HomeMy WebLinkAbout01/07/2003, C5 - FINANCING FOR THE ENERGY CONSERVATION PROJECT council -7,Zn. ao�3
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CITY OF SAN LU I S O B I S P O
FROM: John Moss, Utilities Director
Prepared By: Ron Munds, Utilities Conservation Coordinato
SUBJECT: FINANCING FOR THE ENERGY CONSERVATION PROJECT
CAO RECOMMENDATION
Adopt a resolution preserving the City's ability to enter into a Lease Purchase Agreement for
approximately$3,000,000 to design and construct the approved Energy Conservation Project
DISCUSSION
On December 17, 2002, the Council approved a design and build contract with Kinetics Energy
Services to design and construct energy conservation measures at selected City facilities. As part
of the Council action, the City Council authorized the Finance Director to work with the City's
financial adviser to secure lease purchase financing for the projects. In order to proceed with the
project in a timely manner and assure the availability of the financial incentive being offered for
energy related projects, it will be necessary to proceed with the first phase of the project prior to
securing the lease purchase financing. This resolution simply ensures that advance costs for this
project are eligible for debt financing.
FISCAL IMPACT
There is no fiscal impact associated with adopting this resolution. This resolution merely retains
the City's ability to be reimbursed for expenses paid to Kinetics Energy Services prior to the
completion of the Lease Purchase Agreement. The Lease Purchase Agreement should be
finalized by February 1, 2003.
CONCURRENCES
The City's financial advisor, Fieldman, Rolapp and Associates concurs with adoption of the
resolution by the Council.
ATTACHMENT
Resolution preserving the City's ability to debt finance the Energy Conservation Projects.
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Attachment
RESOLUTION NO. (20003 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
DECLARING INTENTION TO REIMBURSE EXPENDITURES
RELATING TO ENERGY CONSERVATION PROJECTS
FROM THE PROCEEDS OF LEASE PURCHASE AGREEMENT OF THE CITY
WHEREAS, the City Council of the City of San Luis Obispo (the "City") is
undertaking proceedings to finance the Energy Conservation Project at selected City
facilities; and
WHEREAS, in order to provide funds to finance the Energy Conservation
Project, the City Council intends to participate in a tax-exempt Lease Purchase
Agreement (Agreement) financing in the aggregate principal amount of approximately
$3,000,000; and
WHEREAS, in order to use the proceeds of the Agreement to reimburse
advances made by the City for the Energy Conservation Project before the date of
securing the Agreement, but not more than sixty (60) days before the date of adoption of
this Resolution, Section 1.150-2 of the United States Income Tax Regulations requires
that City Council declare its intention to reimburse such advances from the proceeds of
the Agreement; and
WHEREAS, it is in the public interest and for the public benefit that the City
declare its official intent to reimburse the expenditures referenced herein;
NOW THEREFORE BE IT RESOLVED by the Council of the City of San
Luis Obispo as follows:
SECTION 1. Declaration of Intent. The Council hereby declares that it
reasonably expects to enter into a Lease Purchase Agreement and to use a portion of the
proceeds thereof to reimburse expenditures made by the City for the Energy Conservation
Project before the date of the Agreement, and not more than sixty (60) days before the
date of adoption of this Resolution. The Agreement shall be issued in an aggregate
principal amount which is sufficient to raise funds for the Energy Conservation Project in
the approximate amount of$3,000,000.
SECTION 2. Effective Date. This Resolution shall take effect from and after the
date of its passage and adoption.
Upon motion of seconded by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this day of 2003.
Mayor David F. Romero
ATTEST:
Lee Price, City Clerk
APPROVED AS TO FORM:
Gilbert A. TrujVo, cting City Attorney
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