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HomeMy WebLinkAboutOrdinance - 2004-O0140 - Supplanting Art. XVIII Of Chapt. 20; Duties Of Electric Utility Board - 12/07/2004First Reading , December 7, 2004 Item No. 16 Second Reading December 16, 2004 Item No. 11 ORDINANCE NO. 2004-00140 AN ORDINANCE SUPPLANTING ARTICLE XVIIl OF CHAPTER 20 OF THE CODE OF ORDINANCES, PURSUANT TO CHAPTER 1, ARTICLE XII, SECTION 1 OF THE LUBBOCK CITY CHARTER, OUTLINING THE DUTIES AND RESPONSIBILITIES OF THE ELECTRIC UTILITY BOARD; PROVIDING FOR THE DISBURSEMENT OF REVENUES OF THE CITY'S ELECTRIC UTILITY; FURTHER DEFINING CONFLICTS OF INTERESTS AND PENALTIES ASSOCIATED THEREWITH; PROVIDING A SAVINGS CLAUSE AND PROVIDING FOR PUBLICATION. WHEREAS, on November 2, 2004, the voters of the city of Lubbock voted to amend the Charter of the City of Lubbock providing for an Electric Utility Board composed of nine Lubbock citizens and eligible voters appointed by the City Council be created to govern, manage and operate the City's electric utility; WHEREAS, the Lubbock City Charter was amended by adding Chapter l , Article XII, Section I which outlines certain responsibilities and duties of the Electric Utility Board; WHEREAS, Chapter I, Article XII, Section I of the Lubbock City Charter requires the City Council of the City of Lubbock to pass an ordinance further detailing and outlining the duties of the Electric Utility Board, such ordinance to be effective January I, 2005; WHEREAS, on November 12, 2004, the City Council appointed the nine members of the new Electric Utility Board pursuant to the Charter amendment passed by the voters of the city of Lubbock on November 2, 2004; and WHEREAS, pursuant to Chapter I, Article XII, Section l of the Lubbock City Charter, 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 TI IE CITY OF LUBl3OCK SECTION I: Tl IA T Sections 2-4 79 through 2-4~5 of the Code of Onlinam:cs, City of' Lubbock, Texas, arc hereby amenc..lcc.l to read as follows: Sec. 2-479. Electric Utility Board, Purpose. Pursuant to Chapter 1, Article XI L Section I of the Lubbock City Charter, the City of Lubbock\; municipally owned ekctric utility, known as Lubbock Power & Light, shall he governed anc.l managed by a boarc.l appointed by the City Council such board to be known as the Ekctric Utility Board. The City's electric utility shall have as its primary purpose the provision of dependable and reliable elci.:tric service at reasonable and competitive rates to the citizens of Lubbock whik being ti11a111.:ially self-sustaining. Sec. 2-480. Members, Qualifications. a) The number of iloard members and their terms arc governed by Chapter I. Article XII. Section I of the Lubbock City and shall be considered officers of the City of Lubbock. Nn Buarc.l member shall serve more than thn:e terms. The City Cou1H:il shall consider cxtcnsiYc business and/or financial cxperienci.: as a qualification for serving on the BuarJ as well as whether or nut the indivic.lual is a customer of the City"s electric utility provided that service with the City's electric utility is a\'ailablc. The Mayor or the tvlayor's appointee shall serve as an ex c~//icio. non-rnting member of the Board. b) The l3oarc.l members shall serve without compensation. The l3oard may n.:irnburse board members for expenses incurred in performing their duties as board members. c) The Board members shall not be inc.lebted tu the City or the City's ckctric utility, and shall not be interested in the profits or emoluments of any contract. job. \\'ork or Page 2 of9 service for the City or the Citys electric utility. The Board members shall not have a substantial interest in any public utility operating within the City of Lubbock and shall fully disclose any potential or actual conflict of interest to the City Council. Substantial interest shall mean substantial interest as defined by the laws of the State of Texas regulating conflicts of interest of officers of municipalities. Sec. 2-481. Powers/Authority Reserved to the City Council. Pursuant to and subject to Chapter 1, Article XII, Section I of the Lubbock City Charter, the following powers, as they relate to the Citys electric utility, are for the sole and exclusive use and authority of the City Council: a) Establishing, changing, altering or otherwise setting the electric rates of the City's electric utility, including all components thereof; b) Approving the budget of the City's electric utility; c) Exercising powers of eminent domain for the benefit of the City's electric utility; d) Issuing bonds or otherwise creating any indebtedness in the name of the City for the benefit of the City's electric utility that is secured by the general tax revenue of the City, the net revenue of the City's electric utility or the pledging of the assets of the Citys electric utility; and e) Requiring the City's electric utility to pay an annual fee to the City equivalent to any fee outlined in Section 2-484 herein. Sec. 2-482. Authority, Duties, Responsibility of the Board. a) The Board shall approve an annual budget and electric rate schedule for the Citys electric utility, submit the budget and electric rate schedule to the City Council for approval, and be responsible for the proper implementation of each following Page 3 of9 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 auditors report must be completed in sufficient time such that the Comprehensive Annual Financial Report (CAFR) may be presented to the City Council at the first Council meeting in January following the fiscal year end. The auditors are 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 have all authority necessary to govern, manage, administer and operate the City's electric utility including the authority to contract for accounting, financial, human resource, legal and other services separate and apart from those services currently being provided by the City of Lubbock. Furthermore, this authority includes, without limitation, the right of the Board to enter into contracts in the name of the City relating solely to the operation and management of the City's electric utility including the right of the Board to establish any and all policies relating to the administration and implementation of contracts related solely Page 4 of9 to the City's electric utility. If the Board contracts for legal services separate and apart from the City Attorney's office, the legal counsel for the Board shall also report to and be responsible to the City Council of the City of Lubbock. d) No person related within the second degree by affinity, or within the third degree of consanguinity, to any member of the Board, the City Council or the City Manager shall be appointed as director of the City's electric utility. Sec. 2-483. Director of Electric Utilities. a) The Director of Electric Utilities shall be the chief administrative officer of the City's electric utility and shall report to the Board for the proper administration, management and operation of the City's electric utility as directed and authorized by the Board, the City Charter and/or the City's ordinances and resolutions. The Director shall be responsible for preparing the annual budget and fee schedule for the City's electric utility and shall present the budget and fee schedule to the Board for their approval prior to the Board submitting such budget and fee schedule to the City Council. b) The Director of Electric Utilities shall not have a substantial interest in any public electric utility operating within the City of Lubbock and shall fully disclose in writing any interest, including any potential or actual conflict of interest, to the Board. For purposes of Section 2-483 only, "substantial interest" shall not include any pension, retirement income or retirement benefits received by the Director of Electric Utilities. c) A Director of Electric Utilities that ceases to possess any of the qualifications outlined in this section shall forfeit his position and any contract in which the Director shall or may become interested may be declared void by the Board. Failure by the Page S of9 Director of Electric Utilities to disclose the interest outlined in Section 2-483(b) above shall be a Class C misdemeanor, and on conviction thereof, such employment shall be forfeited. Sec. 2-484. Disbursement of Net Revenues a) 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) 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) An Operations Reserve containing reserves equivalent to three months gross retail electric revenue as determined by the previous fiscal year of the City's electric utility; ii) A Rate Stabilization Reserve containing reserves equivalent to two months gross retail electric revenue as determined by the previous fiscal year of the City's electric utility; and iii) An Electric Utility Development Reserve containing reserves equivalent to one months gross retail electric revenue as determined by the previous fiscal year of the City's electric utility. This Electric Utility Development Fund shall be used Pagc6of9 for the sole purpose of meeting the electric utility demand of any rapid or unforeseen increase in residential and/or commercial dcvclop111enl. c) Following proper funding of the above described funds, the Board sball pay to the City a fee equivalent to a franchise fee and payment in lieu of taxes as required by the City. However, this fee shall be equal to the franchist! fee paid by any competing electric utility serving within the City of Lubbock and competing with the City's electric utility system or five percent (5%) of the gross revenue generated from all retail electric sales, whichever is less. d) Any net operating revenues remaining, as calculated by the accrual method of accounting for governmental entities, shall be refunded to the ratepayers of the City's electric utility witbin six months following the fiscal year in \vhich the net revenues arc reali zed. c) This section shall be included in and become a part of each annual budget ordinance of the City of Lubbock. Sec. 2-485. Amendments. a) 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. b) 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 tbe proposed amendment, alteration or change. The notice must be publisheJ at least thirty days before the date for public bearing and at least once a week for three consecutive weeks. The last day of rublication must not Page 7 of9 be less than one week or more than l\vo weeks before the date of the hearing. The notice must be publishe<l in a newspaper of general cin.:ulation and that is published at least six days a week in the city of Lubbock. SECTION 2: TIIAT the City Council finds and dcchlres that sulfo:ienl written notice of' the date, hour, place and subject of this meeting of the Council was posted at a designated place rnn\'cnicnt to the public at the City I lall 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 la\\' at all times during whid1 this Ordinance and the subject matter thereof has been discussed, consi<.kred and formally acted upon. II The City Council funhcr ratilks. approves and conlinns such written notice and tht: contents of posting thereof. SE.CTIOI\' 3: Tl IA T should ,my paragraph, sentence, clause, phrase, or wnrd of this Ordinance be declared unconstitutional or invalid for ,rny reason, the remainder of this Ordin.ince shall nnt be affected thereby. SECTION 4: TI-IA T the City Secretary is hereby authorized and directed to cause publication of the descriptive caption of this Ordinance as an alternative method or publication provided by law. AND IT IS SO ORDERED Passed by the City Council on the first reading on this 7th day of December Passed by the City Council on the si:r.:on<l reading on this 16th <lay of December Page S of9 , 2004. , 2004. ATTEST: . . '\ ~ L~?.,> K u_ 'ok._,C., L G< 1 _./ -~r Rcb~cca Garla, City Secretary APPROVED AS TO CONTENT: APPROVED AS TO FORM: , h ----;; } , £1~ , / ~~,-& M~mifow L. Wa&, Natural Resources Attorney I L:/cityatl/mau/Elcc Util Bo.ml Ordi11am:c ! 1-23-5-04 Page 9 of 9