HomeMy WebLinkAbout10510RESOLUTION NO. 10510
A RESOLUTION DIRECTING THE CITY ADMINISTRATION TO CONTINUE EVALUATION OF
THE POSSIBLE ACQUISITION OF AQUILA INC.'S FACILITIES WITHIN AND WITHOUT THE
CITY LIMITS UNDER ARTICLE IX OF FRANCHISE ORDINANCE NO. 5222 AND
TRANSFERRING FUNDS FOR THE PURPOSE OF SAID EVALUATION
WHEREAS, Aquila, Inc has advised the City that its facilities used in providing electric
services in Colorado may be for sale and invited the City to participate in the possible acquisition
thereof; and
WHEREAS, the continued evaluation of Aquila Inc.'s facilities is necessary for the possible
acquisition of Aquila's electric services in Colorado; NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The City Council hereby finds and determines that it is necessary, and in the best interest of
the City and it's citizens to continue the evaluation of the possible acquisition of Aquila, Inc.'s
facilities within or without the City limits under Article IX of Franchise Ordinance No. 5222.
SECTION 2.
The City administration is directed to continue the evaluation of the possible acquisition of
Aquila's facilities under Article IX of the Franchise ordinance No. 5222
SECTION 3
Funds in the amount of $60,000 shall be dispersed from the account CPO505 "Vehicle
Replacement" into the Capital Project CP0510 "Aquila Acquisition"
SECTION 4
Funds in the amount of $60,000 transferred in Section 3 above to account CP0510 "Aquila
Acquisition shall be used to continue the services of independent consultants to evaluate the
possible acquisition of Aquila's Colorado facilities.
INTRODUCED September 12, 2005
APP
' 9F CITY - C?WUIL
BY Michael Occhiato
Councilperson
/ao). W /05/0
Background Paper for Proposed
RESOLUTION
AGENDA ITEM # Ll /
DATE: September 12, 2005
DEPARTMENT: OFFICE OF THE CITY MANAGER
DAVE GALLI, CITY MANAGER
DOUG FITZGERALD, ASSISTANT CITY MANAGER
TITLE
A RESOLUTION DIRECTING THE CITY ADMINISTRATION TO CONTINUE
EVALUATION OF THE POSSIBLE ACQUISITION OF AQUILA INC.'S
FACILITIES WITHIN AND WITHOUT THE CITY LIMITS UNDER ARTICLE IX
OF FRANCHISE ORDINANCE NO. 5222 AND TRANSFERRING FUNDS FOR
THE PURPOSE OF SAID EVALUATION
ISSUE
The initial phase of evaluation toward the possible acquisition of Aquila Inc.'s
facilities has been completed. The Energy & Resource Consulting Group, LLC
(ERG) was contracted to perform this evaluation and is needed to continue
analyzing the possible acquisition. The initial dispersed funds for the first phase
of evaluation was $141,921, however, these funds have been exhausted, and an
additional $60,000 is needed at this time. It is necessary for the continued
evaluation of the possible acquisition of Aquila's facilities by ERG for the purpose
of studying the feasibility of operations and maintenance.
RECOMMENDATION
Approval of the Resolution.
FINANCIAL IMPACT
The cost to the City will be $60,000. This balance will be derived from the
"Vehicle Replacement Account" (CP0510) to be subsequently replenished with
said funds.
low Energy & Resource Consulting Group, LLC
Engineering, Financial and Managemenn Consultants
8955 E ist T.Lfts Avenue, Suite 925[7 • f7enver, Culuredo 86287 -2835 -Tel. 303'843 -9660 • Fax 303/643 9529 • , ,m. ri gcon1ull ng.nom
September 2, 2005
David J. Galli
City Manager
City of Pueblo
One City Hall Place
Pueblo, Colorado 81003
Client Matter: 21002
Subject: Potential Acquisition of the Colorado Electric Assets of Aquila, Inc.; Phase II
Services
Dear Dave:
For your review, I have enclosed a copy of a proposed exhibit (Exhibit C), which if accepted by the
City, will modify our existing Professional Services Agreement ( "Agreement "), and authorize the
performance of the additional Scope of Services, as detailed in Exhibit C, under the terms and
conditions of the Agreement.
Upon receipt of a signed copy of the exhibit to our office, we will initiate work on the proposed
Scope of Services. Should you have any questions, please don't hesitate to call me.
Very truly yy yours,
/ ly 1,
ENERGY & RESOURCE CONSULTING GROUP, LLC
Philip J. Movish
Partner & Executive Consultant
Oenver /New 0 -leans
EXHIBIT C
CITY OF PUEBLO
POTENTIAL ACQUISITION OF AQUILA, INC. COLORADO ELECTRIC ASSETS
PHASE II SCOPE OF SERVICE
A. SCOPE OF SERVICE
The following tasks are proposed to be performed in Phase II:
I) Initiate Discussions with Aquila:
Objectives: 1) eliminate uncertainty regarding City's' intentions
2) gauge Aquila's willingness to enter into a voluntary sale
3) determine Aquila's current time line for sale
4) respond to Aquila's questions
i) obtain any information still required for negotiations
G) initiate head -to -head due diligence
7) if possible, obtain certainty as to purchase price contingent
upon referendum and Council approval
The accomplishment of two (2) face -to -face meetings of the negotiating team with Aquila
are proposed.
D) Accomplish Informational Forums for Affected Municipalities
Objectives: 1) provide information and answer questions
2) eliminate uncertainty
The accomplishment of up to four (4) informational meetings with elected officials, staff and
citizens are proposed.
III) Accomplish Informational Meetings with Aquila's Large Customers
Objectives: 1) provide information and answer questions
2) eliminate uncertainty
The accomplishment of one (1) informational meeting with Aquila's large customers is
proposed.
IV) Accomplish Informational Forums with Local Citizens and Local Community and Civic Groups
Objectives: 1) provide information and answer questions
2) eliminate uncertainty
The accomplishment of two (2) informational forums for local citizens, and local community
and civic groups is proposed.
Exhibit C
Phase H Scope of Service
B. BUDGET
Page 2
The not to exceed budget concerning the performance of Tasks I - IV as described above follows:
Task Budget
I $25,000
II $15,000
III $10,000
IV $10,000
Total Budget $60,000
Accepted: ✓� G?- ✓ /J
Title:
Date: 9/�/