Florida PACE Funding


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Florida PACE Funding

  1. 1. FPP 2012-001Pre-Proposal Conference
  2. 2.  PACE stands for “Property Assessed Clean Energy” PACE is designed to provide commercial and residential property owners a means to finance the costs of installing renewable energy and energy efficiency improvements to their buildings and pay for the costs over the functional life of the improvement as an on-going assessment on property tax bills. Florida legislation also permits the financing of wind resistance improvements.
  3. 3.  In 2010, Florida enacted Section 163.08, Florida Statutes, to provide general law authority to use special assessments to finance qualifying improvements to real property. Supplemental authority is granted to cities and counties to levy special assessments to finance “qualifying improvements”. All PACE special assessments are voluntary. Mandates special assessments be collected only on annual property tax bill; and are not severable from property taxes due. Establishes certain credit limits and amount limits for assessments. Authorizes local governments to work together and to work with for-profit and not-for-profit entities to operate a program.
  4. 4.  Cities or Counties can act individually or collectively as a conduit to make financing available to property owners. Each separate financing is secured by a statutorily authorized non-ad valorem special assessment on the improved property in the form of a financing agreement. Each financing is paid back through assessment payments made as part of the property tax bill (the mortgage escrow can be increased to include the annual assessment as part of the owner’s monthly mortgage payment, which effectively converts the annual cost to a monthly cost). Assessments are on a parity with other special assessments and property taxes and are senior to all titles, mortgages and other non-tax related liens.
  5. 5.  Cost of start up and implementation can be expensive and small local programs have to rely on local government funding or resources. Current lack of local government funding resources, expertise and focus are limiting factors. Individual local programs have resulted in a lack of uniformity of standards from one local government to another. Inability to create large demand which is needed to attract significant funding. Unsettled issues raised by federal mortgage giants. Liability concerns.1. Based on findings in Financial Innovations Lab Report, Milken Institute, April, 2010
  6. 6.  An entity with authority to operate throughout a state allows for establishment and use of uniform standards and procedures for both property owners and vendors. Statewide entity only acts upon invitation from local government. Larger scale enhances ability to attract needed financial resources to adequately fund growing demand. Centralized administration provides efficiencies and cost savings. A statewide program fosters a partnership with commercial and industrial groups, educators, energy auditors, contractors, suppliers and installers – and creates local private sector jobs! Uniform approach works to address concerns in residential mortgage market. Provides limited liability for local governments.
  7. 7.  The Florida PACE Funding Agency was created in June 2011 by general law through an interlocal agreement between Flagler County and the City of Kissimmee. The Agency is a separate legal entity independent of these incorporators. The Agency’s mission is to facilitate the implementation, planning, development, funding, financing, marketing and management of a uniform statewide platform so that counties and cities can easily and economically take advantage of a scalable program for their property-owning constituents. The Agency has adopted a master bond resolution, and has validated with respect to the Agency’s Program the Agency’s ability to issue bonds to fund voluntary financing agreements entered into pursuant to general law, together with a litany of matters and issues associated with the statutorily authorized non-ad valorem assessments which will comprise the sole revenues to repay the bonds, and the insulation of liability by subscribing governments to debts and obligations of the Agency for the Program. No local or state funds other than revenues from the special assessments are available to the Agency to fund program costs or reserves.
  8. 8.  The mission of the Agency is be to aspire to and undertake, cause and/or perform all such acts as are necessary to provide a uniform, efficient, and scalable statewide platform in Florida, so that, when and if embraced by individual local governments and interest property owners, the Agency can facilitate the provision, funding and financing of energy conservation, renewable energy, and wind- resistance improvements to Florida properties.
  9. 9.  The Agency has been designed to encourage local governments to subscribe to its statewide, uniform program. It is believed that such a subscription approach will be attractive to create markets with little or no cost to local government treasuries. The form of subscription agreements were approved by the Court in the validation Final Judgment. No special assessment will be imposed on any property for the cost of qualifying improvements unless all owners of the property voluntarily agree to allow the assessment to be imposed pursuant to a financing agreement entered into by the property owners and the local government. The Agency has judicially validated the nature and validity of non-ad valorem assessments imposed pursuant to its program providing certainty as to the impact on mortgage lenders doing business in Florida, as well as the ability to only issue bonds on an as needed basis to underwrite energy efficiency, renewable energy and wind resistance improvements.
  10. 10.  Key points of the program that serve as benefits to local governments include: ◦ This unique platform will allow for local governments to participate in the advantages of the PACE programs and access capital markets, without having to implement or deploy individual programs or individually seek capital for their constituents. ◦ The Agency will not provide its services within the jurisdiction of any local government that does not desire and request to cooperatively enter into a subscription agreement. ◦ The Agency’s charter, any future subscription agreements with local governments and the validation final judgment are all designed to make it clear that no local government is responsible for the actions or liabilities incurred by the Agency, thus providing and confirming the insulation of liability pursuant to general law to any participating local government.
  11. 11.  On November 7, 2011, the incorporators of the Agency appointed Cheryl Grieb, Barbara Revels, and Edward Marquez to serve on the Board of Directors for the Agency. ◦ Cheryl Grieb currently serves as the Mayor Pro-Tem for the City of Kissimmee and has done so since 2006. Concurrently since 2000, Ms. Grieb has been the Owner/Manager of Olde Kissimmee Investments, Inc., specializing in commercial and residential real estate construction, renovations and investments. ◦ Barbara Revels currently serves as the Vice-Chair of the Flagler County Board of County Commissioners. She is also a general contractor and realtor who serves as the president and owner of Coquina Real Estate & Construction, Inc., a full service real estate company and general contracting firm. Ms. Revels has previously served as the President of the Florida Homebuilders Association. ◦ Edward Marquez, was appointed as Deputy Mayor of Miami-Dade County Government in August 2011 by the Honorable Mayor Carlos A. Gimenez. As Deputy Mayor, Mr. Marquez is responsible for overseeing the internal management functions of the County, which include the County’s Management and Budget, Internal Services, Finance, Audit and Management, and Information Technology Departments. In addition to serving as Deputy Mayor, Mr. Marquez is also serving as Interim Finance Director. The new Board members have a wealth of local government, real estate and financial experience to bring to the Agency.
  12. 12.  The Board of Directors held their organizational meeting on November 10, 2011, at which meeting the Board took various actions including establishing a timetable to bring the Agency’s PACE program online. The Board of Directors has selected the PFM Group and FirstSouthwest and Southeastern Investments Securities, LLC to serve as co-financial advisors to the Agency. On November 15, 2010, responses to the Agency’s Request for Information from Providers of Third Party Administration and/or Investment Banking and Program Finance Services (the “RFI”) were received. The Board at its December 7, 2011 meeting established the parameters for the Agency’s Program and directed that a formal RFP for Third Party Administration and/or Investment Banking and Program Finance Services be issued. On January 9, 2012, the RFP was issued with a February 2, 2012 response date, on February 24, 2012 the short-listed firms will be selected for negotiation and by March 21, the Board expects to approve contracts with the selected firms. By the end of the second quarter of 2012, the Agency anticipates being in a position to fully commence initial operation of its PACE program.
  13. 13.  The Agency conducted a lengthy Request for Information process seeking industry input on how best to effect the operation of the first statewide platform for a PACE Program. With respect to administration functions, the Board determined that a single administration firm (or team) capable of administering both a residential and commercial program would be preferred. The administration firm would be acting as an agent of the Agency and would be subject to fiduciary obligations to the Agency. The firm or team of firms providing financial services would need to link the availability of short term funds necessary for the operation of the Agency’s program with the delivery of long term debt solutions. Both the administrative services provider and the financial services provider would need to be committed to the long term operation of the program, even if market demand and acceptance is slow to materialize or never materializes.
  14. 14.  The Agency intends on pursuing a statewide launch of the Program shortly after the service providers are selected and under contract. Although Florida has 67 counties, about 15 of these counties represent roughly 85% of total Florida population The service providers will be expected to launch in both heavily populated counties and less densely populated counties. The overall success and acceptance of the Program will heavily depend on the ability of the service providers to successfully market the Program to both vendors and property owners.
  15. 15.  The Agency prefers to engage a single TPA Service Provider to oversee the administration and marketing of the Program to both residential and commercial property owners and potential vendors of Qualifying Improvements in jurisdictions where the local government has subscribed to the Program. The Agency is seeking a TPA Service Provider that can readily demonstrate the capability and experience to undertake the delivery of services and marketing efforts believed to be needed to accommodate a rapid subscription by counties and cities to the Program. This robust subscription process may result in a need to serve virtually all of Florida within a very short time frame. Since no statewide PACE program currently exists, the Agency believes that the required skill sets for the Program can be found in existing administrative service providers. The ability of the TPA Service Provider to provide the services listed in the RFP and to develop and manage the new marketplace will be critical to the success of the program. The Agency will not be in a position to provide funds to the selected provider to cover the Program start-up and initial operating costs.
  16. 16.  The Agency seeks a financial Service Provider to provide both short term revolving funds and to underwrite the issuance of long term debt obligations as necessary to fund the Agency’s Program. The Agency prefers to engage a financial Service Provider or team of providers that readily demonstrate the capability and performance experience to deliver a program funding solution that assures consistent funding at the lowest possible cost. The Agency will not have funds to pay initial facility costs for the funding solution, but does expect to recover such costs through assessment payments over time. Thus the rapidity of the implementation of the Program will greatly affect the availability of such revenues to the Agency and the Program. The Agency will be seeking identification of the Proposer as a registered broker-dealer, or if not so registered, the inclusion of a broker-dealer with the Proposer team, or as a separate Agency selection. Any Respondent seeking to provide Program financing services must demonstrate its experience, capability and commitment to finance the Program as described in the RFP. To the extent that funding is being offered by a third party warehouse or line of credit, the Proposal shall include a commitment letter.
  17. 17.  The Agency anticipates the following schedule for the procurement process. The Agency reserves the right at its sole discretion to revise the schedule and other aspects of the RFP by issuing addendums to the RFP at any time. The Agency will post notices of any addendums to the RFP on the Website. Each potential Proposer must register with Demand Star or with the Agency’s point of contact in order to receive addendums and responses to questions. Proposers are responsible for monitoring the Website for information concerning the Program. All Proposers are required to acknowledge that they have received and reviewed all materials posted on the Website or provided through Demand Star.
  18. 18.  January 9, 2012 RFP Issued January 17, 2012 Pre-Proposal Conference January 19, 2012 Last day for written questions January 25, 2012 Answers to questions published February 2, 2012 Proposals due Continuing Proposal Evaluation February 24, 2012 Presentations/Interviews (Board) Continuing Negotiation of Agreement(s) March 21, 2012 Approval of Agreement(s) (Board)
  19. 19.  Proposers may submit written clarification questions via email to the Agency at procurement@FloridaPACE.gov any time before 5:00 PM ET on January 19, 2012. Questions will be answered as promptly and as completely as possible, and shared with all registered Proposers. Questions early in the process are encouraged.
  20. 20.  Before the submission of Proposals, communication to assemble team members is encouraged. After the submission of Proposals, no Proposer or any of its team members may participate in any capacity on another Proposer’s team or engage in any communication with another Proposer or its team members concerning the RFP. Team members of any Proposer teams that are not shortlisted will be allowed to participate on the shortlisted Proposer teams, subject to the requirements of the next paragraph. Any Proposer that fails to comply with these requirements may be disqualified from further participation in this solicitation. A shortlisted Proposer must obtain the Agency’s written approval before changing the composition of its team. A shortlisted Proposer must obtain the Agency’s written approval before communicating with a member of a Proposer team that was not shortlisted. A shortlisted Proposer seeking such approval must first submit to the Agency sufficient details of the proposed change or communication for review, consideration and approval by the Agency.
  21. 21.  Submit one original of the Proposal in loose-leaf three ring binders, plus eleven (11) complete electronic copies in indexed and searchable “PDF” format on CD (one copy of the Proposal on each of the eleven CDs). Proposals must be prepared in at least 12-point font size on 8.5” x 11” white paper, with pages sequentially numbered. Some of the sections described below have page limitations; the Agency may disregard information not complying with these page limitations. The Proposal contents shall be separated by sequentially numbered tabs as follows (and each electronic copy shall be indexed similarly). The Proposal shall be delivered no later than 1:00 p.m. EST on February 2, 2012, to: Debbie Luke, Acting Procurement Officer Florida PACE Funding Agency c/o City of Kissimmee Finance Department/Purchasing Division 101 North Church Street, 4th Floor Kissimmee, Florida 34741
  22. 22.  The Agency will initially review each Proposal for: (a) minor informalities, irregularities, and apparent clerical mistakes which are unrelated to the substantive content; and (b) conformance to the RFP instructions regarding organization and format. Proposals that are deemed nonresponsive to this RFP will be excluded from any further consideration. The Agency reserves the right to waive any minor nonconformance. Proposals may be excluded from further consideration and the Proposer will be so advised. The Agency may, in its sole discretion, also exclude from consideration any Proposer whose response contains a material misrepresentation. The Agency may, in its sole discretion, request clarifications of the information submitted, and may also rely upon any information obtained from any source that pertains to the issue of a Proposer’s integrity and capability to perform.
  23. 23.  The Agency’s preferences are (1) to award separate Agreements for TPA services and for financing services and (2) for a single TPA service providers for both residential and commercial properties. Proposers may offer Proposals that do not match the Agency’s preferences. However, if the Agency receives at least two (2) Proposals for TPA services and at least two (2) Proposals for financing services that do match its preferences, the Agency reserves the right to forego evaluation of Proposals that do not match its preferences. The Agency will evaluate all Proposals that do match its preferences. For those Proposals selected for evaluation, the Agency will apply the following high-level measures: Past Performance on Similar Functional Requirements Ability to Meet Program Goals and Objectives Financial Capacity