Title
Ordinance No. 24-107 of the City Of Colorado Springs, Colorado Approving and Authorizing the Execution and Delivery of Standby Letter of Credit and Reimbursement Agreement Between The City of Colorado Springs, Colorado and Sumitomo Mitsui Banking Corporation, Acting Through its New York Branch, and the Fee Agreement Between the City of Colorado Springs, Colorado and Sumitomo Mitsui Banking Corporation, Acting Through its New York Branch; and Ratifying Certain Action Heretofore Taken.
Presenter:
Travas Deal, Chief Executive Officer, Colorado Springs Utilities
Adam Hegstrom, Treasury and Finance Manager, Colorado Springs Utilities
Body
Summary:
The attached ordinance approves and authorizes the execution of a standby letter of credit and reimbursement agreement between the City of Colorado Springs and Sumitomo Mitsui Banking Corporation, and the related fee agreement.
Background:
On September 17, 2024, the Utilities entered into a Precedent Agreement to lease capacity on a natural gas pipeline to be constructed by a third party. To comply with the terms of the Precedent Agreement, the Utilities is obligated to deliver a standby, irrevocable Letter of Credit.
The Ordinance addresses approval of the Letter of Credit Agreement for a term of five years.
Previous Council Action:
N/A
Financial Implications:
Estimated annual cost is $500,000 to $550,000.
City Council Appointed Board/Commission/Committee Recommendation:
The Utilities Board Finance Committee reviewed this proposed action at their October 14, 2024 meeting. Additionally, the Utilities Board reviewed this item at the October 16, 2024 meeting.
Stakeholder Process:
N/A
Alternatives:
N/A
Recommended Action
Proposed Motion:
Approve Ordinance No. 24-107 of the City Of Colorado Springs, Colorado Approving and Authorizing the Execution and Delivery of Standby Letter of Credit and Reimbursement Agreement Between The City of Colorado Springs, Colorado and Sumitomo M...
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