BY MARK J. CRAWFORD
Telegraph Editor
STARKE — Tax Collector Teresa Phillips and counsel from her state association successfully defended a lawsuit trying to force her to collect outrageous assessments from homeowners
Phillips isn’t the only tax collector who has been sued for refusing to collect payments on home improvements financed by the Florida PACE Funding Agency. She and the tax collectors from Alachua and Bradford counties were united in their opposition of the agency’s tactics.
They learned last week they have prevailed.
PACE stands for Property Assessed Clean Energy program. The agency says it’s “a public entity that provides homeowners with financing options for energy-efficient and hurricane-resistant home improvements.” The loans are offered to low- and middle-income homeowners who then repay via their tax bill.
In addition to not having agreements with county tax collectors to perform this service, the program is seen by some a predatory. Phillips provided an example to the county commission last month, saying if she attached the homeowner’s loan payment to their tax bill, the tax bill would jump to more than $2,000 a year over the next 30 years.
Attorney Rich Komando said the legislation creating the Florida PACE Funding Agency called for the agency to come to an interlocal agreement with the county commission in each county where it intended to operate.
In November, Komando said a Leon County court found that, as a statewide entity, PACE didn’t need interlocal agreements.
“Most counties that didn’t already have an agreement with the Florida PACE Agency disagreed with that ruling,” he said.
Florida PACE has provided home improvements, such as new roofs, hurricane-safe windows and doors, and solar panels. When the work was completed, they began sending tax collectors lists of assessments to be collected on the homeowners’ tax bills.
“The tax collectors as a group, all 67 with their association, consulted legal counsel who agreed with our tax collectors that, no, without an agreement, you do not have to collect those assessments,” Komando said.
When, tax collectors jointly noticed Florida PACE about their position, the agency began filing lawsuits.
“That has happened here in Bradford County, and as part of that lawsuit, counsel for the tax collectors have asked if the commission would be willing to file a motion to intervene and adopt the position that they’re presenting on behalf of the tax collectors,” Komando said.
He shared two concerns with commissioners, however. First, intervening would result in the county commission sharing legal fees. Second, if Florida Pace Agency prevails in the lawsuit, the county could be liable for the agency’s legal fees.
Komando did say he thought a win for the agency is unlikely. PACE tried to get the court in Hillsborough County to order the tax collector to collect the payments, but the judge said without an agreement with the county, the agency could not continue. Palm Beach County sued PACE when it refused to abide by consumer protection rules set by county commissioners following complaints about their tax bills.
If those tax bills cannot be paid, then those homes could be foreclosed on. That was Phillips’ concern.
“I got a guy here that got a roof for $20,418. They’re charging him 9.9% interest,” she said ‘They want me to collect on his tax bill $2,164 for 30 years.”
People are going to lose their homes over this, Phillips said.
“There’s a guy Alachua County that is a 100% disabled American veteran. He pays no ad valorem taxes. He’s going to have to pay this bill, and if he can’t afford to pay it, he will lose his home. It’s ridiculous.”
“I mean, there are what I consider to be valid arguments that it’s predatory lending,” Komando said. “You ever go to buy a house or a car, you get the truth in lending statement. However, when PACE goes out and sells these improvements to homeowners, they don’t provide a truth in lending statement. It’s been intimated to a number of government officials that are not very clear on exactly the fact that this is going on people’s tax bills.”
He also said the program promotes itself as “county funded” so it appears local government is responsible for the program.
By Komando’s count, Phillips was the sixth county tax collector sued by Florida PACE, but several counties, including Alachua, took an offensive position and sued the agency. The Alachua County Commission also chose to intervene in the lawsuit against its tax collector, and so has Union County, he said.
The Bradford Commission —while opposing PACE’s demands of the tax collector — didn’t intervene, however, hoping that the result in Hillsborough County would set the precedent for other rulings as the lawsuits move forward.
For now, the fight seems over locally, but cases continue to proceed around the state.
Union tax collector wins assessment lawsuit
LAKE BUTLER — You may have heard about the controversy concerning loans from Florida PACE funding Agency. These are loans that provide funds for increasing a home’s energy efficiency and hurricane hardness, to be repaid as an assessment on the property owner’s ad valorem taxes each year.
The agency (there are several in as many states) requires the county tax collector to assess and collect these fees for them and, since they are on the tax bill, they must be paid or the homeowner stands a good chance of losing their home.
Many Florida tax collectors have objected to the assumption that they are required to assess and collect these loans – Union County Tax Collector Lisa B. Johnson included – and are alarmed at the increase these assessments cause on the average tax bill. According to several Florida media sources, these assessments create an increase of $1,700 to the average tax bill, making residents unable to tax their taxes and risk losing their homes in local tax sales.
Johnson joined forces with Alachua and Bradford counties in a lawsuit challenging the right of PACE to require them to add the assessment to county ad valorem tax bills, saying that the agency would need to have an interlocal agreement with each county to require the assessment and collection of fund on their (PACE’s) behalf. Earlier this week the verdict came down that the agency could not require these actions without such an interlocal agreement.
“These loans are dangerous,” Johnson said. “I only know of one in the county and have spoken with that homeowner. They went to PACE funding to pay for a new roof for their home. Their first payment would have been more than their ad valorem taxes. Such a high assessment could cause county residents to lose their homes. These people were out knocking on doors trying to sell these loans to consumers and may in the state had little idea what the result would be when they got their first bill. I partnered with two area counties in this suit, but the majority of Florida counties are involved in lawsuits, or considering them, in response. The city council of Jacksonville is now considering taking action concerning the loans as well.”
While the loans are technically legal, there are questions as to whether they can involve the local governments in billing for (assessments) and collecting the payments without an agreement. These loans are financed by a group of Florida counties and cities and are legal to operate under Florida Statute (as well as in other states) but there have been concerns about the quality of work being done as well. Many consumer advice agencies are advising against the loans, even though the idea for them came about on the Federal level under the Obama administration.
The assessment to repay PACE loans are actual liens on the property and can interfere with the sale of the property should the loan not be paid back in full. Another consideration in the financial community is that the loans not be considered to supersede any primary mortgage that is in place on the property – in New York it was ruled that it did not.
PACE Florida representatives say they can offer financing for residential and commercial projects in the state, with or without city or county approval, but the recent lawsuit verdict seems to indicate otherwise. Whatever the outcomes, Johnson has done her best to protect the property owners of the county from getting tax assessment they cannot pay and therefore running the risk of losing the homes they have worked hard to own.
