1982 08 26 CC Minutes20826 -1
MINUTES OF THE REGULAR MEETING
OF THE CITY COUNCIL OF THE CITY OF BAYTOWN
August 26, 1982
The City Council of the City of Baytown, Texas, met in
regular session on Thursday, August 26, 1982, at 5:30 p.m.
in the Council Chamber of the Baytown City Hall with the
following attendance:
Fred T. Philips
Jimmy Johnson
Perry M. Simmons
Mary E. Wilbanks
Roy L. Fuller
Allen Cannon
Emmett 0. Hutto
Fritz Lanham
Larry Patterson
Randy Strong
Eileen P. Hall
Councilman
Councilman
Councilman
Councilwoman
Councilman
Councilman
Mayor
City Manager
Assistant City Manager
City Attorney
City Clerk
The meeting was called to order with a quorum present
and the invocation was offered; afterwhich the following
business was transacted:
Minutes
Councilman Wilbanks moved for approval of the minutes
for the special and regular meetings held August 12, 1982;
Councilman Johnson seconded the motion. The vote follows:
Ayes: Council members
Wilbanks, Fuller
Mayor Hutto
Nays: None
Receive Petitions
Philips, Johnson, Simmons,
and Cannon
Councilman Johnson acting as a private citizen presented
a petition with a total of 556 signatures requesting that
Softball Field "A" at the Wayne Gray Sports Complex be named
for Mr. Butch Young who had contributed so much to the youth
of Baytown.
Councilwoman Wilbanks moved to accept the petition;
Councilman Simmons seconded the motion. The vote follows:
Ayes: Council members Philips, Simmons, Wilbanks,
Fuller and Cannon
Mayor Hutto
Nays: None
*Councilman Johnson at the podium.
20826 -2
Minutes of the Regular Meeting - August 26, 1982
Mr. Lanham mentioned that the Baytown Parks & Recreation
Advisory Board has adopted a policy regarding the naming of
parks and parks facilities and inquired if Council would
like to refer this matter to that Board.
Councilman Johnson moved that the petition be referred
to the Baytown Parks & Recreation Advisory Board for consideration;
Councilman Philips seconded the motion. The vote follows:
Ayes: Council members Philips, Johnson, Simmons,
Wilbanks, Fuller and Cannon
Mayor Hutto
Nays: None
City Manager's Report
Brownwood Subdivision Report - Mr. Lanham briefly
reviewed a memorandum from Larry Patterson, Assistant City
Manager, concerning problems in the Brownwood Subdivision.
A copy of that memorandum is attached to the minutes as
Attachment "A ".
Councilman Cannon clarified that when Ridgeway was
deleted from the list of streets to be repaired, Council had
recently expended approximately $400,000 for the Perimeter
Road while the taxes derived from the area were approximately
$28,000. Besides that, at that time the City was in the
process of attempting to have the area evacuated through
participation with the Corps of Engineers.
Mrs. Shepherd will be given a copy of the memorandum.
Houston Lighting and Power Company - The fuel cost
adjustment for the month of September is $ .11 below the
cost for August for the customer using 2,000 KWH.
Chief of Police - Wayne Henscey, Chief of Police, has
received an invitation from Mr. William H. Webster, Director
of the FBI, to participate in the Law Enforcement Development
Seminars to be held at the FBI Academy on September 26
through October 8. The FBI will pay all expenditures.
Drainage Work - City crews have completed the Jasmine
and Narcille drainage work; the work on Crow Road is about
twenty (20 %) percent complete.
Community Development (Cypress /Magnolia) - The project
is complete with the exception of cleanup.
1982 Street Improvement Program - Curb and gutter has
been replaced on Georgia and some base work has been done.
Curb and gutter has been replaced on East Wright and Gresham.
Some streets were only to be overlaid and the contractor has
completed overlaying Pecan Manor, Bayou Avenue, Elton Avenue,
Cedar Avenue and Pecan Street. The contractor is responsible
to remove any excess dirt and driveways are replaced.
20826 -3
Minutes of the Regular Meeting - August 26, 1982
West District - McKey Construction received final
inspection-and for the most part everything on the contract
had been completed.
Questions and Comments of Council
Council requested that the Administration:
1. Check on the possibility of a "protected left turn
on arrow only" at Garth and Rollingbrook.
2. Contact the railroad regarding work performed at
the Decker Drive crossing.
3. Keep Council apprised of the progress being made
to cleanup the house on Largo Street.
4. Check with the highway department regarding
improvement of State Highway 146 at Fayle Street.
5. Check on situation off Cary Lane, a long narrow
street off Cedar Bayou Crosby Road, where it
appears that lots are being staked off for sale.
Mr. Lanham, in response to inquiries from Council,
explained that the Administration had been working on the
acquisition of a small triangular parcel of right of way to
install a signal at Schilling and Garth Road near the Centennial
Square Apartments. One owner is in Saudi Arabia, but a
local real estate agent has authority to handle the transaction
upon approval from the owner. On the other parcel, the
owner has agreed to sale the necessary right of way. All
that is necessary is to acquire an executed deed.
With regard to the placement of a mobile home off
Kilgore Road, that side of Kilgore Road is only ten (10)
feet above sea level and therefore, it is prohibitive to
place a trailer within the flood plane.
The water leak at Dale and Sheridan had been repaired,
but the line broke again. It will be necessary to replace a
section of two -inch line.
The City Attorney's office is working on a report
concerning billboards which will indicate to Council what
authority the city has or could have by the adoption of
ordinances.
Councilman Philips stated that the main thrust of what
he had been hearing was that billboards are acceptable in
commercial areas, but not in residential areas.
The City does have an inspector who surveys for abandoned
vehicles. At present, the city's storage area is filled to
capacity. In the very near future, an auction will be held.
With regard to the possible striping of Deanne Street,
Mr. Lanham explained that Deanne is probably a 29 -foot
street and with striping, if people park on Deanne, there is
a problem with their being in violation of the law.
20826 -4
Minutes of the Regular Meeting - August 26, 1982
Mayor Hutto commended Mr. Lanham on his being elected
Vice President of the Texas City Manager's Association.
Mayor Hutto suggested that the Administration be in
contact with Harris County regarding the possibility of the
county installing a metal barrier similar to the ones used
by the county on approaches to bridges on Baker Road between
the roadway and Walden Oaks. Mr. Lanham mentioned that
another day care is being constructed off Massey Tompkins
Road with the play yard to the front of the structure.
There are no restrictions in this regard.
Mayor Hutto mentioned that there is a 30 mph speed-zone
along that portion of Baker Road which Council established
when Baker was a two -lane roadway. Mayor Hutto requested
that the Traffic Commission consider establishing a speed
limit for the street which would be more conducive to what
the traffic flow is. Councilman Fuller stated that conditions
along Baker Road should be taken into account.
Mayor Hutto mentioned that the school speed signs have
been posted for the year and the signs on Baker Road read
7 :00 a.m. to 4:00 p.m. Council had previously taken action
for school signs to read 7:00 a.m. to 9:00 a.m, and 2:00
p.m. to 4:00 p.m.
Hold Public Hearing on Houston Lighting and Power Company's
Rate Increase
Mayor Hutto called the public hearing on Houston Lighting
and Power Company rate increase request to order and advised
all those present who might desire to testify at the hearing
that a register for that purpose had been provided in the
hallway. All present were given ample opportunity to sign
the register. Mayor Hutto explained that after the representatives
of HL&P had made their presentation and the city was allowed
time to present its case, the list would provide the order
that persons would be called upon to speak.
Mayor Hutto encouraged everyone to be brief and to the
point. He informed those present that HL&P had requested a
system -wide increase that would increase the company's
revenues by $336,000,000. The City of Baytown has jurisdiction
over these utilty rates and the hearing was to provide City
Council with information necessary to determine rates that
HL&P should charge. After hearing from HL&P and the city's
consultants, Council would welcome any additional testimony.
Mayor Hutto requested that Mr. Jim Schaefer address
City Council regarding HL&P's proposal. Mr. Schaefer stated
that he had no formal statement to make. He mentioned that
the ordinance that Council would be taking action on came about
as a result of a study and public hearing that had been
conducted by the City of Houston's Public Service Department
as.based on testimony by Don Gordon, Chief Executive Officer
of HL&P. Beyond that Mr. Schaefer stated that he would have
no further comments, other than to answer any questions
Council might have.
20826 -5
Minutes of the Regular Meeting - August 24, 1982
Randy Strong, City Attorney, pointed to several stacks
which represented the HL&P rate filling package. The package
contains the testimony of Mr. Gordon and numerous other
persons. As part of the Coalition of Cities with Original
Jurisdiction, the City of Houston provided its staff rate
consultants to other cities. The City of Baytown has copies
of their testimony and the City Attorney offered the direct
testimony to Council of Harvey Winkleman, Ellen Blumenthal
and Jane Wilton. Council was provided in its packet a
summary of the testimony of those individuals and their
recommendations. That summary is attached to the minutes as
Attachment "B." The consultants are recommending an increase
of $181,561,000. Since Council had been provided with this
summary, the City Attorney stated that he would not go
completely through the summary, but would answer any questions
that Council might have. Mr. Strong also presented a copy
of the proposed tariff which consists of the rate schedules
that would set the rates for HL&P within the city limits of
Baytown based on the recommendation before Council.
Mr. Strong presented the facts that under present
rates, consumption of 500 KWH for one month would cost
$38.86; while costs under the proposed rates would be $44.59.
For a user of 1,000 KWH for one month, the cost would be
$87.36 versus $99.53. The city's proposal would mean that a
user of 1,000 KWH for one month would pay $81.94. For 2,000
KWH, the present rates would cost $169.66 versus $189.86.
The city's proposal would cost $177. However, the proposed
city's tariff does not include summer and winter rates. One
would pay the same amount year round based on consumption.
For instance, while under the HL&P proposed rates, a person
might pay $188.86 in the summer, those using 2,000 KWH in the
winter would cost $156.20. Under the city's proposed schedule
a person would pay $177 year round. Basically under the
city's proposal 1,500 KWH is the cut -off point and if a
person uses less than 1,500 KWH per month, there is a
considerable savings.
Tony Polumbo, State Representative, stated that he
came to appear at the public hearing because he represents
part of Baytown and he was concerned with the rate increase
requested by HL&P. He acknowledged that he was aware that
the City of Houston has recommended approximately $180,000,000
increase, but the original request was $380,000,000. If the
$180,000,000 is equated to rate of return, that dollar
amount represents 16.95% rate of return on equity. Representative
Polumbo stated that with the current economic times and
considering the strain and stress on the average pocket
book, that rate of return is much too high.
Representative Polumbo recommended that Council begin
to take a more careful look at fuel costs since over half
the utility bill is attributed to fuel costs. He mentioned
that City Council had original jurisdiction and could
scrutinize fuel costs more closely. Again, Representative
Polumbo pointed to the rate of return on equity and asked
Council to deny the $181,000,000 and only grant the company
16% return on equity which is required by law. He stated
that the guaranteed 16% would need to be addressed by legislators.
One proposal that will be considered is to Sunset the PUC
and put jurisdiction back where it belongs - -at the local
level. He mentioned that the Texas PUC is the nation's
second most friendly toward the utility company.
20626 -6
Minutes of the Regular Meeting - August 26, 1982
Represetative Polumbo asked that Council consider
denial of the company's request in light of the 16.95° rate
of return on investment. He stated that from speaking with
many people, there are many who are concerned with the.
escalating costs of electricity and requested that Council
deny the company's request.
Mayor Hutto replied tha Council was certainly cognizant
of the problem, but Council felt that it would be an exercise
in futility to attempt to fight HUP alone. The law is so
structured that Council does not have control of the rate.
Mayor Hutto commended the local managers of HUP, however,
Mayor Hutto stated that he did not feel that the ratepayers
should pay for the mistakes of management. That should be
the obligation of shareholders. However, Mayor Hutto stated
that he did not want to address that by spending a great
amount of money for consultants only to have the PUC reject
the city's presentation. The Mayor stated that cities need
help at the State level.
Representative Polumbo assured Mayor Hutto that this
question would be addressed most vigorously on many fronts
the next session of the legislature. Either the PUC would.
be abolished or the legislation which created the PUC would
be strengthened to give the PUC more power to handle the
rate - making process more effectively. He stated that he
could understand the cities' frustrations because no matter
what decision is made at the local level that decision may
be appealed to the PUC.
Mayor Hutto stated that anytime representatives of the
company are questioned concerning fuel costs adjustments, a
stock answer is always received. Cost of fuel in other
areas is declining, but on HUP bills, that cost continues
to escalate. Mayor Hutto stated that the City Council of
the City of Baytown would need help to make a determination
regarding fuel costs.
Representative Polumbo stated that Council at some
point would need to make the decision of whether it would
like to retain local control.
Mayor Hutto continued that he would like to see the
company go -on the open market for its money. The company
would not have as much equity and its bond rating would not
be as high, but so what. That way maybe the company will
manage its money better. As a businessman, the Mayor felt
that with the reduced bond rating, the company would have to
pay more for its money, but by the same token he felt that
this would bring on better management.
Representative Polumbo requested that Council take a
stand and in Austin, he would take a stand on the proper
equity that the company should be receiving.
Mayor Hutto stated that the city had joined with the
Coalition of Cities with Original Jurisdiction to obtain the
best rate possible and the coalition has suggested a rate
which was felt to be fair. The Mayor stated that personally
he would vote against giving the company anything, except
for the recommendation of the coalition. Mayor Hutto felt
that if Houston had withdrawn, the whole effort would have
crumbled.
20826 -7
Minutes of the Regular Meeting - August 26, 1982
Representative Polumbo commended Council for joining
the coalition, but mentioned to Council the rising costs and
the people on fixed incomes who are being adversely affected.
He stated that he looked forward to working with members of
Council while in Austin. He agreed that the legislature had
created an awkward situation for Council to deal with and
stated that that situation needed to be corrected.
Councilman Philips stated that he felt that in the
matter of the fuel costs adjustments, the light company is
being given carte blanche approval to handle fuel cost
adjustments in any manner they deem advisable. He felt that
HL&P needed to be given the managerial responsibility of
purchasing fuel at the most economical costs and then using
it in the most economic manner to produce electricity.
Representative Polumbo added that the company's rate of
return needs to be tied to economic conditions so that its
rate of return is in line with other businesses.
Councilman Philips stated that having worked in industry
along the lines of attempting to get some guidelines he
would recommend the Texas Air Control Board or the Texas Air
Quality Board. Both are structured in such a manner as to
provide for the public's best interest and he commended both
organizations. The legislature could consider the operation
of these two organizations in looking at replacing the PUC
with something that would better serve the public's interest.
Representative Polumbo suggested that the three members
of the PUC are appointed by the Governor and if citizens
begin to let the Governor know of their dissatisfaction with
the PUC, he felt that this would produce favorable results.
Representative Polumbo again encouraged Council to
refuse the company's request. He felt that granting the
$181,000,000 which translated to over 16% return on equity
was too high.
Councilman Cannon inquired why the coalition recommended
the 16.9% return on equity.
The City Attorney stated that he was not certain of
what Representative Polumbo was referring to when he mentioned
that the law specifies that the company must get 16% return
on equity. The 16.95% return on equity was derived after
the cities' representatives reviewed the request and deleted
a number of items which represented about $150,000,000. The
problem is that HL&P is in the mist of an extensive construction
program and in order for the company to maintain its financial
integrity, the company must get a higher return on equity.
If the company were reduced to 10% on equity, this would
have the effect of destroying their financial creditability
and the company would not be able to borrow. The idea is
not to destroy the company, but to keep the rate of return
as low as possible, but allow the company to be on going.
Councilman Cannon stated that Representative Polumbo
had made a good point in that there are many companies that
would appreciate this type of return on investment.
20826 -8
Minutes of the Regular Meeting - August 26, 1982
The City Attorney stated that he was unaware of any
statute that established a specific rate of return. As he
recalled the rate of return allowable is that which will
allow the company to maintain its financial integrity.
Representative Polumbo stated that the guidelines are
if the company does everything right, a 16% rate of return
is guaranteed. He commented that without a rate increase at
all the company would still be making approximately 16% rate
of return.
The City Attorney called Council attention to the
recommendation of Ms. Blumenthal who had made recommendations,
not only for this rate case, but future rate cases. She
recommended that since the cost of the South Texas Project
has soared from about $790 million to $5.5 billion, to
place a cap on the $5.5 billion. HL&P has a 39% share in
that. Any increased costs above the $5.5 billion will not
be passed on to the rate - payers, but will be absorbed by the
investors. In the future this escalation will not be
passed on to the ratepayers and in future rate cases, the
company will not be allowed to pass on costs beyond the $5.5
billion to ratepayers.
Mayor Hutto responded that the company has allowed the
costs to escalate to $5.5 billion. This is not the place to
put a cap, the cap should have been placed on the $790
million.
The City Attorney pointed out that another major change
the coalition of cities is recommending is that there should
not be a recovery for the abandonment or cancellation of the
Allen's Creek Nuclear Project. Part of the company's proposal
is that some $362 million should be allowed the company as a
write -off. The cities have taken the position that since
the company has not taken a definite commitment one way or
the other, the company should not be allowed to recover
anything for writing off that project until that final
decision has been made. Therefore, that amount has been
backed out of the rate base.
Councilman Cannon informed Council that it had been
announced that the company has definitely decided to abandon
this project.
The City Attorney responded that if this is allowed,
the cities' recommendation is that the method of write -off
be the usual method utilized by the PUC, the straight line
ten -year method. The company has recommended that the write -off
be in the first few years.
Councilman Cannon stated that on some of these management
decisions whether good or bad, these should be passed on to the
stockholders and not the ratepayers. Councilman Cannon then
inquired of Jim Schaefer, how the company became involved in
Allen Creek with an expenditure of $324 million for the plant
and $64 million for nuclear fuel before cancelling the prject.
Jim Schaefer, Division Manager of Houston Lighting and Power
Company, responded that perhaps Council would like to know
some of the history behind the Allen Creek Nuclear Project.
Nuclear power has been produced economically in the United States
since 1957. All utilities must go through a licensing process
with the Nuclear Regulatory Commission. In 1973 the company
20826 -9
Minutes of the Regular Meeting - August 26, 1982
made the decision to construct the Allen Creek project. At
that time the inflation rate was 4 %, house mortgage rates
were 7% and capital was much less than 7 %. The project
appeared to be an extremely good decision. The company was
committed to the project and to following all the rules to
obtain a permit to construct said plant. The company naturally
assumed that if all the rules were met, that the permit
would be issued and construction would be no problem. The
company is now ten years from the initial decision to construct
the Allen Creek plant and the company has been in off and
on hearings before the Nuclear Regulatory Commission to obtain
construction permit. If the company had construction permit
in hand today, the project would still be viable, but the
regulatory lag being as uncertain as it is today, the company
is not certain when the permit could be secured and time
marches on so the decision had to be made. Mr. Schaefer
stated the system of regulatory process in the United States
today is prohibitive to the development of nuclear energy.
Other countries have been quite successful in their
development of nuclear energy in a shorter period of time
at half the costs. The company is reacting to the facts and
it would be very imprudent to not evaluate the project at
this time and try to get it going. The company has a nuclear
power plant to which major components are stored in
warehouses. Westinghouse, when HL&P ordered its reactor in
1974, produced a sister reactor which was purchased by the
Republic of Taiwan which is producing electricity today. The
company proposed to find a buyer for the components, but the
company feels that the buyer will not be in the United States
because the prospect for nuclear energy in this country is
dead.
Councilman Cannon inquired if the company had to acquire
permits to utilize lignite. Mr. Schaefer responded that the
regulatory process was not the same. The company must go to
the PUC to acquire those permits. If you really look at the
process anyone can slow down and delay and in the utility
business, slow down and delay is tantamount to denial.
Mr. Schaefer stated that part of the problem that the
company faces is the cumbersome rate - making procedure in the
State of Texas where there is a dual jurisdiction. In 1975
prior to enactment of the law which established the PUC, Texas
was the last state to adopt laws to establish a Public
Utility Commission. If there were no such legislation in
existence, possibly Baytown and one or two other cities
would band together to make a decision and that would be the
final decision. There is a PUC and what the act gave to
PUC in effect is original jurisdiction. It gave the concept
of dual jurisdiction to the cities, but when the legislature
set up the act, the PUC was the final authority and appealing
body. Therefore, effectively the PUC sets the rate. This is
an extremely cumbersome method. It is costly to the company,
ratepayers and cities. It is difficult to sit on Council
and address the issues of a rate request. Those issues that
address things like service can be easily handled at the
local level. The company has no preference with regard to
who should maintain jurisdiction over the rate - making process;
however, the company would like for it to be either one or
the other.
20826 -10
Minutes of the Regular Meeting - August 26, 1982
Mr. Schaefer apologized to Councilman Philips for not
responding to a letter from the Councilman regarding fuel costs,
but Mr. Schaefer explained that he had received the letter just
prior to leaving on vacation. Mr. Schaefer stated that the
reason for the fuel cost adjustments can be adequately demonstrated
by looking at the fact that there are some incentives in the
fuel adjustment clause. He stated that perhaps the company has
a tendency to over - simplify and it appears on the outset that the
company is careless The company purchases gas by BTU content
which BTU content is monitored on a 24 -hour basis. Each one of
the plants have calibrators. Fuel oil is purchased by bid basis
on lowest costs. Natural gas and coal are not purchased in that
fashion because of the large quantities that the company purchases.
Mr. Schaefer stated that he would get Councilman Philips a
response in writing.
The company is a very large company and serves a very large
area electricity wise. This is a very difficult job and
employees of HL&P are human, and from past experiences, they are
better managers. The personnel of the company live in the area
and they pay the same utility bills. No utility company likes
to see continued escalating rates. Everyone would be happier
with stabilized rates. The rate - making process is a very
difficult process with many facets that are difficult to
understand. Many companies today are in the process of curtailing
and HL&P could be in that same posture. The company could shut
down the construction program and not borrow the massive amounts
necessary to construct new plants to continue to support the
tremendous growth of this area. However, the company feels that
that wouldn't be a very prudent decision nor the decision that
the city or the PUC would have in mind. Power plants cannot be
constructed without long lead times. In that way, the company
is a little different in having to meet the demand even in very
adverse conditions. There have been very adverse conditions in
the capital market which have caused a severe dampening of
construction programs in many other industries. In summarization,
Mr. Schaefer stated that the city or the State could form a
utility company and buy out HL&P, but the same problems would
still exist. There are no easy answers.
Councilman Simmons stated that Mr. Schaefer had made a
valid statement about the need to construct plants for the
future, and inquired if in determining a rate base, a certain
percentage of construction in process is considered as part
of that rate base. To this question, Mr. Schaefer responded
in the affirmative.
The City Attorney stated that it was 100% this year.
Councilman Simmons stated then whatever millions of
dollars the company had invested in construction, part of
the rate is to cover that expenditure. The company then acquires
this construction as assets. Councilman Simmons stated that
the money the ratepayers pay toward construction should be
considered a loan to the company and that the company should
have a column on its billing which indicates the loan amounts
and at the time the plant is fully constructed, the company should
begin remitting to its customers until that loan is paid in full.
20826 -11
Minutes of the Regular Meeting - August 26, 1982
Mr. Schaefer responded that that was a very philo-
sophical point and that Council as a regulator could do
whatever they want to, but the funds have to come from
someplace. Currently, the funds come partially from the
ratepayer and partially from.internally generated cash
(stock, common equity in the company) and from long - termed
cancelled debt. What the ratepayer is paying for is the
carrying costs of those funds to build that particular
project.
Councilman Simmons pointed out that the company is
almost 100 years old and the assets of the company
approach close to $4 billion and in 1995 when all the plants
are constructed, the company's assets could reach anywhere
from $12 -$20 billion. At that time unless one is a
stockholder of the company, one will be paying the
rates requested while having participated over the years
in purchasing assets for the company.
Mr. Schaefer responded that this was a philosophical
question and that reasonable men can differ on amounts
used for construction. There has been a different number
every year. The total package must be considered.
Mayor Hutto reminded those in attendance that the
City of Baytown's Public Hearing on the Proposed Budget
was scheduled for this time and that hearing would commence
upon conclusion of the hearing on the rate request of
HUP.
Councilman Philips stated that he appreciated Mr.
Schaefer's response to his comments and that he had made
those comments in the context that HUP is being denied
the opportunity to put its managerial skills to use and
contribute to an overall lower price by being responsible
for the stewardship of the fuel and not just passing it
through. The comment was meant to be constructive.
In response to an inquiry from Council, Randy Strong,
City Attorney, explained that under the Commission rules
there is an allowance for construction work in progress
and that could be anywhere from 60% to 100%.
Mr. Schaefer stated that that again is an indication
of what the financial community perceives concerning the
health of HUP or any other company. The City works very
diligently to maintain and improve its bond rating. Not
too long ago HUP had its rating reduced from AAA to A+
by one company and A- by another, which translates into
what the company must pay to borrow and what ratepayers
will pay for electricity.
Representative Polumbo recommended that if one percentage
point represents $150,000,000, then grant about $40,000,000
which will put the company at 16% return on equity.
There were no other persons present desiring to speak;
therefore, Mayor Hutto declared the public hearing to be
closed.
20826 -12
Minutes of the Regular Meeting - August 26, 1982
Consider Proposed Ordinance No. 30826 -1, Establishing Rates
to be Charged by Houston Lighting and Power in the City of
Baytown
Council had been presented with a proposed ordinance which
ordinance is based on the recommendation prepared by the City
of Houston Public Service Department and is similar to the
ordinance which was adopted by the City of Houston and the City of
Pasadena, Other cities have adopted other ordinances. Any
decision other than to adopt the rate proposed by HL&P will be
appealed to the PUC for ultimate decision. It is important
that the City of Baytown make its decision known so that decision
will be part of the hearing before the PUC on rural rates.
Councilman Philips stated that taking Representative
Polumbo's feeling into account, he also had to look at the
other side of the issue and that is the possibility of brown
outs such as are experienced on the East coast. That would
serve no one and the problem would only be escalated. Councilman
Philips stated that the -City of Houston has dealt with this
issue in depth and that the intention is to assert themselves
and by joining with a group of cities in a common objective, a
stronger front may be presented. On that basis, Councilman
Philips moved to adopt the proposed ordinance; Councilman Simmons
seconded the motion.
In response to a request from Council, the City Attorney
reviewed the process to this point and stated that the cities
which have adopted rates other than presented by the City of
Houston's expert witnesses will need to produce their own
expert witnesses to justify their proposed rates. The City
of Baytown would be in the same posture should Council determine
to set a different rate, other than what was requested by
HL&P or what was proposed by the City of Houston experts. The
vote follows:
Ayes: Council members Philips, Johnson, Simmons,
Wilbanks, Fuller and Cannon
Mayor Hutto
Nays: None
ORDINANCE NO. 3443
AN ORDINANCE RELATING TO RATES TO BE CHARGED BY HOUSTON
LIGHTING & POWER FOR ELECTRIC UTILITY SERVICE WITHIN THE
CORPORATE LIMITS OF THE CITY OF HOUSTON, TEXAS; CONTAINING
FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; PROVIDING
FOR A REPEALER AND FOR SEVERABILITY; AND PROVIDING FOR THE
EFFECTIVE DATE HEREOF.
Hold Public Hearing on Proposed City of Baytown 1982 -83
Budget (7:00 p.m.)
Mayor Hutto called the public hearing on the proposed City
of Baytown 1982 -83 Budget to order. The Mayor announced that
anyone present desiring to speak at the public hearing should
register on the list provided in the hallway for that purpose.
Mayor Hutto reminded those present that the hearing was not an
adversary type hearing and that all who registered would be
given ample opportunity to be heard.
20826 -13
Minutes of the Regular Meeting - August 26, 1982
The City Manager explained to those in attendance that
the City Manager is required by Charter to present to
City Council a proposed budget prior to the end of July.
The proposed budget was presented and the City Council has
expended several hours reviewing the budget, but no
decisions have been made. The Administration has recommended
a proposed total budget of $30,425,805 which is an increase
over the current year of $3,313,567 or 12.22 %.
The City's budget contains four main categories. The
first is the General Fund which supports such departments
as Fire, Police, Library, Parks and Recreation, Health,
and others. The recommended budget for the general fund is
approximately $1,500,000 greater than the current year or
10.04% increase. For Solid Waste the recommended expenditure
is $1,822,000 for an increase of $370,000 or an increase
of 25.51 %. The main reason for this size increase is that the
city has adopted a new accounting system for the garage
so that expenditures are charged out to the various departments.
Another reason is that the costs for the - landfill has increased
substantially. The Water Fund has increased by $1,012,000
or 13.82% and one of the reasons for this increase is that
the city expects to be using more surface water than this
year and the city will be placing in service the new sewage
treatment plant which will use more electricity than the
old plant and will have an operator on hand 24 hours a day.
The General Obligation Interest and Sinking Fund (a fund to
pay principal and interest on bonded indebtedness) has been
increased by $405,000 or 14.50 %. The reason for this increase
is the bonds which were sold last year.
Another category is the Waterworks and Sanitary Sewer
Interest and Sinking Fund. Since no revenue bonds were
sold, there is no increase. The only significant change
in the level of service that the city expects to provide
next year as compared to this year is the new sewerage
treatment plant. The city will have the same number of
full -time employees as this year. The Administration
has recommended a budget that will not require an increase
in the tax rate nor any increase in water and sewer rates.
An increase of $2.00 per month has been recommended for
solid waste collection charges. Mr. Lanham ended his
presentation by emphasizing that the total budget increase
is only 12.22 %.
Jocelyn Wesselhoft, 120 Caldwell, appeared as representative
of the Baytown Senior Citizens Nutrition Center to request
that Council consider increasing the amount to the nutrition
center from $5,000 to $11,000. The reason for the requested
increase is to fund the position of senior aide which had
previously been funded through another program. Mrs.
Wesselholft introduced, Carabell Hemingway, Senior Aide,
responsible for food preparation and distribution, including
the home bound. Home bound service is limited to 10 -12
persons and Ms. Hemingway is constantly revising the list
for those who qualify.
The nutrition center has a total budget of $30,000.
Previously, the City of Baytown has contributed $5,000 for
the center and $15,000 toward the operation of the van.
20826 -14
Minutes of the Regular Meeting - August 26, 1982
Mayor Hutto mentioned to Ms. Wesselhoft that the Adminis-
tration had included the $11,000 in the proposed budget. Council
commended Ms. Wesselhoft for the tremendous job being performed
at the nutrition center.
Mayor Hutto reminded those in attendance that the public
hearing on revenue sharing was scheduled for 7:15 p.m. and
would be conducted immediately following the close of the
hearing on the proposed budget.
V. T. Glass, Chairman of Baytown Library Advisory Board,
stated that the Board and staff of Sterling Municipal Library
would like to urge Council to adopt the proposed budget for
Sterling Municipal Library. He mentioned that due to inflation,
use of the library had increased along with costs to operate
the library. The recommended level of service is 4 books per
capita and presently the library does not have quite 2 books
per capita. Therefore, Mr. Glass urged Council to accept the
proposed budget for Sterling Municipal Library in order to
meet the continuing needs of the citizens of Baytown. He also
requested that Council consider the $30,000 request of the
library for 1982 -83 Revenue Sharing Funds.
David L. Black, First Vice President of Bay Area Heritage
Society, appeared to request Council support of the Administration's
recommendation that the request of the Society be moved from
revenue sharing to the 1982 -83 proposed City of Baytown Budget.
Mr. Black explained that the museum is open 20 hours a
week with two full time employees. Recently, the museum lost
one of its employees and it will be necessary to replace that
person. The museum relies heavily on funding from the city
since the only other means of funding is the annual tour which
participation was down this past year and donations which are
not as great during these economic times.. The museum is facing
large utility bills due to the fact that the building where the
museum is located is an old building and the fact hat the
building must be maintained at a temperature of 72 - 780. In
recent months, the museum has begun to be utilized for more
than just preserving the past. Recently, the Goose Creek
School has solicited aid from the museum to help with the
indoctrination of 57 Third Grade teachers concerning Baytown
history which will be taught this year. The museum has become
known as an authority on Baytown and Bay area history. This
year 2,500 persons registered as having visited the museum.
Over 1,000 children have visited the poetry room which room
was funded through a grant from Atlantic Richfield Corporation.
Presently, the museum is working with Exxon on its anniversary
celebration. Without the grant from the City of Baytown, none
of this could be possible.
There being no other persons present desiring to speak,
Mayor Hutto declared the public hearing to be closed.
Hold Public Hearing on Proposed Uses for Revenue Sharing
Entitlement %IV Period Funding (7:15 p.m.)
Mayor Hutto declared the public hearing on proposed
uses for Revenue Sharing Entitlement %IV to be open. He
mentioned that the same procedure would be utilized for this
hearing. Those desiring to speak should sign the register
20826 -15
Minutes of the Regular Meeting - August 26, 1982
in the hallway. He urged those making presentations to
be brief and he mentioned that all questions should be
directed to him. A staff member then would be called
upon to respond.
Fritz Lanham, City Manager, explained that federal law
requires that the Chief Administrator of the City hold
a public hearing. After that hearing, the Chief Administrator
must make recommendations as to the expenditure of said
funds. The City Manager held a hearing on July 12.
Based on notification that the City of Baytown will be
receiving $620,266 in revenue sharing for Entitlement
%IV, the City Manager made the following recommendations:
1. Slope Mower Replacement - $30,000 - These funds
would be used to purchase a replacement for the
1968 International Slope Mower now in use at the
Parks Department. The present mower is old and
much down time is being experienced.
2. Tractor Replacement - $14,000 = These funds would
be used for the replacement of the 1974 Case
Tractor which has become non - economical to operate
due to its age.
3. Swimming Pool Repairs - $9,500 - These monies
would be used to replace electrical work in the
Roseland filter house ($2,500); purchase four
(4) Scott Air Packs for use at each pool when
changing chlorine bottles ($4,000); and to repair
an underground leak at the N.C. Foote pool ($3,000).
4. Sectional Meter Vaults & Meter Bypasses - $10,000 -
These funds would cover the installation of these
meter vaults and materials for meter bypasses
and labor; which installations will provide the
capabilities for testing, replacing, and repairing
2" meters or greater.
5. Walk Behind Striping Machine - $3,000 - These funds
would provide for acquisition of a walk behind
striping machine. This purchase would allow machine
application of pavement markings which will decrease
paint application and drying time.
6. Soil Study - $15,000 - These funds would provide
for the hire of a geo technical firm to conduct
soil studies in Baytown to provide the Inspection
Department with necessary information for building
foundations.
7. Street Reconstruction - $202,766 - These funds would
be used to supplement the funds in the proposed
82 -83 budget for street reconstruction.
8. Emergency Vehicle - $9,000 - These funds would
allow the Baytown Emergency Corps the funds to
perform necessary repairs to their reserve vehicle,
as well as allow for the purchase of two mobile
radios and one walkie talkie.
20826 -16
Minutes of the Regular Meeting - August 26, 1982
9. Library Books - $30,000 - These funds would be used
to purchase library books and materials to continue
to expand the collection.
10. Nutrition Center - $15,000 - These funds would be
used for the continuing operation of the nutrition
van.
11. Police Radio System - $280,000 - These funds would
be used to supplement the proposed funds in the 82 -83
budget to install Phase I of the radio system.
12. Audit - $2,000 - The funds would be used to pay for
the audit of revenue sharing funds.
Wendell Romans, 1507 Narcille, Chairman of Baytown Volunteer
Five- Station Committee, appeared to request allocation of
$3,700; $3,000 to purchase a four -wheel drive government surplus
truck to be utilized to fight grass fires and $700 for Fire
Prevention Education in Baytown. Mr. Romans stated that he
conducts safety meetings and he has been paying for costs of
handouts.
Mayor Hutto inquired of Mr. Romans had contacted the county
with regard to this $3,000 since most of these grass fires will
be in the county.
Mr. Romans indicated that two other volunteer departments had
made the request of the county and were refused.
Mr. Romans stated that the truck being requested could
also be utilized for structural fires.
Jocelyn Wesselhoft, 120 Caldwell, appeared to request
continued funding of the van operation for the Baytown Senior
Citizens Nutrition Center. Ms. Wesselhoft introduced the van
driver, Ms. Lyn Smith. A six (6%) percent increase was
granted to Ms. Smith this year.
*Councilman Perry Simmons absent.
Martha Mayo, President of Friends of Sterling Municipal
Library, appeared to urge Council to give consideration to
the library's request for $30,000 in revenue sharng allocation.
Mrs. Mayo stated that during the past summer more than 2,000
children joined the library's summer reading program and because
of this enthusiastic response, at times the library shelves were
almost bare. Children often had to go home without a book or
with a book below their reading level. Mrs. Mayo requested
that Council consider this request which would benefit so many.
Since there were no other persons present who indicated a
desire to speak,, Mayor Hutto declared the public hearing to be
closed.
20826 -17
Minutes of the Regular Meeting - August 26, 1982
Representative of U. S. Steel Will Appear
A copy of the presentation made by U. S. Steel represen-
tative, George Bradford is attached to the minutes as
Attachment "C."
Mayor Hutto stated after the presentation that he could
appreciate U. S. Steel's position and inquired if U. S.
Steel representatives had appeared before the Tax Appraisal
Review Board. Mr. Bradford responded that the company had
appeared before the Board.
Councilman Cannon inquired what was the 1983 figure to
which Mr. Lanham responded that the combination industrial
district payment and tax payment would be $643,670; last
year the figure was $561,342. In 1975, the company paid
$295,000 for the first year of the seven -year contract. Mr.
Bradford mentioned that on the back of the presentation he
had included two charts which indicated a 44% drop in shipments
from last year and how those shipments had begun to decline
before then. The company has been making an effort to get
the value down and the charts show how performance declines
as value is decreased, but with the new resolution, the
payment goes up approximately 15%.
Councilman Philips inquired how many employees were
employed in 1975 to which Mr. Bradford responded that approximately
1,000 persons were employed at that time and at present
there are 1,400 employees. The reason for the larger number
of employees at this time is that in 1975 the pipe mill was
not in operation.
Councilwoman Wilbanks stated that Council had not
reviewed any evaluations yet and she felt that that information
would be helpful to Council in making a determination. Mr.
Lanham responded that that information would be made available
to Council.
Mr. Lanham mentioned that representatives of the company
did accept the value that had been placed on the facility.
Mr. Bradford stated that this was correct, but since that
January 1 evaluation date, the company now sees that the
company will be in a position of paying a tax that will not
be corrected until next year.
Councilman Cannon mentioned that Council had recently
entered an industrial contract with Exxon and that company
is having problems. If Council were to grant the relief
requested to U. S. Steel, this would establish a precedent.
Mr. Bradford pointed out that U. S. Steel was not
talking of loss in profits, but much larger losses and
because this is a contractual relationship, he felt that the
contract could be amended if there were a meeting of the
minds.
Mayor Hutto stated that he would have no problem with
placing an item in this regard on the next Council agenda,
but he would have grave concerns about breaching the contract
since he too felt that all the other industries would expect
treatment equal to U. S. Steel.
20826 -18
Minutes of the Regular Meeting - August 26, 1982
Mayor Hutto stated that by looking at the request, he
could see that if the request were to be granted, Council
would be looking at a possible tax increase or budget adjustment.
Councilman Philips explained that Council's immediate
concern is the ripple effect - -would this same consideration
have to be given across the board and he felt that would be
the only equitable thing to do. To look at that the effect
of that would mean a tremendous tax increase.
Mayor Hutto pointed out that several of the industrial
district contracts are up for renewal.
Mr. Bradford stated that U. S. Steel would be glad to
assist Council in its deliberation with any additional
information that might be of help.
Mayor Hutto stated that an item would be placed on the
next agenda in this regard.
Representatives of Naylor 'Industries, Inc. Will 'Appear
There was no representative of Naylor Industries present.
Consider Proposed Ordinance No. 20826 -2, Awarding Contract
for 1982 Sanitary Sliplinink Phase II
The Administration has failed to indicate to Council at
the last meeting that anytime a bid on a public works project
is awarded to anyone other than the low bidder, an opportunity
must be provided for the low bidder to appear before Council.
A letter was written to Naylor Industries indicating that if
the company so desired, a representative could appear before
Council. The company had indicated a desire to do so, but
since that time, members of the City of Baytown Engineering
Department and the city's consulting engineers met with
representatives of Naylor Industries concerning the project
that Naylor is performing at the West District. Naylor has
stipulated that that project will be completed in a timely
manner and that if awarded the contract for the 1982 Sanitary
Sliplining Phase II, that contract will also be completed in
a timely manner. There had been a disagreement concerning
time which has been corrected to everyone's satisfaction;
therefore, the Administration would like to change its
recommendation and recommend that the contract be awarded to
the low bidder, Naylor Industries, Inc.
Councilman Cannon moved to adopt the ordinance, awarding
contract for 1982 Sanitary Sliplining Phase II to Naylor
Industries, Inc., Councilman Johnson seconded the motion.
The vote follows:
Ayes: Council members Philips, Johnson, Fuller and
Cannon
Mayor Hutto
Nays: Councilwoman Wilbanks
20826 -19
Minutes of the Regular Meeting - August 26, 1982
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.
Consider Proposed Ordinance No. 20826 -3, Setting Date for
Public Hearings on Proposed Annexation of West District
Wastewater Plant and Rest Stop
Council was provided with a map showing the locations
of both this proposed annexation and the other. This
particular annexation will consist of West District Wastewater
Plant and rest stop. The reason that the rest stop is being
included is that some of the problems being experienced at
the plant may be due to the close proximity of the rest stop.
Ultimately, all of this area will be in the city. The Admin-
istration recommended that the public hearings be called
on proposed annexation of West District Wastewater Plant
and adjacent rest stop for September 9 at 5:30 p.m. on site
and 7:00 p.m. in the Council Chamber.
Two or three meetings ago, the Administration had
mentioned Love's Truck Stop and the fact that that business
had requested service. At that time, annexation could
not be considered due to the 500 foot rule, but since
that time, the Administration has received a request from
Reading Buick for annexation and the BAWA water plant has
been included so that the city can furnish police protection,
plus the necessary portion of highway. The city will be
responsible for a very small portion of Thompson upon
finalization of annexation. The Administration recommended
approval of both ordinances setting dates for public hearings.
Councilman Fuller moved for the adoption of the ordinance
calling a public hearing for annexation of West District
Wastewater Treatment Plant and the adjacent rest stop.
Councilman Philips inquired when the Council would
need to look at impact of these annexations with regard
to furnishing service. Mr. Lanham responded that service
plans would be available for the hearings and that there
was another item on the agenda that related to service for
Love's Truck Stop. Councilman Philips stated that he felt
that Council needed to be certain that whatever was done
in this regard could stand alone and that no tax increase
would be necessitated.
Councilman Johnson seconded the motion. The vote
follows:
Ayes: Council members Philips, Johnson, Wilbanks,
Fuller and Cannon
Mayor Hutto
Nays: None
20826 -20
Minutes of the Regular Meeting - August 26, 1982
ORDINANCE NO. 3445
AN ORDINANCE SETTING A DATE, TIME AND PLACE FOR THE PUBLIC
HEARINGS ON THE PROPOSED ANNEXATION OF THE WEST DISTRICT
WASTEWATER TREATMENT PLANT; DIRECTING THE PREPARATION OF A
SERVICE PLAN; AUTHORIZING AND DIRECTING THE CITY CLERK TO
PUBLISH NOTICE OF SUCH PUBLIC HEARINGS; AND PROVIDING FOR
THE EFFECTIVE DATE HEREOF.
Consider Proposed Ordinance No. 20826 -4, Setting Date for
Public Hearings on Proposed Annexation of Baytown Area
Water Authority Water Plant, Love's Truck Stop and
Reading Buick
The proposed ordinance sets the public hearings for
5:45 p.m. on site and 7:15 p.m. in the Council Chamber on the
proposed annexation of Baytown Area Water Authority Water
Plant, Love's Truck Stop and Reading Buick.
Councilman Johnson moved for adoption of the ordinance;
Councilman Cannon seconded the motion. The vote follows:
Ayes: Council members Johnson, Wilbanks, Fuller and
Cannon
Mayor Hutto
Nays: Councilman Philips
ORDINANCE NO. 3446
AN ORDINANCE SETTING A DATE, TIME AND PLACE FOR THE PUBLIC
HEARINGS ON THE PROPOSED ANNEXATION OF LOVE'S TRUCK STOP,
READING BUICK, AND BAYTOWN AREA WATER AUTHORITY PROPERTY;
DIRECTING THE PREPARATION OF A SERVICE PLAN; AUTHORIZING AND
DIRECTING THE CITY CLERK TO PUBLISH NOTICE OF SUCH PUBLIC
HEARINGS; AND PROVIDING FOR THE EFFECTIVE DATE HEREOF.
Consider Greenwood Drive Drainage Stud
Mr. Lanham explained that in order to drain the Greenwood
Drive area, it is necessary to get water to Kilgore Road;
therefore, the Administration would need permission to obtain
appraisal for necessary easements.
Norman Dykes, Director of Public Works /City Engineer,
explained that in the 1979 budget, pipe was installed along
Greenwood Drive which helped, but since that time some of
the residents have expressed concerns with street flooding.
Greenwood Drive was included on the drainage list for
1981 -82. What the engineering department is proposing is
instead of placing more pipe behind the apartments that a
direct route be taken from the flow area with an overflow
pipe to the natural drainage area that exists. In order to
do that work, easements are necessary. Funds are available
in the current revenue sharing budget for this work.
Councilman Philips moved to authorize the Administration
to obtain appraisal for easements in the Greenwood Drive
drainage area; Councilman Johnson seconded the motion. The
vote follows:
20826 -21
Minutes of the Regular Meeting - August 26, 1982
Ayes: Council members Philips, Johnson, Wilbanks,
Fuller and Cannon
Mayor Hutto
Nays: None
Consider Proposed Ordinance No. 20826 -5, Authorizing
Additional Easement Acquisition for the Baker Road /Bayway
Drive Drainage Ditch
When the city requested Harris County Flood Control
assistance with part of the Baker Road /Bayway Drive drainage
ditch, the county agreed with the understanding that the
city would provide right of way. The flood control district
has requested additional right of way in order that 120
feet of right of way can be provided. This is the minimum
amount of right of way that is acceptable to flood control.
The owner has agreed to a per square foot payment for
additional right of way based on the previous appraisal which
represents a total of $15,646.92. The Administration recommended
approval of the ordinance. Exxon has agreed to give an
easement along their property.
Coucilman Johnson moved for adoption of the ordinance;
Councilman Philips seconded the motion.
In response to an inquiry from Council, Mr. Lanham
stated that the flood control district has changed its
requirements for right of way in order to get away from
piping ditches and placing concrete liners. In order to
properly maintain the ditch, flood control needs the
additional right of way. The vote follows:
Ayes: Council members Philips, Johnson, Wilbanks,
Fuller and Cannon
Mayor Hutto
Nays: None
ORDINANCE NO. 3447
AN ORDINANCE AUTHORIZING THE CITY ATTORNEY TO MAKE AN
OFFER FOR AND IN BEHALF OF THE CITY OF BAYTOWN, FOR
FIFTEEN THOUSAND SIX HUNDRED FORTY SIX & 92/100
($15,646.92) DOLLARS TO THE OWNERS, OR OTHER PARTIES
IN INTEREST FOR THE ACQUISITION OF CERTAIN INTERESTS
IN A TRACT DESCRIBED HEREIN REQUIRED FOR A DRAINAGE
EASEMENT; REQUIRING THAT SUCH OFFER BE ACCEPTED WITHIN
FIFTEEN (15) DAYS; DIRECTING THE CITY ATTORNEY TO
INSTITUTE CONDEMNATION PROCEEDINGS IN THE EVENT SUCH
OFFER IS REFUSED; AND PROVIDING FOR THE EFFECTIVE DATE
HEREOF.
Consider Authorization to Advertise for Bids for Sanitary
Sewer Main Under IH -10 at Thompson Road for Love's
Truck Stop
This matter was discussed at a previous meeting. Love's
Truck Stop owner has requested that the city take bids for
a 6 -inch sewer line to tie to the city's 21 -inch gravity
sewer at the southwest corner of IH -10 and Thompson Road
20826 -22
Minutes of the Regular Meeting - August 22, 1982
in accordance with the requirements of the water and sanitary
sewer extension policy. At the same time, the city would
like permission to obtain an alternate bid of 10 -inch pipe.
Oversizing would enable the city to serve a larger area.
Estimated cost of the oversizing is $8,000 which the city
would pay. Money is available in the water and sewer extension
fund. The Administration recommended approval of the
request.
Councilman Fuller moved that the Administration be authorized
to advertise for bids for a 6 -inch sanitary sewer main under
IH -10 at Thompson Road for Love's Truck Stop and an alternate
bid for 10 -inch sanitary sewer main under IH -10 at Thompson
Road for Love's Truck Stop; Councilwoman Wilbanks seconded the �1
motion. The vote follows:
Ayes: Council members Philips, Johnson, Wilbanks,
Fuller and Cannon
Mayor Hutto
Nays: None
Consider Authorization to Acquire Appraisal for Site for
Water Tower
*Councilman Simmons present.
Council had received at a previous meeting a report from
Bovay Engineering recommending a site at the intersection
of Highway 146 and Spur 201 for the construction of a 2,000,000
gallon water tower. The Administration requested permission
to acquire appraisal for the site.
Councilman Johnson moved to authorize the Administration
to proceed with acquiring an appraisal for a site at Highway
146 and Spur 201 to construct a 2,000,000 million water tower.
Councilman Philips seconded the motion.
Councilman Fuller pointed out that funds may be a-prime
consideration, as well as optimal location.
Mr. Lanham explained that the Administration really would
like to begin with appraisals for this particular site since
this is the optimum site with its location near existing
12 -inch water lines. If the city selects a site away from that
area, then additional height must be built to the water tower.
After appraisal on this site is received, Council can determine
if other appraisals are necessary. The vote follows:
Ayes: Council members Philips, Johnson, Simmons,
Wilbanks, Fuller and Cannon
Mayor Hutto
Nays: None
20826 -23
Minutes of the Regular Meeting - August 26, 1982
Consider Specifications for Bank Depository
Council had been furnished with specifications for
bank depository based on flexible and non - flexible contracts.
Contract lA would permit the City to designate one bank
as the sole and single depository of the City, for the term
of the contract. Under the terms of this contract, the
City shall not maintain time or demand accounts in any
bank other than the one specified in the contract. The
exception here is bond interest and sinking fund accounts.
Contract 1B would permit the City to designate multiple
banks as depository banks of the City and maintain time
deposit accounts in other depository banks. The City would
require all depository banks to secure deposits under the
same terms and conditions that are specified in the contract.
The City would also be entitled to negotiate re- purchase
agreements with the depository bank or with other depository
banks located within the City limits for funds that will
be invested for time periods of less than thirty (30) days.
The Depository Bank would have the power to limit its
participation in time deposits that exceed twelve (12)
million at any one time.
The Administration will need to take bids soon since
the current depository contract expires in September.
Council expressed concern with the legality of a
flexible contract, but the City Attorney assured Council
that, by statute, the city may designate more than one
depository bank. The City of Houston has in excess of
30 Depository Banks. Council also expressed concern that
with a flexible contract, Council would be placing control
of where city funds are to be deposited with a staff
member rather than Council.
Councilman Cannon suggested that a report could be
made to Council on a regular basis which would indicate
bids taken on various deposits and where those deposits
were made.
Councilman Philips suggested that Council could take
bids both ways and then make a decision after reviewing the
bids. The City Attorney stated that he had not researched
the question, but he could think of no reason to prevent
the taking of bids on both contracts.
Councilman Johnson moved to authorize the Administration
to advertise for bids for a City Bank Depository Contract
on the basis of Contract lA - Non Flexible. Councilman
Fuller seconded the motion. The vote follows:
Ayes: Council members Johnson, Simmons, Wilbanks
and Fuller
Mayor Hutto
Nays: Council members Cannon and Philips
20826 -24
Minutes of the Regular Meeting - August 26, 1982
Consider Proposed Resolution No. 818, Opposing Federal
Regulation of Cable Television
The Administration has received correspondence from Texas
Municipal League requesting Council action to oppose proposed
federal legislation regarding federal regulation of cable
television. The Administration recommended adoption of the
resolution since the city will receive calls from dissatisfied
customers even if the federal government assumes the responsibility.
Besides that the Administration felt that the place for this
responsibility was not Washington.
Councilman Philips moved for adoption of the resolution;
Councilman Johnson seconded the motion. The vote follows:
Ayes: Council members Philips, Johnson, Simmons,
Wilbanks, Fuller and Cannon
Mayor Hutto
Nays: None
RESOLUTION NO. 818
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN
OPPOSING FEDERAL LEGISLATION WHICH WOULD PREEMPT REGULATION
OF CABLE TELEVISION AND PLACE REGULATION IN THE FEDERAL
GOVERNMENT.
Consent Agenda
, In response to Council concerning auto fittings, Mr.
Cote, Purchasing Agent, explained that the term auto fittings
consists of things like nuts, bolts, cap screws, etc. All
these items were itemized in the bid. Bids were taken on
estimated quantities, but the city need only purchase the
necessary quantities.
Mr. Lanham commended the Purchasing Department on its
efforts to bid more items.
Council considered the Consent Agenda as follows:
a. Proposed Ordinance No. 20826 -6, will award the bid
for the annual Premix Rock Asphalt Contract.
Three (3) bids were received. The low bid of
$38,805 was submitted by Azrock Industries.
We recommend the low bidder, Azrock Industries, be
awarded this contract.
b. Proposed Ordinance No. 20826 -7, will award the bid
for the annual Hot Mix Asphalt Contract. Five
companies were sent bid packets. One bid was
received, Radcliff Materials, Inc. of Texas in the
amount of $23,900.
We recommend Radcliff Materials, Inc. of Texas be
awarded this contract.
20826 -25
Minutes of the Regular Meeting - August 26, 1982
C. Proposed Ordinance No. 20826 -8, will award the bid
for the annual auto fittings contract. Six (6)
bids were received. Baytown Oil Sales submitted
the low bid of $11,175.56.
We recommend the low bidder, Baytown Oil Sales be
awarded this contract.
d. Proposed Ordinance No. 20826 -9, will award the
annual masonry and construction materials contract.
Six (6) bids were received. Lowe's of Baytown
submitted the low bid of $8,632.07.
We recommend the low bidder, Lowe's of Baytown be
awarded this contract.
e. Proposed Ordinance No. 20826 -10, will authorize
Change Order No. 1 for the 1982 Street Improvement
Program. This Change Order consists of adding
sidewalk replacement to E. Wright. All of the
sidewalk replacement is due to severely cracked or
rolling sidewalk which is hazardous to the public.
Included in the request is additional salvage /reuse
existing base material, excavation of clay subgrade,
& additional base material on Georgia, W. Republic,
& Gresham Streets. This work will ensure that
these streets have the required 8" of lime stabilized
reconstructed base and that the asphalt mat fits
properly with the gutter lip. In addition, this
will enable the humps in the streets on Georgia at
Virginia & Gresham just west of N. Main to be
removed. Originally, the traffic islands that
were included in the plans for concrete curb work
were to be filled with cement stabilized sand and
asphalt by City crews, but because of exceptional
bid prices, I would like to request this be done
by the contractor. Also, the addition of an
island at Fleetwood and Memorial is included in
the Change Order.
The total amount of the Change Order is $21,719.50.
The original contract amount is $524,503.20, thus
bringing the adjusted contract amount to $546,222.70.
The money is available in the Street Improvement
account.
We recommend approval of Proposed Ordinance No.
20826 -10.
f. Proposed Ordinance No. 20826 -11, awards the contract
for the rehabilitation work at 200 West Republic.
Three (3) bids were received. Ed Shook Building
Contractor, Inc. submitted the low bid of $7,295.
We recommend the low bidder, Ed Shook Bldg. Contractor,
Inc., be awarded this contract.
20826 -26
Minutes of the Regular Meeting - August 26, 1982
Councilman Johnson moved to adopt the Consent Agenda
Items a through f; Councilman Simmons seconded the motion.
The vote follows:
Ayes: Council members Philips, Johnson, Simmons,
Wilbanks, Fuller and Cannon
Mayor Hutto
Nays: None
ORDINANCE NO. 3448
AN ORDINANCE ACCEPTING THE BID OF AZROCK INDUSTRIES, INC.
FOR THE ANNUAL PREMIX ROCK ASPHALT CONTRACT AND AUTHORIZING
THE PAYMENT BY THE CITY OF BAYTOWN OF THE SUM OF THIRTY
EIGHT THOUSAND EIGHT HUNDRED FIVE & N01100 ($38,805.00)
DOLLARS. (Proposed Ordinance No. 20826 -6)
ORDINANCE NO. 3449
AN ORDINANCE ACCEPTING THE BID OF RADCLIFF MATERIALS, INC.
OF TEXAS FOR THE ANNUAL HOT MIX ASPHALT CONTRACT AND
AUTHORIZING THE PAYMENT BY THE CITY OF BAYTOWN OF THE SUM
OF TWENTY THREE THOUSAND NINE HUNDRED & N01100 ($23,900,000)
DOLLARS. (Proposed Ordinance No. 20826 -7)
ORDINANCE NO. 3450
AN ORDINANCE ACCEPTING THE BID OF BAYTOWN OIL SALES FOR
ANNUAL AUTO FITTINGS CONTRACT AND AUTHORIZING THE PAYMENT
BY THE CITY OF BAYTOWN OF THE SUM OF ELEVEN THOUSAND ONE
HUNDRED SEVENTY FIVE & 56/100 ($11,175.56) DOLLARS.
(Proposed Ordinance No. 20826 -8)
ORDINANCE NO. 3451
AN ORDINANCE ACCEPTING THE BID OF LOWE'S OF BAYTOWN FOR THE
ANNUAL MASONRY AND CONSTRUCTION MATERIALS CONTRACT AND
AUTHORIZING THE PAYMENT BY THE CITY OF BAYTOWN OF THE SUM
OF EIGHT THOUSAND SIX HUNDRED THIRTY TWO & 07/100 ($8,632.07)
DOLLARS. (Proposed Ordinance No. 20826 -9)
ORDINANCE NO. 3452
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN
AUTHORIZING CHANGE ORDER NO. 1 TO THE CONTRACT WITH SKRLA,
INC. FOR THE CITY OF BAYTOWN 1982 STREET IMPROVEMENT PROGRAM.
(Proposed Ordinance No. 20826 -10)
ORDINANCE NO. 3453
AN ORDINANCE AWARDING THE CONTRACT FOR COMMUNITY DEVELOPMENT
REHABILITATION PROJECT #81 -04 -07 TO ED SHOOK BUILDING
CONTRACTOR, INC. FOR THE SUM OF SEVEN THOUSAND TWO HUNDRED
NINETY FIVE & N01100 ($7,295.00) DOLLARS. (Proposed Ordinance
No. 20826 -11)
For tabulations, see Attachments "D" through "H."
20826 -27
Minutes of the Regular Meeting - August 26, 1982
Consider Appointments to Clean City Commission
Councilman Fuller moved-to appoint Maurine Davis and
E. J. Hoffmann to the Baytown-Clean City Commission; Council-
woman Wilbanks seconded the motion. The vote follows:
Ayes: Council members Philips, Johnson, Simmons,
Wilbanks, Fuller and Cannon
Mayor Hutto
Nays: None
Consider Appointment to Baytown Planning Commission
Councilman Johnson moved to- appoint Moody Barker to
the Baytown Planning Commission; Councilman Simmons
seconded the motion. The vote follows:
Ayes: Council members Philips, Johnson, Simmons,
Wilbanks, Fuller and Cannon
Mayor Hutto
Nays: None
Consider Appointment to Baytown Traffic Commission
Councilman Johnson moved to appoint Buddy Bean to the
Baytown Traffic Commission; Councilman Simmons seconded
the motion. The vote follows:
Ayes: Council members Philips, Johnson, Simmons,
Wilbanks, Fuller and Cannon
Mayor Hutto
Nays: None
Consider Appointments to BAWA Board
Councilman Philips moved to appoint Knox T. Beavers to
replace Harry Hartman on the Baytown Area Water Authority
and reappoint Peter Buenz; Councilman Simmons seconded
the motion. The vote follows:
Ayes: Council members Philips, Johnson, Simmons,
Wilbanks, Fuller and Cannon
Mayor Hutto
Nays: None
Budget Work Session
Council set a work session to discuss the proposed City
of Baytown 1982 -83 Budget and Revenue Sharing Budget for
Entitlement XIV for Wednesday, September 1, 1982 at 5:00 p.m.
20826 -28
Minutes of the Regular Meeting - August 26, 1982
Trip to Austin
Mayor Hutto and Mr. Lanham will be in Austin on August
30 at the request of Texas Municipal League to discuss Civil
Service proposal that Texas Municipal League is considering,
along with the proposal of the City of Houston.
H -GAC
Councilwoman Wilbanks stated that she had asked that
information concerning H -GAC services to Baytown be included
in the packet to Council. Councilwoman Wilbanks reported
that there had been an accident where a bus had driven'
through the first floor wall of the H -GAC offices, but the
staff was attempting to conduct business.
Ad ourn
There being no further business to be transacted, the
meeting was adjourned.
Eileen P. Hall, City Clerk
Attachment "A"
M E M O R A N D U MS
August 26, 1982
TO: Fritz Lanham, City Manager
FROM: Larry Patterson, Asst. City Manager
SUBJECT: Brownwood Subdivision Report
Jean Shepherd appeared at the Council Meeting of July 22,
19820 and reported several problems in the Brownwood Subdivision.
Listed below is a summary of the actions the City has taken
or will take in regards to these problems:
1. Drainage Problem
In her appearance before Council, Mrs; Shepherd related
several areas that are in need of drainage work. These
areas include Mapleton off Crow, ditches off Bayshore,
Shreck at Bayshore inside the Perimeter Road, and the
distribution of drainage to the pumps.
The 1981 -82 drainage budget contains six projects in
the Brownwood Subdivision: They are as follows:
1. Crow Road - clean ditches & outfall ditch, reset
pipe as necessary.
0
2. Cabaniss - clean ditches & outfall ditch, reset
pipe as necessary.
3. Katherine - clean ditches & outfall ditch, reset
pipe as necessary.
4. Milner Street clean ditches, reset pipes as
necessary.
5. Brownwood Subdivision - an extensive study on
connecting interior drainage system to perimeter
road pumps with even distribution.
6. Brownwood Drive - construct dirt berm along road
shoulder. (The berm is 95% complete. The asphalt
section at the lower endis all that remains to be
completed. Estimated completion time is two
weeks.)
The proposed 82 -83 drainage budget includes work to be
done on Ridgeway, Bayshore, and Mapleton. Once these
projects are complete, three streets in Brownwood
(Martha, Harvey, and Queens Court) remain to be reviewed.
The streets that have not been mentioned are Linwood,
MacArthur; and Brownwood Drive. Linwood is a concrete
street with curb and underground storm sewer system.
MacArthur & Brownwood Drive have both been cleaned
within the last li years.
2. Dumping
Mrs. Shepherd indicated that individuals have been
dumping debris and garbage at Brown Park and on streets
that we have blockaded.
The City will continue to remove litter, garbage and
debris that is dumped illegally in areas. We have
placed "No Dumping" signs along Brown Park. The City
will continue to enforce violations of dumping;
Mrs. Shepherd also-indicated that many people were
carrying in dirt and other materials*to reclaim land,
but stated in one place these materials had not been
covered or packed. She believed that area was simply
being used for dumping. The Inspection Department was
called and did inspect the area. The materials found
were dirt and concrete. Materials were placed there on
a joint venture between several -home owners.
3. Park and Recreation Activities
Mrs. Shepherd complained about people utilizing Brown
Park and the-Y at Bayshore for recreation purposes.
The purposes that were stated (fishing and sleeping
through the night) represent no violation to City
ordinances. If, however these activities disturb the
peace or impede the normal flow of traffic, the Police
Department will intercede to correct the situation.
4. Streets
Mrs. Shepherd remarked that all the streets in Brownwood
except two are in a state of deterioration and need
repair. In regards to streets, as in the case with
drainage projects, the City outlines projects each year
so as to provide an on -going system of repairs and
replacement. Two streets, Ridgeway and Pond Circle,
are in the current reconstruction program.
As in the case in past years, the Administration will
evaluate streets throughout the entire City and recommend
to the City Council those we feel are top priority to
be worked on in that year.
5. Brown Park and Adjacent Area Mowing
Airs. Shepherd stated the area across from Brown Park,
where the City has filled, has-grown over with grass
and.brush. The Parks Division will mow this area on
its regular mowing schedule. After the first mowing we
will spray it to kill the weeds and encourage the
growth of the bermuda grass.
6. Water
Mrs. Shepherd indicated the water lines in the-Brownwood
Subdivision are in a deteriorated state-and persons who
live along Milner can't drink the water. Mrs. Shepherd
also stated there was a water leak on Mapleton near
Crow Road.
The City's approach to the replacement of water lines
is consistent throughout the City. Lines are generally
replaced at the time it becomes necessary to do so.
Much of this is determined based upon the number and
nature of problems we have with a given line or the age
of the pipe. We recently replaced the line along
Linwood Drive.
Concerning the water's suitability for consumption on
Milner, BAWA has conducted bacteriological studies on
water taken from numerous residences on this street and
other streets and found it safe for human consumption.
(Eleven homes - 116, 110, 125, 118, 102, 10, 112, 121,
and 198 and 201 Bayshore, and 121 Mapleton.) Of
course, as with any surface water, there will be taste
problems from time to time.
The water leak on Mapleton has been repaired.
7. Sewer
The City's approach to the repair and replacement of
sewer lines is the same as with water lines. We feel
our actions are consistent throughout the City.
Also, the City has pending, §ince'.1980, an application
to the EPA for a construction grant for the purpose of
constructing a low pressure sewer system in the Brownwood
Subdivision. The Administration recently sent a letter
to the Texas Department of Water Resources seeking a
clarification of the construction grant so we can
determine how to proceed with this project.
8. Demolition of Structures
Mrs. Shepherd mentioned the uncompleted demolition
contracts on Bayshore (104, 130', 132, 134, 136, 138',
and 140 N..'Bayshore). As you recall, the contract for
that demolition project was let to :fir. Henry Dodd. Mr.
Dodd did not.complete his contract. Bids were taken on
August 24, 1982 (four (4) bids were received). These
bids will be taken to the Urban Rehabilition Board on
Monday, August 30, 1982, and brought to Council on
September 9, 1982.
The Urban Rehabilitation Board has been active in the
Brownwood Subdivision. Listed below.are other homes it
has taken action on:
108 West Bayshore Drive - Repairs-have been made
and charges have been dropped.-
174 South Bayshore - Mr. Ed Shook has been released.
from his contract by the Urban Rehabilitation
Standards Board. We have started over by sending
condemnation letters to the new owners.
170 South Bayshore - Action will be taken at next
Urban Board meeting on demolition of house.
168 South Bayshore - A contract has been let to
demolish the home. The contractor is about 75%
complete.
N
a
188 South Bayshore - Contractor is finished and
ready for final payment.
166 Cabaniss -
Repairs have
been made
and charges
have been dropped.
150 Mapleton -
First 60 day
letter has
been sent
to owners..
156 Mapleton
- Bid has been
awarded to
have house
demolished.
117 Ridgeway
- Repairs are
being made
at this
time.
With respect to occupied homes, it has not been our
policy in the past to condemn these residences.and
require the residents to vacate them. If in the future
a home that appears unfit for occupancy becomes vacant,
we would inspect it and if it were found to be so, we
would take action to prohibit new occupants.
LP:cs
REQUEST FOR COUNCIL ACTION
TO: Mayor via City Secretary
Attachment "B"
Agenda Item
u
SUBJECT:
HOUSTON LIGHTING & POWER COMPANY
a®` 6
Request for Rate Increase dated June 16, 1982.
FROM (Department or other point of origin):
Origination Date
Agenda Date
Public Service Department
August 18, 1982
211 0 OR'S SIGNATURE:
T
:
Council District affected:
A
• ALL
For ad ' Tonal information co tact: Marsha Gardner
Date and identification of prior authorizing .
Phone: 658 -0343
'Council action:
RECOMMENDATION: Grant increase in revenues to Houston Lighting & Power
Company in the amount of $181,561,000 and approve rate design to effect increase.
On June 16, 1982, Houston Lighting & Power Company ( "HL &P") filed a request with the
City to increase its revenues from electric service by a total of $336 million on a system -wide
basis. Prior to the proposed effective date of July 22, 1982, Council suspended the rates for 120
days until November 18, 1982. By way of Resolution No. 82 -26, Council authorized the *Public
Service Department to coordinate with the other cities with original jurisdiction in HL &P's system
in order to analyze and evaluate HL &P's application for a rate increase. Approximately 53 cities
have joined together in the effort and have become known as the Coalition of Cities With Original
Jurisdiction.
The application as filed this. year is particularly complex in that HL &P is seeking recovery
of $362 million for the conditional abandonment of the Allen's Creek Nuclear Project, and the
Company plans to expend $1;136,506,000 in 1983. for the construction of the South Texas Nuclear
Project (2 units), and the Limestone (2 units)' and Malakoff (2 units) lignite generating plants. This
intensive construction program appears justified in order to maintain sufficient margins of .
electrical power to meet the growth of customers in HL &P's 5,000 square mile service area.
Presently there are approximately 1,141,440 customers in the total service area.
However, after a thorough review of HL &P's rate filing package, the opinion of the Public
Service Department is that HL &P's request for $336 million in additional revenue is excessive. It
is our recommendation that Council grant HL &P a rate increase in the amount of $181,561,000, a
5.56% increase in rates. This represents 54% of its requested increase. The testimony of the
Regulatory Affairs Division of the Public Service Department is attached hereto in support of our
recommendation, as well as the report and recommendation of C.H. Guernsey & Company, .
consultants retained by the City to study and evaluate the South Texas Nuclear Project. The
following is a summary of the basis for the Public Service Department's recommendation:
RATE BASE (Original Cost)
Allen's Creek Nuclear Project
The Public Service Department - recommends no recovery of the $362 million that HL &P has
requested for abandonment or cancellation of the Allen's Creek Nuclear Project. In its rate filing
package; the Company has not included the $362 million amount in the rate base; instead such -
amount is included in an account entitled "Extraordinary Losses." HL &P requests the recovery of
its $362 million investment (using the sum -of- the - years' digits method) over a ten -year period with
.,-0,
Dale Subject: Or i inalor's 2 page
8/18/82 HL&P RATE INCREASE MZr7tials of 6
a return on the unamortized balance of its investment less accumulated deferred taxes. However, 73%
would be recovered during the five -year period between 1983 -1987. We recommend disallowance of
$388 million actually attributable to the Project, including $324 million for plant and $64 million for
nuclear fuel, whether categorized as an extraordinary loss or as an item in the rate base under
"Construction Work In Progress ", as explained below.
The reason for disallowance as an extraordinary loss is that HL&P in testimony filed with the
City as a part of its application admits that no decision has been made by the Company as to whether,
to cancel the plant. Such a decision is predicated on "appropriate action by the (Public Utility)
Commission which provides for recovery of the investment in the Project through rates." Jordan, Vol.
It p.6. In other words, HL&P is asking the City and ultimately the Public Utility Commission to
indicate the amount of recovery they will be granted before they will decide whether or not to build
the plant.
Our position is that until there has been a formal cancellation of HL&P's certificate to build
Allen`s Creek Nuclear Project ("Allen's Creek "), it is untimely and inappropriate to recover any funds
for such cancellation.
Because the recover of Allen's Creek is disallowed under "Extraordinary Losses ", the alternative
for recouping funds would be to include it in rate base or "Construction Work In Progress ".
However, because the Company has stated that they have virtually ceased investing funds in the
Allen's Creek and do -not consider it to be economically feasible, such item is not properly included in
rate base as Construction Work In Progress. Eliminating Allen's Creek from the case reduces the
Company's $336 million rate increase request by more than $90 million.
South Texas Nuclear Project
Another major consideration for analysis and treatment is the South Texas Nuclear Project
( "STNP ").. HL&P recently filed with the City a report by Bechtel Power Corporation, the proposed new
architect /engineer for the STNP, which indicates an estimated cost of $5.5 billion to complete the
project. While blaming Nuclear Regulatory Commission changes in rules and requirements along with
management deficiencies of Brown be Root, the former architect /engineer and contractor for STNP,
the costs for the project have soared from estimates of $790 million to $5.5 billion. The PUC has
ignored the reasons for such cost escalations in the past, but our opinion is that the burden upon the
ratepayer to finance this project is rapidly becoming impermissible and it is extremely appropriate to
address the situation at this time. While the Public Service Department had neither the time nor
manpower to investigate all allegations of mismanagement in the operation of the Project, there likely
will be a full inquiry as a result of the suit filed by HL&P against Brown be Root. We are
recommending certain rate treatment based on the outcome of the court's findings.
C.H. Guernsey be Company has made the following regommendations affecting both present and
future rate treatment, in which we concur (see Blumenthal testimony):
1} Eliminate the equity portion of Allowance for Funds Used During Construction (" AFUDC") when
there was no construction under way. This includes 12/1/79- 10/31/80; 12/1/81- 3/31/82 (end of
test year). For any future rate case, we recommend the exclusion of the period from 3/31/82
until construction commences. The total dollars eliminated from the proposed rate base are
$16,312,480.
2) Disallow accrual of the equity portion of AFUDC or additional money invested for any
construction until there is Council review in a subsequent rate case:
Date Subject: • at
p or's
8/18/82 HL &P RATE INCREASE fy{ gat 3 Page 6
• of
3) Limit HL &P's total participation in the $5.5 b�lUon project to $1,692,460,000 with cost overruns
being borne by the investor and not the ratepayer. (This amount excludes AFUDC and sales and
property taxes.)
4) Disallow the cost of the lawsuit filed by HL &P against Brown & Root.
5) Credit any recovery in the lawsuit filed by HL &P against Brown & Root to the cost of the
Project.
6) Disallow recovery from the ratepayer of any damages found to be payable by HL &P in the
lawsuit filed by HL &P against Brown & Root.
Other Major Adjustments
Excluding Allen' s Creek, HL &P requests a rate base of $4,006,153,000. The Public Service
__. Department recommends an original cost rate base of $3,953,996,000. Other primary differences
between the two rate bases include: (1) elimination of $6,319,000 for certain cost -free capital; (2)
elimination of $5,993,000 in deferred taxes; and (3) elimination of $22,954,000_for plant held for future
use which includes the site for Allen's Creek.
COST OF CAPITAL
The average weighted cost of capital proposed by HL &P is 12.98%. The Public Service
Department recommends 12.73% based on the following considerations: (See Wilton, Schedule I, for
suggested method for determining cost of capital).
Average Cost of Debt
HL &P proposes 9.55 %. The-Public Service Department recommends 9.55 %. This percentage is
based on the actual average cost of long -term debt for which the Company is presently obligated.
Return on Equity
HL &P has requested a 17.50% return on equity. The Public Service Department recommends
16.95%. The recommendation is based on an assessment of risk in raising capital for the Company's
massive construction program. Although the Company has indicated that by recovering money for the
cancellation of Allen's Creek Nuclear Project they would be able to bring the two lignite projects (4
units) on line one year earlier than originally anticipated, we have had to maintain the original
schedule for the lignite plants in order to allow the Company enough internal cash to finance the other
projects. By eliminating Allen's Creek as a means for recovery of funds, the Company's ability to
generate cash internally is reduced.
• Both Standard & Poor's Corporation and Moody's Investor Service, the two major securities
rating agencies, have downgraded HL &P to A+ and A -1,• respectively, from a AA status because of the
financial risk associated with the Company's construction program. Further downgrading would leas'
higher interest cost to the ratepayer and limit the avaDable financial markets. Therefore, it is
important to generate sufficient cash internally to enable the Company to finance the majority of its
needs through stocks and bonds. Although the PUC has generally prescribed a parameter of 40% for
internal cash generation, our recommendation allows the Company to recover approximately 35%
through rates. A 16.95% return on equity is necessary to achieve the 35% parameter. The'recent
decline in market interest rates should impact favorably upon the Company's ability to finance its
capital needs for the next year.
)ate Subject: {�� ator's
8/18/82 HL&P RATE INCREASElniiia{s 4 Page 6
of
ADDITIONAL REVENUE REQUIREMENTS
Based on invested capital (rate base) of $3,953,996,000, a rate of return of 12.73%, and revenue
requirements of $3,529,921,000 (see Winkelman, Schedule I), HL&P has an additional revenue
requirement of $181,561,000.
OTHER ISSUES
Street Lights
HL &P has proposed s change in its street light tariff, which will greatly benefit the ratepayer
and the public -at- large. The Company has effectively eliminated the present charge for installation,
which has ranged from $350 -$850 per street light, payable by the customer. In addition, the Company
has decreased the rates pertaining to high pressure sodium lights to make this efficient light more
economical to use. These changes will facilitate the Department's master plan to install
approximately 12,000 street lights within the City.
Lead -lag Stud
Pursuant to Council's request in its 1981 order concerning HL &P's 1981 rate application, the
Company performed a lead -lag study through Arthur Anderson & Company to determine the actual
working capital allowance which should be allowed in the rate base for the test year ending March 31,
1982. Working capital is required to fund the timing difference between the payment of operating
costs and the receipt of customer revenue. The "formula approach" utilized presently by HL &P and
the PUC adopts a 45 -day lag period for determining working capital needs, which represents 1/8 times
operation and maintenance expenses, less any prepayments and materials /supplies charged to operation
and maintenance.
The purpose of the special lead -lag study was to determine the method most favorable to the
ratepayer. The result is that the formula method in this case saves the ratepayer more than $2 million
annually. Because the study itself costs approximately $70,000 annually, and the results are
unfavorable to the ratepayer, we recommend the continuation of the 111/8 formula approach" until
changes in HL &P's operational procedure indicate otherwise.
Cogeneration
In simple terms, cogeneration is the ability of a company to produce electricity as a by- product
of its normal operation. Such electricity can be used for internal purposes or sold to someone else,
e.g., HL &P. Because HL&P's massive construction program is directly related to customer demand, in
particular the industrial customers, we recommend that HL &P be directed to evaluate and determine
cogeneration potential in the Houston area and aggressively seek to develop power through such
sources. If such opportunity and capability is developed, the result will be a reduced need for new
plants and excessive capital expenditures, which would in turn stabilize the rates now paid by the
(omsconsumer.
Fuel Adjustment Clause
The Public Service Department has received numerous complaints about the fuel adjustment
clause on the customer's bill, which allows the pass - through of certain costs associated with the
purchase of fuel by HL &P. Although we have had inadequate time for a thorough analysis of the
appropriateness of the fuel adjustment clause for this proceeding, the Public Service Department
intends to undertake such an analysis on behalf of the ratepayer. One reason for the clause is that it
Date I Subject:
8/18/82
HL&P RATE INCREASE
Q� ator's I Page
kMals 5 of 6
helps to maintain the utility's bond ratings. There are arguments that the fuel adjustment clause
discourages incentive on the part of the Company to vigorously and actively negotiate fuel contracts.
On the other hand, if the fuel adjustment clause were to be incorporated into base rates (as expense .
for purchases of fuel) there would necessarily be a working capital allowance included, too.
Fluctuating fuel costs and market conditions are a primary consideration in whether such a clause is
warranted. These factors and others will be reviewed and analyzed for recommendations in any
subsequent rate case or for legislative action.
Spring Creek Agreement
In 1978, Utility Fuels, Inc. ( "UFI "), a coal supplier to HL&P (both companies are subsidiaries of
Houston Industries, Inc.) contracted with Spring Creek Coal Mining Company for coal deliveries. The
coal was intended to fire HL&P's Parish Units. However, because of slagging and fouling
characteristics, the coal proved unsuitable for burning. There is a lawsuit pending on this issue.
_ ..However, there is an $a per ton non - deliverable charge which has been paid by UFI. We recommend
. that .this $8 per ton charge not be recoverable through HL&P's Fuel Adjustment Clause.
RATE DESIGN
-- - -- - Under our recommendation, the spread of -the increase in revenues to customer classes will not.
differ proportionally from that proposed by HL&P. -Thus, 37% will be spread to the residential class,
41% to the commercial class, and 18% to the industrial class.
The Public Service Department is proposing a change in the rate structure for the residential
class in order to encourage conservation and provide a rate incentive to do so. This will result in
levelizing bills all year round so that winter rates will increase, but summer rates will remain fairly
constant for 750 -1500 Kwh users and increase for those customers using more than 1500 Kwh. Thus,
there should be incentive to move toward the 750- 1500.category.
The new "block" or "tier" is compared to the existing rate structure as indicated below:
Present Rate Structure
(a) - Customer charge of $6.00 per month, which includes 30 Kwh
plus
(b) Kwh charge for May through October of 3.8450 per Kwh over 30 Kwh. For bills of 750
Kwh or less, a charge of 2.3450 per Kwh over 30 Kwh.
Kwh charge for November through April of 2.3450 per Kwh over 30 Kwh.
plus
(c) Fuel Adjustment. Charge
Proposed Rate Structure (City)
(a) Customer charge of $8.00 per month, which includes 30 Kwh.
plus
n-0
Description
Fuel
Purchased Power
Operations and Maintenance
Extraordinary Amortization
Depreciation
Other Taxes
Interest on Customers Deposits
Federal Income Taxes
Return
Revenue Requirement
L ess
Other Revenue
Fuel Revenues
Base Rate Revenue
Less Test Period Base Rate
Revenue Adjusted
Base Rate Revenue Deficiency
WINKELMANN
SCIIEDULE - I
74,218 171560 91,778
1,779,830 204,175 1,984,005
$1,089,331 $489,738 $125790069
(1,243,371)
$ 335,698
(2,621)
30,732
$(153,042)
(1,095)
$(154,137)
89,157
2,014,737
$1,426,027
(112441466)
$ 181,5ri1
CITY OF HOUSTON
HOUSTON LIGHTING & POWER COMPANY - 4540
REVENUE REQUIREMENT
Test -!Year
Company
Company
City
City
Per Books
Adjustments
Test Year
Adjustments
Test Year
$1,673,251
$129,325
$1,802,576
$ 30,732
$1,833,308
130,764
95,139
225,903
0
225,903
330,850
55,871
386,721
X7,260)
379,461
3,044
91,112
94,156
(91,112)
3,044
117,376
16,257
133,633
(4,933)
128,700
155,178
39,016
194,194
(5,030)
1890164
0
1,225
1,225
0
1,225
178,222
118,223
29G,445
(30,673)
265,772
3541694
165,305
519,999
(161655)
5031344
$2,9439379
$711,473
$3,654,852
$(1241931)
$31529,921
74,218 171560 91,778
1,779,830 204,175 1,984,005
$1,089,331 $489,738 $125790069
(1,243,371)
$ 335,698
(2,621)
30,732
$(153,042)
(1,095)
$(154,137)
89,157
2,014,737
$1,426,027
(112441466)
$ 181,5ri1
Date Subject: i ator's
8/18/82 HL�cP RATE INCREASE
(b)
An amount based on total Kwh consumed times the appropriate rate as follows:
30 Kwh — ?50 Kwh, a rate of 2.10150 per Kwh
30 Kwh — 1500 Kwh, a rate of 3.10150 per Kwh
1501 Kwh end over, a rate of 4.10150 per Kwh
The thrust of the new middle tier based on average summer usage is to afford a price
advantage for consumption up to 1500 Kwh.
plus
{c)
Fuel Adjustment Clause.
• SUMMARY
The Public Service Department recommends that HLb�P be permitted to�roduce additional
revenues in the amount of $181,561,000. This excludes recovery for the Allen's Creek Nuclear
Project, and imposes cost limitations upon the South Texas Nuclear Project and makes appropriate
deductions from rate base for South Texas Nuclear Project. '
Rate design treatment includes an additional tier to provide a price incentive for
conservation among residential customers.
MRG:BAB
&-2014
WILTON
SCHEDULE I
PAGE 2 of 2
CITY OF HOUSTON
HOUSTON LIGHTING be POWER COMPANY
Weighted Average Cost of Capital (000's)
For the Test Year ended March 31, 1982
Including ITC in the Capital Structure
Adjusted
Capitalization Percent
Weighted
as of of Total
Average
-
March 31, 1982 • • Capitalization Cost
Cost
Long Term Debt
$2,028,042 .4664 .0955
.0445
Preferred Stock
243,518 .0560 .0823
.0046
Common Equity
1,795,597 .4129 .1695
.0700
Unamortized ITC
281,393 .0647 .1273
.0082
Total - -
$4,348,550 1.0
.1273
Attachment "C"
MAYOR HUTTO, MEMBERS OF THE COUNCIL, MR. LANHAM, MR. STRONG;
MY NAME IS GEORGE BRADFORD, I AM MANAGER OF TAXES, SOUTHERN
AREA FOR UNITED STATES STEEL CORPORATION, AND I WOULD LIKE TO VISIT
WITH YOU TONIGHT ABOUT THE DOMESTIC STEEL INDUSTRY, AND SPECIFICALLY
TEXAS WORKS LOCATED NEAR HERE I14 CHAMBERS COUNTY.
I AM SURE YOU ARE ALL AWARE OF THE DEVASTATING IMPACT THE
CURRENT RECESSION IS HAVING ON THE STEEL AND AUTOMOBILE INDUSTRIES
IN THIS COUNTRY,
THE WALL STREET .JOURNAL RECENTLY REPORTED THAT THE BIG THREE
AUTOMAKERS POSTED SHARPLY HIGHER EARNINGS IN THE 2ND QUARTER OF
THIS YEAR OVER THE PREVIOUS YEAR. GENERAL MOTORS' NET, FOR EXAMPLE,
ROSE 8.7% FROM A YEAR EARLIER TO $560 MILLION OR $1.82 A SHARE.
EVEN WITH PRODUCTION AND SALES OFF, ANALYSTS STILL EXPECT GM TO
REPORT A SLIM PROFIT; FORD TO POST A LOSS; AND CHRYSLER TO ABOUT
BREAK EVEN.
THE STEEL INDUSTRY, IN CONTRAST, IS HEMORRHAGING. IN THE 2ND
QUARTER, THE EIGHT LARGEST STEELMAKERS HAD AN ESTIMATED PRETAX LOSS
FROM STEEL OPERATIONS TOTALING UPWARDS OF $700 MILLION.
HOWEVER, DUE TO SEVERAL LARGE NON- RECURRING GAINS WHICH INCLUDES
THE SALE OF ASSETS, U.S. STEEL REPORTED A NET INCOME OF $4.3 MILLION
OR 5 CENTS A SHARE. THAT SLIM PROFIT - A 97% PLUNGE FROM $167.6
MILLION OR $1.89 A SHARE A YEAR EARLIER - WAS DUE TO THESE LARGE
NON- RECURRING GAINS AND EARNINGS FROM THE NEWLY ACQUIRED MARATHON
OIL UNIT. BY CONTRAST, WITH SHIPMENTS THE LOWEST IN OVER 40 YEARS,
w
-2-
OUR STEEL OPERATIONS ALONE HAD A SIGNIFICANT LOSS IN THE 2ND QUARTER,
AND PROSPECTS FOR THE 3RD QUARTER, TRADITIONALLY OUR POOREST, APPARENT-
LY WILL BE NO EXCEPTION THIS YEAR.
AS THESE LOSSES CONTINUE TO MOUNT, WE AT U.S. STEEL MUST SEEK
EVERY MEANS POSSIBLE IN TRYING TO REDUCE TAX COSTS WHICH DIRECTLY ADD
TO THESE INCREDIBLE LOSSES.
THAT BRINGS US TO THE PURPOSE OF MY ASKING YOU FOR A FEW MINUTES
OF YOUR TIME HERE TONIGHT.
FROM THE BEGINNING OF PRODUCTION IN 1970, TEXAS WORKS HAS BEEN
PLAGUED WITH THE USUAL PROBLEMS OF THE START -UP AND BREAK -IN OF A
NEW MILL. THROUGH ALL OF THIS, THE MANAGEMENT OF TEXAS WORKS 160
PLATE MILL HAS WORKED TO IMPROVE COST PERFORMANCE, IMPROVE PRODUCT-
IVITY, AND FIGHT FOR ITS NECESSARY MARKET SHARE. ALL THE WHILE,
FOREIGN PLATES HAVE BEEN AND CONTINUE TO BE ILLEGALLY DUMPED MONTHLY,
IN NEARBY HOUSTON, IN LARGER TONNAGES AND AT LOWER PRICES THAN CAN BE
HAD RIGHT HERE AT TEXAS WORKS, A MERE 30 MILES AWAY.
FOR THE WEEK ENDING AUGUST 141 THE RAW STEEL OUTPUT IN THE U.S.
WAS APPROXIMATELY 41% OF CAPABILITY, THE SECOND LOWEST WEEKLY PRO-
DUCTION SINCE THE WEEK ENDING AUGUST 7, 19811 ACCORDING TO THE
AMERICAN IRON AND STEEL INSTITUTE. DOMESTIC STEEL SHIPMENTS FOR 1982
ARE FORECAST AT ABOUT 67 MILLION TONS. WALTER CARTER, A STEEL
ECONOMIST WITH DATA RESOURCES, INC., PREDICTS DOMESTIC SHIPMENTS
WILL NOT REACH 80 MILLION TONS IN 1983, AND THAT RECOVERY WOULD ONLY
EQUAL THE TONNAGE SHIPPED IN 1975's SEVERE RECESSION. THIS TRANS-
LATES THAT IN 19831 STEELMAKERS WILL BE FIGHTING TO BREAK EVEN.
-3-
WHAT THIS ALSO MUST SURELY MEAN IS THAT IN 1983 SOME PRODUCERS WILL
BE REFERRED TO IN THE PAST TENSE AS HAVING FOUGHT THE GOOD FIGHT AND
JOINED THOSE OTHER MILLS WHICH CLOSED BEFORE THEM.
IN 19751 TEXAS WORKS ENTERED INTO AN AGREEMENT WITH THE CITY OF
BAYTOWN, WHERE U.S. STEEL AGREED TO PAY THE CITY AN IN- LIEU -OF PROP-
ERTY TAX PAYMENT BASED ON VALUE BUT DETERMINED BY FORMULA - PER THE
CONTRACT, IN CONSIDERATION OF THIS, THE CITY HAS AGREED NOT TO ANNEX
OUR PLANT AND PROPERTY. IT WAS FURTHER AGREED THAT FOR THIS IN -LIEU-
OF PAYMENT, THE CITY WOULD RESERVE THE RIGHT NOT TO BE REQUIRED TO
FURNISH USSC: 1) SEWER OR WATER SERVICE; 2) POLICE PROTECTION; 3)
FIRE PROTECTION; 4) ROAD AND STREET REPAIRS; AND 5) GARBAGE PICKUP.
AND FOR THIS RIGHT NOT TO BE ANNEXED, AND FOR THIS RIGHT NOT TO MAKE
ANY DEMANDS UPON THE CITY, WE HAVE PAID OVER THE LAST SEVEN (7) YEARS
$4,153,678. TO THE BEST OF MY KNOWLEDGE, U.S. STEEL HAS MADE NO
SPECIFIC REQUEST FOR AID OR ASSISTANCE DURING THIS PERIOD, AND THE
REQUIRED ANNUAL PAYMENTS HAVE BEEN TIMELY PAID.
WITHIN THIS SAME PERIOD OF TIME, TEXAS WORKS HAD SUBSTANTIAL
LOSSES AND EMPLOYED AN AVERAGE OF 1300 EMPLOYEES, MANY OF WHOM LIVED
IN BAYTOWN. FOR THE YEAR 1981, WE EMPLOYED APPROXIMATELY 2,000 EM-
PLOYEES WITH AN ANNUAL PAYROLL OF MORE THAN $51 MILLION, AND WE
PURCHASED GOODS AND SERVICES IN EXCESS OF $142 MILLION.
OVER THE PAST SEVERAL MONTHS, WE HAVE BEEN WORKING WITH APPRAISAL
COMPANIES REPRESENTING THE VARIOUS TAXING JURISDICTIONS IN AN ATTEMPT
TO GET OUR PROPERTY VALUATIONS IN LINE WITH WHAT WE BELIEVE IS
HAPPENING IN THE REAL WORLD. IN THIS ENDEAVOR, WE HAVE HAD VARYING
DEGREES OF SUCCESS.
-4-
I AM SURE YOU CAN APPRECIATE THE ELUSIVE NATURE OF THE VALUATION
OF LARGE INDUSTRIAL PLANTS, AND THE IMPACT SHARP DECREASES HAVE ON
TAXING JURISDICTIONS. WE BELIEVE WE UNDERSTAND THE POLITICS OF THESE
PROBLEMS AND HAVE TRIED TO LIVE WITHIN THE SYSTEM.
FOR THE YEAR 1982, WE WERE ABLE TO ACHIEVE A REDUCTION IN THE
CITY'S•VALUE FOR TEXAS WORKS OF $10 MILLION OR 3% OVER THE PRIOR YEAR.
WE BELIEVE THAT IN THE PAST EIGHT MONTHS - SINCE THE JANUARY
1 VALUATION DATE - OUR PROPERTY HAS UNFORTUNATELY SUFFERED A STAG-
GERING AMOUNT OF YET UNRECOGNIZED LOSS IN FAIR MARKET VALUE.
ON APRIL 14, 1981, THIS COUNCIL PASSED RESOLUTION NO, 767
REPEALING RESOLUTION 514 WHICH, IN EFFECT, CHANGED THE FORMULA IN DE-
TERMINING IN- LIEU -OF PROPERTY TAX PAYMENTS TO THE CITY.
THE IMPACT OF THIS ON OUR PROPERTY RESULTS IN AN UNJUSTIFIED
TAX BURDEN FROM OUR PERSPECTIVE. WHILE WE WORKED TO REDUCE VALUATIONS,
AND WHILE OUR SHIPMENTS AT THIS PLANT HAVE DROPPED 44 %, OUR LOSSES
ARE MOUNTING, AND UNEMPLOYMENT IS OVER 600 - OUR IN- LIEU -OF TAX PAY-
MENT TO THE CITY WILL GO UP $82,000 OVER THE PREVIOUS YEAR.
RESOLUTION NO. 767 IN ITS PREAMBLE STATES - AND WE AGREE -
THAT "MANUFACTURING INDUSTRIES AS A WHOLE SHOULD COMPENSATE THE
CITY OF BAYTOWN PROPORTIONATELY AS TO THEIR USE AND ENJOYMENT OF
SUCH MUNICIPAL SERVICES." USSC IS CERTAINLY NOT EMBARRASSED BY ITS
"QUID PRO QUO" WITH THE CITY IN THIS AGREEMENT. WE HAVE CONTRIBUTED
TO THE GROWTH AND PROSPERITY OF THIS COMMUNITY FOR 12 YEARS.
-5-
WE HAVE PARTICIPATED IN THE INDUSTRIAL DISTRICT ARRANGEMENT WITH THE
CITY FOR SEVEN YEARS. WE NOW ASK FOR YOUR HELP IN MAKING CONTINUED
PARTICIPATION POSSIBLE.
TONIGHT, I STAND BEFORE YOU WITH THE STEEL INDUSTRY'S VERY
EXISTENCE THREATENED, AND ASK THAT YOU, AS THE GOVERNING BODY OF
THIS COMMUNITY, AND AS CITIZENS CONCERNED ABOUT WHAT IS HAPPENING
THROUGHOUT THIS COUNTRY TODAY, GRANT THIS PLANT TEMPORARY RELIEF
FROM THE IN- LIEU -OF PROPERTY TAX PAYMENTS DETERMINED UNDER OUR
CONTRACTUAL RELATIONSHIP WITH THE CITY OF BAYTOWN.
BASED ON THE OUTLINED ECONOMIC CONDITIONS FOR OUR INDUSTRY, AND
SPECIFICALLY THIS PLANT, WE REQUEST THAT THIS COUNCIL GRANT U.S. STEEL
TEMPORARY RELIEF BY REDUCING OUR PAYMENT IN 1983 AND 1984 BACK TO THE
AMOUNT PAID IN 1975 ($295,847). WE ARE REQUESTING THAT THE PAYMENTS
FOR 1983 AND 1984 BE THE SAME AS THE 1975 PAYMENT BECAUSE: 1) TEXAS
WORKS PRODUCTION LEVEL IN 1982 AND 1983 WILL BE COMPARABLE TO 1975'S
PRODUCTION LEVEL; 2) CURRENTLY, IT APPEARS THAT THIS PLANT'S FINANCIAL
PICTURE WILL BE SIMILAR TO 1975; 3) AN EMPLOYMENT LEVEL APPROXIMATING
1975; AND 4) THE PRESENT RECESSION IS FAR MORE SEVERE THAN THE 1975
RECESSION.
I WOULD HOPE THAT YOU WOULD NOT ACT ON THIS REQUEST TONIGHT, BUT
RATHER TAKE IT UNDER SERIOUS DELIBERATION AND CONSIDER THE FUTURE OF
OVER 600 UNEMPLOYED LOCAL STEELWORKERS, AND 1,400 PRESENTLY EMPLOYED,
WHO COULD BE JOINING THEIR RANKS.
I WOULD LIKE FOR YOU TO CONSIDER THE COURAGEOUS OPPORTUNITY YOU
HAVE TO SEND A MESSAGE TO THE INDUSTRIALIZED COMMUNITIES OF THIS
w
w
go
COUNTRY THAT BAYTOWN, WHILE ENJOYING ITS RELATIVE PROSPERITY IN A
TIME OF HIGH UNEMPLOYMENT AND GREAT ECONOMIC SACRIFICE, IS WILLING
TO MAKE A DEMONSTRATIVE SHOW OF ITS SUPPORT. SEND THE MESSAGE THAT
roll
THIS GOVERNMENT AND THIS COMMUNITY WOULD LIKE TO PLAY AN IMPORTANT
ROLE IN DOING ITS PART TO PREVENT TEXAS WORKS FROM JOINING THE
GROWING LIST OF CLOSED OR TEMPORARILY SHUT —DOWN STEEL MILLS IN THIS
COUNTRY.
WE HAVE PETITIONED THE FEDERAL GOVERNMENT FOR ENFORCEMENT OF
CURRENT IMPORT LAWS AND ARE FIGHTING FOR COST EFFECTIVE ENVIRONMENTAL
LEGISLATION. U.S. STEEL'S 16 CLOSINGS AND PARTIAL SHUT —DOWNS IN 1979
WERE DESIGNED TO STREAMLINE U.S. STEEL'S OPERATIONS TO FEWER PRODUCTS
AND TO CUT OUT THE LESS PROFITABLE MILLS. U.S. STEEL'S CHAIRMAN,
DAVID M. RODERICK, IS LEAVING THE DOOR OPEN TO STILL MORE SHUTDOWNS
IF EFFICIENCY AND PROFITABILITY DO NOT PICK UP.
U.S. STEEL AND THE UNITED STEEL WORKERS OF AMERICA SAY THAT MILL
CLOSINGS MEAN INCREASED DEPENDENCE ON FOREIGN STEEL — WITH IMPORTS
THIS YEAR AVERAGING ABOUT 23% OF DOMESTIC SUPPLY. UNLESS SOMETHING
IS DONE ABOUT IMPORTS, WHEN THE NEXT SHORTAGE COMES, THE FOREIGN
STEELMAKERS MIGHT BE ABLE TO SELL THEIR STEEL TO US AT ALMOST ANY
PRICE. SOUND FAMILIAR? THAT'S HOW WE HANDED CONTROL OF OUR ENERGY
DESTINY TO THE ARAB NATIONS. THE POINT IS THIS: THE STEEL INDUSTRY
CAN DO CERTAIN THINGS FOR ITSELF, BUT IT WILL ALSO NEED A POLITICAL
DECISION FROM THE AMERICAN PEOPLE. DOES THE U.S. WANT A STEEL
INDUSTRY OR DOESN'T IT?
V
CJt
C.1:
V
V
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co
CD
V
Co
Me
�a
Thousand Tons
W W 4 .P• 01 Cn CA CA V V 0:) 00 Co
0 al 0 cn 0 CA 0 cn 0 cn 0 CA 0
0 0 0 0 0 0 0 0 0 0 0 0 0
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GROSS TOTAL I
LESS DISC
NET TOTA L
GfrY OF 8AYTOWN
_ _
I Lis
ANNUAL HOT MIX ASPHALT CONTRACT
BID TA T f ON
31 D:
#828 -88
U V _ H
LATE.
.August
18, 1982 2 :00 P.M.
Radcliff Materials
H. Shell & Concrete
ti;
QTY
DESCRIPTION
:T
UNIT
EXTENDED
U1111T
EXTENDED
UNJ
x No o
UNIT
Ex-rEr4DED
R
r
Ppir r
eglaF
��
.r r
, c
a r--
1. 1.000 TONS
ANNUAL HOT MIX ASPHALT CONTRACT,
per specifications:
'
$23.90 $23,900.00
1 No Bid
TOTAL:
$23,900.00
-
I
DELIVERY
i
AS REQUESTE
.
W
ti
�
GROSS TOTAL I
LESS DISC
NET TOTA L
Z z
IL
O Q
V
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2
0
2
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• GTTY Or BA.YTOW N
ANNUAL AUTO FITTINGS CONTRACT
BID TABULATION
2 PAGE 1 OF 2
August 11, 1982 2:00 P.M.
•
KAR PRODUCTS INC.
MELCO ELECTRIC CO.
A.I.P. PRODUCTS
TIFCO INDUSTRIES
BOWMAN
QTY
DESCRIPTION
.uN,r xTFNoea
U,l,r aTFn,oF0
UNI x7rN -j5-r
UN,r FxT[r {��'a
u:r:i�rz��,.�
ANNUAL AUTO FITTINGS CONTRACT,
'
per specifications
I
Lot
$13,633.59
I $40218.97
$11,615.26
�
$12,935.74
I
1512,024.15
`
I
I
i TOTAL:
'$13,633.59
i $11,615.26
$12,935.14
$12,024.15
*$41218.97
I
�
.
!
DELIVERY
5 DAYS
5 DAYS
W
PRICES FIRM
FOR 6 M0.
PRICES FIRM FOR 4 M0.
PRICES F RM FOR 5 M
c
U
I
;
*DOES NOT ME
III)
T
'
SPECS BEC
USG DID NOT
ALL ITEMS.
GROSS TOTAL
LESS DISC.
.
NET T.. A L
4 C)
Body
Q
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F1 TL ANNUAL MASONRY c CONSTRUCTION CONTRACT
310 '�? _9 ° -- )ATE: 'August 19, 1982 2 :00 P.M. PAGE 2 of 2
C17-Y Ur 13AYTOW PJ
E31D TABULATION
TEM
QTY
DESCRIPTION
Urr:r ' `- x��..•
.•p•�c I, �p �
UNIT
X ND D
C'
UNIT
C'
EXTEND
A r-
.UNIT
XTEND£0
UNIT I
b £NOED
R r•
p
��
.1
i
i
ANNUAL MASONRY ARD CONSTRUCTION
f
I
1
CONTRACT, per specifications
1
CONTINUED:
1. 39 rollsi#15
Felt
$9.69
j $377.91
'
2. 529 sacksjMasonry
Cement (70 lb, sack)
$4.79
$2,533.91
I
I
3. 263 sacks
Portland Cement (94 lb. sack)
$5.00 1
$1,315.00
'
I
4. ( 72 sacks
Sackrete (80 lb, sack)
$2.25
$162.00
I
5. 17 sacks
Lime (50 lb. sack)
$4.19
$71.23
6. 20,000 ft.
#" Rebar Steel (20 ft. lengths)
$2.90
$2,900,00
7. 1 7,800 ft.
5/8" Rebar Steel (20 ft. lengths)
$3.69
$1,439.10
8. ! 40 roll
Tie wire for rebar (3} lb. roll)
$2.29
$91.60
i
TOTAL:
1 $80890.75
DELIVERY:
I 4 DAYS
I
i
PRICES FIRM
I
I
FOR 90 DAYS
I
1
I
t
I
,
GKUSS 1 U 1/4 L
LESS DISC
ItIC`r TrITA I
rL L• ANNUAL MASONRY 6 CONSTRUCTION CONTRACT
p; #828 -90
T E-
August 19, 1982 2:00 P.M. PAGE 1 of 2
-tv L01•!E' S
� QTY DESCRIPTION .UNIT
• Da,I'c
0
A
(D
v
c�
4J
4J
44
39 rolls
529 sacks;
263 .sacks I
72 sacksi
17 sacks
20,000 ft.
7,800 ft.
40 rolls
ANNUAL MASONRY 6 CONSTRUCTION
CONTRACT, per specifications:
#15 Felt
Masonry Cement (70 lb. sack)
Portland Cement (94 lb. sack)
Sackrete (80 lb. sack)
Lime (50 lb. sack)
}" Rebar Steel (20 ft, lengths)
5/8" Rebar Steel (20 ft. lengths)
Tie wire for rebar (3} lb. roll)
TOTAL:
DELIVE
GROSS TOTAL
LESS DISC
NET TAL
n r„lt c[> v
CITY OF BAYTOW N
81D TABULATION
DEER PARK LUMBER 184 LUMBER
LADED U141T , EXTENDED UNi7
arc ojoirr Palm DRI!'F
$9.85
$384.15
$9.95 1
$388.05
$9.28
$4.54.
$2,401,66
$4,60
$2,433.40
$4.54
$4.95
$1,301,85
$5.15 i
$1,354.45
$4.69
$2,59 i
$186,48
$2,45,
$176.40
$2,14
$1.99
)33.83
$3.75
$63.75
N/S
$2,65
.$2,650.00
$2.75
$2,750.00
$2.64
$3.99
$1,556.10
$3.95
$1,540.50
$3.84
$2.95
$118.00
$2.75
$110.00
$2.84
$80632.07•
$8,816.55
.2 DAYS
J 1 DAY
i
PRICES FIRM
!PRICES FIRM
IFOR 90 DAYS
IFOR 4 MONTHS
WHITE SUPPLY
:r: i.
r;'
$361.92
$11.071
$431.73
$2,401.66
$5.50
$2,909.50
$1,233.47
$5.95.
$1,564.85
$154.08
$3.50:
$252.00
$4.65.
$79.05
$2,650.00.
$3.711
$3,708.00
$1,497.60
$5.32
$2,075.80
$113.60
$3.10
$124.00
*$8,402.33
10 DAYS
;PRICES FIRM
'UNTIL NOTIFI-
CATION OF
PRICE INCREA E
(30 DAYS)
..DID NOT BID
ITEM #5
1$11,143-93
1 DAY
PRICES FIRM
FOR 60 DAYS
WOODS
u:I: T cZ
$9.75 $380.25
$4.49 '.$2,375.21
$4.89 $1,286.07
$2.20 $158.40
$4.00 i $68.00
$2.80 • $2,800.00
$4.25 $1,530.00
$2.00 $80.00
';$8,677.93
3 -4 DAYS
PRICES FIR
FOR 30 DAY
N
7'17�L � ;� Rehabilihatlon Housing Protects
8 1 D� ,,,,B i {LPar_kane N�II .
DATE August 5, 1981
B1D TABULATION
,�
ITEM
QTY
DESCRIPTlO1V
Ed Shook
urv,r
Bldg Cont,l�c.'
Fxrrrvoa_o
Prosper
Bros.
J.B.A.
Const.
^EXf��rv�'15-
x1�L�L�
urr,�r
r�rCrli�
uNlr
�xrErvr,�'o
uN,r
UNI
PRICE
Pl�I('
�£�.1LE_
�ft.lL�
�1'f�1C�
1
Rehabilitation Housing Protect
7,295.00
7,400.00
9,196.00
8i -o4 —o7 .
zoo w. Republic
x
a�
U
GROSS TOTAL
LESS DISC.
�. .
�� NAT TnTa �
n � IvFRY �