Colton Municipal Code Ch. 3.44 Electric System Revenue Fund

Footnotes:

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Editor's note— Ord. No. O-09-02, §§ 1—3, adopted July 2, 2002, amend Ch. 3.44, in its entirety, to read as herein set out. Prior to inclusion of said ordinance, Ch. 3.44 pertained to similar subject matter. See also the Code Comparative Table and Disposition List.

As used in this chapter, the terms that are initially capitalized and not otherwise defined herein shall have the respective meanings ascribed to them in the 2002 Installment Purchase Agreement, the Indenture of Trust relating to the 2002 Bonds (the "2002 Indenture"), between the Authority and the Trustee named therein, or as otherwise provided herein. Such capitalized terms and the meanings ascribed thereto shall survive the termination, cancellation or expiration of the 2002 Installment Purchase Agreement, the 2002 Indenture or any other applicable agreement.

(Ord. No. O-09-02, § 1, 7-2-2002)

(a) The following fund and accounts are hereby created or continued, as applicable, each of which is to be held by the Treasurer separate and apart from all other funds and accounts held by the Treasurer:

Electric System Revenue Fund and the following accounts therein:

(i) Electric System Revenue Account (the "Revenue Account");

(ii) Electric System Maintenance and Operation Account (the "M&O Account");

(iii) Electric System Qualified Obligations Account (the "Qualified Obligations Account");

(iv) Electric System Surplus Revenue Account (the "Surplus Revenue Account") and the Subordinate Qualified Obligations Sub-account (the "Subordinate Qualified Obligations Sub-account") therein; and

(v) Operating Reserve Account.

(b) The Treasurer shall maintain the Electric System Revenue Fund and the accounts therein so long as any of the Qualified Obligations or Subordinate Qualified Obligations remain Outstanding.

(Ord. No. O-09-02, § 2, 7-2-2002)

The Treasurer shall deposit the Gross Revenues of the Electric System as received in the Revenue Account into a bank account separate and apart from other accounts of the City. On or before the 20th day of each calendar month, the Treasurer shall withdraw the entire amount on deposit in the Revenue Account and shall allocate and deposit such amount in the indicated priority to the following accounts, sub-account and fund:

(i) First, there shall be transferred to the M&O Accounts an amount sufficient for the payment of Maintenance and Operation Expenses for the following month;

(ii) Second, there shall be transferred to the Qualified Obligations Account the amount of Qualified Obligation Service necessary to be deposited (assuming equal monthly deposits) such that all Qualified Obligations may be made as scheduled (to the extent not already transferred to such Account in such month or not otherwise on deposit in such Account) or, if less, the entire amount of Gross Revenues then available for transfer, to such Account; and

(iii) Third, all moneys remaining in the Revenue Account after the above transfers have been made shall be transferred to the Surplus Revenue Account. Moneys in the Surplus Revenue Account at any time shall be used in the following order of priority:

(a) For the payment of all Additional Installment Payments (as defined in the 1997 Installment Sale Agreement) that have accrued or been incurred or that are then due and payable.

(b) For transfer to the Operating Reserve Account an amount equal to one year's Maximum Annual Qualified Obligation Service, payable as follows: over a period not to exceed twelve months, and in each such month not less than one-twelfth of one year's Maximum Annual Qualified Obligation Service, until such Account contains an amount equal to one year of Maximum Annual Qualified Obligation Service; provided, however, that if any amount is withdrawn from this Account for this purpose, it shall be replenished with all available funds in the Surplus Revenue Account after transfers have been made pursuant to clause (a) of this paragraph (iii);

(c) For the payment of all additional installment payments, additional purchase payments or similar payments that have accrued or have been incurred or that are then due and payable with respect to any Qualified Obligations issued or incurred to prepay 1997 Installment Payments;

(d) For transfer to the Subordinate Qualified Obligations Sub-account within the Surplus Revenue Account the amount of Subordinate Qualified Obligation Service necessary to be deposited (assuming equal monthly deposits) such that all Subordinate Qualified Obligations may be made as scheduled (to the extent not already transferred to such Sub-account in such month or not otherwise on deposit in such Sub-account) of if less, the entire amount of moneys in the Surplus Revenue Account after transfers have been made pursuant to clauses (a), (b) and (c) of this paragraph (iii);

(e) For the payment of all Additional Purchase Payments that have accrued or have been incurred or that are then due and payable;

(f) For the payment of all debt service or similar payments that have accrued or have been incurred or that are then due and payable on any bond, note, warrant, evidence of indebtedness, contract, instrument or other agreement which is payable from Gross Revenues of the Electric System on a basis that is subordinate and junior to the payment of the Subordinate Qualified Obligations;

(g) For the payment of all additional installment payments, additional purchase payments and other similar payments that have accrued or have been incurred or that are then due and payable with respect to any such bond, note, warrant, evidence of indebtedness, contract, instrument or other agreement referred to in clause (f) of this paragraph (iii);

(h) For transfer to any fund or account under any trust agreement, indenture of trust or similar agreement relating to the Qualified Obligations, the 2002 Bonds, any other Subordinate Qualified Obligations or any obligation referred to in clause (f) of this paragraph (iii) to the extent of the deficiency in any such fund or account;

(i) For transfer to the City's general fund, on a monthly basis, in an amount set by the City Council, but not greater than the following: One-twelfth of twenty percent of the Electric System's Gross Revenues of the preceding Fiscal Year (less (x) the costs and expenses relating to sales of electricity for resale during such Fiscal Year, (y) contributions in aid of construction during such Fiscal Year and (z) the public benefit charge collected pursuant to Assembly Bill 1890) or all available moneys in the Surplus Revenue Account if less than such amount;

(j) For transfer to the City's general fund (which additional transfers shall be considered to be a loan, subject to such terms and conditions of repayment as the City Council may establish); provided, however, that before such additional transfer may be made (i) no deficiency shall exist with respect to the amounts required to be on deposit in the Surplus Revenue Account as provided in clauses (a) through (h) of this paragraph (iii) and (ii) the Net Revenues of the Electric System, as shown on the books of the City for each of the last two completed Fiscal Years (as shown by an audit certificate or opinion of an independent certified public accountant or firm of certified public accountants employed by the City), shall have amounted to at least 1.25 times the sum of (i) the Maximum Annual Qualified Obligation Service on all Qualified Obligations to be outstanding immediately subsequent to such additional transfer and (ii) the Maximum Annual Subordinate Qualified Obligation Service on all Subordinate Qualified Obligations to be outstanding immediately subsequent to such additional transfer; provided, however, that for the purpose of applying the restriction in this clause (j), the following may be added to Net Revenues; an allowance for earnings arising from any increase in charges made for service from the Electric System which has become effective prior to said additional transfer but which, during all or any part of said last two completed Fiscal Years, was not in effect, in an amount equal to ninety-five percent of the amount by which the Net Revenues would have been increased if such increase in charges had been in effect during the whole of said last two completed Fiscal Years, as shown by the audit certificate or opinion of an independent certified public accountant or firm of certified public accountants employed by the City; and

(k) For any lawful purpose of the Electric System (excluding any further loans to the City).

Notwithstanding the foregoing, moneys remaining on deposit in the Surplus Revenue Account at any time shall be transferred as needed to the Qualified Obligations Account in the amount necessary (or all moneys in the Surplus Revenue Account if less than the amount necessary) to make up any deficiency in the Qualified Obligations Account.

(Ord. No. O-09-02, § 3, 7-2-2002; Ord. No. O-08-12, § 1, 7-17-2012; Ord. No. O-04-16, § 1, 6-7-2016; Ord. No. O-10-18, § 1, 11-6-2018)

A. For a period of five years from the effective date of this Section, the City Council may not set electric utility service rates for City of Colton customers in an amount that exceeds those rates set by City of Colton Resolution No. R-39-13 (adopted June 18, 2013) (the "Rate Freeze").

B. The City Council may increase electric utility service rates beyond the maximum amount set forth in subsection A. only by resolution, duly adopted by a unanimous vote of all members of the City Council, and making written findings that there exists an emergency to the City's Electric System that requires such an increase in rates.

C. Upon the fifth (5th) anniversary of the effective date of this Section, the Rate Freeze shall have no further force or effect and the City Council may set increased electric utility service rates as otherwise permitted by law. However, it may not "back-bill" or apply rates retroactively to the Rate Freeze period.

D. As a voter-approved ordinance, pursuant to Elections Code Section 9217, this Section 3.44.040 shall apply notwithstanding any ordinance, resolution or other action of the City to the contrary.

(Ord. No. O-04-16, § 2, 6-7-2016)