Loading...
Resolution No. 7647i 1 2 3 4 5 6 7 8 9 10 11 0rM 13 14 15 16 17 18 19 20 21 22 23 24 25 PX:f 27 28 29 [glen RESOLUTION NO. 7647 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON AMENDING RESOLUTION NO. 6868, WHICH AUTHORIZED THE ESTABLISHMENT OF THE POWER RESOURCE COST REDUCTION ACCOUNT, PROVIDED PROCEDURES FOR DEPOSITS TO AND WITHDRAWALS FROM THE ACCOUNT AND AUTHORIZED CITY OFFICERS TO DO ALL THINGS NECESSARY CONCERNING THE ACCOUNT WHEREAS, the City Council of the City of Vernon (the "City") wants its Utilities Department (the "Department") to compete in a competitive and volatile wholesale energy market; WHEREAS, pursuant to Resolution No. 6868, a Power Resource Cost Reduction Account (the "Account") was established to collect deposits of certain surplus revenues and retire certain power resource costs, including the City's investment in the Palo Verde Nuclear Generating Station ("Palo Verde") asset and the various projects, including the gas turbines, financed through the Independent Cities Lease Finance Authority ("ICLFA"); WHEREAS, the City Council wants to expand the use of the Account to include deposits of surplus revenues and withdrawals to reduce power resource costs associated with the enterprise operations of the Department; and WHEREAS, the Finance Committee has recommended to the City Council that it adopt a resolution to amend Resolution No. 6868, concerning the definitions, deposits, withdrawals and administration of the Account and to enable the Department to efficiently manage the acquisition and retirement of its power resources and investments. ARTICLE I DEFINITIONS SECTION 101. Definitions. In this Resolution, in addition to the terms defined in the above recitals, the following terms shall have me 1 2 3 4 5 6 7 8 9', 10 11 12 13 14 15 16 17 18 19 20 21 KPM 23 24 25 26 27 28 29 30 the indicated meanings: Annual Amount shall mean the amount of the Department's surplus operating revenues available for deposit to the Account submitted by the Director of the Utilities Department (the "Director") to the City Treasurer after the end of every fiscal year, beginning with the fiscal year ending June 30, 2001. Authorized City Representative shall mean for purposes of this Resolution the City Administrator, the Director of the Utilities Department, the City Treasurer and any other person or entity as may be designated in writing by the City Administrator. Bank shall mean Wells Fargo Bank, National Association, or any other financial depository institution licensed by the United States or any state and operating within the United States, designated by the City Administrator to hold the Account specified pursuant to this Resolution. City Treasurer shall mean the Treasurer of the City of Vernon and any other person or entity as may be designated in writing by the City Administrator. Direction shall mean a communication of the City to the Bank to cause the Bank to make a payment from the City's Account, as described in Section 203(2) hereof. Investment Securities shall mean any investments permitted by the California Government Code, as amended, consistent with the City's then current investment policy. ARTICLE II ESTABLISHMENT AND ADMINISTRATION OF POWER RESOURCE COST REDUCTION ACCOUNT; DEPOSITS TO AND WITHDRAWALS FROM THE ACCOUNT. Section 201. Establishment and Administration of Power Resource Cost Reduction Account. 1. The Account shall be established for the purposes set forth in this Resolution and be administered under the sole authority and -2- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 discretion of the City Administrator and its uses shall include the reduction of costs associated with power resource procurement and investments made by the City for power supply. 2. The City shall direct the Bank to hold the Account separate and apart from all of the funds and accounts of the City and shall direct the Bank not to combine, consolidate or commingle, for investment purposes or otherwise, moneys on deposit in the Account with any other moneys held by the Bank on behalf of the City. Section 202. Deposits to the Account. 1. The City Treasurer is hereby directed by the City to transfer the Annual Amount to the Account. 2. The City shall instruct the Bank to provide to the City by the fifteenth day of each month an accounting statement relating to the preceding month. The accounting statement shall set forth the following with respect to the Account: (i) the amount of any deposit or deposits, (ii) any investment or interest earnings credited to the Account and (iii) the Account balance at the end of the month. Section 203. Withdrawals from the Power Resource Cost Reduction Account. 1. The amounts in the Account, upon satisfaction of the conditions set forth in subsection (2) of this Section 203, may be applied to or set aside for one or more of the following purposes: (a) to pay monthly power costs, monthly transmission costs or any other costs payable by the City relating to power resources; (b) to pay capital costs relating to any power resource project in which the City is a participant; (c) to pay operation and maintenance costs relating to any power resource project in which the City is a participant; (d) to purchase.or redeem bonds or other obligations relating to any power resource project in which the City, is a participant -3- 0 r 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 EW l 0WM 20 21 22 23 24 25 26 Palm 28 29 30 and to pay costs and expenses in connection therewith, (e) to pay costs of issuance and any other costs incurred in connection with the issuance of bonds (including refunding bonds) or other obligations relating to any power resource project in which the City is a participant; (f) to cure any deficiency in any fund or account in any indenture of trust relating or any power resource project in which the City is a participant; and (g) any other lawful purpose relating to the Department. 2. The City shall direct the Bank to make payments from the Account in the amounts, at the times, in the manner and on the terms and conditions set forth in this subsection (2). Before any payment from the City's Account shall be made, an Authorized Representative shall submit to the Bank its written direction to cause the Bank to make such payment. The Direction shall state (a) the name and address of the person, firm, corporation or other entity to which payment is to be made, (b) the amount of such payment, (c) that the payment is a proper charge against the Account, (d) the date the payment is to be made by the Bank and (e) the means by which the payment is to be made (e.g., check or wire transfer). ARTICLE III INVESTMENT OF MONEYS; SALE OF INVESTMENT SECURITIES Section 301. Investment of Moneys in Power Resource Cost Reduction Account. 1. The City Administer, or his authorized designee, shall direct the Bank to invest the moneys deposited to the Account. The City Administrator, or his authorized designee, may also direct the Bank to invest and manage the assets in the Account, but the Bank shall first consult with the City and receive the City's specific prior approval for each investment transaction before initiating investment activity. Moneys -4- a I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 PxM 23 24 25 26 27 28 29 30 z in the Account shall be invested in Investment Securities and shall be invested and managed in accordance with all applicable laws and the Investment Policy of the City. Until such time as the City Administrator, or his authorized designee, directs otherwise, the Bank may act as principal or agent in the purchases or sales of Investment Securities and may purchase Investment Securities through its own investment department. 2. Investment income earned on moneys or investments in the Account shall be credited to the Account. Nothing in this Resolution shall prevent any Investment Securities from being issued or held in book - entry form. Securities 302. Sale of Investment Securities in Account. 1. Investment Securities in the Account may be sold by the Bank upon the approval of the City Administrator, or his authorized designee. 2. Investment Securities purchased as an investment for the Account shall be deemed at all times to be a part of the Account and any profit realized from the sale of such Investment Securities shall be credited to the Account; any loss resulting from the sale of such Investment Securities shall be charged to the Account. ARTICLE IV MISCELLANEOUS Section 401. Recitals of this Resolution. The City Council of the City of Vernon hereby finds and determines that the recitals contained hereinabove are true and correct. Section 402. Effect of this Resolution. 1. This Resolution is adopted for the purposes described in this Resolution, and is intended solely for the benefit of the City. Accordingly, the obligations of the City contained herein shall not be, or be deemed to be, covenants, agreements or conditions on the part of the City for purposes of any agreement, contract or other document, including -5- t 1 any power supply agreement, transaction confirmation agreements, 2 indentures of trust, or other agreement, contract or document governing 3 any power resource project in which the City is a participant. 4 2. Neither the Bank nor any successor entity shall at any time 5 be charged with the responsibility of monitoring, or taking any actions 6 with respect to, the obligations on the part of the City contained herein. 7 Neither the Bank nor any successor entity shall have any responsibility to 8 perform any action to be performed by the City under this Resolution. 9 Section 403. Bank Records; Inspection of Bank Records. 10 The City Administrator, or his authorized designee, shall 11 direct the Bank to keep records of all deposits to and withdrawals from 12 the Account. Upon the request of the City, the Bank shall allow the City 13 or an agent of the City to inspect or audit, during reasonable business 14 hours, the books and records of the Bank with respect to the Account. 15 Section 404. Termination of Responsibilities. 16 The City Administrator shall have the right to terminate the 17 Bank arrangements described in this Resolution upon written notice to the 18 Bank. Any such notice shall include instructions to the Bank regarding 19 the transfer or other disposition of the Account. 20 Section 405. Interest Earnings. 21 All interest earned on the principal amounts of money in the 22 Account shall remain with the Account. No portion of any moneys in the 23 Account shall be subject to transfer to the General Fund pursuant to the 24 provisions of City Council Resolution No. 6102. City Council Resolution 25 No. 6102 implements Government Code §53647(a) with respect to the transfer 26 to the City's General Fund of interest earned in the special funds and 27 accounts of the City not otherwise restricted by law. 28 Section 406. Other Actions. 29 In order to carry out the transactions contemplated hereby and 30 satisfy the intent of the Resolution, the City Administrator is hereby -6 0 1 2 3 4 5 6 7 8 9 10 low 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 `�M 28 29 30 authorized, upon advice of counsel, to (a) make whatever changes to the Account, (b) execute and deliver any and all documents and instruments and (c) to do and cause to be done any and all acts and things necessary or advisable Section 407. Severability. If any section or part of this Resolution is found to be unenforceable by operation of law, the remaining sections or parts of this Resolution shall be in full force and effect. Section 408. Effective Date. This Resolution shall become effective immediately. Section 409.. Prior Resolutions. This Resolution replaces City Council Resolution No. 6868 in its entirety. Section 410. Certification. The City Clerk of the City of Vernon shall certify to the passage of this Resolution and thereupon and thereafter the same shall be in full force and effect. APPROVED AND ADOPTED this 17th of October, 2000. (ATTEST: IBRUCE V. MALKENHORST, City Clerk LEONIS C. MALBU , MAYOPY -7- t , I l S- STATE OF CALIFORNIA ) ) COUNTY OF LOS ANGELES ) I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 7647, was duly adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Tuesday, October 17, 2000, and thereafter was duly signed by the Mayor of the City of Vernon. v BRUCE V. MALKENHORST, City Clerk (SEAL) SUPPORTING DOCUMENTS CITY COUNCIL LEONIS C!. MALBtRG Mayor THOMAS A. YBARRA Mayor Pro-Tem WM. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICK Councilman BRUCE V MALKENHORST City Administrator / City Clerk FAX (323) 581-7924 Finance Committee City of Vernon Honorable Members: CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 October 12, 2000 EDUARDO OLIVO City Attorney FAX: (562) 927-8722 KEVIN WILSON Director of Community Services & Water FAX: (323) 588-2761 KENNETH J. DeDARIO Director of Municipal Utilities FAX: (323) 583--1983 DAVE TELFORD Fire Chief FAX: (323) 581-1385 BRUCE W. OLSON Police Chief FAX: (323) 583-5236 The City Council previously approved a resolution that authorized the administration of a Power Resource Reduction Account. To enable the Utility Department to take advantage of electrical rates in the industry it is recommended that we expand our use of this account and change the administration to be under the sole authority of the City Administrator. This change will allow the City Administrator to authorize, in part, the Utility Department to: • Use the account to reduce its power resources costs during periods of instability • Make deposits of all excess revenue as they are realized It is hereby recommended that the expansion of the use of the Power Resource Reduction Account be approved and that Resolution No. 6868 be amended to re-establish the administration of the account. Very truly yours, Bruce V. Malkenhorst Director of Finance BVMing r f ' LAW OFFICES OF • r ERIC T. FBESCH CITICORP CENTER, ONE SANSOME STREET TWENTY-FIRST FLOOR SAN FRANCISCO. CALIFORNIA 94104 TELEPHONE (AIS) 235-9312 FAX (AIS) 43S-6385 September 27, 2000 Mr. Bruce V. Malkenhorst City Administrator City of Vernon 4305 Santa Fe Avenue Vernon, California 90058 Dear Mr. Malkenhorst: I recommend the City expand the use of the Palo Verde Account to support power resource procurement, in addition to the reduction of the Palo Verde obligation. The Utilities Department should also be authorized to deposit any excess revenues in order to enable the Department to support reductions in rates if prudent and as circumstances warrant. , > I recommend the City Council approve an amendment to Resolution No. 6868, passed in 1996, that established the Power Resource Cost Reduction Account. The new resolution would change the administration of the account, under the sole authority of the City Administrator. The City_Administrator would have the ability to authorize the Utilities Department to use the account to reduce its power resource costs during pen o Instability' t# rt General Fund transfers— an rye the Department to make —de —posits of all excess revenues as ey are rea ized in`+- eluding revenues which may flow ro e i y s ransmission Revenue Requirement, as it be oche mi s part of the Transmission Access Charge charged to the California Independent y-`stem-Operator's customers. I look forward to discussing this proposal with you at your convenience. Sincerely, Z _4� Eric Fresch Legal Counsel EF:rmt c: Kenneth J. DeDario Jorge C. Somoano Limited Trading Authorization to Purchase and Sell Securities and Commodities Notice: Security account customers must read and sign page 2. Commodity account customers must read and sign pages 2, 3 and 4 of this document. 1. You, the undersigned, hereby authorize ERIC T. FRESCH (Authorized Agent's Name) whose signature appears below, as your Agent and attorney -in - fact to buy, sell (including short sales) and trade in any stocks, bonds, options (both puts and calls, covered or uncovered), and other securities, commodities and contracts relating to them, on margin or otherwise. These transactions will be according to terms and conditions of A.G. Edwards & Sons, Inc. (Edwards) for your account and risk and in your name or number on Edwards' books. You hereby agree to indemnify and hold Edwards harmless from and to pay Edwards promptly on demand all losses or debit balances due from any transaction. 2. Regarding all purchases, sales or trades, Edwards is autho- rized to follow the instructions of the Authorized Agent in every respect concerning your Edwards account.The Authorized Agent is authorized to act for you and in your behalf in the same manner and with the same force and effect as you might or could do regarding transactions and the means to effect transactions. 3. You hereby ratify and confirm all transactions with Edwards made by the Authorized Agent for your account. 4. This Agreement is in addition to and in noway limits or restricts any rights Edwards may have under any other agree- ments between you and Edwards. S. This Agreement establishes a fiduciary relationship between you and the Authorized Agent, who may act only in your interest. 6. The Authorized Agent maybe required to be registered as an investment adviser in the state where you reside as well as with the Securities and Exchange Commission or the Commod- ity Futures Trading Commission (CFTC) if you are compensating the Authorized Agent for services related to this Agreement, the investment of your funds or investment advice.You should determine if the Authorized Agent is registered as an investment adviser and, if not registered, whether he or she should be registered. 7. This Agreement is a continuing one and shall remain in full force and effect until you revoke it in writing addressed to Edwards' headquarters at One North Jefferson, St. Louis, Missouri 63103, Attn: Director of Operations. Revocation in no way affects AGE 401-5/02 .GEdwards One North Jefferson St. Louis, MO 63103 541-047301 / 052399 (LPOAC-CMDTY) (LPOA-STOCK) Branch/Account Number any liability resulting from transactions initiated before such revocation. This Agreement shall inure to the benefit of Edwards, its assigns or successors. 8. Except as provided in this Agreement, no provision of this Agreement as printed shall be waived, modified, amended or deleted in any respect, and any action taken in any account or otherwise will not constitute ratification of any such change. Acceptance shall not stop Edwards from asserting and enforcing the original provisions of this Agreement as printed unless such changes are expressly agreed to in a separate written document signed by Edwards' Director of Operations or a designee. 9. The Authorized Agent, by executing this Agreement, agrees to advise Edwards of your death or mental incapacity. 10. The following disclosure is required by various regulatory bodies but shall not limit the applicability of the following arbitration provision to any controversy or claim or issue in any controversy or claim which may arise between you and/or your Authorized Agent and Edwards: (A) Arbitration is final and binding on the parties. (0) The parties are waiving their right to seek remedies in court, including the right to jury trial. (C) Pre -arbitration discovery is generally more limited than and different from court proceed- ings. (D) The arbitrator's award is not required to include factual findings or legal reasoning, and any party's right to appeal or to seek modification of rulings by the arbitrators is strictly limited. (E) The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. (F) No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre -dispute arbitration agreement against any person who has initiated in court a putative class action; or who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (i) the class certifi- cation is denied; (ill the class is decertified; or (iii) the customer is excluded from the class by the court. Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this agreement except to the extent stated herein. 11. You agree and, by carrying any account for you, Edwards agrees that all controversies between you and Edwards or any of Edwards' present or former officers, directors, agents or employ- ees which may arise for any cause whatsoever, shall be deter- Lizpited Trading Authorization page 2 mined by arbitration.Any arbitration under this Agreement shall be before the National Association of Securities Dealers, Inc., or the New York Stock Exchange, Inc., or an arbitration facility provided by any other securities exchange of which Edwards is a member, or the Municipal Securities Rulemaking Board, and in accordance with the rules of the elected organization.You or your Authorized Agent may elect in the first instance whether arbitration shall be before and in accordance with the rules of one of the aforementioned arbitration forums by registered letter or telegram addressed to Edwards at Edwards' office in St. -Louis, Missouri. If you or your Authorized Agent fail to notify Edwards of such election as specified within five (5) days after receipt from Edwards of a request to make such election, then Edwards may make such election. 12. This arbitration provision shall apply to any controversy, claim or issue in any controversy arising from events which occurred before, on or after execution of this arbitration agree- ment.The award of the arbitrators, or of the majority of them, shall be final, and judgment upon the award rendered may be entered in any court, state or federal, having jurisdiction. 13. Any suit, reparation proceeding, claim or action, except arbitration proceedings governed by paragraph 11,against Edwards, its present or past officers, agents or employees will be brought and heard in the location where the Edwards branch office which serviced your account is or was located. If the court or reparations tribunal does not conduct hearings in that location, then any such action must be brought and heard in the locale closest to that location in which the court or reparations tribunal conducts hearings.This paragraph shall apply even if you have related disputes with other parties that cannot be resolved in the same locale. 14. This Agreement, its enforcement and the interest charged under it is governed by the internal laws of the State of New York without the application of the principles of conflicts of law. 15. By signing this Agreement, you and your Authorized Agent acknowledge that you and the Authorized Agent have received a duplicate of this Agreement and that this Agreement contains a binding and enforceable arbitration provision in paragraph 11 on page 1. AGE 401-5102 Client Si� Date X v' Client Signature (Print Name) BRUCE V. MALKENHORST - CITY ADM ' o - 0 Z Client Signature Date X Client Signature (Print Name) Witness Signature Date X Witness Signature (Print Name) Authori Age Si Date X _2 Authorized gent ( nt ame ERIC T. FRESCH - LEGAL COUNSEL Authorized Agent Address 4305 SANTA FE AVENUE VERNON CA 90058 City State ZIP Check box if agent and client reside at the same address. This Agreement does not give authority to the Autho- rized Agent to endorse securities registered in your name. Confirmations and Statements Edwards is required by Exchange rules to send confirmations and statements to the principal of the account unless instructed otherwise in writing. I (as principal) do not wish to receive confirmations and statements. Principals of commodity accounts cannot decline to receive confirmations and statements. Client Signature Date X Client Signature (Print Name) Client Signature Date X Client Signature (Print Name)