Pub. 3 2021 Issue 4

19 nebraska society of cpas W W W . N E S C P A . O R G Bob Dailey is a partner with the McGrath North Law Firm in Omaha. He is a veteran real estate attorney and has been honored as Omaha Lawyer of the Year for Land Use and Zoning Law on two separate occasions. Dailey has significant experience with PACE loans and can assist you or your clients through the entire PACE loan process, including the passage of a local ordinance that will facilitate the use of a PACE loan in a city. For more information, contact him at (402) 341-3070 or rdailey@mcgrathnorth.com. Applicants must include estimated operations and maintenance costs, and projected increases in the cost of energy use in the applicant’s calculations. Length of the Loan The term of the loan may not exceed the “weighted average useful life” of the energy project, which would follow this simple example. Say two separate energy reduction projects are being installed, each with different useful lives. This includes a chiller with a 30-year useful life and LED lighting with a 20-year useful life. Assume both the chiller and the lights cost the same. The “weighted average useful life,” or the term of the loan, would be the average useful life of the two separate projects. That is: (30 + 20) ÷ 2 = 25 years. Examples of Previous PACE Loans to Churches Churches nationally have been very successful with PACE loans. In Washington, D.C., a church did a PACE loan that provided 100% of the capital to complete an energy efficiency retrofit resulting in savings of $95,700 the first year. In Spring Valley, Calif., another church completed installation of a solar system that will result in lifetime energy savings of $903,083. What Type of Improvements Can Be Financed? The definition of improvements allowed under a PACE loan is very broadly written. This would include any acquisition, installation, or modification benefiting property that is designed to reduce utility demand or consumption. A PACE loan can f inance the costs of materials and labor, permit fees, inspection fees, application and administrative fees, bank fees, and other fees incurred by the owner/borrower for the installation of the improvements. Where Are PACE Loans Available? PACE loans are made in Nebraska pursuant to the Property Assessed Clean Energy Act. PACE ordinances have been passed in Omaha, Bellevue, and Lincoln as well as several other Nebraska cities. If an ordinance has not been passed in a community where a PACE loan would be helpful, that can be corrected. Procedures for Obtaining a PACE Loan The first step to obtain a PACE loan is submitting a PACE application to the city. Applicants must include estimated operations and maintenance costs, and projected increases in the cost of energy use in the applicant’s calculations. To be eligible for PACE financing, the scope of any project must generate some amount of energy or water savings. For upgrades to existing buildings, the new systemmust be more efficient than the original building; in new construction, the new system is compared to the requirements of the existing building code. The application must describe the entire project, not just the PACE component, and describe the financing, including the name of the lender, amount financed, interest rate, and fees. t