Last week the Fayetteville City Council unanimously enacted an ordinance that will create the first energy improvement district as part of the Property Assessed Clean Energy (PACE) financing program (Act 1074), which was enacted by the state legislature earlier this year.
Mayor Lioneld Jordan and council will appoint seven members of a PACE board of directors and plan to formally launch the program after the first of the year, 2014. One member will be appointed by the mayor and six will be selected by the city council to serve a term of two years.
"I am proud that the city of Fayetteville is creating the first PACE district in Arkansas," Jordan said. "PACE will provide green jobs that will help build the future of Fayetteville."
Signed into law by Governor Beebe in April, the Arkansas local-option PACE program authorizes the voluntary creation of energy improvement districts to fund loans for 100% of the cost of energy savings projects by interested property owners.
The loans are repaid via a special assessment on the owner's property. Loan payments are generally less than the amount of energy savings achieved, so most business owners experience an increase in cash flow. Without access to low-cost financing opportunities, Arkansas property owners must typically bear the upfront costs of energy savings projects, an obstacle that has stymied many energy savings projects in Arkansas.
"The security of tying the repayment of loans to property tax assessments combined with low default rates allow PACE to offer very low and extremely attractive interest rates for these improvement loans," said Peter Nierengarten, city sustainability and strategic planning director. "PACE is a completely voluntary program that enables private investment for the purpose of energy savings."