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HomeMy WebLinkAbout2008-10-27 Workshop, Closed Session & Regular Meeting Packet(972) 924-3325 • fax (972) 924-2620 CITY OF ANNA AGENDA NOTICE — CITY COUNCIL WORKSHOP/CLOSED SESSION October 27, 2008 6:30 p.m. — Anna City Hall Administration Building The City Council of the City of Anna will meet in Workshop Session and Closed Session at 6:30 p.m., Monday, October 27, 2008,(NOTE THE DATE) at the Anna City Hall Administration Building, located at 111 North Powell Parkway (Hwy 5), regarding the following items. 1. Call to Order 2. Roll Call and Establishment of Quorum. 3. CLOSED SESSION: Under Tex. Gov't Code Chapter 551, the City Council may enter into closed session to: - a. discuss or deliberate the purchase, exchange, lease, or value of real property (Tex. Govt Code §551.072); ----- b. consult with legal counsel on matters in which the duty _ofthe attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Government Code (Tex. Gov't Code §551.071); c. Discuss or deliberate Economic Development Negotiations: (1) To discuss or deliberate regarding commercial or financial information that the City Council has received from a business prospect that the City Council seeks to have locate, stay, or expand in or near the territory of the City of Anna and with which the City Council is conducting economic development negotiations; or (2) To deliberate the offer of a financial or other incentive to a business prospect described by subdivision (1). (Tex. Gov't Code §551.087) The council further reserves the right to enter into executive session at any time throughout any duty noticed meeting under any applicable exception to the Open Meetings Act 4. Discussion regarding any item on the City Council's October 27, 2008 Regular Meeting Agenda. 1, the Couneil may vete and/or act We each of the {terns listed in this agenda 2. TM Council reserves the r dato retire into executive ass lou conserving mry ofthe items listed on this agenda, whenever it is cauidemdcecos andlegagyjus fiedm athe OQ Mating Ad. 3. Pwsoes wbhadissbility who weotto atteedthis medivg who mby.eed assistance should comacttbe Cit, Se Otey 99'12924 3325 hwwedcing days priorte the meeting so that appropriate bosegements ese be made. 10.27-08 Regular CC AgeMa.doc i Posted 10.24-08 Post Office Box 776 • Anna, Texas 75409-0776 5. Adjourn. This is to certify that 1, Natha Wilkison, City Secretary, posted this agenda at a place readily accessible to the public at the Anna City Hall and on the City Hall bulletin board at or before 5:00 p.m., October 24, 2008. N ha Wilkison, City Secretary 1. The Coundl may vote and/or W upon earn of the items listed In this agenda 2. The Comcil reserves the right m retire into executive sesion ramcming any of the Hems listed ou this agwds, whenmer it is considered veCess and kgally)ustdie under the Open Meeting ACL 3. Persons with a disability eim want to atter! flus meeting who may need assisiaowshould contactthe City Secremryat912924- 3325 rem working days prior to the meefing so that appropriate arrangements can he made. 1427-08 Regular CC Agerda.doc 2 Posted 10.24-08 (972) 924-3325 • fax (972) 924-2620 CITY OF ANNA AGENDA NOTICE - CITY COUNCIL REGULAR MEETING October 27, 2000 7:30 p.m. - Anna City Hall Administration Building The City Council of the City of Anna will meet in Regular Session at 7:30 p.m., Monday, October 27, 2008, (NOTE THE DATE) at the Anna City Hall Administration Building, located at 111 North Powell Parkway (Hwy 5), to consider the following items. 1. Call to Order. 2. Invocation and Pledge of Allegiance. 3. Collin County Commissioner Joe Jaynes to present the Grant Award for Natural Springs Park. 4. Citizen comments. Citizens are allowed 3 minutes to speak. The Council is unable to respond to or discuss any issues that are brought up during this section that are not on... _ the agenda, other than to make statements of specific factual information in response to a citizen's inquiry or to recite existing policy in response to the inquiry. 5. Consent Items. These items consist of noncontroversial or °housekeeping" items required by law. Items may be considered individually by any Council member making such request prior to a motion and vote on the Consent items. a. Approve Minutes of Regular City Council Meeting, October 14, 2008. b. Approve Minutes of Closed Session City Council Meeting, October 8, 2008. 6. Consider/Discuss/Action to Reschedule Adoption of an Ordinance Authorizing the Issuance of Certificates of Obligation. (Philip Sanders) 7. Consider/Discuss/Action regarding a Resolution authorizing the Cities Aggregation Power Project, Inc. (CAPP) to negotiate an electric supply agreement for deliveries of electricity and necessary, related services effective January 1, 2009; approving CAPP contracting with FPL energy and direct energy and authorizing the City Manager to sign a contract with CAPP for the city's electricity needs for the period beginning January 1, 2009 and extending up to December 31, 2013; committing to budget for energy purchases and to honor the city's commitments to purchase power through CAPP for its electrical needs for said period. 1. The Council mayvotc and/or actupon earl ofthe it tors listed m this agenda 2. The Council reserves the rightro more inro exewtive session concerning any oftbe imms listed on this agenda,.wAenever it is considered necessary and legaliyjuctl&d under the Open Meeting Act. 3. Persons withedisabiliTy wtw wzntto ffimndthis mating wlm may vced assismva should rovmctthe City Secretaryffi9R 924 3325 two wailing days prior to the mceting w that appropriate arrangements ran bs made. ie -27-08 Regular CC Agerula.doo Post Office Box 776 • Anna, Texas 75409-0776 Posted 10.24-08 8. Consider/Discuss/Action regarding an ordinance giving the City Manager authority to enter into a contract with Cities Aggregation Power Project, Inc. ("CAPP") and to sign related documents to acquire electric capacity and energy, provide for payments as public property finance contractual obligations of the city, pledge and levy an ad valorem tax for such payments, and assign payments to CAPP to support debt issuance incurred to acquire electric capacity rights from luminant Generation Company and related entities under a 24 -year power purchase agreement. 9. Consider/Discuss/Action on any items listed on posted agenda for October 27, 2008 City of Anna Workshop Session and Closed Session, or any closed session occurring during this Regular Meeting, as necessary. 10. Adjourn. This is to certify that 1, Natha Wilkison, City Secretary, posted this agenda at a place readily accessible to the public at the Anna City Hall and on the City Hail bulletin board at or before 5:00 p.m., October 24, 2008. N tha Wilkison, City Secretary 1. The Council may vote and/or act arm each ofthe itt o s listed in this agenda 2. The Council reserves the right to retire tato executive session wnreruiog any ofthe he. listed nn this agenda, whenever it n considered necessary and legallyjustified under the Open Meeting Act 3. Persons wah adiaability wh.waat to Wood this meeting who may need assiaana should eontad fhe City Secretary a 972 924- 3325 two working days prior to the mating sn that appmpriffic arcengements car, be made. 10-274)8 Regular CC Agenda.doc 4 Posted 10-24-08 � ,4 OF,4�l TEXAS Council Meeting: October 27, 2008 Item No. 3 City&.,d.y,su only City of Anna City Council Agenda Staff Report Staff Contact: Philip Sand AccountCode #: Budgeted Amount: Exhibits: O Yes ❑ No AGENDA SUBJECT: Collin County Commissioner Joe Jaynes to present the Grant Award for Natural Springs Park. SUMMARY: The Collin County Parks Foundation Advisory Board completed review of applications and provided funding recommendations which were approved by the Commissioners Court on October 14,. 2008. Commissioner Joe Jaynes will present the award for Natural Springs Park Project in the amount of $400,000.00. STAFF RECOMMENDATION: GX,tY OFA.4N rF,XPs Council Meeting: October 27. 2008 Account Code Budgeted Arm Item No. 5 City S.Witry's u --,y City of Anna City Council Agenda Staff Report Staff Contact: Philip Sanders Exhibits: 0 Yes ❑ No AGENDA SUBJECT: Consent Items. These items consist of non -controversial or "housekeeping" items required bylaw. Items maybe considered individually by any Council member making such request prior to a motion and vote on the Consent Items. a. Approve Minutes of Regular City Council Meeting, October 14, 2008. b. Approve Minutes of Closed Session City Council Meeting, October 8, 2008. SUMMARY: STAFF RECOMMENDATION; Make a motion to approve the consent items. Council Meeting: October 27, 2008 Item No. 6 Citys.'d 'e WY City of Anna City Council Agenda Staff Report Staff Contact: Philip. Sanders Account Code #: Budgeted Amount: Exhibits: 0 Yes ❑ No AGENDA SUBJECT: Consider/Discuss/Action to Reschedule Adoption of an Ordinance Authorizing the Issuance of Certificates of Obligation. SUMMARY: It will be necessary for Council to reschedule adoption of the ordinance authorizing the issuance of certificates of obligation, since the October 28 meeting has been rescheduled to October 27. The CO ordinance cannot be adopted prior to the date set forth in the CO notice. STAFF RECOMMENDATION: The motion has to be made "Move to reschedule adoption of the ordinance authorizing the issuance of certificates of obligation to the November 10, 2008, City Council meeting, scheduled to begin at 6:30 p.m. at the City Hall Administration Building" Ov�'i 6E41,q R PEXP's Council Meeting: October 27 2008 Account Code Budgeted Ami Item No. cay Seccetery'n uw only City of Anna City Council Agenda Staff Report Staff Contact: Philip Sanders Exhibits: O Yes ❑ No AGENDA SUBJECT: A resolution of the City of Anna, Texas, authorizing the Cities Aggregation Power Project, Inc. (CAPP) to negotiate an electric supply agreement for deliveries of electricity and necessary, related services effective January 1, 2009; approving CAPP contracting with FPL energy and direct energy and authorizing the City Manager to sign a contract with CAPP for the city's electricity needs for the period beginning January 1, 2009 and extending up to December 31, 2013; committing to budget for energy purchases and to honor the city's commitments to purchase power through CAPP for its electrical needs for said period. SUMMARY: In December of 2007, the City Council approved the City's membership in the Cities Aggregation Power Project (CAPP) and authorized a one-year power purchase agreement through CAPP. CAPP is a non-profit organization that pools Texas cities' electric power needs in order to negotiate lower, more stable prices through bulk purchasing. As an aggregation group, it has the statutory authority to negotiate directly with energy producers as well as retail electric providers on behalf of its members. By aggregating the entire electricity load of all its members and negotiating directly with power generators, CAPP is able to provide pricing for electricity that is generally lower with more favorable terms than an individual customer acting alone. No individual municipal customer acting alone can negotiate directly with the energy producers. In addition to lower electricity rates, CAPP members enjoy a wide array of services that include professional consultant advice on electric load management and billing issues, access to legal counsel regarding electric utilities. Our contract with CAPP (which will expire on December 31) has saved us about 20"% on the electricity purchased through the City accounts that are subject to retail competition. The current financial and credit market collapse has caused a rapid decline in natural gas prices, which is good news for the short term price of power. To take advantage of very favorable pricing in the market right now, the CAPP Board has approved a contract with CAPP's current providers, NPL Energy and Direct Energy, to serve CAPP accounts over the next five years (beginning January 1, 2009). The attached resolution allows CAPP to secure power on our behalf for delivery beginning January 1, 2009. CAPP is in the position to lock -in very favorable rates for a five year period. Item No_ City seoewy's use only Indicative prices (as of October 8t6) would suggest an energy price around $0.07651kWh for 2009 (a savings of approximately $24.4 million in comparison to 2008 average CAPP prices), with prices during the five year term reaching a high of $0.0827lkWh. Actual prices will depend upon natural gas prices the day that CAPP executes the contract. RECOMMENDATION: Approving the Resolution allows the _City to purchase electricity for the next five years at very favorable prices. It does not obligate us to participate in the long-term power purchase agreement nor does it jeopardize our ability to do so if we choose. Our research suggests that the October 8" pricing (see above) is very competitive to what is being offered for a multi-year purchase. Staff recommends approval of this Resolution. Council Meeting: October27 2008 Account Code Budgeted Am< Item No.._� Car SecrGery's uve only City of Anna City Council Agenda Staff Report Staff Contact: Philia Sanders Exhibits: ❑ Yes ❑ No AGENDA SUBJECT: Consider/Discuss/Action regarding an ordinance giving the City Manager authority to enter into a contract with Cities Aggregation Power Project, Inc. ("CAPP") and to sign related documents to acquire electric capacity and energy, provide for payments as public property finance contractual obligations of the city, pledge and levy an ad valorem tax for such payments, and assign payments to CAPP to support debt issuance incurred to acquire electric capacity rights from Enrolment Generation Company and related entities under a 24 -year power purchase agreement. SUMMARY: During the past two Council Meetings (September 23 and October 14) Staff has briefed the City Council on a proposal to enter into a 24 year contract with the Cities Aggregation Power Project (CAPP) for the purchase of approximately 1.5 million kilo -watt hours (kWh) of electricity annually. The cost of power purchased under this ,agreement would be 5.6 cents per kWh in 2009 and increase gradually to approximately 8 cents per kWh in 2033. CAPP will issue debt to pre -pay three-fifths of the cost of the total power purchased under the agreement. 'Phe City of Anna's share of this pre -payment will be relatively fixed over the life of the contract. Monthly payments are expected to be $3,189 per month in 2009 and are not expected to exceed $4,000 per month over the 24 year life of the contract. The remaining two-fifths of the cost of power purchased under the agreement will be wrapped into the cost of the additional power we need to purchase annually above 1.5 million kWh, and for which we will receive a typical monthly bill. The question was posed during the last Council discussion if our participation in this long term power purchase for 1.5 million kWh annually obligated us to purchase our remaining power needs through the CAPP contracts or would we have the flexibility to choose another retail contract. I spoke with Geoffrey Gay the general council for CAPP about this issue. He said that while it is technically possible to use another retail contract he felt it would highly impractical. We would essentially have to find another retail electric provider that is willing participate in fairly unusual power purchase agreement for which there are no standard procedures or contracts. Even assuming we find a willing partner who has better prices than CAPP, we do not have the in-house expertise to effectively manage such an endeavor and may in fact spend more money trying to get the Item No. City Secretary's ase oNy deal to work right than the savings we hoped to achieve. If Council approves the agreement, the best course is to recognize that we will be partners with CAPP for the term of the contract. A contract of this nature is not without risk; however, based on what we know, the risks have been mitigated in the Power Purchase Agreement to the extent possible. Because about one-half of the power we currently purchase is not subject to retail competition we would not as heavily invested as a number of other cities who have already approved the agreement. Original estimates provided by CAPP showed a potential savings in 2009 of about $22,000. However, with the recent decline in the price of natural gas, saving in the first few years of the contract will be much more modest. If the City does not approve this contract, we will still be able to take advantage of the very favorable current market rate for electricity through a multi-year contract. There is no guarantee however, that rates will be as favorable when we need to renew the contract. RECOMMENDAPION: If it is reasonable to expect the average price of natural gas to increase over the next 20 years as predicted by the Department of Energy, then the City of Anna would benefit from participation in the CAPP long term contract which decreases our reliance on electricity tied to the volatile price of natural gas. Staff recommends approval of the agreement. .. _ I have attached the analysis that was provided to the Council during the October 14 meeting along with a Disclosure Statement that must be acknowledged and signed.