The City of Medicine Hat is examining a program that would allow it to administrate low interest loans to property owners who undertake energy savings projects like installing solar panels or improved insulation.--NEWS PHOTO COLLIN GALLANT
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The city will study the potential of offering low-interest loans to residents to pay for energy efficiency upgrades over time on property tax bills, but it could be two years before such a system could launch.
The March 17 meeting of the council’s utility and infrastructure heard the “Clean Energy Improvement Program”, or CEIP, would allow the city to pass loans to property owners from a program offered by the Federation of Canadian Municipalities.
Once approved upgrades are verified, payments would be charged on individual property tax bills, potentially aided by the energy cost savings earned by the upgrades.
“The financing is tied to the property not the property owners,” said Jaret Dickie, the city’s business support manager. “The loan would be recorded on the property tax roll and paid off over time.”
The issue was first raised by Coun. Shila Sharps late last year as priorities were being set, and since has been moved ahead by the city’s strategic management division.
The program is offered by the national municipalities lobby group and would provide low-interest loans to cities, which would manage the loans, and would need to pass a special bylaw to allow the unique collection process.
Committee chair Alison Van Dyke was enthusiastic about the program.
Other members voted to send the item to council, which will be asked to direct staff to further explore the program and take initial steps.
“I imagine it will be quite popular,” said Coun. Robert Dumanowski. “We’ve heard people say that they would love to capitalize on (home improvement) grants but there’s a upfront cost to making those improvements.”
Similar programs have been in place for years in the United States, and other privately operated loan programs were publicized to municipalities in Alberta over the past several years.
CEIP is offered via the FCM, the national lobby group for municipalities, and is already operating in Edmonton.
Calgary, Grande Prairie, Lethbridge and St. Albert are now developing bylaws toward it, and other communities like Brooks are in early consideration, the committee heard.
Administrators are now talking with other municipalities for potential pitfalls, and estimates of administrative costs required.
“It piggybacks well on other programs, like HatSmart and other grant programs,” said Dickie.
According to the outline, loans would be capped at $50,000 for residential, $1 million for commercial and $300,000 for farm properties inside Medicine Hat corporate limits.
Qualified improvements would include furnaces, windows, insulation and “anything that would be considered an energy efficient improvement,” said Dickie – that is a permanent fixture of the house or structure installed by a qualified professional.
A one-time application processing fee to recover city departmental costs would be capped at a 5 per cent fee, but a further FCM grant could waive such fees for the first several years.
Loan terms would vary, and the annual repayment cannot be higher than the standard portion of the property tax bill.
“(Length of term is) based on the usual lifetime of the improvement, which is probably 16 years for a furnace – that’s how long the term is,” said Jonathon Linowski, a city analyst.
Annual payments also cannot exceed the usual municipal portion of a property tax bill, a measure to discourage up-selling by contractors.
