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HomeMy WebLinkAboutOrdinance 7181 ORDINANCE NO. 1121 AN ORDINANCE REGULATING RATES AND CHARGES FOR LOCAL EXCHANGE TELEPHONE SERVICE FURNISHED BY SOUTHWESTERN BELL TELEPHONE COMPANY; REPEALING ALL PREVIOUS ORDINANCES PRESCRIBING RATES AND CHARGES FOR TELEPHONE SERVICE IN THE CITY OF FORT WORTH; AND NAMING AN EFFECTIVE DATE. WHEREAS, the Southwestern Bell Telephone Company has filed an application with the City Council of the City of Fort Worth to increase its rates within the City of Fort Worth; and, WHEREAS, the City Council of the City of Fort worth, after public hearings and after due deliberation and con- sideration of all of the facts involved in such application, now finds that the proposed schedule of rates prescribed in this ordinance will provide the company a fair rate of return upon the fair value of its property devoted to the service of the public and make available sufficient additional reve- nues to enable the Company to continue to provide for the expanding telephone communication needs of the citizens of the City of Fort Worth; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS: SECTION 1. Southwestern Bell Telephone Company is hereby authorized to immediately place in effect the following schedule of rates for local exchange telephone service in the Central Zone and in the first and second tier zones of the Fort Worth Metropolitan Exchange: Monthly Rate Class of Service Central & First Tier Second Tier One Party Business - Flat Rate - Single Line $23.60 $25.10 One Party Business - Flat Rate - Multi Line 25.95 27.60 Business Extension - Flat Rate 2.10 2.10 One Party Business - Measured Rate 14.00(a) (NO) Business Extension - Measured Rate 1.35 (NO) One Party Residence - Flat Rate 8.00 9.50 Two Party Residence - Flat Rate 4.90 5.65 Residence Extension - Flat Rate 1.40 1.40 Commercial PBX Trunks - Flat Rate 41.30 43.90 Commercial PBX Stations - Flat Rate 2.10 2.10 Residence PBX Trunks - Flat Rate 14.00 16.60 Residence PBX Stations - Flat Rate 1.40 1.40 Hotel, Measured PBX Trunks - (Guarantee) (b) (b) Hotel, Measured PBX Stations 1.25 1.25 Semi-Public - (coin) 9.45 10.05 Semi-Public Extension - (Coin) 2.40 2.40 Semi-Public Extension - (Non-Coin) 1.40 1.40 (a) includes 100 outgoing local messages, others 8� each. (b) Minimum local message revenue guarantee at 8j6 each equal to one party business flat rate service. (NO) Not Offered Rates and charges for miscellaneous services and equipment, service connection, move and change charges, and coin telephone access charges shall remain as heretofore established except for such modifications as have been recommended by the Stanford Research Institute in its analysis of May, 1975; provided, however, that Southwestern Bell Telephone company shall have the right to file from time to time with the City Secretary and/or the Director, Consumer Protection Division, different tariff rates and charges for such mis- cellaneous services and equipment, such different tariff rates and charges to become effective 30 days after filing unless otherwise ordered by the City Council. SECTION 2. That bills and statements of account for local service shall be due and payable upon receipt but shall not become delinquent until fifteen (15) days after the date of billing. The substance of this provision shall appear on the face of each bill rendered. SECTION 3. All prior ordinances heretofore adopted by the City Council of the City of Fort Worth establishing rates and charges for telephone service are repealed, effective upon the adoption hereof. SECTION 4. Nothing contained in this ordinance shall be construed now or hereafter as restricting, limiting or modifying in any manner the right, power and authority of the City under the Charter of the City of Fort Worth, the Constitution and laws of the State of Texas and of the United States to regulate the rates and charges of Southwestern Bell Telephone company for local exchange telephone service within the City of Fort Worth. APPROVF,D AS TO FORM AND LEGALITY: Cj-t'y Attorney Adopted by the City Council of the City of Fort worth, Texas, on the '? W day of 1 1975. City of Fort Worth, Texas Mayor and Council Communication DATE REFERENCE SUBJECT: Southwestern Bell Telephone PAGE NUMBER Company Request for Rate 3 6/9/75 G-2734 Relief Iof The City's administrative staff has completed its analysis of the report sub- mitted to the City Council on June 2, 1975, by the City's Rate Consultant, Stanford Research Institute (SRI) . This analysis indicates that adjustments should be made to the Bell Telephone Company request in addition to those recommended by SRI. It is proposed that a reduction be made from the Consultant's recommended Rate of Return of 7.5% to a level of 7.2% utilizing the same Fair Value Rate Base as recommended by SRI. The staff sees no reason to allow a higher rate of return in Fort Worth than the 7.2% recently allowed by the City of Dallas. Other adjustments are proposed to reflect disallowance for the payments made by Southwestern Bell Telephone Company to the General Telephone System for Bell's completed calls originating in the Fort Worth Metropolitan Exchange and terminating in General Telephone Exchanges. It is further proposed to disallow a token $273 disputed expense allocated to the Fort Worth' Exchange alleged to be improperly charged to the Company by certain former company officials in San Antonio and Dallas. The overall effect of these additional recommended adjustments would result in a Gross Revenue Deficiency amounting to $8.981 million, instead of the $9.999 million increase recommended by the Consultant, as detailed in the following tabulation: (Millions) Bell City Request SRI Staff 1. Fair Value $293.755 $221.667 $221.667 2. Rate of Return 3.55% 7.5% 7.2% 3. Revenue Requirement (1 x 2) 10.433 16.625 15.960 4. Adjusted Operating Income 4.703 11.643 11.643 5. Additional Adjustments Made - - 158 by Staff 6. Adjusted Operating Income 4.703 11.643 11.485 7. Revenue Deficiency (Net) 5.730 4.982 4.475 8. Gross Revenue Deficiency 11.500 9.999 8.981 Extent of Additional Revenues Needed (Line 7 x 2.007) The staff has prepared an alternative rate structure which is lower with respect to the basic services than that recommended by SRI, while leaving the other proposed miscellaneous increases as recommended by SRI. DATE REFERENCE SUBJECT: Southwestern Bell Telephone PAGE NUMBER Company Request for Rate 2 3 6/9/75 G-2734 Relief Of Rates have been identical in the Fort Worth and Dallas Metropolitan areas for at least 34 years, and this is the first time in this period that telephone rates are proposed to be lower in Fort Worth. The rate schedule proposed by the staff proposes no change in the 2-party residential rate, so it may be retained as a "lifeline" service, as has been done in the past several rate cases. One party residential service at the recommended $8.00 rate would amount to a 67(,% per month increase, or 9.1%. One party business service is proposed to be allowed to increase $2.37 per month to $23.60 or 11.2%. Additional information on requested and recommended basic rates is provided in Attachment I. It is recommended that the SRI proposal be approved with respect to the various service connection charges, pay telephone rate and charges for other miscel- laneous and optional services. Those rates would be identical with those approved by the Dallas City Council. Attachment 2 indicates the dollars and percentage of increase proposed by categories of service. The burden on basic users producing additional revenue has been reduced to 38% of the total in the staff's recommendation compared to the Consultant's 44% recommendation. Service Improvement Telephone bills now rendered in Fort Worth do not indicate the time allotted for payment of the bill. As a result, the Company is not prevented from demanding payment from the customers at unpredictable times. The practice has generated considerable complaints, and highlights a problem that needs attention. The staff recommends that the ordinance establishing telephone rates be amended to require that the telephone bill give 15 days notice for payment. Effective Date Because of the unusual length of time that has elapsed since the original filing of this application on October 16, 1974, the staff would not argue with the company in its plea for prompt consideration and its request to making the effective date coincident with the date of City Council action. An ordinance has been prepared encompassing the staff's recommended rate schedule, as well as a requirement as to the billing notice practices. DATE REFERENCE SUBJECT: Southwestern Bell Telephone PAGE NUMBER Company Request for Rate 3 Of 3 6/9175 G--2734 Relief Recommendation It is recommended that the City Council approve the ordinance which has been prepared authorizing Southwestern Bell Telephone Company to increase its rates in the Fort Worth Exdhange as summarized herein and listed in the ordinance, including the additional billing procedure requirements described above. RNL:ms Attachments D BY: DISPOSITIOIJ BY COUNCIL: PROCESSED BY 7 APPROVED ❑ OTHER (DESCRIBE) 1243 CITY SECRETARY DATE I RMAL REPORT TO CITY COUNCIL MEMBERS No. 2575 �- 0aww' To the Manor and Member: of the Cit9r C�oun�cil October 8, 1975 Subject: SOUTHWESTERN BELL TELEPHONE COMPANY DIRECTORY SERVICE ASSISTANCE fail CHARGES Attached to this communication is a letter from B. D. Serrault , Fort Worth Division Manager, Southwestern Bell Telephone Company, in which he advises that the Company will, in the immediate future, start making a charge for directory service assistance calls. At the time of the telephone rate increase case study, it was the advice of the Consultant, Stanford Research Institute, in both the Dallas and Fort Worth reports, that this concept was to be recommended as part of the Com- pany's policy of usage-sensitive pricing, in the same manner that the three part rate was established for installation and service connection ,and moving charges. The attached letter has been forwarded to the Public Utilities Advisory Board. Respectfully ubmitted, R. N. Line City Manager RNL:mm Attachment ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS -----� J .:sue Southwestern Bell B. D.Serraull lUU2 Coinnonce F 161 DIVIbuxm Manager Forl Worth, IeXaS 16101 Phone(tit/):i3ti ('Y'l October 3, 1975 Mr. Rodger Line - City Manager ` Mr. R. H. Aughinbaugh - Director-Consumer Protection Division Municipal Building 1000 Throckmorton Fort Worth, Texas Gentlemen: As you will recall during past conversations and negotiations, we discussed the need for some means of control of expenses related to non-revenue producing services such as Directory Assistance. Stanford Research Institute also urged that the Company and the City begin immediately to develop systems of usage sensitive pricing wherein the primary costs of providing any service would be placed upon those cust, ,iiers using the service and in proportion to their usage. You have authorized the first steps toward this end in approving the present non -publish charge and three element pricing for service connection, move and change charges. Directory Assistance is another of our more expensive non-revenue services and most of these costs are generated by relatively few of our cus- tomers. In August, 1974, our customers in the Fort Worth Metropolitan Exchange made 93,800 calls to Directory Assistance per average business day which re- quired the exclusive services of 245 operators. Should we continue the present arrangement, we estimate that 267 operators will be needed to handle an expected 1U2,000 daily calls by the end of 1976. This growth pattern will surely be ex- tended through the foreseeable future if some means of relief is not developed. In order to comply with the Stanford Research Institute recommenda- tions, we intend to begin charging those customers who use this service exces- sively. We propose a charge of .20� for customer dialed calls to Directory Assistance in excess of three per month in order to obtain the desired result of materially reducing non-essential calls with a minimum impact on those who must exceed the free three call limit. In addition to the basic three call allowance there will be no charge to any customer who is unable to use a directory due to visual or physical im- pairment, for calls placed from coin telephones or for calls from hospitals or hotels and motels. Business PRX customers will be allowed three Free calls per trunk. Centrex and Package PBX call allowances will b.� on the basis of three for each group of six stations. Our studies of calling patterns of Fort Worth Metropolitan customers show that only 39`/ of our residence customers and 6%1', of business customers presently make more than 3 calls per month to Directory Assistance and these customers account for 96'r, of all calls. The Bell System has now had more than a year' s experience with an identical plan in Cincinnati , Ohio and if the results there are equally effec- tive here the arrangement should significantly re_luce the volume of calls, result in only about 4% of residence customers and 9/ of business customers being billed any charges, and produce annual expense savings of approximately $ 1 .4 million dollars. Anticipated gross additional revenue is not likely to exceed $300,000 and may very well decline from that level as people modify their calling habits. Some offsetting expenses will be incurred for additional directories and billing. The effect of this expense reduction and revenue from this plan in the Metropolitan Exchange will not exceed the 7.2/ rate of return authorized by the City in June of this year. Rather, we are hopeful ] that this will at least partially compensate for the effects of continuing inflation and regula- tory lag both of which are largely beyond control of either the Company or the City and will allow us to continue to meet the rapid growth requirements in the area and avoid the possibility of requesting another general basic rate increase in the immediate future. In connection with the expected reduction in call volume, there will be fewer operators needed but no regular will be laid off or terminated. As the load permits, people will be given other work assignments where they are needed and, of course, normal attrition will minimize the problem. We will comply with the miscellaneous services and equipment regula- tions as set forth in Ordinance 7181 by filing herewith the proposed tariff and delaying its implementation for a minimum of thirty days From this date. Division Manager EUD IVfTH THE CITY. OF FORT wulall General Exchange Tariff N.wnnl•m•nl to u,l.arlre will '75 Directory Assistance Service be .•Wed.•c•pt rnr the purpo.• original Sheet 1 �f a. Neel ing Ihl. tatW. MIZECT011 ' ASS1STA'XI: S1-'.1Z►'IC1' I. C.UN1C1:AL A. 1.11a 1'clepilonc Couthany furnishes Directory ,Assistance /'� Scrvicc wherclly custorlurs nay rq t eues assistance in [ ) dotermininr telephone nu,:,bcrs . `�•/ B. The rates set forth below apply to calls from customers in the Ft. Worth Metropolitan Exchange who .request assistance in determining telephone numbers of ' customers who are located in the 817 Numbering Plan Area. I1. RATES © A. Where the customer direct dials the Directory Assistance number, the charge for each call (1naximum of two requested telephone numbers per call) is $.20. Be Where the customer places a call to the Directory rssistanc, attendant via an operator, the charge for each call (maxi::•.0 of t%•;o requested telephone nur.,hcrs per call.) is $. 40. I;- • dial I.acilities are not available, calls placed to Directcrl Assistance via an operator shall be considered as Customer dialed. C. Directory Assistance charges billed to a telcohor.e credit card, or a telephone nur.ber other than the originat_' nq number via all operator, Brill be billed at the $.40 rate. O. A customer is allowed three direct dipped Directory Assis- tance calls per line per r..on;.h at no charge. Custcmers with Ccrtrex and rack, g,e Private Branch Exchange Service will be allowod three direct dialed Directory P.ssistance calls p.".r month for each group of six -m in stations per system, or 4rvction thereof, at no charge. Customers of Dortnitory Centre:: Service will be allowed three direct dialect Directory assistance calls per month for each station at no charge. E. No credit will be given for any unused portion of the customers all.ot;r,.nce. Fo• credit trill be r.iven for requested telephone nul;qbers that aro non-publish:O. ►•.o credit will be cliven for requested telephone numbers that are not found in the: directory. F. Call allo..:anccs are not transferable between separate accounts o:: the same eustoirer. G. Charges for Directory Assistance Service are not auolicable to calls placed from Public and Selni-Public Telepho.:c service or over llospi.tal, Ilotel. and Eotcl Trunk i.ilics to tile Directory Assistance attendant or on calls from custolrcrs �'�!►� whose physical or visual handicaps prevent thcln from using the .telephone directory. Issued: EXecti ve: By CHARLES ]\IARSTTALL. Vice President—Texas T Soutimcstern hell Telephone Company • llallas,'1 cxas