RESOLUTION NO. ________(N.C.S.)
A RESOLUTION AUTHORIZING THE EXECUTION OF A FINANCING AGREEMENT WITH BANC OF AMERICA PUBLIC CAPITAL CORP TO PROVIDE FINANCING FOR AN ENERGY SERVICES CONTRACT WITH ENGIE SERVICES U.S. INC., MAKING CERTAIN FINDINGS REQUIRED THEREFORE, AND AUTHORIZING RELATED ACTIONS WHEREAS, the City of Salinas, California ("City") is a charter city organized pursuant to the California Constitution and with authority derived directly from Article XI of the California Constitution; WHEREAS, the City finds it to be in the best interests of the City to implement projects to promote energy efficiency and renewable energy to achieve utility budget cost reductions; WHEREAS, Government Code sections 4217.10 through 4217.18 authorize the City's governing board (the “City Council") to enter into one or more energy service contracts with any person or entity if the City Council finds that the anticipated cost to the City for thermal or electrical energy or conservation services provided by the energy conservation facility under the contract will be less than the anticipated marginal cost to the City of thermal, electrical, or other energy that would have been consumed by the City in the absence of those energy service contracts ("Savings"); WHEREAS, Government Code sections 4217.10 through 4217.18 authorize the City Council to enter into one or more facility financing contracts if the City Council finds that funds for the repayment thereof are projected to be available from the Savings, representing funds that otherwise would have been used for purchase of electrical, thermal, or other energy required by the City in the absence of the energy conservation services and facilities financed by proceeds available through the facility financing contracts; WHEREAS, the City gave notice of its intent to conduct a public hearing and take public comment upon the subject matter of this Resolution two weeks prior to the regularly scheduled public meeting of the City Council at which the City Council has held a public hearing and taken public comment and has now considered a corresponding resolution, all as required under Government Code sections 4217.10 through 4217.18; WHEREAS, ENGIE has offered to enter into an Energy Services Contract ("Energy Services Contract,") to provide design/build implementation of the recommended energy conservation measures for the price stated therein and a savings performance guarantee; WHEREAS, the City Council has approved the execution of the Energy Services Contract with ENGIE at its meeting on December 3, 2024; WHEREAS, the City desires to finance the cost of the improvements under the Energy Services Contract to align the cost of the improvements with the benefit derived over the anticipated useful life of the improvements; WHEREAS, Banc of America Public Capital Corp or its affiliate has offered to enter into an Equipment Lease/Purchase Agreement ("Equipment Lease/Purchase Agreement,") between the City as Lessee, and Banc of America Public Capital Corp or its affiliate, as Lessor; WHEREAS, Banc of America Public Capital Corp or its affiliate has offered to enter into an Escrow and Account Control Agreement ("Escrow Agreement," and, together with the Equipment Lease/Purchase Agreement, the "Financing Agreements"), with City and Wilmington Trust, National Association, as escrow agent, under terms that are beneficial to the City; WHEREAS, the feasibility of various potential energy conservation measures to reduce the City’s energy consumption and expense was completed (“Analysis”). The Analysis made certain conclusions about the cost to the City for energy conservation services and the potential savings to be realized therefrom and recommended specific conservation measures upon which the City Council and City staff have relied; WHEREAS, the Analysis indicates that funds for the repayment of lease payments under the Equipment Lease/Purchase Agreement are anticipated to be available from the Savings, representing funds that otherwise would have been used for purchase of electrical, thermal, or other energy required by the City in the absence of the energy conservation services provided under the Energy Services Contract; WHEREAS, in accordance with Government Code Section 5852.1, the City Council has obtained and disclosed the information set forth in Exhibit A hereto; WHEREAS, the City Council finds and determines that this project is categorically exempt from environmental review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines sections 15301 (Existing Facilities) and 15303 (New Construction or Conversion of Small Structures) and statutorily exempt pursuant to Public Resources Code section 21080.35.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL, AS FOLLOWS:
Section 1. Recitals. All of the recitals herein contained are true and correct and are fully incorporated herein by this reference.
Section 2. Equipment Lease/Purchase Agreement Findings. The City Council finds that funds for the repayment of rental payments under the Equipment Lease/Purchase Agreement are projected to be available from the Savings, representing funds that otherwise would have been used for purchase of electrical, thermal, or other energy required by the City in the absence of the energy conservation services, and that it is in the best interest of the City to approve and enter into the Financing Agreements.
Section 3. Financing Agreements Approval. The forms of the Financing Agreements, in the forms on file with the City Clerk, are hereby approved, with such changes thereto, deletions therefrom and additions or modifications thereto as may be approved pursuant to Section 4 hereof; provided that the par amount of the Financing Agreements shall not exceed $4,900,000 and the initial, tax exempt interest rate shall not exceed 4.30% (exclusive of adjustments to the rate upon an event of default or event of taxability).
Section 4. Execution and Delivery. Any one of the City Manager, the Finance Director, or any deputy thereof, or person duly appointed in writing to act in the stead of such officer (collectively, the “Responsible Officers”), is hereby authorized and directed for and in the name of and on behalf of the City to execute and deliver the Financing Agreements, each in substantially the form presented to and considered at this meeting, with such changes therein, deletions therefrom and additions thereto as may be approved (i) by any Responsible Officer, in such person’s discretion, as being in the best interests of the City, (ii) as to form, by City Attorney; such approval to be conclusively evidenced by the execution and delivery thereof by the person executing the same on behalf of the City.
Section 5. Further Actions. The Responsible Officers are, and each of them acting alone is, hereby authorized and directed to take such actions and to execute such documents and certificates as may be necessary to effectuate the purposes of this resolution, including the execution and delivery of the Financing Agreements, and execution and delivery of any and all memorandums of agreement or understanding, assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, deem necessary or advisable in order to consummate the transactions and requirements as described herein.
Section 6. No General Liability. Nothing contained in this Resolution, the Financing Agreements nor any other instrument shall be construed with respect to the Lessee as incurring a pecuniary liability or charge upon the general credit of the Lessee or against its taxing power, nor shall the breach of any agreement contained in this Resolution, the Financing Agreements, or any other instrument or document executed in connection therewith impose any pecuniary liability upon the Lessee or any charge upon its general credit or against its taxing power, except to the extent that the Rental Payments payable under the Agreement are limited obligations of the Lessee, subject to annual appropriation, as provided in the Agreement.
Section 7. Ratification. All actions heretofore taken by any officer of the City with respect to the execution and delivery of the Financing Agreements, and the financing of the equipment and projects described therein are hereby approved, confirmed and ratified.
Section 8. Effective Date. This Resolution shall take effect upon approval.
PASSED AND APPROVED this 3rd day of December by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED:
________________________________
Kimbley Craig, Mayor
ATTEST:
_________________________________
Patricia M. Barajas, City Clerk
Attachment: Exhibit A (Government Code section 5852.1 Disclosure) The City Clerk of the City of Salinas, California does hereby certify that the foregoing Resolution was introduced and duly passed and adopted by the City Council at a regularly scheduled meeting thereof held on this date, by the forgoing vote.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City, California on this date. ___________________________________
Patricia M. Barajas, City Clerk
EXHIBIT A
GOVERNMENT CODE SECTION 5852.1 DISCLOSURE
The following information consists of estimates that have been provided by NHA Advisors, the City’s Municipal Advisor, as required by Section 5821.1 of the California Government Code, which has been provided to the City in good faith:
True interest cost of the Equipment Lease/Purchase Agreement (“Lease”): 4.255% Finance charge of the Lease (sum of all costs of issuance and fees/charges paid to third parties): $65,000 Net proceeds to be received (net of finance charges, reserves and capitalized interest, if any): $4,578,522 Total payment amount through maturity: $7,394,631