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Home My WebLink AboutOrdinance - 2012-O0026 - EUB And The Disbursement Of Net Revenues From EUB - 03/29/2012First Reading March 29, 2012 Item No. 6.7 ORDINANCE NO. 2012-00026 Second Reading April 10, 2012 Item No. 5.25 AN ORDINANCE AMENDING CHAPTER 2, ARTICLE 2.03, DIVISION 12 OF THE CODE OF ORDINANCES OF THE CITY OF LUBBOCK, TEXAS, WITH REGARD TO AUTHORITY, DUTIES, AND RESPONSIBILITIES OF THE ELECTRIC UTILITY BOARD, AND TO THE DISBURSEMENT OF FUNDS FROM THE GENERAL RESERVE OF THE ELECTRIC UTILITY; PROVIDING A SAVINGS CLAUSE; AND PROVIDING FOR PUBLICATION. WHEREAS, the City Council of the City of Lubbock, Texas deems it in the best interest of the citizens of the City of Lubbock and of the City's electric utility to clarify and update certain portions of the City of Lubbock Code of Ordinances by proposing certain amendments to Chapter 2, Article 2.03, Division 12 of the Code of Drdinances with regard to the City of Lubbock's electric utility; WHEREAS, a public hearing and notice therefor, and publication of the proposed changes to Chapter 2, Article 2.03, Division 12 of the Code of Ordinances has preceded consideration by the City Council of this Ordinance as is required by Chapter 2, Article 2.03, Division 12, Section 2.03.418 of the City of Lubbock Code of Ordinances; NOW THEREFORE: BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: SECTION 1. THAT Chapter 2, Article 2.03, Division 12 of the Code of inances of the City of Lubbock, Texas, is hereby amended to read as set forth in ibit "A" attached hereto, and incorporated herein for all purposes. SECTION 2. THAT the City Council of the City of Lubbock herebv finds a public hearing and proper notice therefor, and publication of the proposed ges to Chapter 2, Article 2.03, Division 12 of the Code of Ordinances has .ded consideration by the City Council of this Ordinance as is required by aer 2, Article 2.03, Division 12, Section 2.03.418 of the City of Lubbock Code of SECTION 3. TI-IAT' should any paragraph, section, clause, phrase or word of is Ordinance be declared unconstitutional or invalid f'or any reason, the remainder 'the Ordinance shall not be affected thereby. SECTION 4. THAT the City Secretary of the City of Lubbock, Texas, is ;by authorized and directed to cause publication of the descriptive caption of this inane as an alternative means of publication provided by law. AND IT IS SO ORDERED. by the City Council on first reading this 29th day of March , 2012, by the City Council on second reading this loth day of April , 2012. ) AS TO CONTENT: AS TO FORM: City Attorney Ordinance Amendment �A TOM MARTIN, MAYOR Ordinance No. 2012-00026 EXHIBIT A Division 12. Electric Utility Board Sec. 2.03.415 Authority, duties and responsibilities (a) The board shall approve an annual budget and electric rate schedule for the city's electric utility, submit the budget and electric rate schedule to the city council for approval by filing the same with the City Secretary, and be responsible for the proper implementation of each following adoption. The board may, as required from time to time, submit to the city council for its approval amendments to the budget and/or electric rate schedule. (b) The board shall authorize and oversee an audit of the city's electric utility system and shall report any and all findings of such audit to the city council. The board may authorize such audit to be performed by an external auditor. The external auditors must be a certified public accounting (CPA) firm that has the experience and depth of staff to audit the city's electric utility in accordance with generally accepted auditing standards and contractual requirements. The audited financial numbers ^a 4ker— rxys:4—must be completed and reported to the city's accounting department in sufficient time foruueh-that the comprehensive annual financial report to'r A' *-nmT be presented to the city council cr^' "•- c-' eaaped Meeting in 'anua— feNewixg the audit schedulcfiseai-year-ead. The auditors arc accountable to the board and will have access to direct communication with the board if staff is unresponsive to auditor recommendations or if the auditors consider such communication necessary to fulfill their legal and professional responsibilities. (c) To the extent authorized by law and subject to the city's charter and Code of Ordinances, the board shall be responsible for reconvnendingaeminetieg individuals to the city council for their consideration in appointing individuals to the board and for appointing individuals to the West Texas Municipal Power Agency. See. 2.03.417 Disbursement of funds from the General Reservene! Fevenues (a) PriorSubjeet tobseetiaw(g),"or-tem-paying any fee equivalent to a franchise fee, making any payment in lieu of taxes (PILOT), ; and prior to disbursing any funds from appropriable net assets (the "General Rcservc )eperat,4% evenaes of the city's electric utility, the board shall first fully meet all bond reserve or fund obligations defined in any bond covenant for the city's electric utility. (b) Subjee' to subse-"-- (g), -Alter providing for sufficient funds to meet the obligations contained in subsection (a) above, by tlw end of the lscal veer the board shall ensure that the General Reserve is equal to three (3) months cross revenue generated from all retail electric sales (the "GRR'•) as determined by tnkine the average monthly GRIT limn the previous fiscal year as shown in the latest comrrchensivc annual financial report (CAPR). The term "GRR" as used herein shall include nil receipts from the sale of retail electric lighting and power in LP&L's certificated territory.{and-the-feliewing-iteomss (cl +j—The board may usCshall -maintain -sultieieoF-epm.:;;r�.rio-s:.t:s`J�.. cuff an! aeee "- nyable line! ding any a i"enn PPOWefURIMSe(IKOHMSthat are payable); an (2-)--.6. e__._: :_:_-._ _:;.lal-te the General Reserve e-mmentlts-lass ._t_:1 11MIFiR suss...suss _.. deleF...:..ed by •n✓suss !Ile nu �s.__ .___•.e IJ. .. ...ul na lna �T�^ illi (efn nnn nnn nm Thus, ,. _ shallw4 for epPF tional-patp0ses, rate stabilization, unforeseen emergency Situations be for meeting the electric utility demand of any rapid or unforeseen increase in residential and/or commercial development. (d) LP&L shall (e) Begififli!IgWith A Seat a_ 2nnn van the heed shall transfer to the city a fee equivalent to a franchise fee in tltc amount and--lieu-lie -f.�. taxes (the "FFE") as outlined below! n\ The r P (%) _ _ dfrom _ Fe4ail of five percent 5/ of the a^-- Fe venue r:e salefi"krGRR and a PILOT in the amount of one ��percent (1300A) of the GRR. -• eat ern_..__..__ expenses and 1..._ges :_ fund _ the ....1...nsi fina ,..:nl�m e _. .......... ._ .,suss• ,........ ., suss _ ... _suss ._. ____._ r. __ .___ __ ,-_____. _. __. _. , .•nnr0.9 adding back a na__f__\ general _ e.hefift The transfers shall be made on the 15'h day of each month and shall be based on the GRR of LP&L during the nreccdine calendar month. For budgetine nurposes(2) 1. the event the genetal __.__ a is less than fifty million /iC<n nnn nnn nn\ thus. of fitly (50%) of •1.e ehan. a in net .. _ t ... suns.._ suss__. n_m •(as in t a5tatemell•-vf revenues, expe s••_ and _hang.__ :n fund net assets in the latest n n FR adding bask . FFE __._f._\ of in n_.._..d ne.. with the fell.: na fmmular „\ o__:__:__ ...:ah r.__ai suss_ •,nno ,nnn on or before MayApal 1st of each year, the board shall report to the city council their estimate of the General reserve, the GRR and the resulting franchise fee and PILOT"" the• will he •—_efe_ed to !he far the pe__.:ng f_e.l suss.. 1_ due subsequent ASEM yea, 'he board shall adjust the kesr rr t nef _ L. SA aMORIA! .n te the diffe... Lath. ea.. tha FFP , naC _ r'M on th,estinnuM-Valuer. af4he-gene. 1 sane... a Md-uu, GRA and the FFE Lased ..__a Fes__,_ and e._ non Any _ eh adjustment _._d_ Ld) Subject to the approval of the board, any netepereting—revel ue remaining General Reserve mayshaH be refunded to the ratepayers of the city's electric utility within six ((]_months following the fiscal year in which the General Reserve balance exceeds three (3) months of GR(6) shall be eqnsimed as a cap of Front An I eiefixntaatlined4n lbe:sabseetiar1(4. (e) This seeiian shall be ineluded in an annual budget wdiaflme ef tile crtJvrxvvwc+r. (1) The general reserve shall be based on finds not otherwise committed, and generally defined as "current assets' less "current liabilities" as those terms arc defined in (1) and (2) below: (1) Current assets. asassets classified in the latest CAM as—eagh and each eq i�,alentg an investments -of the city's electric utility fund, excluding cash committed to capital protects and (but itdoes He! iRel.. de ReSOUHIS F......:...Ll.. __.e__l..a _......k _. other non -cash assets} (2) Current liabilities. as Classi fed in the latest CAM of the chv's electric utility fund, cacludine d3nbj n"p ig one milliondollars-and-n •""Y O determined-by-the-b"RE