Ty Compton, a representative of law firm Bricker and Eckler, and Chris Jones of Ohio’s Property Assessed Clean Energy program told Martins Ferry City Council recently that East Ohio Regional Hospital is seeking funding to make improvements to its building.
City Solicitor Paul Stecker introduced Compton and Jones, who came to speak about the Property Assessed Clean Energy funding program and what triggered this.
“The hospital is doing a couple of projects and they want to utilize PACE financing, and that’s going to require some legislative action on our part,” Stecker told council, adding that Compton and Jones were there to explain the program and answer questions.
Jones said Ohio was one of the first of 20 states to authorize legislation 12 years ago that allows local governments to create an “Energy Special Improvement District.”
This allows commercial property owners to improve upon various energy-related fields, such as renewable energy, for example, to make improvements to their buildings.
“OHIO PACE is a program administrator that works with property owners to secure PACE financing for qualified energy projects. It coordinates efforts with local governments and connects property owners with private PACE capital providers and contractors to ensure the successful funding and installation of energy projects,” ohpace.org states.
Bernie Albertini, administrator for EORH, said work has already begun on several projects, which include air conditioning, lighting, new boilers, windows and a new roof.
“It’s all rated back to energy efficiency,” Albertini said, which is what PACE is geared toward.
He added that the boilers have most of the work left to do but the lighting is about 80% complete with windows and roof work around 25% complete.
Regarding the PACE application, Jones said EORH would ask the city for a special assessment “to be placed on their property tax as a means to repay the up-front PACE loan for these energy-efficiency-related improvements.”
Jones said the assessment will be placed only on the hospital’s property and will not affect any other city taxpayers.
The hospital’s petition, which includes details of the project, would be submitted to council for approval.
“This one will include, again the PACE special assessment … the financial terms and then City Council will be approving the actual assessment, levy of those assessments, which will in turn certify at the county auditor’s (office),” Compton said.
Once the project has been determined to be eligible for PACE financing, the special assessment is then added to the property’s tax bill.
“It will not have any direct effect to any property owners within the taxing district or city of Martins Ferry,” Jones said, which Compton confirmed. He also confirmed that the city or the residents will have no costs to their property, in answer to Service Director Andy Sutak’s question.
When Councilwoman Suzanne Armstrong asked why the city’s approval would be needed, Compton said there were “private PACE lenders that will provide long-term financing.” If long-term financing is attached, those private lenders would have to have good security and the special assessment “is the security that has created this PACE financing market, not only in Ohio but around the country,” he said.
“And so, obviously, as the private taxing authority, you’re the only ones that can approve that special assessment,” Compton explained.
“Anything that has any energy savings component could be eligible for the PACE program,” Compton said, citing examples such as roofs, windows or solar panels.
Stecker added that it’s basically a “government-private partnership” in which private parties do the funding but are paid back through a special assessment.
“So, instead of making your loan payment, your property taxes increase on that particular parcel and they pay the increased property taxes and then the county pays the funder,” Stecker said.