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HomeMy WebLinkAboutSolar Energy Facilities - Resolution 2010-71 - Issuance of t J-; a)/( Dij, Council/Agency Meeting Held: Q d Deferred/Continued to: r ved CovitiQ Ily proved ❑ ieed,T Cit! lerW ISignat r Council Meeting Date: October 18, 2010 Department ID Number: AD10-032 - CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Administrator PREPARED BY: Fred A. Wilson, City Administrator SUBJECT: Adopt Resolution No. 2010-71 approving the issuance of tax-exempt bonds by the California Statewide Communities Development Authority (CSCDA) to finance the construction of a solar energy facilities located at Civic Center, Central Library and City Yard constructed by SunEdison, LLC Statement of Issue: City Council is asked to adopt a resolution approving the issuance of tax-exempt bonds by the California Statewide Communities Development Authority (the "Authority") to finance the construction of a solar energy facility for SunEdison, LLC (the "Borrower") Financial Impact: Not applicable, there is no direct or indirect financial impact to the City of Huntington Beach as a result of this proposed financing. Recommended Action: Motion to: Adopt Resolution No. 2010-71, "A Resolution of the City Council of the City of Huntington Beach Approving the Issuance by the California Statewide Communities Development Authority of Recovery Zone Facility Revenue Bonds for the SunEdison California Portfolio" in an aggregate principal amount not to exceed $6.5 million. Alternative Action(s): Do not approve the resolution and advise staff on how to proceed. -673- Item 14. - Page 1 REQUEST FOR COUNCIL ACTION MEETING DATE: 10/18/2010 DEPARTMENT ID NUMBER: 10-032 Analysis: If City Council approves the solar power purchase agreement item to install solar systems at Civic Center, Central Library and City Yard, then City Council is asked to hold a public hearing and adopt the resolution to enable California Statewide Communities Development Authority (the "Authority") to sell recovery zone facility bonds on behalf of SunEdison (the "Borrower") to finance a portion of the municipal solar projects. Such approval is required for compliance with the federal tax laws under the Tax and equity Fiscal Responsibility Act of 1982 ("TEFRA"), as well as Section 9 of the Authority's Amended and Restated Joint Powers Agreement (the "Agreement"). This approval will not constitute any other approval of the local agency. The American Recovery and Reinvestment Act of 2009 (ARRA) created a new type of exempt facility bond called a "Recovery Zone Facility Bond (RZFB)." These bonds are tax- exempt private activity bonds subject to an annual cap. Huntington Beach received a direct allocation of these bonds and has worked with the California Debt Limit Allocation Committee (CDLAC) to retain the allocation for the solar power project. RZFB bonds provide tax exempt financing to private businesses and developers. The private business is solely responsible for the repayment of the RZFBs. The City will not be under any obligation to repay the Bond indebtedness. Eligibility for these bonds requires that a recovery zone resolution is adopted. City Council adopted a resolution in April 2010 declaring all of Huntington Beach a recovery zone. Projects must be located inside the recovery zone and encourage capital investment by qualified businesses in renovating or reconstructing recovery zone property. Solar power purchase agreement projects meet the eligibility criteria. As a result of the RZFB financing SunEdison will receive lower-interest financing for this project making the solar power purchase agreement more cost-effective for the City. Several consultants have estimated the benefit of RZFB financing in a solar power purchase agreement to be in the range of 1-2 cents per Kilo-watt hour or about $33,000-$66,000 in lower solar power costs for the city annually). SunEdison has successfully completed an RZFB sale for Irvine Unified School District's solar power project. The Bonds would be tax-exempt private activity bonds for the purposes of the Internal Revenue Code and, as such, require the approval of the elected body of the governmental entity having jurisdiction over the area where the project to be financed is located. In order for the Authority to issue such Bonds, the City must (1) conduct a public hearing allowing members of the public to comment on the proposed Project, and (2) approve of the Authority's issuance of Bonds on behalf of the proposed financing. With respect to the Authority, over 500 California cities, counties and special districts have entered into and executed the Agreement to become a member of the Authority, including the City of Huntington Beach. The Authority is authorized to assist in the financing of these types of projects. Environmental Status: Not applicable Strategic Plan Goal: Maintain, improve and obtain funding for infrastructure and equipment Item 14. - Page 2 -674- REQUEST FOR COUNCIL ACTION MEETING DATE: 10/18/2010 DEPARTMENT ID NUMBER: 10-032 Attachment(s): De ptfpn 1 Resolution No. 2010-71, "A Resolution of the City Council of the - City of Huntington Beach Approving the Issuance by the California Statewide Communities Development Authority of Recovery Zone Facility Revenue Bonds for the SunEdison California Portfolio" 2. Notice of Public Hearin 3. Notice order confirmation -675- Item 14. - Page 3 ATTACHMENT # 1 Item 14. - Page 4 -676- RESOLUTION NO. 2010-71 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING THE ISSUANCE BY THE CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY OF RECOVERY ZONE FACILITY REVENUE BONDS FOR THE SUNEDISON CALIFORNIA PORTFOLIO WHEREAS, the California Statewide Communities Development Authority (the "Authority") is.authorized pursuant to the provisions of California Government Code Section 6500 et seq. and the terms of an Amended and Restated Joint Exercise of Powers Agreement, dated as of June 1, 1988 (the "Agreement"), among certain local agencies throughout the State of California, including the City of.Huntington Beach (the "City"), to issue revenue bonds for the purpose of promoting economic development in the State of California; and SunEdison, LLC or related entities, has requested that the Authority adopt a plan of financing providing for the issuance of recovery zone facility revenue bonds (the "Bonds")in one or more series issued from time to time, including bonds issued to refund such revenue bonds in one or more series from time to time, and at no time to exceed $6,500,000 in outstanding aggregate principal amount, to finance the construction of a solar energy facility at the following locations in the City and generally known as SunEdison California Portfolio (the "Project"): City of Huntington Beach Civic Center, City Yard and Central Library, in the City of Huntington Beach; and The Bonds or a portion thereof will be "private activity bonds" for purposes of the Internal Revenue Code of 1986,(the "Code"); and Pursuant to Section 147(f) of the Code, prior to their issuance, private activity bonds are required to be approved by the "applicable elected representative" of the governmental units on whose behalf such bonds are expected to be issued and by a governmental unit having jurisdiction over the entire area in which any facility financed by such bonds is to be located, after a public hearing held following reasonable public notice; and The members of this City Council ("City Council") are the applicable elected representatives of the City; and There has been published, at least 14 days prior to the date hereof, in a newspaper of general circulation within the City, a notice that a public hearing regarding the Bonds would be held on a date specified in such notice; and Such public hearing was conducted on such date, at which time an opportunity was provided to interested parties to present arguments both for and against the issuance of the Bonds; and The Authority is also requesting that the City Council approve the issuance of any refunding bonds hereafter issued by the Authority at no time to exceed $1,000,000 for the purpose of refinancing the Bonds which financed the Project (the "Refunding Bonds"), but only in such cases where federal tax laws would not require additional public hearings, consideration or approval by the City Council; and 10-2385.003/53491 1 Resolution No. 2010-71 It is intended that this resolution shall constitute the approval of the issuance of the Bonds required by Section 147(f)of the Code and Section 9 of the Agreement. NOW,THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: I. The above recitals are true and correct. 2. The City Council hereby approves the issuance of the Bonds and the Refunding Bonds by the Authority. It is the purpose and intent of the City Council that this resolution constitute approval of the Bonds for the purposes of(a) Section 147(f)of the Code and(b) Section 9 of the Agreement. 3. The officers of the City are hereby authorized and directed,jointly and severally, to do any and all things and to execute and deliver any and all documents that they deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution and the financing approved hereby. 4. The City Clerk shall forward a certified copy of this Resolution and a copy of the affidavit of publication of the hearing notice to: Justin Cooper, Esq. Orrick, Herrington& Sutcliffe LLP 405 Howard Street San Francisco, California 94 105 5. This resolution shall take effect immediately upon its passage. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 18th day of October 52010 May INITI REVIEWED AND APPROVED: Cif Ad inistrator APPROVED_AS TO FORM: �v uw c. City Attorney 10-2385.003/53491 2 Res. No. 2010-71 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, JOAN L. FLYNN the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on October 18, 2010.by the following vote: AYES: Green, Bohr, Dwyer, Hansen NOES: None .ABSENT: Carchio, Coerper, Hardy ABSTAIN: None y Clerk and ex-offic Clerk of the City Council of the City of Huntington Beach, California ATTACHMENT #2 -679- Item 14. - Page Cal-Net Legal Advertising Our Control # CN P.O. Box 60859 Contact Los Angeles, Ca 90060 Ref. # Pub. Paper Run Dates Phone: (213) 346-0033 Printed at FAX.• (213) 687-3886 Page 1 of 1 NOTICE OF PUBLIC HEARING REGARDING ISSUANCE OF RECOVERY ZONE FA- CILITY REVENUE BONDS FOR SUNEDISON CALIFOR- NIA PORTFOLIO NOTICE Is HEREBY GIVEN that, at 6 p.m., or as soon the- reafter as the matter can be heard, on Monday, October 18, 2010 in the Council Chambers, 2000 Main Street, Huntington Beach,California,the City of Huntington Beach(the "City—) will conduct a public hearing as required - by section 147(t) of the Internal Revenue Code of 1986,at which A will hear and consider information concerning a proposed plan of financing provid- ing for the Issuance by the California Statewide Communities Develop- ment Authority of recov- ery zone facility revenue bonds in one or more series issued from time to time, including bonds issued to refund such revenue bonds in one or more series from time to time, and at no time to exceed $6.500,000 in outstanding aggregate principal amount, to finance the construction of solar energy facilities (the"Project')located at the following addresses in the City: 2000 Main Street,Huntington Beach, California; 7111 Talbert Ave, Huntington Beach, California and 17374 Gothard Street, Hunting- ton Beach,California. The Project will be owned and operated by SunEdison, LLC or re- lated entities. Those wishing to comment on the proposed financing and the nature and location of the Project may either appear in person at the public hearing or submit written comments,which must be received by the City prior to the hearing. Written comments should be sent to 2000 Main Street, Huntington Beach, Cali- fornia 92648 Attention: City Clerk. CITY CLERK CITY OF HUNTINGTON BEACH Dated: October 3,2010 Item 14. - Page 8 -680- ATTACHMENT #3 -681- Item '14. - Page 9 O R D E R C O N F I R M A T I O N Metropolitan News Company P.O. Box 60859 Los Angeles, CA 90060 Phone: (213)346-0033 Fax: (213) 687-3886 12 : 50 PM, October 1, 2010 PAUL TOLAND ORRICK HERRINGTON & SUTCLIFFE THE ORRICK BUILDING 405 HOWARD ST SAN FRANCISCO CA 94105 FAX: 14157735759 Dear Ladies and Gentlemen: We have received the following order for processing. If you have any questions our staff would be pleased to assist you. Please note, we are extending credit to you--not to your client. You are liable for timely payment of all charges. Your Reference Num Other Reference Num Our Reference Num 00844991 Order Start Date 10/03/10 Projected Cost Run Dates 10/03/10 Type of Pub/Service NOTICE OF PUBLIC HEARING Business/Case Name SUNEDISON CALIFORNIA PORTFOLIO Publisher/Servicer ORANGE COUNTY REGISTER Thank you for your business. City ®f Huntington Beach e Y � 2000 Main Street • Huntington Beach, CA 92648 s OFFICE OF THE CITY CLERK s JOAN L. FLYNN CITY CLERK October 19, 2010 Justin Cooper, Esq. Orrick, Herrington & Sutcliffe, LLP 405 Howard Street San Francisco, CA 94105 Dear Mr. Cooper The City Council of the City of Huntington Beach at the meeting held October 18, 2010, adopted Resolution No. 2010-71 approving the issuance by the California Statewide Communities Development Authority of Recovery Zone Facility Revenue Bonds for the SunEdison California portfolio. Enclosed is a certified copy of the resolution for your records. Sincerely, Jo L. Flynn,qCMC ?") City Clerk Enclosure JF:pe G:followup:agrmtltr Sister Cities: Anjo, Japan • Waitakere, New Zealand (Telephone:714-536-5227)