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City of Fayetteville Creates First Property Assessed Clean Energy (PACE) District in the State of Arkansas
On Tuesday, October 15, 2013, the Fayetteville City Council unanimously passed an ordinance that creates an Energy Improvement District for the City of Fayetteville. The District will manage innovative financing programs for renewable energy, energy efficiency and water conservation improvements on residential, commercial, industrial and other real properties at the request of the owner. These financing programs include property assessed clean energy (PACE) as a financing option.
PACE has long been a priority for Fayetteville Mayor Lioneld Jordan. At Tuesday night’s City Council Meeting Mayor Jordan talked about how proud he was to be creating the first PACE district in Arkansas and added that PACE would provide green jobs that would help build the future of Fayetteville.
PACE is a creative financing mechanism that allows property owners to borrow money for weatherization, energy efficiency, renewable energy or water conservation improvements to their property. 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. PACE is a completely voluntary program that enables private investment for the purpose of energy savings.
PACE enabling legislation was passed by the Arkansas Legislature in the 2013 session and signed by Governor Mike Beebe in April 2013. That legislation allows Cities, Counties or the State to create Energy Improvement Districts within the State of Arkansas. The Arkansas Legislature noted that Energy Improvement Districts would benefit Arkansas by:
* Creating jobs and stimulating the economy
* Generating significant economic development
* Protecting citizens from the rising cost of electricity and non-renewable fuels
* Providing citizens with options for financing improvements that are otherwise not available
* Providing a positive cash flow on energy improvements
* Increasing the value of real property
* Improving the state’s air quality and conserving natural resources
* Promoting energy independence and security for the nation and state
FAYETTEVILLE ENERGY IMPROVEMENT DISTRICT
The Energy Improvement District will manage innovative financing programs, including PACE, for renewable energy, energy efficiency and water conservation improvements on residential, commercial, industrial and other real properties at the request of the owner. Fayetteville’s Energy Improvement District will be managed and controlled by a board of seven directors who will at a minimum meet quarterly. One board member will be appointed by Mayor Jordan. The remaining six at-large members will be appointed by the City Council through the normal Boards and Committees selection process. Once the full board is selected by the beginning of 2014, they will begin working to develop the PACE program for Fayetteville.