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RESOLUTION NO.5110 <br />A RESOLUTION APPROVING A REVISED METHODOLOGY FOR <br />DETERMINING THE CONTRIBUTION IN LIEU OF TAX PAYMENT ON <br />ELECTRICITY SALES FROM THE EUGENE WATER & ELECTRIC BOARD. <br />The City Council of the City of Eugene finds that: <br />A <br />.Since 1943, the Eugene Water & Electric Board (EWEB) has made contributions <br />in lieu of tax(CILT) payments to the City. For more than 50 years, theamount of the CILT <br />payments hasgenerally equaled 6% of gross operating revenues of the electric utility. <br />B. <br />In November 1976, voters approved a new City Charter. Section 44(4) of the <br />Charter providesthat the 1976 rates of CILT payment would not change unless approved by the <br />EWEB Board and the City Council. <br />C. <br />Since 1976, the City and EWEB have entered into a number of agreements <br />revising and refining the amount of and methodology for CILT payments. Those revisions have <br />included differentiating between retail and wholesale power sales, with the CILT payments for <br />retail based on gross operating revenues and the CILTpayments for wholesale based on net <br />revenues. Other revisions have included specific arrangements for sales from EWEB’s steam <br />operation and certain large-scale power contracts to individual customers. Changes in the <br />electric power market have made it challenging to determine net revenues for wholesale power <br />sales from particular electric generating sources, as well as making it difficult to predict what the <br />CILT payments might be, which in turn has made itincreasinglydifficult for the City and EWEB <br />to reliably forecast those potential revenues as part of preparing the future budgets. <br />D. <br />EWEB and the City now desire to revisethe CILT agreements to create a <br />predictable and stable payment stream and a more streamlined methodology for calculating CILT <br />payments. <br />NOW, THEREFORE, <br />BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EUGENE, a <br />municipal Corporation of the State of Oregon, as follows: <br />Section 1. <br />Based on the above findings, which are hereby adopted, the City Council <br />approves a change in the payments received from EWEB pursuant to Section 44(4) of the <br />Eugene Charter of 2002.Beginning in January 2015, EWEB’s CILT payments to the City will <br />consist of two components: (a)a percentage of operating revenues from retail electric sales, as <br />further defined in a Memorandum of Understanding between the City and EWEB, and (b) an <br />annual payment of no less than $825,000which will replace the more volatile wholesale and <br />other miscellaneous revenuebased CILT payments. <br />Resolution -Page 1of 2 <br />