STAFF REPORT
City of Lancaster
CC 13
8/12/2025
TN
Date:August 12, 2025
To: Mayor Parris and City Council Members
From:George Harris, Senior Director of Administrative Services Subject:Consider Approval of an Amendment to the Promissory Note Dated January 28, 2025, Between the City of Lancaster and First Public Hydrogen Authority Increasing the Amount by $4,000,000.
Recommendation:
1. Approve an amendment to the Promissory Note dated January 28, 2025, between the City of Lancaster and First Public Hydrogen Authority increasing the amount from $2,600,000 to $6,600,000, an increase of $4,000,000.
2. Authorize the City Manager, or his designee, to sign all documents related to the promissory, subject to City Attorney approval.
G.C. Section 84308: Yes
Fiscal Impact:
This action authorizes administrative and operational support of First Public Hydrogen (FPH2) to increase the Promissory Note from $2,600,000 to $6,600,000. The Maturity Date of July 1, 2028 remains unchanged. The new loan repayment is memorialized in the Promissory Note attached.
Background:
The First Public Hydrogen Authority (FPH2) is a joint powers authority established in December 2024 by the cities of Lancaster and Industry to lead hydrogen-related initiatives previously managed by the City of Lancaster. Since that time the Rowland Water District and City of Fresno have joined FPH2 as members for the purpose of procuring hydrogen to support its operations.
FPH2 began its operations in January 2025, and the expenditures incurred for the period January 2025 – June 2026 were financed through a promissory note approved by City of Lancaster at its 2 1
3 4
January 14, 2025 City Council meeting, in a not to exceed amount of $2,600,000. Through June 30, 2025, FPH2 expended only $1,700,000 and the remaining $900,000 was rolled forward to provide initial cash flow for FPH2 fiscal year 2025/26 expenditures.
FPH2 staff has been making significant progress in its hydrogen procurement and sales activity. A Request for Proposal process was completed, with over 20 suppliers responding.
FPH2 is poised to execute off-take agreements by the end of the current fiscal year, providing FPH2 visibility to its initial revenue sources. An increase in the Promissory Note of $4,000,000 will provide sufficient funds for expenditures through June 30, 2026. The Maturity Date of July 1, 2028 and interest in an amount equal to the average of the average monthly effective yields of the Local Agency Investment Fund (“LAIF”) remain unchanged.
Attachment:
Amended Promissory Note Between the City of Lancaster and First Public Hydrogen Authority