March 18, 2025
TO: City Council
REQUESTED BY: Erika Gomez, Finance Director
APPROVED BY: Robert A. Johnson, City Manager
SUBJECT: Resolution of the IDA Authorizing the Creation of the City of San Jacinto Public Financing Authorty
RECOMMENDATION:
Staff recommends that the Board of Directors adopt Resolution No. IA 25-01, establishing the City of San Jacinto Public Financing Authority.
Introduction
The City of San Jacinto has identified the need to enter into a financing agreement for the purpose of constructing certain improvements to the City’s water system. The City may enter into obligations that are secured by the water system revenues to finance the projects. The legal structure that must be used for the financing requires the City to enter into an installment purchase agreement for the water system improvements with a public financing authority or nonprofit benefit corporation. The City’s existing financing authority, the San Jacinto Financing Authority, consists of two members, the City and the Former Redevelopment Agency of the City of San Jacinto (the “Former Redevelopment Agency”). The Successor Agency to the Former Redevelopment Agency will dissolve upon the satisfaction of the Former Redevelopment Agency’s outstanding obligations. This is anticipated to occur prior to the maturity of the proposed obligations to be issued to finance the water system improvements. As such, the existing financing authority is not a viable financing authority to utilize.
It is recommended that a new joint powers authority be formed by the City and the Industrial Development Authority of the City of San Jacinto (“Industrial Development Authority”) to allow the City to enter into a proposed financing for the water system improvements. The Industrial Development Authority was activated by the City Council of the City of San Jacinto to assist the community in industry development by providing a financing mechanism to encourage such development in the City. The joint powers authority is proposed to be called the City of San Jacinto Public Financing Authority (“Financing Authority”) and the Financing Authority will issue the water revenue obligations.
Background
The Joint Exercise of Powers Act, Government Code section 6500 et seq. (“Act”), permits public agencies to enter into a joint exercise of powers agreement (“JEPA”) to form a separate governmental entity to jointly exercise powers common to the member agencies (Government Code Section 6502). The parties to the JEPA may create a separate legal entity (i.e. a joint powers authority) under the JEPA to administer the agreement. Additionally, the joint powers authorities have the power of issuing obligations secured by local revenues, in the case of the City, water system revenues. This is a commonly utilized financing mechanism for cities throughout the State of California.
Discussion
The governing body of the Financing Authority will be the Mayor and members of the City Council. Any regular meeting of the Financing Authority’s Board of Directors shall be held at the same time and same location as regular meetings of the City Council and noticed in the same manner. The Board of Directors of the Financing Authority will conduct a regular meeting at least once each calendar year on the first Tuesday of December. The Financing Authority Board meetings will have separate agendas from the City Council meetings, and will comply with Brown Act requirements.
Presented before the City Council is the following resolution related to the formation of the Financing Authority and the JEPA:
• Resolution No. 4066, A Resolution of the City Council of the City of San Jacinto, California, Authorizing the Creation of the City of San Jacinto Public Financing Authority and Certain Other Matters Pertaining Thereto.
Presented before the Board of Directors of the Industrial Development Authority is the following resolution related to forming the Financing Authority and the JEPA:
• Resolution No. IA 25-01, A Resolution of the Board of Directors of the City of San Jacinto Industrial Development Authority of the City of San Jacinto Authorizing the Creation of the City of San Jacinto Public Financing Authority and Certain Other Matters Pertaining Thereto.
Presented before the Board of Directors of the Financing Authority is the following resolution related to approval of the Financing Authority bylaws:
• Resolution No. PFA 25-01, A Resolution of the Board of Directors of the City of San Jacinto Public Financing Authority Approving and Adopting Bylaws, Establishing Regular Meeting Dates and Authorizing Certain Other Actions in Connection Therewith.
It is anticipated that at its April 1st meeting, the City Council will consider whether to enter into obligations to finance improvements to its water system.
FISCAL IMPACT:
None.
ATTACHMENTS:
Resolution No. IA 25-01 - IA Authorization of JPA
Joint Exercise of Powers Agreement - San Jacinto Public Financing Authority