Min - City Council - 1986 - 01/21 - Special CalledALLEN CITY COUNCIL
CALLED - SPECIAL MEETING AND WORKSHOP
JANUARY 21, 1986
Present:
Donald P. Rodenbaugh, Mayor
Council Members:
Rex Womack
Jim Wolfe
Jim Pendleton
Absent:
Joe Farmer, Mayor Pro Tem
Jim McClure
Gary Koch
City Staff:
Jon McCarty, City Manager
Marty Hendrix, City Secretary
Guest:
Bill R. McMorries, P.E., with Bill R. McMorries & Associates, Inc.
The called - special meeting and workshop session of the
Allen City Council was called to order at 7:12 p.m. on Tuesday,
January 21, 1986, in the Council Chambers of the Allen Municipal
Annex, One Butler Circle, Allen, Texas.
Workshop on Lone Star Gas Company
Rate Increase Request and Con-
sultant's Report and Recommendation (Agenda Item II)
City Manager Jon McCarty reviewed briefly the items to be
considered at this meeting and introduced Mr. Bill R. McMorries,
with Bill R. McMorries & Associates, Inc., who had completed a study on
the Lone Star Gas Company's request to increase rates and who had
made a recommendation on the rate increase for the Council's
consideration.
Mr. McMorries spoke before the Council on the background
of his company and advised of some of the clients he had done
work for in the past. He also provided background information
on the rate case process from the point when the rate cases are
filed by the utility companies to the role of the Council in
the action and what can happen after the Council has taken
action on a rate case.
Mr. McMorries advised of the items to consider when trying
to determine reasonable rates. Those items are gas loss exper-
ienced in Allen, the amount of monies expended by the gas company
in investments in equipment in the Allen area, the fact that gas
sales are down this winter, the cost of labor and expenses
incurred by the gas company, etc.
Mr. McMorries advised that his recommendation was as
follows:
Rate Base $723,254 (adjusted value)
Rate of Return 11.57% on adjusted value
Revenue increase $ 57,691 or 6.218
An increase of $89,828 (9.678) had been requested.
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Workshop on Lone Star Gas
Company Rate Increase Request
and Consultant's Report and
Recommendation (cont'd) (Agenda Item II)
Mr. McMorries then reviewed the exhibits presented in
his presentation to substantiate his recommendation. In
Exhibit No. 4, Mr. McMorries pointed out to the Council
the items "unrestored tax" and "deferred income tax" and
explained the figures. Mr. McMorries then reviewed Exhibit
No. 5 and advised that he is recommending a 14.6% return on
equity.
The Council discussed with Mr. McMorries areas that
should be emphasized in the negotiations with Lone Star
Gas Company. The Council also discussed how they should
approach the matter and negotiation of the rate as well as
the time factor before Lone Star Gas can submit another
rate increase request to the city.
There was considerable discussion by the Council on
the points of negotiation and the need to include a time
factor in the negotiations.
There was further review of the 14.6% return on equity
and how Mr. McMorries determined that figure and what it
related back to in this recommendation.
Consider Appointing a
Subcommittee to Conduct
Final Negotiations with
Lone Star Gas Company (Agenda Item III)
The Council discussed what members would volunteer to
serve on the subcommittee to negotiation with Lone Star
Gas Company on this rate increase request. It was concluded
that the subcommittee would consist of Mayor Rodenbaugh,
Councilman Pendleton and Councilman Wolfe.
Resolution No. 674-1-86(R):
A Resolution of the City
Council of the City of
Allen, Collin County, Texas,
Authorizing the Submission
of Application Materials for
Participation in the Texas
Cities for Economic Leadership
(TEXCEL) Program Sponsored by
the Texas Economic Development
Commission. (Agenda Item IV)
City Manager McCarty advised the Council of the additional
information that had been provided to the Council on the new
program, TEXCEL, and of the proposed resolution for their con-
sideration to authorize the submission of application materials
for participation in this program.
There was discussion by the Council on the need for additional
personnel to handle this program and who in the city would be
responsible for this program, what the commitment would be on
the part of the city as compared to the Chamber of Commerce,
and what the exact benefits would be to the city to participate
in this program.
City Manager McCarty spoke before the Council on the benefits
to the city of this program and advised the Council of the current
methods to promote industrial development in the city.
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ALLEN CITY COUNCIL
JANUARY 21, 1986
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Resolution No. 674-1-86(R) (cont'd) (Agenda Item IV)
MOTION: Upon a motion made by Councilman Wolfe and seconded
by Councilman Pendleton, the Council voted 4 - 0 to
approve and adopt Resolution No. 674-1-86(R), as
captioned previously. The motion carried.
Adjourn
(Agenda Item V)
Mayor Rodenbaugh adjourned the called - special meeting
and workshop of the Allen City Council at 9:50 p.m. on Tuesday,
January 21, 1986.
These minutes approved on the 6th day of February
1986.
Marty Hendrixb CITY SECRETARY
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