Kalispell City Council signaled interest in establishing a C-PACE district in the municipality during a work session held Monday.
Mayor Mark Johnson described taking advantage of the state’s newly implemented financing program as “a no brainer.” C-PACE, or Commercial Property Assessed Capital Enhancement, was passed into Montana law in 2021, and the program launched early this year.
The program finances green or high energy efficiency capital upgrades on commercial and other properties. Single-family residential and government buildings are ineligible.
Interested property owners can apply for a loan through the program. They are then connected with private lenders who finance upfront costs of certain renovations, including adding solar panels, improving insulation, or modernizing boilers and HVAC systems.
The loans are paid back over the life of the improvements via additional property tax assessed on the upgrades. The money saved through increased energy efficiency is expected to cover that cost.
The tax dollars are directed to the Montana Facility Finance Authority (MFFA), the agency tasked with administering the financing program, which sends the funds to the private lender.
According to Adam Gill, MFFA executive director, Montana businesses lost over $350 million last year in wasted energy. Gill led councilors through the program’s mechanisms and benefits Dec. 12, and described the local government’s responsibility in establishing the special district to start the program. To give local businesses the opportunity to participate, the city must first set up a special tax district to collect property taxes and the MFFA administers the program from there.
According to Gill, counties also can participate in the program. Flathead County was uninterested in taking part, he said.
“Should we lead again, guys?” Johnson asked as he looked around at city councilors.
Steven White, county spokesperson, offered several reasons Tuesday for why commissioners passed on Gill’s presentation. They included the lack of interest expressed thus far in C-PACE from businesses located in unincorporated areas of the county.
White also said commissioners harbored concerns about the newness of the program in Montana and wanted to “wait and see” how it was implemented at the municipal level. The PACE model launched in 2001 and has been adopted in 38 states.
Additionally, White said commissioners were concerned about being left “holding the bag” on loans that defaulted, although the way the Montana program is structured — using private loans and property liens— no public liability is created, according to a fact sheet published by the Department of Energy.
White said that commissioners felt the program was best implemented by municipalities, but that if they heard interest from businesses they would be open to learning more about the process.
Back in Kalispell on Monday, City Manager Doug Russell indicated that a resolution of intent could be drafted and on the agenda for next week’s Council meeting. If city staff is able to draft the paperwork in time, Council may vote then on whether to move forward.
Reporter Adrian Knowler can be reached at 758-4407 or aknowler@dailyinterlake.com.
