HomeMy WebLinkAboutResolution No. 5110
COUNCIL RESOLUTION NO.5110
A RESOLUTION APPROVING A REVISED METHODOLOGY
FOR DETERMINING THE CONTRIBUTION IN LIEU OF TAX
PAYMENT ON ELECTRICITY SALES FROM THE EUGENE
WATER & ELECTRIC BOARD.
PASSED: 8:0
REJECTED:
OPPOSED:
ABSENT:
CONSIDERED:July 14, 2014
RESOLUTION NO.5110
A RESOLUTION APPROVING A REVISED METHODOLOGY FOR
DETERMINING THE CONTRIBUTION IN LIEU OF TAX PAYMENT ON
ELECTRICITY SALES FROM THE EUGENE WATER & ELECTRIC BOARD.
The City Council of the City of Eugene finds that:
A
.Since 1943, the Eugene Water & Electric Board (EWEB) has made contributions
in lieu of tax(CILT) payments to the City. For more than 50 years, theamount of the CILT
payments hasgenerally equaled 6% of gross operating revenues of the electric utility.
B.
In November 1976, voters approved a new City Charter. Section 44(4) of the
Charter providesthat the 1976 rates of CILT payment would not change unless approved by the
EWEB Board and the City Council.
C.
Since 1976, the City and EWEB have entered into a number of agreements
revising and refining the amount of and methodology for CILT payments. Those revisions have
included differentiating between retail and wholesale power sales, with the CILT payments for
retail based on gross operating revenues and the CILTpayments for wholesale based on net
revenues. Other revisions have included specific arrangements for sales from EWEB’s steam
operation and certain large-scale power contracts to individual customers. Changes in the
electric power market have made it challenging to determine net revenues for wholesale power
sales from particular electric generating sources, as well as making it difficult to predict what the
CILT payments might be, which in turn has made itincreasinglydifficult for the City and EWEB
to reliably forecast those potential revenues as part of preparing the future budgets.
D.
EWEB and the City now desire to revisethe CILT agreements to create a
predictable and stable payment stream and a more streamlined methodology for calculating CILT
payments.
NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EUGENE, a
municipal Corporation of the State of Oregon, as follows:
Section 1.
Based on the above findings, which are hereby adopted, the City Council
approves a change in the payments received from EWEB pursuant to Section 44(4) of the
Eugene Charter of 2002.Beginning in January 2015, EWEB’s CILT payments to the City will
consist of two components: (a)a percentage of operating revenues from retail electric sales, as
further defined in a Memorandum of Understanding between the City and EWEB, and (b) an
annual payment of no less than $825,000which will replace the more volatile wholesale and
other miscellaneous revenuebased CILT payments.
Resolution -Page 1of 2