CITY COUNCIL STAFF REPORT
Meeting Date: October 07, 2024
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: ADOPT RESOLUTION NO. ___-24 AUTHORIZING THE CITY
MANAGER TO EXECUTE AN AGREEMENT WITH THE
RECREATION AND PARK DISTRICT TO PROVIDE A LOAN IN THE
AMOUNT OF $240,000 TO PAY FOR AN EMERGENCY GENERATOR
AT THE PUBLIC SERVICES CENTER AND COMMUNITY CENTER
SYNOPSIS
The City Hall/Public Services Center (PSC) & Community Center Emergency Generator Project provides for a shared generator to produce backup power to the PSC and the Community Center during power outages.
The purpose of this item is for the City Council to authorize a no-interest, short-term loan to the Recreation and Park District for its fair share cost of the generator.
The Budget Committee reviewed staff’s request for this no-interest, short-term loan and recommends the City Council adopt the proposed resolution.
DISCUSSION
Background
On June 17, 2024, the City Council approved the Fiscal Year (FY) 2024-2029 Capital Improvement Program (CIP), which included the City Hall/Public Services Center & Community Center Emergency Generator Project as a funded project. The PSC & Community Center emergency generator will provide a reliable source of backup power to the PSC and the Community Center during power outages. The City and/or the Recreation and Park District may need to activate the Emergency Response system during power outages caused by an earthquake or a major weather event. Power for the backup generator could be maintained for a week or longer, depending on deliveries of fuel for the generator.
At the time of the CIP adoption, the City was in negotiation with the Recreation and Park District on cost apportionment for the shared generator, but no agreement had been formalized. To ensure the viability of the project, the approved CIP reflected the City fully funding the generator project, utilizing available American Rescue Plan Act (ARPA) funds.
Analysis
The Recreation and Park District is seeking a three-year, no-interest loan totaling $240,000 from the City’s General Fund to pay for its fair share (50%) of the cost of the generator ($480,000).
The City cannot utilize ARPA funds for this loan, as all ARPA funds, including loans, must be expended by December 31, 2026, before the end of the loan term. Staff has confirmed with the Finance Division that there are sufficient funds in the General Fund for this three-year loan. The corresponding ARPA funds identified in the CIP for this project will be returned to the ARPA fund for use on other authorized projects.
The City has historically extended no-interest loans to our community partners, most recently to the Pleasant Hill Library Foundation to cover costs for shelving and other items for the Pleasant Hill Library. Similar to the Pleasant Hill Library, this project would have a benefit for the entire City in case of a power outage or an emergency, since the generator can assist with planning, housing, and recovery during an incident.
Acceptance of this proposal by the City Council will authorize $240,000 from the General Fund for a three-year, no-interest loan to the Recreation and Park District for the Public Services Center (PSC)/Community Center Emergency Generator Installation Project.
The Budget Committee reviewed staff’s request for this short-term loan and recommended the City Council adopt the proposed resolution. If approved, staff anticipates construction beginning mid-December 2024 and concluding by April 2025. The first loan payment of $80,000 would be due 15 days after project completion and then annually thereafter until the loan is repaid in full.
Councilmember Flaherty inquired whether the District could repay the loan sooner, if the voter bond measure for the Recreation and Park District passes this November. Michelle Lacy, General Manager for the Recreation and Park District, was amenable to the request, but noted that she would need to work with her staff to finalize the details, assuming the bond measure passes.
FISCAL IMPACT
The requested $240,000 loan, if approved, would be allocated from the General Fund, subject to the proposed terms of the loan agreement between the Recreation and Park District and the City.
Given the anticipated short-term nature of this loan, City Staff does not anticipate the proposed temporary use of General Fund money will affect City operations and/or the delivery of City services.
PUBLIC CONTACT
Public contact was made through posting of the City Council agenda on the City’s official notice bulletin board, at the Pleasant Hill Senior Center, and at the Pleasant Hill Police Department.
The agenda and staff report are posted on the City’s web page.
RECOMMENDED CITY COUNCIL ACTION
Adopt Resolution.
ALTERNATIVES TO RECOMMENDED ACTION
None Recommended.
ATTACHMENT(S):
Proposed Resolution
Loan Agreement
Prepared by: Ann James, Public Works Director
Reviewed by: Erick Cheung, Finance Manager
Approved by: Ethan Bindernagel, City Manager