Sonoma County intends to forge ahead with a government program that allows residents to pay for energy-saving home retrofits through property taxes despite the county's having lost a prolonged court battle recently to protect the program.
The fight was over tighter federal lending requirements that county officials and others say hamper such programs by scaring off homeowners.
The nearly three-year court battle came to an end this week when the Board of Supervisors formally decided not to appeal the case to the U.S. Supreme Court. The step came after a federal appellate court in March upheld the guidelines issued by the Federal Housing Finance Agency, saying it had acted within its authority.
The California Attorney General's Office, which also filed suit to block the 2010 lending guidelines and assumed the role of lead plaintiff in the combined case, is not filing an appeal.
Sonoma County officials said their decision doesn't mean the end of the county's four-year-old energy retrofit program, the first countywide effort in the country.
Even with the tighter lending guidelines, enough homeowners appear to be taking advantage of the program that it should continue regardless of the court loss, officials said.
"If the numbers weren't there, I'd be the first to say we should wind it down or change focus," said Board of Supervisors Chairman David Rabbitt. "But the numbers are still strong."
The county's Energy Independence Program has financed more than 1,900 projects worth upward of $66 million on homes and businesses, including solar panels and plumbing and heating improvements. Officials credit it with creating a least 80 local construction jobs, supplying business to an industry hit hard in the recession.
But federal officials say the program and more than two dozen others like it across the country present "significant safety and soundness concerns" to recession-wracked mortgage giants Fannie Mae and Freddie Mac.
That's because, in the event of a foreclosure, the programs prioritize repayment of property tax liens for the upgrades over home loans controlled by the mortgage giants.
The Federal Housing Finance Agency directed the two lenders, who control more than half of all home mortgages, to impose significantly tighter loan requirements for both participating homeowners and communities with a government-financed energy upgrade program.
For some homeowners, that meant having to pay off the entire amount of an upgrade before a refinance or sale. County officials and local bank officers said they were aware of only a handful of instances where local homeowners had to take such measures.
They were not aware of any broader action in Sonoma County or elsewhere by the government-chartered lenders to lower loan limits for an entire community because of a retrofit program.
The guidelines spurred lawsuits by public and private entities across the country and scared off residential business. Monthly applications to Sonoma County's program dropped by half and left its future, at least on the residential side, in some doubt.
Only this year has home retrofit business through the program begun a slow and steady rebound. Upgrades for businesses have not been affected by the lending conflict because the guidelines did not apply to the commercial sector.
Three federal appellate courts, including the 9th U.S. Circuit Court of Appeals in Sonoma County's case, upheld the federal housing agency's action.
County officials conceded their odds before the U.S. Supreme Court would have been long.