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07/17/1978-CC-Minutes-Regular4. On a motion by Cooper and second by Hampton the recommendation of the Planning and Zoning Commission to approve the final plat of Dr. Ben Smith and John Wilson was passed. Voting unan. 5. a. The City Manager reported that tractors for mowing could be purchased from the Denton Ford dealer for between $2700.00 and $7400.00 and the Mayor reported that a used tractor could be purchased -for between $1600.00 and $2300.00. No action was taken to obtain bids. 6. Minutes: Present: Absent: b. Ken Cornell requested the Council to reconsider its previous decision concerning service to his property West of Sanger on Duck Creek. He was notified this item would be placed on the Council agenda for July 17, 1978. c. Mr. Roy Lemons reported the need to trim trees from some of the Stop and Yield signs in West Sanger. The City Manager reported this would be done. Motion to adjourn by Bridges and second by Cooper, voting unan. ATTEST: City Council July 17, 1978 Mayor Protem McDaniel M ayor Cole rlay�r Coker , Cooper, Hampton, Bridges, and Others Present: City Mgr., City Sec., City Att., L. Carr, D. Swenke, Mr. Monahan, Ken Cornell, Bill Rice, David Ballinger, Richard Muir, Mr. Lemons 1. Minutes were approved as printed. 2. Disburements for $3806.69 were approved on a motion by Cooper and seconded by Hampton. 3. Sanger Electric System Budget - Mr. Monahan, General Manager with the Brazos Coop. addressed the Council and apologized for the length of time (10 weeks) in getting back with the Council. During the last meeting Mr. Monahan stated that he made up a list of questions that came up. He stated there seemed to be a lot of misunderstandings, lot of problems, lot of concerns on both behalves and its ended up with the relationship between the City and the Brazos being a bit strained at the present time. Stated he had a proposal to make to the City and handed a written proposal, to each member of the Council for their consideration. Mr. Monahan stated the SE Budget is based on the same rates we are on now. Monahan went over the philosophy of the approach and stated Dan Swenke would go over the budget detail. Satted everytime we got looking at one problem of the things Council mentioned, something would crop up someplace else, such as the billing, what did that do to this, and we got thinking, that if we got a couple of people, and not any of the people that Council had met with so far, to go over the questions, to go over the problems, and go over the procedures, so Brazos could find out exactly what it is the City wants and the City could find out exactly what it is Brazos' problems are, he felt we could come to a resolution of which way to go. One thing Brazos is very concerned over is the money that needs to be made up during the next six years. How that is to be done - there is several ways to do it. But, when, and if, and how we get that done will make a lot of difference on how we handle some of the other problems. In operating 8 years under the present contract we've gone at things a certain way and we've got ourselves at a certain point in time, and money, and everything else. To change now (we can change) but we may need to change the contract to do it - if we're going to do things a different way and if the City is going to do the billing etc. Our main concern is to get a good system here and provide electricity as cheaply as we can but we need to get our money back. Mr. Monahan thought if he could get two people, and he told Mr. Swenke he would not be one of them and said that jokingly to him, but to get kinda a fresh look at the problems and see if we can resolve them and get along real well, then everybody will be happy with the end result. Everytime we got to looking at all the questions which he wrote out (and I wrote out about two pages worth) everytime he resolved one he created another. So basically that's That we would like to do in the next few months. Called on Dan Swenke to go over what the budget says. Mr. Monahan interrupted and stated the last time, at the beginning of the year, Brazos came in to present a budget to the City, and were kinda cold in raising certain things to get the money. Mr. Monahan thinks this time that we can find a way to get the money over the next six years and that's what we're looking for. How we do it, he feels there are several ways this can be done. But he would like to have a way in which the Council would be in agreement rather that try to force it on the City. Dan Swenke stated Brazos had a six months history to begin the budget with. Stated he felt more comfortable with projections of power to purchase. Both of these quantities are up quite a bit from what we had previously. The contract payments to the City are estimated to $116,395.00. The net increase on cash $8,197.00. At the end of the year Brazos expects the net system debt to be $77,988.00, Schedule B reflects Revenues expected to be $613,552.00. This is a combination of base rates sales and fuel adjustments. Miscellaneous service fees, $9,319.00, forfeited discounts and other $6,341.00. Bringing the total revenues to $629,212.00. The total operating expenses for the year including purchase power and depreciation for $529,120., leaving a net operating margin of $100,092.00. The detail at bottom of schedule shows the electric revenue which the 60/40 split is made, and the purchase power and the net Revenue which is the remainder of 600 of that value $116,395. which is the City's portion. When Brazos was up the last time the City ask that they add somewhere on the budget a simple statement of the debt of the system so the City would not have to add or subtract with the liabilities and receiveables. It was done on the next to the last page. Swenke quoted the statement as of December 21, 1977, total liabilities to be $162,610. Cash receivables $76,425. leaving a net debt of the system of $86,185, This same figure is projected to be $77,988. at the end of this year. The construction budget is the same as submitted to City previously which has already been approved. Discussion followed. Councilman Coker ask Mr. Monahan about the 7000 gallons of diesel fuel on hand and if there is anyway the City and Brazos could work out anything on that. Monahan stated if Brazos let the City buy the diesel at a low cost and then have to use the stand by, Brazos would have to buy at a higher price. It was brought out the machinery did not work. It needs repairing and Monahan stated he was unaware.of this and it would be necessary for the City to decide if they wanted the stand by, how much back up they want, and did they want to spend the money for the repairs. Discussion. According to Contract, machinery should have been kept running. Bridges brought out the past due power bills which continue to show up. Coker stated in the letter of February 6, that Brazos' legal department would rule if it is illegal for the City to have past due power bills. City never received an answer. Monahan replied that he could not give an answer to questions until he knew what it was the City desired. Coker asked Monahan about the City requesting Brazos to file an amended Budget as revenues changed and expenses changed. Stated Brazos asked a $18,000.00 rate increase, the City gave $24,000.00 but had never received an amended Budget. Swenke replied that the $6,000.00 represented about 220 of the total Budget. Budget was based on estimates of power sales, losses, cost of fuel. Simply no use to go through another budget for a change of 30. Coker asks if the law dosen't state that we have to have a new budget filed if its changed. Called on ruling from City Attorney. He stated that if the budget is amended he felt it would require an amended budget. Monahan stated he thought the main thing the City wanted at this time was not to raise the rates. Monahan stated, I took the position that since Brazos could not intelligently answer some of these questions that we would keep rates as they are and keep the request until later in the year and maintain the 60/40, and sit down and reasonably iron out the questions and problems. Stated he thought this was very fair. Coker stated fair is fair and that he was sure the rest of the Council felt the same, but just dosen't understand why the City has not been able to get answers to the questions. We ask questions, put it in writing, and we're still going to have some more meetings and this is what he is concerned about. Monahan responded that he had given answers to all questions but a few of the questions he could not answer. Stated there were 13 items in letter of Feb. 6. He had a memorandum from Swenke where he answered all 13. Coker asked for a copy and he stated he could not give them to him! Swenke read as follows. (l.) The City of Sanger has told Brazos Electric Power Coop. employees on at least three different occasions the schedule referred to in your letter of January 30th is quite acceptable. This is your authority to place that schedule into effect. Ans. If you recall when I discussed that the last time, there was a misunderstanding between Mr. Franzen and employees of Brazos Power. I myself heard Clarence Carpenter ask him in the conference room in Waco if he was ready to put that into effect and he said I have not made a decision on that yet. All I can say about that, is there was a misunderstanding on that fact and that once your letter came to Brazos and stated "this is your authority to place this schedule into effect," it was placed into effect. (2.) In January, 1977 the City was told that Brazos' Legal Department would rule on whether it was illegal for the City to have past due power bills. Swenke stated he told the Council he would consult with Brazos' attorney. I don't believe I ever said I would send you a copy of his opinion. As a result to what the attorney told Brazos, we were more than willing to place the schedule into effect. He said it was doubtful whether or not it was legal and that Brazos probably should have paid the power bills and left the capital improvements unpaid. (3.) In January,. 1977, as well as December, 1977 the City requested the capital expenditures owed to Brazos to be shown in the annual budget. Ans. It is included for this years budget. (4.) In December, 1977 the City asked for a line item budget presentation with the cost of vehicles which is charged to Sanger Electric included by vehicle. Ans. Copy of vehicle charges given to the City. Also Brazos does not break down their operating expenses any further than what is shown on the budget. (5.) In late summer of 1977, the City requested confirmation of Brazos Electric to follow Sanger Budget as approved by the City Council. Reply: On the Budget presented City last Dec. which the City subsequently rejected, referred to paragraph on second page that Brazos would do their very best to follow the budget considering that the Budget was amended and there were no factors involved that was beyond Brazos' control. (6.) In Jan. 1977 as well as Dec. 1977 Brazos was asked to file amended budgets on the electric system as revenues changed and expenses changed. None filed. Swenke recalls no request in January but does recall the one in December. (7.) The City requested the budget be trimmed, but that suggestion apparently was ignored. Brazos simply cannot do without the people they have. You people want first class service thats certainly what we want to provide for you. We cannot do with less people than we have. The suggestion was not ignored but looked at and Brazos found no place to cut labor. Brazos did make some adjustments in the labor figures, due to the fact that we lost a long time employee and Brazos is planning to hire an untrained man and by training him, therefore, the labor figures are less. Employee lost was Dennis Hewlett. Coker: Were we paying to train him and were we out the expense while he was at Whitesboro? (Vague on tape) Yes, he was offered a promotion and he took it. (8.) The fuel adjustment charge is a major stumbling block to any rate increase for Sanger Electric System at this time. Ans. (Nothing on tape) (9.) It appears in your budget that depreciation is not actually money, but only a figure. Yet this is subtracted from the amout of net profit available. It would appear these are funds which could be recovered by Brazos. Ans. It (vague) would take four or five years for depreciation as a non -cash expenditure. It's added into liabilities and added back into assets and it's just a washout. It's not a cash expenditure and it is available - to be used for operations. But with even adding depreciation back in, we only project $8,000. increase. This was my answer last time. (10.) It also appears to me that Brazos should have been including in the budget a specific amount of money to retire the debt of Sanger Electric Capital Improvements. Ans. That's exactly what we would like to do. But you have to have some money to be able to do that. Unless more funds are available for Brazos we can show $25,000. a year in this budget to recover capital improvements and we can recover it, but if the money is there all you can do is transfer the pay off of the capital improvements and have a bigger operating loss. What's the difference! You have got to have the money there. (11.) As you know the City of Sanger pays back Electric System monies capial improvements as well as electrical power usage: My answer to that last time was you pay for a comodity that has value. (12.) Last year Sanger returned approximately $60,000. to the system, and your proposed budget calls for the City to return more than $120,000. during 1978. Ans. As you well know the construction budget is based on projections of building within the City of Sanger. If those projections don't come to pass then the money is not expendable. Light discussion. No action taken on budget until Mayor is present and council has opportunity to agian go over with Brazos what the City wants to do and what Brazos can do. Sanger Electric Capital Improvements for May, 1978 in the amount of $2,862.06 were approved on a motion by Cooper. Bridges second. Unan. 4. The Gheen Subdivision Plat was approved on a motion by Cooper. Bridges second. Unan. City Attorney was requested to draw up Annexation Ordinance for the lot not already in the City as recommended by Planning & Zoning. 5. The Letter Agreement on placement of passive warning devices at public railroad grade crossings was approved on a motion by Bridges. Cooper seconded. Unan. 6. It was motioned by Cooper to make the Emergency Fund transfer of $4,908.50. Hampton second. Unan. 7. Other such matters: a. Cooper made a motion the City grant the building permit for E.E. Horst's carport. Hampton second. Unan. b. City Mgr. was advised to get with Lindon and set up ordinance or policy for electric utility extensions. c. City Mgr. was advised to get signs on Willow & 7th where they could be clearly seen. d. City received a refund check of $1,459.00 from Muir Agency representing a credit on our Workmen's Compensation Audit. 9. Water connection on Rice Property on West Austin Street. David Ballinger requested a water connection to his property outside the City. It is not a policy of the City to grant new service hookups to residents outside the City. The City asked Mr. Ballinger if he was opposed to being annexed into the City. Stated he would rather not. Council explained the tax rates as opposed to double rates for outside users. Said he would consider and let council know. i U. Ken Cornells Line - Discussion. Cooper made the motion the City pay $900.00 on the line to Ken Cornell's property West of Sanger on Duck Creek and FM 455. Hampton second. Voted unan. City Mgr. was advised to get with Lindon and set up policy regarding electric utilities extension. 8. Council went into executive session. Meeting reopened and Council was adjourned. ATTEST: Mayor Minutes: City Council, August 7, 1978 Present: Mayor Cole, Coker, Cooper, McDaniel, Hampton, and Bridges Others Present: City Mgr., City Sec., City Att., Rev. Burke Richardson, Jack Garland, Autry Burke, Eddie Hernandez, Jack Armstrong, Bob Shawn, Ken Cornell, Vernetta Powell, Bob Wallace, Melvin January, Hardy Burke 1. Minutes were approved as printed. 2. Disbursements in the amount of $20,949.89 were approved on a motion by McDaniel. Bridges second. Voted unan. 3. Brazos Contracts - Mayor Cole discussed several points from the text of the contract. General discussion concerning the interpretations of the contract. City Mgr, was directed to write Lindon Carr and underline Section I and II of the contract which the Council feels directs Brazos Electric to operate and maintain the City's generating plant. Mayor Protem Coker annoinced that he had appointed Councilman Bridges and McDaniel to a Committee to serve with two Brazos Electric personnel to draft a 1979 Sanger Electric Budget, 4. John Coker made the motion to approve. the resolution setting places for council members. Bridges second. Voting for were: Coope, Bridges, Hampton, and Coker. Voting against was McDaniel. Motion carried 4-1. Council places are as follows: Place 1 - Henry Cooper Place 2 - John W. Coker Place 3 - Danny McDaniel Place 4 - J. P. Hampton Place 5 - Benny Bridges 5. Hardy Burke, Attorney for Ned Wilson was present to speak on Mr. Wilson's behalf. Mr. Wilson requested disannexation of 32 acres recently annexed in by the City. It was mentioned that Mayor Cole and past Mayor Cornell had made a verbal agreement with Mr. Wilson if he would give the City an easement for laying a sewer line that the City would not annex his property. Discussion. City Council informed Mr. Burke that the City would need a Letter from Ned Wilson as property owner requesting disannexation. Council further stated this item will be placed on the agenda for August 21, 1978. John L. Sullivan does not feel that the Annexation Ordinance can be attacked. He feel. there could be a problem regarding