community Development Department Director of his/her designee is hereby designated as the contact persons for the Authority in connection with the Programs. Section 5. The City Manager or his/her designee is hereby authorized and directed to execute and deliver such certificates, requisitions, agreements and related documents as are reasonably required by the Authority to implement the Programs in the City. Section 6. The City Council hereby finds that adoption of this Resolution is not a "project" under the California Environmental Quality Act, because the Resolution does not involve any commitment to a specific project which may result in a potentially significant physical impact on the environment, as contemplated by Title 14, California Code of Regulations, Section 15378(b)(4)). Section 7. This Resolution shall take effect immediately upon its adoption. The City Clerk is hereby authorized and directed to transmit a certified copy of this Resolution to the Financial Advisor of the Authority at: California Municipal Finance Authority, 2111 Palomar Airport Road, Suite 320, Carlsbad, California 92011, Attn: Travis Cooper. PASSED AND ADOPTED this 23' day of May, 2017 by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Council Members Council Members Council Members Council Members ATTEST: Andrew J. Morin, MAYOR Christa Freemantle, CITY CLERK Resolution No S'Enei laport Page No. 8 of 30

9 ATTACHMENT #2 Standard City Agreement for Property Assessed Clean Energy Programs in the City of Folsom Staff Report Page No. 9 of 30

10 AGREEMENT FOR PROPERTY ASSESSED CLEAN ENERGY PROGRAMS IN CITY OF FOLSOM THIS AGREEMENT ("Agreement") is made and entered into as of this _ day of 2017 by and between the City of Folsom, a municipal corporation, hereinafter referred to as "City", and, hereinafter referred to as "PACE Provider", as an entity delivering Property Assessed Clean Energy (PACE) Financing utilizing the California Assembly Bill 811 and/or California Senate Bill 555 Model. RECITALS WHEREAS, the City desires to promote an "open" PACE environment in the City in order to provide more choices for residents and businesses to reduce the upfront costs associated with energy efficiency, renewable energy and water conservation projects that are affixed to real property and proposed by property owners; WHEREAS, the City desires to participate in one or more PACE programs ("Programs") to promote widespread retrofits, thereby reducing greenhouse gas emissions, promoting energy efficiency, and improving water conservation while stimulating economic opportunities; WHEREAS, the PACE Provider will meet or exceed the Performance Requirements as detailed below; and WHEREAS, the PACE Provider will establish its own interest rates, payback terms, and fees, if not explicitly stated and provided for in this Agreement, as the market defines and allows; and WHEREAS, the purpose of this Agreement is to set forth the mutual understandings, terms and conditions related to PACE Providers operating in the City. NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, the parties hereto agree as follows: AGREEMENT I. DEFINITIONS: A. "Eligible Improvement" is a renewable energy, energy efficiency or other improvement authorized by Assembly Bill 811 ("AB 811") or Senate Bill 555 ("SB 555"), including any additional improvements deemed eligible in the future by the California Legislature. Staff Report Page No. 10 of 30 1

11 B. "PACE Provider" is an entity or provider delivering PACE Financing within the City of Folsom. C. "Participating Contractor" is any licensed contractor performing work in the City of Folsom who has agreed to, and abides by, the terms and conditions of the PACE Provider's contractor standards. D. "Property Assessed Clean Energy (PACE) Financing" is a means of financing Eligible Improvements for buildings which are repaid through contractual assessments, utilizing either AB 811 or SB 555. E. "Director" shall mean the Director of the Community Development Department, or his/her designee. F. "Efficiency Landscape Inspection" refers to the pre-project and post project inspections performed by City of Folsom Water Management Program staff to verify that landscape/irrigation improvement projects are in accordance with the terms and conditions of PACE Financing. G. "Local Contractor" is defined as a licensed contractor with a business address within Sacramento County, Placer County or El Dorado County. H. "Value" shall mean the greater of assessed value or fair market value. I. "Residential" shall mean residential properties of 3 units or fewer. J. "Renewable Generation" refers to energy supplied by sources that are naturally occurring and continually replenished, for instance solar, wind, and geothermal. K. "Non-Residential" shall mean any property not considered Residential. PERFORMANCE REQUIREMENTS A. PACE Provider's Specified Services. The PACE Provider will offer and provide PACE Financing under the requirements of AB 811 and/or SB 555. B. Cooperation with City. PACE Provider shall independently operate its Program and cooperate with the City and City staff as described in this Agreement. C. Performance Standard. PACE Provider shall perform all work hereunder in a manner consistent with the level of competency and standard of care normally observed by an organization providing PACE Financing pursuant to AB 811 and/or SB 555. City has relied upon the professional ability and expertise of PACE Provider as a material inducement to enter into the Agreement. PACE 2 Staff Report Page No. 11 of 30

12 Provider hereby agrees to provide all services under this Agreement in accordance with generally accepted professional practices and standards of care, as well as the requirements of applicable federal, state and local laws, it being understood that acceptance of PACE Provider's work by City shall not operate as a waiver or release. If City determines that any of PACE Provider's work is not in accordance with such level of competency and standard of care, City, in its sole discretion, shall have the right to do any or all of the following: (a) require PACE Provider to discuss with City to review the quality of the work and resolve matters of concern; (b) terminate this Agreement pursuant to the provisions of Section VI, Termination; or (c) pursue any and all other remedies at law or in equity. D. Project/Disclosure Requirements. The PACE Provider shall: 1. Encourage contractors to advocate efficiency measures before renewable generation installation. 2. Encourage an energy analysis and a whole building approach to energy efficiency, water conservation and renewable generation projects 3. Implement a process to require confirmation of satisfaction with work completed from the applicant prior to making distribution of project payments. 4. Provide financing disclosure details to the applicant specific to the requested amount of the financing to be acknowledged by signature and/or initials prior to approval of the financing. The following comprise the minimum elements and key disclosures required of the financing provided by PACE Providers in a written financing summary to applicants prior to approval of the financing: O Terms of financing. The maximum time period of the financing O Amount financed. The total amount financed, including fees and capitalized interest O Annual payment amount. The amount due each year, even if paid in semi-annual installments or through impound payments O Annual percentage rate/annual interest rate/apr. The effective interest rate after taking into account all fees, charges, interest, and capitalized interest, but not including any federal tax credits or income tax write offs 15 Improvements financed. The Eligible Improvements installed 15 Right to cancel, The 3-day right to rescind the financing Staff Report Page No. 12 of 30 3

13 O Prepayment, The option to prepay the Program financing without penalty for Residential properties 5. Provide detailed disclosure to the applicant to be acknowledged by signature and/or initials prior to approval of financing; including and not limited to the Federal Housing Finance Agency position on PACE, for all Residential financings, for all PACE models regardless of enabling legislation including and not limited to AB 811 and SB 555. Key disclosures of the financing shall include: O Program overview. A document or section of a document that provides a comprehensive summary of the Program, including a summary of a homeowner's rights and obligations 6 Property tax repayment process. Payment of a homeowner's property tax bill that will include a line item related to the installed Eligible Improvements 6 Privacy. A notice describing the privacy policies of the Program o Federal disclosures. Those appearing in the Program application O Foreclosure. The foreclosure process in the event of a homeowner default 6. PACE Provider will immediately, upon 24 hours' notice from the City, discontinue its residential Program in the City, as it relates to Fannie Mae and Freddie Mac mortgages, in the event the FHFA takes any action in California related to PACE Programs which the City interprets as creating an undue liability to the City or an unreasonable threat to its citizens, including both program participants and non-participants. PACE Provider will be able to close out contracts entered into prior to City discontinuance. 7 Require Property Owners on Non-Residential Projects to obtain signed Lender Acknowledgement or Consent before entering into a voluntary contractual assessment agreement from any lender who holds a lien against the property where the subject property is collateral. 8. Advocate and promote the use of Local Contractors, as defined in Definition Section of this Agreement. 9, Optimize all available rebates (for all utility and generation types) that can be approved prior to funding. 10. Require that Building Permits and/or Efficiency Landscape Inspections (as defined in Section I) are obtained and finalized for all improvements where such permit or inspection is usually and customarily required and not exclusive to improvements made with PACE financing. 4 Staff Report Page No. 13 of 30

14 11. Ensure all marketing application materials and calculation methodologies conform to all applicable tax laws. Whether through an AB 811 or SB 555 program, the PACE Provider, participating contractors, representatives, employees, and agents may NOT imply or make claims through discussions or calculations that the full assessment or special tax payment is 100% tax deductible. Recommend that property owners consult with a tax professional for information about their tax preparation. 12. Determine applicability of the California Environmental Quality Act ("CEQA") and notify the City related to improvements requiring actions related to CEQA. E. Financial Policies. The PACE Provider shall: 1. For its residential Program only, participate in the State of California's PACE Loss Reserve Program Administered by the California Alternative Energy and Advanced Transportation Finance Authority (CAEATFA), and shall provide evidence of current participation and copies of all reports submitted to CAEATFA, upon request. If the State discontinues the PACE Loss Reserve Program, or if the City determines that the State's PACE Loss Reserve Program does not provide adequate coverage, then the City may terminate the Agreement unless the City is satisfied with coverage by an alternative loan loss reserve program. 2. Notify the City of any involuntary legal action related to a liability or legality of the PACE lien regarding any property with a PACE assessment placed in the City. 3. Verify for Residential projects, the Financing is for less that fifteen percent (15%) of the value of the property, up to the first seven hundred thousand dollars ($700,000) of the value of the property, and is less than ten percent (10%) of the remaining value of the property above seven hundred thousand dollars ($700,000). 4. Verify for Non-Residential projects, a maximum financing amount no greater than 20% of Value of the property. 5. Verify a pre-lien loan to value no more than 90% of Value, including any principal amount of all outstanding private debt, the principal of any assessments (including the contractual assessment) and the allocable portion of any outstanding bonds issues under the Mello-Roos Community Facilities Act of 1982 as determined as of the execution date of the Staff Report Page No. 14 of 30 5

15 assessment contract. The principal amount of any assessments and any outstanding bonds may be computed by rational means that would yield an amount reasonably proximate to the principal amount. 6. Verify a post-lien loan to value no more than 100% of Value, including all mortgage-related debt as determined as of the date the assessment contract is executed. 7. Verify total aggregate property taxes and assessments will not exceed 5% of the Value as determined as of the date the assessment contract is executed. 8. Verify that property owners are current on all annual property taxes of the subject property and have not made late payments in the past 3 years (or since ownership if less than three years). 9. Verify that no owner of the property has filed for bankruptcy. If a property owner has filed for bankruptcy, verify that it has been at least five years since the discharge of the bankruptcy and that the subject property is not currently an asset in a bankruptcy proceeding. F. Documents, Data, and Information Policies. The PACE provider will, without additional compensation therefore, make fiscal, program evaluation, progress, and such reports as may be reasonably required by Director concerning PACE Provider's activities for internal evaluation purposes only (and not for distribution to any third party, including without limitation, utility companies, service providers or equipment manufacturer of for marketing purposes). The PACE provider will share project information and data (subject to the limitations of use provided above) in an accessible electronic format with the City on a quarterly and annual basis and upon request, including but not limited to the following: 1. Assessor's Parcel Number (APN) of the property 2. Estimated building size in square feet for Non-Residential (if available) 3. Dollar amount financed (amount of the assessment) 4. Listing of Eligible Improvements installed by virtue of the financing, including the unit of measure for the improvement and the quantity installed 5. Listing of all generation improvements installed and the solar STC-DC rating in watts or kilowatts 6 Staff Report Page No. 15 of 30

16 6. If available, the amount of rebate or incentive dollars associated with the project (not financed). 7. Residential or Non-Residential property type designation 8. Year of construction of the building (if available) 9. Expected financial and energy savings associated with each project G. Participating Contractor Standards. PACE Provider shall insure that Participating Contractors agree to and abide by the terms and conditions of the Contractor's standards outlined below. 1. Require that Participating Contractors have the appropriate license(s) issued by the California Contractors State License Board.* 2. Require that Participating Contractor's bonding is in good standing.* 3. Require that Participating Contractors have Workers' Compensation insurance coverage as required by law.* 4. Require that Participating Contractors make true claims about performance and or savings associated with projects. 5. Require that Participating Contractors and their representatives, employees, and agents do not represent themselves as agents, representatives, contractors, subcontractors, or employees of the City, or claim association or affiliation with the City. * As determined and reported by the California Contractors State License Board H. PACE Provider Standards. PACE Provider shall NOT do any of the following: 1. Endorse, recommend, or refer any specific contractor. 2. Make any representation or warranty regarding the qualifications, licensing, products, or workmanship of any contractor. 3. Make any warranty regarding the contractor's work or products purchased from contractors provided. III. JNDEMNIFICATION AND RELEASE OF LIABILITY 7 Staff Report Page No. 16 of 30

17 A. The PACE Provider shall protect, defend, indemnify and hold the City and its officers, agents and employees free and harmless from any and all claims, demands, causes of action, costs, expenses, liabilities, losses, damages or injuries of any kind, in law or equity, to property or persons, including wrongful death, to the extent arising out of the willful misconduct or negligent acts, errors or omissions of the PACE Provider or its directors, officials, officers, employees and agents in connection with the Property Assessed Clean Energy Program, including without limitation the payment of expert witness fees and attorneys' fees and other related costs and expenses, but excluding payment of consequential damages; provided, however, that the PACE Provider shall not be required to defend or indemnify the City and its officers, agents and employees for their sole negligence or willful misconduct. B. This indemnity shall not be limited by the types and amounts of insurance or self- insurance maintained by PACE Provider or PACE Provider's Contractors. C. Nothing in this Indemnity shall be construed to create any duty to, any standard of care with reference to, or any liability or obligation, contractual or otherwise, to any third party. D. The provisions of this Indemnity shall survive the expiration or termination of the Agreement. E. PACE Provider agrees to have the following release of liability language acknowledged by participating property owners, or a substantially similar language with participating property owners approved by the City Attorney: "In consideration of being allowed to participate in the PACE program within the City of Folsom, and to the fullest extent permitted by law, I, for myself, my heirs, personal representatives or assigns, do hereby release, waive, discharge, and covenant not to sue the City of Folsom, its officers, employees, and agents from liability from any and all claims, demands, actions, losses, liabilities, damages, including diminution of property values, and all costs incidental thereto, including cost of defense, settlement, arbitration, and reasonable attorneys' fees arising out of, pertaining to, or resulting from my participation in the PACE program. The undersigned further expressly agrees that the foregoing release of liability is intended to be as broad and inclusive as is permitted by the law of the State of California and that if any portion thereof is held invalid, it is agreed that the balance shall, notwithstanding, continue in full legal force and effect." IV. COMPkNSATION The parties hereto understand and agree that the City shall incur no cost or expense relating to the administration or implementation of the PACE program under this 8 Staff Report Page No. 17 of 30

18 Agreement. The PACE Provider is solely responsible and liable for all costs and expenses associated with the administration and implementation of the PACE program under this Agreement. No compensation shall be due or payable to the PACE Provider by the City under this Agreement. V. TERM OF AGREEMENT The term of this Agreement shall be from the Effective Date until termination in accordance with the provisions of Section VI, Termination, below. VI. TERMINATION A. Termination without Cause. Notwithstanding any other provision of this Agreement, at any time and without cause, City or PACE Provider shall have the right, in its sole discretion, to terminate this Agreement by giving 30 days written notice to the other Party of this Agreement. B. Termination for Cause, Notwithstanding any other provision of this Agreement, should the PACE Provider fail to uphold any of its obligations hereunder, within the time and in the manner herein provided, or otherwise violate any of the terms of this Agreement, City may immediately terminate this Agreement by giving PACE Provider written notice of such termination, stating the reason for termination. C. Delivery of Data and Information upon Termination. In the event of termination, PACE Provider, within 14 days following the date of termination, shall deliver to City all raw data and information in an editable electronic format as outlined in Section 11(F) Document, Data, and Information Policies. D. Authority to Terminate. The City Council has the authority to terminate this Agreement on behalf of the City. In addition, the Director, in consultation with the City Attorney, shall have the authority to terminate this Agreement on behalf of the City. E. Effect of Termination. In the event of termination pursuant to this Section VI, PACE Provider shall not solicit new assessment contracts within the City; provided however, nothing in this Section VI shall prohibit PACE Provider from continuing to administer any assessment contracts outstanding as of the termination date. VII. ENVIRONMENTAL CREDITS AND BENEFITS PACE Provider will use best efforts to track all improvements in a manner that anticipates such improvements may derive renewable energy credits or other Staff,Report Page No. 18 of 30 9

19 environmental benefits. The parties hereby agree that any credits or other environmental benefits attributable to the Eligible Improvements financed by the PACE Provider under this Agreement will be allocated as follows: No less than 75% to the City and no more that 25% to the PACE Provider, as determined by the City. Prior to signing this Agreement, PACE Provider shall provide the City with documentation acceptable to the City demonstrating the allocation of the environmental credits as required herein. VIII. IN,OILU Any notice, demand, request, consent, or approval that either party hereto may or is required to give the other pursuant to this Agreement shall be in writing and shall be either personally delivered or sent by mail, addressed as follows: TO City Director Community Development Department 50 Natoma Street Folsom, CA TO PACE Provider Name Title Address Either party may change the address to which subsequent notice and/or other communications can be sent by giving written notice designating a change of address to the other party, which shall be effective upon receipt. IX. COMPLIANCE WITH LAWS PACE Provider shall observe and comply with all applicable Federal, State, and City laws, regulations and ordinances. X. GQVERNING LAWS AND JURISDICTION This Agreement shall be deemed to have been executed and to be performed within the State of California and shall be construed and governed by the laws of the State of California. Any legal proceedings arising out of or relating to this Agreement shall be brought in a state court in Sacramento County, California. XI. LICENSES. PERMITS AND CONTRACTUAL GOOD STANDING A. PACE Provider shall possess and maintain all necessary licenses, permits, certificates and credentials required by the laws of the United States, the State of California, County of Sacramento, City of Folsom, and all other appropriate governmental agencies. Failure to maintain the licenses, permits, certificates, 10 Staff Report Page No. 19 of 30

20 and credentials shall be deemed a breach of this Agreement and constitutes grounds for the termination of this Agreement by City. B. PACE Provider further certifies to City that it and its principals are not debarred, suspended, or otherwise excluded from or ineligible for, participation in federal, State, County or local government contracts. PACE Provider certifies that it shall not contract with a Contractor that is so debarred or suspended. XII. PERFORMANCE STANDARDS PACE Provider shall perform its services under this Agreement in accordance with the industry and/or professional standards applicable to PACE Provider's services. XIII. INDEPENDENT CONTRACTOR A. It is understood and agreed that PACE Provider (including PACE Provider's employees) is an independent contractor and that no relationship of employeremployee exists between the parties hereto. PACE Provider shall be responsible for the payment of all applicable taxes, workers' compensation insurance and unemployment insurance. B. PACE Provider's personnel shall not be entitled to any benefits payable to employees of City. C. City is not required to make any deductions or withholdings from the compensation payable to PACE Provider's personnel, and is not required to issue W-2 Forms for income and employment tax purposes for any of PACE Provider's personnel. D. PACE Provider, is only authorized to perform the obligation set forth hereunder related to the City within the boundaries of the City. PACE Provider in not authorized to perform any additional services for or on behalf of the City. E. Any third persons employed by PACE Provider shall be entirely and exclusively under the direction, supervision, and control of the PACE Provider. PACE Provider hereby protects, defends, indemnifies and holds City harmless from any and all claims that may be made against City based upon any contention by any third party that an employer-employee relationship exists by reason of this Agreement. In the event PACE Provider or any of its employees, agents, or subcontractors providing services under this Agreement is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS as an employee of the City, PACE Provider shall further indemnify, protect, defend, and hold Staff Report Page No. 20 of 30 11

21 harmless the City for the payment of any employee and/or employer contributions for PERS benefits on behalf of PACE Provider or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of the City. XIV. CONFLICT OF INTEREST PACE Provider and PACE Provider's officers and employees shall not have a financial interest, or acquire any financial interest, direct or indirect, in any business, property or source of income which could be financially affected by or otherwise conflict in any manner or degree with the performance of services required under this Agreement, provided, however, that salary, equity ownership and other compensation paid to any employee, officer, director, agent, consultant or independent contractor by PACE Provider shall be excluded from the prohibitions described above in this Section XIV. XV. OBBYING AND UNION ORGANIZATION ACTIVITIES A. PACE Provider shall comply with all applicable certification and disclosure requirements prescribed by Section 319, Public Law (31 U.S.C. 1352) and any implementing regulations. B. If services under this Agreement are funded with state funds granted to City, PACE Provider shall not utilize any such funds to assist, promote or deter union organization by employees performing work under this Agreement and shall comply with the provisions of Government Code Sections through XVI. NONDISCRIMINATION IN EMPLOYMENT, SERVICES. BENEFITS AND FACILITIES A. PACE Provider agrees and assures City that PACE Provider and any subcontractors shall comply with all applicable federal, state, and local antidiscrimination laws, regulations, and ordinances and to not unlawfully discriminate, harass, or allow harassment against any employee, applicant for employment, employee or agent of City, or recipient of services contemplated to be provided or provided under this Agreement, because of race, ancestry, marital status, color, religious creed, political belief, national origin, ethnic group identification, sex, sexual orientation, age (over 40), medical condition (including HIV and AIDS), or physical or mental disability. B. PACE Provider shall ensure that the evaluation and treatment of its employees and applicants for employment, the treatment of City employees and agents, and recipients of services are free from such discrimination and harassment. PACE Provider represents that it is in compliance with and agrees that it will continue to comply with the Americans with Disabilities Act of 1990 (42 U.S.C et seq.), the Fair Employment and Housing Act (Government Code et seq.), and regulations and guidelines issued pursuant thereto. 12 Staff Report Page No. 21 of 30

22 C. PACE Provider agrees to compile data, maintain records and submit reports to permit effective enforcement of all applicable antidiscrimination laws and this provision. ID. PACE Provider shall include this nondiscrimination provision in all subcontracts related to this Agreement. XVII. INSURANCE Without limiting PACE Provider's indemnification, PACE Providers shall maintain in force at all times during the term of this Agreement and any extensions or modifications thereto, insurance as specified in Exhibit A. it is the responsibility of PACE Provider to notify its insurance advisor or insurance carrier(s) regarding coverage, limits, forms and other insurance requirements specified in Exhibit A. Failure to maintain insurance as required in this Agreement may be grounds for material breach of contract. XVIII. AMENDMENT AND WAIVER Except as provided herein, no alteration, amendment, variation, or waiver of the terms of this Agreement shall be valid unless made in writing and signed by both parties. Waiver by either party of any default, breach or condition precedent shall not be construed as a waiver of any other default, breach or condition precedent, or any other right hereunder. No interpretation of any provision of this Agreement shall be binding upon City unless agreed in writing by the City. XIX. SUCCESSORS This Agreement shall bind the successors of City and PACE Provider in the same manner as if they were expressly named. XX. TIlkfl Time is of the essence of this Agreement. XXI, INTERPRETATION This Agreement shall be deemed to have been prepared equally by both of the parties, and the Agreement and its individual provisions shall not be construed or interpreted more favorably for one party on the basis that the other party prepared it. XXII. DISPUTES Staff Report Page No. 22 of 30 13

23 In the event of any dispute arising out of or relating to this Agreement, the parties shall attempt, in good faith, to promptly resolve the dispute mutually between themselves. Pending resolution of any such dispute, PACE Provider shall continue without delay to carry out all its responsibilities under this Agreement unless the Agreement is otherwise terminated in accordance with the Termination provisions herein. If the dispute cannot be resolved within 15 calendar days of initiating such negotiations or such other time period as may be mutually agreed to by the parties in writing, either party may pursue its available legal and equitable remedies, pursuant to the laws of the State of California. Nothing in this Agreement or provision shall constitute a waiver of any of the government claim filing requirements set forth in the California Government Code or as otherwise set forth in local, state and federal law. XXIII. AUDITS AND RECORDS Upon City's request, City or its designee shall have the right at reasonable times and intervals to audit, at PACE Provider's premises, PACE Provider's program records directly and solely related to PACE Provider's services under this Agreement. PACE Provider shall maintain such records for a period of four years following termination of the Agreement, and shall make them available for copying upon City's request at City's expense, XXIV. PRIOR AGREEMENTS This Agreement constitutes the entire contract between City and PACE Provider regarding the subject matter of this Agreement. Any prior agreements, whether oral or written, between City and PACE Provider regarding the subject matter of this Agreement are hereby terminated effective immediately upon full execution of this Agreement. XXV. SEVERABILITY If any term or condition of this Agreement or the application thereof to any person(s) or circumstance is held invalid or unenforceable, such invalidity or unenforceability shall not affect other terms, conditions, or applications which can be given effect without the invalid term, condition, or application; to this end the terms and conditions of this Agreement are declared severable. XXVI. FORCE MAJEURE Neither PACE Provider nor City shall be liable or responsible for delays or failures in performance resulting from events beyond the reasonable control of such party and without fault or negligence of such party. Such events shall include but not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics, acts of government, fire, power failures, nuclear accidents, earthquakes, unusually severe weather, acts of terrorism, or other disasters, whether or not similar to the foregoing, and acts or 14 Staff Report Page No. 23 of 30

24 ! omissions or failure to cooperate of the other party or third parties (except as otherwise specifically provided herein). XXVII. SURVIVAL OF TERMS All services performed provided pursuant to this Agreement are subject to all of the terms and conditions set forth herein, notwithstanding the expiration of the initial term of this Agreement or any extension thereof. Further, the terms, conditions and warranties contained in this Agreement that by their sense and context are intended to survive the completion of the performance, cancellation or termination of this Agreement shall so survive. XXVIII. DUPLICATE COUNTERPARTS This Agreement may be executed in duplicate counterparts. The Agreement shall be deemed executed when it has been signed by both parties. XXIX. AUTHORITY TO EXECUTE Each person executing this Agreement represents and warrants that he or she is duly authorized and has legal authority to execute and deliver this Agreement for or on behalf of the parties to this Agreement. Each party represents and warrants to the other that the execution and delivery of the Agreement and the performance of such party's obligations hereunder have been duly authorized. [END OF DOCUMENT SIGNATURE PAGE FOLLOWS] Staff Report Page No. 24 of 30 15