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Home My WebLink About1964/12/21-Agenda-Pre-Council l / All- AML PRE-COUNCIL CONFERENCE DECEMBER 21, 1164 �► Present: Late: Absent : 1 , Friedman None 9 . Stovall 2 . Jones 3. Kemb 1 v 4. Harding 6. Shannon 7 . Hoover 8. Harr I t e m Follor-Up 1. Evaluation of Loll,- Star and CA)astal States NAN Gas Proposals (MSC G-738) Council discussed evaluation of proposals from the Lone Star Gas and the Coastal Gas Producing Qampanies. Councilman Hamm inquired as to what was considered to be an excessive rate of return for a utility, and was info n»ed by the City Manager that a rate of return up to 8 per cant was considered as beini; a legal rate of return. The City Manager re- ported that, However, the staff 's evaluation was that a to per cent rate of return represented a fair rate. Councilman Haim also referred to Item 2 in the letter from Mr. Joe C. Darrow, Lone Star Gas Company, regarding the prices quoted in the Coastal OP'' States proposal being subject to adjustment by the Railroad Commission. The City Manager reported that the City Attorney's office had not stated definitely whether or not the prices stated by Coastal would be subject to Railroad Commission regulations . Councilman Jones referred to a court case in San Antonio , referred to as the Alamo Case, which he r.tated indicated that the gas company could con- tract with the city and not be subject to jurisdic- tiun of the Railroad Commission. Councilman hoover stated that he did not know if a set price during the term of the contract would be best since the tern of the contract would be best since the price was subject to both upward and downward fluctuations. Councilman Jones inquired if the gas company could legally be required to dedicate its reserves under the contract to the City, and was informed by Mayor Friedman that this could be included in the contract. However, Utilities Supervisor Aughinbaugh, reported that the gas company reserves were dedicated on a system-wide basis and that it was not standard for the gas company to dedicate its reserves to individual cities. Councilman Hamm referred to the City's jurisdic- tion in regard to establishing the gate rate of the Ago' gas company, and was informed by the City Manager that the gate rates were not set locally but could be influenced by other cities acting together before the Railroad Commission. Councilman Jones stated that he did not under- stand the field rate adjustment provision as provided in the consent agreement. Councilman Barr stated that he did not like the provision providing; for automatic and unilateral adjustments by the gas company. Coun- cilman Barr stated that he understood the Lone Star Gas Company had agreed to an addition to this adjust- vuent provision providing; for 30 day notice to the Utilities Supervisor prior to any proposed adjustment, and inquired i1. the Lone Star Gas Company had agreed to provide additional notice in the newspaper of general circulation regarding any proposed adjustments . Utili- ties Supervisor Aug;hinbaug;h stated that the Gas Company had agreed to both of these provisions. Councilman Jones also inquired as to the additional ataount of revenue which would be received by the City from the propos••d consent agreement with Lone Star Gas Company, and was informed by the City Manager that the additional revenue would be approximately $130,000 annually, or an average rate of slightly more. thau 3 per cent total gross receipts . Councilman Harding asked City Attorney Johndroe if there had not been a previous gate rate hearing; for which each water meter customer was assessed a 10 cent fee in order to finance the hearing. City Attorney JDbolr u indicated that there had been a previous hear- ing is 1958 or 1959 in which the gate rate had been ioero"ad from approximately 30 cents to 35 cents per MQ. Mayor Friedman, Councilman Kemble, and Councilman Narding indicated that they were ready to proceed with the consent agreement. Councilman Hamm stated that he was also in favor of the agreement since he had been assured by the City Attorney that the City would not relinquish any of its rights under the proposed con- sent agreement. Councilman Shannon stated that he did not feel there was a need to approve the proposed consent agree- ment since the present agreement had another two years before its expiration, and Councilman Shannon stated that the gas afraid a rate hearing; might be called within the next sir months . Councilman Kemble stated that he did not feel the City was rushing; into the agreement, but that the gas company needed to know a reasonable period ahead of time as to future status since it would allocate funds for capital improvements during this period . Councilman Barr stated that a continuous rate study by the Utilities Supervisor was being; undertaken. The City Manager reported that the staff had the responsi- bility to advise the Council of any excessive earnings of the utilities companies revealed by the continuous analysis by the Utilities Supervisor, and referred to the rate decrease by Texas Electric Service Company which had been effected some two years previously with- out a formal rate hearing. Council unanimously approved the proposed consent AM agreement with Lone Star Gas Company at regular Council meeting. Aft ? . Writer and Sewer Installations Policy ElID - Agenda, December 28th. Policy tM&C G-732) Councilman Kemble referred to the provision in the Witter and Sewer installation policy regard- ing temporary zewage treatment plants, and inquired if this provision had been provided for any speci! is purpose. The City Manager reported that there were at leant two cases where the provision for a package or temporary sewage treatr,aent plant was being, con- sidered . lie stated that there was provision in the Capital Itaprovement Program for a sewage trunk again to terve the east section of the trinity River East arca (the International Airport Main), but that Menaseo Manufacturing Compdny uas eager to re_eive City sewer service iimnediatcly and it would be possi- ble to provido service earlii�r through use of a pack- age treatment plant. The Manager reported that such a package plant could be used to provide .ervice until the area developed and the trunk main was built. The City Hanoger alio reported that the Chamber of Ca xc* lfnd an option on land ::oath of Fort Worth f*r development. for induat.rial purposes which would be ! rvod eventually by the Vi l lag;e Creek sewage treatment plant, but that the package plant could pruv1de for inciediate development prior to the con- ntmsetion (-,f a major trunk line thrnu,gh the area. The Gir_y Manak.-r t,,p,,rtcJ that the prevision for pt>taaaze tri+atsucnt ja Lante provided ujore flexibility iu prvv"Lolat. Service by the City. Lbuncilman Kmble inquired it the provision for to-;7orary crdua.Ke tr"Moat planta might delay the constructi-on i the trunk lure planned for an area, and taxa info med by .he hana ,er that the: coclstructiadd of Ote package p..ant might delay the construction of a hunt: Pins, but OWL It wort 60- at the option 4f the Cl-Ly. Cbintf lmOn XaMblt atstod that he jolt the doclsioa rant.;ardin); the inatallation of a packago treat- anent plant should be the responsibility of the City Cnancil . The City Manal;er tated MAt the policy could provide that proposed package plant installations would be submitted to the City Council prior to any determina- tion for construction of a treatment plant. Councilman Jones requested that the proposed Water and Sewer Installations Policy be deferred for one addi- tional week, and this action war, taken at regular Council meeting. ,OW