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Home My WebLink AboutRESO 102091 0005_20241015 Resolution No. 10209 A Resolution of the City of Palo Alto Declaring Intention to Reimburse Expenditures Relating to Modernization of the Electric Utility System Infrastructure from the Proceeds of Tax-Exempt Debt WHEREAS, the City of Palo Alto (the “City”) operates a system for the distribution of electric energy (the “Electric System”); and WHEREAS, the City provides electricity from a 100% carbon neutral portfolio, and has been in the forefront of efforts to design programs allowing customers to easily use clean energy; and WHEREAS, one major initiative in the City’s Sustainability and Climate Action Plan (“S/CAP”) is to promote the transition to all-electric homes and electric vehicles (“EVs”) to reduce greenhouse gas (“GHG”) emissions; and WHEREAS, in 2020, the City launched an update to the S/CAP to reduce GHG emissions 80 percent below 1990 levels, i.e., reduce 624,095 metric tons of greenhouse gases by 2030 (the “80 x 30 goal"); and WHEREAS, a 2021 impact analysis showed that to meet the “80 x 30 goal”, the City must electrify all of its roughly 15,000 single-family homes, replacing natural gas equipment with efficient electric alternatives; and WHEREAS, the City recently conducted an electrification study to evaluate the impacts of projected electrification loads from converting houses to electrical power and the adoption of EVs on the City’s distribution and substation transformers, primary/secondary distribution circuits, and to propose upgrades needed to mitigate overloads; and WHEREAS, in response, the City developed the Electric Grid Modernization for Electrification Project (“Modernization Project”) to increase distribution capacity, enhance grid resiliency and reliability of the electric distribution system, and to continue to accelerate the City’s clean energy and decarbonization goals; and WHEREAS, to meet the expected increase in demands, the Modernization Project will increase network capacity; capacity increases will include the following work: •converting 4kV systems to 12kV, •installing more distribution transformers with greater capacity, •rebuilding secondary networks by increasing the conductor size and creating more secondary networks, and Docusign Envelope ID: 1D643600-964B-430B-BE96-01C734CFF9EA 2 0005_20241015 •replacing distribution substation transformers, breakers and feeders at three substations to increase capacity; and WHEREAS, in addition, the City expects to finance acquisition and construction of a Hanover substation improvement and the acquisition of land for use in the construction of the Electric Grid Modernization for Electrification Project, among other things; and WHEREAS, the estimated cost of the Modernization Project, the Hanover substation improvement and the land acquisition (collectively, “Project”) is between $220 million to $306 million, depending on the approach and cost of materials; and WHEREAS, United States Income Tax Regulations section 1.150-2 provides generally that proceeds of tax-exempt debt are not deemed to be expended when such proceeds are used for reimbursement of expenditures made prior to the date of issuance of such debt unless certain procedures are followed, one of which is a requirement that prior to the payment of any such expenditure, the issuer declares an intention to reimburse such expenditure; and WHEREAS, it is in the public interest and for the public benefit that the City declares its official intent to reimburse the expenditures referenced herein. NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE, as follows: 1. The City intends to issue one or more series of debt payable from its Electric System revenues, including, but not limited to revenue bonds, loans and installment purchase obligations (collectively, the “Bonds”) for the purpose of paying the costs of the Project. 2. The City hereby declares that it reasonably expects (i) to pay certain costs of the Project prior to the date of issuance of the Bonds, and (ii) to use a portion of the proceeds of the Bonds for reimbursement of expenditures for the Project that are paid before the date of issuance of the Bonds. // // // // // // Docusign Envelope ID: 1D643600-964B-430B-BE96-01C734CFF9EA 3 3. The principal amount of the Bonds is not expected to exceed $350,000,000, not including the amount needed to pay for debt service reserve funds, costs of issuance and capitalized interest. INTRODUCED: DECEMBER 16, 2024 PASSED: DECEMBER 16, 2024 AYES: BURT, KOU, LAUING, LYTHCOTT-HAIMS, STONE, TANAKA, VEENKER NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ City Clerk APPROVED AS TO FORM: __________________________ Chief Assistant City Attorney Jones Hall, A Professional Law Corporation By: _______________________ Christopher K. Lynch Jones Hall, A Professional Law Corporation Bond Counsel 0005_20241015 __________________________ Mayor APPROVED AS TO CONTENT: __________________________ City Manager __________________________ Director of Utilities __________________________ Director of Administrative Services/ Chief Financial Officer Docusign Envelope ID: 1D643600-964B-430B-BE96-01C734CFF9EA Certificate Of Completion Envelope Id: 1D643600-964B-430B-BE96-01C734CFF9EA Status: Completed Subject: RESO 10209 - Intention to Reimburse Expenditures Re. Electric Utility System Infrastructure Source Envelope: Document Pages: 3 Signatures: 7 Envelope Originator: Certificate Pages: 2 Initials: 0 Christine Prior AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 Christine.Prior@CityofPaloAlto.org IP Address: 199.33.32.254 Record Tracking Status: Original 12/19/2024 5:35:29 PM Holder: Christine Prior Christine.Prior@CityofPaloAlto.org Location: DocuSign Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Palo Alto Location: DocuSign Signer Events Signature Timestamp Caio Arellano Caio.Arellano@CityofPaloAlto.org Chief Assistant City Attorney City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Uploaded Signature Image Using IP Address: 199.33.32.254 Sent: 12/19/2024 5:39:17 PM Viewed: 12/23/2024 10:04:33 AM Signed: 12/23/2024 10:04:40 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Christopher K. Lynch clynch@joneshall.com Vice President Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 150.249.206.182 Sent: 12/23/2024 10:04:43 AM Viewed: 1/5/2025 1:33:58 PM Signed: 1/5/2025 1:39:58 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Lauren Lai Lauren.Lai@CityofPaloAlto.org Director Administrative Services/CFO COPA Security Level: Email, Account Authentication (None) Signature Adoption: Drawn on Device Using IP Address: 199.33.32.254 Sent: 1/5/2025 1:39:59 PM Viewed: 1/6/2025 1:56:17 PM Signed: 1/6/2025 1:56:59 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Alan Kurotori Alan.Kurotori@CityofPaloAlto.org Utilities Chief Operating Officer COPA Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 1/6/2025 1:57:00 PM Viewed: 1/8/2025 12:47:45 PM Signed: 1/8/2025 12:48:41 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Signer Events Signature Timestamp Ed Shikada Ed.Shikada@CityofPaloAlto.org Ed Shikada City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 73.231.231.68 Sent: 1/8/2025 12:48:43 PM Viewed: 1/8/2025 1:58:23 PM Signed: 1/8/2025 1:58:42 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Greer Stone Greer.Stone@CityofPaloAlto.org Vice Mayor Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 208.185.159.235 Sent: 1/8/2025 1:58:44 PM Viewed: 1/15/2025 9:51:08 AM Signed: 1/15/2025 9:51:16 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Mahealani Ah Yun Mahealani.AhYun@CityofPaloAlto.org City Clerk Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 1/15/2025 9:51:18 AM Viewed: 1/17/2025 4:47:39 PM Signed: 1/17/2025 4:47:44 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 12/19/2024 5:39:17 PM Certified Delivered Security Checked 1/17/2025 4:47:39 PM Signing Complete Security Checked 1/17/2025 4:47:44 PM Completed Security Checked 1/17/2025 4:47:44 PM Payment Events Status Timestamps