Loading...
HomeMy WebLinkAbout1977-02-15 Regular Meeting � � t � € � a � CITY OF GRAPEVINE, TEXAS � � � AGENDA � SPECIAL CITY COUNCIL WORKSHOP SESSION � FEBRUARY 15, 1977 AT 6:00 P.M. � CONFERENCE ROOM - 413 MAIN STREET � � � T. CALL TO ORDER t e � § � II. INVOCATION: Councilman Dalton # � � �, III. WORKSHOP 3 � City Council to hald a workshop sessian regarding the Lone Star Gas rate increase request and study the pro- £ posed rates relating thereto. � ;: IV. ADJOURNMENT � � ; i � ! IN ACCORDANCE WITH ARTICLE 6252-17, V.A.T. C.S. , AS AMENDED � � BY CHAPTER 227, ACTS OF THE 61ST LEGISLATURE, REGULAR SESSION, �' ; THE CITY COUNCIL SPECIAL WORKSHOP AGENDA WAS PREPARED AND $ POSTED ON THIS THE 11TH DAY OF FEBRUARY, 1977 AT 3:30 P.M. € a �: , � 't CITY SEC TA Y � t P h 4: r,= x r { � i F 2 € + [ s $ � s � � � � i a s � 5 � �' � E STATE OR TEXAS � � s COUNTY OF TARRANT � � � CITY OF' GRAPEVINE X � � � � fi' The City Council of the City of Grapevine, Texas convened in a ;: workshop session at 6:00 P.M. on this the 15th day of February � 1977 in the Conference Room with the following members present , to-wit: � � � g. William D. Tate Mayor £ Doil Dalton Mayor Pro-Tem Charles Dunn Councilman � Willis Pirkle Councilman � David Florence Councilman � Larry Oliver Councilman � Charles Gideon Councilman � . g �, constituting a quorum with, � z Floy T. Ezell City Manager � James L. Hancock Ass � t. City Manager � Shirley Armstrong City Secretary x John Boyle City Attorney � � � The members of the Grapevine City Council met in a special ` ; workshop session for the purpose of reviewing and studying the � rate increase requested by Lone Star Gas Company. ;; 3 The City Attorney briefly explained the overall increase of � approximately twenty-three percent. For comparative purposes, �' he referred to facts and figures relative to the rate increase # that Lone Star Gas requested of the City of Irving. f Mayor Tate asked if efforts were being made through the Municipal League for cities to join together in studying the rate increase request. The City Manager answered that the Texas Power and Light rate increase request was being studied by a consultant 4 because it was a systemwide request, but that that process would � not be used with the Lone Star Gas request. 3 � There was a lenghty discussion regarding various facts and figures � included in the rate increase request with the City Attorney ad- vising Council members of actions necessary to protect the city�s � interests . � ,: There was no action taken. : � tr There being no further business, the Council recessed for fifteen � minutes before coming to order in the Council Chambers for their ` regular city council meeting of February 15, 1977. PASSED AND APPROVED on this the �_ day of , 1977. { �r� � � Mayor ` � ATTEST: � � City Secr tary ` � t � ti �: t � � f 3 P CITY OF GRAPEVINE, TEXAS ! AGENDA � REGULAR CITY COUNCIL MEETING � FEBRUARY 15, 1977 AT 7: 30 P.M. � COUNCIL CHAMBERS - 413 MAIN STREET � � I I I. CALL TO ORDER I � II. INVOCATION: Councilman Oliver � III. PUBLIC HEARING � City Council to hold a public hearing for the � purpose of considering the rate increase re- � quested by Lone Star Gas Company. � E IV. CITIZENS REQUEST AND/OR MISC. REPORTS & DISCUSSIONS � � V. CONSIDER.ATION OF THE MINUTES (February 1, 1977) � € « VI. NEW BUSINESS r � City Council to discuss the organizatian of a � citizens advisory committee and take any necessary ° action relating thereto. � � i VII. EXECUTIVE SESSION � A. City Council to recess to the Conferenc+e Room � to discuss pending litigation and the purchase � of real estate pursuant to Article 6252-17, ' � � Section 2, � (e) and (f) , Texas Civil Statutes. ,1 � B. City Council to return to the Council Chambers and � take any necessary action regarding pending liti- � gation. � C. City Council to consider any necessary action � regarding the purchase of real estate. $ VIII. ADJOURNMENT � . � o �i IN ACCORDANCE WITH ARTICLE 6252-17, V.A.T. C.S. , AS AMENDED � BY CHAPTER 227, ACTS OF THE 61ST LEGISLATURE, REGULAR SESSION, � THE CITY COUNCIL REGULAR MEETING AGENDA WAS PREPARED AND � POSTED ON THIS TE3E 11TH DAY OF FEBRUARY, 1977 AT 3 :45 P.M. � � ¢ . � # 1r� � CITY SEC ARY � � � � � i a � � a � s � � � � � � € � � :r i i J I STATE OF TEXAS � �(' 4 ; COUNTY OF TARRANT � � � � CITY OF GR.APEVINE � ` f r � The City Council of the City of Grapevine, Texas convened in C' regular session at 7:45 P.M. on this the 15th day of February � 1977 with the following members present to-wit: � ; William D. Tate Mayor � Doil Dalton Mayor Pro-Tem �: Charles Dunn Councilman Willis Pirkle Councilman � David Florence Councilman � Larry Oliver Councilman Charles Gideon Councilman � � constituting a quorum with, � � F'loy T. Ezell City Manager ; James L. Hancock Ass ' t. City Manager Shirley Armstrong City Secretary . John Boyle City Attorney Mayor Tate called the meeting to order. i The invocation was delivered by Councilman Oliver. 3 ; The first order of business was for the City Council to hold a public hearing for the purpose of considering the rate in- crease requested by Lone Star Gas Company. Mayor Tate in- troduced Lone Star Gas representative, Mr. Vernie Henderson. `� Mr. Henderson stated that his formal presentation had been made previously, but that he was in attendance to answer any questions that the Council might have. Mayor Tate asked if there were guests present who wished to I speak for or against the application. There were none. � Mr. Henderson briefly explained the rate increase request by ' saying that Lone Star Gas was asking for rates that would produce $98,519 or an overall increase of 24.33 percent. He further explained that the request was in the form of a two step rate rather than the traditional six step rate. � Mayor Tate asked if the firm was requesting the Council to { grant a rate that would increase Lone Star�s rate of return � from 3.30 percent to 8 percent and incorporate the fuel � adjustment cost through April, 1976 and if the rate base in- ; cluded one-third of the investment at Da11as�Fort Worth Air- port. Mr. Henderson answered that was correct. Mayor Tate then acknowledged that the Council had until April 3rd to further evaluate the rate increaserequest and recommended that the Utility Committee make further evalua- tions and �enter into negotiations with Lone Star Gas in an attempt to compromise the gas company's needs with the needs of the community. ' " Councilman Dalton asked Mr. Henderson if the eight percent + increase was the maximum that the utility company could re- ' quest. Mr. Henderson answered that the 8� was the amount that was testified in the hearing before the Railroad Commission by a group of cities as being an amount that the utility companies had to have to secure the capital necessary to provide adequate service. Mayor Tate acknowledged tha� the eight percent was what the Utility Compar�ies testified before the Railroad Commission and not what the cities testified. Mayor Tate then asked Mr. Hendarson if it was , correct that the eight percent was the maximum amount allowed by state statute. I � s � � G 1 ; 3 � � � } � � Mr. Henderson answered that his company asked for a nine per- ' ; cent rate of return but that the eight percent was testified ° and accepted. Mr. Henderson then acknowledged that an eight ' percent rate of return was impossible to maintain in today�s # inflation spiral. � } � Councilman Dalton commented that if the company was now exist- # ing on 3.30 percent rate of return that it seemed to him that �' they could operate on a lot less than the requested eight per- r cent. He then commented that if the average wage earner had � to make sacrifices in order to pay their utility bills that it ; seemed only fair that the utility companies should be willing � � to sacrifice as well. �� � i i Mr. Henderson commented that Lone Star Gas was asking for what ; the Railroad Commission granted and accepted as a fair rate of � � ; return. He then added that his firm had been operating under i ; a very restricted budget over the past few years and commented ; that Lone Star Gas did not appear before the Council every year # seeking a rate increase. x � � � Councilman Dalton then stated that he would be interested in � seeing some dollar figures rather than always being referred � � to a fair rate of return or a percentage. He added that a small � percentage would be more money on today�s market because of the � volume of business. � Mr. Henderson answered that the overall rate of return last year � was two percent. Councilman Dalton then asked how much that would � be in dollars . Mr. Henderson stated that he did not have that � figure available. Mr. Henderson commented that his firm had approximately $1,600,000 ' investment in the Grapevine system and that they should be en- titled to make a fair rate of return. He added that Lone Star � Gas was now providing as good or better service than ever before. 4 � f Councilman Dunn commented that the requested eight percent rate G of return might be fair to Lone Star Gas, but might not be fair � to the consumer. Councilman Dunn then asked if the firm antici- °� f ' pated that the price of gas would increase , therefore, bought � gas now for future use. Mr. Henderson answered that they � c negotiated contracts, but that they did not take the full supply � ' of gas at that time. Councilman Dunn then asked if the contracted ; } price was the price paid for the gas when it was finally used. Mr. Henderson answered that when gas was contracted it had a � price at the end of the year, or a redetermination, and that the � � price could go up again. He added that if they contracted for � so much gas, to be purchased by the end of the year, then his ° firm would purchase that amount of gas. Councilman Dunn asked � again if they contracted for gas now, knowing that they would not � use it for two or three years , and when it was useci; if they paid � the contracted price. Mr. Henderson answered yes. Councilman Dunn commented that Mr. Henderson had previously stated that Lone � Star was now using gas that had been contracted approximately � ten years prior. Councilman Dunn acknowledged that they did not pay the price then, that they are charging now. Mr. Henderson ` answered that that was true. Mr. Dunn then stated that they must ` f now be making a profit from gas that was purchased several years ago. Mr. Henderson answered no, and explained that gas was figured on a weighted average cost, and that Lone Star�s weighted � average costs were less than any other gas company in the state. � � f Councilman Dunn then asked how much Lone Star Gas sales had in- � t creased in Grapevine over the past two or three years. Mr. Henderson answered that they had been selling more gas, primarily { due to the weather, but that the overall growth of their system in Grapevine had not been too great and that it could have de- F creased last year. Councilman Dunn then asked if Lone Star Gas had lost any money in Grapevine. Mr. Henderson answered no, be- � ,: cause they have a 3.30 rate of return. � 3, �' � l i Councilman Dunn commented that it appeared, even with the 3.30 ` � percent rate of return, that Lone Star was making as much money � � now as they were at six percent when the revenues were less. ;j Mr. Henderson stated that their system is much more valuable ' today then ever before. � ,i Mayor Tate commented that he felt Lone Star Gas had suffered � as everyone else from inflationary consequence and that they C'! j probably were entitled to some adjustment to accomodate their :i increase in net operating cost. He added, however, that during r j the inflationary spiral Lone Star had an 85% pass through of K the increase in the cost of fuel which was passed on to the � customer. Mayor Tate continued to say that he felt there must be some incentive in the company to try to be more efficient and � to apply some pressures so that fuel could be purchased at a more economical cost rather than passing the additional cost on f to the customer. Mr. Henderson answered in regard to the fuel adjustment, that his company was losing $.15 an MCR and that the customer was gaining because of the $.15 per MCF, and added that that alone was in- y ' centive not to take contracts of a high priced nature. He added � that gas would not be provided customers as cheaply as it is � today if Lone Star had not purchased previous supplies. � The Mayor acknowledged that gas companies were going to have to f start looking to someone else, other than the citizens of given = communities, to pay the price. He added that utility companies � were going to have to do something to change the regula�tions so � that the people of Texas could live with the cost of fuel. He -� added that there was no incentive, no intent, and no practice of doing that and until the people started saying no, the utility companies were not going to do anything. He added that he hoped the utility companies realized this was the tone across the state. .� Mr. Henderson commented that if they could not buy the gas , then they could not provide service to their customers, and at that point, they would be out of business . He continued to say that he had been an employee of Lone Star Gas for eighteen years and that in his opinion, they had demonstrated their worthiness to each community be being one of the lowest gas utilities in the state of Texas, and the only gas utility with an 85% pass through. ,': Mayor Tate commented even if that was correct, it would be only a matter of time before that argument would be untenable. He added that they had extremly high fuel adjustment costs that were going to be, on a weighted basis, extremely higher than they are today. He then commented that people could not afford $200 to $300 per month fuel bills today, and the question was what would be in � store for tomorrow. The Mayor then stated that fuel was being produced in this state and asked why couldn � t regulations be changed so that the people of Texas could obtain the fuel and ; energy produced as economically as other states . He then added i that Lone Star Gas hould have some incentive to take action on th� matter. ; Mr. Henderson answered that Lone Star did not purchase any gas ' in 1974, yet gas kept selling. He added that Lone Star felt they must compete for the gas they purchased. He then stated that gas was the cheapest energy that could be bought with the exception of coal and added that he felt Lone Star Gas had done : everything possible to hold down the price of gas for its customers. Councilman Oliver commented that he could well understand the ; situation and added that he felt the concern was not only local, � but that it must be pressed over the stated. He then added that it might be beneficial for the Utiility Committee to meet with : representatives of Lone Star Gas and negotiate the requested increase. � � � n g � � � ; The City Attorney then asked how the $98,519 request for � ' additional revenue related to Exhibit Six, which indicated a re- $ quired increase in revenue of $141,540. Mr. Henderson replied x that the $98,519 was taken directly from his worksheet and re- � ferred to Grapevine �s portion of the $141,540. The City Attorney � then asked where the balan�e of the $141,540 came from. Mr. � Henderson answered that it came from Southlake and Westlake, and � further explained that three cities made up the Grapevine �: distribution system. r � � Councilman Florence asked if Mr. Henderson could provide a ratio � figure that wazld be appiicable throughout the rate increase re- � quest that would help determine Grapevine ' s share of the re- z quested incresse. Mr. Henderson commented that he did not have � that figure. � Councilman Dunn requested Mr. Henderson to bring his worksheets � f F when he met with the Utility Committee. % ,' Councilman Florence asked if the item referred to in Exhibit 4, as unaccounted for gas , would mean a leak in a line that was not going through a meter? Mr. Henderson answered that it would mean a leak, or a mismeasurement. Councilman Florence then asked why a customer should pay for the gas companies loss. Mr. Henderson answered that that was entered into the books as an � operating expense. Councilman Oliver noted that the unaccounted for gas figure made up over five percent of the total expenses. Mr. Henderson commented that five percent unaccounted for gas was an accepted leakage within the gas industry. � � Councilman Rlorence then asked why Grapevine should pay for a leak that might occur in Southlake, or vice versa. Mr. Henderson x answered that the Grapevine system was much older than the South- � lake system. � ; Councilman Dunn asked if the unaccounted for gas was a tax deduc- � tion. Mr. Henderson commented that he was not a tax expert, but � � would imagine that it would be figured as part of the expenses. � Councilman Dunn then commented that if they were writing it off �= on taxes and then charging it back as an expense that it appeared � to him they would be getting paid twice. � � Mayor Tate explained that the $26,000 was Lone Star's cost of the } fuel loss and if they saved any additional taxes by taking the ; r deduction, then that would be taken into consideration ss a tax credit. He then added that the $26,000 only represented their cost of the fuel and the tax write-off would reduce their tax � ` liability. t � ` Councilman Florence asked if Mr. Henderson could explain the � i negative federal income tax figures as related to the positive � tax figures. Mr. Henderson stated that after taking into " consideration a tax credit of $6,694, and it was credited back into the net income before federal income taxes, it then gave an adjusted net operating income of $61,504, which is the amount g of income on the system. _ The City Attorney then asked if foot note # one in exhibit six, : reflected that Lone Star gas paying 51% of all revenue for taxes of either occupational tax, street and alley rental, or : federal income tax, and that was then applied into the $70,000 � and the figure after tax dollars was $141 ,540. Mr. Henderson � answered yes. � � ; Mayor Tate then asked if there �vere any further questions from f any guests present. There were none. ` Councilman Dunn made a motion to refer the rate increase re- � quest to the Utility Committee for further study. � � � � j i i i � ; I. I The City Attorney suggested that the motion include that the rates continued to be suspended, that the public hearing be ' reset for another date, and that consideration be given to the f Utility Committee for further analization. t # Councilman Dunn accepted the amendment to his motion and the � � date to continue the public hearing was set for March 15, 1977. Councilman Florence seconded the motion and the motion pre- vailed by the following vote: i � Ayes: Tate, Gideon, Florence, Oliver, Dalton, Pirkle & Dunn i Nays: None The next order of business was consideration of the minutes of February 1, 1977. Councilman Dunn referred to the discussion f regarding the ex-officio member to the Park Board and asked if ;' the term of office should "reflect a one year term rather than i a two year term. The City Secretary acknowledged that Council- � man Dunn was correct and that the minutes would be amended to reflect the proper term of office. Councilman Dalton made a motion to approve the minutes as amended. The motion was seconded by Councilman Pirkle and prevailed by the following vote: Ayes: Tate, Gideon, Florence, Oliver, Dalton, Pirkle & Dunn Nays: None The next order of business was for the City Council to discuss the organization of a citizens advisory commitee and take any necessary action relating thereto. Mayor Tate explained that Councilmen Oliver and Gideon had worked with him in an attempt to make a recommendation to the Council and adopt a resolution to create a citizens advisory committee and to make the appoint- ments. He then asked Councilman Gideon to make a report of the " committee. Councilman Gideon then outlined the proposed purposes and organizational structure of the committee. (See Exhibit "A" attached hereto and made a part hereof) . He explained that the list of nominees was made up of persons who the committe felt ' would best represent that particular area of the city. Council- ' man Gideon asked other Council members to review the list of . � nominees before the next meeting and submit any suggestions regarding the matter. Mayor Tate then stated that if the Council decided to go for- ward with the Committee that it needed to be by resolution of the Council. Councilman Pirkle then made a motion to instruct the city attorney ; to draft a resolution creating the aforementioned committee. ' The motion was seconded by Councilman Florence and prevailed by the following vote: Ayes: Tate, Gideon, Oliver, Dalton, Pirkle, Florence & Dunn Nays: None The City Council then recessed to the Conference Room to discuss ' pending litigation and the purchase of real estate pursuant to Article 6252-17, Section 2, (e) and (f) , Texas Civil Statutes. 1 � � � � a � � � � fi � The Council reconvened in the Council Chambers at 8:40 P.M. � There being no further business to come before the Council, � Councilman Pirkle made a motion to adjourn. The motion was ; seconded by Councilman Dunn and all present voted aye. ; r � .� } PASSED AND APPROVED on this the �� day of , 1977. � ; � .C-./`:c.t-KJ f �'i� � � � Mayor { ; 2 ATTEST: a � � � . � € � City Sec tary ` � � � t f � � � §g 3 , � �L 5 � € �4 4 4 Y } � � � � € E k � i- � � Y X i � � y � € : e � € 5 � € � ! � i F t: 1 `€ { i i 4 s E � « � � � i i a 't, F I E t h j . . • i , . EXHIBIT "A" ' i;' r 9 . I` � ; � � . � , . , I . CITI7ENS ADVISORY COMM7`1'TEE ------ _ _—._._— ----—_--- � I. PURPOSES : � � A. To i_nduce new ideas for improvements in City Government. ���� � � B. To help identify the needs of the people for community serv�_ces. C. To develop new interest and participation in City Government. D. To open better lines of communication between the City Government and the people. E. To sample public opinion and make surveys of community � interest in regard to specific proposals and issues. , II. ORGANIZATION: A. The committee will be composed of 25 regular members and their respective alternates , plus 10 Ex-Officio members to be representative of various local civic groups. B, The City to be divided into 22 Districts, with each district having at Ieast one representative. Bellaire, Oak Creek Estates, Lucas having two representatives. �. The appointments will be for 1 year terms , running from April l, 1977 until March 31, 1978. D. The Committee shall meet at least quarterly, and at other special called meetings by the Mayor. � E. The Committee shall elect from its membership a Chairman, ' who will preside at the meetings, and a Secretary, who will record the minutes. F. The Committee shall receive regular briefings between regular meetings via mail outs. � G. The Committee will act .only upon the majority vote of its - members. I f � � � 1 � ' � 3 ' �- � f � � EXHIBIT "A" (Continued) � � ' � LIS'1� OF NOMIN}�;l:S � , - __ _— ---_ ___ � � � � � l. T,ucas 1lddition � - --- - - - --- __ _ -- . � � Rev. R. L. I1o1_!nes � a P�Iary Affleck Melvin McGrew, I�lternate � � E t 2. Oak Creek F,states Addition � --- -- -------- --- --- ----- -- � � Margaret Bloomer � � Bob Stewart ¢ Robert L. Sands , Alternate � � E 3. Bellaire . � � Neal Asher Carrnen n7arti_nez ; � Tommy 7i,��:��erer, Alternate ; f $. _ , t � 4. Reed Addition { � Carl Choate � � Bill Criswell, Alternate ; � � � 5. ,North Reed Addition ;: _- _ ____� f. ' Bill Boswell � Neil Elliott, Alternate � � � k V � 6. Sunshine Harbor Addition � � i 5 ' Ben Durham � ; Alternate � � � M Y 7. Southshore Estates Addition s — - — � Rex Boyd - '' Dr. Jerry Burgess, Alternate � i � � 8. Ridgecrest Addition ` — � � Wayne Hoover � Alice Hardin, Alternate i P 9. Shorecrest Addition Richard Grant ` Bob P�7urphy, Alternate � � > s 10. East Side t f Z. D. Baisden Annie �ti'aters, Alternate � . ' � ;. � s � � � � . � � � � i 7 f � � ,. ' � EXHIBIT "A" (Continued) t i � ' E ' 11. South Si_de �' - �� , , ; Tom Goodgar�e �:�� � Jerrell Est.iJ.l, Altexnate � � � { K 3 G " 12. West Side �. Fred Joyce � Roger Dickerson, Alternate [ i { 13. North Dove & Corbin Trailer Ben Graves Mrs. Pilney, Alternate � 14. ' Camelot Jesse Woods David Harwell, Alternate ; { - `! 15. Manor Oaks Addition { ----- -- Brennon Swindell 1'�Zrs. Jerry Spenser, Alternate 16. Far East Pat Stinson Alternate 17. North P�Iain Jack Toyer Louise Watts, Alternate 18. West Main Rev. Redmon Alternate 19, rlarina Del Ray � Andrew L. Ogg, Jr. Bud Marshall, Alternate } 20. Mustang Mobile Home Parks Dwayne Rogers Sharon Mathews, Alternate 21. Placid Penninsula ` Isham Kimble, IV. Alternate 22. Mustang Apartments Aubrey Burrows Altern ate � � � � F �: � , � EXHIBIT "A" (Continued) � , � � ��X-Ok'k TCIO ��7EM$ERS " __ _ ._ _ ___- ----- --- f 3 l. School � � � 2. Ch amI�er � � � 3. Rntary ¢ , � €: 4. Kiwanis � � � 5. Lions � � s � � 6. Bay View ; 7. Garden Club ; ;,'' � 8. 36 Club � � € � 9. Historical Society $' s t .� 10. P�tinisterial Alliance �; ; � i� ��� �� �� � � i � � � � � � : �� fi � � ,� s i � f ¢ I � ,,. � y S t � ¢ � 'E . i � i t f ¢ � � ia s' £ : ; � i' � fi'