HomeMy WebLinkAboutR 2025-08065501.00014\44391136.1
RESOLUTION NO. 2025-080
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO
GRANDE APPROVING A LOAN IN AN AMOUNT NOT TO EXCEED
$1,430,000 FROM THE GENERAL FUND TO THE WATER FUND
WHEREAS, the City of Arroyo Grande (“City”) operates a municipal water system that
provides water service to properties within the City’s service area; and
WHEREAS, the City maintains a separate enterprise fund for the purpose of owning and
operating the water system (the “Water Fund”); and
WHEREAS, the County of San Luis Obispo (the “County”) is currently defending a lawsuit
over its operations of the Lopez Dam (the “Lawsuit”);
WHEREAS, the City has water rights to the Lopez Dam for its municipal water system
and is required to pay a portion of the County’s legal expenses related to the lawsuit (the
“Legal Expenses”) which are estimated at approximately $1,430,000 this fiscal year; and
WHEREAS, the Water Fund currently lacks sufficient funding to pay the Legal Expenses ;
and
WHEREAS, the City desires to loan funds from its General Fund to the Water Fund for
the purpose of paying its portion of the Lawsuit’s Legal Expenses (the “Inter fund Loan”)
pursuant to the terms of the Interfund Loan Agreement (the “Agreement”) attached hereto
as Exhibit “A”; and
WHEREAS, it is unknown at this time the total amount of Legal Expenses the City could
be required to pay and it is possible additional Interfund Loans could be contemplated, to
the extent funding is available; and
WHEREAS, the Interfund Loan serves a public purpose by satisfying the City’s
obligations to the County related to Lopez Dam and ensuring the continued access to
water and the provision of water service to the City’s water customers.
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Arroyo Grande
does hereby declare the foregoing recitals are all true and correct and are incorporated
herein by this reference:
1. This Resolution is not subject to the California Environmental Quality Act (“CEQA”)
pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably
foreseeable indirect physical change in the environment) and 15060(c)(3) (the activi ty is
not a project as defined in Section 15378 of the CEQA Guidelines, California Code of
Regulations, Title 14, Chapter 3, because it has not potential for resulting in physical
change to the environment, directly, or indirectly).
RESOLUTION NO. 2025-080
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2. Approves the Interfund Loan in an amount not to exceed $1,430,000, for the purpose
of paying the Legal Expenses. Staff is hereby authorized to make such changes to the
Agreement as are necessary to effectuate the purposes provided herein, provided such
changes may not increase the not-to-exceed principal amount, interest rate, or term of
the Interfund Loan.
3.The Interfund Loan shall accrue interest at a rate of 4.34% per year. The 4.34% interest
rate reflects the City’s current rate of return on investment on surplus General Funds
invested in the Local Agency Investment Fund as of September 30, 2025.
4. The Interfund Loan shall mature in 13 years with principal and interest payable annually
on December 1 of each year commencing December 1, 2029, as set forth in more detail
in Agreement.
5. The Interfund Loan may be prepaid in whole or in part at any time upon direction of the
City Council.
6. The obligations to repay the Interfund Loan shall be subordinate to all other debts of
the City’s municipal water system.
7. This Resolution shall become effective immediately upon adoption.
On motion of Council Member Loe, seconded by Council Member Guthrie, and on the
following roll call vote, to wit:
AYES: Council Members Loe, Guthrie, Maraviglia, Secrest, and Mayor Ray Russom
NOES: None
ABSENT: None
the foregoing Resolution was passed and adopted this 25th day of November, 2025.
CAREN RAY RUSSOM, MAYOR
ATTEST:
JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:
MATTHEW DOWNING, CITY MANAGER
APPROVED AS TO FORM:
ISAAC ROSEN, CITY ATTORNEY
RESOLUTION NO. 2025-080
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RESOLUTION NO. 2025-080
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OFFICIAL CERTIFICATION
I, JESSICA MATSON, City Clerk of the City of Arroyo Grande, County of San Luis
Obispo, State of California, do hereby certify under penalty of perjury, that the
attached Resolution No. 2025-080 was passed and adopted at a regular
meeting of the City Council of the City of Arroyo Grande on the 25th day of November,
2025.
WITNESS my hand and the Seal of the City of Arroyo Grande affixed this 2nd day
of December, 2025.
JESSICA MATSON, CITY CLERK