AGENDA MEMORANDUM

Meeting Date:           September 12, 2011

From:                          Jack Rogers, Gas Director

Subject:                       Resolution authorizing the Eighth Amendment of the Depository Trust Agreement to conform the City’s depository account for Florida Gas Utility.

Staff Recommendation:

Staff recommends approval of the Eighth Amendment to the Depository Trust Agreement to conform the City’s depository account for Florida Gas Utility to the latest requirements for the amount to be held in escrow.

Analysis:

The City of Leesburg obtains natural gas from Florida Gas Utility for resale to customers of the City.  As a condition of providing natural gas to the City of Leesburg, Florida Gas Utility requires the city to maintain a depository account with SunTrust Bank, as Trustee, which is currently $441,000.  Based on periodic review of natural gas pricing, the volume of gas utilized by the City of Leesburg and other variable factors, Florida Gas Utility has now decreased the required amount in the fund to $364,000. The City of Leesburg will receive a refund of $77,000. 

Options:

1.  Approve the Eighth Amendment of the Depository Trust Agreement; or

2.  Such alternative action as the Commission may deem appropriate

Fiscal Impact: 

$77,000 will be refunded to the gas fund.

Submission Date and Time:    9/8/2011 7:34 PM____

Department: ___Gas________________ Prepared by:  _____JR______________                      Attachments:         Yes _x__   No ______ Advertised:   ____Not Required _x___ Dates:   __________________________                      Attorney Review :       Yes _x__  No ____ _________________________________            Revised 6/10/04

Reviewed by: Dept. Head ________ Finance  Dept. _______JB_________                                    Deputy C.M. ___________________                                          Submitted by: City Manager ___________________

Account No. _042-0000-159-2200___ Project No. ___________________ WF No. ______________________ Budget  ______________________ Available _____________________

RESOLUTION NO. ___________

A RESOLUTION  OF  THE  CITY  COMMISSION  OF  THE CITY

OF LEESBURG,  FLORIDA,  AUTHORIZING  THE MAYOR AND

CITY CLERK  TO  EXECUTE  THE  EIGHTH AMENDMENT OF

DEPOSITORY  TRUST  AGREEMENT, WHICH IS NECESSARY

TO CONFORM THE CITY’S DEPOSITORYACCOUNT,  MAINTAINED FOR THE BENEFIT OF FLORIDA GAS UTILITY, TO THE LATEST REQUIREMENTS  FOR THE AMOUNT  OF THE DEPOSIT TO BE HELD IN ESCROW AND TO PERMIT A REFUND OF A PORTION OF THE DEPOSIT CURRENTLY HELD IN THE ESCROW ACCOUNT; AND PROVIDING AN EFFECTIVE DATE.

WHEREAS, The City of Leesburg obtains natural gas from Florida Gas Utility for resale to customers of the City; and

WHEREAS, as a condition of providing natural gas to the City of Leesburg, Florida Gas Utility requires that the City maintain a depository trust account with SunTrust Bank, as Trustee, which is currently in the amount of $441,000.00; and

WHEREAS, based on its periodic review of natural gas pricing, the volume of gas utilized by the City of Leesburg, and other variable factors, Florida Gas Utility has determined that the City may decrease the deposit to $364,000.00; and

WHEREAS,  it is  in the  best interest  of  the  City of Leesburg,  its citizens and natural gas customers, to comply with the decreased deposit requirement of Florida Gas Utility, and to obtain a refund of a portion of the deposit currently being held in the depository trust account.

NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Leesburg, Florida:

That the Mayor and City Clerk are hereby authorized and directed to execute the Eighth Amendment to the Depository Trust Agreement with SunTrust Bank, as Trustee, this Deposit Trust Agreement with Florida Gas Utility, and such other documents as are necessary to effectuate a decrease in the City’s deposit to the required level of $364,000.00, and to receive a refund in the amount of $77,000 that is currently held in the depository trust account.

THIS RESOLUTION shall become effective upon its passage  and adoption according to

law.

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a

regular meeting held the _12th____ day of __September_____, 2011.