HomeMy WebLinkAboutR-11011 application to CA Infrastructure and Economic Dev Bank (Ibank) for financing the Water Energy Efficiency ProjectRESOLUTION NO. 11011 (2019 Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AUTHORIZING THE SUBMISSION OF THE
APPLICATION TO THE CALIFORNIA INFRASTRUCTURE AND
ECONOMIC DEVELOPMENT BANK (IBANK) FOR FINANCING THE
WATER ENERGY EFFICIENCY PROJECT, AUTHORIZING THE
INCURRING OF AN OBLIGATION PAYABLE TO IBANK FOR THE
FINANCING OF THE WATER ENERGY EFFICIENCY PROJECT IF
IBANK APPROVES SAID APPLICATION, DECLARATION OF
OFFICIAL INTENT TO REIMBURSE CERTAIN EXPENDITURES FROM
PROCEEDS OF OBLIGATION, AND APPROVING CERTAIN OTHER
MATTERS IN CONNECTION THEREWITH
WHEREAS, the California Infrastructure and Economic Development Bank ("IBank")
administers a financing program to assist local governments with the financing of Public
Development Facilities as described in Section 63000 et seq. of the California Government Code
(the "Act"); and
WHEREAS, IBank created the Infrastructure State Revolving Fund Program ("ISRF
Program") pursuant to the provision of the Act; and
WHEREAS, IBank has instituted an application process for financing under its ISRF
Program; and
WHEREAS, IBank's Criteria, Priorities and Guidelines for the Selection of Projects for
Financing under the ISRF Program, dated February 23, 2016, and as may thereafter be amended
from time to time (the "Criteria"), establishes requirements for the financing of projects under the
ISRF Program; and
WHEREAS, the City of San Luis Obispo ("Applicant") desires to submit an application
("Financing Application") to the IBank from the ISRF Program for the financing of the Water
Energy Efficiency Project ("Project") in an amount not to exceed $14,300,000; and
WHEREAS, the Act and the Criteria require the Applicant to make, by resolution of its
governing body, certain findings prior to a project being selected for financing by IBank; and
WHEREAS, the Applicant expects to incur or pay certain expenditures in connection with
the Project from its Water Fund that are reimbursable with the proceeds of tax exempt bonds or
other tax exempt securities under Federal Tax Law (defined below) prior to incurring indebtedness
for the purpose of financing costs associated with the Project on a long-term basis (the
"Reimbursement Expenditures"); and
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Resolution No. 110011 (2019 Series) Page 2
WHEREAS, the Applicant reasonably expects that a financing arrangement
("Obligation") in an amount not expected to exceed $14,300,000 will be entered into under and
memorialized by one or more financing agreements and related documents (collectively, the
"Financing Agreement") and that certain proceeds of such Obligation will be used to reimburse
the Applicant for Reimbursement Expenditures incurred or paid prior to incurring the Obligation;
and
WHEREAS, the Applicant acknowledges that IBank funds the ISRF Program, in part,
with the proceeds of tax exempt bonds and, as such, has certain compliance obligations that may
require it to have the Applicant enter into one or more new financing agreements to replace the
Financing Agreement (collectively, the "Replacement Agreement") on terms and conditions
substantially identical to the original Financing Agreement.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. The Council hereby approves confirms, ratifies, and affirms all actions of the
Applicant's representatives, employees and officers heretofore taken in connection with, or with
respect to, submitting the Financing Application, and the consideration and approval of the
Obligation and the Financing Agreement, if IBank approves the Financing Application and the
Obligation, and in connection therewith the Council finds and certifies:
a. The Project facilitates the effective and efficient use of existing and future public
resources so as to promote both economic development and conservation of natural
resources;
b. The Project develops and enhances public infrastructure in a manner that will attract,
create, and sustain long-term employment opportunities;
c. That the Project is consistent with the General Plan of the City of San Luis Obispo, and
the General Plan of the County of San Luis Obispo;
d. The proposed financing is appropriate for the Project;
e. The Project is consistent with the Criteria; and
f. It has considered (i) the impact of the Project on California's land resources and the
need to preserve such resources; (ii) whether the Project is economically or socially
desirable; and (iii) whether the project is consistent with, and in furtherance of the State
Environmental Goals and Policy Report (as defined in the Criteria).
SECTION 2. Environmental Determination. In compliance with the California
Environmental Quality Act (CEQA), the City Council of the City of San Luis Obispo finds that
the activity funded by the loan is a project that is exempt under Class 1 (CEQA Guidelines,
§15301), Existing Facilities and Class 28 (CEQA Guidelines, §15328), Small Hydroelectric
Projects at Existing Facilities.
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Resolution No. 110011 (2019 Series) Page 3
SECTION 3. The Applicant hereby declares its official intent to use proceeds of the
Obligation to reimburse itself for the Reimbursement Expenditures with the proceeds of tax
exempt bonds or other tax exempt securities issued under the provisions of the Internal Revenue
Code of 1986, as amended, and those Treasury Regulations implementing such provisions
(collectively, "Federal Tax Law"). This declaration is made solely for purposes of establishing
compliance with applicable requirements of Federal Tax Law and its date is controlling for
purposes of reimbursement under Federal Tax Law. This declaration does not bind the Applicant
to make any expenditure, incur any indebtedness, or proceed with the Project.
SECTION 4. All of the Reimbursement Expenditures were made no earlier than 60 days
prior to the date of this Resolution. The Applicant will allocate proceeds of the Obligation to pay
Reimbursement Expenditures within eighteen (18) months of the later of the date the original
expenditure was paid or the date the Project was placed in service or abandoned, but in no event
more than three (3) years after the original expenditure was paid.
SECTION 5. The Director of Utilities, or Deputy Director Utilities — Water, is hereby
authorized and directed to act on behalf of the Applicant in all matters pertaining to the Financing
Application, and if IBank approves the Financing Application and the Obligation, the execution
of related financial documents, including but not limited to, the authority to: (i) pledge the revenues
of the Water Fund and all legally available amounts in the Water Fund, on a parity basis with the
Applicant's obligations in connection with the existing debt, to the repayment of the Obligation,
(ii) provide covenants relating to, among other things, maintaining the debt service coverage ratio
required by IBank, rates and charges to be pledged, and as to any other security or collateral
securing the Obligation, and (iii) take any other action necessary or desirable to enable the
Applicant to enter into the Financing Agreement and incur the Obligation.
SECTION 6. If the Financing Application and the Obligation is approved by IBank, the
Director of Utilities, or Deputy Director Utilities — Water is authorized to negotiate, enter into and
sign financing documents and any amendments thereto, including, but not limited to the Financing
Agreement and the Replacement Agreement, with IBank for the purposes of financing the
Obligation.
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Resolution No. 110011 (2019 Series) Page 4
SECTION 6. This resolution shall become effective immediately upon adoption.
Upon motion of Council Member Christianson, seconded by Council Member Gomez, and on the
following roll call vote:
AYES: Council Members Christianson, Gomez, and Stewart,
Vice Mayor Pease, and Mayor Harmon.
NOES: None
ABSENT: None
The foregoing resolution was adopted this 21St day of May 2019.
ATTEST:
(� "-O-V —
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this —�, day of 3uy, -e , 2Iq
eresa Purrington
City Clerk
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