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Home My WebLink AboutPR 20687: RETURN/REFUND OF UNUSED SEP MONTY TO TCEQ • City of ;- nr ! rtn!I/ www.PortArthurTx.gov INTEROFFICE MEMORANDUM Date: February 22, 2019 To: The Honorable Mayor and City Council Through: Mr. Harvey Robinson, Interim City Manager From: Harold Hankins, Assistant Finance Director RE: P.R. 20687—Return/refund of unused SEP money to TCEQ Introduction: Per agreement number 2008-011, the City of Port Arthur was given money to use on Supplemental Environmental Projects (SEP). These funds were to be used for expenditures related to Alternative Fuel Vehicle and Building and Infrastructure Energy Efficiency. Background: Since June 27, 2011, the Texas Commission on Environmental Quality (TCEQ) terminated the SEP agreement 2008-011 and has requested that the City of Port Arthur refund the unspent SEP money in the amount of $165,992.26 for Alternative Fuel Vehicle accounts and $106,439.87 for Building and Infrastructure accounts. Funds to be paid out of account numbers 135-8999-531.99-00, Energy Grant Other Expenses, and 625-8999-531.99-00, Capital Reserve Fund Other Expenses. Bucket Impact: Funds will be provided in a future budget amendment from the General Fund ($105,711.00) and Capital Reserve Fund ($165,992.00). Funding is available in the SEP special revenue fund ($728.00). Recommendation: It is recommended that City Council approve the return of unused SEP money to the Texas Commission on Environmental Quality, as discussed and/or outlined above. "Remember,we are here to serve the Citizens of Port Arthur" P.O.Box 1089 X Port Arthur,Texas 77641-1089 X 409.983.8101 X FAX 409.982.6743 P. R. No. 20687 02/26/19 bw Page 1 of 3 RESOLUTION NO. A RESOLUTION AUTHORIZING THE RETURN OF UNUSED SUPPLEMENTAL ENVIRONMENTAL PROJECT FUNDS TO THE TEXAS COMMISSION ON ENVIRONMENTAL QUALITY, $106,439.87 FROM ACCOUNT NO. 135-8999-531.99-00, ENERGY GRANT OTHER EXPENSES,AND$165,992.26 FROM 625-8999- 531.99-00, CAPITAL RESERVE FUND OTHER EXPENSES. WHEREAS, the City of Port Arthur was given money for upgrading buildings, infrastructure, and vehicles; and, WHEREAS,the funds were to be used in accordance with the energy efficiency restriction for upgrading of aforementioned assets; and, WHEREAS,the funds were not completely used, but the remainder accumulated interest; and, WHEREAS,the City of Port Arthur has a responsibility to ensure it handles public funds appropriately; and, WHEREAS, the Texas Commission on Environmental Quality terminated the SEP agreement 2008-011 (Exhibit A); and, WHEREAS, the City of Port Arthur has been instructed by the Texas Commission on Environmental Quality to return the unused funds earmarked for Supplemental Environmental Projects"SEP"in the amount of$272,432.13. NOW THEREFORE,BE IT RESOLVED BY CITY COUNCIL OF CITY OF PORT ARTHUR: THAT,the facts and opinions in the preamble are true and correct; and, P. R. No. 20687 02/26/19 bw Page 2 of 3 THAT, the City Council authorizing the return of unused supplemental environmental project funds to the Texas Commission on Environmental Quality,$106,439.87 from Account No. 135-8999-531.99-00, ENERGY GRANT OTHER EXPENSES, and $165,992.26 from 625- 8999-531.99-00,CAPITAL RESERVE FUND OTHER EXPENSES; and, THAT,a copy of the caption of this resolution be spread upon the minutes of City Council. READ, ADOPTED, AND APPROVED THIS day of 2019 at a Regular Meeting of City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor ; Councilmembers: NOES: Derrick Freeman Mayor ATTEST: Sherri Bellard City Secretary APPROVED AS TO FORM: Valecia Tizeno City Attorney P. R. No. 20687 02/26/19 bw Page 3 of 3 APPROVED FOR ADMINISTRATION: Harvey Robinson Interim City Manager Harold Hankins Assistant Finance Director-Accounting, Auditing, and Financial Reporting EXHIBIT A (TCEQ Correspondence) .74,E Jon Niermann,Chairman ,,,��:.� Emily Lindley,Commissioner ':�J i Toby Baker,Executive Director -- TEXAS COMMISSION ON ENVIRONMENTAL QUALITY Protecting Texas by Reducing and Preventing Pollution November 9, 2018 Mr.Harold Hankins Comptroller, Finance Department City of Port Arthur P.O. Box 1098 Port Arthur, Texas 77641 Re: Termination of Supplemental Environmental Project Agreement No. 2008-011 Between Texas Commission on Environmental Quality and the City of Port Arthur and Rejection of Renewal SEP Applications Dear Mr. Hankins: The Texas Commission on Environmental Quality("TCEQ")is terminating the City of Port Arthur's (the "City") current SEP Agreement No. 2008-011 ("SEP Agreement") and rejecting the City's subsequent renewal applications due to inactivity and failure to respond to TCEQ requests for additional information and reporting. The City's SEP Agreement was executed on February 16, 2009 and consisted of two separate projects: the Alternative Fuel Vehicle and Equipment Program(the "Vehicle SEP") and the Building and Infrastructure Energy Efficiency Upgrades Program (the "Energy Efficiency SEP"). According to our records, although the City has received and deposited SEP Funds into its SEP Account, it has failed to expend SEP Funds to implement either of these projects since the SEP Agreement became effective. The City has also failed to submit the required extension requests seeking approval to hold on to SEP Funds for more than the one-year term allowed by the SEP Agreement.Accordingly, TCEQ is terminating the City's SEP Agreement and will remove it from the Pre-Approved List so that it can no longer receive contributions. On June 27, 2011, TCEQ sent the City a letter requiring it to submit a renewal application for each of the two projects contained within the SEP Agreement by August 27, 2011, or the TCEQ would terminate the SEP Agreement. A copy of that letter is enclosed for'your convenience. This was a program-wide requirement, and identical letters were sent to all Third-Party Administrators for the purpose of drafting revised agreements for all operational SEPs to facilitate efficient tracking of SEP expenditures and reporting. The City submitted its renewal applications after the deadline had expired and has subsequently failed to provide necessary clarification on the information provided within the applications pursuant to TCEQ's requests. Accordingly, TCEQ is rejecting the renewal applications submitted by the City for the two projects included within the SEP Agreement. In accordance with Section 10 of the SEP Agreement, the effective date of termination shall be 30 days after the date of this letter. Therefore, please provide the Final Report for the SEP Agreement, including all invoices, receipts, proof of expenditures, and bank statements, as well as a check, made out to the "Texas Commission on Environmental Quality," for the total amount of all remaining SEP Funds held by the City by December 9, 2018 to the following address: Texas Commission on Environmental Quality Litigation Division Attention: SEP Coordinator, MC 175 P.O. Box 13087 Austin, Texas 78711-3087 P.O.Box 13087 • Austin,Texas 78711-3087 • 512-239-1000 • tceq.texas.gov How is our customer service? tceq.texas.gov/customersurvey printed on recycled paper using vegetable based ink Mr.Harold Hankins City of Port Arthur Page 2 November 9, 2018 Re: Termination and Rejection of SEP If the City is not able to provide the information requested above by December 9, 2018,you must submit an extension request. The extension request form can be found on the TCEQ website at https://www.tceq.texas.gov/compliance/enforcement/sep/forms.html. Please contact Ryan Rutledge, Attorney, Litigation Division, at 512-239-0630 or ryan.rutledge@tceq.texas.gov if you have any questions. Sincerely, /1-ykAat..-( Margaret Ligarde, Deputy Director Office of Legal Services Texas Commission on Environmental Quality Enclosure cc: Charmaine Backens, Director, Litigation Division, Office of Legal Services SEP Team O M �n •