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Home My WebLink AboutOrdinance - 2006-O0135 - Amending Article XV111 Of Chapt. 2; Duties/Responsiblites-Electric Util. Board - 12/19/2006First: Reading Deceaber 19, 2006 IteJD No. 6.11 ORDINANCE NO. 2006--00135 Second Reading January 12, 2007 !tea Bo. 5.2 AN ORDINANCE AMENDING ARTICLE XVIII OF CHAPTER 2 OF THE CODE OF ORDINANCES, OUTLINING THE DUTIES AND RESPONSIBILITIES OF THE ELECTRIC UTILITY BOARD; PROVIDING FOR THE DISBURSEMENT OF REVENUES OF THE CITY'S ELECTRIC UTILITY; PROVIDING A SAVINGS CLAUSE AND PROVIDING FOR PUBLICATION. WHEREAS, the Chapter 1, Article XII, Section 1 of the Lubbock City Charter establishes and outlines certain responsibilities and duties of the Electric Utility Board; WHEREAS, Chapter 1, Article XII, Section 1 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; WHEREAS, on December 16, 2004, the City Council of the City of Lubbock passed Ordinance Number 2004-00140, amending Sections 2-479 through 2-485 of Chapter 2, Article XVITI of the Code of Ordinances, City of Lubbock, Texas detailing the duties and responsibilities of the Electric Utility Board and detailing the procedure for disbursing net revenues ofthe City's municipally owned electric utility; WHEREAS, the Electric Utility Board has requested that the City Council amend certain portions as of the above described ordinance as outlined herein; WHEREAS, Section 2-485 of the Code of Ordinances, City of Lubbock, Texas outlines the procedures for amending said ordinance; 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 improve the efficiency and competitiveness of Lubbock Power & Light by amending the Code of Ordinances of the City of Lubbock in the following manner; NOW THEREFORE: BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK SECTION 1: THAT Section 2-480 (a) of the Code of Ordinances, City of Lubbock, Texas, is hereby amended to read as follows: Sec. 2-480. Members, Qualifications. a) The number of Board members and their tenns are governed by Chapter 1, Article XII, Section 1 of the Lubbock City Charter and shall be considered officers of the City of Lubbock. No Board member shall serve more than three terms. However, for each Board member appointed whose original term was for one year or less, such original term shall not apply towards the three term term-limitation outlined herein. The City Council shall consider extensive business and/or financial experience as a qualification for serving on the Board as well as whether or not the individual is a customer of the City's electric utility provided that service with the City's electric utility is available. The Mayor or the Mayor's appointee shall serve as an ex officio, non-voting member of the Board. SECTION 2: THAT Section 2-482 of the Code of Ordinances, City of Lubbock, Texas, is hereby amended by adding subsection (e) to read as follows: e) To the extent authorized by law and subject to the City's Charter and Code of Ordinances, the Board shall be responsible for nominating 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. Page 2 of7 SECTION 3: THAT Section 2-484 of the Code of Ordinances, City of Lubbock, Texas, is hereby 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 current bond reserve and fund obligations contained in any bond issuance and/or 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 but prior to reimbursing any other fund of the City, 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 fund the following items: i) The Board shall maintain sufficient operating cash to satisfy all current accounts payable; ii) 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 reserve fund shall be used for operational purposes, rate stabilization and for meeting the electric utility demand of any rapid or unforeseen increase in residential and/or commercial development. Page 3 of7 c) Following proper funding of the above described funds, the Board shall pay to the City a fee equivalent to a franchise fee and payment in lieu of taxes as required by the City. This fee shall be equal to the lesser of the following: i) Five percent (5%) of the gross revenue generated from all retail electric sales; or ii) Fifty percent (50%) of net income from the most recent audited, unqualified annual financial statements. 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) Reserve amounts, franchise fees, payments in lieu of taxes and refunds to the ratepayers of the City's electric utility shall be based on audited, unqualified financial statements from the most recent completed fiscal year. 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. SECTION 4: THAT Section 2-485 of the Code of Ordinances, City of Lubbock, Texas, is hereby amended to read as follows: Page 4 of7 Sec. 2-485. Amendments. a) To the extent authorized by law and subject to the City's Charter and Code of Ordinances, the Board shall be responsible for recommending any amendments to Chapter 2, Article XVIII of the Code of Ordinances of Lubbock, Texas. b) The City Council shall not amend, alter, delete or change any provision contained in this ordinance without first conducting a public hearing following proper notice as described below. c) Prior to conducting a public hearing as described above, the City Council shall provide notice of such hearing. The notice must state clearly the time and place of the hearing and must clearly state the proposed amendment, alteration or change. The notice must be published at least thirty days before the date for public hearing and at least once a week for three consecutive weeks. The last day of publication must not be less than one week or more than two weeks before the date of the hearing. The notice must be published in a newspaper of general circulation and that is published at least six days a week in the city of Lubbock. SECTION 5: THAT the City Council finds and declares that sufficient written notice of the date, hour, place and subject of this meeting of the Council was posted at a designated place convenient to the public at the City Hall for the time required by law preceding this meeting, that such place of posting was readily accessible at all times to the general public, and that all of the foregoing was done as required by law at all times during which this Ordinance and the subject matter thereof has been discussed, considered and formally acted upon. The City Council further ratifies, approves and confirms such written notice and the contents of posting thereof. Page 5 of7 SECTION 6: THAT should any paragraph, sentence, clause, phrase, or word of this Ordinance be declared unconstitutional or invalid for any reason, the remainder of this Ordinance shall not be affected thereby. SECTION 7: THAT the City Secretary is hereby authorized and directed to cause publication of the descriptive caption of this Ordinance as an alternative method of publication provided by law. AND IT IS SO ORDERED Passed by the City Council on the first reading on this ..l.2.th day of December , 2006. Passed by the City Council on the second reading on this 12th day of January '2007. -/~~ DAVID;-MAYOR ATTEST: ~et~ Page 6 of7 APPROVED AS TO CONTENT: (>&!R ~. W.R. Collie;,Chairm~ Electric Utility Board APPROVED AS TO CONTENT: APPROVED AS TO FORM: /ltf /_/ zc:(~ ~ / /\·&~«<; _?~" ( Mftihew L. Wade, Natural Resources Attorney as/CityAtt/Matt!ResolutionsiLP&L Ordinance Aml:lldment 2006 December 12. 2006 Page 7 of7