HomeMy WebLinkAboutAgenda Report - July 16, 2008 E-12AGENDA ITEM EWrL
CITY OF LODI
COUNCIL COMMUNICATION
TM
AGENDA TITLE: Adopt Resolution renewing line of credit with Farmers and Merchants Bank
($3,000,000) at no cost to the City of Lodi for the Lodi Electric Utility through
June 30,2009 (CM)
MEETING DATE: July 16, 2008
PREPARED B Y Budget Manager
RECOMMENDED ACTION: Adopt Resolution approving the line of credit with Farmers and
Merchants Bank for $3,000,000 through June 30, 2009.
BACKGROUND INFORMATION: On July 19, 2006, the Lodi Electric Utility secured a short-term
line of credit with Farmers and Merchants Bank through June 30,
2007. This was renewed for FY 2007-08. The line of credit was
not needed during this year, however, extending the line of credit for another year is appropriate in
order to provide for emergency cash reserves. Farmers and Merchants Bank provides the City of
Lodi with all of its banking services and has approved the line of credit to be used for Electric Utility
operations and other emergency needs should they arise through June 30, 2009. If the line of credit
is exercised, the loan would be secured with a certificate of deposit with the bank. Securing the
repayment of loans in this manner allows for very favorable interest rates.
FISCAL IMPACT: It is anticipated there will be no additional costs for renewing the line of credit with
Farmers and Merchants Bank. It is not anticipated the line of credit will be utilized, but if it is, there
will be a short term interest cost associated with the amount and for the time the line of credit is
utilized.
FUNDING AVAILABLE: The costs for renewing the line of credit are budgeted in the Electric Utility
Fund
ME
Attachments
cc: City Attomey
APPROVED:
Blair K' ty Manager
I�Y�1���L�]i•li•L���I�I:�iCy;
A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING AND
APPROVING THE EXECUTION AND DELIVERY O FA LOAN
AGREEMENT TO FARMERS& MERCHANTS BANK OF CENTRAL
CALIFORNIAAND THE BORROWING OF FUNDSTHEREUNDER
WHEREAS, Farmers & Merchants Bank of Central California (the "Bank") has
offered to provide a revolving line of credit to the City of Lodi (the "City") in the amount of
three million dollars ($3,000,000) to be available through June 30, 2009, pursuant to a
loan agreement between the City and the Bank (the "Loan Agreement"), which is on file
in the City Clerk's Office and incorporated herein by reference; and
WHEREAS, Government Code Sections 53850 et seg. authorize the City to
borrow money by the issuance of temporary notes under the Loan Agreement; and
WHEREAS, in order to make best use of the credit facility provided by the Bank,
it is desirable to delegate to the Budget Manager the authority to make borrowings under
the line of credit.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lodi as
follows:
1. Recitals. The City Council hereby finds and determines that the foregoing
recitals are true and correct.
2. Approval of Loan Aareement. The proposed form of the Loan Agreement
between the Bank and the City, including the form of promissory notes to be delivered by
the City thereunder, as presented to this meeting, is hereby approved in substantially
final form. The City Manager of the City of Lodi is hereby authorized, for and on behalf of
the City Council, to execute and deliver to the Bank the Loan Agreement in substantially
said form, with such changes therein as such officer, with the advice of the City Attorney,
may require or approve, such approval to be conclusively evidenced by the execution
and delivery thereof.
3. Deleoation of Authoritv to Make Borrowings under Loan Aareement. The
City Council hereby authorizes the Budget Manager of the City, for and on behalf of the
City Council, to execute and deliver to the Bank promissory notes representing
borrowings under the Loan Agreement; provided that such additional borrowings are
made in conformance with the terms, conditions, and limitations of the Loan Agreement
and the temporary borrowing provisions of Government Code Sections 53850 et seq., all
as determined by the Budget Manager. Such promissory notes shall be issued in
substantially the form attached to the Loan Agreement as Exhibit B, with interest
thereon, determined in accordance with the provisions of the Loan Agreement, with such
changes therein as such officer, with the advice of the City Attorney, may require or
approve, such approval to be conclusively evidenced by the execution and delivery
thereof.
4. Authorization to Execute Documents. City officials and staff are hereby
authorized and directed, jointly and severally, to do any and all things and to execute
and deliver any and all documents that they may deem necessary or advisable in order
to proceed with the borrowings authorized hereby and otherwise carry out, give effect to,
and comply with the terms and intent of this Resolution. Such actions already taken by
such officials and staff are hereby ratified, confirmed, and approved.
Dated: July 16, 2008
hereby certify that Resolution No. 2008-142 was passed and adopted by the
City Council of the City of Lodi in a regular meeting held July 16, 2008 by the following
vote:
AYES: COUNCIL MEMBERS — Hansen, Hitchcock, Johnson, Katzakian,
and Mayor Mounce
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS—None
ABSTAIN: COUNCIL MEMBERS—None
qANDI JOHL
City Clerk
K1I1Isl V -1K
2