HomeMy Public PortalAbout08-18-1980 PROCEEDINGS OF THE COMMON COUNCIL OF THE
CITY OF RICHMOND, INDIANA, SERVING AS A BOARD
IN CHARGE OF THE OPERATION OF THE RICHMOND POWER
& LIGHT PLANT, AUGUST 18, 1980
1 The Common Council of the City of Richmond, Indiana, serving as a Board in
2 charge of the, operation of the Richmond Power & Light Plant, met in regular
3 session August 18, 1980 at the hour of 7 :00 p.m. in the Municipal Building
4 of said City. Chairman Ahaus presided with the following members present:
5 Messrs. Elstro, Williams, Hankinson, Welch, Parker, Carter, Mills and Paust.
6 Absent: None. The following business was had, to-wit:
7
8 APPROVAL OF MINUTES
9
10 Councilman Hankinson moved to approve the minutes of the previous meeting as
11 prepared, seconded by Councilman Paust and on unanimous voice vote the motion
12 was carried.
13
14 APPROVAL OF BILLS, TRANSFERS .AND INVESTMENTS
15
16 Councilman Carter moved to approve the following bills, transfers and invest-
17 ments purchased as submitted, seconded by Councilman Williams and on unani-
18 mous voice vote the motion was carried.
19
20 Approve the following:
21 Bills in the amount of 1,148,893.26
22 Bonds & Interest Coupons - 0 -
23 1 Payroll 102,362.93
24
25 Transfer from Cash Operating Fund to:
26 Cash Reserve Fund 52,961.62
27 Bond Sinking Fund 65,865.42
28
29 Investments Purchased
30 * Cash Operating Fund 472,630.75
31 * Depreciation Reserve Fund 77 ,369.25
32 ** Depreciation Reserve Fund 1,590,618.75
33
34 U.S. Treasury notes (repurchase agreements) yielding 7 and
35 8.75% interest
36 ** U.S. Treasury notes, maturing 4/30/82, yielding 11.375% interest.
37
38 Chairman Ahaus stated the Executive Committee is looking at RP&L's payment in
39 lieu of taxes to the City. The City went through a major reassessment last
40 year; however, there was no reassessment at RP&L. The average assessment went
41 up approximately 25%.
42
43 WAYNE COUNTY REMC (URMSTON FACILITIES)
44
45 General Manager Irving Huffman presented Resolution No. 4-1980 which will
46 transfer certain facilities to the Wayne County REMC. Mr. Huffman noted the
47 resolution was omitted from the agenda, and he requested suspension of the
48 rules to consider the motion. Councilman Mills so moved, seconded by Council-
49 man Hankinson and on unanimous voice vote the motion was carried.
50
51 The following resolution was presented:
52
53 RESOLUTION 4-1980
54
55 A Resolution Providing For the Transfer of Certain Facilities of
III 56 the Richmond Power & Light to the Wayne County REMC and Matters
57 Related Thereto.
58
59 WHEREAS, Richmond Power & Light has been engaged in extensive negotia-
60 tions with Wayne County REMC concerning the transfer of property from Wayne
61 County REMC (airport and golf course facilities) and to Wayne County REMC
62 (Urmston facilities) ; and,
63
64 WHEREAS, an agreement has been reached with respect to the property
RP&L Minutes Cont'd.
August 18, 1980
Page 2
1 being transferred to R P & L, which agreement has been executed and is
2 shortly to be closed, and an agreement in principal has been reached with
3 respect to the Urmston facilities which agreement is reasonable and in the
4 best interest of R P & L.
5
6 NOW, THEREFORE, BE IT RESOLVED BY THE COMMON COUNCIL OF THE CITY OF
7 RICHMOND, INDIANA ACTING AS THE BOARD OF MANAGERS OF RICHMOND POWER &
8 LIGHT AS FOLLOWS:
9
10 SECTION 1. The City of Richmond d/b/a Richmond Power & Light hereby
11 agrees to transfer to Wayne County REMC its property, as set forth in
12 Exhibit A hereto, and its right to serve the Urmston residence located
13 at 2312 Niewoehner Road, Richmond, Indiana for a total cost of $2,290.84
14 payable upon closing. Excluded from the facilities serving the Urmston
15 residence is the R P & L meter, which is to be removed when said meter is
16 read pursuant to the closing, and a 25 KVA transformer which transformer is
17 to be disconnected by Wayne County REMC and delivered to R.P & L.
18
19 SECTION 2. The manager of R P & L is hereby authorized to execute
20 a bill of sale for the facilities which are to be transferred to Wayne
21 County REMC pursuant hereto. Further, the manager is hereby authorized
22 to execute any and all documents required and to take such action as
23 may be necessary in order to accomplish and carry out the terms of this
24 resolution.
25
26 DATED: August 18, 1980
27
28 COMMON COUNCIL OF THE CITY OF RICHMOND
29 ACTING AS THE BOARD OF MANAGERS OF
30 RICHMOND POWER & LIGHT:
31
32 /s/ Howard J. Elstro
33 /s/ Marion J. Williams
34 /s/ Kenneth Paust
35 /s/ James H. Hankinson
36 /s/ Fredric A. Ahaus
37 /s/ Bing Welch
38 /s/ Larry L. Parker
39 /s/ James E. Carter
40 /s/ Kenneth Mills
41
42 Councilman Mills moved to approve Resolution No. 4-1980, seconded by Councilman
43 Carter and on a call of the roll the following was recorded: Ayes,: Elstro,
44 Williams, Paust, Hankinson, Welch, Parker, Carter, Mills and Ahaus. Noes: None.
45 The vote being nine (9) to zero (0) in favor of passage of Resolution No. 4-1980.
46
47 PUBLIC SERVICE COMMISSION RETAIL RATE CASE
48
49 RP&L's rate case has been changed to a figure of 10.2% rather than 17 which had
50 been requested. The Commission went through all items and acknowledged and
51 authorized them in every detail. The area for a rate of return was 5.4% and the
52 Commission was silent in this area. This means RP&L will not show a profit, and
53 will have to go back for a rate increase sooner and will not have money to build
54 up any type reserve. There is a hearing scheduled for November at which RP&L
55 will present their cost of service study and have a rate review.
56
57 Councilman Carter challenged the statements of Mr. Huffman that RP&L is not
58 making a profit and cash reserve funds are being depleted. He stated in the
59 first seven (7) months of this year RP&L has made $590,043.59. Further, there
60 is interest income in excess of interest expense of about $570,000. This is
61 a bottom line net income for seven (7) months of $1,163,976. He noted an
62 increase of $800,000 over the past year in restricted accounts.
63
64 Mr. Huffman stated the accounting statement shows a figure as to what revenues
RP&L Minutes Cont'd.
August 18, 1980
Page 3
1 are generated. Out of those revenues the principal has to be paid for debts.
2 This also reflects restricted funds and certain loan agreements. There are
3 agreements that have to be made when bonds are sold and the bond ordinance
4 is that agreement. The bond ordinance spells out that there will be money
5 funded into the depreciation reserve fund, payments into the bond reserve
6 fund and any interest money generated from any fund that exists must go
7 back into those funds.
8
9 Chairman Ahaus read from the budget statement "after payment of bond princi-
10 pal and after putting money in the restricted funds, there is a profit for
11 the year of $208,441.65."
12
13 Councilman Mills requested Mr. Huffman explain the 5.4% rate of return as he
14 was under the impression there would be an 8 to 11% return from the 17%
15 increase. Mr. Huffman stated that in RP&L's accounting exhibit to the Com-
16 mission it came out to the 5+% figure.
17
18 Mr. Huffman pointed out a correction to be made in the rate ordinance coming
19 before Council this evening. On Sheet 11. the rate shows $10.77 on two (2)
20 different points and this should read $11.63. This change has been made to
21 the Public Service Company.
22
23 There being no further business on motion duly made, seconded and passed
24 the meeting was adjourned.
25
26 Rick Ahaus
27 Chairman
28
29 ATTEST: JoEllen Trimble
30 City Clerk