HomeMy WebLinkAbout1976-05-20 - Special City CouncilM_
SPECIAL SESSION - THURSDAY
MAY 20, 1976 - 7:00 P.M.
CHAMBER OF THE CITY COUNCIL
CITY HALL, CITY OF STEPHENVILLE, TEXAS
The City Council met in Special Session Friday, May 20, 1976 at 7:00 P.M. with
Mayor Donald R. Jones present and presiding. Councilpersons Jim Chambers, W. M.
Irwin, Cal McGee, Charles Riggins, Raymond Anderson, Larry Hammett, and Betty
Heath were present.
Others attending the meeting were City Administrator Marshall Shelton, City
Attorney Joseph Chandler, Administrative Assistant Kurt Ackermann, City
Secretary Joyce Pemberton, Dr. Jack Hopper, Jim Hinds, Bob Reading, and J. W.
Beck.
Mayor Jones called the meeting to order and explained that Dr. Jack Hopper had
been requested to examine Lone Star's application to the City for a rate increase.
Mayor Jones then called on Dr. Hopper to make his presentation.
Dr. Hopper explained that he had made his review of Lone Star's application based
on figures supplied to him by Lone Star Gas plus supplemental information sup-
plied to him.
Dr. Hopper then proceeded to summarize his report to the Council. He explained
that there were four major differences in the way Lone Star had prepared their
report and the way his recommendations were made. These differences were, 1) the
way the rate base was prepared, 2) the rate of return itself, 3) net income re-
quired, and 4) increase in revenues required. Dr. Hopper stated that these dif-
ferences show different regulatory philosophies and judgement.
Dr. Hopper explained that by looking at the company's income, revenues, and in-
vestments a rate of return can be arrived at. He also told the Council that the
law requires a reasonable rate of return be provided.
Based on his figure of adjusted value of invested capital he recommended that the
company receive a 6.6% rate of return as compared to the company's figure of 8%
based on fair market value.
Dr. Hopper further explained that the key to what the company should receive is
tested in the return to the common stockholder. This rate of return to the
common stockholder in Stephenville should be 12% as compared to the company's
figure of 26.4 %. Since national average return to the common stockholder for
gas and electric companies is 12% then this is a reasonable_ return to Lone
Star.
After considerable discussion and questioning, Mayor Jones called on Mr. Bob
Reading representing Lone Star Gas Company.
Mr. Reading responded to Dr. Hopper's report explaining in detail why Lone Star
Gas Company's figures differed. Following Mr. Reading's presentation numerous
questions were asked by the Council regarding Lone Star's application.
Councilman Chambers asked Mr. Reading if Lone Star would be willing to submit
a schedule of rates based on the figure for adjusted value of invested capital
for the Council's examination and hopefully a compromise figure could be agreed
upon.
After further discussion, Mr: Reading responded by telling the Council that Lone
Star would have an answer on the rate schedule by the coming Friday or the follow-'
ing Monday.
Mayor Jones stated that the Tanglewood West plat had been examined by Director of
Public Works Gann and Mr. Boyd and that they recommended its approval.
After some discussion, Councilman Hammett made the motion to approve the final
plat on the Tanglewood West Addition. Councilman Chambers made the second.
Motion carried unanimously.
Mayor Jones read a letter from Tax Assessor - Collector Groves recommending that Mr.
Harlan Huey, Mr. Jack Arthur, and Mr. Telefus Cawyer be appointed to the Equalization
Board and that the Board's first meeting be set for June 1st or shortly thereafter.
Mayor Jones stated that an hourly rate of pay for the Board members needed to be
set.
Councilman Irwin made the motion that the Mayor appoint Mr. Huey, Mr. Arthur,,and
Mr. Cawyer to the Equalization Board and that they meet on the first day of June.
Councilman Hammett made the second. Motion carried unanimously.
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Mayor Jones explained to the Council that a lawsuit had been filed against the
City regarding the rezoning of Lots 10 and 11, Block 139, of the City Addition
and that a hearing had been set for the 27th of May.
Being there no further business, the Mayor adjourned the meeting at 9:20 P.M.
Mayor