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1975 06 19 CC Minutes, Special3093 MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF BAYTOWN June 19, 1975 5843 The City Council of the City of Baytowimet in special session, Thursday, June 19, 1975 at 6:30 p. m., in the Council Chamber of the Baytown City Hall with the following members in attendance: Jody Lander Councilman Emmett 0. Hutto Councilman Charles Pool Councilman Mary E. Wilbanks Councilwoman - - Tom Walmsley q Councilman * Fred Bednarski, Jr. Councilman Tom Gentry Mayor Fritz Lanham City Manager Neel Richardson City Attorney Edna Oliver City Clerk In calling the meeting to order, Mayor Gentry stated the purpose of the meeting, which was to have a hearing regarding General Telephone's request for increase in their rates for local telephone service in the Baytown exchange. He referred to Articles 1119 and 1124 of Vernon's Civil Statutes which provides that governing bodies of cities have the power to regulate telephone rates within the city's limits at the present time. However, a new Utilities Commission has been created by HB 819,providing the Governor does not veto it. The Commission willnot assume jurisdiction over local telephone rates until September 1, 1976, so until that time, the cities retain the responsibility of setting rates. He stated that individuals wishing to give testimony would be heard after General Telephone had presented its case, and asked that all wishing to do so to sign the register provided just outside the Council Chamber. The registration was required not only for citizens wishing to give testimony, but representatives of General Telephone also. General Telephone Presentation - Mr. Claude Jackson, Division Manager Mr. Claude Jackson, the Division Manager of General Telephone, presented the case of General Telephone by stating that the Company was seeking the rate increase in the amount of $1.2 Million in order to continue its growth and expansion of its facilities so as to meet the communication needs of Baytown and continue to improve its service level on existing customer service. The increase represents a 28% overall dollar increase, and will allow the company to earn 9.45% rate of return. He stated the company wanted to provide the best service possible within the framevork of its resources. He presented several charts to show what the company has done and will continue to do to make the service better. The presentation revealed that in each segment of service listed on the charts, an improvement was shown. Testimony - Mrs. W. H. Boucher Mrs. Dorothy (W. H.) Boucher gave a brief testimony on the escalating costs of providing telephone facilities for patrons of her Beauty Salon showing a graduating cost increase from 1958 of $12.10 to the present rate of $25.65 since June, 1974. Her beauty salon is more a hobby than a business venture and she asked for some relief in classification for small business firms which use the telephone much less than most residences. Testimony - Mrs. Beatrice L. Burden 71, Mrs. Beatrice Burden of Barrett Station came to represent the citizens of Barrett Station and to report on the type service which the customers in the area receive from General Telephone. She reported that most of the customers pay a monthly bill of $17.55 and such poor service until it is hard to get an emergency through. When the operator is called, the telephone stays dead from 2 - 3 hours . Another complaint was the cost of transfer service which she has been required to pay after her home was destroyed by fire. �- JVTT June 19, 1975 Testimony - Mrs. D. R. Wiggins_- Barrett Station Mrs. D. R. Wiggins gave testimony in that she was supposed to be paying for a straignt line but she has constant interference from others using her line. She has called the company and they have responded but have been unable to correct the interference. Testimony - Ernest Hauser Mr. Ernest Hauser of the Herbert - Hauser Insurance Agency appeared to protest the proposed increase being requested by General. He stated that the telephone was very important to him as a person and-to his business firm as it makes it possible for his firm to deliver a higher level of service to his customers, and expand their markets outside the city limits of Baytown. His objection was based on the 69% proposed increase, not on the company making a fair return on its investments but he did question the business management of General Telephone if it would now take a 69% rate increase to achieve a fair profit. He also expressed some concern on the rumor that General Telephone has based their request on the desire to increase their present return from approximately 4.75% to 9.45 %. He was of the opinion that a monopoly was not entitled to a 9% return on its money but should be based on the risk and reward concept. He suggested some type of ceiling on any increase and finally he opposed the 25� charge on local pay telephone service. He charged the Council to grant a raise to General Telephone which would allow them to make a reasonable return on their investment but to look after his investment as a local business man and not to allow the rate to be increased the 69 %. Testimony - Jerry Simmons Mr. Jerry Simmons protested the 25t pay phone charge and the $20 charge to change a telephone number from one local to another on the same cable. His question was directed at "why the cost of $20 when the same terminal box and cable were used ?" A telephoen representative replied to the inquiry by giving cost figures on the overall expense of making a service call, and the charge is levied against the portion of service where the cost occurs. He gave their policy on paying interest on deposits of 6% annually until satisfactory credit rating is established. Several other questions were considered during the course of the discussion. *Councilman Bednarski present Conclusion After hearing all parties who wished to be heard, Mayor Gentry stated the position of the Council at this time in trying to regulate the telephone rates after hearing the request of General Telephone Company. At this time, if the Council and Company cannot reach an agreement, their only recourse would be to go into Court and present their case and in either instance the citizens have no assurance that a rate increase will not be granted based on certain facts. The State law guarantees a utility a fair rate of return on its investment. Recess Meeting Mayor Gentry then recessed the hearing until Tuesday, June 24 at 5:00 o'clock p.m. A work session will then be held with the Council and General Telephone representatives reviewing the rate increase request. The meeting will be open to the public. APPROVED: /s/ Tom Gentry TOM GENTRY, Mayor (!4tV ' EDNA OLIVER, City Clerk