1996-213J \~PDOC$\ORD\TNPA ORD
ORDINANCE NO. q~--~D
AN ORDINANCE APPROVING AND AUTHORIZING THE MAYOR OF THE CITY OF
DENTON, TEXAS TO EXECUTE AN AMENDMENT TO THE POWER SALES CONTRACT
DATED SEPTEMBER 1, 1976, BETWEEN THE TEXAS MUNICIPAL POWER AGENCY
AND THE CITIES OF BRYAN, DENTON, GARLAND AND GREENVILLE, TEXAS, AND
RESOLVING OTHER MATTERS INCIDENTAL AND RELATED THERETO, AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, the Texas Municipal Power Agency (the ,'Agency") and
the cities of Bryan, Denton, Garland, and Greenville, Texas, have
previously executed a certain Power Sales Contract, dated September
1, 1976, as amended in 1989 (the ,,Power Sales Contract"); and
WHEREAS, the Power Sales Contract requires the City of Denton,
Texas (the "City"), along with the Cities of Bryan, Garland, and
Greenville, Texas (collectively, the "Member Cities") to take with
certain exceptions all of their power and energy requirements from
the Agency; and
WHEREAS, the Agency and the Member Cities have agreed to amend
the Power Sales Contract to convert that Power Sales Contract from
a requirements contract to a take or pay contract and to make
additional changes to the Power Sales Contract, and
WHEREAS, the City desires to approve the amendment to the Power
Sales Contract as presented to the c~ty council at the meeting at
which this Resolution is considered; NOW THEREFORE,
THE COUNCIL OF TEE CITY OF DENTON HEREBY ORDAINS:
~ That the Power Sales Contract amendment, a copy of
which is attached hereto as Exhibit A and incorporated herein for
all purposes, between the Agency and the Member Cities is hereby
approved in substantially the form and content as set forth in
Exhibit A, and that the Mayor is authorized to execute the same.
~ The City Council hereby reaffirms the oblIgation
of the city speclf~ed in Section 10 of the Power Sales Contract to
the effect that the City's obligations under said contract shall
constitute an operating expense of the City's electric system and
the obligations under said contract shall be payable solely from
the revenues and receipts of such electric system and shall not
constitute a general obligation on other assets or revenues of the
City
~ That the amendments to the Power Sales Contract
shall become effective upon the approval of the Member Cities and
the Agency, upon final execution of the said Power Sales Contract
amendment, and upon satisfaction of the other condItions that are
specified in the Power Sales Contract or the bond resolutions
associated with the outstandIng bonds of the Agency and upon the
entry by a court of competent jurisdiction of a final judgment
valldatlng the amendments to the Power Sales Contract.
PASSED AND APPROVED th~s the /~ day of~ 1996.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
AMENDMENT TO POWER SALES CONTRACT
BETWEEN
TEXAS MUNICIPAL POWER AGENCY
AND
CITY OF BRYAN, TEXAS
CITY OF DENTON, TEXAS
CITY OF GARLAND, TEXAS
CITY OF GREENVILLE, TEXAS
Th~s Amendment to Power Sales Contract (the "Amendment"), made and entered
~nto as of the 5th day of November, 1997, by and between the Texas Mumc~pal Power
Agency, a mumc~pal corporation and poht, cal subdivision of the State of Texas and
hereto referred to as the "Agency" and the C~ty of Bryan, Texas, the C~ty of Denton,
Texas, the C~ty of Garland, Texas and the C~ty of Greenv,lle, Texas, each of which c~t~es
~s a mumc~pal corporation of the State of Texas and a home rule c~ty, and hereto
collectively called the "C~t~es" and ~nd~v~dually called "C,ty"
WITNESSETH
WHEREAS, the Agency and the C~t~es entered into that certain Power Sales
Contract (the "Power Sales Contract"), made and entered into as of the let day of
September, 1976, which Power Sales Contract was amended by and between the Agency
and the C~t~es as of the 1st day of September, 1976 (such amendment together w, th the
Power S~les Contract being here~n called the "Contract"),
WHEREAS, the C~t~es desire to amend the Contract to prowde each of them w~th
the ab~hty to purchase or to generate Power and Energy from sources other than the
Agency and other than as contained ~n the Contract,
WHEREAS, the C~t~es have agreed to alter the terms and conditions upon which
they each agree to purchase Power and Energy from the generating fac~ht~es of the
Agency to provide that the C~t~es wall be unconditionally obhgated to take or pay for
Power or Energy, or both, from the Agency m accordance w~th the provm~ons set forth
below m th~s Amendment,
WHEREAS, the Agency concurs w~th the desire of the C~t~es to purchase Power
and Energy as provided ~n th~s Amendment,
WHEREAS, the Board of D~rectors of the Agency adopted Rules and Regulations
on November 18, 1976 and such Rules and Regulations have from t~me to t~me been
amended and are here,n referred to as the "Rules and Regulations",
WHEREAS, the Agency has obtained the consents and given the notices required
to be obtained or given prior to entering into the Amendment,
WHEREAS, the C~tles hereby reaffirm their commitment to the Agency and the
holders of the outstanding Debts to provide the payments required under the Contract
to assure that the obhgat~ons of the Agency are t~mely paid in accordance w~th the
prows~ons of the Contract,
NOW, THEREFORE, m consideration of the mutual undertakings herein
contained, the Agency and each of the Cities hereby agree as follows
SECTION I
Section 3(a) of the Contract is hereby amended to read as follows
Section 3 Sale and Purchase of Power and Energy
(a) Each City and the Agency agree as follows
(1) Each C~ty shall be entitled to purchase and receive a percentage of
the available output of Power and Energy from the generating
fac~ht~es owned by the Agency The percentage of available output
to which each City ~s entitled is as set forth in Section 3(a)(2)
hereof
(2) For the r~ght to receive Power and Energy from the Agency, each
C~ty shall be unconditionally obhgated to pay to the Agency,
w~thout offset or counterclaim and w~thout regard to whether
Power and/or Energy ~s dehvered by the Agency to the respective
C~ty or C~t~es or whether or not any City or Cities actually use
Power and/or Energy from such generating faclhtles the percentage
of the Annual System Costs, including the payment of the Debt
Service Requirements and Operating and Maintenance Expenses
which may from time to time ex,st, set forth below
C~ty of Bryan, Texas 21 7%
C~ty of Denton, Texas 21 3%
C~ty of Garland, Texas 47 0%
City of Greenville, Texas 10 0%
(3) The percentage of the payment obhgat~on of each City shall be
subject to amendment by the mutual agreement of the Cities,
provided, however, that the percentages shall never total less than
one hundred percent (100%) of the Annual System Costs
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(4) Each City binds Itself to take or pay for its entitlement to Power
and Energy m accordance with the rates and charges established
pursuant to Section 7 of this Contract
SECTION II
Section 3(b) of the Contract is hereby amended to read as follows
Section 3 Sales and Purchase of Power and Energy
(b) The Agency shall devote its best efforts to the generation and
delivery of Power and Energy from the generation fac~htms of the
Agency
SECTION III
Section 3(c) of the Contract is hereby amended by deleting Section 3(c) m
its entirety
SECTION IV
Section 7(a)(3) of the Contract m hereby amended to read as follows
Section 7 Rates and Charges'
(3) an amount sufficient to (1) pay the Annual System Costs as set
forth in the Annual System Budget, as provided in the Rules and
Regulations, (ii) make the deposits required by the Bond
Resolution, (ill) fund the annual capital budget, as provided in the
Rules and Regulations, and (iv) with respect to other funds or
other accounts established by the Board and not required by the
provisions of the Bond Resolution, fund such funds or accounts in
an amount not greater than 3 5% of the Annual System Budget, or
such greater amount as may be approved by the affirmative vote of
at least s~x (6) members of the Board of Directors of the Agency
w~th at least one (1) member of the Board of Directors appointed
by each City voting m favor of any such increase Except for funds
held for purposes of self insurance, any funds held by the Agency
on September 30, 1998, and any funds held by the Agency on the
last day of each Contract Year thereafter over and above the
amounts required in connection with subsections (9, (il), (ill) and
(iv) of this Section 7(a)(3) shall be returned to the Cities within 120
-3-
days of such date in the same percentage as the percentage each
City contributed to such amounts Funds held pursuant to
subsection (~v) of th~s Section 7(a)(3), ~f approved by the affirmative
vote of at least sm (6) members of the Board of Directors of the
Agency w~th at least one (1) member of the Board of D~rectors
appointed by each C~ty voting in the affirmative, may be used to
reduce the debt of the Agency
SECTION V
Sectmn 12 of the Contract is hereby amended by adding subsections (f) and (g)
to read as follows
Section 12 Covenants of the Agency
(i0 The Agency covenants and agrees that in the event properties of
the System which were acquired w~th funds received from the sale
of Bonds are sold, the proceeds from the sale of such properties
shall be apphed ~n accordance w~th the provisions of 6 22 of the
Bond Resolution
(g) No Bonds, Subordinated Indebtedness or Specml Contract
Obligations shall be ~ssued or recurred w~thout the prior approval of the
Board of Directors of the Agency
SECTION VI
Section 13(d)(1)(a) of the Contract ~s hereby amended to read as follows
Section 13 Project Approval and R~ghts of C~t~es when a Project ~s not
Approved
(a) Each City shall be entitled to schedule and receive, each month for
~ts own account, the proportion of the avadable Power and Energy
from the System equal to the percentage estabhshed under Section
3(a) of th~s Contract, as such percentage may be from t~me to t~me
adjusted in accordance with the prows~ons of Section 3(a) hereof
SECTION VII
Section 13(d)(1)(b) of the Contract ~s hereby amended to read as follows
Section 13 ProJect Approval and R~ghts of C~t~es when a Project m not
Approved
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(b) As consideration for such Power and Energy, and the r~ght to
purchase the same, each C~ty shall, each month, pay to the Agency
its proportionate share of the Annual System Costs equal to the
percentage estabhshed under Section 3(a) of thru Contract, as such
percentage may be from t~me to t~me adjusted m accordance vnth
the provisions of Section 3(a) hereof
SECTION VIII
Section 13(d)(1)(c) of the Contract is hereby amended to read as follows
Section 13 Project Approval and R~ghts of C~t~es when a Project is not
Approved
(c) Each C~ty's obhgat~on under Section 14 of th,s Contract shall be
equal to the greater of the percentage estabhshed under Section
3(a) of th~s Contract or the percentage estabhshed under Section
14 hereof
SECTION IX
Section 13(d)(2) of the Contract ~s hereby amended to read as follows
Section 13 Project Approval and R~ghts of C~tles when a Project ~s not
Approved
(2) During the balance of the term of th~s Contract after the effective
date of the option, the amount of Power and Energy reqmred by
the C,ty exerc, s~ng the option to be purchased under Sectmn 3 of
th~s Contract shall be hm~ted Such C~ty shall, m each calendar
month, take or pay for an amount of Power and Energy equal to
the amount of Power and Energy such C~ty ~s entitled to receive
from the Agency during the corresponding month or such other
amount of Power and Energy as may be from time to t~me agreed
upon by the C~ty, the Agency and other C~t~es, but ~n no event shall
such take or pay reqmrement be less than the amount reqmred to
be pa~d pursuant Section 3(a) or Section 14 hereof, whichever
amount shall be greater, and the Agency shall not be reqmred to
provide any Power and Energy m excess of the amount to which
such C~ty ~s entitled pursuant to Section 3(a) hereof The Power
and Energy furmshed to such City shall be b~lled by the Agency at
rates and charges as from t~me to t~me adopted pursuant to Section
7 of th~s Contract The calculation of the hm~tmg C~ty's obhgat~on
under Section 14 of th, s Contract shall assume such City's Net
Energy for Load for the purposes of sa~d calculations ~s equal to
-5-
such City's Net Energy for Load In the completed Contract Year
next preceding the effective date of the option or the amount
required to be paid pursuant Section 3(a) hereof, whichever is
greater
SECTION X
All other terms, provisions, conditions and obligations of the Power Sales
Contract'between the Cities and the Agency, dated September 1, 1976, as the same has
been amended prior to the effective date of this Amendment, shall remain in full force
and effect, and said Power Sales Contract, as amended, shall be construed together as
a single contractual agreement
This Amendment shall become effective upon the execution by the Agency
and the Cities, all by the proper officer duly authorized by the Agency and the Cities
to execute this Amendment for and on behalf of said executing party
-6-
TEXAS MUNICIPAL POWER AGENCY
CITY OF BRYAN, TEXAS
ATTEST
ATTEST
CITY OF GREENVILLE, TEXAS
CITY OF DENTON~ TEXAS MUNICIPAL BUILDING · DENTON, TEXAS 76201 · TELEPHONE (817) 566-8200
Off~ce of C~ty Attorney
October 23, 1996
Mr. Bob Dransfleld, Attorney
Fulbrlght & Jaworskl
2200 Ross Avenue, Suite 2800
Dallas, Texas 75201
Re: Amendment to Power Sales Contract (TMPA)
Dear Mr. Dransfield:
Enclosed please find nine (9) copies of the executed Amendment to
Power Sales Contract. The Mayor has executed the contract on this
date and we are forwarding the copies to you in accordance with
Carl Shahady's request, as contained in his letter of October 2,
1996.
I regret the brief delay in securing our execution of the Agreement
by Mayor M~ller. Pursuant to our telephone d~scusslon of October
11, 1996, I waited to present the Agreement to Mayor Miller upon
h~s return to Denton from extended travel.
Please forward a fully-executed copy of the Agreement to me once
TMPA has executed same. Thank you for your assistance with th~s
matter.
Sincerely,
M~chael S ,Copeland
Assistant City Attorney
MSC:tr
Enclosures
pc: Jack Miller, Mayor (letter only)
Ted Benavldes, City Manager (letter only)
Herbert L. Prouty, City Attorney
Carl J. Shahady, Attorney (letter only)
Charles Hlnton, C~ty Attorney (letter only)
Gary Smith, City Attorney (letter only)
Robert E. Nelson, Executive Director for UtilitIes
Jennlfer Walters, City Secretary
J \WPDOC$\COR\TMPAL~Y LET
'~¢dlcatcdtoQuahty~r~"
OFFICE OF THE CITY ATTORNEY
MEMORANDUM
TO Jennifer Walters, City Secretary
FROM Michael S Copeland, Assistant City Attorney
SUBJECT Amendment to Power Sales Contract
TMPA/Clty of Denton, Texas et al
DATE November 13, 1997
Attached ts an executed original of the foregoing contract which this office received from
TMPA's Agency Attorney on November 7, 1997 Please attach this executed original
document to Ordinance No 96-213 which was enacted by the City Council on September
17, 1996
The reason for the nearly fourteen month delay in obtaining an original signed contract
from TMPA is that TMPA did not execute the amendment until a judgment was signed in
the declaratory judgment/judmlal validation proceeding entitled Ex Parte TMPA, Cause
No 97-07872, m the 345th Judicial Dmtnct Court of Traws County, Texas The Court
stgned the judgment tn that case on November 5, 1997
I am prepanng a brief item for this week's status report regarding the above matter
Thank you for your assistance
Michael S Cdpelahd
MSC/cd
pc Jack Miller, Mayor (w/attachment)
Ted Benawdes, C~ty Manager
Bob Nelson, Assistant C~ty Manager/Utlhtles
Howard Martin, Director of Environmental Servlces<thty Admlmstrat~on
Sharon Mays, D~rector of Electric Utthtms (w/attachment)
s \sharedXdocs\cor\power sales contract doc