HomeMy WebLinkAbout25311RESOLUTION NO. 25311
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS, CALIFORNIA, APPROVING A GUARANTY
OF THE ELECTRICITY PROCUREMENT OBLIGATIONS OF
DESERT COMMUNITY ENERGY, NOT TO EXCEED $25
MILLION, UNDER A RESOURCE MANAGEMENT
AGREEMENT WITH THE ENERGY AUTHORITY, INC..
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.; and
WHEREAS, DCE currently provides clean energy for the residents and businesses
of the City, which has resulted in a substantial reduction in greenhouse gas emissions
within 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 demonstrate enhanced liquidity to credit rating agencies, provide
financial flexibility for increased collateral required on certain long-term power purchase
agreements, and address new exposure limits from short-term procurement parties, DCE
has negotiated an expansion of the line of credit in the Credit Agreement in the amount
of up to $20,000,000 pursuant to the terms of a Fourth Amendment to the Credit
Agreement; and
WHEREAS, the consent of the City as the guarantor is required for the Fourth
Amendment to the Credit Agreement to take effect, including an acknowledgment of the
City's potential increased exposure to liability as the guarantor in the amount of
$20,000,000; and
WHEREAS, the City Attorney has reviewed and approved the attached form of
Consent and Reaffirmation of Guaranty and the Fourth Amendment to the Credit
Agreement;
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, DOES HEREBY
RESOLVE AS FOLLOWS:
Resolution No. 25311
Page 2
SECTION 1. That the findings and determinations reflected above are true and
correct, and are incorporated by this reference herein as the cause and foundation for the
action taken by the and through this Resolution. 0
SECTION 2. The City Council hereby consents to the Fourth 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 $20,000,000 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 Fourth Amendment to the
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. 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. This Resolution will become effective immediately upon adoption
and remain effective unless superseded by a subsequent resolution.
ADOPTED THIS 28TH DAY OF MAY 2025.
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Scott Stiles, City Manager
ATTEST:
enda Pree, MMC, CERA
City Clerk
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Resolution No. 25311
Page 3
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS)
I, BRENDA PREE, City Clerk of the City of Palm Springs, hereby certify that
Resolution No. 25311 is a full, true and correct copy, and was duly adopted at a regular
meeting of the City Council of the City of Palm Springs on the 28th day of May, by the
following vote:
AYES: Councilmembers Ready, Garner, Bernstein, Mayor Pro Tern Soto, and
Mayor deHarte
NOES: None
ABSENT: None
ABSTAIN: None
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of Palm Springs, California, this U AL day of June 2025.
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renda Pree, MMC, CERA
City Clerk
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