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HomeMy WebLinkAbout5/17/2000 - STAFF REPORTS (22) DATE: May 17, 2000 TO: City Council FROM: Procurement Manager ADOPT RESOLUTION TO BECOME A MEMBER OF THE CALIFORNIA UTILITY BUYERS JOINT POWERS AUTHORITY AND AUTHORIZE EXECUTION OF THE JOINT POWERS AGREEMENT RECOMMENDATION: That City Council adopt resolution approving membership in the California Utility Buyers Joint Powers Authority(the CUB JPA)and authorize execution of the Joint Powers Agreement. BACKGROUND: In 1992 the California gas industry began its "re-regulation"process. In response to market challenges, more than 450 school districts joined the School Project for Rate Reduction (SPURR) or the Regional Energy Management Coalition (REMAC) Joint Powers Authorities. These JPAs provide information and savings programs for the schools. Additionally, they provide active and effective intervention at the California Utilities Commission (CPUC) and the State Legislature. Having saved millions of dollars for member agencies, SPURR and REMAC have been model organizations for schools in other states to emulate for their own situations. Up Lentil a year ago there was no organization in California providing similar services on behalf of cities and counties. Then a new JPA was formed patterned after SPURR and managed by the same personnel who successfully manage SPURR. The California Utility Buyers Joint Powers Authority (the CUB JPA) provides information and advice about utility issues to California member cities, counties and special districts. Like SPURR and REMAC it also provides intervention at the CPUC and State Legislature on behalf of its members on utility issues. The Managing Director of both SPURR and CUB is Michael Roclunan. Tom Solberg is the Senior Energy Consultant for CUB as well as serving as Proj ect Director for SPURR. CUB also provides opportunities for its members to save money through combining their purchasing power by aggregating purchases of gas and electricity for member agencies. Staff believes participation in CUB's aggregated purchase program for natural gas would result in the lowest possible pricing available for purchase of natural gas utilized for the co-generation plants. Membership (which is free) established eligibility for the program but does not obligate the City to purchase 19A through CUB. CUB is about to develop a new natural gas contract for the upcoming fiscal ADOPT RESOLUTION TO BECOME A MEMBER OF THE CUB JPA May 17, 2000 Page 2 year. If City Council approves membership the City usage figures will be pooled with those of other members to establish pricing. After the group pricing figures are known the City may elect to participate or not to participate in the purchase program. If the pricing developed appears to be advantageous,City Staff will bring back a "Natural Gas Sales and Aggregation Agreement" to City Council for consideration. Participation in CUB would have no impact on Palm Springs Energy Services which serves the City as an electricity aggregator to benefit Palm Springs residents and businesses. It should be noted that CUB is a public entity separate from its members and its debts, liabilities and obligations are not those of its members. Also, each CUB member retains individual authority to contract for the purchase of natural gas, electricity and for advice on energy issues. CUB is governed by a five member Board of Directors. Current members of the Board are: David Inger, Energy Manager, County of Ventura Gary C. Ingraham, Assistant City Manager, City of Stockton Constance Underhill, Mayor, City of Placentia Ed Johnson,Energy and Utility Manager,CalPoly San Luis Obispo Harmonic H. Marearian, Energy Manager, CalPoly Pomona Harold Good, Palm Springs' Procurement Manager, has been nominated for the Board to take Mr. Marearian's seat who is resigning. The appointment is conditional on the City joining the JPA because the by laws prohibit selection of board members from non-member agencies. Mr. Good would like to accept the nomination and believes service on the board would benefit the City by increasing its voice in matters before the CPUC and the Legislature in addition to providing the City with additional options for group leveraged energy savings. There is no cost for membership. Board meetings are conducted via the telephone except for one face-to-face annual meeting. This years annual meeting will be held in Concord,California. Meetings are subject to the Brown Act and must be noticed 72 hours in advance.Board meetings conducted by conference call are also publicly noticed. Member participation is by speaker phone so that members of the public can hear the proceedings and speak during public comments. 2 ADOPT RESOLUTION TO BECOME A MEMBER OF THE CUB JPA May 17, 2000 Page 3 It is recommended that City Council adopt the resolution and approve execution of the Agreement to enter into the CUB JPA. � ova— HAROLDE. GOODOD Procurement Manager APPROVE: City Manager Attachment: (1) Resolution (2) JPA Agreement CALIFORNIA UTILITY BUYERS JOINT POWERS AGREEMENT CREATING THE CALIFORNIA UTILITY BUYERS JPA This Joint Powers Agreement creating the California Utility Buyers JPA (this "Agreement") is made as of (the "Effective Date"), among the public entities identified on the signature page of this Agreement and the additional public agencies who subsequently sign this Agreement (collectively, "Members"). RECITALS Each Member has the authority to and does purchase natural gas and electricity for the operation of its respective facilities. Members believe that savings can be achieved if they arrange for the purchase of natural gas and electricity as a group directly from natural gas or electric power suppliers. Members agree that acquisition of natural gas and electricity in this manner requires expertise of a special nature not available within their respective organizations. Members wish to jointly exercise their powers to provide for the mutual acquisition of natural gas and electricity utilizing the services of a management consultant to administer the acquisition program, and in connection therewith, also advise the Authority on methods by which its Members may economize on the use of natural gas, electricity and other energy sources. NOW, THEREFORE, in consideration of the mutual promises set out, the parties agree as follows: AGREEMENT ARTICLE I POWERS AND PURPOSES 1. Authority Created. The California Utility Buyers JPA ("CUB") is formed by this Agreement pursuant to the provisions of Article 1, Chapter 5, Division 7, Title l(commencing with section 6500) of the Government Code of the State of California. CUB shall be a public entity separate from its Members and its debts, liabilities and obligations shall not be the debts, liabilities and obligations of its Members. 2. Purpose of the Agreement: Common Powers to be Exercised. Each of the Members individually has the authority to contract for the purchase of natural gas, electricity and for advice on energy consumption. The purpose of this agreement is to jointly exercise the foregoing powers in the manner set forth herein. CUB A Powers Agmt 99 04 09.doc 1 3. Effective Date of Formation. CUB shall be formed effective as of the Effective Date, or such later date as agreed to by all original parties to this Agreement at their first meeting. 4. Powers. Pursuant to and to the extent required by Government Code Section 6509, CUB shall be restricted in the exercise of its powers in the same manner as is the City of Stockton, California. CUB shall have the power: (a) To exercise the common powers of its Members to purchase natural gas and electricity and to seek advice on means of economizing on the use of natural gas, electricity and other energy sources. (b) To make and enter into contracts for the purchase of natural gas and electricity, for the sale of natural gas and electricity by CUB to its Members, for balancing the difference between the supply of natural gas or electricity ordered and the amount actually consumed, and for advice on means of economizing the use of natural gas, electricity and other energy sources. (c) To incur debts, liabilities and obligations in connection with the purchase of natural gas and electricity and advice on the means of economizing on the use of natural gas, electricity and other energy sources. (d) To sue and be sued in its own name. (e) To contract for the services of a management consultant as more specifically set forth in Article III. (f) To contract with Members to provide necessary administrative services to CUB as appropriate. (g) To adopt rules, regulations, policies, bylaws and procedures governing the operation of CUB. (h) To recruit additional Members to CUB to increase the purchasing power of CUB. ARTICLE II ORGANIZATION 1. Membership. Members of CUB shall be the original parties to this Agreement and such other cities, counties and public districts as may join CUB after execution of this Agreement, including any counterpart copy of this Agreement. 2. Officers. (a) CUB shall be governed by a Board of Directors ("the Board") consisting of five Members which shall be selected in the manner identified in the bylaws and shall exercise its authority in accordance with this Agreement and CUB's bylaws which are attached hereto as Exhibit A and incorporated herein by reference. The term of office shall be four years, except that for the initial Board one Director shall serve for two years, two for three years and two for four years. CUB Jt Powers Agmt 99 04 09 doc (b) CUB may appoint an Executive Director by contracting with one of its Member agencies. (c) CUB shall appoint a Treasurer by contracting for such services with one of its Members or a private certified public accountant. (d) CUB shall appoint an Auditor by contracting for such services with one of its Members. In the event CUB appoints a Treasurer from one of its Members, the Auditor must come from the same Member. The Treasurer and Auditor shall possess the powers of and shall perform the treasurer and auditor functions for CUB required by Government Code sections 6505, 6505.5 and 6505.6 and shall assure that there shall be strict accountability of all funds and reporting of all receipts and disbursements of CUB. The Treasurer and Auditor shall be required to file an official bond with the Board in an amount which shall be established by the Board. The premiums on any such bonds shall be appropriate expenses of CUB. Pursuant to Government Code section 6505 the Auditor shall contract with a certified public accountant to make an annual audit of the accounts and records of CUB. The costs of the audits shall be borne by CUB. 3. Principal Office. The principal office of CUB shall be 1430 Willow Pass Rd., Suite 240, Concord, California 94520 or as may be otherwise designated by the Board from time to time. 4. Fiscal year. The fiscal year of CUB will be from July 1 to June 30. 5. Member Contributions. The costs of operating CUB, purchasing natural gas and electricity and payment of consultant shall be recovered from the Members as follows: (a) Operating and Consultant Costs. Each Member shall pay its share of operating and consultant costs based on the cost of natural gas and electricity units ordered by the Member compared to the cost of the total natural gas and electricity units ordered by all Members. Payment shall be made monthly in arrears. (b) Natural Gas Costs. Each Member shall pay for the number of natural gas and electricity units it orders. Payment shall be made concurrently with placement of the order. (c) Membership Fee. In lieu of recovering all or part of its operating or consultant costs as prescribed in subparagraph (a), the Board may impose an annual membership fee payable at such time or times as the Board deems appropriate. 6. Withdrawal. Any Member may withdraw from CUB upon six months prior written notice. Upon withdrawal a Member will not be entitled to return of any funds previously paid to CUB. 7. Termination of the Agreement. This Agreement may be terminated upon resolutions adopted by a majority of its Members. Upon termination, all surplus money and CUB Jt Powers Agmt 99 04 09.doc 1 5 A 3 property of CUB shall be distributed to each Member in proportion to the funds provided CUB by the Member over the previous twelve months. ARTICLE III MANAGEMENT CONTRACT 1. The acquisition of natural gas and electricity and all administrative functions relating thereto, except those of Treasurer and Auditor, shall be performed by a management consultant selected by CUB's Board through such procedure, including sole source, as its deems appropriate for special services under Government Code section 53060. 2. For the first five years of operation of CUB, the management consultant shall be North Star Consulting, Inc., a California corporation("NSC"), under a contract to be executed immediately upon formation of CUB. Under the contract, NSC shall receive a management and operations fee, and may receive consideration for recruiting new Members to CUB. Original Signatories City of Placentia County of Ventura Constance Underhill David Inger Mayor Energy Manager Cal Poly Pomona City of Stockton Harmick H. Marcarian Gary C. Ingraham Energy Manager Assistant City Manager Cal Poly San Luis Obispo Ed Johnson Energy and Utility Manager Your Organization: By: Name: Title: Date: Phone: FAX: 15117 CUB Jt Powers Agmt 99 04 09.doc 4 r« CALIFORNIA UTILITY BUYERSzBrT A BYLAWS OF THE CALIFORNIA UTILITY BUYERS JPA 1. Membership. Membership in the California Utility Buyers JPA ("CUB") shall be evidenced by a resolution of the governing board of a member authorizing execution of the Agreement and the executed Agreement 2. Meetings. The first and organizational meeting of the CUB shall be held in Sacramento, California. Thereafter the Board shall meet at the office of the Treasurer of CUB or at such other places as may be designated by the Board. The time and place of the regular meetings of the Board shall be determined by resolution adopted by the Board, and a copy of such resolution shall be furnished to each member. All Board meetings, including regular and special meetings, shall be noticed and held in accordance with the Ralph M. Brown Act, Government Code section 54590, et seq 3. Quorum Voting. A majority of the Board's Directors shall constitute a quorum for the purpose of the transaction of business relating to the CUB Each Director shall be entitled to one vote. Unless otherwise provided herein, a vote of the majority of those Directors present and qualified to vote shall be sufficient for the adoption of any motion, resolution or order and to take any other action deemed appropriate to carry forward the objectives of the CUB. 4. Designation of Directors. On the Effective Date the members shall hold their first meeting at which time they shall select a nominating committee to select the CUB's Board of Directors. At the same meeting, and after the nominating committee is selected, each member may submit to the nominating committee as a candidate for the Board the name of one of their officers or employees, or the name of an officer or employee of another member, including a member of the nominating committee, as a candidate for the Board. The nominating committee shall then select five of the nominees as Directors of the Board, specify the term that each is to serve and submit the nominees to the members for approval. To the extent possible, the membership of the Board of Directors shall reflect geographic diversity consistent with securing the best available candidates. In the event a nominee is not approved, the nominating committee shall propose an alternate or alternates to the members for approval. After the first Board of Directors is elected, thereafter the Board will elect persons to fill vacancies or commence new terms. Vacancies will be filled for the unexpired term. 5. President, Vice President and Secretary. At the first meeting, and every two years thereafter, the Board shall appoint three of its Board members as the President, Vice President and Secretary. CUB Bylaws 990409.doc 6. Budget. Within 60 days after formation of the Board, the Board shall adopt a budget for the balance of the fiscal year. Thereafter, thirty days prior to the expiration of the fiscal year the Board shall adopt a budget for the ensuing fiscal year. The Board may contract with a member for preparation of the budget. The budget shall include, but not be limited to, the general operating costs and natural gas and electricity acquisition costs to be incurred during the period covered by the budget, and the allocation of such costs among the members. The budget shall be adopted by at least a majority of all the directors of the Board. 7. Expenditures for the Approved Budget. All expenditures made within the designations and limitations of the approved budget shall be made on the authorization of the Treasurer, or in his or her absence the President of the Board, without further action of the Board. No expenditures in excess of those budgeted shall be made without the approval of a majority of all of the directors of the Board. 8. Amendment of Bylaws. These bylaws may be amended by the Board at a regular meeting at which a quorum is present. CUB Bylaws 99 04 09.doo 2 { 9 A RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS APPROVING MEMBERSHIP IN THE CALIFORNIA UTILITY BUYERS JOINT POWERS AUTHORITY AND AUTHORIZING EXECUTION OF JOINT POWERS AGREEMENT. WHEREAS,the City of Palm Springs has the authority to and does acquire utility services (such as natural gas, electric power, water, and telecommunications)for its facilities; and WHEREAS, the City of Palm Springs wishes to better control the costs of utilities at its facilities, through cooperative acquisition and management programs with other public agencies in California; and WHEREAS, the California Utility Buyers JPA has been established as a California joint powers authority to operate such cooperative programs; and WHEREAS, Title 1, Division 7, Chapter 5, Article 1 (Section 6500 et seq.) Of the Govermnent Code authorizes joint exercise by two or more public agencies of any power common to them. NOW THEREFORE, BE IT RESOLVED the City Council of the City of Palm Springs, California, does hereby resolve as follows: Section 1. The City Council hereby approves Agreement entitled "Joint Powers Agreement Creating the California Utility Buyers JPA", on file in the office of the City Clerk. Section 2. The Mayor or his designee is hereby authorized to affix his signature to this resolution signifying its adoption by the City Council of the City of Palm Springs, and the City Clerk, or her duly appointed deputy, is directed to attest thereto. Section 3. The Mayor or his designee, or their successor(s) in office, are authorized and hereby directed to execute and deliver on behalf of the City of Palm Springs any documents or instruments deemed necessary or appropriate to evidence membership in the CUB JPA, including the Joint Powers Agreement of the CUB JPA, or to participate in particular programs of the CUB JPA as such officer(s) deem appropriate. ADOPTED this_day of 12000 doffift RESOLUTION NO. May 17, 2000 Page 2 AYES: NOES: ABSENT: ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By City Clerk City Manager REVIEWED & APPROVED AS TO FORM 9"6 zoom