Frequently Asked Questions for Local Governments
PACE Financings are authorized in the State of Wisconsin pursuant to Section 66.0627(8), (the “PACE Statute”). The PACE Statute enables “political subdivisions” (counties, cities, towns and villages) to impose a special charge on real property to secure loans made for energy efficiency, water conservation and renewable energy improvements.
A political subdivision must adopt a local ordinance authorizing the use of special charges to secure PACE financings and must create a program structure for the use of PACE special charges to ensure that PACE financings made in its jurisdiction are consistent with the PACE Statute.
With the support of the Wisconsin Counties Association and the League of Wisconsin Municipalities—Wisconsin local governments established the Wisconsin PACE Commission (the “PACE Commission”). Wisconsin counties and municipalities utilized their joint exercise of powers authority under Wisconsin Statute § 66.0301, to form the PACE Commission. Under the terms of a Joint Exercise of Powers Agreement (the “JPA”), County members agree to adopt a Model PACE Ordinance, and to delegate to the PACE Commission the ability to impose PACE special charges according to a single, uniform PACE program operated in the PACE Commission members’ jurisdiction. Municipal members (cities, villages, and towns) join the PACE Commission, participate in its governance, and agree to support the PACE Commission.
For an individual unit of government, creating a PACE program from the ground up can be time consuming and resource-intensive. That’s why—with the support of the Wisconsin Counties Association and the League of Wisconsin Municipalities—Wisconsin local governments established the PACE Commission, which offers an efficient and cost-effective option to collectively administer a uniform PACE program in Wisconsin entitled "PACE Wisconsin." The PACE Commission establishes uniform standards, documents, and best practices applied consistently across the state. A single PACE program promotes scalability by simplifying participation for stakeholders (financial institutions, contractors, project developers, and building owners).
The market facing brand name for the PACE program offered by the PACE Commission and administered by the Program Administrator pursuant to the terms of the Program Manual. How does the Model PACE Ordinance work? County members agree to adopt a Model PACE Ordinance as a condition of joining the PACE Commission. Among other powers, this ordinance authorizes the County to impose a PACE special charge, collect payments for the special charge in installments, place those installments on the tax roll, and delegate that authority to the PACE Commission.
While the Model Ordinance does appear to place this responsibility on the County, there is no intention for the County to be required to do so. In this regard, the wording of the Model Ordinance is somewhat of a legal formality. A political subdivision cannot delegate rights or powers to a joint powers commission that the political subdivision itself does not have. The authority to assess special charges and administer PACE Financings under the PACE Statute is first created by the County for itself (by adopting the Model Ordinance) and then delegated to the PACE Commission.
Participating Counties and Municipalities will delegate to the PACE Commission the power to administer the PACE program in their jurisdictions, which will include creating PACE program guidelines, PACE Project qualification and general program oversight. County Members will delegate the additional powers to impose special charges as part of PACE Projects and collect the installments for the PACE Financing. PACE Wisconsin is then administered by a Program Administrator the Wisconsin Energy Conservation Corporation, a Wisconsin nonprofit organization.
The Program Administrator serves as a single point of access for stakeholders to access PACE financing. Serving as an agent of the PACE Commission, the Program Administrator maintains and enforces comprehensive program guidelines to ensure each PACE project meets the requirements of the Wisconsin PACE statute, model ordinance and program guidelines as set forth in the Program Manual. The Program Administrator also certifies that special charge repayments occur according to contract. The Program Administrator is also responsible for: 1) recruiting members to join the PACE Commission, 2) recruiting PACE Lenders to offer financing to program participants, 3) providing marketing and outreach to PACE Wisconsin stakeholders, and 4) administration of certain PACE Commission activities.
Property owner participation in PACE Wisconsin is 100 percent voluntary. No property owner is obligated to take any action. Only those property owners who choose to use PACE to improve their property pay the special charge.
PACE Wisconsin requires no credit exposure, nor dedication of general funds, or allocation from constricted budgets for local governments to implement PACe. To help promote no-cost, efficient implementation, PACE Wisconsin is administered by a Wisconsin nonprofit organization which recovers its costs through transaction fees assessed on completed projects.
The PACE Statute authorizes two sources for PACE Financings – third-party financing (including banks, other private lenders or affiliates of the PACE borrower) and public financing by a political subdivision. There is private capital available for PACE Financings and it is anticipated that this will be the predominant source of financing. PACE Wisconsin is an “open market,” meaning any qualified lender can participate—providing property owners with access to competitive rates and financing terms. See PACE Lenders for program qualification requirements. Local governments retain the option to make available public funds to fund PACE Financings for qualified PACE Projects, though this will not be a requirement for the Wisconsin PACE Commission.
No. To participate in the program, PACE Lenders recognize that neither the Wisconsin PACE Commission nor its Members have an obligation to settle or reimburse PACE Special Charges to PACE Lenders.
See the PACE Financing FAQ’s available here.