HomeMy WebLinkAbout2005-06-06 Ordinance 4874ORDINANCE NO. 4874
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
AMENDING THE BUDGET FOR THE FISCAL YEAR 2004-05 TO
PROVIDE AN ADDITIONAL APPROPRIATION OF $21,500,000 FOR
THE SETTLEMENT AGREEMENT WITH THE ENRON COMPANIES
The Council of the City of Palo Alto does ORDAIN as
follows:
SECTION 1. The Council of the City of Palo Alto finds and
determines as follows:
A. Pursuant to the provisions of Section 12 of Article III of
the Charter of the City of Palo Alto, the Council on June 28, 2004
did adopt a budget for fiscal year 2004-05; and
B. On March 28, 2005, the City and the Enron Companies entered
into a settlement agreement intended to be a compromise, release and
settlement of all claims related to the City's cancellation of its
contracts and other related documents with the Enron Companies; and
C. Judge Arthur Gonzalez of the United States Bankruptcy Court
approve.d the settlement agreement on April 21, 2005; and
D. The City has agreed to pay to Enron Companies the sum of
Twenty-One Million Five Hundred Thousand Dollars ($21,500,000) in
two installments. The first installment of $15,000,000 is due and
payable on or before May 6, 2005. The second installment of
$6,500,000 is due and payable on or before October 1, 2005; and
E. In accordance with generally accepted accounting principles,
the entire $21,500,000 will be recognized as an expense during the
fiscal year 2004-05; and
F. Additional appropriations from the Electric Fund and the Gas
Fund are necessary to fulfill the terms of the settlement agreement.
The Electric Fund Supply Rate Stabilization Reserve will cover 84
percent of the settlement amount. The Gas Fund Supply Rate
Stabilization Reserve will cover 16 percent of the settlement
amount; and
G. City Council authorization is needed to amend the fiscal
year 2004-05 budget to make additional appropriations of $18;060,000
and $3,440,000 as hereinafter set forth.
SECTION 2. The sum of Eighteen Million Sixty Thousand Dollars
($18,060,000) is hereby appropriated to non-salary expense in the
Supply Resource Management Division in the Electric Fund. The sum
of Three Million Four Hundred Forty Thousand Dollars ($3,440,000) is
hereby appropriated to non-salary expense in the Supply Resource
Management Division in the Gas Fund.
SECTION 3. This transaction will reduce the Supply Rate
Stabilization Reserve in the Electric Fund by $18,060,000 from
$52,954,000 to $34,894,000. This transaction will also reduce the
Supply Rate Stabilization Reserve in the Gas Fund by $3,440,000 from
$6,652,000 to $3,212,000.
SECTION 4. As specified in Section 2.28.080(a) of the Palo Alto
Municipal Code, a two-thirds vote of the City Council is required to
adopt this ordinance.
SECTION 5. As provided in Section 2.04.330 of the Palo Alto
Municipal Code, this ordinance shall become effective upon adoption.
INTRODUCED AND PASSED: June 06, 2005
AYES: BEECHAM, BURCH, CORDELL, FREEMAN,
KLEINBERG, MORTON, MOSSAR, OJAKIAN
NOES:
ABSENT: KISHIMOTO
ABSTENTIONS:
ATTEST:
~ML~I~ C'ity Clerk ~
APPR~.
APPROVED AS TO FORM:
City Attorney