Committee backs moving forward on Illinois Finance Authority PACE ordinance, asks staff for more implementation details

The LaSalle Economic Development Committee voted to recommend that staff prepare an ordinance enabling participation in the Illinois Finance Authority Property Assessed Clean Energy (PACE) program and present it to the City Council, while requesting additional information about local administration and real-world use.

Committee members described the PACE (Property Assessed Clean Energy) program as a state-enabled financing tool that allows property owners to secure long-term loans for energy- and water-efficiency projects that attach as voluntary assessments to the property. The committee’s action directs staff to work with the IFA representative on a draft ordinance and to gather examples of municipalities that have implemented the program and whether they encountered administrative or lender-consent issues.

Kurt (city staff) summarized the program’s structure, explaining that municipalities adopting an enabling ordinance generally do not take on the loans themselves: ‘‘you’re not gonna be on the hook for whatever financing is given. You’re just a facilitating agency,’’ he said, likening it to prior city-assisted financing programs for homeowners.

Committee members raised operational questions that staff agreed to pursue before full council consideration: whether first-mortgage lenders must consent to a PACE assessment to give a PACE lender adequate priority, how voluntary special assessments are enforced in default scenarios, whether nonparticipating taxing districts would be exposed to risk, and how often other Illinois municipalities have actually used the program. Staff reported outreach to several communities and said some had little experience to report because the tool is still not widely used.

Staff noted two example projects included in their materials: a South School Street project in Mount Prospect and a Skokie Boulevard project in Northbrook. Aldermen said they wanted at least one municipality that had actively used PACE to speak to the City Council when the ordinance is considered.

The committee approved a motion recommending preparation of an ordinance and further study; the committee recorded aye votes (Alderman Jepsen, Alderman LaViere and Chairman Patek). Staff said a draft ordinance could be ready for the City Council in the following two meetings, pending additional review and answers to outstanding operational questions.

Committee discussion emphasized several implementation points for staff to clarify: that PACE assessments are property-specific (the obligation attaches only to the property receiving financing), the PACE loan is typically secured by a special assessment that can be enforced on default, and that program uptake has been limited in some Illinois communities because the financing mechanism is not widely known and because lender-consent requirements can complicate transactions.

The committee recommended proceeding with ordinance preparation but requested that staff obtain concrete examples of municipalities that have used PACE, confirm the length of program availability (staff estimated about 10 years remaining for program availability) and arrange for an IFA representative or municipal peer to be available at the council presentation.