HomeMy WebLinkAboutResolutions - No. 2005-126RESOLUTION NO. 2005-126
A RESOLUTION OF THE CiTY COUNCIL OF THE CITY OF LODI
TRANSFERRING $4,500,000 FROM THE RATE STABLIZATION FUND TO
THE ELECTRIC REVENUE FUND AND DIRECTING THE CiTY MANAGER
TO PERFORM A RATE STUDY AND FISCAL ANALYSIS
WHEREAS, the City of Lodi, a municipal corporation duly organized and existing under
and by virtue of the Constitution and laws of the State of California (the "City") owns and
operates a municipal electric system (the "Electric System") to provide the City and its
inhabitants with electricity; and
WHEREAS, the City Council adopted Resolution No. 2001-303 on December 19, 2001,
whereby the City is authorized to enter into an installment Purchase Contract (the "installment
Purchase Contract") with the Lodi Public Improvement Corporation, a non-profit, public benefit
corporation duly organized and existing under and by virtue of the laws of the State of California
(the "Corporation"), whereby the Corporation acquired from the City certain existing improvements
to the Electric System, as more fully described in Exhibit 1 to the installment Purchase Contract
(the "Existing Facilities"), and whereby the Corporation sold such Existing Facilities back to the
City as provided in the Installment Purchase Contract; and
WHEREAS, pursuant to the Installment Purchase Contract, the City is obligated to make
installment payments (the "Payments") to the Corporation for the purchase of the Existing
Facilities; and
WHEREAS, Resolution No. 2001-303 further approved the refinancing of the
improvements to the Existing Facilities as provided in the Installment Purchase Contract through
the execution and delivery of Electric System Revenue Variable Rate Demand Certificates of
Participation, 2002 Series A (the "Series A Certificates") evidencing proportionate interests of the
owners thereof in the Payments to be made by the City; and
WHEREAS, the Trust Agreement for the Series A Certificates provides that the term
"Available Reserves" is defined to mean, as of the date of calculation, the amount of unrestricted
funds in the Electric Revenue Fund designated as "Available Reserves" for purposes of the
Installment Purchase Contract by the City and then available to pay Maintenance and Operation
Costs andfor Annual Debt Service (as such terms are defined in the Installment Purchase
Contract), which may include transfers to the Electric Revenue Fund from the Rate Stabilization
Fund or any other fund that is legally available for deposit in the Electric Revenue Fund; and
WHEREAS, the Rate Stabilization Fund exists for the purpose, among others, of providing
a buffer against the need to increase electric rates in the short term due to increases in the cost of
purchasing power; and
WHEREAS, the Rate Stabilization Fund currently has a balance of $6,349,583; and
WHEREAS, the moneys in the Rate Stabilization Fund are legally available for deposit in
the Electric Revenue Fund; and
WHEREAS, The 2004-05 budget year has seen significant increases in the cost of bulk
power and the 2005-06 budget year is expected to see continued high -bulk power costs; and
WHEREAS, the City Council desires to provide sufficient revenue for the 2004-05 budget
year; and
WHEREAS, $4,500,000 is needed to cover the demands on the Electric Revenue Fund
created by the increased cost of bulk power in the 2004-05 budget year; arid
WHEREAS, this action will draw down on the Rate Stabilization Fund arid Council is
committed to maintaining an appropriate reserve in the Rate Stabilization Fund for the 2005-06
budget year and beyond; and
WHEREAS, all acts, conditions, and things required by the laws of the State of California
to exist, to have happened, and to have been performed precedent to and in connection with the
consummation of the transactions authorized hereby, do exist, have happened, and have been
performed in regular and due time, form, and manner as required by law, and the City is now duly
authorized and empowered, pursuant to each and every requirement of law, to consummate such
transactions for the purpose, in the manner and upon the terms herein provided.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
LODI, AS FOLLOWS:
Section 1, The Finance Director is directed to transfer $4,500,000 from the Electric
Rate Stabilization Fund to the Electric Revenue Fund and such moneys are designated as
"Available Reserves" for purposes of the Installment Purchase Contract, which are available to
pay Maintenance and Operation Costs and Annual Debt Service.
Section 2. The City Manager is directed to perform a rate study for the Electric Utility
and return to the Council for action to replenish the Rate Stabilization Fund and provide sufficient
revenue to cover the increase in bulk power costs for the 2005-06 budget year by no later than
December 31, 2005.
Section 3, This Resolution shall take effect immediately upon its passage.
Date: June 15, 2005
I hereby certify that Resolution 2005-126 was passed and adopted by the City Council of
the City of Lodi in a regular meeting held June 15, 2005, by the following votes:
AYES: COUNCIL MEMBERS — Hansen, Hitchcock, Johnson, Mounce, and
Mayor Beckman
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
Approved As to Form:
DStephen Schwabe
Susan J. BlacksJo City Clerk
2005-126
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