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HomeMy WebLinkAbout#15 JPA Board UAMPS Lassen MUD Agenda Item # 15 TRUCKEE O Public Utility District ACTION To: Board of Directors From: Stephen Hollabaugh Date: November 04, 2009 Subject: Consideration of Appointing a Director to the JPA Board with UAMPS and Lassen MUD 1. WHY THIS MATTER IS BEFORE THE BOARD This item involves appointing representative to serve on the Board of the newly formed Joint Powers Agency (JPA) between UAMPS, Lassen MUD and Truckee Donner PUD. 2. HISTORY Truckee Donner PUD adopted a resolution on July 1, 2009 to enter into a Joint Power Agreement to Establish the Municipal Utility Financing Authority. A possible project for the JPA could be a forward natural gas generation purchase project. Much of the cost of the Nebo generation comes from the cost of the fuel (natural gas). If the fuel cost can be lowered, the overall electric generation costs can be reduced. 3. NEW INFORMATION Utah Associated Municipal Power Systems (UAMPS) is investigating a natural gas prepay issue. UAMPS members have interest in the Nebo natural gas project. The natural gas (fuel) for the plant is a large portion of the cost to operate the plant. If the cost of natural gas can be reduced, the overall cost of electricity produced would be reduced. Issuer for Prepay Bonds would sell bonds while the proceeds would be used to make prepayment in exchange for future gas supplies. Issuer would sell the gas to UAMPS and UAMPS would take responsibility for resale of gas, scheduling, marketing, tracking and accounting. Issuer would assign all rights to gas revenue to bond trustee to repay bondholders. A California issuer has the following advantages: • Lower yield on the bonds due to higher state income taxes; • Broader market of sophisticated investors; • Secondary market transactions demonstrated up to 30 basis points benefit; and (estimate by financial analyst, McDonald Partners) The proposed issuer is a New JPA to be made up of the public entities Lassen MUD, Truckee Donner PUD, and DAMPS. Each JPA participant would appoint one member to the JPA Board. The JPA Board would authorize Gas Project and bond sale. Prepay investors have recourse only to the gas revenues. The JPA would have no operational staff or responsibilities, and would assign its rights and responsibilities under the prepay agreement to UAMPS. An annual JPA audit must be preformed. The physical address of the JPA is proposed to be the Lassen MUD office. The Joint Exercise of Powers Agreement for the formation of this JPA is included as Attachment 1. 4. FISCAL IMPACT If a new JPA is formed, the financial impact will be paid by UAMPS. No financial impact will be born by Truckee Donner PUD. However, purchasing gas through the JPA is expected to result in lower overall operating costs for the NEBO plant. 5. RECOMMENDATION Appoint a Member of the Board of Directors as the representative and Stephen Hollabaugh as the alternate to the JPA Board. Stephen Hollabaugh Michael D. Holley Assistant General Manager General Manager Attachment 1 JOINT EXERCISE OF POWERS AGREEMENT By and Among TRUCKEE DONNER PUBLIC UTILITY DISTRICT, LASSEN MUNICIPAL UTILITY DISTRICT and UTAH ASSOCIATED MUNICIPAL POWER SYSTEMS Dated as of November 1, 2009 Relating to MUNICIPAL UTILITY FINANCING AUTHORITY JOINT EXERCISE OF POWERS AGREEMENT THIS JOINT EXERCISE OF POWERS AGREEMENT, dated as of November 1, 2009, by and among the Truckee Donner Public Utility District, a public utility district organized and existing under and pursuant to the laws of the State of California, Lassen Municipal Utility District, a municipal utility district organized and existing under and pursuant to the laws of the State of California, and Utah Associated Municipal Power Systems, a joint action agency and political subdivision of the State of Utah, WITNESSETH WHEREAS, pursuant to the Joint Powers Act (capitalized terms used herein and not otherwise defined shall have the meanings given such terms in Section 1 hereof) two or more public agencies may enter into an agreement to exercise any power common to the contracting parties; and WHEREAS, pursuant to the Joint Powers Act the agreement to exercise any power common to the contracting parties may provide for the creation of a separate entity to administer the agreement; and WHEREAS, each of the Parties is a "public agency" as that term is defined in Section 6500 of the Joint Powers Act; and WHEREAS, each of the Parties hereto possesses one or more Utility Powers; and WHEREAS,the Parties desire to enter into this Agreement to provide for the exercise of their common Utility Powers on the terms and conditions herein provided; and WHEREAS, it is the desire of the Parties to establish the Municipal Utility Financing Authority as a public entity under the Joint Powers Act and this Agreement separate and apart from the Parties and for the Municipal Utility Financing Authority to administer this Agreement in exercising the common Utility Powers of the Parties and each power conferred upon the Authority by any law (whether currently in force or hereafter enacted) as an entity separate from the Parties; NOW, THEREFORE, the Parties, for and in consideration of the mutual promises and agreements herein contained, do agree as follows: SECTION 1. DEFINITIONS. Unless the context otherwise requires, the following terms shall have the meanings set forth below for all purposes of this Agreement: "Agreement" means this Joint Exercise of Powers Agreement, as the same may be amended and supplemented from time to time. "Applicable Participant Share" means, with respect to a Project, the Participant Share specified in the applicable Project Agreement as the minimum Participant Share necessary to object to a Board action pursuant to Section 6 or to treat such action as an Approved Action. "Approved Action" means any of the following: (i) a proposed action to be taken by the Board in connection with a Project pursuant to a written request or prior approval by Participants in the Project representing not less than the Applicable Participant Share; or (ii) an action taken by the Board in connection with a Project which has received the written consent or approval of Participants in the Project representing not less than the Applicable Participant Share; or (iii) an action taken by the Board with respect to a Project which is approved by each Director appointed by a Party where the Party is a Participant in the Project representing not less than the Applicable Participant Share. "Assistant Secretary"means the Assistant Secretary of the Authority. "Authority" means the Municipal Utility Financing Authority created and established pursuant to this Agreement, and its successors. "Board" means the Board of Directors established as the governing body of the Authority pursuant to Section 4(B). "Bond Act" means each of Article 2 of the Joint Powers Act, Article 4 of the Joint Powers Act, and any other State legislation, whether currently in force or hereafter enacted, which authorizes the Authority to issue Bonds. "Bonds" means bonds, notes, or other evidences of indebtedness, and certificates of participation representing rights to receive payments under leases or other agreements regardless of their structure, name or the statutory authority for their issuance. "Brown Act" means the Ralph M. Brown Act, constituting Sections 54950 through 54963 of the California Government Code as the same may be amended and supplemented, and any successor statute. "Chair"means the Chair of the Board pursuant to Section 4 (C)(1). "Controller"means the controller of the Authority. "Credit Enhancement" means: (i) with respect to Bonds or any other payment obligation of the Authority, a municipal bond insurance policy, a financial guarantee insurance policy, a letter of credit, a line of credit or other surety or guarantee instrument guaranteeing the payment when due of amounts due on such Bonds or other obligations; and (ii) with respect to a Public Finance Contract, a financial guarantee insurance policy, a letter of credit, a line of credit or other surety or guarantee instrument guaranteeing the payment when due of all or any portion of the payments under such Public Finance Contract. "Director"means a member of the Board in office pursuant to Section 4(B). 2 "Fiscal Year" means the fiscal year of the Authority being, until changed by resolution of the Board, the period from July 1 to and including the following June 30 except for the first Fiscal Year which shall be the period from the effective date of this Agreement to June 30, 2009. "Indenture"means an instrument providing for the issuance of Bonds and specifying the terms and conditions thereof and includes an indenture of trust, a trust agreement, a resolution, an order or any other instrument or proceeding. "Joint Powers Act" means the Joint Exercise of Powers Act constituting Chapter 5 of Division 7 of Title 1 of the California Government Code, as amended and supplemented, and any successor statute. "Lassen" means the Lassen Municipal Utility District, a municipal utility district organized and existing under and pursuant to the laws of the State of California and its successors. "Liquidity Support" means a letter of credit, line of credit, standby bond purchase agreement or other surety or guarantee instrument providing for the payment, subject to the conditions thereof, of the purchase price of Bonds tendered for purchase in accordance with the applicable Indenture. A Credit Enhancement with respect to Bonds may also constitute Liquidity Support if it provides for the payment of the purchase price of tendered Bonds as well as the principal of and interest on Bonds. "Organization Agreement" means the Utah Associated Municipal Power Systems' Amended and Restated Agreement for Joint Cooperative Action as the same may be amended and supplemented. "Participant" means, with respect to a Project, an entity which has entered into a Project Agreement with the Authority with respect to the Project. "Participant Share" means, with respect to a Participant in a Project, that percentage of the obligations, expenses and costs of the Authority with respect to the Project for which the Participant is responsible as set forth in the applicable Project Agreement. "Party"means each of Truckee Donner, Lassen, and UAMPS. "Prepaid Agreement" means an agreement pursuant to which the Authority prepays for a supply of natural gas or electricity. "Project" means a project or program for the exercise of a Utility Power or any other undertaking by the Authority in the exercise of its powers as to which the Authority has entered into a Project Agreement with one or more Participants. "Project Agreement" means, with respect to a Project, an agreement among the Authority and the Participants in the Project (or collectively, all the agreements between the Authority and each of the Participants in the Project) entered into pursuant to Section 6 pursuant to which, among other things, the each Participant in the Project agrees to pay its Participant Share of the obligations, expenses and costs of the Authority with respect to the Project and the 3 Authority agrees to make the capacity, output or other benefits of the Project available to the Participants in the Project. "Public Finance Contract" means a contract or arrangement to place Bonds, investments of the Authority or any agreement which secures Bonds, in whole or in part, on the interest rate, currency, cash-flow or other basis desired by the Authority, including without limitation, interest rate swap agreements, currency swap agreements, forward payment conversion agreements, futures agreements, contract providing for payments based on levels of, or changes in, interest rates, currency exchange rates, stock or other indices, contracts to exchange cash flows or a series of payments, and contracts to hedge payment, currency, rate, spread, commodity price or similar exposure, including floors and caps, swaptions, options, puts and calls. "Reimbursement Agreement" means an agreement pursuant to which the Authority is obligated to make payments to reimburse advances under Credit Enhancement or a Liquidity Support, to pay interest thereon, and to pay fees and expenses of the provider of the Credit Enhancement or Liquidity. "Secretary"means the Secretary of the Authority. "State"means the State of California. "Treasurer"means the treasurer and auditor of the Authority. "Truckee Donner" means the Truckee Donner Public Utility District, a public utility district organized and existing under and pursuant to the laws of the State of California, and its successors. "DAMPS" means the Utah Associated Municipal Power Systems, a joint action agency and a political subdivision of the State of Utah, organized under the Utah Interlocal Cooperation Act, Title 11, Chapter 13 of the Utah Code Annotated 1953, as amended, and the Organization Agreement, and its successors. "Utility Powers" means all powers, express or implied, in connection with, or necessary or convenient for,providing a utility service, whether to retail or wholesale customers, including: (i) the acquisition, generation,transmission and/or distribution of electricity; (ii) the acquisition, exploration, extraction, transmission and/or distribution of natural gas, including as a fuel for electric generation facilities; (iii) the acquisition, collection, extraction, transportation, treatment and/or distribution of water and/or reclaimed water; (iv) the collection, transportation, treatment and/or disposition of wastewater and/or storm water; (v) the acquisition, operation and/or maintenance of a system or discrete facilities, or the acquisition of any commodity or commodities, in each case in connection with any of the foregoing utility operations; and/or (vi) the financing of any of the foregoing, including funding costs of issuance, capitalized interest and/or reserves in connection therewith. "Vice Chair"means the Vice Chair of the Board pursuant to Section 4 (C)(1). 4 Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neutral genders. Except where the context otherwise requires, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and associations, including districts, agencies and other public bodies, as well as natural persons. Unless otherwise indicated, references in this Agreement to paragraphs, subsections, and Sections are to such paragraphs, subsections, and Sections of this Agreement. Unless the context requires otherwise, the terms "herein," "hereof," "hereunder" and any similar terms, as used in this Agreement, shall refer to this Agreement as a whole and not to any particular provisions of this Agreement. Defined terms shall include any variant of the terms set forth in this Section. The term "and" in connection with a list of items shall mean each item in the list. The term "including" shall be construed to mean "including without being limited to." Whenever the written consent, approval or other action of multiple Parties or Participants is required or permitted hereunder, such consent, approval or other action need not be in a single writing but may be in multiple writings of substantially similar tenor signed and delivered by the Parties or Participants, as applicable, at different times. SECTION 2. PURPOSE. It is the purpose of this Agreement to create and establish the Authority as a public entity separate and apart from the Parties pursuant to the provisions of the Joint Powers Act, and to have the Authority administer this Agreement through which the Parties will jointly exercise their common Utility Powers and to have the Authority exercise those powers which are available to the Authority as a separate public entity and in addition to the common Utility Powers of the Parties. SECTION 3. TERM. This Agreement shall become effective in accordance with Section 18 hereof as of the date first above written and shall continue in full force and effect for a period of fifty (50) years from the date first above written, or until such earlier time as it is terminated by a writing signed by all the Parties; provided, however, that, notwithstanding the foregoing, this Agreement shall not expire or be terminated until the date on which: (i) all Bonds issued by the Authority shall have been paid or deemed paid in accordance with the applicable Indenture; (ii) all contracts and agreements of the Authority, including all Prepaid Agreements, Public Finance Contracts, and Reimbursement Agreements (a) shall have expired or been otherwise terminated and all amounts owed by the Authority thereunder have been paid or (b) the Authority's obligations thereunder have been transferred or assigned to another party in accordance with the terms of such contracts and agreements; and (iii) all other indebtedness and liabilities incurred by the Authority shall have been fully paid or defeased, satisfied and discharged in accordance with their respective terms. SECTION 4. THE AUTHORITY. A. CREATION OF AUTHORITY. (1) Pursuant to the Joint Powers Act, there is hereby created a public entity, separate and apart from the Parties, to be known as the Municipal Utility Financing Authority. The Authority's debts, liabilities and obligations do not and will not constitute debts, liabilities or 5 obligations of any Party; provided that nothing in this Agreement shall limit a Party's authority or ability to enter into, and be obligated under, Project Agreements with the Authority. (2) Except as provided in Section 4.A.3 hereof, neither the Authority nor the Board shall have the power or authority to bind the Parties, or any of them, to any debt, liability, contract, obligation, employee or agent of the Authority or the Board. No action or omission of the Authority shall be attributable to the Parties, and no action or omission of any Party shall be attributable to the Authority or the other Parties, except as expressly provided in Section 4.A.3 hereof. (3) As, but only to the extent, required by California Government Code Sections 895 and following, the Parties shall be jointly and severally liable to an injured person for any tort that may occur in the performance of this Agreement but only to the extent that one of the Parties or the Authority is otherwise liable under the law. Any Party that pays a tort judgment shall be entitled to contribution from the other Parties or Participants in the Project from which the judgment arose based on the portions established pursuant to Section 6 hereof. B. BOARD OF DIRECTORS. (1) The governing body of the Authority shall be a Board of Directors which shall consist of one Director appointed by each Party. Each Party may appoint a person to serve as its Alternate Director to act in the absence of the Director appointed by such Party. Each Director and Alternate Director shall serve at the pleasure of the Party appointing such Director or Alternate Director. A Director or Alternate Director may resign from office by a written notice from such Director or Alternate Director delivered to the Authority. A Director or Alternate Director may be removed from office by a written notice from the Party appointing such Director or Alternate Director delivered to the Authority. Any such resignation or removal shall be effective as of the date specified in the notice to the Authority and, if no effective date is specified in such notice, on receipt of such notice by the Authority. The Party which appointed a resigning or removed Director or Alternate Director shall use its best efforts to appoint a replacement for such Director or Alternate Director within twenty days of the effectiveness of the resignation or removal. (2) Directors and Alternate Directors shall not receive any compensation for serving as Directors or Alternate Directors but shall be entitled to reimbursement for any expenses actually incurred in connection with serving as a Director or Alternate Director if the Board shall determine that such expenses shall be reimbursed and there are unencumbered funds available for such purpose. C. OFFICERS; DUTIES; OFFICIAL BONDS. (1) As soon as practicable after the effectiveness of this Agreement, each Party shall appoint a Director to the Board, and the Directors shall hold an organizational meeting to: (a) Elect a Chair, a Vice Chair, and a Secretary of the Authority, and such other officers as the Board shall find appropriate, to serve the Board at its pleasure. 6 (b) Appoint an Assistant Secretary and such other officers and agents as they shall find appropriate. (c) Establish such committees as they shall find appropriate. (d) Provide for the powers and general directives for the work of such committees. (e) Determine the time and place of the regular meetings of the Authority to be held pursuant to Section D(2); provided that not less than one regular meeting of the Board shall be held each Fiscal Year. (f) Take appropriate measures to meet the financial requirements of the Authority and make other provisions as they shall find appropriate for the work of the Authority; provided that the Board shall not be authorized to require the payment of assessments or contributions from the Parties. Nothing is this subsection (e) limits the ability of a Party to voluntarily make a contribution to the Authority or limits the obligations of a Party under a Project Agreement to which it is a signatory. (2) The Chair of the Board shall preside at meetings of the Board and the Chair shall have such other powers, duties and responsibilities as shall be determined by the Board. (3) The Vice Chair of the Board shall have the usual and customary duties of such officer and such other powers, duties and responsibilities as shall be determined by the Board. (4) The Secretary shall perform the normal duties of the secretary of an organization such as the Authority, including maintaining custody of the records of the Board and the Authority, and the Secretary shall have such other powers, duties and responsibilities as are set forth herein or shall be determined by the Board. The Assistant Secretary shall perform such powers, duties and responsibilities of the Secretary in the absence of the Secretary or as shall be requested by the Secretary or directed by the Board. (5) Each of the Chair, the Vice Chair and any other officer of the Authority authorized by Board resolution is authorized to execute any and all Bonds, contracts, agreements, instruments and other documents on behalf of, and in the name of, the Authority. The Secretary or Assistant Secretary shall attest to the signature of an officer on any such Bond, contract, agreement, instrument and other document when required to do so by Board resolution. (6) The Treasurer of UAMPS shall serve as the Treasurer and Auditor of the Authority. The Treasurer shall have and discharge the powers, duties and responsibilities specified in the Joint Powers Act for the treasurer and the auditor of a separate entity established thereunder. Subject to the provisions of each Indenture providing for the powers and duties of a trustee or other fiscal agent, the Treasurer is designated as the depositary of the Authority to have custody of all money of the Authority from whatever source derived. Subject to the 7 provisions of each Indenture and any contracts authorized by the Board for the lease, operation or custody of Authority property, the Treasurer is designated as the public officer or person who has charge of,handles, and has access to all property of the Authority. The Treasurer shall file an official bond with the Secretary of the Authority in the amount of$1,000 or such greater amount as shall be specified by the Board. If and to the extent permitted by law, the Treasurer may satisfy this requirement by filing an official bond in not less than said amount obtained in connection with another public office so long as such official bond includes coverage of the Treasurer as such officer of the Authority. (7) The Controller of UAMPS shall serve as the Controller of the Authority. Subject to the applicable provisions of any resolution or Indenture authorizing the execution and delivery of any Credit Enhancement, Indenture, Liquidity Support, Prepaid Agreements, Public Finance Contract, Reimbursement Agreement or other agreement and providing for a trustee, paying agent or fiscal agent, the Controller shall have the powers, duties and responsibilities specified in the Joint Powers Act, and shall draw checks to pay demands against the authority when the demands have been approved by the Authority. (7) The Board shall have the power to appoint from time to time such other officers, agents, employees, counsel and accountants, and to specify their respective powers, duties and responsibilities, as it may deem necessary or convenient. (8) The Board shall have the power, to the extent permitted by the Joint Powers Act or any other applicable law, to delegate any of its functions to one or more members, committees of the Board, Directors, officers, employees or agents of the Authority or other persons, and to cause any of said members, committees, Directors, officers, employees or agents, or other persons, to take any actions for and in the name and on behalf of the Board or the Authority. D. MEETINGS OF THE BOARD. (1) Brown Act. All meetings of the Board, including regular, adjourned regular, special, and adjourned special meetings shall be scheduled, called, noticed, held and conducted in accordance with the provisions of the Brown Act and any other applicable law or regulation. (2) Regular Meetings. The Board shall hold not less than one regular meeting quarterly during each Fiscal Year. Unless otherwise provided by a resolution of the Board, all regular meetings shall be held at the principal office of Lassen in Susanville, California. The date or dates and time or times of the regular meetings shall be determined by the Board. (3) Special Meetings. Special meetings of the Board for any purpose or purposes may be called at any time by the Chair or a majority of Directors then in office. Special meetings of the Board may be 8 held at any place and time specified in the notice of the meeting which is consistent with the notice and other provisions of the Brown Act and any other applicable law or regulation. (4) Minutes. The Secretary shall cause to be kept minutes of meetings of the Board, including the regular, adjourned regular, special, and adjourned special meetings of the Board, and shall, as soon as possible after each meeting, cause a copy of the minutes to be delivered to each Director. (5) Quorum. Each Director shall have one vote. All three Directors (or the Alternate Director or Alternate Directors acting in the place of an absent Director or Directors) shall constitute a quorum for the transaction of business at a Board meeting; except that less than a quorum may adjourn a meeting to another time and place. Any action taken by the Board at a meeting shall require the affirmative vote of a majority of all three Directors (or the Alternate Director or Alternate Directors acting in the place of an absent Director or Director) constituting the quorum for the meeting; provided that none of the terms and conditions set forth in this Agreement, nor any of the procedures expressly provided for herein, may be altered, changed, or amended by such a vote, or by any means, except by written amendments to this Agreement executed by all Parties hereto. E. RULES AND REGULATIONS. The Authority may adopt, from time to time, by resolution of the Board, such rules and regulations for the conduct of its meetings and affairs as the Board determines are necessary or convenient. SECTION 5. POWERS. The Authority shall have any and all powers necessary or convenient to exercise common Utility Powers of the Parties and to exercise those powers which are available to the Authority as a public entity separate and apart from the Parties, including all powers which are incidental to express powers. All such powers, whether a Utility Power common to the Parties or a power separately conferred by law upon the Authority (whether currently in force or hereafter enacted), are specified as powers of the Authority. Without limiting the generality of the preceding paragraph, the Authority is hereby authorized, in its own name, to do any and all of the following: to sue and be sued; to make and enter into contracts, including but not limited to Prepaid Agreements, Public Finance Contracts, and Reimbursement Agreements; to employ agents, consultants, attorneys and employees; to acquire, construct, maintain and operate (or to provide for maintenance and operation of) any buildings, works or improvements; to acquire, hold or dispose of property, whether real or personal, tangible or intangible, wherever located; to issue Bonds; to pledge any property (whether real or personal, tangible or intangible and/or revenues or receivables) as security for Bonds, Public Finance Contracts, Reimbursements Agreements and/or other Authority obligations; and to receive gifts, contributions and donations of property, funds, services and other forms of assistance from persons, firms, corporations and any governmental entity. 9 SECTION 6. PROJECTS. In exercising its powers with respect to a Project, the Authority shall enter into a Project Agreement or Project Agreements with the Participants in such Project. Each Project Agreement shall include a provision to the effect that all obligations, expenses and costs of the Authority, including the administrative expenses of the Authority in connection with the Project and the Authority's obligations under contracts entered into in connection with the Project, such as but not limited to Bonds, Prepaid Agreements, Public Finance Contracts and Reimbursement Agreements, shall be payable by the Participants in accordance with their respective Participant Shares. The Participant Shares of all Participants in the Project shall equal one hundred percent (100%). In a Project with a single Participant, the Participant's Share shall be one hundred percent (100%). The Participant Share of each Participant in the Project and the Applicable Participant Share shall be specified in the applicable Project Agreement. No Party shall have any obligation under this Agreement with respect to the obligations, expenses and costs of the Authority in connection with a Project, but all such obligations, expenses and costs of the Authority shall be payable by the Participants in such Project pursuant to the applicable Project Agreement or Project Agreements. The Parties to this Agreement hereby agree that the Authority is to be equally available to each Party, and that in the event a Parry is proposing a Project whereby its Participant Share is equal to 100%, the other Parties will vote in favor of the Project and the corresponding Project Agreement, absent demonstrable reasonable grounds to vote in opposition thereto. SECTION 7. PARTICIPANT CONTROL OF PROJECTS. The provisions of this Section shall apply to all actions by the Board in connection with a Project other than Approved Actions which need not comply with any of the requirements of this paragraph. The authorization by the Board of any action in connection with a Project shall be subject to objection by the Participants in the Project as provided in this Section. Within fifteen days of the Board authorizing any action with respect to a Project, the Secretary shall transmit a notice of such action to each Participant in the Project which shall describe the action authorized by the Board. Unless otherwise specified in the applicable Project Agreement, such notice may be sent by facsimile, internet or other electronic means if acknowledgement of receipt of such sending is generated or such notice may be sent by certified mail, postage prepaid, return receipt requested addressed to the person and address specified in the Project Agreement for the receipt of notices. The Authority shall not implement any action authorized by the Board in connection with a Project within fifteen days of the Secretary sending the notice thereof to Participants as provided above. The Authority shall not implement any action authorized by the Board in connection with a Project if, within fifteen days of the Secretary sending the notice thereof to Participants as provided above, the Authority receives written objection to such action by Participants in the Project representing not less than the Applicable Participant Share. SECTION 8. MANNER OF EXERCISING POWERS. To the extent required by Section 6509 of the Joint Powers Act, the manner in which the Authority shall exercise its powers and perform its duties is and shall be subject to the restrictions upon the manner in which UAMPS could exercise such powers and perform such duties. The manner in which the Authority shall exercise its powers and perform its duties shall 10 not be subject to any restrictions applicable to the manner in which any other public agency could exercise such powers or perform such duties, whether such agency is a Party to this Agreement or not. SECTION 9. DISPOSITION OF ASSETS. At the end of the term hereof or upon the earlier termination of this Agreement as set forth in Section 3, after payment of all expenses and liabilities of the Authority, all property of the Authority both real and personal, and all funds of the Authority, shall automatically vest in the Parties in proportion to the payments made by each of the Parties to or for the account of the Authority in connection with its Projects. SECTION 10. BONDS. A. ISSUANCE OF BONDS. The Authority may, when authorized by any Bond Act and by resolution of the Board, issue Bonds for the purpose of raising funds for the exercise of its powers or otherwise to carry out its purposes under this Agreement. Said Bonds may have such terms and conditions as shall be authorized by the Board. B. BONDS SPECIAL OBLIGATIONS. The Bonds, including the principal, redemption price and purchase price thereof, and the interest thereon, shall be special obligations of the Authority payable solely from, and secured solely by, the revenues, funds and other assets pledged therefor under the applicable Indenture(s) and shall not constitute a charge against the general credit of the Authority. The Bonds shall not be secured by a legal or equitable pledge of, or lien or charge upon or security interest in, any property of the Authority or any of its income or receipts except the property, income and receipts pledged therefor under the applicable Indenture(s). Neither the faith and credit nor the taxing power of the State of California, Truckee Donner, Lassen, UAMPS or any other public agency shall be pledged to the payment of the principal, redemption price or purchase price of, or the interest on, the Bonds. The issuance of the Bonds shall not directly, indirectly or contingently obligate the State or any public agency, including the Truckee Donner, Lassen or UAMPS to levy or pledge any form of taxation or to make any appropriation for the payment of the Bonds. The payment of the principal, redemption price or purchase price of, or interest on, the Bonds shall not constitute a debt, liability or obligation of the State or any public agency, including Truckee Donner, Lassen or DAMPS, but shall constitute only the special obligation of the Authority as provided in the applicable Indenture(s). No covenant or agreement contained in any Bond or Indenture shall be deemed to be a covenant or agreement of any Director, officer, agent or employee of the Authority in his individual capacity and no Director or officer of the Authority executing a Bond shall be liable personally on such Bond or be subject to any personal liability or accountability by reason of the issuance of such Bond. 11 SECTION 11. SPECIFIC AUTHORIZATION. Without limiting the scope of the general powers of the Authority contained elsewhere in this Agreement, in the exercise of a common Utility Power of the Parties or a power conferred upon the Authority by any law (whether currently in force or hereafter enacted) as an entity separate from the Parties, and when authorized by resolution of the Board, the Authority may enter into Public Finance Contracts and Reimbursement Agreements. Such Public Finance Contracts and Reimbursement Agreements may have such terms and conditions as shall be authorized by the Board. SECTION 12. ACCOUNTS AND REPORTS. A. BOOKS AND RECORDS. All funds of the Authority shall be strictly accounted for in books of account maintained by, or on behalf of, the Authority which shall report all receipts and disbursements of Authority funds. The Authority shall establish and maintain such funds and accounts as may be required by good accounting practice and by each Indenture for outstanding Bonds (to the extent such duties are not assigned to trustees under the Indentures). The books and records of the Authority shall be open to inspection at all reasonable times by each Party. The Authority shall require that each Indenture provide that the trustee appointed thereunder shall establish suitable funds and furnish suitable financial reports in connection with the funds held by such trustee. B. AUDIT. The Treasurer shall cause an independent, annual audit to be made of the books of account and financial statements of the Authority, and shall cause such financial statements and audit to be filed and reported, in compliance with the applicable requirements of the Joint Powers Act. Any costs of the audit, including contracts with, or employment of, certified public accountants or public accountants in making an audit pursuant to this Section shall be borne by the Authority and, to the extent not paid from funds provided pursuant to one or more of the Authority's Projects, shall be a charge against any unencumbered funds of the Authority available for that purpose. SECTION 13. FUNDS. Subject to the applicable provisions of each Indenture, which may provide for a trustee to receive, have custody of, invest and disburse funds that constitute Authority funds, the Treasurer of the Authority shall receive, have the custody of, invest and disburse Authority funds pursuant to accounting procedures approved by the Board, and shall make the disbursements necessary or convenient in carrying out any of the provisions or purposes of this Agreement. SECTION 14. NOTICES. Notices and other communications hereunder shall be sufficient if such notice is sent by facsimile, internet or other electronic means if acknowledgement of receipt of such sending is 12 generated or such notice may be sent by certified mail, postage prepaid, return receipt requested addressed to the person and address specified in this Agreement for the receipt of notices. Notices and other communications hereunder to the Authority shall be sent to the following: Notices and other communications hereunder to a Party shall be sufficient if delivered: to the Director appointed by such Party. SECTION 15. INDEMNIFICATION. To the full extent permitted by law and to the extent the Authority has unencumbered funds available therefor, including amounts paid under Project Agreements for such purpose, the Board may authorize indemnification by the Authority of any person who is or was a Director, Alternate Director or an officer, employee or other agent of the Authority, and who was or is a party, or is threatened to be made a party, to a proceeding by reason of the fact that such person is or was such a Director, Alternate Director, officer, employee or other agent of the Authority, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such proceeding, if such person acted in good faith and in a manner such person reasonably believed to be in the best interests of the Authority and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlawful and, in the case of any action by or in the right of the Authority, acted with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. SECTION 16. CONTRIBUTIONS AND ADVANCES. Without limiting the power of the Authority to accept contributions from persons other than the Parties, contributions or advances of public funds and of the use of personnel, equipment or property may be made to the Authority by the Parties hereto for any of the purposes of this Agreement. Any advance of funds by a Party may be made subject to repayment, and in such case shall be repaid, in the manner, and from the available Authority funds, agreed upon by the Authority and the Party making such advance. SECTION 17. IMMUNITIES. All of the privileges and immunities from liabilities, exemptions from laws, ordinances and rules, all pension, relief, disability, workers' compensation, and other benefits which apply to the activity of officers, agents, employees or other representatives of a Party when performing their respective functions within the territorial limits of their public agency, shall apply to them to the same degree and extent while engaged as a Director, officer, agent, employee or other representative of the Authority or while engaged in the performance of any of their functions or duties under the provisions of this Agreement whether within or outside of the boundaries of the applicable Party. 13 SECTION 18. CONSULTANTS AND ADVISORS. The Authority may employ the services of independent counsel, including bond and other special counsel, financing, engineering, utility, commodity and other consultants and advisors, and accountants and auditors in connection with the Projects undertaken pursuant to this Agreement, including the issuance of Bonds and the entry into Prepaid Agreements, Public Finance Contracts and Reimbursement Agreements in connection therewith. The fees and expenses of such counsel, consultants, advisors, accountants and auditors, and the expenses of the Authority in connection with such Projects, shall, to the extent not paid from funds received pursuant to one or more Project Agreements, including Bond proceeds, be paid from any unencumbered funds of the Authority available for such purpose. SECTION 19. AMENDMENTS. This Agreement shall not be amended, modified, or altered except by a written instrument duly executed by each of the Parties. SECTION 20. EFFECTIVENESS. This Agreement shall become effective and be in full force and effect and a legal, valid and binding obligation of each Party at 9:00 a.m., California time, on the first date as of which each Party shall have received from the others an executed counterpart of this Agreement, together with a certified copy of a resolution of the governing body of such Parry approving this Agreement and the execution and delivery hereof. SECTION 21. PARTIAL INVALIDITY. If any one or more of the terms, provisions, promises, covenants or conditions of this Agreement shall to any extent be adjudged invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, each and all of the remaining terms, provisions, promises, covenants and conditions of this Agreement shall not be affected thereby, and shall be valid and enforceable to the fullest extent permitted by law. SECTION 22. SUCCESSORS. This Agreement shall be binding upon and shall inure to the benefit of the successors of the Parties hereto. No Party may assign any right or obligation hereunder without the consent of the other Parties. SECTION 23. MISCELLANEOUS. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. The section headings herein are for convenience only and are not to be construed as modifying or governing the language in the section referred to. 14 Each of the Parties represents and warrants that it is duly organized and validly existing under the laws of the state under which it is organized and exists and possesses the common powers referred to in the recitals hereof. Nothing in this Agreement shall be construed as a limitation on the rights of the Parties to exercise the common powers referred to in the recitals hereof outside of this Agreement. This Agreement is made in the State, under the Constitution and laws of the State, and is to be construed as a contract made and to be performed in the State without regard to conflicts of law principles. This Agreement is the complete and exclusive statement of the agreement among the Parties with respect to the subject matter hereof, and this Agreement supersedes and merges all prior proposals, understandings, and other agreements, whether oral, written, or implied in conduct, between the Parties relating to the subject matter of this Agreement. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed and attested to by their proper officers thereunto duly authorized, as of the day and year first above written. Dated: 2009 TRUCKEE DONNER PUBLIC UTILITY DISTRICT By: J. Ron Hemig, President of the Board Approved as to form: Steven C. Gross, District Counsel Attest: By: Barbara H. Cahill, Secretary 15 Dated: , 2009 LASSEN MUNICIPAL UTILITY DISTRICT By: Fred Nagel, President of the Board Approved as to form: Hal Gartner, District Counsel Attest: By: Jerri Kresge, Board Secretary Dated: , 2009 UTAH ASSOCIATED MUNICIPAL POWER SYSTEMS By: Douglas O. Hunter, General Manager Approved as to form: Matthew F. McNulty, III, General Council Attest: By: Jacqueline Coombs, Assistant Secretary 16