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W R I E R E N E R G Y I T F F RIVERSIDE PUBLIC UTILITIES Board Memorandum PUBLIC U T I L I T I E 5 BOARD OF PUBLIC UTILITIES DATE. May 18, 2012 ITEM NO. 7 SUBJECT: WITHDRAWAL FROM THE FINANCING AUTHORITY FOR RESOURCE EFFICIENCY OF CALIFORNIA JOINT POWERS AGREEMENT ISSUE: That the Board of Public Utilities consider withdrawing from the Financing Authority far Resource Efficiency of California Joint Powers Agreement. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: 1. Approve the City's withdrawal from the Financing Authority for Resource Efficiency of California; 2. Adopt the appropriate resolution to approve withdrawal from the Authority; and 3. Authorize the City Manager, or his designee, to execute all documents related to this transaction. BACKGROUND: On May 5, 1993,the City of Riverside executed the Joint Powers Agreement creating the Financing Authority for Resource Efficiency of California (Authority), also known as FARECAL. The Authority was created to assist member agencies with development and pooled financing for water, gas and electric conservation, reclamation and other projects and programs designed to utilize energy or water resources more efficiently. Membership includes the local cities of Colton,Azusa, Pasadena and the Los Angeles Department of Water and Power, as well as several central and northern California cities and special districts. Over the course of its membership, Riverside participated in a single joint financing in 1994 with Riverside's share totaling approximately $8,800,000. That debt has been fully remitted. Riverside has declined to participate in other pooled financing as the Utility's credit strength and internal program management yield superior results in the credit markets. As such, our membership in the Authority is duplicative and unnecessary. FISCAL IMPACT: There is no cost to withdraw from the Authority. Avoidance of insurance,auditing or other minor professional services costs incurred by the Authority and labor reduction from joint management and participation in the Authority will yield de-minimus savings to the utility. Prepared by: Kevin Milligan, Utilities Assistant General Manager/interim Finance 8 Administration Approved by: David H. Wright, Public Utilities General Manager Approved by: Belinda J. Graham, Assistant City Manager Approved as to form: Gregory P. Priamos, City Attorney Concurs with: Brent Mason, Finance Director/Treasurer Attachments: 1. FARECAL Agreement 2. Resolution