City Has $2.6 Million Stimulus Surplus Burning Hole in its Pocket
|That was fast...|
As City Hall struggles to close a $483 million budget gap, bureaucrats a block away at the San Francisco Department of the Environment are faced with the opposite quandary: They must figure out how to spend $2.6 million in federal stimulus money due the city, but which they have no immediate use for.
"There's a fair amount of stimulus money awarded to the city to support this," said the department's Richard Chien, in reference to GreenFinanceSF, a home-improvement funding program recently shut down due to concerns from the Federal Housing Finance Agency. "We are working with the Department of Energy, as well as the California Energy Commission to determine alternative uses of the Recovery Act grant funds."
Mayor Gavin Newsom on April 12 announced GreenFinanceSF with a special, Internet Town Hall explaining how property owners could save on their PG&E bill by signing up for a special type of loan to pay for energy-saving improvements such as purchasing solar panels, adding insulation, and buying low-flow toilets. The money was to then be repaid through homeowners' property tax bills under a 1982 rule designed to let local governments fund infrastructure improvements.
That way, GreenFinanceSF boosters claimed, the home-improvement bill would pass to the building's next owner in the form of a special tax lien, and the full cost wouldn't have to be paid off for 20 years. The program was one of many launched around the country with the help of $150 million in federal stimulus money directed toward home energy improvements.
|Meanwhile, at the Department of the Environment...|
Buyers weren't the only leery ones, it turned out. Mortgage bankers, including federally contgrolled mortgage lenders Fannie Mae and Freddie Mac, were concerned that these liens would make it harder for banks to collect if affected home mortgages were ever to go into default.
On July 6, the Federal Housing Finance Agency, which oversees Fannie and Freddie, issued a statement questioning the rigorousness of the program's oversight.
"The lack of energy retrofit standards to assist homeowners, appraisers, inspectors and lenders determine the value of retrofit products combine to raise safety and soundness concerns," the statement said, also citing "uncertainty as to whether the home improvements actually produce meaningful reductions in energy consumption."
In May, Fannie and Freddie told lenders they would refuse loans associated with these types of programs, known as Property Assessed Clean Energy Financing, or PACE.
So San Francisco's version of the initiative was suspended in June. And the Department of the Environment was left with an extra $2.6 million in committed stimulus grants to spend.
Anyone need some low-flow toilets?
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