AGENDA MEMORANDUM

Meeting Date:     September 22, 2008

From:                    Jack Rogers, Gas Director

Subject:                Resolution authorizing execution of the Sixth Amendment of the Depository Trust agreement to conform the City’s depository account for Florida Gas Utility

Staff Recommendation:

Staff recommends approval of the Sixth 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 $687,000.00.  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 now requires the City of Leesburg to increase the deposit to $782,000.000.

Options:

1.  Approve the resolution to conform the City’s depository account; or

2.  Such alternative action as the Commission may deem appropriate

Fiscal Impact: 

There is no fiscal impact to the operating budget.  The City of Leesburg retains ownership of the trust fund and Florida Gas Utility can only access the funds if the City fails to make timely payments for gas purchases.

Submission Date and Time:    9/17/2008 5:44 PM____

Department: _Gas__________________ Prepared by:  _Harmon Bynum_________                      Attachments:         Yes__X_   No ______ Advertised:   ____Not Required ___X__ Dates:   __________________________                       Attorney Review :       Yes_X_  No ____ _________________________________            Revised 6/10/04

Reviewed by: Dept. Head ___X____ Finance  Dept. ___________JB_____                                     Deputy C.M. _______EFS_________                                          Submitted by: City Manager ___________________

Account No. _________________ 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 SIXTH AMENDMENT OF THE DEPOSITORY TRUST AGREEMENT NECESSARY TO CONFORM THE CITY'S DEPOSITORY ACCOUNT, MAINTAINED FOR THE BENEFIT OF FLORIDA GAS UTILITY, TO THE LATEST REQUIREMENTS FOR THE AMOUNT OF THE DEPOSIT TO BE HELD IN ESCROW; AND PROVIDING AN EFFECTIVE DATE.

Whereas, The City of Leesburg obtains natural gas for 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 Utilities requires the city to maintain a depository account with SunTrust Bank, as Trustee, which is currently $687,000.00; 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 it should require the city to increase the deposit to $782,000.00; and

Whereas, it is in the best interest of the City of Leesburg, its citizens and natural gas customers, to comply with the increased deposit requirement of Florida Gas Utility,

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 Sixth 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 an increase in the city’s deposit to the required level of $782,000.00, and to place into the depository account any additional funds needed to achieve the required amount of deposit

            This Resolution shall become effective immediately. 

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the _22^nd  day of _September__ 2008.

                                                                           __________________________________

                                                                             Mayor

ATTEST:

____________________________________

City Clerk