Mike Moran is running for Sarasota County's tax collector, though he's fighting them in court (2024)

It's not often that a legal brief from the Florida Attorney General's Office uses the phrase "pulled a fast one," but that's how the state's top law enforcement office described what Sarasota County Commissioner Mike Moran's organization did in late 2022.

The comment came in a June filing by the Florida Attorney General's Office describing its view of a legal fight now before the state Supreme Court between most of the state's tax collectors and the Florida PACE Funding Agency, where Moran is executive director.

Florida PACE, a governmental financing agency for energy efficient home improvements, scored a lower court win that the organization claims allows it to operate throughout Florida without local oversight. The Attorney General's Office criticized how Florida PACE achieved that victory.

"In this case, the Florida PACE Funding Agency pulled a fast one, smuggling into a bond validation order rulings that purport to shield it from consumer-protection regulations by all of Florida's local governments," Deputy Solicitor General Kevin A. Golembiewski wrote in a brief for the Supreme Court case filed on June 17.

Moran, who reported being paid a $194,250 salary from Florida PACE, is at the forefront of the legal battle. Precluded by term limits from seeking a third term on the County Commission, he is now campaigning to unseat nine-term incumbent Sarasota County Tax Collector Barbara Ford-Coates.

Mike Moran is running for Sarasota County's tax collector, though he's fighting them in court (1)

Late last year, Moran slammed several of the state's tax collector's offices over the dispute, declaring them "rogue" and promising to take the fight to the state's top court if necessary.

"This is a governmental entity, with a statewide public purpose, defined as a compelling state interest," Moran said of Florida PACE in a news conference late last year, according to the Naples Daily News.

Moran declined to comment to the Sarasota Herald-Tribune on the pending litigation.

Program for energy efficient home improvements can lead to loss of home

At stake in the case are the home rule powers of local government. The 2022 bond validation proceeding criticized by the deputy solicitor general allows Florida PACE to sidestep local requirements while at the same time forcing tax collectors across the state in essence to be the program's debt collection agency, whether they agree to participate in the program or not.

Tax collectors across the state have pushed back against what they see as a vast expansion of the initial PACE program. Without the local agreements, the program lacks consumer protections and needed guardrails considering PACE loans have the power to force the sale of property if Florida homeowners fall behind on payments, they contend.

Property Assessed Clean Energy (PACE) programs were created to provide a financing option for owners who had difficulty accessing traditional credit options or without the cash for needed home improvements. Improvements include rooftop solar panels, solar water heaters, energy-efficient air conditioning units, cool roofs, impact windows, insulation and more, according to the Sarasota County website.

But the controversial program has also been criticized by consumer advocates because the loans result in a tax lien on the property. If the payments aren't kept up, a homeowner's property can be sold for unpaid taxes in as little as two years in Florida.

Only three states have implemented residential PACE programs — Florida, Missouri and California.

The commercial lending program is popular with more than 35 states participating in the loan program, according to 2019 data.

Consumer advocates say the residential PACE program lacks transparency and carries above-market interest rates, with few protections for homeowners. The loans also do not have income qualification requirements and do not check whether an applicant has the ability to repay the loan.

They also say some unscrupulous contractors don't fully explain how the program works, hide the total cost of the improvements and overcharge for their services.

Before a court ruling in Leon County in 2022, each of the state's 67 counties required PACE funding agencies to craft agreements with local governments where they sought to provide loans.

Mike Moran is running for Sarasota County's tax collector, though he's fighting them in court (2)

Many local governments required consumer protections to be implemented before they would put the tax liens on property.

Tax collectors allege 'fraud, misrepresentation, misconduct'

Tax Collectors in Palm Beach, Lee, and Polk counties have argued the Florida PACE Funding Agency's final judgment in the bond validation order in Leon County was "procured through fraud, misrepresentation, and misconduct."

A state Supreme Court brief from those three tax collectors' offices noted that while Palm Beach County negotiated updates to an agreement with Florida PACE, the financing agency simultaneously sought a way around those agreements and "deliberately determined not to inform Palm Beach County (or the other counties) of the pending" changes that would allow PACE programs in the entire state to function independent of local agreements.

According to the brief, Florida PACE canceled the individual county agreements after the deadline to appeal the bond procedure had passed and before tax collectors had discovered what the action in court in Leon County meant.

That initial bond validation hearing − a court proceeding before government bonds are sold to investors so they are considered legal − in Leon County Circuit Court has sparked more than 23 lawsuits, with 63 of Florida's tax collector's offices joining the Supreme Court case, with support from the Sarasota County Tax Collector's Office.

Both the tax collector's offices and the attorney general argue the circuit court judge in Tallahassee erred in allowing the bond validation hearing to usurp home rule authority. The Attorney General's brief noted that statute hasn't changed since the 1960s and that the role of a bond validation hearing should not have decided "collateral issues."

Florida PACE has not filed its own brief yet in the Supreme Court case.

Moran faces Charles A. Bear in the Republican primary for Sarasota County Tax Collector for the chance to take on Ford-Coates in the November general election. In response to a question from the Herald-Tribune, Moran provided a letter saying that if he won, he would resign as Florida PACE's executive director.

Mike Moran is running for Sarasota County's tax collector, though he's fighting them in court (3)

Florida PACE loans

Mike Fasano, a former state Senator and current Pasco County Tax Collector, said he's seen contractors take advantage of seniors through the home improvement program that threatened their ability to stay in the home they had lived in for years.

Palm Beach Tax Collector Anne Gannon said she had to issue more than 300 tax certificates this year on properties where homeowners in her county fell behind on payments.

Tax certificates are sold to investors who pay off the tax debt for a guaranteed return on investment that will be paid by either the homeowner if they can come up with the funds or through the sale of the property at auction if the homeowner doesn't pay off the certificate in two years. It isn't clear if the program has led to any homeowners losing their property.

Fasano said that his office reaches out directly to every PACE loan recipient and goes over what the total cost of the loan will be and other details that he hopes will prevent people from losing their homes if they are not fully informed.

"We require full disclosure," he said. "The good, the bad and the ugly."

Several other consumer protections in the Pasco County agreement with Florida PACE would be sidestepped if the Supreme Court upholds the Leon County ruling.

Fasano said that, regardless of the decision in Leon County, it won't affect Pasco's requirements as that circuit court has no jurisdiction in Pasco County. He has refused to put any PACE loans on the tax rolls from agencies that don't have a local agreement.

Nevertheless, Fasano's office is supporting the tax collectors' Supreme Court case against Florida PACE.

"I think it's laughable," he said of the financing agency's argument.

State lawmakers this year approved a bill that would require PACE financing agencies to sign agreements with individual local governments moving forward.

Fasano said the regulation is needed.

"It's a loan that's being given to somebody and there's a lien being put on your home, no different than a mortgage," he said. "But yet they are not regulated."

Florida PACE has provided more than 26,000 loans to Florida property owners since 2015 totaling about $846 million in financing for home improvement projects, according to the agency's website.

Fasano pointed out the loans are low risk for the lender since the lien goes on the tax notice and stays with the property even after the sale of a tax certificate.

"The PACE provider doesn't care whether the person pays them or not, because they're not paying them," he said. "They're paying their tax notice. So its the tax collector who will be forced to sell a tax certificate ... The PACE provider is guaranteed their money. Mike Moran is guaranteed the money, no ifs ands or buts, by an unregulated scheme we have in Florida."

Mike Moran is running for Sarasota County's tax collector, though he's fighting them in court (2024)

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