HomeMy WebLinkAboutEIP Limited Obligation Imprvmnt Bonds - Mtg of 01/14/10 CITY OF PALM DESERT
FINANCE DEPARTMENT
STAFF REPORT
REQUEST: CONSIDERATION OF (1) AMENDMENTS TO THE ENERGY
INDEPENDENCE PROGRAM (EIP) REPORT, (2) FIRST READING OF
ORDINANCE AMENDING CHAPTER 3.30 OF TITLE 3 OF THE PALM
DESERT MUNICIPAL CODE, (3) AUTHORIZATION OF THE ISSUANCE
OF ONE OR MORE SERIES OF LIMITED OBLIGATION
IMPROVEMENT BONDS TO THE PALM DESERT REDEVELOPMENT
AGENCY TO ADDITIONALLY FUND THE EIP, A VALIDATION
PROCEEDING IN CONNECTION WITH EIP LIMITED OBLIGATION
IMPROVEMENT BONDS, A NO-ACTION LETTER REQUEST TO THE
U.S. SECURITIES & EXCHANGE COMMISSION TO FACILITATE THE
PUBLIC OFFERING OF EIP LIMITED OBLIGATION IMPROVEMENT
BONDS, AND CITY ADVANCE TO ENERGY INDEPENDENCE FUND,
AND (4) APPROVAL OF RELATED DOCUMENTS
SUBMITTED BY: Paul S. Gibson, Finance Director
DATE: January 14, 2010
CONTENTS: Amended EIP Report
Form of Notice Entitled, "Payment Of Contractual Assessment Required"
City Resolution No. 10- 3 [Approving EIP AmendmentsJ
Ordinance No. 1204
City Resolution No. 10- 4 [Bond Resolution]
Agency Resolution No. 569
Form of Bond Purchase Agreement
City Resolution No. 10- 5 [Authorizing Validation Proceeding, Sec-
No-Action Letter Request, and City Advance]
Recommendation
By Minute Motion:
1. That the City Council hold the public hearing regarding proposed
amendments to the EIP Report;
2. That the City Council adopt the following resolution:
Resolution No. 10- 3 , a Resolution of the City Council of the City of
Palm Desert Approving Amendments to the Energy Independence
Program Report and Administrative Guidelines Prepared Pursuant to
Section 5898.22 of the California Streets and Highways Code;
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3. That the City Council conduct its first reading of the following ordinance,
clarifying the inapplicability of prevailing wage law to improvements
constructed under the EIP:
Ordinance No. 120� an Ordinance of the City of Palm Desert to Amend
Chapter 3.30 of Title 3 of the Palm Desert Municipal Code;
4. That the City Council adopt the following resolution:
Resolution No. 10- 4 , a Resolution of the City Council of the City of
Palm Desert Providing for the Issuance and Sale of its Energy
Independence Program Limited Obligation Improvement Bonds
(Taxable), in One or More Series and in Aggregate Principal Amount not
to Exceed Five Million Dollars ($5,000,000), Approving as to Form and
Authorizing the Execution and Delivery of One or More Bond Purchase
Agreements in Connection Therewith, and Authorizing Certain Other
Matters Relating Thereto;
5. That the Palm Desert Redevelopment Agency adopt the following
resolution:
Agency Resolution No. 569 authorizing the Redevelopment Agency's
investment in and purchase of the City of Palm Desert's Energy
Independence Program, Limited Obligation Improvement Bonds
(Taxable), in One or More Series and in Aggregate Principal Amount not
to Exceed Five Million Dollars ($5,000,000), approving as to form and
authorizing the execution and delivery of one or more bond purchase
agreements in connection therewith, and authorizing certain other matters
relating thereto; and
6. That the City Council adopt the following resolution:
Resolution No. 10- 5 , a Resolution of the City Council of the City of
Palm Desert Authorizing Judicial Validation Proceedings Relating to its
Energy Independence Program, Limited Obligation Improvement Bonds,
and a No-Action Letter Request to the U.S. Securities and Exchange
Commission, Appropriating Moneys from the General Fund to Additionally
Fund the Program, and Approving Additional Actions Related Thereto.
Backqround
EIP Financial Strategy.
As discussed at the City Council meeting on December 10, 2009, the EIP financial strategy
contemplates potential funding for the program in an amount up to $15 million by the City, if there
were sufficient interest in the program by applicants and if such funding could be confirmed as
financially prudent for the City.
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To date, the City has provided $5,651,000 in financing to the EIP, through a combination of the
$2,500,000 initial advance from the City's General Fund and proceeds from the sale of 2 limited
obligation bonds to the Palm Desert Redevelopment Agency in the respective initial principal
amounts of $2,015,000 and $1,136,000. To reach the original policy threshold amount of
$15,000,000 of internal funding, $9,349,000 of additional funding from the City is required.
Currently, interest in the EIP is still at a very high level. In the last program application intake
period, applications for$1 million in funding were submitted by interested participants within 1 hour.
As to additional, financially prudent funding by the City up to $9,349,000, the City will raise this EIP
funding by (a) authorizing an appropriation for a General Fund advance to additionally fund the
program ($4.349 million), as an investment with interest at the rate of 4.0% per annum, and (b)
selling additional limited obligation bonds to the Palm Desert Redevelopment Agency ($5 million),
with an interest rate of 3.0% per annum, on a private placement basis.
If approved by Council at this meeting, the City General Fund advance ($4.349 million) will be
made available immediately to the Energy Independence Fund for funding new EIP loans. If
approved by Council at this meeting, the limited obligation bonds will be sold to the Agency ($5
million) at such later time or times that the City has aggregated sufficient new funded assessment
contracts to pledge as security for the bonds, and in one or more series and without any further
Council action required.
Secured by and repayable from specified EIP contractual assessment revenues, the limited
obligation bonds are prudent investments for the Agency, as the superior lien priority of AB 811
assessments and the fact that the entire property (not just the improvement) is secured by the AB
811 lien provide for significant overcollateralization in the event foreclosure on a delinquent parcel
is required.
The City advance will enjoy similar benefits of overcollateralization and superior lien priority, as it
will be repayable from EIP contractual assessment revenues deposited in the Energy
Independence Fund, to the extent not pledged to (or released from the pledge ofl limited obligation
improvement bonds, including excess revenues from contracts pledged for bonds, as released
from time to time from the applicable pledge pursuant to the related bond resolution or indenture.
As a matter of internal recordkeeping and financial responsibility, the City will match unpledged EIP
assessment contracts to the City advance to ensure sufficient revenues for repayment.
The issuance of limited obligation bonds by the City and the repayment of the General Fund
advance also do not impose any repayment liability on the City's General Fund, as repayment of
the bonds and the General Fund advance are both limited to revenues derived from EIP
assessment contracts.
Additionally, the interest rates offered by the City on such limited obligation bonds and the General
Fund advance will exceed the current rates availab�e for the investment of City or Agency funds.
For instance, the average interest rate currently earned by the City's General Fund portfolio is
1.69%, and interest rate offered by LAIF for investment of City or Agency monies is currently below
1.00%. Limiting financial risk to the City as the issuer of the bonds, the interest rate on the bonds
also will not exceed the 7.00% interest rate currently paid by property owners on the EIP
assessments.
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In order to meet the City's five-year goal to cut energy usage by 30 percent, it is anticipated that
additional EIP funding, above the $15 million total City funding will be required, particularly funding
from third parties.
Tfie actions proposed today facilitate the financial strategy by authorizing (a) the additional
advance from the City's General Fund in the amount of $4.349 million, and (b) the City's issuance
of additional limited obligation bonds, in one or more series and in aggregate principal amount not
to exceed $5 million, for purchase by the Agency.
Proposed Amendments to EIP Report and Administrative Guidelines.
On December 10, 2009, the City Council adopted Resolution No. 09-62 declaring its intent to
amend the City's Energy Independence Program Report and Administrative Guidelines (the
"EIP Report") and ordering a public hearing to be held on January 14, 2010. In accordance with
applicable law, the City Clerk provided notice of the public hearing by publishing Resolution No.
09-62 once a week for two weeks in the Desert Sun.
The proposed amendments are necessary to secure third party financing for the EIP on workable
terms for the City.
Additionally, on October 11, 2009, AB 474 ("AB 474"), which amends AB 811, which created the
authority for the EIP, was enacted with an effective date of January 1, 2010. As amended by AB
474, Section 5898.24(d) of the California Street and Highways Code requires the City Council to
cause to be recorded a new notice entitled "Payment of Contractual Assessment Required" in the
office of the Recorder of the County of Riverside, concurrently with the creation of the contractual
assessment (i.e., execution of the respective EIP loan agreement) and with recordation of the
Notice of Assessment recorded pursuant to California Streets and Highways Code Section 3114.
Therefore, the proposed amendments to the EIP Report include a form of notice entitled "Payment
of Contractual Assessment Required"that meets the requirements of Section 5898.24(d) of the Act
(as amended by AB 474), which must be recorded with respect to each participating property,
together with the Notice of Assessment, at the time the related EIP loan agreement is executed.
The proposed amendments were reviewed by the Finance Committee prior to submission to the
City Council for approval and include the following general concepts:
(1) Clarify that City's right of access to project includes (a) once a year visual inspection to
verify improvement is still in place and (b) additional right to visit and inspect "for cause."
(2) Clarify that City's right to inspect property owner's books and records includes records
and documents relating to continued maintenance and repair of the improvement.
(3) Add annual certification from property owner as to improvement being in place and
functioning, any additions/changes to the improvement, changes in ownership of the property,
information of insurer providing property insurance, or certain listed material events affecting the
property or its owner.
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(4) Add requirement that property owner provides evidence of property insurance covering
the improvement, prior to entering into loan agreement, and covenant to maintain insurance
during assessment repayment term.
(5) Require minimum value-to-lien ratio of 10 to 1, with ability for property owner to appeal
to City Manager to grant a lower value-to-lien ratio (no lower than 8 to 1 permitted) if sufficient
evidence is presented, in the City Manager's sole discretion. Value may be established by
assessed value or appraisal (cost of appraisal to be paid by property owner).
(6) Require that repayment term cannot exceed the reasonably expected useful life
expectancy of improvements (as determined by City policy), with ability for property owner to
appeal to City Manager to grant a longer repayment term (not to exceed 5 additional years) if
sufficient evidence is presented, in the City Manager's sole discretion. Value may be
established by assessed value or appraisal (cost of appraisal to be paid by property owner).
For properties with multiple improvements, useful life expectancy is calculated on a weighted
basis (by value of improvement).
(7) Provide for a notice entitled "Payment of Contractual Assessment Required," to be
recorded by the City Clerk with respect to each participating property, together with the Notice of
Assessment, at the time the related EIP loan agreement is executed.
Validation Proceeding.
Pursuant to Sections 860 et. seq. of the California Code of Civil Procedure and Section 53511
of the California Government Code, the City may bring an action in superior court to determine
the validity of its bonds and any contracts related to such bonds.
The issuance of a final judgment in validation proceeding forecloses the ability of any person to
challenge the documents underlying the subject bonds or to raise any issues relating to the
bonds or the documents.
The EIP was formed under AB 811, a bill enacted on July 21, 2008 as an urgency statute. As
AB 811 is a recent development in California law, market uncertainty among third-party
investors impacts things such as the interest rate on the bonds, costs of marketing the bonds,
and the ability to sell bonds at all. This is similar, for instance, to the situation that confronted
the bond market when the legislation that authorized community facilities district (CFD)
financing (the Mello-Roos Community Facilities Act of 1982) was first enacted. In the 1980s, to
address market uncertainty on account of the newness of the law, agencies wishing to issue
CFD special tax bonds coupled these issuances with validation proceedings. After several
years, the bond market became comfortable with CFD bond financing, and validation
proceedings for such bonds became a thing of the past.
Based on consultations with the City's financial advisor, potential underwriters, and the City's
bond counsel and on the market requirements as stated at a number of recent conference with
respect to AB 811 financing, a validation judgment would facilitate the sale of limited obligation
improvement bonds to third party investors and simplify foreclosure proceedings with respect to
any defaulting properties participating in the EIP.
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SEC No-Action Letter Request.
Generally under federal securities laws and regulations, municipal bonds issuances are exempt
from the registration and reporting requirements that govern publicly-traded companies.
However, certain bond structures may trigger registration and reporting requirements if
exemptive requirements are not met, even if the issuer of the bond is a municipality. Currently,
under applicable federal securities laws, the sale of AB 811 limited obligation improvement
bonds on a public offering basis (as opposed to a private placement basis) may trigger federal
securities laws that require registration of the securities or the EIP assessment contracts with
the U.S. Securities and Exchange Commission (SEC), depending on the structure of the
particular AB 811 program and the level and kinds of governmental controls involved in the
program and the continued operation of the improvements constructed.
The SEC offers a procedure by which issuers may obtain assurances that the SEC will not take
any enforcement action with respect to unregistered securities. In this procedure, the issuer
may file a letter with the SEC requested such assurances and describing the securities and
background information. If the SEC agrees with the analysis and reasons for exemption, it will
provide a letter providing for "no-action relief' (the SEC's assurances that it will not take any
enforcement action with respect to unregistered securities).
Bonds issued on a public offering basis are generally considered to achieve better (lower)
interest rates than bonds issued on a private placement basis, because of bonds sold on a
private placement basis are subject to restrictions on resale and have less liquidity in the
market.
To provide for the City's ability to issue bonds on a public offering basis while ensuring that the
City will not become subject to an enforcement action by the SEC, staff recommends that the
City Council authorize bond counsel to prepare and file a no-action letter request with the SEC.
Clarification of Municipal Code Provisions re/ating to Prevailing Wage.
All of the improvements financed by the EIP are private improvements and not public works or
public contracts. Approval of the attached ordinance at the next City Council meeting, after its
first reading at this meeting, will clarify existing law and the inapplicability of prevailing wage law
to improvements constructed with financing from the EIP.
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Fiscal Impact
Approval of resolutions and ordinances as presented with result in borrowing $4 million from the
General Fund and $5 million from the Redevelopment Agency funds. This action would be
treated as an investment opportunity with the potential to earn interest at a rate up to 7%.
Typical earnings are closer to 1%, so the program presents the prospect of substantial
increased interest earnings.
Submitted by: roval:
l
Paul S. Gibson, Finance Director n M. Wohlmuth, City Manager
� �
Ju � cCarthy, CM/ e elopment
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Martinez, Gloria
From: Moeller, Charlene [CMOELLER@palmspri.gannett.com]
Sent: Wednesday, December 16, 2009 11:33 AM
To: Martinez, Gloria
Subject: RE: Legal Notice- Res 09-62 - PH 01/14/10 EIP Rprt&Admin Guidelines
:-)
Ad received and will publish on date(s) requested.
Charleue Moetler
Public Notice Customer Service Rep.
The Desert Sun Newspaper
750 N. Gene Autry Trail, Palm Springs, CA 92262
(760) 778-4578, Fax(760) 778-4731
Desert Sun IeqalsCcr�.thedesertsun.com
&Desert Post Weekly_dpwleqals(a�thedesertsun.com
The Coachella Valley's#1 Source in News&Advertising!
Visit us at mydesert.com
During the Holiday Season, Please note that Deadlines may be earlier than normal.
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From: gmartinez@cityofpalmdesert.org [mailto:gmartinez@cityofpalmdesert.org]
Sent: Wednesday, December 16, 2009 11:22 AM
To: tds-legals
Cc: pgibson@cityofpalmdesert.org
Subject: Legal Notice - Res 09-62 - PH 01/14/10 EIP Rprt&Admin Guidelines
PLEASE PUBLISH THE FOLLO�'1/ING:
NOTICE OF PUBLIC HEAR/NG
Resolution No. 09-62—Declaring Its Intention to Amend Energy Independence Program Report and
Administrative Guidelines Prepared Pursuant to Section 5898.22 of the California Streets and Highways
Code and Setting a Public Hearing Thereon
TWICE IN THE DESERT SUN
Wednesday, December 23, 2009
Wednesday, December 30, 2009
If you have any questions or require additional information, please call me.
Thank you, Charlene!
?�.!/Ko�ii.a 'H?c+vt�ir�P�r,
0 O
Records Technician
City of Palm Desert
1
RESOLUTION NO. 09-62
limitation amendments (i) to require documentation of consent by a preexisting lender for
any Program loan that is $30,000 or more, (ii) to establish $100,000 as the maximum
amount of any Program loan, and (iii)to require fifty percent of funds available for Program
loans to be reserved for energy efficiency upgrades and retrofits; and
WHEREAS, in furtherance of the financial strategy of the Program, City staff has
consulted with respondents to the City's "Request for Proposals — Energy Program
Financing," dated February 2009 and also with legal counsel as to amendments to the
Program and the Report necessary to provide for certain credit criteria and legal flexibility
in order to secure third party financing for the EIP on workable terms for the City; and
WHEREAS, to facilitate the financial strategy of the Program, the City Council now
desires to further amend the Report (i) to clarify the City's right of access to the project, (ii)
to clarify the City's right to inspect property owners' books and records, (iii) to require
certain annual certification from property owners, (iv) to require that property owners
maintain property insurance covering the EIP improvement and provide evidence of such
insurance prior to entering into the EIP Contract, (v) to require a minimum value-to-lien
ratio, (vi) to require a nexus between the repayment term and the reasonably expected
useful life expectancy of the EfP improvements, and (vii) to make other changes that the
Finance Director of the City or the City Manager determines are necessary for
implementation of financial strategy of the Program, as set forth in the Report.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT
HEREBY FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS:
Section 1. The City Council hereby directs the Finance Director to prepare and
file at or before the time of the public hearing described in Section 2 hereof with the City
Council proposed amendments to the Report as described in the Recitals hereto.
Section 2. The City Council hereby calls a public hearing to be held on
Thursday, January 14, 2010, at 4:00 p.m., or as soon thereafter as feasible, in the
Council Chambers, 73-510 Fred Waring Drive, Palm Desert, California, on the proposed
amendments to the Report. At the public hearing all interested persons may appear
and hear and be heard and object to or inquire about the proposed amendments to the
Report.
[The remainder of this page is intentionally left blank.]
2
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Energy Independence Program Report and
Administrative Guidelines
Outline
Introduction
Goa/s
Background
Benefits
Program Administration
Program Requirements
Eligible Property Owners
Eligible Properties
Consent Agreement
Eligible Equipment
Eligible Costs
Tracks for Participation
The Efficiency Track
The So/ar Track
The Custom Measure Track
Financial Strategy
Energy Surveys and So/ar Site Checks
Energy Independence Program Parameters
Minimum Loan Amount
Maximum Loan Amount
Maximum Portfolio
Assignment of Rebates and Incentives
Duration
Interest Rate
Administrative Fees
Changes to Report
Appendices
A. Equipment Lisf
B. Map of Program Area
C. Draft Program Application
D. Draft Loan Contract
E. Summary of Loan Process
F. Consent Agreement
G. Notice of Assessment
H. Payment of Contractual Assessment Required
Revised January 14,2010
1
Introduction
This Report has been prepared pursuant to Section 5898.22 of the California Streets and
Highways Code in connection with the establishment of the City of Palm Desert Energy
Independence Program ("EIP"). This is the guiding document for EIP and fulfills the Section
5898.22 requirements that this report contain:
1. A map showing the boundaries of the territory within which contractual assessments are
proposed. (See Appendix B.)
2. A draft contract between a property owner and the City. (See Appendix D.)
3. City policies concerning contractual assessments.
4. A plan for raisin� a capital amount to pay for the work performed.
The Energy Independence Program described herein is designed to help Palm Desert property
owners save energy and gain independence from the scarcity of sources of energy that are
compromising the California power grid, threatening national security, and endangering the
global climate.
The Energy Independence Program helps Palm Desert property owners
save energy and money while doing right for the environment.
Goals
EIP will carry out the City's mission of helping property owners of improved real property make
principled investments in the long-term health of the local, state, and national economy and
global environment.
EIP aims to provide multiple benefits. By enabling property owners to take responsible energy
actions, the program seeks to cut their utility bills. At the same time it shores up the local
economy, the California power grid, and national and global energy interests, and makes it
possible for Palm Desert to fulfill energy conservation and climate protection commitments.
The City has established a goal to reduce electric and natural gas energy consumption by 30%.
The City welcomes innovative energy solutions that will contribute to this goal. The City intends
to initially fund EIP with $2.5 million for energy reduction investments that might not have
otherwise been possible, with a maximum aggregate amount of$25 million.
Backqround
As a result of Palm Desert's authorship and advocacy of what became Assembly Bill 811, the
bill was approved by the California Legislature, signed into law by the Governor on July 21,
2008 and became immediately effective as an urgency measure. Under this bill, the California
Legislature has declared that a public purpose will be served by a contractual assessment
program that provides the local government with the authority to finance the installation of
distributed generation renewable energy sources — such as solar -- and energy efficiency
improvements that are affixed to residential, commercial, industrial, or other real property
(collectively known as "Energy Improvements").
2
To make Energy Improvements more affordable and to promote their installation, AB 8] 1
provides procedures for authorizing voluntary assessments to finance the cost of these
improvements. The Energy Independence Program works with the free and willing consent of
owners of the property on which the Energy Improvements are to be made.
The City will make loans ("EIP Loans") to properly owners within the City to finance the
installation of Energy Improvements pursuant to contractual assessment agreements. Property
owners in the City will repay EIP Loans through an assessment levied against their property
which is payable in semi-annual installments on property tax bills.
Propram Benefits
From the City's perspective, the Energy Independence Program will be a key element in
achieving the City's 30% energy reduction goals. EIP provides a significant channel for
funneling more resources into the shift to greater efficiency and renewable energy, while
securing the energy future. For example, $25 million of energy efficiency and renewable energy
investments has the potential to provide over $50 million in direct consumer benefits over time
while contributing to regional, state, national and international goals.
For propert,y owners, EIP offers:
■ A no-money-down means of financing Energy Improvements.
■ Fixed-rate loans.
■ Financing without requiring a property appraisal.
■ A stream-lined loan process.
Proqram Administration
EIP will be administered by the City's Office of Energy Management ("OEM"), which is headed
by the Director of the O�ice of Energy Management (the "Director") and staffed by EIP
professionals. EIP staffwill be responsible for:
■ Community outreach
■ Energy surveys
■ Solar site checks .
■ Advising property owners
■ Processing loan applications
■ Managing and tracking funds available for EIP Loans
■ Monitoring individual and collective energy conservation
■ Integrating EIP with Palm Desert's successful Set to Save rebate program.
The intent of these services is to provide a "turn-key" service for Palm Desert property owners
who would otherwise be unable or unwilling to finance efficiency measures and renewable
energy options. Their participation is critical to the City in achieving its 30% energy reduction
goals and for the State to meet its greenhouse gas commitments to reduce carbon emissions to
1990 levels by 2020.
3
Program Requirements
Eliqible Proqertv Owners
All owners of improved real property are eligible for the Energy Independence Program. Owners
may be individuals, associations, business entities, cooperatives, and virtually any owner which
pays real property taxes.
A property owner needs to be current in the payment of property taxes and the property must be
free and clear of all liens, excluding customary mortgage liens and assessment liens. Property
owners are eligible to make multiple applications for additional Energy Improvements with the
maximum aggregate of these applications not to exceed $100,000 per parcel.
Eliqible Properties
EIP Loans are available to all owners of improved real properties in the City including, but not
limited to, residential, commercial, and industrial properties. Unfortunately at this time, EIP
Loans are not available for properties that do not pay property taxes, such as governmental
entities and certain non-profit corporations.
Consent Apreement
All EIP loans $30,000 or more shall have a Consent Agreement, signed by each private
institution or individual which is the beneficiary and holder of a pre-existing Deed of Trust,
authorizing the placement of the Notice of Assessment on the property. (See Appendix F.)
Eliqible Equipment
EIP affords property owners in Palm Desert the opportunity to take advantage of a wide range of
energy-savings measures, consistent with the following provisions:
1. EIP provides financing for Energy Improvements that are permanently affixed to
property.
2. EIP Loans are specifically made available for Energy Improvements. Property owners
that elect to engage in broader retrofit projects— such as home or business remodeling—
will only be provided EIP Loans for that portion of the costs used to retrofit existing
structures with Energy Improvements. (This is discussed further in Eligible Costs.)
3. EIP Loans are intended for retrofit activities to replace outdated equipment and to install
new equipment that takes energy offthe grid. However, EIP Loans are also made
available for purchasers of new homes and businesses that wish to add Energy
Improvements after the property owner takes title to the property.
4. EIP Loans are made available for the following types of improvements that are presented
in greater detail in Appendix A:
4
a. Efficiencv Measures. EIP supports a wide range of efficiency measures as
presented in A�pendix A. EIP also supports Energ�Improvements that are
eli�ible for Set to Save program rebates.
b. Solar Systems. EIP Loans will be available for a range of solar systems, from
photovoltaic to solar thermal.
c. Custom Measures. Upon review and approval by the Office of Energy
Management, EIP Loans are made available for emerging technologies for Energy
Improvements that provide new ways to save or generate energy and that will be
evaluated on a case-by-case basis.
5. EIP is flexible and provides three "Tracks" for participation that focus on Efficiency
Measures, Solar Systems, and Custom Measures. See "Tracks for Participation" below
for more information.
6. EIP Loans are also made available for combinations of Energy Improvements such as
bundling energy efficiency and renewable energy measures. For instance, a property
owner may choose to replace both an aging and inefficient air conditioner and install a
solar system.
Eliqible Costs
Eligible costs of the Energy Improvements include the cost of equipment and installation.
Installation costs may include, but are not limited to, labor, drafting, engineering, permit fees,
and inspection charges.
The installation of Energy Improvements can be completed by a qualified contractor of the
property owner's choice. Eligible costs do not include labor costs for property owners that elect
to do the work themselves.
In each case, the Office of Energy Management will determine whether the estimated equipment
and installation costs are reasonable. The OEM will evaluate market conditions and may require
additional bids to determine whether costs are reasonable. While the property owner will be able
to select the bidder of his or her choice, the amount available for the EIP Loan may be limited to
an amount deemed reasonable by the OEM, and may be reviewed by the City Manager and the
Palm Desert City Council.
Credit Criteria for Eliqibilitv
Satisfaction of the credit criteria for eligibility is required for participation in the Program, in
order to reduce risk for both the property owner and the City. Both of the tests below must be
met, at the time of the application approval:
1. Value-to-Lien Ratio—the ratio of(a) the value of the property to (b)the sum of the
amount of(i) the requested amount of the EIP Loan (including contingency) and (ii) the
amount all other liens on the property securing a special tax levied pursuant to the Mello-
5
Roos Community Facilities Act of 1982, a special assessment, or any other contractual
assessment (e.g., EIP Loan), must be at least 10:1.
a. "Value of the property" will be determined as the assessed value of the property,
as reflected on the County Assessor's most current tax roll. In the alternative, the
property owner may request the City to have an appraisal (in form and substance
acceptable to the City and from an appraiser of City's choice) conducted on the
property, at the cost of the property owner, for the purpose of establishing the
value of the property.
b. Exceptions to the minimum 10:1 value-to-lien ratio may be granted by the City
Manager (to a minimum of an 8:1 value-to-lien ratio), upon sufficient evidence,
provided by the property owner, of the fiscal prudency and rationale for such
exception. The determinations of whether the evidence is sufficient and whether
or not to grant an exception shall be in the City Manager's sole discretion and
shall be final.
2. Re_payment Term —the term of the EIP,Loan shall not exceed the reasonably expected
useful life expectancy of the Energy Improvements financed by the EIP Loan. "Useful
life expectancy" shall be determined in accordance with the then current policy
maintained by the OEM, which policy establishes reasonably expected useful life
expectancy for the purpose of the EIP.
a. For properties participating with respect to multiple types of Energy
Improvements, reasonably expected useful life expectancy shall be calculated on
a weighted basis, weighted by cost value of each improvement.
b. Exceptions to the repayment term limitation above may be granted by the City
Manager, to provide for a longer repayment term (up to a maximum of the
reasonably expected useful life expectancy of the Energy Improvements l�us 5
years), upon sufficient evidence, provided by the property owner, of the fiscal
prudency and rationale for such exception. The determinations of whether the
evidence is sufficient and whether or not to grant an exception shall be in the City
Manager's sole discretion and shall be final.
Tracks for Participation
There are three ways for property owners to participate in the Program. Eligible equipment and
standards are presented in greater detail in Appendix A:
The Efficiencv Track
The Ef�iciency Track covers a wide range of energy efficiency fixtures, from windows and
doors, attic insulation that are Energy Star rated. Packaged and central air conditioning systems
must meet the minimum efficiencies specified in the Set to Save program. Given Palm Desert's
preponderance of pools, specific efficiency requirements are presented for pool pumps and
heaters. All other efficiency measures must go through the Custom Measure Track.
6
The Solar Svstem Track
The Solar System Track makes available Energy Independence Program loans for Energy
Improvements. The Solar Track also helps property owners with solar electric and solar thermal
investments by offering optional, no-cost solar site checks and consultation by EIP experts.
Custom Measure Track
All other proposed measures follow the Custom Measure Track. These measures may include
renewable energy sources (other than solar), such as wind, geothermal, and potentially solar-
hydrogen fuel cells, as well as more complex and innovative energy management solutions and
emerging technologies. The developments of technologies are encouraged by EIP as a means of
diversifying the City's energy sources.
Applicants for the Custom Measure Track should consult the OEM to determine eligibility. In
some cases, the findings of national energy laboratories and nationally accredited research and
testing centers will be required for EIP approval. In all cases, the City reserves the right to
decline funding of a custom measure.
Energy Surveys and Solar Site Checks
The Office of Energy Management offers energy surveys at owners' properties. During these
on-site surveys, a trained Program expert will review as appropriate, energy efficiency, energy
management, and renewable energy opportunities and EIP financial details with the property
owner. The property owner will then be.advised as to the potential Energy Improvements, their
estimated costs and savings through EIP participation.
Energy surveys are highly recommended but not required.
The Financial Strategy
The City will create the Energy Independence Program Fund which may accept funds from any
available source and which may disburse such funds for the purpose of funding Energy
Improvements. Loan repayments—through the property assessment mechanism — will be made
to the Energy Loan Fund.
The City initially will seed the Energy Loan Fund with $2.5 million from the General Fund.
Thereafter, the Energy Loan Fund may be funded from a number of other potential sources, and
combinations of sources, which may include but are not limited to additional funding from the
General Fund, the issuance of notes, bonds, or agreements with utilities or public or private
lenders or other governmental entities and quasi-governmental entities such as CALPERS.
EIP Funds will then be used by the City for additional EIP Loans and/or to establish a Reserve
Fund or pay administrative costs and/or to reimburse itself for advancing moneys from the
General Fund to the EIP Fund.
7
At a minimum, $1.25 million of the $2.5 million loan amount will be reserved for EIP Loans for
residential property owners. The Office of Energy Management will report on penetration to the
City Manager and Council on a quarterly basis at a minimum, providing Council with the
information necessary to shift funds as it elects to do so at its sole discretion.
The City may also establish an EIP Reserve Fund if bonds are issued to cover EIP Loan
payments in the event of assessment delinquencies prior to foreclosure and tax sale if deemed
necessary by the City Manager and the City Council.
Energy Independence Program Parameters
Minimum Enerqv Loan Amount
The minimum size for an EIP Loan is $5,000.
Maximum Enerqv Loan Amount
The maximum size for an EIP Loan is $100,000. All EIP Loans greater than $60,000 must be
approved by the City Manager.
Maximum PortFolio
The maximum principal amount of the Energy Loans to property owners under the Program is
$25 million. This may be increased by the City Council at its discretion. A minimum of 50% of
the loan funds available shall be set aside and used only for energy efficiency upgrades and
retrofits, as determined by the Office of Energy Management.
Assiqnment of Rebates and Incentives
The Office of Energy Management recommends that the amount of an EIP loan be reduced by an
applicable California Solar Initiative Expected Performance Based Buy-Down rebate, Self-
Generation Incentive Program (SGIP) rebate, and any Set to Save rebates. Such rebates may be
assigned to the applicable contractor.
Duration
EIP Loans are made available for up to 20-year terms to accommodate a wide range of efficiency
measures and renewable energy investments. The term of the loan is in the discretion of the
property owner in consultation with the Office of Energy Management.
Interest Rate
EIP Loans will be made for the initial $2.5 million an annual interest rate not to exceed 7% for
all loans. Thereafter, the City Council will maintain the discretion to adjust the interest rate up to
an amount not to exceed 10%. The Council will determine interest rates so that the Energy Loan
Fund remains financially viable up to the legal limit.
8
;
The City will set the interest rate for an EIP Loan at the time that the City and property owner
enter into the contractual assessment agreement.
Administrative Fees
The City of Palm Desert will offer the Energy Independence Program as an additional City
service that will help property owners achieve their energy goals, while helping the City achieve
its energy and climate protection goals. The City of Palm Desert will be responsible for all EIP
marketing and outreach, as well as the duties of the Office of Energy Management.
The City may elect to cover a portion of its costs through the "spread" between its combined
earnings rate, and the EIP Loan issuance rate. Similarly, it may elect to recover EIP costs
through a spread between bond rates and loan rates, or the spread between interest rates of any
financial vehicle. The City will not charge property owners a fixed administrative fee.
Two forms of costs will be the responsibility of the property owner:
1. Title costs — including title insurance—will be paid by the property owner.
2. Assessment collection costs will appear as a line item on property taxes not to exceed $40
per property per year and will be paid by property owner. This cost was determined after
consultation with the County of Riverside Assessor's Office.
Additionally, if the property owner requests the City to cause an appraisal to be conducted
for the purpose of determining the "value of the property" for the purpose of the satisfying
the minimum value-to-lien ratio credit eligibility requirement, the cost of the appraisal will
be paid by the property owner.
Changes to Report
The Director or City Manager may make changes to this Report that the Director or City
Manager reasonably determines are necessary to clarify its provisions. Any changes to this
Report that materially modify the Energy Independence Program shall only be made after
approval by the City Council.
The City Manager or Director may modify from time to time the Equipment List, draft Loan
Contract and draft Application attached hereto as Appendix A, Appendix D and Appendix C,
respectively, as deemed necessary by the City Manager or the Director to effectuate the purposes
of the Program.
9
Appendix A: Equipment List
The Energy Independence Program offers EIP loans for a number of equipment types, including
efficiency measures, solar systems, and other innovative, energy-saving custom measures. In
each case, the use of rebates and tax credits to prepay a portion of the loan is at the discretion of
property owner.
Efficiencv Measures
The Energy Independence Program provides services and loans for a wide range of Energy Star-
rated efficiency measures, including many Set to Save Efficiency Measures for which property
owners can get rebates as well as EIP Loans. Excepting HVAC equipment as noted below,
efficiency measures that are Energy Star rated must meet the Energy Star minimum ef�iciency
levels.
For all packaged and central air conditioning systems funded in this loan program, the minimum
efficiency levels shall be as required by the current minimum requirements set forth in Set to
Save program.
All other proposed efficiency measures will be considered in the Custom Measure Track.
The City of Palm Desert anticipates that Energy Star requirements will "ratchet up" to greater
efficiency levels over time. Energy Star will also become more inclusive of technologies over
time. Thus the EIP will evolve with Energy Star and the market for energy-efficient
technologies.
The following Energy Star measures— among others— are eligible in the Efficiency Track.
■ Attic and wall insulation
■ Light fixtures (no bulb-only retrofits)
■ Reflective roofs and coatings
■ Windows, doors, and skylights
Pool Equipment
Given the preponderance of pools in Palm Desert the following prescriptive standards must be
upheld for Efficiency Track funding:
o Pool circulating pumps (must be Variable Flow and/or Multi-speed with
controllers)
o Natural gas pool heaters (must have a thermal efficiency of 84% or greater)
10
Solar Equipment
Solar Track funding is available for a wide range of solar equipment. EIP Loans will be available
for photovoltaic equipment and installers listed by the California Energy Commission. Solar
thermal equipment must be rated by the Solar Rating Certification Council (SRCC). As with
efficiency measures, the property owner maintains the discretion as to whether to prepay a
portion of the gross loan with any solar rebates and tax credits.
Eligible solar equipment includes:
■ Solar thermal systems (hot water)
■ Photovoltaic systems (electricity)
o Battery back-up systems will be allowed
o Funding for off-grid systems will be allowed
o PV systems can be sized to accommodate plug-in electric vehicles
Custom Measures
The City of Palm Desert encourages innovation in saving energy to meet its energy-savings
goals. Custom Measures will only be funded for EIP Loans if sufficient proof of energy savings
is provided to the Office of Energy Management that the measure will reduce usage by 20%. The
Director reserves the right to defer funding until he deems the evidence sufficient to verify this
performance requirement.
The following types of ineasures— among others—will be considered for EIP Loans through the
Custom Measure Track:
■ Building Energy Management controls
■ HVAC Duct zoning control systems
■ Irrigation pumps and controls
■ Lighting controls
■ Motors and controls
■ Natural gas fuel cells
■ Water heating equipment
o Tank-style
o Tankless
o Central water heating system
As these "Custom Measures" become Energy Star rated they will be included in the Efficiency
Measure Track.
11
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APPENDIX C
PALM DESERT
ENERGY INDEPENDENCE PROGRAM
LOAN APPLICATION INSTRUCTIONS
1. Please complete and sign the attached Application Form and include all requested
attachments. Please type or print neatly in blue or black ink.
2. All applications are processed on a first-come, first-served basis, upon receipt, until funds
are depleted. Incomplete and/or incorrect applications cannot be processed and will be
returned. Resubmitted applications are processed on a first-come, first-served basis upon
the new receipt date.
3. If there are insufficient funds available, an approved applicant will be placed on a waiting
list.
4. Keep a copy for your records of your completed application and all documents submitted.
Keep a copy of all receipts, paid invoices, and home improvement contracts.
5. Mail or Deliver your completed application and attachments to:
City of Palm Desert
Office of Energy Management
73510 Fred Waring Drive
Palm Desert, CA 92260
6. For questions regarding the status of your application call:
Benjamin Druyon
City of Palm Desert
Office of Energy Management
Phone: (760) 837-0287
Fax: (760) 674-3428
7. For information on home improvement contracts or the status of your contractor's license
visit www.cslb.ca.� or call the Contractor's State License Board at 1-800-321-CSLB.
8. All required applicable permits must be obtained from the City of Palm Desert Building
and Safety Department. City inspections must be made prior to final disbursement of
funds.
G:lEnergy ManagementlE7PlPhase 31AB811 Loan Application Phase 3
P6401.0001\1073723.13
PALM DESERT
ENERGY INDEPENDENCE PROGRAM
LOAN APPLICATION
The Energy Independence Program(EIP)provides for the City of Palm Desert to make loans to property owners to finance the
installation of distributed generaUon renewable energy sources or energy efficiency improvements that are permanently fixed to
the real property. Loans will be made pursuant to Chapter 29 of Part 3 of Division 7 of the California Streets and Highways
Code(commencing with Section 5898.10)and the City of Palm Desert's Energy Independence Program Report and
Administrative Guidelines dated August 28,2008 and amended June 25, 2009.
APPLICANT INFORMATION
Property Owner(s)Legal Name(s)as they appear on property tax records:
Property Address(where improvements are to be installed): Mailing Address(if different):
Assessor's Parcel Number(9 digit APN found on your properiy tax bill)
Contact Name: Daytime Telephone Number: ( )
E-mail Address:
Property Owner(s)(check one):
_Individual(s) _Corporation** _LLC **
_Trust** _Parmership** _Other,please specify below
Other:
**OrganizaUonal Documents required with submission of application
Are you, or the property described herein,currently involved in a bankruptcy proceeding? ❑ yes ❑ no
Are there federal or state income tax liens,judgment liens or similar involuntary liens wtuch encumber the property described
herein? ❑ yes ❑ no
PROPERTY INFORMATION
Is property developed? ❑ yes ❑ no By law,EIP loans are not applicable for new construction,
Property Type(check one):
_Single Family Residential Multi-Fa�nily Residential _Commercial
_Industrial Mobile Home -Housing and Community _Other,please specify below
Development Form 433(A)required with submission of
application(obtained from the Riverside County
Recorder's Office)
Other:
G:lEnergy ManagementlElPlPhase 31AB81/Loan Application Phase 3 1
P6401.0001\1073 723.13
IMPROVEMENTS INFORMATION
Proposed Improvements Please attach the contractor's proposals with full description including make and model
numbers of all equipment.
Solar Measure: Estimated Costs
1. Panels:
2. Inverters:
3. Labor:
Energy Efficiency Measures: Estimated Costs
l.
2.
3.
4.
If replacing A/C unit, is it a rooftop unit? ❑ yes ❑ no
ITEMIZED ESTIMATED COST OF IMPROVEMENTS *
A. (i) Construction contract (bid price for cost of materials and labor): or $
(ii) If self-installing, cost of equipment (do not include any labor costs): $
B. Title Fees* ❑Include in Loan ❑Pay Cash $ 360.00
C. Other(please specify on separate sheet) $
TOTAL $___
Minimum loan amount is $5,000; Maximum loan amount is $100,000
Requested Loan Amount: $
Loan term requested: years (20 years maximum)
Multiple Disbursements requested (loans in excess of$20,000): ❑ yes ❑ no
PROPERTY INSURANCE INFORMATION **
Name of Insurance Company:
Name of Agent: Agent's telephone na
* The Applicant will be responsible for Utle report and title insurance costs. The Applicant's title costs can be included in the
Loan Amount or the Applicant may pay this cost to the City in cash at the time of executing the Loan Agreement,
** Evidence of Property Insurance required with submission of application.
G:IEnergyManagementlElPlPhase 31ABR11 Loan.AppGcation Phase 3 2
P6401.0001\1073723.13
DECLARATIONS:
By signing this Application, the undersigned hereby declares under penalty of perjury under the laws of the
State of California all of the following:
1. I/we am/are all of the current owner(s) of record of the property described herein.
2. I/we am/are not, and the property described herein is not, currently involved in a bankruptcy
proceeding.
3. That (i) the information provided in this Application is true and correct as of the date set forth
opposite my/our signature(s) on this Application and (ii) that I/we understand that any intentional or
negligent misrepresentation(s) of the information contained in this Application may result in civil
liability and/or criminal penalties including, but not limited to, fine or imprisonment or both and
liability for monetary damages to the City of Palm Desert, its agents, successors and assigns, insurers
and any other person who may suffer any loss due to reliance upon any misrepresentation which I/we
have made in this Application.
4. I/we am/are applying for a loan pursuant to the City of Palm Desert's Energy Independence Program.
I/we understand that I/we must execute a Loan Agreement with the City of Palm Desert in order to
receive a loan and I/we have the authority, without the consent of any third party which has not been
previously obtained, to execute and deliver the Loan Agreement, this Application, and the various
documents and instruments referenced herein and thereon.
5. I/we understand that the loan made pursuant to the Loan Agreement will be repayable through an
assessment levied against my/our property. The assessment and the interest and any penalties thereon
will constitute a lien against my/our property until they are paid, even if I/we sell the property to
another person. I/we understand that assessment installments together with interest on the assessment
will be collected on my/our property tax bill in the same manner and at the same time as property
taxes and will be subject to the same penalties, remedies, and lien priorities as for property taxes in
the event of delinquency.
6. That executing the Loan Agreement, receiving the loan proceeds, and consenting to the assessment
levied against my/our property to repay the loan will not constitute a default under any other
agreement or security instrument which affects my/our property or to which I/we am/are a party.
7. I/we agree that the selection of product(s), equipment, and/or measures referenced in this Application
(the `Bquipment"), the selection of manufacturer(s), dealer(s), supplier(s), contractor(s) and/or
installer(s), and the decision regarding the purchase, installation and ownership/ maintenance of the
Equipment is/are my/our sole responsibility and that I/we have not relied upon any representations or
recommendations of the City of Palm Desert in making such selection or decision, and that my
manufacturer, dealer, supplier, contractor or installer of the Equipment is not an agent or
representative of the City of Palm Desert.
8. I/we understand that the City of Palm Desert makes no warranty, whether express or implied,
including without limitation, the implied warranties of inerchantability and fitness for any particular
purpose, use or application of the Equipment.
G:lEnergyManagementtElPtPhase 3L1B811 Loan Application Phase 3 3
P6401.0001\1073723,13
9, I/we agree that the City of Palm Desert has no liability whatsoever concerning (i) the quality or safety
of the Equipment, including its fitness for any purpose, (ii) the estimated energy savings produced by
the Equipment, (iii) the workmanship of any third parties, (iv) the installation or use of the
Equipment including, but not limited to, any effect on indoor pollutants, or any other matter with
respect to the City of Palm Desert Energy Independence Program.
10. Uwe understand that I/we is/are responsible for meeting all City of Palm Desert Energy Independence
Program requirements and complying with all applicable Federal/State/County/City laws and the
requirements of any agreement which effects the use of the property (such as homeowner's
association requirements, if any).
Signed on this_ day of , 20_, in the City of , State of
Property Owner Signature: Printed Name:
Property Owner Signature: Printed Name:
REQUIRED ATTACHMENTS:
❑ Organizational Documents if Property Owner is not an individual(s)
❑ Home Improvement Contract or contractor's bid or proposal, which includes contractor's name and
license number (unless self-installing)
❑ Evidence of Property Insurance
❑ Disclosure Regarding Assessment Financing (please complete and sign)
❑ State of California Fair Lending Notice (please complete and sign)
❑ Housing and Community Development Form 433(A)
❑ Consent Agreement(s) executed by each institution or individual which is the beneficiary or holder of
a pre-existing Deed of Trust, mortgage or other interest (required for loans of$30,000 or more)
IF YOUR APPLICATION IS DENIED, YOU HAVE THE RIGHT TO A WRITTEN STATEMENT OF
THE SPECIFIC REASONS FOR THE DENIAL. TO OBTAIN THE WRITTEN STATEMENT, PLEASE
CONTACT THE OFFICE OF ENERGY MANAGEMENT AT (760) 837-0287, 73510 FRED WARING
DRIVE, PALM DESERT, CA 92260, OR SEND AN EMAIL TO BENJAMIN DRUYON AT
BDRUYON(�CITYOFPALIVIDESERT.ORG WITHIN 60 DAYS FROM THE DATE YOU ARE
NOTIFIED OF THE DENIAL. THE OFFICE OF ENERGY MANAGEMENT WILL PROVIDE YOU A
WRITTEN STATEMENT OF THE REASONS FOR THE DENIAL WITHIN 15 DAYS OF RECENING
YOUR REQLTEST FOR THE STATEMENT.
THE FEDERAL EQUAL CREDIT OPPORTUNITY ACT PROHIBITS CREDITORS FROM
DISCRIMINATING AGAINST CREDIT APPLICANTS ON THE BASIS OF RACE, COLOR,
RELIGION, NATIONAL ORIGIN, SEX, MARITAL STATUS, AGE (PROVIDED THE APPLICANT
HAS THE CAPACITY TO ENTER INTO A BINDING CONTRACT); BECAUSE ALL OR PART OF
THE APPLICANT'S 1NCOME DERIVES FROM ANY PUBLIC ASSISTANCE PROGRAM; OR
BECAUSE THE APPLICANT HAS 1N GOOD FAITH EXERCISED ANY RIGHT UNDER THE
CONSUMER CREDIT PROTECTION ACT. THE FEDERAL AGENCY THAT ADMINISTERS
COMPLIANCE WITH THIS LAW CONCERNING THIS CREDITOR IS THE FEDERAL TRADE
COMMISSION, EQUAL CREDIT OPPORTLTNITY, WASHINGTON, DC 20580.
G:lEnergy ManagementtElPlPhase 31AB811 Loan Application Phase 3 4
P6401.0001\1073723.13
DISCLOSURE REGARDING ASSESSMENT FINANCING
The Energy Independence Program establishes the manner by which the City of Palm Desert (the "City") may
make loans to property owners pursuant to Chapter 29 of Part 3 of Division 7 of the California Streets and
Highways Code (commencing with Section 5898.10) to finance the installation of distributed generation
renewable energy sources or energy efficiency improvements that are permanently fixed to the owner's real
property. Each loan will be made pursuant to a loan agreement between the City and the property owner.
The loan will be secured by and repayable through an assessment levied by the City against the owner's property.
Each year until the loan is repaid, assessment installments together with the interest on the assessment will be
collected on the property tax bill for the property in the same manner and at the same time as property taxes and
will be subject to the same penalties, remedies (including foreclosure and sale of the property), and lien priorities
as for property taxes in the event of delinquency.
The assessment and each installment thereof, and any interest and penalties thereon, will constitute a lien against
the property until paid even though prior to full payment the property is conveyed to another person. An
assessment lien will be recorded against the owner's property in the office of the County Recorder of the County
of Riverside. Such lien will be paramount to all existing and future private liens against the property, including
mortgages, deeds of trust and other security instruments.
Before completing an Energy Independence Program Applicatioq a property owner should carefully review any
agreement(s) or security instrument(s) which affect the property owner's property or to which the property owner
is a party.
ENTERING INTO AN ENERGY INDEPENDENCE PROGRAM LOAN AGREEMENT
WITHOUT THE CONSENT OF THE OWNER'S EXISTING LENDER(S) COULD
CONSTITUTE AN EVENT OF DEFAULT UNDER SUCH AGREEMENTS OR SECURITY
INSTRUMENTS. DEFAULTING UNDER AN EXISTING AGREEMENT OR SECURITY
INSTRUMENT COULD HAVE SERIOUS CONSEQUENCES TO THE PROPERTY OWNER,
WHICH COULD INCLUDE THE ACCELERATION OF THE REPAYMENT OBLIGATIONS
DUE UNDER SUCH AGREEMENT OR SECURITY INSTRUMENT.
A property owner must declare under penalty of perjury in the Energy Independence Program Application that (i)
the owner has the authority, without the consent of any third party which has not been previously obtained, to
execute and deliver the loan agreement, the Application, and the various documents and instruments referenced
therein; and (ii)that executing the loan agreement, receiving the loan proceeds, and consenting to the assessment
levied against the property owner's property will not constitute a default under any other agreement or security
instrument which effects the property owner's property or to which the property owner is a party.
If you have any questions regarding any agreements or security instruments which effect your property or
to which you are a party or your authority to execute the Energy Independence Program Application or
enter into a loan agreement with the City without the prior consent of your existing lender(s), the City
strongly encourages you to consult with your own legal counsel and/or your lender(s). City Staff will not
provide property owners with advice regarding existing agreements or security instruments.
ACKNOWLEDGEMENT OF RECEIPT
I have received a copy of this Notice. I have received a copy of this Notice.
Property Owner Signature: Property Owner Signature:
Printed Name: Printed Name:
Date: Date:
P6401.0001\1073723.13
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G:tEnergy ManagementlElPlPhase 31AB81/Loan Application Phase 3
P6401.0001\1073 723.13
APPENDIX D-1
LOAN AGREEMENT
CITY OF PALM DESERT ENERGY INDEPENDENCE PROGRAM
[SINGLE DISBURSEMENTJ
This Loan Agreement ("Agreement") is made and entered into as of this
day of , by and between the CITY OF PALM DESERT, a
California municipal corporation ("City") and
("Borrower").
RECITALS
A. City has established the Energy Independence Program (the "Program")
pursuant to which City may extend loans to property owners to finance the acquisition
and installation on their property of certain qualifying renewable energy systems and
energy efficient equipment. The purpose and method of administration of the loans
under the Program are described in the Energy Independence Program Report adopted
by the City Council on August 28, 2008, as it may be amended from time to time (the
"ReporY').
B. The Program is authorized by Chapter 29 of Part 3 of Division 7 of the
California Streets and Highways Code (the "Act").
C. The Borrower has submitted to the City that certain Palm Desert Energy
Independence Program Loan Application dated , 200 , a copy of which is
attached hereto as Exhibit "A" and incorporated herein by this reference (the
"Application"). The Application describes, among other things, the renewable energy
system and/or energy efficient equipment which is to be financed with the proceeds of
the loan described herein, and to be constructed on or installed in the property of
Borrower described in Exhibit "B" attached hereto and incorporated herein by this
reference (the "Property"), and the City has approved the Application as provided in the
Report.
D. The Borrower wishes to participate in the Program by executing this
Agreement with the City and using the proceeds of the loan made by the City to the
Borrower hereunder to finance the acquisition and [construction] [installation] on the
Property of the [renewable energy system] [energy efficiency equipment] described in
the Application (the "Equipment"). The Equipment and its construction on or
installation in the Property is collectively referred to herein as the "Work".
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties agree as follows:
Borrower's Initials
P6401.0001\1077697.8 Energy Program Loan Agreement
AGREEMENT
1. Loan Aqreement.
(a) Subject to the conditions set forth herein, City agrees to extend a
loan ("Loan") to Borrower in the amount of up to
Dollars ($ ) (the "Loan Amount"). Notwithstanding anything to the
contrary contained herein, the Loan Amount shall not in any event exceed the actual
cost of the Work. The Loan Amount shall be adjusted, if necessary, prior to the first
disbursement of the Loan Amount to the Borrower and following the post-completion
inspection by the City's Office of Energy Management ("OEM") as described in
Section 3 below, and shall be adjusted by the Director of the OEM (the "Director") to an
amount equal to the actual cost of the Work. Any adjustment of the Loan Amount by
the Director shall be made on the basis of the best available written evidence of the
actual cost of the Work and in the exercise of the Director's reasonable judgment. The
Borrower shall be solely responsible for the payment of all cost of the Work which
exceeds the Loan Amount and Borrower agrees in any event to complete the Work and
to fund all costs associated with such completion which may be in excess of the Loan
Amount. This Agreement, together with the Application, the Report and the documents
and instruments attached to or referenced in this Agreement and the Application are
collectively referred to herein as the "Loan Documents."
(b) The term of the Loan and this Agreement shall be
( ) years from the date that the proceeds of the Loan are first disbursed to the
Borrower.
(c) Interest shall accrue on the unpaid principal balance of the Loan
Amount from the date first disbursed to Borrower at the simple interest rate of seven
percent (7%) per annum. Interest shall be computed on the basis of a three hundred
sixty (360) day year. If a law which applies to the Loan and which sets maximum
interest rates or loan charges is interpreted by a court of competent jurisdiction in a
manner as would cause the interest or other loan charges collected or to be collected
in connection with the Loan to exceed the limits permitted by such laws, then: (i) any
such interest or loan charge shall be reduced by the amount necessary to reduce the
interest or charge to the permitted limit; and (ii) any sums already collected which
exceed permitted limits will be refunded by the City. The City may choose to make the
refund by reducing the outstanding principal amount of the Loan or by making a direct
payment to the Borrower.
(d) The Borrower promises to pay to the City, without deduction or
offset, the Loan Amount and the interest accrued thereon as provided herein. The
repayment of the Loan Amount and interest accrued thereon shall be repaid by the
Borrower to the City by the payment of an assessment levied against the Property
pursuant to Section 5898.30 of the California Streets and Highway Code (the
Borrower's Initials
P6401.0001\1077697.8 Energy Program Loan Agreement-2
"Assessment"). In addition to the Assessment, the Borrower promises to pay to the
City, without deduction or offset, an annual assessment levied against the Property to
pay costs incurred by the City which result from the administration and collection of the
Assessment or from the administration or registration of any associated bonds or
reserve or other related funds (the "Annual Administrative Assessment"). The Annual
Administrative Assessment shall not exceed Forty Dollars ($40.00) per year. The
Assessment and the Annual Administrative Assessment, and the interest and any
penalties thereon shall constitute a lien on the Property until they are paid. The
installments of the Assessment and the Annual Administrative Assessment (including
principal and interest) shall be collected on the property tax bill pertaining to the
Property, and shall be subject to the same penalties, remedies, and lien priorities as for
property taxes in the event of non-payment. The Borrower hereby expressly consents
to the levy of the Assessment and the Annual Administrative Assessment and the
imposition of the lien on the Property as described herein and in the Act.
(e) The amount of assessment installments that will be placed on the
Property each year is set forth in Exhibit "C" attached hereto and incorporated herein
by this reference.
(f) The Assessment may be prepaid, in whole or in part, at any time
upon the payment of a premium in an amount equal to three percent (3%) of the
amount of the Assessment to be prepaid.
2. Use of Proceeds.
All proceeds of the Loan shall be used by Borrower for the sole purpose
of paying for the reasonable costs and expenses of the Work on the Property, and in
connection therewith the Borrower shall comply with all requirements set forth herein, in
the Application and in the Report.
3. Disbursement Procedures.
(a) Notwithstanding anything to the contrary contained herein, the City
shall have no obligation to disburse the Loan Amount hereunder unless and until each
of the following conditions is satisfied, or any such condition is expressly waived by the
D i rector:
(i) The receipt by the Director of a written certification from
Borrower, and the contractor(s), if any, that performed the Work, stating that the Work
for which disbursement is requested is complete, and the actual cost of such Work.
Such certification shall be in form and substance acceptable to the Director.
(ii) An inspection of the Work by the OEM, and a determination
by the Director that the Work has been completed in full compliance with the
requirements of the Loan Documents.
Borrower's Initials
P6401.0001\1077697.8 Energy Program Loan Agreement-3
(iii) The receipt by the Director of such other documents and
instruments as the Director may require, including but not limited to, if applicable, the
sworn statements of contractor(s) and releases or waivers of lien, all in compliance with
the requirements of applicable law.
(iv) Borrower has, as appropriate, executed and delivered to
Director the Loan Documents and such other documents or instruments pertaining to
the Loan or the Work as the Director may require.
(v) As of the date of disbursement of the Loan Amount, the
Director shall have determined that the representations of the Borrower contained in
the Loan Documents are true and correct, and no Default (as defined in Section 12
below) shall have occurred and be continuing.
(vi) No stop payment or mechanic's lien notice pertaining to the
Work has been served upon the City and remains in effect as of the date of
disbursement of the Loan Amount.
(vii) The City shall have received a title policy (the "Title Policy")
in the Loan Amount and insuring the Loan and the lien of the assessments described in
Section 1(d) hereof. The Title Policy shall be in form and substance acceptable to the
Director.
(b) Borrower will, within ( ) days of presentation by the
Director, execute any and all documents or instruments required by the Loan
Documents in connection with the disbursement of the Loan Amount.
4. Reports reqardinq the Work.
Borrower agrees, upon the request of Director, to promptly deliver to the
Director, or, if appropriate, cause its contractor(s) to promptly deliver to Director, a
written status report regarding the Work.
5. Representations and Warranties of Borrower.
Borrower promises that each representation and warranty set forth below
is true, accurate and complete as of the date of this Agreement, and the date of
disbursement of the Loan Amount. The disbursement of the Loan Amount shall be
deemed to be a reaffirmation by the Borrower of each and every representation and
warranty made by Borrower in this Agreement.
(a) Formation; Authoritv. If Borrower is anything other than a natural
person, it has complied with all laws and regulations concerning its organization,
existence and the transaction of its business, and is in good standing in each state in
which it conducts its business. Borrower is the owner of the Property and is authorized
Borrower's Initials
P6401.0001\1077697.8 Energy Program Loan Agreement-4
to execute, deliver and perform its obligations under the Loan Documents, and all other
documents and instruments delivered by Borrower to the City in connection therewith.
This Agreement and the Application have been duly executed and delivered by
Borrower and are valid and binding upon and enforceable against the Borrower in
accordance with their terms, and no consent or approval of any third party, which has
not been previously obtained by the Borrower, is required for the Borrower's execution
thereof or the performance of its obligations contained therein.
(b) Compliance with Law. Neither Borrower nor the Property is in
violation of, and the terms and provisions of the Loan Documents do not conflict with,
any regulation or ordinance, any order of any court or governmental entity, or any
building restrictions or governmental requirements affecting Borrower or the Property.
(c) No Violation. The terms and provisions of the Loan Documents,
the execution and delivery of the Loan Documents by Borrower, and the performance
by Borrower of its obligations contained therein, will not and do not conflict with or
result in a breach of or a default under any of the terms or provisions of any other
agreement, contract, covenant or security instrument by which the Borrower or the
Property is bound.
(d) Other Information. If Borrower is comprised of the trustees of a
trust, the foregoing representations shall also pertain to the trustor(s) of the trust. All
reports, documents, instruments, information and forms of evidence which have been
delivered to City concerning the Loan are accurate, correct and sufficiently complete to
give City true and accurate knowledge of their subject matter.
(e) Lawsuits. There are no lawsuits, tax claims, actions, proceedings,
investigations or other disputes pending or threatened against Borrower which may
impair Borrower's ability to perform its obligations hereunder.
(f) No Event of Default. There is no event which is, or with notice or
lapse of time or both would be, a Default under this Agreement.
(g) Accuracv of Declarations. The declarations of the Borrower
contained in the Application are accurate, complete and true.
6. Borrower's Covenants.
Borrower promises to keep each of the following covenants:
(a) Completion of Work and Maintenance of Eauipment. Borrower
shall, or shall cause its contractor to, promptly commence construction of the Work,
and diligently continue such Work to completion, in a good and workmanlike manner
and in accordance with sound construction and installation practices. Borrower shall
maintain the Equipment in good condition and repair.
Borrower's Initials
P6401.0001\1077697.8 Energy Program Loan Agreement-5
(b) Compliance with Law and Aqreements. In commencing and
completing the Work, Borrower shall comply with all existing and future laws,
regulations, orders, building restrictions and requirements of, and all agreements with
and commitments to, all governmental, judicial and legal authorities having jurisdiction
over the Property or the Work, and with all recorded instruments, agreements, and
covenants and restrictions affecting the Property.
(c) Permits, Licenses and Aqprovals. Borrower shall properly obtain,
comply with and keep in effect all permits, licenses and approvals which are required to
be obtained from any governmental authority in order to commence and complete the
Work. Borrower, upon the request of the Director, shall promptly deliver copies of all
such permits, licenses and approvals to the Director.
(d) Site Visits; Examination of Records and Documents. Borrower
grants City, its agents and representatives the right to enter and visit the Property at
any reasonable time, after giving reasonable notice to Borrower, for the purposes of (i)
observing the Work during construction and installation, (ii) an annual visual inspection
for each year during the term of the Agreement to verify that the Equipment is still
affixed to the Property, and (iii) any additional number of visits each year during the
term of the Agreement, "for cause" (e.g., upon reports of stolen Equipment, receipt of
notice of foreclosure upon the Property, etc.). City will make reasonable efforts during
any site visit to avoid interfering with Borrower's use of the Property. Borrower shall
also allow City to examine and copy records and other documents of Borrower which
relate to (A) the Work during its construction and installation and (B) the continued
maintenance and repair of the Equipment. City is under no duty to visit the Property, or
observe any aspects of the Work, or examine any records, and City shall not incur any
obligation or liability by reason of not making any such visit or examination. Any site
visit, observation or examination by City shall be solely for the purposes of protecting
City's rights under the Loan Documents.
(e) Protection Aaainst Lien Claims. Borrower shall promptly pay or
otherwise discharge any claims and liens for labor done and materials and services
furnished to the Property in connection with the Work. Borrower shall have the right to
contest in good faith any claim or lien, provided that it does so diligently and without
delay in completing the Work.
(f) Insurance. Borrower shall provide, maintain and keep in force at
all times (i) until the Work is completed, builder's all risk property damage insurance on
the Property, with a policy limit equal to the full replacement cost of the Work, and (ii)
property insurance covering the Property, including coverage for the replacement cost
(without deduction for depreciation) of the Equipment.
(g) Annual Certification and Report. Borrower shall promptly complete
and return to City an annual certification and report provided to Borrower by City each
Borrower's Initials
P6401.0001\1077697.8 Energy Program Loan Agreement-6
year with respect to the Equipment and the Property, and ownership thereof. A sample
annual certification and report is attached hereto as Exhibit "D"; provided, any annual
certification and report required pursuant to this Section 6(g) may vary from the form
attached hereto as Exhibit "D" and in all respects shall be in form and substance as
determined by the City in its sole discretion, for the purposes of protecting City's rights
under the Loan Documents.
(h) Notification of Material Events. Borrower shall promptly notify City
in writing of (i) any voluntary or involuntary bankruptcy proceeding (reorganization or
liquidation) filed with respect to Borrower, (ii) any making of an assignment for the
benefit of creditors with respect to Borrower's assets, (iii) the appointment of a trustee
or receiver with respect to Borrower's assets in bankruptcy or any other similar
proceeding under law for relief of debtors, (iv) any indictment or conviction of Borrower,
or if Borrower is not an individual, of any officer, manager, managing member, general
partner, or principal of Borrower, for embezzlement, fraud, or criminal or dishonest acts,
(v) any change in organization of Borrower, (vi) if Borrower is not an individual, any
dissolution of Borrower, (vii) receipt by Borrower of any notice of condemnation with
respect to the Property, or (viii) receipt by Borrower of any eminent domain offer with
respect to the Property from any governmental entity or of any notification of the
commencement of any eminent domain proceeding with respect to the Property by any
governmental entity.
(i) Notices. Borrower shall promptly notify City in writing of any
Default under this Agreement, or any event which, with notice or lapse of time or both,
would constitute a Default hereunder.
7. Completion of the Work.
Subject to Section 12(h), Borrower agrees to complete the Work on or
before , 20_.
8. Mechanic's Lien and Stop Notices.
In the event of the filing of a stop notice or the recording of a mechanic's
lien pursuant to applicable law of the State of California and relating to the Work,
Director may summarily refuse to make any disbursement of the Loan Amount, and in
the event Borrower fails to furnish Director a bond causing such notice or lien to be
released within ten (10) days of notice from Director to do so, such failure shall at the
option of City constitute a Default under the terms of this Agreement. Borrower shall
promptly deliver to Director copies of all such notices or liens.
9. Indemnification.
(a) Borrower shall indemnify, defend, protect, and hold harmless the
City and any and all agents, employees, attorneys and representatives of the City
Borrower's Initials
P6401.0001\1077697.8 Energy Program Loan Agreement-7
(collectively, the "City Parties"), from and against all losses, liabilities, claims, damages
(including consequential damages), penalties, fines, forfeitures, costs and expenses
(including all reasonable out-of-pocket litigation costs and reasonable attorney's fees)
and any demands of any nature whatsoever related directly or indirectly to, or arising
out of or in connection with, (i) the Loan Docurnents, (ii) the disbursement of the Loan
Amount, (iii) the Work, (iv) the Equipment, (v) any breach or Default by Borrower under
the Loan Documents, (vi) the Assessment and the Annual Administrative Assessment,
and (vii) any other fact, circumstance or event related to City's extension and
disbursement of the Loan to Borrower or Borrower's performance of its obligations
under the Loan Documents (collectively, the "Liabilities"), regardless of whether such
Liabilities shall accrue or are discovered before or after the disbursement of the Loan
Amount.
(b) The indemnity obligations described in this Section 9 shall survive
the disbursement of the Loan Amount, the repayment of the Loan, the transfer or sale
of the Property by the Borrower, and the termination of this Agreement.
10. Wavier of Claims.
For and in consideration of the City's execution and delivery of this
Agreement, Borrower, for itself and for its successors-in-interest to the Property and for
any one claiming by, through, or under the Borrower , hereby waives the right to
recover from and fully and irrevocably releases the City Parties from any and all claims,
obligations, liabilities, causes of action, or damages, including attorneys' fees and court
costs, that Borrower may now have or hereafter acquire against any of the City Parties
and accruing from or related to (i) the Loan Documents, (ii) the disbursement of the
Loan Amount, (iii) the performance of the Work, (iv) the Equipment, (v) any damage to
or diminution in value of the Property that may result from the Work, (vi) any personal
injury or death that may result from the Work, (vi) the selection of manufacturer(s),
dealer(s), supplier(s), contractor(s) and/or installer(s), and their action or inaction with
respect to the Work or the Equipment, (vii) the merchantability and fitness for any
particular purpose, use or application of the Equipment, (vii) the amount of energy
savings resulting from the Work and the Equipment, (ix) the workmanship of any third
parties, and (x) any other matter with respect to the Program. This release includes
claims, obligations, liabilities, causes of action, and damages of which Borrower is not
presently aware or which Borrower does not suspect to exist which, if known by
Borrower, would materially affect Borrower's release of the City Parties.
BORROWER HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS
FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542
("SECTION 1542"), WHICH IS SET FORTH BELOW:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR
Borrower's Initials
P6401.0001\1077697.8 Energy Program Loan Agreement-8
HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS
OR HER SETTLEMENT WITH THE DEBTOR."
BY INITIALING BELOW, BORROWER HEREBY WAIVES THE
PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE MATTERS
WHICH ARE THE SUBJECT OF THE FOREGOING WAIVERS AND RELEASES.
Borrower's Initials
The waivers and releases by Borrower contained in this Section 10 shall
survive the disbursement of the Loan Amount, the repayment of the Loan, the transfer
or sale of the Property by the Borrower, and the termination of this Agreement.
11. Further Assurances.
The Borrower shall execute any further documents or instruments
consistent with the terms of this Agreement, including documents and instruments in
recordable form, as City shall from time to time find necessary or appropriate to
effectuate its purposes in entering into this Agreement and making the Loan.
12. Events of Default.
(a) Subject to the further provisions of this Section 12, the failure of
any representation or warranty of the Borrower contained herein to be correct in all
material respects, or the failure or delay by Borrower to perform any of its obligations
under the terms or provisions of the Loan Documents, shall constitute a default
hereunder ("Default"). The Borrower must immediately commence to cure, correct, or
remedy such failure or delay and shall complete such cure, correction or remedy with
reasonable diligence, but in any event, within the time set forth in Sections 12(c)
and (d) below, as applicable.
(b) The City shall give written notice of default to Borrower, specifying
the default complained of by the City. Delay in giving such notice shall not constitute a
waiver of any default nor shall it change the time of default.
(c) If a monetary event of default occurs, prior to exercising any
remedies under the Loan Documents or the Act, City shall give Borrower written notice
of such default. Borrower shall have a period of thirty (30) days after such notice is
given within which to cure the default prior to exercise of remedies by City.
(d) If a non-monetary event of default occurs, prior to exercising any
remedies under the Loan Documents or the Act, City shall give Borrower notice of such
Borrower's Initials
P6401.0001\1077697.8 Energy Program Loan Agreement-9
default. If the default is reasonably capable of being cured within thirty (30) days,
Borrower shall have such period to effect a cure prior to exercise of remedies by City
under the Loan Documents or the Act. If the default is such that it is reasonably
capable of being cured, but not within such thirty (30) day period, and Borrower
(i) initiates corrective action within such thirty (30) day period, and (ii) diligently,
continually, and in good faith works to effect a cure as soon as possible, then Borrower
shall have such additional time as is reasonably necessary to cure the default prior to
exercise of any remedies by City. However, in no event shall City be precluded from
exercising remedies if its security becomes or is about to become materially
jeopardized by any failure to cure a default, or if the default is not cured within one
hundred and twenty (120) days after the first notice of default is given.
(e) If any Default occurs, then, upon the election of City, (i) if there has
been no disbursement of the Loan Amount, this Agreement shall terminate and, except
as otherwise expressly provided herein, the parties have no further obligations or rights
hereunder, or (ii) if the Loan Amount has been disbursed in whole or in part, City may
terminate its obligations to make any further disbursement of the Loan Amount and
exercise any or all of the rights and remedies available to it under applicable law, at
equity or as otherwise provided herein.
(f) Any and all costs and expenses incurred by the City in pursuing its
remedies hereunder shall be additional indebtedness of the Borrower to the City
hereunder, and shall be secured as provided in the Act.
(g) Except as otherwise expressly stated in this Agreement, the rights
and remedies of the City are cumulative, and the exercise of one or more of such rights
or remedies shall not preclude the exercise by the City, at the same time or different
times, of any other rights or remedies for the same Default or any other Default. No
failure or delay by City in asserting any of its rights and remedies as to any Default
shall operate as a waiver of any Default or of any such rights or remedies, or deprive
the City of its rights to institute and maintain any actions or proceedings which it may
deem necessary to protect, assert or enforce any such rights or remedies.
(h) Performance of the covenants and conditions imposed upon
Borrower hereunder with respect to the commencement and completion of the Work
shall be excused while and to the extent that, Borrower is prevented from complying
therewith by war, riots, strikes, lockouts, action of the elements, accidents, or acts of
God beyond the reasonable control of the Borrower; provided, however, that such
event is not caused by the fault, negligence or misconduct of Borrower; and provided,
further, as soon as the cause or event preventing compliance is removed or ceases to
exist the obligations shall be restored to full force and effect and Borrower shall
immediately resume compliance therewith and performance thereof.
Borrower's Initials
P6401.0001\1077697.8 Energy Program Loan Agreement- 10
13. Compliance with Local, State and Federal Laws.
Borrower shall perform the Work, or cause the Work to be pertormed, in
conformity with all applicable laws, including all applicable federal, state and local
occupation, safety and health laws, rules, regulations and standards. Borrower agrees
to indemnify, defend and hold the City Parties harmless from and against any cost,
expense, claim, charge or liability relating to or arising directly or indirectly from any
breach by or failure of Borrower or its contractor(s) or agents to comply with such laws,
rules or regulations. The indemnification obligations described in this Section 13 shall
survive the disbursement of the Loan Amount, the repayment of the Loan, and the
termination of this Agreement.
14. Severabilitv.
Each and every provision of this Agreement is, and shall be construed to
be, a separate and independent covenant and agreement. If any term or provision of
this Agreement or the application thereof shall to any extent be held to be invalid or
unenforceable, the remainder of this Agreement, or the application of such term or
provision to circumstances other than those to which it is invalid or unenforceable, shall
not be affected thereby, and each term and provision of this Agreement shall be valid
and shall be enforced to the extent permitted by law.
15. Notices.
All notices and demands shall be given in writing by certified mail,
postage prepaid, and return receipt requested, or by personal delivery (by recognized
courier service or otherwise). Notices shall be considered given upon the earlier of
(a) personal delivery or (b) two (2) business days following deposit in the United States
mail, postage prepaid, certified or registered, return receipt requested. Notices shall be
addressed as provided below for the respective party; provided that if any party gives
notice in writing of a change of name or address, notices to such party shall thereafter
be given as demanded in that notice:
To City: City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, California 92260-2578
Attention: Director, Office of Energy Management
To Borrower:
Palm Desert, California 92260
Attention:
Borrower's Initials
P6401.0001\1077697.8 Energy Program Loan Agreement- 11
16. Attornevs' Fees and Costs.
In the event that any action is instituted to enforce payment or
performance under this Agreement, the parties agree that the non-prevailing party shall
be responsible for and shall pay all costs and all attorneys' fees incurred by the
prevailing party in enforcing this Agreement.
17. No Waiver.
No disbursement of the Loan Amount shall constitute a waiver of any
conditions to the City's obligation to make further disbursements nor, in the event
Borrower is unable to satisfy any such conditions, shall any such waiver have the effect
of precluding the City from thereafter declaring such inability to constitute a Default
under this Agreement. No disbursement of the Loan Amount based upon inadequate
or incorrect information shall constitute a waiver of the right of City to receive a refund
thereof from Borrower.
18. Governinq Law.
This Agreement shall be governed by the laws of the State of California.
Any legal action brought under this Agreement must be instituted in the Superior Court
of the County of Riverside, State of California, or in an appropriate municipal court in
that County or in the United States District Court for the Central District of California.
19. Amendment of Aqreement.
No modification, rescission, waiver, release or amendment of any
provision of this Agreement shall be made except by a written agreement executed by
the Borrower and City.
20. Citv Mav Assiqn; Role of the City.
City, at its option, may (i) assign any or all of its rights and obligations
under the Loan and this Agreement, and (ii) pledge and assign its right to receive the
Assessment, the Annual Administrative Assessment, and the repayment of the Loan
and any other payments due to the City hereunder, without obtaining the consent of the
Borrower.
21. Borrower Assiqnment Prohibited.
In no event shall Borrower assign or transfer any portion of this
Agreement or Borrower's rights or obligations under the Agreement without the prior
express written consent of City, which consent may be granted or withheld in the sole
and absolute discretion of the City.
Borrower's Initials
P6401.0001\1077697.8 Energy Program Loan Agreement- 12
22. Relationship of Borrower and City.
The relationship of Borrower and City pursuant to this Agreement is that
of debtor and creditor and shall not be or be construed to be a joint venture, equity
venture, partnership, or other relationship.
23. General.
Time is of the essence of this Agreement and of each and every provision
hereof. This Agreement, together with the other Loan Documents, constitutes the
entire agreement between the parties hereto, and there shall be no other agreement
regarding the subject matter thereof unless signed in writing by the part to be charged.
If there is more than one "Borrower," the obligations hereunder of all Borrowers shall be
joint and several.
24. Counterparts.
This Agreement may be executed in several counterparts, each of which
shall be deemed an original, and all of such counterparts together shall constitute one
and the same instrument.
25. Special Termination.
Notwithstanding anything to the contrary contained herein, this
Agreement shall terminate and be of no further force or effect If the Borrower has
submitted to the Director a notice of its decision to cancel this transaction on or prior to
the date and time described in the Notice of Right to Cancel which was delivered to the
Borrower upon its execution of this Agreement.
26. No Third Partv Beneficiary Riqhts.
This Agreement is entered into for the sole benefit of Borrower and City
and, subject to the provisions of Sections 9, 10 and 20, no other parties are intended to
be direct or incidental beneficiaries of this Agreement and no third party shall have any
right in, under or to this Agreement.
Borrower's Initials
P6401.0001\1077697.8 Energy Program Loan Agreement- 13
IN WITNESS WHEREOF, Borrower and City have entered into this
Agreement as of the date and year first above written.
Borrower: City:
CITY OF PALM DESERT,
a California municipal corporation
Date of Execution by Borrower: By�
Name:
Title:
, 20
ATTEST:
P6401.0001\1077697.8 Energy Program Loan Agreement
STATE OF CALIFORNIA }ss.
COUNTY OF }
On , before me, ,
a notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
STATE OF CALIFORNIA }ss.
COUNTY OF }
On , before me, ,
a notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
P6401.0001\1077697.8 Energy Program Loan Agreement- 15
EXHIBIT "A"
[ATTACH COPY OF EXECUTED AND APPROVED APPLICATION]
P6401.0001\1077697.8 Energy Program Loan Agreement
Exhibit A
EXHIBIT "B"
DESCRIPTION OF THE PROPERTY
P6401.0001\1077697.8 Energy Program Loan Agreement
Exhibit B
EXHIBIT "C"
SCHEDULE OF ASSESSMENT INSTALLMENTS
Year Principal Interest Maximum Annual Totai
Administrative Assessment
[To be provided]
P6401.0001\1077697.8 Energy Program Loan Agreement
Exhibit C
(Page 1)
EXHIBIT "D"
FORM OF ANNUAL CERTIFICATION AND REPORT
�>�:.
.� � Energy Independence Program ("EIP")
I';�L,"vti [���;�E�'f"
Annual Certification and Report
Property Address ("Property"):
APN: Owner's Phone Number:
Name of Legal Owner(s) of Property ("Owner"):
Name of Individual authorized by Owner to complete this report:
Within the past 12 months has there been a change in ownership (e.g., sale, transfer, etc.) of the
Property? _ No _Yes If Yes, please provide date of change in ownership:
Property Insurance Information
Name of Insurance Company:
Name of Agent: AgenYs telephone no.
Additions/Modifications to EIP Improvements
If in the past 12 months any additions or modifications have been made to the improvements
originally financed by the EIP, please complete the table below:
Date Brief Descri tion of Nature of Addition and/or Modification
Material Events — Owner
In the past 12 months, have any of the following events occurred with respect to Owner?
(Please check as many as applicable:]
As to all types of Owners (e.g., individual, trust, corporation, LLC, etc.):
_ voluntary or involuntary bankruptcy (reorganization or liquidation)
_ an assignment for the benefit of creditors _ appointment a trustee or receiver
As to Owners that are individuals:
_ indictment or conviction for embezzlement, fraud, or criminal or dishonest acts
As to Owners that are not individuals (e.g., trust, corporation, LLC, etc.):
_ indictment or conviction of any officer, manager, managing member, principal, etc. of
Owner for embezzlement, fraud, or criminal or dishonest acts
_any change in organization _ dissolution
If you have checked any of the events in this section, please provide the date of the event and a brief
description, including court and case no. information, if any:
P6401.0001\1077697.8 Energy Program Loan Agreement
Exhibit D
(Page 1)
;..<v Paim Desert Energy Independence Program
�;,�,����5tr� Annual Certification and Report
Material Events — Property
In the past 12 months, has the Property been condemned? _ No _Yes
If Yes, please provide the following information:
Name of Agency condemning the Property:
Date or approximate date of the condemnation:
In the past 12 months, has the Property been subject to any eminent domain offer or eminent
domain proceeding? _ No _Yes
If Yes, please provide the following information:
Name of Agency seeking to acquire the Property through eminent domain:
Date of Eminent Domain Offer:
Court and Case No. (if any):
Date Case was filed (if any):
Annual Certification:
On behalf of the Owner, I hereby certify as follows:
(i) I am an Owner of the Property or a duly authorized representative of the Owner.
(ii) As of the date of this certification, the improvements financed by the EIP are
�Please check one:]
_ still in place and affixed to the Property.
_ missing, stolen, or otherwise no longer affixed to the Property.
(iii) As of the date of this certification, the improvements financed by the EIP
�P/ease check one:]
_ are operational and functioning.
_ are not operational / do not function.
I hereby certify that I am the Owner or Authorized Representative of Owner, named above, and
that the information provided herein is true and correct to the best of my knowledge.
Signature of Owner or Authorized Representative of Owner Date
Property Address:
P/ease complete and return this Annual Certification and Report within 14 days of
receipt to: City of Palm Desert, Attn: Benjamin Druyon, 73-710 Fred Waring Drive,
Suite 200A, Palm Desert, California 92260
Thank you!
P6401.0001\1077697.8 Energy Program Loan Agreement
Exhibit D
(Page 2)
APPENDIX D-2
LOAN AGREEMENT
CITY OF PALM DESERT ENERGY INDEPENDENCE PROGRAM
[MULTIPLE DISBURSEMENTS]
This Loan Agreement ("Agreement") is made and entered into as of this
day of , by and between the CITY OF PALM DESERT, a
California municipal corporation ("City") and
("Borrower").
RECITALS
A. City has established the Energy Independence Program (the "Program")
pursuant to which City may extend loans to property owners to finance the acquisition
and installation on their property of certain qualifying renewable energy systems and
energy efficient equipment. The purpose and method of administration of the loans
under the Program are described in the Energy Independence Program Report adopted
by the City Council on August 28, 2008, as it may be amended from time to time (the
"Report").
B. The Program is authorized by Chapter 29 of Part 3 of Division 7 of the
California Streets and Highways Code (the "Act").
C. The Borrower has submitted to the City that certain Palm Desert Energy
Independence Program Loan Application dated , 200 , a copy of which is
attached hereto as Exhibit "A" and incorporated herein by this reference (the
"Application"). The Application describes, among other things, the renewable energy
system and/or energy efficient equipment which is to be financed with the proceeds of
the loan described herein, and to be constructed on or installed in the property of
Borrower described in Exhibit "B" attached hereto and incorporated herein by this
reference (the "Property"), and the City has approved the Application as provided in the
Report.
D. The Borrower wishes to participate in the Program by executing this
Agreement with the City and using the proceeds of the loan made by the City to the
Borrower hereunder to finance the acquisition and [construction] [installation] on the
Property of the [renewable energy system] [energy efficiency equipment] described in
the Application (the "EquipmenY'). The Equipment and its construction on or
installation in the Property is collectively referred to herein as the "Work".
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties agree as follows:
Borrower's Initials
P6401.0001\1080467.5 Energy Program Loan Agreement
AGREEMENT
1. Loan Aqreement.
(a) Subject to the conditions set forth herein, City agrees to extend a
loan ("Loan") to Borrower in the amount of up to
Dollars ($ ) (the "Loan Amount"). Notwithstanding anything to the
contrary contained herein, the Loan Amount shall not in any event exceed the actual
cost of the Work. The Loan Amount shall be adjusted, if necessary, prior to the first
disbursement of the Loan Amount to the Borrower and following the post-completion
inspection by the City's Office of Energy Management ("OEM") as described in
Section 3 below, and shall be adjusted by the Director of the OEM (the "Director") to an
amount equal to the actual cost of the Work. Any adjustment of the Loan Amount by
the Director shall be made on the basis of the best available written evidence of the
actual cost of the Work and in the exercise of the Director's reasonable judgment. The
Borrower shall be solely responsible for the payment of all cost of the Work which
exceeds the Loan Amount and Borrower agrees in any event to complete the Work and
to fund all costs associated with such completion which may be in excess of the Loan
Amount. This Agreement, together with the Application, the Report and the documents
and instruments attached to or referenced in this Agreement and the Application are
collectively referred to herein as the "Loan Documents."
(b) The term of the Loan and this Agreement shall be
( ) years from the date that the proceeds of the Loan are first disbursed to the
Borrower.
(c) Interest shall accrue on the unpaid principal balance of the Loan
Amount from the date first disbursed to Borrower at the simple interest rate of seven
percent (7%) per annum. Interest shall be computed on the basis of a three hundred
sixty (360) day year. If a law which applies to the Loan and which sets maximum
interest rates or loan charges is interpreted by a court of competent jurisdiction in a
manner as would cause the interest or other loan charges collected or to be collected
in connection with the Loan to exceed the limits permitted by such laws, then: (i) any
such interest or loan charge shall be reduced by the amount necessary to reduce the
interest or charge to the permitted limit; and (ii) any sums already collected which
exceed permitted limits will be refunded by the City. The City may choose to make the
refund by reducing the outstanding principal amount of the Loan or by making a direct
payment to the Borrower.
(d) The Borrower promises to pay to the City, without deduction or
offset, the Loan Amount and the interest accrued thereon as provided herein. The
repayment of the Loan Amount and interest accrued thereon shall be repaid by the
Borrower to the City by the payment of an assessment levied against the Property
pursuant to Section 5898.30 of the California Streets and Highway Code (the
"Assessment"). In addition to the Assessment, the Borrower promises to pay to the
Borrower's Initials
P6401.0001\1080467.5 Energy Program Loan Agreement-2
City, without deduction or offset, an annual assessment levied against the Property to
pay costs incurred by the City which result from the administration and collection of the
Assessment or from the administration or registration of any associated bonds or
reserve or other related funds (the "Annual Administrative Assessment"). The Annual
Administrative Assessment shall not exceed Forty Dollars ($40.00) per year. The
Assessment and the Annual Administrative Assessment, and the interest and any
penalties thereon shall constitute a lien on the Property until they are paid. The
installments of the Assessment and the Annual Administrative Assessment (including
principal and interest) shall be collected on the property tax bill pertaining to the
Property, and shall be subject to the same penalties, remedies, and lien priorities as for
property taxes in the event of non-payment. The Borrower hereby expressly consents
to the levy of the Assessment and the Annual Administrative Assessment and the
imposition of the lien on the Property as described herein and in the Act.
(e) The amount of assessment installments that will be placed on the
Property each year is set forth in Exhibit "C" attached hereto and incorporated herein
by this reference.
(f) The Assessment may be prepaid, in whole or in part, at any time
upon the payment of a premium in an amount equal to three percent (3%) of the
amount of the Assessment to be prepaid.
2. Use of Proceeds.
All proceeds of the Loan shall be used by Borrower for the sole purpose
of paying for the reasonable costs and expenses of the Work on the Property, and in
connection therewith the Borrower shall comply with all requirements set forth herein, in
the Application and in the Report.
3. Disbursement Procedures.
(a) Except as otherwise provided in Section 3(b), the City shall have
no obligation to make any disbursement of the Loan Amount hereunder unless and until
each of the following conditions is satisfied, or any such condition is expressly waived
by the Director:
(i) The receipt by the Director of a written certification from
Borrower, and the contractor(s), if any, that pertormed the Work, stating that the Work
for which disbursement is requested is complete, and the actual cost of such Work.
Such certification shall be in form and substance acceptable to the Director.
(ii) An inspection of the Work by the OEM, and a determination
by the Director that the Work has been completed in full compliance with the
requirements of the Loan Documents.
Borrower's Initials
P6401.0001\1080467.5 Energy Program Loan Agreement-3
(iii) The receipt by the Director of such other documents and
instruments as the Director may require, including but not limited to, if applicable, the
sworn statements of contractor(s) and releases or waivers of lien, all in compliance with
the requirements of applicable law.
(iv) Borrower has, as appropriate, executed and delivered to
Director the Loan Documents and such other documents or instruments pertaining to
the Loan or the Work as the Director may require.
(v) As of the date of disbursement of the Loan Amount, the
Director shall have determined that the representations of the Borrower contained in
the Loan Documents are true and correct, and no Default (as defined in Section 12
below) shall have occurred and be continuing.
(vi) No stop payment or mechanic's lien notice pertaining to the
Work has been served upon the City and remains in effect as of the date of
disbursement of the Loan Amount.
(vii) The City shall have received a title policy (the "Title Policy")
in the Loan Amount and insuring the Loan and the lien of the assessments described in
Section 1(d) hereof. The Title Policy shall be in form and substance acceptable to the
Director.
(b} Notwithstanding the provisions of Section 3(a), the City , upon
written request of the Borrower, may make one disbursement of the Loan Amount as a
progress payment prior to the completion of the Work if each of the following conditions
is satisfied, or any such condition is expressly waived by the Director:
(i) The Loan Amount must be Twenty Thousand Dollars
($20,000) or greater;
(ii) The amount of the requested disbursement does not exceed
fifty percent (50%) of the Loan Amount;
(iii) The Director shall have determined that at least seventy-five
percent (75%), on a cost basis, of the Equipment or construction materials necessary
for its installation on the Property and constituting a portion of the Work shall have
been delivered to the Property and shall have been reasonably secured from theft or
vandalism;
(iv) The proceeds of the requested disbursement shall not
exceed the actual cost of the Equipment or related construction materials described in
(iii) above; and
Borrower's Initials
P6401.0001\1080467.5 Energy Program Loan Agreement-4
(v) The conditions to disbursement of the Loan Amount
contained in Sections 3(a)(iv), (v), (vi) and (vii) above shall have been satisfied or
waived by the Director.
(c) Borrower will, within ( ) days of presentation by the
Director, execute any and all documents or instruments required by the Loan
Documents in connection with the disbursement of the Loan Amount.
4. Reports reqardinq the Work.
Borrower agrees, upon the request of Director, to promptly deliver to the
Director, or, if appropriate, cause its contractor(s) to promptly deliver to Director, a
written status report regarding the Work.
5. Representations and Warranties of Borrower.
Borrower promises that each representation and warranty set forth below
is true, accurate and complete as of the date of this Agreement, and the date of
disbursement of the Loan Amount. The disbursement of the Loan Amount shall be
deemed to be a reaffirmation by the Borrower of each and every representation and
warranty made by Borrower in this Agreement.
(a) Formation; Authoritv. If Borrower is anything other than a natural
person, it has complied with all laws and regulations concerning its organization,
existence and the transaction of its business, and is in good standing in each state in
which it conducts its business. Borrower is the owner of the Property and is authorized
to execute, deliver and perform its obligations under the Loan Documents, and all other
documents and instruments delivered by Borrower to the City in connection therewith.
This Agreement and the Application have been duly executed and delivered by
Borrower and are valid and binding upon and enforceable against the Borrower in
accordance with their terms, and no consent or approval of any third party, which has
not been previously obtained by the Borrower, is required for the Borrower's execution
thereof or the performance of its obligations contained therein.
(b) Compliance with Law. Neither Borrower nor the Property is in
violation of, and the terms and provisions of the Loan Documents do not conflict with,
any regulation or ordinance, any order of any court or governmental entity, or any
building restrictions or governmental requirements affecting Borrower or the Property.
(c) No Violation. The terms and provisions of the Loan Documents,
the execution and delivery of the Loan Documents by Borrower, and the performance
by Borrower of its obligations contained therein, will not and do not conflict with or
result in a breach of or a default under any of the terms or provisions of any other
agreement, contract, covenant or security instrument by which the Borrower or the
Property is bound.
Borrower's Initials
P6401.0001\1080467.5 Energy Program Loan Agreement-5
(d) Other Information. If Borrower is comprised of the trustees of a
trust, the foregoing representations shall also pertain to the trustor(s) of the trust. All
reports, documents, instruments, information and forms of evidence which have been
delivered to City concerning the Loan are accurate, correct and sufficiently complete to
give City true and accurate knowledge of their subject matter.
(e) Lawsuits. There are no lawsuits, tax claims, actions, proceedings,
investigations or other disputes pending or threatened against Borrower which may
impair Borrower's ability to perform its obligations hereunder.
(f) No Event of Default. There is no event which is, or with notice or
lapse of time or both would be, a Default under this Agreement.
(g) Accuracy of Declarations. The declarations of the Borrower
contained in the Application are accurate, complete and true.
6. Borrower's Covenants.
Borrower promises to keep each of the following covenants:
(a) Completion of Work and Maintenance of Equipment. Borrower
shall, or shall cause its contractor to, promptly commence construction of the Work,
and diligently continue such Work to completion, in a good and workmanlike manner
and in accordance with sound construction and installation practices. Borrower shall
maintain the Equipment in good condition and repair.
(b) Compliance with Law and Aqreements. In commencing and
completing the Work, Borrower shall comply with all existing and future laws,
regulations, orders, building restrictions and requirements of, and all agreements with
and commitments to, all governmental, judicial and legal authorities having jurisdiction
over the Property or the Work, and with all recorded instruments, agreements, and
covenants and restrictions affecting the Property.
(c) Permits, Licenses and Approvals. Borrower shall properly obtain,
comply with and keep in effect all permits, licenses and approvals which are required to
be obtained from any governmental authority in order to commence and complete the
Work. Borrower, upon the request of the Director, shall promptly deliver copies of all
such permits, licenses and approvals to the Director.
(d) Site Visits; Examination of Records and Documents. Borrower
grants City, its agents and representatives the right to enter and visit the Property at
any reasonable time, after giving reasonable notice to Borrower, for the purposes of (i)
observing the Work during construction and installation, (ii) an annual visual inspection
for each year during the term of the Agreement to verify that the Equipment is still
affixed to the Property, and (iii) any additional number of visits each year during the
term of the Agreement, "for cause" (e.g., upon reports of stolen Equipment, receipt of
Borrower's Initials
P6401.0001\1080467.5 Energy Program Loan Agreement-6
notice of foreclosure upon the Property, etc.). City will make reasonable efforts during
any site visit to avoid interfering with Borrower's use of the Property. Borrower shall
also allow City to examine and copy records and other documents of Borrower which
relate to (A) the Work during its construction and installation and (B) the continued
maintenance and repair of the Equipment. City is under no duty to visit the Property, or
observe any aspects of the Work, or examine any records, and City shall not incur any
obligation or liability by reason of not making any such visit or examination. Any site
visit, observation or examination by City shall be solely for the purposes of protecting
City's rights under the Loan Documents.
(e) Protection Aqainst Lien Claims. Borrower shall promptly pay or
otherwise discharge any claims and liens for labor done and materials and services
furnished to the Property in connection with the Work. Borrower shall have the right to
contest in good faith any claim or lien, provided that it does so diligently and without
delay in completing the Work.
(f) Insurance. Borrower shall provide, maintain and keep in force at
all times (i) until the Work is completed, builder's all risk property damage insurance on
the Property, with a policy limit equal to the full replacement cost of the Work, and (ii)
property insurance covering the Property, including coverage for the replacement cost
(without deduction for depreciation) of the Equipment.
(g) Annual Certification and Report. Borrower shall promptly complete
and return to City an annual certification and report provided to Borrower by City each
year with respect to the Equipment and the Property, and ownership thereof. A sample
annual certification and report is attached hereto as Exhibit "D"; qrovided, any annual
certification and report required pursuant to this Section 6(g) may vary from the form
attached hereto as Exhibit "D" and in all respects shall be in form and substance as
determined by the City in its sole discretion, for the purposes of protecting City's rights
under the Loan Documents.
(h) Notification of Material Events. Borrower shall promptly notify City
in writing of (i) any voluntary or involuntary bankruptcy proceeding (reorganization or
liquidation) filed with respect to Borrower, (ii) any making of an assignment for the
benefit of creditors with respect to Borrower's assets, (iii) the appointment of a trustee
or receiver with respect to Borrower's assets in bankruptcy or any other similar
proceeding under law for relief of debtors, (iv) any indictment or conviction of Borrower,
or if Borrower is not an individual, of any officer, manager, managing member, general
partner, or principal of Borrower, for embezzlement, fraud, or criminal or dishonest acts,
(v) any change in organization of Borrower, (vi) if Borrower is not an individual, any
dissolution of Borrower, (vii) receipt by Borrower of any notice of condemnation with
respect to the Property, or (viii) receipt by Borrower of any eminent domain offer with
respect to the Property from any governmental entity or of any notification of the
commencement of any eminent domain proceeding with respect to the Property by any
governmental entity.
Borrower's Initials
P6401.0001\1080467.5 Energy Program Loan Agreement-7
(i) Notices. Borrower shall promptly notify City in writing of any
Default under this Agreement, or any event which, with notice or lapse of time or both,
would constitute a Default hereunder.
7. Completion of the Work.
Subject to Section 12(h), Borrower agrees to complete the Work on or
before , 20_.
8. Mechanic's Lien and Stop Notices.
In the event of the filing of a stop notice or the recording of a mechanic's
lien pursuant to applicable law of the State of California and relating to the Work,
Director may summarily refuse to make any disbursement of the Loan Amount, and in
the event Borrower fails to furnish Director a bond causing such notice or lien to be
released within ten (10) days of notice from Director to do so, such failure shall at the
option of City constitute a Default under the terms of this Agreement. Borrower shall
promptly deliver to Director copies of all such notices or liens.
9. Indemnification.
(a) Borrower shall indemnify, defend, protect, and hold harmless the
City and any and all agents, employees, attorneys and representatives of the City
(collectively, the "City Parties"), from and against all losses, liabilities, claims, damages
(including consequential damages), penalties, fines, forfeitures, costs and expenses
(including all reasonable out-of-pocket litigation costs and reasonable attorney's fees)
and any demands of any nature whatsoever related directly or indirectly to, or arising
out of or in connection with, (i) the Loan Documents, (ii) the disbursement of the Loan
Amount, (iii) the Work, (iv) the Equipment, (v) any breach or Default by Borrower under
the Loan Documents, (vi) the Assessment and the Annual Administrative Assessment,
and (vii) any other fact, circumstance or event related to City's extension and
disbursement of the Loan to Borrower or Borrower's performance of its obligations
under the Loan Documents (collectively, the "Liabilities"), regardless of whether such
Liabilities shall accrue or are discovered before or after the disbursement of the Loan
Amount.
(b) The indemnity obligations described in this Section 9 shall survive
the disbursement of the Loan Amount, the repayment of the Loan, the transfer or sale
of the Property by the Borrower, and the termination of this Agreement.
10. Wavier of Claims.
For and in consideration of the City's execution and delivery of this
Agreement, Borrower, for itself and for its successors-in-interest to the Property and for
any one claiming by, through, or under the Borrower , hereby waives the right to
recover from and fully and irrevocably releases the City Parties from any and all claims,
Borrower's Initials
P6401.0001\1080467.5 Energy Program Loan Agreement-8
obligations, liabilities, causes of action, or damages, including attorneys' fees and court
costs, that Borrower may now have or hereafter acquire against any of the City Parties
and accruing from or related to (i) the Loan Documents, (ii) the disbursement of the
Loan Amount, (iii) the performance of the Work, (iv) the Equipment, (v) any damage to
or diminution in value of the Property that may result from the Work, (vi) any personal
injury or death that may result from the Work, (vi) the selection of manufacturer(s),
dealer(s), supplier(s), contractor(s) and/or installer(s), and their action or inaction with
respect to the Work or the Equipment, (vii) the merchantability and fitness for any
particular purpose, use or application of the Equipment, (vii) the amount of energy
savings resulting from the Work and the Equipment, (ix) the workmanship of any third
parties, and (x) any other matter with respect to the Program. This release includes
claims, obligations, liabilities, causes of action, and damages of which Borrower is not
presently aware or which Borrower does not suspect to exist which, if known by
Borrower, would materially affect Borrower's release of the City Parties.
BORROWER HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS
FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542
("SECTION 1542"), WHICH IS SET FORTH BELOW:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR
HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS
OR HER SETTLEMENT WITH THE DEBTOR."
BY INITIALING BELOW, BORROWER HEREBY WAIVES THE
PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE MATTERS
WHICH ARE THE SUBJECT OF THE FOREGOING WAIVERS AND RELEASES.
Borrower's Initials
The waivers and releases by Borrower contained in this Section 10 shall
survive the disbursement of the Loan Amount, the repayment of the Loan, the transfer
or sale of the Property by the Borrower, and the termination of this Agreement.
11. Further Assurances.
The Borrower shall execute any further documents or instruments
consistent with the terms of this Agreement, including documents and instruments in
recordable form, as City shall from time to time find necessary or appropriate to
effectuate its purposes in entering into this Agreement and making the Loan.
Borrower's Initials
P6401.0001\1080467.5 Energy Program Loan Agreement-9
12. Events of Default.
(a) Subject to the further provisions of this Section 12, the failure of
any representation or warranty of the Borrower contained herein to be correct in all
material respects, or the failure or delay by Borrower to perform any of its obligations
under the terms or provisions of the Loan Documents, shall constitute a default
hereunder ("Default"). The Borrower must immediately commence to cure, correct, or
remedy such failure or delay and shall complete such cure, correction or remedy with
reasonable diligence, but in any event, within the time set forth in Sections 12(c)
and (d) below, as applicable.
(b) The City shall give written notice of default to Borrower, specifying
the default complained of by the City. Delay in giving such notice shall not constitute a
waiver of any default nor shall it change the time of default.
(c) If a monetary event of default occurs, prior to exercising any
remedies under the Loan Documents or the Act, City shall give Borrower written notice
of such default. Borrower shall have a period of thirty (30) days after such notice is
given within which to cure the default prior to exercise of remedies by City.
(d) If a non-monetary event of default occurs, prior to exercising any
remedies under the Loan Documents or the Act, City shall give Borrower notice of such
default. If the default is reasonably capable of being cured within thirty (30) days,
Borrower shall have such period to effect a cure prior to exercise of remedies by City
under the Loan Documents or the Act. If the default is such that it is reasonably
capable of being cured, but not within such thirty (30) day period, and Borrower
(i) initiates corrective action within such thirty (30} day period, and (ii) diligently,
continually, and in good faith works to effect a cure as soon as possible, then Borrower
shall have such additional time as is reasonably necessary to cure the default prior to
exercise of any remedies by City. However, in no event shall City be precluded from
exercising remedies if its security becomes or is about to become materially
jeopardized by any failure to cure a default, or if the default is not cured within one
hundred and twenty (120) days after the first notice of default is given.
(e) If any Default occurs, then, upon the election of City, (i) if there has
been no disbursement of the Loan Amount, this Agreement shall terminate and, except
as otherwise expressly provided herein, the parties have no further obligations or rights
hereunder, or (ii) if the Loan Amount has been disbursed in whole or in part, City may
terminate its obligations to make any further disbursement of the Loan Amount and
exercise any or all of the rights and remedies available to it under applicable law, at
equity or as otherwise provided herein.
(f) Any and all costs and expenses incurred by the City in pursuing its
remedies hereunder shall be additional indebtedness of the Borrower to the City
hereunder, and shall be secured as provided in the Act.
Borrower's Initials
P6401.0001\1080467.5 Energy Program Loan Agreement- 10
(g) Except as otherwise expressly stated in this Agreement, the rights
and remedies of the City are cumulative, and the exercise of one or more of such rights
or remedies shall not preclude the exercise by the City, at the same time or different
times, of any other rights or remedies for the same Default or any other Default. No
failure or delay by City in asserting any of its rights and remedies as to any Default
shall operate as a waiver of any Default or of any such rights or remedies, or deprive
the City of its rights to institute and maintain any actions or proceedings which it may
deem necessary to protect, assert or enforce any such rights or remedies.
(h) Performance of the covenants and conditions imposed upon
Borrower hereunder with respect to the commencement and completion of the Work
shall be excused while and to the extent that, Borrower is prevented from complying
therewith by war, riots, strikes, lockouts, action of the elements, accidents, or acts of
God beyond the reasonable control of the Borrower; provided, however, that such
event is not caused by the fault, negligence or misconduct of Borrower; and provided,
further, as soon as the cause or event preventing compliance is removed or ceases to
exist the obligations shall be restored to full force and effect and Borrower shall
immediately resume compliance therewith and performance thereof.
13. Compliance with Local, State and Federal Laws.
Borrower shall perform the Work, or cause the Work to be performed, in
conformity with all applicable laws, including all applicable federal, state and local
occupation, safety and health laws, rules, regulations and standards. Borrower agrees
to indemnify, defend and hold the City Parties harmless from and against any cost,
expense, claim, charge or liability relating to or arising directly or indirectly from any
breach by or failure of Borrower or its contractor(s) or agents to comply with such laws,
rules or regulations. The indemnification obligations described in this Section 13 shall
survive the disbursement of the Loan Amount, the repayment of the Loan, and the
termination of this Agreement.
14. Severability.
Each and every provision of this Agreement is, and shall be construed to
be, a separate and independent covenant and agreement. If any term or provision of
this Agreement or the application thereof shall to any extent be held to be invalid or
unenforceable, the remainder of this Agreement, or the application of such term or
provision to circumstances other than those to which it is invalid or unenforceable, shall
not be affected thereby, and each term and provision of this Agreement shall be valid
and shall be enforced to the extent permitted by law.
15. Notices.
All notices and demands shall be given in writing by certified mail,
postage prepaid, and return receipt requested, or by personal delivery (by recognized
courier service or otherwise). Notices shall be considered given upon the earlier of
Borrower's Initials
P6401.0001\1080467.5 Energy Program Loan Agreement- 11
(a) personal delivery or (b) two (2) business days following deposit in the United States
mail, postage prepaid, certified or registered, return receipt requested. Notices shall be
addressed as provided below for the respective party; provided that if any party gives
notice in writing of a change of name or address, notices to such party shall thereafter
be given as demanded in that notice:
To City: City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, California 92260-2578
Attention: Director, Office of Energy Management
To Borrower:
Palm Desert, California 92260
Attention:
16. Attornevs' Fees and Costs.
In the event that any action is instituted to enforce payment or
performance under this Agreement, the parties agree that the non-prevailing party shall
be responsible for and shall pay all costs and all attorneys' fees incurred by the
prevailing party in enforcing this Agreement.
17. No Waiver.
No disbursement of the Loan Amount shall constitute a waiver of any
conditions to the City's obligation to make further disbursements nor, in the event
Borrower is unable to satisfy any such conditions, shall any such waiver have the effect
of precluding the City from thereafter declaring such inability to constitute a Default
under this Agreement. No disbursement of the Loan Amount based upon inadequate
or incorrect information shall constitute a waiver of the right of City to receive a refund
thereof from Borrower.
18. Governinq Law.
This Agreement shall be governed by the laws of the State of California.
Any legal action brought under this Agreement must be instituted in the Superior Court
of the County of Riverside, State of California, or in an appropriate municipal court in
that County or in the United States District Court for the Central District of California.
19. Amendment of Aqreement.
No modification, rescission, waiver, release or amendment of any
provision of this Agreement shall be made except by a written agreement executed by
the Borrower and City.
Borrower's Initials
P6401.0001\1080467.5 Energy Program Loan Agreement- 12
20. City Mav Assiqn; Role of the City.
City, at its option, may (i) assign any or all of its rights and obligations
under the Loan and this Agreement, and (ii) pledge and assign its right to receive the
Assessment, the Annual Administrative Assessment, and the repayment of the Loan
and any other payments due to the City hereunder, without obtaining the consent of the
Borrower.
21. Borrower Assiqnment Prohibited.
In no event shall Borrower assign or transfer any portion of this
Agreement or Borrower's rights or obligations under the Agreement without the prior
express written consent of City, which consent may be granted or withheld in the sole
and absolute discretion of the City.
22. Relationship of Borrower and Citv.
The relationship of Borrower and City pursuant to this Agreement is that
of debtor and creditor and shall not be or be construed to be a joint venture, equity
venture, partnership, or other relationship.
23. General.
Time is of the essence of this Agreement and of each and every provision
hereof. This Agreement, together with the other Loan Documents, constitutes the
entire agreement between the parties hereto, and there shall be no other agreement
regarding the subject matter thereof unless signed in writing by the part to be charged.
If there is more than one "Borrower," the obligations hereunder of all Borrowers shall be
joint and several.
24. Counterparts.
This Agreement may be executed in several counterparts, each of which
shall be deemed an original, and all of such counterparts together shall constitute one
and the same instrument.
25. Special Termination.
Notwithstanding anything to the contrary contained herein, this
Agreement shall terminate and be of no further force or effect If the Borrower has
submitted to the Director a notice of its decision to cancel this transaction on or prior to
the date and time described in the Notice of Right to Cancel which was delivered to the
Borrower upon its execution of this Agreement.
Borrower's Initials
P6401.0001\1080467.5 Energy Program Loan Agreement- 13
26. No Third Partv Beneficiary Riqhts.
This Agreement is entered into for the sole benefit of Borrower and City
and, subject to the provisions of Sections 9, 10 and 20, no other parties are intended to
be direct or incidental beneficiaries of this Agreement and no third party shall have any
right in, under or to this Agreement.
Borrower's Initials
P6401.0001\1080467.5 Energy Program Loan Agreement- 14
IN WITNESS WHEREOF, Borrower and City have entered into this
Agreement as of the date and year first above written.
Borrower: City:
CITY OF PALM DESERT,
a California municipal corporation
Date of Execution by Borrower: By�
Name:
Title:
, 20
ATTEST:
P6401.0001\1080467.5 Energy Program Loan Agreement
STATE OF CALIFORNIA }ss. �
COUNTY OF }
On , before me, ,
a notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
STATE OF CALIFORNIA }ss.
COUNTY OF }
On , before me, ,
a notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
P6401.0001\1080467.5 Energy Program Loan Agreement- 16
EXHIBIT "A"
[ATTACH COPY OF EXECUTED AND APPROVED APPLICATION]
P6401.0001\1080467.5 Energy Program Loan Agreement
Exhibit A
EXHIBIT "B"
DESCRIPTION OF THE PROPERTY
P6401.0001\1080467.5 Energy Program Loan Agreement
Exhibit B
EXHIBIT "C"
SCHEDULE OF ASSESSMENT INSTALLMENTS
Year Principal Interest Maximum Annual Total
Administrative Assessment
[To be provided]
P6401.000111080467.5 Energy Program Loan Agreement
Exhibit C
(Page 1)
EXHIBIT "D"
FORM OF ANNUAL CERTIFICATION AND REPORT
:�`;>��
:� ;i Energy Independence Program ("EIP")
E�',•��.:vt L�tti�#��t'
Annual Certification and Report
Property Address ("Property"):
APN: Owner's Phone Number:
Name of Legal Owner(s) of Property ("Owner"):
Name of Individual authorized by Owner to complete this report:
Within the past 12 months has there been a change in ownership (e.g., sale, transfer, etc.) of the
Property? _ No _Yes If Yes, please provide date of change in ownership:
Property Insurance Information
Name of Insurance Company:
Name of Agent: AgenYs telephone no.
Additions/Modifications to EIP Improvements
If in the past 12 months any additions or modifications have been made to the improvements
originally financed by the EIP, please complete the table below:
Date Brief Descri tion of Nature of Addition and/or Modification
Material Events —Owner
In the past 12 months, have any of the following events occurred with respect to Owner?
�Please check as many as applicable:J
As to all types of Owners (e.g., individual, trust, corporation, LLC, etc.):
_ voluntary or involuntary bankruptcy (reorganization or liquidation)
_ an assignment for the benefit of creditors _appointment a trustee or receiver
As to Owners that are individuals:
indictment or conviction for embezzlement, fraud, or criminal or dishonest acts
As to Owners that are not individuals (e.g., trust, corporation, LLC, etc.):
_ indictment or conviction of any officer, manager, managing member, principal, etc. of
Owner for embezzlement, fraud, or criminal or dishonest acts
_ any change in organization _ dissolution
If you have checked any of the events in this section, please provide the date of the event and a brief
description, including court and case no. information, if any:
P6401.0001\1080467.5 Energy Program Loan Agreement
Exhibit D
(Page 1)
�.,� Palm Desert Energy Independence Program
,,,,,���,fst�r Annual Certification and Report
Material Events — Property
In the past 12 months, has the Property been condemned? _ No _Yes
If Yes, please provide the following information:
Name of Agency condemning the Property:
Date or approximate date of the condemnation:
In the past 12 months, has the Property been subject to any eminent domain offer or eminent
domain proceeding? _ No _Yes
If Yes, please provide the following information:
Name of Agency seeking to acquire the Property through eminent domain:
Date of Eminent Domain Offer:
Court and Case No. (if any):
Date Case was filed (if any):
Annual Certification:
On behalf of the Owner, I hereby certify as follows:
(i) I am an Owner of the Property or a duly authorized representative of the Owner.
(ii) As of the date of this certification, the improvements financed by the EIP are
(P/ease check one:J
_ still in place and affixed to the Property.
_ missing, stolen, or otherwise no longer affixed to the Property.
(iii) As of the date of this certification, the improvements financed by the EIP
�P/ease check one:J
_ are operational and functioning.
_ are not operational / do not function.
I hereby certify that I am the Owner or Authorized Representative of Owner, named above, and
that the information provided herein is true and correct to the best of my knowledge.
Signature of Owner or Authorized Representative of Owner Date
Propertjr Address:
P/ease complete and return this Annual Certification and Report within 14 days of
receipt to: City of Palm Desert, Attn: Benjamin Druyon, 73-710 Fred Waring Drive,
Suite 200A, Palm Desert, California 92260
Thank youl
P6401.0001\1080467.5 Energy Program Loan Agreement
Exhibit D
(Page 2)
APPENDIX E:
SUMMARY OF LOAN PROCESS
Project Scopinq
The first step in the loan process is project scoping. Property owners can work directly
with contractors to determine the scope of a project. Property owners can also schedule a
meeting with OEM staffto discuss proposed Energy Improvements and to get no-cost
and objective assistance with planning for those Energy Improvements.
Property owners can also request an optional, no-cost, on-site energy survey to be
completed by OEM professionals. The energy survey is intended to assist property
owners in determining their most effective means for EIP participation. A no-cost solar
site check is also available to help a property owner weigh his or her solar options.
As the project is defined, the property owner obtains a contractor's bid or determines the
cost of the equipment if self-installing.
Proqram Application
The property owner calls, e-mails, or visits the Office of Energy Management to request
an EIP application form (the "Application"). The OEM staffwill provide an Application
by hard copy, e-mail, facsimile, or web link as requested by the property owner.
Applications and instructions are available online at the Palm Desert web site.
The property owner submits the Application together with its required attachments to the
OEM. The OEM determines whether each Application is complete within 15 business
days of receipt of the Application. The OEM will notify the property owner if the
Application is complete, incomplete or denied by U.S. Mail, and additionally by phone,
facsimile, or e-mail if requested by the property owner.
Applications will be processed on first-come, first-served basis until funds are no longer
available.
Title Check
The OEM will verify that the applicant is the property owner through a City of Palm
Desert contract with a nationally-recognized title company. This contract will provide for
expedited title checks for EIl' participants. The title company will provide a copy of the
vesting deed for the property prior to the OEM's approval of the Application, and the
OEM will also obtain a title insurance policy for the amount of the loan.
Page 1
Application Review
During the Application Review process the OEM verifies that:
(i) The application is complete and accurate;
(ii) The property owner(s) owns the subject property;
(iii) The subject property is developed and located in the City of Palm Desert;
(iv) The subject property is not exempt from ad valorem property taxes;
(v) The property owner(s) is/are current in the payment of ad valorem
property taxes for the subject property;
(vi) The property owner(s) has/have declared that the property owner(s) and
the subject property is/are not currently involved in a bankruptcy
proceeding;
(vii) The proposed Energy Improvements and costs are eligible to be financed
under the Program. If the proposed Energy Improvements are part of a
project that includes new construction (e.g., a room addition), the costs of
the work have been properly allocated between retrofitting and new
construction;
(viii) The cost estimate(s) is/are reasonable;
(ix) The property owner(s) currently maintain(s) property insurance covering
the subject property, and the insurance policy includes or will include
coverage for the replacement cost (without deduction for depreciation) of
the proposed Energy Improvements, and that the evidence of such
insurance is satisfactory in form and substance to the OEM.
(x) The proposed contractor(s) is/are licensed by the State of California and
is/are in good standing with the Contractors State Licensing Board;
(xi) The requested loan amount (including contingency) is equal to or greater
than $5,000 and is less than or equal to $60,000; or the requested loan
amount (including contingency) is greater tlian $60,000 and less than or
equal to $100,000 and the City Manager has approved the application; or
the requested loan amount is greater than $100,000 (including
contingency) and has been approved by City Council; and
(xii) The value-to-lien ratio, calculated as ratio of(a) the value of the property
to (b)the sum of the amount of(i) the requested amount of the EIP Loan
(including contingency) and (ii) the amount all other liens on the property
securing a special tax levied pursuant to the Mello-Roos Community
Facilities Act of 1982, a special assessment, or any other contractual
assessment (e.g., EIP Loan), is at least 10:1; or the City Manager has
approved a lower value-to-lien ratio that is at least 8:1.
(xiii) The term of the EIP Loan does not exceed the reasonably expected useful
life expectancy of the proposed Energy Improvements; or the City
Manager has approved a longer term of the EIP Loan that is no longer than
the reasonably expected useful life expectancy of the Energy
Improvements l�us 5 years.
(xiv) EIP funding is available.
Page 2
Within 15 business days of receipt of an application, the OEM notifies the property
owner if the application is incomplete, approved or denied.
a. Incomplete. An application shall be deemed incomplete if it is missing any
information or attachments the property owner is required to provide.
Incomplete applications may be resubmitted. The OEM will process
resubmitted applications on a first-come, first-served basis based upon the
new receipt date.
b. Approved. An application shall be deemed approved if the OEM has
verified all of the items in step (i) through (xi).
c. Denied. An application shall be deemed denied if the OEM cannot verify
any of the items in steps (i) through (xi). A property owner may request a
written statement of specific reasons for the denial within 60 business days
of the date of notification of denial. In such case, the OEM will provide
such a statement to the property owner within 15 business days of receipt
of a request for a statement. Denied applications may be resubmitted. The
OEM will process resubmitted applications on a first-come, first-served
basis based upon the new receipt date.
i. If an application is denied on the sole basis that EIl' funding is not
available, the application does not need to be resubmitted;
applicants will be placed on a waiting list based on the date of
application receipt.
ii. If an application is denied because the cost estimate(s) is/are not
deemed reasonable by the Director, a resubmitted application must
be accompanied by additional documentation of cost estimates as
determined in the Director's discretion, including, but not limited
to, cost estimates provided by one or more additional contractors.
The property owner will not be required to select the low bid;
however, the Director may limit the maximum loan amount to an
amount deemed reasonable by the Director.
d. With respect to an application to finance a renewable energy system(s)
other than solar(such as wind or geothermal) or a custom energy
efficiency measure(s) (such as a combined heat and power system
cogeneration system), or to finance an emerging technology, the OEM
reserves the right to require the appropriate energy studies showing the
energy savings and/or energy generation capabilities of the proposed
project.
Page 3
Loan Contract and Reservation
Within 10 business days of notification that an Application has been approved, the
Director, on behalf of the City, will enter into a contractual assessment agreement (the
"Loan Contract") with the property owner. This will assure the property owner that the
EIP Loan has been approved and that funds are reserved for the property owner's
approved project. Failure of the property owner to execute a Loan Contract within such
10-day period will require the Application to be resubmitted. The OEM will process
resubmitted applications on a first-come, first-served basis based upon the new receipt
date.
Upon execution of a Loan Contract, the City records an assessment lien against the
subject property in the City offices and the County Recorder's office.
A 10% contingency will be included in the Loan Contract to reserve additional funds for
the property owner to draw against if needed in the case of change orders. A copy of the
dra$ Loan Contract is included as Appendix D of this Report.
Installation of Improvements
Property owner enters into a contractual arrangement directly with a contractor for
Energy Improvements unless the property owner is self-installing the Improvements. All
work is subject to the City's Building Department permitting and inspections and all
other applicable federal state and local laws and regulations. All work must be completed
within 180 days of execution of the Loan Contract.
Proqress Pavments
If the maximum loan amount is $20,000 or greater, the property owner may request in
writing that the OEM make a progress payment prior to the completion of the work. The
OEM shall make the progress payment within 10 business days of receipt of the request
provided all of the following conditions have been met:
• At least 75 percent of the required materials have been delivered to the property
and have been reasonably secured. The OEM has the discretion to make its own
determination with respect to whether this condition has been satisfied; and
• The requested progress payment does not exceed 50 percent of the maximum loan
amount.
Final Inspections
The Property owner notifies the OEM that all work has been completed. The OEM
reserves the right to inspect completed work within five business days of receipt of
notification that work is completed.
Page 4
Based on satisfactory project completion, the OEM disburses loan funds to the property
owner within 10 business days of the completion of the inspection. The total amount of
funds to be disbursed shall not exceed the lesser of(i) the maximum loan amount
provided in the loan agreement (less the property owner's share of the title costs if not
paid in cash by the property owner) or(ii) the actual costs.
Property Tax Rolis
The City staff sends a database of assessment installments to the Riverside County
Assessor for collection of the assessment on the property tax roll.
Page 5
!J
Appendix F : Consent Agreement
[see attached]
RECORDING REQUESTED BY:
City of Palm Desert
PREPARED BY AND WHEN
RECORDED MAIL TO:
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, California 92260
Attn.: Benjamin Druyon
A.PN:
File No:
CONSENT AGREEMENT
THIS AGREEMENT is made this day of , 2009, by
and between , a ("Owner") and
, a (`Beneficiary"), and for the benefit of the CITY
OF PALM DESERT, a municipal corporation ("Lender").
WITNESSETH
WHEREAS, Owner has executed a deed of trust dated , to Beneficiary, as
trustee and beneficiary thereunder, covering that certain real property described in Exhibit A
attached hereto ("Property"), to secure a promissory note in the sum of$ , and
recorded on as Instrument No. in the Official Records of
Riverside County ("Deed of Trust"); and
WHEREAS, Owner has executed, or is about to execute, a loan agreement with the Lender
("Loan Agreement") by which the Lender will make a loan to the Owner in a principal amount
not to exceed $ ("Loan") to finance the purchase and installation of a
certain renewable energy system on the Property in connection with the Lender's Energy
Independence Program, and such Loan will be payable with interest and upon the terms and
conditions described in the Loan Agreement; and
WHEREAS, pursuant to Chapter 29 of Part 3 of Division 7 of the California Streets and
Highways Code, the repayment by the Owner of the principal and interest on the Loan will be
paid by a statutory assessment levied against the Property (the "Assessment") notice of which
shall be recorded against the Property in the Official Records of Riverside County, and which
Assessment, together with the interest thereon and any penalties, shall constitute a lien (the
"Lien") on the Property, and which Assessment shall be collected in installments on the property
tax bill pertaining to the Property, and shall be subject to the same penalties, remedies and lien
priorities as for real property taxes in the event of non-payment by the Owner; and
P6401-0001\1116812v2.doc
WHEREAS, Lender is willing to make the Loan provided that the Beneficiary consents to the
Loan, the levy of the Assessment against the Property, the imposition of the Lien upon the
Property, and the recordation of the notice of Assessment in the Official Records of Riverside
County and acknowledges that the Lien shall be prior and superior to the lien or charge of the
Deed of Trust.
NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and
other valuable consideration, the receipt and sufficiency of which consideration is hereby
acknowledged, and in order to induce Lender to make the Loan, it is hereby declared, understood
and agreed as follows:
1) That the Lien shall unconditionally be and remain at all times a lien on the
Property prior and superior to the lien or charge of the Deed of Trust.
2) That Lender would not make the Loan without this Agreement.
Beneficiary declares, agrees and acknowledges that:
1. Beneficiary consents to and approves (a) all provisions of the Loan Agreement,
including but not limited to those pertaining to the disbursement of the proceeds of the Loan, and
the Owner's execution of the Loan Agreement, and (b)the levy of the Assessment against the
Property, the imposition of the Lien upon the Property and the recordation of the notice of
Assessment in the Official Records of Riverside County with the effect as to its nature and
priority hereinabove described, and Beneficiary hereby confirms that the Owner's execution of
the Loan Agreement will not constitute a default under the Deed of Trust.
2. Lender in making disbursements pursuant to the Loan Agreement is under no
obligation or duty to Beneficiary, and Lender shall have no responsibility to see to the
application of the proceeds of the Loan by the Owner, or to such other person or persons to
whom Lender disburses such proceeds.
3. Beneficiary understands that in reliance upon, and in consideration of, this
consent, approval and confirmation, the Loan will be made by the Lender to the Owner and, as
part and parcel thereof, specific monetary and other obligations are being and will be entered into
which would not be made or entered into by the Lender or Owner but for and in reliance upon
this consent, approval and confirmation by Beneficiary.
The Beneficiary and Owner agree that:
A. This Agreement shall be binding on and inure to the benefit of the legal
representatives, heirs, successors and assigns of the parties hereto.
B. This Agreement shall be governed by and construed in accordance with the laws
of the State of California.
C. This Agreement may be signed by different parties hereto in counterparts with the
same effect as if the signatures to each counterpart were upon a single instrument, and all
counterparts shall be deemed an original of this Agreement.
2
P6401-0001\1116812v2.doc ,
D. Each of the parties hereto shall, whenever and as often as they reasonably shall be
requested to do so by the other party, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, any and all such further instruments and documents as may be
reasonably necessary to carry out the intent and purpose of this Agreement, and to do any and all
further acts reasonably necessary to carry out the intent and purpose of this Agreement.
E. In the event any legal action is commenced by any party hereto concerning this
Agreement or the rights and duties hereunder of any party hereto, whether such action be an
action for damages, or for equitable or declaratory relief, the prevailing party in such litigation
shall be entitled to, in addition to all other relief as may be granted by the court, reasonable sums
as and for attorneys' fees in an amount to be set by the court.
F. Each person or entity executing this Agreement on behalf of a party hereto
represents and warrants that such person or entity is duly and validly authorized to do so on
behalf of such party with full right and authority to execute this Agreement and to bind such
party with respect to all of its obligations hereunder.
3
P6401-OOOI\1116812v2.doc
BENEFICIARY: ,
a,
By:
Name:
Title
By:
Name:
Title
OWNER: ,
a
By:
Name:
Title
By:
Name:
Title
4
P6401-0001\1116812v2.doc
A �
STATE OF ) SS
COUNTY OF )
On , before me, , a
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
My Commission Expires:
This area for official notarial seal.
STATE OF ) SS
COUNTY OF )
On , before me, , a
notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
My Commission Expires:
This area for official notarial seal.
5
P6401-0001\l l 16812v2.doc
' �
EXHIBIT A
LEGAL DESCRIPTION
REAL PROPERTY IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE
OF CALIFORIVIA, DESCRIBED AS FOLLOWS:
P6401-0001\1116812v2.doc
Appendix G : Notice of Assessment
[see attached]
RECORDING REQUESTED BY AND
AFTER RECORDATION RETURN TO:
City Clerk
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
No Recording Fee Req'd—Gov't Code Sec. 6103
NOTICE OF ASSESSMENT
CITY OF PALM DESERT
ENERGY INDEPENDENCE LOAN PROGRAM
On August 28, 2008, the City Council (the "City Council") of the City of Palm Desert, State of
California (the "City") adopted its Resolution No. 08-_(the "Resolution") whereby the City
Council approved the report (the"Report") prepared by the Director of the City's Office of
Energy Management (the"OEM") in accordance with Section 5898.22 of Chapter 29 of Part 3 of
Division 7 of the California Streets and Highways Code (the "Act"), established the Energy
Independence Program (the "EIP") to be implemented as provided in the Report, and confirmed
contractual assessments to be levied against parcels within the City within the parameters of the
Report to finance certain distributed generation renewable energy sources and energy efficiency
improvements (the "Improvements") through the use of contractual assessments.
Pursuant to the Act, the Resolution, and the Report, the City and the record owner(s) (the
"Record Owners") of the Property (defined below) have entered into a loan agreement pursuant
to the EIP entitled "Loan Agreement, City of Palm Desert Energy Independence Program" and
dated as of , (the "Loan Agreement"). Pursuant to the Loan Agreement, the City is
extending a loan in the principal amount of up to $ (the "Loan") to the Record
Owners of the Property to finance the acquisition and installation and/or construction on such
property of the Improvements. Pursuant to the Loan Agreement, the Record Owners promise to
pay to the City, without deduction or offset, the Loan and the interest accrued thereon as
provided therein. Pursuant to the Loan Agreement, the repayment of the Loan and interest
accrued thereon shall be repaid by the Record Owners to the City by the payment of an
assessment levied against the Property pursuant to Section 5898.30 of the Act (the
"Assessment"). In addition, so long as the Assessment is unpaid, the Record Owners promise to
pay to the City, without deduction or offset, an annual assessment levied against the Property to
pay costs incurred by the City which result from the administration and collection of the
Assessment or from the administration or registration of any associated bonds or reserve or other
related funds (the"Annual Administrative Assessment"). The Annual Administrative Assessment
shall not exceed Forty Dollars ($40.00) per year.
P6401-0001\1049685 v3.doc
Pursuant to the requirements of California Streets and Highways Code Section 3114, the
undersigned City Clerk of the City hereby gives notice that the Loan Agreement, a diagram, the
Assessment and the Annual Administrative Assessment were recorded in the OEM, and filed in
the Office of the Clerk of the City, 73-510 Fred Waring Drive, Palm Desert, CA 92260 (the "City
Clerk") and relating to certain property, being the real property described on Exhibit "A" to this
Notice, attached hereto and incorporated herein by reference (the"Property"). The name[s] of
the Record Owners of the Property are shown on Exhibit "B" to this Notice, attached hereto and
incorporated herein by reference.
Notice is further given that upon the recording of this Notice in the office of the County Recorder
of the County of Riverside, the Assessment assessed on the Property shall become a lien upon the
Property. In addition, the installments of the Assessment (including principal and interest) and the
Annual Administrative Assessment shall become a lien upon the Property at the same time as the
property taxes upon the Property become a lien each year and shall be collected on the property
tax bill pertaining to the Property, and shall be subject to the same penalties, remedies, and lien
priorities as for property taxes in the event of non-payment.
Reference is hereby made to the assessment diagram and the assessment roll recorded in the
OEM. Reference is hereby further made to the Loan Agreement on file in the Office of City Clerk
for the terms of the Loan and the Loan Agreement, including the interest rate and the prepayment
penalty. Pursuant to the Loan Agreement, the principal amount of the Loan may be adjusted, but
will not exceed the amount set forth above.
Dated: , 20
Rachelle D. Klassen
City Clerk
City of Palm Desert
P64Q 1-0001\1049685v3.doc
EXHIBIT A
(See Attached)
P6401-0001\1049685v3.doc
_.,�
Appendix H : Notice — Payment of Contractual Assessment Required
[see attachedJ
--,
RECORDING REQUESTED BY&
WHEN RECORDED RETURN TO:
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, California 92260
Attn.: Benjamin Druyon
EIP File No:
PAYMENT OF CONTRACTUAL ASSESSMENT REQUIRED
Pursuant to the requirements of Chapter 29 of Part 3 of Division 7 of the California Streets and
Highways Code, as amended, commencing with Section 5898.10 (the "Act"), including without
limitation Section 5898.24(d) of the Act, and in furtherance of Section 1102.6b of the California
Civil Code, the City of Palm Desert, State of California (the "City"), hereby provides notice of
the levy and collection of a contractual assessment under the City's Energy Independence
Program ("EIP"), established and authorized pursuant to the Act. Pursuant to the Act and the
EIP, the City and the current owner(s) described below (the "Owners") of the real property (the
"Property") described herein have entered into that certain assessment contract entitled, "Loan
Agreement," dated as of , 20_, by and between the City and the Owners (the
"Assessment Contract"). Pursuant to the Assessment Contract and the Act, the Owners have
requested and voluntarily agreed to the City's imposition of a contractual assessment against the
Property (the "Contractual Assessment"), which is collected by the County of Riverside, on
behalf of the City, through the consolidated property tax bill.
Current Owner(s):
Legal Description of Property: See Exhibit "A" attached hereto.
Assessor's Parcel Number:
Annual Amount of Contractual Assessment: per year, plus a $40 Annual
Administrative Assessment each year.
Expiration of the Contractual Assessment: the last installment of the Contractual Assessment
shall be due on April 10 of the th tax year following the date that the City advances monies
under the Assessment Contract to the Owners for payment of the Work (as defined below).
Purpose for Which Funds Will Be Used: the Contractual Assessment finances the acquisition
and construction and/or installation on the Property of the renewable energy system(s) and/or
energy efficiency improvement(s) which are permanently affixed to the Property and identified
in the Assessment Contract (the "Work"}.
Contact Information: More information regarding the Contractual Assessment may be obtained
by contacting the Of�ice of Energy Management, City of Palm Desert, 73-510 Fred Waring
Drive, Palm Desert, California 92260, tel: (760) 837-0287.
Dated: , 20
Rachelle D. Klassen, City Clerk, City of Palm Desert
P6401.0001\1196703.3
PAYMENT OF CONTRACTUAL ASSESSMENT REQUIRED
EXHIBIT "A" - LEGAL DESCRIPTION
REAL PROPERTY IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE
OF CALIFORNIA, DESCRIBED AS FOLL�WS:
P6401.0001\1196703.3 A-1
STATE OF CALIFORNIA }ss.
COUNTY OF RIVERSIDE }
On , before me,
, a notary public, personally appeared
who proved to me on the basis of
satisfactory evidence to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity, and that by
his/her signature on the instrument the person or the entity upon behalf of which the person
acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
S ignature
(This area for official notarial seal)
P6401.0001\ll 96703.3
RECORDING REQUESTED BY &
WHEN RECORDED RETURN TO:
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, California 92260
Attn.: Benjamin Druyon
EIP File No:
PAYMENT OF CONTRACTUAL ASSESSMENT REQUIRED
Pursuant to the requirements of Chapter 29 of Part 3 of Division 7 of the California Streets and
Highways Code, as amended, commencing with Section 5898.10 (the "Act"), including without
limitation Section 5898.24(d) of the Act, and in furtherance of Section 1102.6b of the California
Civil Code, the City of Palm Desert, State of California (the "City"), hereby provides notice of the
levy and collection of a contractual assessment under the City's Energy Independence Program
("EIP"), established and authorized pursuant to the Act. Pursuant to the Act and the EIP, the
City and the current owner(s) described below (the "Owners") of the real property (the
"Property") described herein have entered into that certain assessment contract entitled, "Loan
Agreement," dated as of , 20_, by and between the City and the Owners
(the "Assessment Contract"). Pursuant to the Assessment Contract and the Act, the Owners
have requested and voluntarily agreed to the City's imposition of a contractual assessment
against the Property (the "Contractual AssessmenY'), which is collected by the County of
Riverside, on behalf of the City, through the consolidated property tax bill.
Current Owner(s):
Legal Description of Property: See Exhibit "A" attached hereto.
Assessor's Parcel Number:
Annual Amount of Contractual Assessment: per year, plus a $40 Annual
Administrative Assessment each year.
Expiration of the Contractual Assessment: the last installment of the Contractual
Assessment shall be due on April 10 of the th tax year following the date that the City
advances monies under the Assessment Contract to the Owners for payment of the Work (as
defined below).
Purpose for Which Funds Will Be Used: the Contractual Assessment finances the
acquisition and construction and/or installation on the Property of the renewable energy
system(s) and/or energy efficiency improvement(s) which are permanently affixed to the
Property and identified in the Assessment Contract (the "Work").
Contact Information: More information regarding the Contractual Assessment may be
obtained by contacting Benjamin Druyon at City of Palm Desert, 73-510 Fred Waring Drive,
Palm Desert, California 92260, tel: (760) 837-0287.
Dated: , 20_
Rachelle D. Klassen, City Clerk, City of Palm Desert
G:\Finance\Niamh Ortega\Energy Independence Program\SR 011410 Amendments validation resolutions\Payment of Contractual
Assessment Required.DOC
PAYMENT OF CONTRACTUAL ASSESSMENT REQUIRED
EXHIBIT "A" - LEGAL DESCRIPTION
REAL PROPERTY IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE,
STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
A-1
STATE OF CALIFORNIA }ss.
COUNTY OF RIVERSIDE }
On , before me,
, a notary public, personally
appeared who proved to
me on the basis of satisfactory evidence to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person or the
entity upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
Resolution No. 10- 3
RESOLUTION NO. 3
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT
APPROVING AMENDMENTS TO THE ENERGY INDEPENDENCE PROGRAM
REPORT AND ADMINISTRATIVE GUIDELINES PREPARED PURSUANT TO
SECTION 5898.22 OF THE CALIFORNIA STREETS AND HIGHWAYS CODE
RECITALS:
WHEREAS, pursuant to Chapter 29 of Part 3 of Division 7 of the California Streets and
Highways Code (the "Act"), the City Council established its Energy Independence Program (the
"Program" or "EIP") to assist property owners with the cost of installing distributed generation
renewable energy sources or making energy efficient improvements that are permanently fixed
to their property; and
WHEREAS, on August 28, 2008, in connection with the Program and in accordance with
Section 5898.22 of the Act, the City Council approved the Energy Independence Program
Report and Administrative Guidelines (the "Report"); and
WHEREAS, on May 21, 2009, the City Council adopted its Resolution No. 09-34
declaring its intention to amend the Report and directing the Director of the City's Office of
Energy Management to prepare amendments to the Report (i) to require documentation of
consent by a preexisting lender for any Program loan that is $30,000 or more, (ii) to establish
$100,000 as the maximum amount of any Program loan, (iii) to require fifty percent of funds
available for Program loans to be reserved for energy efficiency upgrades and retrofits, and (iv) to
make other changes that the Director or City Manager determines are necessary for
implementation of the Program; and
WHEREAS, the Director of the City's Office of Energy Management filed the proposed
amendments to the Report with the City Clerk; and
WHEREAS, on June 25, 2009, the City Council approved amendments to the Report
following a full and fair public hearing at which interested persons were afforded the opportunity
to object to, inquire about or provide evidence with regard to the proposed amendments to the
Program or any of its particulars, including without limitation amendments (i) to require
documentation of consent by a preexisting lender for any Program loan that is $30,000 or more, (ii)
to establish $100,000 as the maximum amount of any Program loan, and (iii) to require fifty percent
of funds available for Program loans to be reserved for energy efficiency upgrades and retrofits;
and
WHEREAS, in furtherance of the financial strategy of the Program, City staff has consulted
with respondents to the City's "Request for Proposals — Energy Program Financing," dated
February 2009 and also with legal counsel as to amendments to the Program and the Report
necessary to provide for certain credit criteria and legal flexibility in order to secure financing on
workable terms from third parties;
WHEREAS, on December 10, 2009, the City Council adopted its Resolution No. 09-62
declaring its intention to further amend the Report and directing the Finance Director of the City
(the "Finance Director") to prepare amendments to the Report (i) to clarify the City's right of
access to the project, (ii) to clarify the City's right to inspect property owners' books and records,
1
G:\Finance\Niamh Ortega\Energy Independence Program\SR 011410 Amendments validation resolutions\Resolution approving
report amendments 011410.docx
Resolution No. 10-�_
(iii) to require certain annual certification from property owners, (iv) to require that property owners
maintain property insurance covering the EIP improvement and provide evidence of such
insurance prior to entering into the EIP assessment contract (each, a "Loan AgreemenY'), (v) to
require a minimum value-to-lien ratio, (vi) to require a nexus between the repayment term and the
reasonably expected useful life expectancy of the EIP improvements, and (vii) to make other
changes that the Finance Director of the City or the City Manager determines are necessary for
implementation of the financial strategy of the Program; and
WHEREAS, on October 11, 2009, AB 474 ("AB 474"), which amends the Act, was enacted
with an effective date of January 1, 2010; and
WHEREAS, commencing January 1, 2010 and with respect to each EIP loan, Section
5898.24(d) of the Act (as amended by AB 474) requires the City Council to cause to be recorded a
new notice entitled "Payment of Contractual Assessment Required" in the office of the Recorder of
the County of Riverside, concurrently with the creation of the contractual assessment (i.e.,
execution of the respective Loan Agreement) and with recordation of the Notice of Assessment
recorded pursuant to California Streets and Highways Code Section 3114; and
WHEREAS, as authorized in Resolution No. 09-62, among the proposed amendments to
the Report, the Finance Director has caused to be prepared a form of notice entitled "Payment of
Contractual Assessment Required" that meets the requirements of Section 5898.24(d) of the Act
(as amended by AB 474); and
WHEREAS, the Finance Director has filed the proposed amendments to the Report, listed
in Resolution No. 09-62 and including the new notice required by AB 474, with the City Clerk; and
WHEREAS, Resolution No. 09-62 set the time and place for a hearing on the proposed
amendments to the Report; and
WHEREAS, on January 14, 2010, following notice duly given in accordance with law, the
City Council held a full and fair public hearing at which interested persons were afforded the
opportunity to object to, inquire about or provide evidence with regard to the proposed
amendments to the Report; and
WHEREAS, the City Council, having considered all oral and written testimony, desires to
approve the amendments to the Report;
NOW, THEREFORE, BE IT RESOLVED, DETERMINED, AND ORDERED BY THE
CITY COUNCIL OF THE CITY OF PALM DESERT AS FOLLOWS:
Section 1. The above recitals are all true and correct.
Section 2. The City Council declares that the amendments to the Report as filed are
hereby approved.
Section 3. Upon the execution of any Loan Agreement by all parties thereto
pursuant to the Program and concurrently with recordation of the Notice of Assessment recorded
pursuant to California Streets and Highways Code Section 3114, the City Clerk is hereby
authorized to sign, and hereby directed to cause to be recorded in the office of the Recorder of
the County of Riverside, a notice entitled "Payment of Contractual Assessment Required" in
substantially the form on file with the City Clerk and in form and content approved by the Finance
2
G:\Finance\Niamh Ortega\Energy Independence Program\SR 011410 Amendments validation resolutions\Resolution approving
report amendments 011410.docx
Resolution No. 10- 3
Director, as provided by Section 5898.24(d) of the California Streets and Highways Code. In the
event the City Clerk is unavailable to sign any such notice at the time required, the notice may be
signed by a duly appointed deputy clerk.
PASSED, APPROVED AND ADOPTED this 14th day of January 2010, by the
following vote to wit: .
AYES:
NOES:
ABSENT:
ABSTAIN:
Cindy Finerty, Mayor
ATTEST:
Rachelle D. Klassen, City Clerk
City of Palm Desert, California
3
G:\Finance\Niamh Ortega\Energy Independence Program\SR 011410 Amendments validation resolutions\Resolution approving
report amendments 011410.docx
ORDINANCE NO. 1204
AN ORDINANCE OF THE CITY OF PALM DESERT TO AMEND
CHAPTER 3.30 OF TITLE 3 OF THE PALM DESERT MUNICIPAL CODE
THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES ORDAIN AS
FOLLOWS:
Section 1. Paragraph C is added to Chapter 3.30 of Title 3 of the Palm Desert Municipal
Code to read as follows:
"C. Contracts for the installation of improvements financed pursuant to the Energy
Independence Program, which program was established pursuant to Chapter 29 of Part
3 of Division 7 of the California Streets and Highways Code, shall not be subject to
prevailing wage law (Labor Code, Section 1770 et seq.)."
Section 2. Any provisions of the Palm Desert Municipal Code or appendices thereto or
any other ordinances of the City inconsistent herewith, to the extent of such inconsistencies and
no further, are hereby repealed or modified to the extent necessary to effect the provisions of
this ordinance.
Section 3. If any section, subsection, sentence, clause or phrase of this ordinance is for
any reason held to be invalid, illegal or unenforceable, such holding shall not affect the validity
of the remaining portions of this ordinance. The City Council hereby declares that it would have
adopted this ordinance and each and every other section, subsection, sentence, clause and
phrase hereof not declared invalid, illegal or unenforceable without regard to whether any
portion of this ordinance would be subsequently declared invalid, illegal or unenforceable.
Section 4. The City Clerk shall certify to the passage of this Ordinance and cause it to
be published or posted in accordance with law within fifteen (15) days after its final passage and
adoption, and this Ordinance shall be in full force and effect thirty (30) days after its final
passage and adoption.
The foregoing ordinance was duly and regularly introduced at a regular meeting of the
City Council of the City of Palm Desert held in said city on the 14th day of January, 2010,
thereafter adopted on the _th day of , 2010, by the following vote to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Cindy Finerty, Mayor
ATTEST:
Rachelle D. Klassen, City Clerk
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RESOLUTION NO. 10- 4
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM
DESERT PROVIDING FOR THE ISSUANCE AND SALE OF ITS
ENERGY INDEPENDENCE PROGRAM LIMITED OBLIGATION
IMPROVEMENT BONDS (TAXABLE), IN ONE OR MORE SERIES AND
IN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED FIVE
MILLION DOLLARS ($5,000,000), APPROVING AS TO FORM AND
AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE
BOND PURCHASE AGREEMENTS IN CONNECTION THEREWITH,
AND AUTHORIZING CERTAIN OTHER MATTERS RELATING
THERETO
RECITALS:
A. The City Council of the City of Palm Desert, California (the "City")
by its Resolution No. 08-75 ("Resolution 08-75") declared its intention to establish the
City of Palm Desert Energy Independence Program (the "EIP") to finance the acquisition
and construction or installation of distributed generation renewable energy sources and
energy efficiency improvements (the "Improvements") on or in properties in the City
through contractual assessments pursuant to Chapter 29 of Part 3 of Division 7 of the
California Streets and Highways Code, commencing with Section 5898.10, (the "Act")
and ordered the preparation and filing of a report (the "Report") with the City Council
and provided that bonds may be issued under Resolution 08-75 pursuant to the
provisions of the Act or, as Resolution 08-75 has heretofore been amended by
Resolution No. 08-89 (adopted on August 28, 2008) and Resolution No. 09-2 (adopted
on January 22, 2009) (Resolution 08-75, as so amended is referred to herein as the
"Resolution of Intention"), pursuant to the provisions of Title 17 (the "Municipal Code") of
the Palm Desert Municipal Code as it may be amended from time to time.
B. Following notice duly given in accordance with law, the City Council
held a public hearing regarding the EIP as described in the Report.
C. Following the public hearing, pursuant to its Resolution No. 08-89,
the City Council established the EIP and confirmed contractual assessments to be
levied against properties in the City within the parameters of the Report.
D. In accordance with Resolution No. 08-89, the City advanced $2.5
million of its own funds to the "Energy Independence Fund," a special trust fund
established and held by the City for the purpose of extending loans to property owners
to finance Improvements to the owners' properties (each, a "Loan").
E. Pursuant to the EIP, the City entered into certain contractual
assessment agreements with property owners whereby the City extended Loans to
certain property owners to finance Improvements to the owners' properties.
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G. Pursuant to such contractual assessment agreements, the property
owners who are parties to such agreements agreed to repay the Loans through the levy
of assessments by the City against the property owners' properties pursuant to Section
5898.30 of the Act.
E. To additionally fund the EIP, on January 29, 2009 the City issued
on a private placement basis to the Palm Desert Redevelopment Agency (the "Agency")
its not-to-exceed $2,500,000 initial principal amount Energy Independence Program
Limited Obligation Improvement Bond, Series 2009A (Taxable) (the "2009A Bond"), in
the form of a draw-down bond up to the actual aggregate principal amount of
assessments securing such 2009A Bond, and such actual principal amount of such
assessments and such since been determined to be $2,015,000.
F. Also to additionally fund the EIP, on September 22, 2009 the City
issued on a private placement basis to the Agency its $1,136,000 initial principal
amount Energy Independence Program Limited Obligation Improvement Bond, Series
2009B (Taxable) (the "2009B Bond").
F. Pursuant to the EIP, the City has entered into certain additional
contractual assessment agreements, to be identified on Exhibit B of the respective bond
purchase agreement or agreements (each individually, and collectively, as the context
may require, the "Purchase Agreement") authorized and executed pursuant to Section
9.7(d) hereof (each, a "Contractual Assessment Agreement") with certain property
owners whereby the City has extended Loans to such property owners to finance
Improvements to the owners' properties.
G. Pursuant to the Contractual Assessment Agreements, the property
owners who are parties to such agreements have agreed to repay the Loans through
the levy of assessments by the City against the property owners' properties pursuant to
Section 5898.30 of the Act (each, an "Assessment").
H. The City Council desires to issue one or more additional series of
City of Palm Desert, Energy Independence Program, Limited Obligation Improvement
Bonds (Taxable) (as determined in accordance with Sections 2.3 and 9.7(d) of this
Resolution) (the "Bonds") in aggregate initial principal amount not to exceed five million
dollars ($5,000,000) under and pursuant to the Municipal Code to provide additional
funds to the Energy Independence Fund for the purpose of making additional
contractual assessment agreements and Loans to additional property owners pursuant
to the EIP.
H. In order to effectuate the sale of the Bonds, the City Council desires
to approve the form of, and authorize the execution and delivery of, the Purchase
Agreement, the form of which is on file with the City Clerk.
z
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N01N THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM
DESERT, CALIFORNIA HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS
AS FOLLOWS:
SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION;
AUTHORIZATION AND PURPOSE OF BONDS; EQUAL SECURITY.
Section 1.1. Definitions. Unless the context otherwise requires, the
following terms shall, for all purposes of this Resolution and of any Supplemental
Resolution and of the Bonds, and of any certificate, opinion or other document herein
mentioned, have the following meanings:
"Act" means Chapter 29 of Part 3 of Division 7 of the California Streets
and Highways Code, commencing with Section 5898.10.
"Agency" means the Palm Desert Redevelopment Agency.
"Assessment Installments" means, with respect to a Series of Bonds, the
installments of principal, interest and premium, if any, to be paid on the unpaid
Assessments by the owners of real property as provided by the applicable Contractual
Assessment Agreements with respect to such Series of Bonds. The term "Assessment
Installments" does not include (i) the prepayment premium paid after the fifth (5th)
anniversary of the applicable Bond Date by property owners pursuant to Section 1(fl of
the applicable Contractual Assessment Agreements or (ii) the "Annual Administrative
Assessment" paid by property owners pursuant to Section 1(d) of the applicable
Contractual Assessment Agreements.
"Assessment Revenues" means, with respect to a Series of Bonds, the
revenues received by the City in each Fiscal Year from the collection of the applicable
annual Assessment Installments with respect to such Series of Bonds, including any
interest and penalties thereon and the proceeds of the exercise of any of the remedies
for delinquent payments available hereunder or under the Act.
"Assessments" means, with respect to a Series of Bonds, the unpaid
assessments levied by the City pursuant to the Act under the proceedings taken
pursuant to the Resolution of Intention, constituting a first lien and charge upon real
properties in the City as provided by the applicable Contractual Assessment
Agreements with respect to such Series of Bonds.
"Authorized Investments" means any obligation in which the City may
lawfully invest its funds.
"Authorized Representative of the City" means the Mayor, the City
Manager and any other person designated by such officers and authorized to act on
behalf of the City pursuant to this Resolution or any Supplemental Resolution.
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"Bond Date" means, with respect to a Series of Bonds, the dated date of
such Series of Bonds, which shall be the Closing Date with respect to such Series of
Bonds.
"Bonds" means the limited obligation improvement bonds authorized in
one or more series by, and at any time Outstanding pursuant to the provisions of, this
Resolution and as designated pursuant to Section 2.3 hereof.
"Business Day" means any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the State or the Federal Reserve System are
authorized or obligated by law or executive order to be closed.
"City" means the City of Palm Desert, California.
"City Council" means the City Council of the City.
"City Manager" means the City Manager of the City.
"City Treasurer" means the City Treasurer of the City.
"Closing Date" means, with respect to a Series of Bonds, the respective
date of delivery of such Series of Bonds to or upon the order of the Purchaser.
"Contractual Assessment Agreements" means, with respect to a Series of
Bonds, the agreements by and between the City and the property owners identified in
Exhibit B of the applicable Purchase Agreement with respect to such Series of Bonds,
whereby the City has extended Loans to such property owners to finance Improvements
to the owners' properties.
"County" means the County of Riverside, California.
"Debt Service Schedule" means, with respect to a Series of Bonds, the
debt service schedule set forth in Exhibit A of the applicable Purchase Agreement with
respect to such Series of Bonds, authorized and executed pursuant to Section 9.7(d)
hereof.
"Energy Independence Fund" means the fund by that name described in
Recital D herein.
"Federal Securities" means those securities described in Sections 1360
and 1360.1 of the California Financial Code and includes United States Treasury notes,
bonds, bills or certificates of indebtedness, or obligations for which the faith and credit of
the United States are pledged for the payment of principal and interest, including the
guaranteed portions of small business administration loans so long as the loans are
obligations for which the faith and credit of the United States are pledged for the
payment of principal and interest.
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"Fiscal Year" means any twelve-month period extending from July 1 st in
one calendar year to June 30th of the succeeding calendar year, both dates inclusive,
or any other twelve-month period selected and designated by the City as its official
fiscal year period.
"Improvements" means the qualifying distributed generation renewable
energy sources and energy efficiency improvements acquired and constructed or
installed on or in properties in the City pursuant to the Contractual Assessment
Agreements.
"Independent Public Accountant" means any certified public accountant or
firm of certified public accountants appointed and paid by the City or the Agency, who,
or each of whom (i) is in fact independent and not under domination of the City or the
Agency; (ii) does not have any substantial interest, direct or indirect, in the City or the
Agency; and (iii) is not connected with the City or the Agency as an officer or employee
of the City or the Agency but who may be regularly retained to make annual or other
audits of the books of, or reports to, the City or the Agency.
"Interest Payment Date" means March 2 and September 2 in each year,
beginning with respect to a Series of Bonds on the March 2 or September 2 first
occurring at least 3 months after the Closing Date for such Series of Bonds (and as set
forth in the applicable Debt Service Schedule, and continuing thereafter so long as any
Bonds remain Outstanding; provided, however, that, if any such day is not a Business
Day, interest up to the Interest Payment Date will be paid on the Business Day next
succeeding such date.
"Loans" has the meaning provided in Paragraph D of the Recitals herein.
"Maturity Date" means the date specified in any Bond on which the
principal of such Bond becomes due and payable.
"Municipal Code" means Title 17 of the Palm Desert Municipal Code as it
may be amended from time to time, relating to a complete, additional, and alternative
method for issuing bonds to be secured by Contractual Assessments levied pursuant to
the Act.
"Outstanding" when used as of any particular time with reference to Bonds
of a Series, means (subject to the provisions of Section 9.6) all Bonds of such Series
theretofore executed, issued and delivered by the City under this Resolution except
(i) Bonds of such Series theretofore cancelled by the City Treasurer or surrendered to
the City Treasurer for cancellation, (ii) Bonds of such Series paid and discharged
pursuant to the terms of Section 6, and (iii) Bonds of such Series in lieu of or in
substitution for which other Bonds of such Series shall have been executed, issued and
delivered pursuant to this Resolution.
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Resolution No. 10- 4
"Owner" when used with respect to any Bond, means the person in whose
name fhe ownership of such Bond is registered on the Registration Books maintained
by the City.
"Principal Payment Date" means September 2 of each year, commencing
with respect to any Series of Bonds on the first September 2 for which a principal
payment is required (including sinking fund payments pursuant to Section 3.1(b)), as
shown on the respective Debt Service Schedule for such Series of Bonds.
"Purchase Agreement" means a bond purchase agreement with respect to
a Series of Bonds or all bond purchase agreements authorized under this Resolution,
as the context may require, authorized and executed pursuant to Section 9.7(d) hereof.
"Purchaser" means the Agency.
"Record Date" means, with respect to any Interest Payment Date, the
fifteenth day of the calendar month immediately preceding the applicable Interest
Payment Date, whether or not such day is a Business Day.
"Redemption Account" means, with respect to a Series of Bonds, the
applicable account established within the Redemption Fund pursuant to Section 4.2
hereof correlating to such Series of Bonds.
"Redemption Date" means, with respect to any Bonds, the date on which
such Bonds have been called for redemption pursuant to the terms of this Resolution
prior to their Maturity Date.
"Redemption Fund" means the fund by that name created and established
pursuant to Section 4.2 hereof.
"Redemption Notice" has the meaning provided in Section 3.4 hereof.
"Registration Books" means the records maintained by the City Treasurer
pursuant to Section 2.9 hereof for the registration and transfer of ownership of the
Bonds.
"Resolution" means this Resolution and includes subsequent amendments
hereof and any Supplemental Resolution.
"Resolution of Intention" means Resolution No. 08-75, as amended by
Resolution No. 08-89 and Resolution No. 09-2 of the City Council.
"Series" means each series of Bonds issued and designated pursuant to
and in accordance with Section 2.3 and Section 9.7(d) hereof.
"State" means the State of California.
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Resolution No. 10- 4
"Supplemental Resolution" means any resolution adopted by the City
Council amendatory of or supplemental to this Resolution.
"2009A Bonds" means the City's not-to-exceed $2,500,000 initial principal
amount Energy Independence Program Limited Obligation Improvement Bonds, Series
2009A (Taxable), issued on January 29, 2009 in the form of a draw-down bond up to
the actual aggregate principal amount of assessments securing such 2009A Bond,
which actual principal amount of such assessments has since been determined to be
$2,015,000.
"2009B Bonds" means the City's $1,136,000 initial principal amount
Energy Independence Program Limited Obligation Improvement Bonds, Series 2009B
(Taxable), issued on September 22, 2009.
Section 1.2. Rules of Construction. All references in this Resolution to
"Sections," and other subdivisions, unless indicated otherwise, are to the corresponding
Sections or subdivisions of this Resolution; and the words "herein," "hereof,"
"hereunder," and other words of similar import refer to this Resolution as a whole and
not to any particular Section or subdivision hereof.
Section 1.3. Authorization and Purpose of Bonds. The City has reviewed
all proceedings heretofore taken relative to the authorization of the Bonds and has
found, as a result of such review, and hereby finds and determines that all things,
conditions and acts required by law to exist, happen and be performed precedent to and
in the issuance of the Bonds do exist, have happened and have been performed in due
time, form and manner as required by law, and the City is now authorized, pursuant to
each and every requirement of law, to issue the Bonds in the manner and form as in this
Resolution provided. The City Council hereby authorizes the issuance of the Bonds
pursuant to the Municipal Code and this Resolution for the purpose of reimbursing the
City for funds that the City advanced to make Loans to finance the Improvements.
Section 1.4. Equal Security. In consideration of the acceptance of the
Bonds of a Series by the Owners thereof, this Resolution shall be deemed to be and
shall constitute a contract between the City and the Owners of such Series of Bonds;
and the covenants and agreements herein set forth to be performed on behalf of the
City shall be for the equal and proportionate benefit, security and protection of all
Owners of such Series of Bonds without preference, priority or distinction as to security
or otherwise of any of the Bonds of a Series over any of the others within a Series by
reason of the number or date thereof or the time of sale, execution or delivery thereof,
or otherwise for any cause whatsoever, except as expressly provided therein or herein.
SECTION 2. THE BONDS.
Section 2.1. Equality of Bonds; Pledqe.
(a) With respect to each Series of Bonds issued hereunder, the City
hereby pledges, in trust for the protection and security of the Owners, all of its right, title
�
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Resolution No. 10- 4
and interest in the applicable Assessment Revenues with respect to such Series of
Bonds, and in the applicable Redemption Account within the Redemption Fund with
respect to such Series of Bonds and all other subaccounts therein that are created
hereunder for the payment of principal of (including sinking fund payments pursuant to
Section 3.1(b)), premium (if any), and interest on such Series of Bonds. Pursuant to the
Municipal Code and this Resolution, the Bonds of each Series shall be and are equally
secured by a pledge of and lien upon the applicable Assessment Revenues with respect
to such Series of Bonds, and the amounts on deposit in the applicable Redemption
Account within the Redemption Fund with respect to such Series of Bonds and all other
subaccounts therein.
(b) The Bonds and interest thereon are not payable from the general
funds of the City. Neither the credit nor the taxing power of the City is pledged for the
payment of the Bonds or the interest thereon, and no Owner of the Bonds may compel
the exercise of any taxing power by the City or force the forfeiture of any of its property.
The principal of (including sinking fund payments pursuant to Section 3.1(b)), and
premium (if any) and interest on the Bonds are not a debt of the City nor a legal or
equitable pledge, charge, lien or encumbrance upon any of its property, or upon any of
its income, receipts or revenues, other than the applicable Assessment Revenues with
respect to such Series of Bonds and the funds described in Section 2.1(a) above.
Section 2.2. Collection of Assessments. The Assessment Installments
shall be payable as provided in the Contractual Assessment Agreements and shall be
payable in the same manner and at the same time and in the same installments as
general taxes on real property are payable, and become delinquent at the same times
and in the same proportionate amounts and bear the same proportionate penalties and
interest after delinquency as do general taxes on real property. Nothing in this
Resolution or in any Supplemental Resolution shall preclude the redemption prior to
maturity of any Bonds or the payment of the Bonds from proceeds of refunding bonds
issued under any law of the State.
Section 2.3. Issuance of Bonds to Represent Unpaid Assessments;
Authorization to Complete Debt Service Schedule. The issuance of the Bonds, in an
aggregate principal amount not to exceed $5,000,000, is hereby authorized as provided
in this Resolution in accordance with the provisions of the Resolution of Intention and
the Municipal Code and the proceedings conducted thereunder.
(a) The Bonds may be issued in one or more Series, with the exact
principal amount of each Series of Bonds to be determined by official signing the
Purchase Agreement in accordance with Section 9.7(d) below.
(b) The Bonds shall be designated as "City of Palm Desert, Energy
Independence Program, Limited Obligation Improvement Bonds, Series 2010
(Taxable);" �rovided, that with respect to each Series of Bonds, the series designation
(e.g. "Series 2010_") shall be completed with a letter designated alphabetically by date
of issuance. (E.g., the first Series of Bonds issued under this resolution shall bear the
s
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Resolution No. 10- 4
series designation "Series 2010A," the second Series shall bear the series designation
"Series 2010B," etc.).
(c) The Bonds shall be issued only in fully registered form without
coupons in the denomination of $5,000 or any integral multiple thereof, or in such other
denomination or denominations as determined by the City Treasurer. The Bonds of
each Series shall initially be issued in the form of a single bond subject to mandatory
sinking fund payments in accordance with Section 3.1(b) hereof, shall be dated the
applicable Closing Date, shall mature on the date specified on the Bond, and shall be
payable on September 2 in the years and in the principal amounts specified in the
applicable Debt Service Schedule. Each Series of Bonds shall bear interest at a rate of
3.00% per annum.
Section 2.4. Medium and Payment. Principal of, and premium (if any)
and interest on the Bonds shall be payable in lawful money of the United States of
America. The principal of (including sinking fund payments pursuant to Section 3.1(b))
each Series of Bonds shall be payable on each Principal Payment Date in accordance
with the applicable Debt Service Schedule. Interest on each Series of Bonds shall be
payable on each Interest Payment Date in accordance with the applicable Debt Service
Schedule. Interest on the Bonds shall be payable from the Interest Payment Date next
preceding the date of authentication of the Bonds, un�ess (i) such date of authentication
is an Interest Payment Date, in which event interest shall be payable from such date of
authentication, (ii) the date of authentication is after a Record Date but prior to the
immediately succeeding Interest Payment Date, in which event interest shall be payable
from such Interest Payment Date, or (iii) the date of authentication is prior to the close of
business on the first Record Date, in which event interest shall be payable from the
Bond Date; provided, however, that if at the time of authentication of such Bond, inte�est
is in default, interest on that Bond shall be payable from the last Interest Payment Date
to which the interest has been paid or made available for payment.
Principal of (including sinking fund payments pursuant to Section 3.1(b))
and interest on any Bond shall be paid by check of the City mailed by the City Treasurer
on or before the Interest Payment Date by first class mail, postage prepaid, to the
person whose name appears in the Registration Books as the Owner of such Bond as
of the close of business on the Record Date, to the address that appears on the
Registration Books (or in such other manner as determined by the Purchaser if the
Purchaser is the sole Owner of the Bonds), provided that the payment of principal of
any Bond on its respective Maturity Date and the payment of the principal of the Bonds
and any premium due upon the redemption thereof shall be payable upon presentation
and surrender thereof at maturity or earlier redemption at the office of the City
Treasurer. In addition, upon a request in writing received by the City Treasurer on or
before the applicable Record Date from an Owner of $1,000,000 or more in principal
amount of the Bonds, payment shall be made on the Interest Payment Date by wire
transfer in immediately available funds to an account designated by such Owner.
Each Bond shall bear interest until its principal sum has been paid;
provided, however, that if at the Maturity Date of any Bond, or if at the redemption date
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of any Bond which has been duly called for redemption as herein provided, funds are
available for the payment or redemption thereof in full accordance with the terms of this
Resolution, the Bond shall then cease to bear interest.
Section 2.5. Form of Bonds and Certificate of Authentication and
Reqistration. The Bonds shall be sold to the Purchaser and shall be initially issued in
the form of a fully registered bond or bonds registered in the name of the Purchaser.
The form of the Bond, the form of the certificate of authentication and the form of
registration thereon shall be substantially in the form attached hereto as Exhibit A and
incorporated herein by this reference. The Bonds may be printed, lithographed or
typewritten and may contain such reference to any of the provisions of this Resolution
as may be appropriate.
Section 2.6. Execution and Authentication. The Bonds shall be executed
by the manual or facsimile signature of the City Manager and attested by the manual or
facsimile signature of the City Clerk and the seal of the City (or a facsimile thereofl shall
be impressed, imprinted, engraved or otherwise reproduced thereon. In case any one
or more of the officers who shall have signed or sealed any of the Bonds shall cease to
be such officer before the Bonds so signed and sealed have been authenticated and
delivered by the City Treasurer (including new Bonds delivered pursuant to the
provisions hereof with reference to the transfer and exchange of Bonds or to lost,
stolen, destroyed or mutilated Bonds), such Bonds may, nevertheless, be authenticated
and delivered as herein provided, and may be issued as if the persons who signed or
sealed such Bonds had not ceased to hold such offices.
The Bonds shall bear thereon a certificate of authentication and
registration, in the form set forth in Exhibit A hereto, executed by the manual signature
of the City Treasurer. Only such Bonds as shall bear thereon such certificate of
authentication and registration shall be entitled to any right or benefit under this
Resolution, and no Bond shall be valid or obligatory for any purpose until such
certificate of authentication and registration shall have been duly executed by the City
Treasurer.
Section 2.7. Registration of Exchanqe or Transfer. The registration of any
Bond may, in accordance with its terms, be transferred upon the Registration Books by
the person in whose name it is registered, in person or by his or her duly authorized
attorney, upon surrender of such Bond for cancellation at the office of the City
Treasurer, accompanied by delivery of a written instrument of transfer in a form
acceptable to the City Treasurer and duly executed by the Owner or his or her duly
authorized attorney. Bonds may be exchanged at the office of the City Treasurer for a
like aggregate principal amount of Bonds of other authorized denominations. The City
will not charge for any new Bond issued upon any exchange, but may require the
Owner requesting such transfer or exchange to pay any tax or other governmental
charge required to be paid with respect to such transfer or exchange. Whenever any
Bond or Bonds shall be surrendered for registration of transfer or exchange, the City
Treasurer shall authenticate and deliver a new Bond or Bonds; provided that the City
Treasurer shall not be required to register transfers or make exchanges of (i) Bonds for
lo
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a period of 15 days next preceding the date of any selection of Bonds to be redeemed,
or (ii) any Bonds chosen for redemption.
Section 2.8. Mutilated, Lost, Destroved or Stolen Bonds. If any Bond
shall become mutilated, the City Manager, at the expense of the Owner of such Bond,
shall execute, and the City Treasurer shall thereupon authenticate and deliver, a new
Bond of like series, tenor, maturity and aggregate principal amount in authorized
denomination in exchange and substitution for the Bond so mutilated, but only upon
surrender to the City Treasurer of the Bond so mutilated. Every mutilated Bond so
surrendered to the City Treasurer shall be cancelled and destroyed. If any Bond issued
hereunder shall be lost, destroyed or stolen, evidence of such loss, destruction or theft
may be submitted to the City Treasurer and, if such evidence be satisfactory to the City
Treasurer and indemnity satisfactory to the City Treasurer shall be given, the City
Manager, at the expense of the Owner, shall execute, and the City Treasurer shall
thereupon authenticate and deliver, a new Bond of like series and tenor in lieu of and in
substitution for the Bond so lost, destroyed or stolen (or if any such Bond shall have
matured or shall have been called for redemption, instead of issuing a substitute Bond,
the City Treasurer may pay the same without surrender thereof upon receipt of
indemnity satisfactory to the City Treasurer). The City Treasurer may require payment
of a reasonable fee for each new Bond issued under this Section 2.8 and of the
expenses which may be incurred by the City and the City Treasurer. Any Bond issued
under the provisions of this Section 2.8 in lieu of any Bond alleged to be lost, destroyed
or stolen shall constitute an original contractual obligation on the part of the City
whether or not the Bond alleged to be lost, destroyed or stolen be at any time
enforceable by anyone, and shall be equally and proportionately entitled to the benefits
of this Resolution with all other Bonds secured by this Resolution.
Section 2.9. Re�gistration Books. The City Treasurer will keep or cause to
be kept, at the office of the City, sufficient books for the registration and transfer of the
Bonds, and, upon presentation for such purpose, the City Treasurer shall, under such
reasonable regulations as he or she may prescribe, register or transfer or cause to be
registered or transferred, on the Registration Books, Bonds as herein provided.
The City may treat the Owner of any Bond whose name appears on the
Registration Books as the absolute Owner of such Bond for any and all purposes, and
the City shall not be affected by any notice to the contrary. The City may rely on the
address of the Owner as it appears in the Registration Books for any and all purposes.
It shall be the duty of each Owner to give written notice to the City of any change in
such Owner's address so that the Registration Books may be revised accordingly.
Section 2.10. Validity of the Bonds. The validity of the authorization and
issuance of the Bonds shall not be dependent upon the completion of the Improvements
or upon the performance by any person of such person's obligation with respect to the
Improvements.
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Section 2.11. Refundinq of Bonds. The Bonds may be refunded by the
City as permitted by and in accordance with applicable law including, but not limited to,
the Municipal Code.
Section 2.12. No Acceleration. The principal of the Bonds shall not be
subject to acceleration hereunder. Nothing in this Section shall in any way prohibit the
redemption of Bonds under Section 3 hereof, or the defeasance of the Bonds and
discharge of all obligations of the City under this Resolution under Section 6 hereof.
SECTION 3. REDEMPTION OF BONDS.
Section 3.1. Mandatory Redemption.
(a) Mandatory Redemption from Prepavments of Assessments. The
Bonds of each Series shall be redeemed prior to maturity, in whole or in part on any
date by lot within a Series from monies on deposit and available for such purpose in the
Assessment Prepayment Subaccount of the Redemption Account within the
Redemption Fund relating to such Series of Bonds after making the disbursements
required in Section 4.5(a) through (d) with respect to such Series of Bonds, from the
sources, to the extent of and in the manner set forth in the fourth paragraph of Section
4.3 hereof, at a redemption price, expressed as a percentage of the principal amount of
the Bonds to be redeemed, of 103 percent for the first five years of the term of the
applicable Series of Bonds together with accrued interest to the date of redemption;
provided, so long as the Purchaser is the sole Owner of the applicable Series of Bonds,
the Purchaser may waive (pursuant to Section 9.8 hereofl the right to receive any
redemption premium pursuant to this Section 3.1, upon which waiver the redemption
price shall be equal to 100 percent of the principal amount of the Bonds to be
redeemed. After the first five years of the term of the applicable Series of Bonds, the
redemption price shall be equal to 100 percent of the principal amount of the Bonds to
be redeemed.
(b) Mandatory Redemption From Sinking Fund Payments. The Bonds
of each Series shall be called before maturity and redeemed, from the sinking fund
payments that have been deposited into the Redemption Account within the
Redemption Fund relating to such Series of Bonds, on September 2 of each year as
shown on and in accordance with the schedule of sinking fund payments set forth in the
applicable Purchase Agreement for such Series of Bonds authorized and executed
pursuant to Section 9.7(d) hereof. The Bonds so called for redemption shall be selected
by the City Treasurer by lot within a Series and shall be redeemed at a redemption price
for each redeemed Bond equal to the principal amount thereof, plus accrued interest to
the redemption date, without premium.
Section 3.2. Optional Redemption. The Bonds of each Series may be
redeemed prior to maturity, in whole or in part on any Interest Payment Date by lot
within a Series from monies on deposit and available for such purpose in the
Redemption Account within the Redemption Fund relating to such Series of Bonds from
sources other than those referred to in Section 3.1, at the option of the City, at a
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redemption price, expressed as a percentage of the principal amount of the Bonds to be
redeemed, of 103 percent for the first five years of the term of the applicable Series of
Bonds together with accrued interest to the date of redemption; provided, so long as the
Purchaser is the sole Owner of the Bonds, the Purchaser may waive (pursuant to
Section 9.8 hereofl the right to receive any redemption premium pursuant to this
Section 3.2, upon which waiver the redemption price shall be equal to 100 percent of
the principal amount of the Bonds to be redeemed. After the first five years of the term
of the applicable Series of Bonds, the redemption price shall be equal to 100 percent of
the principal amount of the Bonds to be redeemed.
Section 3.3. Selection of Bonds for Redemption. If less than all of the
Outstanding Bonds of any Series are to be redeemed pursuant to Section 3.1 or Section
3.2, the City Treasurer shall select the Bonds of such Series to be redeemed by lot in
any manner that the City Treasurer deems fair.
Section 3.4. Notice of Redemption. In the event that Bonds are to be
redeemed as provided in this Section 3, at least 30 days, or other such shorter period
upon the consent of the Owners of any Bonds designated for redemption, but not more
than 60 days prior to any Redemption Date, a notice of redemption (the "Redemption
Notice") shall be sent by personal service, or registered or certified mail by the City
Treasurer to the Owners of any Bonds designated for redemption and, if the Purchaser
is not the sole Owner of the Bonds to be redeemed, to such securities depositories and
securities information services as shall be designated by the City Treasurer. Such
Redemption Notice shall specify: (i) the Bonds or designated portions thereof which are
to be redeemed, (ii) the date of redemption, (iii) the redemption price, (iv) the CUSIP
numbers (if any) assigned to the Bonds to be redeemed, and (v) if less than all Bonds
are to be redeemed, the Bond numbers of the Bonds to be redeemed, and shall require
that such Bonds be surrendered at the office of the City Treasurer for redemption at the
redemption price. Such Redemption Notice shall further state that on the specified date
there shall become due and payable upon each Bond or portion thereof being
redeemed the redemption price, together with interest accrued to the redemption date,
and that from and after such redemption date interest thereon shall cease to accrue and
be payable.
Neither failure to receive any Redemption Notice nor any defect in such
Redemption Notice so given shall affect the sufficiency of the proceedings for the
redemption of such Bonds. Each check or other transfer of funds issued by the City
Treasurer for the purpose of redeeming Bonds shall bear to the extent specified the
CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the
proceeds of such check or other transfer.
Section 3.5. Partial Redemption of Bonds. Upon surrender of any Bond
to be redeemed in part only, the City Treasurer shall authenticate and deliver to the
Owner a new Bond or Bonds of authorized denominations equal in aggregate principal
amount to the unredeemed portion of the Bond surrendered, with the same interest rate
and the same maturity. Such partial redemption shall be valid upon payment of the
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amount required to be paid to such Owner, and the City shall be released and
discharged thereupon from all liability to the extent of such payment.
Section 3.6. Effect of Notice and Availability of Redemption Price. Notice
of redemption having been duly given, as provided in Section 3.4, and the amount
necessary for the redemption having been made available for that purpose and being
available therefor on the date fixed for such redemption:
(1) The Bonds, or portions thereof, designated for redemption
shall, on the date fixed for redemption, become due and payable at the redemption
price thereof as provided in this Resolution, anything in this Resolution or in the Bonds
to the contrary notwithstanding;
(2) Upon presentation and surrender thereof at the office of the
City, such Bonds shall be redeemed at the redemption price;
(3) From and after the redemption date, the Bonds or portions
thereof so designated for redemption shall be deemed to be no longer Outstanding and
such Bonds or portions thereof shall cease to accrue interest; and
(4) From and after the date fixed for redemption no Owner of
any of the Bonds or portions thereof so designated for redemption shall be entitled to
any of the benefits of this Resolution, or to any other rights, except with respect to
payment of the redemption price and interest accrued to the redemption date from the
amounts so made available.
SECTION 4. FUNDS AND ACCOUNTS.
Section 4.1. Disposition of Bond Proceeds. There previously has been
established a special trust fund held by the City called the "Energy Independence Fund"
to which the City advanced its funds to make Loans to property owners to finance the
Improvements pursuant to the Contractual Assessment Agreements. The amount
received by the City from the sale of each Series of Bonds issued hereunder shall be
deposited in the Energy Independence Fund to making additional contractual
assessment agreements and Loans to additional property owners pursuant to the EIP.
Section 4.2. Establishment of Bonds Redemption Fund, Series
Redemption Accounts, and Subaccounts. For administering and controlling the
Assessment Revenues and any related monies, there is hereby created and established
the Bonds Redemption Fund (the "Redemption Fund"), within which there shall be an
account designated with respect to each Series of Bonds issued under this Resolution
(each, a "Redemption Account"), and within each such Redemption Account, there shall
be an Assessment Installment Subaccount and an Assessment Prepayment
Subaccount, such special fund, accounts, and subaccounts to be maintained by the City
Treasurer.
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Section 4.3. Redemption Fund. The City hereby agrees to establish and
maintain the Redemption Fund and each Redemption Account established therein with
respect to each Series of Bonds until all payments of principal of (including sinking fund
payments pursuant to Section 3.1(b)) and premium (if any) and interest on the Bonds of
the applicable Series have been made and all of the Bonds of the applicable Series
have been paid or redeemed. All sums received by the City from the collection of
Assessment Revenues relating to a Series of Bonds shall be deposited and held in the
Assessment Installment Subaccount of the applicable Redemption Account of the
Redemption Fund except for prepayment of the Assessments herein.
On each Interest Payment Date and each Principal Payment Date, the
City Treasurer shall make payments of interest and principal (including sinking fund
payments pursuant to Section 3.1(b)), respectively, due and payable with respect to
each Series of Bonds from monies in the Assessment Installment Subaccount of the
applicable Redemption Account of the Redemption Fund. If, on any Interest Payment
Date or Principal Payment Date, there will be insufficient funds in the applicable
Assessment Installment Subaccount to make the payments provided for in the
preceding sentence, available monies shall be applied first to the payment of interest on
such Series of Bonds, and then to the payment of principal due on such Series of Bonds
(including sinking fund payments pursuant to Section 3.1(b)) and then to the payment of
principal due on the Bonds of such Series called for redemption pursuant to Section 3
(other than Section 3.1(b)) hereof.
On each September 2, all monies in the applicable Assessment
Installment Subaccount in excess of the amount necessary to make the payments of
principal of (including sinking fund payments pursuant to Section 3.1(b)) and interest on
the related Series of Bonds then due or overdue and payable on such date (assuming
all Owners entitled to payment on or before such date take or have taken any and all
actions necessary on their part to receive amounts due them) shall, to the extent
permitted by law, be applied as follows:
(a) The moneys shall be retained in such Assessment
Installment Subaccount; or
(b) The moneys shall be transferred to the Assessment
Prepayment Subacccount of the Redemption Account relating to such Series of Bonds
within the Redemption Fund for application to the advance maturity and redemption of
Bonds pursuant to Section 3.
Amounts received from, or on behalf of, property owners as prepayments
of the Assessments relating to a Series of Bonds pursuant to the Section 4.4 shall be
deposited by the City Treasurer in the applicable Assessment Prepayment Subaccount
for application pursuant to Section 4.5. Amounts in an Assessment Prepayment
Subaccount relating to a Series of Bonds shall be used to pay the principal of and
redemption premium (if any) on Bonds of such Series the maturities of which shall have
been advanced pursuant to Chapter 8 of the Municipal Code. The City Treasurer shall
advance the maturity of and call Bonds of a Series for redemption pursuant to this
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Resolution and the Municipal Code whenever and to the extent monies are on deposit
in the applicable Assessment Prepayment Subaccount, after making the disbursements
required in Section 4.5(a) through (d) with respect to such Series of Bonds, sufficient to
pay the principal thereof plus the redemption premium (if any). On or after each
Redemption Date, or prior thereto, upon presentation and surrender thereof, the City
Treasurer shall pay the principal of and redemption premium (if any) on each Bond the
maturity of which has been so advanced from monies in the related Assessment
Prepayment Subaccount. Interest accrued on each such Bond to the earlier of the
Principal Payment Date or Redemption Date shall be paid from monies in the
Assessment Installment Subaccount relating to the applicable Series of Bonds.
Any amounts remaining in a Redemption Account of the Redemption Fund
or the subaccounts thereof after payment of all of the Bonds of the corresponding
Series and the interest thereon shall be applied in accordance with Section 4.7.
Section 4.4. Prepayment of Assessments. The owner of assessed land
may prepay the Assessment and remove the lien of the Assessment in accordance with
the Contractual Assessment Agreement.
Section 4.5. Application of Prepaid Assessments. Upon receiving a
prepayment of an Assessment relating to a Series of Bonds, the City Treasurer shall
deposit it in the Assessment Prepayment Subaccount of the applicable Redemption
Account relating to such Series within the Redemption Fund. All prepayments of
Assessments relating to a single Series of Bonds may be commingled in a single
subaccount. From the applicable Redemption Account the City Treasurer shall make
disbursements in the following priority as follows:
(a) The administrative fee, if any, shall be deposited in the
general fund of the City.
(b) Delinquent principal, interest, and penalties shall be
transferred to the Assessment Installment Subaccount corresponding to the applicable
Series of Bonds.
(c) The installment of principal due in the Fiscal Year of
prepayment shall be transferred to the Assessment Installment Subaccount
corresponding to the applicable Series of Bonds.
(d) Interest accrued to the Redemption Date shall be transferred
to the Assessment Installment Subaccount corresponding to the applicable Series of
Bonds.
(e) The balance in such Assessment Prepayment Subaccount
shall be used to advance the maturity of Bonds of the applicable Series to the next call
date as provided in Chapter 8 of the Municipal Code and Section 3.1(a) of this
Resolution. The amount of Bonds of a Series to be retired shall be the maximum for
which principal and redemption premium (if any) may be paid in full from the applicable
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Assessment Prepayment Subaccount. Accrued interest on Bonds of a Series to be
retired shall be paid from the applicable Assessment Installment Subaccount.
Section 4.6. Certain Procedures Upon Redemption. If notice of
redemption is given, the Bonds so advanced shall mature and become payable on the
date fixed for redemption in the notice. The Owner of any such Bond may, prior to the
date of redemption, with the consent of the City Treasurer, surrender it and receive the
principal and interest thereon to the date of payment together with the redemption
premium provided for the Bond, if any. If the Bond has not been sooner surrendered on
the date fixed for redemption, the City Treasurer shall set aside to the credit of the
Owner of the Bond the amount of principal and accrued interest then due on the Bond
together with the redemption premium, if any, and the Bond shall then be deemed to
have matured and interest shall cease to accrue on the Bond. The amount so set aside
shall upon demand and upon the surrender and cancellation of the Bond be paid to the
Owner of the Bond.
Section 4.7. Redemption Account Surplus. If there is a surplus remaining
in a Redemption Account of the Redemption Fund relating to a Series of Bonds or any
of the subaccounts therein after payment of all Bonds of such Series and the interest
thereon, that surplus shall be released from the pledge and lien hereunder and
transferred to the City to be used for any lawful purposes.
Section 4.8. Investments. (a) All moneys in any of the funds, accounts, or
subaccounts established pursuant to this Resolution shall be invested by the City
Treasurer solely in Authorized Investments. Obligations purchased as an investment of
moneys in any fund, account, or subaccount shall be deemed to be part of such fund,
account, or subaccount.
All interest or gain derived from the investment of amounts in any of the
funds, accounts, or subaccounts shall be deposited in the fund, account, or subaccount
from which such investment was made. The City Treasurer shall incur no liability for
losses arising from any investments made pursuant to this Section.
(b) For the purpose of determining the amount in any fund, account or
subaccount established hereunder, the value of investments credited to such fund,
account, or subaccount shall be calculated at the cost thereof, excluding accrued
interest and brokerage commissions, if any.
(c) Moneys in a Redemption Account of the Redemption Fund relating
to a Series of Bonds shall be invested only in obligations which will by their terms
mature on such dates as to ensure the timely payment of principal (including sinking
fund payments pursuant to Section 3.1(b)) and interest on the Bonds of such Series as
the same become due.
The City Treasurer shall sell at the best price obtainable or present for
redemption any obligations so purchased whenever it may be necessary to do so in
order to provide moneys to meet any payment or transfer for such funds, accounts and
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subaccounts or from such funds, accounts, and subaccounts. For the purpose of
determining at any given time the balance in any fund, account, or subaccount, any
such investments constituting a part of such fund, account, and subaccount shall be
valued at their amortized cost.
SECTION 5. COVENANTS.
So long as any of the Bonds of a Series issued hereunder are
outstanding, the City makes the following covenants with the Owners under the
provisions of the Act and the Municipal Code, as applicable (to be perFormed by the City
or its proper officers, agents or employees), which covenants are necessary, convenient
and desirable to secure the Bonds; provided, however, that said covenants do not
require the City to expend any funds other than the Assessment Revenues relating to
such Series of Bonds.
Section 5.1 Punctual Payment. The City will punctually pay or cause to
be paid the principal of (including sinking fund payments pursuant to Section 3.1(b)),
and interest and any premium on, the Bonds when and as due in strict conformity with
the terms of this Resolution and any Supplemental Resolution, and it will faithfully
observe and perform all of the conditions, covenants and requirements of this
Resolution and all Supplemental Resolutions and of the Bonds.
Section 5.2. Limited Obliqation; No Required Advances From Available
Surplus Funds. The Bonds of each Series issued under this Resolution are limited
obligation improvement bonds and are payable solely from and secured solely by
applicable Assessment Revenues with respect to each such Series of Bonds and the
amounts in applicable Redemption Account within the Redemption Fund with respect to
each such Series of Bonds and any other funds, accounts, and subaccounts created
hereunder with respect to each such Series of Bonds. Notwithstanding any other
provision of this Resolution, the City is not obligated to, but may in its sole and absolute
discretion, advance available surplus funds from the City treasury to cure any deficiency
in the Redemption Fund, any Redemption Account, or any subaccount therein.
Section 5.3. General. The City shall do and perform or cause to be done
and performed all acts and things required to be done or performed by or on behalf of
the City under the provisions of this Resolution. The City warrants that upon the
respective date of execution and delivery of each Series of Bonds, the conditions, acts
and things required by law and this Resolution to exist, to have happened and to have
been performed precedent to and in the execution and delivery of such Series of Bonds
do exist, have happened and have been performed and the execution and delivery of
the Bonds of such Series shall comply in all respects with the applicable laws of the
State.
Section 5.4. Protection of Security and Rights of Owners. The City will
preserve and protect the security of the Bonds and the rights of the Owners thereto, and
will warrant and defend their rights to such security against all claims and demands of
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all persons. From and after the delivery of each Series of Bonds issued under this
Resolution by the City, the Bonds of such Series shall be incontestable by the City.
Section 5.5. Aqainst Encumbrances. The City will not encumber, pledge
or place any charge or lien upon any of the Assessment Revenues relating to a Series
of Bonds or other amounts pledged to each such Series of Bonds issued under this
Resolution superior to or on a parity with the pledge and lien herein created for the
benefit of such Series of Bonds, except as permitted by this Resolution.
Section 5.6. Collection of Assessments. The City shall comply with all
requirements of the Act so as to assure the timely collection of the unpaid Assessments.
Section 5.7. Accounting Records and Statements. The City will keep or
cause to be kept proper accounting records in which complete and correct entries shall
be made of all transactions relating to the receipt, deposit and disbursement of the
Assessment Revenues, and such accounting records shall be available for inspection
upon five business days' written notice by any Owner or such Owner's agent duly
authorized in writing at reasonable hours and under reasonable conditions.
Section 5.8. Further Assurances. The City will adopt, make, execute and
deliver any and all such further resolutions, instruments and assurances as may be
reasonably necessary or proper to carry out the intention or to facilitate the performance
of its duties under this Resolution, and for the better assuring and confirming unto the
Owners of the Bonds the rights and benefits provided in this Resolution.
SECTION 6. DEFEASANCE.
Section 6.1. Defeasance. If all Outstanding Bonds of a Series shall be
paid and discharged in any one or more of the following ways:
(a) by paying or causing to be paid the principal of and interest with
respect to all Bonds of such Series Outstanding, as and when the same become due
and payable;
(b) by depositing with the City Treasurer, at or before maturity, an
amount which, together with the amounts then on deposit in the Redemption Fund, is
fully sufficient to pay the principal of and redemption premium (if any) and interest on all
Bonds of such Series Outstanding as and when the same shall become due and
payable or, in the event of redemption thereof, before their respective Maturity Dates; or
(c) by depositing with the City Treasurer Federal Securities in such
amount as the City shall determine, as verified by a nationally recognized Independent
Public Accountant (unless the Purchaser is the sole owner of the applicable Series of
Bonds, in which case no such verification is required), will, together with the interest to
accrue thereon and moneys then on deposit in the Redemption Fund together with the
interest to accrue thereon, be fully sufficient to pay and discharge the principal of, and
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premium (if any) and interest on all Bonds of such Series Outstanding as and when the
same shall become due and payable;
then, at the election of the City, and notwithstanding that any Bonds of
such Series shall not have been surrendered for payment, all obligations of the City
under this Resolution with respect to all Outstanding Bonds of such Series shall cease
and terminate, except for (i) the obligation of the City Treasurer to pay or cause to be
paid to the Owners of the applicable Series of Bonds not so surrendered and paid, all
sums due thereon, and (ii) the City's obligations under Section 5.4. Any funds held by
the City Treasurer, at the time of receipt of such notice from the City, which are not
required for the purpose above mentioned, shall be transferred to the City to be used for
any lawful purposes.
SECTION 7. SUPPLEMENTAL RESOLUTIONS.
Section 7.1. Supplemental Resolutions Without Owner Consent. The
City, may from time to time, and at any time, without notice to or consent of any of the
Owners, adopt resolutions supplemental hereto as shall not be inconsistent with the
terms and provisions hereof for any of the following purposes:
(a) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make any other
provision with respect to matters or questions arising under this Resolution or in any
supplemental resolution, provided that such action shall not adversely affect the
interests of the Owners;
(b) to add to the covenants and agreements of and the limitations and
the restrictions upon the City contained in this Resolution other covenants, agreements,
limitations and restrictions to be observed by the City which are not contrary to or
inconsistent with this Resolution as theretofore in effect; and
(c) to modify, alter, amend or supplement this Resolution in any other
respect which is not materially adverse to the interests of the Owners.
Section 7.2. Supplemental Resolutions with Owner Consent. Except as
provided in Section 7.1, the Owners of a majority in aggregate principal amount of a
Series of Bonds then Outstanding shall have the right to consent to and approve the
execution of such supplemental resolutions as shall be deemed necessary or desirable
for the purpose of waiving, modifying, altering, amending, adding to or rescinding, in any
particular, any of the terms or provisions contained in this Resolution or in any
supplemental resolution or agreement; provided, however, that nothing herein shall
permit, or be construed as permitting: (a) an extension of the Maturity Date of the
principal of, or the payment date of interest on, any Bond, (b) a reduction in the principal
amount of, or redemption price of, any Bond or the rate of interest thereon, (c) a
preference or priority of any Bond or Bonds of a Series over any other Bond or Bonds of
such Series, or (d) a reduction in the percentage of Bonds of a Series the Owners of
which are required to consent to such supplemental resolution, without the consent of
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the Owners of all Bonds of such Series then Outstanding. In no event, however, may a
modification or amendment provide for the issuance of additional bonds, notes or other
evidences of indebtedness payable out of the Assessment Revenues.
Section 7.3. Notice of Supplemental Resolution to Owners. If at any time
the parties hereto shall desire to enter into a resolution supplemental hereto, which
pursuant to the terms of Section 7.2 shall require the consent of the Owners, the City
shall cause notice of the proposed resolution to be mailed, postage prepaid, to all
Owners at their addresses as they appear in the Registration Books. Such notice shall
briefly set forth the nature of the proposed resolution and shall state that a copy thereof
is on file at the office of the City for inspection by all Owners. The failure of any Owner
to receive such notice shall not affect the validity of such resolution when consented to
and approved as in Section 7.2 provided. Whenever at any time within one year after
the date of the first mailing of such notice, the City shall receive an instrument or
instruments purporting to be executed by the Owners of not less than a majority in
aggregate principal amount of the Bonds then Outstanding, which instrument or
instruments shall refer to the proposed resolution described in such notice, and shall
specifically consent to and approve it substantially in the form of the copy thereof
referred to in such notice as on file with the City, such proposed resolution, when duly
adopted by the City, shall thereafter become a part of the proceedings for the issuance
of the Bonds. In determining whether the Owners of the requisite aggregate principal
amount of the Bonds have consented to the adoption of any supplemental resolution,
Bonds which are owned by the City or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the City, shall be
disregarded and shall be treated as though they were not Outstanding for the purpose
of any such determination.
Upon the adoption of any resolution supplemental hereto and the receipt
of consent to any such resolution from the Owners of the appropriate aggregate
principal amount of Bonds in instances where such consent is required, this Resolution
shall be, and shall be deemed to be, modified and amended in accordance therewith,
and the respective rights, duties and obligations under this Resolution of the City and all
Owners of Bonds then Outstanding shall thereafter be determined, exercised and
enforced hereunder, subject in all respects to such modifications and amendments.
SECTION 8. DEFAULT.
Section 8.1. Events of Default. If any of the following events occur, it is
hereby declared to constitute an "Event of DefaulY' with respect to a Series of Bonds:
(a) Default in the due and punctual payment of interest on any Bond of
such Series, whether at the stated Interest Payment Date thereof, or upon proceedings
for redemption thereof;
(b) Default in the due and punctual payment of the principal of or
premium, if any, on any Bond of such Series, whether at the stated Principal Payment
Date thereof, or upon proceedings for redemption thereof; or
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(c) Failure by the City to observe and perform any material covenant,
condition or agreement required by this Resolution to be performed by it (other than a
default described in clause (a) or (b) above) as it pertains to such Series of Bonds for a
period of 60 days following written notice to the City from any Owner of such failure;
provided, however, if the City is in good faith attempting to remedy said failure and is
unable to do so within the 60 day time period, an additional 60 days shall be allowed.
Section 8.2. Remedies Not Exclusive: Non-waiver. No remedy conferred
hereby upon any Owner is intended to be exclusive of any other remedy, but each such
remedy is cumulative and in addition to every other remedy and may be exercised
without exhausting and without regard to any other remedy conferred by the Municipal
Code, the Act, or any other law of the State. No waiver of any default or breach of duty
or contract by any Owner shall affect any subsequent default or breach of duty or
contract or shall impair any rights or remedies on said subsequent default or breach.
No delay or omission of any Owner to exercise any right or power accruing upon any
default shall impair any such right or power or shall be construed as a waiver of any
such default or acquiescence therein. Every substantive right and every remedy
conferred upon the Owners may be enforced and exercised as often as may be deemed
expedient. In case any suit, action or proceeding to enforce any right or exercise any
remedy shall be brought or taken and the Owner shall prevail, said Owner shall be
entitled to receive reimbursement for reasonable costs, expenses, outlays and
attorney's fees and should said suit, action or proceeding be abandoned, or be
determined adversely to the Owners then, and in every such case, the City and the
Owners shall be restored to their former positions, rights and remedies as if such suit,
action or proceeding had not been brought or taken.
Section 8.3. Limited Liabilit�of the Citv to the Owners. Except for the
collection of the Assessment Installments and the observance and perFormance of the
other conditions, covenants and terms contained herein, in the Act or in the Municipal
Code required to be observed or performed by it, the City shall not have any obligation
or liability to the Owners with respect to this Resolution or the preparation,
authentication, delivery, transfer, exchange or cancellation of the Bonds. In the
Resolution of Intention, the City has determined pursuant to Chapter 2 of the Municipal
Code that the City will not obligate itself to advance available funds from the City's
treasury to cure any deficiency which may occur in the Redemption Fund.
Section 8.4. Action bv Owners Upon Default. In the event the City fails to
take any action to eliminate an Event of Default under Section 8.1 hereof, the Owners of
a majority in aggregate principal amount of a Series of Outstanding Bonds may institute
any suit, action, mandamus or other proceeding in equity or at law for the protection or
enforcement of any right under this Resolution, but only if such Owners have first made
written request of the City, after the right to exercise such powers or right of action shall
have occurred, and shall have afforded the City a reasonable opportunity either to
proceed to exercise the powers granted herein or granted under law or to institute such
action, suit or proceeding in its name and unless also, the City shall have been offered
reasonable security and indemnity against the costs, expenses and liabilities to be
incurred therein or thereby, and the City shall have refused or neglected to comply with
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Resolution No. 10- 4
such request within a reasonable time. Any moneys recovered in such suit, action,
mandamus or other proceedings shall be applied first to the payment of the reasonable
costs and expenses of the Owners in bringing such suit, action, mandamus or other
proceeding, including reasonable compensation to their agents and attorney.
SECTION 9. MISCELLANEOUS.
Section 9.1. Partial Invaliditv. If any section, paragraph, subdivision,
sentence, clause or phrase of this Resolution shall for any reason be adjudged by any
court of competent jurisdiction to be unconstitutional, unenforceable or inva►id, such
judgment shall not affect the validity of the remaining portions of this Resolution. The
City Council hereby declares that it would have adopted this Resolution and each and
every other section, paragraph, subdivision, sentence, clause and phrase hereof and
would have authorized the issuance of the Bonds pursuant hereto irrespective of the
fact that any one or more sections, paragraphs, subdivisions, sentences, clauses or
phrases of this Resolution or the application thereof to any person or circumstance, may
be held to be unconditional, unenforceable or invalid.
Section 9.2. General Authorization. The officers of the City are hereby
authorized and directed, jointly and severally, to do all acts and things which may be
required of them by this Resolution, or which may be necessary or desirable in carrying
out the issuance of each Series of Bonds as provided by this Resolution and all matters
incidental thereto, including, without limitation, to execute such agreements, certificates,
receipts, opinions and other documents, and to deliver at the closing and delivery of
each Series of Bonds any and all of the foregoing as may be appropriate in the
circumstances. All such acts and things heretofore done are hereby approved, ratified
and confirmed.
Section 9.3. Personal Liability. The City or any officer, agent or employee
thereof, shall not be individually or personally liable for the payment of the principal of
or interest on the Bonds; but nothing herein contained shall relieve any such entity,
officer, agent or employee from the perFormance of any official duty provided by law.
Section 9.4. Pavment of Business Day. In any case where the date of the
maturity of interest or of principal (and premium, if any) of the Bonds or the date fixed
for redemption of any Bonds or the date any action is to be taken pursuant to this
Resolution is other than a Business Day, the payment of interest or principal (and
premium, if any) or the action need not be made on such date but may be made on the
next succeeding day which is a Business Day with the same force and effect as if made
on the date required and no interest shall accrue for the period after such date.
Section 9.5. Employment of Aqents by the Citv. In order to perform its
duties and obligations hereunder, the City may employ such persons or entities as it
deems necessary or advisable. The City shall not be liable for any of the acts or
omissions of such persons or entities employed by it in good faith hereunder, and shall
be entitled to rely, and shall be fully protected in doing so, upon the opinions,
calculations, determinations and directions of such persons or entities.
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Resolution No. 10- 4
Section 9.6. Disqualified Bonds. In the event of a later transfer of any
Bonds of a Series in accordance with Section 9.7 hereof, in determining whether the
Owners of the requisite aggregate principal amount of such Series of Bonds have
concurred in any demand, request, direction, consent or waiver under this Resolution,
Bonds which are owned or held by or for the account of the City shall be disregarded
and deemed not to be Outstanding for the purpose of any such determination, provided,
however, that for the purpose of determining whether the City Treasurer shall be
protected in relying on any such demand, request, direction, consent or waiver, only
Bonds which the City Treasurer knows to be so owned or held shall be disregarded.
Section 9.7. Sale of Bonds to Purchaser; Transfer of Bonds; Purchase
Aqreement; Restrictions. (a) The Purchaser, as the initial Owner of each Series of
Bonds issued under this Resolution, has represented to the City that the Purchaser
intends to hold the Bonds for its own account, for an indefinite period of time, and does
not intend at this time to distribute, sell or otherwise dispose of the Bonds, or any
portion thereof, to any third party.
(b) At the time of adoption of this Resolution, the City has not
prepared, and does not intend to prepare, any offering document (in the form of an
official statement or otherwise) with respect to any Series of Bonds issued under this
Resolution. The City has not made, and at this time does not intend to make, any
continuing disclosure filings with state or national information repositories with respect
to the any Series of Bonds issued under this Resolution.
(c) The transfer of the Bonds shall be restricted as set forth herein.
With respect to any transfer of less than all of the then outstanding principal amount of
any Series of Bonds, the portion being transferred shall be equal to $100,000 or greater
in principal amount. No Bond (or any portion thereofl may be transferred and no such
transfer shall be effective or recognized in the Registration Books, unless the City
Treasurer shall have received a letter from the proposed transferee in the form
satisfactory to the City Treasurer, which shall contain statements substantially to the
following effect:
(i) The transferee has received and reviewed copies of this
Resolution. The transferee understands that (A) the Series of
Bonds subject to the transfer are limited obligations of the City
secured by and payable solely from applicable Assessment
Revenues as provided in this Resolution, (B) no other fund or
property of the City is liable for the payment of the Bonds, (C) none
of the payment obligations with respect to the Bonds are secured
by a pledge of any money received or to be received from taxation
by the City or any political subdivision thereof, other than the
applicable Assessment Revenues, and (D) there is no reserve fund
for the Bonds.
(ii) The transferee has sufficient knowledge and experience in financial
and business matters, including in the purchase and ownership of
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a
Resolution No. 10- 4
municipal obligations of a nature similar to the Bonds, to be able to
evaluate the risks and merits of investing in the Bonds.
(iii) The transferee acknowledges that the City has not prepared any
offering document with respect to the Series of Bonds subject to the
transfer. The transferee, as a sophisticated investor, has made its
own credit inquiry and analyses with respect to the Series of Bonds
subject to the transfer. The transferee has assumed the
responsibility for obtaining and making such review as the
transferee has deemed necessary or desirable in connection with
the transferee's decision to invest in the Series of Bonds subject to
the transfer. The transferee's decision to invest in the such Series
of Bonds did not rely on any information provided by the City (or
any representatives or agents of the City) that is not in written form.
(iv) The transferee has duly determined that (A) the transferee is legally
authorized to purchase the Series of Bonds subject to the transfer,
and (B) the Series of Bonds subject to the transfer are a lawful
investment for the transferee under all applicable laws.
(v) The transferee understands that (A) the Series of Bonds subject to
the transfer have not been registered with any federal or state
securities agency or commission or otherwise qualified for sale
under the "Blue Sky" laws or regulations of any state, (B) will not be
listed on any securities exchange, (C) will not carry a rating from
any rating service, and (D) may not be readily marketable.
(vi) The transferee is investing in the Series of Bonds subject to the
transfer for its own account, and at the time of its purchase of the
Bonds of such Series, does not intend to distribute, resell or
otherwise dispose of such Bonds.
(vii) The transferee agrees that, in the event that the transferee decides
to sell or otherwise transfer any of the Bonds, it shall require the
new transferee to deliver to the City Treasurer the letter required by
this Section 9.7 as a condition precedent to the consummation of
such transfer.
(d) The Purchase Agreement proposed to be entered into by and
among the City and the Purchaser with respect to each Series of Bonds, in the form on
file in the office of the City Clerk, and the sale of each Series of Bonds pursuant thereto
upon the terms and conditions set forth in the applicable final Purchase Agreement with
respect to each Series of Bonds are hereby approved. Subject to the following
sentence, each of the Mayor and the City Manager, or their designee (each, an
"Authorized Officer"), acting singly, is authorized and directed, for and in the name and
on behalf of the City, to execute and deliver one or more Purchase Agreements (a
Purchase Agreement corresponding with each Series of Bonds) in substantially said
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e
Resolution No. 10- 4
form, with such changes therein as the officer executing the same may require or
approve (such approval to be conclusively evidenced by such Authorized Officer's
execution and delivery thereofl. Each Authorized Officer, acting singly, is hereby
authorized and directed to act on behalf of the City to establish and determine (i) the
particular Contractual Assessment Agreements to be included in Exhibit B of each
Purchase Agreement, from which the Assessment Revenues subject to the pledge in
Section 2.1 of this Resolution will be derived, provided that any such agreement
included in Exhibit B of any Purchase Agreement authorized hereunder with respect to
a Series of Bonds shall not be related to the pledge of any assessment revenues
securing (A) the 2009A Bonds, (B) the 2009B Bonds, or (C) any other Series of Bonds
issued hereunder; and (ii) the initial principal amount of each Series of Bonds, provided
that the aggregate initial principal amount of all Series of Bonds issued hereunder shall
not exceed $5,000,000.
(e) Upon satisfaction of subsection (c) above, any Bond may in
accordance with its terms be transferred upon the Registration Books by the person in
whose name it is registered, in person or by such person's duly authorized attorney,
upon surrender of such Bond for cancellation, accompanied by delivery of a written
instrument of transfer, duly executed, in a form approved by the City Treasurer.
Whenever any Bond shall be surrendered for such transfer, the City shall execute and
the City Treasurer shall thereupon authenticate and deliver to the transferee a new
Bond or Bonds of like Series, tenor, maturity or maturities and aggregate principal
amount. The City Treasurer shall not be required to transfer, pursuant to this
Section 9.7, either (i) any Bond during the period established by the City Treasurer for
the selection of Bonds for redemption, or (ii) any Bond selected for redemption pursuant
to Section 3.
Section 9.8. Waivers. So long as the Purchaser is the sole Owner of any
Series of Bonds, the Purchaser may waive any provisions of this Resolution with
respect to such Series of Bonds, including but not limited to the provisions related to the
redemption of Bonds or to the adoption of resolutions supplemental hereto.
Section 9.9. Effective Date. This Resolution shall take effect immediately
upon adoption.
PASSED, APPROVED AND ADOPTED this 14th day of January, 2010.
Cindy Finerty, Mayor
ATTEST: .
Rachelle D. Klassen, City Clerk
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Resolution No. 10- 4
EXHIBIT A
FORM OF BOND
Transfer of this Bond is subject fo the restrictions set forth in the Resolution referred to
herein. A transfer of Bonds is limited to certain parties that qualify under the
requirements of the Resolution, which include the requirement that the transferee can
bear the economic risk of investment in the Bonds and has such knowledge and
experience in business and financial mafters, including the purchase and ownership of
municipal obligations of a nature similar to the Bonds, to be able to evaluate the risks
and merits of the investment in the Bonds. The Bonds have not been registered with
any federal or state securities agency or commission.
United States of America
State of California
County of Riverside
REGISTERED REGISTERED
NUMBER 1 $
CITY OF PALM DESERT
ENERGYINDEPENDENCE
LIMITED OBLIGATION IMPROVEMENT BOND
SERIES 2010_ (TAXABLE)
BOND DATE: , 2010 MATURITY DATE: September 2,
[2030]
REGISTERED OWNER: Palm Desert Redevelopment Agency
Under and by virtue of Title 17 of the Palm Desert Municipal Code (the
"Municipal Code"), the City of Palm Desert (the "City"), County of Riverside, State of
California, will, out of the Redemption Fund for the payment of the Bonds issued upon
the unpaid assessments made for the work and improvements more fully described in
proceedings taken pursuant to Resolution of Intention No. 08-75, adopted by the City
Council on July 24, 2008, and as amended by Resolution No. 08-89, adopted by the
City Council on August 28, 2008, and as further amended by Resolution No. 09-2,
adopted by the City Council on January 22, 2009, pay to the registered owner hereof, or
registered assigns, the principal sum specified above and interest thereon, or so much
thereof as may have been disbursed and remain outstanding, at a rate of interest of
three percent (3.00%) per annum, in lawful money of the United States of America, and
in accordance with Resolution No. 10- of the City Council of the City (the "Resolution
of Issuance"), adopted on January 14, 2010; provided that the final installment of
A-1
Resolution No. 10- 4
principal equal to the then unpaid principal balance of this Bond and interest accrued
thereon shall be due and paid upon surrender of this Bond on the final maturity date set
forth above ("Maturity Date").
The principal of this Bond shall be payable on each Principal Payment
Date in accordance with the Debt Service Schedule (as defined in the Resolution of
Issuance). Interest on this Bond shall be payable on each Interest Payment Date in
accordance with the Debt Service Schedule. Interest shall be payable semiannually on
March 2 and September 2 (each an "Interest Payment Date") in each year commencing
on 2, 20 . This Bond bears interest from the Interest Payment Date next
preceding its date of authentication and registration, unless this Bond is authenticated
and registered (i) on an Interest Payment Date, in which event interest shall be payable
from such date of authentication and registration, (ii) prior to an Interest Payment Date
and after the close of business on the 15th day of the month immediately preceding
such Interest Payment Date, in which event it shall bear interest from such Interest
Payment Date, or (iii) prior to the close of business on 15, 20_, in which
event it shall bear interest from the Bond Date stated above, until payment of such
principal sum shall have been discharged; provided, however, that if at the time of
authentication of such Bond, interest is in default, interest on that Bond shall be payable
from the last Interest Payment Date to which the interest has been paid or made
available for payment. Principal of and interest on this Bond shall be paid by check of
the City mailed by the City Treasurer on or before the Interest Payment Date by first
class mail, postage prepaid, to the person whose name appears in the Registrations
Books as the Owner of such Bond as of the 15th day of the calendar month immediately
preceding each Interest Payment Date, to the address of that person on the
Registration Books, provided that the payment of principal of this Bond on the Maturity
Date and the payment of the principal of this Bond and any premium due upon the
redemption thereof shall be payable upon presentation and surrender thereof at
maturity or earlier redemption at the office of the City Treasurer in Palm Desert,
California.
This Bond shall bear interest until the principal amount has been paid;
provided, however, that if at the Maturity Date, or if at the redemption date of any
principal amount of this Bond which has been duly called for redemption as provided in
the Resolution of Issuance, funds are available for the payment or redemption thereof in
full accordance with the terms of the Resolution of Issuance, such principal amount
shall then cease to bear interest.
This Bond is issued by the City of Palm Desert under Title 17 of the
Municipal Code and the Resolution of Issuance in the principal amount of $ for
the purpose of reimbursing the City for funds that the City advanced to make loans to
finance the improvements described in the proceedings, and is secured by the moneys
in the Series 2010_ Redemption Account of the Redemption Fund and by the
Assessment Revenues (as defined in the Resolution of Issuance), and, including
principal and interest, is payable exclusively out of the Series 2010_ Redemption
Account of the Redemption Fund and certain other funds and accounts as provided in
the Resolution of Issuance. The City will not obligate itself to advance available
A-2
Resolution No. 10- 4
funds from the City treasury to cure any deficiency which may occur in the Series
2010_ Redemption Account of the Redemption Fund.
This Bond is transferable by the registered owner hereof, in person or by
the owner's attorney duly authorized in writing, at the office of the City Treasurer,
subject to the terms and conditions provided in the Resolution of Issuance, including the
payment of certain charges, if any, upon exchange, transfer, surrender or cancellation
of this Bond. Upon transfer, a new registered Bond or Bonds, of any authorized
denomination or denominations, of the same maturity, and for the same aggregate
principal amount, will be issued to the transferee in exchange therefor.
Bonds shall be registered only in the name of an individual (including joint
owners), a corporation, a partnership or a trust.
The City shall not be required to exchange or to register the transfer of
Bonds during the fifteen days immediately preceding any Interest Payment Date or of
any Bonds selected for redemption in advance of maturity.
The City may treat the owner hereof as the absolute owner for all
purposes, and the City shall not be affected by any notice to the contrary.
This Bond or any portion of it in the amount of $5,000, or any integral
multiple thereof, is subject to mandatory redemption and payment in advance of
maturity on any date from prepayments of assessments and subject to optional
redemption and payment in advance of maturity on any second day of March or
September in any year by giving at least 30 days' notice or other such shorter period
upon the consent of the owners of any Bonds designated for redemption, by registered
or certified mail, postage prepaid, or by personal service to the registered owner hereof
at the registered owner's address as it appears on the registration books of the City and
by paying principal and accrued interest together with a premium equal to three percent
(3%) of the principal for the first five (5) years after the Bond Date and zero percent
(0%) after the first five (5) years after the Bond Date. Interest shall cease to accrue
from and after the date of redemption.
This Bond is also subject to mandatory redemption from sinking fund
payments on September 2, 20 on each September 2 thereafter prior to maturity, in
accordance with the schedule of sinking fund payments as provided in the Resolution of
Issuance at a redemption price equal to the principal amount thereof, plus accrued
interest to the redemption date, without premium.
This Bond is subject to refunding pursuant to the Municipal Code prior to
maturity.
This Bond shall not be entitled to any benefit under the Municipal Code or
the Resolution of Issuance, or become valid or obligatory for any purpose, until the
certificate of authentication and registration hereon endorsed shall have been dated and
signed by the City Treasurer of the City.
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Resolution No. 10- 4
[The remainder of this page is intentionally left blank.]
IN WITNESS WHEREOF, the City of Palm Desert, California has caused
this Bond to be signed by the City Manager and by the City Clerk, and has caused its
corporate seal to be impressed hereon, all as of , 2010.
CITY OF PALM DESERT, CALIFORNIA
City Clerk City Manager
[seal]
CERTIFICATE OF AUTHENTICATION AND REGISTRATION
� This is one of the Bonds described in the within mentioned Resolution of
Issuance which has been authenticated and registered on , 2010.
City Treasurer
A-4
Resolution No. 10- 4
[FORM OF ASSIGNMENT]
For value received the undersigned do(es) hereby sell, assign and transfer unto
, whose tax
identification number is , the within-mentioned registered Bond and
hereby irrevocably constitute(s) and appoint(s) attorney
to transfer the same on the books of the Trustee with full power of substitution in the
premises.
Dated:
Signature guaranteed:
NOTE: The signature(s) on this
Assignment
must correspond with the name(s) as
written
on the face of the within Bond in every
particular without alteration or
enlargement
or any change whatsoever.
NOTICE: Signature must be guaranteed by a
member of an institution which is a participant
in the Securities Transfer Agent Medallion
Program (STAMP) or other similar program..
A-5
TABLE OF CONTENTS
Paqe
SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION; AUTHORIZATION AND
PURPOSE OF BONDS; EQUAL SECURITY.................................................................. 3
Section1.1. Definitions ............................................................................................. 3
Section 1.2. Rules of Construction............................................................................7
Section 1.3. Authorization and Purpose of Bonds.....................................................7
Section1.4. Equal Security.......................................................................................7
SECTION2. THE BONDS .............................................................................................7
Section 2.1. Equality of Bonds, Pledge.....................................................................7
Section 2.2. Collection of Assessments.................................................................... 8
Section 2.3. Issuance of Bonds to Represent Unpaid Assessments; Procedure for
Disbursement; Authorization to Complete Debt Service Schedules...........................8
Section 2.4. Medium and Payment...........................................................................9
Section 2.5. Form of Bonds and Certificate of Authentication and Registration....... 10
Section 2.6. Execution and Authentication............................................................... 10
Section 2.7. Registration of Exchange or Transfer.................................................. 10
Section 2.8. Mutilated, Lost, Destroyed or Stolen Bonds........................................ 11
Section 2.9. Registration Books.............................................................................. 11
Section 2.10. Validity of the Bonds ......................................................................... 11
Section 2.11. Refunding of Bonds........................................................................... 12
Section 2.12. No Acceleration................................................................................. 12
SECTION 3. REDEMPTION OF BONDS..................................................................... 12
Section 3.1. Mandatory Redemption....................................................................... 12
Section 3.2. Optional Redemption .......................................................................... 12
Section 3.3. Selection of Bonds for Redemption..................................................... 13
Section 3.4. Notice of Redemption.......................................................................... 13
Section 3.5. Partial Redemption of Bonds .............................................................. 13
Section 3.6. Effect of Notice and Availability of Redemption Price.......................... 14
SECTION 4. FUNDS AND ACCOUNTS ...................................................................... 14
Section 4.1. Disposition of Bond Proceeds............................................................. 14
Section 4.2. Establishment of Bonds Redemption Fund, Series Redemption
Accounts, and Subccounts....................................................................................... 14
Section 4.3. Redemption Fund................................................................................ 15
Section 4.4. Prepayment of Assessments .............................................................. 16
Section 4.5. Application of Prepaid Assessments................................................... 16
Section 4.6. Certain Procedures Upon Redemption ............................................... 17
Section 4.7. Redemption Account Surplus.............................................................. 17
Section 4.8. Investments......................................................................................... 17
SECTION5. COVENANTS .......................................................................................... 18
Section 5.1 Punctual Payment................................................................................ 18
Section 5.2. Limited Obligation; No Required Advances From Available Surplus
Funds....................................................................................................................... 18
Section5.3. General ............................................................................................... 18
Section 5.4. Protection of Security and Rights of Owners....................................... 18
�
Section 5.5. Against Encumbrances ....................................................................... 19
Section 5.6. Collection of Assessments.................................................................. 19
Section 5.7. Accounting Records and Statements.................................................. 19
Section 5.8. Further Assurances............................................................................. 19
SECTION 6. DEFEASANCE ........................................................................................ 19
Section 6.1. Defeasance.......................................................... ............. 19
..................
SECTION 7. SUPPLEMENTAL RESOLUTIONS .........................................................20
Section 7.1. Supplemental Resolutions Without Owner Consent............................20
Section 7.2. Supplemental Resolutions with Owner Consent ................................. 20
Section 7.3. Notice of Supplemental Resolution to Owners....................................21
SECTION8. DEFAULT................................................................................................21
Section 8.1. Events of Default.................................................................................21
Section 8.2. Remedies Not Exclusive; Non-waiver.................................................22
Section 8.3. Limited Liability of the City to the Owners ...........................................22
Section 8.4. Action by Owners Upon Default..........................................................22
SECTION9. MISCELLANEOUS..................................................................................23
Section 9.1. Partial Invalidity...................................................................................23
Section 9.2. General Authorization .........................................................................23
Section 9.3. Personal Liability.................................................................................23
Section 9.4. Payment of Business Day...................................................................23
Section 9.5. Employment of Agents by the City ......................................................23
Section 9.6. Disqualified Bonds ..............................................................................24
Section 9.7. Sale of Bonds to Purchaser; Transfer of Bonds; Purchase Agreement;
Restrictions ..............................................................................................................24
Section9.8. Waivers...............................................................................................26
Section9.9. Effective Date......................................................................................26
EXHIBITA— FORM OF BOND ....................................................................................A-1
��
RESOLUTION NO. 569
A RESOLUTION OF THE PALM DESERT REDEVELOPMENT AGENCY
AUTHORIZING THE AGENCY'S INVESTMENT IN AND PURCHASE OF THE
CITY OF PALM DESERT'S ENERGY INDEPENDENCE PROGRAM, LIMITED
OBLIGATION IMPROVEMENT BONDS, IN ONE OR MORE SERIES AND IN
AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED FIVE MILLION
DOLLARS ($5,000,000), APPROVING AS TO FORM AND AUTHORIZING THE
EXECUTION AND DELIVERY OF ONE OR MORE BOND PURCHASE
AGREEMENTS IN CONNECTION THEREWITH, AND AUTHORIZING
CERTAIN OTHER MATTERS RELATING THERETO
RECITALS:
WHEREAS, the City of Palm Desert (the "City") proposes to sell and issue one or
more additional series of its Energy Independence Program, Limited Obligation Improvement
Bonds, in aggregate initial principal amount not to exceed five million dollars ($5,000,000) (the
"Bonds"), on a private placement basis and pursuant to its resolution adopted on January 14,
2010 authorizing the sale of such Bonds (the "City Bond Resolution"); and
WHEREAS, the Board (the "Agency Board") of the Palm Desert Redevelopment
Agency (the "Agency") desires to provide authority for the Agency to invest in and purchase the
Bonds from the City and to approve the form of, and authorize the execution and delivery of one
or more bond purchase agreements (each individually, and collectively, as the context may
require, the "Purchase Agreement") (one Purchase Agreement with respect to each series of
Bonds), which form of Purchase Agreement is file in the office of the Secretary of the Agency;
NOW, THEREFORE, THE PALM DESERT REDEVELOPMENT AGENCY DOES
HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals. The above recitals, and each of them, are true and correct.
Section 2. Findinqs; Specific Investment Authorization. The Agency Board
hereby finds and determines that the Agency's investment in, and purchase of, a portion or all of
the Bonds, in one or more series and in aggregate initial principal amount not to exceed five
million dollars ($5,000,000), subject to the terms and conditions set forth in this Resolution, are
prudent under the general economic conditions and the anticipated needs of the Agency. In
accordance with Government Code Section 53601, the Agency Board hereby grants express
authority for the Agency to invest in the Bonds, in one or more series, including but not limited to
those Bonds with a term remaining to maturity in excess of 5 years.
Section 3. Purchase Aqreement. The Purchase Agreement proposed to be
entered into between the Agency and the City with respect to each series of Bonds, in the form
on file with the Secretary, and the purchase of a portion or all of the Bonds in one or more series
pursuant thereto upon the terms and conditions set forth in the applicable final Purchase
Agreement with respect to each series of Bonds, are hereby approved. Subject to the
provisions of Section 4 below, each of the Chairman and the Executive Director, or their
designee (each, an "Authorized Officer"), acting singly, is authorized and directed, for and in the
name and on behalf of the Agency, to execute and deliver the Purchase Agreement in
substantially said form, with such changes therein as the officer executing the same may require
Resolution No. 569
or approve, including such matters as are authorized by Section 4 hereof (such approval to be
conclusively evidenced by such Authorized Officer's execution and delivery thereofl.
Section 4. Terms of Purchase of Bonds. The interest rate on any Bond and
Series of Bonds purchased by the Agency pursuant to this Resolution shall be 3.0% per annum.
The Agency hereby approves the particular contractual assessment agreements to be included
in Exhibit B of each Purchase Agreement, provided such agreements are determined in
accordance with Section 9.7(d) of the City Bond Resolution. Each Authorized Officer, acting
singly, is hereby authorized and directed to act on behalf of the Agency to establish and
determine the initial principal amount of each series of Bonds to be purchased by the Agency,
provided the aggregate initial principal amount of all Bonds purchased by the Agency hereunder
shall not exceed $5,000,000.
Section 5. Other Acts. The Authorized Officers and all other officers of the
Agency are hereby authorized and directed, jointly and severally, to do any and all things and to
execute and deliver any and all documents which they may deem necessary or advisable in
order to effectuate the purposes of this Resolution and the Purchase Agreement, including but
not limited to a certificate, investor letter, or such other document certifying as to the Agency's
qualifications as a purchaser of the Bonds, as appropriate, and any such actions previously
taken by such officers are hereby ratified and confirmed.
Section 6. Effective Date. This Resolution shall take effect immediately upon
adoption.
PASSED, APPROVED and ADOPTED this 14th day of January, 2010, by the
following vote to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
CINDY FINERTY, CHAIR
ATTEST:
RACHELLE D. KLASSEN, SECRETARY
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BOND PURCHASE AGREEMENT
�
City of Palm Desert
Energy Independence Program
Limited Obligation Improvement Bonds
Series 2010_ (Taxable)
This Bond Purchase Agreement (this "Agreement") is made and entered
into as of , 2010, by and between the PALM DESERT
REDEVELOPMENT AGENCY, a public body, corporate and politic, duly organized and
validly existing under the laws of the State of California (the "Agency") and the CITY OF
PALM DESERT, a municipal corporation duly organized and existing under and by
virtue of the Constitution and the laws of the State of California (the "City").
Recitals
A. The City Council of the City of Palm Desert, California (the "City")
by its Resolution No. 08-75 established the City of Palm Desert Energy Independence
Program (the "EIP") to finance the acquisition and construction or installation of
distributed generation renewable energy sources and energy efficiency improvements
(the "Improvements") on properties in the City through the use of contractual
assessments pursuant to Chapter 29 of Part 3 of Division 7 of the California Streets and
Highways Code (the "Act").
B. The City Council of the City has determined to issue the City's
Energy Independence Program Limited Obligation Improvement Bond, Series 2010
(Taxable), in an initial principal amount of $ (the "Bond") pursuant to its
resolution adopted on January 14, 2010 and entitled "A Resolution of the City Council of
the City of Palm Desert Providing for the Issuance and Sale of Its Energy Independence
Program Limited Obligation Improvement Bonds (Taxable), in One or More Series and
In Aggregate Principal Amount Not to Exceed Five Million Dollars ($5,000,000),
Approving as to Form and Authorizing the Execution and Delivery of One or More Bond
Purchase Agreements in Connection Therewith, and Authorizing Certain Other Matters
Relating Thereto° (the "City Resolution°).
C. The Agency is a redevelopment agency, a public body, corporate
and politic, duly created, established and authorized to transact business and exercise
its powers, all under and pursuant to the Community Redevelopment Law of the State
of California, being Part 1 of Division 24 (commencing with Section 33000) of the
California Health and Safety Code, as amended, and the powers of the Agency include
the power to invest any money not required for immediate disbursement in the bonds of
any city.
G:\Finance\Niamh Ortega\Energy Independence Program\SR 011410 Amendments validation resolutions\Bond Purchase
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D. The City has determined to sell, and the Agency has determined to
invest in and purchase, the Bond pursuant to the terms of this Agreement.
E. All acts and proceedings required by law necessary to make this
Agreement, when executed by the Agency and the City, the valid, binding and legal
obligation of the Agency and the City, and to constitute this Agreement a valid and
binding agreement for the uses and purposes herein set forth in accordance with its
terms, have been done and taken, and the execution and delivery of this Agreement
have been in all respects duly authorized.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto do hereby agree as follows:
Section 1. Definitions. Unless the context clearly requires or unless
otherwise defined herein, the capitalized terms in this Agreement shall have the
respective meanings which such terms are given in the City Resolution.
Section 2. Purchase of the Bond. Upon the terms and conditions herein set
forth, the Agency hereby agrees to purchase, and the City hereby agrees to sell,
execute and deliver the Bond to the Agency. The purchase price to be paid by the
Agency for the Bond shall be the par value thereof.
Section 3. The Bond. The Bond will be delivered in definitive, fully
registered form, registered in the name of the Agency and may be typewritten. The
Bond shall be dated the Closing Date (defined below), shall mature on September 2,
[2030], and bear interest at 3.0% per annum. Interest on the Bond shall be payable on
March 2 and September 2 of each year, commencing 2, 20 , and the debt
service schedule with respect to the Bond shall be as set forth on Exhibit A to this
Agreement.
Section 4. Closinq. At 9:00 A.M., California time, on September 22, 2009,
or at such other time or date as shall have been mutually agreed upon by the City and
the Agency (the "Closing Date"), the City will, subject to the terms and conditions
hereof, deliver to the Agency, at the office of the Treasurer in City of Palm Desert,
California, the Bond in fully registered form, duly executed and registered; and, subject
to the terms and conditions hereof, the Agency will accept such delivery and cause the
purchase price of the Bond to be paid by check or draft or by interfund transfer, as the
case may be.
Section 5. Contractual Assessment Agreements. The City and the Agency
agree that the particular contractual assessment agreements from which the
Assessment Revenues subject to the pledge in Section 2.1 of City Resolution will be
derived and which constitute the "Contractual Assessment Agreements," as such term
is defined in the City Resolution, shall be as set forth on Exhibit B to this Agreement.
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Section 6. Representations of the Aqencv — Suitability for Private
Placement. The Agency represents, warrants and agrees as follows:
a) The Agency has received and reviewed copies of the City
Resolution. The Agency understands that (i) the Bond is a limited obligation of the City
secured by and payable solely from Assessment Revenues (as defined in the City
Resolution), (ii) no other fund or property of the City is liable for the payment of the
Bond, (iii) none of the payment obligations with respect to the Bond are secured by a
pledge of any money received or to be received from taxation by the City or any political
subdivision thereof, other than the Assessment Revenues, and (iv) there is no reserve
fund for the Bond.
b) The Agency has sufficient knowledge and experience in financial
and business matters, including in the purchase and ownership of municipal obligations
of a nature similar to the Bond, to be able to evaluate the risks and merits of investing in
the Bond.
c) The Agency acknowledges that the City has not prepared any
offering document with respect to the Bond. The Agency, as a sophisticated investor,
has made its own credit inquiry and analyses with respect to the Bond. The Agency has
assumed the responsibility for obtaining and making such review as the Agency has
deemed necessary or desirable in connection with the Agency's decision to invest in the
Bond. The Agency's decision to invest in the Bond did not rely on any information
provided by the City (or any representatives or agents of the City) that is not in written
form.
d) The Agency has duly determined that (i) the Agency is legally
authorized to purchase the Bond, and (ii) the Bond is a lawful investment for the Agency
under all applicable laws.
e) The Agency understands that (i) the Bond has not been registered
with any federal or state securities agency or commission or otherwise qualified for sale
under the "Blue Sky" laws or regulations of any state, (ii) will not be listed on any
securities exchange, (iii) will not carry a rating from any rating service, and (iv) may not
be readily marketable.
fj The Agency is investing in the Bond for its own account, and at the
time of its purchase of the Bond, does not intend to distribute, resell or otherwise
dispose of the Bond.
g) The Agency agrees that, in the event that the Agency decides to
sell or otherwise transfer the Bond, it shall require the new transferee to deliver to the
City Treasurer the letter required by the City Resolution as a condition precedent to the
consummation of such transfer.
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Section 7. Condition of Closinq. The City's obligation to sell the Bond is
conditioned upon the Agency's delivery to the City, on or prior to the Closing Date, of a
certificate, dated the Closing Date, signed by a duly authorized official of the Agency in
form and substance satisfactory to the City and Richards, Watson & Gershon, A
Professional Corporation, as bond counsel with respect to the Bond, to the effect that
the representations and warranties of the Agency contained herein are true and correct
as of the Closing Date.
Section 8. Termination. If the conditions to the City's obligations contained
in this Agreement cannot be satisfied at or prior to the Closing Date, this Agreement
may be canceled by the City. The City shall give notice of such cancellation to the
Agency in writing. Upon any such termination, neither the City nor the Agency shall be
under any further obligation hereunder.
Section 9. Parties in Interest. This Agreement shall constitute the entire
agreement between the Agency and the City and is made solely for the benefit of the
Agency and the City (including their successors or assigns). No other person shall
acquire or have any right hereunder or by virtue hereof.
Section 10. Governinq Law. This Agreement shall be construed and
governed in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the CITY OF PALM DESERT and the PALM
DESERT REDEVELOPMENT AGENCY have each caused this Agreement to be signed
in its name by its duly authorized officer, all as of the day and year first above written.
CITY OF PALM DESERT
By
Cindy Finerty
Mayor
PALM DESERT REDEVELOPMENT AGENCY
By .
John M. Wohlmuth
Executive Director
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EXHIBIT A
DEBT SERVICE SCHEDULE
CITY OF PALM DESERT
ENERGYINDEPENDENCE
LIMITED OBLIGATION IMPROVEMENT BOND
SERIES 2010_ (TAXABLE)
True Interest Cost: 3.000%
Semi-Annual
Payment Principal Interest Debt Service Annual Debt
Date Payment Payment Total Service Total
A-1
Total:
SCHEDULE OF SINKING FUND PAYMENTS
SERIES 2010 BOND MATURING SEPTEMBER 2, 20
Redemption Date
(September 2) Principal Amount
$
(maturity)
A-2
EXHIBIT B
CONTRACTUAL ASSESSMENT AGREEMENTS
CITY OF PALM DESERT
ENERGYINDEPENDENCE
LIMITED OBLIGATION IMPROVEMENT BOND
SERIES 2010_ (TAXABLE)
Date of Contractual
Assessment Original Principal
No. Address of Pro ert A reement Amount Funded
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19. .
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
Total Funded:
[additional rows to be added as necessary]
B-1
RESOLUTION NO. 10- 5
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM
DESERT AUTHORIZING JUDICIAL VALIDATION PROCEEDINGS
RELATING TO ITS ENERGY INDEPENDENCE PROGRAM, LIMITED
OBLIGATION IMPROVEMENT BONDS, AND A NO-ACTION LETTER
REQUEST TO THE U.S. SECURITIES AND EXCHANGE COMMISSION,
APPROPRIATING MONEYS FROM THE GENERAL FUND TO
ADDITIONALLY FUND THE PROGRAM, AND APPROVING
ADDITIONAL ACTIONS RELATED THERETO
WHEREAS, the City Council of the City of Palm Desert, California (the "City") by
its Resolution No. 08-75 ("Resolution 08-75") declared its intention to establish the City
of Palm Desert Energy Independence Program (the "EIP") to finance the acquisition and
construction or installation of distributed generation renewable energy sources and
energy efficiency improvements (the "Improvements") on or in properties in the City
through contractual assessments pursuant to Chapter 29 of Part 3 of Division 7 of the
California Streets and Highways Code, commencing with Section 5898.10, ("Chapter
29") and ordered the preparation and filing of a report (the "Report") with the City
Council and provided that bonds may be issued under Resolution 08-75 pursuant to the
provisions of Chapter 29 or, as Resolution 08-75 has heretofore been amended by
Resolution No. 08-89 (adopted on August 28, 2008) and Resolution No. 09-2 (adopted
on January 22, 2009) (Resolution 08-75, as so amended is referred to herein as the
"Resolution of Intention"), pursuant to the provisions of Title 17 (the "Municipal Code") of
the Palm Desert Municipal Code as it may be amended from time to time;
WHEREAS, following notice duly given in accordance with law, the City Council
held a public hearing regarding the EIP as described in the Report;
WHEREAS, following the public hearing, pursuant to its Resolution No. 08-89,
the City Council established the EIP and confirmed contractual assessments to be
levied against properties in the City within the parameters of the Report;
WHEREAS, pursuant to Chapter 29 and the EIP, the City may enter into, and
has entered into, contractual assessment agreements (each, an "Assessment
Contract") with property owners whereby the City will extend financing to such property
owners for the construction and/or installation of the Improvements on or in the owners'
properties;
WHEREAS, pursuant to the Assessment Contracts, the property owners who are
parties to such agreements have agreed, or will agree, to repay the amount disbursed
to the owners under the Assessment Contracts through the levy of assessments by the
City against the property owners' properties pursuant to Section 5898:30 of Chapter 29
(each, an "Assessment");
Resolution Na 10- 5
WHEREAS, in accordance with Resolution No. 08-89, the City advanced $2.5
million of its own General Fund monies to the "Energy Independence Fund," a special
trust fund established and held by the City for the purpose of extending loans to
property owners to finance Improvements to the owners' properties (each, a "Loan");
WHEREAS, to additionally fund the EIP, on January 29, 2009 the City issued on
a private placement basis to the Palm Desert Redevelopment Agency (the "Agency") its
not-to-exceed $2,500,000 initial principal amount Energy Independence Program
Limited Obligation Improvement Bond, Series 2009A (Taxable) (the "2009A Bond"),
pursuant to Resolution No. 09-3 of the City Council, adopted on January 22, 2009 (the
"2009A Bond Resolution") and in the form of a draw-down bond up to the actual
aggregate principal amount of assessments securing such 2009A Bond, and such
actual principal amount of such assessments and such since been determined to be
$2,015,000;
WHEREAS, also to additionally fund the EIP, on September 22, 2009 the City
issued on a private placement basis to the Agency its $1,136,000 initial principal
amount Energy Independence Program Limited Obligation Improvement Bond, Series
2009B (Taxable) (the "2009B Bond"), pursuant to Resolution No. 09-63 of the City
Council, adopted on August 27, 2009 (the "2009B Bond Resolution");
WHEREAS, in furtherance of the EIP financial strategy and to provide additional
funding to the EIP, on January 14, 2010, the City Council approved and adopted its
resolution entitled "A Resolution of the City Council of the City of Palm Desert Providing
for the Issuance and Sale of Its Energy Independence Program Limited Obligation
Improvement Bonds (Taxable), in One or More Series and In Aggregate Principal
Amount Not to Exceed Five Million Dollars ($5,000,000), Approving as to Form and
Authorizing the Execution and Delivery of One or More Bond Purchase Agreements in
Connection Therewith, and Authorizing Certain Other Matters Relating Thereto" (the
"2010 Bond Resolution"), pursuant to which additional limited obligation improvement
bonds will be issued in one or more series in an aggregate initial principal amount not to
exceed $5,000,000, on a private placement basis to the Agency (the "2010 Bonds");
WHEREAS, in furtherance of the EIP financial strategy and to provide additional
funding to the EIP, the City desires to authorize an additional General Fund advance in
the amount of $4.349 million to the Energy Independence Fund, as an investment with a
rate of return of 3.00% per annum;
WHEREAS, the City expects that the need may arise in the future, for the
purpose of providing additional financing for the EIP and to meet the City's five-year
energy usage reduction goal of 30%, to authorize or enter into additional bond
resolutions, bond indentures, or similar instruments (each, an "Additional Bond
Resolution"), providing for the issuance and sale of additional series of limited obligation
improvement bonds (the "Additional Series of Bonds") secured by and payable solely
from revenues received by the City from the payment of Assessments pursuant to
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Chapter 29 and the Assessment Contracts, on a private placement basis or through
public offering;
WHEREAS, the City has determined the advisability of filing an action to
determine the validity of the Assessments, the Assessment Contracts, the 2010 Bonds,
the Additional Series of Bonds, the 2010 Bond Resolution, and the Additional Bond
Resolutions, and the actions proposed to be taken in connection therewith;
WHEREAS, the City has determined the advisability of filing a request with the
U.S. Securities and Exchange Commission (the "S.E.C.") for a "no-action letter"
confirming that any Additional Series of Bonds may be issued by the City at a public
offering without registration of such bonds or Assessment Contracts securing the
repayment therefor, in accordance with exceptions to registration provided by Rule 131
under the Securities Act of 1933 and Rule 3b-5 of the Securities Exchange Act of 1934;
NOW, THEREFORE, the City Council of the City of Palm Desert does resolve as
follows:
Section 1. Recitals True and Correct. The City Council does hereby find and
declare that the above recitals are true and correct.
Section 2. General Fund Advance - Terms. The City Council hereby
authorizes and directs the Director of Finance of the City to transfer from the City
General Fund to the Energy Independence Fund the amount of Four Million Three
Hundred Forty-Nine Thousand Dollars ($4,349,000) (the "General Fund Advance"), for
the purpose of making additional Assessment Contracts and Loans to additional
property owners pursuant to the EIP and Chapter 29. The General Fund Advance shall
be repayable solely from contractual assessment revenues deposited in the Energy
Independence Fund, to the extent not pledged to (or released from the pledge ofl any
limited obligation improvement bonds issued by the City to fund the EIP, with interest at
a rate of 4.00% per annum. The principal amount of the General Fund Advance shall
be repayable to the General Fund from such revenues in annual installments, with each
installment due and payable on June 30 of each year, commencing June 30, 2010,
together with interest on the principal amount of each installment accrued to the date of
repayment, and with the amount of each annual installment to be determined by the
Finance Director. The final installment, consisting of the remaining principal amount to
be repaid, together with accrued interest thereon to the date of repayment, shall be due
and payable on June 30, 2035.
Section 3. Findinqs; Specific Investment Authorization. The City Council
hereby finds and determines that the General Fund Advance, subject to the terms and
conditions set forth in Section 2 of this Resolution, are prudent under the general
economic conditions and the anticipated needs of the City. In accordance with
Government Code Section 53601, the City Council hereby grants express authority for
the City to make the General Fund Advance as an investment, with a term remaining to
maturity in excess of 5 years (i.e., June 30, 2035).
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Resolution No. 10- 5
Section 4. Additional Series of Bonds; Nature of Obliqation. The City hereby
authorizes and approves the issuance of Additional Series of Bonds to provide
additional funding for the EIP, under additional bond resolutions, bond indentures, or
similar instruments to be approved at such time of issuance by the City Council (each,
an "Additional Bond Resolution"), from time to time; provided, that similarly to the 2009A
Bond, the 2009B Bond, and the 2010 Bonds, each Additional Series of Bonds
authorized hereunder shall be limited obligation improvement bonds, and each
Additional Bond Resolution authorized hereunder shall provide that the applicable
Additional Series of Bonds shall be secured by, and repayable solely from, contractual
assessment revenues derived from Assessment Contracts entered into pursuant to
Chapter 29 and the EIP, without recourse to the City's General Fund.
Section 5. Validation Action. In order to determine the validity of the
Assessments, the Assessment Contracts, the 2010 Bonds, the Additional Series of
Bonds, the 2010 Bond Resolution, and the Additional Bond Resolutions, and the actions
authorized hereby to be taken in connection therewith, the City Council hereby
authorizes Richards, Watson & Gershon, A Professional Corporation, Bond Counsel
("Bond Counsel") to prepare and cause to be filed and prosecuted to completion all
proceedings required for the judicial validation of the Assessments, the Assessment
Contracts, the 2010 Bonds, the Additional Series of Bonds, the 2010 Bond Resolution,
and the Additional Bond Resolutions in the Superior Court of Riverside County, under
and pursuant to the provisions of Sections 860 et seq. of the California Code of Civil
Procedure. The City Council further authorizes the Mayor and the City Manager of the
City (the "Authorized Officers"), and all other officers, employees and agents of the City
to take any and all actions, including the execution and delivery or appropriate
documentation, as may be required to conclude such judicial validation proceedings. .
Section 12. S.E.C. No-Action Letter Request. In order to confirm that any
Additional Series of Bonds may be issued by the City by public offering without
registration of such bonds or the Assessment Contracts securing the repayment
therefor, in accordance with exceptions to registration provided by the federal securities
laws, the City Council hereby authorizes Bond Counsel to prepare and cause to be filed
with the S.E.C. a no-action letter request and to diligently pursue to completion the
request.
Section 13. Additional Authoritv. The Authorized Officers and any other
officers, employees or agents of the City are, and each of them hereby is, authorized
and directed to execute and deliver any and all documents and instruments and to do
and cause to be done any and all acts and things necessary or proper for carrying out
the transactions contemplated hereby, including, but not limited to, the execution and
delivery of any documents required in connection therewith.
Section 14. Ratification of Prior Action. All actions heretofore taken by the
Authorized Officers and by any other officers, employees or agents of the City with
respect to the incurrence of the Loan and the issuance of the Note, or in connection with
or related to any of the agreements or documents referenced herein, are hereby
approved, confirmed and ratified.
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Resolution No. 10- 5
Section 15. Effective Date. This Resolution shall take effect from and after the
date of approval and adoption hereof.
PASSED AND ADOPTED by the City Council of the City of Palm Desert,
California, this 14th day of January, 2010, by the following vote to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
CINDY FINERTY, MAYOR
ATTEST:
Rachelle D. Klassen, City Clerk
Palm Desert, California
5
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� :_