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HomeMy WebLinkAboutInclusion of Properties - CMFA Open PACE ProgramCONTRACT NO. C35800 RESOLUTION NO. 2016-81 CITY OF PALM DESERT DEPARTMENT OF COMMUNITY DEVELOPMENT STAFF REPORT REQUEST: APPROVE THE INCLUSION OF PROPERTIES WITHIN THE CITY OF PALM DESERT IN THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY (CMFA) OPEN PROPERTY ASSESSED CLEAN ENERGY (PACE) PROGRAM SUBMITTED BY: Deborah S. Glickman, Management Analyst DATE: October 13, 2016 CONTENTS: Opt -in and Joining Resolution Joint Exercise of Powers Agreement Recommendation By Minute Motion: 1. Authorize the California Municipal Finance Authority (CMFA) to accept applications for the Open Property Assessed Clean Energy (PACE) Program from property owners, conduct contractual assessment proceedings, levy contractual assessments within the City of Palm Desert, and authorize related actions; 2. Authorize the staff to finalize the negotiations of the subject Resolution No. 2016-81 and authorize Mayor to execute same, subject to the satisfaction of the City Attorney; 3. Authorize the staff to finalize the negotiations of the subject Joint Exercise of Powers Agreement and authorize Mayor to execute same, subject to the satisfaction of the City Attorney. Committee Recommendation At its meeting of August 29, 2016, the Sustainability Committee recommended approval of the inclusion of properties within the City of Palm Desert in the CMFA Open PACE Program with a unanimous vote of 7-0-0. The Committee also recommended that the CMFA and Coachella Valley Association of Governments (CVAG) investigate the large number of PACE solicitation phone calls that residents are receiving via random phone calls. Both the CMFA and CVAG stated Staff Report CMFA PACE Program Page 2 of 4 October 13, 2016 that they are aware of the issues and are working with PACE programs and contractors to develop a solution. Strateqic Plan This item is in line with two Energy & Sustainability Priorities: Priority 1: Reduce per capita consumption of energy and water. Priority 4: Encourage owners of all existing properties to voluntarily retrofit them to obtain reductions in energy and water usage. Backqround The City of Palm Desert currently has three approved providers — Y Green, Hero, and California First as part of the PACE program. CVAG has brought forward a fourth provider, CMFA, for consideration and inclusion in the program. The inclusion of CMFA will assist in offering Palm Desert residents a greater diversity in choices for their PACE program provider. PACE is an innovative way to finance energy efficiency, water efficiency, and renewable energy upgrades for residential and commercial buildings. Property owners who participate in the program prepay the loans through a voluntary contractual assessment collected together with their property taxes. One of the most notable characteristics of PACE programs is that the loan is attached to the property rather than belonging to an individual. Therefore, when the owner sells the property, the loan may be paid off during the sale or stay with the property and be paid off by the new owner, who also benefits from the upgrades that were completed. PACE financing enables individuals and businesses to defer the upfront costs of energy efficiency, water efficiency, and renewable energy improvements. PACE loans are paid over a long period of time while energy costs are simultaneously lower, which typically provides the property owner with net savings. PACE overcomes challenges that have hindered adoption of energy efficiency and renewable energy measures for many property owners. The CMFA is a Joint Powers Authority formed to assist local governments, non-profit organizations, and businesses by promoting economic, cultural, and community development by financing of economic development and charitable activities throughout California. To date, over two hundred (200) municipalities have joined the CMFA. As part of its economic and community development, the CMFA and its current Program Administrators - Energy Efficient Equity ("E3"), BlueFlame PACE Services, OnPACE Energy Solutions, and Structured Finance Associates - are offering PACE financing for Staff Report CMFA PACE Program Page 3 of 4 October 13, 2016 residential and commercial property owners in its members' territories. The CMFA is expected to fund the projects by issuing limited obligation bonds, notes, or other forms of indebtedness. In order for the CMFA to have the authority to provide PACE financing in the City of Palm Desert, it is necessary for the City to become a member of the CMFA. Currently, CMFA is working with one of Palm Desert's larger Home Owners Associations on a $3.6 million dollar water conservation and energy efficiency program, but cannot move forward with the project without the City's membership in the CMFA. Attached to this report is a copy of the Joint Exercise of Powers Agreement that will allow for the City's members. The Joint Exercise of Powers Agreement (JPA) provides that the CMFA is a public entity, separate and apart from each member executing such agreement. The debts, liabilities and obligations for the CMFA do not constitute debts, liabilities, or obligations of the members executing such agreement. There are no costs associated with membership in the CMFA. The City will not incur any cost of involvement, and there are no administrative responsibilities, marketing obligations, or financial exposures to the City. No City staff support is required. Upon initial review of the CMFA's proposed Resolution and Joint Exercise of Powers Agreement, the City Attorney had the following concerns: 1. The City will be joining into the JPA not just for the limited purpose of PACE financings but for all financings offered by JPA; 2. There is no indemnity provision for the City. The City should receive blanket indemnification since it will not be involved in the financings other than authorizing the JPA to solicit assessment contracts within the City's boundaries; 3. An express statement should be included in the resolution that the City will not be responsible for any on -going administration or financial contribution; 4. The resolution should authorize the City to withdraw at anytime; 5. For residential properties, the City may want to consider adding provisions that require enrollment in with California Alternative Energy and Advanced Transportation Financing Authority's reserve, and adherence to its policies as well as the PACE Nation Residential PACE Policies. Staff posed the City Attorney's concerns to the CMFA representative who made changes to the resolution and answered the concerns to the satisfaction of the City Attorney. Therefore, staff feels comfortable recommending approval of the program. Staff Report CMFA PACE Program Page 4 of 4 October 13, 2016 Fiscal Analvsis If it joins the CMFA, the City will not incur any cost of involvement, and there are no administrative responsibilities, marketing obligations, or financial exposures to the City. No City staff support is required for the implantation of the program. Submitted By: Deborah S. Glickman Management Analyst Reviewed: Janet Moore, DiYector of Finance Approval: Department Head: Ryan Stendell Director of Community Development Lauri Aylaian, City Manager �_� RESOLUTION NO. 2016-81 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT APPROVING, AUTHORIZING, AND DIRECTING EXECUTION OF A JOINT EXERCISE OF POWERS AGREEMENT RELATING TO THE CALIFORNIA MUNICIPAI. FINANCE AUTHORITY; CONSENTING TO THE INCLUSION OF PROPERTIES WITHIN THE TERRITORY OF THE CITY IN THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY OPEN PACE PROGRAMS; AUTHORIZING THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY TO ACCEPT APPLICATIONS FROM PROPERTY OWNERS, CONDUCT CONTRACTUAL ASSESSMENT PROCEEDINGS AND LEVY CONTRACTUAL ASSESSMENTS WITHIN THE TERRITORY OF THE CITY; AND AUTHORIZING RELATED ACTIONS WHEREAS, the California Municipal Finance Authority (the "Authority") is a joint exercise of powers authority, the members of which include numerous cities and counties in the State of California (the "Members"), formed pursuant to a Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority, dated as of January 1, 2004 (the "Agreement") for the purpose of promoting economic, cultural and community development and in order to exercise any powers common to its Members, including the issuance of bonds, notes or other evidences of indebtedness; and WHEREAS, City of Palm Desert (the "City"), has determined that it is in the public interest and for the public benefit that the City become a Member of the Authority in order to facilitate the promotion of economic, cultural and community development activities in the City, including the financing of projects therefor by the Authority; and WHEREAS, there is now before this City Council the form of the Agreement; and WHEREAS, the Agreement has been filed with the City, and the members of the City Council, with the assistance of its staff, have reviewed said document; and WHEREAS, the Authority is implementing Property Assessed Clean Energy (PACE) programs, which it has designated CMFA Open PACE, consisting of CMFA Open PACE programs each administered by a separate program administrator (collectively with any successors, assigns, replacements or additions, the "Programs"), to allow the financing or refinancing of renewable energy, energy efficiency, water efficiency and seismic strengthening improvements, electric vehicle charging infrastructure and such other improvements, infrastructure or other work as may be authorized by law from time to time (collectively, the "Improvements") through the levy of contractual assessments pursuant to Chapter 29 of Division 7 of the Streets & Highways Code ("Chapter 29") within counties and cities throughout the State of California that consent to the inclusion of properties within their respective territories in the Programs and the issuance of bonds from time to time; and 011SUSA 759166422 3 RESOLUTION NO. 2016-81 WHEREAS, the program administrators currently active in administering Programs are Energy Efficient Equity, BlueFlame PACE Services, OnPACE Energy Solutions and Structured Finance Associates, and the Authority will notify the City in advance of any additions or changes; and WHEREAS, Chapter 29 provides that assessments may be levied under its provisions only with the free and willing consent of the owner or owners of each lot or parcel on which an assessment is levied at the time the assessment is levied; and WHEREAS, the City desires to allow the owners of property ("Participating Property Owners") within its territory to participate in the Programs and to allow the Authority to conduct assessment proceedings under Chapter 29 within its territory and to issue bonds to finance or refinance Improvements; and WHEREAS, the territory within which assessments may be levied for the Programs shall include all of the territory within the City's official boundaries; and WHEREAS, the Authority will conduct all assessment proceedings under Chapter 29 for the Programs and issue any bonds issued in connection with the Programs; and WHEREAS, the City will not be responsible for the conduct of any assessment proceedings: the levy of assessments; any required remedial action in the case of delinquencies in such assessment payments; or the issuance, sale, administration repayment or guarantee of any bonds issued in connection with the Programs: NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm Desert as follows: Section I. This City Council hereby finds and declares that the foregoing recitals are true and correct. Section 2. The Agreement is hereby approved and the Mayor, City Manager, or the designee thereof is hereby authorized and directed to execute said document, and the City Clerk or such clerk's designee is hereby authorized and directed to attest thereto. Section 3. This City Council hereby finds and declares that properties in the territory of the City will benefit from the availability of the Programs within the territory of the City and, pursuant thereto, the conduct of special assessment proceedings by the Authority pursuant to Chapter 29 and the issuance of bonds to finance or refinance Improvements. Section 4. In connection with the Programs, the City hereby consents to the conduct of special assessment proceedings by the Authority pursuant to Chapter 29 on any property within the territory of the City and the issuance of bonds to finance or refinance improvements; provided, that 2 0HSUSA 759360-122 3 RESOLUTION NO. 2016-81 (1) The Participating Property Owners, who shall be the legal owners ol' such property, execute a contract pursuant to Chapter 29 and comply with other applicable provisions of' California law in order to accomplish the valid levy of assessments; and (2) The City will not be responsible for the conduct of any assessment proceedings; the levy of assessments; any required remedial action in the case of delinquencies in such assessment payments; or the issuance, sale, administration, repayment or guarantee of any bonds issued in connection with the Programs. (3) The Authority and Administrators jointly and severally agree to defend, indemnify, and hold harmless the City, its officers, agents, employees and attorneys from and against any and all liabilities, claims, or demands arising or alleged to arise as a result of the Authority's or such Administrator's performance or failure to perform under this Agreement or the Program, except that arising from the sole negligence or willful misconduct of City. (4) City shall not have any liabilities or obligations or incur any costs or expenses for the Program, including, but not limited to, the repayment of any bonds issued for the PACE Program. City will not have any responsibilities or obligations with respect to the PACE Program, including, but not limited to, the conduct of' any assessment proceedings, the levy of assessments, any required remedial action in the case of delinquencies, the issuance, sale or administration of the bonds or other indebtedness issued in connection with the PACE Program. Section 5. The appropriate officials and staff of the City are hereby authorized and directed to make applications for the Programs available to all property owners who wish to finance or refinance improvements; provided, that the Authority shall be responsible for providing such applications and related materials at its own expense. The following staff persons, together with any other staff persons chosen by the Mayor or City Manager of the City from time to time, are hereby designated as the contact persons for the Authority in connection with the Programs: [specify name of position]. Section 6. The appropriate officials and staff of the City are hereby authorized and directed to execute and deliver such certificates, requisitions, agreements and related documents as are reasonably required by the Authority to implement the Programs. Section 7. The City Council hereby finds that adoption of this Resolution is not a "project" under the California Environmental Quality Act, because the Resolution does not involve any commitment to a specific project which may result in a potentially significant physical impact on the environment, as contemplated by Title 14, California Code of Regulations, Section 15378(b)(4)). Section 8. This Resolution shall take effect immediately upon its adoption and remain in effect unless cancelled in writing by either the City or Authority". The City Clerk is hereby authorized and directed to transmit a certified copy of this resolution to the Financial 3 OHSL'SA.759366-422.3 RESOLUTION NO. 2016-81 Advisor of the Authority at: California Municipal Finance Authority, 2111 Palomar Airport Road, Suite 320, Carlsbad, California 92011, Attn: Travis Cooper. PASSED AND ADOPTED this day of , 20_ by the following vote, to wit: AYES: Council Members NOES: Council Members ABSENT: Council Members ABSTAIN: Council Mcmbers 4 011SUSA 7591(4422 3 CONTRACT NO. C35800 ,JOINT EXERCISE OF POWERS AGREEMENT RELATING TO THE CALIFORNIA MUNICIPAL, FINANCE AUTHORITY THIS AGREEMENT, dated as of October 13, 2016, among the parties executing this Agreement (all such parties, except those which have withdrawn as provided herein, are referred to as the "Members" and those parties initially executing this Agreement are referred to as the "Initial Members"): WITNESSETH WHEREAS, pursuant to Title 1, Division 7, Chapter 5 of' the California Government Code (in effect as of the date hereof and as the same may from time to time be amended or supplemented, the "Joint Exercise of Powers Act"). two or more public agencies may by agreement jointly exercise any power common to the contracting parties; and WHEREAS, each of the Members is a "public agency' as that term is defined in Section 6500 of the Joint Exercise of Powers Act; and WHEREAS, each of the Members is empowered by law to promote economic, cultural and community development, including, without limitation, the promotion of opportunities for the creation or retention of employment, the stimulation of economic activity, the increase of the tax base, and the promotion of' opportunities for education. cultural improvement and public health, safety and general welfare; and WHEREAS, each of the Members may accomplish the purposes and objectives described in the preceding preamble by various means, including through making grants, loans or providing other financial assistance to governmental and nonprofit organizations; and WHEREAS, each Member is also empowered by law to acquire and dispose of real property for a public purpose; and WHEREAS, the Joint Exercise of Powers Act authorizes the Members to create a joint exercise of powers entity with the authority to exercise any powers common to the Members, as specified in this Agreement and to exercise the additional powers granted to it in the Joint Exercise of Powers Act and any other applicable provisions of the laws of the State of California; and WHEREAS, a public entity established pursuant to the Joint Exercise of Powers Act is empowered to issue or execute bonds, notes, commercial paper or any other evidences of indebtedness, including leases or installment sale agreements or certificates of participation therein (herein "Bonds"), and to otherwise undertake financing programs under the Joint Exercise of' Powers Act or other applicable provisions of the laws of the State of California to accomplish its public purposes; and CONTRACT NO. C35800 WHEREAS, the Members have determined to specifically authorize a public entity authorized pursuant to the Joint Exercise of Powers Act to issue Bonds pursuant to the Joint Exercise of Powers Act or other applicable provisions of the laws of the State of California; and WHEREAS, it is the desire of the Members to use a public entity established pursuant to the Joint Exercise of Powers Act to undertake the financing and/or refinancing of projects of any nature, including, but not limited to, capital or working capital projects, insurance, liability or retirement programs or facilitating Members use of existing or new financial instruments and mechanisms, and WHEREAS, it is further the intention of the :Members that the projects undertaken will result in significant public benefits to the inhabitants of the jurisdictions of the Members; and WHEREAS, by this Agreement, each Member desires to create and establish the "California Municipal Finance Authority" for the purposes set forth herein and to exercise the powers provided herein; NOW, THEREFORE, the 'Members, for and in consideration of the mutual promises and agreements herein contained, do agree as follows: Section 1. PurQose. This Agreement is made pursuant to the provisions of the Joint Exercise of Powers Act. The purpose of this Agreement is to establish a public entity for the joint exercise of powers common to the Members and for the exercise of additional powers given to a joint powers entity under the Joint Powers Act or any other applicable law, including, but not limited to, the issuance of Bonds for any purpose or activity permitted under the Joint Exercise of Powers Act or any other applicable law. Such purpose will be accomplished and said power exercised in the manner hereinafter set forth. Section 2. Term. This Agreement shall become effective in accordance with Section 17 as of the date hereof and shall continue in full force and effect until such time as it is terminated in writing by all the Members; provided, however, that this Agreement shall not terminate or he terminated until all Bonds issued or caused to be issued by the Authority (defined below) shall no longer he outstanding under the terms of the indenture, trust agreement or other instrument pursuant to which such Bonds are issued, or unless a successor to the Authority assumes all of the Authority's debts, liabilities and obligastions. Section 3. Authority. A. CREATION AND POWERS OF AUTHORITY. Pursuant to the Joint Exercise of Powers Act, there is hereby created a public entity to be known as the "California Municipal Finance Authority" (the "Authority"), and said Authority shall be a public entity separate and apart from the Members. Its CONTRACT NO. C35800 debts, liabilities and obligations do not constitute debts, liabilities or obligations of' any Members. The Authority shall be administered by the Board of Directors (the "Board," or the "Directors" and each a "Director') of the California Foundation for Stronger Communities, a nonprofit public benefit corporation organized under the laws of the State of California (the "Foundation"), with each such Director serving in his or her individual capacity as a Director of the Board. The Board shall be the administering agency of this Agreement and, as such, shall be vested with the powers set forth herein, and shall administer this Agreement in accordance with the purposes and functions provided herein. The number of Directors, the appointment of Directors, alternates and successors, their respective terms of office, and all other provisions relating to the qualification and office of the Directors shall be as provided in the Articles and Bylaws of the Foundation, or by resolution of the Board adopted in accordance with the Bylaws of the Foundation. All references in this Agreement to any Director shall be deemed to refer to and include the applicable alternate Director, if any, when so acting in place of' a regularly appointed Director. Directors may receive reasonable compensation for serving as such, and shall be entitled to reimbursement for any expenses actually incurred in connection with serving as a Director, if the Board shall determine that such expenses shall be reimbursed and there are unencumbered funds available for such purpose. The Foundation may be removed as administering agent hereunder and replaced at any time by amendment of this Agreement approved as provided in Section 16; provided that a successor administering agent of this Agreement has been appointed and accepted its duties and responsibilities under this Agreement. C. OFFICERS; DUTIES-, OFFICIAI. BONDS. The officers of the Authority shall be the Chair, Vice -Chair, Secretary and Treasurer (defined below). The Board, in its capacity as administering agent of' this Agreement, shall elect a Chair, a Vice -Chair, and a Secretary of the Authority from among Directors to serve until such officer is re-elected or a successor to such office is elected by the Board. The Board shall appoint one or more of its officers or employees to serve as treasurer, auditor, and controller of the Authority (the "Treasurer") pursuant to Section 6505.6 of the Joint Exercise of Powers Act to serve until such officer is re-elected or a successor to such office is elected by the Board. Subject to the applicable provisions of any resolution, indenture, trust agreement or other instrument or proceeding authorizing or securing Bonds (each such resolution, indenture, trust agreement, instrument and proceeding being herein referred to as an "Indenture") providing for a trustee or other fiscal agent, and except as may otherwise be CONTRACT NO. C35800 specified by resolution of the Board, the Treasurer is designated as the depositary of the Authority to have custody of all money of the Authority, from whatever source derived and shall have the powers, duties and responsibilities specified in Sections 6505, 6505.5 and 6509.5 of the Joint Exercise of Powers Act. The Treasurer of the Authority is designated as the public officer or person who has charge of, handles, or has access to any property of the Authority, and such officer shall file an official bond with the Secretary of the Authority in the amount specified by resolution of the Board but in no event less than S 1,000. The Board shall have the power to appoint such other officers and employees as it may deem necessary and to retain independent counsel, consultants and accountants. The Board shall have the power, by resolution, to the extent permitted by the Joint Exercise of Power Act or any other applicable law, to delegate any of its functions to one or more of the Directors or officers, employees or agents of the Authority and to cause any of said Directors, officers, employees or agents to take any actions and execute any documents or instruments for and in the name and on behalf of the Board or the Authority. D. MEETINGS OF THE BOARD. (1) Ralph M. Brown Act. All meetings of the Board, including, without limitation, regular, adjourned regular, special, and adjourned special meetings shall be called, noticed, held and conducted in accordance with the provisions of the Ralph M. Brown Act (commencing with Section 54950 of the Government Code of the State of California), or any successor legislation hereinafter enacted (the "Brown Act"). (2) Regular Meetings. The Board shall provide for its regular meetings, provided, however, it shall hold at least one regular meeting each year. The date, hour and place of' the holding of the regular meetings shall be fixed by resolution of the Board. To the extent permitted by the Brown Act, such meetings may be held by telephone conference. (3) Special Meetings. Special meetings of the Board may be called in accordance with the provisions of Section 54956 of the Government Code of the State of California. To the extent permitted by the Brown Act, such meetings may he held by telephone conference. CONTRACT NO. C35800 (4) Minutes. The Secretary of' the Authority shall cause to be kept minutes of' the regular, adjourned regular, special, and adjourned special meetings of the Board and shall, as soon as possible after each meeting, cause a copy of the minutes to be forwarded to each Director. (5) Quorum. A majority of the Board shall constitute a quorum for the transaction of business. No action may be taken by the Board except upon the affirmative vote of a majority of the Directors constituting a quorum, except that less than a quorum may adjourn a meeting to another time and place. E. RULES AND REGULATIONS. The Authority may adopt, from time to time, by resolution of the Board such rules and regulations for the conduct of its meetings and affairs as may be required. Section 4. Powers. The Authority shall have the power, in its own name, to exercise the common powers of the Members and to exercise all additional powers given to a joint powers entity under any of the laws of the State of California, including, but not limited to, the Joint Exercise of Powers Act, for any purpose authorized under this Agreement. Such powers shall include the common powers specified in this Agreement and may be exercised in the manner and according to the method provided in this Agreement. The Authority is hereby authorized to do all acts necessary for the exercise of such power, including, but not limited to, any of all of the following: to make and enter into contracts. to employ agents and employees; to acquire, construct, provide for maintenance and operation of, or maintain and operate, any buildings, works or improvements: to acquire, hold or dispose of property wherever located; to incur debts, liabilities or obligations: to receive gifts, contributions and donations of property, funds, services, and other forms of assistance from person, firms, corporations and any governmental entity; to sue and be sued in its own name; to make grants, loans or provide other financial assistance to governmental and nonprofit organizations (e.g., the Members or the Foundation) to accomplish any of its purposes: and generally to do any and all things necessary or convenient to accomplish its purposes. Without limiting the generality of the foregoing, the Authority may issue or cause to be issued Bonds, and pledge any property or revenues as security to the extent permitted under the Joint Exercise of Powers Act, or any other applicable provision of law; provided, however, the Authority shall not issue Bonds with respect to any project located in the jurisdiction of one or more Members unless the governing body of any such Member, or its duly authorized representative, shall approve, conditionally or unconditionally, the project, including the issuance of Bonds therefor. Such approval may be evidenced by resolution, certificate, order, report or such other means of written approval of such project as may be selected by the Member (or its authorized representative) whose approval is required. No such approval shall be required in CONTRACT NO. C35800 connection with Bonds that refund Bonds previously issued by the Authority and approved by the governing board of a Member. The manner in which the Authority shall exercise its powers and perform its duties is and shall be subject to the restrictions upon the manner in which a California general law city could exercise such powers and perform such duties. The manner in which the Authority shall exercise its powers and perform its duties shall not be subject to any restrictions applicable to the manner in which any other public agency could exercise such powers or perform such duties, whether such agency is a party to this Agreement or not. Section 5. Fiscal Year. For the purposes of this Agreement, the term "Fiscal Year" shall mean the fiscal year as established from time to time by resolution of the Board, being, at the date of this Agreement, the period from July 1 to and including the following June 30, except for the first Fiscal Year which shall be the period from the date of this Agreement to June 30, 2016. Section 6. Uisnosition of Assets. At the end of the term hereof or upon the earlier termination of this Agreement as set forth in Section 2, after payment of all expenses and liabilities of the Authority, all property of the Authority both real and personal shall automatically vest in the Members in the manner and amount determined by the Board in its sole discretion and shall thereafter remain the sole property of the Members; provided, however, that any surplus money on hand shall be returned in proportion to the contributions made by the Members. Section 7. Bonds. From time to time the Authority shall issue Bonds, in one or more series, for the purpose of exercising its powers and raising the funds necessary to carry out its purposes under this Agreement. The services of' bond counsel, financing consultants and other consultants and advisors working on the projects and/or their financing shall be used by the Authority. The expenses of the Board shall be paid from the proceeds of the Bonds or any other unencumbered funds of the Authority available for such purpose. Section 8. Bonds Only Limited and Saecial Obligations of Authority. The Bonds, together with the interest and premium, if any, thereon, shall not be deemed to constitute a debt of any Member or pledge of the faith and credit of the Members or the Authority. The Bonds shall be only special obligations of the Authority, and the Authority shall under no circumstances be obligated to pay the Bonds except from revenues and other funds pledged therefor. Neither the Members nor the Authority shall be obligated to pay the principal of, premium, if any, or interest on the Bonds, or other costs incidental thereto, except from the revenues and funds pledged therefor, and neither the faith and credit nor the taxing power of the Members nor the faith and credit of the Authority shall be pledged to the payment of the CONTRACT NO. C35800 principal of, premium, if any, or interest on the Bonds nor shall the Members or the Authority in any manner be obligated to make any appropriation for such payment. No covenant or agreement contained in any Bond or related document shall be deemed to be a covenant or agreement of any Director, or any officer, employee or agent of the Authority in his or her individual capacity and neither the Board of the Authority nor any Director or officer thereof executing the Bonds shall be liable personally on any Bond or be subject to any personal liability or accountability by reason of the issuance of any Bonds. Section 9. Accounts and Resorts. All funds of' the Authority shall be strictly accounted for. The Authority shall establish and maintain such funds and accounts as may he required by good accounting practice and by any provision of any Indenture (to the extent such duties are not assigned to a trustee of Bonds). The books and records of the Authority shall be open to inspection at all reasonable times by each Member. The Treasurer of the Authority shall cause an independent audit to be made of the books of accounts and financial records of the Authority by a certified public accountant or public accountant in compliance with the provisions of Section 6505 of the Joint Exercise of' Powers Act. In each case the minimum requirements of the audit shall be those prescribed by the State Controller for special districts under Section 26909 of the Government Code of the State of California and shall conform to generally accepted auditing standards. When such an audit of' accounts and records is made by a certified public accountant or public accountant, a report thereof shall be filed as a public record with each Member and also with the county auditor of' each county in which a Member is located; provided, however, that to the extent permitted by law, the Authority may, instead of filing such report with each Member and such county auditor, elect to post such report as a public record electronically on a wcbsite designated by the Authority. Such report if made shall be filed within 12 months of the end of the Fiscal Year or Years under examination. The Treasurer is hereby directed to report in writing on the first day of July, October, January, and April of each year to the Board and the Members which report shall describe the amount of money held by the Treasurer for the Authority, the amount of receipts since the last such report, and the amount paid out since the last such report (which may exclude amounts held by a trustee or other fiduciary in connection with any Bonds to the extent that such trustee or other fiduciary provided regular reports covering such amounts.) Any costs of the audit, including contracts with, or employment of, certified public accountants or public accountants in making an audit pursuant to this Section, shall be borne by the Authority and shall be a charge against any unencumbered funds of the Authority available for that purpose. In any Fiscal Year the Board may, by resolution adopted by unanimous vote, replace the annual special audit with an audit covering a two-year period. CONTRACT NO. C35800 Section 10. Funds. Subject to the applicable provisions of any Indenture, which may provide for a trustee or other fiduciary to receive, have custody of and disburse Authority funds, the Treasurer of the Authority Shall receive, have the custody of and disburse Authority funds pursuant to the accounting procedures developed under Sections IC and 9, and shall make the disbursements required by this Agreement or otherwise necessary to carry out any of the provisions ol' purposes of this Agreement. Section 11. Notices Notices and other communications hereunder to the Members shall be sufficient it' delivered to the clerk of the governing body of each Member, provided, however, that to the extent permitted by law, the Authority may, provide notices and other communications and postings electronically (including, without limitation, through email or by posting to a website). Section 12, Additional Members/Withdrawal of Members. Qualifying public agencies may be added as parties to this Agreement and become Members upon: (1) the filing by such public agency with the Authority of- an executed counterpart of this Agreement, together with a copy of the resolution of the governing body of such public agency approving this Agreement and the execution and delivery hereof-, and (? ) adoption of a resolution of the Board approving the addition of such public agency as a Member. Upon satisfaction of such conditions, the Board shall file such executed counterpart of this Agreement as an amendment hereto, effective upon such filing. A :Member may withdraw from this Agreement upon written notice to the Board; provided, however, that no such withdrawal shall result in the dissolution of' the Authority so long as any Bonds remain outstanding. Any such withdrawal shall be effective only upon receipt Of the notice of withdrawal by the Board which shall acknowledge receipt of such notice of withdrawal in writing and shall file such notice as an amendment to this Agreement effective upon such filing. Section 13. jpdemnificatioq. To the full extent permitted by law, the Board may authorize indemnification by the Authority of any person who is or was a Director or an officer, employee of other agent of the Authority, and who was or is a party or is threatened to be made a party to a proceeding by reason of the fact that such person is or was such a Director or an officer, employee or other agent of the Authority, against expenses, including attorneys fees, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such proceeding, if such person acted in good faith in a manner such person reasonably believed to be in the best interests of the Authority and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlawful and, in the case of an action by or in the right of the Authority, acted with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. CONTRACT NO. C35800 Section 14. Contributions and Advances. Contributions or advances of public funds and of' the use of' personnel, equipment or property may be made to the Authority by the Members for any of the purposes of this Agreement. Payment of public funds may be made to defray the cost of any such contribution or advance. Any such advance may be made subject to repayment, and in such case shall be repaid, in the manner agreed upon by the Authority and the Member making such advance at the time of such advance. It is mutually understood and agreed to that no Member has any obligation to make advances or contributions to the Authority to provide for the costs and expenses of' administration of the Authority, even though any Member may do so. The Members understand and agree that a portion of the funds of the Authority that otherwise may be allocated or distributed to the Members may instead be used to make grants, loans or provide other financial assistance to governmental units and nonprofit organizations (e.g., the Foundation) to accomplish any of the governmental unit's or nonprofit organization's purposes. Section 15. Immunities. All of the privileges and immunities from liabilities, exemptions from laws, ordinances and rules, and other benefits which apply to the activity of officers, agents or employees of Members when performing their respective functions within the territorial limits of' their respective public agencies, shall apply to the same degree and extent to the Directors, officers, employees, agents or other representatives of the Authority while engaged in the performance of any of their functions or duties under the provisions of this Agreement. Section 16. Amendments. Except as provided in Section 12 above, this Agreement shall not be amended, modified, or altered, unless the negative consent of each of the Members is obtained. To obtain the negative consent of' each of the Members, the following negative consent procedure shall be followed: (a) the Authority shall provide each Member with a notice at least sixty (60) days prior to the date such proposed amendment is to become effective explaining the nature of such proposed amendment and this negative consent procedure; (b) the Authority shall provide each Member who did not respond a reminder notice with a notice at least thirty (30) days prior to the date such proposed amendment is to become effective; and (c) if no Member objects to the proposed amendment in writing within sixty (60) days after the initial notice, the proposed amendment shall become effective with respect to all Members. Section 17. Effectivene$1. This Agreement shall become effective and be in full force and effect and a legal, valid and binding obligation of each of the Members on the date that the Board shall have received from two of the Initial Members an executed counterpart of this Agreement, together with a certified copy of a resolution of the governing body of each such Initial Member approving this Agreement and the execution and delivery hereof. CONTRACT NO. C35800 Section 18. Partial Inva ' it . If any one or more of the terms, provisions, promises, covenants or conditions of this Agreement shall to any extent he adjudged invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, each and all of the remaining terms, provisions, promises, covenants and conditions of this Agreement shall not he affected thereby, and shall be valid and enforceable to the fullest extent permitted by law. Section 19. Successors. This Agreement shall be binding upon and shall inure to the benefit of the successors of' the parties hereto. Except to the extent expressly provided herein, no Member may assign any right or obligation hereunder without the consent of the other Members. Section 20. Miscellaneous. This Agreement may he executed in several counterparts, each of which shall he an original and all of' which shall constitute but one and the same instrument. The section headings herein are for convenience only and are not to be construed as modifying or governing the language in the section referred to. Wherever in this Agrcement any consent or approval is required, the same shall not he unreasonably withheld. This Agreement shall be governed under the laws of the State of California. This Agreement is the complete and exclusive statement of the agreement among the Members, which supercedes and merges all prior proposals, understandings, and other agreements, whether oral, written, or implied in conduct, between and among the Members relating to the subject matter of this Agreement. CONTRACT NO. C35800 IN WITNESS WHEREOF, the City of Palm Desert has caused this Agreement to be executed and attested by its duly authorized representatives as of the day of 2016. ATTEST: Clerk Member: CITY OF PALM DESERT By Name: Title: