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HomeMy WebLinkAbout1971-01-04 Regular Meeting~ i MINUTES - REGULAR MEETING OF THE LA PORTS CITY COMMISSION, LA PORTS, TEXAS JANUARY 4, 1971 7:00 P.M. MEMBERS OF THE COMMISSION PRESENT: Mayor H. Carlos Smith, Commissioners E.A.Thomas, I.J.Kibodeaux, Bobby J. Burgin, and H. Gould Crofoot. MEMBERS OF THE COMMISSION ABSENT: None. OTHER CITY OFFICIALS PRESENT: P.V.Werner, City Administrator; Virginia Cline, City Clerk; Knox Askins, City Attorney; Robert Cline, Director of Public Works; H. F. Freeman, Chief of Police and Jack Oliphant, Fire Chief. PRESIDING: Mayor Smith. + + + Invocation was offered by Commissioner Kibodeaux. 1. Motion by Comm. Thomas, seconded by Comm. Kibodeaux to approve the minutes of the regular meeting of December 21, 1970 as presented. Motion carried by the following vote: AYES: Commissioners Thomas, Kibodeaux, Burgin and Crofoot. NAYS: None. + + + 2. Motion by Comm. Crofoot, seconded by Comm. Burgin to call a joint public hearing with the Planning and Zoning Commission on February 1, 1971, at 7:00 P.M. to consider the request of W. A. Stabs, Jr., to rezone Lots 1 to 8, Block 4, Bay Front Addition from R-1 Residential to Duplex. Motion carried by the following vote: AYES: Commissioners Thomas, Kibodeaux, Burgin and Crofoot. NAYS: None. + + + 3. Motion by Comm. Burgin, seconded by Comm. Crofoot that Resolution No. 71-O1, whereby the City of La Porte agrees to share one-third of the cost of installation of mechanical gates and automatic flashing signals on Spencer Highway and Fairmont Parkway, with the Southern Pacafic Railroad Co., be adopted as read. Motion carried by the follow- ing vote: AYES: Commissioners Kibodeaux, Burgin and Crofoot. NAYS: Commissioner Thomas. + + + 4. Mayor Smith read a letter from Houston Lighting and Power Company requesting an increase in rates for electrical service.(See exhibt 1) Mr. James L. Martin, Division Manager for Houston Lighting and Power Company, addressed the Commission in regards to the rate increase. Mr. Martin stated under the new rate, the minimum charge would be increased from $1.20 to $1.90. Motion by Comm. Burgin, seconded by Comm. Crofoot that Ordinance No. 871 be adopted as read. Motion carried by the following vote: AYES: Commissioners Kibodeaux, Burgin and Crofoot. NAYS: Commissioner Thomas. CAPTION: AN ORDINANCE OF THE CITY OF LA PORTE, ADOPTING AND APPROVING THE RATE SCHEDULES TO BE KNOWN AS SCHEDULE RS-1 AND SCHEDULE MGS-1 SET FORTH IN EXHIBT "A" AND EXHIBT "B" AS ATTACHED HERETO AND MADE A PART HEREOF BY REFERENCE AND PROVIDING FOR AN EFFECTIVE DATE FOR SUCH RATES. + + + 5. Motion by Comm. Crofoot, seconded by Comm. Burgin to ratify hiring Mr. Bill Kelly as new Police Officer. Motion carried by the following vote: AYES: Commissioners Thomas, Kibodeaux, Burgin and Crofoot. NAYS: None. + + + 6. Motion by Comm. Crofoot, seconded by Comm. Kibodeaux to accept the low bid of X2,986.57 from Kemp and z ti ~ Tony Equiptment Company for an ambulance and the low bid of $3,441.54 from Lumus Baytown Dodge for a patrol car. Motion carried by the following vote: AYES: Commissioners Thomas, Kibodeaux, Burgin and Crofoot. NAYS: None. + + + '7. Motion by Comm. Burgin, seconded by Comm. Kibodeaux to accept the bid of $11,265.25 from Lumus Baytown Dodge for five C5) pickup trucks for the Public Works Department. Motion carried by the following vote: AYES: Commissioners Thomas, Kibodeaux, Burgin and Crofoot. NAYS: None. + + + 8. Motion by Comm. Kibodeaux, seconded by Comm. Crofoot to postpone for additional study the request from the Spenwick Water District for the City of La Porte to service the system. Motion carried by the follow- ing vote: AYES: Commissioners Thomas, Kibodeaux, Burgin and Crofoot. NAYS: None. + + + 9. Motion by Comm. Thomas, seconded by Comm. Burgin that the meeting be adjourned. Motion carried. The meeting of the City Commission adjourned at 8:50 P.M. Approved this 18th day V' ginia Cline, City Clerk of January, 1971. H. Carlos Smith, Mayor • h N HOUSTON LIGHTING & POWER COMPANY 2000 NASA 1, P. O. BOX 897, SEABROOK, TEXAS 77686 December 30, 1970 Honorable Mayor and Board of Commissioners City of LaPorte LaPorte, Texas Gentlemen: During the past five years, 1966 through 1970, our Company has invested more than $1+70 million in new plant and equipment to provide adequate service to its customers and to supply service to the tremendous influx of customers in all classifications -- residential, commercial, and mayor indus- trial complexes. Because of our longstanding practice of building ahead to meet anticipated need, adequate capacity has been available. No request for electric service has been denied nor has any customer been limited in the use of electricity. Now we are committed to invest more than $168 million during the three years 1971-1973, in order to assure continued adequate electric service to all of our customers and to provide for the anticipated growth of this area. However, you are well aware of the erosion of the money supply and the resulting increase in the cost of money in recent years. The Company has experienced an increase in cost of money, along with other increases in cost, with the result that the re- turn for the year 1970 on the new investment of the last five years was considerable less than the current cost of capital. Exhibt 1 • Houston Lighting & Powe~ny • -2 In constructing new electric plant, costs and operating expenses have been held down to the maximum extent possible by increasing the unit size of mayor components. It must be recognized, however, that much of the equipment directly related to serving each customer is not subject to economy because of size but must be tailored to meet their individual requirements. In addition, there has been a marked escalation of the operating expenses attendant to serving individual customers. We feel that an adjustment in the minimum step of the rates is appropriate because when the present minimum was fixed (at the conclusion of the Company's 1960-62 Houston rate hearing) the direct cost (exclusive of primary distribution lines, transformers, sub- station, generation and transmission expense) of serving a residential customer was approximately $3.00 and the minimum was set at $1.20, which was k0~ of the $3.00 service cost. At present the same direct cost of serving a residential customer is in excess of $5.00 so that with the same 40$ ratio the minimum should be $2.00. The last increase in the rates was in 1962, at which time the • cost of money was considerably lower than now. At that time top quality electric utility bonds were selling at interest cost ranging between 5.18 and 5.97. During the current year (January through December 9th) such costs have ranged between 7.92 and 9.17. In three recent cases the Texas Railroad Commission has approved a rate of return of 7.25 on a fair value rate base. On May 6, 1970, we filed with the City of Houston an appli- cation to increase from $1.20 to $2.00 the minimum step of rate schedules RS-l, Residential Service, and MGS-1, Miscellaneous General Service. The Company's Houston application was submitted to the City's Department of Public Service and to the City Attorney. The Company presented detailed information concerning its revenues, expenses, plant account and the current cost of money. It also presented a fair value rate base computed from current land appraisals and a trending of plant accounts, such trending having been done by Whitman, Requardt and Associates, the publishers of the Handy- Whitman Index. • ' Ffouston Lighting & Power Co • -3- After a comprehensive study and extended discussions with Company representatives the Houston Director of Public Service and the City Attorney ,jointly recommended that a new rate ordinance be enacted by the Houston Council in which the minimum step of the rates above referred to would be increased from $1.20 to $1.90. They found such adjustment would result in a return to the Company of approxi- mately 6.62, determined in same manner as in the 1962 Houston Lighting 8c Power Company rate hearings, using as a test period twelve months end- ing June 30, 1970, and that the return upon the Company's trended rate base would be approximately 6.48. Both of these figures are well below the 7.25 returns recently allowed by the Texas Railroad Commission. On December 22, 1970, the Houston City Council passed an ordinance (No. 70-3230) adopting the above recommendation. Although the Company felt very strongly that it should have been granted the full increase applied for, nevertheless it was decided that it was in the best interest of the Company and its customers to put an end to this matter by accepting the recommended adjustment. Since the Company is in the midst of the largest expansion program • in its history, it will materially assist the Company in financing this expansion to have this rate matter concluded. We are submitting a new ordinance designed to make effective in your City the rate Changes which have been made at Houston. Under this ordinance, despite the small increase, your rates will continue to be among the lowest in the State and Nation. We earnestly ask that you act on this matter as soon as possible in view of the fact the Company has under way mayor financing, in connection with which it is scheduled to file with the Securities & Exchange Commission its Registration Statement in late January, 1971, and it is very desirable that this rate matter be concluded prior to that time. Our financial records are available and we shall be glad to submit any information you desire. We regret that, despite our best efforts, this increase has been necessary. The Company considers it a privilege to serve your city. We are grateful for your past cooperation and we shall endeavor to merit your continued confidence. Yours very truly, HOUSTON LIGHTING & POWER COMPANY • By ,~ Division Manager