HomeMy WebLinkAboutAgenda Report - April 7, 1993 (110)o.
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CITY OF LODE COUNCIL COMMUNICATION
AGENDA TITLE: Approve transfer of funds from Developer Deposit Account to Salvation
Army "Reach Program"
MEETING DATE: April 7, 1993
PREPARED BY: Finance Director
RECOMMENDED ACTION: That the City Council authorize staff to pay a $26,149 developer
deposit to the Lodi office of the Salvation Army for use in the
Reach Program.
BACKGROUND INFORMATION
On April 25, 1990, the City entered into an agreement with J.W. Properties to have the City install
electrical improvements at the Meadows, Unit 2, lots 5-46 (copy attached), in consideration for this
agreement, J.W. Properties paid the City the sum of $67,320 to cover the cost of electrical installations
and the City agreed to refund the developer the sum of $28,829 at a rate of approximately $300.00 per
quarter (in accordance with a formula dependent on the number of connections and electric revenue as
units were sold).
On November 6, 1992, J.W. Properties assigned their $26,149 deposit refund to the Salvation Army
(copy attached). At a rate of $300.00 per quarter, it would require J.W. Properties 21.8 years to recover
their deposit. Accordingly, Mr. John Cheney, the managing partner of J.W. Properties, requested staff
to prepare the necessary papers to assign the deposit to the Salvation Army. The tax deduction is a
greater benefit to the partners in J.W. Properties than the deposit based their ages and the number of
years it will take get the deposit back.
The papers were prepared by the City Attorney and given to Mr. Cheney and the Salvation Army for
approval and signature. Both parties agreed to the assignment and the signed papers were returned to
the Finance Department in early December.
REACH PROGRAM
The "Reach Program" managed by the Lodi office of the Salvation Army is funded by donations of
Pacific Gas and Electric customers to assist qualified customers. Under this program, the Salvation Army
assists Lodi utility customers on a once a year basis when they can not pay their electric bill due to
economic hardship and their utilities are scheduled to be turned off for non-payment. In addition, the
"Reach Program" allows concerned citizens to make tax deductible donation to assist the less fortunate
utility customers pay their utility bills without using tax monies or raising rates to offset bad debt losses.
APPROVED: V - (111 _ _ - _. ___. �4%
THOMAS A. PETERSON
City Manager
ME
In past years, the Lodi office of the Salvation Army received approximately $50,000 per year to assist
Lodi residents. However, the donations to the program are down this year at a time when the need is
greater due to the rising cost of utilities, the loss of jobs in the local economy and personal hardships.
FINANCIAL IMPACT
There is essentially no financial impact on the City by paying the deposit to the Salvation in full at this
time. The deposit will be returned to the City as revenue to pay the utility bills of customer. What the
City will lose in interest earnings will be offset a reduction in bad debt losses and the administrative
burden of tracking this deposit for the next 22 years.
CITY PROGRAM
The City Council may wish to consider establishing a program similar to the program PG&E customers
to allow City customers to make a tax deductible contribution to the "Reach Program" at the time they
pay their City bili.
Attachments
Assignment dated November 6, 1992
Developer Agreement dated April 25, 1990
cf Henry Rice, Electric Utility Director
7 Dtxon Flynn
Finance Director
E
1,
ELECTRICAL UTILITY AGREEMENT
THE MEADOWS UNIT NO. 2
Supersedes Agreement dated March 21, 1988
THIS AGREEMENT made and entered into this 25th day of April 1990
by and between J. W_ PROPERTIES hereinafter designed "Developer' and
the CITY OF LODI, a municipal corporation located in the County of San
Joaquin, State of California, hereinafter designated "City,"
WITNESSETH:
WHEREAS, Developer contemplates the improvements of a certain
tract of land known a5 THE MEADOWS, UNIT NO. 2, LOTS 5-46 (PART 1) AND
LOTS 1-4 (PART 2); and
WHEREAS, Developer is desirous of having City install the
definable portion of the electrical facilities to and within said
Development; and
WHEREAS, City and Developer hereto are mutually desirous of
providing for the manner and method of paying the cost of installing
said facilities;
NOW THEREFORE, in consideration of the mutual covenants and
conditions herein contained, City and Developer hereto do hereby
mutually covenant and agree as follows:
I
In the event that the electrical facilities are to be installed
underground, then excavating and backfilling of the necessary trenches
to the specifications of the City shall be the obligation of
Developer. The coordination of the installation of the electrical
facilities, along with the installation of other underground utility
lines and street construction, shall be the obligation and
responsibility of Developer.
Iia
City covenants and agrees to bring to and install within Part 1
all necessary electrical facilities. the installation within said Part
1 Development to be within the streets and easements provided for
utilities. The City further agrees to install the connections frcm
these electrical lines within the easement to the. improvements to be
erected within said Part 1 Development.
Ilb
City covenants and agrees to bring to and install within Part 2
the first phase ('backbone' system) of the electrical facilities. the
installation within said Part 2 Development to be within the streets
and easements provided for utilities. It is expressly understood and
agreed that this agreement does not contemplate nor cover the
connections from these electrical lines within the easement to the
improvements to be erected within said Part 2 Development, but only
covers the 'backbone' system to the Part 2 Development (Phase 1) and
within said easements. The electrical facilities within Part 2 must be
further developed by third party (Phase 2) to bring electrical power to
the improvements to be erected within Part 2.
III
Developer does hereby agree to pay the sum of $67,320 to cover
the cost of installing said electrical facilities. City agrees to
refund to Developer the sum of $28,829. Refunds to be made quarterly
at the rate of 33% of revenue derived from the use of electrical power
at commercial/industrial developments and S2.50 per month, for each
residential connection made to the electrical facilities within said
Part 1 and Part 2 Development following completion of refunds to third
parties for Phase 2 eledtrical facilities within Part 2.
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EA/MEADO/TXTU.01D
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For purposes of computation, the number of connections in place
and in use as of the end of each quarter shall be the basis upon which
the refund for the quarter shall be made. Said payments shall continue
until the entire sum of S28.829 has been refunded to Developer, subject
to paragraph IV. It is expressly understood and agreed that the
obligation of City to repay Developer shall not include the payment of
any interest whatsoever.
IV
In the event that at the end of 13 years from April 25, 1990,
Developer has not been repaid the deposit in full, then and in that
event, and commencing with the 14th year and annually thereafter, City
shall charge an annual depreciation of ten percent (10T) on the balance
of principal then remaining due and owing to Developer, and the amount
due Developer shall be reduced accordingly by this amount of
depreciation as of the start of said 14th year and continuing annually
thereafter. In other words, commencing with the said 14th year, the
obligation of City to repay Developer shall be reduced in an amount
computed at the rate of ten percent (101.1) on the amount of principal
due and owing each year.
V
Nothing is this Agreement shall be construed as preventing City,
at its option, from repaying Developer at a faster rate than the amount
provided for herein.
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EA/MEADO/TXTU.OID
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V I
For the r3ason that City is making payments from revenue derived
solely from the use of the electrical facilities installed within the
development, it is mutually understood and agreed that City shall ,be
under no obligation to commence payments unless and until the
electricity is not only connected to the improvements within the
development, but also that the improvement is used and occupied.
VII
This Agreement shall insure to the benefit of the heirs,
successors, and assigns of the Developer. In this connection, City is
authorized to mail the reimbursement to J.W. Properties
at 3515 Country Club Blvd., Stockton, CA 95204 ;
and in the event reimbursement is returned or unclaimed after two years
from the date of mailing, the amount of the reimbursement shall revert
to the City's general fund. It shall be the responsibility of the
Developer to notify the Finance Director of the City of Lodi of any
address change.
IN WITNESS WHEREOF, the parties hereto have set their hands the
day and year first hereinabove written.
CITY OF LODI,
a Municipal Corporation
homas . Peterson
City Manager
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EA/MEADO/TXTU.OID
J. W. PROPERTIES,
a Limited Partnership
By:
n Cheney, Presi ndt
' t of
Sierra Nevada Land Company,
Its General Partner
ASSIGNMENT
THIS ASSIGNMENT is entered into this 6th day of November, 1992 by and
between J. W. PROPERTIES, a limited partnership (hereinafter "Assignor"),
the SALVATION ARMY OF LODI (hereinafter "Assignee"), and the CITY OF LODI,
a municipal corporation (hereinafter "City"), and
W I T N E S S E T H:
WHEREAS, Assignor and City on April 25, 1990 entered into a
reimbursement agreement for repayment of costs advanced by Assignor for
installation of electric utilities, which reimbursement agreement is
attached hereto as Exhibit A and incorporated by reference as if fully set
forth herein; and
WHEREAS, under such agreement, City is obligated to pay to Assignor
certain reimbursements on a periodic basis, as more particularly described
in Exhibit A hereto; and
WHEREAS, Assignor now desires to assign and make a charitable gift of
all rights and remaining reimbursements which come due under said
agreement, to the Salvation A=my of Lodi for the specific purpose as set
forth below;
NOW, THEREFORE, BE IT AGREED AS FOLLOWS:
1. Assignor forever assigns, releases and remises without reservation to
Assignee any and all reimbursement payments or other rights which are
now or may in the future became due and payable from City under the
terms of Exhibit A hereto.
2. Assignor directs and authorizes City to pay to Assignee, on the same
terms, any payments due under Exhibit A, subject to all conditions of
Lodi Municipal Code Chapter 16.40 and the covenants contained herein.
3. Assignor forever releases, saves, and holds harmless the City for any
claims arising from payment by City of such obligations to Assignee in
lieu of Assignor.
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4. Assignee agrees that all sums received under this assignment shall be
segregated and used only for emergency payment of electric bills of
needy persons residing in the City of Lodi. Assignee shall have
discretion to determine which, if any, residents of Lodi qualify for
such payments.
S. It is understood that, except as to any rights or duties existing
under Exhibit A, that no fiduciary relationship between City and
either Assignee or Assignor is created hereunder. Both Assignee and
Assignor have been advised to consult with their own attorneys if
desired, regarding their respective rights or duties which may arise
by way of this agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands the day
and year first hereinabove mentioned.
"CITY" "ASSIGNOR"
CITY OF LODI, J. W. PROPERTIES,
a municipal corporation a limited partnership
THOMAS A. PETERSON
City Manager
ATTEST:
Jennifer M. Perrin
City Clerk
Approved As To Form:
BOBBY W. MCNATT
City Attorney
AGRSAL/TXTA.01V
n
By�;rrJ.lJsztr/
"ASSIGNEE"
SALVATION ARMY OF LODI
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CITY OF LODI
SPECIAL ALLOCATION REQUEST
TO: Finance Director DATE: April 7, 2993
FROM: City Clerk PROJECT NUMBER:
Request is made for funds to accomplish the following project which was not
included in the current budget:
Description of Proiect Estimated Cost
Transfer of funds from Developer Deposit Account to Salvation Army "Reach
Program"
$26,149.00
Approved by the City Council - April 7. 1993
(If you need more space, use additional sheet and attach to this form)
FUND OR ACCOUNT TO BE CHARGED
Current Budget $ Prior Year Reserve $
Contingent Fund $ General Fund Surplus $
Capital Outlay Reserve $ Gas Tax Fund $
Utility Outlay Reserve S Other (Election) $
Hotel/Motel Tax Reserve S
General Fund Operating Reserve $
Dixon Flynn, rinFinance Director *"ier
Cle
Submit this form in duplicate to the Finance Director. Distribution after
approval will be as follows: 1) Originating Department 2) Finance
Department
--• toft,
CITY OF LODI
SPECIAL ALLOCATION REQUEST
Finance Director DATE: April 7, 1993
FROM PROJECT NUMBER: 16. 6'- 60/-0/- 6.713
Request is made for funds to accomplish the following project which was not
included in the current budget:
Description of Proiect Estimated Cost
Transfer of funds from Developer Deposit Account to Salvation Army "Reach
Program"
$26,149.00
Approved by the City Council - April 7. 1993
(If you need more space, use additional sheet and attach to this form)
FUND OR ACCOUNT TO BE CHARGED
Current Budget $_ Prior Year Reserve $
Contingent Fund $ General Fund Surplus $
Capital Outlay Rese:'ve $ Gas Tax Fund $
Utility Outlay Rese:-ve $ Other (Rleeti-er.4 $ 72.40— O49•01
Hotel/Motel Tax Reserve - $
General Fund Operating Reserve S
1
Dixon Flynn, a fifer Perrin
Finance Director ty Cle
Submit this form in duplicate to the Finance Director. Distribution after
approval will be as follows: 1) Originating Department 2) Finance
Department