HomeMy WebLinkAboutAgenda Report - November 3, 1999 E-15CITY OF LODI COUNCIL COMMUNICATION
AGENDA TITLE: Transfer of Funds to the Northern California Power Agency Geothermal Bond
Escrow Account ($2,300,000)
MEETING DATE: November 3, 1999
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: That the City Council approve the transfer of funds to the Northern
California Power Agency (NCPA) Geothermal Bond Escrow Account
in an amount not to exceed $2,300,000.
BACKGROUND INFORMATION: As previously discussed with the Council, NCPA and its members
concluded a major project debt restructuring this year which resulted
in significant reductions of yearly debt service payments.
Subsequently, NCPA has continued to pursue additional opportunities to enhance members' competitive
positions.
Recently, NCPA and its Financial Advisor developed a financial instrument designed to result in a net
savings to NCPA Geothermal Project participants. This instrument would establish a Geothermal Bond
Escrow Account for a portion of outstanding Geothermal Project debt drawing a higher rate of return than
the Local Area Investment Fund 6.35% on October 20, 1999. The total additional return for the City of
Lodi would be approximately $222K over the period January 1, 2000 through July 1, 2010. Subsequently,
and in accordance with the NCPA Geothermal Project Third Phase Agreement and NCPA Commission
rules, establishment of the Geothermal Bond Escrow Account was approved at the October 28, 1999
NCPA Commission Meeting.
The City of Lodi's escrow account funding share is $2,300,000 based upon Geothermal Project share and
anticipated interest rate. Due to the amount required, FY1999-2000 Operating Revenues will not be
adequate to accommodate the requirement. Therefore, it is recommended that source of funds be as
follows: $1,000,000 from City of Lodi - NCPA General Operating Reserve and $1,300,000 from the
Electric Utility Rate Stabilization Reserve 162.
The above actions are compatible with the Electric Utility Department's Competition Transition Plan.
FUNDING: City of Lodi - NCPA General Operating Reserve: $1,000,000
Electric Utility Rate Stabilization Reserve 162: $1,300,000
Funding Available: k) X� �4 �
Vicky McAthie, Finance Director
Alan N. Vallow
Electric Utility Director
APPROVED: C
Dixon Flynn - City Manager
CITY OF LODI COUNCIL COMMUNICATION
PREPARED BY: Jack Stone, Manager, Business Planning and Marketing
ANV/JLSAst
C: City Attorney
Manager, Rates and Resources
APPROVED:
H. Dixon Flynn - City Manager
RESOLUTION NO. 99-177
A RESOLUTION OF THE LODI CITY COUNCIL APPROVING THE
TRANSFER OF FUNDS TO THE NORTHERN CALIFORNIA
POWER AGENCY (NCPA) GEOTHERMAL BOND ESCROW
ACCOUNT
BE IT RESOLVED, that the Lodi City Council does hereby approve the transfer of
funds not to exceed $2,300,000 to the Northern California Power Agency Geothermal
Bond Escrow Account; and
BE IT FURTHER RESOLVED, that funds be appropriated as follows:
City of Lodi — NCPA General Operating Reserve $1,000,000
Electric Utility Rate Stabilization Reserve 162 $1,300,000
Dated: November 3, 1999
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I hereby certify that Resolution No. 99-177 was passed and adopted by the Lodi
City Council in a regular meeting held November 3, 1999 by the following vote:
AYES: COUNCIL MEMBERS — Hitchcock, Mann, Nakanishi and Land (Mayor)
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — Pennino
99-177