1994 AGN AUG 16 I19 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT For Council Meeting of August 16, 1994 TO: Honorable Mayor, City Council, and City Manager FROM: Thomas K. Clarke, Acting Electric Utility Director Date: 8/10/94 SUBJECT: AUTHORIZATION TO ISSUE PURCHASE ORDERS FOR CAPITAL IMPROVEMENTS TO BE FUNDED FROM PROPOSED REVENUE BONDS BACKGROUND At the July 119, 1994, meeting of the City Council, a bid for steel poles was awarded to Valmont Industries as one of the components for the proposed transmission and new substation project for the Electric Utility. In addition to this bid, the current Council agenda includes the request for authorization to acquire the land for the substation site. Both of these actions are identified components in the overall system expansion plan. STATEMENT OF THE PROBLEM The budget fbr the current fiscal year has not yet been approved. Even though Council approved ongoing expenditures for operations, they did not make provisions for capital improvements. The Electric Utility has earmarked all of the capital addition costs of the transmission and substation project to be funded through the sale of electric revenue bonds in order to mitigate the effects of the capital improvements in the retail rates. Since the approval of the bond sale has not been before Council as part of the budget package, the Electric Utility, in reality has no appropriation of funds to make the capital improvement expenditures. The Department is in the process to draft and present the necessary documents to proceed with the bond sale and to reimburse the operating accounts for funds expended to meet the obligations of the bond -funded capital improvements. In the meantime, it is felt to be a prudent move to obtain specific City Council approval to issue the purchase orders for the components thus protecting the integrity of the bids and preventing any delays in moving forward with the project. Page 1 of 2 Item No.