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)