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ITEM #19 <br />CITY OF COLTON <br />AGENDA REPORT <br />FOR COUNCIL MEETING OF August 5, 2008 <br />TO: HONORABLE MAYOR AND CITY COUNCIL <br />FROM: CITY ATTORNEY <br />SUBJECT: APPROVAL OF FIRST AMENDMENT TO SECOND AMENDED AND <br />RESTATED SERVICES AGREEMENT WITH SHELL ENERGY NORTH <br />AMERICA (US) LP (FORMERLY CORAL ENERGY MANAGEMENT <br />LLC) <br />DATE: July 31, 2008 <br />BACKGROUND: <br />As part of a settlement agreement to end the lawsuit between the City, American Utility Network <br />("AUN"), and Shell Energy North America (US) LP ("Shell Energy"), as successor in interest to <br />Coral Energy Management LLC ("Coral"), the City is extending its agreement with Coral to provide <br />power and natural gas purchases and related services for an additional two years. <br />DISCUSSION/ANALYSIS: <br />The City's current Second Amended and Restated Services Agreement with Coral is scheduled to <br />expire in December 2008. In accordance with the terms of the settlement and to address <br />concerns that the Council previously raised, the City will enter into the First Amendment to Second <br />Amended and Restated Services Agreement (the "First Amendment") with Shell Energy, the <br />successor in interest by merger to Coral. Under the terms of the First Amendment, the <br />agreement will expire on December 31, 2010. <br />FISCAL IMPACT: <br />Funds are budgeted in account number: 520-8000-8006-2330-0555-900. <br />Budget Year-to-date Open Encumbrances Available Funds <br />Expenditures <br />$7,668,941 $0 $0 $7,668,941 <br />ENVIRONMENTAL IMPACT: <br />None. <br />RVPUB\NSTUBBS\751867.1 <br />