On Oct. 8, the Cassville City Council voted to join the Missouri Clean Energy District, (MCED) which will give local business owners an opportunity to apply for low-interest loans for building improvement projects.
Doyle Childers, of Flotron and McIntosh, offered information on MCED during the monthly council meeting held last week.
"In 2009, each state formed an energy district, which are commonly called PACE," said Childers. "In 2012, the districts began releasing information to political subdivisions regarding the program."
Childers, who worked for the Missouri Department of Economic Development for over 20 years, was recruited to tell municipalities and counties about the program.
"This allows private businesses to get funding for improvements," said Childers. "They have to show an energy savings of some sort, and they have to show an economic benefit."
The program gives businesses an opportunity to pay for improvements over a 20-year period using the fixed rates that are offered to municipalities, said Childers.
"Any political subdivision, cities and counties, can opt into the district," said Childers. "It's a little like flood insurance. It is patterned about the same situation. After a city opts in, it has no other responsibility."
Property owners located in the district have the opportunity to apply to MCED for funding projects, which can include sewer, water or building improvements or equipment upgrades. Childers said that 95 percent of the projects are approved.
"There have been a lot of small projects, but some have been big," said Childers. "When you have a $20,000 to $500,000 project it is not cost effective to do a bond issue. To be cost effective, it has to be $3 million and $5 million is desired.
"The district takes all of the projects and combines them to do a bond issue," said Childers.
Local banks have the opportunity to partner with MCED to offer bridge funding for a project. Bridge funding is paid to the district, which makes the loan to the business.
"Instead of waiting on a bond issue, local banks or other banks in the state do the bridge funding, and then when the bond is sold they are paid back," said Childers.
The largest project funded through the district was in the St. Louis area. That project totaled around $300,000. Most of the projects are around $25,000 to $50,000, said Childers.
"Older folks who own a business and don't want to do a 20-year mortgage can do this," said Childers. "If they retire in five years the loan transfers with the property. It is a voluntary property tax between the property owner and MCED."
In addition to joining MCED, the council voted to established Cassville as a member of the Green Community Program, which will allow businesses to apply for qualified engery conservation bonds (QECBs), which are similar to grants. QECB funding is not available at this time, said Childers.