Municipalities: Step 3

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NJPACE_buildingscape_smallSTEP 3: Introduce the Ordinance.

Regardless of which path you choose, the first step toward realizing your vision of a local PACE program involves reviewing the Model Ordinance, deciding if you want to add or subtract elements, and following your normal procedures for introducing the ordinance. Here’s a typical procedure (taken from the web site of the Village of South Orange):

The introduction of a proposed ordinance is also known as the “First Reading.” The proposed ordinance is a written document that is read, by title only, into the official record at a convened meeting of the town council or committee.  While there is no requirement to read the full text of the proposed ordinance into the official record, state law requires the municipal Clerk to post a full copy of the introduced ordinance in town hall and make it available to the public.  The proposed ordinance is also posted on the municipal website.

Once the committee or council has approved the introduction of the proposed ordinance by roll call vote, the Clerk is required to publish a legal notice within 10 days in the local newspaper to notify the public the proposed ordinance has been introduced by the governing body with a clear and concise statement setting forth the purpose of the ordinance and the date, time and place when it will be discussed for further consideration by the council and a public hearing will be held.

The Public Hearing and final adoption of an ordinance is also known as the “Second Reading.” Before an ordinance can be adopted by the governing body, a public hearing is held at the stated date, time and place contained in the legal notice.  The public hearing allows all interested parties to comment on the ordinance before the committee considers its final adoption and passage.

Only after a Public Hearing is held can the council consider the adoption of an ordinance.  An affirmative vote of the majority of the governing body present is needed for passage. Once an ordinance is passed and adopted by the governing body, the Clerk is required to publish a second legal notice in the local newspaper notifying the public of the passage of the ordinance.

The ordinance empowers the executive branch of the municipality to select the administrator(s), execute the necessary agreements, and develop administrative procedures to implement the PACE program. Municipalities may, but are not required to, specify particular conditions or applications for the local PACE program, but (once the new law is signed) they must include the following:

(a) That PACE financing recipients are either the legal owners of the underlying property or provide the written consent of the legal owners of the underlying property, are current on mortgage and property tax payments with respect to the underlying property, and are not the subject of a default or in bankruptcy proceedings,

(b) That in no circumstance may the combination of a PACE financing and the existing loan-to-value ratio on a property exceed 100 percent, and

(c) That the maximum duration of a PACE special assessment shall not exceed 30 years.

The ordinance may also include a statement of the municipality’s purposes or intentions regarding the PACE program.

If the intention is to leverage it for conventional economic development, then the ordinance should include the proposed mechanisms (or a procedure for specifying these mechanisms). If the intention is to use it as the basis for regenerative community development, then it should include the proposed mechanisms (or a procedure for specifying these mechanisms) for this option. An example might be authorizing the contracting of a consultant, or approving a grant application, or some other means of undertaking the program.

New Jersey PACE can assist the municipality in choosing the right options for its unique circumstances.

Once the ordinance has been finalized and introduced, the next step is to engage one or more program administrators to process, approve, finance, and submit projects for the special assessment process. Step 4 explains various procedures for doing this, and the choices that the community needs to make in order to maximize the positive impact of the program.

Then proceed to Step 4….