Montgomery County notebook: PACE Program plan fails; hazard mitigation plan funded

Montgomery County commissioners met for a regular session of commissioners court on July 26. Commissioners heard a preliminary budget presentation and from county officials working on rising mental health cases.

Here are two other agenda items discussed at the meeting. A recording of the July 26 meeting can be found here.

Commissioners decline PACE Program

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

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

Lone Star PACE President Lee McCormick said over 70 cities and counties have implemented the program. McCormick said Montgomery County property owners had expressed interest in PACE but did not specify who had reached out.

“This is private dollars going into private properties,” McCormick said. “The state Legislature was trying to incentivize upgrades on energy and water efficiencies without increasing burdens on taxpayers.”

The PACE Act allows local and county governments to work with commercial lenders to finance property improvements involving energy and water efficiency and resilience upgrades with property assessments being used as a repayment method, according to the Texas comptroller’s office. According to the U.S. Department of Energy, 37 states and the District of Columbia have PACE legislation in effect.

According to the proposal, commercial, industrial and residential properties with five or more living units that are adding permanent improvements to decrease energy or water dependence would have been eligible for PACE financing. The property 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 appraisal to help finance the upgrades.

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

McCormick said the additional appraisal was intended as a security for lenders, and the county is needed to put a lien on the property. County Tax Assessor-Collector Tammy McRae confirmed if the property owner defaults on taxes, the county’s lien would be considered superior to the PACE lien.

No commissioner made a motion on the item, leaving the proposal to die.

Hazard mitigation plan funded

Commissioners unanimously awarded $100,000 in funding to the Montgomery County Hazard Mitigation Plan to cover for a grant that was not immediately available for county use. The approved funds will come out of the contingency fund.

According to Jason Millsaps, the director of the Montgomery County Office of Homeland Security and Emergency Management, Montgomery County was “tentatively approved” for the Local Hazard Mitigation Plans Program under the Texas General Land Office. Commissioners approved the county’s application for the $100,000 grant at a May 10 Commissioners Court session.

However, Millsaps said the final delivery date of the grant would fall beyond an expiration date for the planned Hazard Mitigation Plan and requested funding so the OHSEM could begin work on the plan immediately.

Noack made the motion to award funds, contingent upon a memorialized reimbursement agreement.

Newpark tax abatement terminated

Commissioners unanimously terminated a tax abatement granted to Newpark Industrial Blending Solutions in the Conroe Industrial Park North. According to County Attorney B.D. Griffin, who presented the termination notice, the company was not employing the amount of workers needed to satisfy the abatement agreement.

"This is an abatement that has finished; there are no more years; their numbers fell below for the first time, and we reached an agreement on the recapture amount," Griffin said.

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

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

The initial abatement granted a 100% tax break for 2016-17, an 80% abatement for 2018, a 60% abatement for 2019, a 40% abatement for 2020 and a 20% abatement for 2021.

The initial abatement was set to expire Dec. 31, 2021, and required Newpark Drilling to create 44 new full-time jobs over the course of three years. On Dec. 15, 2020, the Commissioners Court voted to approve Newpark Industrial Blending’s assumption of the abatement. No public details of the assumption are available on the agenda for that 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 company’s “Industrial Sources” segment. According to the same release, the company shut down its Industrial Blending operations in March.