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HomeMy WebLinkAboutOrdinance 16399-04-2005®RDINANCE No. ~~'~ a~as AN ORDINANCE AMENDING CHAPTER 2 ~~ADMINISTRATION" OF THE CODE OF THE CITY 4F FORT WORTH (1.986), AS AMENDED, DY PROVIDING THAT CONTRACTS FOR THE PURCHASE OF ELECTRICITY MAY BE EXECUTED BY THE CITY MANAGER WITHOUT CITY COUNCIL APPROVAL SO LONG AS THE TERM OF SUCH CONTRACT DUES NOT EXCEED FORTY-EIGHT MONTHS AND SUFFICIENT FUNDS HAVE PREVIOUSLY BEEN APPROPRIATED BY THE CITY COUNCIL FOIL THAT PURPOSE; AND FURTHER PROVIDING THAT THIS ORDINANCE IS CUMULATIVE; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. DE IT ORDAINED ~Y THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS THAT: SECTION 1. Subsection (g) of Section 2..g ("Contract execution; change orders") of the Code of the City of Fort Worth, Texas (1986), as previously amended, is hereby amended to read as follows: Sec. 2-9. Contract execution; change ©rders. (g) Any contract for the purchase of electricity maybe executed by the City Manager without City Council approval provided that {i) the terrxa of any such contract does not exceed forty-eight (48) months and (ii) sufficient funds have previously been appropriated by the City Council for that purpose. SECTION Z. This Ordinance shall be cumulative of all ordinances of the City, except where the provisions of this Ordinance are in direct conflict with the provisions of such other ordinances, in which case the conflicting provisions of such other ordinances are hereby repealed. SECTION 3. The sections, paragraphs, sentences, clauses and phrases of this Ordinance are severable. If any portion of this Ordinance is declared illegal or unconstitutional by the valid final judgment or decree of any court of competent jurisdiction, such illegality or unconstitutionality shall not affect the legality and enforceability of any of the reaxa.aining portions of this Ordinance. SECTION 4. This Ordinance shall be in full force and effect upon its adoption. AND IT IS SO ®ItDAINED. ADOPTED AND EIwFECTIVE: `ly ~ aEti ~ M&C: ~~' c~~~ APPROVED AS TO FORM AND LEGALITY: By: Peter Vaky Assistant City Attorney 2 Ce~y caf "art VII®rth, l'~xas r end ~~r~~ ~nr~m~ar~cat~®r~ COUNCIL ACTION: Approved on 4/26/2005 -Ordinance #'i6399-04-2005 ©ATE: Tuesday, Apri126, 2005 LOG NAME: 173ELECTRICITY REFERENCE NO.: C-20675 SUBJECT: Adopt an Ordinance Amending Section 2-9 of the City Code in Order to Allow the City Manager to Execute Contracts for the Purchase of Electricity RECOMIiFIENDATION: ft is recommended that the City Council adopt the attached ordinance amending Section 2-9 of the City Code in order to allow the City Manager to execute contracts far the purchase of electricity so long as {i) term of any such contract does not exceed 48 months, and {ii) sufficient funds have previously been appropriated by the City Council far that purpose. DISCUSSION: On January 1, 2002 the retail electricity market in Texas was deregulated. As a result large electric utility customers and customers with numerous service locations became eligible to aggregate their accounts to shop far electricity., As one of the largest customers, the City took immediate steps to minimize its costs by entering into a contract for electricity. Under this contract program the City has realized avoided cos#s compared to the regulated Price-to-Beat rates. The competitive market for electricity is very fluid. Prices change several times daily. In order to lock in prices, the City must have the flexibility to execute a contract in a very shor# amount of time. To this end, an July 10, 2001 the City Council adopted Ordinance No.14689 (M&C G-93298) authorizing the City Manager to execute a contract for the purchase of electricity without City Council approval provided the term of the contract was less than 24 months. The City has entered into two major supply contracts since Electric Deregulation began. The first contract, for seventeen months, had a nominal energy price of $O.A46 per kWh. The second contract, for twenty-four months, has a nominal price of $0.53867 per kWh, Recent quotes far a new cantract indicate that prices have risen 25% to 40%. The trend for electricity prices is that they are increasing and they are expected to continue to increase for the forseeable future. Based on recent quotes, longer-term contracts have lower prices. This ordinance wi11 allow-the City to take advantage of these trends and lower prices by allowing the City Manager to execute an electricity contract with a term of up to 48 months. City staff may negotiate lower prices associated with the longer terms, and will be able to lock in those prices for a longer period of time. City staff will notify the City Council of the terms and conditions of any new contract as scan as possible following execution. Pursuant to Section 252.022(a)(15} of the Texas Local Government Code, purchases of electricity are exempt from competitive bidding and competitive proposal requirements. FISGAL INFORIViATIONICERTIFICATION: The Finance Director certifies that this action will have no material effect on City funds. Lagname: 03ELECTRICITY Fage I of 2 TO FundlAccounflCenters FROM FundlAccountlCenters Submitted for City Manaaer's,.Off_.ice #-~ Richard Zavala (Acting) (8222) Ori inatin De artment Head: Bridgette Garrett (859 S} Additional Information Contact: Danny Reed (8945) Logna~ne: ~3ELECTRICITY Pale 2 pf 2