by Erin L. Deady, Herb Thiele & Chad Friedman
Excerpt from “Another New Chapter Begins For PACE”
NO GOOD DEED GOES UNPUNISHED
Only in Florida can we come this far where PACE is beginning to scale again in this post-litigation climate, where we now have new legal hurdles. In no other state are PACE programs facing such obstacles deploying the myriad of options that exist for local governments to launch PACE as in Florida. Currently, there are four active cases in litigation regarding three ongoing bond validations for PACE programs. These cases include the Leon County Energy Improvement District (a dependent special district of Leon County)5, the Clean Energy Coastal Corridor6 and the Florida Development Finance Corporation7. Despite this current activity, three validations have occurred to date: 1) 2010 for St. Lucie County 2) 2011 for the Florida PACE Funding Agency and 3) 2012 for the Green Corridor, but now challenging and appealing these rather routine bond validation proceedings is common.
Either through single jurisdiction programs or multi-jurisdictional programs, bond validations pursuant to Chapter 75, F.S.,8 are undertaken to use bond proceeds to finance the actual “qualifying improvements” in a PACE program. The PACE assessments are used to secure the bonds in the programs. The scope of bond validation proceedings is a three-pronged test: 1) does the public body have authority to issue the bonds, 2) is the purpose of the bonds legal and 3) does the bond issuance comply with the requirements of law?
As stated, three bond validation proceedings for PACE are being challenged and appealed to the Florida Supreme Court and a fourth appeal has been filed by the Florida Banker’s Association (separate case involving one of the three mentioned proceedings). The scope of the appeals has been to challenge the financing agreement or due process/procedural claims regarding the bond validation process itself. None of the appeals have included an attack on the PACE statute, Section 163.08, F.S., (for instance constitutionality), or the underlying programs. Robert Reynolds, a citizen of Leon County filed a notice of appeal in two of the three proceedings (Leon County Energy Improvement District and Florida Development Finance Corporation) and three citizens in Broward County, Vicki Thomas, Christopher Trapani and Sidney Karabel, filed an appeal in the Clean Energy Coastal Corridor proceeding. The Florida Banker’s Association has also filed a notice of appeal involving one of the three proceedings (Florida Development Finance Corporation), although their basis for appeal is unknown at the time of this writing. Given the common nature of these programs, it begs the question as to why these common proceedings are being challenged in the first place. Appellees are represented by common counsel in three of the four total cases while the three residents of Broward County are represented by separate counsel.