Moran, tax collectors in a Supreme Court fight

As the $194,250-a-year executive director of Florida PACE Funding Agency, a Legislature-authorized home-improvement lending organization, Mike Moran is a central player in lawsuits involving FPFA and 30 Florida county tax collectors.

The tax collectors have sued FPFA, alleging FPFA's lending practices are misleading, often resulting in large increases in property tax bills and assessments that surprise homeowners and, in many cases, also have resulted in long-term tax liens being placed on homes.

The tax collectors also have argued FPFA doesn’t have the authority to require them to place the PACE assessments on homeowners’ tax bills.

The Legislature created the PACE lending program (Property Assessed Clean Energy) to provide loans to Floridians who might otherwise not qualify for traditional lending. The loans are to be used to improve a home’s energy efficiency and/or increase its storm resilience. The Florida PACE Funding Agency is one of four PACE districts under Florida’s PACE Program. Starting early in 2023, FPFA began operating in counties without interlocal agreements in place and is the only PACE district in Florida to do so.

The Florida PACE Funding Agency has issued $869.4 million in assessable loans to more than 27,586 Floridians. These loans typically incur 9% to 10% interest rates — half of typical credit card rates.

The PACE agency acts as a middleman. Floridians apply for the loans through PACE. Rather than traditional loan qualifications, the loans are tied to home equity. On the other side of the transaction, PACE lines up private lenders. In exchange for the cash to complete the construction project, PACE providers put a lien on the property and collect annual payments through property tax bills.

Tax collectors opposed to this have argued FPFA does not have legal authority to force the collectors to add assessments to homeowners’ tax bills and that the program’s contractors often have misled homeowners.

FPFA, in turn, has sued the tax collectors, with Moran arguing that his quasi-governmental agency does have taxing authority. In January 2023, a Leon County judge ruled in FPFA's favor, saying it did not need county tax collectors’ permission to operate in their counties or add assessments to tax bills.

But that judge’s ruling did not end the fight. Other Florida tax collectors said despite that ruling, they were not going to comply. Rob Stoneburner, Collier County tax collector, told the Miami Herald:

“I believe the responsibility tax collectors have is we’re only going to collect what is proper and authorized on the tax rolls. As it stands right now, these assessments are not proper or authorized, so they’re not getting collected.”

As word of the controversy spread, Moran put out a news release this past October that said FPFA's bondholders and investors were withdrawing funding from Florida.

Moran and FPFA also sued the collectors at that time asking the court to force them to collect the assessments. According to the Miami Herald, judges in Sarasota and Hernando counties have agreed with FPFA, while judges in Alachua, Bradford and Hillsborough counties have not.

Moran commented in typical fashion to the Miami Herald: “We don’t do ‘mother may I’ to another governmental authority to tell them to put it on the tax bill. We are the governmental authority. There are a billion dollars of bondholders on the street in Florida that need to be paid back, and property tax collectors need to put this on the tax bill. That is not a complicated discussion.”

The final outcome either hinges on the courts or the Legislature. Currently pending in the Florida Supreme Court is the lawsuit Palm Beach County, Florida, et al. v. Florida PACE Funding Agency, et al.

Filing amicus briefs in support of Palm Beach County are the state of Florida, the Florida attorney general, the Florida Tax Collectors Association and the Florida Association of Counties.

Suffice it to say, you can predict if Moran is elected Sarasota County tax collector, however the outcome of this dispute, there won’t be a welcoming committee for Moran among Florida’s 66 other tax collectors.

Footnote: Aware that he could not serve as tax collector and executive director of Florida PACE Funding Agency, Moran sent to the Observer a copy of a letter dated June 28 that he planned to submit to the Florida PACE Funding Agency board. The letter said, in part: “please accept this letter as my commitment to offer my resignation should I win the position.”

This opinion piece has been updated to clarify which agency is being referred to. It is the Florida PACE Funding Agency, or FPFA. There are multiple PACE agencies in Florida not connected to Florida PACE Funding Agency.