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Approving the amendment of the Fiscal Year 2020 Capital Budget providing for expenditures for the capital purposes of the Philadelphia Gas Works (including the supplying of funds in connection therewith) subject to certain constraints and conditions, and acknowledging the receipt of the Revised Forecast of Capital Budgets for Fiscal Years 2021 through 2025, as amended.
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WHEREAS, Section IV.2(b) of the Agreement between the City of Philadelphia and the Philadelphia Facilities Management Corporation (“PFMC”) relating to the management and operation of the Philadelphia Gas Works (“Management Agreement”) requires (“PFMC”) to prepare annually for the Philadelphia Gas Works (“PGW”) a proposed capital budget for the ensuing year and a forecast for the six (6) years next following comprising the ensuing budget year and the five (5) years next following; and
WHEREAS, Section IV.2(b)of the Management Agreement also requires that the proposed capital budget and forecast be submitted to the Director of Finance and the Gas Commission for their review and for submission of said budget and forecast, together with their recommendations thereon, to the Council of the City of Philadelphia (“City Council”) for its approval; and
WHEREAS, Section IV.2(b)of the Management Agreement further requires that the proposed capital budget and forecast include a showing of the amounts needed and how the funds required are to be supplied as between funds generated within the business through charges to customers or otherwise and funds to be obtained through capital loans (“Financing Plan”); and
WHEREAS, Section IV.2(c)of the Management Agreement requires that all PGW expenditures be made pursuant to approved budgets; and
WHEREAS, PGW filed with the Philadelphia Gas Commission (“Gas Commission”) on January 2, 2019 a proposed Fiscal Year (“FY”) 2020 Capital Budget of One Hundred Forty-Nine Million Six Hundred Fifty-Six Thousand Dollars ($149,656,000) (“FY 2020 Capital Budget” or “Budget”) and a Five Year Forecast of Capital Budgets ( FY 2021 - FY 2025) (“Forecast”); and
WHEREAS, the Gas Commission’s review of the Budget in its FY 2020 Budgets/Oversight Proceeding culminated in deliberations taken at a public meeting held on April 9, 2019 at which the Gas Commission endorsed a proposed FY 2020 Capital Budget in an amount not to exceed One Hundred Twenty-Seven Million Seven Hundred Eight Thousand Dollars ($127,708,000) including a revised Financing Plan and revised Forecast with related constraints and conditions related thereto; and
WHEREAS, on May 8, 2019, PGW filed with the Gas Commission a FY 2020 Compliance Capital Budget of One Hundred Twenty-Seven Million Seven Hundred Eight Thousand Dollars ($127,708,000) including its revised Financing Plan and revised Forecast; and
WHEREAS, on July 24, 2019, the Mayor approved Bill No. 190385, wherein City Council approved the foregoing FY2020 Compliance Capital Budget; and
WHEREAS, on May 6 2019, PGW submitted a proposed amendment that would increase the FY 2019 Capital Budget by Six Hundred Fifty Thousand Dollars ($650,000) (“Amendment 1”) so as to allow for the reauthorization of a certain line item originally included in the FY 2018 Capital Budget that was to expire on August 31, 2019; and
WHEREAS, on August 6, 2019, PGW submitted a request for a further proposed amendment that would increase the FY 2019 Capital Budget by Six Hundred Forty-Nine Thousand Dollars ($649,000) (“Amendment 2”) so as to allow for the reauthorization of an additional FY 2018 Capital Budget line item that was to expire on August 31, 2019
WHEREAS, on September 10, 2019, PGW revised its initial filings to specifically request that both budget reauthorizations be applied to the FY 2020 Capital Budget, to avoid any conflict with budget reauthorization filing deadlines contained in the Capital Program Protocols (“Final Amendment”); and
WHEREAS, the Gas Commission’s review of the proposed Final Amendment culminated in deliberations taken at a public meeting held on November 12, 2019, whereupon the Gas Commission endorsed amendments to the FY 2020 Capital Budget adding One Million Two Hundred Ninety-Nine Thousand Dollars ($1,299,000), thereby increasing the total Budget to an amount not-to-exceed One Hundred Twenty-Nine Million Seven Thousand Dollars ($129,000,007) with related constraints and conditions; and
WHEREAS, on November 15, 2019 PGW filed with the Gas Commission an Amended FY 2020 Compliance Capital Budget of One Hundred Twenty-Nine Million Seven Thousand Dollars ($129,000,007) (“Amended Compliance Budget”), a revised Financing Plan and a revised Forecast; and
WHEREAS, City Council seeks to provide for evolving capital needs and related expenditures of PGW by incorporating the Gas Commission endorsed amendment to the FY 2020 Capital Budget reflected in Exhibit 1 hereto; now, therefore,
THE COUNCIL OF THE CITY OF PHILADELPHIA ORDAINS:
SECTION 1. Approval and Acknowledgment
Pursuant to the provisions of Section IV.2(b)and IV.2(c) of the Management Agreement, the Council:
A. does hereby approve the Fiscal Year (“FY”) 2020 Capital Budget for the Philadelphia Gas Works (“PGW”) in total amount not exceeding One Hundred Twenty-Nine Million Seven Thousand Dollars ($129,000,007) as reflected in the Amended FY 2020 Compliance Capital Budget and associated revised Financing Plan, subject to the provisions of Section 3-6 of this Ordinance; and
B. does hereby acknowledge receipt of PGW’s Revised Forecast of Capital Budgets for FY 2021 - FY 2025.
SECTION 2. Spending Authorization
The amounts shown in the approved Amended FY 2020 Compliance Capital Budget (“Amended Compliance Budget”) are hereby authorized for the purposes shown and shall be available for expenditure as of FY 2020 defined as September 1, 2019 through August 31, 2020 in an aggregate amount not to exceed One Hundred Twenty-Nine Million Seven Thousand Dollars ($129,000,007) as reflected in the Amended FY 2020 Compliance Capital Budget and subject to the provisions of Sections 3-5 of this Ordinance. The Amended Compliance Budget (including the revised Financing Plan) is attached as Exhibit 1.
SECTION 3. Constraints and Conditions - Capital Program Protocols
During the lifespan of the line items in the approved FY 2020 Amended Compliance Budget, as a condition of approval, PGW shall adhere to the “Capital Program Protocols” (“Protocols”) adopted by the Gas Commission on April 9, 2019. Said Protocols are incorporated herein by reference.
SECTION 4. Constraints and Conditions - Line Item Transfer Exclusions
Except as necessitated by Emergency Circumstances as set forth in the Protocols at Part 1 - Subpart I.3, the following line items shall be unavailable as a source of spending authority in transfer transactions:
A. Replace/Add Shutoff Valve at LNG Tank Passyunk (#53-02-1-01) ($650,000); and
B. Relocate LNG Switchgear at Passyunk (#52-02-2-03) ($649,000).
SECTION 5. Constraints and Conditions - Line Item Lifespan
Spending authority for the following line items shall expire as of August 31, 2020:
A. Replace/Add Shutoff Valve at LNG Tank Passyunk (#53-02-1-01) ($650,000); and
B. Relocate LNG Switchgear at Passyunk (#52-02-2-03) ($649,000).
SECTION 6. Constraints and Conditions - Line Item Spending Authorization
The total combined spending for the following line items shall not exceed the spending authorization for each project as approved in the FY 2018 Capital Budget:
A. Replace/Add Shutoff Valve at LNG Tank Passyunk (#53-02-1-01) ($650,000); and
B. Relocate LNG Switchgear at Passyunk (#52-02-2-03) ($649,000).
SECTION 7. Exhibit
Exhibit 1 referenced in this Ordinance and incorporated herein shall be kept on file by the Chief Clerk of City Council and shall be available to the public for inspection, reading or copying at reasonable times.
[Note: Exhibits to this Bill are on file in the Office of the Chief Clerk.]
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