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R. E. ScrrwESER & CouelNY
}IUNICIPAL FINANCING
NINE'IEDNTII STREET
OMA1IA 2, NEBIIASKA
Honorable l{ayor and Clty Cour:ci1
City of l,lerltlian
lGridian, fdaho
Gentlerneu:
Your long expressed lnterest in obtairing the benefits of a
natural gas distribution systen for .vour city ard the gas consrmers Ls
well known ty us. The passage of time eBphasizes the need for sqne action
if you are to know hat these benefits eay be. In contemplating the
oporation, ve believe that the rates of charge to the consumer for natural
gas should be the same or olightly below those proposed by the ldaho NaturaL
Gas Compargr. Tn older to place your city in a positlon to make a sounal decisloD,
we proposs to do certain things and yorrc Clty, urder certain provislons here inl
ls reqrrired to tlo certain things. As a matter of presentation of the obllgations
of each hereund.er, they have been set forth in this
AGREEX'M}E OF II{IXIM
1. lie rril1 have our enginee?s, at otr expense, make an econmLc
study as to the feaslbility of the c,-'nstruction oi a transmisslon pipeJ.ine
fron the Pacific llorthwest Pipeline near your Clty and the construction
of a dlstribution systen in Merltlian. If the resutts of our engineers r
study indicates the feasibllity of such ccnstruction, then your city r,riJ-I-
select eapable and ccrmpetent engineers, experienced in natural gas systen
construction and operati-on, approved by us, to make an lndependent report
for your city as to the feasibllity of such ccnstTuction and operation.
2. If your engineers c).ear1y find that the construction i.s
feasible, we w111 have nationally known bond counsel nake a study of arry
Lega1 uetboil wherebT a non-proflt eorporation aay be formed to construct
and operate a natr:ral gas s;rstern for the benefit of the clty and its
gas consrEels. The operation of said corporation shal1 be rithout profit
and shalf be for the.benefit of the clty anc the gas consurers. The
operation of the gas systen sha11 be under the eontrol- of a Board of
nirectors of flve members, r^rho shall have been residents and property
holders in Meridian for five years prior to talcing office. Such Directors
sha11 be ccamposed of persons approved by yorlr City Councl1.
l,layor and City Courcil of Meridian
3. llhen the englneeri.ng stuily of your englneers shous the
cl-ear feaslbllity of the construction and operatlon antl nationa).Iy
knorn municlpal bord attorneya have prep:,red all proceedings or documents
as to J.egality of the formation of said corporation, we vill enter into
a contract uith saltl corporation to pr:rchase ar6r seeurl,ties to te lssuetl
an anount necessal'Xr to pay aJ.1 costs of the progran and the corporatlon
vl1J. agree to se11 us Buch securities.
1. Uhen the econcrnlc feasiblllty of the program has been
establlsheil antl the Lega].lty has been established and approved b5r
nationally known nuricipal col:.nse1, then your city does, by lts acceptance
of thls Agrosnent of Intent, authorize us to teke all. steps necessarlr
to proceetl uith the project, includir,g authority to negotiate for a
vholesale srrypIy of natura] gas. It is untlerstootl that otr ccarnitrnent
is necessarily subject to the obtainlng of a wholesale eontract for natural
gas for the systen, the appropriate allocation if such is required ty the
Federal- Power Ccrmission, and the approval of any re4rlatorX' body having
jrnlsillctlon of the subject natter h6reof.
5. It ls further interded blr the partles hereto that an annual
franchise fee or a payr,eirt in Lieu thereof, sha11 be paid to the city
in an arnount betveen 3i ar1- 1o%of the gross ,nn ^t &Kl*€,{ri* t'/'t
on the engineering report as to feasibility and the policy adopteil by
your Clty Council-.
6. It is further recognized that at this tfue detaiLed agreements
ard. contracts cannot be fi naL1y tlrarn and executed, but it 1s
tderetootl that -,,he agreements herein are entered into in gootl falth
and for value. The City and we therefore aglee to take innedlately ary
and aI[ needed steps and to cause to be executeil auch legaL docruputs
ard proeeedlngs as may be necessary in the oplnlon of nationally
recoghizedl Eunicipal eounsel to consuaate pro-erly the prrpose of this
agreenent. The l'{ayor and City Clerk have been tluly authorizetl to execute
thls acceptance hereof in the space provided for be1ov.
7. It ls furtl:er understood that the Clty, in acceptlng this
Agreement, shaII be '.:rder no obligation to us fc,r the expenditures of
re rffirEqIIiEElrllt
The foregoing agreement is hereby accepted hy resolution of the
a arunicipal corporatlon of Idaho, thls
'lo<a
Ilayor and Clty Councll of Merid.lan
ary amourt of moreSr, 1f the proJect is not consttrated, provlded thet
the City sha11 act in good falth anC cooperate in all me,tters.
Re spe ctfully subnitted,
}IACHOB-BEIIDM, COP.PORATION
R. E. SCFI{ESM, & CO4PAM
Clty Cou c1-t of
ay
the City of lleridian,
or At*,tN.__\
Vln,
City Cl
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