HomeMy WebLinkAboutResolution - 2008-R0392 - Amendment To Code Of Ordinances Per Electric Utility Board - 09_25_2008Resolution No. 2008-RO392
September 25, 2008
Item No. 6.8
RESOLUTION
WHEREAS, the Electric Utility Board has requested that the City Council amend
certain portions of Chapter 2, Article XVIII of the Code of Ordinances of Lubbock,
Texas as provided for in Chapter 2, Article XVIII, Section 2-485(a) of the Code of
Ordinances, City of Lubbock, Texas;
WHEREAS, Chapter 2, Article XVIII, Section 2-485 of the Code of Ordinances,
City of Lubbock, Texas requires a public hearing be conducted, after notice of the public
hearing is published, prior to amending any provision of Chapter 2, Article XVIII of the
Code of Ordinances, City of Lubbock, Texas; and
WHEREAS, pursuant to the procedures outlined in Section 2-485 of the Code of
Ordinances, City of Lubbock, Texas, the City Council of the City of Lubbock deems that
it would be in the best interest of the City of Lubbock and its municipally owned electric
utility, Lubbock Power & Light, to call for a public hearing to consider the proposed
amendments to Chapter 2, Article XVIII of the Code of Ordinances of Lubbock, Texas;
NOW THEREFORE:
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
1. THAT the Mayor of the City of Lubbock BE and is hereby authorized and
directed to call a public hearing on November 6, 2008 at 10:00 a.m. to amend certain
sections of Chapter 2, Article XVIII of the Code of Ordinances of Lubbock, Texas, as
proposed in Exhibit A, which is attached hereto and incorporated herein as though set
forth fully herein.
2. THAT the City Secretary publish notice of the date and time of the public
hearing along with a complete copy of the proposed changes to Chapter 2, Article XVIII
of the Code of Ordinances of Lubbock, Texas, in accordance with the procedures
described in Chapter 2, Article XVIII, Section 2-485 of the Code of Ordinances of
Lubbock, Texas.
Passed by the City Council this 25th
ATTEST:
QeL-ti�-'4 -C �2-� -
Rebe ca Garza, City Secretary
day of September '2008.
Tom Martin, Mayor
APPROVED AS TO CONTENT:
X&40,t,'�
Lee Dumbauld,
City Manager
APPROVED AS TO FORM:
Ma ew L. Wade
General Counsel — LP&L
mw/ccdocs/Res.Hearing Ordinance Amendment091708
Resolution No. 2008-RO392
RESOLUTION
WHEREAS, Chapter 1, Article XII, Section I of the Lubbock City Charter establishes
and outlines certain responsibilities and duties of the Electric Utility Board; and
WHEREAS, Chapter 1, Article XII, Section I of the Lubbock City Charter required the
City Council of the City of Lubbock to pass an ordinance further detailing and outlining the
duties of the Electric Utility Board; and
WHEREAS, Ordinance Number 2004-00140 passed by the City Council of the City of
Lubbock on December 16, 2004, as amended and as found in Chapter 2, Article XVIII of the
Code of Ordinances of Lubbock, details the procedure for disbursing net revenues of the City's
municipally owned electric utility; and
WHEREAS, the Electric Utility Board has consistently built cash reserves for the City
of Lubbock's municipally owned electric utility, Lubbock Power & Light ("LP&L"), in order
to protect LP&L from unforeseen and unexpected increases in operational expenses, to
stabilize the rates of LP&L and to meet unforeseen and rapid increases in electric demand due
to economic growth; and
WHEREAS, Section 2-485(a) of the above described ordinance states that the Electric
Utility Board shall be responsible for recommending amendments to the above described
ordinance; and
WHEREAS, this resolution supplants any previous recommendation made by the
Electric Utility Board; and
WHEREAS, pursuant to the procedures outlined in Section 2-485(a) of the Code of
Ordinances, City of Lubbock, Texas, the Electric Utility Board of the City of Lubbock deems
that it would be in the best interest of the City of Lubbock and its municipally owned electric
utility, Lubbock Power & Light, to improve the efficiency and competitiveness of Lubbock
Power & Light by amending the Code of Ordinances of the City of Lubbock in the following
manner and recommends to the City Council that the following amendments be adopted; NOW
THEREFORE:
BE IT RESOLVED BY THE ELECTRIC UTILITY BOARD OF THE CITY OF
LUBBOCK:
SECTION 1. THAT Section 2-484 of Chapter 2, Article XVIII of the Code of
Ordinances, City of Lubbock, Texas, be amended to read as follows:
Sec. 2-484. Disbursement of Net Revenues
(a) Subject to Section 2-484(g), prior to paying any fee equivalent to a
franchise fee, making any payment in lieu of taxes, and prior to disbursing any net
operating revenues of the City's electric utility, the Board shall first fully meet all
W- . - . ,-,--.,-,
eiiffe-bond reserve or andfund obligations eentaineddefined in any bond
aa&er-covenant for the City's electric utility.
(b) Subject to Section 2-484(g), after providing for sufficient funds to
meet the obligations contained in Section 2-484(a) above, the Board shall fund the
following items:
(1) The Board shall maintain sufficient operating cash to satisfy all current
accounts payable(including any current purchase power accounts t t
are payable); and
(2) A General Reserve equal to the greater of four months gross retail
electric revenue as determined by taking the average monthly gross
retail electric revenue from the previous fiscal year or fifty million
dollars ($50,000,000.00). This General RReserve Amdshall be used 0
operational purposes, rate stabilization and for meeting the electric
utility demand of any rapid or unforeseen increase in residential and/or
commercial development.
(c) Folio-A4ng propef funding of the above deser-ibed Ain , Beginni
with fiscal year 2009-2010, the Board shall pa} -transfer to the City a fee equivalent
a franchise fee and payment in lieu of taxes (the "FFE") as wired by the C
Outlined below:
(1)
(2)
FM
General Reserve reaches fifty million dollars ($50,000,000.00); or
following formula:
multiplied times the
follows: FIFE _ [(actual reserve/$50,000,000,00) x .051 x GRR
Page 2 of 4
St
year, the Board shall report to the City Council their estimate of
reserve. the GRR and the resulting FIFE that will be transferred to
City for the upcoming fiscal year. In the subsequent fiscal Year. t
ie
Board shall adjust the next FFE transfer by an amount equal tot
e
difference between the FFE transfer based on the estimated values oft
e
General Reserve and the GRR and the FFE based on the actual values
f
the General Reserve and the GRR. Any such adjustment made by the
Board will be reflected in the April 1" report made by the Board tot
e
City Council as required herein.
(d) Subject to the approval of the Board, any net operating revenues
remaining shall be refunded to the ratepayers of the City's electric utility within six
months following the fiscal year in which the net revenues are realized. Nothing
contained in Section 2-484(g) shall be construed as a cap or limit on the refund
outlined in this Section 2-484(d).
(e) This section shall be included in and become a part of each annual
budget ordinance of the City of Lubbock.
(f) The General Reserve ameunrs, fees —e Nat to—ffanehise
Payments in lieu of t oalads to the reAepaye shall be based on as
classified in the latest CAFR as cash and cash equivalents and investments of
City's electric utility fund (but it does not include accounts receivable, restrii
(g) Beginning with fiscal year 2006 — 2007 and subject to the approval of
the Board, the City's electric utility may refund up to one million dollars and no/100
dollars ($1,000,000.00) to the ratepayers of the City's electric utility for marketing
and competitive purposes as solely determined by the Board.
a
FFE in accordance with the terms of Section 2484(c) above.
Passed by the Electric Utility Board this -L&- day of , 2008.
W.R. COLLIER, CHAIRMAN
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ATTEST:
r
Loy art, Board Secretary
APPROVED AS TO CONTENT:
Gary Zheng
Chief Executive Officer — LP&L
APPROVED AS TO FORM:
aL � " ; � r-, 0, �
Mat ew L. Wade
General Counsel — LP&L
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