City of Piedmont COUNCIL AGENDA REPORT

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1 City of Piedmont COUNCIL AGENDA REPORT DATE: May 16, 2016 TO: FROM: SUBJECT: Mayor and Council Paul Benoit, City Administrator Adoption of Resolutions Authorizing Membership in Three Property Assessed Clean Energy (PACE) Programs and the Approval of Association of Bay Area Governments (ABAG) Regional Collaborative Services Agreement with Residential PACE Providers RECOMMENDATION 1. Adopt and authorize execution of the attached resolutions and agreements (Exhibits A through D, beginning on page 8) consenting to join the California Enterprise Development Authority, a joint powers authority, as an associate member and participate in the Figtree PACE Program; consenting to join the Golden State Finance Authority, a joint powers authority, as an associate member and participate in the Ygrene PACE Program; and consenting to join the Western Riverside Council of Governments, a joint powers authority, as an associate member and participate in the California HERO PACE Program. 2. Authorize the City Administrator to approve and sign the acknowledgement addendums of the Regional Collaborative Services Agreement, as executed between ABAG and Residential PACE Providers, for each of the PACE Providers listed above (Exhibit G on page 66, Exhibit I on page 87, and Exhibit K on page 109). BACKGROUND: On January 4, 2010 Council accepted the report of the Environmental Task Force (ETF), which contained 31 actions to be pursued by the city, including Action 10: Participate in the Countywide Voluntary Renewable Energy Assessment District [PACE Program]. On March 15, 2010 Council adopted the Piedmont Climate Action Plan (CAP), which includes 32 measures that the City can implement in order to reach its greenhouse gas emissions target of 15% below 2005 levels by the year Of these, Measure BE 2.2 is Identify and consider developing financial incentives and low-cost financing products and programs that encourage investment in energy efficiency and renewable energy within existing residential buildings. On May 5, 2014, the City Council received a report from staff on the progress the City has made toward reaching its greenhouse gas reduction goals and the results of a 2010 Greenhouse Gas Emissions Inventory. The inventory found that in % of Piedmont s emissions came from the residential building sector and noted that reaching the City s goals will be virtually impossible without a reduction in emissions from the residential sector.

2 Agenda Report Page 2 On December 7, 2009, City Council approved two resolutions: one directing the City Administrator to execute a Joint Powers Agreement with the California Statewide Communities Development Authority (CSCDA); and the other authorizing the City of Piedmont to join the CaliforniaFIRST PACE financing program. Due to directives by the Federal Housing Finance Agency (FHFA), the CaliforniaFIRST program did not launch its residential financing until the summer of 2014, after the California Alternative Energy and Advanced Transportation Financing Agency created a reserve fund for PACE programs in order to mitigate the FHFA s concerns. Since the launch of its residential financing program, the California FIRST program has received 19 applications from Piedmont residential property owners, seven of which have received funding. On April 20, 2015, City Council approved the City s participation in the CSCDA s Open PACE program, in order to increase the number of and competition between PACE financing providers available to Piedmont property owners. Currently, the Open PACE program includes the following PACE providers: CaliforniaFIRST, Alliance NRG, and PACE Funding Group, all of which offer their PACE financing programs to Piedmont property owners. In an effort to streamline and support consistent application of best management practices for PACE providers throughout the Bay Area region, ABAG, through the Bay Area Regional Energy Network (BayREN) developed the Regional Collaborative Services Agreement ( Agreement ). Executed by and between ABAG and Residential PACE Providers active in the Bay Area, the Agreement now affords ABAG member jurisdictions (Participating Entities) the opportunity to ensure that PACE best management practices apply to Residential PACE Providers active within their communities (see Exhibit E, page 43). Such practices include identifying services eligible for financing, setting minimum performance standards, branding and marketing requirements, and providing trainings for financers and homeowners. DISCUSSION: PACE is rapidly growing in popularity with home and business owners as a means to finance the upfront cost of energy efficiency, water conservation, and renewable energy improvements to their properties and to repay the funds (as level principal and interest payments over a term that generally matches the average useful life of the installed improvements) via a special voluntary property tax assessment. In response to property owner demand, California cities and counties are increasingly opening their jurisdictions to a competitive market of PACE financing providers. Currently, over $1.5 billion in residential PACE has been financed in California, primarily in the single family residential market. Typical improvements financed through PACE include the installation of energy efficient appliances and lighting, solar photovoltaic systems, insulation, water-efficient plumbing fixtures, and water-wise garden conversions. PACE differs from traditional lending by basing loan criteria on the equity in the building rather than the creditworthiness of the building owner. Under the most popular model for PACE adoption, local jurisdictions make residential PACE available to their property owners by passing an authorizing resolution to join Joint Power Authorities (JPA) that have partnered with private PACE Providers, who arrange capital, administer programs, review and work with installation contractors, and service assessments in partnership with county tax collectors. However, since the Residential PACE Providers primary relationship is

3 Agenda Report Page 3 with the JPA partner (which issues bonds or related instruments to Residential PACE Providers, and provides legal oversight of the financing and administration), the local jurisdiction has no oversight responsibilities for Residential PACE Provider activities. The intent of the Agreement, as administered by ABAG, is to collaborate with Residential PACE Providers on behalf of member jurisdictions to: Monitor Residential PACE Providers activities in regards to consumer protections practices; Improve program reporting and transparency; and Support complementary efforts in local communities. Features of ABAG s Regional Collaborative Services Agreement include: Designates ABAG as the liaison to the residential PACE providers locally; Requires all residential PACE providers to have clearly visible disclosures regarding the FHFA s policies on residential PACE programs; Requires all residential PACE providers to participate in the state s California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) PACE Loss Reserve program; Limits claims that residential PACE providers (or their designated contractors) can make to applicants regarding the tax deductibility of PACE assessments; Requires data sharing between the residential PACE providers and participating entities to monitor program performance locally and report out to local stakeholders; and Requires residential PACE providers to accept responsibility for negligence in administering PACE programs. The City of Piedmont has already joined CSCDA, the JPA for CaliforniaFIRST, AllianceNRG and PACE Funding Group, all of which can currently offer their financing products to Piedmont property owners through their participation in the CSCDA s Open PACE program. In order to foster greater competition and provide more alternatives for property owners seeking financing for improvements, the City Council might consider approving the additional PACE providers included in ABAG s Regional Collaborative Services Agreement. At this time AllianceNRG, California HERO, Figtree, Ygrene, and PACE Funding Group have signed onto the Agreement and the City has the option of approving the three additional PACE financing programs that have been vetted through ABAG s Regional Collaborative Services Agreement and that do not currently offer their services in Piedmont: California HERO Program, administered by the Western Regional Council of Governments (WRCOG); Figtree PACE Program, administered by the California Enterprise Development Authority (CEDA); and Ygrene PACE Program, administered by the California Home Finance Authority (CHF). By adopting the attached PACE Resolutions and signing the acknowledgement form of the relevant Agreements between the PACE Providers and ABAG (Exhibit F beginning on page 45, Exhibit H beginning on page 67, and Exhibit J beginning on page 88), the City will provide greater competitive options for Piedmont residents seeking to make energy and water efficient property improvements.

4 Agenda Report Page 4 PROGRAM COMPARISON: The three PACE providers to be authorized in the attached resolutions represent the three PACE programs operating in California that have signed onto the ABAG Regional Collaborative Services Agreement, but are not currently authorized to offer their financing services in Piedmont. Authorizing these providers, in addition to those already authorized either individually or under Open PACE, would not limit the ability of the City Council to consider additional providers in the future. While the PACE providers discussed below are all similar in nature, specific programs have developed expertise in certain areas. For example, Ygrene is the first and only PACE provider to have completed multifamily housing projects. HERO has launched a marketing and outreach program specifically targeting water efficiency improvements to homeowners. Open PACE provider AllianceNRG has expertise in using PACE for seismic upgrades and is the only PACE program to set aside funding specifically for this purpose and Ygrene will also finance seismic retrofits. An overview of each of the PACE programs previously authorized or proposed under this report is as follows: California HERO Program (Proposed) The California HERO Program is a PACE provider that has primarily served residential projects, and is the largest provider by volume of projects completed, financing provided, and number of participating communities. More than 383 cities and counties have adopted the program since its launch in 2010, including the Alameda County cities of Albany, Berkeley, Dublin, Hayward, Oakland, and Union City, as well as unincorporated Alameda County. As of August 2015, the program has completed more than 43,177 building improvement projects. The economic activity associated with these projects includes 7,312 jobs created and more than 1.59 million tons of CO2 emissions reductions annually. The program has registered more than 5,900 contractors, including 143 in Alameda County. The California HERO program requires City Council approval of associate membership in the Western Riverside Council of Governments (WRCOG) JPA, which administers the program. WRCOG includes representatives from 17 cities, the Riverside County Board of Supervisors, the Eastern and Western Municipal Water Districts, and the Morongo Band of Mission Indians. Its goal is to unify Western Riverside County and speak at the local, regional, and state levels with a collective voice on important issues that affect its members, such as transportation, environment, energy, economy, and health. Membership with WRCOG is included at no cost within the attached resolution and authorizes the HERO program to provide services in Piedmont and is limited in scope to the PACE program only. Figtree PACE Program (Proposed) The Figtree PACE Program has primarily served commercial, industrial, and multifamily properties, but launched a single-family residential service in Since its launch in 2011, 149 cities and counties in California have adopted the program, including the Alameda County cities of Dublin, Hayward, Oakland, and Union City, as well as unincorporated Alameda County. More than $280 million in financing has been approved for commercial projects. The program has 112 contractors providing service in Alameda County.

5 Agenda Report Page 5 The California Enterprise Development Authority (CEDA) is the program administrator for Figtree. CEDA was formed by the California Association for Local Economic Development in order to maximize the availability of capital to California small and medium sized manufacturers and nonprofits for expansion and job creation by addressing gaps in economic development financing. All cities and counties in California have the ability to issue conduit revenue bonds for qualified housing and economic development projects, and while there are a small number of statewide issuers, CEDA is dedicated to the issuance of such bonds specifically for economic development projects. Piedmont is not yet a member of CEDA, which is required in order to operate the Figtree PACE Program. Ygrene PACE Program (Proposed) The Ygrene PACE Program serves residential and commercial projects, and is the only provider operating in multiple states. In California, 175 cities and counties have adopted the program since its launch in 2013, including the Alameda County cities of Hayward, Oakland, and Union City. As of May 2015, the program has financed more than $370 million in project loans. The program has registered 1,822 contractors in California. The Ygrene PACE Program is administered by the Golden State Finance Authority (GSFA), a California public entity and agency formerly known as California Home Finance Authority (CHF). GSFA was established in 1993 under the California Joint Powers Authority Act to support and provide affordable homeownership. Beginning as a rural residential homebuyer assistance program in 11 California counties, GSFA has expanded to include financial assistance programs for both homebuyers and homeowners throughout California. Since its inception, GFSA has helped more than 63,400 individuals and families purchase a home, gifted over $104 million in down payment assistance grants, and assisted over 10,100 homeowners to make energy efficiency upgrades to their properties. Since Piedmont is not currently a member of GSFA, the opt-in resolution being considered by City Council includes a no-cost associate membership in GSFA. Membership in this JPA authorizes the Ygrene program to provide services in Piedmont and is limited in scope to the PACE program only. Open PACE Program: (Previously Authorized) Open PACE launched in 2015 and operates under AB 811. It is sponsored by the California Statewide Communities Development Authority (CSCDA), of which Piedmont is a member. CSCDA founded Open PACE with the goal of creating a platform to vet and pre-qualify PACE providers so that local governments only need to pass a single resolution to authorize multiple programs. As noted above, the City of Piedmont joined CSCDA in 2009 and opted into the Open PACE program in Currently, Open PACE has pre-qualified three PACE programs CaliforniaFIRST, AllianceNRG and PACE Funding Group. Any additional PACE programs that are qualified under Open PACE after the adoption of the CSCDA Open PACE resolution by the City will automatically be authorized to operate within Piedmont. In California, 40 cities and counties have approved the Open PACE suite of programs, including Piedmont, Albany, Berkeley, Hayward, Oakland, and Union City in Alameda County. FINANCIAL CONSIDERATIONS FOR PACE PARTICIPANTS: In May, 2010, Fannie Mae and Freddie Mac, government sponsored enterprises that purchase a large segment of conforming single family home mortgages, issued new instructions to lending

6 Agenda Report Page 6 institutions on how to treat properties with assessments under PACE programs. Subsequently, the FHFA instructed lenders to treat energy assessments as loans instead of assessments. In July 2010, the Federal Housing Finance Agency (FHFA) announced its opposition to PACE financing programs under the rationale the senior lien status afforded by California law to PACE transactions could make PACE investments risky for mortgage lenders. Under this status, and in the event of a default, borrowers could be required to repay PACE lenders prior to repaying their original mortgage lenders. On August 31, 2010, additional instructions were issued to lenders that Fannie Mae and Freddie Mac will not purchase mortgage loans secured by properties with an outstanding PACE obligation. To mitigate these concerns, the State tasked the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) with creation of the PACE Loss Reserve Program, a $10 million fund that will repay first mortgage lenders for any losses in a foreclosure or a forced sale that are attributable to a PACE lien covered under the Program. Residential PACE Providers participate in the Loss Reserve Program by applying to CAEATFA and demonstrating that they meet the Program s minimum underwriting criteria. Once a Residential PACE Provider is enrolled, the Loss Reserve will cover assessments issued by that program for their full terms, or until funds are exhausted. In the three years since the authorization of the CAEATFA PACE Loss Reserve Program, no claims against it have been made. It should be noted that debt obligations from PACE financing run with the property rather than the applicant, since the repayment is generated from the utility savings associated with the improvements. Thus, whoever owns the building is responsible for repayment per the conditions of the agreement with the program administrator. Terms vary by program, but are generally considered in line with market rate options for similar improvements. BENEFITS TO THE CITY OF PIEDMONT: PACE programs provide an additional means of financing to make environmentally sustainable property improvements more affordable and accessible to property owners. PACE financing provides capital for renewable energy systems, electric vehicle charging infrastructure, and a range of energy and water efficiency improvements to buildings. Some PACE programs also include seismic upgrades as an eligible improvement. The offering differs from traditional home equity loans or lines of credit in that eligibility is based on property equity rather than the credit worthiness of the applicant. Some advantages to PACE financing include 100% financing for eligible improvements, a repayment period of up to twenty years, and the reliability of pre-approved contractors. Adoption of the resolutions and actions contained herein would not result in any additional costs to the City. All costs of marketing, financing, and program administration are born by the program administrators, and with private capital. If approved, staff will modify the City s Climate Action Program webpage by listing and providing links to all Residential PACE Providers operating in Piedmont. Additionally, there are no anticipated fiscal or staffing impacts to the City for acknowledging ABAG s Residential PACE Provider Regional Collaborative Services Agreement. The City will have no administrative responsibilities, marketing obligations, or financial obligations associated with the Agreement.

7 Agenda Report Page 7 CONCLUSION: Creating a competitive marketplace with multiple providers creates a variety of options for home and business owners to finance improvement projects based on finance terms, conditions of approval, and eligible measures offered by the different programs. Authorizing multiple providers ensures that financing will remain available if one or more providers cease to operate in Piedmont. Supporting a viable PACE marketplace serves to implement the City s Climate Action Plan (CAP), which includes policies to develop comprehensive energy efficiency programs for the residential sectors. Signing the acknowledgement addendum for each PACE Provider under ABAG s Regional Collaborative Services agreement protects Piedmont residents by ensuring that PACE best management practices are followed. The resolutions and acknowledgements have been reviewed and approved by the City Attorney as to form and legality. By: Emily Alvarez, Assistant Planner ATTACHMENTS: Exhibit A Pages 8-10 Resolution to join the JPA for CEDA Exhibit B Pages Resolution to opt-in to Figtree Exhibit C Pages Resolution to join the JPA for GSFA and opt-in to Ygrene Exhibit D Pages Resolution to join the JPA for WRCOG and opt-in to California HERO Exhibit E Pages Memo regarding ABAG Regional Collaborative Services Agreement Exhibit F Pages ABAG Regional Collaborative Services Agreement with CEDA Exhibit G Page 66 ABAG Agreement Acknowledgement Form for Figtree Exhibit H Pages ABAG Regional Collaborative Services Agreement with GSFA Exhibit I Page 87 ABAG Agreement Acknowledgement Form for Ygrene Exhibit J Pages ABAG Regional Collaborative Services Agreement with WRCOG Exhibit K Page 109 ABAG Agreement Acknowledgement Form for California HERO

8 EXHIBIT A Agenda Report Page 8 ASSOCIATE MEMBERSHIP AGREEMENT by and between the CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY and the CITY OF PIEDMONT, CALIFORNIA THIS ASSOCIATE MEMBERSHIP AGREEMENT (this Associate Membership Agreement ), dated as of May 16 th, 2016 by and between CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY (the Authority ) and the CITY OF PIEDMONT, CALIFORNIA, a municipal corporation, duly organized and existing under the laws of the State of California (the City ); WITNESSETH: WHEREAS, the Cities of Selma, Lancaster and Eureka (individually, a Member and collectively, the Members ), have entered into a Joint Powers Agreement, dated as of June 1, 2006 (the Agreement ), establishing the Authority and prescribing its purposes and powers; and WHEREAS, the Agreement designates the Executive Committee of the Board of Directors and the President of the California Association for Local Economic Development as the initial Board of Directors of the Authority; and WHEREAS, the Authority has been formed for the purpose, among others, to assist for profit and nonprofit corporations and other entities to obtain financing for projects and purposes serving the public interest; and WHEREAS, the Agreement permits any other local agency in the State of California to join the Authority as an associate member (an Associate Member ); and WHEREAS, the City desires to become an Associate Member of the Authority; WHEREAS, City Council of the City has adopted a resolution approving the Associate Membership Agreement and the execution and delivery thereof; WHEREAS, the Board of Directors of the Authority has determined that the City should become an Associate Member of the Authority; NOW, THEREFORE, in consideration of the above premises and of the mutual promises herein contained, the Authority and the City do hereby agree as follows:

9 EXHIBIT A Agenda Report Page 9 Section 1. Associate Member Status. The City is hereby made an Associate Member of the Authority for all purposes of the Agreement and the Bylaws of the Authority, the provisions of which are hereby incorporated herein by reference. From and after the date of execution and delivery of this Associate Membership Agreement by the City and the Authority, the City shall be and remain an Associate Member of the Authority. Section 2. Restrictions and Rights of Associate Members. The City shall not have the right, as an Associate Member of the Authority, to vote on any action taken by the Board of Directors or by the Voting Members of the Authority. In addition, no officer, employee or representative of the City shall have any right to become an officer or director of the Authority by virtue of the City being an Associate Member of the Authority. Section 3. Effect of Prior Authority Actions. The City hereby agrees to be subject to and bound by all actions previously taken by the Members and the Board of Directors of the Authority to the same extent as the Members of the Authority are subject to and bound by such actions. Section 4. No Obligations of Associate Members. The debts, liabilities and obligations of the Authority shall not be the debts, liabilities and obligations of the City. Section 5. Execution of the Agreement. Execution of this Associate Membership Agreement and the Agreement shall satisfy the requirements of the Agreement and Article XII of the Bylaws of the Authority for participation by the City in all programs and other undertakings of the Authority

10 EXHIBIT A Agenda Report Page 10 IN WITNESS WHEREOF, the parties hereto have caused this Associate Membership Agreement to be executed and attested by their proper officers thereunto duly authorized, on the day and year first set forth above. CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY By: Gurbax Sahota, Chair Board of Directors Attest: Helen Schaubmayer, Asst. Secretary CITY OF PIEDMONT, CALIFORNIA By: Margaret Fujioka, Mayor City Council Attest: John Tulloch City Clerk

11 EXHIBIT B Agenda Report Page 11 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PIEDMONT, STATE OF CALIFORNIA, CONSENTING TO INCLUSION OF PROPERTIES WITHIN THE INCORPORATED AREA OF THE CITY OF PIEDMONT IN THE FIGTREE PROPERTY ASSESSED CLEAN ENERGY PROGRAM TO FINANCE DISTRIBUTED GENERATION RENEWABLE ENERGY SOURCES AND ENERGY AND WATER EFFICIENCY IMPROVEMENTS, APPROVING THE REPORT SETTING FORTH THE PARAMETERS OF THE REFERENCED PROGRAM AND CERTAIN MATTERS IN CONNECTION THEREWITH RECITALS: WHEREAS, California Enterprise Development Authority ( CEDA ) has adopted the Figtree Property Assessed Clean Energy (PACE) and Job Creation Program (the Program or Figtree PACE ), to allow the financing of certain renewable energy, energy efficiency and water efficiency improvements (the "Improvements") through the levy of contractual assessments pursuant to Chapter 29 of Division 7 of the Streets & Highways Code ("Chapter 29"), and the issuance of improvement bonds or other evidences of indebtedness (the "Bonds") under the Improvement Bond Act of 1915 (Streets and Highways Code Sections 8500 et seq.) (the "1915 Act") upon the security of the unpaid contractual assessments; and WHEREAS, Chapter 29 provides that assessments may be levied under its provisions only with the free and willing consent of the owner of each lot or parcel on which an assessment is levied at the time the assessment is levied; and WHEREAS, the Board of Supervisors (the Board of Supervisors ) of the County of Alameda, a political subdivision of the State of California (the County ), on the 20 th of March, 2012 adopted Figtree PACE pursuant to the Act; and WHEREAS, the parameters of Figtree PACE are set forth in the Program Report and such Report has been prepared pursuant to Section of the Act and approved by the CEDA Board of Directors; and WHEREAS, the City Council of the City of Piedmont (the City Council ) has reviewed the Report; WHEREAS, the Act authorizes CEDA to enter into contractual assessments with property owners located within incorporated cities in the County of Alameda upon the approval of the legislative body of the related city to participate in Figtree PACE; and

12 EXHIBIT B Agenda Report Page 12 WHEREAS, the City of Piedmont (the City ) desires to participate with the County in Figtree PACE, and provide for participation in Figtree PACE by property owners located within City limits; and WHEREAS, pursuant to Chapter 29, the City authorizes CEDA to levy assessments, pursue remedies in the event of delinquencies, and issue bonds or other forms of indebtedness to finance the Improvements in connection with Figtree PACE; and WHEREAS, to protect the City in connection with operation of the Figtree PACE, Figtree Energy Financing, the program administrator, has agreed to defend and indemnify the City; and WHEREAS, the City will not be responsible for the levy of assessments, any required remedial action in the case of delinquencies, the issuance, sale or administration of the bonds or other indebtedness issued in connection with Figtree PACE. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Piedmont as follows: Section 1. Good Standing. The City is a municipal corporation in good standing. Section 2. Public Benefits. On the date hereof, the City Council hereby finds and determines that the Program and issuance of Bonds by CEDA in connection with Figtree PACE will provide significant public benefits, including without limitation, savings in effective interest rates, bond preparation, bond underwriting and bond issuance costs and reductions in effective user charges levied by water and electricity providers within the boundaries of the City. Section 3. Resolution of Intention. The City Council ratifies the resolution adopted by the CEDA Board of Directors on June 1, 2006 declaring the Board s intention to order the implementation of a contractual assessment program to finance Improvements pursuant to the Act. Section 4. Boundaries. The City Council hereby approves the inclusion in Figtree PACE all of the properties in the incorporated area within the City, as same may be amended through annexation from time to time, the acquisition, construction and installation within City limits of the energy and water efficiency measures set forth in the Report upon the request and agreement of the affected property owner, and the assumption of jurisdiction thereof by CEDA for the aforesaid purposes. The adoption of this Resolution by this City Council constitutes the approval by the City to participate in Figtree PACE. This City Council further authorizes CEDA to set the terms of, and implement, Figtree PACE and take each and every action necessary or desirable for financing the Improvements, including the levying, collecting and enforcement of the contractual assessments to finance the Improvements and the issuance of bonds, notes or other forms of indebtedness secured by such contractual assessments as authorized by Chapter 29. Section 5. Appointment of CEDA. The City hereby appoints CEDA as its representative to (i) record the assessment against the Participating Parcels, (ii) administer the District in accordance with the Improvement Act of 1915 (Chapter 29 Part 1 of Division 10 of

13 EXHIBIT B Agenda Report Page 13 the California Streets and Highways Code (commencing with Section 8500 et seq.) (the Law ), (iii) prepare program guidelines for the operations of the Program and (iv) proceed with any claims, proceedings or legal actions as shall be necessary to collect past due assessments on the properties within the District in accordance with the Law and Section of the California Government Code. The City is not and will not be deemed to be an agent of Figtree or CEDA as a result of this Resolution. Section 6. Program Report. The City Council hereby acknowledges that pursuant to the requirements of Chapter 29, CEDA has prepared and will update from time to time the "Program Report" for Figtree PACE (the "Program Report") and associated documents, and CEDA will undertake assessment proceedings and the financing of Improvements as set forth in the Program Report. Section 7. Foreclosure. The City Council hereby acknowledges that the Law permits foreclosure in the event that there is a default in the payment of assessments due on a property. The City Council hereby designates CEDA as its representative to proceed with collection and foreclosure of the liens on the defaulting properties within the District, including accelerated foreclosure pursuant to the Program Report. Section 8. Indemnification. The City Council acknowledges that Figtree has provided the City with an indemnification agreement, as shown in Exhibit A, for negligence or malfeasance of any type as a result of the acts or omissions of Figtree, its officers, employees, subcontractors and agents. The City Council hereby authorizes the appropriate officials and staff of the City to execute and deliver the Indemnification Agreement to Figtree. Section 9. City Contact Designation. The appropriate officials and staff of the City are hereby authorized and directed to make applications for Figtree PACE available to all property owners who wish to finance Improvements. The following staff persons, together with any other staff designated by the City Administrator from time to time, are hereby designated as the contact persons for CEDA in connection with Figtree PACE: Emily Alvarez, Assistant Planner, (510) , ealvarez@ci.piedmont.ca.us.the City Clerk is directed to provide a certified copy of this Resolution to Figtree Energy Financing. Section 10. CEQA. The City Council hereby finds that adoption of this Resolution is not a "project" under the California Environmental Quality Act ( CEQA ), 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 11. Effective Date. 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 Figtree Energy Financing. Section 12. Costs. Services related to the formation and administration of the assessment district will be provided by CEDA at no cost to the City. PASSED AND ADOPTED this 16th day of May, 2016 by the following vote, to wit:

14 EXHIBIT B Agenda Report Page 14 AYES: NOES: ABSENT: ABSTAIN: Councilmembers Councilmembers Councilmembers Councilmembers Mayor ATTEST:, City Clerk Approved as to Form: City Counsel

15 EXHIBIT B Agenda Report Page 15 EXHIBIT A Indemnification Agreement

16 EXHIBIT B Agenda Report Page 16 INDEMNIFICATION AGREEMENT BY AND BETWEEN THE CITY OF PIEDMONT AND FIGTREE COMPANY, INC. This Indemnification Agreement (the Agreement ) is entered into by and between the City of Piedmont, a municipal corporation or political subdivision, duly organized and existing under the laws of the State of California (the Public Entity ) and Figtree Company, Inc., a California corporation, the administrator of the Figtree Property Assessed Clean Energy and Job Creation Program (the Administrator ), which is a program of the California Enterprise Development CEDA, a California joint exercise of powers authority (the CEDA ). RECITALS WHEREAS, the CEDA is a joint exercise of powers authority whose members include the Public Entity in addition to other cities and counties in the State of California; and WHEREAS, the CEDA established the Figtree Property Assessed Clean Energy and Job Creation Program (the Figtree PACE Program ) to allow the financing of certain renewable energy, energy efficiency and water efficiency improvements that are permanently affixed to real property through the levy of assessments voluntarily agreed to by the participating property owners pursuant to Chapter 29 of Division 7 of the Streets and Highways Code ( Chapter 29 ) and the issuance of improvement bonds, or other forms of indebtedness, under the Improvement Bond Act of 1915 upon the security of the unpaid assessments; and WHEREAS, the CEDA has conducted or will conduct proceedings required by Chapter 29 with respect to the territory within the boundaries of the Public Entity; and WHEREAS, the legislative body of the Public Entity adopted or will adopt a resolution authorizing the Public Entity to join the Figtree PACE Program; and WHEREAS, the Public Entity will not be responsible for the formation, operation and administration of the Figtree PACE Program as well as the sale and issuance of any bonds or other forms of indebtedness in connection therewith, including the conducting of assessment proceedings, the levy and collection of assessments and any remedial action in the case of such assessment payments, and the offer, sale and administration of any bonds issued by the CEDA on behalf of the Figtree PACE Program; and WHEREAS, the Administrator is the administrator of the Figtree PACE Program and agrees to indemnify the Public Entity in connection with the operations of the Figtree PACE Program as set forth herein; 6

17 EXHIBIT B Agenda Report Page 17 NOW, THERFORE, in consideration of the above premises and of the Public Entity s agreement to join the Figtree PACE Program, the parties agree as follows: 1. Indemnification. Figtree has provided the CEDA with an indemnification for negligence or malfeasance of any type as a result of the acts or omissions of Figtree, its officers, employees, subcontractors and agents, arising from or related to the Figtree PACE Program, the assessments, the assessment districts, the improvements or the financing and marketing thereof. Figtree agrees to defend, indemnify and hold harmless the Public Entity, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all actions, suits, proceedings, claims, demands, losses, costs and expenses, including legal costs and attorneys fees, for injury or damage due to negligence or malfeasance of any type claims as a result of the acts or omissions of Figtree, except for such loss or damage which was caused by the sole negligence or willful misconduct of the Public Entity. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Figtree. 2. Amendment/Interpretation of this Agreement. This Agreement represents the entire understanding of the parties as to those matters contained herein. No prior oral or written understanding shall be of any force or effect with respect to those matters covered hereunder. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. This Agreement shall not be interpreted for or against any party by reason of the fact that such party may have drafted this Agreement or any of its provisions. 3. Section Headings. Section headings in this Agreement are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. 4. Waiver. No waiver of any of the provisions of this Agreement shall be binding unless in the form of writing signed by the party against whom enforcement is sought, and no such waiver shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof. 5. Severability and Governing Law. If any provision or portion thereof of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California applicable to contracts made and to be performed in California. 6. Notices. All notices, demands and other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed certified or registered mail and addressed as follows: If to the Administrator Figtree Company, Inc Mira Mesa Blvd., Suite 130 San Diego, California Attn: Chief Executive Officer 7

18 EXHIBIT B Agenda Report Page 18 If to the Public Entity: City of Piedmont 120 Vista Avenue Piedmont, CA Attn: Planning Department 7. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, which together shall constitute the same instrument. 8. Effective Date. This Agreement will be effective as of the date of the signature of Public Entity s representative as indicated below in the signature block. IN WITNESS HEREOF, the parties hereto duly executed this Agreement as of the date below. APPROVED AS TO FORM: Public Entity Attorney Public Entity Name By Name: Paul Benoit Title: City Administrator Date: Figtree Company, Inc., a California corp. By Name: Mahesh Shah Title: CEO Date: 8

19 EXHIBIT C Agenda Report Page 19 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PIEDMONT, CALIFORNIA, CONSENTING TO INCLUSION OF PROPERTIES WITHIN THE CITY S JURISDICTION IN THE CALIFORNIA HOME FINANCE AUTHORITY, PROGRAM TO FINANCE RENEWABLE ENERGY GENERATION, ENERGY AND WATER EFFICIENCY IMPROVEMENTS AND ELECTRIC VEHICLE CHARGING INFRASTRUCTURE AND APPROVING ASSOCIATE MEMBERSHIP IN THE JOINT EXERCISE OF POWERS AUTHORITY RELATED THERETO WHEREAS, the California Home Finance Authority ( Authority ) is a joint exercise of powers authority established pursuant to Chapter 5 of Division 7, Title 1 of the Government Code of the State of California (Section 6500 and following) (the Act ) and the Joint Power Agreement entered into on July 1, 1993, as amended from time to time (the Authority JPA ); and WHEREAS, the Authority is in the process of amending the Authority JPA to formally change its name to the Golden State Finance Authority; and WHEREAS, Authority has established a property-assessed clean energy ( PACE ) Program (the Authority PACE Program ) to provide for the financing of renewable energy generation, energy and water efficiency improvements and electric vehicle charging infrastructure (the Improvements ) pursuant to Chapter 29 of the Improvement Bond Act of 1911, being Division 7 of the California Streets and Highways Code ( Chapter 29 ) within counties and cities throughout the State of California that elect to participate in such program; and WHEREAS, City of Piedmont (the City ) is committed to development of renewable energy generation and energy and water efficiency improvements, reduction of greenhouse gases, and protection of the environment; and WHEREAS, in Chapter 29, the Legislature has authorized cities and counties to assist property owners in financing the cost of installing Improvements through a voluntary contractual assessment program; and WHEREAS, installation of such Improvements by property owners within the jurisdictional boundaries of the counties and cities that are participating in the Authority PACE Program would promote the purposes cited above; and WHEREAS, the City wishes to provide innovative solutions to its property owners to achieve energy and water efficiency, and in doing so cooperate with Authority in order to efficiently and economically assist property owners within the City in financing such Improvements; and WHEREAS, Authority has established the Authority PACE Program, which is such a voluntary contractual assessment program, as permitted by the Act, the Authority JPA, originally made and entered into July 1, 1993, as amended to date, and the City, desires to become an Associate Member of the JPA by execution of the JPA Agreement, a copy of which is attached \

20 EXHIBIT C Agenda Report Page 20 as Exhibit A hereto, to participate in the programs of the JPA and to assist property owners within the jurisdiction of the City in financing the cost of installing Improvements; and WHEREAS, the City will not be responsible for the conduct of any assessment proceedings; the levy and collection of assessments or any required remedial action in the case of delinquencies in the payment of any assessments or the issuance, sale or administration of any bonds issued in connection with the Authority PACE Program. NOW, THEREFORE, BE IT RESOLVED THAT: 1. This City Council finds and declares that properties in the City s incorporated area will be benefited by the availability of the Authority PACE Program to finance the installation of the Improvements. 2. This City Council consents to inclusion in the Authority PACE Program of all of the properties in the jurisdictional boundaries of the City and to the Improvements, upon the request by and voluntary agreement of owners of such properties, in compliance with the laws, rules and regulations applicable to such program; and to the assumption of jurisdiction thereover by Authority for the purposes thereof. 3. The consent of this City Council constitutes assent to the assumption of jurisdiction by Authority for all purposes of the Authority PACE Program and authorizes Authority, upon satisfaction of the conditions imposed in this resolution, to take each and every step required for or suitable for financing the Improvements, including the levying, collecting and enforcement of the contractual assessments to finance the Improvements and the issuance and enforcement of bonds to represent such contractual assessments. 4. This City Council hereby approves joining the JPA as an Associate Member and authorizes the execution of the California Home Finance Authority Amended and Restated Joint Exercise of Powers Agreement attached hereto as Exhibit A. 5. City staff is authorized and directed to coordinate with Authority staff to facilitate operation of the Authority PACE Program within the City, and report back periodically to this City Council on the success of such program. 6. This Resolution shall take effect immediately upon its adoption. The City Clerk is directed to send a certified copy of this resolution to the Secretary of the Authority. (Insert Voting Block for the City) \

21 EXHIBIT C Agenda Report Page 21 Exhibit A JPA Agreement \

22 EXHIBIT C Agenda Report Page 22 CALIFORNIA HOME FINANCE AUTHORITY AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT (Original date July 1, 1993 and as last amended and restated December 10, 2014) THIS AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT ( Agreement ) is entered into by and among the counties listed on Attachment 1 hereof and incorporated herein by reference. All such counties are referred to herein as "Members" with the respective powers, privileges and restrictions provided herein. RECITALS A. WHEREAS, the California Rural Home Mortgage Finance Authority ( CRHMFA ) was created by a Joint Exercise of Powers Agreement dated July 1, 1993 pursuant to the Joint Exercise of Powers Act (commencing with Article 1 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the Act ). By Resolution , adopted on January 15, 2003, the name of the authority was changed to CRHMFA Homebuyers Fund. The most recent amendment to the Joint Exercise of Powers Agreement was on January 28, B. WHEREAS, the Members of CRHMFA Homebuyers Fund desire to update, reaffirm, clarify and revise certain provisions of the joint powers agreement, including the renaming of the joint powers authority, as set forth herein. C. WHEREAS, the Members are each empowered by law to finance the construction, acquisition, improvement and rehabilitation of real property. D. WHEREAS, by this Agreement, the Members desire to create and establish a joint powers authority to exercise their respective powers for the purpose of financing the construction, acquisition, improvement and rehabilitation of real property within the jurisdiction of the Authority as authorized by the Act. NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Members individually and collectively agree as follows: 1. Definitions Unless the context otherwise requires, the following terms shall for purposes of this Agreement have the meanings specified below: "Act" means the Joint Exercise of Powers Act, commencing with Article 1 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, including the Marks-Roos Local Bond Pooling Act of 1985, as amended. "Agreement" means this Joint Exercise of Powers Agreement, as the same now exists or as it may from time to time be amended as provided herein.

23 EXHIBIT C Agenda Report Page 23 "Associate Member" means a county, city or other public agency which is not a voting member of the Rural County Representatives of California, a California nonprofit corporation ( RCRC ), with legal power and authority similar to that of the Members, admitted pursuant to paragraph 4.d. below to associate membership herein by vote of the Board. Audit Committee means a committee made up of the nine-member Executive Committee. "Authority" means California Home Finance Authority ( CHF ), formerly known as CRHMFA Homebuyers Fund or California Rural Home Mortgage Finance Authority. "Board" means the governing board of the Authority as described in Section 7 below. "Bonds" means bonds, notes, warrants, leases, certificates of participation, installment purchase agreements, loan agreements and other securities or obligations issued by the Authority, or financing agreements entered into by the Authority pursuant to the Act and any other obligation within the meaning of the term "Bonds" under the Act. Delegate means the Supervisor designated by the governing board of each Member to serve on the Board of the Authority. Executive Committee means the nine-member Executive Committee of the Board established pursuant to Section 10 hereof. "Member" means any county which is a member of RCRC, has executed this Agreement and has become a member of the Authority. Obligations means bonds, notes, warrants, leases, certificates of participation, installment purchase agreements, loan agreements and other securities or obligations issued by the Authority, or financing agreements entered into by the Authority pursuant to the Act and any other financial or legal obligation of the Authority under the Act. Program or Project means any work, improvement, program, project or service undertaken by the Authority. "Rural County Representatives of California" or RCRC means the nonprofit entity incorporated under that name in the State of California. Supervisor means an elected County Supervisor from an RCRC member county. 2. Purpose The purpose of the Authority is to provide financing for the acquisition, construction,, improvement and rehabilitation of real property in accordance with applicable provisions of law for the benefit of residents and communities. In pursuit of this purpose, this Agreement provides for the joint exercise of powers common to any of its Members and Associate Members as provided herein, or otherwise authorized by the Act and other applicable laws, including assisting