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MIN CC 02/19/1991CITY COUNCIL MEETING OF FEBRUARY 19, 1991 BOOK "0" 305 MINUTES OF THE HUNTSVILLE CITY COUNCIL MEETING HELD ON THE 19TH DAY OF FEBRUARY, 1991 IN THE CITY HALL COUNCIL I' CHAMBERS, LOCATED AT 1212 AVENUE M IN THE CITY OF HUNTSVILLE, COUNTY OF WALKER, TEXAS AT 6:45 P.M. The Council met in a regular session with the following members present: 0. Eugene Barrett, Mayor Pro tem WiLLiam B. Green City officers present: Gary M. Bell WiLLiam H. Knotts, Jr. James L. Carter Ronald L. Lange Its G. Gaines Charles Robinson Gene Pipes, City Manager Scott Bounds, City Attorney Member absent: W. H. Hodges, Mayor Ruth DeShaw, City Secretary FORMAL MEETING Mayor Pro tem Barrett called the formal session to order at 6:45 P.M. There were no persons present to speak in the citizen input /inquiry section of the agenda. Councilmtmber Its Gaines presented the invocation. CONSIDER RESOLUTION Consider Resolution approving the Gulf States Utilities rate case Ludoement Mayor Pro tem Barrett introduced the resolution and asked Mr. Gene Pipes, City Manager, to present the information. Mr. Pipes referred to GSU's request of 865,089,195 in base rates plus 822,955,060 in fuel charges for a total request of 888,044,255. He then presented the examiner's original report /recomnerxiation to the Public Utility Commission by the administrative law judges in the amount of 88,969,511 in base rates and 822,488,128 in fuel charges for a total combined cost of 831,457,638. He said there are some errors in the ' calculation of the original examiner's report and GSU has made one calculation of the examiners report, as follows: 822,200,000 for base rates and 822,488,128 for fuel for a combined total of 844,688,128. The examiners report as calculated by the PUC staff is 815,251,247 for the base rate and 822,483,128 for fuel for a total of 837,739,375. Mr. Pipes said the settlement offer is 830,000,000 in base rates and 817,488,128 in fuel charges for a total of $47,488,128. Mr. Pipes said the impact to the customers will be an increase to 887.00 per 1,000 kilowatt per month bill for a 9.9 percent increase. He said one of the problems with the examiners' original findings was that 96 percent of the increase was passed on to residential rate customers, rather than a rate designed to spread over the entire customer cLassificati on system. He said part of the stipulations was that the rate increase not be narrowly applied to the residential class, but spread over the entire rate structure and that there would be a two year moratorium on rate cases by the company under certain identified guidelines. He said the Public Utility Commission met last Wednesday and after hearing public input, the Commission encouraged the parties in the matter to try to settle the matter and report back by Noon on Wednesday, February 20, 1991. He said the staff felt it should have the Council's consultation before taking any further action. Mr. Pipes then presented the GSU proposal for settlement, PUCT Docket No. 8702 dated February 15, 1991 that points out the various conditions that Mr. Don Butler, a rate analyst representing the cities, has considered in making this recommendation for a settlement. He then presented a resolution provided by GSU for each city's consideration. Mayor Pro tem Barrett asked if there are any other cities that have foL Lowed Conroe's action. Mr. Pipes said one of the cities in the South Jefferson County area liked what Conroe did yesterday and moved to follow suit in that matter. He said he does not know of any formal endorsement so far of that particular position. He said Conroe seemed to want to communicate that they were willing to settle, but were not willing to accept what was offered and wanted, in the spirit of compromise, to at least make a counter offer rather than just not act or reject the company's proposal. He said this information is from the Conroe City Manager. * Councilmember Gaines did not see how the Council could make a decision on this matter with the ' information that it had available. She said the Council wants to do the right thing, but is not in a position to make a decision on something it doesn't know enough about. She said some of the information sent to them is unclear. She said she feels uncomfortable making a decision and in trying to propose a compromise. She felt the PUC has placed the City Council in an bad position by placing it in its Lap; it is the PUC's job to analyze this request and make a decision. CITY COUNCIL MEETING OF FEBRUARY 19, 1991 BOOK "G" 306 * Councilmember Green felt the City does not want to forfeit original jurisdiction although the way is implemented, it really makes no difference what the Council decides. He said the way things done, the PUC will ultimately make the decision as to accept or reject regardless of this C Councils decision. He felt the Council does not have adequate information and even if the Council I the information, having looked at some of these cases before, it is virtually impossible to make a ri good judgement unless we have a considerable wo nt of knowledge of regulation procedures, account procedures, etc.; therefore, the City Council cannot make an informed judgement about this matter. wondered if Conroe, in coming up with their own proposal, might even cloud the issue further becat if that then is to become a Legitimate proposal, then it requires that the Council reconsider it wait. He felt we should either accept or reject because to endorse something about which they hi very little information is not recommended. He suggested the Council just vote against this and the PUC ultimately decide. * Councilmebmer Carter noted in calling various people in Austin today, it is his understanding that the�l, settlement is not even finalized and that there is a lot of language that hasn't been determined byl, Lawyers for both parties. He did not quite understand why the Council is even being asked to make ail so- caLLed final settlement. He said he was told that the return on equity is not specified in the document on which the Council is being asked to pass judgement. He said he agrees with Counci )members Gaines and Green. He said white he appreciates the work of the lawyers representing the cities and the work of the City Manager on this, he did not feel this Council is ready to take action tonight. x x Councilmember Lange said in reviewing the information over the weekend, he felt that it is rather implied in paragraph A on the third page of the document that the Cities are perhaps being blackmailed)' in this situation. He said he didn't appreciate that and objects to this settlement offer as presented. Councilmember Bell said Councilmember Carter has shared the telephone information he received from Austin. He said he would like responses to questions, such as: "why is it, that out of seven classes': of rate payers, the residential rate payers seem to be experiencing a rise rather than a decrease ?" He said he would also Like to know more about the state of the River Bend Plant. He said he understands there may be a decision in the works to allow an extra six months in the River Bend''. expenses which could amount to as much as $37 million being tacked on to what is being allowed by the ' PUC. He said he wants to know more about this before he votes. * Councilmember Robinson said he too noted that the residential class was receiving approximately 96 percent of the increase and he wondered about the basis for this. * Councilmember Knotts agreed with Councilmebmer Gaines. He asked if the base rate is minus any fuel; charges so that they can vary the fuel costs as it varies. Mr. Pipes said yes and the fact that the, fuel costs stay so consistent is something that can be pegged down. Mr. Knits said the base rate does) not include the fuel charges because they are added on. Mr. Pipes said the fuel costs are supplemental) costs. * Councilmebmer Carter noted he learned from some of his conversations with people in Austin today that! the Council should ignore the fuel costs and pay attention only to the base rate because the fuel costs•'. are going to vary over time and it is going to be passed on to the consumers to some extent anyway. He said it is not a factor in the whole matter. He said the base rate is what needs our attention because it is going to be "in- perpetuity" for the rate payers. He said it is his understanding, according to one source, that the fuel rates can be used to hide some of the other costs periodically. !, * Counci[member Knotts said as he understands it, the fuel rate increase was put in when petroleum took J. such a big jump, supposedly it was to go down when the costs leveled out. Mr. Pipes said the fuel used!''. to fluctuate; fuel was an adjustment on a monthly basis or more periodic basis. Mr. Pipes said the;! basis of pegging the fuel now in a framework like this is to try to get some continuity and not have''.. a fluctuating fuel cost. CITY COUNCIL MEETING OF FEBRUARY 19, 1991 BOOK "0" 307 * Counci Lmember Gaines asked if this new rate set up is a compromise that previously the households were carrying the full load of the increase. Mr. Pipes said under the examiners- original report recommendation, 96 percent of the case would go to the residential rate payers. He said this should amount to a decrease; 9.9 percent would go to residential and the other seven classes getting a -. smattering of the rest of it. He said that was the condition because this is where the coalition of cities and others stalemated last week and this is where the Chairman of the PUC asked them to go out and settle. He said now in the examiners- report, the residential class is getting 96 percent and everyone ought to be paying under some sort of rate design more equally. He said this is where the average of 1 1/2 percent deviation in maximum deviation from the average of the rate increase for any classification customer was designed into how it is spread across the system. Mayor Pro tem Barrett said what he is hearing tonight is that we do not have enough accurate information and we do not have enough time to study it. He then asked for the Council's pleasure. Co ncilmember Green made the motion that the City Council deny the settlement offer and Councilmember Bell seconded the nation All were in favor and the motion passed unanimously. MAYORS ACTIVITY REPORT - -O. EUGENE BARRETT, MAYOR PRO TEN Mayor Pro tem Barrett advised he went to the H -GAC Board Member orientation last Tuesday in Houston. He said he would be attending his first board meeting next Tuesday. He said he is looking forward to perhaps bringing some good things to Huntsville that it needs but was unable to acquire before this Board representation became available. Arts Commission Memorandum Mayor Pro tern Barrett encouraged the Council to read the memorandum concerning the Arts Commission ' meting and to try to be present Thursday evening, February 21, 1991 at 7:30 P.M. for a detailed review of the downtown streetscape report. He said the following Tuesday, this will be the subject of the City Councils workshop. He said this will prepare the Council for the work session discussions. Mr. Pipes said if the Council is unable to attend on Thursday evening, the plans are also available on a daily basis if the Council has time to drop by the HEAP building to review them. CITY MANAGER'S REPORT- -GENE PIPES Mr. Gene Pipes presented a more detailed "Preliminary Agenda,- for the Council for next week's meeting. He said there may still be some adjustments, but he wanted them to have the benefit of this advance agenda. He noted the Council will meet at 5:15 P.M. for the joint meeting with the Arts Commission to hear a report on the downtown streetscape. He said it will then continue at 6:00 P.M. with the orientation series on a department by department basis with the Public Utilities Department being featured Tuesday night. He noted at 6:45 P.M. the Council will convene in formal session for citizen input and the formal meeting. He said if there are any questions about this agenda before it is formally posted on Friday morning, he will be glad to visit with the CounciLmembers about them. Mayor Pro tem Barrett felt the preliminary agendas are very good and a big help to everyone. COUNCILMEMBER ACTION Suggested Appointment of a Utility Board Co ncilmember Carter noted because of the GSU issue, and the recent Telecable company representatives requested a rate increase, while at the same time being aware that Mayor Hodges wishes to consolidate some of the boards and commissions, he feels, on the other hand, that we my need a 1-Utility Board" in the city -- someone who could give the Council an institutional memory because it is difficult for the Council to keep up with all of the various policy areas to which it must pay attention. He said a Board of this type could do some preliminary work for the Council before the Telecable representatives come in, for example, and even do some preliminary research about service and costs in other places. He said the way it is now we tend to hear only from the Telecable people when they come in. He said it could also check telephone, GSU, Entex, etc. He said ' he does not mean they would, in any way, develop into an agency or board that would have the ability to make the kinds of decisions that the Council was called on to make tonight, but at least they would have some information that the Council might find useful when the Council confronts various utility company representatives. Mayor Pro tem Barrett said Telecable can raise their rates 5 percent without even coming to the City Council, noting they came to advise the Council as a courtesy. He said, however, it may be in order to have a committee along those Lines. CITY COUNCIL MEETING OF FEBRUARY 19, 1991 BOOK "a" 308 Use of Diesel Fuels -- Baylor College of Medicine Councilmember Carter distributed to the Council an article by the Baylor College of Medicine concerning the use of diesel fuels. He said he would urge the City not to purchase EMS, police or any fleet vehicles that use diesel fuels for the reasons outlined by Baylor College of Medicine and as outlined by numerous other studies. He asked that diesel fueled vehicles be avoided in the future. Redistricting in the Cit Councilmember Carter asked where the City is in the process of redistricting. Mr. Scott Bounds, City Attorney, noted this has to be a joint function with the County, and that it is the County's responsibility to initiate redistricting. He rated final census figures should be available in April or May and that process can then begin. He suggested the appointment of a city - county redistricting task force to look at the options for redistricting. Removal of trees in the city auestion Councilmesber Carter said he has been encouraged by a number of things GSU has done recently until this Last week. He said he does not understand what happened on Ilth street as he can find no reason whatsoever for those trees to have been removed. He asked that someone review the contract GSU has with Blume Tree Company!', to see if there is perhaps an unintentional or intentional incentive that they remove trees completely rather than just trim them. He said he would be happy to review that contract if it can be afforded to him. He asked also how Blume's employees approach citizens about trimming their trees or removing their trees. He said most citizens are probably willing to go along with what utility companies want to do. He said his argument is that they ought to aggressively try to maintain and preserve the trees rather than aggressively try to get the!' citizens to have their trees removed because that then drives up their energy costs if they are removed. He: , said he would like some answers either from GSU or Blume about these matters. He said he hopes we are approaching citizens in a way that gives them the option on how their trees are handled. Review Kim Williams study on Downtown - Councilmember Knotts said he would encourage the Councilmembers to stop by to review the Kim Williams downtown plan. He said he has reviewed it with the 1982 Texas A&M study. He said by comparison, it is amazing the similarities. He said he feels the City paid $10,000 for something it had in 1982 and while we cannot do ;! anything about it now, in the future, we need to remember what we had done in the past before we commission new studies and spend money again for something we already have. Mayor pro tem Barrett said he understands that one of the things that went along with the grant was that this study would have to be done. Councilmember Knotts said that was a provision for the Texas Endowment of the Arts grant, but the grant we got from the Meadows Foundation did not require that; the Arts Commission just resubmitted the first proposal as it was written to the Meadows Foundation and assumed that is what we would do if we got that grant; it was not a,,� requirement of the Meadows Foundation. He said we didn't need to spend that money again because the Texas A &M document is very similar and has very good plans in it. Mayor Pro tem Barrett said the Texas A&M study was done by students. Councilmember Knotts noted it was done by graduate students and it is a very good report. He encouraged the Council to compare the Williams study with the Texas A&M study. ADJOURNMENT Respectfully submitted, c` u h DeShaw, City Secretary C -- �� February 19, 1991