Resolution / Intention to Issue Tax-Exempt Bonds Page 1 of 4 RESOLUTION NO. 23-9223
A RESOLUTION OF THE CITY OF SANTA CLARA, CALIFORNIA ,
REGARDING ITS INTENTION TO ISSUE TAX -EXEMPT ELECTRIC
SYSTEM BONDS FOR REIMBURSEMENT OF EXPENDITURES FOR
CERTAIN CAPITAL IMPROVEMENT PROJECTS OF SILICON
VALLEY POWER
BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:
WHEREAS, on July 13, 2021, the City Council adopted its Resolution No. 21-8992 declaring the intention of the City of Santa Clara (the “Issuer”) to finance the costs of acquisition and construction of certain public facilities and improvements to be undertaken by the Electric Department of the City of the Santa Clara dba Silicon Valley Power (“SVP”) through the issuance and sale of obligations the interest upon which is excluded from gross income for federal income tax purposes (“Obligations”) and to reimburse certain expenditures incurred by SVP with respect to such facilities and improvements prior to the issuance of the Obligations; WHEREAS, the public facilities and improvements identified in Resolution No. 21-8992 include the replacement and upgrading of the Scott Receiving Station (SRS) and Kifer Receiving Station (KRS) described in Resolution No. 21-8992 and as further set forth in Exhibit A; WHEREAS, SVP has identified certain additional public facilities and improvements as set forth in Exhibit A, which is attached hereto and incorporated herein (the “Additional Projects” and together with the replacement and upgrading of SRS and KRS, the “Projects”), the costs of acquisition and construction of which it desires to finance with proceeds of the sale of Obligations; and
WHEREAS, SVP also desires to incur certain expenditures with respect to the Additional Projects from available monies of SVP which expenditures are desired to be reimbursed to SVP from a portion of the proceeds of the sale of Obligations. //
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Resolution / Intention to Issue Tax-Exempt Bonds Page 2 of 4
NOW, THEREFORE, BE IT FURTHER RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:
1. The Issuer hereby states (and with respect to the SRS and KRS reaffirms) its intention and reasonably expects to reimburse costs of the Projects incurred prior to the issuance of Obligations with proceeds of the sales of Obligations. Exhibit A describes the general character, type, purpose, and function of the Projects.
2. This Resolution is being adopted on or prior to the date (the “Expenditures Date or Dates”) that the Issuer will expend monies for the portion of the costs of the Projects to be reimbursed from proceeds of the sales of Obligations.
3. The reasonably expected maximum principal amount of Obligations to be issued to finance the Projects is five hundred million dollars ($500 Million) including the principal amount of Obligations relating to the SRS and KRS. The Obligations may be sold at one time or from time-to-time in one or more series or issue.
4. Except as described below, the expected date of issuance of Obligations will be within eighteen months of the later of the Expenditure Date or Dates and the date the component of the Projects being financed is placed in service; provided, the reimbursement may not be made more than three years after the original expenditure is paid.
5. Proceeds of the sales of Obligations to be used to reimburse Project costs are not expected to be used, within one year of reimbursement, directly or indirectly to pay debt service with respect to any obligation (other than to pay current debt service coming due within the next succeeding one year period on any tax-exempt obligation of the Issuer, other than the Obligations) or to be held as a reasonably required reserve or replacement fund with respect to an obligation of the Issuer or any entity related in any manner to the Issuer, or to reimburse any expenditure that was originally paid with the proceeds of any obligation, or to replace funds that are or will be used in such manner.
Resolution / Intention to Issue Tax-Exempt Bonds Page 3 of 4
6. This Resolution is consistent with the budgetary and financial circumstances of the Issuer, as of the date hereof. No monies from sources other than the Obligation issued are, or are reasonably expected to be reserved, allocated on a long-term basis, or otherwise set aside by the Issuer (or any related party) pursuant to their budget or financial policies with respect to the Project costs. Other than as specified above, to the best of our knowledge, the Issuer is not aware of the previous adoption of official intents by the Issuer that have been made as a matter of course for the purpose of reimbursing expenditures and for which tax-exempt obligations have not been issued.
7. The limitations described in Section 2 and Section 4 do not apply to (a) costs of issuance of Obligations, (b) an amount not in excess of the lesser of $100,000 or five percent (5%) of the proceeds of the sales of Obligations, or (c) any preliminary expenditures, such as architectural, engineering, surveying, soil testing, and similar costs other than land acquisition, site preparation, and similar costs incident to commencement of construction, not in excess of twenty percent (20%) of the aggregate issue price of Obligations that finances the Project for which the preliminary expenditures were incurred.
8. This Resolution is adopted as official action of the Issuer in order to comply with Treasury Regulation § 1.150-2 and any other regulations of the Internal Revenue Service relating to the qualification for reimbursement of Issuer expenditures incurred prior to the date of issuance of Obligations, is part of the Issuer’s official proceedings, and will be available for inspection by the general public at the main administrative office of the Issuer. //
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9. All the recitals in this Resolution are true and correct and the City of Santa Clara so finds, determines, and represents .
10. Effective date. This Resolution shall take effect immediately.
I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED
AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF SANTA CLARA, CALIFORNIA, AT A REGULAR MEETING THEREOF DULY HELD ON THE 9TH DAY OF MAY, 2023, BY THE FOLLOWING VOTES:
AYES: COUNCILORS:
NOES: COUNCILORS:
ABSENT: COUNCILORS:
ABSTAINED: COUNCILORS :
Attachments incorporated by reference:
1. Exhibit A - Description of the Projects
Resolution/ Intention to Issue Tax-Exempt Bonds
Becker, Chahal, Hardy, Jain, Park, and Watanabe,
and Mayor Gillmor
None
None
None
ATTEST: [ig;;;J_/
NORA PIMENTEL , MMC
ASSISTANT CITY CLERK
CITY OF SANTA CLARA
Resolution / Intention to Issue Tax-Exempt Bonds / Exhibit A Page 1 of 3
EXHIBIT A
DESCRIPTION OF THE PROJECTS
S
ilicon Valley Power (SVP) has been serving its residents since 1896 and has grown substantially over the years. Today, SVP owns and operates significant infrastructures including five (5) receiving stations, twenty-six (26) substations in 2023 (and anticipated to grow to 40 by 2026), one (1) phase shifting transformer, 568.9 (381.6 Underground + 187.3 Overhead) miles of distribution cabling, sixty-one (61.1) miles of transmission cabling, and approximately 8,200 utility poles and many more physical assets. As this infrastructure ages, a replacement plan is needed to continue to serve power reliably to SVP’s customers.
SVP’s customer profile has nearly 60,000 customer accounts in the City of Santa Clara, that are made up of 85% residential, 11% commercial, 3% industrial, and <1% others. The proportion of revenue contributed by each type of customer is reversed, with almost 92% of revenues generated by industrial customers while residential, commercial, and others are 6%, 2%, and <1%, respectively. Industrial customers include many publicly listed technology companies headquartered in the City of Santa Clara and data centers hosting servers for the same companies. These companies continue to grow and request new services.
The projects outlined below are the primary projects associated with City of Santa Clara dba Silicon Valley Power’s System Expansion Plan approved by City Council by the following actions:
• RTC 21-871 Three-Year System Growth Plan (September 29, 2021) o April 6, 2021, Council Presentation
o S
ilicon Valley Power – Three-Year System Growth Plan Strategy o P
roject List and Conceptual Estimates
• RT
C 22-1172 System Expansion Plan (November 15, 2022)
o Silicon Valley Power System Expansion Plan for TPP 2023/2024 o S
ummary of Proposed Projects for SVP System Growth Strategy O
ther projects may be required such as additional substation or transmission system upgrades.
Resolution / Intention to Issue Tax-Exempt Bonds / Exhibit A Page 2 of 3 The Projects include the following two projects referenced and described in Resolution No. 21-8992:
Kifer Receiving Station (KRS) Rebuild: estimated cost $ 88.4M KRS was constructed almost 50 years ago in 1975 and has reached the end of its useful life.
Due to limited space availability, the KRS Rebuild project includes converting KRS from an air insulated switchgear (AIS) substation into an indoor, Gas Insulated Switchgear (GIS) substation on electric utility property directly adjacent to the existing site. The current 372MVA capacity of the existing station will be upgraded to 900MVA with the installation of GIS with a breaker-and- a-half (BAAH) bus scheme with four (4) 115kV/60kV, 300/336 MVA (55C/65C) autotransformers. The project scope also includes relocation of the three (3) existing 115kV incoming transmission lines and relocation of the existing six (6) 60kV transmission lines to the new GIS location. Other associated work includes design and installation of new GIS breakers for a future 115kV incoming transmission line and future 60kV outgoing transmission lines, a control enclosure, and demolition of the existing receiving station after the new GIS substation is placed into service.
Scott Receiving Station (SRS) Rebuild: estimated cost $92.3M SRS was constructed over 50 years ago in 1968 and was last upgraded in 2002. Due to limited space availability, the SRS Rebuild project includes converting SRS from an AIS substation into an indoor GIS substation at the warehouse (which will be demolished) located within the existing station site. The current 372MVA capacity of the existing station will be upgraded to 900MVA with the installation of a GIS with a breaker-and-a-half (BAAH) bus scheme and four (4) 115kV/60kV, 300/336 MVA (55C/65C) autotransformers. The project scope also includes relocation of the existing three (3) incoming 115kV transmission lines and existing four (4) 60kV transmission lines to the new GIS location. Other associated work includes new GIS breakers for future 60kV outgoing transmission lines, a control enclosure, and demolition of the existi ng
r
eceiving station after the new GIS substation is placed into service.
The Additional Projects include the following facilities and improvements:
Northern Receiving Station (NRS) Transformer & Breaker Upgrades: estimated cost $91.0M NRS was constructed almost 20 years ago in 2004. This project includes installing additional transformers and reconfiguring/expanding the 60kV, 115kV, and 230kV buses and associated air insulted switchgear (AIS) using available space within the existing station site to increase Resolution / Intention to Issue Tax-Exempt Bonds / Exhibit A Page 3 of 3 station reliability and capacity. The current 372MVA capacity of the existing station will be upgraded to 900MVA with the installation of 60kV, 115kV, and 230kV bus and AIS improvements to Double-Bus-Double-Breaker (DBDB) configurations; four (4) 115kV/60kV, 300/336 MVA (55C/65C) autotransformers; and two (2) 230kV/115kV, 500/560 MVA (55C/65C) autotransformers. Other associated work includes affected protection and control relay panels within existing (or new) control enclosure(s), and improvements or infrastructures necessary to facilitate the connection of future 60kV, 115kV and 230kV transmission lines.
NRS/KRS 115kV Transmission Line: estimated cost $33.5M
The NRS/KRS 115kV Transmission Line project includes construction of a new transmission line between the two receiving stations. The line will be energized at 115kV and designed and constructed to accommodate 230kV specifications eliminating the need for future upgrades.
The new transmission line will also implement 60kV and 12kV underbuilds and/or duct banks to accommodate additional services at these voltage levels along the same route. Currently, there are three possible routing options to be evaluated. Construction of this line will allow energy to be balanced and redistributed within SVP’s transmission receiving stations.
Homestead Substation Rebuild: estimated cost $74.9M
The Homestead Substation was first constructed almost 50 years ago in 1975 and has reached the end of its useful life. The project includes replacement of the existing substation in its entirety and increasing the substation’s capacity to deliver 12 kV distribution power within its service area. The project includes three (3) new transformers and associated switch gear, control enclosure, switchgear enclosure, support structures, foundations, and appurtenances.
Other associated work includes demolition of the existing substation after the new one is in service as well as civil and security improvements at the site. The project will occur in two phases to allow installation of part of the rebuilt substation prior to decommissioning and removing the existing substation equipment.
Transmission Line Re-conductor, Re-configuration/New Loops: estimated cost $ 123.3M Several miles of transmission line re-conductoring for 60kV and 115kV lines may be required to support SVP’s System Expansion Plan. A reconfiguration for an existing loop or a new loop design of ~5.89 miles of overhead 60kV transmission lines is expected between NRS and SRS.
This 60kV transmission loop will connect existing and future substations such as those built for specific data centers. The estimated project costs include property easement and acquisition for the new alignment.