HomeMy WebLinkAboutJune 26, 2001 Agenda AGENDA -----.----
Agenda Item ..... , .....
CITY OF DENTONjune 26, CITY2001 COLTNCIL }ate_ ~//~o ~,/O/
After dete atoning that a quorum is present, the City Council of the Cay of Denton, Texas will
convene n. a Work Session or~ Tuesday, June 26, 2001 at 6 00 p m in the Council Work Session
Room in ( hty Hall, 215 E McK]rmey Street, Denton, Texas at which the following Items will be
consldere(
NOTE ~ [ Work Session Is used to explore matters of interest to one or more City Council
Members 3r the City Manager for the purpose of giving staff direction into whether or not such
matters sl: ould be placed on a future regular or special meeting of the Council for citizen mput,
City Cour eft dehberatmn and formal City action At a Work Sessmn, the C~ty Council generally
receives ]1 tformal and prehmmary reports and reformation from C~ty staff, officials, members of
City com~ a]ttees, and the individual or organization proposing council actmn, ff mwted by C~ty
Council o ~ City Manager to participate m the session Participation by ~n&wduals and members
of orgam2 atlons ]nv]ted to speak ceases when the Mayor announces the session is being closed to
pubhc ]nt ut Although Work Sessmns are pubhc rneettngs, and citizens have a legal right to
attend, th ~y are not pubhc heartngs, so citizens are not allowed to partm~pate m the session
unless mx ired to do so by the Mayor Any citizen may supply to the City Council, prior to the
begmmng of the sessmn, a written report regarding the cmzen's opmton on the matter being
explored Should the Council direct the matter be placed on a regular meeting agenda, the staff
will genel ally prepare a final report defimng the proposed act]on, whmh vall be made available
to all cra: ~ns prior to the regular meetmg at which cmzen input is sought The purpose of this
procedure Is to allow mtizens attendmg the regular meeting the opportumty to hear the views of
their fello ' mtizens without having to attend two meetings
1 R~:ce]ve a report, hold a dmeussmn and give staff direction regarding the architect's
sc ~ematlc design of Central Fire Station
2 R~ ~ce~ve a report, hold a d~scuss]on and give staff &rection regarding TXU Gas
D stnbut~on's request to change rates m the Northwest Metro Mid-Cities Distribution
S: 'stem as it affects gas rates to customers within the City of Denton, Texas
3 R ~ee]ve a report, hold a dlscussmn, and give staff direction regarding Code Enforcement
p~ ~cedures
4 R ,'ce]ve a report, hold a discussion, and give staff direction regarding the Capital
Ir )rovemant Process and the status of 1996 and 2000 Bond Program Projects
5 New Business
T us item provides a sectton for Council Members to suggest items for future agendas
6 13 fie]al Action on Closed Meeting Item(s) under Sections 551 071-551 086 of the Texas
13 )en Meetings Act
Followm; the completion of the Work Session, the Council will convene ~nto a Specml Called
Meeting :o cons]der the following
1 C Ohs]der nommat]ons and appointments to the City's boards and commissions
City of Denton City Council Agenda
June 26, 2001
Page 2
2 Consider approval of a resolution requesting the Denton County Commissioners Court to
place the C~ty of Denton ~n one county commissioners' district
CERTIFICATE
I certify that the above notice of me~egng ~vas posted 90 the bulletin board at the C~ty Hall of the
City o.~n~on, Texas, on the ~'~/~day of (.?~'//72'J , 2001 at ,5-00 o'clock
(a m ~,(~V
CI~Y SECRETARY
NOTE THE CITY OF DENTON CITY COUNCIL WORK SESSION ROOM IS ACCESSIBLE
1N ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT THE CITY WILL
PROVIDE SIGN LANGUAGE INTERPRETERS FOR THE HEARING IMPAIRED IF
REQUESTED AT LEAST 48 HOURS IN ADVANCE OF THE SCHEDULED MEETING
PLEASE CALL THE CITY SECRETARY'S OFFICE AT 349-8309 OR USE
TELECOMMUNICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1-800-RELAY-
TX SO THAT A SIGN LANGUAGE INTERPRETER CAN BE SCHEDULED THROUGH THE
CITY SECRETARY'S OFFICE
Agenda No ~
Agenda item
AGENDA INFORMATION SHEET
AGENDA DATE' June 26, 2001
DEPARTMENT: Fire Department
\/
CM/ACM: Jon Fortune, Assistant City Manager ~
SUBJ]~CT:
Receive a report, hold a d~scusswn and g~ve staff d~rectlon regarding the architect's
schematm design of Central F~re Station
BACKGROUND:
Due to extranrdlnary pubhc interest, the C~ty Counml d:rected C~ty Staff to keep them
updated on the construct:on and renovatmn of the old power plant s~te at H~ckory and
Bell into a new Central F~re Station Staffw~ll brief and update the C~ty Counml at th~s
work sessmn and answer any questions James K~rkpatnck, the selected architect for th~s
project, w~ll also be avaalable for questions
Arckitect Selection:
Staff'was directed by the City Council at their Work Session on January 23, 2001, to
~ntervtew the four top architectural firms for the design of Central F~re Statmn ~n the old
power plant at H~ckory and Bell The following Selectmn Committee interviewed the
four finahsts on Monday, April 4, 2001
Mark Burroughs, C~ty Council Member
Mike Cochran, C~ty Counml Member
Peggy Capps, Chair-Denton H~stoncal Landmark Comm~ssmn
Jon Fortune, Assistant C~ty Manager-Pubhc Safety
Ross Chadwick, F:re Ctnef
Bruce Hemngton, Director of Factht~es Management
Christy Sk~rchak, Purchasing Department
Craig GaJdos, F~refighter/Dnver
The Selectmn Committee recommended James K~rkpatnck Architect of Denton as the
most l~:ghly quahfied arch:tect A negotmtlons team made up of C~ty Staff then
negotmted w~th Mr I~rkpatnck m accordance w~th State law and C~ty pohcy and a
contract agreement was reached The contract was subrmtted to and approved by the C~ty
Counml on May 1Sth, 2001
Sames K~rkpatnck added the following key members to h~s team for th~s project
· Stewart-Cooper-Newell Architects, consulting architects for the project, prowde a
formidable expertise ~n the des:gn and constructmn of fire stations and mwc famht~es
Page 1
Their experience includes approximately fifty (50) fire facfliUes, w~th ten (10)
currently under construction
· The firm of DASA of Charlotteswlle, V~rgm~a, specmhzes m historic architecture,
rehabilitation and conservation/preservation They will work closely with the team to
evaluate the ex~stmg structure and preserve the h~stoncal significance, and techmcally
assist w~th the renovation and restoration
· The architectural firm of Lloyd Walker Jary & Associates will provide additional
expertise for the restoration of fire statmons The firm has a fire station project h~story
and has specifically worked on the h~stoncal restoration of ex~stIng fire stations
Design Process:
A kick off meeting was held on May 23, 2001 w~th City Staff and Mr Klrkpatnck to iron
out the detmls of the project Bruce Henmgton, Facilities Management D~rector, was
selected as the lead C~ty contact for the project Facilities Management will also
admmlster the approved budget for th~s project
Three days of lntens~ve meetings were held on May 22nd to 24th by Mr K~rkpatnck and
Ken Newell (of Stewart-Cooper-Newell Architects) w~th the Fire Chief and a task force
of selected Fire Department members The meetings resulted in the complete
programming of the new Central and ultimately a schematic design (attached)
On May 29th, Mr Karkpatnek met with key City Staff members to review the prehmmary
design and get as much ~nput as possible on possible issues that m~ght come up Staff
members included representatives from Facihties Management, Engmeenng, Planning,
Builchng Department, City Management and Fire
Mr K~rkpamck has met several more times w~th the F~re Department's task force to
finahze the design A scheduled meeting on June l lth wIth the H~stoncal Landmark
Commission (HLC) was canceled due to the lack of a quorum and reseheduled for July
Mr Kirkpatnck and the Fire Chief will continue to be closely involved with the
H~stoncal Landmark Commission, Greater Denton Arts Council (GDAC) and other
commumty groups who are stakeholders in this building
The s~te at Hickory and Bell has been surveyed and also studied for any environmental
issues. A structural engineer has made several bonngs around the foundation and it looks
very sufficient to bmld on a second floor to the exlstmg structure Tests are being made
for possible lead paint and asbestos A hydrogeologlst will also do a comprehensive
study m the near future of the sxte for any s~mflar underground water problems that have
plagued "old" Central
Following th~s Work Session w~th the City Cotmcfl, Staffwlll take th~s project to the
Development Rewew Committee and through the normal City budding process
P~e2
Tentative Project Timeline:
June 26 Present Development Phase of work to C~ty Council
June 28 Take project to C~ty's Development Rewew Committee (DRC)
July 1 Commence Construction Documents Phase of Work
July 1-31 Meet With HLC and GDAC and other Community Stakeholders
September 4 Present Construction Documents to C~ty Council
September 7 B~d Documents Avmlable for Interested B~dders
October 2 Receipt of Proposals
October 16 C~ty Council Rewew of Proposal and Possible Action
November 1 Commence Construction
FISCAL INFORMATION:
A prehmmary project cost estimate of the current design will be fimshed by the week of
June 25th
Respectfully Submitted
Ross Chadwick
F~re Chief
Attacb. ment
Schematic Destgn
Page 3
Agenda No ~
AGENDA INFORMATION SHEET
AGENDA DATE June 26, 2001
DEPARTMENT Legal Department
CM/DCM~ACM Herbert L Prouty, City Attorney
1
SUBJECt:,2 Receive a report, hold a discussion and give staff direction regarding TXU Gas
Dlstnbutl0n s request to change rates m the Northwest Metro Mid-Citrus Dmtnbution System as
~ e
tt affects g~s rates to customers wtthm th City of Denton, Texas
PREVIOUS ACTIONS: On February 26, 2001, TXU Gas Dmtnbutlon (TXU) filed an
apphcatio~ to change rates m the Northwest Metro Mid-Cities Dmtnbutlon System (System)
composedlof 40 North Central Texas cities mcluchng the City of Denton TXU sought rates to be
effective beglnmng March 23, 2001 The imtml filing proposed an overall annual revenue
increase o~ $10 16 million or a 5 1% annual increase w~th the average remdentlal increase being
ab ' ~'" ......... '~ "~ ......... ~,-~ r~,,*,,n was o-eater Under the initial filing, Denton
would ha,~e received an annual increase or $1,054,474 or a 7 52% annual increase Tne increase
would have fallen heavily on residential customers with about $691,591 being allocated to
residential customers There was also a substantial percentage increase for industrial customers
On Maret 6, 2001, the C~ty Council passed Resolution No 2001-010 suspending the effective
date of th rate increase for 90 days to June 21, 2001, authorizing the City to join the Steenng
Commate of the Northwest Metro Mxd-Cltms Distribution System (Steering Committee) and
authonzir the Steenng Committee to bare rate case consultants and legal counsel to review
TXU's rs change application The City Council also authorized the City Manager to bare
Dlverslfie d Utility Consultants, Inc (DUCI) to review the Steenng Committee's consultants'
findings 0v~th respect to the City of Denton service area The hmng of DUCI almost
lmmedlat fly prod chvldends smee they qmckly uncovered a major error m TXU's calculation of
federal m :omc tax expense wbaeh reduced TXU's annual revenue requirement from $10,156,809
to $7,53~ 605 and reduced the annual increase from 5 09% to 3 69% system wide The error
also redu ed the annual revenue reqmrements in the Denton service area by nearly $200,000
from an; anual revenue requirement of $1,054,474 to $858,466 It also reduced the projected
annual ir crease from 7 52% to 6 12%. As a result of this error, TXU refiled its rate change
apphcam n on April 3, 2001 A copy of that fihng is attached as Exbabat A
RATE ~2ONSULTANTS' RECOMMENDATION: On May 16, 2001, the Steenng
Committ ~e's rate consultants' report on TXU's application to change rates was submitted It
was sub~ equantly discussed at a meeting of the Steenng Committee on May 24 in the City
Attorney s office in Arlington A copy of the Steenng Committee's consultants' report is
attached xs Exhibit B
The consultants recommended redumng TXU's increased annual revenues from $7 4 mdhon to
$3 6 mdlmn Under the consultants' recommendation, the res~dentml ~ncrease went from about
$4 m~lhomto $1 3 mflhon The commercml ~ncrease from $1 7 to $400,000 and the ~ndustnal
actually increased from $1 7 m~lhon to $1 9 mdhon ~n annual revenues The effect of the
~ncrease vaned greatly among the 40 c~t~es Some of the reties received decreases wh~le other
received increases The C~ty of Denton and the C~ty of Carrollton and some other c~t~es received
larger ~ncreases Denton's ~ncrease was actually about 6 98% or about 2 95% ttmes the System
average of 2 37 oA Under the Steenng Committee's consultants' recommendation, Denton
mt~zens' gas rates would increase by $625,089 annually for an overall 6 98% annual increase
The ~ncrease ~s allocated among the customer classes as follows residential ($439,706 or 8 34%
annual increase), commermal ($47,928 or 1 52% annual ~ncrease), and ~ndustrml ($164,875 or
43 49% atmual increase) Servme charges would decrease by $27,420 The reason for th~s
d~spanty was explatned by the Steenng Committee's consultants Many of the smaller reties in
the System had generally accepted TXU's prewous rate ~ncreases w~thout hmng consultants As
a result, they had h~gher rates to beg~n w~th whereas c~tles hke Denton--who had w~sely h~red
rate consultants--were able to get the company to agree to lower rates Another factor ~s that,
generally spealang, ~n System-w~de filings, the larger, more rapidly growing cities may end up
subs~d~zmg smaller communmes Rate factors may also differ from city to city Another ~ssue
that the Steenng Committee had to dec,de is whether or not they were wflhng to accept a
s~gmficant increase m the customer charge to $7 00 per res~dentml and $12 00 per commercml
customers For instance, the C~ty of Denton has some of the lowest customer charges m the
System, $5 50 for res~dentml and $10 00 for commercml
A final factor that may be of some concern to you--since one of your primary goals as mdmated
~n your recent retreat ~s economic development--~s a substantial 43% ~ncrease m Denton's gas
rates for industrial customers Th~s large ~ncrease in industrial rates ~s spread throughout the
System with many other c~t~es also show~ng substantml ~ncreases In the past, TXU has kept
~ndustnal, rates low to remain competitive In th~s fihng, TXU has agreed to place more of the
burden on industrial customers One of Dan Lawton's of DUCI recommendatlons~whmh has
not been accepted by the Steenng Committee--was to take the industrial rate ~ncrease out of the
apphcatlon and to allow TXU to negotiate ~ts industrial rates d~rectly with the industrial
customers
Dan Lawton, of DUCI, addressed th~s factor ~n h~s rewew of the Steenng Committee's report
and recommendation, a copy of which ~s attached as Exhibit C Dan ~ndmates that the C~ty only
has regulatory jurisdiction m gas rate cases over TXU's operational costs - the cost for the
dehvery of gas through TXU's d~stnbut~on system to Denton customers The gas cost is
regulated by the Ra~koad Commission Dan recommends remowng the gas or commodity costs
from TXU's rate request By removmg the gas costs, TXU's full rate request throughout the
System is reduced to $3,025,785 w~th System residential customers recelwng a $1,043,143
annual increase, commercial customers receiving a $440,322 decrease and ~ndustnal customers
reee~wng a $2,423,064 ~ncrease The removal of gas costs from the TXU's rate request would
reduce the residential annual revenue requirement for Denton customers to $409,085 and the
commermal revenue reqmrement to $32,479 from TXU's request of $575,214 for residential and
$89,187 for commemml (See attachment 3 of Exhibit C) IfTXU and the c~t~es settle for 70%
Page 2
of th~s mount, as d~scussed below, th~s would reduce the annual restdential revenue requirement
to $286,359 and the annual commercial revenue reqmrement to $22,735 Dan has not included
any industrial customer annual increase becanse~as mdmated above--he recommends taking
the industrial mcrease out of the rate request and letting TXU negotmte th~s directly with the
industrial customers He w~ll be present at the work session to make a presentation and to
answer your questions
TXU'S RESPONSES TO THE CONSULTANTS' RECOMMENDATION
TXU was not happy w~th the nnt~al recommendation of the Steenng Committee consultants of
$3 6 mllhon ~n additional annual revenue So the Steenng Comnnttee authorized negotiations
w~th TXU We understand that TXU may agree to an ~ncrease of $5,151,019 which ~s
approximately 70% of the revised revenue mqmrement as opposed to the $3 6 mflhon originally
recommended by the Steenng Committee consultants, which ~s approximately 50% of the
rewsed revenue reqmrement Approximately $3 4 mflhon of thru ~ncrease would be spread
between the res~dentml and commemml customers Negotmtlons are stall ongoing between the
System's attorney, Geoffrey M Gay, and TXU We may have more to report to you regarding
negotiations at the meetmg A settlement at around 70% of the revmed fihng would stall amount
to about a 6~A to 6V2% overall increase for the City of Denton We w~ll prowde any additional
~nformatton we receive e~ther from the System consultants or from DUCI prior to your work
session
TXU would hke to make a presentation dunng the work session w~th regard to their rate change
apphcat~on and representatives from TXU wall be avadable to answer your questmns Although
you usually do not allow comments from the general pubhc dunng work sessions, ~t has been the
practice to allow the utthty to make such a presentation I recommend you allow TXU to make
their presentatton
OPTIONS' As a result of the negotmt~ons between the System and TXU, TXU has agreed to an
extension of the effective date of the rate ~ncrease until July 21 of th~s year Unfortunately the
City Council does not have another meeting after your June 26 work session until July 17 At
that time ~t appears that the C~ty Connell w~ll have to make a dec~slon on th~s rate increase
request The purpose of thru item is to give you as much information as possible regardmg the
rate ~ncrease request and to seek your d~rectlon Your options include
1 Approving the rate increase as refiled by TXU (Th~s ~s not recommended )
2 Approwng an ~ncrease m rates as negotmted by the System consultants w~th TXU
3 Approving an increase as recommended by DUCI
4 Some combmat~on of the above options
Page 3
Additional,Information concerning the apphcatlon for change ~n rates 1s presented in the status
report Your options not only include an approval or demal of a negotiated settlement by the
Steenng Committee consultants and TXU but changes in the rate design that would distribute the
rate increase in a different proportion among TXU's residential, commercial and ~ndustnal
customers
~PACT: The rate increase will obviously have a fiscal impact on all residential,
commercml and industrial gas customers w~thln the City of Denton As ~ndlcated above, the
largest percentage Increase is for industrial customers, while the largest monetary increase is for
resldentml customers The amount of fiscal impact will depend on the total amount of ~ncrease
you antho~aze and how it is distributed among the various customers classes
Respectfully submitted,
Herb Prouty
City Attorney
Page 4
O TXU
TXU Business Services Autry L Warren [i~ ~
1~01 Bryan Street Rate, Manager ~[~ (~ ~ ~ ~
Dallas, TX 75201 3411
Tel 21481238 3 APR - 200',
April 2, 2001 CI[~[ %~}ON
Honorable Mayor Euhne Brock
C~ty of Denton
215 E McKumey
Denton, Texas 76201
Re Northwest Metro/Mid Crees Dlstnbut~on System Rate Case F~hng -
Correctmn of Error m Proposed Rates
Dear Mayor Brock
Enclosed are revised pages for TXU Gas Dlstnbut~on's Northwest Metro/M~d Crees
Rate Fflmg Package Tariffs and Cost of Service Schedules, whxch reflect the correctmn
of an error m the calculation of Federal Income Tax expense at proposed rates The
error can be fotmd on Schedule G-7, page 1 hne 4 column d, of the filmg package This
error was caused by a component of the spreadsheet that d~d not update correctly
The ongmal filmg overstated the FIT expenses by $2,647,590 and the proposed revenue
reqmrement by $2,798,210 Thas correctmn lowers the requested increase m the
Northwest Metro/M~d C~t~es D~stnbutaon System to $7,358,598, wluch represents a
total system increase of 3 69% The attached rewsed schedules and tariffs only reflect
flus change and do not reflect any change an TXU Gas D~stnbut~on's methodology
If your mty has accepted the Favored Natron offer, your respective city rates will be
adjusted accordingly
In addat~on, TXU Gas Dastnbutton has enclosed a report showmg the proposed
increase/decrease by elty refleetmg the revased numbers
Sincerely,
Enclosures
Recmpt Acknowledged by
6
Page 1 of 1
4/2/01
NORTHWEST METRO / MID CITIES DISTRIBUTION SYSTEM
Revenue Increase / (Decrease) by C~ty
Increase / (Decrease)
I.Jne C~ty Name Reeldent~al Commercial Industrial Serv Chr,q Amount Pement
I Add~son $54 331 $115 358 $9 645 ($1 978) $177 357 3 89%
2 Argyle (782) 233 $0 498 (5O) 0 O2%
3 Arhngton 607 548 171 451 $210 916 (36 097) 953 818 2 77%
4 Aubrey (12 497} (149) $0 (1 050) (13697) 544%
5 Bedford 103 330 19 291 $15 854 (3 948) 134 527 2 61%
6 Carreliton 783,498 251 355 $298 867 (17 849) I 315 871 7 05%
7 Colleyville 4 426 3 085 $0 (3 743) 3,768 0 07%
8 Coppell (15,266) (4 076) $0 (6,359) (25 701) 0 37%
9 Copper Canyon 31 0 $0 (24) 7 0 06%
10 Connth (142 677) (7 736) $10 807 (996) (140 601) 6 99%
11 Cross Roads (274) 181 $0 (2) (95) 1 78%
12 Dalworthmgton Gardens 2 856 1,036 $0 (361) 3 530 0 85%
13 Denton 575 214 89 187 $221 457 (27 392) 858 466 6 12%
14 Double Oak 866 28 $0 (206) 687 0 51%
15 Euless 109,101 19 179 $37 508 (4 242) 161 546 3 63%
16 Farmem Branch 262,566 104,498 $170,769 (5512) 532 322 6 85%
17 Flower Mound 110663 3597 $42199 (12813) 143645 145%
18 Gmpewne 155,979 63,861 $68,145 (7 055) 277 930 3 21%
19 Hickory Creek 1 784 247 $0 (482) I 550 0 60%
20 Highland Village 27,325 385 $0 (2 627) 25,084 0 91%
21 Huret 147777 18,896 $21647 1,997 190316 343%
22 Irving 906 387 707 006 $321 678 11,359 1 946 430 6 27%
23 Juatln (12 136) 3 023 $0 (286) (9,399) 3 10%
24 Keller 99,384 3 309 $9,859 (6,968) 105 584 2 15%
25 Krum 11,475 2 214 $0 1,079 14 769 4 92%
26 Lake Dallas 10 098 (1,090) $0 391 9 398 1 28%
27 Lew[aville 32,775 (9 321) $141 806 (14,088) 151,172 I 42%
28 Lincoln Park (11,566) (487) $0 53 (12,000) 25 95%
29 Manefteld 85 549 13 875 $59,784 (4 580) 154 628 4 86%
30 Mareha~l Creek 6,464 226 $0 162 6,852 22 53%
31 Northlake 0 0 $0 2 2 8 67%
32 Pantego 9,540 3 000 $4,057 (615) 15 982 2 87%
33 Pilot Point (29,282) 2 536 $0 165 (26 581) 4 16%
34 Ponder 4 278 3,503 $3,411 239 11 431 7 97%
38 Roanoke 32 082 14 238 $0 809 47,129 17 05%
36 Sanger (23,257) (6 706) $0 1 757 (28,206) 4 31%
37 Shedy Shores (18858) (156) $0 (186) (17 200} 793%
38 Southlake (11,343) 4,998 $6 741 (5 602) (5 206) -0 08%
39 Trophy Club 9 787 I $0 (756) 9 032 I 80%
40 Weatlake 1,635 1 147 $0 (119) 2,664 1 18%
41 Other 1941181 87~828 $10%202 (3r367) 381~845 4 96%
42 Total Revenue $4,074 9~0 $1,679 052 $1 785 353 ($150 790) $7 358 605 3 69°^
Page 1 of 1
TXU GAS DISTRIBUTION
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM
FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000
4/2/01 REVISION INDEX
T~,RIFI= FOR GAS SERVICE
Rate Soheduls No
4101 Residential Service
4102 Commercial Serwce
4103 Industrial Sales
4104 Industrial Transportation
COST OF SERVICE SCHEDULES
SECTION I OVERALL COST OF SERVICE SUMMARY
A Cost of Service Study
A-1 Overall Cost of Serv;ce
A-2 Net Operating Income
SECTION I1' HISTORIC TEST YEAR DATA
Schedule B Rate Base
B Total Rate Base
Schedule E Other Rate Base Items
E Summary of Other Rate Base Items
E-8 Cash Working Capital
Sohedule G Distribution System Expense Data
G-7 Test Year FIT and Requested FiT
G-8 Taxes Other than Income Taxes
Schedule I Return on Invested Capital
I-1 Summary of Return
SECTION III RATE DESIGN
Schedule K Class Coat of Service Analys,s
K-1 Rate of Return
K-2 AIIocstmn of Rate Base to Proposed Rate Classes
K-4 Allocation of Revenue Deductions to Proposed Rate Classes
K-6 Unit Cost Analysis
K-7 Allocation Factors
Sohedule L Rate Design
L-1 Revenue Summary
L-2 Revenue Summary by City
L-4 Summary Proof of Revenue at Proposed Rates
L-5 Proposed Rate Calculation
Tariff for Gas Service TXU Gas Dlstrlbut,on
RATE S~HEDULE NO 4101
APPLICABLE TO NW Metro/Mid Cities DIstribution ISSUE DATE 04/02/01
System
EARLIEST EFFECTIVE DATE 03/23/01 PAGE I OF 1
RESIDENTIAL SERVICE
Monthly Rate
Subject to apphcable adjustments, the following rates are the maximum apphcable to res~denbal
consumers per meter per month or for any part of a month for which gas serwce ~s available at the same
location
Customer Charge $ 8 0000
All Consumpbon @ 5 9430 Per Mcf
If the service penod ~s tess than 28 days ~n a month the customer charge ,s $ 2857 t~mes the number of
days service If the consumption contains a port~on of an Mcf, a prorata port~on of the per Mcf charge w~ll
be made
B,lls are due and payable when rendered and must be pa~d w~th~n hfteen days from monthly b~ll~ng date
APPLICABLE RATE SCHEDULES/RIDERS
Rate Adjustment Provisions
4108-1 Gas Cost Adjustment
4108-2 Tax Adjustment
4108-3 Weather Normahzatmn Adjustment
Miscellaneous/Service Charges
9001 Connection Charge
9002 Read for Change Charge
9003 Returned Check Charges
9004 Dehnquent Notification Charge
9005 Main Line Extension Rate
9006 Excess Flow Valve Charge
Surcharges
4106 Sumharge R~der
NW Metro/Mid Cities Distribution System - Page 4
Tariff for Gas Service TXU Gas O,stribution
RATE sCHEDULE NO I 4102
APPLICABLE TO NW Metro/Mid Cities Distribution ISSUE DATE 04/02/01
System
EARLIEST EFFECTIVE DATE 03/23/01 PAGE 1 OF 1
COMME~RCIAL SERVICE
Monthly Rate
Customer Charge $ 14 0000
First 20 Mcf @ 6 3340 Per Mcf
Next 30 Mcf @ 6 0340 Per Mcf
Over 50 Mcf @ 5 8840 Per Mcf
If the service per~od ~s less than 28 days ~n a month the customer charge ~s $ 5000 t~mes the number of
days service If the consumption contains a port,on of an Mcf, a prorata porhon of the per Mcf charge w~ll
be made
B~lls are due and payable when rendered and must be pa~d w~thln fifteen days from monthly b~llmg date
APPLICABLE RATE SCHEDULES/RIDERS
Rate Adjustment Provisions
4108~1 Gas Cost Adjustment
4108.2 Tax Adjustment
4108,3 Weather Normaflzat;on Adjustment
Miscellaneous/Service Charges
9001 Connection Charge
9002 Read for Change Charge
9003 Returned Check Charges
9004, Delinquent Notification Charge
9005 Ma~n Line Extension Rate
9006 Excess Flow Valve Charge
9007 Certain Stand-By Gas Generators
Surcharges
4106 Surcharge R~der
NW Metro/Mid Cities Distribution System - Page 5
Tariff for Gas Service TXU Gas D~str~bution
RATE S~HEDULE NO 4103
APPLICABLE TO NW Metro/Mid Cities Dlstr~bution ISSUE DATE 04/02/01
System
EARLIEST EFFECTIVE DATE I 03/23/01 PAGE I OF 1
Monthly Rates.
Industrial Rates-N is hereby amended and rewsed as follows
Subject to Company's I~m~tabons on the availability of each rate, Customer shall receive service under ~ts
choice of one of the follow~ng rates in accordance w~th the rate selected by Customer as prowded ~n the
contract
RATE 1
F~rst 125 Mcf or less $ 470 870
All over 125 Mcf @ $ 3 676 per Mcf
RATE 2
All over 600 Mcf @ $ 3 336 per Mcf
RATE 3
All over 1,250 Mcf @ $ 3 197 per Mcf
In all other respects, Industnal Rates-N shall remain m effect as filed w~th the Cities m the NW Metro/M~d
C~t[es, D~stribut~on System 100% of the ~ncrease ~n ~ndustnal margtn ~s to accrue to the benefit of TXU
Gas Distr;bution
APPLICABLE RATE SCHEDULES/RIDERS.
Rate Adjustment Provisions
4108-2 Tax Adjustment
Miscellaneous Service Charges
9005 Mare L~ne Extension Rate
Surcharges.
4106 Sumharge R~der
NW Metro/Mid Cities Distribution System · Page 6
Tariff for Gas Serv,ce TXU Gas DIstr,bution
RATE S(~HEDULE NO 4104
APPLICABLE TO NW Metro/Mid Cities Distribution ~SSUE DATE 04/02/01
System
I EARLIEST EFFECTIVE DATE 03/23/01 PAGE I OF 1
INDUSTRIAL TRANSPORTATION
Monthly Rates
The maximum fee for ~ndustnal transportation service on the NW Metro/M~d C~bes D~stnbut~on System
~s $1 2551 per MMBTU dehvered plus apphcable taxes exclusive of the backup fee
The above transportation fees ~nclude both the fees ~ncurred to move the gas from the receipt point on
the transmission system to the c~ty gate and the fee incurred to move the gas from the c~ty gate to the
customer's fac~hty
If the fees for transportation service on the transmission system change, the rewsed fees w~ll be ~nctuded
~n the overall transportation rate charged to customers
100% of the increase in transportabon fees mcurrad to move the gas from the city gate to the customer's
fac~hty is to accrue to the benefit of TXU Gas Distnbut~on
APPLICABLE RATE SCHEDULES/RIDERS
Rate AdJuetment Provlelone
4108-2 Tax Adjustment
Surchargee
4106 Sumharge Rider
NW Metro/Mid cities Distribution System - Page 7
Schedule A
Page 10l 1
Revised 4-02-01
TXU GAS DISTRIBUTION
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM
COaT OF SERVICE STUDY
FOR THE TEST yEAR ENDED SEPTEMBER 30, 2000
SPONSOR B W MYERS
Northwest Metro/Mid Cities Distribution System
Line prseent Propose¢J Proposen F,,,,-e,,~
No Dsecripflon Rates Rates Increase Increase
(a) (h) (c) (d) (e)
2 Res~pential $ 120223703 $ 124298810 $ 4075106 339
3 Commercial (1) 73 292 124 74 971 268 1 679 144 2 29
4 Industrial (2) 4 9481919 5704057 1755138 3547
5 Total Gas Sales Revenue 198 464,747 205 974 135 7 509 389 3 78
6 Other Rev Saw,ce Charges etc 1 080~812 930 021 (150 790} (13 95I
7 Total Operating Revenues $ 199 545~555 $ 205 904 157 $ 7 358 598 3 69
8
9
13
14 Total Revenue Requirement
15 Operating Expenses
17 For Reci;]entlal Sales 81 862 752
18 For Commercial Sales (1) 56 716 371
19 For Industrial Sales (2) 2 755 085
20 Unaccounted for Gas 1 342 630
21 Other O & M Expenses 22 079 234
22
23 Taxes Other than Income Taxes 14 303 462
24
25 Provision for Depreciation 7 901 643
26
27 Interest on Customer Deposits 215 134
28 Interest on Customer A~vancas 48 831
29
30 Federal Income Taxes 5 1 g5 051
31
32 Return on Rate Base 14 483 965
33
34 Total Revenue Requirement $ 206 904 157
35
36 (1) Commercial class includes schools se proposed ~n this rate filing
37 (2) thduetdal class includes transportation and electhc generation customers
$ch~Bule A 2
Page 1 of 1
Rewsed 4-02-01
TAU GAS DIETRIBtJTION
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM
NET OPERATING INCOME
FOR ~I~E TEST yEAR ENDEC SEPTEMBER 30 2000
SPONSOR J K. BAKER
Distribution
Line Amount Per System At present Rates At Propomed Schedule
(a) (b) (c) (0) (e) (0
8
9 Operating Expenae8
19 Total Operating Expen#l~ Before
24 Tot. l Operating Income BMore Fed~al
31 C~lumn(h) ilnesS~ndlSareexclude~omtheGostofsen~ce§llng
'rxu GAS DISTRIBUTION
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM
TOTAL RATE BASE
AB OF SEPTEMBER 30, 2000
SPONBOR D A WATSON
Line Schedule Per Books Total Total
No Description Reference Syetsm Adluatment Recluested
1 (a) (b) (a) + (b) = (c)
2 Net Plant m Service
3 Distribution Plant in Service I B 1 I $ 164 949 144 $ 164 949 144
4 General Plant i ~ 9 620 218 9 620 218
5 NstGasD~stribut~onPlant~nSew~ce $ 174569362 $ $ 174569362
6
7 investment Additions
8 Regulsto~y Asset Pcty 1 Safety Comphance Program r E ~ $ 2 078 997 $ 2 078 997
9 Working Caprial
10 Working Cash Allowance [ I (7365129) (7365129)
11 Matenals& Supplres E 484 877 484 877
12 Prepayments 717~692 717~692
13 Total investment Additions $ 14 083 563} $ $ (4 083 563)
15 Investment Deductions
16
17 Customer Deposits ] $ 3 618 273 $ 3 618 273
18 Customer Advances for Construction I 1 518 108 1 518 108
19 Injunes end Damages Reserve E 223 007 223 007
20 Income Tax Adjustments 15 547 589 15 547 589
21 TXU LSP Industrial Meter &Regulstor Adjustment 35 365 36 365
22
23 Total Investment Deductions $ 20~943 342 $ $ 20~943 342
24
25 Total Rste Base $ 149542457 $ $ 149T542457
]6
Schedule E
Page 1 of 1
Rewsed 4~2-01
TXU GAS DISTRIBUTION
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM
SUMMARY OF OTHER RATE BASE ITEMS
AS OF SEPTEMBER 30, 2000
SPONSORS D A WATSON, B W MYERS, J K BAKER
Line Schedule
No Description Reference Amount
1 Current Assets (13 month average)
2 Materials & Supphes E 1 $ 484,877
3 Prepayments E-2 717,692
4
5 Current Liabilities (Year-end Balance)
6 Customer Depostts E-3 3,618 273
7 Customer Advances E 4 1,518,108
8 Injuries & Damages Reserve E-5 223,007
9 Income Tax Adjustments E-7 15,547,589
10
11 Plant Adjustments
12 Poly 1 Safety Compliance Program Costs E-6 2,078,997
13 TXU LSP Industrial Meter & Regulator Adjustment E-9 36,365
14
15 Cash Working Cap;tel E-8 (7,365,129)
l!
18
Schedule G 7
Page 1 of 4
Revised 4-02~31
TXU (]AS DISTRIBUTION
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM
TEST YEAR FIT AND REQUESTED FIT
FOR THE T=BT YEAR ENDED SEPTEMBER 30, 2000
SPONSOR J K BAKER
Test Year Test Year
(a) (b) (~) (d) (e)
14 P~or Yesr Adjustments (225) (225) (225)
$cfle0u~e G 7
Rewsed 4 02~)1
(a) (b) (o) (~)
20
Rewsed 4-02~)1
TXU GAS DISTRIBU11ON
NORTHWEST METRO/MID CITIE~i DISTRIBUTION SYSTEM
(t)) (¢) (d) (e) (~
Schedule G 7
Page 4 of 4
Rewsed 4-02-01
TXU GAE DISTRIBUTION COMPANY
NORTHWEST METRO/MID CITIEE DISTRIBUTION SYSTEM
DETAIL OF OTHER DEDUCTIONS
FOR 12 MONTHE ENDED SEPTEMBER 30 2000
EPONEOR J K. BAKER
(a) (b) (=) (d) (e)
9 Saint/Oeferral (143385) 137515% Tote] Labor per Books (t9 718~
13 Less
14 ?est year Adjustments
17 Tent Year as Adjusted $ (221 3231 $ [30 55?)
22
Schedule
Page 1 of
Revised
TXU OAS DISTRIBI.~rlON
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM
SUMMARY OF RETURN
FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000
SPONSOR A L WARREN
Total System
With Wtth
Line Present Proposed Schedule
NO Rates Rates Reference
1 Summe~ of Net Operetin~ Income/Return
2 Cost of Debt 727% 5 077 101 5 077 101
3 Cost of Preferred Stock 5 79% 147 195 147 195
4 Available or Requeed Retum on
5 Book Value of Common Equity 5 836 423 9 259 669
6 Total Return on tnvestad Capital 11 060 719 14 483,965 A I
7 Summary of Rate Base by Kind of
Inveetad Capital
8 Debt 46 70% 69,836 327 69 836 327
9 Preferred Stock 1 70% 2 542,222 2,542 222
10 Common Equity at Book Value 51 60% 77~163 908 77,163 908
11 Total Invested Capital 149,542 457 149,542 457 B
12 Pement Return
13 Cost/Rate on Debt 7 27% 7 27%
14 Cost/Rate on Preferred Stock 5 79% 5 78%
15 Cost/Rate on Book Value of Common Equity 7 56% 12 00%
16 Total Cost/Rate on Invested Capital 7 40% 9 69%
24
26
44
45
,48
49
50
$!
52
54
TXU GAS DISTRIBUllON Schedule
NORTHWEST METRO/MID CreES DISTRIBUTION SYSTEM Page 10 of
RATE DESIGN - REVENUE SUMMARY BY CITY Rewsed 4-02-o1
FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000
SPONSOR G L GOBLE
Line Description
1 TRANSPORTATION
2
3 Adjusted Transportation Volume-MCF 8187654
4 Adjusted Per BooksTransportat~on Volume 8093821
5 Transportation Volume Per Books 93 833
6 Adjustment to Transportation Volume
7 Industrial TransDratatlon Revenue
8 Transportation Fee 19148 I 025 $1 00 0 5000 9 813
9 Transportation Fee 124079 1 025 0 65 0 5000 41 493
10 Traneportauon Fee 107558 1 025 0 64 0 5000 35 279
11 Transportation Fee 1482326 I 025 0 63 0 5000 478 606
12 Transportation Fee 857302 1 025 0 62 0 5000 272,408
13 Transportation Fee 315798 1 025 0 61 0 5000 98 726
14 Traneportauon Fee 188062 1 025 0 60 0 5000 57 829
15 Transportation Fee 107209 I 025 0 59 0 5000 32 417
16 Transportation Fee 94299 I 025 0 58 0 5000 28 030
17 Transportation Fee 55958 1 025 0 48 0 5000 13 622
18 Transportation Fee 481399 1 025 0 46 0 5000 112,256
19 Transportation Fee 1655616 I 025 0 44 0 5000 369 099
20 Transportauon Fee 226358 1 025 0 38 0 5000 43 503
21 TraneportsUon Fee 369837 1 025 0 32 0 5000 60~653
22 Total Industrial Transportation Revenue $1,653 736
23 Electric Generation Transportation Reve~lue
24 Transportation Fee 1848808 1 025 $0 02 1 0000 33~807
26 Total Electrtc Generation Transportation Revenue $33 807
26 Commercial Trensoortaflon Reversra
27 Transportation Fee 29571 1 025 $0 50 1 0000 15 155
28 Transportation Fee 63951 I 025 0 37 I 0000 24 122
29 Transportation Fee 39211 1 025 0 29 1 0000 11 655
30 Transportation Fee 9437 1 025 0 30 1 0000 2,902
31 Transportation Fee 111727 I 025 0 29 1 0000 33 211
32 Commercial Customer Charge (1 cuetomem) t 12 000 20 00 1 0000 240
33 Commercial Customer Charge (2 customers) 18 12 000 12 00 1 0000 2,592
34 Commercial Customer Charge (3 suetoraers) 53 12 000 10 00 1 0000 6r360
96 237
35 Total Comraercial Transportation Revenue I 783,780
36 Total Trane Only Revenue 0 05860 104~523
37 Total Revenue Taxes 1 888 303
38 D;stribut~on Trans Only Rev Adjusted
39 Less Trans Only Rev Per Books 1~911~345
40 Transportation Only Rev Adjustraent 1231042),
TXU GAS DISTRIBUTION Schedule L 2
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM Page 1 ! of 11
RATE DESIGN - REVENUE SUMMARY BY crrY Rewsed 4-02-91
FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000
SPONSOR G L, GOBLE
Line Deecr~ptlon Adj Mcr Rate Amount
I TRANSPORTATION
2
3 Adluated Tranapa~lation Volume. MCF
4 Adjusted Per BooksTransportat~on Volume 0
5 Tranaportat~on Volume Per Books 0
6 Adjustment to Transportation Volume 0
7
8 Rate 1 0 0 0
9 Rate 2 0 0 0
10 Rate 3 0 0 0
11 Rate4 0 0 0
12 Rate 5 0 0 0
13 Rate 6 0 0 0
14 Rate7 0 0 0
15 Rata 8 0 0 0
16 Rate 9 0 0 0
17 Rata 10 0 0 0
18 Rate 11 0 0 o
19 Rate 12 0 0 0
20 Rate 13 0 0 0
21 Rate 14 0 0 0
22 Rate 15 0 0 0
23 Rata 16 0 0 0
24 Rata 17 0 0 0
25 Rate 18 0 0 0
26 Rate 19 0 0 0
27 Rate 20 0 0 0
28 Rate 21 0 0 0
29 Rats 22 0 0 0
30 Rate 23 0 0 0
31 Rata 24 0 0 0
32 Total Trane W/Corn Revenue 0
33 Total Revenue Taxes 0 05860 0
34 Distribution Trane W/Com Rev Adjusted 0
35 Less Trane WICom Rev Per Seeks 0
36 Transpo~lat~on W/Corn Rev Adjustment 0
· rxu GAS DISTRIBUTION Schedule L 4
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM Page 1 of 7
SUMMARY PROOF OF REVENUE AT PROPOSED RATES Rev.sad 4 o2-01
FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000
SPONSOR G L GOBLE
Line _~e_-~riptlon Winter Summer Total
1 TOTAL RESIDENTIAL
2
3 Rate_9999
4
s ~
6 Customer Charge $8 0000 $8 0000
7 Block 1 $5 9430 $5 9430
8 Off-Peak D~scount per MCF $0 0000 $0 0000
9
10 Plus Gas Cost Adjustment Above $0 0000 $0 0000
11 Gas Cost Adjustment 0 0000 0 0000
12 Volume Factor $1 0234 $1 0234
13 Tax Factor 0 0586 0 0586
14 Plus Franchise Fee Reimbursement $0 0000 $0 0000
15
16 ~
17 Zero 0 0000 0 0000
18 Block 1 1 0000 1 0000
19 Oft-Peek Discount 0 0000 0 0658
20
21 ~lllna Umts.
22 Bills 1,309,506 1,313,538 2,623,044
23 Block 1 13,578,298 2 648,191 16,226,489
24 Total MCF 13,578,298 2,648,191 16,226,489
25 Off-Peak Discount Block 0 174,304 174,304
26
27 J~
28 Customer Charge Revenue $10,476,048 $10,508,304 $20,984,352
29 Block 1 80,695,826 15 738,199 96,434,025
30 Less Off-Peak Discount 0 0 0
31 Total Sase Rate Revenue $91,171,874 $26,246,503 $117,418,377
32
33 Gas Cost Adjustment $0 $0 $0
34 Subtotal (Base Rate + GCA) 91,171,874 26,246,503 117,418,377
35 Franchise Fee Rmmburaement 0 0 0
36 Revenue Related Taxee 5r342~361 lr537~956 6~880~316 .
37 Subtotal $96,514,234 71 $27,784,458 74 $124,298,693
38 Ratio Gross to Net 1 00000 1 00000
39 Total Annual Gross Revenue $96 514~235 $27~7841459 $124~298r693
6O
TXU GAS DISTRIBUTION Schedule L 4
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM Page 2 o! 7
SUMMARY PROOF OF REVENUE AT PROPOSED RATES Rewsed 4 02-O1
FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000
SPONSOR G L GOBLE
Line Description Winter Summer Total
1 TOTAL COMMERCIAL
2
3 Rata_9999C
4
5 Rate Charactanst~cs.
6 Customer Charge $14 0000 $14 0000
7 Block 1 $6 3340 $6 3340
8 Block 2 $6 0340 $6 0340
9 Block 3 $5 8840 $5 8840
10
11 Plus Gas Cost Adjustment Above $0 0000 $0 0000
12 Gas Cost Adjustment $0 0000 $0 0000
13 Volume Factor 0 0000 0 0000
14 Tax Factor 0 0586 0 0586
15 Plus Franchise Fee Reimbursement $0 0000 $0 0000
16
17 Consumr~tion Charaoteristias.
18 Zero 0 0000 0 0000
19 Block 1 0 1933 0 1953
20 Block 2 0 1515 0 1635
21 Block 3 0 6552 0 6412
22 I 0000 I 0000
23 Billino Units.
24 Bills 121,541 118,081 239,622
25 Block 1 1,510,626 658,275 2,168,901
26 Block 2 1,183,634 550,907 1,734,540
27 Block 3 5~119~649 2~161~041 7~280~690
28 Total MCF 7,813,908 3,370,223 11,184,131
29
30 ~
31 Customer Charge Revenue $1,701,574 $1,653,134 $3,354,708
32 Block 1 9,568,304 67 4,169,515 65 13,737,820 32
33 Block 2 7,142,045 05 3,324,169 90 10,466,214 95
34 Block 3 30~124~014 30 12~715~565 87 42~839~580 17
35 Total Base Rate Revenue $48,535,938 $21,862,385 $70,398,323
36
37 Gas Cost Adjustment $0 $0 $0
38 Subtotal (Base Rate + GCA) 48,535,938 21,862,385 70,398,323
39 Franchise Fee Reimbursement 0 0 0
40 Revenue Related Taxes 2~844~040 1 ~281 ~061 4~125~101 49
41 Subtotal $51,379,978 $23,143,447 $74,523,425
42 Ratio Gross to Net 1 00000 I 00000
43 Total Annual Gross Revenue $51 ~379~978 $2311431447 $741523~425
'rxu GAS DISTRIBUTION Schedute L 4
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM Page 3 of 7
SUMMARY PROOF OF REVENUE AT PROPOSED RATES Rewsed 402~1
FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000
SPONSOR G L GOBLE
L~ne -n~- -"cript~on W~nter Summer Total
1 TOTAL SCHOOL
2
3
4
5 ~
6 Mimmum Charge $14 0000 $14 0000
7 Block 1 $6 3340 $6 3340
8 Block 2 $6 0340 $6 0340
9 Block 3 $5 8840 $5 8840
10 Adjustment Factor 1 0000 1 0000
11 Plus Gas Cost Adjustment Above $0 0000 $0 0000
12 Cost of Gas $0 0000 $0 0000
13 C~ty Street & Alley Rental 0 0000 0 0000
14 State O~cupation Tax 0 0586 0 0586
15
16 Bi[lino Umts.
17 Bills 246 246 492
18 Block 1 11,379 2,061 13,441
19 Block 2 8,916 1,725 10,641
20 Block 3 38~566 6~767 45~333
21 Total MCF 58,862 10,553 69,414
22
23 ~
24 Customer Charge Revenue $3,444 $3,444 $6 888
25 Block I 72,077 32 13,055 50 85,132 82
26 Block 2 53,800 49 10,408 57 64,209 06
27 Block 3 226~921 93 39~814 71 266~736 63
28 Total Sase Rate Revenue $356,244 $66,723 $422,967
29
30 Gas Cost AdJustment $0 $0 $0
31 Subtotal (Base Rate + GCA) 356,244 66,723 422,967
32 C~ty Street & Alley Rental 0 0 0
33 State Occupation Tax 20~875 3~910 24~784
34 Subtotal $377,118 $70,633 $447 751
TXU GAS DISTRIBUTION Scheduie L 4
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM Page 4 of 7
SUMMARY PROOF OF REVENUE AT PROPOSED RATES Revmed 402 01
FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000
SPONSOR G L GOBLE
Line Description W~nter Summer Total
1 TOTAL MILITARY
2
3
4
5 ~
6 M~mmum Charge $0 0000 $0 0000
7 Block 1 $0 0000 $0 0000
8 Block 2 $0 0000 $0 0000
9 Block 3 $0 0000 $0 0000
10 Adjustment Factor 0 0000 $0 0000
11 Plus Gas Cost Adiustment Above $0 0000 $0 0000
12 Cost of Gas $0 0000 $0 0000
13 City Street & Alley Rental 0 0000 $0 0000
14 State Occupation Tax 0 0000 $0 0000
15
16 ~JJJ J,o.g-~ 0 0 0
17 Bills
18 Block 1 0 0 0
19 Block 2 0 0 0
20 Block 3 0 0 0
21 Total MCF 0 0 0
22
23 Base Rate Revenue,
24 Customer Charge Revenue $0 $0 $0
25 Block 1 0 0 0
26 Block 2 0 0 0
27 Block 3 0 0 0
28 Total Base Rate Revenue $0 $0 $0
29
30 Gas Cost Adjustment $0 $0 $0
31 Subtotal (Base Rate + GCA) 0 0 0
32 C~ty Street & Alley Rental 0 0 0
33 State Occupation Tax 0 0 0
34 Subtotal $0 $0 $0
35
36 Gas Cost
37 Cost of Gas $0 $0 $0
38 Plus 1/2 of Markup 0 0 0
39 Total Gas Cost $0 $0 $0
TXU GAS DISTRIBUTION Schedule L 4
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM Page 5 of 7
SUMMARY PROOF OF REVENUE AT PROPOSED RATES Revised 4 0201
FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000
SPONSOR G L GOBLE
Line -n~- -~cription Total
1 TOTAL INDUSTRIAL
2
3 Adlustment To Industr~al Sales Volume - MCF
4 Adjusted Industrial Sales Volume - MCF 610 888
5 Less Per Books Industrial Sales Volume MCF 649~795
6 Adjustment To industrial Sales Volume - MCF (381907)
7
8 Adlustment to Industrial Sales Revenue
9 15t 125 MCF Or Less 1,824 470 870 $858,867
10 Over 126 MCF 160,841 3 676 5917252
11 Subtotal 1 ~4507118
12 1at 600 MCF Or Less 72 2,106 140 151,642
13 Over 600 MCF 68,765 3 336 229~421
14 Subtotal 381~063
15 1at 1250 MCF Or Less 36 4,067 100 146 416
16 Over 1250 MCF 42 706 3 197 136~518
17 Subtotal 282~934
18 GCA Revenue 610,888 3 245 1 ~982T515
19 Subtotal 4,096,630
20 City Street & Alley Rental 4,096,630 0 0000 0
21 State Occupation Tax 4,096,630 0 0586 240~049
22 Total Adjusted Revenue 4,336,678
23 Less Per Books Revenue 27585T665
24 Adjustment To Industrial Revenue $1T751,013
64
TXU GAS DISTRIBUTION Schedule L 4
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM Page 6 ol 7
SUMMARY PROOF OF REVENUE AT PROPOSED RATES Rewsed 4 02~)1
FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000
SPONSOR G L GOBLE
Description Adj Mci Rate Amount
TRANSPORTATION
Adjusted Transportation Volume-MCF 0
Adjusted Per BooksTransportat~on Volume 0
Transportation Volume Per Books 0
Adjustment to Transportation Volume
Rate 1 0 0 0000 0
Rate 2 0 0 0000 0
10 Rate 3 0 0 0000 0
11 Rate 4 0 0 0000 0
12 Rate 5 0 0 0000 0
13 Rate 6 0 0 0000 0
14 Rate 7 0 0 0000 0
15 Rate 8 0 0 0000 0
16 Rate 9 0 0 0000 0
17 Rate 10 0 0 0000 0
18 Rate 11 0 0 0000 0
19 Rate 12 0 0 0000 0
20 Rate 13 0 0 0000 0
21 Rate 14 0 0 0000 0
22 Rate 15 0 0 0000 0
23 Rate 16 0 0 0000 0
24 Rate 17 0 0 0000 0
25 Rate 18 0 0 0000 0
26 Rate 19 0 0 0000 0
27 Rate 20 0 0 0000 0
28 Rate 21 0 0 0000 0
29 Rate 22 0 0 0000 0
30 Rate 23 0 0 0000 0
31 Rate 24 0 0 0000 0
0
32 Total Trans Revenue
33 Total Revenue Taxes 0 0586 0
0
34 Distribution Trans Rev Adjusted 0
35 Less Trans Rev Per Books 0
36 Transpoffatlon Rev Adjustment
TXU GAS DISTRIBUTION Schedule L 4
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM Page 7 Of 7
SUMMARY PROOF OF REVENUE AT PROPOSED RATES Rewsed 4-02~1
FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000
SPONSOR G L GOSLE
Line
1 TRANSPORTATION
2
3 Adjusted Transportation Volume-MCF 8 187 654
4 Adjusted Per BooksTransportat~on Volume 8 093 821
5 Transportation Volume Per Books 93 833
6 Adjustment to Transportation Volume
7 Industrial mranseortet~on Revenue
8 Trans ~ortat~on Fee 19 148 I 025 $1 26 0 5000 12 317
9 Trane ~ortation Fee 124 079 1 025 0 82 0 5000 52 074
10 Trans )o~atton Fee 107 558 I 025 0 80 0 5000 44 251
11 Trane )ortation Fee 1,482 326 1 025 0 79 0 5000 600 689
12 Trane =ortation Fee 857 302 1 025 0 78 0 5000 341 916
13 Trane )ortat~on Fee 315 798 1 025 0 77 0 5000 123 910
14 Tran$ 3orteflon Fee 188 062 1 025 0 75 0 5000 72 585
15 Trane ~ortetion Fee 107,209 I 025 0 74 0 5000 40 686
16 Tran~ ortation Fee 94 299 1 025 0 73 0 5000 35 183
17 Tran= ~ortat~on Fee 55,958 1 025 0 60 0 5000 17 098
18 Trane ortat~on Fee 481 399 I 025 0 57 0 5000 140 900
19 Tran~ )ortation Fee 1,655 616 I 025 0 55 0 5000 463,283
20 Tran~ 3ortation Fee 226 358 1 025 0 47 0 5000 54 605
21 Tram ~ortation Fee 369 837 I 025 0 40 0 5000 76r120
22 Total Industna[ Transportation Revenue $2 075 646
23 ~[lectnc Generation Transoortation Revenue
24 Transportation Fee 1 848 808 I 025 $0 02 1 0000 42,449
25 Total Electnc Generation Transportation Revenue $42 449
26 ~ommercial Transportation Revenue
27 Transportation Fee 29 571 1 025 $0 63 1 0000 19,020
28 Transportation Fee 63,951 1 025 0 46 1 0000 30 277
29 Transportation Fee 39 211 1 025 0 36 1 0000 14 630
30 Transportation Fee 9 437 1 025 0 38 1 0000 3 642
31 Transportation Fee 111,727 1 025 0 36 I 0000 41,685
32 Commercial Customer Charge (1 customers) I 12 000 20 00 1 0000 240
33 CommerciaJ Customer Charge (2 customers) 18 12 000 12 00 I 0000 2 592
34 Commem~al Customer Charge (3 customers) 53 12 000 10 00 1 0000 6~360
35 Total Commercial Transportation Revenue 118,446
36 Total Trane Only Revenue 2,236,541
37 Total Revenue Taxes 0 0586 131~054
38 Distribution Trane Only Rev Adjusted 2,367,594
39 Less Trane Only Rev Per Books 1~91 lr345
40 Transportation Only Rev Adjustment 456 249
'FXU GAS DISTRIBUTION Schedule L 5
NORTHWEST METRO/MID CITIES DISTRIBU'I3ON SYSTEM Page 1 of 3
PROPOSED RATE CALCULATION RESIDENTIAL Rewsed 4-02-o1
FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000
SPONSOR G L GOBLE
Line -n'~"riptlon Total
1 Residential Revenue Requirement $124 298 810
2 Less Revenue From Customer Charge $2 623 044 x $8 00 20 984 352
3 Less Revenue Related Taxes O 5 5353% 6 880 323
4 Less Gas Cost $16 226 489 x $0 0000 0
5
6 Revenue Redu~red From Commedity Rate $96 434 135
7
8 Residential Peak Penod MCF 13 578 298
9 Residential Off Peak Period MCF 2,648 191
10
11 Total Resldenttal MCF 16,226 489
12
13 Residential Peak Period MCF 13,578 298
14 Residential Off Peak Penod MCF - Bleck 1 2,473 887
15 Residential Off Peak Period MCF Block 2 174 304
16 16 226 489
17 Total Residential MCF
18
19 Revenue Required From Commodity Rate $96 434 135
20 Plus (Off Peak Period Block 2 MCF * 0) 0
21
22 Total $96 434 135
23 Divided by Totat MCF 16 226 489
24 Commodity Rate $5 94301
25 Off Peak Per~od Commodity Rate Discount 0 0000
26
27 Customer Charge Revenue $20 984 352
28 Commodity Rate Revenue 96 434 135
29 Off Peak Period Commodity Rate Discount Revenue 0
30 Revenue Related Taxes Revenue 6 880 323
31
32 Total $1241298 810
33
34 BIll Analys~s Adjusted
35 /1/ Residential MCF M(~F Ratio M~F
36 Off Peak Period 2,648 191 0 16320 2 648 191
37 Peak Penod 13~578~298 0 83680 13~578~298
38 Total 16~226 489 1 00000 16 226 489,
39
40
41 /2/ Off Peak B~[I Anelys~s Off Peak
42 Block MCF Block MCF F~;~tiq MCF
43 0 to 8 0 2 473 887 0 93418 2,473,887
44 Over 8 0 174 304 0 06582 174~304,
45 Total 2 648 191 1 00000 2 648~191
TXU GAS DISTRIBUTION Schedule L 5
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM Page 2 of 3
PROPOSED RATE CALCULATION - RESIDENTIAL Revised 4 02 01
FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000
SPONSOR G L GOBLE
Line Description Total
1 Commercial Revenue ReClu~rement $74 971 268
2 Less Revenue From Customer Charge 240,114 x $14 00 3 361 596
3 Less Revenue Related Taxes @ 5 5353% 4 149 891
4 Less Gas Cost 11 253 645 x $0 00 0
5
6 Revenue Required From Commodity Rate $67 459 781
7
8 Commerciel Block I MCF 2 182 342
9 Commercial Block 2 MCF 1,745 181
10 Commercial Block 3 MCF 7~326~023
11
12 Total Commercial MCF 11,253 546
13
14 Revenue Required From Commodity Rate $67,459 781
15 Plus (Block 2 MCF ' 0 3) 523 554
16 Plus (Block 3 MCF * 0 45) 3r296~710
17 $71,280 046
18 Total 11 253 546
19 Divided By Total Commercial MCF 6 334
20 Block I Commodity Rate 6 0340
21 Block 2 Commodity Rate 5 8840
22 Block 3 Commodity Rate
23 $3 361 596
24 Customer Charge Revenue
25 Block 1 Commodity Rate Revenue 13,822 953
26 Block 2 Commodity Rate Revenue 10 530 424
27 Block 3 Commodity Rate Revenue 43,106,317
28 Revenue Related Taxes Revenue 4~14%891
29
30 Total Revenue $741971r 181
31
32 First Next Over
33 ~ 20 MCF 30 MCF 50 MCF Total
34 Commercial Summer I 510 526 1 183 634 5 119 649 7 813 908
35 CommerclaIWinter 658,275 550,907 2 161,041 3,370 223
36 Schools 13~441 10~641 45r333 69~414
37 Total 2 182,342 1 745 181 7,326,023 11 253 546
38 Ratio 0 19392 0 15508 0 65100 I 00000
39 Adjusted MCF 2 182 342 1 745,181 7,326,023 11,253 546
TXU GAS DISTRIBUTION Schedule L 5
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM Page 3 of 3
PROPOSED RATE CALCULATION RESIDENTIAL Rewsed 4 024~1
FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000
SPONSOR G L GOBLE
1 Industnal Revenue Requirement $4 146 066
2 Leas Revenue Related Taxes 5 5353% 229 498
3 Less GCA 610,888 $3 2453 I 982 515
4 Less SO 00 Gas Cost In Base Rate 610 888 I 0000 0 0000 0
5 Proposed Base Rate Revenue $1,934 053
6
7 industrial Revenue From Present Rates $3 060 616
8 Leas Revenue Related Taxas O 55353% 169415
9 Less GCA 610 888 $3 2453 I 982 515
10 Lass $0 00 Gas Cost In Base Rate 610 888 1 0000 0 0000 0
11 Present Base Rate Revenue $908 686
12
13 Proposed Base Rate Revenue $1 934,053
14 Present Base Rate Revenue 908~686
15 Multiplier For Change in Base Rate Revenue $2 13
16
Equals
Present T~mes Proposed
17 Rate Multiplier Rate
18 Rate 1
19 First 125 Mci or leas $202 39 2 1 $470 87
20 Over 126 MCI I 580 2 1 3 676
21
22 Rate 2
23 First 600 Mci or lass $905 26 2 1 $2 106 14
24 Over 600 MCI 1 434 2 1 3 3363
25
26 Rate 3
27 First 1250 Mcf or less $1,748 12 2 1 $4 067 10
28 Over 1250 MCI 1374 21 31967
29
69
iULTING SERVICES, INC.
7801 Pencross Ln Tel (972) 726-7218
Dallas, Texas 75248 Fax (972) 726-0212
May 14, 2001
Mr Geoffrey Gay
Lloyd, (3ossehnk, Blevms, Baldwin & Townsend, P C
1 t l Congress Avenue, Sane 1800
Austin, Texas 78701
Dear Mr Gay
C2 Consulting Services, [nc ("C2"), Bill R McMomes, P E, and Hill Associates~ have
completed the evaluation of TXU Gas' ("TXU" or the "Company") Statement of Intent to
change natural gas burner tip rates for the resldantlal, commercial, industrial, and
transportation customers served within the Nor, hwest Metro/Mid Cities Distribution
' System ~ The follovang discussion provides an overview of the Company's fihng, the
- analyses performed and preliminary recommendations wt~ regard to potentml regulatory
actmns This report is organlzed to provide an overview of the impact of the combined
Consultants' analyses, w~th detailed d~scusslons from each fm'n orgamzed as follows
Tab A - Consultants' Summary Reeommendatmns, C2's Recommended
AdJustments and Summary Schedules
Tab B - Testimony and Exl~blts of Bill R McMomes
Tab C - Cost of Eqtuty Analys~s of HIll Associates
Th~s study does not conmt'ute an examination of the .~nan¢lal condition of TXU or tis
parent company As snob, C2 cannot and does not express any posmon wlth regard to the
accuracy or vahdlty of the financial ,nformauon provided by TXU dunng the course ot
the analyses Addmonally, fray lack of discussion w~th regard to TXU's regulator~
treatment of investment/costs does not necessarily red,cate acquiescence by C2
~ Here~n referred to as "Consultants" un[ess otherwise related to specific adjustments recorra'aendsd by each
firm.
2 The tihng includes proposed changes In rates ~n forty jurisdictions ("Cities") The schools that were
ch~ged ~c public sckoo~ con.act rates d~ng the test ye~ (Ca~ollto~ F~crs Branch ~d Add,son)
have been placed by T~ m the eo~e~c~al customer class along ~ ~e schools located m the o~er
j~lsdlc~O~
71
Mr Geoffrey Gay
May 14, 2001
Page 2
BACKGROUND
On or about February ltl, 2001 TXU flied a Statement of Intent v~th the Crees Due to
an error m the tax computataon, TXU "re-filed" its proposed changes on or about April 2,
2001 that mcludes the foltowmg proposed burner tip rates
Customer Commodity
Charge $ per MCF
Residential. (1)
TXU Proposed Rates $8 00 $5 9430
Customer First 20 Next 30 Over S0
Charge $ per MCF $ per MCF $ per MCF
Commercial' (1)
TXU Proposed Rates $14 00 $6 3340 $6 0340 $5 8840
Current Proposed
htdustrial. (2) Charge Rate
(1) Fast 12$MCF $202 39 $470 87
(1) Over 125 MCF $1 580 $3 676
-- (2) F~sr 600 MCF $905~6 $2106 14
(2) Over 600 MCF $1 434 $3 3360
(3) F~rst 1250 MCF $1748 12 $4067 10
(3) Over 1250 MCF $I 374 $3 197
Current Proposed
Industrial Trans Charge Rate
Per MMBTU Vanous $1 2551
(1) Current rates for resldentml and eomn~er¢lal vary considerably as r~y of the junsdact~ons had
separate rate 6hugs m the past The average mcrease ~s noted below w~th specific increases by
lurachc~aon m~ludefl m the f:~ng
(2) The,industrial rates have remained unchanged since October 1989
(3) The proposed rate for transportation of natural gas xs a not-to-exceed per IvIMBTU amount plus
apphcable taxes
TXU proposes an average mcrease to each of the customer classes as follows 3
, Res~denual Rates - 55 0% increase
~ These percentage increases are based on the average for the enttre system and include TXU's proposed
mclusmu of total gas costs m the base rates (rather than the Ra~oad Com,~sslon approved $2 7535 per
MCF) Vermtaons erast among Clues However only shght vananons exxst for those Clues that were
included in the prior Mad extras Dxstn"ounon System fflmg m 1997 Most of the Cltaes w~th a Cost of
Service Adlustmant ("COSA') show declines m the rates and many of the C~Ues that have not had a rate
increase since 1995 or before show increases that are greater t~.n the proposed average increase
72
Mr Geoffrey
May 14, 2001
Page 3
. Commercial Kates - 65 1%
· Industrial Rates - 35 4% increase
In addition to the proposed changes m the monthly rates, TXU proposes to
increase/decrease various service charges and to include an automatuc adjustment for
weather normakzat~on4
SUMMARY OF CONSULTANTS~ FI~q)INGS
Based on thc analysis of the fihng, subsequent mformanon prowded by the Company,
and a cost allocation methodology that more closely assigns costs based on a cost, causal
relatmnsh~p, the Comultants conclude the follow~ng
1 The cun'ent annual revenues received from all customers served w~tHm the
Citrus are not sufficient m prowdmg a reasonable return on the total
investment m the Northwest Metroft~d Citrus Dlsmbutmn System As
shown on Schedule 2, curr~nt revenues are defiment by approx~nately
$3,640,000 for the total system ~ Th~s compares to the Company's proposed
increase for the d~stnbutton system of $75,775,000
2 The current annual revenues received from resldentml customers located
within the Cmas are not sufflcmnt to provide the Company vath a reasonable
- return on the mvastment requ~red to provtde service to tlns customer class As
shown on Schedule 2, the cu~ent rates for rasldentml customers ~enerate
revenues that are insufficient by approxnnately $1,343,000
The current ~uuual revenues received from the commercial customers located
wlthm the Cities are not sufficient to provide the Company vath a panty
return on the mvestmant requtred to provide serwce to ttus customer class As
shown on Schedule 2, current revenues from the commercial class should be
increased by approx~nately $385,000
~ The weather norm~l~zauon ad~u~tn~nt ~s currently authorized m most of the .~m-tsdlctlom included m th~
f~hn$ It would continue to allow for ad~uslm~nt to the amount ofMCFs fo~ whtch customers ~te b~lled to
reflect nom~l weather patterns Currently, ~d under TXU's proposal, the weather normahzat~on
~d~ustr~nt would be performed vathout the Company lmwn~ to file for a reqUested clmn~e m rotes
Z~ts--a~no~mt ~ prior to the deducUon of the proposed decreases m service ch~r~es Includm~ the son. ce
charge decre~es the reqmred increase m burner up r~tes for the system ts appro~tely $3,791,000
~ The total revenue requn:ements proposed by TXU includes en increase of appro~r~toly $~58,417~000 m
~evenue due to "rolling m" the total cost of $~s at test year-end of $~ 0514 per MCF Tlns mcre~e m gas
cost ts nom~lly provided for m the C~s Cost ~d~ustment Clau~e The remaining mcrense m other
requested m the ~ended fihng C2 also notes tn~ me ~. ........
for the total system do not ~ddress Mr McMomes' recommendaUon that some of the system investment
~nd expemes be ~llocated to use for dehv:ry of backup/standby MCF As of the wntm~ of tb~s ~port,
there ts insufficient d~t~ to e~*~te the ~mount of mvestrn~nt ~nd expense tl~t should be deducted f~om
the system film~ (md thereby reduce the revenue reqmrements)
73
Mr Geoffrey Gay
May 14, 2001
Page 4
4 The current annual revenues received f~om both mdusmal and transport
customers located w~thm the Crees are not sufficient to provide the Company
wth a panty return on the investment reqmred to prowde services to these
customers As shown on Schedule 2, the current revenues from both
industrial and transport customers should be increased by approximately
$I,910,000
5 The current mmual revenue received from the pubhc schools not included m
the commercial class (Ada,son, Farmers Branch and Carrollton) are not
sufficient to prowde the Company v~th a panty return on the mvesunent
required to prowde servmas to these customers As shown on Schedule 2, the
cun-ent revenues from these schools should be increased by approxmaately
$2,000 ?
6 The Company's proposed increases/decreases m selected servace charges
appear reasonable
7 The proposed weather normahzataon clause appears reasonable with the
requ. trement that regular reporting of its use and effectaveness m prowded
- A An~ysts of Investment m the Northwest MetroflVhd Ct~es Distribution System
Prior to the allocation of investment and expense to each of the customer classes served
within the Northwest Metro/Mid Crees Dmtnbutmn System, both C2 and Mr
McMomes evaluated the appropriateness of vanous components of TXU's proposed
total investment m the system AS shown on Schedule 3, TXU proposes a net ongmal
cost of investment m the system of $149,542,457 C2 and Mr McMomes are
recommending a net original cost of mvesmaent of $147,760,165, a reducUon of
$1,782,292 Tlns summary reduction ts compnsed of two major msues with respect to
TXU's proposal
1 As shown on Schedule 3, the first recommended adjustment xs to net plant m serace
The first component of ths recommended adjustment ts to dismbut~on plant and is
related to a chsallowance of certmn CCNC as completed plant m senaee discussed m
Mr McMomes testtmony Based on the filmg, $30,589 of the proposed CCNC for
distnbuUon plant had not been placed into serwce at test year-end In Mr
MeMomes' opunon, these amounts should not be considered plant m servme, but
rather should continue to be evaluated as Construction Work m Progress ("CWIP")
Although placed into servace subsequent to the test year-end, the Company has fmled
? Due to the Company's mabdity to provide certain dam vath respect to the schools (e g peak demand), the
r:venua reqmren'mnt has been astmmted In thc event th: thcs: schools ar~ moved to thc commercml class,
thc total revenue mqture~nts for the syst:m would not b: changed, but the co~mercml class mvanue
ovenge would be increased m approx~mstely $386,600
74
Mr Geoffrey Gay
May 14, 2001
Page 5
to match any add~honal revenue/expense related to t. ins investment as pray,drag
service to customers ~
Thc second component of the adjustment to net plant m scrwce relates to thc CCNC
that ts recor~mendcd for inclusion as plant m scrwce In C2's opu~on, dunng the
~st year m wluch the new rates w~ll be m effect, there w~ll be deprecmUon on this
addlt~onal amount of investment Ttus depreciation should be reflected as a reduction
to the mvestrnent (and as an addltonal operating expense) Because investment is a
"snap shot" of a point m tune, only one.half of the adchuonal expense ~s appropriately
reflected as an adjustment to investment Tlus provides for an average investment
during a year that concludes with a full year's deprecmUon expense ~
The tlurd component of the adjustment to net plant m service relates to TXU's
proposed level of meter shop inventory m general plant TXU proposes to include a
level of $13,388,430 at the total Company, $2,340,899 when allocated to thc
Northwest Metro/M~d Cities Distnbutmn System To begin vath, the Company was
unable to pmwde an estimate of the current investment for wluch these meters would
serve as replacement 10 To include both the current meters and tlus excessive level of
inventory potentially would prowde thc Company with an excessive return on
investment In ad&tion, based on mi'ormataon provided by the Company, the level of
ineter shop inventory fluctuates substantially from year to year
Given tlus fact, and that a more accurate understanchng of the investment for winch
these meters are planned replacement ~s not avatlable, it is C2's opinion that a more
representative level of meter shop inventory is an average of thc last five-year penod
Tlus computation results m meter shop inventory of $4,386,338 When allocated to
the Northwest Metre/lVhd Cities Dmmbution System, the meter shop inventory is
$756,929 or approxunately $ 85% oft. he total net investment m meters for the system
The,recommended adjustment to TXU's proposed level of investment is ($1,573,971)
for the D~stnbution System
2 The second adjustment was provided by TXU m response to RFI 2-15 Supplement
Due to adjusted computaUons, TXU corrected its proposed materials and supphcs
inventory from $484,877 to $321,136, a reduction of $153,741 C2 has incorporated
this adjustment
See Tab B for a complete dmcusston o/'th~s msue
The Company has included the annual deprecmnon expense on its proposed CCI,lC
,0 See response ~o RFI No 2-23
75
Mr Geoffrey Gay
May 14, 2001
Page 6
B. Analysis of Operating Income for the Northwest Metro/1Vhd Cities Distribution
System
As shown on Schedule 4, TXU Is proposing an ad. lusted net opera, t,mg income for the
Northwest Metro/IVhd Clttes Distribution System of $9,965,186 Based on C
evaluation, the total system adjusted net operatm§ income for the test year should be
$9,802,635, or $162,551 less than represented by the Company The chfference is
comprised often recommended ad3ustments
1 The first recommended adjustment concerns TXU's proposed inclusion of total gas
costs as of the test year end m base rates In prior cases, the cost of gas included m
the burner tsp commochty rates has been based on the city gate rate approved by the
Rmlroad Comm~smon T~ns rate is adjusted each month via the Gas Cost Ad]astment
Clause ("GCA") to take mto account the fluctuatmns m the well head cost of natural
gas
In this ~lmg, TXU proposes to mclude a base cost of gas of $5 0514 per MCF and
h~ annuahzed mst year revenue and gas costs to include tl~s rate In C2's opinion,
test year revenue and gas costs should be annuahzed by using the cstabhshed city gate
rate of $2 7535 pet MCF, and allow any over/under recovery of gas cost to continue
to be taken rotc account m the monthly C-CA~ The nnpact of reducing the gas cost is
to reduce ennuahz~d revenue by approxunately $68,400,000, to reduce s~nuahzed
gas cost by approxmmtely $~3,400,000, and to reduce revenue related t~xes by
approxnnately $3,800,000 ~
2 The second recommended ati]ustment ~s related to revenue received for the
transportation of gas to mdust~al/cornm~rclal transport customers According to Mr
McMomes, an adchtmnal $129,298 should be included as "Other Revenue" for a
commochty payment concerm~g transported gas Please refer to Tab B for a detatled
chsousmon ofthts recommended adjustment
$ C2',s recommended adjustment to the lost and unaccounted ~or gas ("LUO') proposed
by the Company is comprised of ~vo somewhat offsetting calculations Fn-st, TXU
provided a oorrectnon to ~ts proposed calculation m respons~ to R_FI 6-14 Th~s
correct,on increased the Company's ongmaiIy proposed LUG by apprommatety
$323,600 However, the second component ts to reduce the per MCF gas cost
proposed by the Company ($5 0~ 14) to the city gate rate of $2 7535 Tl~s reduces the
' TXU'~ revmed filing actually shows a test year adjusted amount of $11,060,719 This amount does not
include TXU's proposed increases m d~prectaUon rates or taxes other than income
t~ The net m~pact ofth~ adjustment m to increase opemnng mcom~ before FIT by approximately
$2,500,000 These adjustments have been calculated hased on the anunahzatton data included m the filing
workpapers Th~ Company has ha~n requested to restate the revenue and gas costs based on the $2 7535
p~r MCF base cost of gas However, as of the writing of ~s report, TXU has not prowded thts m/'ormauon
to verify these amounts
76
Mr Geoffrey Gay
May 14, 2001
Page 7
ad3ustment by $758,000, for a net recommended decrease of approxnnately $434,400
4 The fourth recommended change to the adjusted net operating raceme concerns the
operations and maintenance ("O&M') expenses proposed by the Company TXU
proposes O&M expenses for labor and supphes and expense of $21,774,562 C2
recommends O&M for labor and supphes and exp~nse be set at $21,324,104, or a
reductmn of $450,458 The adjustment ~s prennsed on
Insuffim~nt jusuficatlon for allocating costs from the total dmtnbuUon l~vel rather
than actual costs recorded for each of the juns&ctmns included
Imuffic~ent justification for mcreasmg O&M costs based on customer growth
In prior local d~stnbuUon cases, TXU has reported the "per books" amounts of O&M
ba~ed on the operanng statements maintained at e~ther the actual town level or at the
chstnbut~on system level (a summaUon of all towns included m a parncular
d~stnbuUon system) In the instant filing, TXU begins w~th the "per books" amounts
reported on the tra~l balance of the entire TXU Gas D~stnbuUon and apparently
allocates to the Northwest Metro/M~d ClUes D~stnbuUon System These amounts are
then adjusted for a vanety of total company costs (as allocated to the system level)
and for increases/decreases m customers per the annuahzatlon of customers
_ In a rewew of all junschct~ora included m the Northwest Metro/Mid Cmos
D~$tnbulaon System, C2 noted that the sum of OalVI reported m each of the
jurisdictions did not come,de v~th the amounts TX-U reported as "System Alloeatmn
Per Books ,a~ Adchtmnally, a revmw of the O~Vl per customers over the last several
years chd not show a steady cost per customer to inchoate that such expenses clearly
increase v~th an increase m the number of easterners t4
Therefore, C2 recommends that the O&M expense be ad3usted to reflect the actual
"per books" reported for each of the junschcuons included m tins fihng Although
many of the accounting ad3ustments made by TXU appear reasonable, ~t is not certain
as to whether the amounts on whmh the adjustments are based were ever reported at
the system level Adch+aonally, Dven the trend m O&M per customer for the last
several years, C2 does not behove that TXU has supported ~ts contenUon that O&M
should be increased for pro3 coted customer growth
5 The fifth recommended ad3ustm~nt to operating expense is to reduce uncollect~ble
accounts by $58,628, Please refer to Mr McMomes under Tab B for a detmled
d~scuss~on of tins ad3ustment
u h respome to R.FI No 4-03, TXU stated that ~t had not changed ~ts accounting for costs at the system
level Therefore, aectunulanon of costs reported at the each of the towns included should be equal to the
"per books" for the total d~stnbuUon system
l~Iu fa~ for the years 1998 and 1999, the O&M per customer for the junsd~¢tlons muluded m ~s ~I~u~
were szgmficantly elevated over those shov~ m the pnor years Adchuonally, although customers
continued to ~row m the test year, the costs per customer dechned
77
M.r Geoffrey Gay
May 14, 2001
Page 8
Thelslxth recommended adjustment zs related to taxes other than income TXU is
requesting increases m both the ad valorem taxes and state francluse taxes over the
test ,year amounts t~ C2 has incorporated the adjustment for ad valorem, but has
rewsed the requested increase m state franchise taxes to come,de v~th the
Consultants' recommended cap~tahzatmn
7 Due to the recommended adjustment to the labor poruon of OS~vi, C2 recommends
that,the payroll taxes be adjusted accordingly As a result, payroll taxes have been
reduced by $5,103
8 .As w~th payroll taxes, the revenue related taxes have been adjusted to reflect the
downward adjustment to revenue for gas costs As shown on Schedule 4, revenue
related taxes for the test year have been reduced by $3,779,915
9 As d~scussed w~th regard to the invested capital, deprecmtmn expense has been
reduced to exclude annual depreciauon on those amounts of "completed constructmn
not classified" that have not been included as plant m sennee The total recommended
adjustment to deprecmUon expense ~s ($954)
10 The resulting recommended changes to net operating income before FIT neeeasanly
change the amount of federal income taxes computed for rate-making purposes
_ Because the cumulative nnpact of all recommended operaUng income adjustments ~s
a decrease to operating income before FIT of $508,321, the income taxes on fins
decrease must also be reflected Therefore, federal income taxes, computed at TXU's
proposed rate of 35% are decreased by $345,769 as shown on Schedule 4 t6
C Analysis of the Cost of Capital
The cost of capital used m estabhshmg natural gas rates typically ~s determined by
evaluating the capital structure of the enUty that ~s acqumng the capital and the ongoing
costs to that entaty for such capltal Capital st~-uctures typ~cally include some
comb~natmn of debt, preferred equtty and common eqmty and may include other
components depending on the corporate structures under rewew Analysxs of cost of
capxtal, focuses on an assessment of the weighted average costs of these components
based on the percentage that a particular component ~s of the total capttal structure tmaes
~ts respective on-going costs (1 e interest rate, eqmt7 return)
ts TXU dtd not mclude these increases m ~t~ teat year adjusted amounts, but rather included the requested
mcreeses only m the propoaed revenue reqanrements
~ Tlm cen'~utataon follow~ the ta'adt~.onal approach taken an prior d~ambut~on cases winch ayncl~-omzes
anterest ~d apphes a 3~% ~ rate In tl~s f:flmg, however, TXU has prowded a ea~,~.ted tax computanon
that purppm to reflects adchUonal tax deducUous and adthuous C2 reco,~mends that the C:ues continue
to compute F~ an the tradmonal ,~nner untal auch tnne that th~ propoaed calculation can be shown to
represent a more accurate approach
78
Mr Geoffi:ey Gay
May 14, 2001
Page 9
Because TXU is not an ~nttty that issues tis own debt and equity instruments, there ts not
a caplt~l structure per sc for tlus ~laty However, its parent company, TXU Gas
Company (formerly known as Enserch), does issue debt and preferred equity instruments
that are used to provide capital for the TXU operstaons In adchtlon, TXU Gas Company
receives advances and other prod m capital fi:om Texas Ut~htms Company that are
recorded as components of TXU Gas Company's overall capital structure ~7
Prior to[the late 1980s, TXU used the actual capital structure of Enserch m determining
the cost, of capital for its dnstnbutlon rate filings However, after that tmae, TXU began
to employ a hypothetical capital structure based on a composite capital structure fi:om
other natural gas chstnbution compamas
In the instant filing, TXU is proposing a hypotheincal capital structure that is based on
comparisons with natural gas distribution compamas tkrou~hout the country ts
addmo~, TXU ~s using these compames' costs as they relate to the debt and preferred
eqmty components TXU's proposed cost of common eqmty is based on an analysis
conducted by Dr Brace F~rchtld m Dec~nb~r 2000 ~9 TXU proposes the following
capital structure and cost of capital
% OF
cosx
_ Debt 45 70% ? 27% 3 ~O%
preferred Equity 1 70% 5 79% 10%
CommOn Eqmty 51.50% 12 00%
- 9 59%
100 00%
However, the actual capital structure of TXU Gas Company is mgmficantly chfferent than
the above Based on re.formation prowded by TXU, (i e Deco. abet, 2000), the
capital structure of TXU Gas Company and related costs are more closely represented as
follows
WEIGIt'rED
% OF
Debt ~0 27% 6 87% 2 08%
Advances fxom TUC 22 96% 6 61% 1 52%
Preferred Equity 8 87% 6 18 55%
CommOn Equuty ~ 90% 10 ?5%
8 22%
100 00%
- ' m ~ts SEC filings
iv TXU does r~.port ~ts actual cap,mi st~-ucture
ts C2 notes that the Pu~flroad Cot~m~ss~on approved ~e usc of a h~o~encal cap~ml s~c~e m ~e most
rec~ c~ gate case a~ ~e ~st recent a~eal of a d~m~uUon c~e
t~ Ke~ome to ~ 2-04 _
~o ~ A~soc~ate~ prodded ~e cost of co-man ~qu~w PI~ r~fer to Tab C for a dotafled ~s~on of
~ coat
79
Mr Geoffrey Gay
May 14, 2001
Page 10
As shown, the hypothetical capital structure does not reflect TX'U Gas Company's new
source of capital, ~ts parent TUC 2~ Because TUC advances TXU Gas Company capital
at lower costs than the debt or eqmty shown on e~ther the hypothetical or the actual
capital, structure, the mapaet of reco~nzmg these advances xs to reduce the overall
weighted cost of capital proposed by TXU AdchUonally, by including tlus actual source
of capital, the percentage shown as common equity ~s reduced, further lowering the
weighted cost of cap~taI
Based on the above analys~s, C2, along w~th Hall Associates recommends that the Crees
consider a weighted average cost of capital of 8 22% to be apphed to the adjusted test
year net original cost of invested eapatal The reanltmg computaUon ts the after tax
return that the total Northwest Me~ro/Ivhd C~Ues D~smbuuon SFstem requares m order to
pay interest expenses and provide a reasonable return to eqtuty holders
D. Analysis of Cost of Service by Customer Class
TXU's overall allocaUon methodology ~s prennsed, m large part, on an alloca~.on of
mvestmentYcosts that was used m the most recant chsmbut~on system case heard before
the Railroad Commission 22 The allocation methodology approved m that case was
based on the following
_ · An ass~ment of the lowest possible cost per customer necessary to connect
a customer ("zero intercept' tort)
· An allocation of the remainder of the mvesmaent based on a combma~.on of
volume related and peak demand related factors
Generally, C2 has taken the approach that there should be no "zero intercept" aas~gnment
of cost by customer class, but that a 50/$0 spht between the amount of investment
(roa~ns) that Is allocated on the basts of volume and peak day demand (Seaboard
methodology) ts reasonable However, m the instant ~hng, C2 recox~ends the
following.
· Accept TXU's proposed zero intercept computalaon
· ALlocate the remainder of the mares on the bas~s of 75/25 volume and peak
demand, respecUvely
C2 recommends fins weighting due to the fact that TXU has been unable to support ~ts
reported peak demand by customer class Please refer to Mr McMornes testnnony m
The source of capital f~om TUC m shown as both advmaces fi:om TUC and as common eqtuty TXU Oas
Con, any no longe~ ~ssues common stock, but rather TUC Lssues common stock and provades pa~d m
capatal tO TXU Gas Company
Appeal of TX~f Ga~ Dt~tr~but~on ~om the .~cnon o/the C~ty o/Dallas et al, GUD Nos 9145-91,$8
8O
Mr Geoffrey Oay
May 14, 2001
Page 11
Tab B for a detmled discussion of the dlfficultaes noted w~th TXU's proposed peak
demand,23
As shown on Schedule 2, the following revenue reqmrements result from the use of the
mochfied Seaboard method
· Res~dentmt $82,078,551
· Coramercml $45,471,793
· Industrial/Transport $6,989,632
· Schools24 $358,045
These revenue requirements assume that each customer class will prowde the same
return on its respeetlvely allocated investment az the return recommended for the total
system (~ e 8 22%) Based on these revenue reqmrements wath panty returns, the
adjusted test year revenues by elazs should be increased as follows
· Kesidentml $1,343,409
· Commercml $384,845
, Industnalfrranzpo~t $1,909,781
· Schools $1,776
- E. Analysis of Proposed Automatic Adjustment Clauses
In addaUon to the Oas Cost Adjustment ("GCA") clause estabhshed by the Rmkoad
Comrmss~on, TXU has requested that the Cmos authonze the Weather Norm~b~,at~on
Clause The adjustment clause is designed to smooth out s~grnficant chfferences between
actual heating load and autm~pated heating load under normal weather conch~ons (30-
year norms) If approved, ~t would be employed dunng the months of October through
May (the heating season) and would be sub~ect to vanatmns that exceed fifty percent of
the weather norms C2 and lVl. r McMomes recommend that the Cmos/dow the WNA
w~th the requarement that TXU provide regular reporting to the Cmos of its use and
calculauon
F Overall Rate Design
TXU ~s proposing to mcreaze the resldenUal and commercial customer chargers m those
~unsdmtmns that have not akeady rinsed them to the level of $8 00 and $14 00,
adjusted or the
~ As noted m Mr McMornes tesUmony, the peak demand for the industrial class ~hould be For purposes
weighting between volume and peak demand should be ad3usted from the typical 50/50 spht
of thts report, C2 ~s chosen to adjust the wetghtmg to 75/25 and allow the peak demand as reported by
TXU to remain unch~mged
fo~ those schools not currently on the commercml rate have been esn~ated
~' The revenue requttemants
such peakbased on the propo~onai peak demanas o~me omer cu~
81
Mr C~of-h'ey C-ay
May 14, 2001
Pa~e 12
res .pect~vely TXU is also proposing to umresse th~ mdustnal sales ratas as well as to
estebhsh a not.to-exoeed rote per MMBTU for Wansportat~on ooniract rates
In order to det~,,~, the appropriateness of the customer ~h,r~e increase, C2 and Mr
McMomes recommend that, at a rn,.,r~,~r~; the Clt~es consider tho fonowmg-
Should the revenue stre_~rn to TXU be more stable throughout the year?
Should there be an effort to promote more commodity usage through lower
oor~,~ochty rates?
Should the overall monthly char~s to the customers be less s~ns~ttve to
fluomatmn as a result of usa~?
Increases m the customer charges neoessanly rediwe the commodity rates m order to
aclueve the approved revenue reqturemeni. Therefore, the morease proposed does not
mesll addiilonal r~wnue to TXU, but does potentislly r~ult m a different monthly
rcveaue strew_m_ ,h~n ourmntly experienced.'~ As of the writing of tt~_~ report, Mr
McMomes recommends that tho Crties consider a rest~ntml customer charg~ of $7 00
and a oo~merozal customer oharge of $12 00 Ihs
included in Tab B
With respeot to the TXIYs proposed ch~nl/e m industrial ~as sales rate destgr~ C2's
_ opinion is that the mdusmal rates do appear to requu~ adjustment. However, because
C2 oarinot separate the iranspor~aon computatmn from the industrial sales computa~on
m the overall ~ost of service, C2 does not have any recommended
considered just for the mduatnal rate development.
The ~vorall rate design is chscussed m more detail m Mr MdVlomcs testunony and v~ll
be updated to reile,~: the/inal de~is~ons made by the
C2 greatly appreciates having fins oppo~t~lty to work vath the Cmos served by the
Horthwest Metro/Mid Czt~es Distribtmon System. If you have any questmns re~archng
the projeot activities, pro, eat analyses and/or th~ prehratnary recor~mendat~ons, please
contaot Ms Conme C~-.dy at (972) 726-72115
Very truly yours,
C2 Consultini/Seraoes, ho
:0 Wi~h ht~h~r mon~lfly cus~om~ oharlt~s, TXU po~ually w',tl re~ve mor~ r~v~ue dunng ~o suro_,u~r
mon~s ~n aun'~.ly r~wd and po~ntmlly l~ss dunn~ ~e wirier mon~i~s ~s.n currm~ly recmved The
latler Wo~Id b~ dus ~o lov~r commodf~ ra~ dun~ a p~nod h~ wbloh commogi~' usa~ ~ a ~mch latimer
complm~ of'~
82
:SCHEDULE
TXU GAS
NORTHWEET METRO/MID CITIES DISTRIBUTION 6YOTEM
:SUMMARY OF RECOMMENDED REVENUE REQUIREMENT5
TEST YEAR ENDED SEPTEMBER ,10, 2000
CONEULTANT
COMPANY' PROPO:SED
PROPOSED ADJUSTMENTS RECOMMENDED
Curre/It Resident/al Close Revenue 080,735 14.2 (1) SD $D0,72,5 142
Required ReSidential Glass Revenue ~ (1) (43,070.090~ ~
Proposed Incroeee/(Decreese) ~A,4t 4,388 ($43,070,980) $1343Aoe
CUrTent Commercl;~l Cl~ Revenue $45.443,21:S (4) ($358.298) $45,08S.946
Required CummM~lcl Class Revenue 76.0~,0.161 (1) ~.577.366T ~.&71.793 (2)
Cur~nt Industrlal/Trenoport Revenue ~,900,553 (1) 129~96 $5,079,851
Required indueutcVTrenepmt Revenue ~'1~6.403 (1) ~84.169 6.989.632
Proposed Incmaso/(Decreas,} $1,764,010 $1 ~4,871 6t,D09,701
Currrent Public :School Revenue $~56,268 (3) $0 $350,26*q
ReqUired Public School Revenue ~/A ~/A ~35e.0~D
Proposed Increase/(Decmase} NJA ~Z/A Sl.770
SCHEflULE 2
TXU (3AS
NORTHYTEST METRO/MID {~IT$E~ DIaTR]EUTION SYSTEM
CUSTOMER C[.A~S REVENUE REO~JIREMENTS
INDU~=TRtAIJ
RESIDENTIAl. COMMERCIAL TRANGPoRT ~=CHOOLS TOTAL
CparatJng Expenaes (I) 523,160,546 $7,22S,952 $2,111,20'1 $25733 .~32.523 494
UnaccotJntac[ For Gas (2} 405,984 279 059 221,57B 1,753 908.275
Federal Inqome Taxee (3) 2.195,089 't,ln0,955 37S,124 4,910 3 977,579
C=at of Qas (2) ,44,572,669 9o,721 665 2 7'54,975 292.200 78,341,$05
Return on Iriveatmant (9) 7~248~630 3~632,808 1,248r949 14r2'92 12~144~"i12
Subtotal $77,662,917 $42.959,367 $8,714,522 $3:38 229 9127 664 93:3
RavorllJe Related Taxe~ (5} 4~,49~1734 2~512.428 275~I10 191917 $?1305r066
Current Gas $~le~ Revenue~ (4} S"79,7,4~,465 $44 a96,426 $:3,060.916 $358 268 $128,159 797
C4her Revenue (~=) ~ln~?~l' 90~b'29 2,019,235 O 3r098r412
To,at Revenues I $80~7~5~142 S49~98~M6 66~07%B91 -~,'~ S131,~;~?an
Rovenuo T~eflclonc.'Y (Surplus J S1,343,409 S394,5M S1,669,791 $I,~'/e S3,a3g,:3'12
Other Revenue Inara..e (S) {137'r939) (.t2~627'1 (2261 q160,700)
Gao Sales Rate Dofl,~laney (Gui'plus) j $1~481~44 S39'/~47:3 ~lvOt0r000 S1~778 63~790~61"2
84
SCHEDULE
TXU
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM
TEST YEAR ENDED SEPTEMBER 30, ='000
ORICINAL COST OF INVESTED CAPITAL
COMPANY CON~aULTANT
PROPOBED CONSULTANT RECCMMENDED
CAPITAL (1) ADJUSTMENT8 CAPITAL
Plant in 8ervlee.
Net Dlalnb~.~n Plant $164.~48,144 (;44,481) (1) 3184,~04,683
Nat General Plant g~820~218 (1~574~0el,) (2) 0~048~127
Nat Plant In Service
Other Rata Ba~e Item-,.
R~ulam~y A~SaI 2.078,997 0 2.078,987
Retirement Work h~ Progress 0 0
Working Capital
Cash Woddng Capital (7,355,12g) 0 C7,365,129)
Materials and Supplies 484.BTT (103,741) (3) ~2t,1~6
Prepayment~ 717,802 0 717,0~.
Customer Dapoait~ (3,018.273) 0 (3.610,273)
Cuatomer Aclvancoe far
C=natructian (1,Sla,108) 0 (1,$18,108)
_ Injuries ~nd Damagax Reearve (223,007) 0 (223,007)
Untastored Inveetmant Tax Cmdlt~ (2,084,364) (2,084,364)
Mainline In~ Mater and Rag AdJ (36,365) O
AccumulaLed Deferred Fed. In= Taxes (13~463T225) 0 (13~483r225)
Nat Original Goat of Inva~ted (=aplml $140,~42.417 ($1,133.2'J2) $147,750.¶6~s
(1)c~uiat~d ~m Rat~ ~ ;=~oka~ ami MGM S~lb~ 1
(2)¢a~ tram R~te ~ ~ and Re~mma~ I= RF[ 2-23
(3)~ 'to ~t 2-1 a
85
SCHEDULE
TXU CAE
NORTHEAST METRO DISTRIBUTION sYSTEM
CONSULTANT RECOMMENDED TEE? YEAR
ADJUETED OPERATII4G ~NCOME
COMPANY CONSUL,TAN? COMSULTANT
ADJUSTED RECOMMENDED AOJUSTED
TE~T YEAR (1) ADJUSTMENT8 TEST YEAR
operating Revenues
ResldentJel $120,223,704 (s40,4,7-/,219) (2) $79,746,485
Commemtal 72,S36,866 (27,939,426} (2) S~A,996,428
Induatrla[ 3,060,616
PubLic A,~thoflty
Total Gee Eniac Revenue $1M,675,443 ($S8~,16,647) $13S,159,797
6ewl~J Cha~e Revenue 1,080,812 0 S1 0B0 812
Transportation Revenue 17688~303, 129~9q.
TotallOperatlng Revenue $t96,646,668 ($6a,217,349) $131,268,2t0
Ope~EflG Expenses
Reeldentfal 81.662,752 (37.290 086} (2) 44.,572 655
Ccmmst;lal 54~,716,371 (25,994~700) (2} 30,721,s95
Industrtel 2,TSS,0SS (116} (2} 2754075
Public Autho~¥ 0 202.200 (2) 292 200
Unaccounted For Gas 1 342,~130 (434,356} (4) 90B 275
Other O&M Expenses
O&M Labor 7,417,204 (65,002} (0) 7,362,~12
O&M Euppiles end Expenses 14,357,356 (366~366} (5) 13 671,692
Uncolleut[ble Accoun~ 304 672 (5S,626} (6} 246 044
Taxes Ottmr Then Income Texee
Property Related 2,266,005 (55,s16} (7) 2,212,095
Payroi[ Reistecl 561,570 (5,1o3) (5) 57666'7
Revenue Relsted 11,045462 (3,776,516} (9) 7,26564.7
Provltdcn for Depredation 7,901,643 (954) (10) 7,0;)0,659
interest off Customer Deposits 219,134 0 215,13~,
Interest on Customer Aclvanoea 45~891 0_ 48~831
To~_I operating Expenses Before
Federal Income Taxes $1H~517~520 (6G7f'776~028) $1t5~036~T62
Net Operating Income
Federst InGome T~xea $12,727,73a ($606,321) S1~2t6,4~3
Federal income Taxes 2~752~552 (3,45T769) (11) 2~416~753 ,.
NET OPERATING INCOME $5,569,t65 (S162,561) S5,802,635
86
SCI.IEOULE 5
TXU GAS
NORTHWE$? METRO/MID CITIES DISTRIBUTION SYSTEM
CONSULTANT RECOMMENDED
COST OF CAPITAL
(1) (1) CONSULTANT CONSULTANT
TXU PROPOSED TXU pFIDPOSED pI~OPOaiED PROPOSED
CAPITAL, COST OF CAPITAL COST OF
STRUCTURE CAPITAL STRUCTURE CAPITAL
DeW 46 70% 3 40% 30 27% 2 06%
Preferred Stock
Advances from Parani 0 00% 0 00% 22 ~6% I 52%
C~rnmon Equdy(3) 01 60% a 19% 37 90% 4 07%
100 00% B 69% 100 00% a 22%
Weighted Cost of Capital 9 69% 8.22%
8'7
SCHEDULE 8
NORTHWEST METRO/MIS CITIES DISTRIBUTION SYSTEM
INVESTED CAPITAL AND AG,JUSTED VALUE MATE BASE
TEST yEAR ENDED SEPTEMSER 30, 2000 (2)
TOTAL (2) (2) INDUSTR&AU
SYSTEM RESIDENTAL COMMERCIAL TRANSPORT SCHOOLS
Net O;Igiflal C~! ;ff Plant in Eervlaa
D,strib~on Plnn'L
Me(em $1:3 109,532 $7 590,791 95,14q,724 $364,486
House Ragutastor n~cl Instat~ Mats 3,264 03t 1,696,959 1,280 882 90 750 2 E28
9B~t~:s 43 825,397 26 646,680 16 819 490 328,882 34,528
Cu~omer A.~gflmemt 31,325,949 26,541,641 2,719,206 80 487 5,362
CommodRy NIo~t~ons 6:3,776,92D 24,027,177 19 580,913 13
Total Maine $103,028,072 $63,521,041 $24,483,702 $15 3M,548 $'136 790
Tot~[ Dtstribution Plant $t64,904,683 1100,174,960 r~l~,ln~8 $.19,42'J,022 $196,723
General Plaflt 8T04~[127 418971781 %3,48A11 80%224 9[111
Total Plant Iff n~lan 817;t.960,911 $105,062,431 $60,470,299 SI?,2Z2,246 $1951834
WotldnO Cap,tel (733 411) (8 340)
Cass Working Cap,tel (7,385,129) {4 474 08~t} (2,148,283)
Unamortized Ra~as Cm Exp 0 O 0 0 O.
-- Total Addibnna (94,247,304) ($2 580,1'10) ($1,238 443) (~422 542) (54 809)
Customer Dep~Mte and
Customer Advannee ($5,136,381) (54 706,428} ($429,555) S0
Mainline Meterland Rag Ad) ($36 368) $0 60 (S38 365)
(2,094,364) { 1,266,156} (806,257) (207,589) (2380)
Total anginal Coast Invented CaFdtsl $147 790 '&ets S98 155 731 $44 198 744 $15 192,521 S173 188
Total Rate Base Aa Afio=at~d [ 1147T760~166 $88tt861731 $,&4,TIGBT744 $19:192~821 6173~t66,J
88
B,-"HE~I'JLE
NORTH~$T METRO/MID C~E~ DIST~B~ON
OPE~N~ ~PEN~E~ ~C~UOING G~ COST ~D R~UE T~E5
~8T Y~R ~DED SEPTEMBER 30, 2000
(~) (2)
TOTA~ (2) ~) INDUST~ (2)
SYSTEM ~81DE~L ~MMERC~ T~BPO~ SCHOOLS
Dl~b~on
Suppli~ & ~s 3~0t,e02 1 ,~,~ e~aa 318,~12 3,~
Custo~r ~, ~fo &
~r 3~60,547 2,050,752 30G,317 2,g1~
Supplies & ~n~ 3~2~SBB 3~151 706 327~ ~ 3~11~
Bubto~l
~bor ~,1~0,~3 S63B6,GO~ $1~Z,742 ~7,~6 $4,920
5uppl~ & ~es 6,~t00 6,006,5~ ~,261,~5 321,030 4,212
~mlnb~ve and GenBMI
~r ~31,~9 $172,204 ~,590 S12,5~ S180
Suppl~ & ~nm~ 7~87,802 5,~56,828 1,375,380 351,002
Con~o~ O 0 O 0 0
Un.liable ~ounm 2~ ~5 ~ 2OTto o 0
Total ~h~r O~m~ng ~pen~a $7,765~9~ S~,g~,480 Sl ~2,~7 $363,~gG
Summ~ of O~dng
~bor ~,3~,112 S5,~7,810 Sl ,479,333 ~66,8e0 SS,DSO
Supples & ~pen~s 13,9?1,B02 10,653,411 2,~6,B4S ~,9~
~er ~ans# 2~ O~ ~5~6 2O~S~ 0 0
-- TG~( O&M ~n&aa ~21,~0,1~ S16,~e,670 ~13G,T74 S1,072,B21 S13,B83
Pro.on for Depre~adon S7,~0,569 ~ 769 431 S2,305,570 S78B 742
Inte~ on C~mer Dopo~ 215,1~ 197,126 18,008 0 O
In~m~ on Cu~mer ~anoee 4B,831 44,743 4,068 0 0
Pm~ Rela~ T~ea 2~12,~65 1,~3 781 645,531 ~0 276 2 505
Payroll Rela~d Tins 676~7 42B~797 1167012 31 ~0 308
To~I OperaUng ~ ~ludlng
Gas ~ a~ Re.flue Rela~ 1 ~2,~23,~4 ~3,160,548 57,~5,982 ~,111~01
Re.hue Raqql~nt Far
~pena. ~=ludlng
~st and Rev Taxes ~ ~?~?~4~ S~lSO~ ~7~22Sts82 S~111~201 S2S~733
SOURCES
89
SCHEDULE R
NORTHWEST METROII~ID CITIES DISTRIBUTION SYSTEM
CAL.CULATION OF FEDERAL INCOME TAXES BY CUSTOMER CLASS
TEST YEAR ENDED SEPTEMBER 3n, 2000
TOTAL. INDUSTR~d-/
SYSTEM RESIDENTIAL COMMERCIAL TRANSPORT SCHOO{.S
Invl~ Capital
Det;t 30 27% $44,729,315 $25,698,23g 5~3,:375 652 $4 559 014 $52.421
Prefa~'acl Stock 8 87% 13,10z3,142 ?,B19,270 3,918,575 1 ~4'q,941 t$,353
Ac~Qm~ from Parent 22.96~ 33,930,549 20,252,514 10,149,472 3 488,~08 39,755
Total Invoata~ C~pltJiJ (2) $147,?M,165 $M,t91,731 $44,10~,74,'~ $15,192,~21 $171,f68
Rs~Jrn l~ClUlremsnt
i~ $f,3'J4,324 i:3 172,0:37 Sl 585,847 S54S,412 SE 228
Tot~ R~turn Requimmant $1211441112 STr;~t130 $3r632T508 51~2481&43 1141232
Fad.~rld tn=omo TaJma I $3reTTrb'T8 62115OT0~0 SI Tt(X~tOB~i S378T124 $4r310 J
TXU GAS DISTRIBUTION
NORTHWEST METRO/MID CITIES
FILED February 16,2001
fIVE DATE: March 23, 2001
SUSPENDED TO: June 21, 2001
JUNE 2001
C2 CONSULTANTS
BILL R. MCM01111W~S, P.E.
91
TABLE OE CONTENTS
Page
Executive summary ................................................................ Begmnmg
]Purpose of Testm~ony .............................................
Explanation and g~xh~bits:
Construction Work in ]Progress
Exhibit 1, Pages 1 & 2
Transportation?industrial Customers M-5 to M-7
Calculation of Peak Demand for Transportation/Iadustml M-8 to M-10
Exhibit 2 M-11
Depreciation Expense M-12
Uncollectible Expense M=13 to M-14
Exhibit 3
-- Donations M~I6
Exhibit 4 M-17
Rate Design M=18 to M-19
~xhlbits 5, pages 1, 2, 3, 4,5, & 6
Miscellaneous
Comparison of Expenses Per Customer A-I
]Peak Day Comparison A-2
Vital Stat~tic~
Most Recent Approved Rates by Citaes A-4
Monthly C~ty Gate Rate A-5
Qualifications - Bill R. McMorrles, P.E. B
TabIBcon. mem
92
BILL R. MCMORRIES~ P.E.
93
EXECUTIVE SUMM.4~Y
Bdl P.. MclVIornes,
1 Fdmg- T~ G~ D~nbuflon filed on Feb~a~ 16, 2~1 to mc~ ~nu~ revenue m
the ~0~h~ ~e~o~d C~ D~trsbutlon Sy~em by $10,ZS6,8~ or ~.~%. ~e
Cl~es iwho suspend~ rat~ for ~0 days ~om ~e ~fec~ve date wo~d hawe un~ J~e
2~1 to ~dy ~d t~e a~on on thru requ~ ~ April 2, 2~1, ~ ~ed ~s~
pages to co~ a major ~or m i~ o~n~ fi~g ~e r~sed ~mg reduc~ ~e~r
requited in~ease to $7~8~98 or 3 69%. ~ere ~e 4~ sep~a~ ~ ~d s~en~
m~uded in this fihng. ~e date of approv~ for ~e ~mg ra~ (i~ rate case or
adju~me~t) ~e sho~ by ~ ~d s~ment under App~d~ A~ and va~ from
10, 1982 for Ro~oke to May ~0, 1~9 for M~field
2 ~. ~commend rmovM of ~0~0 from Pl~t m Se~c~ because the co~on
proje~ ~la~ng to th~ co~ w~e not y~ complet~ ~d plaid into sauce un~l a~r
· e e~d of~e t~ ye~. Ad.ag oMy ~e ~m~t to ~e rate b~e on thee n~
customer proje~ c~at~ a mismat~ b~n in~ent, ~ens~, m~ ~enu~
Comply fMl~ to prov~ ~e ne~ to m~ude the co~ for uncompl~d proje~ ~
nec~S~ for ~ ~t~.
3 Indu~a~du~ Cu~ome~ ~ propos~ r~o~ng ~37,~I of r~ue for
Ba~up ~d S~dby f~ ~ause of ~e ~lroad Comm~sslom ruhng i~ G~ 8976
It would appe~ ~at f~n~ ~ ~qm~ ~at sm~ the r~ue m to be ~d~d to
~ ~SP's ~o~a~on co~ of sauce ~en the co~ of se~ for ~ese cu~omer be
aBocq~d away from ~ D~ufio~ IfLSP is to g~ ~e r~ue then LSP n~ to
be ~sgned ~e ~em~
4 Pe~ Dem~d CM~,d*~ons for Indu~ffr~soo~on Cu~ome~ We ~omm~d
- that fii~er ~e dmi~ p~ for ~ cu~me~ to be a mimmum of 87,~1 M~ ~ day
m heu of ~e Comp~y's ~cula~ons of ~4~7~M~ or the demand component of the
S~bo~d ~iocafion Me,od ~ reduc~ maten~ly ~ f~ed to ~e iU normM
meth5d ~ d~ning ~ ~mated ~ for ~e Industcyffr~po~a~on
~. Deu~ ~e comply proposm incense m dep~da~n ~nsm of
~9 (~om ~,798~ to $7~1,~3, S~edule ~). ~fle ~ls ~e~ m
denr~a~on ~p~e ~s unw~r~te~ the T~ Rmlroad Comm~slon h~ ~c~y
~, ~ ~omm~d dss~prov~
~. Recomm~d ~ adjusment downw~d of ~,6~ to co~pond ~th
~efi~c~ bad debt loss.
7 ~~e Comply h~ reque~ed ~ a ve~ sm~l ~ount of donaUom ($1,765)
~ indud~ ~ the co~ ofs~ ~e CIU hm a ~o*ce wh~ to include donmons
S ~ ~e month~ Custom~ ~ce Ch~ges v~ wea~ by
~er~e (~m~c) of~e R~den~ ~d Commer~ Cu~omer Ch~ge ~
~U~at~ at ~.77 md $10.79 p~ mon~ r~pe~.
We ~commend ~e c~omer s~ce cha~ be ~bhsh~ at not more th~ $7
~d S12.~ for R~ldena~ ~d Commer~M ~pec~.
9 ~ Und~ App~d~ A ~e ~e following informa~on data:
~o~mon of~s~ P~ Customer, Pe~ Day Comp~sson, ~tM
S~fi~cs on usage by d~s ~d number of ~stom~, ~t~ by Cm~ of
mo~ re~t rate c~ & g~ co~ (gate ra~) ~ monks.
10. W~ather ~orm~izauon Adlus~ent ~aus~ we have no obje~on (at th~s ~me) to
use ~ ]tl~s intended to be r~enue neut.. ~cSum ~m
94
Bdl R. McMorne~, P.E Gas Rate Consultant
PURPOSE OF TEST/MONY
Q What is the purpose ofyour testimony?
A The purpose of this testimony is to present recommendations to officials and
staffs of the Cities m the Northwest Metro/Mid-Cities D~stnbution System of
TXU Gas D~stnbution in regard to Construction Work m Progress included
as Plant m Serwce, calculation for peak demand oflndastrles and
Transportation Customers, Depreciation Expense,
Uncollectible Expenses, Donatsons, and Rate Design.
Q Would yon describe the nature and scope of work performed by you in these
proceeding?
A We were retained by the Northwest Metro/Mad-Cities to review, evaluate,
and to prepare recommendations in regard to TXU's ~ing and supporting
data, and to asmst the C~ty staffs in malong recommendations to the City
Couneds tn the matter of a request to increase rates to these Cities.
Q Have you prepared any exh~its supporting your recommendations?
A Yes. McM Exhibits 1 through 4 were prepared by me or under my
supervision.
Page
95
Bdl R. McMornez, P.E Gas Rate Consultant
Construction Work in Progress
Q OD Mc.M Exhibit 1, page 1, please explain why you recommend an
adjustment downward of $30,580 to the Company's Net Plant.
A An adjustment Is recommended because the Company has reclassified some
cNArlp projects as Plant m Service even though the projects were either
projects that added new services or projects st~H not complete at end of the
Test Year. GURA requires uncompleted CWIP projects to be omstted from
the rate base unless ~t is necessary to malntmn the financial integrity of the
company The Company has offered no reasonable proof that it rs necessary
to include CAVIP m the rate base ~n order to mamtmn financial integrity of
the Company.
If the Company can show that certain proJects were completed and placed
into service before the end of the test year, these proJects might be considered
as plant in service. Fairness requires a corresponding adjustment for
added revenue and expenses so a mismatch between rate base, revenue, and
expenses does not occur. The Company has faded to identify and quantify
the expected revenue and expenses from these added customers.
In response to RFI 3-29, Attachment 2, the Company shows that $30,580
of CWIP was completed and placed m service after the test year. See
McM Exhibit 1, page 2 for a list of these proJects. Also all of these add
ADDTO rtwrn Page M-2
96
l~ill R. McMornes, P E Ga~ Rate Consultant -
McM Exhibit 1
Page I
TXU GAS DISTRIBUTION
Northwest Metro/Mid Cities Distribution System
TYE 9/30/00
RATE BASE
Adjust-
Company ments Consultant
Ongmal Coet $ $
Net Plant 11 174,569,362 -30,580 =/ 174,538,782
Construction Work In Progress 0 ~/ 0 O
Retirement Work in Progress 0 0 0
Working Capital:
Working Cash Allowance -6,205,161 0 -6,206,161
Poly J-Safety Compliance 2,078,997 0 3/ 2,078,997
- Customer Deposits & Advances -5,136,381 -5,136,381
Injury and Damage Reserve -223,007 -223,007
Ind. Mainline Mtr& Reg Adjust .37,846 0 -37,846
Deferred Income Tax -15,547,589 -15,547,589
TOTAL INVESTED CAPITAL 149,498,375 -30,580 149,467,795
Source~ghedule K. f , page ,l of 3
f/f.fA & MgM Exhibit 1, p.2 2/M=M Exhibit f,
97 Page M-3
Bdl 1L McMornes, P.E. Gas Rate Consultant -
Mc~ Exhibit 1
TXU GAS DISTRIBUTION
Northwest Metro/IVied C~ties D~stnbut~on System
TYE September 30, 2000
D~SA~LLOWED CONSTRUCTION WORK lin I'ROGRESS
TOTAL SYSTEM
Completion
ER N~mber D~te Amount
DISTRIBUTION:
Uncompleted st end of Test Year
Also projects ident~fled as adding customers or increasing volumes
1216367G Not Complete at e~d of Te~t Year
1227670~ Not Complete at end of Test Year
1246022G ~ot Complete at end of Test Year
1234642G Not Complete at e~d of Test Year 161
ll?S?33G NOt Complete at end of Test Year 3'1,183
-- 122406~G NOt Complete at end of Test Year
1235493G NOt Complete at md of Test Year ~,.~*
12390S2G Not Complete at end of Test Year
1241284G Not Complete at end of Test Year
12~34G NOt Complete at end of Test Year
11~8~93G Not Complete at md of Test Year
1209416G NOt Complete at end of Test Year 604
~2.~0168G Not Complete at end of Test Year 317 £/
1268883G Not Comulote at end of Test Year (1.072~ £/
Total C'~V~-Total System $30,~8~
Summary:
Disallowed all CA~P claimed -- $
Pl~ di~nllo~, balance to l'lant in Serwce -- 30~80
Disallowed CWI~, Plant in Serwce -- $ 30,~80
Source:l workpapers 7/.~'~ C~oa~rs J~es~onse $-~ 2#~t
~ Stn~e ~oughts are nc~ included m ~he $915,79~ of
98 Page
~ Ball R. McMorrms, P E Gas Rate Consultant
TltANSPORTATION & INDUSTRIAL CUSTOMERS
Q Is ~N~U requesting the citi~ determine the rates to be charged the
Transportation and Indastnal Customers?
A Yes, in the Statement of Intent filed in this case TXU has requested
tariffs be established for Industrial Sales 01ate Schedule 410:3) and
for Industrial Transportation CRate Schedule 4104).
Q What are the increases proposed by TXU for the Industrial Customers?
A A.42.99% increase Is proposed for thelndastnal Sales customers. The
revenue under ex~sting rates ~s 5~3,060,617 whde the proposed new rates
would prowde $4.376,237 per year. (Schedule L-2, page 7)
A 26.93% increase is proposed for the Industnul Transportation customers.
The revenue under existing rates is $1,888,303 (Schedule L-2, page 10) while
the proposed new rates would prowde $2,396,739 per year. (Schedule L-2,
page 9 & Schedule L-4, page 7).
Schedule L-4, page 7 of 7 shows the proposed new rates for Transportation
customers as follows:
14 Industrial Transportation customers ~ $0.41 to $1.27 per MCI
1 ~ieetric Generation Customer (~ $0 02 per MCF
- $ Commercial Transportation customers (~ $0 37 to $0,64 per MCF
All the revenue generated from the rates above ~s proposed to be credited to
this D~stnbution System except the 14 Industrial Transportation customers
revenue is d~wded S0% to this Distributmn System and 50% to Transmission
System.
Q To what system does TXU propose the increase in the margin for the
Industrial Sales accrue?
A In Tariff 4103, it states" 100% of the mcrease in industrial margin is to
accrue to the benefit of TX'U Gas Distribution'.
Q What is the existing and proposed margin m the Industrml sales rate?
A Existing Rate Schedule 48-N and proposed rates prowde margins as follows:
CRate less $1.00 for gas):
~ ! ~lsimg- $0 $8 per MCF over 12:5 IvlCF (S202 39 rmmmum)
PrOl~sed $2 '/41 I~r MC~' over 12:5 MCF ($4'/9 21)
Rate 2 F_mmng- $0 434 tm' MCF over 600 MCF ($90:5 26
PrOl~sed $2 39:5 per MCF over 600 MCF ($2,143 43
t~te3 F~slmg-$0374/m'MCFoverl,2~OMCF($1,74g 12rmmmum)
Proposed $2 2:53 p~r MCF ov~ 1,250 MCF ($4,139 10)
.Page M-5
99
Bill IL McMomes, P.E. Gas R~te Consultant
Q To what system does TXU propose the increase ~n the transportation fees
accrue?
A In Tariff4104, ~t states "100% of the increase in transportation fees
incurred to move the gas from the c~ty gate to the customer's facihty ~s to
accrue to the benefit of TXU Gas Dtstnbutton'.
Q How does TXU propose the revenues from standby and backup fees be
credited?
A The Standby and Backup fees are not included tn this Dtstrthut~on System
revenues. Schedule L-4~ page ? of? shows the revenue at proposed rates at
$2~396,739 and there are no standby or backup fees included
On T2~'-LT's workpapers WP/L=I.I/1 (page 196) adjustment to test years
expenses are shown ns follows:
11 Adjust Re~n~ to reflect l~llmm.~llon of ~lldllfflnal/J~ec~l¢
C-~raon Baclcup Fe~ ($30,I~0)
12 Ad. luSt Othe~ C~s Revenue to reflect ehrmn~hOn of
Backup/Stupefy Fees ($537,401)
In TXU's respouse to Questton 1-02a of C]t]e~ RFI Set No. 1, TX-LT states
'Backup re= aud smuc~y.~ were remowl from tins ~,nS because ~ a~ to a part of
lhe '¥XU Gas D~n'bu~on rl~nm~l~m Cost of Serwc¢ proceechng
Q How do you recommend these backup and standby fees be handled?
A According to Response to/-03, the backup fees are for serwce that ~ull no lenler be
offered so/t appears the Generation backup fees of $30,150 should be removed The
Backup/Standby fees of $-~37,401 are que~onable. TXU contends that these fees
were removed to comply w/th The Texas Railroad Commlsmon's order in GUD
89?6. The Final Order m that case (m Finding of Fact 100 & 101) st~puinted
100 ~'~e stand-by ser~c~ revenues are not atr~butable to ~
Gas-Dtst~'butio~
101 Stand-by set.ce revenue of $£, ~81.~11 should be credated ~o
27/IU L?P's transportation cost of se~oe as other revenue
It would appen~ that dtbe stand-by settee revenues are not attr~utable to the
Ihstribotinn System that must pro~ude that ser~ee when called upon, then neither
should the expenses to serve be attributable to the Dlst~'but~en System. Since TXU
has failed to prove (response ~-03a) that gas, when required, would not flow through
the D~stHbut~on System, then ~t has also fmled to ~ashfy why some investment and
operating expenses should not be allocated away from the other customers that use
the system It appears th~s ~s a instant where one system (LSP) gets the revenue and
another system (Northwest Metro/l~d Crees) gets the expenses. The lo&feet
benefit (cre&t TXU~s LSP's transportation cost of serwce) to th~s Distribution
System ~s dduted to such an extent that renders such method as ~neqmtable~
100
Bdl IL McMornes, P E Gas Rate Consultant
S~nce the company has failed to justify this revenue removal, have failed so far to
demonstrate that th~s Dtstr~bution System would not be revolved in transpomng gas
to these customers, and has failed to demonstrate the fairness ofth~s concept, then
some allocation of expenses and rate base needs to be assigned LSP transportation
cost of servace
Q Are there any other revenues relating to Transportation customers that
needs to be adjusted?
A Yes, In addition to fees charged for transportation, TXU requires a
commodity payment of generally 1 to 1.5% of the gas transported. In
response to Cities RFI Set No. 3, Ques~on 3-78 this was identified ns
a credited amount of $129,298 (39,327 MCF ~ $3.2878 per MCF)
which was credited to Account 8050800, retentson d~stnbution credit.
This should be included as Other Revenue.
Tran~oortatton n~vm
Page .M- 7
101
BH! R. McMorries, P E. Gas Rate Consultant
CALCULATION OF PEAK DEMAND FOR INDUSTRY
AND TRANSPORTATION CUSTOMERS
Q Please explmn the purpose of MoM Exhibit 2.
A This exhibit shows the calcalat~on by the Company and also our
recommendation of the peak demand expected for the Industrial and
Transportation Customers.
Q What is the amount of the design peak you recommend in this case?
A We recommend a design peak of $7,081 MCF per day be assigned to the
Industrial and Transportation Customers.
- Q Why are the design pe~ks necessary?
A. It is necessary to determine the re~afive peak demand of each customer
class to assist m the determination of class cost. Allocatmas and assignment
of cost are required in this case since the industrml and transportation rates
are not a part of the rates to be determined m th~s case. Therefore there
needs to be a fair method of estimating the cost to be assigned to the various
glasses.
Allocations are not an e~ct science but are based upon judgements as to
what method would be fair to assign cost. The Company has no lead studms
to assist in th~s endeavor or to support their theory of allocations. Also the
Company does not have measured peaks for its customers so some form of
Page M..8
102
Bill R. McMornes, P.E Gas l~te Consultant
estimntmg must be employed to calculate these peaks.
Q Explain why your recommended peak design for Industrial and
Trar~sportatqon customer~ are 87,081 MCF per day wh~le the Company only
shows a recommended peak of 54,375 MCF per day.
A Look at McM Exhibit 2. In response to RY[ set no. 5-14 the Company
presents its calculation of the estimated peak day for
Industrial/Transportation. Thew calculation were as follows:
Baso Load was soloctzd a~ the month of August 2000 The usage *h~ month was
re, ported as 591,396 MCF (excludm.~ Denton Power Plant) $o for the month of
August the average dady use was 19,077 MCF Based upon a FIeatnng Factor
of 111 3 the Company e~mx~d ~ pr~k day ox 24,641MCF To tim pask
number tho Company added th~ peak day measured at tho Denton Power
Plant of29,732 MCF ~ September 20, 2000 So the Company assume~ ~ peak
~ peak day of all oi~er Indasmal/Transp~ Customels = 24,641
A~aal ~eak day ofli~ Dealon Power Plant on 9/20/00 = 29.732
- Total of Company's estunated Peak Day m MCI/Day = 54,3?3
The method used in th~s ease by the Company is not the nonnul method the
Company uses m determining peak day for Industrial/Transport. Normally the
Company calculates each mthviduul customer's contnbutmn to peak and then sum
the mdreidual peaks. In it response the Company said (3-14) that due to the large
number of Industrial/Transportation in this distribution system It did not calculate
the individual peak for each customer. In response 2-37 there appears of hat of
some 275 Industrial/Transportation customers. In request 5.14, we asked for the
raw inf0rmatmn so that we could make these individual peak caiculahons but the
Company failed to prowde such data. Therefore we recommend either:
a. The peak day demand percentage (50%) be lowered in the Seaboard
Allocation Method and the Volume Component be increased or
b. An estimation of the peak day determined if each individual
customers peak was calculated.
Pa~e M-9
103
BHi 12. McMornes, P E Gas Rate Consultant
If "b' above is utilized then we would recommend the following as the peak day for
the Industri~al/Transportation Customers:
Total flnnual Usage for Test Year for th~so ~ust~aets 6,949,734 MCF
Ave~ago Daffy Usag~ 19,040 MCF
Use Load Factor m the Cth,~t I-Ifil Country Case 33 2%
$o pe..ak Day ~s ~stm, o~,t at 57,349 MCI: for all
except the De,ton Power Plant
Add the De~Wn Power Plant's measured leak 29,732
Estu-na.~l P~ak Day tor Industnal/Transportaaon gT,0gl MCF/Day
See MoM Exh'mt 2
.P~ak. da~ nwm
.Page M-10
104
Bill R. McMornes, P E Gas Rate Consultant
Mc.M E. xhlbit 2
ESTIMATION OF PEAK DAY
NORTHVVEST METRO/MID CITIES DISTRIBUTION SYSTEM
TXU's METHOD OF ESTIMATING PEAK DAY- INDUSTEIAL.ri'RANSPORTATION CUSTOMERS
est Monthly Average Ava Dally
ear Usage [)ays Da~ly use Months with Zero HDD Usage
Oct-99 564~98 31 18,219 May-00 557075 31 179,,u
Nov-99 511104 30 17,037 Jun-00 559147 3,0 18658
Dec-99 711250 31 22,944 Jul-00 512589 31 18535
Jan-00 64tl 39 31 20,682 Aug-00 591396 31 19077
Feb-00 661352 28 23,620
Mar-00 63023,4 31 20,330 Base Load* 1 9,077 MCF/Day
Apr-00 50971 3 30 16,990 Heating Factor 111 3
May-00 557075 31 17,970 Design Day Demand 24,641 MCF/Day
Jun-00 559147 30 18,638 Plus Denton PP Peak 29,732
Jul-00 512589 31 16,535 Total 54,373 MCF/Day
Aug-00 591396 31 19,077
Sap-00 499937 30 16665 *Excluding Denton Power Plant
66497:~1. 365 19040387
Design Day 24,641
365
6949734 8993985 0 772710812 Load Factor
CONSULTANT'S ESTIMATION OF PEAK DAY USING THE HILL COUNTRY LOAD FACTOR
Average Day* 19,040 MCF
Load Factor 33 20%
Peak Estimated 57,349 MCF/Day
Plus Denton Power P 29,732 MCF/Da~/
Total Peak Day 87,081 MCF/Day
Re~ponee 3-14
Peekdayf nwrn
Page M-I 1
105
Bdl R. McMorries, P.E. Gns Rate Consultant
DEPRECIATION EXPENSE
Q ffnve you reviewed the Company's proposed change m depreciation
rates and proposed depreciation expense?
A Yes.
Q Please explain the change m depreciation rate and expenses.
A TX-U proposes to use the Equal Lsfe Group (ELG) method of
depreciation for its propemes. TXU proposes n increase in
deprecmtion expenses of $1,102,739 (from $6,798,904 to $7,901,643,
Schedule D-4).
These new proposed rates of depreciation are based upon n study at
December 31, 1999 that the Company obtmned.
Q Has the Radroad Commission approved the ELG method for
deprecintmn on any of TXU's Distnbntmn Systems?
A Yes, the Equal Life Group (ELG) method of deprecmtmn was
approved by the Texas Railroad Commission m the recent Dallas City
Case (GUD Nos. 914~-9148 in November of 2000).
Q Is TXU proposing the same survivor curves, lrees, a~d salvage values
approved in this City of Dallas ease?
A Yes, The proposed new rotes in this ease are based on ~ELG method
with the same Iowa Survr~or Curves, lives, and salvage values
approved by the Railroad Commission in the Dallas case.
Are you recommending approval of TXU's proposed new
depreciation rates?
A While this increase m deprecmtion expense seems unwarranted, the
Texas Railroad Commission has already approved such rates. We
are hesitant, un~ there is further study, to recommend that tim
increase not be allowed.
The examiner for the Railroad Commission recommended that the
Average Life Group (ALG) method be used In the Dallas case and
that would have materially decreased the rates for depreciation but
the Commission over ruled its own examiner on this mane.
Until the Railroad Commmnon becomes convinced that there ~s n
better method to determine depreciation expense then we may be
wasting our efforts.
depreclatlonexp~nse nwrn
106 ~Page M-12
Bill IL McMorries, P E Gas Rate Consultant -
UNCOLL~CT~LE EXPENSES
Q In uncollectible expenses, the Company proposes $304,672 for the test year
Do you agree with this amount?
A Please refer to McM Exhiblt 3. In response to C~faes RFI 3-07 TXU
indicates that beginning with October 1999 they have changed their pchcy in
determining the amount of charge off for uncollec~ble~. The bad debt
expeflse is accrued based on the historical percentage of bad debt wnteooff.
The percentage is derrved by applying the 12-month average write-off
percentage for each aging category to the total account~ receivable balance
by aging category. Prior to October 1999, bad debt expense was based on
actual customer net-chargenffs. There has been very little fame since
the new policy was placed in effect so it is ddficult to know whether the new
method will increase or decrease the bad debt expense so I recommend
the last available data be used for this expense which ts calendar year
2000 of $246,044.35. This is shghfly more than calendar year 1999
of $2:~2,618.37 ('Response 3-07). The net Charge-off Amount for the
Test Year was $231,187 so either thc calendar year 2000 or the Test
Year amount would be reasonable.
Page .,~-2 3
107
Bill 1L McMornes, I~.E. Ga~ Rate Consultant
Q Is the charge-off of uncollectible accounts a fairly uniform amount during
the year?
A No. The charge-offs during the test year vanes but are often high in the
months when the need for gas (heating) seems unimportant and when the
high gas cost of January and February were becoming 90 days past due~
The monthly charges to the uncollectible account (unallocated) for the test
year are as follows:
October 1999 4,025
November 12,599
December 1997 (2,688)
January 1997 (11,654)
February 13,763
March 6,117
April 9,900
_ May 31,320
June 65,297
July 57,246
August 46,955
5entember 18.325
Total Test Year $2~1,188
Q. Do you propose any adjus~ent to the Uncollectible Expenses?
A. Yes. I propose a downward adJustment of $58,628 {McM Exhibit 3)
Uncollectible m~ .Page M-14
108
Bill IL McMornes, P E Gas Rate Consultant -
~McM Exhibit 3
Lone Star Gas Company
Northwest Metro/Mid Czt~es Distribution System
TYE September 30, 2000
UNCOLL~.CTIBLE EXPENSES
Account 904-Customer Account Expense
Northwest Metro/
Year M~d-Cmes Total
Ending Per Percent Texas
12/31 Books Sales D~str,bution
1996 N~A. N.A. 0.46%
1997 N.A. N.A. 0.51%
- 1998 319,597 0.27% 0 50%
1999 232,618 0.21% 0.43%
2000 246,044 0.16% 0.43%
Five Year Average N.A. N~. 0.45%
Three Year Average 0.21% ~/
Three Year Average of Percentages 0.247%
Last Year (And trending downward) 0.16%
Five Year Average of Total Distribution System 0.45%
Uncolleetibles based upon calendar year 2000, Response 3-07
0.16% x $152,678,189 = 246,044 2/
~n Test Ye~ar Exnenses R & C = 304,672 :V
Disallowed Uncollecfibles = $ 58,628
1/ Changed methods of accounting for bad debt expense to htstorwal percentage wrrteoff-Resj~onse
2/liespon~eto 3-07 5/L~ne $8, Schedule G-2, page 2
~NCOLEXP2OOOJJ'ul
109 Page M-i $
Bill IL McMorr~es, P.E. Gas Rate Consultant
OT~F~ OPERATION AND MAIN~NCE EXPENSE
DONATIONS
Please explain your McM Exhibit 4.
A This is n summary of the TXU's donations m the Northwest lVEetrofM~d
Cities Distribution System that are included in the cost of service.
Distribution System. These donetmns only were in the amount of $1,765.
Q Should this donation expense be allowed in the cost of serwce?
A The Gas Utthty Regulatory Act (GURA) allows th~s item to be the
City's choice as to whether to include or exclude these expenses in the
cOSt of services. So th~s ~s a decision to be rendered by the City Councils.
M-16
Danat~onsl.#wrn
1 10 Bdl R. McMornes, P.E. Gas Rate Cons~t~nt A
Md~l Exhibit 4
I Northw'est Metro/Mid Cities Distribution System Charitable Contributions
Organb:atlan Dlstrfbutlon AmL Total Custom~ & Donations ~n~e
~ed~ ~,~. ~.~ $ 1~ 00 16 5916% $ 24 8~
~ln~on lSD Eduction 20 00 16 5916% 3 ~
A~re F~ndatlon 10 ~ 16 59t6% 1 86
B~ &,Gl~ Club 150 ~ 18 5e18% 24 8g
C~ of Len~ew ~0 00 15 ~16% 155 g6
Cus~r ~slBtance 285 82 16~gl 8% 47 42
~ W~ Busings Press ~0 00 16 5918% ~ 18
Fo~ W~ Public ~m~ 1~ 00 16 5918% ~ 86
G~ DaUas ~er 4,125 ~ 16 5916% 6~ 40
~er Helgh~ Chamber ~ Commer~ 25 ~ 16 5918% 4 15
Hewlff Chamber ~ C~me~ 24 ~ 18 5916% 3 ~8
Home Bufld~ ~n~ ~0 00 16 5918% 1~ ~
Hop~n~ C~n~ Da~ F~t 14 00 16 5918% [32
Hosp~ ~ ~n ~g~o Inc ~ ~ 16 5916% ~ 96
Ho~a ~nual GeE ~sl~ ~ 00 16 591 ~ 6 ~
~nne~ale Ch~as Club 5 ~ 16 5918% 0 ~
~ad~hlp 8o~ T~nt Coun~ 60 00 16 ~16% 9 g5
M=L~ Coun~ Pmg~ 10 ~ 16 5916% 1 ~
M~c ~5 91 16 5916% 37 ~
;~ Jr C~ebmflon Co~ ln~ 15 00 16 5916% 2 49
N~ Tm~ C~n~ 7 ~ 16 5918% 1 18
No~he~[ T~nt Chamber 70 ~ 16 5918% 11 61
Pe~n $~ F~ 200 ~ 16 5916% ~ 18
P~ot Point Edu~ ~ ~ 16 59t8%
P~e ~ ~M UnNeml~ 125 00 16 5916% 20 74
Ranals~ Cu~ Caner ~ 00 16 5916% g ~
Sags~ ~e~e~; Cam Cent~ 280 OD 16 5916% 48 ~
San ~o Ch~ ~ Comme~ 680 ~ 16 5916% 112 ~
8~ ~1o Co~ 200 00 16 5916% ~ la
San ~elo ~ ah~ a Rodeo 694 ~ 16 5918% 1
TeJas S~l~g ~SOClB~n 20 ~ 16 5916% 3 32
T~s H~h S~ F~alJ Hall 20 00 16 5918% 3 ~
Unl~ H~pan~ ~un~ of 100 ~ 16 5918% 16 59
Wa~ Senior League' Golf 20 ~ 16 5916% ~ ~
~Eew~ht ~gh ~1 50 00 16 5916% 8 ~
~tem~Coun~ Club 150 ~ 16 5916% 24 89
~CA MlnoH~ ~i~ 300 00 16 5916% 49 ~
.Page M-I 7
111
Bill R. McMornea, P.E Gaa Rate Consultant -
RAT~ DESIGN
Q 'ghe Company proposes to increase the customer charges to customers
to $8.00 on Residential customers and from to
$14.00 on Commercml customers (Mansfield & some of the segments
have higher current rates). Do you concur with these proposed
chargm?
A No. One may justify the charge of $8.00 for Residential and $14.00 for
Commercial for customer charges based upon TXU's an.alysm of ats
costs but due to rate impact to some low volume customers we suggest a
more modest merense. A residentml increase from $2.81 to $8.00 on a
- minimum use customer could provide a 285% incrense~
Also the monthly Customer 5erviea charges vary greatly by cities and
sometimes varies between winter or summer. The Residential Customer
Charge currently varies from a iow of $2.81 per month in Marshall Creek &
Ronoaketo a high of $8.44 per month in ~Iustin. The average (ar~thmct~c)
Residential Customer Charge in the 45 Caries & segments an th.* Distnbutmn
group is estimated at $5.77 per month. The Commercial Customer Charge
currently varies from a low of $6.06 per mouth m Marshall Creek &
Ronoake to a h~gh of $14.44 per month an Justin. The average (arithmetic)
Commercial Customer Charge in this Distribution group is estimated at
$10.79 per month. Page .M-j8
112
Bill IL McMorrles, P E. Gas Rate Consultant
We recommend these customer service charges be established at
at no more than $7.00 and $12.00 for l~esJdential and Commercial
respectively.
2. M~scellaneous Service Charges- AHow the proposed increases as
follows:
Connec~on Cha~s $35 O0
Read for C~n~ Charge $12 00
Return Check Charges from $1625
D~hnqueut ~ot~caUon Charge $4 ?5
$. Weather Normalization Adjustment Clause-Whale this is a fairly new concept
here in Tezas, and while we are still watching the effect of this elosely~ we have
oo objection (at this t~me) to its use as it ~ intended to be revenue neutral. If the
weather is colder than normal then customer is charged less and if weather is
warmer than usual then the customer is charged more. The Texas Railroad
Commission has approved th~ clause in recent cases before it.
4. Other A~nual Adjustment Clauses Requested. In the past, when Lone 5tar
owned this System two other annual adjustment clauses were normally
reque~tedoCost of $arviee Adjustment and l~lant Investment Cost Adjustment,
TXU has not requesled these two clauses m th~s ease. If such clauses
should he requested, we would recommend not allowing these two type of
clauses. The Tezas Railroad Commzss~on did not approve of these two clauses
m recent cases before it.
Page M-19
P~eDe~n~
113
l~ill IL McMorrie~, P E. Gas Rate Consultant
McM Exhibit
Page
'rxu GAS DISTRIBUTION
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM
PROOF OF REVENUE AT PROPOSED RATES
TEST YEAR ENDING SEPTEMBER 30, 2000
CONSULTANT'S RECOMMENDATION
RESIDENTIAL
Revenue Requirement $82,078,563 wi~basecostofgas{~$27535
Less Service Char~es 988,657 Sch K-3, page 1
Revenue Reqmred from rates 81,089,908
Customer Charge $ 7 00
Block 1 3 5892
Off-Peak D~scount 0
Plus GCA Adjust
Gas Cost Adjust 0 00000
Volume Factor 1 02340
Tax Factor 0 05860
Franchise Fee Relmb 0 00000
Consumption characteristics
Zero 0 0000
Block 1 1 0000
Off-Peak Discount 0 0658
BIIlin$ Umts
Bills 2,623,044
Block 1, MCF 16,226,489
Off-Peak Discount MCF 174,304
Base Rate Revenue
Customer Charge Rev $ 18,361,308
Block 1 58,240,114
Less 'Off-Peek piscount 0
Total Base Rate Rev $ 76,601,422
Gas Cost Adjustment 0
Subtotal (Base + GCA) $ 76,601,422
Franchise Fee Relmbu 0
Revenue Related Taxes 4,488,843
Total annual gross rev $ 81,090,266
/~ateDeslgn2R nwm Schedule
114
Rewsed 5/15/01 McM Exhibit
Page 2A
TXU GAS DISTRIBUTION
NORTHWEST METRO/MIl:) CITIES DISTRIBUTION SYSTEM
PROOF OF REVENUE AT PROPOSED RATES
TEST YEAR ENDING SEPTEMBER 30, 2000
COMMERCIAL 0N~th Schools included In this Commercml Rate)
Revenue Requirement $45,829,838 with base cost of gas ~_. $2 7535
Less Serwce ChaqTes 90,520
Revenue Required from rates 45,739,318
Customer Charge $ 12 00
Block 1 3 9229
Block 2 3 8229
Block 3 3 4729
Plus GCA AdJust 0 00000
Gas Cost Adjust 0 00000
Volume Factor 1 00000
Tax Factor 0 058597
Franchise Fee Relmb 0 00000
Consumption Characteristics Winter Summer
Zero 0 0000
- Block 1 0 1933 0 1953
Block 2 0 1514 0 1635
Block 3 0 6552 0 6412
B~ll~ng Units
Bills 240,114
Block 1, MCF 2,152,342
Block 2, MCF 1,745,181
Block 3, MCF 7,326,023
Total MCF 11,253,546
Base Rate Revenue
Customer Charge Rev $ 2,881,368
Block I 8,561,109
Block 2 6,322,618
Block 3 25,442,545
Total Base Rate Rev $ 43,207,639
Gas Cost Adjustment 0
Subtotal (Base + GCA) $ 43,207,638
Franchise Fee, Re,tabu 0
Revenue Related Taxes 2,531,838
Total annual gross rev $ 45,739,477
RateDes/gn2CS nwm Schedule L-4 page 2
115
Revised 5/15/01 McM Exhibit 5
Page 2A
TXU GAS DISTRIBUTION
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM
PROOF OF REVENUE AT PROPOSED RATES
TEST YEAR ENDING SEPTEMBER 30. 2000
COMMERCIAL ~(Schools with Separate Rates)
Revenue Requirement $45.471,793
Less Service Char~es 90,520
Revenue Required from rates 45,381,273
Customer Charge $ 12 00
Block 1 3 9154
Block 2 3 6154
Block 3 3 4654
Plus GCA Adjust 0 00000
Gas Cost Adjust 0 00000
Volume Factor 1 00000
Tax Factor 0 058597
Franchise Fee Relmb 0 00000
Consumption Charectenstlcs Winter Summer
Zero 0 0000
Block 1 0 1933 0 1953
Block 2 0 1514 0 1635
Block 3 0 8552 0 6412
Billing Units
Bills 239.622
Block 1, MCF 2,168,901
Block 2, MCF 1,734,540
Block 3, MCF 7,280~690
Total MCF 11.184,131
Base Rate Revpnue
Customer Charge Rev $ 2,875,464
Block 1 8,492.115
Block 2 6,271,056
Block 3 25,230,503
Total Base Rate Rev $ 42,869,138
Gas Cost Adjustment 0
Subtotal (Base + GCA) $ 42,869,138
Franchise Fee,Relmbu 0
Revenue Related Taxes 2,512,003
Total annual gross rev $ 45.381,141
RateDeslgn2C nwm Schedule L-4, page 2
116
McM Exhibit 5
Page 3
TXU GAS DISTRIBUTION
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM
PROOF OF REVENUE AT PROPOSED RATES
TEST YEAR ENDING SEPTEMBER 30, 2000
SCHOOL
Revenue Raqblrement $358,045 w~h gas cost (~ $2 7535
Customer Charge $ 12 00
Block 1 5 12751
Block 2 4 82751
Block 3 4 87751
Adjustment Factor 1 00000
Plus GCA Adjust 0 00000
Cost of Gas 0 00000
City Street & Alley 0 00000
State Occupational 0 058597
Consumption ~haracterlstlcs
Zero
Block 1
Block 2
Block 3
B~ltln~ Units
Bills 492
Block 1, MCF 13,441
Block 2, MCF 10,641
Block 3, MCF 45,333
Total MCF 89,415
Base Rate Revenue
Customer ChaYga Rev $ 5,904
Block 1 88,919
Block 2 51,370
Block 3 212~046
Total Base Rata Rev $ 338,238
Gas Cost Adjustment 0
Subtotal (BaSe + GCA) $ 338,238
City Street & Alley &
State Occupation jTax 19,820
Total annual gloss rev $ 358,058
Gas Cost
Cost of Gas 0
Plus 1/2 of m~arkup 0
Total Gas Cost
ReteDeslgn2D nwm Schedule L..4, page 3
117
Revmed 5/15/01 McM Exhibrt $
Page 3A
TXU GAS DISTRIBUTION
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM
PROOF OF REVENUE AT PROPOSED RATES
TEST YEAR ENDING SEPTEMBER 30, 2000
SCHOOL (If part of the Commercial Rate Class)
Revenue Requirement $358,045 32 8% h~gher
Revenue Recovered under this rate $ 269,540
Customer Charge $ 12 00
Block 1 3 9229
Block 2 3 6229
Block 3 3 4729
Adjustment Factor 1 00000
Plus GCA Adjust 0 00000
Cost of Gas 0 00000
City Street & Alley 0 00000
State Occupational 0 058597
consumption Characteristics
Zero
Block 1
Block 2
- Block 3
Billing Units
Bills 492
Block 1, MCF 13,441
Block 2, MCF 10,841
Block 3, MCF 45,333
Total MCF 69,415
Base Rate Revenue
Customer Charge Rev $ 5,904
Block 1 52,728
Block 2 38,551
Block 3 157,437
Total Base Rat~ Rev $ 254,620
Gas Cost Adjustment 0
Subtotal (Base + GCA) $ 254,620
C~ty Street & Alley $
State occupation ITax 14,920
Total annual gross rev $ 289,540
Gas Cost
Cost of Gas 0
Plus 1/2 of mprkup 0
Total Gas Cost
RateDeslgn2DA nwm Schedule L..4, page 3
118
McM Exhiblt 5
Page 4
TXU GAS DISTRIBUTION
NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM
PROOF OF REVENUE AT PROPOSED RATES
TEST YEAR ENDING SEPTEMBER 30, 2000
TRANSPORTATION MCF Convert MCF Fee per Percent to
to MMBTU MMBTU Distnbution Fee
Industrial Transportation Revenue
Trans ~ortation Fee 19,148 1 025 $1 27 0 50 $12,462 95
Trans ~ortatlon Fee 124,079 1 025 0 83 0 50 52,780
Trans )ortation Fee 107,558 1 025 0 81 0 50 44,650
Trans )ortation Fee 1,482,326 1 025 0 8 0 50 607,754
Trans )ortation Fee 857,302 I 025 0 79 0 50 347,100
Trans )ortation Fee 315,798 I 025 0 78 0 50 126,240
Trans )ortatlon Fee 188,082 1 025 0 76 0 50 73,250
Trans )ortation Fee 107,209 1 028 0 75 0 50 41,208
Trans )ortation Fee 94,299 I 025 0 74 0 50 35,763
Trans ~ortabon Fee 55,958 I 025 0 6 0 50 17,207
Trans )ortation Fee 481,399 1 025 0 58 0 50 143,096
Trans ~ortation Fee 1,655,616 1 025 0 55 0 50 466,677
Trans )ortation Fee 228,358 1 025 0 48 0 50 55,684
Trans )ortetlon Fee 369,837 I 025 0 41 0 50 77,712
Total Ind Transp Rev 6,084,949 $2,101,584
Electric Gan Tranp Rev
Transportation Fee 1,848,808 1 025 0 02 oo 37,901
comm Transp Revenue
Transportation Fee 29571 1 025 0 84 00 19,399
Transportation Fee 63,951 1 025 0 47 00 30,808
Transportation Fee 39,211 1 025 0 37 00 14,871
Transportation Fee 9,437 I 025 0 38 00 3,676
Transportation Fee 111,727 1 025 0 37 00 42,372
Customer Charge (1) 1 12 00 20 00 00 240
Customer Charge (2) 18 12 00 12 00 00 2,592
Customer Char~e (3~) 53 12 00 10 00 00 6,360
Corem TranspRev 253,897 120,318
Total Transp Revenue 2,259,803
Total Revenue Taxes 0 0586 $ 132,424
Distribution Transp Rev 2,392,227
No Backup or Standy Fees Included
RateDes;gn2E nwm Schedule L.-4, page 7
119
120
Bill R. McMomes, P.E Gas R~te Consultant
126 Bill R. McMorr~, P.E Gas Rate Consultant -
~VIcM Exhibit
Page
VITAL STATISICS
CUSTOMER INFORMATION
Northwest Metro/IVhd C~tles D~smbution System
Remd~ntfal Customers- Number MCF Sales
12/31D8 197~51 12,678.900
12/31D9 204,898 ! 1,800,47!
12/31/00 214,821 13,395,176
Commar~:[~ Customers Number MCI? Sales
12/31/98 21,751 10,138,927
12/31/99 21,-~00 9,629,223
12/31/00 20,657 10,159,895
Public Authority Number MCF Sales
][2/31/98 ~6 62,763
12/31/99 S9 58,77~
12/31/00 41 53,701
Industrial Customers Number MCT Sales
12/31/98 184 444,915
12/31/99 209 400,219
12/31/00 209 723*903
Trausoortation Customers Number MCF Volumes
12/31/98 132 10,851,601
12/31/99 138 9,771,278
12/31/00 174 8,614,753
Total Distribution System Number MCT Volumes
12t3~D8 219,674 34,177,106
12f3~/99 226~04 31,659.966
12/~1/00 235,903 $2.9-~6,428
127
A'; HMENT / ,,
TO crees RFI SET NO
TXU NORTHVVEST METRO/MID CITIES
DISTEIBUTION SYSTEM
TEST YEAR 9/00
TXU GAS DISTRIBUTION
NORTHWEST METRO/MID.CreES DISTRIBUTION SYSTEM
MOST RECENT RATES APPROVED
Date
Approved
~doleon 11/24/98
10/12./82
04/20/99
09/16/97
04/13/99
11/10/98
04/20/99
Coppall 11110199
Copper Canyon 11/29/98
Corinth 01/05/93
Cross IRoads 04/30/90
Dalworthlngton Gardens 04/15/99
Dentoh 02/23/99
Doubl~ Oak 11/17/98
EuleS~ 04/13/99
Farmers Branch 12/07/98
Flower Mound 11/16/98
Grapevine 04/20/99
Hlcko~7 Creak 08/04/88
Highland Vlllege 11124/98
Hurst 05/11/9g
02/05/87
09/14/92
04/20/99
11/05/84
06/12/88
11/16/98
11120/90
05/10/99
Ill
04112199
1 2/09/91
10/25/82
04/10182
06103/85
~ Shores 01/04/93
04/20/9g
04/05/99
04/12/99
Ill Marshall Creek incorporated September 6, 1983 and approved the same rate
that was In effect in Roanoke December 12, 1983
/2/ Northlake, which was than recently Incorporated, approved a rate September 12, 1991
128
A-4
ATTACHMEN-r
TXU GAS DISTRIBUTION TO CITIES R[~I SET NO
TXU NORTHWEST METRO/M~D CITIES
TEXAS CiTY GATE RATE PER MCF o~s'm~ELrr~oN SYSTEM
JANUARY 1998 · APRIL 2001 TEST YEAR
1999 2000 2001
JAN 3 7097 3 3187 3 2464 7 2220
FEB :~ 0610 2 8015 3 3221 7 2220
MAR 2 9987 2 4450 2 9838 7 2220
APR 2 8315 3 5628 3 7093 5 8613
MAY 3 4550 2 4123 2 8679
JUN 3.2073 2 7668 4 8158
JUL 3 1663 3 1469 5 0495
AUG 3 2220 3 2733 5 0368
SEP 3 1862 3 9234 5 0667
OCT 3 2841 3 8858 6 2346
NOV 3 1893 3 5497 5 8072
DEC 3 3527 3 1493 5 6404
129
McM ~,Th~btt 6 Page 6
T~ Gas Distribution
1WORTHW]gST METRO/MID CITIES Distnbutmn Systerra
TYE 9/50/00
FEDERAL INCOME TAX CALCULATION
Company// Consultant
At Present Rates: $ $
~ 11,060,180
Interest on operalan~ Items 5,222,756 2/
Plus Other (Ex~ess DF1T. Leusl. Dxwidend Ch'. etc.~ + 386,923 3/ 0
Taxable component of Return 2/ 6,224,347
Tax at 35% of Taxable Income (0 $384615) 3,351,572
Tax Cmdtts 4!
AmertmationofexcussDmT + 955 4/
Prl~ year Ac~u~axent .225 4/
Federal Income Tax~ 3,352,303
At l~ropoaed Rate~:
Net Operating In, omo before FIT $14,176,622 ]/ $19,702,451
Less Intem~ on Debt and Preferr~ - 303,073 2/ -5,2:22,756
Return 14,479,695 14,479,695 I?, t,.,~ l,/"~'"~"'
Deduct~cos & Ackhtmns ,
lnt~mst on olin"rig Iteans 303,073 2/ -:~,222,756
plmOtll~(l~x~sDFIT, l~al.l~_va~mtlCt..etc'} + 386.9233/ + 386,023
T~ratifl~ ~omtxmem of Rcm.m 1/ 14,563,545 9,642,962
Tax lit 35% ofTaxabl, Incom~ (0 5384615) 7,841,909 ~,192,364
Amortt~aon af~m~sD~'~' + 955 4/ + 955
Prior ¥~ar Ad~m~nt - 225 4/ - 225
Fe. cl~al Income Tax~ 7,842,641 ~,193,094
lhfference 2~649.54'1
Sv' l~.~twrt wq~mw~ ~ Dw~t & .Pr~'m'r~d *, .149,498,3 ?$ x 45. ?O~ x ? 27~6 + l 49, 498,3 75 x I
A-6
130
McM Exhibit
TXU Gas D;strlbution
Northwest Metro/Mid Cities Distribution System
RATE OF RETURN SCHEDULE
September 30, 2000
De.~t 46 70~ 7 27% = 3 40~
~=e£a==~d [ 70~ 5 79% = 0 [0~
Comao~ 51 60~ 10 70~ ~ 5 $2% 9 01%
Deb~ 46 ?oe 7 27~ = 3 40~
9=e£e==~scl, I ?0~ S 79~ = 0 10~
~c~*b'2' 5Z.60~ 11 10% = 5.73% 9 22%
RofR nwm
131
Bill R. ~c]~l_or~e~ ~P.E. G~s R~te Consultant
HILL ASSOCIATES
Regulatory Finance & Economics
Bus (304) 562-3645
Fax (304) 562-3645 PO Box 587, Benedict Rd
Hurncane, WV 25526
Geoffrey Gay, asq May 5, 2001
Lloyd, Gassellnk, Blevlns, et al
111 Congress Ave
Suite 1800
Ausbn TX 78701 ,,
Re TXU Gas D~strlbubon
Northwest Metro/Mid Claes
Cost of Equity Analys~s
Dear Mr Gay
As per your request, and under the terns of our contractual agreement, I have
performed a cost of ell_ ulty capital analysis for the Northwest Metro/Mid Cities portion of
the TXU gas distributlrn utility system My analys~s, which is described bnefly below,
mdicate.s that an .appropriate. range of the cost of equity capital for gas distribution utility
compan~e.s, currenay ranges from 10 00% to 10 75% Also, given the capital structure
emp~oyeo Dy the TXU gas dlstrlbubon utilities and utilized by Ms Canady m her overall
cost of capltsl analysis, the company caress somewhat more leverage than the sample
group of gas distributors with which I estimated the cost of equity Becauas of that capital
structure~ dlfferanca, an appropriate pomt-estimate of the cost of equity capital for this
company would be atthe upper end of th,e, range of equity capital costs, or 10 75%
Because the equity capital of TXU s gas divisions is not pubhcly traded it was
necessary to analyze the market data of a sample group of publicly traded firms whose
pnmary business Isgas distribution se ected a group of seven firms which had bond
ratings of "A" or below and which danved a substantial portion of their revenues from gas
d~stnbut~on operaaons
Using the market data of those companies I performed a D~scounted Cash Flow
(DCF) analysis of the cost of equ¢.7 capita n order to calculate the DCF d v~dend y~eld I
ut I zed the next quarter dlv~dand, annualized, divided by the most recent slx-week da~ly
closmg average stock price for each gas dlstnbuaon company in the sample group In
calculating the. D. CF growth rate, I analyze the underlying fundamentals of rowth for each
comp .an.y~..stu?ylng mat parameter over the past flveyears as well as prroj~;cflons five
.years In~O ?l.e/l~ur..e .and .tile growth rata trends Imphed there~n In add~bon to that
~vn~ea~nc~sn~_~lr~o_w~_,_ I ,e, vle.w both .historical and,projected growth rates I. earnings,
_ ~,.u.? .apo. o.ooK v~ue for earn company wmch are publ shed by investor services
and available to Investors i nrough that analysis I determine an appropriate long-term
susta!nable growth .rate, (th.e growth rate called for in DCF theory) for each firm In the
sample group mna~ly, I aojust the growth rate to account for mvestors' expectations w~th
regard to additional growth, If any, attributable to the Issuance (or repurchase) of shares of
stock for each company
In addition to the DCF analysis, I ut~ltzed Capital Asset Pncing Model (CAPM),
Modified Earnmgs-Prica Rabo (MEPR), and Market-to-Book Ratio (MTBR) analyses as
checks of,the DCF The results of my cost of equity analyses are shown mn the table
below
METHOD COST OF EQUITY
DCF 10 46%
CAPM 8 54%
MEPR 10 25%-10 89%
MTBR 10 26%-10 11%
132
COST OF EQUITY ANALYSIS
TXU GAS DISTRIBUTION
NORTHWEST METRO/MID CITIES
STEPHEN G HILL
These results indicate a current cost of equity range for gas d stnbutors of 10 0%
to 10 75%, with a mid-point of 10 375%
W;th regard to capital structure, I am ~nformed by Ms Canady that the corrlpany s
currently capitalized with approximately 38% common equity, 9% preferred equity and
53% debt, comprised of long-term debt, short-term debt and advances from the parent
company While that ca.o~tal structure ~s s m ar to that utilized, on average, by the gas
.d. ls~.but[on Industry (40% common, 60% debt and preferred), it is slightly more leveraged
mat me average caprtal structure of the sample compamas I ~llzed ~n my analysis
(43 8% ,common, 56 2% debt and preferred) Because of that d~fference in leverage
between the Company and the sample group, an upward adjustment to the
recommended return on equity is warranted My anal~.s~s indicates that an equity return
near the upper end of the range of current equity capital cost for gas d stnbutors would
pr~(~c,an adequate ad.lus, trr~.ent to. offs. et ~.e Company's sllghtlyhlgher financ~aJ risk.
o?, my. recommenaea equity return mr th~s company is 10 75%
IT you nave any questions regarding this analysis, or if you require addit~onal
supporting documentation, please do not hesitate to contact me As always, I look forward
to working with you
Sincerely,
~'~ephen G Hill
133
0G/21/2001 lB ~1 ~122§72243 DUCI PA~E 82
DIVERSI]~r~D UTI~TY
0ONSUT~T~I~TT ~, INC,
~une 21, 2001
H~rbert L ~ Sent VlaF~ (940) 382-7923
C~ At~m~
Ca~ of D~*on
21 ~ E~ M~ey Street
~: lx~-Gas,,Diatzlbuflon*s App~"'aon to Incr~se Rat~ ~ ~e Not.west
~9~o~id Clti~ No~hwe~ ~ro~4 Ci~es ~ay 16, 2001 Consulta.~
ReDo~
Dear ~ Prou~
p~umt to yo~ ~ues~ we have ~ew~ed the T~-G~ Dlsmbu~on application for a rote
mcre~e ~ the C~ of Denton, Te~, We have ~so r~wewed fl~e Cmos' con~t~t r~o~
~spo~s~ve,to ~ Comp~y's rate r~uest In ~dmon, we prowd: some ad&~o~
~o~daflo~ w~ch may be help~l m setting
~-Gas :~te Request
~or about Feb~ 16, 2001 T~-G~ fil~ for a ~c mcreas~ m ~e 40 ~s desolated
~ the No.west Me~o~td-Cmes Dm~bu~on Syst~ Den~ ts on~ of~e c~Ues mcl~ed m ~
~d ~e C~ty ofD~ton'a mcre~e by class
TABLE 1
TXU-~s ~te Request
Not.west ~o System
And CI~ of DenOn by Customer Cica
! T~e m~ mcreasu reflected m Table I ~s baaed on ~c TX'U.Gas Apnl 2, 2001 t~vmed rate requ~t c(ntecflng the
Federal I~ome Tax ex, ors m ~hc February 16, 2001 original rat~ ~cqucSt
135
06/21/2001 10 11 5122572243 DUCI PAGE 03
The Company's rate racreasc includes a rctum on shareholder equity of 12% and also
mcludesanassuraedpnoeofgasof$5 0514 The Company, through the praP°sedratedeslEn,has
increased monthly fixed cnstoraer char6es to $8 00 and $14,00 for residential and commercial class
customers, respec~vely
Included in Atta~braent 1 is a cost of service analysis that duplicates the Company s filed rat
request and res~dential and cor~erclal class rate design in this case Each general area of cost
clmraed by TXU-(~as is shown on a total systera and customer class bas~s in Attachrucnt I
Base Cos~ of Service
The Cities regulatory junsdwtlon m gas rate cases addresses only oPerahons c°sts In other
words, the regulatory authority of the cities extends to setting rates for the delivery of gas through
the thstnbutlon system to the ultiraate custoraer Thc coraraochty or gas costs (assumed at $5 0514
per Mcfm the Coii,i~any's rote request) is regulated by the Railroad Cornmmaion of Texas
Included ~u Attachment 2 Is a recalculation of thc Company's rote request, whtch includes
only the thstnbution systera operations costs In other words, the gas or commodity costs, whch are
' t
regulated by the Ratlroad Commission of Texas, have been reraoved from the Company s toques
Again, the only change is to rcraove the $5 0514 per Mcfgas cost and associated revmrae related tax
on the lp~ cost.
It should bc noted that m a recent TX'U-Oas case, the Corapany stated that gas cost should be
removed frora cost oi'actwlce to I~ve consuraers it clear picture of what actual costs for gas scrwco
and commodity (gas) cost are for the consuraer Thc Company also stated that such uubundhng of
costs would be eas~er £or consuraers to u~derstend Moreover, ra recent heanngs be£olc the Rmlroad
Commission of Texas lavest~gatrag gas cost price spikes m recent raonths, the Commtssion
encouraged seperatmg the coramodiW cost frora the operations costs
Attachraent 2, which shows the Corapany's operations costs (gas cost is removed) and
includes the Corapany's cnttre cost request (exeel0t gas costs), shows the follownag ~ncrease
TABLE 2
TXU-Gas O ~erations Cost
Rate Increase b Customer Class
Residential
~-ommercial
Industrial
In other wolds, the Corapany's £ull rate request before t~e Cities ~s $~,0~5,?$~ ~ T~us
$~.025,78~ increase reflects only the operahons ~osts clmmc~ by the Company, an~ e×c~udes ~as
costs regulated by the Emboad Commission o~Texas
2 Included in A~mclmmnt ~ ~s ~h~ residential snd commercml chss operations (exclud~g gas) m~eese for t~c
of Denton customers when gas cost ~s remov~cl
136
06/21/2001 10 ii 5122572243 DUCI PAGE 04
Northwest Metro/Mid-Cities Consultants Report
On or about May 16, 2001 the consultant lured by the Northwest Metro/M~d-Clties group
issued a report shovang its findings and concluslons regarchn~ the TXU'Gas rate request The report
concluded that the followm$ rate request by class and for the system were justlfied
TABLE
Northwast Metro/Mid-Cities
May 16, ii001 Consultant Report
Rate Increase By Class
CommerclaiZ" $399,~-48
Industrial $1.910,009 $154,875
-Total $~2~,.~. ~2..~0~
Tt should be noted that ~ consultant report &d not remove 8as cost from the Company's
request. T~le Northwest Me~zo/Mid-Ctties consultant reduced gas costs ~rom $5 0514 per Mc£to the
$2 75~5 per Mcr level ordered by the Railroad Comm~sswn of Texas In a prewous case Whether
~as cost ~s included at $~,05 ~4 per Mo£or $2 ?~35 per Mcr makes no differeuce T~e City has no
junsdlct~orl to regulate the cost of gas
On o~ about ~une ~ 8,2001 the Attorney for the Norttlwest Metro/Mxd-C~ties Stoup outlined
an oP~r o~ set~lemel~ of th~s case ~ TXU-Gas Thc following table outlines ~ilo Tig~U-Gas
proposed resolution o£tlus case
TABLE 4
TXU-Gas Proposed Settlement
Residential $2,5 ~ 1,718
Commercial $1,034,9~ 1
'-hldustrlal $1
S~rwce Charips
Total
Thus, under the Company's proposed resolution, TXU-Gas would settl~ for a $~,151,019
Lncroase ~ rates Thlsmcrcaser~presents70%($5,151,O19/$7,358,598)oftheC°mpany's°nlp°al
(revved) request
137
86/21/200[ ~0 [[ 5122572243 DUCI PA~E 85
Summflr~ Klld Conclusions
The Cl~y has before it a Compargt rate increase request of $7,358.598, ofwhmh $858,~6
wo~d be ~c increase for Dmton ¢~tomem ~c ~o~hwest Me~o~d-C~aes ~up cmsulmt has
m~y~d ~ Compmy, s request md concluded ~t m mor~e of $3,790,602 la Jmtxfi'~d
h~ off. ed to resolve ~ls ma~ at m ~u~ mcrc~c of $5,151,019
L~tly, zfthc C~ty con~d~s only the Co~my's r~uest on costs ~. C~ bas ~lato~
3msdmtmn over, t c opemuom costs, ~en ~e Company's ~uast m ~ls c~e xs $3,025,783
(A~t 2, ~e 33) Moreover. if the Comply ts ~llmg to seRle for 70% of ~o req~stcd
mount, ~en tho seRl~t v~ue would b, a $2,118,048 (70% x $3,025,783) ~ual
DUCI would mcomm~d ~at ~e Cl~ only ~mtd~ opora~ons cogs as outhn,d m
A~ao~t 2 ~on o~y op~atmm costs ~ consld~ed (whmh ~U-Gas has stated m
precedings is appropriate), tho ms~d~ e~s ~u~ mcgee before ~jus~ is $ 1,043,043 If
T~-G~ studs by t~ 70% s,Rloment off~, the ~ldentl~ mc~e Is $730,130
~ o~y ~hom oosts are ~ns~dered, ~e co~ cl~s ~stom~ ~oelv~ a ra~
d~m~e of ~0,32~ ruder ~e Company's on~nal request We have included m At~t 3
the ~pact ofr~ovmg g~ cost on Denton's r~d~h~ ~d co~ml cusmm~ ~ese mcmases
o~ be reduced to 70% tf~e Comply ts w~lhng to s~ behind ~ts scttlem~t propos~
If yo~ have ~y qucs~ons, plebe feel ~ to oall We look fo~d to ~sw~g ~y
~u~om you. ~ Maym or Council M~bers may Mw at ~e workshop next week
138
0S/21/2001 10 lh §~22572243 DUCI PAGE 86
TXU GAS NORTHWEST METRO MID CITIES
RATE INCREASE REQUEST
TEST YEAR ENDING SEPTEMBER 30, 2000
No I~BGOIW*T1ON AMOU.Y' AMOUNT AMOUNT ~U~
2 ~E ~ ~ $138 1ta ~1 $7,~9,763 $142,626,5~ $~ 2~ ~),126,~ ~,~2
3 ~AW ~.N~a ~,991,742 ~ ~8 991,742 ~AI0~ ~ ~1,9~,515
6 ~c~ ~g ~iNT $1,0~,812 ($150790) $930,0~ ~B8.667
6 ~NU.~ $109 ~5 6~ ~,3~,973 ~,~4,~I $121 212 360 ~J,~2,~
13 ~~Y~ $142~68~ ~ S1~,6~,~ ~.~742 ~ 131.474 ~,~,~1
18 ~R~ RB~ T~ $1,~? ~ S~005 ~,259,008 $1,~,717 ~91,~ ~1~,492
21 ~N9~, ~166,133,~ $1,~,7~ $1~,817,7~ $111785,~ ~,~.~ ~,~7,~9
~ ~a ~1~ ~,4~,4~ ~ ~,4~77 $t,~5,~ ~8 $I,~
26 ~m~ ~1,~3~1~ ~ $1 ~,411 $1 116,680 ~,TO3 ~,~7
29 ~U~ T~ F~ 6~ ~63% 8~% 5 6353~
' 30 ~ua n~ ~T,~t ~ ~7,~1 ~,7~ $I~,429 610,157
~ ~R ~B~ (61E0~790) ($1~,~) ($137,~ (612 ~ (~)
37 ~NUE~I~~UE ~05,~4,509 ~,974,509 $1~,~9,~ $7t,97t,~
40 ~ 2,~3,~ 2~ 114
~ ~K2 0 1,7~,18t
46 ~ ~R~B ~0,~,362 ~,~1,~
~ ~ ~B ~ T~
49 ~O~~ ~1,2~ 192
~ ~P~B~S ~0000 ~0
~ R~8N~ ~1
~ B~K ~ ~UR ~,~,362 $1 ~,~,~7
139
06/21/2001 10 il 5122572243 DUCI PAGE 07
TXU GAS NORTHWEST METRO MID CITIES
RATE INCREASE REQUEST REMOVING GAS COST
TEST YEAR ENDING SEPTEMBER 30, 2000
2 B~tB~TERL~ $1:~,1t8,801 $?,609,763 $t42,825564 ~3,295,205 ~,128,129 $2692~
10 ~R~ RU~8 (~129,117) $0 ($129,117) (~47~
12 ~u~ C~ (~) $0 (~2,2~) ($~,~5) (~4,~ (~1,214)
t4 ~ · ~ ~P ~2,079,~31 $0 ~2,0~,231 $16 751 078
1~ PA~ ~O T~ $~1,670 ~ ~81,~0 ~,821 ~116,959 ~,sg0
20 ~Z ~ T~_~A ~,1~ ~8 ~ ~,1~,728 $1.8~,~ S].I~AIO ~8,193
~ ~B RB~ T~ $10,130 $0 s16g,1~ ~0,1~ (~6,0~ $1~,111
~ ~NUB ~ ~,~6,783 ~,~,783 S1,~3,~ (~) ~3,~
~ ~p~. (~,~) (~,~e) (~,~,~3) (~Z,llg.~) ~7,~
~ ~g~l~ ~,5~,615 ~,781,9~ ~14,~.6~ ~7,371,~
~ C~ 2,6~,~ ~0,114
~ ~Kz 0 1,7~,t81
43 ~K3 0
~ ~R C~ R~B ;20,9~,~2 $1,361
M ~K ~ R~NU6 $13,761,~ ~7~,~5
57 ~K a R~UB $0 ~ I,~3,~
140
85/21/2881 10 11 5122572243 DUCI PAGE 08
.
141
Agenda It era .~.,Z.~.~
AGENDA INFORMATION SHEET
AGENDA DATE June 26, 2001
DEPARTMENT' Pohce
ACM. Jon Fortune
SUBJECT
Receive a staffreport, hold a d~scuss~on, and g~ve staff d~rectmn regarding Code
Enforcement procedures
BACKGROUND.
In Apnl 2001, Cotmcd requested a staffreport regarding the current Code Enforcement
abatement procedures
In 1998, staffworked w~th the C~ty Cotmcd to adopt the current Code Enforcement
procedures Previously, officers would simply send a letter of notfficat~on to the address
where an observed wolat~on was located The owner or resident was g~ven ten days to
abate the v~olat~on If the owner or resident dtd not comply, the officer would contact a
private contractor to clean the property and the owner or resident would be ~nvmced an
adm~mstrat~ve fee and the cost of the contract The Councd expressed concerns that th~s
process thd not prowde ample opportumty for the wolator to resolve the problem
Currently, the Department has five Code Enforcement officers and each officer ~s
assigned to an area of the C~ty They are responsible for responding to c~t~zen complmnts
of wolat~ons and proact~vely addressing observed violations in their assigned area
The following actions are taken by Code Enforcement Officers ~n response to a c~t~zen
complaint or observed v~olatlon ~nvolv~ng grass and weeds, trash and debris, and junk
vehmles
· A door hanger ~s left at the location notifying the tenant/owner of the wolat~on If
the property ~s a vacant lot or appears vacant, the door hanger ~s mmled to the
property owner as ~dentffied using currently available tax records A remspect~on
date ~s set for seven days from the date the door hanger ~s left at the locatmn and
such date ~s noted on the door hanger
· The property ~s relnspected no earher than the date on the door hanger If the
v~olat~on m abated, no other action ~s taken and the case ~s closed If the violation
still exists, the Code Enforcement officer takes two pmtures for the case file and a
certified letter is sent to the property owner and, ~f apphcable, the tenant The
letter contains mformat~on about the violation and notfficatlon of the relnspectlon
date
· The property is remspected 14 days after the certffied letter ~s sent If the violation
is abated, the case is closed If the violat~on still exists, the officer takes two more
pictures for the case file Code Enforcement attempts to call the property owner
to discuss the wolatlon and agree to a deadhne for the violation to be abated If it
is determined that the property owner is ~nd~gent or physically unable to abate the
violation, Code Enfomement will request assistance from the Keep Denton
Beantlful volunteer program If comphance ~s ginned within the agreed time, the
case is closed
· If compliance is ginned following notification by either door hanger or registered
letter, a card ~s sent to the owner that notffies them that their property was found
to be m compliance upon remspectlon and thankang them for their cooperation
· If compliance is still not ginned, Code Enforcement will ~mtlate admlmstrat~ve
action or file a case ~n Mummpal Court
o Grass and weed violations are generally addressed through admlmstrat~ve
action A private contractor mows the property and the owner is ~nvmced
an adm~mstrat~ve fee in the amount of $80 00 and all contractor fees
o Trash and debns and junk vehicle violations are generally addressed by
fihng a case in Municipal Court Staffm hesitant to s~mply clean the
property due to the possible clmmed value of property and vehmles that
might be removed The trash, debns or velucle in question will remain on
the property until the disposition of the case If the violator abates the
violation prior to the court date, the prosecutor will usually d~smlss the
case If the violator ~s found gmlty and stall fails to abate the violation,
Code Enfomement will contract for the property to be cleaned and the
property owner will be invoiced accordingly
· An owner has thirty days within whmh to remit payment for admlmstrat~ve and
contractor fees If the owner fmls to make payment w~thin the allotted t~me, a lien
~s placed on the property
PRIOR ACTION/REVIEW. As stated, these procedures were ~mplemented with the
approval of the C~ty Council in 1998
FISI~AL IMPACT: None
Respectfully submitted,
Chief of Police
Prepared by
Scott'Langford
Support Operations Lieutenant
City of
Denton
codo 21546
Enforcement
Division
Date
Maintaining property values and aesthetically pleasing
neighborhoods m which to live takes a great deal of effort
on the part of all the residents m Denton In an effort to
prevent neighborhood decline, your C~ty Council has
passed ordinances that deal w~th varmus C~ty Code
wolat~ons Please help our community stay clean and safe
by correcting the observed wolatlon noted below
Address of V~olat~on
Scheduled for Re~nspecbon
[] Weeds and Grass Weeds and grass over
12 ~nches h~gh ~s a wolat~on of the C~ty Code
[] Garbage, Trash and Rubbish Front and back
yards must be kept clean and frae of junk, trash and debns
Storage of ~tems shold be screened from public wew
[] Junk Vehicles on Private Property Motor
vehicles that are inoperative and have exp~rad license
plates or safety inspection stickers are ~n v~olat~on of
C~ty Codes Junk vehicles must be completely
screened from public wew
[] Other
Comments
If you would I~ke to d~scuss an arrangement for compliance,
or have any queshons, please contact the Code
Enforcement off~ce at 940-349-7819
Officer
4
City of Denton
Code Enforcement Division
601 E H~ckory St #E e Denton, TX 76201 · (940) 349 7819
COMPLIANCE CONFIRMATION
Date
Dear
You were recently notified of a correct~on(s) that needed to be addressed on your property
W~th your help, these correcbons have been made and are now m compliance
Thank you for ass~sbng us ~n our efforts to maintain the clean and safe community that you
and your neighbors have come to expect Your continued efforts w~ll help prowde a ,
commumty that we can all enjoy
Officer
601 E Hickory * Denton, TX 76205 * (940) 349-7819
Code Enforcement Department
Malntaanng property values and race neighborhoods m which to hve takes a great deal of effort on the part of all
residents m Denton In an effort to prevent neighborhood dechne, your City Council has passed ordinances that deal
with various City code wolat~ons
A wsual inspection of your property at ~ on ~ revealed that the
followqng C~ty code violation(s) ex~st
JUNKED VEIIICLE: The vehicle ~s eonslde~d inoperative andjunked ~f~t ~s inoperative, does not have lawfully
afl]xed to ~t either an unexpired hconse plate or a vahd motor vehicle safety inspection certificate, ~s wrecked,
d~smantled, dmcarded, or remains inoperable for a continuous per~od of more than 45 days
Regards to but not hm~ted to
Since many restdents are not aware that the above is a ~o C~t~ or_dlnanc_es, a follow-up inspection w~ll be
conducted to ensure that compliance has been made by
.
Failure to comply by the above date may result m a Municipal Court c~tatlon, or the C~ty will correct the violation If
the cry corrects the violation, the cost for services plus an administrative fee of $80 will be b~lled to responsible
pames
If you would hke to discuss an arrangement for compliance, or have any questions, please contact the Code
Enforcement Office at (940) 349-7819
Sincerely,
Code Enforcement Officer
6
Hickory * Denton, TX* Telephone (940) 349-7819
Code Enforcement Division
Maintaining property values and a nice netghborhood m which to llve takes a great deul of effort on the part of all residents tn
Denton In an effort to prevent neighborhood deelme, your City Coancll has passed ordinances which deal v~th various City
Code V~olat~ons
A visual tnspectlon of your property at ~ on ~ revealed that the following City
Code V~olatlon(s) ex~st
TRASH AND DEBRIS Old lumber, junk, car or machinery parts, serap material, demohshed or pertly demohshed
structures, plies of stones, bricks or brokon rocks on a premises bordering any public street are all constdered a nUlsenee and
should be cleaned up tn order to protect the health, safety, and welfare of the pubhc
Regards to but not hmited to ~
Since many residents are not aware that the above ~s a wolat~on of C~t~ ordinances, a follow-up inspection wll be conducted
to ensUre that comphance has been tnade by
Falloro to comply by the above date tnay result m a Municipal Court ¢;tatlon, or the City will correct the vlolat;on lfthe city
corrects the v~ol~on, the cost for sermces plus an admtn~strative fee ors 80 will be billed to responsible part~es
If you would lfl(e to dtscuss an arrangement for compliance, or have any questions, please contact the Code Enforcement
office at (940) 349-7819
Sincerely,
~t Officer
Denton, TX ~
7
601 E Hickory Surie E * Denton, TX 76206 * (940) 349.7819
Code Enforcement Diws~on
DATE
NAME OF
ADDRE6S
STA r I tP
Ma~nta~mng property values and race neighborhoods ~n which to hve takes a groat deal of effort on the part
of all residents ~n Denton In an effort to prevent neighborhood dechne, your C~ty Councd has passed
ordinances whmh deal wrth various C~ty code wolabons
A wsual ~nspecbon of your property at ~I~N~!~DRi~t~ on DATE INI~i~ECTED revealed that the
following C~ty code wolabon(s) ex~st
GRASS AND WEEDS A standard of 12 ~nches for the height of grass, weeds and other vegetation except
agncultural crops, trees, shrubs, flowers or other decorabve or ornamental plans If your property ~s two (2)
or moro acres, you must mow one hundred (100) feet from any pubhc street or nght-of-way and one
hundred (100) feet from any adjacent property under dn~ferent ownership on whmh a house or bus~ness ~s
located (At the comer of Colhns and Cleveland )
S~nce many residents aro not aware that the above ~s a wolabon of C~ty ordinances, a follow-up ~nspecbon
wdl be conducted to ensure that comphance has been made by RIEINSPECTION DATE14 DAY8
Fmlure to comply by the above date may result ~n a Mumc~pal Court c~tahon, or the C;ty wdl correct the
wolabon If the c~ty corrects the wolatmn, the cost for servmes plus an admm~strabve fee of $80 w~ll be
bdled to responsible parties
If you would I;ke to d;scuss an arrangement for comphance, or have any questions, please contact the
Code Enforcement Office at (940) 349-7819
S;nceroly,
Code Enforcement Officer
8
601 E Hickory * Denton, TX * Telephone (940) 349.7819
Code Enforcement Division
FINAL NOTICE
FOR THE GROWING SEASON
(MARCH TO NOVEMBER)
DAT~
PLEASE BE ADVISED THAT THIS IS YOUR FINAL NOTICE AND THE CITY MAY ENTER
THE PROPERTY, AS NECESSARY, FOR THE REMAINDER OF THE CURRENT GROWING
SEASON (MARCH TO NOVEMBER) TO CORRECT FURTHER VIOLATIONS WITHOUT
FURTHER NOTICE TO YOU AND MAY ASSESS THE COSTS SO THAT THE GRASS DOES
NOT EXCEED THE TWELVE INCH STANDARD
Mmntarmng property values and taco ne~ghborheeds m which to hve takes a great deal of effort on the p~t of all
res~deets m Denton In an effort to prevent neighborhood deehne, your C~y Councd has passed orthnancos wluch deal
w~th va~ous Chty ~de vlolatmns
A visual mspecUon of your property VI~ ~Dlllfl~ on DATg5 INSPECr~VED revealed that the following
C~ty code wolatton(s) ex~st
GRASS AND WEEDS A standard of 12 mches for the height of grass, weeds, and other veget~on excopt
agr~cultoral crops, trcos, shrubs, flowers, or othez deeorat~ve or ornamantal plans If your property ~s two (2) or more
acres, you must mow one hundred (100) feet from any pubhc street or right-of-way and one hundred (100) feet from
any adJaCent property under d~fferent ownerstup on wluch a house or business ~s located
Smco many residents are not aware that the above ~s a wolaaon ofC~ty ordmanees, a follow-up inspection will be
conducted to easure that comphanee has been made by ~lt~N DA~I4 DAY~
Failure to comply by the above date may result m a Mume~pal Court c~tatmn, or the C~ty wdl correct the Trash and
Debris wolat~on If the C~ty correats the v~olattan, the cost for services plus an adm~mstrat~ve fee of $ 80 will be bdled
to respous~ble paraes
If you would hke to (hseuss an arrangement for comphanco, or have any questions, please contact the Code
Enforcement office at (940) 349-7819
Sincerely,
Code Enforcomont Officer
9
' ~,genda item /-.~,-:2~' ~
AGENDA INFO~ATION SHEET r)ate_ ~T~/~ / :
AGENDA DATE: June 26, 2001
DEPAR'~MENT: F~nance
ACM: Kathy DuBose, F~ecal and Municipal Servicas
SUBJECT
Receive a report, hold a d~scuss~on and g~ve staff direction regarding the Capital Improvement
Process and the status of 1996 and 2000 Bond Program pro}cots
BACKGROUND
In April 1999, the Oty Council approved formation of a SO-member Citizens Adwsory
Committee (Blue Pdbbon Committee) composed of seven appointments per Council member
with one chairperson appointed by the entire Council The formal charge of the Committee reads
as follows
"The Ctty Councd charges the spectal Citizen '~ Advtsory Commtttee with the goal of obtalmng
clttzen l~put, studytng capttal improvement needs for the next five years, and malang a
recommegdatton for projects to be funded tn a January 2000 Bond Electron The Committee's
revtew should encompass street constructton and transportatton tmprovements, buddtng
constructwn and renovatton, park~ acqu~sttton and tmprovements, public safety facdtt~es, and
any other needs tdenttfied by the Committee
Ctty staf~ has esttmated a five-year tmlorovement program of $22 6 mdhon using the tradtttonal
method cJf issuing ad valorem tax supj~orted bonds Because of thts hmlted fundtng capacity,
Ctty Cou~cll charges the Commtttee to review the need for addttlonal fundtng if recommended
CIP needle exceed this $22 6 mdhon hmtt Priority should be given to those projects that
enhance the quahty of life of current c~ttzens
The City Council also charges the Commtttee wtth the responstbdtty of pubhc tnformatton,
educatton, and promotion of the adopted five-year capital improvement proposltton for the
January 2000 Bond Elect~on "
Each Co~mcfl member appointed seven members to the Blue Rabbon Committee and the Council
unanxmopsly appointed Euhne Brock as chturperson Ms Brock chose Time Charles as the
Committee co-chmr The Commxttee held its first meeting on June 21, 1999 They orgamzed
into seven groups to begin gathenng data The groups selected their own chairs and met w~th the
following entxt~es Cxty Council, Planmng and Zoning Commissxon, Chambers of Commerce,
Umverm$;es and DISD, the County Commissioners, citizens (pubhc meetings) and the City staff
In additign, each member was asstgned to ~ntervlew ten lndiwduals for their top five priorities
Over 350 surveys were completed
After this lnformation-gathenng phase was completed, the Committee reorganized into three
project teams Members served on the teams of their choice The three project teams were
Facilities, Parks & Recreation, and Transportation The task of these teams was to review all of
the projects that were mentaoned in the reformation gathering and survey stage, and then to
prioritize them using public input and data provided by the staff Each team went on tours to
learn as much as possible about proposed projects
On October 4, 1999 the Committee met as a whole Each team presented their team's critical
needs, both funded and not funded After consldenng all of this information, the Committee
voted unanunously to recommend Capxtal Improvement Program (CIP) projects worth $22 6
million to the Council Further, the Committee also recommended $12 27 million of critical
unfunded needs to the Council A motion to attach a "no additional taxes" proviso failed 22-5
The projects themselves received unammous support from the Committee
On October 13, 1999 the City Council and Planning and Zoning Commission held a joint
meeting At that meeting a public heanng was held by the Planning and Zoning Conzrnlsslon
The CIP Blue Pdbbon Committee presented their recommendation to the Planning and Zoning
Commission The Committee's recommendation was two-fold The Committee recommended
$22 6 million of funded projects plus an additional $12 27 million worth of critical unfunded
needs The Committee stressed that they believed that this was the charge given to them by the
Council of "providing a $22 6 mflhon list and any other critical needs" that the Committee felt
should be recommended The Planmng and Zoning Commission voted 7-0 to endorse the Blue
Pabbon Committee's recommendations
City Council then unanimously approved a funding option for the program that would implement
a two-cent tax increase in both the second and third years, three-quarters ora cent tax increase in
the fourth year, and a one-quarter cent tax increase In the fifth year based upon a six-percent
annual growth estimate
On January 15, 2000 Denton's citizens voted overwhelmingly to adopt the proposed 2000-2004
Capital Improvement Program (see attached brochure gl), and the first year's bonds were sold
on May 2, 2000
The 2000-2001 Adopted Budget includes the second year of the five-year program and
incorporates the first two-cent tax increase The CIP Bond Election Campaign Brochure
(attached brochure #2) states, "If the City's assessed value grows at more than six percent a year,
the program could be speeded up and shortened"
Because the growth in apprmsed values for 2000 was higher than projected, we were able to
accelerate the projected bond program The accelerated projects include street improvements,
Airport improvements, construction of the North Branch Library, and the American Legion Hall
Annex (see attachment A)
On February 1, 2000 City Council appointed a five-member CIP Oversight Committee to
momtor, evaluate and report the progress of the Capital Improvement Program Members
included the chmrperson and co-ehturperson and co-chairs of the sub-committees Eullne Brock,
Tim Charles, Dorothy DamICO, Tim Crouch, Fran Morgan, Greg Sawko, and Jack Swanson
make up this committee
This Committee meets quarterly to review the progress of the program, approve allocation of and
changes in spemfie projects
Attachment B ~s an update of the current CIP projects from the January 2000 Bond Election, and
Attachment C ~s an update of the Downtown Improvement ProJect approved m the 1996 Bond
Program
PRIOR ACTIONfREVIEW (Council, Boards, Commissions)
Council approved fonuanon of the Blue Ribbon Committee on April 20, 1999
Planmng and Zoning Commission unammously endorsed the Blue R~bbon Committee
recommeadanon for the January 2000 Bond Elect~on on October 13, 1999
City Council unanimously approved the recommended $34 87 mflhon CIP project list for the
January 2000 Bond Elect~on on October 19, 1999
Voters overwhelmingly approved all three propositions on January 15, 2000
The CIP Oversight Committee was appointed by City Cotmcfl on February l, 2000 and has met
on February 7, 2000, March 6, 2000, April 26, 2000, June 5, 2000, September 18, 2000, March
26 2001 and June 11, 2001
City Cotmcfl adopted the 2000-2001 Capital Improvement Program and incorporated the first 2¢
ad valorem tax mcrease on September 5, 2000
FISCAL ,INFORMATION
The Bond program ~ncorporates a two-cent tax increase m 2001 and 2002, a three-quarter cent
tax merease in 2003 and a one quarter-cent tax increase ~n 2004 The funding for the current
year of the Capital Improvement Program is included m the budget
EXHIBITS
Brochure # 1 - CIP Bond Propositions/Breakdown of Projects
Brochure # 2 - Frequently Asked Questions About The 2000-2004 CIP Program
Attachment A - 2000-2001 Capital Improvement Program
Attachment B - Update of Current Bond ProJects
Attachment C - Update of 1996 Downtown Improvement ProJect
Respectfully submitted
Kathy DuBose, Assistant C~ty Manager
Fiscal and Mumclpal Services
3
ATTACHMENT A
5A
6
ATTACHMENT B
7
CITY OF DENTON, TEXAS PARKS & RECREATION DEPARTMENT
321 E McKINNEY * DENTON, TEXAS 76201 (940) 349-PARK * FAX (940) 349-8384
To: Mayor and Members of the City Council
From: Ed Hodney, Director of Parks and Recreation ~ ~
Date: June 22, 2001
Subject: Status of Park ProJects--2000 and 2001 Bond Sales
The 2000 bond sales included $650,000 for park projects, the 2001 sale was $2,325,000 The
park projects and their current status are described as follows
1 Communtty Park.4cqutsttton $1,800,000
A community park site has been targeted for acqmsltlon in the Ryan
Road/Teasley area We have opened negotiations with the owner Purchase is
now expected during the summer A site search is underway for the eastslde
community park
2 Upgrade Extstmg Parks $670,000
These funds have been obligated for construction of roads/parking and related
improvements in North Lakes Park, as well as the design of hke improvements in
Evers, Mack and Dema parks Construction has begun at North Lakes Park and
should be completed this fall
Design of parking improvements to others athletic faelhtles will begin late
summer/early fall 2001, with construction of these improvements taking place
w~th the 2002 bond sale
3 Beautt, flcatton $80,000
} The Water Conservation Landscape at Bell and Robertson has been
completed Matched wath Keep Denton Beautiful (KDB) funds
} The landscape at the Dallas Drlve/Teasley intersection has been completed
Matched with KDB funds
~' The Carroll Blvd (Umverslty to Westway) new median plantmgs and new
colored pattern concrete have been completed Matched with KDB and Street
Dept funds A second phase (Westway to Hickory) will begin in late 2001
} New trees and lrngatlon will be installed In the Hercules median before
summer Matched by KDB
} Restoration of the Teasley median ~n front of Sam Houston Elementary ~s
scheduled for early 2002
} Restorataon of the Civic Center Park garden will begin in summer 2001 with
the renovation of the ~rngat~on system and removal of some over-aged
plantings The project wall continue through late 2001
} A new monument s~gn and landscaping for Caty Hall ~s planned, but pendmg
the design of a new signage/wayfmdmg system that addresses all C~ty
properties and streets
4 Trads &Ltnkages $250,000 } Fred Moore Park bridge and walk ~mprovements have been completed.
~' Trails m Cross Timbers Park will begin m fall 2001
} Bowhng Green Trml has been completed.
} Raft Trail constmctmn wall be fhushed this summer
5 ~tmertcan Leg#on Buddtng Annex $175,000
Design wall begin flus summer, wath construction tentatively scheduled for late
2001 Meanwhile, the ¢ommumty has requested addmonal funding through the
next Commumty Development program If additional fundJng is approved by the
C~ty Council, adjustments can be accommodated m the bmldmg design
F ~mva\Clty Council~2OOl\Counci12000 Bond Project Update 6-27 Ol doc
9
DENTON PUBL1C L1BRARY
T E X A S
502 Oakland St, Denton, TX 76201
940-349-8566 Fax 940-349-8260
www dentonhbrary com
MEMORANDUM
DATE. June 21, 2001
TO' The Honorable Mayor and Members of the Ctty Council
FROM Eva Poole~
Director ot Literaries
SUBJECT Status of North Branch L~brary ProJect
Since the last Overmght Committee meeting of June 11, 2001, the following action has
occurred on the North Branch Library Project
>' All of the bonds for th~s project have been sold for a total of $5,600,000
~' Schematic design on the Food Lmn bmldmg is about 85% complete
We are excited about th~s project and look forward to answenng any other questions you
m~ght have about our second branch hbrary
EP dl
10
"Dedicated to Quahty Servtce"
www cityofdenton com
215 E McKlnney * Denton, Texas 76201 * (940) 349-8535 * Fax (940) 349-7206
Office of Jon Fortune, .4sslstant Ctty Manager, Pubhc Safety and Transportation Operattons
MEMORANDUM
DATE. June 21, 2001
TO. Honorable Mayor and Council Members
FROM' Jon Fortune, Assistant City Manager, Pubhc Safety and Transportation Operataons
SUBJECT' CIP Transfer - FY 2001 A~rport Grant
On May 21, 2001 Airport management received reformation from the Texas Department of
Transportation, Awat~on D~VlSlOn (TxDOT) that the construction phase of the FY 2001 Pdrport
Improvement ProJect (ALP) ~s currently estimated at $2 14 mflhon The FY 2001 AIP is a 90 10
matchlng~ grant provided by the federal government and is administered through TxDOT The
project ~ncludes the following maintenance and infrastructure ~mprovements that will increase the
level of safety at the Denton Municipal Airport (DTO)
Rehabflltataon of the runway and mmn tax,way,
Remarlang of the runway and main taxlway,
Reconstruction of 1,000 feet of the mmn taxlway,
Reconstruction of three mmraft parlang ramps,
Construction ora mn-up ramp for the north runway,
Improved safety hghtmg and slgnage for the runway and tamway,
Construction of a hehpad, and
Installation of 6,000 feet of security fencing
Carter & Burgess, the engmeenng consultant for the project, developed the $2 14 mflhon
construction phase estimate that ~s $584,000 over the original estimate of $1,580,000 promded by
TxDOT m FY 1999 The 2001 Airport budget currently has $150,000 available in matching funds
designated for this project, whmh will leverage a total of $1 5 mflhon in ~mprovements An
ad&t~onal $65,000 for the City's 10% match will be needed to complete the project as designed
The Bond Oversight Conumttee and the Denton Airport Adwsory Board approved the transfer of
$65,000 from the $220,000 CIP package for land acqmslt~on for the proposed runway extension
1
"Dedicated to Quahty Service"
The $65,000 will be apphed to the AlP Grant to leverage the remmmng $584,000 in infrastructure
improvements and avoid construction delays or potential ~ncreases to construction costs A~rport
management ~s m the preliminary stages of the land acquisition process and does not anticipate
needing access to the entire $220,000 m FY 2001 for land acqmslt~on
Agmn, staffbeheves that it ~s important to capitalize on the opportunity to match the 90 10 federal
grant and make needed improvements to the A~rport ~nfrastmcture Should you have any questions
concerning th~s request, please do not hesitate to contact me at 349-8535 Thank you for your
consideration of ttus request
cc Michael A Conduff, City Manager
Kathy DuBose, Assistant City Manager, Fiscal and Municipal Services
2
12
~ 215 E McK~nney Street Denton, Texas 76201 (940) 349-8314
FAX (940) 349-8596
OFFICE OF THE ASSISTANT CITY i~f~NAGER - DEVELOPMENT SERVICES
MEMORANDUM
To Honorable Mayor & C~ty Council Members
From Dave H,II, Assistant C~ Manager- Development Services
Date June 21, 2001
Re PROJECT UPDATES
1. Series 2000 Brlnker Road Extension
2 Series 2000 Bonnie Brae
3 Series 2000 Fry Street
4 Series 2000 Miscellaneous Traffic Signals
5 Series 2000 Sidewalks and Bikeways
6 Series 2000 Miscellaneous Streets
7 Series 2001 Miscellaneous Traffic Signals
8 Series 2001 Loop 288 Westem Extension
9. Series 2001 Miscellaneous Streets
10. Series 2001 FM 2t81
11. Series 2001 Hickory Creek Road
12. Series 2001 Miscellaneous Sidewalks and Bikeways
13 Series 2001 Western Loop 288. Transfer to US 77 Project
I Series 2000 Brlnker Road Extension - $900,000
Construcbo~ of the Brinker Road extension started on February 5t' The project got off to a
slow start because of rain To date, the contractor has completed ubhty hne relocabons, and
~s currently completing earthwork and installing the stormwater drainage system So far, the
contractor has used 27 workdays out of 120 contract days
2 Series 2000 Bonnie Brae - $250,000
Th~s money, was ongmally intended to partner w~th the developers of the Smith Tract to
complete Bonme Brae from Riney Road to US 77 as a 45-foot street It appears that the
developer (Intermandeco) has no immediate plans to develop the northern port~on of their site
adjacent to Bonnie Brae The Engineering Department has proceeded with the design of the
1
13
east half of the street, ~nclud~ng at least 2 lanes, curb & gutter on the east s~de of the road,
and associated drainage ~mprovements C~ty of Denton street construction crews ara
intended to commence construction in fall 2001
3, Series 2(100 Fry Street- $250,000
The Eng~neenng Department completed topography surveying the week of March 19th, during
spnng break Design of the street and sidewalk ~mprovements for Fry Street, Avenue A, and
Mulberry Street has begun, with bidding antm~pated for th~s fall
4 Series 2000 M,sc. Traffic Signals - Rad,o Controller Equ,pment - $200,000
Th~s equipment has arrived Two s~tes have been ~nstalled The antennae w~ll be located on
C~ty of Denton Communications Towers to allow coverage of the enbra c~ty's traffic s~gnal
synchromzatlon system This ehmlnates the need to hardw~ra the signal systems together
5. Series 2000 Sidewalks and Bikeways - $200,000
The Emerson and Colorado s~dewalk projects are underway Staff has done field studies for
the Carroll and Longndge s~dewalks These projects ara expected to be b~d out, awarded,
and constructed by late summer
6 Series 2000 Miscellaneous Streets - $300,000
The following roads were selected as part of the budget process for the 1999-2000 F~scal
Year, and the projects are complete
~. McK~nney
> Avenue E
> Palmwood
~. Oakwood
7 Series2001 Miscellaneous Traffic Signals - $150,000
The San Jacinto / Colorado signal ($115,000) ~s ~n prehm~nary design and cost estimating
stage The Carroll Boulevard system upgrades ($40,000) for the s~gnal heads were ordered
~n May
8 Sones 2001 Loop 288 Western Extension - $1 mill,on
Project funding ~s intended for the section of Loop 288 between IH 35 and US 380 West, to
be used toward the Plans, Specs, and Estimates Phase w~th the county and the Texas
Department of Transportation, and to begin ROW acquisition C~ty staff ~s working w~th the
county to finish public ~nvolvement stage, after which a preferrad alignment will be selected
Part~al project funding for currant design work w~ll be drawn from 1998 ClP funds, through
city/county Interlocal agreement expected to be approved by C~ty Council on June 19, 2001
9 Series 2001 Miscellaneous Streets - $2 3 Million
The following Roads wera selected as part of the budget process for the 2000-2001 F~scal
Year
> Windsor, from Hinkle to Bonme Brae-S670,179
> Pennsylvania, from IH 35 to Sandp~per-$532,350
> Atlas, from Redstone to Heroules-$115,425
> Sherman Drive, from Locust to Hercules-S598,179
> Windsor, from H~nkle to Locust-S560,324
]4
Some General fund monies will be also be used as needed to complete these projects
Estimated need ~s $2,476,457 Senes 2001 bond funds avadable total $2 3 m~lhon The
concrete section on Windsor through North Lakes Park ~s complete The W~ndsor, Atlas, and
Pennsylvania projects are all showing progress now that drier weather has prevaded Rain
has slowed project work over the last several months
10 Series 2001 FM 2181-$250,000
These funds plus $200,000 from FM 1830 were allocated toward the Enwronmental
Assessment, Preliminary Design Schematic, and Plans, Specifications and Estimates
(PS&E's) fo~ the widening of Teasley Lane (FM 2181 ) from 2 to 6 lanes, between H~ckory
Creek Road~and L~lhan Miller The consultant ~s underway on the project Th~s is a
partnership with the county, city staff has received the first schematic from the consultant to
review
11 Series 2001 Hickory Creek Road - $750,000
A consultant was h~red to perform a route study and do cost estimates for H~ckory Creek
Road, between FM 2181 (Teasley) and FM 1830 (Country Club) The ~nformabon was
presented tO C~ty Council ~n a closed session on February 27, 2001, at whmh t~me the Council
d~rected staff to begin design of the road from Teasley Lane to R~verpass Drive (west side of
Ryan Ranch Subdivision) Current C~ty of Denton and Denton County funding ($2 3 million
total) w~ll not be sufficient to widen the road all the way over to FM 1830, due primarily to
floodplain ~ssues The C~ty Council approved a contract with the consultant for the design of
Hickory Creek Road from R~verpass Drive to Teasley Lane on Apn117, 2001 To date, the
consultant has completed the draft schematics, which have been rewewed and are being
rewsed The next step w~ll be to hold a neighborhood meeting once the schemabcs are ~n an
acceptable form to receive ~nput prior to beginning the detailed design work
12 Series 2001 Miscellaneous Sidewalks and Bikeways - $200,000
On March 26, 2001, staff recommended that the Oversight Committee select from the
following projects, using $200,000 ~n Miscellaneous S~dewalks and B~keways funding for
fiscal year 2000 - 01
I Mountain Bike Trail - $50,000
2 Bike Lanes (in accordance with Mobility Plan, Phase I and 25%
of Phase II) - $75,000
3 Civic Center Park Sidewalk (Withers to Locust) - $75,000
4 Elementary School Sidewalks - $50,000
The Oversight Committee quesboned the use of transportation funds for a mountmn b~ke tra~l
(wewed more as a recreational project), and asked staff to confirm that McK~nney Street
s~dewalks were funded before making a recommendabon to C~ty Councd Staff has s~nce
confirmed that on May 15, 2001, C~ty Councd approved $84,525 for McK~nney Street
s~dewalks (new construcbon between Frame and Janme, and replacement where necessary
from Janme to Campbell) The McKinney s~dewalk funding ~s subJect to final approval as part
of the c~ty's budget adoption process
3
]S
> New Funding Request
After ,March 26tn, c~ty staff was approached by the Denton Independent School District
(DISD) regarding the need for s~dewalks along Ryan Road for the new Ryan
Elementary School Dunng the joint C~ty Council / DISD Board meeting held on May
16, 2001, the following ~nformation was presented
o South Side of Ryan Road' $$0,000
DISD requested that the city install 880 hnear feet of 5-feet wide s~dewalk on
the south s~de of Ryan Road between the school s~te and Thistle H~II
Subdivision, roughly estimated to cost $12,500 R~ght-of-way (ROW)
acquisition would also be ~nvolved, roughly estimated to cost $37,500 The
south s~dewalk was ~denbfied as the first priority for Ryan Elementary School
pedestrian and b~ke needs
o North Side of Ryan Road' $350,000
DISD also requested that the c~ty ~nstall a sidewalk on the north s~de of Ryan
Road, extending 1 5 miles to the east of the school The length requested ~s
directly related to DISD's 1 5 m~le "walk zone" - students hwng w~th~n 1 5
miles are expected to be able to walk or bike to school, students outside the
walk zone are ehg~ble for DISD-prowded bus transportation Unbl s~dewalks
are provided, DISD will temporarily offer bus transport to students ms,de the
walk zone, using pick-up points along Ryan Road The costs for the project
are roughly estimated as
1 R~ght-of-way acqu~slbon $120,000
2 5-feet wide, 1 5-mile long s~dewalk $110,000
3 2 Pedestrian bridges @ $50,000 $100,000
4 Retaining walls / Slope stab~hzat~on $ 20,000
Staff~presented the Ryan Elementary School s~dewalks project for Oversight
Committee as a discussion ~tem on June 11th The project was brought forward
because of student safety concerns and because the school is scheduled to open ~n
August 2001
Staff~dld not ask for an Oversight Committee recommendation for use of the
m~scellaneous sidewalk funding for two reasons
(1) The estimated $400,000 s~dewalk project far exceeds the $200,000
available for Ser~es 2001 M~scellaneous S~dewalks, and the source of
additional funding has not yet been ~dent~fied, and
(2) Ryan Road is slated to be w~dened eventually, from two lanes to a s~x-lane
artenal, and staff cannot provide any assurances at the current bme that the
proposed s~dewalks would not be demolished to make way for the road
widening
Staffers ~n the process of h~nng an eng~neenng consultant to determine the proper
alignment for a vadened Ryan Road, and to determine more precisely the associated
ROW acqu~slbon and construction costs The Oversight Committee agreed that the
Ryan s~dewalk project was important g~ven student safety concerns, and also agreed
4
that further analysis as proposed by staff should be conducted before a funding
decision Js made
13 Series 2001 Western Loop 288' Transfer to US 77 ProJect
On June 11 ,; 2001 the Oversight Committee authorized the use of Loop 288 2000-01 CIP
funds toward the US 77 project, ~n an amount not to exceed $380,000, based on the
explanation that follows
Estimated Expenses {beyond existing US 77 ClP funding) > Completion of US 77 ROW acqu,sition $352,000
~ Funding supplement to TXDOT Agreement 28,000
> TOTAL $380,000
Funding Source > Loop 288 2000-01 (Phase I)
> Available $1,000,000 1 Authorization Use of an amount not to exceed
$380,000 for the US 77 Project
> Loop 288 2003-04 (Phase II)
> Available $250,000 1 Authorization Request' $0
o Funding availability is anticipated in FY 2001-02
US 77 Project Background
The Sones 2001 project hst ~ncludes $1,450,000 for US 77 That amount w~ll be used
to leverage state funding for two dlsbnct secbons of US 77
I North Section. US 77, from US 380 to IH-35
Th~s project raqu~rad the commitment of $1 2 million ~n construction funds to the
Texas Department of Transportabon (TXDOT) to widen US 77 from two to four
lanes (using Elm and Locust as an oppomng one-way pair for part of the route),
connecting University to Interstate H~ghway 35 north of the outlet mall The
construction contract for th~s $13 m~lhon roadway project ~s scheduled to be
awarded in fall 2001 The city has also been responsible for r~ght-of-way (ROW)
acquisition, a process that was imt~ated m 1988 Thus far, more than $700,000 has
been spent or reserved for over 50 acquisitions An esbmated $352,000 ~s
requested to enable about 15 more property closings
2 80uth Section. US 77, from US 380 to Eagle
This proJect involves the use of $250,000 for selected curb and gutter repair on Elm
and Locust between Umvers~ty and Eagle Drive TXDOT w~ll then resurface these
roadways, beg~nmng ~n September 2001 Another secbon of US 77 (Dallas Dnve,
frOm Teasley to Callaway Gardens) will also be rasurfaced as part of this project
TXDOT construction permits have been secured by the c~ty, and the curb/gutter
repairs began th~s month
5
]?
Funding Shortfall - ROW Acquisition
The C~ty of Denton ~s required to complete all ROW acquisition before construction
begins mn fall 2001 The cost of ROW acqu~s;t~on ~s above and beyond the $1 2 m,lhon
needed for the c~ty's share for construction costs The cost of ROW acquisition has
exceeded ~nit~al estmmates, primanly due to changes ~n land values s~nce the project
started ~n the late 1980's Staff ms neanng the final stages of the acqumsmtion, and,
despite strong efforts to reach voluntary agreements w~th all property owners, some
condemnabon proceedings wmll be required which w~ll also contnbute to ~ncreased
project costs
Funding Shortfall - TXDOT LPFA
The City of Denton recently entered ,n an agreement w~th TXDOT called a ~LPFA"
(Local Project Funding Agreement), commmtt~ng the c~ty to pay $1,228,000 toward US
77 construction costs The current CIP funds available for the c~ty/TXDOT agreement
total ,$1 2 milimon, leaving a shortage of $28,000
Why~ use the Western Loop 288 Extension Funds?
C~ty of Denton commitments to the US 77 project must be secured before fall 2001,
when TXDOT expects to let the construction contract Approximately $13 m~ll~on ~n
state and federal funding could be lost ~f these commitments are not honored
Typically, when addmbonal capital project funding ms needed, other ClP fundmng hnes
that are ~nactmve are evaluated to determine ;f sh~ft;ng can occur Project funding can
be borrowed and then 're~mbursed" m subsequent bond programs The Western
Boulevard Project ($800,000) and the Loop 288 Extension ProJect (Phase I -
$1,000,000 & Phase II - $250,000) have not made any progress to date During a
bnefing m November 2000, the C;ty Counc, I was reluctant to ehm~nate the Western
Boulevard Project The Loop 288 Extension funds (for the new western section
around the amrport) are intended to be leveraged w~th Denton County funds, and the
county has mnd~cated that the city's share would not be needed unbl near the end of the
2003-04 fiscal year If the C~ty of Denton continues to accelerate ~t's bond program
and compress the current 5-year CIP program ~nto 3 years, the Loop 288 funding w~ll
s~t dormant for 2 more years The Oversight Committee authonzed the use of an
amount not to exceed $380,000 for the US 77 project out of $1,250,000 reserved for
the Western Loop 288 Extensmon, leawng $870,000 ~n reserve for Loop 288
6
ATTACHMENT C
Attachment C
CITY OF DENTON, TEXAS PARKS & RECREATION DEPARTM
321 E MoKINNEY * DENTON, TEXAS 76201 (940) 349-PARK * FAX (940) 349-8
To Mayor and Members of the City Council
From: Ed Hodney, Director of Parks and Recreation ~ ~
Date: June 22, 2001
SubJect. Update of 1996 Downtown Improvement Project
The Downtown Improvement Project was originally conceived through a community "visioning"
process m 1994-1995, a process m which several hundred cltazens participated During thas
process, concept drawings were produced by Dallas-based Corgan Assocmtes in concert wath a
committee that was charged wath defining amtmtaves that would help make Denton a "great place
to lave, work, learn and play" Subsequently, the concept for this project was Included in the
1996 bond election by a "blue ribbon" CIP commattee composed of 51 Caty Councll-appmnted
residents A brief hastory ofthas project, from concept stage to constmctmn as attached for your
review (Attachment 1) In Attachment 2, we have listed the meetings that have been held with
multiple stakeholder groups, as well as the general public, during the project planning phases
The objectaves of thas project were to improve the overall appearance of the Courthouse Square
area, establish a more pedestrian-friendly setting, amprove traffic flow, reduce exastmg
pedestnan-vehaeular conflicts, eliminate pedestrian hazards on the s~dewalks and an the street,
amprove wheelchmr access from parking spaces to sidewalks and reduce m~nor drainage
problems m the parking zones These objectlves~estabhshed through extensive discussions wath
resadents and businesses on the Square-- are to be accomplished through new sidewalks, curbs,
brick paver treatments to the sadewalks and crosswalks, all elements currently under constmctaon
by the Caty's contractor
Over a four-year desagn phase, several issues surfaced and were resolved through &scuss]ons
with project stakeholders The most sagmficant issues, summarazed an Attachment 3, related to
the need to maximize parking whale achaevmg the projects other objectives, and preservang the
elaglhahty of the Courthouse Square as a National Hastorlc Dastract (subsequently desagnated as
such) Other concerns related to the schedule and sequencang of construction were addressed
with busntesses, prior to the City Counml's award of the construction contract
The contractor is expected to complete its work by October 2001 New lane and parking space
markings wall be installed by City fomes as the contractor completes various stages of the
project After the contractor as done, the Caty wall mall the examng asphalt and overlay the streets
to establish final grades and drmnage
1
2O
The approved plan for the project includes other elements that depend on future public or private
funding, including
S,te furmture, landscaping and ~rngat~on for the comer br~ck "landings" at each
Intersection,
· The extans~on of the pavement and landscape features west along H~ekory Street to Bell
Avenue,
· The construction of s~mllar ~mprovements on Walnut, Cedar, Austin and Pecan streets
Tbas particular element relies on the conversion of these streets to one-way traffic, in
order to estabhsh more parlang adjacent to the Square and improve the appearance of
these areas
Parks and Recreation, Keep Denton Beautiful and Mmn Street Office staff are presently working
to secure funding for the landscaping, ~mgatlon and site furniture The Main Street Association
has committed some of its funds as a match to secure a Neighborhood Empowerment grant from
the C~ty a~d funds from TXDOT's cost-sharing program All other phases of the plan, if desired,
wtll require funding from as yet undetermined sources
Cop~es of the original Vision for Denton concept drawings, the master concept .]~lan and the
construction drawings will be avmlable for review at the City Council at the June 27"' meeting
Estimated Pro,lect Schedule
Construction ~s projected for completion in October 2001 The implementation of other elements
of the project concept plan may commence as funding ~s secured
Fiscal Information
$700,000 was allocated to the project in the 1996 bond program Another $51,000 was allocated
from Street bonds toward the mdhng and resurfaemg of the streets involved m the project
$695,625 was appropriated for the current construction contract
Attachmgnts 1 History of project
2 Ltst of Meetings with Stakeholder Groups
3 Report to the C~ty Couneti, dated June 12, 1998 and August 8, 2000
2
21
ATTACHMENT 1
DOWNTOWN IMPROVEMENTS PROJECT HISTORY
1994-1995 Project concept is formed through V~sion for Denton process
1995 City Council-appointed Blue R~bbon CIP Committee conducts public
meetings and stakeholder ~nterv~ews to develop new bond program,
recommended projects approved after multiple pubhc hearings by the Planmng
and Zomng Commission and C~ty Councd
1995-1996 Blue Ribbon Committee conducts privately funded campoagn ~n support of bond
program
1996 Voters approve all bond propositions by margins of 70-80%
1997 Public Improvements Committee formed by Vision Cabinet to guide planmng
efforts for Downtown Improvements project Work begins on refined concept
drawings In summer 1997, The Longhorn Gallery ~s completed at the comer of
Elm and Hickory Sidewalk and landscape ~mprovements are constructed in
partnership w~th the bmld~ng owner, estabhshmg an advance model for the rest of
the project
1998 Concept plans reviewed w~th various ~nterests, ~ncludmg H~stonc Landmark
Commission, Moan Street Association, V~sion Cabinet, C~ty Council and through
open public meetings Design placed on hold m June 1998, pending a ruling on
the City's apphcat~on for des~gnataon as a National H~stonc D~str~ct
1999 City Council approves contract w~th Armstrong-Berger for design development
and construction dravangs Design process continues through a series of meetings
and reviews w~th all stakeholder groups (see Attachment 3)
2000 Design continues through public meetings and reviews F~nal construction
drawings are reviewed on August 8th by the C~ty Council, which then d~rects staff
to proceed w~th project b~dd~ng
2001 C~ty enters into a contract with TRI DAL Inc on February 6th Construction work
begins on March 27t~ Projected completion ~n October
3
ATTACHMENT 2
STAKEHOLDER AND PUBLIC MEETINGS
HELD TO REVIEW DOWNTOWN IMPROVEMENTS PROJECT PLANS
Open Public Forum (concept plan rewew)
Apr:l 29, 1998
Cl.~y of Denton Historic Landmark Commission (concept through final plans)
February 9 1998
March 9, 1998
June 8, 1998
January 10, 2000
March 20, 2000
April 10, 2000
Main Street Association (concept plan through final plans)
March 20, 1998
Febmary 1999
June 18, 1999
October 1999
May 19, 2000
June 16, 2000
July 21, 2000
September 22, 2000
Downtown Businesses and Residents (concept plan through final drawings)
November 9, 1999
December 5, 1999
February 15, 2000
March 7, 2000
August 10, 2000
August 15, 2000
4
i~ ATTACHMENT $ ~
CITY OF DENTO_N, TEXAS PARKS & RECREATION DEPARTMENT
321 E M=KINNEY · DENTON, TEXAS 76201 (940) 349-PARK · FAX (940) 349-8384
MEMORANDUM
To. Mayor and Members of the City Councd
From: Ed Hodney, Director ~ /~/~
Parks and Recreation ~}e~ent
Date June 12, 1998
Subject: Report on Downtown Improvements ProJect
At last report, I reformed the City Council that some concerns had been expressed by the
Historical Landmark Commission, members of the Main Street Association and others
regarding the concept plan for the "streetscape' ~rnprovements around the Courthouse
Square The Public Improvements Committee, formed to grade tins project, has s~nce
conducted a public meetrng and sohc~ted addit~onal comment on the concept plan It is
t~rne for us to update you on tins project
After reviewing all comments, the committee has recommended that the Cxty staff
advance the design of the streetscape unprovements, "cautiously and subject to" several
changes and conditions agreed to in a rneetm§ on June 1't Margaret Srnxth, chart of the
committee, has composed a letter that will be sent to those who have participated in the
rewew of the plan A copy of Mrs Srmth's letter ~s attached for your ~nformatmn, along
w~th the committee's June l"t recommendations
Unless otherwise chrected, I will secure a consultant to develop construction plans and
subrmt a contract for C~ty Council conslderatxon sornetune rn August or September
Please feel free to contact me with any questions regarding tins project
Attachments Letter frorn Margaret Srmth
Minutes of the Public Improvements Committee
c Ted Benawdes, Cxty Manager ~ck Svehla, Deputy City Manager
Michael W Jez, Assistant C~ty Manager of Operations
24
DRAFT
ARer ivoter approval of the 1996 capital unprovements program, a Public Improvements
Comm~s~tee was established to Bmdo City staff and consultants on the ~Sl~l of
"streetscape tmprovenients" to the streets around the Courthouse Square and alon~
I-hckm'y Street. These unprovements essentmlly nurror the work that was constructed a
year ago at the comer of Ehn and I-hckory, next to the Longhorn Cmllery I wa~ asked to
chan' 1h~ committee
A cog~ept plan for this pro.~ct has been completed and sub.~ected to mtmme public
review, including an open pubhc m~l~ng at the Civic Center on Aprd 29, 1998. Some of
you 1rove pamc~pated m th~s reviow On June 1=, the coram~ttee met to con~ider the
comm~ents recmved through the review process and to decide upon the next course of
Mmut~ fi.om the June 14 mzetmg are attached for your review In summary, the Public
L~lp/D¥omants Comm~ _ha_~ r~omm~nd~d to Cl~y 5t~ that a colx~Bltsnt bo ~ ~
~ ~ possible to dzvelop pi .a~ and construction documents A number of elements
fi.om me concept plan drew cnt~m~m, pamcularly the Texa~ Star motif m the ~eet
mter~c~en~ the m~d-block pedes~an crossings and any assocmted reduction m parking
SP~ AS the m!nB~s ~ow, the comm~oo h~8 r~ommendod that these element~ be
ebmma~J fi.om the proj~t plan~
Another mgmficant enncem, expre~med by the City's H~stonc Landmark Commission,
wa~ that certain elzments of the concept plan nught negatively ~mpact Denton's pending
apphcatmn for National I~tonc Register ~tatus We believe that the comrmttee's
recommended changes to the concept plan, along w~th a parallel process for both pro.~eet
des~g~ and review of the iu~tonc &~tnct apphcat~on ~hould resolve such issues
Finally, despite the concerns expre~ed about the concept plan, th~s pro. leet st~ll seems to
en?oy !general support, especially among the business commamty around the Square The
members of the Public Improvements Committee believe that it ~s t~me to advance this
pro?eot, cautiou~ly and ~ubject to the attached recommendations
25
Please feel free to contact me or ~my member of the ¢OlIlllllttee with questions about this
important project for downtown Denton A roster of the committee is attached for your
convenience
Sincerely,
Comm~ ~
Attachments Meeting Minutes J~mo 1~
Roster of the Pobhc Improvements Commit~ee
c Pubh¢ Improvements Committee Members Denisha Wflhams, Mare Street Manager
Ed Hodney, Dm~tor of Parks and Recreatmn
26
PUBLIC IMPROVEMENTS COMMITTEE
MEETING NOTES JUNE 1, 1998
Downtown Improvements Project
Present. Margaret Smith. Cha~ Fred Patterson
Barbara lhsser Bill Thomas
Macha~l Monticmo Derasha Williams
Ed Hodney
· Reviewed comments received from public meeting held at the Ciwc Center on 4-29-
98
· Agrsed to elmimate the Texas Star f~se from the strut intersections However,
Stars vall be retmned m the concapt, to be applied perhaps at smaller scale m slgnage,
walk~ otc
· Agr~d to eliminate mid-block orossmgs from the project, matcad possibly eddmg
cr0ss-walk/comzr treatments at tbe mtsrs~tious on the Square md one block off the
Square It is thought that ~s edded featoro would help to slow down or"calm" traffic
e~tenng the Square and would pull m Auatm, Walnut, Pecan and Cedar streets as part
o~the overall plan
· Agreed to replace the tur~grezmpace treatment on the ms,de comers of the
mtzrse~ous ruth pavers or other hard surface
· Q~estioned the effectiveness/usefulness of the ate furmtore, as presently used at Elm
and Hickory. Will continue to consider more user-friendly locaUom for thee items as
plms progress.
· Agreed that the vade sidewalks, corrections in curb elevations, decorative brickwork
and landacapmg were cnUcal elements of the project
· Dncossed the ueed to look at other onprovements on Walnut, Austin, Cedar and
Pecan streets that could be made a part oftlus project Ideas mclude one-way traffic
on these stores, walk unprov~ments, renrgamzed perking, screened trash contaum~
· Agreed that m~s must be used strategically and must not negntively affect adjacent
bUsmessas
· Denisha felt that the above proposed changes m~ght mitigate the concerns of the
Historic Landmark Comm~ssion(HLC) for ttus project She noted that the design
process for the Downtown Improvements project would hkely overlap the dates by
which the Commission's application for lustonc chstnct status vail be decided
(November 1998 by State of Texas, January 1999 by the National Park Service) Such
o~erlap vail allow us to continue pubhc &alog until decisions are reached regarding
tho HLC's application and project design is completed.
· Agreed that the Public Improvements Committee forward a recommendation to the
C~y to proceed vath the design phase of th~s project, subject to each of the above
comments. Further, agreed to forward letters to the Vision Cabinet, Mare Street
ASsociation, Downtown merchants and the I-hstonc Landmark Commission vath a
copy of these minutes
EH 6-4-98
Pubhc Improvement Committee
Margaret Srmth, Chasr Staff
2216 Archer Trail Ed Hodney
Denton, TX 76201 Demsha Wflhams ext 8529
382-3296
Bill Thomas Gary Hudson
Ethan Allen Furmture Ftrat State Bank
200 W Oak P O Box 100
Denton, TX 76201 Denton, TX 76202
382-2125 381-7359
Fred Pole Fred Patterson
Umvemty of North Texas Denton Record Chromcle
P O Box 13737 P O Box 100
Denton, TX 76203 Denton, TX 76202
565-2103 387-3811
Dan Martin
Martin Parlang Systems
620 W Hickory
Denton, TX 76201
380-8184
Machael Montacmo
3605 Forrestndge
Denton, TX 76205
565-4693
Barbara Passer
278 Daxqd Fort
Argyle, TX 76226
240-3027
Bob & Bette Sherman
32 Trmbergreen Ctrcle
Denton, TX 76205
484-8778
Larry L'Heureux (LaRue)
Selwyn School
3333 W Umverslty Dr
Denton, TX 76201
382-6771
28
Aoend~ No ~
^Oenda Item ~ ~'-~ ~ ~
Date_ *-
AGENDA INFORMATION SHEET
AGENDA DATE' August 8, 2000
DEPARTMENT Parks and Recre~tw.n
ACM Dave HlU
SUBJECT:
Receive a report, hold a discussion and give staff direction regarding the construction of
streetscape improvements around the Courthouse Square
BACKGROUND:
The 1996-1999 CIP included $700,000 for the design and construction of "streetseape"
improvements around the Courthouse Square and along Hickory Street to Bell Avenue
The objectives of the project are 1) to improve the appearance of the area, 2) to provide
for a safer, more pedestrian-friendly environment, 3) to provide for bicycle traffic
linkages, 4) to improve the organization of vehicular traffic and parking, including
handicap spaces, 5) to correct poor drainage Each of these objectives is to be
accomplished w~thout a loss of parking spaces and w~th minimal negative effect on area
merchants dunng the construction phase
The original vision for this project included the streets around the Courthouse and the
section of Hickory Street that runs from Bell Avenue to the Square (the "arts eomdor")
Due to funding constraints, plans have been prepared only for the work immediately
around' the Square Future funding wtll be required to accomplish improvements on the
streets one block off of the Square (Cedar, Austin, Pecan and Walnut) and the arts
comdor The designed project scope includes sidewalk replacement, new brickwork
crosswalks, landscaping, site furniture, and signage similar to that already in place at the
corner of Elm and Hickory (Exhibit A) Full-scale drawings will be presented at the
August 8t~ meeting
Throughout the planning and design phase, staffand the project consultants work closely
vath representatives of Vision for Denton, Main Street Association and other downtown
merchants Numerous meetings have been held to develop the design concept, make
decisions regarding traffic and parlang patterns, and test the consultant's solutions against
the needs of the businesses and residents around the Square Plans and construction
document have been completed for this project, and staff is prepanng to advertise for
bids
Recently, a meeting was held with members of the Main Street Association to review the
latest set of plans and to discuss the construction schedule Those in attendance expressed
support for the current design However, the group requested that the City not initiate
major construction until after January 2001, in order to avoid disruption of business
dtmng the busiest shopping period of the year In order to advance the project and
mlmmlzed the escalation of construction of construction prices over time, staff IS
presently exploring the pusslblhty of letting a construction contract pnor the end of 2000
to implement some project elements that would not significantly disrupt business activity
We wll ipursue this option only after the merchants are satisfied that their interests have
been protected
OPTIONS:
1 'D~rect staff to proceed w~th the project, as recommended
2 Direct staff to address any further issues and concerns identified by Council
Members, and revisit this project at a future work session
Should the City Council support the project as designed, the staff recommends that the
constmciion bids be sought as soon as practical, dependent upon agreement w~th the
merch~mta regarding elements that could be constructed vath mlmmal disruption to
busmass~ during the hohday shopping season
ESTIMATE SCHEDULE OF PROJECT;
A construction contract should be awarded no later than December 2000, vath
construction bern§ completed by November 2001 Should the merchants agree, a
construction contract could be awarded prior to December, allowng work to proceed on
certam elements of the project.
PRIOR]ACTION/REVIEW:
This is the City Council's first review of the t~mal design There have been numerous
presentations to the Vision Cabmet, m which several Council Members have been
involved
FISCAL INFORMATION:
$?oo,oo0 m 199s funds
I XHIBiTS:
1. Exlublt A--project s:te plan
Respectfully submitted
Ed Hodney ~
D~rector of Parks and Recreation
F ~admln\Clty CounciI~AOENDA INFORMATION SHEET Downtown Imptovments doc t
RuG 0~ OU 05:04p Gonzalez & SohneebepG EnG ,~14-881-1431
EXHIBIT
Ill
I l
Illh~ll
11 1
JOA3AEI(~S 9 S~:~::;NIgN3 '9t:I3g:3]NHOS t~ Z31VZN09 O00Z c~ §0 /l ~0 5nv po~ §~p ~:tyf]OS-M~]N\NOLH]O\:lOel;o,.JCl\pa,JetlS\ 3
Agenda Item -~'~' -~---~
AGENDA INFORMATION SHEET
AGENDA DATE: June 26, 2001
DEPARTMENT' C~ty Manager's Office
CM M~ke Conduf£
SUBJECT
Consider nominations and appmntments to the C~ty's Boards and Comm~sslons
BACKGROUND
Each City Cotme~l Member ~s responmble for makmg nominations for board and comm~ssmn
places assigned to h~m or her Indlwdual C~ty Council Members w~ll make nominations to the
full C~ty Cotmcll for the Council's approval or d~sapproval at the next regular scheduled
meeting
Attached is a hst detalhng the nommatmns made at the June 19' Councd meeting A vacancy
has been created on the Airport Adwsory Board due to the nomination of Joe Roy to the
Planning and Zomng Comm~ssmn If that nomination ~s approved, Councd Member McNedl
wall have a nommat~on to make to that board In addition, Brenda Phllhps has resigned from the
Parks, Recreation and Beautlficat~on Board That vacancy ~s noted under that board and is a
nom~natlon for Councd Member McNedl
Staff has also researched the orchnances estabhshmg the Community Development Advisory
Committee, the Human Services Advisory Committee and the H~stonc Landmark Commission
and there appears to be no state legislation that would reqmre membership on those boards to be
greater than seven members Cotmcd would need to adopt ordmances redefimng the three
boards should it demre to reduce the number of members on those boards
Respectfully su~d
e~ fear Wa~llers~
C~ty Secretary
BOARDS/COMMISSION NOMINATIONS
AIRPORT ADVISORY BOARD
Dtst Current Member Nomtnat~on Term Counctl
1 Hal Jackson 1999-01 Redmon
2 Rtck Woolfolk Lan'y Luce 1999-01 Fulton
6 Don Smith 1999-01 Burroughs
4 Joe Roy 2000-02 McNelll
ANIMAL SI~P,I,TER ADVISORY COMMITTEE
Dzst Current Member Nomtnatton Term Council
7 Bob Rohr Susan Wemkeln 1999-01 Brock
3 Lynn Stucky 1999-01 Phillips
4 Jenm fer Walters Jennifer Walters 1999-01 McNedl
CIVIL SERVICE COMMISSION
I
Dtst Current Member Nomtnat~on Term I
0 Tory Cacti 1998-01 City Manager
,COMMUNITY DEVELOPMENT ADVISORY COMMITTEE
Dtst Current Member Nommatton Term Councd
1 Harry Bell Harry Bell 1999-01 Redmon
2 Pat Colonna 1999-01 Fulton
4 Diane Crew Hank Dmkenson 1999-01 McNelll
6 Peggy Fox 1999-01 Burroughs
CONSTRUCTION ADVISORY & APPEALS BOARD
Dtst Specialty Current Member Nommatton Term Councd
1 General Contractor Bill Redmon 1999-01 Redmon
3 General Contractor Jay Thomas 1999-01 Phillips
5 General Contractor Scott Rachter 1999-01 Beasley
Rep fi:om
6 electrical industry Doug Grantham 1999-01 Burroughs
7 Rep from
plumbing industry Frank Cunnmgham Frank Cunmngham 1999-01 Brock
2
Seat Current Member Nomtnatton Term Counctl
7 Rosemary Rodnguez 1999-01 Brock
7 Katie Flemmmg 1999-01 Brock
7 Mark Chew 1999-01 Brock
HISTL, RIC LANDMARK COMMISSION
Dtst Current Member Nomtnatton Term Councd
2 l,anelle Blanton 1999-01 Fulton
4 Barry Verm~lhon 1999-01 McNefll
5 Peggy Cal~ps 1999-01 Beasley
6 John Bmnes 1999-01 Burroughs
1 Steve Boedeker Steve Boedeker 1999-01 Redmon
3 Steve Johan.qson 1999-01 Phflhps
HUI~.~-,~, SERVICES ADVISORY COMMITTEE
Dtst Current Member Nomtnatton Term Councd
4 Audrey Bryant 1999-01 McNefil
5 James MeDade 1999-01 Beasley
1 Mae Nell Shephard Mae Nell Shephard 1999-01 Redmon
3 Betty Tombouhan 1999-01 Phflhps
5 Peggy Kelly 1999-01 Beasley
6 Kent Miller 1999-01 Burroughs
7 Ehnor I4nghes 1999-01 Brock
LIBRA.,~ .' BOARD
Dtst Current Member Nomtnatton Term Counctl
5 Ken Ferstl 1999-01 Beasley
6 Adrienne Noms 1999-01 Burroughs
2 Carroll Trml Judy Deck 1999-01 Fulton
3
PARKS, .~ECREATION AND BEAUTIFICATION BOARD
Dtst Current Member Nomtnatton Term Counctl
5 Don Edwards 1999-01 Beasley
6 Teresa Andress 1999-01 Burroughs
7 D~tlton Gre~,orv Dalton Gregory 1999-01 Brock
1 Gwendolvn Carter Shalaura Logan 1999-01 Redmon
4 Vacant 2000-02 McNefll
PLANNI~-G AND ZONING COMMISSION
Dtst Current Member Nomtnatton Term Councd
4 g.h ~abeth Gourche 1999-01 McNefll
7 Sn~an Apple Joe Roy 1999-01 Brock
1 Carl Wflhams 1999-01 Redmon
2 Rudy Moreno Bill Ke~th 1999-01 Fulton
PUBLIC UTILITIES BOARD
Dtst Current Member Nomtnatton Term Councd
6 Charldean Newell 1997-01 Burroughs
4 VACANT Bill Cheek, Jr 1999-03 Fulton
TMPA BOARD OF DIRECTORS
Seat , Current Member Nomtnatton Term Council
0 Sandy Knstoferson Jack Miller * 1999-01 ALL
· Nommataons will still be considered at the next meeting
TRAFFI~ ~,AFETY COMMISSION
Dtst Current Member Nomination Term Counctl
3 Marshall Smith 1999-01 Phflhps
4 M~chael Montmmo 1999-01 McNefll
7 Pat Cheek Pat Cheek 1999-01 Brock
4
ZONL~G BOARD OF ADJUSTMENT
Dtst Current Member Nomtnatton Term Council
3 Greg Mmrhead 1999-01 Phdhps
6 ByronWoods 1999-01 Burroughs
7 John Johnson 1999-01 Brock
1 Tom Reece Tom Reece 1999-01 Redmon
4 Jon Bergstrom Grant Jacobson 1999-01 McNelll
0 Grant Jacobson (Alt 1) James Ydrkpatnck 1999-01 ALL
0 Jmaes ~ck (Alt. 2) David Gumfor7 1999-01 ALL
0 David Gumfory (Alt 3) 1999-01 ALL
/ _
AGENDA INFORMATION SHEET '
AGENDA DATE: June 26, 2001
DEPARTMENT: Legal
CM/DCM/ACM: Herbert L Prouty, City Attorney
SUBJECT A resolution requesting the Denton County Commissioners to place the City of
Denton ~n,one county commissioners' dastnct
BACKGROUND The Denton County Commissioners have begun the process of red]smctlng
The County Commissioners have appointed a sub-committee The Mayor of Flower Mound and
the Mayo~ of Lewlswlle w~ll serve on the committee The City Councd may want to add to the
attached resolution a request to allow the Mayor of Denton to serve on the Committee In
addition, the resolution requests that the Denton County Commissioners put the City of Denton
in one County Commissioner d~stnct
OPTIONS
1 The City Council may pass the resolution
2 The C~ty Council may consider adchng to the resolution some of the ~tems discussed
3 The City Council may decide not to pass the resolution
RECOMMENDATION: Staffrecommends approval oftheresolutlon
FISCAL IMPACT There is no fiscal Impact as a result of this resolution
Respectfully submitted
Herbert L ~routy
Czty Attorney
RESOLUTION NO
A RESOLUTION OF THE CITY OF DENTON, TEXAS, REQUESTING THE DENTON
COUNTY COMMISSIONERS COURT TO PLACE THE CITY OF DENTON IN ONE
COUNTY COMMISSIONERS' DISTRICT, AND PROVIDING AN EFFECTIVE DATE
WHEREAS, the Denton County Commlsslongrs' Court has certatn responmbfl~t~es for
redmtnct~ng under federal and state law including, but not hnuted to, Amendments 14 and 15 to
the Umted States Constitution, U S C A (West 1987), and the Voting Rights Act, 42 U S C A §
1973, et seq (West 1987 and Supp 1999), and Tex Gov't Code Ann §§ 2058 001 and 2058 002
(Vernon Pamph 2000), and
WHEREAS, the Denton County Comm~smoners Court has appmnted a committee and
held a meeting concerning redistricting,
WHEREAS, the Denton C~ty Council demres to promde Input dunng the re&stnctmg
process to the Denton County Commmmoners Court, and
WHEREAS, the C~ty Council requests that the Denton County Commlsmoners' Court
place the C~ty of Denton m one commmmoner's d~stnct, NOW THEREFORE,
THE COUNCIL OF TIlE CITY OF DENTON HEREBY RESOLVES
SECTION I That the City of Denton requests that Denton County
Commasmongrs' Court place the City of Denton m one county comnusmoner's district
SECTION II That the City Secretary submit a mgned copy of tlus resolution to
the Denton County Commmmonors' Court
SECTION II This resolution shall become effective ~mmedmtely upon 1ts
passage and approval
PASSED AND APPROVED tins the day of ,2001
EULINE BROCK, MAYOR
ATTEST
JENNIFER WALTERS, CITY SECRETARY
BY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
DIVERSIFIED UTILITY CONSULTANTS, INC
PRESENTATION ON
TXU-GAS DISTRIBUTION'S
APPLICATION TO INCREASE RATES
IN THE NORTHWEST METRO/MID-CITIES
CITY cOUNCIL MEETING - JUNF 26, 200l
DIVERSIFIED UTILITY CONSULTANTS, INC
12113 ROXIE DRIVE SUITE 110
AUSTIN FX 78729
JUNE 26, 2001
ATTACHMENT 1
TXU GAS NORTHWEST METRO MID CITIES
RATE INCREASE REQUEST
TEST YEAR ENDING SEPTEMBER 30, 2000
COMPANY COMPANY
LINE PRESENT ADJUSTMENTS PROPOSED RESIDENTIAL COMMERCIAL INDUSTRIAL
NO DESCRIPTION AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT
I PRESENT REVENUES
2 EASE RATE REVENUE $135 115,801 $7 509 763 $142 625 564 $83 295 206 $49 128 129 $2 692 466
3 CAS COETADJ REVENUER $58991 742 $0 $58991 742 $34410233 $22598994 $1 982515
4 REVENUE RELATED TAXER $4 357,203 $0 $4 357 203 $2 518 264 $1 565 001 $273 938
5 MISCELLANEOUS REVENUE PRESENT $1 080,812 ($150 790) $930 022 $988 657 $90 520 $1 634
6 TOTAL REVENUE PRESEI~t' $199 545,558 $7 358 973 $206 904 531 $121 212 360 $73 382 644 $4 950 553
7 EXPENSES OPERATING
8 GAS COST CITYGATE $141,513,305 $0 $141 513 305 $81 966 488 $56 788 241 $2 758 576
9 UNACCOUNTEDFOROA~ $1,342,630 $0 $1 342630 $599989 $415104 $327537
10 OTHER GAS PURCHAEEE ($129,117) $5 ($129117) ($74786) ($51814) ($2517)
11 COMPANY USED GA8 $12,285 $5 $12285 $71t6 $4930 $239
12 COMPANY USED GA8 CREDIT ($62,266) $0 ($52 266) ($36 065) ($24 987) ($1 214)
13 TOTAL OA~ EUPPLY EXPENSES $142 676,837 $0 $142 676 837 $82 462 742 $57 131 474 $3 082 621
14 OPERAllONS & MAINTENANCE EXP $22 079,23t $0 $22,079 231 $16 751 078 $4 348 312 $979 841
15 DEPRECIAllON EXPENSES $6 798,904 $1 102,739 $7,901 643 $4 230 537 $1 982 011 $586 356
16 INTEREST ON CUSTOMER DEPOSlT8 $215,134 $0 $215 134 $133,654 $81 480 $0
17 INTEREST ON CUETO~ER ADVANCE~ $48 831 $0 $48 831 $30 337 $18 494 $0
18 PROPERTY RELATI~D TAXES $1 687,003 $582 005 $2 269 008 $1 049 717 $491 794 $145 492
19 PAYROI.LRELATEDTAXES $581,670 $0 $581 670 $436821 $116959 $27890
20 REVENUE RELATE[) TAXES $11,045,445 $6 $11 045 445 $6 690,983 $4 079 032 $275 429
21 TOTAL EXPENaEE $185 133 055 $1,684 744 $186 817,799 $111 785 869 $58,249,556 $5 097 629
22 NET OPERAllNO ~NCOME BEFORE FIT $14,412,503 $5674229 $20,086,732 $9426491 $5,133,088 ($147076)
23 FEDERAL ~NCOME TAXER $3,352,015 $1,843 411 $5,195,426 $2030545 $1,237,884 $83,586
24 REQUIRED RETURN $14 483,965 $0 $14 483 965 $5 921 599 $4 239,531 $1 322 834
25 EARNINGS DEFICIENCY $3 423 477 $0 $3 423,477 $1 525 654 $344 328 $1 553 496
26 ADDI'I1ONAL FIT REQUIREMENT $1 843411 $0 $1 843411 $1 116680 $680763 $45967
27 OTHER REQUIREMENTSCO~ $1 684,744 $0 $1 684744 $1,048,312 $491 135 $145297
28 INCREASEIN RATBS $5951,631 $5 $5951 631 $3 690,646 $1 516226 $1 744761
29 REVENUE8 TAX FACTOR 5 5353% 5 6353% 5 5353% 5 5353% 5 5353% 5 5353%
30 REVENUE RELATEOTAXF~ $407,341 $0 $407 341 $246,754 $150,429 $10 157
31 TOTAL RATE REQUIREMENT $7 358,973 $7 358 973 $3 937 401 $1 666 655 $1 754 918
32 OTHER REVENUE ~HANGE ($150,790) ($150,790) ($137935) ($12627) ($228)
33 SALE REVENUE tNCREASE $7 509,763 $7 509 763 $4 075 336 $1 679 282 $1 755 146
34 COMPANY REQUEST $7 509 389 $7 509 389 $4 075 106 $1 679 144 $1 755 138
35 DIFFERENCE $374 $374 $230 $138 $8
36 $0
37 REVENUEREQUIRSMENTSALESREVENUE $205,974,509 $205974,509 $124299039 $74971406 $5704065
ATTACHMENT 2
TXU GAS NORTHWEST METRO MID CITIES
RATE INCREASE REQUEST REMOVING GAS COST
TEST YEAR ENDING SEPTEMBER 30, 2000
COMPANY COMPANY
LIRE PRESENT ADJUSTMENTS PROPOSED RESIDENTIAL COMMERCIAL INDUSTRIAL
NO OESCRIP'I!ON AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT
1 PRESENT REVENUE8
2 BASE RATE REVENUE $135 115,801 $7 509 763 $142,625 564 $83 295 206 $49 128 129 $2 692 466
3 GASCOSTADJ REVENUES ($82,521,563) $0 ($82,521 563) ($47 556,255) ($34 189 247) ($776 061)
4 REVENUE RELATEn TAXES $0 $0 $0 $0 $0 $0
5 MISCELLANEOUS REVENUE PRESENT $1,080,811 ($150790) $930021 $988657 $90520 $1 634
6 TOTAL REVENUE P~B~ERT $53,675,049 $7,358,973 $61 034 022 $36 727 608 $15 029 402 $1 918 039
7 EXPENSES OPERATING
8 OAS COST C~TY GATE $0 $0 $0 $0 $0 $0
9 UNACCOUNTEDFORGAS $1 342,630 $0 $1 342 630 $599989 $415 104 $327 537
10 OTHERGAS PURCHASES ($129,117) $0 ($129,117) ($74 786) ($51 814) ($2 517)
11 COMPANY USED GAS $12,285 $0 $12285 $7116 $4930 $239
12 COMPANY USED OAS CREDIT ($62,266) $0 ($62 266) ($36 065) ($24 987) ($1 214)
13 TOTAL GAS SUPPLY EXPENSE8 $1,163,632 $0 $1 163 532 $496 254 $343 233 $324 045
14 OPERATION8 & MAINTENANCE EXP $22,079,231 $0 $22 079 231 $16 751 078 $4 348 312 $979 841
15 DEPRECIATION EXPENSE8 $6,798,904 $1 102 739 $7 901 643 $4,230 537 $1 982 011 $586 356
16 tNTERESTON CUSTOMER DEPOSIT8 $215,134 $0 $215 134 $133654 $81 480 $0
17 INTEREST ON CUSTOMER ADVANCES $48,831 $0 $48831 $30337 $18494 $0
18 PROPERI~ RELATEDTAXE8 $1 687,003 $582 005 $2 269 008 $1 049 717 $491 794 $145 492
19 PAYROLL RELATEI) TAXES $881,670 $0 $581670 $436,821 $116959 $27890
20 REVENUE RELATED TAXES $2,971,075 $0 $2 971 075 $1,799 784 $1 097,204 $74 087
21 TOTAL EXPENSES $35,548,380 $1 684 744 $37 230 124 $24 928 182 $8 479 487 $2 137 711
22 RET OPERATING INCOME BEFORE FIT $18 129,669 $5,674 229 $23 803,898 $11 799 426 $6 549 915 ($219 672)
23 FEDERAL INCOME TAXES $4653,023 $1,843,411 $6496434 $2818655 $1,718340 $116028
24 REQUIRED RETURN $14,483,965 $0 $14,483,955 $8,921,599 $4 239,531 $1 322 834
25 EARNINGS DEFICIENCY $1 007,319 $0 $1 007,319 ($59 172) ($592 043) $1 658 534
26 ADDITIONAL FIT REQUIREMENT $542,402 $0 $542 402 $328,570 $200,307 $13 525
27 OTHER REQUIREMENTBCOS $1 684,744 $0 $1,684,744 $1 048312 $491 135 $145297
28 INCREASE IN RATE8 $3 234,465 $0 $3 234,465 $1 317 710 $99 399 $1 817 356
29 REVERUES TAX FACTOR 5 8353% 5 5353% 5 5353% 5 5353% 5 5353% 5 5353%
30 REVENUE RELATE~ TAXES $189,528 $189 528 $114 810 $69 992 $4 726
31 TOTAL RATE REQUIREMENT $3 423,993 $3 423,993 $1 432 521 $169 391 $1 822 082
32 OTHER REVENUE CHANOE ($150,790) ($150790) ($137935) ($12627) ($228)
33 SALE8 REVENUE INCREASE $3,574,783 $3,574 783 $1,570,456 $182,018 $1,822310
34 COMPANY REQUEST $7 509,389 $7 509 389 $4 075 106 $1 679 144 $1 755 138
35 DIFFERENCE ($3,934,606) ($3 934 606) ($2 504 650) ($1 497 126) $67 172
36
37 REVENUE REQUIREMENT 8ALES REVENUE $56 169,021 $56 169 021 $36 838,270 $15 066 294 $3 738 715
ATTACHMENT 3
CITY OF DENTON RESIDENTIAL AND COMMERCIAL CLASS
RATE INCREASE IN OPERATIONS COST (TOTAL COST LESS GAS COST)
RESIDENTIAL COMMERCIAL
LINE PRESENT CONSULTANT PRESENT COMPANY
NO DESCRIPTION RATE8 PROPOSED CHANGE RATES PROPOSED CHANGE
1 CUSTOMERS (ANNUAL BILLS) 199,872 199872 22272 22,272
2 CUSTOMER CHARGE $5 50 $7 00 $10 00 $12 00
3 MCFSALESBLOCKI 1 113,832 1,113,832 190284 190284
4 MCF SALES BLOCK2 0 0 131 428 131,428
5 MCF SALES BLOCK3 0 0 449,621 449 621
6 TOTAL MCF EALEE 1,113832 1,113832 771 333 771 333
7 MCF RATE BLOCK 1 $0 6978 $0 8336 $1 0137 $1 1371
8 MCF RATE BLOCK 2 $0 0000 $0 0000 $07137 $08371
9 MCF RATE BLOCK 3 $0 0000 $00000 $05637 $06871
10
11 CUSTOMER CHARGE REVENUES $1,099,29~ $1 399 104 $222 720 $267 264
12 MCF SALES REVENUES $777,243 $928490 $540142 $635325
13 SUDTOTAL REVENUES $1,876,539 $2,327,594 $762,862 $902 589
14 REVENUE RELATED CHARGES $103,872 $128,839 $42227 $49961
15 TOTAL REVENUE8 $1,980,411 $2,456 434 $476 023 $805 089 $952,550 $147 461
16 24 04% 18 32%
ATTACHMENT 3
CITY OF DENTON RESIDENTIAL AND COMMERCIAL CLASS
RATE INCREASE IN OPERATIONS COST (TOTAL COST LESS GAS COST)
RESIDENTIAL COMMERCIAL
LINE PRESENT CONSULTANT PREBENT COMPANY
NO DESCRIPTION RATE8 PROPOSED CHANGE RATES PROPOSED CHANGE
1 CUSTOMERS (ANNUAL BILLS) 199,872 199872 22,272 22272
2 CUSTOMER CHAI~GE $5 50 $7 00 $10 00 $12 00
3 MCFSALES BLO~KI 1,113,832 I 113,832 190,284 190,284
4 MCF SALES BLOCK2 0 0 131 428 131 428
5 MCF SALES BLOCK3 0 0 449 621 449 621
6 TOTAL MCFSALBS I 113,832 1 113832 771 333 771 333
7 MCF RATE BLOCK 1 $0 6978 $0 7788 $1 0137 $1 0655
8 MCF RATE BLOCK 2 $0 0000 $0 0000 $0 7137 $0 7655
9 MCF RATE BLOCK 3 $0 0000 $0 0000 $0 5637 $0 6155
10
11 CUSTOMER CHA~GE REVENUES $1 099,296 $1 399,104 $222 720 $267 264
12 MCF SALE8 REVI~NUES $777 243 $867 452 $540,142 $580 097
13 SUBTOTAL REVENUES $1,876,539 $2 266 556 $762 862 $847,361
14 REVENUE RELATED CHARGE8 $103872 $125461 $42,227 $46,904
15 TOTALREVENUES $1980411 $2392,017 $411606 $805089 $894,265 $89176
16 20 78% 11 08%
'FXU GAS DISTRIBUTION Schedule L 5
souTH REGION DISTRIBUTION SYSTEM Page 1 of 3
PROPOSED RATE CALCULATION o RESIDENTIAL
FOR THE TE~I' YEAR ENDED DECEMBER 31, 2000
SPONSOR A. L WARREN
DeKrlptlon Total
Line (a) (b) (c) <d} (e) <f) ,
1 Residential Revenue Requirement $82,786,421
2 Less Revenue From Customer Charge 2,135 472 x $8 00 17,083 776
3 Leas Revenue Related Taxes O 2 5387% 2 101,718
4 Less Gas Cost 7 927,619 I 0117 $5 7575 46,177,293
5 $17,423,634
6 Revenue Required From Commodity Rate
7
16 7 927,619
17 Total Residential MCF
18
19
2O
21
22 Revenue Required From~ommod~ty Rate $17.423.634
7 927,619
23 Diwded by Total MCF $2 1978
24 Commodity Rate
25
26 $17,083 776
27 Customer Charge Revenue 17,423,634
28 Commodity Rate Revenue 46,177,293
29 GasCost 2 101,718
30 Revenue Related Taxes Revenue
31 $82.786,42! _.
32. Total
33
TXU GAS DISTRIBUTION Schedule L-5
SOUTH REGION DISTRIBUTION SYSTEM Page 2 of 3
PROPOSED RATE CALCULATION - COMMERCIAL
FOR THE TEST YEAR ENDED DECEMBER 31,2000
SPONSOR A L WARREN
Description Total
Line <a) (b) (c) (d) (e) (fl
I Commercial Revenue Requirement $31,524,442
2 Less Revenue From Customer Charge 156,132 x $14 00 2,185,848
3 Less Revenue Related Taxes @ 2 5387% 800,318
4 Less Gas Cost 4,079,484 I 0117 $5 7575 23~762,435
5
6 Revenue Required From Commodity Rate $4,775,840
7
8 Commemml Block I MCF 1,171,659
9 Commercial Block 2 MCF 507,290
10 Commercial Block 3 MCF 2~680~048
11
12 Total Commercial MCF 4,358,997
13
14 Revenue Reqmred From Commod~y Rate $4,775,840
15 Plus (Block 2 MCF * 0 3) 152,187
16 Plus (Block 3 MCF * 0 45) 1~206~022
17 $6,134,049
18 Total
19 Dlwded By Total Commercial MCF 4.358,997
I 4072
20 Block 1 Commodity Rate I 1072
21 Block 2 Commodity Rate 0 9572
22 Block 3 Commodity Rate
23
24 Customer Charge Revenue $2,185,848
25 Block 1 Commodity Rate Revenue 1,648,759
561,671
26 Block 2 Commodity Rate Revenue 2,565,342
27 Block 3 Commodity Rate Revenue
28 Revenue Related Taxes Revenue 800,318
29 Gas Cost Revenue 23~762,435.
30 Total Revenue $3115241374.
31
32 F~rst Next Over
33 ~ 20 MCF 30 MCF 50 MCF To~all
34 Commem~al Summer 345,899 240,102 675,393 1.261,394
35 Commem~al W~nter 805,878 253,501 1,965,689 3,025,067
36 Schools 19~882 13~688 38~966 72~536
37 Total 1,171,659 507,290 2,680,048 4,358,997
38 Ratio 0 26879 0 11638 0 61483 I 00000
39 Adjusted MCF 1,171,659 507,290 2,680,048 4,358,997
TAU GAS DISTRIBUTION Schedule L-5
SOUTH REGION DISTRIBUTION SYSTEM Page 3 of 3
PROPOSED RATE CALCULATION - INDUSTRIAL
FOR THE TEST YEAR ENDED DECEMBER 31, 2000
SPONSOR A L WARREN
Desoriptlon Total
Line <a) <b) (c) (d) (e) (t)
I IndustdaFTmnsportat:on Revenue Requirement $5,408,076
2 Less Revenue From Customer Charge 1,641 x $200 OD 328,2OO
3 Less Revenue Related Taxes O 2 5387% 137,296
4 Less Gas Cost 328,913 1 0117 $5 3519 1.780,904
5 $3,161,676
6 Revenue Required From Commodity Rate
7 68,004
8 Industrial/Transportation Block 1 MCF 0 0052
9 Industrial/Transportation Block 2 MCF 0 0163 213,166
10 IndustrlaFTmnspo~lation Block 3 MCF 0 4164 5,445,547
11 Industrial/Transportation Block 4 MCF 0 5621 7~350~966
12 Total Induetrial/Transpo;tation MCF I 0000 13,077,683 13,077,683
13 $3,161,676
14 Revenue Required From Commodity Rate 31,122
15 Plus (Block 2 MCF * $0 146 Discount) 1,121,783
16 Plus (Block 3 MCF * $0 206 Discount) 2~131,780.
17 Plus (Block 4 MCF ' $0 290 Discount) $6.446,361
18 Total 1~077~683
19 Divided By Total Commercial MCF $0 4929
20 Block 1 Commodity Rate $5 3469
21 Block 2 Commodity Rate $0 2869
22 Block 3 Commodity Rate $0 2029
23 Block 4 Commodity Rate $328,200
24 Customer Charge Revenue 33,519
25 Block 1 Commodity Rate Revenue 73,947
26 Block 2 Commodity Rate Revenue 1 562,327
27 Block 3 Commodity Rate Revenue 1,491 511
28 Block 4 Commodity Rate Revenue 1,780,904
29 GCA Revenue 137~296
30 Revenue Related Taxes Revenue
31 $51407~705
32 Total Revenue
Below are two possible methods of rotating the way in which
members of the city's Human Services Advisory Council are
appointed each year. Both would keep the number of members
at eleven (11), a size that has worked very well for the
efficient functlon~ng of the commlttee, but ~ would allow all
the members of the Council the opportunity to appoint two
committee members on a rotating bas~s. The f~rst method ~ncludes
all seven members of the Councll in the rotation. The secon~
g~ves the mayor ar~c~p_~at-t~ge~member~of' the Council two
appointments each year, the council members representing
districts one each year, with the eleventh slot rotating among
the four distrlct~.--~TS-e-~-ationale for the second method would
be that the mayor and at-large members of the Council represent
the whole city. The drawback to this method ~s that council
members representing districts would have an opportunity to
have two appointments only every fourth year. (Of course, under
the present system, three of them never have that opportun~ty~
METHOD I METHOD 2
All Council Pos~tions D~strcts~_~
1 2 3 4 5 6 7 I 2 3 4
2000 I I 1 2 2 2 2 I 1 I 2
2001 2 I I I 2 2 2 2 I I I
2002 2 2 1 I 1 2 2 I 2 1 I
2003 2 2 2 1 1 1 2 I I 2 I
2004 2 2 2 2 1 I 1 I I 1 2
2005 1 2 2 2 2 I I 2 I 1 1
2006 1 1 2 2 2 2 I 1 2 1 I
2007 1 1 1 2 2 2 2 I I 2 I
2008 2 1 1 I 2 2 2 I I I 2
2009 2 2 1 I I 2 2 2 I I 1
2010 2 2 2 I I I 2 I 2 I 1
2011 2 2 2 2 I I I I I 2 I