HomeMy WebLinkAboutAgenda Report - May 20, 1998 (70)CITY OF LODI [COUNCIL COMMUNICATION
AGENDA TITLE: Release of City of Lodi Funds held by the Northern California Power Agency (NCPA) for
Geothermal/Hydroelectric Projects Debt Restructuring ($7,500,000)
MEETING DATE: May 20, 1998
SUBMITTED BY: Electric Utility Director
RECOMMENDED ACTION: That the City Council authorize the City Manager to release up to $7,500,000 from
City of Lodi funds held in the NCPA General Operating Reserve (GOR) in support
of NCPA Geothermal and Hydroelectric Projects debt restructuring.
BACKGROUND: The NCPA Geothermal and Hydroelectric Projects debt restructuring plan requires
an equity contribution by project participants. Also, due to a long-term layoff
contract of Geothermal Plant No. 2, output to Turlock Irrigation District (TID),
certain participants, including Lodi, will need to reimburse TID for foregone future
benefits for the remaining term of the layoff contract as a result of the Geothermal
portion of the debt restructuring.
The NCPA debt restructuring plan is designed to align Geothermal and Hydroelectric Projects' debt service terms
according to life of projects - Geothermal debt service is being shortened while Hydroelectric debt is being
extended. This debt restructuring (with an equity contribution) will decrease total NCPA project cash flow
requirements.
As discussed with the Council at previous Shirt Sleeve Sessions and the last Council Meeting, debt restructuring
plays a major role in the Electric Utility Department Competition Transition Plan. The combination of the above
NCPA debt restructuring plan and the City's electric system debt restructuring plan is designed to significantly
decrease the electric sales revenue requirement thereby allowing Lodi's electric utility to enter California's
competitive electric energy market along with investor-owned utilities.
The current estimates for the required funds are: 1) Equity contribution: $7.1 M; and 2) TID reimbursement: $0.1 M.
The exact amounts required for both portions of the restructuring will be determined once the final elements of the
NCPA debt restructuring financing are set. The recommended maximum amount of $7,500,000 authorized for
release by the City Manager is expected to cover possible variances from the initial amounts. Upon approval, the
City Manager will authorize NCPA to release the appropriate amount of funds to the Geothermal/Hydroelectric
Trustee at the close of financing.
It is anticipated that final details of the debt restructuring plan will be completed by the end of May or early June
and that a presentation will be made to the Council in June on the recommended financing method.
Concurrently or shortly thereafter, the Department will follow with detailed recommendations for the City's
electric system debt restructuring plan (Interconnect Project refinancing and electric distribution system
capita lization/recapitalization ).
Approved --J
H. IN& Flynn
City Manager J
RESOLUTION NO. 98-69
A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE
CITY MANAGER TO RELEASE UP TO $7,500,000 FROM CITY OF
LODI FUNDS HELD BY THE NORTHERN CALIFORNIA POWER
AGENCY (NCPA) FOR GEOTHERMAL/HYDROELECTRIC
PROJECTS DEBT RESTRUCTURING
BE IT RESOLVED, that the Lodi City Council hereby authorizes the City Manager
to release up to $7,500,000 from City of Lodi funds held by the Northern California Power
Agency (NCPA) for Geothermal/Hydroelectric projects debt restructuring.
Dated: May 20, 1998
- I hereby certify that Resolution No. 98-69 was passed and adopted by the Lodi
City Council in a regular meeting held May 20, 1998 by the following vote:
AYES: COUNCIL MEMBERS - Johnson, Land, Mann and Sieglock (Mayor)
NOES: COUNCIL MEMBERS - None
ABSENT: COUNCIL MEMBERS - Pennino
ABSTAIN: COUNCIL MEMBERS - None
tj,r CE M. I CHE
City Clerk