HomeMy WebLinkAboutResolutions - No. 92-156RESOLUTION NO. 92-156
APPROV�NG EXECUTION OF THE
AGREEMENT FOR SALE AND, -FINANCING OF ELECTRIC SYSTEM FACILITIES
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WHEREAS, the Northern California Power Agency (NCPA) is coordinati necessar-y
studies for PG&E system reliability improvement with PG&E and Lodi staff;=
WHEREAS, transformer capacity at the PG&E Lockford substation is no longer
adequate to provide reasonable reliability and must be supported with a short term
emergency "fix" pending a long term solution to reliability improvement; and
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WHEREAS, the long term solution may involve installation of transformers, circuit -
breakers, and other system additions; and
WHEREAS, NCPA in concertwith PG&E will determine the extentof physical additions
necessary to accomplish the long term solution (the "Project"), which may require
dedication of some facilities to PG&E; and
WHEREAS, the Agreement sets forth the terms and conditionsof the acquisition and
construction by NCPA of the Project, issuance of Bonds -to make the proceeds thereof
availableto pay the costs of the Project, and sale by NCPA of system additions to the City;
and
WHEREAS, the Lodi coordinator for this study and Project has been the Electric
Utility Director and it is recommended that person continue' as Authorized City
Representative for purposes of the Agreement; and
WHEREAS, NCPA Counsel and the NCPA Commission have reviewed the Agreement and
recommend its approval.
NOW, THEREFORE, BE IT RESOLVED that the City Council hereby authorizes
executionof the Agreement For Acquisition, Construction and Financing of Electric System
Facilities.
BE IT FURTHER RESOLVED that the City Manager is authorized to execute tF�e
Agreement and the Electric Utility Director shall be the Authorized Representative fCr
purposesof the Agreement.
92-156
Dated: September 2, 1992
I hereby certify' that Resolution No. 92 -156, -was passed and
adopted by the Lodi City Council in a regular meeting held -September 2,
1992 by the following vote: `
Ayes: Council Members - Hinchman, Pennino, Siegloc Snider
and Pinkerton (Mayor)
Noes: Council Members - None
Absent: Council Members - None
Alice M. Reimche
City Clerk
92-156
RES92156/TXTA.02J
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APPENDIX B
r CITY COUNCIL
JAMES W. PINKERTON, Mayor
PHILLIP A. PENNINO
Mayor Pro Tempore
DAVID M. HINCHMAN
JACK A. SIEGLOCK
JOHN R. (Randy) SNIDER
September 2, 1992
CITY OF LODI
CITY HALL, 221 WEST PINE STREET
P.O. BOX 3006
LODI, CALIFORNIA 95241-1910
(209) 334-5634
FAX (209) 333-6795
Northern California Power Agency
180 Cirby Way
Roseville, California 95678
Dear Sirs:
THOMAS A. PETERSON
City Manager
ALICE M. REIMCHE
City Clerk
BOB MCNATT
City Attorney
I am acting as counsel to the City of Lodi ("the City") under the
Agreement for the Sale and Financing of Electric System Facilities, dated
as of August 1, 1992 (the "Agreement") between the City and the Northern
California Power Agency (the "Agency"), and I have acted as counsel to the
City in connection with the matters referred to herein. As such counsel I
have examined and am familiar with (i) those documents relating to the
existence, organization and operation of the City, (ii) all necessary
documentation of the City relating to the authorization, execution and
delivery of the Agreement, and (iii) an executed counterpart of the
Agreement.. (Capitalized terms used and not otherwise defined herein shall
have their respective meanings as set forth in the Agreement.)
Based upon the foregoing and an examination of law and such other
information, papers and documents as I deem necessary or advisable to
enable me to render this opinion, including the Constitution and laws of
the State of California, together with the governing instruments,
ordinances and public proceedings of the general law City, I am of the
opinion that:
1. The City is a municipal corporation, duly created,
organized and existing under the laws of the State of California and
duly qualified to furnish electric service within the State of
California.
2. The City has full legal right, power and authority to
enter into the Agreement and to carry out and consummate all
transactions contemplated thereby, and the City has complied with the
provisions of applicable law in all matters relating to such
transactions required to be complied with as of the date hereof.
3. The Agreement has been duly authorized, executed and
delivered by the City, is in full force and effect as to the City in
accordance with its terms and, assuming that the Agency has all the
requisite power and authority, and has duly executed and delivered
such Agreement, constitutes the legal, valid and binding obligation
of the City enforceable in accordance with its terms.
4. Payments by the City under the Agreement will constitute
an operating expense of the City and are to be made solely from the
Revenues of its Electric System, as provided in Section 6(c)
of the Agreement.
5. No approval, consent or authorization of any other
governmental or public agency, authority or person is required for
the execution and delivery by the City of the Agreement, or the
performance by the City of its obligations thereunder.
6. The authorization, execution and delivery of the Agreement
and compliance with the provisions thereof will not conflict with or
constitute a breach of, or default under, any instrument relating to
the organization, existence or operation of the City, or any
commitment, agreement or other instrument known to me after
reasonable investigation to which the City is a party or by which it
or its property is bound or affected, or any ruling, regulation,
ordinance, judgment, order or decree to which the City (or any of its
officers in their respective capacities as such) is subject or any
provision of the laws of the State of California relating to the City
or its affairs.
7. To the best of my knowledge after reasonable
investigation, there is no action, suit, proceeding, inquiry or
investigation at law or in equity, or before any court, public board
or body, pending or threatened against or affecting the City or any
entity affiliated with the City or any of its officers in their
respective capacities as such, nor is there any basis therefor, which
questions the powers of the City referred to in paragraph 2 above or
the validity of the proceedings taken by the City in connection with
the authorization, execution or delivery of the Agreement, or wherein
any unfavorable decision, ruling or finding would materially
adversely affect the transactions contemplated by the Agreement, or
which, in any way, would adversely affect the validity or
enforceability of the Agreement.
The opinion expressed in paragraph 3 above is qualified to the extent
that the enforceability of the Agreement may be limited by any applicable
bankruptcy, insolvency, debt adjustment, moratorium, reorganization, or
other similar laws affecting creditors, rights generally or as to the
availability of any particular remedy.
This opinion is rendered only with respect to the laws of the State
of California and the United States of America, and is addressed only to
the Agency. No other person is entitled to rely on this opinion, nor may
you rely on it in connection with any transactions other than those
described herein.
Sincerely,
BOB W. MCNATT
City Attorney
BM:vc
RECEIVED
AUG 2 8 1992
Electric Utility Dept.
AGREEMENT FOR THE SALE AND
FINANCING OF ELECTRIC SYSTEM FACILITIES
Dated as of August 1, 1992
By and Between
NORTHERN CALIFORNIA POWER AGENCY
and
CITY OF LODI
1A1-27419.4
TABLE OF CONTENTS
Section
Page
1.
Definitions . . . . . . . . . . . . . . . . .
. 1
2.
Purpose . . . . . . . . . . . . . . . . . . .
. 6
3.
Acquisition, Construction and Financing of
the Project . . . . . . . . . . . . . . . . .
. 6
4.
Sale of Project by NCPA. . . . . . . . . . .
. 7
5.
Title to Project; Operation and
Maintenance . . . . . . . . . . . . . . . .
. 7
6.
Payments to Constitute Special Obligations .
. 8
7.
City Covenants . . . . . . . . . . . . . . .
. 8
8.
Payments to NCPA . . . . . . . . . . . . . .
. 9
9.
Events of Default . . . . . . . . . . . . . .
. 10
10.
Remedies . . . . . . . . . . . . . . . . . .
. 10
11.
City Direction . . . . . . . . . . . . . . .
. 10
12.
Term . . . . . . . . . . . . . . . . . . . .
. 11
13.
Amendments . . . . . . . . . . . . . . . . .
. 11
14.
Bonds, Limited Obligations of NCPA . . . . .
. 11
15.
Indemnification . . . . . . . . . . . . . . .
. 11
16.
Tax Covenant . . . . . . . . . . . . . . . .
. 13
17.
Notices . . . . . . . . . . . . . . . . . . .
. 13
18.
Miscellaneous . . . . . . . . . . . . . . . .
. 14
APPENDIX
A - Addresses for Notices . . . . . . . . . .
. A-1
APPENDIX
B - Form of Opinion of Counsel . . . . . . . .
. B-1
APPENDIX
C - Description of Project . . . . . . . . . .
. C-1
lA1-27419.4
AGREEMENT FOR THE SALE AND
FINANCING OF ELECTRIC SYSTEM FACILITIES
This Agreement, dated as of August 1, 1992, by and
between Northern California Power Agency, a joint powers agency of
the State of California ("NCPA"), and the City of Lodi, California
(the "City"), a municipal corporation duly created, organized and
existing under and pursuant to the laws of the State of California,
WITNESSETH:
WHEREAS, NCPA is a joint powers agency of the State of
California, created pursuant to the prov-isions of Chapter 5,
Division 7, Title 1 of the Government Code of the State of
California (the Joint Powers Act); and
WHEREAS, NCPA is authorized to issue its Bonds
(capitalized terms used herein shall have the meanings given such
terms in Section 1 hereof) to finance the Costs of the Project for
the City under and on the terms and conditions specified in Article
4 of the Joint Powers Act; and
WHEREAS, NCPA proposes to acquire and construct, or cause
to be acquired and constructed, the Project and dedicate or cause
to be dedicated all or any portion of the Project, as described
herein, to Pacific Gas and Electric Company; and
WHEREAS, to provide for financing of the Costs of the
Project, NCPA desires to sell the Project to the City, in
consideration of NCPA's undertaking to issue NCPA's Bonds to
finance the Costs of the Project as herein provided, on the terms
and conditions herein specified; and
WHEREAS, the City desires to purchase the Project from
NCPA on terms and conditions sufficient to provide funds to pay the
principal of, premium, if any, and interest on the Bonds, and the
other terms and conditions herein specified; and
WHEREAS, NCPA and the City now desire to enter into this
Agreement to provide further for the acquisition, construction and
financing of the Project, the sale by NCPA of the Project to the
City, and the security for the Bonds to be issued to finance the.
Costs of the Project;
NOW THEREFORE, the parties hereto do agree as follows:
1. Definitions. The following terms shall, for all
purposes of this Agreement, have the following meanings:
IA 1-27419.4
(a) "Agreement" means this Agreement for the Sale and
Financing of Electric System Facilities by and between NCPA and the
City, dated as of August 1, 1992, as modified or amended in
accordance with the terms hereof.
(b) "Authorized City Representative" means each member
of the City Council of the City, the Mayor of the City and any
other officer, employee or agent of the City designated in a
resolution adopted by the City Council of the City and delivered to
NCPA and each Trustee, which resolution shall be deemed to continue
in full force and effect until a copy of any amendment or
rescission of such resolution has been delivered to NCPA and each
Trustee.
(c) "Bond Resolution" means an instrument providing for
the issuance of Bonds and the terms thereof and may be a
resolution, indenture of trust, order, agreement, or other
instrument.
(d) "Bonds" means bonds, notes or other evidences of
indebtedness of NCPA issued or entered into at the request of the
City pursuant to this Agreement to finance the Costs of the
Project, and shall include that portion of an issue of NCPA bonds,
notes or other evidences of indebtedness issued to finance the
Costs of the Project and the costs of other projects, which portion
is specifically identified as Bonds for purposes of this Agreement
in the applicable Bond Resolution (including, without limitation,
contracts relating to letters of credit or other credit or
liquidity enhancement devices, interest rate swap and other
agreements relating to interest rate or other cash-flow exchanges
such as those authorized by the Public Finance Contracts Law, and
other contracts which are characterized as debt by NCPA entered
into at the request of the City in connection with the Bonds or the
Project), including refunding bonds issued to refinance the Costs
of the Project and includes additional bonds to pay the Costs
necessary to complete the Project or to refurbish, improve, expand
or modify the Project. For purposes of this Agreement, Bonds shall
be considered outstanding as of any date if such Bonds have not
been paid, or if provision for the payment of the principal,
premium, if any, and interest on such Bonds has not been made in
accordance with the Bond Resolution pursuant to which such Bonds
have been authorized.
(e) "Code" means the Internal Revenue Code of 1986, as
amended, and the applicable regulations thereunder and shall
include any successors to such statute and regulations.
(f) "Commission" means the Commission which is the
governing body of NCPA established pursuant to the Joint Powers
Agreement.
(g) "Cost" means all costs and expenses of planning,
designing, acquiring, constructing, installing, refurbishing and
IA I-27419.4 2
financing the Project, placing the Project in operation, disposal
or retirement of the Project, dedicating all or any portion of the
Project to Pacific Gas and Electric Company, decommissioning of the
Project, and obtaining governmental approvals, certificates,
permits and licenses with respect thereto, heretofore or hereafter
paid or incurred and shall include, but shall not be limited to:
(1) Costs of preliminary investigation and development,
the performance or acquisition of feasibility, environmental and
planning studies, and the securing of regulatory approvals, as well
as costs for land and land rights, water and water rights,
engineering and contractors' fees, labor, materials, equipment,
utility services and supplies, legal and accounting fees, financial
services fees, fees incurred pursuant to any lending, liquidity or
credit facility or agreement and financing expenses.
(2) Working capital and reserves.
(3) Interest accruing in whole or in part on Bonds prior
to and during construction of the Project or any portion thereof,
and for such additional period as the City may determine.
(4) The deposit or deposits from the proceeds of Bonds
in any fund or account required by a Bond Resolution.
(5) The payment of principal, redemption price, if any,
and interest when due (whether at the maturity of principal or at
the due date of interest or upon redemption) of any note or other
evidence of indebtedness issued in anticipation of Bonds, the
proceeds of which were applied to any of the costs of the Project
described herein.
(6) Training and testing costs which are properly
allocable to the acquisition, installation, refurbishing or
construction of the Project or any portion thereof or placing the
Project or any portion thereof in operation.
(7) All costs of insurance and contract bonds applicable
to the period of acquisition, installation, refurbishing or
construction of the Project or any portion thereof and placing the
Project or any portion thereof in operation.
(8) All costs relating to injury and damage claims
arising out of the acquisition, installation, refurbishing or
construction of the Project or any portion thereof, or placing the
Project or any portion thereof in operation, in each case less
proceeds of insurance.
(9) Legally required or permitted federal, state and
local taxes and payments in lieu of taxes.
(10) All costs relating to the issuance and sale of
Bonds, including the costs of credit or liquidity enhancement for
IA 1-27419.4 3
Bonds or any letter of credit, insurance policy or surety bond
providing any reserve therefor.
(11) The reimbursement to the City or NCPA of any amounts
paid in connection with the planning, designing, acquiring,
constructing, installing, refurbishing or financing of the Project.
(12) Contributions -in -aid -of -construction paid to
interconnect the Project to the Electric System.
(13) All other costs properly allocable to the
acquisition, planning, design, construction, installation and
financing of the Project, or placing the Project or any portion
thereof in operation.
(h) "Debt Service" means, with respect to any period,
the aggregate of the amounts required by each Bond Resolution to be
paid during said period into any fund or account created by the
Bond Resolution for the sole purpose of paying or providing
reserves for paying the principal (including sinking fund
installments) of and premium, if any, and interest on all the Bonds
from time to time outstanding and shall include any amounts payable
under letters of credit or other credit or liquidity enhancement
devices, interest rate swap and other agreements relating to
interest rate or other cash-flow exchanges such as those authorized
by the Public Finance Contracts Law and other contracts which are
characterized as debt by NCPA entered into at the request of the
City in connection with the Bonds or the Project.
(i) "Electric System" means, with respect to the City,
all properties and assets, real and personal, tangible and
intangible, of the City now or hereafter existing, used or
pertaining to the generation, transmission, transformation,
distribution and sale of electric capacity and energy, including
all additions, extensions, expansions, improvements and betterments
thereto and equipment thereof; provided, however, that to the
extent the City is not the sole owner of an asset or property or to
the extent that an asset or property is used in part for the above
described electric purposes, only the City's ownership interest in
such asset or property or only the part of the asset or property so
used for electric purposes shall be considered to be part of its
Electric System.
(j) "Facilities Agreement" means the Interim Facilities
Agreement, dated as of June 27, 1991, among the cities of Alameda,
Biggs, Gridley, Healdsburg, Lodi, Lompoc, Palo Alto, Roseville,
Santa Clara and Ukiah, the Plumas-Sierra Rural Electric Cooperative
and the Turlock Irrigation District, as amended and supplemented
from time to time, and includes any successor agreement.
(k) "Fiscal Year" means the then current fiscal year of
NCPA, which on the date -of this Agreement is the period from July 1
to the next succeeding June 30.
LA 1-27419.4 4
(1) "Full Operation Date" means the first date when the
Project is capable of producing and delivering capacity and energy
in commercial operation, as shall be determined by the Commission
of NCPA in accordance with prudent utility practices.
(m) "Interconnection Agreement" means the
Interconnection Agreement among Pacific Gas and Electric Company,
NCPA, and certain members of NCPA, as the same may be amended and
supplemented from time to time, and including any successor
agreement.
(n) "Joint Powers Agreement" means the Joint Exercise of
Powers Agreement - Northern California Power Agency, dated as of
July 19, 1968, as amended, among the cities of Alameda, Biggs,
Gridley, Healdsburg, Lodi, Lompoc, Palo Alto, Redding, Roseville,
Santa Clara and Ukiah, the Plumas-Sierra•Rural Electric
Cooperative, the Turlock Irrigation District and the Truckee Donner
Public Utility District, establishing NCPA.
(o) "Project" means those certain 115kV transformers,
breakers, switches and 115kV transmission lines, as more
particularly described in Appendix C hereto, all or any portion of
which may be dedicated to Pacific Gas and Electric Company.
(p) "Public Finance Contracts Law" means Chapter 12 of
Division 6 of Title 1 oo the Government Code of the State of
California, as the same may be amended and supplemented from time
to time and shall include any successors to such statute.
(q) "Revenues" means, with respect to the City, all
income, rents, rates, fees, charges, and other moneys derived by
the City from the ownership or operation of its Electric System,
including, without limiting the generality of the foregoing, (i)
all income, rents, rates, fees, charges or other moneys derived
from the sale, furnishing, and supplying of electric capacity and
energy and other services, facilities, and commodities sold,
furnished, or supplied through the facilities of its Electric
System, (ii) the earnings on and income derived from the investment
of such income, rents, rates, fees, charges or other moneys to the
extent that the use of such earnings and income is limited by or
pursuant to law to its Electric System and (iii) the proceeds
derived by the City directly or indirectly from the sale, lease or
other disposition of all or a part of the Electric System as
permitted hereby, but the term "Revenues" shall not include (y)
customers' deposits or any other deposits subject to refund until
such deposits have become the property of the City or (z)
contributions from customers for the payment of costs of
construction of facilities to serve them.
(r) "Trustee" means the entity or entities, if any,
acting as the trustee under any Bond Resolution.
CA 1-27419.4 5
2. Purpose. The purpose of this Agreement is to set
forth the terms and conditions of (i) the acquisition and
construction by NCPA of the Project; (ii) the undertaking by NCPA
to issue Bonds to make the proceeds thereof available to pay the
Costs of the Project; and (iii) the sale by NCPA of the Project to
the City and the undertaking of the City to make payments with
respect to, among other things, Debt Service on the Bonds.
3. Acquisition, Construction and Financing of the
Project. NCPA will use its best efforts to cause or accomplish the
acquisition, construction and financing of the Project, including
obtaining all necessary authority and rights therefor and
performing all things necessary or convenient in connection
therewith.
NCPA hereby designates the City to undertake, and the
City hereby agrees, on behalf of NCPA and in satisfying its
obligations with respect to the acquisition and construction of the
Project, to undertake and be responsible for the acquisition,
installation and construction of the Project and placing the
Project in operation and agrees to provide for, or cause to be
provided for, such acquisition, installation, construction of the
Project and placing the Project in operation. The City may modify
the Project as it, in its sole discretion, shall determine, and the
City shall have no liability to NCPA for failure to complete the
acquisition, installation and construction of the Project or any
failure to place the Project into operation regardless of the
reason for such failure, provided, however, if for any reason the
acquisition, installation or construction of the Project, or
placing the Project into operation, shall not be completed or shall
be delayed, there shall be no resulting diminution in or
postponement of the payments to be made by the City pursuant to
this Agreement. Notwithstanding the foregoing, pursuant to a
separate agreement or agreements between NCPA and the City setting
forth the rights and obligations of each of the parties, NCPA may
act as project administrator for all or any portion of the Project_
and, to the extent authorized by such agreement or agreements, to
enter into construction contracts with one or more vendors with
respect to the Project. Except to the extent provided in any such
agreement, NCPA shall not be responsible or liable for the
acquisition, installation or construction of the Project or placing
the Project into operation.
In order to provide funds to pay the Costs of the
Project, NCPA shall use its best efforts to sell, issue and deliver
Bonds as soon as practicable after the execution and delivery of
this Agreement in an amount sufficient to pay the estimated Costs
of the Project, including the costs of issuance of such Bonds,
providing capitalized interest on such Bonds, funding any debt
service or other reserves required by the applicable Bond
Resolution, and shall cause each applicable Bond Resolution to
provide that the Bond proceeds, and any other monies, held under
such Bond Resolution for such purpose shall be made available to
L41-27119 4 6
the City to pay the Costs of the Project, upon appropriate
requisitions by the City therefor, submitted pursuant to the terms
of such Bond Resolution; provided, however, that nothing herein
contained shall restrict the authority of any Trustee to apply
funds held under a Bond Resolution to the payment of Debt Service
on Bonds or maintaining reserves therefor in accordance with the
terms of such Bond Resolution. Monies held under each Bond
Resolution representing Bond proceeds, payments by the City or
interest on either thereof shall be invested, to the extent
permitted by the applicable Bond Resolution, at the direction of
the City to the applicable Trustee, in such investments as may be
permitted under such Bond Resolution and, to the extent not
required to be rebated to the United States Treasury, interest or
other investment earnings on such monies shall be applied pursuant
to such Bond Resolution to reduce payments that would otherwise be
required to be made by the City thereunder and hereunder.
As further consideration for the sale of the Project by
NCPA to the City pursuant to this Agreement, upon the written
request of the City, NCPA agrees to use its best efforts to sell,
issue and deliver additional Bonds to provide additional funds to
pay Costs of the Project, including any capital improvements to be
made after the Project is placed into operation, or to refund
outstanding Bonds; provided, however, that the failure of NCPA to
sell, issue and deliver any such additional Bonds shall not release
the City from any of its obligations under this Agreement,
including without limitation, the obligation to make payments when
due pursuant to this Agreement, regardless of the reason for such
failure. NCPA shall cause each applicable Bond Resolution to
provide that the Bond proceeds, and any other monies, held under
such Bond Resolution for such purpose shall be made available to
the City to pay Costs of the Project, upon appropriate requisitions
to the applicable Trustee by the City therefor, submitted pursuant
to the terms of such Bond Resolution.
4. Sale of Project by NCPA. NCPA hereby sells the
Project to the City and the City hereby purchases the Project from
NCPA, in each case on the terms and conditions contained herein.
5. Title to Project; Operation and Maintenance. Title
to each segment or component of the Project shall vest in the City
upon the completion of the acquisition or construction, as
appropriate, of such segment or component. NCPA shall deliver such
documents or instruments as the City may reasonably request to
evidence the vesting of any segment or component of the Project in
the City as herein provided. The City shall be responsible for the
operation and maintenance of the Project. As owner and operator of
the Project, the City shall operate and dispatch the Project and
shall provide such maintenance, renewals and replacements of the
Project as the City shall determine in its sole discretion. NCPA
shall not take any action, or cause any action to be taken, during
the term of this Agreement to encumber the Project or to prevent
the City from having exclusive possession, custody and enjoyment of
[A I-27419.4 7
the Project. Neither NCPA, the Trustee nor any owner of any Bonds
shall have any lien on or security interest in the Project.
6. Payments to Constitute Special Obligations. (a) The
obligations under this Agreement are incurred by the City for the
benefit of future holders of Bonds, shall commence and continue to
exist and be honored by the City whether or not the acquisition and
construction of the Project as completed or completed in a timely
manner and constitutes an obligation to perform such obligations
whether or not the Project is made available or delivered or
provided.
(b) Any payments required to be made by, or costs
incurred by, NCPA or the City pursuant to Section 9.5 of the
Interconnection Agreement shall not be made under this Agreement.
(c) The City is obligated to make payments under this
Agreement solely from the Revenues of, and as an operating expense
of, its Electric System. Nothing herein shall be construed as
prohibiting the City from using any other funds and revenues for
purposes of satisfying any provisions of this Agreement.
(d) The City shall make payments under this Agreement
whether or not the Project or any part thereof is completed,
operable, operating or retired. Such payments are not subject to
any reduction, whether by offset or otherwise, and are not
conditioned upon performance by NCPA or the City under this
Agreement or any other agreement.
(e) The City covenants and agrees that it shall, at all
times, operate the properties of its Electric System and the
business in connection therewith in an efficient manner and at
reasonable cost and shall maintain its Electric System in good
repair, working order and condition.
(f) The City covenants and agrees to establish and
collect fees and charges for electric capacity and energy furnished
through facilities of its Electric System sufficient to provide
Revenues adequate to meet its obligations under this Agreement and
to pay any and all other amounts payable from or constituting a
charge, lien, or encumbrance upon any or all such Revenues;
provided that the obligation of the City to make payments under
this Agreement shall not constitute a legal or equitable pledge,
lien or encumbrance upon any property of the City or upon any of
its income, receipts or revenues; and further provided that neither
the City nor the State of California or any agency or political
subdivision thereof shall ever be obligated or compelled to levy ad
valorem taxes to make the payments provided for in this Agreement.
7. City Covenants.
Project by NCPA, the City shall
Service on the Bonds, all other
the Project required to be made
In consideration of the sale of the
pay an amount equal to the Debt
payments relating to the Bonds or
under the Bond Resolutions and any
LA 8
other costs incurred by NCPA in connection with the Project and
this Agreement, including amounts payable pursuant to Section 15
hereof.
8. Payments to NCPA. A billing statement prepared by
NCPA will be sent to the City not later than the fifteenth (15th)
day of each calendar month showing the amount payable to NCPA by
the City: (i) for amounts due under this Agreement with respect to
Debt Services and other payments required to be made under the Bond
Resolutions in the next succeeding calendar month; and (ii) for
amounts due under this Agreement, other than payments relating to
Debt Service or other payments required to be made under the Bond
Resolutions, for the preceding calendar month, and the amount of
any credits or debits as a result of any appropriate adjustments;
provided, however, that the failure of NCPA to so bill for amounts
due with respect to Debt Services or other payments required to be
made under the Bond Resolutions, or any errors in such billings,
shall not relieve the City of its obligations to make such payments
at the times and in the amounts required by the Bond Resolutions.
Amounts shown on the billing statement are due and payable thirty
(30) days after the date of the billing statement, except that any
invoice coming due on a Friday, holiday or weekend shall be
adjusted by NCPA to come due on the closest following workday, as
applicable.
Any amount due and payable but not paid by the City
within thirty (30) days following the date of the billing statement
shall bear interest at the per annum prime rate (or reference rate)
of the Bank of America National Trust and Savings Association then
in effect, plus two percent per annum, computed on a daily basis
until paid. Such computation shall be made on a simple basis
without compounding.
NCPA shall mail all billing statements within 24 hours of
the billing statement date thereon. The postmark date on the
envelope containing payment by check shall be used to determine
timeliness of payment, except that payments received later than
seven days after the due date shall be declared late without regard
to postmark date.
Payment via wire transfer is the preferred method of
making payments to NCPA. For wire transfers, the transaction date
shall be used to determine the timeliness of payments.
If the City questions or disputes the correctness of any
billing statement by NCPA, it shall pay NCPA the amount claimed
when due and shall within thirty (30) days of the receipt of such
billing statement request an explanation from NCPA. Upon the
request and at the expense of the City, NCPA shall make available
for inspection and copying by the City or its duly authorized
representative, during normal business hours and subject to such
security and safety provisions as NCPA shall reasonably determine,
IA 1.27419.4 9
all of its books and records pertaining to the Project, this
Agreement, and amounts billed by NCPA pursuant to this Agreement.
If the bill is determined to be incorrect, NCPA will
issue a corrected bill and refund any amount which may be due the
City, which refund shall bear interest from the date NCPA received
the excess payment from the City until the date of the refund. The
rate of interest shall be the Bank of America National Trust and
Savings Association average Regular Savings rate, computed on a
simple basis without compounding, for the period the excess is
outstanding. If NCPA and the City fail to agree on the correctness
of a bill within thirty (30) days after the City has requested an
explanation, the parties shall promptly submit the dispute to
arbitration under section 1280 et sea. of the California Code of
Civil Procedure.
9. Events of Default. The following shall constitute
events of default under this Agreement: (a) the failure of the
City to make any payment with respect to Debt Service or other
payments required to be made under a Bond Resolution in full when
due as required by this Agreement; and (b) the failure of either
party to perform any of its other obligations hereunder, which
failure is not remedied within sixty (60) days from the date of
delivery of written notice of such failure to the defaulting party
by the other party, a Trustee or, to the extent provided in a Bond
Resolution, Bondholders; provided, however, if any such failure,
(other than a failure of the City described in clause (a), or to
otherwise pay any amounts when due under this Agreement), is not
remedied within such sixty (60) day period but the defaulting party
shall have instituted remedial action within such period and is
diligently pursuing correction, then no event of default shall be
deemed to exist for so long as such defaulting party is continuing
to diligently take reasonable steps to effect such remedy.
10. Remedies. Subject to the provisions of this
Agreement, a non -defaulting party may protect and enforce its
rights hereunder by suit or suits in equity or at law, whether for
the specific performance of any covenant herein or for damages or
in aid of the execution of any power granted herein or any other
remedy available under any provision of applicable law. No remedy
by the terms of this Agreement conferred upon or reserved to the
non -defaulting party is intended to be exclusive of any other
remedy, but each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this
Agreement or at law or in equity or by statute whether now in
existence or established after the effective date of this
Agreement.
11. City Direction. In order to provide funds to
finance the Costs of the Project, NCPA, as soon as practicable
after the execution of this Agreement, shall use its best effort to
issue Bonds to finance the Costs of the Project and, if requested
by the City to issue additional Bonds and refunding Bonds as
L11-27419.4 10
provided in this Agreement; provided, however, that NCPA shall not
adopt or enter into a Bond Resolution or a contract for the sale of
Bonds without the prior written approval of the City. NCPA agrees
to follow all lawful directions of the City with respect to the
purchase or redemption of Bonds and any other action under the
terms of the applicable Bond Resolution within the control of NCPA.
Any request, approval, authorization, direction or consent of the
City for purposes of this Agreement shall be deemed properly made
or given if such request, approval, authorization, direction or
consent is contained in a writing signed by an Authorized
Representative of the City.
12. Term. This Agreement shall take effect upon the
execution hereof by the authorized representatives of the parties
hereto, and shall remain in full force and effect until the later
of (i) the expiration of the useful life -of the Project or (ii) the
date on which no Bonds remain outstanding; provided, however, that
in no event shall the term of this Agreement with NCPA as a party
extend beyond the date of termination of NCPA. This Agreement
shall not be subject to termination by any party under any
circumstances prior to the term specified in this Section, whether
based upon the default of the other party under this Agreement or
for any other cause whatsoever so long as any Bonds are outstanding
under a Bond Resolution.
13. Amendments. So long as any Bonds are outstanding,
this Agreement shall not be amended, modified or otherwise changed
or rescinded by agreement of the parties without the consent of
each Trustee for Bonds whose consent is required under the
applicable Bond Resolution.
14. Bonds, Limited obligations of NCPA. NCPA shall not
be obligated to pay the principal of, or premium, if any, or
interest on the Bonds, except from amounts paid by the City
pursuant to this Agreement or other moneys, if any, otherwise
available for such payment pursuant to the applicable Bond
Resolution. The City hereby acknowledges that NCPA's sole source
of moneys to repay the Bonds will be provided by the payments made
by the City pursuant to this Agreement, together with other moneys,
if any, held by the Trustee under the applicable Bond Resolution,
and hereby agrees that if the payments to be made hereunder shall
ever prove insufficient to pay all principal of, and premium, if
any, and interest on the Bonds as the same shall become due
(whether by maturity, redemption, acceleration or otherwise), then
upon notice from the applicable Trustee, the City shall pay such,
amounts as are required from time to time to prevent any deficiency
or default in the payment of such principal, premium or interest,
including, but not limited to, any deficiency caused by acts,
omissions, nonfeasance or malfeasance on the part of the Trustee,
the City, NCPA or any third party.
15. Indemnification. The City releases NCPA from and
agrees and covenants that NCPA shall not be liable for, and
LA 1-27419.4 11
covenants and agrees to indemnify and hold harmless the NCPA and
its officers, employees and agents (collectively, the "Indemnified
Parties") from and against, any and all losses, claims, damages,
liabilities or expenses, of every conceivable kind, character and
nature whatsoever arising out of, resulting from, or in any way
connected with (1) the Project, or the conditions, occupancy, use,
possession, conduct or management of, or work done in or about, or
from the planning, design, acquisition, installation or
construction of, the Project or any part thereof; (2) the issuance
of any Bonds or any certifications or representations made in
connection therewith (in each case other than statements made in or
omissions from offering documents relating to the Bonds, which
shall be governed exclusively by clause (3) below) and the carrying
out of any of the transactions contemplated by the Bonds, any Bond
Resolution, or this Agreement; or (3) any untrue statement or
alleged untrue statement of any material -fact relating to the City
or omission or alleged omission to state a material fact relating
to the City necessary to make the statements made, in light of the
circumstances under which they were made, not misleading, in any
official statement or other offering circular approved in writing
by the City utilized by any underwriter or placement agent in
connection with the sale of any Bonds except that the City shall
not be liable for any such loss, claim, damage, liability or
expense that results from the willful misconduct on the part of the
Indemnified Party seeking such indemnity. The City further
covenants and agrees to pay or to reimburse each Indemnified Party
for any and all costs, reasonable attorneys fees, liabilities or
expenses incurred in connection investigating, defending against or
otherwise in connection with any such losses, claims, damages,
liabilities, expenses or actions, except to the extent that the
same arise out of the willful misconduct of the Indemnified Party
claiming such payment or reimbursement. This indemnity agreement
shall not be construed as a limitation on any other liability which
the City may otherwise have to any Indemnified Party, provided that
in no event shall the City be obligated for double indemnification.
An Indemnified Party shall, promptly after the receipt of
notice of any action against such Indemnified Party in respect of
which indemnification may be sought against the City, notify the
City in writing, but the omission to notify the City of any such
action shall not relieve the City from any liability which it may
have to such Indemnified Party under the indemnity agreement
contained herein except to the extent that the City is prejudiced
thereby. In case any action shall be brought against an
Indemnified Party and such Indemnified Party shall notify the City
of the commencement thereof, the City may, or if so requested by
such Indemnified Party shall, participate therein or assume the
defense thereof, with counsel satisfactory to such Indemnified
Party, and after notice from the City to such Indemnified Party•of
an election so to assume the defense thereof, the City will not be
liable to such Indemnified Party under this Section for any legal
or other expenses subsequently incurred by such Indemnified Party
in connection with the defense thereof other than the costs of
LA 1-27419.4 12
reasonable investigation. If the City shall not have employed
counsel to have charge of the defense of any such action or if an
Indemnified Party shall have reasonably concluded that there may be
defenses available to it or them which are different from or
additional to those available to the City (in which case the City
shall not have the right to direct the defense of such action on
behalf of such Indemnified Party), such Indemnified Party shall
have the right to retain legal counsel of its own choosing and
reasonable legal and other expenses incurred by such Indemnified
Party shall be borne by the City, provided that in no event shall
the City be obligated to pay more than one firm of lawyers with
respect to the defense of any Indemnified Party.
The City shall not be liable for any settlement of any
such action effected without its consent by any Indemnified Party,
but if settled with the consent of the City or if by a final
judgment for the plaintiff in any such action against the City or
any Indemnified Party, with or without the consent of the City, the
City agrees to indemnify and hold harmless such Indemnified Party
to the extent provided herein.
The provisions of this Section shall survive the
retirement of the Bonds and the termination of this Agreement.
16. Tax Covenant. Notwithstanding any other provision
of this Agreement, neither NCPA nor the City shall transfer,
assign, sell or exchange any portion of the Project or any other
interest in the Project, directly or indirectly, in any manner, or
shall take, or to the extent it can control the same permit to be
taken, any other action or actions, which would adversely affect
the exclusion of the interest on any of the Bonds from gross income
for federal income tax purposes under Section 103 of the Code,
including without limitation, by reason of the classification of
any Bond as a "private activity bond" within the meaning of said
Code.
17. Notices. Any notice or demand to NCPA under this
Agreement shall be deemed properly given, if delivered by hand,
sent by certified or registered mail postage prepaid and return
receipt requested, or sent via facsimile or other electronic media
and confirmed by telephone or in writing within twenty-four (24)
hours, addressed to the General Manager of NCPA at the address
shown in Appendix A. Any notice or demand to the City under this
Agreement shall be deemed properly given if sent by certified or
registered mail postage prepaid and return receipt requested, or,
sent via facsimile or other electronic media and confirmed by
telephone or in writing within twenty-four (24) hours, addressed to
the initial signatory for the City shown on the signature pages
hereof at the address shown in Appendix A. The designation of the
name, the address and any of the telephone or telecopier numbers to
which any such notice or demand to any party is to be directed may
be changed at any time and from time to time by any party to this
Agreement by such party's giving notice of change to the other
LA 1-27419.4 13
party hereto as above provided in this Section and to each Trustee
under the Bond Resolutions at the addresses set forth in such Bond
Resolutions. In computing any period of time from such notice,
such period shall commence on the date received or, if sent via
facsimile or other electronic media, on the date sent.
18. Miscellaneous. The headings of the sections hereof
are inserted for convenience only and shall not be deemed a part of
this Agreement. This Agreement may be amended, changed, waived or
modified only by written agreement executed by the City and NCPA.
The City shall, if requested by NCPA in connection with
the issuance of any Bonds, cause an opinion or opinions in
substantially the form attached hereto as Appendix B to be
delivered by an attorney or firm of attorneys acting as counsel for
the City.
This Agreement shall be construed in accordance with the
laws of the State of California. If any one or more of the
covenants or agreements provided in this Agreement to be performed
should be determined to be invalid or contrary to law, such
covenant or agreement shall be deemed and construed to be severable
from the remaining covenants and agreements herein contained and
shall in no way affect the validity of the remaining provisions of
this Agreement. Whenever the Agreement requires the payment of
interest and the interest rate specified herein is in excess of the
amount of interest that may legally be charged in the
circumstances, then such interest rate shall be changed to the
maximum interest rate permitted by law. Notwithstanding the
foregoing, each of the parties hereto acknowledges and agrees that
(a) NCPA's willingness to enter into this Agreement and make
proceeds of Bonds available to the City was induced and dependent
upon the City's purchase of the Project as herein provided and
(b) the City's obligations to make payments with respect to Debt
Service or otherwise required under a Bond Resolution or this
Agreement shall be absolute and unconditional as provided in this
Agreement.
This Agreement may be executed
all or any of which shall be regarded for
original and shall constitute and be but
instrument.
LA 1-27419.4 14
in several counterparts,
all purposes as one
one and the same
IN WITNESS WHEREOF, NCPA has executed this Agreement with
the approval of its Commission, and the City has executed this
Agreement in accordance with the authorization of its City Council,
as of the date first above written.
NORTHERN CALIFORNIA POWER AGENCY
By
And
CITY OF LODI
, Ja1Ws 1nkerton, Jr.
ttest:
Cit.;, Cler}d'Alice M. Reimche
LAI -27419.4 15
APPENDIX A
ADDRESSES FOR NOTICES
Northern California Power Agency
180 Cirby Way
Roseville, California 95678
Attention: General Manager
Telephone No: (916) 781-3636
Telecopier No: (916) 783-7693
City of Lodi
221 West Pine Street
Lodi, California 95241
Attention: Electric Utility Director
Telephone No: (209) 334-5634
Telecopier No: (209) 333-6795
LA 1-27419.4 A-1
APPENDIX B
FORM OF OPINION OF COUNSEL
Northern California Power Agency
180 Cirby Way
Roseville, California 95678
Dear Sirs:
I am acting as counsel to the City of Lodi ("the City")
under the Agreement for the Sale and Financing of Electric System
Facilities, dated as of August 1, 1992 (the "Agreement") between
the City and the Northern California Power Agency (the "Agency"),
and I have acted as counsel to the City in connection with the
matters referred to herein. As such counsel I have examined and am
familiar with (i) those documents relating to the existence,
organization and operation of the City, (ii) all necessary
documentation of the City relating to the authorization, execution
and delivery of the Agreement, and (iii) an executed counterpart of
the Agreement. (Capitalized terms used and not otherwise defined
herein shall have their respective meanings as set forth in the
Agreement.)
Based upon the foregoing and an examination of law and
such other information, papers and documents as I deem necessary or
advisable to enable me to render this opinion, including the
Constitution and laws of the State of California, together with the
governing instruments, ordinances and public proceedings of the
charter City, I am of the opinion that:
1. The City is a municipal corporation, duly created,
organized and existing under the laws of the State of
California and duly qualified to furnish electric service
within the State of California.
2. The City has full legal right, power and authority
to enter into the Agreement and to carry out and consummate
all transactions contemplated thereby, and the City has
complied with the provisions of applicable law in all matters
relating to such transactions required to be complied with as
of the date hereof.
3. The Agreement has been duly authorized, executed and
delivered by the City, is in full force and effect as to the
City in accordance with its terms and, assuming that the
Agency has all the requisite power and authority, and has duly
executed and delivered such Agreement, constitutes the legal,
ui-z7419.4 B-1
valid and binding obligation of the City enforceable in
accordance with its terms.
4. Payments by the City under the Agreement will
constitute an operating expense of the City and are to be made
solely from the Revenues of its Electric System, as provided
in Section 6(c) of the Agreement.
5. No approval, consent or authorization of any
governmental or public agency, authority or person is required
for the execution and delivery by the City of the Agreement,
or the performance by the City of its obligations thereunder.
6. The authorization, execution and delivery of the
Agreement and compliance with the provisions thereof will not
conflict with or constitute a breach of, or default under, any
instrument relating to the organization, existence or
operation of the City, or any commitment, agreement or other
instrument known to me after reasonable investigation to which
the City is a party or by which it or its property is bound or
affected, or any ruling, regulation, ordinance, judgment,
order or decree to which the City (or any of its officers in
their respective capacities as such) is subject or any
provision of the laws of the State of California relating to
the City or its affairs.
7. To the best of my knowledge after reasonable
investigation, there is no action, suit, proceeding, inquiry
or investigation at law or in equity, or before any court,
public board or body, pending or threatened against or
affecting the City or any entity affiliated with the City or
any of its officers in their respective capacities as such,
nor is there any basis therefor, which questions the powers of
the City referred to in paragraph 2 above or the validity of
the proceedings taken by the City in connection with the
authorization, execution or delivery of the Agreement, or
wherein any unfavorable decision, ruling or finding would
materially adversely affect the transactions contemplated by
the Agreement, or which, in any way, would adversely affect
the validity or enforceability of the Agreement.
The opinion expressed in paragraph 3 above is qualified
to the extent that the enforceability of the Agreement may be
limited by any applicable bankruptcy, insolvency, debt adjustment,
moratorium, reorganization, or other similar laws affecting
creditors' rights generally or as to the availability of any
particular remedy.
LA 1.27419-4 B-2
This opinion is rendered only with respect to the laws of
the State of California and the United States of America, and is
addressed only to the Agency. No other person is entitled to rely
on this opinion, nor may you rely on it in connection with any
transactions other than those described herein.
Very truly yours,
LA 1-27419.4 B-3
APPENDIX C
DESCRIPTION OF PROJECT
[To be Provided by the City of Lodi]
Lnt-271419.3 C-1