HomeMy WebLinkAbout25019' RESOLUTION NO. 25019
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS, CALIFORNIA, APPROVING A CONSENT
AND REAFFIRMATION OF GUARANTY OF THE
OBLIGATIONS OF DESERT COMMUNITY ENERGY
UNDER A CREDIT AGREEMENT WITH RIVER CITY BANK
WHEREAS, Desert Community Energy ("DCE") is a joint powers authority
established on October 30, 2017 for the purpose of implementing community choice
aggregation programs under Public Utilities Code Section 366.2.0; and
WHEREAS, DCE currently provides clean energy forthe residents and businesses
of the City; and
WHEREAS, DCE entered into a Credit Agreement with River City Bank ("RCB") to
provide a Commercial Revolving Line of Credit in the amount of ,up to $8,000,000 on
February 11, 2022 ("Credit Agreement") to provide working capital and allow DCE to post
collateral for energy procurement in the ordinary course of DCE's provision of energy
service to the City; and
WHEREAS, the City agreed to guaranty the obligations of DCE under the Credit
' Agreement pursuant to that certain Guaranty on behalf of River City Bank dated February
11, 2022 ("Guaranty"); and
WHEREAS, to facilitate the posting of collateral to Southern California Edison in
connection with certain regulatory requirements imposed by the California Public Utilities
Commission, DCE has negotiated an expansion of the line of credit in the Credit
Agreement in the amount up to $13,000,000 pursuant to the terms of a First Amendment
to Credit Agreement, and
WHEREAS, the consent of the City as the guarantor is required for the First
Amendment to Credit Agreement to take effect, including an acknowledgement of the
City's potential increased exposure to liability as the guarantor in the amount of
$13,000,000; and
WHEREAS, the City Attorney has reviewed and approved the attached form of
Consent and Reaffirmation of Guaranty and the First Amendment to the Credit
Agreement;
THE CITY. COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA,
HEREBY RESOLVES, DETERMINES AND APPROVES AS FOLLOWS:
Section 1. Factual Findings. The true and correct recitals above are
incorporated by this reference herein as the basis and foundation for the City's adoption
of this Resolution.
Resolution No. 25019
Page 2
Section 2. Approval of Consent and Reaffirmation of Guaranty. The City ,
Council hereby consents to the First Amendment of Credit Agreement and approves the
Consent and Reaffirmation of Guaranty for the benefit of River City Bank to provide
working capital for the operations of Desert Community Energy in a principal amount not
to exceed $13,000,000 and agrees that the City of Palm Springs will be liable to River
City Bank for the payment of all amounts due to River City Bank in connection with the
Credit Agreement, as amended by the First Amendment to Credit Agreement, upon the
occurrence of an event of default by Desert Community Energy with respect to its
obligations to River City Bank.
Section 3. Authority of City Manager. The City Manager is hereby authorized
to finalize and execute the Consent and Reaffirmation of Guaranty, with the advice of the
City Attorney, in substantially the form which is attached to this resolution.
Section 4. Effective Date. This Resolution will become effective immediately
upon adoption and remain effective unless superseded by a subsequent resolution.
PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY
COUNCIL THIS 16th DAY OF JUNE, 2022.
JUSTIN CLIFTON
V CITY MANAGER
ATTEST:
MONIQUEtL041-I, CMC
INTERIM CITY CLERK
Resolution No. 25019
Page 3
CERTIFICATION
' STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS)
I, Monique Lomeli, Interim City Clerk of the City of Palm Springs, hereby certify
that Resolution No. 25019 is a full, true and correct copy as was duly adopted at a regular
meeting of the City Council of the City of Palm Springs on June 16, 2022, by the following
vote:
AYES: Councilmembers Holstege, Kors, Woods, Mayor Pro Tern Garner, and
Mayor Middleton
NOES:
ABSENT:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of Palm Springs, California, this 16'h day of June, 2022.
L
MONI E LOMELI, CMC
INTERIM CITY CLERK
C