2005 AGN JUN 07 I06 (6/21/05 #7)

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their share of the acquisition and development costs of the project through revenue bonds issued by SCPPA on behalf of the participants. Project B participants will pay their share of the acquisition and development costs through direct capital contributions. The Gas Sales Agreements for Projects A and B will only differ with regard to the project indebtedness. The only Project C participant, LADWP, will be participating through its own separate, stand-alone agreement with SCPPA; however, LADWP is also reserving the right to participate as a Project B participant in the future if it so chooses and said decision is ratified by the other project participants. Each of the SCPPA participants, LADWP, and the other municipal utility are expected to obtain authorization from their respective governing boards in May or June 2005. The first property acquisition, which will meet approximately one-half of the combined participants' elections, is expected to close July 1, 2005. FINANCIAL IMPACT: All Project development expenses will be paid under the Development Agreement that was approved in July 2004, and not under the Gas Sales Agreement; therefore there will be no fiscal or budget impact pursuant to the development work associated with each acquisition. Likewise, there will be no fiscal or budget impact under the Gas Sales Agreements until Acquisition No. 1 is approved. A budget amendment will be included with the approval package at that time. With the City of Burbank out of the project, Colton's share of the financing has increased from approximately 12.5% of the financing costs to approximately 16.7% of the financing costs. This increased financing share has been somewhat mitigated by Colton's nomination reduction from 1000 mmbtu/day to 500 mmbtu/day. ENVIROMENTAL IMPACT: None. RECOMMENDATION: Staff requests that Council approve and adopt the attached Resolution and Ordinance, authorizing the City's participation as a Project A participant in the SCPPA Gas Acquisition Project, and to participate in the project under the Development Agreement. Attachment: Resolution, Ordinance TEAM ONLY Attorney: A . UQ7I U il O;E Finance Director: TLS 1 Manager: :.�� OTHER: