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Resolution No. 2022-78 | Solar PPA and Site Lease - Government Code 4217 Resolution | Adopted 10/03/2022 RESOLUTION NO. 2022-78 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY AUTHORIZING ENTERING INTO A POWER PURCHASE AGREEMENT (PPA) AND SITE LEASE AGREEMENT WITH JUA CAPITAL, LLC WHEREAS, it is the policy of the State of California and the intent of the State Legislature to promote all feasible means of energy conservation and all feasible means of alternative energy supply sources; and WHEREAS, the City of Gilroy (City) desires to reduce the steadily rising costs of energy needs at its facilities; and WHEREAS, the City finds it to be in the best interests to implement projects to promote energy efficiency and renewable energy production to achieve energy cost reductions, to reduce carbon emissions related to the City’s operations, and to secure solar shade structures in portions of their parking areas; and WHEREAS, the City has identified the installation of solar PV at four site locations to be economically favorable, and in the best long-term interest of the City; and WHEREAS, the City has identified a Power Purchase Agreement (PPA) as the most favorable financing mechanism for this solar PV project because of the need for zero capital outlay from the City, with immediate Year 1 cost savings; and WHEREAS, Jua Capital, LLC has provided the City with the most favorable terms to the City, in the form of a Power Purchase Agreement (PPA), in order to provide significant financial benefit to the City; and WHEREAS, California Government Code 4217 authorizes the City to enter into an energy services agreement with respect to an energy conservation system and site lease if its governing body determines, at a regularly scheduled public hearing, that the anticipated cost to the City for an alternative energy project will be less than the anticipated marginal cost to the City for electrical energy that would have been consumed by the City in the absence of s uch energy project and the difference, if any, between the fair rental value for the real property subject to the facility site lease and the agreed rent, anticipated to be offset by below -market energy purchases or other benefits provided under the energy service agreement; and WHEREAS, the City proposes to enter into a Power Purchase Agreement and related contract documents (“Power Purchase Agreement”) and facility ground lease (“Site Lease”) with Jua Capital, LLC, pursuant to which Jua Capital, LLC will be responsible for the design, construction, installation, maintenance, and operation on City property solar photovoltaic systems and arrange with the local utility for interconnection of the systems, which will generate energy at the sites on which such systems are located; and Resolution No. 2022-78 Solar PPA and Site Lease – Government Code 4217 Resolution City Council Regular Meeting | October 3, 2022 Page 2 of 3 WHEREAS, the sites where such solar photovoltaic systems will be located are as follows:  City Hall Annex  The Corporation Yard  Sunrise Fire Station  Pump House #6 WHEREAS, an analysis has been performed with data showing that the anticipated cost to the City for the electrical energy provided by the project will be less than the anticipated marginal cost to the City of electrical energy that would have been consumed by the City in the absence of those purchases; and WHEREAS, the difference, if any, between the fair rental value for the real property subject to the Site Lease and the agreed rent, is anticipated to be offset by below-market energy purchases or other benefits provided under the Power Purchase Agreement; and WHEREAS, the City proposes to enter into the Power Purchase Agreement and Site Lease substantially in the terms presented at this meeting, subject to changes, insertions or omissions as the City Administrator or his/her designee reasonably deems necessary following the Council’s adoption of this Resolution; and WHEREAS, pursuant to Government Code 4217, the City has held a public hearing, public notice of which was given two weeks in advance. NOW, THEREFORE, based upon the above-referenced recitals, the Council hereby finds, determines, and orders as follows: 1. The Council finds that the terms of the Power Purchase Agreement and Site Lease are in the best interest of the City. 2. In accordance with Government Code 4217, and based on data derived from an analysis, the Council finds that the anticipated cost to the City for electrical energy provided by the project under the Power Purchase Agreement will be less than the anticipated marginal cost to the City of electrical energy that would have been consumed by the City in the absence of those purchases. 3. In accordance with Government Code 4217, the Council finds that the difference, if any, between the fair rental value for the property subject to Site Lease and the agreed rent, is anticipated to be offset by below-market energy purchases or other benefits provided under the Power Purchase Agreement. Resolution No. 2022-78 Solar PPA and Site Lease – Government Code 4217 Resolution City Council Regular Meeting | October 3, 2022 Page 3 of 3 4. The Council hereby authorizes the City Administrator to finalize a Power Purchase Agreement and Site Lease containing the terms identified in the staff report, both of which shall be subject to such changes, insertions, or omissions that the City Administrator or his designee reasonably deems necessary. 5. The City Administrator or his designee is hereby authorized and directed to negotiate any further changes, insertions, and omissions to the Power Purchase Agreement and Site Lease as he/she reasonably deems necessary, and thereafter to execute and deliver the Power Purchase Agreement and Site Lease following the Council’s adoption of this resolution. The City Administrator or designee is further authorized and directed to execute and deliver any and all papers and other documents and to do or cause to be done any and all other acts and things necessary or proper for carrying out this resolution and said agreements. PASSED AND ADOPTED by the City Council of the City of Gilroy at a regular meeting duly held on the 3rd day of October 2022 by the following roll call vote: AYES: COUNCIL MEMBERS: ARMENDARIZ, BRACCO, HILTON, LEROE-MUÑOZ, MARQUES, TOVAR, BLANKLEY NOES: COUNCIL MEMBERS: NONE ABSTAIN: COUNCIL MEMBERS: NONE ABSENT: COUNCIL MEMBERS: NONE APPROVED: Marie Blankley, Mayor ATTEST: _______________________ Thai Nam Pham, City Clerk Marie Blankley (Oct 4, 2022 13:56 PDT) Marie Blankley CERTIFICATE OF THE CLERK I, THAI NAM PHAM, City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2022-78 is an original resolution, or true and correct copy of a city Resolution, duly adopted by the Council of the City of Gilroy at a Regular Meeting of said held on Council held Monday, October 3, 2022, at which meeting a quorum was present. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this Monday, October 3, 2022. ____________________________________ Thai Nam Pham, CMC, CPMC City Clerk of the City of Gilroy (Seal)