City and county want special district for green projects

Aspen Daily News

By Curtis Wackerle

August 5, 2009 - Voters in Pitkin County should be asked this fall if they want a “clean energy financing district” that could sell government bonds to finance energy efficiency and renewable energy upgrades for residential and commercial properties, elected officials at a joint session with Aspen City Council and Pitkin County commissioners said Tuesday.

The special taxing district, which takes advantage of a 2008 state law (House Bill 1350) would allow local government to sell bonds and then create a program where homeowners can apply for loans to do approved energy upgrades. Repayment for the improvements would spread out over 15 to 20 years, with payments included in special assessments added onto participants’ property tax bills. Payment obligations would carry with the property, transferring to subsequent owners.

The program would make it easier for homeowners to shore up insulation, improve windows and heating systems and create on-site renewable energy. Such work, even after government rebates and tax credits, still requires upfront costs that most homeowners would struggle to handle.

By eliminating the need for homeowners to provide the initial capital, the program addresses what is often the biggest hurdle for individuals who would like to do green upgrades on their homes, Pitkin County energy program manager Dylan Hoffman said.

Mayor Mick Ireland agreed. Say a solar panel costs $2,000 and saves about $140 per year in energy costs. At that rate, it would take 14 years for the improvement to pay for itself. But since most people can’t be sure they will own the property that long, there is a disincentive to make the improvement. But say, through the clean energy district, the bill for the solar panels would be $100 per year for 20 years added on to the property tax bill. Who wouldn’t take that deal? the mayor asked.

Pitkin County has met with representatives form Gunnison and Eagle counties who have expressed interest in creating a regional district, which could bond for larger amounts of money and share staff resources to handle the increased workload, Hoffman said.

“Gunnison and Eagle are both at the table,” he said, noting the significance and challenge of rural locals eyeing special districts. So far, these programs have only been available in a few urban areas.

Boulder County, which this spring bonded for $6.6 million to loan for residential improvements, is on the leading edge of municipalities across the nation taking on the concept. Another is Berkeley, Calif.

With support form 10 municipalities from Lafayette to Nederland, Boulder County voters in November 2008 approved $40 million in bonding authority for the program. Some of the bonds were tax exempt and sold at a 5.5 percent interest rate while the rest of the bonds sold for 6.8 percent.

Hoffman said the average loan granted in Boulder County was about $15,000. The nature of Aspen might push that figure up to $20,000 for Pitkin County, Hoffman said.

The federal government is also in the process of creating special bonds through the $787 billion stimulus package. The bonds have the potential to be zero interest, Hoffman said, adding that many critical financing details — such as how much debt Pitkin County should authorize — have yet to be calculated and the federal government is still hammering out the details of its program. Any stimulus funds would be distributed through a state office.

But first things first. The county needs support from leaders in Aspen, Basalt and Snowmass Village before citizens in those communities could participate in the “opt-in” program.

Support seemed unanimous on the Pitkin Board of County Commissioners and City Council, as city leaders encouraged the county to press forward to put a question on the November ballot. Staff members are in the process of crunching numbers to see how much debt authorization voters should be asked to approve. Other details, such as how the program would work for multi-family buildings, are still forthcoming, but anyone who pays property taxes would be eligible to participate, Hoffman said.

Hoffman speculated that Pitkin County would want authorization to bond for something in the realm of $5 million — enough to allow a few years of work and a few rounds of bonding.

Hoffman noted that Boulder County is anticipating more demand for the next round of bonds, as many property owners are waiting to see how the first round goes.

Councilman Torre said the program seemed “too good to be true” and wanted to know if there was any downside.

Hoffman said there would be an increased burden on staff, but that the county hoped to spread that burden around by partnering with other counties. It’s too early to know if the county would need to hire more staff to accommodate the program, Hoffman said.

Either way, administrative costs would be passed on only to the participants in the program through one-time loan application fees or other methods, Hoffman said.

Commissioner Jack Hatfield said he likes the idea of the program because it gives middle-income people the ability to get upgrades they might not be able to otherwise access. Hatfield qualified his statement by saying he had concerns about any additional county resources that the program would require.

Ireland said the program is a top council goal for the coming year.

“I think this thing rocks and I appreciate you bringing this to us,” he said.

curtis@aspendailynews.com

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