STAFF REPORT
City of Lancaster
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1/14/2025
TN
Date:January 14, 2025
To: Mayor Parris and City Council Members
From:Jason Caudle, CEO – Lancaster Energy
Subject:Consider Approving Execution of Agreement with First Public Hydrogen for Administrative and Operational Support Services and Promissory Note Recommendation:
1. Approve Execution of Agreement with First Public Hydrogen Authority (FPH2)for Administrative and Operational Support Services and Promissory Note, substantially in the form attached, and authorize the City Manager or designee to execute all documents, subject to City Attorney approval.
G.C. Section 84308: Yes
Fiscal Impact:
This action authorizes administrative and operational support of First Public Hydrogen (FPH2) in a not to exceed amount of $2,600,000 to fund the first year budget. The loan is repayment is memorialized in the Promissory Note attached to the Agreement.
Background:
The FPH2 Joint Powers Agreement establishes the FPH2 fiscal year as July 1 of the current year to June 30 of the following year. For this first year, the fiscal year is a partial year, from the date the JPA was executed, December 10, 2024, to June 30, 2025. The budget assumes that FPH2 is supported through a combination of City of Lancaster staff and professional and technical contractual services.
FPH2 currently has no revenue, and its FY 2024/25 budget is being considered for funding through a loan from the City of Lancaster. The loan, if approved, would be memorialized by a promissory note, included as Exhibit C of the Agreement with FPH2, for an amount not to exceed $2,600,000. The repayment is due by July 1, 2028, with interest in an amount equal to 1 9
1 2
the average of the average monthly effective yields of the Local Agency Investment Fund (LAIF), as published by the California State Treasurer, for the period commencing upon the date of invoice and ending on the Maturity Date.
The staffing and administrative support provided by Lancaster is documented through an agreement between FPH2 and Lancaster. Services being provided include direct staff, payroll, accounts payable, human resources, etc.
Attachment:
Agreement with the First Public Hydrogen Authority for Administrative and Operational Support Services and Promissory Note