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HomeMy WebLinkAboutCC Res 6717 2017-02-27RESOLUTION NUMBER 6717 A RESOLUTION OF THE SEAL BEACH CITY COUNCIL DIRECTING THE TERMINATION OF AN INSTALLATION AGREEMENT WITH CLIMATEC BUILDING TECHNOLOGIES GROUP (FOR EQUIPMENT AND WORK NOT YET ACQUIRED THEREUNDER) AND APPROVING THE EXECUTION AND DELIVERY OF AN AMENDMENT TO LEASE SCHEDULE #13 -030 AND MEMORANDUM REGARDING APPLICATION OF REMAINDER OF ACQUISITION FUND AND TAKING RELATED ACTIONS THE CITY COUNCIL OF THE CITY OF SEAL BEACH HEREBY FINDS, DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS: Section 1. On April 28, 2014, the City Council adopted Resolution No. 6456, approving the City's execution and delivery of contracts pertaining to the acquisition and installation of multiple equipment to be installed in City facilities, to reduce or make more efficient use of energy (the "Equipment "), and the financing of costs for such acquisition and installation (the "Financing "), including: (i) an Installation Agreement, dated as of May 8, 2014 (the "Installation Agreement') by and between the City and KX2 Holdings Building Technologies Group LP, dba Climatec Building Technologies Group ( "Climatec "), (ii) a Lease with Option to Purchase # 13 -030, dated as of May 8, 2014 (the "Financing Lease "), by and between Municipal Finance Corporation ( "Municipal Finance "), as lessor, and the City, as lessee, and (iii) an Acquisition Fund Agreement, dated as of May 8, 2014, dated as of May 8, 2014 (the "Acquisition Fund Agreement "), by and among Municipal Finance, the City and Deutsche Bank, as the custodian thereunder. While a portion of the Equipment has been acquired and installed, based on a review of the progress under the Installation Agreement and an evaluation of the portion of Equipment remaining to be acquired, the City Council hereby finds and determines as follows: (A) Based on an evaluation of the updated savings estimates (as compared to the costs), the City has determined that it is in the City's best interest to not proceed with the further acquisition of the Equipment for which the acquisition has not been completed as of the date hereof. (B) With respect to proceeds of the Financing remaining in the "Acquisition Fund" held under the Acquisition Fund Agreement (in the approximate amount of $600,000), it is in the City's best interest to apply such moneys to the prepayment of "Rental Payments" (as such term is defined in the Financing Lease). Section 2. Based on the finding and determination made in Section 1(A), the City Council hereby authorizes and directs officers of the City take such other actions as necessary or appropriate to terminate any further acquisition under the Installation Agreement. The Mayor (or in the Mayor's absence, the Mayor Pro Tem) or the City Manager, each acting individually, is hereby authorized to execute and deliver, in the name and on behalf of the City, such written instrument to effectuate or in furtherance of such termination. Section 3. At the time of execution of the Financing Lease, the City made certain representations and covenants, with the intent that the interest components of the Rental Payments would not be includable in gross income for federal income tax purposes (i.e., that the Rental Payments would constitute "tax - exempt' obligations within the meaning of Section 150 of the Internal Revenue Code of 1986, as amended (the "Code "). In that connection, the City Council hereby makes the following findings and determinations: (A) On the date of issue with respect to the Financing, the City expected that all of the proceeds of the Financing would be used to acquire the Equipment. 57296- 0001A20302080.do (B) Contrary to the City's original expectations, the City has determined to not proceed with further acquisition of the remaining portion of the Equipment and, therefore, the remaining moneys in the Acquisition Fund are excess proceeds for purposes of the Code. Section 4. There has been presented to the City Council the form of an "Amendment to Lease Schedule #13 -030 and Memorandum Regarding Application of Remainder of Acquisition Fund," to be executed by and among the City, Municipal Finance and City National Bank (the "Amendment "). In connection with the finding and determination made in Sections 1(B) and 3, the City Council hereby authorizes and directs as follows: (A) The Amendment, in substantially the form on file in the office of the City Clerk, is hereby approved. The Mayor (or in the Mayor's absence, the Mayor Pro Tem) is hereby authorized, for and in the name and on behalf of the City, to execute and deliver the Amendment, in substantially such form, with such changes therein as the Mayor (or the Mayor Pro Tem, as the case may be) may approve (such approval to be conclusively evidenced by the execution and delivery thereof). (B) The City Council hereby approves and directs the re- allocation of all of the remaining moneys in the Acquisition Fund to prepay Rental Payments under the Financing Lease. Section 5. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents that they may deem necessary or advisable in order to effectuate the purposes of this Resolution and the Amendment, and any such actions previously taken by such officers are hereby ratified and confirmed. PASSED, APPROVED AND ADOPTED by the City Council of the City of Seal Beach at a meeting held February 27, 2017. AYES: Council Members: Massa - Lavitt, Varipapa, Deaton, Moore, Sustarsic NOES: Council Members: None ABSENT: Council Members: None ABSTAIN: Council Members: None Sandra Massa - Lavitt, Mayor ATTEST: Robin L. Roberts, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF SEAL BEACH ) I, Robin L. Roberts, City Clerk to the City of Seal Beach, hereby certify that the foregoing resolution was duly adopted at a regular meeting of the City Council of the City of Seal Beach, held on February 27, 2017. 1 Robin L. Roberts, City Clerk -2- S 7296- 0001A2030208v5.dm n