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****PRELIMINARY AND TENTATIVE FINDINGS**** ' An accounting treatment to pay these annual amounts to the member from the separate account maintained for withdrawal payments. ➢ Use of the withdrawal payment funds to temporarily correct deficiencies in other operating funds. • Provisions for the FMPA to use "excess amounts" of the funds from the withdrawal payment account at its sole discretion. However, there is no clear specification in the power supply project contract of what constitutes "excess amounts." Although one ARP member submitted a termination notice that indicated a withdrawal date of September 30, 2016, no ARP members have actually withdrawn from the FMPA. As such, the FMPA has not prepared any such true -up calculations and it is not clear how the FMPA will interpret the terms "additional benefits" and "excess amounts" when the member ultimately withdraws. The FMPA's sole discretion to determine "additional benefits" to the member and move "excess" amounts to the "General Reserve Fund" enables the FMPA to unilaterally direct the use of withdrawal payments beyond the assurance of the fixed costs responsibility of the withdrawing member. A review of termination and exit provisions of bond resolutions and power supply project contracts as described in the official statements for eight JAAs' all requirements service system revenue bond issues" disclosed that only four of the eight JAAs' power supply project contracts contain any exit provisions, such provisions are highly restrictive, and none of these JAAs provided for a three-year notice termination provision. Three of the four JAAs provided for member withdrawal but only when there is no debt outstanding, which is standard industry practice. While debt -free JAA projects can occur, it is not the industry norm for JAA projects to be debt -free. Based on the results of the review, the FMPA's termination and exit notice provisions are not consistent with common JAA practice because JAA power supply contracts normally do not allow members to exit the contract while any project debt is outstanding. As indicated above, only one other JAA allowed a member to exit while project debt was still outstanding, and the contract required the withdrawing member to pay its share of debt service, which is consistent with the FMPA contract provisions. The FMPA's assumptions used in estimating the withdrawing member's share of costs to retire debt and project operational fixed costs, and the practice of subtracting excluded resources from the coincident peak demand calculation to estimate the member's share, appear to be reasonable. An evaluation of the FMPA's calculations of estimated withdrawal payments m April 2012 and June 2014, in the amounts of $386 million ($108 million for debt and $278 million for operational fixed costs) and $46 million, for the Cities of Key West and Vero Beach, respectively, disclosed that the primary differences in the withdrawal payments for the two Cities are (1) Key \Vest would be required pursuant to its contract with the FMPA to purchase at net value all generation, transmission, and related assets owned by the FMPA in providing ARP service to Key West, and (2) Vero Beach would not be required to pay the debt component as the City had not, since 201(1, obtained any power through the ARP. The FMPA's calculations of the withdrawal payments in these instances followed the respective ARP power supply power contracts' withdrawal provisions. However, the fact that the FMPA has the sole discretion in determining the actual severance amount and the substantial cash payment due on withdrawal, in effect, represents a compelling case against the decision for an ARP member to withdraw. 14 The official bond statements of these JAAs contained summaries of power sales contracts in sufficient detail to identify the relevant termination provisions. While such official statements do not include provisions of power supply project contracts and bond resolutions in their entirety, they do provide summary language covering their most substantive provisions. 27 29