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HomeMy WebLinkAboutItem No. 11 JPA SRC Engergy Auth. & Designation of Council MembersText File City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 www.lake-elsinore.org File Number: RES 2014-051 Agenda Date: 10/10/2017 Status: Consent AgendaVersion: 1 File Type: ResolutionIn Control: City Council / Successor Agency Agenda Number: 11) Page 1 City of Lake Elsinore Printed on 10/5/2017 REPORT TO CITY COUNCIL To:Honorable Mayor and Members of the City Council From:Grant Yates, City Manager Prepared by: Michael Bracken, Economic Development Consultant to the City of Lake Elsinore Date:October 10, 2017 Subject:Adoption of Resolution Approving Joint Powers Agreement Establishing the Southwest Riverside County Energy Authority and Designation of City Council Members and Alternate to Serve on Board of Directors Recommendations 1.adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING A JOINT POWERS AGREEMENT BETWEEN THE CITY OF LAKE ELSINORE AND THE CITY OF TEMECULA FOR THE ESTABLISHMENT OF THE SOUTHWEST RIVERSIDE COUNTY ENERGY AUTHORITY (SRCEA); and 2.Select two (2) Members of the City Council to serve as the City’s representatives to the Board of Directors for the Southwest Riverside County Energy Authority. Background City staff has been actively seeking opportunities to reduce the City’s electrical costs. These efforts recently led to the Council’s approval of the acquisition of street lights within the City from Southern California Edison (SCE). Once acquired, those lights will benefit from the lower electrical rates for city-owned facilities. Another cost savings opportunity has presented itself in connection with a proposed large solar facility located in the City of Temecula. California law provides a unique program for local government agencies – especially cities and school districts – to participate in renewable energy incentives programs. The Renewable Energy Self-Generating Bill Credit Transfer Program ("RES-BCT") was approved by the Legislature in 2008 and is codified in Public Utilities Code Section 2830. Under RES-BCT, the generation system must be owned, operated, or on the property under the control of the “local government” that is seeking to benefit from the program and must be located within the boundaries of that “local government.” Public Utilities Code Section 2830 includes in its definition of “local government,” joint power authorities (“JPA”). For a JPA, the boundaries are those of its member agencies, thereby allowing the eligible generating facility to be located within the jurisdiction of only one of the member agencies. Resolution Establishing Joint Powers Energy Authority October 10, 2017 Page 2 Under Public Utilities Code Section 2830, local government agencies like the City of Lake Elsinore are eligible to participate in the RES-BCT bill credit program through the development of renewable generating facilities such as solar. Under the program, a local government agency either builds (or contracts with a third party to build) a renewable energy generating facility like solar. Then, through an agreement with the local utility, the solar generated power is transferred to the local utility’s grid and the government agency receives a credit for the solar generating facility against its electric bill. Recently, the City of Temecula took advantage of this bill credit program, albeit not as a JPA. Under the terms of a “Power Purchase Agreement” with solar energy developer SMER Research l, LLC, Temecula will sublease a site currently leased to SMER within the Santa Margarita Ecological Reserve, and owned by San Diego State University. The site has been set aside as part the University’s "Santa Margarita Ecological Reserve Solar Initiative.” Temecula has licensed SMER Research to obtain all government approvals (primarily with the California Public Utilities Commission), shepherd the necessary approvals and interconnection approvals with SCE, and build the solar facility – all at no cost to the city. The City of Temecula will then be obligated to purchase the power generated by the solar facility which, in turn, will be delivered to SCE and the city’s electrical bill appropriately offset leading to a net savings. Because only part of the leased site within Santa Margarita Ecological Reserve is necessary to serve the City of Temecula’s, there is an opportunity for the City of Lake Elsinore to participate with SMER Research in the RES-BCT bill credit program. However, for the City of Lake Elsinore to participate in the bill credit program for a solar facility outside of Lake Elsinore, the City must be part of an organization with a direct “nexus” to the site. Accordingly, for the City of Lake Elsinore to participate in a RES-BCT bill credit program through a solar generating facility in Temecula, it must do so through the formation of a joint powers authority with the City of Temecula. Discussion In connection with tonight’s consideration of this matter, the City Council will also separately consider granting authority to enter into a “Solar Power Purchase Agreement” and related agreements to purchase power from a solar generating facility in Temecula similar to that already approved by the City of Temecula and discussed above. Additionally the City Council will be separately considering a financial guarantee agreement. The details of those agreements are set forth separately in that staff report. The proposed Joint Powers Agreement forming the SRCEA is attached and will allow the City of Lake Elsinore to participate in the RES-BCT bill credit program. The Joint Powers Agreement provides flexibility for the City of Temecula and the City of Lake Elsinore to jointly contemplate additional opportunities that are mutually beneficial. Additionally, the Joint Powers Agreement also allows the flexibility to allow other local jurisdictions to become part of the SRCEA. Ultimately, the SRCEA may prove even more valuable to the community and its residents in addressing long-term energy needs. Administratively, the SRCEA would be managed by a Board of Directors consisting of two (2) elected officials from each community or the designated alternate (which may include the City Manager, Assistant City Manager or Department Director). Administrative functions are to be shared by the member communities and would translate to little or no cost unless or until further projects or opportunities are presented. If such opportunities are to be explored, they would Resolution Establishing Joint Powers Energy Authority October 10, 2017 Page 3 come before the City Council of each jurisdiction for consideration before any action by the SRCEA is taken. As a final administrative matter, the City Council is requested to appoint two directors (elected officials) to serve on the SRCEA’s Board of Directors. As noted above, the attached resolution also provides that the City Manager (or designee, which may be the Assistant City Manager or a Department Director) serve as an alternate if one of the City’s elected representatives is not available. Fiscal Impact There is no cost to the City to participate in the SRCEA. The City has incurred cost, by way of the City Attorney’s Office and staff time, in preparing and reviewing the documents related to the formation of the SRCEA, the Solar Power Purchase Agreement and related other agreement. Exhibits A – Resolution No. 2017-____ B – Joint Powers Agreement RESOLUTION NO. 2017-____ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING A JOINT POWERS AGREEMENT BETWEEN THE CITY OF LAKE ELSINORE AND THE CITY OF TEMECULA FOR THE ESTABLISHMENT OF THE SOUTHWEST RIVERSIDE COUNTY ENERGY AUTHORITY (SRCEA) Whereas, the Local Government Renewable Energy Self-Generation Program, Public Utilities Code Section 2830, requires that the investor-owned utilities like Southern California Edison (“SCE”) offer a tariff (commonly referred to as the “The Renewable Energy Self-Generation Bill Credit Transfer Program” or “RES-BCT” tariff) that allows “Local Governments” to generate energy from an “Eligible Renewable Generating Facility” for their own use as a “Generating Account,” export energy not consumed at the time of generation by the Generating Account onto SCE’s grid, and have a bill credit applied to designated “Benefiting Accounts” for the energy exported onto SCE’s grid (as such terms are defined therein), and, Whereas, Assembly Bill 1773, signed into law on September 26, 2016, amended Public Utilities Code Section 2830 to expand the definition of an eligible “Local Government” to include certain joint powers authorities, and to provide the eligibility requirements for Benefiting Accounts of such authorities. Specifically, the definition of “Local Government” was revised in Section 2830(a)(6) to include “a joint powers authority formed pursuant to the Joint Exercise of Powers Act (Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code) that has as members public agencies located within the same county and same electrical corporation service territory, …”, and, Whereas, Assembly Bill 1773 further added a new subsection (b) to Section 2830(a)(1) to provide the eligibility requirements for Benefiting Accounts of joint powers authorities as follows: “The account or accounts belong to members of a joint powers authority and are located within the geographical boundaries of the group of public agencies that formed the joint powers authority, if the eligible renewable generating facility and electricity account or accounts are wholly located within the confines of a single county within which the joint powers authority is located and electric service is provided by a single electrical corporation, with the account or accounts being mutually agreed upon by the joint powers authority and the electrical corporation”, and, Whereas, the City of Lake Elsinore and the City of Temecula are located entirely within Riverside County and are exclusively within the service territory of SCE, and, Whereas, the City of Lake Elsinore desires to participate in the Local Government Renewable Self-Generation Program pursuant to Public Utilities Code Section 2830 as a member of a joint powers authority that is comprised of members that are public agencies and are authorized and empowered to contract with all the other members for the joint exercise of powers under Articles I and II, Chapter 5, Division 7, Title 1 (commencing with Section 6500) of the California Government Code (the “Act”). CC Reso. No. 2017-_____ Page 2 of 2 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY FIND, DETERMINE AND ORDER AS FOLLOWS: Section 1. The City of Lake Elsinore hereby approves the Joint Powers Agreement of the Southwest Riverside County Energy Authority, on file as a public record in the Office of the City Clerk, and the establishment of the Southwest Riverside County Energy Authority (SRCEA). Section 2. The City Council of the City of Lake Elsinore shall appoint two (2) of its members to serve on the Board of Directors for the SRCEA and shall annually confirm such appointments. Section 3. The City Manager of the City of Lake Elsinore (or his/her designee provided that such designee is the Assistant City Manager or a Department Director) is hereby appointed as the City of Elsinore alternate to the Board of Directors for the SRCEA. Section 4. This Resolution shall take effect from immediately upon its adoption. Passed and Adopted this 10th day of October, 2017. Robert E. Magee, Mayor Attest: Susan M. Domen, MMC City Clerk STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE ) I, Susan M. Domen, MMC, City Clerk of the City of Lake Elsinore, California, hereby certify that Resolution No. 2017- ___ was adopted by the City Council of the City of Lake Elsinore, California, at the regular meeting of July __, 2017, and that the same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: Susan M. Domen, MMC City Clerk @BCL@300E265B.docx 1 JOINT POWERS AGREEMENT OF THE SOUTHWEST RIVERSIDE COUNTY ENERGY AUTHORITY This JOINT POWERS AGREEMENT OF THE SOUTHWEST RIVERSIDE COUNTY ENERGY AUTHORITY (this “Agreement”), is made and entered into pursuant to the provisions of California Government Section 6500 et seq., and is made effective as of ___________ __, 2017. RECITALS A.The Southwest Riverside County Energy Authority (“SRCEA”) is comprised of members that are public agencies and are authorized and empowered to contract with all the other members for the joint exercise of powers under Articles I and II, Chapter 5, Division 7, Title 1 (commencing with Section 6500) of the California Government Code (the “Act”). B.The Local Government Renewable Energy Self-Generation Program, Public Utilities Code Section 2830, requires that the investor-owned utilities like Southern California Edison (“SCE”) offer a tariff that allows “Local Governments” to generate energy from an “Eligible Renewable Generating Facility” for their own use as a “Generating Account,” export energy not consumed at the time of generation by the Generating Account onto SCE’s grid, and have a bill credit applied to designated “Benefiting Accounts” for the energy exported onto SCE’s grid (as such terms are defined therein). C.Assembly Bill 1773, signed into law on September 26, 2016, amended Public Utilities Code Section 2830 to expand the definition of an eligible “Local Government” to include certain joint powers authorities, and to provide the eligibility requirements for Benefiting Accounts of such authorities. Specifically, the definition of “Local Government” was revised in Section 2830(a)(6) to include “a joint powers authority formed pursuant to the Joint Exercise of Powers Act (Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code) that has as members public agencies located within the same county and same electrical corporation service territory, ….” D.Assembly Bill 1773 further added a new subsection (b) to Section 2830(a)(1) to provide the eligibility requirements for Benefiting Accounts of joint powers authorities as follows: “The account or accounts belong to members of a joint powers authority and are located within the geographical boundaries of the group of public agencies that formed the joint powers authority, if the eligible renewable generating facility and electricity account or accounts are wholly located within the confines of a single county within which the joint powers authority is located and electric service is provided by a single electrical corporation, with the account or accounts being mutually agreed upon by the joint powers authority and the electrical corporation.” E.The member agencies of the SRCEA are located entirely within Riverside County and are exclusively within the service territory of SCE, and therefore desire to administer and participate in the Local Government Renewable Self-Generation Program pursuant to Public 2 Utilities Code Section 2830 as an eligible joint powers authority. NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned public agencies, collectively referred to herein as the “Members,” enter into the Joint Powers Agreement and agree as follows: ARTICLE I. – AUTHORITY FORMATION Section 1.01 Formation of Southwest Riverside County Energy Authority. Pursuant to the Act, the Members hereby create a joint powers agency to be known as the Southwest Riverside County Energy Authority. Section 1.02 Separate Public Entity. The SRCEA is a public entity separate from the Members within the meaning of Government Code Section 6507. Section 1.03 Parties to the Agreement. For purposes of this Agreement, each Member intends to, and does, contract with every other Member which is a signatory to this Agreement. The withdrawal of any Member from this Agreement does not affect its validity or enforceability as to the remaining Members, nor any remaining Member’s intent to contract with any of the others. Section 1.04 Membership. In addition to the original forming Members, any “public agency” as defined in Government Code Section 6500 located solely with Riverside County and SCE’s service territory is eligible for membership in the SRCEA. Upon approval by a two-thirds (2/3) majority vote of the full Board and payment of any applicable fees and charges, any such public agency may become a Member if: (a) its governing body duly approves membership and agrees to all of the terms of this Joint Powers Agreement, and (b) an authorized officer of such agency executes this Agreement on its behalf. ARTICLE II. – PURPOSES AND POWERS Section 2.01 Purpose. The purpose of the SRCEA is to implement the sustainable energy initiative offered through the Local Government Renewable Energy Self-Generation Program that advance the use of clean, efficient and renewable resources available in the region for the benefit of the Member agencies, their constituents, and the Member’s Benefiting Account. Section 2.02 Powers. The SRCEA is authorized, in its own name, to do all acts necessary to fulfill the purposes of this Agreement including, without limitation, each of the following: (a)receive grants, contributions and donations of property, funds, services and other forms of assistance from any public or private source; 3 (b)to identify sites and other strategic opportunities to own, lease or otherwise control Eligible Renewable Generating Facility such that a Generating Account may be established; (c)make and enter into contracts, including but not limited, contracts and such other ancillary agreements for the purpose of participating in the Local Government Renewable Energy Self-Generation Program, Public Utilities Code Section 2830; (d)make and enter into contracts and such other ancillary agreements for the purposes of allocating any excess output of any Member’ Eligible Renewable Generating Facility to another Member’s Generating Account so that each Member may fully realize the economic benefit of participation in the Local Government Renewable Energy Self-Generation Program; (e)assure that each Member receives the benefit of the Member’s Benefited Account; (f)incur debts, liabilities and obligations; provided, that no debt, liability or obligation of the SRCEA is a debt, liability or obligation of any Member except as separately agreed to by such Member; (g)acquire, hold, construct, manage, maintain, sell or otherwise dispose of real and personal property by appropriate means, excepting therefrom the acquisition of real property through the exercise of eminent domain; (h)sue and be sued in its own name; (i)employ agents and employees; (j)lease real or personal property as lessee and as lessor; (k)receive, collect, invest and disburse moneys; (l)issue revenue bonds or other forms of indebtedness, as provided by law; (m)adopt ordinances; (n)assign, delegate or contract with a Member or third party to administer or execute this Agreement or to perform any of the functions of the Board, as permitted by law; and (o)exercise all other powers necessary and proper to carry out the provisions of this Agreement. These powers shall be exercised subject only to the limitations set forth in this Agreement, any bylaws, applicable law (including local zoning, building, or other ordinances or regulations arising from the jurisdictions in which the SRCEA is engaged in any specific activity), and any restrictions upon the manner of exercising such powers imposed by law upon the Members in the exercise of similar powers. 4 ARTICLE III. INTERNAL GOVERNANCE Section 3.01 Board of Directors. There is hereby created a Board of Directors (“Board”), which shall serve as the governing body of the SRCEA, and shall exercise or oversee the exercise of all powers and authority on behalf of the SRCEA as set forth herein. Each Member shall designate two persons as members of the Board (“Director”) and one person as an alternate member of the Board (“Alternate Director”). Each Director shall be an elected official of the governing body of the Member that he or she represents. Each Alternate Director may be an elected official of the governing body of the Member that he or she represents or a non- elected representative that is a current executive employee (city manager, assistant city manager or department director) of the Member. The Alternate Director may serve and vote in place of the appointing Member’s Director who is absent or who disqualifies him/herself from participating in a meeting of the Board. Directors and Alternates shall serve at the pleasure of the appointing Member and may be removed at any time, without cause, at the sole discretion of that Member. They shall not be compensated for their service, but may be reimbursed for expenses reasonably incurred in the performance of their Board functions, and appropriately documented. Section 3.02 Procedural and Operational Rules. The Board may adopt bylaws or resolutions to govern its meetings and operations, or may separately adopt a statement of operating policies, provided that such bylaws, resolutions or statements are consistent with this Agreement. Section 3.03 Principal Offices. The principal office of the SRCEA shall be established by the Board. The Board may change the location of the principal office upon giving at least 15 days written notice to each Member. Section 3.04 Quorum and Voting. A majority of the Board shall constitute a quorum for the transaction of business. The Board shall act by motion, resolution or ordinance. Except as otherwise expressly provided by this Agreement or applicable law, all motions, resolutions and ordinances of the Board, and all actions required or permitted to be taken by the Members acting through the Board, shall be by a majority vote of the quorum. Section 3.05 Board Chair and Vice Chair. (a)The Board shall appoint a Chair and a Vice-Chair. (i)The Chair shall be the chairperson of the Board and shall conduct all Board meetings and perform such other duties and functions required of such person by this Agreement or the Board. (ii)The Vice-Chair shall serve in the Chair’s absence and perform such duties as required by this Agreement, the Board, or the Chair. (iii)Only Members of the Board are eligible to hold the positions of Chair and Vice-Chair. (iv)The term of office for the Chair and Vice-Chair shall be one year, commencing on January 1 of each year (excepting the initial year). 5 The initial Chair and Vice- Chair shall be entitled to serve one full term of office in addition to any partial initial term. (b)If a vacancy occurs in the position of Chair or Vice-Chair, the Board shall forthwith fill the vacancy for the duration of the unexpired term. Section 3.06 Treasurer and Auditor. The Board shall designate qualified persons (as described in Government Code Section 6505.5 and Section 6505.6) to serve as Treasurer and as Auditor of the SRCEA who need not be Members, and may designate a single qualified person to hold both offices. The Treasurer shall have charge of depositing and maintaining custody of all funds held by the SRCEA, and shall maintain strict accountability for all funds and reports of all receipts and disbursements. In addition, the Treasurer and the Auditor shall perform all other duties that may be imposed by applicable law (including Government Code Sections 6505 and 6505.5), this Agreement, or any rules of the Board. The compensation, if any, of the person or persons holding these offices shall be set by the Board. Alternatively, upon consent as needed of the governing body of any Member entity, the Board may designate the Treasurer of such Member as the depository of SRCEA funds, and responsible for the discharge of all the duties set forth in Government Code section 6505.5, including the function of auditor, and the maintenance of strict accountability of SRCEA funds. Section 3.07 Other Officers and Employee. The Board may designate such other officers, and may hire employees or independent contractors as appropriate and necessary to conduct the SRCEA’s affairs. Section 3.08 Meetings of the Board. The Board shall establish in the bylaws or by resolution the dates, times and places of its regular meetings, which shall be held not less than one (1) time during each calendar year during the term of this Agreement. The Board’s meetings shall be conducted in accordance with the Ralph M. Brown Act (Government Code Sections 54950 et seq.). Section 3.09 Committees. The Board may create an advisory committee composed of public and private stakeholders such as but not limited to residential and non-residential energy users, local governments, educational institutions, environmental organizations, and the private sector. The Board may also create an executive committee consisting of the managers of the Member entities, and may create any such other committee as it deems appropriate. Section 3.10 Appointment of Administering Entity. Pursuant to Government Code Section 6506, the Board may appoint an agency or entity, including one or more Members upon consent of the governing body of such Member, a commission or board constituted pursuant to this Agreement, or a person, firm or corporation, including a nonprofit corporation, which it may designate, to administer or execute this Agreement, or any portions of this Agreement. Section 3.11 Budget. The SRCEA shall operate on a fiscal year commencing July 1 of each year. The Board shall adopt by majority vote of the full Board an annual budget for each fiscal year at or before its last regular meeting before June 30 of each year. 6 ARTICLE IV. – MISCELLANEOUS PROVISIONS Section 4.01 Audit. The accounts and records of the SRCEA shall be audited as provided in Government Code Sections 6505 and 6505.5. Section 4.02 Limitation on Liability of Members for Debt and Obligations of SRCEA. As provided for by Government Code section 6508.1, the debts, liabilities, and obligations of the SRCEA do not constitute debts, liabilities, or obligations of any party to this Agreement. A Member may separately contract for, or assume responsibility for, specific debts, liabilities, or obligations of the SRCEA. Section 4.03 Amendments. This Agreement may be amended only by a written instrument, approved by an affirmative vote of the governing bodies of two-thirds (2/3) of the Members, and meeting any requirements imposed by the terms or conditions of any revenue bonds issued by the SRCEA and related documentation including, without limitation, indentures, trust agreements, resolutions and letter of credit agreements. Notwithstanding the foregoing, no amendment shall require any Member to contribute any funds to, or become directly or contingently liable for any debts, liabilities or obligations of, the SRCEA, without that Member’s written consent, signed by its duly authorized representative. Section 4.04 Withdrawal. Members may withdraw at any time by providing written notice from the governing body of such Member to the Board; provided, that no Member may withdraw if withdrawal would adversely affect a bond or other indebtedness issued by the SRCEA, except upon a two-thirds (2/3) vote of the full Board. Withdrawal shall be effective upon receipt by the Board of said notice or upon said vote of the Board if required. The withdrawing Member shall continue to be financially responsible for its share of financial obligations and liabilities incurred prior to the effective date of withdrawal. Upon such withdrawal, no withdrawing Member shall be entitled to any distribution or withdrawal of property or funds except as may be agreed to by the Board; however such Member may be entitled to participate in a pro-rated return of surplus money and other surplus personal property upon the dissolution of the SRCEA based on factors as determined by the Board such as but not limited to the Member’s length of time of participation with and contribution to the SRCEA. Section 4.05 Termination and Distribution a. This Agreement continues until terminated by the written consent of a simple majority of the full Board; provided that: (1) this Agreement cannot be terminated until such time as all principal of and interest on any bonds and other forms of indebtedness that the SRCEA may issue are paid in full; and (2) this Agreement and the SRCEA continue to exist following termination for the purpose of disposing of all claims, distributing assets, and all other functions necessary to conclude the obligations and affairs of the SRCEA. b. After completion of the SRCEA’s purposes, any surplus money on deposit in any fund or account of the SRCEA will be disposed of as required by law. The Board is vested 7 with all powers of the SRCEA for the purpose of concluding and dissolving its business affairs. Section 4.06 Notices. All notices which any Member or the SRCEA may wish to give in connection with this Agreement shall be in writing and shall be served by personal delivery during usual business hours at the principal office of the Member or the SRCEA, to an officer or person apparently in charge of that office, or by depositing the same in the United States mail, postage prepaid, and addressed to the Member or the SRCEA at its principal office, or to such other address as the SRCEA or Member may designate from time to time by written notice given to the other Members in the manner specified in this section. Service of notice shall be deemed complete on the day of service by personal delivery (but 24 hours after such delivery in the case of notices of special meetings of the Board) or three (3) days after mailing if deposited in the United States mail. Until changed by written notice to the SRCEA and the Members, notice shall be delivered as follows: If to City of Lake Elsinore:City of Lake Elsinore Attn: City Manager 130 South Main Street Lake Elsinore, CA 92530 With a copy to:City of Lake Elsinore Attn: City Clerk 130 South Main Street Lake Elsinore, CA 92530 If to City of Temecula:City of Temecula Attn: City Manager 41000 Main Street Temecula, CA 92590 With a copy to:City of Lake Elsinore Attn: City Clerk 41000 Main Street Temecula, CA 92590 Section 4.07 Prohibition Against Assignment. No Member may assign any right, claim, or interest it may have under this Agreement. No creditor, assignee or third party beneficiary of a Member has a right, claim or title to any part, share, interest, fund or asset of the SRCEA. However, nothing in this Agreement prevents the SRCEA from assigning any interest or right it may have under the Agreement to a third party. Section 4.08 Severability. If a portion, term, condition or provision of this Agreement is determined by a court to be illegal or in conflict with any law of the State of California, or is otherwise rendered unenforceable or ineffectual, the validity of the remaining portions, terms, conditions and provisions is not affected. Section 4.09 Arbitration. All disputes arising in connection with the interpretation or performance of this Agreement shall be resolved on an equitable basis by a single arbitrator 8 under the commercial arbitration rules of the American Arbitration Association. The arbitrator's decision shall be final and binding on the SRCEA, all Members and all former Members involved or affected by the dispute. The SRCEA, any Member and any former Member that is party to the dispute may enforce any award, order or judgment of the arbitrator in any court of competent jurisdiction. Section 4.10 Waiver. Neither a waiver of any breach nor any failure to enforce any provision of this Agreement shall operate as a waiver of any other breach of such provision or any other provision. Section 4.11 Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California. Section 4.12 Counterparts. This Agreement may be executed in several counterparts, each of which is an original and all of which constitutes but one and the same instrument. Section 4.13 Effective Date. This Joint Powers Agreement shall become effective at the time two-thirds (2/3) of the Members have approved this Joint Powers Agreement. IN WITNESS WHEREOF, THIS JOINT POWERS AGREEMENT HAS BEEN DULY CONSIDERED BY THE GOVERNING BODIES OF ALL MEMBERS OF THE SOUTHWEST RIVERSIDE COUNTY ENERGY AUTHORITY, HAS BEEN APPROVED BY AT LEAST TWO0-THIRDS (2/3) OF SAID GOVERNING BODIES OF THE MEMBERS, AND IS HEREBY ENTERED INTO BY THE MEMBERS EFFECTIVE AS OF THE DATE WRITTEN ABOVE. SIGNATURES APPEAR ON FOLLOWING PAGES 9 CITY OF TEMECULA, a municipal corporation Dated: By: Mayor ATTEST: By: City Clerk APPROVED AS TO FORM: By: City Attorney CITY OF LAKE ELSINORE, a municipal corporation Dated: By: Mayor ATTEST: By: City Clerk APPROVED AS TO FORM: By: City Attorney