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