For municipalities to opt in to C-PACE, their legislative body must first pass a resolution to empower the municipality’s chief executive officer to sign an agreement with the Connecticut Green Bank. The second step is for the municipality’s chief executive officer to sign this agreement, pursuant to which the municipality agrees to assign, assess, collect, and remit, benefit assessments to the Green Bank.
Because C-PACE utilizes the municipalities’ existing method of collecting payments, the Green Bank expects added costs to be minimal in early stages of the C-PACE program. The Green Bank pays a $500 stipend to towns for their basic participation. This amount can be supplemented should it prove necessary. The Green Bank works with Quality Data Services (QDS) and all tax collection software providers to incorporate the C-PACE process into standard operations.
The Green Bank works with participating municipalities to market to building owners. The Green Bank provides municipalities with materials, including (1) market data on eligible buildings in their town; (2) marketing material; and (3) sample text to send to owners, media outlets or other relevant stakeholders.
A municipality is responsible for recording the benefit assessment, billing per the repayment schedule, processing payments and remitting funds. They are not guaranteeing the collection of the funds. The municipality must ensure that the C-PACE funds are separately accounted for and deposited in a separate account and not used for any other purpose. If a building owner is deficient or delinquent on their C-PACE assessment, the municipality remits only funds received and is not responsible for delinquent collection. In the case of a non-payment, the Green Bank can begin a collection process or separately engage the municipality. See sections 3c and 3f of the sample municipal agreement.
C-PACE funds cannot be commingled with municipality funds. The municipality will place the C-PACE collected funds assessment in a separate account pursuant to the legal agreement executed with each municipality, and the municipality has a fixed window by which they must remit such funds to the Green Bank. The Green Bank distributes funds to the lienholders of the associated benefit assessment(s). The municipality is not responsible for pursuing delinquencies or collection efforts beyond customary delinquency notices.
Municipal liens related to real property have first priority, followed by C-PACE payments in arrears, followed by non-real property municipal liens and assessments, followed by the first mortgage holder. The municipality is not required to pay the Green Bank if the owner is delinquent.
The municipality does not need to create its own program locally by opting into the statewide C-PACE Program. As statewide administrator, the Connecticut Green Bank administers the program, whose duties include: 1) establishing program guidelines governing terms and conditions for facilitating financing to pay for energy conservation measures in commercial and industrial-type facilities; 2) receiving applications from building owners and approving them based upon eligibility requirements dictated in the program guidelines; and 3) providing an annual report to the municipality on projects that have executed a finance agreement, C-PACE project payment status for partially and fully paid by building owners, and total benefit assessments paid to the Green Bank in the prior year.
The municipality is not responsible for providing or facilitating the financing needed to complete a commercial property’s energy-saving project. The Green Bank is responsible for facilitating financing for energy-saving projects and consistently strives to grow an open market whereby private capital providers supply the funding to fund projects through C-PACE. The building owner would enter into a financing agreement with the Green Bank, and not with the municipality in which the building is located. At no time would the municipality be required to provide its own capital contribution to C-PACE projects.
Through a financing agreement with the participating building owner, the Capital Provider will determine the total benefit assessment amount, inclusive of any fees, and the interest rate. The Green Bank, in its role as statewide administrator, shall provide written notice to the Municipality and the Municipality will levy the Benefit Assessment (documentation for which is furnished by the Green Bank) and file a lien on the Property in an amount sufficient to pay the estimated costs of the project (the “Benefit Assessment Lien”). The Municipality shall assign to Green Bank all powers and rights under the Benefit Assessment Lien and the Green Bank will assign to the Capital Provider all powers and rights under the Benefit Assessment Lien. The Benefit Assessment Lien may include a schedule of payments due and payable pursuant to the Benefit Assessment, or in some cases an amended lien is filed with the payment schedule at the completion of the construction project. The Green Bank is responsible for bringing amended liens to the attention of the tax collector.