7. Council holds Public Hearing regarding annual Water Quality Report (Consumer Confidence Report) as provided to all customers in their June 8th city bill and as published in the Baylor County BANNER.
No citizen(s) spoke.

PUBLIC HEARING(S) END – REGULAR AGENDA
ITEMS RESUME at 7:25 p.m.

8. Discuss, consider and take action upon request from
Mr. Holloway for alteration of city electric rates for his business being Chicken/Taco Express.

Mr. Lloyd Holloway from LDH Ventures spoke. Thank you for the opportunity to address Council tonight. Please refer to the handouts that have been distributed to you. I’d like to stay here in Seymour and keep my business open. We have been a good corporate citizen here and participated in many activities. I have 14 employees. We have a payroll of $180,000 per year (2005). We have been working with City staff for many months to find a solution to our incredibly high electricity costs. The City staff from the Electric Department has given us some recommendations and we have instituted them. We have tried everything we know to reduce our bill by lowering consumption. This has reduced our demand by about 25%. The way that Chicken Express franchises are set up, we have to stay in line with the costs of the food items as charged in other cities. We can’t suddenly mark up our chicken to re-coup the energy costs. We have a narrower profit margin than most businesses. I own only one store, so I cannot make up a loss here in Seymour with a higher profit store somewhere else. I am requesting that the profit the City makes on the electricity sold to Chicken Express be waived for us, until the City re-negotiates a new contract with the electricity wholesale provider (AEP) and gets better rates.

Mayor Craighead explained that higher energy costs are affecting everyone, every businessman and every farmer. Councilman Snyder pointed out that any solution would have to be equitable for all businesses; Council cannot grant one business a waiver and deny it to others.

Mr. Holloway admitted that some of the other Chicken Express franchises spend more on electricity in other locations. Some pay less. He admitted that his store doesn’t have the volume of business that many other Chicken Expresses have.

Council members and Mr. Holloway discussed that the Seymour Chicken Express operates with the electricity cost classified as a ‘fixed’ cost. Also, Mr. Holloway discussed that a 3% increase in price was approved across the board for all Chicken Express franchises about a month ago, but otherwise, franchise owners are not authorized to raise the prices.

Mayor and CA Shephard explained that there have been electricity issues at this restaurant even under previous owners. The lines have been checked, the meter has been pulled and changed out twice (both meters were found to be operating correctly upon testing at the manufacturer) and energy ‘audits’ have been done. This restaurant pays, with their demand costs, comparative rates to the Dairy Queen and the Rock Inn. The slightly higher rate is due to the higher number of kilowatts used.

Mayor Craighead explained that there had previously been discussion regarding the actual meter and the ‘demand’ that is a factor on commercial electricity meters. Mayor introduced Roger Birch with M&M Meter Service.

Roger Birch: I’m glad to be here to represent the meters we provide to the City of Seymour, we went out today and reviewed the meters on each of the businesses we have been mentioning tonight. All checked out in perfect order. If a meter must handle more than 220 amps, we reduce the amount that goes through the meter by 1/80th and then we call that a meter with a multiplier of ‘80’. To get the true amount of electricity that has gone through the meter, you must multiply it. If the max load is in the 400 amp range, the meter will probably have an 80 multiplier on it. If Chicken Express begins to use more than 800 amps, we will need to increase the size of the meter again. We must use this ‘multiplier’ process – must sample the amp and compute by this ratio, for safety reasons.

Mayor Craighead and Mr. Birch explained that the reduction in the size of the meter, or the ‘multiplier’ would not reduce the bill. For instance, if the multiplier were to be reduced to ‘40’, the sample would need to be increased to ‘1/40th’ of the ampage going through the meter.

Mr. Holloway explained that the multiplier and the meter issues have been clarified for him by his son and the multiplier is no longer a contentious point.

Brad Tilley, City of Seymour Electric Department Superintendent explained that the City must look at the safety factors when dealing with the commercial meters. The ‘sampling’ and then ‘multiplying’ nature of these meters means that they are safer to use, and safer for his crew to work on when repairs are needed.

MOTION:

MOTION BY COUNCILMAN SNYDER, 2ND BY MPT BUTLER TO TABLE THIS ISSUE UNTIL A LATER MEETING.

VOTE ON THE MOTION:

PASSED UNANIMOUSLY.



9. Discuss, consider and take action upon Budget Amendment to add $2,200 to the Capital budget for FY 2005-06, to finance purchase of vacuum tank and used vehicle for the Wastewater Department.

CA Shephard explained that this request is from the Water/Wastewater department to purchase this vehicle which will keep it in the community. It will sell, either to the City of Seymour or to someone else outside. This vehicle with the vacuum tank is one that the City sometimes ‘borrows’ when there are large water leaks. The members of the W/WW department know how to drive and operate this equipment, and they have determined that $2,200 is a fair price for the vehicle and tank. This is a 1995 model F350 pick up with 154,000 miles on it. The vehicle is being purchased from Danny Lane, the plumber. The vacuum tank is 350 gallon steel tank - the pickup has good tires and is in good condition.

Motion:

Motion by Councilman Snyder, 2nd by MPT Butler, to approve the purchase and authorize the expenditure of the $2,200 and the Budget Amendment to finance the purchase of vacuum tank and used vehicle for the Water/Wastewater Department.

Vote on the Motion:

PASSED UNANIMOUSLY.

10. Discuss, consider and take action on denial of natural gas rate increase as requested by Atmos Energy.

CA Shephard explained that ATMOS is requesting that we deny this, so they may appeal it faster to the Texas Railroad Commission.

Motion:

Motion by MPT Butler, 2nd by Councilwoman Fest, to deny of natural gas rate increase as requested by Atmos Energy.

Vote on the Motion:

PASSED UNANIMOUSLY.

11. Discuss, consider and take action on options for next Texas Community Development Grant application cycle – including options for restoration work to water tower on North Washington, or water well ‘tie-in’ project for the Compress area wells.

CA Shephard explained that Shelly Green is still researching this. We’d like to have the repairs done to the water tower, however we are concerned that this project will not qualify for this grant because it is maintenance.

Council took no action on this item.

12. City Council members’ recommendations for proposed budget for the City of Seymour for FY 2006-07.
The H20 tower maintenance needs to be considered.

Councilwoman Fest and MPT Butler would like to have an Arts Council, a performance Art/Theatre group – possibly this group could help us get more grants for the Historic City Hall Auditorium restoration project. Councilman Snyder recommended the establishment of a special dedicated fund to be used by Economic Development department – a special ‘kitty’ for incentive packages or whatever.

13. City Administrator’s report, report of suggestions/concerns received in City of Seymour Suggestion Box, and Well-Level Report.
CA Shephard explained that City Staff will soon provide the information regarding purchasing a street sweeper as requested by Council. Also, the State of Texas has changed the rules regarding credentialing the labs that process our water samples. This makes our testing samples more expensive. We have to test our samples once a week. Also, the electricity item, you will note the information I provided that we are fourth from the bottom regarding rates of electricity. We are one of the lowest.

14. City Council members’ reports and setting of future agenda items.

Note: The Council reserves the right to vote or to act in open session upon any of the items listed in this agenda.


ADJOURNMENT

Motion:
Motion to adjourn at 8:53 p.m. by MPT Butler, 2nd and passed unanimously.

Approved this 20th day of July 2006.


Mayor Dan Craighead


Attest: Elaine Simpson, TRMC, CMC

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