Faulkner County committee hears C-PACE presentation, asks staff to draft ordinance

Jonathan Raspberry, the C-PACE administrator for the Arkansas Advanced Energy Foundation, presented the updated Arkansas commercial PACE (C-PACE) program to Faulkner County justices of the peace, saying the tool could help local commercial and agricultural businesses fund energy, water and resiliency upgrades without upfront capital. "It's a private capital financing tool for qualified improvements in commercial construction," Raspberry said.

Raspberry told the committee the state first adopted PACE enabling legislation in 2013 and updated it in 2025; the Arkansas program now emphasizes capital expenditures for commercial properties. He said the financing is typically a long-term, fixed-rate loan attached to the property as a voluntary special assessment and that Arkansas has capped loan terms at 30 years. "It is a long-term loan that's attached to the property instead of the owner," he said, describing how payments can appear on property tax bills or be paid directly to the lender with reporting back to the county.

The presentation laid out qualifying projects and protections. Raspberry said C-PACE can be used for energy efficiency, water-efficiency and resiliency measures, rooftop solar and battery storage when tied to a qualifying project, and for certain permanently affixed agricultural equipment. He also described project review steps: an energy or water audit, third-party engineer verification of scope, lender negotiation, a PACE board application and a three-party agreement among the district, lender and project owner.

Raspberry said the program places the financial risk with third-party PACE lenders and that participation is voluntary for property owners. "There is absolutely no financial burden on the county at all," he said, adding that the county's role is limited to adopting an ordinance, appointing a local board member (three-year, judge-appointed, quorum-court-approved term) and allowing use of assessor/collector services if a project goes into default. He noted counties may later withdraw by adopting an ordinance to opt out, though previously completed projects remain in effect.

Committee members asked about defaults, compensation for collection work and whether C-PACE stacks with grants or applies to nonprofits. Raspberry said Arkansas projects dating to the program's earlier iteration had not gone into default locally, that lenders typically try to negotiate with mortgage holders and maintain short-term safety nets, and that counties can negotiate an administrative fee to cover collection work if needed. He confirmed churches and nonprofits may qualify and that C-PACE can stack with tax credits and other incentives.

As an example, Raspberry described a recent Pulaski County project (an AC Hotel renovation in Little Rock) that began with an energy audit, moved through lender and PACE board approvals, and proceeded to construction with verification and then loan repayment. He emphasized that C-PACE commonly fills gaps in a capital stack rather than serving as a standalone full-project lender.

After the presentation and questions, the committee agreed to table formal action and asked county staff to draft the boilerplate ordinance and participation agreement for consideration at the next meeting. The committee did not vote to adopt the ordinance at this session.

The committee requested that Raspberry provide the draft ordinance and contact information to staff; county staff (Philip) will prepare the ordinance for committee review next month.