One Month After Joining Show Me PACE, Bourbon Council Exits

The Bourbon City Council held a special session Thursday where they repealed an ordinance entering into Show Me PACE.

During the March 21 meeting, the council voted to join PACE (Property Assessed Clean Energy), which is a financing mechanism for property owners to pay for energy efficiency and renewables.

While more than 70 munipacilities and five counties in Missouri are a part of PACE, including Franklin, the city’s decision to join threatened their contract with Crawford County Collector Pat Schwent.

Schwent’s office collects the city’s real estate taxes.

She said that if the city did not repeal the ordinance, her office would no longer perform that duty.

Schwent explained in an email to the Independent New that once a contract is established, a lien is placed by PACE against the property where the improvements have been completed.

“If a homeowner defaults their interest rates rise substantially, making it almost impossible for the homeowner to pay both the improvements and their mortgages,” Schwent wrote.

She said the “worst part” of the contract is that the Missouri legislature allowed that if there is a default, it goes before any other lien holder who already has attached a lien to the property.

“Which means as a Collector, I would have to collect their debt in addition to taxes on the property,” Schwent explained. “This means any mortgage holder whoever the property owners has takes second to PACE liens.”

According to Schwent, PACE does not have to inform the current lien holder, so they are never made aware of how their position as first lien holder has changed until there is a problem.

“PACE brings in their own contractors and subcontractors to provide work and most of them are out of state and very hard to track down if the need is there.”

Schwent said the Missouri Collector’s Association’s attorney has worked hard with county commissioners and collectors to protect them from becoming collection agents for PACE, and also “to help us from harming our local lien holders.”

Most of the loans cannot be transferred if the homeowner wants to sell their property and the loans cannot be included in the property owners’ escrow payments to their banks, Schwent said.

The collector said she became aware of the city’s agreement with PACE because of a local banker who called her, upset about why she would enter into a contract.

Schwent said that person also contacted Presiding Commissioner Steve Black.

She added that PACE places their own assessed values on the property where improvements are made, which would mean Assessor Kellie Vestal would have to be involved and at odds due to mandates from the Missouri State Tax Commission.

Schwent said that PACE has a bad reputation with counties and are preying on municipalities. 

“I am very happy to work with the city of Bourbon and I have never had an issue working with and for them, but I will not put myself or the county into a position regarding lawsuits from mortgage holders and/or property owners,” Schwent said.

Schwent said that a representative from PACE was brought into the commission meeting roughly three years ago.

“I made my position very clear then and as long as I am the County Collector, I will not change my position with PACE,” she said. “I was elected by the citizens of Crawford County to collect taxes for Crawford County not debts for PACE or any other private companies.”