Bill 251018

..Title Approving the amendment of the Fiscal Year 2026 Capital Budget providing for expenditures for the capital purposes of the Philadelphia Gas Works (including the supplying of funds in connection therewith) subject to certain constraints and conditions and acknowledging the receipt of the Revised Forecast of Capital Budgets for Fiscal Years 2027 through 2031, as amended. ..Body WHEREAS, Section IV.2.b of the Agreement Between the City of Philadelphia and the Philadelphia Facilities Management Corporation for the Management and Operation of the Philadelphia Gas Works ("Management Agreement") requires the Philadelphia Facilities Management Corporation ("PFMC") to prepare annually for the Philadelphia Gas Works ("PGW") a proposed capital budget for the ensuing year and a forecast for the six (6) years comprising the ensuing budget year and the five (5) years next following; and WHEREAS, Section IV.2.b of the Management Agreement also requires that the proposed capital budget and forecast be submitted to the Director of Finance and the Philadelphia Gas Commission ("Gas Commission") for their review and for submission of said budget and forecast, together with their recommendations thereon, to the Council of the City of Philadelphia ("City Council") for its approval; and WHEREAS, Section IV.2.b of the Management Agreement further requires that the proposed capital budget and forecast include a showing of the amounts needed and how the funds required are to be supplied as between funds generated within the business through charges to customers or otherwise and funds to be obtained through capital loans ("Financing Plan"); and WHEREAS, Section IV.2.c of the Management Agreement requires that all PGW expenditures be made pursuant to approved budgets; and WHEREAS, PGW filed with the Gas Commission on January 2, 2025 a proposed Fiscal Year ("FY") 2026 Capital Budget of One Hundred Eighty-Five Million Nine Hundred Sixty-Two Thousand Dollars ($185,962,000) ("FY 2026 Capital Budget" or "Budget") and a Five Year Forecast of Capital Budgets (FY 2027 - FY 2031) ("Forecast"); and WHEREAS, the Gas Commission's review of the Budget in its FY 2026 Budgets/Oversight Proceeding culminated in deliberations taken at a public meeting held on April 15, 2025 at which the Gas Commission endorsed a proposed FY 2026 Capital Budget in an amount not to exceed One Hundred Eighty-Five Million Two Hundred Twelve Thousand Dollars ($185,212,000) including a revised Financing Plan and revised Forecast with related constraints and conditions related thereto; and WHEREAS, on June 13, 2025, the Mayor approved Bill No. 250528, wherein City Council approved the foregoing FY2026 Compliance Capital Budget; and WHEREAS, PGW filed two (2) requests to reauthorize and amend its FY2026 Capital Budget on June 26, 2025, and August 25, 2025 (hereinafter collectively referred to as "FY 2026 Consolidated Capital Budget Amendment Request") by a combined total of Forty-Four Million Seven Hundred Seventy-Three Thousand Dollars ($44,773,000); and WHEREAS, the Gas Commission's review of the proposed FY 2026 Capital Budget Amendment Request culminated in deliberations taken at its public meetings held on September 16, 2025 and November 18, 2025 whereupon the Gas Commission endorsed reauthorizations and amendments to the FY 2026 Capital Budget adding a total of Forty-Four Million Seven Hundred Seventy-Three Thousand Dollars ($44,773,000), thereby increasing the total Budget to an amount not to exceed Two Hundred Twenty-Nine Million Nine Hundred Eighty-Five Thousand Dollars ($229,985,000) with related constraints and conditions; and WHEREAS, on November 18, 2025, PGW filed with the Gas Commission a final Amended FY 2026 Compliance Capital Budget in the amount of Two Hundred Twenty-Nine Million Nine Hundred Eighty-Five Thousand Dollars ($229,985,000) ("Amended Compliance Budget"), a revised Financing Plan and a revised Forecast; and WHEREAS, City Council seeks to provide for evolving capital needs and related expenditures of PGW by incorporating the Gas Commission endorsed amendments to the FY 2026 Capital Budget reflected in Exhibit 1 hereto; now, therefore, THE COUNCIL OF THE CITY OF PHILADELPHIA ORDAINS: SECTION 1. Approval and Acknowledgment Pursuant to the provisions of Section IV.2.b and IV.2.c of the Management Agreement, the Council: A. does hereby approve the amended FY 2026 Capital Budget for the Philadelphia Gas Works ("PGW") in a total amount not to exceed Two Hundred Twenty-Nine Million Nine Hundred Eighty-Five Thousand Dollars ($229,985,000) as reflected in the Amended FY 2026 Compliance Capital Budget ("Amended Compliance Budget") and associated revised Financing Plan, subject to the provisions of Sections 4-8 of this Ordinance; and B. does hereby acknowledge receipt of PGW's Revised Forecast of Capital Budgets for FY 2027 - FY 2031. SECTION 2. Spending Authorization The amounts shown in the approved Amended Compliance Budget are hereby authorized for the purposes shown and shall be available for expenditure as of FY 2026, defined as September 1, 2025 through August 31, 2026, in an aggregate amount not to exceed Two Hundred Twenty-Nine Million Nine Hundred Eighty-Five Thousand Dollars ($229,985,000) as reflected in the Amended Compliance Budget and subject to the provisions of Sections 4-9 of this Ordinance. The Amended Compliance Budget (including the revised Financing Plan) is attached as Exhibit 1. SECTION 3. Reauthorized Line Items A. The following line items from the FY 2023 Capital Budget are hereby reauthorized, with the amended amounts consisting of unspent funds carried over from FY 2023 authorizations into the FY 2026 Capital Budget: 1. Replace Porter Street Fueling Station (#72-01-2-08) ($1,500,000); and 2. Repaving Porter Street Lot (#72-2-01-09) ($1,500,000). B. The following line items from the FY 2024 Capital Budget are hereby reauthorized, with the amended amounts consisting of unspent funds carried over from FY 2024 authorizations: 1. Replace Natural Gas Driven Positioners (#53-01-2-04) ($718,000); 2. Expander TSA System (#53-02-2-01) ($4,735,000); 3. Replace LNG Switchgear Richmond (#53-02-2-03) ($9,025,000); 4. CHP Richmond (#53-02-2-03) ($3,091,000); 5. Replace Two Phase Power (#53-02-2-06) ($1,327,000); 6. Vehicle Additions (#73-01-1-03) ($434,575); and 7. Vehicle Replacements (#73-01-2-03) ($4,318,025). C. The following line item from the FY 2025 Capital Budget is hereby reauthorized, with the amended amounts consisting of unspent funds carried over from FY 2025 authorizations: 1. CHP-Richmond (#53-02-2-05) ($807,000). D. The following line item is hereby included in the FY 2026 Capital Budget, as detailed below: 1. CIS Replacement (#47-01-2-06) ($30,000,000). SECTION 4. Amended Line Item A. The following line item is hereby included in the FY 2026 Capital Budget, as detailed below: 1. CIS Replacement (#47-01-2-06) ($30,000,000). SECTION 5. Constraints and Conditions - Capital Program Protocols During the lifespan of the line items in the approved Amended Compliance Budget, as a condition of approval, PGW shall adhere to the "Capital Program Protocols" ("Protocols") adopted by the Gas Commission on April 15, 2025. Said Protocols are incorporated herein by reference. SECTION 6. Constraints and Conditions - Line Item Transfer Exclusions Except as necessitated by Emergency Circumstances as set forth in the Protocols at Part 1 - Subpart I.3, no line item referenced herein shall be available as a source of spending authority in transfer transactions. SECTION 7. Constraints and Conditions - Line Item Lifespan A. Spending authority for the following line items shall expire as of August 31, 2026: 1. Replace Porter Street Fueling Station (#72-01-2-08) ($1,500,000); 2. Repaving Porter Street Lot (#72-2-01-09) ($1,500,000); 3. Replace LNG Switchgear Richmond (#53-02-2-03) ($9,025,000); 4. Replace Two Phase Power (#53-02-2-06) ($1,327,000); 5. CHP Richmond (#53-02-2-03) ($3,091,000); 6. Vehicle Additions (#73-01-1-03) ($434,575); 7. Vehicle Replacement (#73-01-2-03) ($4,318,025); 8. Replace Porter Street Fueling Station (#72-01-2-08) ($1,500,000); 9. Repave Porter Street Lot (#72-01-2-09) ($1,500,000); 10. CHP Richmond (#53-02-2-05) ($807,000). SECTION 8. Constraints and Conditions - Line Item Lifespan A. Spending authority for the following line item shall expire as of August 31, 2027: 1. CIS Replacement (#47-01-2-06) ($30,000,000). SECTION 9. Constraints and Conditions - Line Item Spending Authorization A. The total combined spending for the following line items from the FY 2023 Capital Budget shall not exceed the spending authorization for each project as approved in the FY 2023 Capital Budget: 1. Replace Porter Street Fueling Station (#72-01-2-08) ($1,500,000); and 2. Repaving Porter Street Lot (#72-2-01-09) ($1,500,000). B. The total combined spending for the following line items from the FY 2024 Capital Budget shall not exceed the spending authorization for each project as approved in the FY 2024 Capital Budget: 1. Replace Natural Gas Driven Positioners (#53-01-2-04) ($718,000); 2. Expander TSA System (#53-02-2-01) ($4,735,000); 3. Replace LNG Switchgear Richmond (#53-02-2-03) ($9,025,000); 4. CHP Richmond (#53-02-2-03) ($3,091,000); 5. Replace Two Phase Power (#53-02-2-06) ($1,327,000); 6. Vehicle Additions (#73-01-1-03) ($434,575); and 7. Vehicle Replacements (#73-01-2-03) ($4,318,025). C. The total combined spending for the following line item shall not exceed the spending authorization as approved in the FY 2025 Capital Budget: 1. CHP-Richmond (#53-02-2-05) ($807,000 plus an additional $300,000 derived from permitted transfers under the FY 2025 and FY 2026 Capital Program Protocols). D. The total combined spending for the following line item shall not exceed the spending authorization as approved in the Amended FY 2026 Capital Budget: 1. CIS Replacement (#47-01-2-06) ($30,000,000). SECTION 10. Exhibit Exhibit 1 referenced in this Ordinance and incorporated herein shall be kept on file by the Chief Clerk of City Council and shall be available to the public for inspection, reading or copying at reasonable times. ..End