Cheboygan County to move forward with scheduling of PACE public hearing

The Cheboygan County Board of Commissioners will move forward in scheduling a public hearing regarding establishment of a district in which the Property Assessed Clean Energy, or PACE, program can be used.

The public hearing to potentially establish the PACE program district in the county will be at the April 26 county board meeting.

The PACE program is an economic development tool promoting the installation of energy efficiency improvements and renewable energy systems by new and existing commercial and industrial properties within a district set up by local municipalities.

"Over the past year, there's been a group that has come to the region, Lean and Green Michigan, that has given presentations at the region level, at NEMCOG and also individual counties and municipalities about the PACE program," said Cheboygan County Administrator Jeff Lawson.

Lawson said there are other counties in the region who have already adopted the program, with Otsego County being most recent. Emmet County also has an adopted program.

"Any particular unit in a county could actually adopt a PACE program, but it becomes most effective for economic development if it's adopted at the county level," said Lawson.

By adopting the program at the county level, anyone who has a business in the county can come forward for a potential loan. It is more efficient to have the program housed within the county than to have multiple units with the program districts established.

Lawson, along with Cheboygan County Treasurer Buffy Jo Weldon and Cheboygan County Equalization Director Elizabeth Zabik, met multiple times with Lean and Green Michigan. Local government officials — such as Cheboygan City Manager Dan Sabolsky — were invited to sit in and have questions answered on how assessments and collections would work for properties who participate in the program.

More: Cheboygan County tentatively looking into PACE program

One big concern voiced during these meetings was if a property goes into foreclosure, would the county be responsible for paying back the loan on the property with its foreclosure fund? After the agreement was reviewed by Cheboygan County legal counsel, it was determined best to include in the county's agreement for the PACE program lending institutions who finance these projects will have to sign off saying they will not go after any type of foreclosure funds.

"Because the state act doesn't specifically state that, there is a chance that a lending institution could come forward and try to pursue that," said Lawson.

By having it in the agreements, it protects the county from banks trying to come back for reimbursement should there be a foreclosure.

At the Cheboygan County Board of Commissioners meeting this week, the board members went through a number of documents connected to the program, which can be viewed on the county's website. These documents include an overview of the program and a list of requirements businesses must meet to be eligible to participate. A draft of the application is also included in this packet.

Lawson said if the county commissioners wanted to move forward with creating the district, the public hearing to establish it would be at the commissioners' April 26 meeting. This will give the residents of the county an opportunity to have any questions regarding the program answered, as well as voice any opinions they may have.

"Once the public hearing is completed, then typically you would adopt the approval resolution ... which then approves our plan within the county," said Lawson.

The determination had been made that repayments of the loans for the energy efficiency improvements will not be made directly to the county, they would be made to the lending institution. It will also be up to the banks to determine whether they feel it is a good project and want to lend the money to make the upgrades.

Ideally, the loans would be paid back from the savings the businesses would realize from the improved energy efficiency. Special assessments would also be set up where if the loan was not paid by the savings, the county would collect the assessments to pay what is owed. If a property were to go into foreclosure, only the immediate back taxes would be paid and the special assessment would stay with the property, to be paid by the person who purchases the property at the tax sale.

Lawson said when speaking with Lean and Green Michigan, the organization had stated it did not know of any foreclosed properties that had participated in the program within the state in the more than 10 years the program has existed.

There are other agencies who offer the PACE program, so the county does not have to use Lean and Green Michigan. The county could also do the program on its own, but would have to cover all the cost associated to put everything together.

"There's really not a reason why we would go that route," Lawson said.

The establishment of this program would come at no cost to the county and would use no taxpayer dollars for any aspect of it. The money for the upgrades would be from lending institutions, not the county.

Cheboygan County Board of Commissioners Vice Chair Rich Sangster said he feels the county should move forward with this project, as it is another economic development tool to have available in the area.

Contact Features Writer Kortny Hahn at khahn1@gannett.com. Follow her on Twitter at @khahnCDT.

This article originally appeared on Cheboygan Daily Tribune: Cheboygan County to schedule PACE public hearing