HomeMy WebLinkAboutB- 5 Staff Report Electric Division Budget Amendment PUBLIC HEARING
TO: HONORABLE MAYOR AND MEMBERS OF THE AZUSA CITY COUNCIL
FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES
DATE: May 5, 2003
SUBJECT: ELECTRIC DIVISION BUDGET AMENDMENT
RECOMMENDATION
It is recommended that the Azusa City Council:
1) Conduct a Public Hearing to amend existing budget, under Electric Division Substation
Project, for an additional increase of $5.5M (Five Million Five Hundred Thousand Dollars) to
pay Edison the costs for interconnecting facilities for Kirkwall Substation.
2) Authorize staff to disburse the $5.5M amount to Edison pursuant to the terms and conditions
set forth in the Edison/Azusa Engineering & Design Agreement that was approved in principle
by Azusa Utility Board on April 28, 2003.
BACKGROUND
As part of the City’s new distribution Substation Project, Edison will need to build interconnecting
facilities to serve Kirkwall Substation. The cost of these facilities are estimated at $5.5M. During
project planning, staff had anticipated that Edison would finance construction of interconnection
facilities. As customarily done in previous projects, such as Azusa Substation upgrades, the cost
would be paid over the life of the project, thru regular monthly installments. These Edison’s costs
were treated as monthly expenses under Operating Budget and not Capital Improvement Project.
However, in late January 2003, Edison informed Azusa Light & Water that it will no longer offer
customer financing and Edison will require the $5.5M upfront payment before construction could
commence. As such, this substantial amount was not budgeted last year in Electric Division’s
Substation Project.
Edison and the City of Azusa will enter into an Engineering & Design Agreement for constructing
Edison’s interconnection facilities to serve new Kirkwall Substation. This Agreement was approved in
principle by Azusa Utility Board during their regular meeting held on April 28, 2003. The Agreement
includes terms and conditions for disbursement of this $5.5M amount.
FISCAL IMPACT
The $5.5M amount will be withdrawn initially from Electric Reserves and will be replenished when
Revenue Bond proceeds are made available which is anticipated to be closed in late summer this
year. Staff is currently coordinating with City Treasurer and Interim Finance Director for issuance of
Revenue Bonds to cover the Substation Project costs.
Prepared by: Federico Langit Jr. PE
Senior Electrical Engineer