HomeMy WebLinkAbout1995-138 Amendment-OMECA/IGAO'DONNELL RAMIS CREW
CORRIGAN & BACHRACH
ATTORNEYS AT LAW
1727 N.W. Hoyl Slreet
Porlland, Oregon 97209
T~I~PHONE; (503) 222-~02
PAX: (S03) 2~3-29~4
DATE:
TO:
FROM:
RE:
June 16, 1995
OMECA Board
James M. Co~, Legal
IGA Amendments
Counsel
At the Board's June 16, 1995 meeting it considered and sent to the agency members for their
consideration the attached proposed amendments to Sections 13, 14 and 22 of the
intergovernmental agreement which forms OMECA. At the Board's request I have prepared a
brief explanation of the effect of each of the proposed amendments.
Section 13
Two separate amendments are proposed for Section 13. The first dealing with revenue bonds
brings the IGA into compliance with the provisions of ORS 190.080(1)(a). In order for
OMF.12A to issue revenue bonds it must first have the governing body of each member utility
approve by resolution or order the issuance of the revenue bonds and this proposed amendment
makes that a requirement of this intergovernmental agency.
The second amendment deals with allocations of debts, liabilities and obUgations of OMECA in
the event OMBCA assets are insufficient to meet the obligation. In the absence of any provision
otherwise in the agreement, the debts, liab'flifies and obligations of OMBCA shall be, jointly and
severally, the debts, liab'flifies and obligations of the parties to the intergovernmental agreement.
ORS 190.080(3). ORS Chapter 190 allows for the modification of this allocation. The proposed
language will alter that allocation of liab'flity based upon the percentage kilowatt hour sales by
a member of the total kilowatt hour sales of all members for the calendar year previous to the
debt, liability or obligation accruing. This amendment establishes a set formula for the
allocation of these obligations prior to their accrual.
In the absence of an anocation such as this the obligations are joint and several for each of the
parties. In that situation each party is legally obligated for 100% of the obligation, subject to
any allocation to other parties which may occur by subsequent agreement or judicial proceeding.
No entity can say with certainty what the extent of their obligation under a jo'mt and several
agreement would be because the outcome of obligation allocation is determined by the facts of
each individual case. This proposed amendment establishes a uniform formula for allocation of
O'DONNELL RAMIS CREW
CORRIGAN ~' BACHRACH
Memo re: IGA Amendments
June 16, 1995
Page 2
an obligation that is based upon the kilowatt hour sales activity of each individual member in
relationship to the total kilowatt hour sales of all members comb'med. While a percentage
allocation is not certain, and will vary somewhat from year to year, each member may
approximate with some certainty its percentage allocation of any obligation should that occur in
the future. This debt allocation section activates only if OMFX2A assets are not sufficient to
meet obligations. It does not preclude a future reallocation, nor does it amend the termination
provisions in Section 16.
Section 14
Two amendments are proposed to Section 14, both of which deal with financial matters. The
first allows the Secretary-Treasurer to delegate ministerial functions to the OMECA staff. This
amendment will bring the agreement into consistency with the agency's bylaws which allow the
Secretary-Treasurer to delegate ministerial functions such as cheek writing within the limitations
of the Board approved budget to staff members.
The second change eliminates the requirement that OIVlF___~A comply with the Oregon Municipal
Budget Law. The Oregon Municipal Budget Law by its terms does not apply to OMECA.
There are provisinns of the budget law, such as the establishment of a budget committee, and
following a July 1 - June 30 fiscal year budgeting process which are not practical for OMECA
to follow. OMECA has determined that it makes practical sense to coincide its fiscal year with
the federal fiscal year beginning on October 1. This change will allow the Board to establish
a budget process and a fiscal year co'mcidmg with the federal fiscal year while maintaining
financial records in accordance with generally accepted accounting principles. OIVIE, CA remains
subject to the Oregon Municipal Audit Law.
Section 22
This amendment to Section 22 simply corrects what appears to be a typographical error in the
existing Section 22. It makes no substantive change to the requirement that modifleations to the
agreement be in writing and signed by all the parties.
AIVIENDM~NT NO. 3
Pursuant to Section 15 of the Intergovernmental Cooperation Agreement (the
"Agreement") between the Cities of Ashland, Forest Grove, Milton-Freewater, Monmouth,
McMinnvllle, the Canby Utility Board and the Springfield Utility Board (the "Member Utilities")
executed January 27, 1994, as amended by Amendments No. I and 2; the governing bodies of
the Member Utilities hereby agree to the following:
Section 1.
Section 13 of the Agreement is hereby amended to read as follows:
"13. Debts of OMECA. No debts of OMECA shall be incurred without
the approval of the governing bodies of each of the Member Utilities. There are
currently no debts of OMECA. It is anticipated that OMECA will not incur any
debts or liabilities under the Conservation Project Acquisition Agreement or the
Bond Resolution with BPA and that BPA will be solely responsible for the debt
service paymcnls on any txmds issued by OMEC:A. No revmlue bonds under
ORS 288.805 to 288.945 shall be issued unless, after a public heating, the
governing body of each of thc Member Utilities approv,~s, by resolution or order,
thc issuance of the n~venue ~mds. The debts, liabilities and obligations of
OMF/2A, to the extent that they become due and excoed the value of the
of OMF, CA, slmll bo divided among thc parties based elam thc peme-magc
kilowatt hour sales by each member of the total kilowatl hour .sales of all
membora for thc calendar year previous to thc obligation becoming due, and in
d~ese shams become the obligation of each member. The parties to this
agreement may allocate thc debts, liabilities and obligations of OMECA in a
different tnanncr than provided by this Section through a separate written
agreement, or upon termination of d~is agreement, through the process set forth
in Section 16 of this agreement."
Section 2.
Section 14 of the Agreement is hereby amended to read as follows:
"14. F. xpenditures. No funds of OMF_.CA shall be expended except upon
the vote of the Board and in furtherance of the purposes of OMBCA; pwvided
however, that expenditures within the limitations of the Board approved budget
may be made by the SecretaD'.T~tst, mr, and the $ecmmz~'-Treast, rer may
delegate the minislerial functions of the office to another porson or persons who
need not be OMFI2A direclors. Additional authoriza, xl siguatures shall include the
Chair or Vice Chair, in the event the Secretary-Treasurer is unable to perform.
The Board shall institute a budget process and maintain fimmcial records in
accordance with generally acceptod accounting principles.
Section 3.
Section 22 of the Agreement is hereby mended to read as follows:
...~ ..... :_ .. ~_a .: .... a by tllc .... : .......
............. ;;'~.::cg ...... s,.,~ v ...... -he~,: ....No modification of this
Agra, anent shall be valid unless in writing and signed by an authorizf, xl
~pre~ntafiv¢ of the governing bodies of the Member Utilities, except that
amendments to add Me~nl~r Utilities who are municipal utilities need only be
executed by ali mcmbezs of the Board."
City of Forest Grove
City of Monmouth
City of Milton-Freewater
Springfield Utility Board
Canby Utility Board
City of McMinnville
70114~mendm~.fn2(6/l 6/95)
OMECA
~legon ~ul~lClpaa ]~lh.a,~, ahd Co~scr~a~loll Agcn~
July 11 1995
Mr. Paul O'Neal
Bonneville Power Administration
703 Broadway, Suite 100
Vancouver, WA 98660
Dear Mr, O'Neal:
Thank you for the time you and Vicki English spent on the phone conference with me and Tom O'Connor
on July 5 regarding Canby's termination of OMECA membership. It was very helpful to review and
discuss the areas affected by this action.
As I offered during the call, I am writing to summarize the steps necessary te respond to Canby's request.
Although OMECA did not anticipate a member termination during such a short contract, we hope we can
make this separation as smooth as possible and continue the positive work with Bonneville for the benefit
of the remaining members.
The following describes the areas needing modification or amendment, and the parties affected. This is
based on my research and discussions with our staff, and Teny Regan at Bonneville. Ter~ was still
reviewing the contract to assure there were no other pertinent areas. I will assume that she agrees with the
item specified below unless notified otherwise.
Affected Item Action Needed Parties Involved
Project Agreement Amend page 3 to delete Canby , Amendment to be edited by
and redistribute savings to Bonneville and signed by
other members as identified by Bonneville and OMECA
OMECA
Intergovernmental Agreement Amendment deleting Canby Approval by all governing
and Exhibit specifying terms of bodies of OMECA member
withdrawal utilities.
Project Implementation Amendment deleting Canby Approval by all governing
Agreement and Exhibit specifying terms of bodies of OMECA member
withdrawal utilities.
The terms referenced hi the above mentioned Exhibit are, for your information:
1. Effective date of termination will be 9/30/95.
2. Canby may obligate 1995 Canby funds through 9/30/95.
3. Canby agrees to submit reports to OMECA as necessary to complete all obligated projects, and to
maintain all records required under the Project Implementation Agreement until the earlier of three
years after the date of the last invoice or notification of final audit completion by BPA.
4. Incorporation of the "hold harmless" language from the Implementation Agreement.
One Main Place - 101 SW Main, Suite 810 phone: 503-796-1850
Portland, Or 97204 fax: 503-294-1250
In addition to the logistics of a member withdrawal, there is the issue of Canby's budget balance.
OMECA's current contract with Bonneville assumes that we would retain the full amount of the intended
1996 Canby implementation budget. This will be much easier than adjusting the cnntmct and bond
amounts to reflect the elimination of Canby. Still, $346~000 dJsttibnted to six small utilities for one year
may be less than a blessing. The risks associated with these funds are:
· If they are not fully expended the bonus target for OMECA may not be achieved (an estimated
$250,000 loss of flexible 'non contract" money), or
· The bonus mount will be decreased based on the funds not spent (effect would be up to $12,000 based
on current performance).
We are currently working on ideas to assure we can acquire cost effective conservation with less
participants. These ideas are:
1. Establish the starting capital for an Energy Service Charge approach.
2. Eexpand the type of measures and approaches for conservation via Piot Projects.
3. Identify large Industrial projects currently funded directly by Bonneville and transfer responsibility to
the OMECA utility as mutually agreed.
4. Consider apphcation of Bandon, or others, as new members.
5. Distribute funds to members in need of additional budget.
Items 1 - 3 directly involve Bonneville support and approval. I am hopeful you will agree with the
appropriateness of these approaches based on the need to maintain the targets for OMECA, as well as the
intent of both the contract and Conservation Reinvention at Bonneville for flexibility in program design and
approach. It will be critical that this perspective be included to staff in their review and timeliness of
response to OMECA requests.
OMECA looks forward to developing the foundation this next year to succeed in the area of Demaad Side
Management services after 1996. We nnticipate a strong continuedrelafionship with Bonneville aswe
work together to accomplish the future goals with new budget constraints.
Thank you for your efforts to facilitate the withdrawal of Canby, and to ease the process of use of the
additional funds.
Sincerely,
Project Manager
CCi
Vicki English - BPA
Terry Regan - BPA
Tom O'Connor - OMECA
OMECA Board Members
REVISED AMENDMENT NO. 3
Pursuant to Section 15 of the Intergovernmental Cooperation Agreement (the
"Agreement") between the Cities of Ashland, Forest Grove, Milton-Freewater, Monmouth,
McMinnville, the Canby Utility Board and the Springfield Utility Board (the "Member Utilities")
executed January 27, 1994, as amended by Amendments No. I and 2; the governing bodies of
the Member Utilities hereby agree to the following:
Section 1.
Section 13 of the Agreement is hereby amended to read as follows:
"13. Debts 9f QIVlF~A. No debts of OMECA shall be incurred without
the approval of the governing bodies of each of the Member Utilities. There are
currently no debts of OMF_X2A. It is anticipated that OIVIY~A will not incur any
debts or liabilities under the Conservation Project Acquisition Agreement or the
Bond Resolution with BPA and that BPA will be solely responsible for the debt
service payments on any bonds issued by ()MECA. No revenue bonds under
ORS 288.80,5 to 288.94:5 shall be issued unless, after a public hearing, the
governing body of each of the Member Utilities apptm'es, by resolution or order,
the issuance of the revenue bends. Tho debts, liabilities and obligations of
OMECA, to ~he ~xtent that they bo:ome due and exceed the value of the assets
of OMECA, shall be divided among the parties based upon the percentage
kilowatt hour sales by each member of the total kilowatt hour ~ales of all
members for the calendar year previous to the obligation b~oming due, and
instead of joint and .several liability each such share shall be the total obligation
of that momb~-r. Tho parties to this agreement may allocatu the debts, liabilities
and obligations of OMEEA in a different manner than provi~at by this Se~ticm
through a separate written agreement, or upon termination of this agr~eaent,
tltrongh tho process set forth in Sextion 16 of this agr~ment."
Section 2.
Section 14 of the Agreement is hereby amended to read as follows:
"14. Expenditures. No funds of OMECA shall be expended except upon
the vote of the Board and in furtherance of the purposes of OMECA; provided
however, that expenditures within the limitations of the Board approved budget
may be made by tile Secretary-Treasurer, and the Secretary-Treasurer ma)'
delegate the ministerial functions of the office m another person or persons who
need not be OMEEA diroetom. Additional amhorized signatures shall include tile
Chair or Vice Chair, in the event the Secretary-Treasurer is unable to perform.
The Board shall institute a budg~ process and maintain financial records in
acco~ with generally accepted accounting principles.
Revised Amendment No. 3
Page 1
Section 3.
Section 22 of the Agreement is hereby mended to read as follows:
"22. cation ....................... ~ ............ v
tm ..... iq-v,=rk~ng ,,mi-.%,..,~--b: ....im, r,:z: her~m~. No modification of this
Agremnent si,all be valid unless in writing and signed by an authorized
i=pte~entative of the governing bodies of the Member L~tilit~s, exo'pt that
amendments to add Member Utilities who are municipal utilities n~d only be
eaecuted by ali meml~ers of the Board."
City of Forest Grove
City of Monmouth
City of Milton-Freewater
City of Ashland
Springfield Utility Board
Canby Utility Board
City of McMinnville
70114~amendno3.f~3(7126195)
Revised Amendment No. 3
Page 2