HomeMy WebLinkAboutResolution - 5413 - Addendum To Energy Agreement - TTU & TTUHSC - Power Plant Construction Agreement - 01_23_1997RESOLUTION NO. 5413
Item #44
January 23, 1997
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor Pro Tempore of the City of Lubbock BE and is hereby authorized and
directed to execute for and on behalf of the City of Lubbock an Addendum to an Energy
Agreement by and between the City of Lubbock and Texas Tech University and Texas Tech
Health Sciences Center, and any associated documents, which Addendum shall be spread upon
the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a
part of this Resolution as if fully copied herein in detail.
Passed by the City Council this 23rd day of January , 1996. 7.
All
ALEX `TY" CO KE, MAYOR PRO TEMPORE
ATTEST:
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Kayth(!)Darnell, City Secretary
APPROVED AS TO CONTENT:
ebra Forte', Assistant City Manager
APPROVED AS TO FORM:
Dbnald G. Vandiver, First
City Attorney
DV:gs%ccdoes\EnergyA.res
November 20, 1996
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THE STATE OF TEXAS
COUNTY OF LUBBOCK §
RESOLUTION NO. 5413
Item #44
January 23, 1997
This Addendum to an Energy Agreement executed February 25, 1988, is entered
into by and between the City of Lubbock, a Texas home rule municipal corporation
(hereinafter called "City") and Texas Tech University and Texas Tech University Health
Sciences Center (both hereinafter called "University").
WITNESSETH:
WHEREAS, the City and the University did heretofore on the 25th day of
February, 1988, enter into an Energy Agreement wherein City agreed to construct and
operate an electrical and steam generation facility upon the campus of the University for
generation of electricity and steam for sale to the University; and
WHEREAS, it is the desire of the City and the University to amend the terms of
said Energy Agreement, including the Power Plant Construction Agreement, the Lease
Agreement and the Utilities and Steam Purchase Agreement, all of which agreements
were incorporated into the main agreement by reference, in accordance with the terms of
this Addendum; NOW THEREFORE:
BE IT RESOLVED BY THE CITY AND THE UNIVERSITY AS FOLLOWS:
The parties hereto desire to amend certain portions of the Energy Agreement
entered into by and between the City and the University on the 25th day of February,
1988, as is set out in detail hereafter.
Section IB on page A-2. This Section shall be amended by adding thereto the
following language:
The City shall have the right to add an additional unit to this site and the
University agrees to allow the City to any undeveloped area adjacent to the
existing site to accommodate either an additional power and steam generation unit
or an expanded power and steam generation facility. The University shall provide
the required area within one (1) year of the City's notice that it intends to add a
unit or expand the existing plant. A map denoting the location available for such
expansion shall be attached hereto as Exhibit A.
Section IIA on page B-2. This Section shall be amended to read as follows:
The term of this Lease Agreement shall be for a period of forty (40) years,
unless earlier terminated or extended in accordance with the provisions of this
Lease Agreement and/or the provisions of the Energy Agreement. This Lease
Agreement may not be terminated so long as the University is receiving either
steam or electricity from the cogeneration plant.
Section IVE on page B-6. This Section shall be amended by adding thereto the
following language:
The University also shall have the right to approve the plans of any proposed
expansion of the cogeneration as to appearance. However, if the University
requires the plan to be modified for aesthetic reasons, then the University hereby
agrees to pay half of any additional cost of design and construction to make the
requested changes by the University.
Section VI on page B-8. This Section shall be amended by adding thereto the
following language.
In the event that the University shall require the City to relinquish the premises
involuntarily for any reason other than breach of this contract prior to the end of the term
of this Lease Agreement, the University will pay the City the market value of the
cogeneration facilities and operation as determined by averaging the value assigned to
such facilities and operation as determined by two appraisers, with each party having the
right to appoint one appraiser at which time ownership of the facilities shall (1) transfer to
the University or (2) the University shall pay the City the cost of removing the facilities
from the University's premises.
Subsection IIIB 1 on page C-5. This subsection shall be amended to read as
follows:
2
The term of the electric service provisions of this Agreement shall be
thirty (30) years unless earlier suspended in accordance with this Agreement.
Such term shall begin upon the 12th day of My June, 1990, which was the date
of first delivery of steam pursuant to this Agreement.
Subsection III132 on page C-6. This subsection shall be amended to read as
follows:
The term of the steam purchase provisions of this Agreement shall be for
thirty (30) years unless earlier suspended in accordance with this Agreement.
Such term shall begin upon the date of first delivery of steam pursuant to this
Agreement.
Subsection I1I133 on page C-6. This subsection shall be amended to read as
follows:
Following expiration of the original term for electrical service and steam,
the City and the University shall have the option to continue this Agreement for
an unlimited number of five (5) year additional terms upon mutual agreement by
the parties hereto expressed in writing prior to expiration of the original term or
any extension thereof by the parties.
Subsection III134 on page C-6. This subsection shall be deleted in its entirety and
shall be of no further force and effect.
Subsection IjIC 1 on page C-7. This subsection shall be amended to read as
follows:
The price paid by Texas Tech for electricity, pursuant to this Agreement,
shall be just and reasonable and shall be the lower of (1) the best electric rate
which has been offered to customers in the University's rate class by the City, or
(2) the lowest competitive rate that is otherwise available to the University for
electric power delivered at the Lubbock campus. It is understood that such rate
may change from time to time consistent with this agreement.
Section IIIG on page C-14. This Section shall be amended to read as follows:
The City agrees to supply steam at the steam quality and volume herein
defined at the availability for each University fiscal year as set out in Exhibit "C-
3", Steam Availability. If at the end of each fiscal year it is calculated that the
steam availability for the year was less than that defined for that year, as set out in
Exhibit "C-3", then the University shall be credited the cost of generating steam
to reach the required availability. The cost of this steam shall be calculated per the
formula on Exhibit "C-3".
Beginning in the second year and each year thereafter, the number of days
of actual availability over and above the scheduled availability will be set aside in
a Reserve Days Account. Each year that actual availability is less than scheduled,
due to mechanical or operational problems, days will be drawn from the Reserve
Days Account as long as days are available. The City will exercise due diligence
in accordance with the prevailing standards of the industry to ensure that all
mechanical and operational problems are repaired as quickly as possible to
prevent the unnecessary use of reserve account days.
Subsection IVA4 on page C-15. This subsection shall be amended to read as
follows:
The failure of the City to offer the University the lower of (1) the best
electric rate which has been offered to customers in the University's rate class by
the City or (2) the lowest competitive rate that is otherwise available to the
University delivered at the Lubbock campus.
THIS Addendum is executed by the parties hereto this 23 day of January,
199& 7.
TEXAS TECH UNIVERSITY AND CITY OF LUBBOCK:
TEXAS TECH HEALTH SCIENCES
CENTER: A
N-3
ALEX "TY" 1C' OKE, MAYOR PRO
TEMPORE
A ST: ATTEST:
Sear City 4e retaryKaythie Darnell
APPROVED AS TO CONTENT:
Wo�bertMassengale, Director of Electric
Utilities
0
APPROVED AS TO FORM:
x6ML�R
D nald G. Vandiver, First Assistant City
Attorney
ddcon/Techcon3.doc
October 25, 1996
T .
This Advertising Agreement, hereinafter referred to as the "Agreement," made and
entered into this 8th day of November , 19 96 , by and between the
CITY OF LUBBOM TEXAS, a home rule municipal corporation, hereinafter referred to as
the "City," and TEXAS TECH UNIVERSITY, hereinafter called "University."
WITNESSETH:
WHEREAS, the City owns and operates the Lubbock Power and Light, hereinafter
referred to as "LP&L"; and
WHEREAS, the University plans to construct a sports arena for the purpose of housing
certain sports events; and
WHEREAS, the City deems it advantageous to itself and to the operation of LP&L to
purchase certain advertising at the arena and other benefits under an Agreement containing
mutually satisfactory conditions and covenants; and
WHEREAS, the University desires to sell advertising in its arena complex and provide
certain other benefits: and
WHEREAS, the LP&L Board of the City of Lubbock has approved and recommends that
the City enter into this Agreement with the University for the term hereinafter designated; and
WHEREAS, the City Council of the City of Lubbock accepts the recommendation of the
LP&L Board and finds that execution of this Agreement will properly serve the public interest of
the citizens of this City and will further the economic development of the City pursuant to the
economic development laws of the state of Texas, including but not limited to V.T.C.A., Local
Government Code, Section 380.001 et seq.; and
WHEREAS, this agreement will be consistent with the economic development programs
of the City of Lubbock, Texas, as established in the City of Lubbock Economic Development
Plan adopted by the City Council of the City of Lubbock on February 8, 1990.
NOW THEREFORE, in consideration of the mutual covenants, terms, conditions,
privileges, obligations and agreements herein contained, the City and the University hereby
mutually undertake, promise and agree, each for itself, and its successors and assigns, as follows:
ARTICLE I
1.1 This Agreement shall become effective upon execution by both parties hereto. The term
of this Agreement shall be for thirty (30) years from the date of the opening of the sports
arena. The City and University may mutually agree in writing to extend this Agreement
for additional five -years terms, subject to all the other terms and conditions of this
Agreement.
ARTICLE II
2.1 The University hereby grants to City the right to advertisement of electrical services in
the sports arena. The University agrees to provide an area for the City to advertise electric
services below any executive skybox occupied by the City and at the scorers's table for
the advertisement of electrical services. This agreement shall not prohibit the University
from selling advertising space at the scorer's table to other advertisers on a rotating basis,
the parties having agreed that the City's advertising space shall be separate from any such
rotating advertising space. The City shall be allowed to review the architect's plans for
the interior space of the arena upon completion of the plans, and shall receive special
consideration to move the location of their scorer's table advertisement to a more
favorable site subject to any agreements between the University and other advertisers
prior to the City's request for relocation. During the remainder of this agreement, the City
shall receive special consideration to move the location of its advertising upon the
availability of more favorable sites, provided however, that the availability of such sites
to the City shall be made subject to any agreements between the University and other
advertisers prior to the City's request for relocation. The University shall be required to
give City notice of availability of any new site or new availability of existing sites.
2.2 With the prior written consent of the University, which consent shall not be unreasonably
withheld, the City may (1) assign its advertising space under this agreement to any
advertiser ; to any successor by operation of law or otherwise; or (2) sublet its advertising
space or any part thereof.
2.3 All advertisements shall be in good taste, professionally developed, and presented so as to
be inoffensive to the general public and of such high caliber as to contribute to the
establishment of the arena's facilities as prestigious locations for commercial advertising.
2.4 City shall pay all expenses associated with its advertising. City will maintain all visual
audio and animated components of its display, and agrees to release the University and
University personnel from liability for any loss or damage to property of City resulting
from fire, theft or other occurrence while on display under the terms of this Agreement.
City shall indemnify and hold harmless the University and University personnel from any
liability for any loss or damage occasioned by City's displays and/or the actions of City,
its employees or agents to the extent permitted by law. City shall also hold University
M
harmless for any copyright or patent infringement claims arising out of the display of
advertising on University premises to the extent permitted by law.
2.5 University shall furnish the wall spaces and/or other areas in the condition required to
accept the City's advertisements, and shall provide electrical current, if necessary, in
reasonable amounts for the lighting of advertising material and the operation of displays.
Without incurring any liability for property damage, University shall provide normal
security surveillance and protection of the displays against vandalism or trespass and will
report to City the discovery of any damage or unsightly appearance requiring immediate
correction.
2.6 The University shall also provide the City with a midcourt corporate suite (Skybox) for
ten (10) years at a rate of $25,000 per year to be paid on September 1 of each calendar
year after completion of the arena; ten (10) season passes for all University sports events
in the arena each year for ten (10) years, and with priority parking passes for every two
(2) seats in the corporate suite for ten (10) years. The City shall have a right of first
refusal on such items for the remainder of -the term of this Agreement. Such payments
shall be made from current revenues available to the City. The tickets and parking passes
shall be sold to the City at fair market value.
2.7 The University further agrees to assist the City as allowed by Texas law, at the City's
option and at a time within the sole discretion of the City, in obtaining legislation
favorable to resolving the City's obligations regarding the coliseum located on the
campus of the University.
ARTICLE III
3.1 This Agreement shall be subject to cancellation by the City, should any one or more of
the following events occur:
a. The University does not build the proposed arena.
b. The abandonment of the arena for longer than one hundred eighty (180) days; or
C. The issuance by any court of competent jurisdiction of an injunction preventing or
restraining the use of the Arena in such a manner as to substantially restrict the
City, through no fault of its own, from exercising its rights or privileges under this
Agreement and the remaining in force of such injunction for at least sixty (60)
days; or
C. The breach by the University of any of the material terms, covenants or conditions
of this Agreement to be kept, performed and observed by the University, and the
failure of the University to remedy such breach, within thirty (30) days of receipt
of written notice from the City of the existence of such breach, or if more than
thirty (30) days shall be required because of the nature of such breach, if
University shall fail within said thirty (30) days period to commence and
thereafter diligently proceed to cure such default; or
3.2 In the event any condition of default shall occur City, then, or at any time thereafter,
while such breach is continuing, shall have the right, at its election, to terminate this
Agreement by giving at least five (5) days written notice to the University, at which time
City will then quit and surrender the advertising area to the University.
3.3 This Agreement shall be subject to cancellation by the University, if one or more of the
following conditions of default by City occur:
a. If City shall neglect or fail to perform or observe any of the terms, provisions,
conditions or covenants herein contained and to be performed or observed by City
and if such neglect or failure should continue for a period of thirty (30) days after
receipt by City of written notice of such neglect or failure or, if more than thirty
(30) days shall be required because of the nature of the default, if City shall fail
within said thirty (30) day period to commence and thereafter diligently proceed
to cure such default; or
b. If City shall fail to take possession of its advertising site; or
C. If City shall abandon all or any part of its advertising sites.
3.4 In the event of breach by the University or unilateral cancellation of this Agreement by
the University, the University agrees to rebate a pro rata portion of the City's advertising
payments. Calculation of the rebate will be effected using the Table attached hereto as
Exhibit A, which table is made a part of this agreement for all intents and purposes. Any
such rebate shall be paid out of current operating funds.
3.5 This Agreement may be terminated unilaterally by either party upon sixty (60) days
written notice to the other party of the termination. However, such unilateral termination
by the University shall be subject to repayment of the unused portion of the City's
advertising payments to the City as provided in Section 3.4 above. Unilateral cancellation
or breach by the City shall not require repayment of the unused portion of the advertising
payments.
A
ARTICLE IV
4.1 This Agreement constitutes the entire Agreement between the parties. No amendment,
modification or alteration of the terms, covenants and conditions contained in this
Agreement shall be binding unless the same shall be in writing, dated subsequent to the
date hereof and duly executed by the parties hereto.
ARTICLE V
5.1 Notices required herein may be given by registered or certified or express mail by
depositing the same in the United States Mail or by private courier in the continental
United States, postage prepaid. Either party shall have the right, by giving written notice
to the other, to change the address at which its notices are to be received. Until any such
change is made, notices to City shall be delivered as follows:
Name Director of Electric Utilities
City of Lubbock
Address 1625 13th Street
Lubbock, Texas 79402
Until any such change is made, notices to University shall be delivered as follows:
ARTICLE VI
6.1 Severabil ly - If one or more clauses, sections or provisions of this Agreement shall be
held to be unlawful, invalid or unenforceable, the parties hereto agree that the material
rights of either party shall not be affected thereby.
6.2 Incorporation of Required Provisions - The parties incorporate herein by this reference all
provisions lawfully required to be contained herein by any governmental body or agency.
6.3 Nonliability of Agents and Employees - No member, officer, agent or employee of the
City or University shall be charged personally or held contractually liable by or to the
other party under any of the terms or provisions of this Agreement or because of any
breach thereof or because of its or their execution or attempted execution.
6.4 Successors and Assigns Bound - This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the parties hereto.
6.5 Force Majeure - Neither the City nor the University shall be deemed in violation of this
Agreement if prevented from performing any of the obligations hereunder by reason of
strikes, boycotts, labor disputes, embargoes, shortages of material, acts of God, acts of the
public enemy, acts of superior governmental authority, weather conditions, riots,
rebellions, sabotage or any other circumstances for which the parties are not responsible
or which are not within their control.
6.6 Rules, Regulations and Procedures - University reserves the right to issue such rules,
regulations and procedures for activities and operations conducted at the Arena as
deemed necessary to protect and preserve the safety, security and welfare of the Arena
and all persons, property and facilities located thereon.
6.7 NCAA/Big 12 Rules and Regulations. This Agreement is made subject to the rules and
regulations of the NCAA and the Big 12 applicable to such agreements. A copy of such
rules and regulations is attached hereto as Exhibit B and made a part hereof for all intents
and purposes.
The parties hereto understand and agree that this instrument contains the entire agreement
between the parties hereto. The parties hereto further understand and agree that the other
party and its agents have made no representations or promises with respect to this
Agreement or the making or entry into this Agreement, except as in this Agreement
expressly set forth, and that no claim or liability or cause for termination shall be asserted
by either party against the other and such party shall not be liable by reason of, the
making of any representations or promises not expressly stated in this Agreement, any
other written or oral agreement with the other being expressly waived.
IN WITNESS WHEREOF, the parties have executed this Agreement, this 8th day
of November
ATTEST:
19 96
n
Secre r 5i
APP VED AS TO CONTENT:
obert Masseng e, Managing D' for
1
i
of Electric Utilities
APPROVED AS TO FORM:
Anita E. Burgess, City Attorney
HW:dp/ ISI-AGf.DOC1DN5 as df4
October 21, 1996
10
YEAR
BALANCE
PAYMENT
1997
$4,000,000
1998
$3,866,667
$133,333
1999
$3,733,333
$133,333
2000
$31600,000
$133,333
2001
$31466,667
$133,333
2002
$3,3331333
$1331333
2003
$3,200,000
$133,333
2004
$3,066,667
$133,333
2005
$2,933,333
$133,333
2006
$2,800,000
$133,333
2007
$2,666,667
$133,333
2008
$2,533,333
$1331333
2009
$2,400,000
$133,333
2010
$2,266,667
$133,333
2011
$2,133,333
$133,333
2012
$21000,000
$133,333
2013
$1,866,667
$133,333
2014
$1,733,333
$133,333
2015
$1,600,000
$133,333
2016
$1,466,667
$133,333
2017
$1,333,333
$133,333
2018
$1,200,000
$1331333
2019
$1,066,667
$133,333
2020
$933,333
$133,333
2021
$800,000
$133,333
2022
$666,667
$133,333
2023
$533,333
$133,333
2024
$400,000
$133,333
2025
$266,667
$133,333
2026
$133,333
$133,333
2027
$0
$133.333
EXHIBIT A