Ordinance No. 3,44420826 -2
ORDINANCE NO. 3444
AN ORDINANCE ACCEPTING THE BID OF NAYLOR, INDUSTRIES FOR
THE 1982 SANITARY SEWER SLIPLINING PROJECT, PHASE II,
AND AUTHORIZING THE CONTRACTING OF INDEBTEDNESS BY THE
CITY FOR THE SUM OF ONE HUNDRED TWENTY SEVEN THOUSAND
SIX HUNDRED SEVENTY FIVE & 50/100 ($127,675.50) DOLLARS
WITH REGARD TO SUCH AGREEMENT; AND CONTAINING A REPEALING
CLAUSE AND PROVIDING FOR THE EFFECTIVE DATE HEREOF.
WHEREAS, the City Council of the City of Baytown did
authorize the administration to advertise for bids for the 1982
Sanitary Sewer Sl.iplining Project, Phase II to be received August
10, 1982; and
WHEREAS, notice to bidders as to the time and place, when
and where the contract for said construction would be let was
published pursuant to provisions of TEX.REV.CIV.STAT. art. 2368a;
and
WHEREAS, all bids were opened and publicly read at City Hall
at 10:00 a.m., Tuesday, August 10, 1982, as per published notice
to bidders; NOW THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
Section 1: That the City Council of the City of Baytown
hereby repeals Ordinance No. 3433 which was passed on August
12th, 1982 and declares it of no further force or effect.
Section 2: That the City Council of the City of Baytown
hereby accepts the bid of Naylor Industries according to the
plans and specifications set forth by the City Engineer on a con-
struction timetable of 100 working days for the sum of One
Hundred Twenty Seven Thousand Six Hundred Seventy Five & 50/100
($127,675.50) Dollars, and the Mayor and City Clerk of the City
are hereby authorized and directed to execute and attest to a
contract with Naylor Industries for the 1982 Siipl.ining Project,
Phase II, containing the plans, specifications, and requirements
of the City Engineer and appropriate bond provisions in ac-
cordance with the provisions of TEX.REV.CIV.STAT., art 5160.
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a. Operations and Maintenance Expenses
Adjustments to the Company's 0 & M Expenses amounted to
$7,260,000.00. The major adjustments include reductions in
salaries and wages expense of $2,695,000.00, employee benefits of
$291,000.00, wheeling cost and line loss of $818,000.00,
amortization of deferred charges of $241,000.00, $2,922,000.00
for other Operations and Maintenance expenses, $498,000.00 for
uncollectables, $422,000.00 for liquid metal breeder reactor
accrual, and $122,000.00 for South Texas Project litigation fees,
and an addition of $749,000.00 for Electric Power Research
Institute Support.
b. Federal Income Taxes
The adjustment to the Cost of Service for Federal Income
Taxes is a reduction of $30,673,000.00.
C. Other Taxes and Fees
The total adjustment for all taxes other than federal income
taxes is a reduction of $2,409,000.00. The components of this
adjustment are the Public Utility Commission fee, State gross
receipts taxes, ad valorem taxes and payroll taxes. An addit-
ional reduction of $2,621,000.00 for local franchise fees was
also made.
d. Return
The rate of return on equity is 16.95 percent. The rate of
return on invested capital is 12.73 percent and the return on the
adjusted value of invested capital is 8.25 percent.
2. Invested Capital
The invested capital is determined to be $3,953,996,000.00.
3. Adjusted Value of Invested Capital
The adjusted value of invested capital is $6,103,672,000.00.
The adjusted value of the invested capital includes
$943,643,000.00 for the construction work in progress,
$60,409,000.00 for nuclear fuel in process and $3,193,000.00 for
property held for future use.
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4. Revenue Deficiency
The overall revenue deficiency is $181,561,000.00.
II. Related Issues
The City has incurred expenses for the purpose of conducting
investigations, presenting evidence, advising and representing
the governing body, and assisting with litigation in connection
with the request of the Company to change its rates. Among such
expenses incurred by the City are the fees of C. H. Guernsey &
Associates, Consulting Engineers and Accountants. The Company
shall reimburse the City for the reasonable costs which the City
has incurred in connection with the Company's request to change
its rates. The City's Director of Public Service shall determine
the correctness of any invoices submitted to the City for
services rendered in connection with the request of the Company
to change its rates. The City's Director of Public Service shall
forward copies of the correct invoices to the Company together
with a request for reimbursement. The Company shall reimburse
the City for such expenses incurred within thirty days after
having received each such request.
III. Conclusions
1. The City has original jurisdiction over this cause
pursuant to Section 43 of the Public Utility Regulatory Act, TEX.
REV.CIV.STAT.ANN., art. 1446a (1980).
2. The Company has the burden of establishing its revenue
deficiency under its present rates and of establishing the amount
of such deficiency that will be collected under it proposed
rates pursuant to Section 40(b) of the Public Utility Regulatory
Act.
3. The rates prescribed herein will allow the Company to
recover its operating expenses together with a reasonable return
on its invested capital, pursuant to provisions of Section 39 of
the Public Utility Regulatory Act.
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4. The rates prescribed herein will yield no more than a
fair return upon the adjusted value of the invested capital used
and useful by the Company in rendering service to the public as
provided by Section 40 (a) of the Public Utility Regulatory Act.
5. The Tariff for Electric Service set forth in Exhibit "A"
provides just and reasonable and not unreasonably preferential,
prejudicial, or discriminatory rates, as provided by Section 38
of the Public Utility Regulatory Act.
Section 3: The City Council hereby determines prescribes,
establishes and authorizes increased rates for sale or supply of
electric service by the Company within corporate limits of the
City of Baytown. Such increased rates are hereby fixed as set
out in "Exhibit A ", which is attached hereto, incorporated herein
by this reference and made a part hereof for all purposes. Such
increased rates shall take effect for electric utility service
provided from and after October 19, 1982. The Company shall be
authorized to collect such rates until such time as they may be
changed, modified, amended or withdrawn in accordance with
applicable statutes and ordinances.
Section 4: The City Council hereby authorizes and directs
the City Secretary to serve the Company with a certified copy of
this ordinance which is the final determination and order of the
City.
Section 5: The Company shall, within ten days following the
final passage and approval of this ordinance and thereafter
whenever required by applicable statutes and ordinances and
whenever requested by the Director of the Department of Public
Service, file a complete schedule of rates and tariffs with the
said Director setting forth all of the Company's rates and
charges for utility service then in effect.
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Section b: Nothing contained in this ordinance shall be
construed now or hereafter as limiting or modifying, in any
manner, the right and power of the City under the law to regulate
the rates and charges of the Company.
Section 7: A11 ordinances or parts of ordinances in
conflict herewith are repealed to the extent of the conflict
only.
Section 8: If any provision, section, subsection, sentence,
clause, or phrase of this ordinance, or the application of same
to any person or set of circumstances is for any reason held to
be unconstitutional, void or invalid, the validity of the
remaining portions of this ordinance or their appl.icat. ion to
other persons or sets of circumstances shall not be affected
thereby, it being the intent of the City Council in adopting this
ordinance that no portion hereof or provision or regulation
contained herein shall become inoperative or fail by reason of
any unconstitutionality, voidness or invalidity of any other
portion hereof, and all provisions of this ordinance are declared
to be severable for that purpose.
Section 9: In the event that Houston Lighting & Power
Company appeals from this order herein setting forth electrical
rates for Houston Lighting & Power Company, the City hereby
waives written notice of the hearing before the Public Utility
Commission on such appeal. Further, the City has no objection to
the consolidation of the appeal with the pending environs case
over which the Public Utility Commission has original juris-
diction.
Section 10: The CIty Council officially finds, determines,
recites and declares that a sufficient written notice of the
date, hour, place and subject of this meeting of the City Council
was posted at a place and subject of this meeting of the City
Council was posted at a place convenient to the public at the
City Hall of the City for the time required by law preceding this
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meeting, as required by the Open Meetings Law, Article 6252 -17,
Texas Revised Civil Statutes Annotated; and that this meeting has
been open to the public 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 and posting thereof.
Section 11: This ordinance shall take effect immediately
Upon its passage by the City Council of the City of Baytown,
Texas.
INTRODUCED, READ and PASSED by the affirmative vote of the
City Council on this the 26thday of August , 1982•
ATTEST:
EILEEN P. HALL, C ty Clerk
APPROVED:
RANDALL B. STR , City torney
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