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HomeMy WebLinkAboutAdopt Resolution No. 2015-56 authorizing the City Council ofDept ID AD-15-034 Page 1 of 2 Meeting Date 10/5/2015 eiWo v&-b 7- -o CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 10/5/2015 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A Wilson, City Manager PREPARED BY: Ken Domer, Assistant City Manager Antonia Graham, Energy and Sustainability Project Manager SUBJECT: Adopt Resolution No 2015-56 authorizing the City Council of the City of Huntington Beach to apply for a Loan to fund the Streetlight Acquisition and Retrofit Project from the California Infrastructure and Economic Development Bank Statement of Issue The City Council has held two study sessions outlining and explaining the City's streetlight system and options for the future operation of the system If ultimately approved by the City Council to move forward acquiring these assets from Southern California Edison (SCE), the City would need to finance the acquisition and subsequent retrofit This item adopts a Resolution authorizing the application of a loan from the California Infrastructure and Economic Development Bank for this project, subject to final City Council approval of a subsequent purchase and sale agreement Financial Impact None In passing a resolution to submit a loan application, the City is under no obligation to submit the loan application or to accept the loan should it be awarded If awarded and Council accepts the loan, the loan would provide low interest financing to fund energy conservation measures Recommended Action Adopt Resolution No 2015-56, "A Resolution of the City Council of the City of Huntington Beach to Apply for a Loan to Fund the Streetlight Acquisition and Retrofit Project From the California Infrastructure and Economic Development Bank " Alternative Action(s) Do not approve the Resolution and finance the streetlight program solely through other financing mechanism(s) at a higher interest rate Analysis On May 4th and September 21st, City Council was presented an overview of the City's streetlight system, streetlight expenditures, the SCE acquisition process to acquire the streetlights, and the subsequent retrofit process for the streetlight system Staff was directed to continue moving forward with the process and bring back to Council the finalized Investment Grade Audit Report, Purchase and Sale package, and financing options This final package of the Investment Grade Audit Report and Purchase and Sale package will be presented to City Council on October 19, 2015 Part of the final package will include various financing mechanisms for the purchase and retrofit of the system One of these funding mechanisms that could be programmed into the cash Item 11. - 1 HB -316- Dept ID AD-15-034 Page 2 of 2 Meeting Date 10/5/2015 flow analysis is a 2 32% loan from the California Infrastructure and Economic Development Bank (IBank) The IBank established the California Lending for Energy and Environmental Needs (CLEEN) Center to encourage public and private investments in clean energy projects This arm of IBank seeks to fund energy efficiency projects Staff had conversations with the IBank and the City's application would the first streetlight project funded by the CLEEN Center The City was quoted a 2 32% interest rate for a twenty-year loan on the total cost of the project (acquisition and retrofit) Should the City move forward with acquiring the streetlights from SCE a loan from the IBank is one way in which the City could finance both the acquisition and retrofit The City is under no obligation to accept the loan if awarded, this Council action simply puts the City in line for funds If approved, staff will return to Council with a future action to approve the final scope of the energy conservation measures that would be funded with the loan Environmental Status This project is categorically exempt from the California Environmental Quality Act (CEQA) under Section 15301 (existing facilities) because there is no expansion of service, light levels will remain relatively consistent, and there is no change in the number of light fixtures Strategic Plan Goal Strengthen economic and financial sustainability Attachment(s) 1 Resolution No 2015-56, Authorizing the City Council of the City of Huntington Beach to Apply for a Loan to Fund the Streetlight Acquisition and Retrofit Project from the California Infrastructure and Economic Development Bank xB -317- Item 11. - 2 RESOLUTION NO. 2 015 - 5 6 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH TO APPLY FOR A LOAN TO FUND THE STREETLIGHT ACQUISITION AND RETROFIT PROJECT FROM THE CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK WHEREAS, the California Infrastructure and Economic Development Bank ("IBank") administers a financing program to assist local governments with financing eligible projects in accordance with in Section 63000 et seq of the California Goverrunent Code (the "Act"), and IBank created the Infrastructure State Revolving Fund Program ("ISRF Program") pursuant to the provisions of the Act; and IBank's Amended and Restated Criteria, Priorities and Guidelines for the Selection of Projects for Financing under the ISRF Program (the "Criteria") establishes requirements for the financing of projects under the ISRF Program; and City of Huntington Beach ("Borrower") has applied to the IBank for the financing of the costs of acquisition and LED retrofitting of certain of the Borrower's street lights ("Project") in an amount not to exceed [$7,769,350], and The Act requires the Borrower to make, by resolution of its governing body, certain findings prior to a Project being selected for financing by the IBank; and The Borrower reasonably expects that a financing arrangement ("Obligation") in an amount not expected to exceed [$7,769,350] will be entered into under and memorialized by one or more financing agreements and related documents (collectively, the "Financing Agreements") and that certain proceeds of such Obligation will be used to reimburse the Borrower for Project expenditures incurred or paid prior to incurring the Obligation, and The Borrower acknowledges that the IBank funds the ISRF Program, in part, with the proceeds of tax exempt bonds and, as such, has certain compliance obligations that may require it to have the Borrower enter into new financing agreements to replace the Financing Agreements (the "Replacement Agreements") on terms and conditions substantially identical to the original Financing Agreements, NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows The City Council hereby approves and affirms the actions of the Borrower's representatives heretofore taken in connection with submitting an application for financing for the Project; and in connection therewith finds and certifies that: 15-4881/125044 doc xeso. Luis —Du a The Project facilitates effective and efficient use of existing and future public resources so as to promote both economic development and conservation of natural resources; b. The Project develops and enhances public infiastiucture in a manner that will attract, create, and sustain long-term employment opportunities, C. That the Project is consistent with the Genial Plan of the City of Huntington Beach, and any elements of the Genial Plan of Orange County that are applicable to the Boiiower and the Project, d The proposed financing is appropriate for the Project, e. The Project is consistent with the IBank's Criteria for the ISRF Program; and It has considered (i) the impact of the Project on California's land resources and the need to preserve such resources, (ii) whether the Project is economically or socially desirable, and (iii) whether the project is consistent with, and in furtherance of the State Environmental Goals and Policy Report (as defined in the Criteria). 2 The Borrower hereby declares its official intent to use certain proceeds of the Obligation to reimburse itself for expenditures reimbursable with the proceeds of tax exempt bonds or other tax exempt securities under the provisions of the Internal Revenue Code of 1986, as amended, and those U S Treasury Regulations implementing such provisions (collectively, "Federal Tan Law"). This declaration is made solely for purposes of establishing compliance with applicable requirements of Federal Tax Law. This declaration does not bind the Borrower to make any expenditure, incur any indebtedness, or proceed with the Project. 3 The City Manager and his or her designee is hereby authorized and directed to act on behalf of the City of Huntington Beach in all matters pertaining to its application for financing from the IBank, and the execution of related financial documents including, but not limited to, the authority pledge general fund revenues to the repayment of the Obligation and to provide covenants relating to the Obligation and as to any other security or collateral securing the Obligation. 4. If the Obligation is approved by the IBank, the City Manager and his or her designee is authorized to enter into and sign financing documents and any amendments thereto, including, but not limited to the Financing Agreements and the Replacement Agieements, with the IBank foi the purpose of financing the Obligation 15-4881/125044 doc 2 Reso. 2015-56 5 This resolution shall become effective immediately upon adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regula.i meeting thereof held on the 5 t h day of October , 2015. Mayor AND APPROVED - APPROVED CityvMailaVer 'Ci* Attorney f rI 15-4881/125044 doc Res. No. 2015-56 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) 1, 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 5, 2015 by the following vote AYES: Posey, O'Connell, Katapodis, Hardy, Sullivan, Delgleize, Peterson NOES: None ABSENT: None ABSTAIN: None City Ark and ex-officio aMwerk of the City Council of the City of Huntington Beach, California