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Home My WebLink AboutTR-57-88 TOWN OF NEWCASTLE Y k... �[mss✓. REPORT File # Res. # By-Law # c MEETING: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE DATE: July 4, 1988 REPORT #: TR-57-88 FILE #: SMUT: ASSOCIATION OF MUNICIPALITIES OF ONTARIO - GASAMO CONSORTIUM RECOMMENDATIONS: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. That this report be received; and 2. That the attached By-Law be forwarded to Council for approval. BACKGROUND AND COMMENT: On March 24, 1988, the Association of Municipalities of Ontario signed a contract appointing GAS Purchase Direct to arrange a direct gas purchase transaction for all of Ontario's Municipalities interested in reducing gas bills. Under gas deregulation, natural gas users can purchase gas directly from western producers at discount prices not available from local utilities. The gas will continue to be carried by Trans Canada Pipe Lines Ltd. and distributed to all Municipal facilities by local utilities. However, savings are generated by the difference between the purchase price of the gas by GASAMO and the price at which it is sold back to the local distributor. Savings which can be as much as 20% are calculated by GASAMO, and quarterly rebate cheques will be sent based on Page - 2 TR-57-88 ASSOCIATION OF MUNICIPALITIES OF ONTARIO - GASAMO CONSORTIUM consumption. As a fee for this service, GASAMO will deduct 10% of the first years savings from the rebate cheques. There is no initial fee and as a result no risk for the Municipality. In year two (2) and each subsequent year of the program, Gas Purchase shall be entitled to a renewal and administration fee of one half the commission charged in year one, payable in the same manner as in year one. GASAMO now includes over fifty (50) municipalities and related public institutions including Metro Toronto, the City of Sudbury, Town of Lindsay and City of Mississauga. Currently in the process of obtaining approval are the Town of Ajax and the Regional Municipality of Durham. For the information of Council, the Town of Newcastle's gas consumption for 1987 is valued at $40,140.88. With the approaching completion of the New Administrative Facility as well as the Arena, it is anticipated that the consumption of gas will increase substantially. Because the user remains a full service customer of the local distributor company (ie. Consumers Gas) , and enjoys the same level of service, there is no risk of short supply. If for any reason the producer(s) supplying GASAMO members with their natural gas was to run into a supply problem, the local distributor company would provide the gas at a higher price. As gas is scheduled to commence flowing approximately November 1, 1988, it is essential that the Agency Agreement be executed and that the consumption data be forwarded to GASAMO as soon as possible. See Schedules "A" and "B" attached. Page - 3 TR-57-88 ASSOCIATION OF MUNICIPALITIES OF ONTARIO - GASAMO CONSORTIUM After review and analysis of the proposal by the Treasury Department, it is recommended that the proposal be accepted and that the Mayor and Clerk be authorized to execute the Agency Agreement. Respectfully submitted, Recommended for presentation to the Committee, (J.R. Blanchard, Y. Iqtseff, reasurer. Chief Ad�n7rative Officer. LAB/hjm Attachments I THE CORPORATION OF THE TOWN OF NEWCASTLE BY-LAW NUMBER 88- Being a By-Law to authorize the entering into a Agreement with GASPURCHASE DIRL'CT LTD. The Municipal Council of the Corporation of the Town of Newcastle Hereby Enacts as follows: l That the Mayor and Clerk are hereby authorized to execute, on behalf of the Corporation of the Town of Newcastle, and seal with the Corporate Seal, an Agreement between GASPURCHASE DIRECT LTD. and the Corporation dated this } day of July, 1988, which agreement is attached hereto and marked Schedule "A". By-Law read a first and second time this day of July 1987. By-Law read a third time and finally passed this day of July 1988. i Mayor Clerk t: .f - - - - - GASAMO NATURAL GAS CONSUMPTION FORM CONTACT PERSON: ADDRESS: TELEPHONE: FAX: INSTITUTION NAME: UTILITY: 1988 Gas Consumption (cubic meters) TOTAL �p Decem. CUBIC May �� August Sept. Octob. Nevem_ CUB]Address Accounts Rate Jarwary febrvary March Ap- c w N BOW. TOWN HALL 23195 FIRE BUILDING 3125 BELL BUILDING q921 952 742 510 1155 ORONO ARMOURIES 6 1155 BOW. ARENA 6 2314 2312 2105 212 70746 NEW. FITNESS CTR. 6 18634 18767 18153 15192 - 3687 PARKS DEPT. 6 2038 1011 638 NEW ADMIN. FACILI 47000 SQ. FT. OF FLO R AREA HEAT BY 5 YDRO T ERMO F RNACES. INPU 1500,0 0 BTUH OUTPUT 1200 0 0 BTUH NET RATE 1,043 000 BT HR. N. CONCOURSE, WAS ROOMS, ONCES ION, KI CHEN E C. 350 S OF F OR SP E HEAT D BY 1 - TRAN MODEL 060 FURNACE INPUT 600 MBH, UTPUT 62 MBH DRESS NG ROOPS 3400 Q. FT. OF FLO R AREA HEATED BY 2 - TRANE MODEL CRNC 010 INPUT 100 MB OUTPU 77 MBH & 2 - RANE M DEL CR 015 I PUT 15 MBH 0 TPUT 1 5 MBH COMP ROOM Z416 NI R00 1000 FT. F FLOO AREA EATED. Y 1 - ANE C C 005 NPUT 5 MBH 0 TPUT 3 MBH 108851 TOTAL CUBIC METERS --) 32017 30212 27275 19347 ILLJS><=zzv:lr zo- GASAnoc!e ASSOCaJ71o1L O! iluniCirALITIES OF ONTAR10 s'PL�'AS�'PRINT:• PLEA ST PRINT'• �"�"�•-7°r°'ta- Ost:i°_ a5J 1Vf (416) 513-1441 °r c.11ect °t (4f�) 511-12oe GASAMO NATURAL GAS CONSUMPTION FORM ' CONTACT PERSON: FAX: INSTITUTION NAME: ADDRESS: UTILITY: TELEPHONE: 1987 Gaa Caasumptiaa (cubic meters) TOTAL - August Sept_ Oetob. Nevem_ Oe`M'' CUB*: Rata January febrvary March April May June 1,1 METERS Fscilit�ANresa Acuoat� �•_:.� BOW. TOWN HALL 6 0 0- 0 v _, 0 a BELL BUILDING 6 1057 836 771 405 a �a Q i ORONO ARMOURIES 6 1523 1 7 BOW. ARENA 6 2320 1881 2258 263 3 0 0 20 1258 1748 1150 1980 12881 NEW. FITNESS CTR. 6 3008 17277 18345 4396 10515 8872 5275 7181 0569 13779 5790 19170 164177 TOTAL CUBIC METERS--M> 5293 7339 7011 16928 10754 8980 5342 7268 12564 19248 22586 29650 222963 rLEASI IZTUAN TO- GASAliOc/e ASSOCIATI01<OI MuiiCl2�LiTIHS OF Oo. u,31 "PLEASEPRINT" "Pl�'ASEPRINT' 199 Vaieersit7 Jveano,Toronto, Oat�ris. t15J lost (416) 593-1441 or c*11ect at (416) 531-129• 03/24/88 1 7:39 JOHNSTON & BUCHAN OTTAWA 017 SCHEDULE "A" AGENCY AGREEMENT THIS AGREEMENT made in duplicate dated as of �+ day of , 1988 is made BETWEEN GASPURCIIASF DIRECT LTD. a corporation incorporated under the laws of Canada (hereinafter called "GasPurchaae" ) AND CORPORATION OF THE TOWN OF NEWCASTLE a municipality innor:porated under the lawn of the Province of Ontario (hereinafter called "t.hn Muni ripality" ) . WHEREAS The parties, in consideration of the mutual promises made herein, agree as follows: 1 . Appointment of Agent The Municipality hereby appoints GasPurchaae as its exclusive agent to perform the services described in this Agreement . 2 . Delivery of Offer (a) GasPurchaae agrees to obtain for the Municipality one or more offers to sell natural gas in accordance with the Municipality' s requirements within 180 clays of the time this agreement is signed. (b) An offer to sell natural gas to the Municipality shall be deemed tQ be received if a copy of all 03/24/88 17:40 JOHNSTON & BUCHAN OTTAWA 018 1 - z - offer to sell, from a third party, either a producer or broker# to either GasPurc:hase as agent for the Municipality or the Municipality at a point of sale cast of the Alberta/Saskatchewan Wrder, volumes of natural gas at a price which results In a lower effective unit cost of natural gas to the Municipality as a result either of revenues received by the Municipality from the operation of a Huy-$ell Agreement entered into between the Municipality and the distributor# or as a result of a T-Service arrangement between the Municipality and the distributor, is presented to 021e Company within the 180 day period. 3 . Extension and Termination If OasPurchase has not delivered an offer to sell within 180 days of siyning this Agreement, Oaspurchase may ask in writing to extend the time period within which it must submit an offer for a further 90 days beyond Lhe 180 day period. If the Municipality has noL refused the extension in writing within 7 days, the time period shall be deemed to be extended a further 90 days. If the request for extension is refused, this Agreement shall be considered terminated and both parties shall be released from all obligations hereunder without atiy liability to each other. 4. Services to be Performed GasPurc:hase will be responsible for anointing the Municipality in the implementation of a direct yaps purchase arrangment. Specificaly, GasPurQlxaue will be responsible for the followings (a) Assistance to the Municipality in the assessment of the natural gas requirements of the Municipality. (b) The solicitation of Offers to Sell Natural Gas from selected producers and/or brokers. (c) The analysis of bids, taking into account all relevant factors, including price, security of supply and 03%24%88 17:40 JOHNSTON & BUCHAN OTTAWA 019-'°"`r� 3 -- current regulatory requirements, The ysis •hall include a recommendation of the p supP liar. (d) The negottt,tion and finalization of all agreements related to the psurcchase, ransportationt and enable distribution of natural g a s required the company to consumes the quantiti.ee of gar. acquired under the terms of the accepted offer to Sell Natural Gas. (3aspurchase shall provide the legal services necessary to complete the negotiation and finalization of such agreements. (e) The administration of the direct purchase arrangements . 5 . When Commisision Payable The Cemmiss 011 shall be considered earned and payable by the Municipality to GasPurchase ifs (a) Gaspurcliase delivers an offer to sell gas to the Municipality within the time period set out in Section 2, Which would result in the Municipality' s unit cost of natural gas being lees than the unit cost of natural gas from the current supplier for the volumes and class of service currently applicable to the Municipality (the delivered coat of natural gas shall be deemed lower if the Municipality' s unit cost of gas Is lower after crediting any revenue to the Mu,sicipalily from a Buy/Sell P►greement ) ; and (b) The Municipality subsequently within 9 months of the date hereof enters into a contract to purchase natural gas from a praduuer, group of producers, natural gas marketing firm, broker, or from the current suppliers at rates below the current supplier' s published oEB approved rates . (c) In the event the Municipality enters into the direct purchase transaction recommended by GasPurchase, GasPurchase performs the services outlined in Section 4 above. 03/24/88 17;41 JOHNSTON & BUCHAN OTTAWA 020 4 _ 6, payment of Commission (a) In consideration for GasPurchase ' s effort to deliver all offer Lo sell on a direct-purchase basis and the co,npetitive element thereby introduced into the Municipality' s gas purchase environment the Municipality agrees to pay GasPurchase a fee of 108 of projected savings in the first year of the contract. The projected savings are defined as the projected annual utilisation of gas during the first year of the contract (as set out in the Duy-Dell Agreescient) x Lhe difference between the Purchase Price under which Lhe distributor agrees to purchase gas from the Municipality (as set out in the nuy-Sell Agreement) and the price the Municipality pays for the gas (as set out in the Gas Purchase Contract) . Volumes should be expressed in cubic metres and gas costs in cents/cubic metre. Where the local distributor does not offer the Buy-Sell Agreement, the savings per cubic metro are the difference between the current "burner-tip" price to the Municipality and the price under the Gas Purchase Agreement plus applicable transportation service charges on TransCanada Pipelines Ltd . and the local. distributor. (b) The commission for year one will be payable on closing of the Gas Purchase Agreement and the Huy-Sell Agreement, or on the consuicunation of anoLher transaction by the Municipality as not out in Section 5(b) above aucl shall he paid in the following manner. QasPurchase shall deduct the fee from monies it accumulates on behalf of the municipalities and institutions prior to making any distributions thereof. In the event this municipality clods not enter into a direct purchase transaction but instead enters Into a systdcu yau aiacount transaction with a utility, the fee shall become payable, and be paid, on closing of that transaction. (c) In year 2 and each subsequent year of the program, oasPurchass shall be entitled to a renewal and administration fee of one half the commission charged in year one. This fee shall be paid in the manner outlined in paragraph 6(b) above . 03/24./86 17:42 JOHNSTON & BUCHAN OTTAWA 021 5 - (d) In addition to the fees outlined in paragraph 6(a) , and 6(c) above, 25% interest on monies 4asPurchase accumulates on behalf of the municipality representing the difference between payments it receives from the utility and payment it make* to the producer on a monthly basis, prior to distributing these moniee on a quarterly basis to thQ municipalities, shall be shared on the following basis : the municipality - 50%, the Asmoc:ialion of Municipalities of Ontario - 25%, and aasPurchase - 25% . IN WITNESS WHEREOF the parties have executed this Agreement. GASPURCHASZ DIRECT i'�'h• By: Title : MUNICIPALITY CORPORATION OF THE TOWN OF NEWCASTLE By: Title: