24-677ORDINANCE NO. 24-677
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, A TEXAS HOME-
RULE MUNICIPAL CORPORATION (“DENTON”) PROVIDING FOR, AUTHORIZING, AND
APPROVING THE EXECUTION BY THE CITY MANAGER OF THE POWER PURCHASE
AGREEMENT (“PPA”) BETWEEN DENTON AND YELLOW VIKING DEVELOPMENT
ONE, LLC (“YELLOW VIKING”); AUTHORIZING THE ACCEPIANCE AND APPROVAL
BY THE CITY MANAGER OF THE LETTER OF CREDIT, OR OTHER CREDIT SUPPORT
ISSUED ON BEHALF OF YELLOW VIKING, FURTHER SECURING THE OBLIGATIONS
OF YELLOW VIKING TO DENTON FOR THE BWEFIT OF DENTON; APPROVING THE
EXECUTION OF SUCH OTHER AND FURTHER RELATED DOCUMENTS DEEMED
NECESSARY TO EFFECTUATE THE TRANSACTIONS ALLOWED UNDER THIS
AGREEMENT BY THE CITY MANAGER, WHICH ARE INCIDENT TO OR RELATED TO
THE PPA; FINDING THAT THAT THE PURCHASE OF CAPACITY AND ENERGY MADE
BY DENTON UNDER THE TERMS OF THE PPA ARE IN THE PUBLIC WELFARE;
AUTHORIZING THE EXPENDITURE OF FUNDS; DETERMINING THAT SPECIFIC
INFORMATION CONTAINED IN DOCUMENTS INVOLVED IN THIS TRANSACTION
PERTAIN TO A “CONPETITIVE ELECTRIC MATTER” AS SET FORTH UNDER THE
PROVISIONS OF §551.086 AND §552.133 OF THE TEXAS GOVERNMENT CODE, AS
AMENDED; ALLOWING THE PUBLIC TO INSPECT AND REPRODUCE THE PPA AS
REDACTED; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, Denton is a home-rule city and a Texas municipal corporation governed by
the constitution and laws of the State of Texas (“State”); and
WHEREAS, in accordance with the provisions of §551.086 of the Texas Government
Code, after due notice of the public meeting was provided as required by law, the PPA between
Denton and Yellow Mking (hereafter the “Transaction”) was submitted for final consideration of
the Denton Public Utilities Board on April 8, 2024; a majority of the Public Utilities Board
(“PUB”), a “Public Power Utility Governing Body” as defined by State law, convened in open and
closed meetings as permitted by law, and discussed, considered, and deliberated the Transaction;
and thereafter in its open meeting proceeded to take final action and recommend to the City
Council that the Transaction by and between Denton and Yellow Viking be recommended by a
vote of three (3) in favor to one opposed, in substantially the form of the PPA presented to it; being
a majority vote of all PUB members present; and
WHEREAS, in accordance with the provisions of 9551.086 of the Texas Government
Code, after due public notice being given, the City Council of Denton (the “City Council”), a
“Public Power Utility Governing Body” as defined by State law, convened in open and closed
meeting as permitted by law, and discussed, considered, and deliberated the Transaction, the
subject of this ordinance, in closed and open meeting of the City Council on April 16, 2024, after
receiving a legal opinion of counsel that the Transaction is a proper item for consideration in its
open and closed meeting, which item involves competitive electric matters, including business and
commercial information, which if disclosed, would give advantage to its competitors or
prospective competitor; and
WHEREAS, the City Council has further determined and finds that several of those
documents to be entered into by and between Denton and Yellow Viking namely the PPA, and all
other documents which are related thereto as from time to time may be executed by Denton and
Yellow Viking, in connection therewith; should be excepted from public disclosure, as permitted
by the provisions of §552.133 of the Texas Government Code, as documents that are reasonably
related to a competitive electric matter, the disclosure of which documents would provide an
advantage to the competitors or prospective competitors of Denton Municipal Electric (“DME”);
and
WHEREAS, the City Council has further determined that it is in the public interest that it
should exercise its right under Texas Government Code to lawfully safeguard and keep certain of
these documents in the preceding paragraph sealed, as they are competitive documents which
contain competitive electric and financial information; and
WHEREAS, the City Council finds that there is no divestiture, sale, or other disposition of
the property of any utility of Denton, and therefore that no public election is required pursuant to
the Charter of Denton; and
WHEREAS, the City Council finds that said Transaction involves DMIE purchasing from
Yellow Viking replacement power and energy requirements for a contractual term of fifteen years
from the Project’s Commercial Operation Date, as provided in the said PPA; and that such
Transaction involves Denton’s acquisition of reliable, cost-effective replacement solar power and
energy from Yellow Viking, and
WHEREAS, the City Council finds and concludes that a diversified portfolio of renewable
energy resources is prudent considering the ever-changing present circumstances; and that Denton,
through its electric utility, DME, provides 100% renewable energy to meet the demands of the
customers of DME; and
WHEREAS, the City Council finds that the Transaction provided by this ordinance, will
not impair the ability of Denton to comply with the provision of any of its utility revenue bonds,
as amended, which are issued and outstanding; and
WHEREAS, Denton desires to enter into such other arrangements in support of the PPA
with Yellow Viking, which are incident and related to the said PPA, and to take such additional
actions as the City Manager, or their designee, shall determine to be necessary and advisable to
consummate and effectuate the matters set forth herein; and
WHEREAS, the City Manager, or a designated employee, has received, reviewed, and
recommended that the herein described proposals are the most advantageous to the City
considering the relative importance of price and the other evaluation factors included in the request
for proposals; and
WHEREAS, this procurement was undertaken as part of the City’s governmental function;
and
WHEREAS, the City Council has provided in the City Budget for the appropriation of
funds to be used for the purchase of the materials, equipment, supplies, or services approved and
accepted herein; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION 1. The recitations contained in the above preamble are incorporate herewith and
are considered to be a part of this ordinance.
SECTION 2. The City Council hereby approves and authorizes the City Manager and the
City Secretary, to execute and attest respectively, the PPA, by and between Denton and Yellow
Viking, under the terms and condition set forth in Exhibit “ A”, attendant with all Exhibits attached
thereto, and made part hereof, with such ancillary instruments, changes and additions which are in
substantial compliance with said PPA, as the City Manager, or their designee, may approve, and
consummate the execution and delivery thereof on behalf of Denton, by or at the direction of the
City Manager, or their designee.
SECTION 3. The City Council, as further security for Yellow Viking’s performance of this
Transaction, hereby approves and authorizes the City Manager and the City Secretary, and their
respective designees, to approve and accept the irrevocable non-transferable standby Letter(s) of
Credit furnished to Denton by Yellow Viking, in accordance with the PPA, said Letter(s) being
drawn upon a commercial bank within the United States, on behalf of Denton, as additional credit
protection, under the terms and conditions being contained in substantially the form as set forth in
said agreements, with such amendments, changes, and additions as the City Manager, or their
designee, may approve, and approval and acceptance thereof on behalf of Denton by or at the
direction of the City Manager, or their designee, shall constitute such approval.
SECTION 4. The City Council hereby approves and authorizes the City Manager and the
City Secretary, and their respective designees, to execute and attest respectively, all other
documents which are incident and related to the PPA referenced herein, and to take such additional
actions as the City Manager, or their designee, shall determine to be necessary and advisable to
effectuate the matters set forth above.
SECTION 5. The City Council, the Mayor, the City Manager, the City Attorney, or their
designees, and each of them individually hereby, is authorized and empowered to perform all such
acts and obligations as required with respect to the PPA described herein.
SECTION 6. The Mayor, the City Manager, the City Attorney, or their designees, and each
of them individually hereby, is authorized, empowered, and directed to negotiate, deliver, and
perform all such acts and things, and to sign all such documents, certificates, contracts,
assignments, licenses, leases, agreements, directions, instruments, and statements, each together
with such amendment, changes and additions thereto as Mayor, the City Manager, the City
Attorney, or their respective designees, shall determine to be necessary or advisable to effectuate
the matters set forth herein. Any such determination to be conclusively evidenced by the taking or
causing to be taken of such action, or the execution and delivery of any such document, certificate,
agreement, license, lease, direction, instrument or statement by the Mayor, the City Manager, the
City Attorney, or their designee is authorized.
SECTION 7. All prior action taken by the Mayor, the City Manager, the City Attorney, or
their designees in furtherance of the foregoing matters, are hereby ratified, confirmed, approved
and authorized in all respects as of the dates and times such actions were taken.
SECTION 8. Immediately following the execution and delivery of the documents
described as the PPA and all Guaranties and Letter(s) of Credit which are incident to such PPA, as
provide in this ordinance, the City Secretary is hereby directed to seal and maintain said documents
in their custody and control, as documents excepted from public disclosure under the provision of
§552.133 of the Texas Government Code (the “Public Power Exception”); unless otherwise
lawfully ordered to disclose such documents.
SECTION 9. This ordinance shall be open for public inspection. However, all Exhibits and
Attachments which are appended to this ordinance, including without limitation, the Power
Purchase Agreement, and all Guaranties and Letter(s) of Credit incident to such PPA, shall not be
produced for public inspection, but shall be sealed, as provided for in Section 8 above.
SECTION 10. The expenditure of funds as provided for in this ordinance is hereby
authorized.
SECTION 11. This ordinance shall become effective immediately upon its passage and
approval.
The mod,n t, ,PPD„, thi, ,„di„,„,, w„ m,d, by h,-\, U' A 3 M
seconded by Bf rb_ ILnL– . This) oved
by the following vote U - A :
Aye
L/
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Nay Abstain Absent
Mayor Gerard Hudspeth:
Vicki Byrd, District 1 :
Brian Beck, District 2:
Paul Meltzer, District 3 :LZ
L/Joe Holland. District 4:
Brandon Chase McGee, At Large Place 5 :
Chris Watts, At Large Place 6:IZ
PASSEDANDAPPROVEDa,i,th, iG+’' d,y ,f Rf f - I J 2024.
GERARD HUDSPETH, MAYOR
ATTEST:
LAUREN THODEN, CITY SECRETARY
(Yac£'L„„,Md„-
APPROVED AS TO LEGAL FORM:
MACK REINWAND, CITY ATTORNEY
Digitally signed by MaKella Lunn
DN: dc=com, dc=cityofdenton,
dc=codad, ou=Department Users
and Groups, ou=General
rernment, ou=Legal,
!n=Marcella Lunn. _
email=Marcella.Lunn@cityofdento
n.com
Date: 2024.04.1009:34:01 b5'00'
BY _ HI\n\\h \\\hr\