Montgomery County Notebook: PACE Program Plan Fails; funded risk mitigation plan

Montgomery County commissioners met for a regular session of commissioners’ court on July 26. Commissioners heard a presentation of the draft budget and county officials working on increasing mental health cases.

Here are two other agenda items discussed at the meeting. A recording of the July 26 meeting is available here.

Commissioners reject PACE program

Commissioners decided not to proceed with a proposed clean energy program that would have allowed commercial owners to upgrade their facilities at the cost of an additional tax assessment. If approved, the item would have set a public hearing for further discussion on August 23.

The program would have been known as the Montgomery County Property-Rated Clean Energy Program. The proposal was submitted by Lone Star PACE, a potential program administrator.

Lone Star PACE President Lee McCormick said more than 70 cities and counties have implemented the program. McCormick said Montgomery County landowners have expressed interest in PACE, but did not say who reached out.

“These are private dollars going into private properties,” McCormick said. “The state legislature was trying to incentivize energy and water efficiency improvements without increasing the burdens on ratepayers.”

The PACE Act allows local and county governments to work with commercial lenders to finance real estate improvements involving energy and water efficiency and resiliency improvements, with property assessments used as a method of repayment, according to the Texas Comptroller’s Office. According to the US Department of Energy, 37 states and the District of Columbia have PACE legislation in effect.

Under the proposal, commercial, industrial and residential properties of five or more housing units that add permanent improvements to reduce dependence on energy or water would have been eligible for PACE funding. The owner would work with the county tax assessor-collector and a private lender of the owner’s choice to set up a separate property tax assessment to help fund the improvements.

Precinct 3 commissioner James Noack said he didn’t understand the need for the assessment, saying the program should be “sold to Harris County, maybe.” Harris, Fort Bend and Galveston counties have all implemented PACE programs, according to the Lone Star website.

McCormick said the additional appraisal was meant to act as security for the lenders and the county was required to put a lien on the property. County tax assessor-collector Tammy McRae confirmed that if the homeowner failed to comply with taxes, the county lien would be considered superior to the PACE lien.

No commissioner made a motion on the point, letting the proposal die.

Funded risk mitigation plan

Commissioners unanimously awarded $100,000 in funding to the Montgomery County Risk Mitigation Plan to cover a grant that was not immediately available to the county. Funds approved will come from the Contingency Fund.

According to Jason Millsaps, director of the Montgomery County Office of Homeland Security and Emergency Management, Montgomery County has been “tentatively approved” for the Texas General Land Office’s Local Risk Mitigation Plans program. Commissioners approved the county’s request for the $100,000 grant during a May 10 Court of Commissioners session.

However, Millsaps said the final grant delivery date would fall past an expiration date for the planned risk mitigation plan and requested funding so that OHSEM could begin work on the plan immediately.

Noack moved the motion to award funds, subject to a documented repayment agreement.

End of the Newpark tax allowance

Commissioners have unanimously ended a tax abatement granted to Newpark Industrial Blending Solutions in Conroe Industrial Park North. According to County Attorney BD Griffin, who served the layoff notice, the company was not employing the number of workers needed to satisfy the reduction agreement.

“It’s an abatement that’s over; it’s no more years; their numbers went below for the first time, and we’ve come to an agreement on the amount of the clawback,” Griffin said.

Newpark, which received the abatement as Newpark Drilling, will owe the county $241,717.26, which must be paid by July 30. Griffin confirmed that the amount does not include penalties and interest, but the total is the amount of taxes owed. Griffin also said the company plans to sell the building entirely.

The abatement was granted to Newpark Drilling in January 2016 with a motion and a second from Precinct 1 Commissioner Mike Meador and Precinct 2 Commissioner Charlie Riley, according to former Commissioners’ Court minutes. The Montgomery Central Appraisal District lists a parcel owned by Newpark Industrial Blending valued at $13.47 million at 701 Conroe Park West Drive as of July 22.

The original abatement provided 100% tax relief for 2016-17, 80% abatement for 2018, 60% abatement for 2019, 40% abatement for 2020 and 20% abatement for 2021.

The initial reduction was due to expire on December 31, 2021 and required Newpark Drilling to create 44 new full-time jobs over a three-year period. On December 15, 2020, the Court of Commissioners voted to approve Newpark Industrial Blending’s assumption of the reduction. No public details of the hypothesis are available on the agenda for this meeting.

In a May 3 press release announcing first quarter results, Matthew Lanigan, president and CEO of Newpark Resources, the parent company of Newpark Industrial Blending, reported a 31% decline in the “Industrial Sources” segment of the society. According to the same release, the company closed its industrial blending operations in March.

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