State CPACE program explained to Helena commission as a tool for commercial sustainability financing

Representatives of the Montana Facility Finance Authority described the statewide CPACE (Community Property Assessed Capital Enhancements) program to the Helena City Commission and answered commissioners’ questions about how the city might opt in to allow commercial property owners to finance energy-efficiency, water-conservation and renewable projects through a property tax assessment mechanism.

Carolyn Jones, CPACE program manager, said Montana enabled CPACE in the 2021 legislative session and the statewide program launched in January 2022. She described how CPACE financing is repaid as a special property tax assessment attached to the property, often with terms tied to the useful life of the improvement (commonly up to 25 years), which can reduce annual debt-service burdens for property owners compared with short-term commercial loans.

Jones explained eligible improvements include HVAC upgrades, building-envelope work, lighting and controls, water fixtures, irrigation, roof work needed for photovoltaics and certain elevators; the statute allows retrofit projects and retrospective financing for eligible improvements made up to 36 months earlier. Multifamily eligibility currently is tied to a statutory definition that effectively excludes many Montana buildings; Jones said legislation in the current session would change the multifamily threshold from four units to five units to better align with federal programs.

Jones said the local-government role is limited to adopting a district (resolution of intent, public hearing, final resolution) and placing assessments on the local tax rolls once financings close. The Montana Facility Finance Authority acts as the statewide program administrator and handles project intake, lenders’ coordination and tracking collections; local treasurers enter CPACE assessments into existing tax software (Black Mountain or Taxwise). Jones noted 18 counties and three cities in Montana have adopted CPACE districts and the program currently covers about 66% of the state’s commercial building population. The authority reported six projects closed with seven financings to date and described example projects including a $1.6 million retrofit in Billings and motel solar projects financed under $250,000.

Commissioners asked about local administrative burdens and fees. Jones said local jurisdictions may adopt an administrative fee but most counties and cities that adopted districts have not added one; the statewide program charges origination and annual fees that fund program administration. City staff and commissioners raised concerns about whether Lewis and Clark County or the city would manage tax-entry workload and timing of transfers; the city manager said staff will do additional due diligence on how the city could implement a district and whether to pursue adoption.

Public works and sustainability staff noted CPACE could pair with local residential loan programs and other resilience efforts. No final decision was made; staff said they would return with additional information if the commission wishes to pursue adoption.