HomeMy WebLinkAboutC16-225 CEC Solar Lease Purchase AgreementEXHIBIT C
LEASE PURCHASE AGREEMENT
This Lease Purchase Agreement, is effective as of 14l lto ,2016 (this "Lease"),
and is by and between Eagle County through its Sanitary Landfi
County through its General Fund ("Lessee").
I Fund ("Lessor") and Eagle
RECITALS
WHEREAS, Eagle County, Colorado is a duly organized and validly existing political
subdivision of the State of Colorado, with the authority, pursuant to Section 30-11-101(l)(c),
Colorado Revised Statutes, to sell, convey, or exchange any real or personal property owned by
the County and make such order respecting the same as may be deemed conducive to the
interests of the inhabitants; and to lease any real or personal property, either as lessor or lessee
together with any facilities thereon, when deemed by the Board of County Commissioners to be
in the best interests of the County and its inhabitants; and
WHEREAS, pursuant to Section 30-l l-104.1, Colorado Revised Statutes, counties may
enter into lease purchase agreements regarding equipment used, or to be used, for governmental
pu{poses, and such agreements may include an option to purchase, transfer, and acquire title to
such property within a period not exceeding the useful life of the property, but in no case
exceeding thirty years; and
WHEREAS, CEC SOLAR #lll3, LLC, is constructing a cofirmunity solar aray in
Garfield County, Colorado that may benefit customers of Holy Cross Energy (hereinafter the
"Array"); and
WHEREAS, Eagle County, Colorado is a customer of Holy Cross Energy and desires to
participate in the Array and has or will enter into a Solar Interest Purchase Agreement ("SIPA")
with CEC SOLAR #lll3, LLC, for the purchase of Production Capability (defined below),
related bill credits, and acquisition of selected solar panels all as defined and described in the
SIPA; and
WHEREAS, energy savings and acquisition of, or an interest in, the selected solar panels
in the Array through the SIPA will benefit the inhabitants of Eagle County through the
generation of clean energy and will result in a substantial reduction or offset in energy expenses
for Eagle County, Colorado; and
WHEREAS, the Eagle County Landfill is an enterprise and maintains a Sanitary Landfill
Fund (the "Sanitary Landfill Fund") that has money available to fund the purchase price as set
forth in the SIPA in the amount of One Million Three Hundred Forty-Five Thousand Two
Hundred Six Dollars (91,345,206.00) (the "Purchase Price"); and
WHEREAS, Lessee, for application to its various buildings and through the use of the
General Fund, desires to lease and obtain the benefits of Production Capability, related bill
C16-225
credits and an option to ultimately acquire the selected solar panels on the terms and conditions
set forth herein.
NOW THEREFORE, for and in consideration of the mutual promises and covenants
herein contained, it is agreed as follows:
ARTICLE 1
DEFINITIONS
All capitalized terms used herein and not otherwise defined shall have the meanings given to
them herein or in the SIPA, unless the context otherwise requires. Capitalized terms used herein
shall have the following meanings under this Lease:
"Appropriation" means the action oftthe Board in annuallymaking money available for all
payments due under this Lease, including the payment of Rent.
"Board" means the Board of Eagle County Commissioners.
"Budget" means the annual budget of the County as finally adopted by the Board.
"Equipment" means the selected solar panels identified in Exhibit A to the SIPA.
"Event(s) of Lease Default" means any event as defined in Section 8.lof this Lease.
66Event of Non-appropriation" means the termination and non-renewal of this Lease by the
Lessee, determined by the Board's failure, for any reason, to appropriate by the last day of each
Fiscal Year, sufficient funds to pay Rent due in the next Fiscal Year. The term also means a
notice under this Lease of the Lessee's intention to not renew and therefor terminate this Lease.
"Fiscal Year" means January I of any calendar year and ends on December 31 of the same year,
and which is also Lessee's budget year, or any other period of up to 12 months that is designated
by statute or otherwise as the fiscal year for the County.
"Initial Term" means the period which coflrmences on the date of delivery of this Lease and
terminates on December 31, 2016.
"Lease" means this Lease Purchase Agreement between Lessor and Lessee as the same may be
amended or supplemented.
"Leased Property" means all of Lessor's interest in the Equipment under the SIPA or any
amendments or modifications or replacements thereof, including Production Capability, related
bill credits and Lessor's right to purchase the Equipment under the SIPA.
"Lease Remedy" or "Lease Remedies" means any or all remedial steps provided in this Lease
whenever an Event of Default or an Event of Non-appropriation has happened and is continuing.
"Lease Term" means the Initial Term and any Renewal Term as to which Lessee may exercise
its option to renew this Lease by effecting an Appropriation of funds for payment of Rent
hereunder, as provided in and subject to the provisions of this Lease.
"Production Capability" of the selected solar panels is comprised of their (a) electric generating
capacity, and (b) the actual generated electricity (i.e. solar output).
"Purchase Option Price" means the amount payable on any date, at the option of the Lessee, to
prepay Rent, terminate the Lease Term and purchase the Lessor's interest in the Leased Property,
as provided herein. The Purchase Option Price shall be the amount necessary to pay the Purchase
Price, plus interest at arate mutually agreed upon by the parties, less Rent paid to the date of
exercise of the Option and less the option price under the SIPA, if any.
"Renewal Term" means any portion of the Lease Term commencing on January 1 of any
calendar year and terminating on or before December 3l of the same year as provided in Article
4 of this Lease.
"Rent" means the rental payments payable by Lessee during the Lease Term, which constitute
payments payable by Lessee for and in consideration of the right to receive the benefits of the
Leased Property.
ARTICLE 2
REPRESENATATIONS AND COVENANTS
Section 2.1 The payrnent of Rent hereunder shall constitute currently budgeted and
appropriated expenditures of the Lessee and may be paid from any legally available funds. The
Lessee's obligations under this Lease shall be subject to the Lessee's annual right to terminate
this Lease (as further provided herein), and shall not constitute a mandatory charge or
requirement in any ensuing Fiscal Year beyond the current Fiscal Year.
No provision of this Lease shall be construed or interpreted as creating a general obligation,
multiple fiscal year financial obligation, or other indebtedness of the Lessee within the meaning
of any constitutional or statutory debt limitation. No provision of this Lease shall be construed or
interpreted as creating an unlawful delegation of governmental powers nor as a donation by or a
lending of the credit of the Lessee within the meaning of Article XI, Sections 1 or 2 of the
Colorado Constitution. This Lease shall not directly obligate Lessee to make any payments
beyond those duly budgeted and appropriated for the Lessee's then current Fiscal Year. The
Lessee shall be under no obligation whatsoever to exercise its option to purchase the Lessor's
interest in the Leased Property. No provision of this Lease shall be construed to pledge or to
create a lien on any class or source of any Lessee funds. In the event the Lessee fails to perform
the sole security to the Lessor is the Leased Property.
ARTICLE 3
LEASE OF THE LEASED PROPERTY
The Lessor hereby demises and leases the Leased Property to Lessee and the Lessee hereby
leases the Leased Property from Lessor, in accordance with the provisions of this Lease.
ARTICLE 4
LEASE TERM
Section 4.1 The Lease Term shall commence as of the date hereof. The Initial Term shall
terminate on December 31, 2016. This Lease may be renewed, solely at the option of Lessee, for
successive one year Renewal Terms (subject to Section 4.2hereof), provided, however, that the
Lease Term shall terminate no later than December 3I,2036. The Lessee hereby finds that the
maximum Lease Term hereunder does not exceed the weighted average useful life of the Leased
Property. The Lessee further determines and declares that the period during which the Lessee
has an option to purchase the Leased Property does not exceed the life of the Leased Property.
The County Budget Officer or other officer of the Lessee at any time charged with the
responsibility of formulating budget proposals for the Lessee is hereby directed to include in the
annual budget proposals submitted to the Board, in any year in which the Lease shall be in effect,
items for all payments required for the ensuing Renewal Term under this Lease until such time,
if any, as the Lessee may determine to not renew and terminate this Lease. Notwithstanding this
directive regarding the formulation of budget proposals, it is the intention of the Lessee that arry
decision to effect an Appropriation for the Rent shall be made solely by the Board in its absolute
discretion, as further provided in the following paragraph, and not by any other official of the
Lessee.
Not later than December 31 of the then current Initial Term or any Renewal Term the Countv
Finance Director or his designee shall determine:
a. That the Lessee has effected or intends to effect on a timely basis an Appropriation
for the ensuing Fiscal Year which includes sufficient amounts authorized and directed
to be used to pay all Rent whereupon this Lease shall be renewed for the ensuing
Fiscal Year; or
b. The Lessee has determined, for any reason, not to renew this Lease for the ensuing
Fiscal Year and shall notiff Lessor of the same.
The Lessee's option to renew or not to renew this Lease shall be conclusively determined by
whether or not the applicable Appropriation has been made on before December 3l of each
Fiscal Year, all as further provided in Article 6 of this Lease.
The terms and conditions hereof during any Renewal Term shall be the same as the terms and
conditions hereof during the Initial Term.
Section 4.2 Termination of Lease Term. The Lease Term shall terminate upon the earliest
of the following events:
a. The expiration of the Initial Term or any Renewal Term during which there
occurs an Event of Non-appropriation pursuant to Section 4.1 and Article 6 of this
Lease (provided that the Lease Term will not be deemed to have been terminated
if the Event of Non-appropriation is cured as provided in Section 6.3 hereof);
b. The conveyance of Lessor's interest in the Leased Property under this Lease to
the Lessee upon payment of the Purchase Option Price or all of the Rent, for
which an Appropriation has been effected by the Lessee for such pu{pose, as
provided in Article 7 of this Lease; or
c. An uncured Event of Lease Default and termination of this Lease under Article 8
of this Lease by Lessor.
Except for an event described in paragraph (b) above, upon termination of this Lease, the Lessee
agrees that is will no longer receive the benefits and rights associated with the T eased Property.
Termination of the Lease Term shall terminate all unaccrued obligations of the Lessee under this
Lease, and shall terminate the Lessee's rights under this Lease, except of any purchase pursuant
to Article 7 of this Lease. All obligations of the Lessee accrued prior to such termination shall
be continuing until the Lessor gives notice to the Lessor that such accrued obligations have been
satisfied.
ARTICLE 5
ENJOYMENT OF THE LEASED PROPERTY
Section 5.1 Lessee's Need for the Leased Property; Determinations as to Fair Value and
Fair Purchase Price. The Lessee has determined and hereby determines that it has a current
need for the Leased Property. It is the present intention and expectation of the Lessee that this
Lease will be renewed annually until unencumbered title to the Leased Property is acquired by
the Lessee pursuant to this Lease; but this declaration shall not be construed as contractually
obligating or otherwise binding the Lessee. The Lessee has determined and hereby determines
that the Rent under this Lease during the Lease Term for the Leased Property represents the fair
value of the use of the Leased Property and that the Purchase Option Price for the Leased
Property will represent the fair purchase price of the Lessor's leasehold interest in the Leased
Property at the time of the exercise of the option. The Lessee has determined and hereby
determines that the Rent does not exceed a reasonable amount so as to place the Lessee under an
economic compulsion to renew this Lease or to exercise its option to purchase the Lessor's
interest in the Leased Property hereunder. In making such determinations, the Lessee has given
consideration to the estimated current value of the Leased Property, the uses and purposes for
which the Leased Property will be employed by the Lessee, the benefit to the citizens and
inhabitants of the County by reason of the use of the Leased Property pursuant to the terms and
provisions of this Lease, the Lessee's option to purchase the Lessor's interest in the Leased
Property and the expected eventual vesting of unencumbered title to the Leased Property in the
Lessee. The Lessee hereby determines and declares that the period during which the Lessee has
an option to purchase the Lessor's interest in the Leased Property (i.e., the entire maximum
Lease Term for the Leased Property) does not exceed the weighted average useful life of the
Leased Property.
ARTICLE 6
PAYMENTS BY THE LESSEE
Section 6. I Payments to Constitute Currently Budgeted Expenditures of the Lessee. The
Lessor and Lessee acknowledge and agree that the Rent and any other obligations hereunder
shall constitute currently budgeted expenditures of the Lessee, if an Appropriation has been
effected for such purpose. The Lessee's obligations to pay Rent and any other obligations under
this Lease shall be from year to year only (as further provided in Article 4 and Sections 6.2 and
6.3 hereof), shall extend only to moneys for which an Appropriation has been effected by the
Lessee, and shall not constitute a mandatory charge, requirement or liability in any ensuing
Fiscal Year beyond the then current Fiscal Year. No provision of this Lease shall be construed
or interpreted as a delegation of governmental powers or as creating a multiple fiscal year direct
or indirect debt or other financial obligation whatsoever of the Lessee or a general obligation or
other indebtedness of the Lessee within the meaning of any constitutional, or statutory debt
limitation, including without limitation Article X, Section 20 of the Colorado constitution. No
provision of this Lease shall be construed or interpreted as creating an unlawful delegation of
governmental powers nor as a donation by or a lending of the credit of the Lessee within the
meaning of Sections I or 2 of Article XI of the Constitution of the State. This Lease shall not
directly or indirectly obligate the Lessee to make any payments beyond those for which an
Appropriation has been effected by the Board for the Lessee's then current Fiscal Year. The
Lessee shall be under no obligation whatsoever to exercise its option to purchase the Lessor's
interest in the Leased Property. No provision of this Lease shall be construed to pledge or to
create a lien on any class or source of Lessee's moneys (other than moneys for which an
Appropriation has been effected by the Board for the Lessee's then current Fiscal Year), nor
shall any provision of this Lease restrict the future issuance of any bonds or obligations payable
from any class or source of moneys.
Section 6.2 Rent and Purchase Option Price
The Lessee shall pay Rent for which an Appropriation has been effected to the Lessor
during the Initial Term and any Renewal Term. Rent shall be comprised of the value of the bill
credits received by Lessor which shall be paid quarterly in alrears based upon the prior quarter's
actual credits. In no event shall the total Rent exceed the Purchase Price plus 5% interest.
The Lessee may, on any date, pay the then applicable Purchase Option Price for the
purpose of terminating this Lease and purchasing the Lessor's interest in the Leased Property as
further provided in Article 7 of this Lease. The Lessee may also, at any time during the Lease
Term, prepay any portion of the Rent due under this Lease.
Section 6.3 Non-appropriation. In the event that the Lessee gives notice that it intends to
not renew this Lease as provided by Section 4.1 hereof or the Lessee shall not effect an
Appropriation, on or before December 31 of each Fiscal Year, of moneys to pay all Rent coming
due for the next ensuing Renewal Term as provided in Section 4.1 hereof and this Article, an
Event of Non-appropriation shall be deemed to have occurred; subject, however, to each of the
following provisions:
a. In the event an Appropriation has not been effected by the Lessee on or before
December 31 of a Fiscal Year, then the Lessor shall declare an Event of Non-
appropriation on or before the January 15 of the following Fiscal Year or such
declaration shall be made on any earlier date on which the Lessor receives official,
specific written notice from the Lessee that this Lease will not be renewed. In order
to declare an Event of Non-appropriation, the Lessor shall send written notice thereof
to the Lessee.
b. The Lessor shall waive any Event of Non-appropriation which is cured within thirty
(30) days of the receipt by the Lessee of notice from the Lessor as provided in (a)
above, by a duly effected Appropriation to pay all Rent due for such Renewal Term.
If an Event of Non-appropriation occurs, the Lessee shall not be obligated to make payment of
the Rent or any other payrnents provided for herein which accrue after the last day of the Initial
Term or any Renewal Term during which such Event of Non-appropriation occurs; provided,
however, that, subject to the limitations of Section 6.1 hereof; the Lessee shall continue to be
liable for Rent allocable to any period during which the Lessee shall continue to receive benefit
from the Leased Property.
The Lessee shall in all events cease use of all benefits from the Leased Property by
March I of the Renewal Term in respect of which an Event of Non-appropriation has occurred.
After March I of the Renewal Term in respect of which an Event of Non-appropriation
has occurred, the Lessor may proceed to exercise all or any Lease Remedies.
ARTICLE 7
PURCHASE OPTION
Section 7.1 Purchase Option. The Lessee shall have the option to purchase the Lessor's
interest in the Leased Property, but only if an Event of Lease Default or an Event of Non-
appropriation is not then occurring. The Lessee may exercise its option on any date (consistent
with the SIPA) by complying with the conditions of Section 7.2.
Section 7.2 Conditions of Purchase Option. Transfer all right, title and interest in the
Leased Property to Lessee upon payment, to Lessor of the then applicable Purchase Option Price
which shall equal the amount necessary to pay the Purchase Price, plus interest at arate mutually
agreed upon by the parties, less Rent paid to date of exercise of the Option and, less the option
price under SIPA, if any.
ARTICLE 8
EVENTS OF LEASE DEFAULT AND REMEDIES
Section 8.1 Events of Lease Default Defined. Any one of the following shall be Events of
Lease Default under this Lease:
a. Failure by Lessee to pay Rent which has been specifically appropriated by the Lessee
for such purpose during the Initial Term or any Renewal Term within fifteen (15)
business days of the date on which payment is due; or
b. Failure of Lessee to perform as set forth in this lease.
Section 8.2 Remedies on Default. Whenever any Event of Lease Default shall have happened
and be continuing beyond any applicable cure period, the Lessor may terminate the Lease.
Article 9
MISCELLANEOUS
Section 9.1 Amendments. This Lease may not be amended or supplemented, nor may any
obligations hereunder be waived, except by agreement signed by both parties.
Section 9.2 Entire Agreement. This Lease contains the entire agreement between the parties
with respect to the subject matter hereof and supersedes all other agreements or understanding
between the parties with respect thereto.
Section 9.3 No Third Party Beneficiaries. This Lease shall be binding upon and shall inure
to the benefit of the parties hereto and their respective permitted assigns and successors in
interest. Enforcement of this Lease and all rights and obligations hereunder are reserved solely
for the parties, and not to any third party.
Section 9.4 Waiver. No failure or delay by either party in the exercise of any right hereunder
shall constitute a waiver thereof. No waiver of any breach shall be deemed a waiver of anv
preceding or succeeding breach.
Section 9.5 Severability. The invalidity, illegality or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision hereof.
Section 9.6 Financial Obligations Contingent upon Appropriations. Financial
obligations of Lessee payable after the current Fiscal Year are contingent upon funds for
that purpose being appropriated, budgeted, and otherwise made available.
Section 9.7 No individual Liability. This Lease, and all obligations and rights hereunder,
shall be deemed to be rights and obligations of the Lessee and not any individual member,
director, officer, employees, servant or other agent in his or her individual capacity, and no
recourse shall be had on account of any such right or obligation.
Section 9.8 Recitals. Recitals are incorporated herein by this reference and made a part of
this Lease.
Section 9.9 Captions. Captions are for convenience only and in no way define, limit or
describe the scope or intent of any provisions or sections of this Lease.
THIS LEASE PURCHASE AGREEMENT has been approved and is in full force and
effect as a result of the Board's approval of Resolution No. 2016-lEt
