HomeMy WebLinkAbout1977-068-11/01/1977-SETTING FORTH THE FINANCIAL POLICIES OF THE CITY LIGHT AND POWER DEPARTMENT y . F
RESOLUTION 77- 68
OF THE COUNCIL OF THE CITY OF FORT COLLINS
SETTING FORTH THE FINANCIAL POLICIES OF
THE CITY LIGHT AND POWER DEPARTMENT
WHEREAS, the Board of Directors for the Platte
River Power Authority, which furnishes power to the Light
and Power Department of the City of Fort Collins, is re-
quired by their General Bond Resolution to make annual rate
reviews and adopt rates necessary to meet the Bond covenants
and
WHEREAS, the City of Fort Collins is notified of
these revised rates each year and
WHEREAS, the City Charter requires that the Depart-
ment collect sufficient revenues to meet specified expenses
and
WHEREAS, it is apparent that it will be necessary
to revise the rates for customers of the Fort Collins Light
and Power Department in order to meet changing expenses
which will be incurred by the City utility and
WHEREAS, the City Council desires to set forth
certain policies of the City Council and requirements of
the City Charter and ordinances relating to the establish-
ment of rates for the City electric utility
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF
THE CITY OF FORT COLLINS
Section 1 The Light and Power Department is
hereby directed to undertake rate studies for the City
electric utility and to make recommendations to the City
Council regarding the rates to be charged for service from
said utility
Section 2 The rate and finance policy for the
City of Fort Collins Light and Power Department shall be as
follows
A Fundamental Purpose The fundamental
purpose of the Fort Collins Light and Power Department shall be
1 To supply electric energy in adequate
amounts, reliably, economically, in an environmentally accept-
able fashion, and with due regard to conservation of natural
resources
a
2 To provide ever higher standards of
electric service, utilizing progressive management techniques
and business principles to construct, operate and maintain
the Fort Collins energy supply system for the benefit of
the consumer and the community
B Rates Electric rates will be based upon the
cost of service approach to reflect full distribution of costs
to appropriate rate classes in order to effect equitable sharing
of costs Rates will be established and maintained at a level
sufficient
1 To pay the full cost of operation and
maintenance of the electric utility in good repair and working
order
2 To pay the principal and interest on all
bonds of the City due and payable from electric revenue
3 To provide and maintain an adequate working
capital for the day to day business operations
4 To provide and maintain a depreciation and
capital improvement fund for the replacement of depreciated
and obsolete property and for the extension, improvement,
enlargement, and betterment of the electric utility The
depreciation and capital improvement fund will be maintained
at an average level equal to i5ventory plus the 6-month average of
the approved 5-year Capital Injprovements Procram
5 To pay into the general fund of the City of
Fort Collins in lieu of taxes and franchise permits a percen-
tage of revenue from the sale of electric energy and/or
specified mils per kwh as defined below
YEAR FORMULA
1978 7 58 of revenue
1979 3 75% of revenue plus
1 0381 mils/kwh
1980 and 1 15% of revenue plus
thereafter 6 mils/kwh
Payments will be made monthly on the basis of actual revenue
and kwh energy sales The Department will submit to the
Council at budget time an estimate of the amount of taxes and
franchise fees that would be chargeable against the Light and
Power Department if the utility were privately owned
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C Revenues All net operating revenues
of the Light and Power Department shall be paid into the
Light and Power Depreciation and Capital Improvement Fund and
such funds shall be expended only for renewals, replacements,
extraordinary repairs, extensions, improvements, enlargements
and betterments of the electric utility
D Operating Records
1 The Light and Power Department will
maintain a standard system of accounting which shall at all
times correctly reflect all financial operations of the system
and keep such other records and data as are generally used by
the electric utility industry
2 The accounts of the Light and Power
Department shall be kept separate and distinct from all other
accounts of the City and shall contain proportionate charges
for all services performed by other departments as well as
proportionate credits for all services rendered to other
departments The charge for administrative services shall
be based upon appropriate studies and may be determined
thereafter, until a new study is indicated, by an appropriate
formula which is designed to track the actual cost of such
services
Passed and adopted at a regular meeting of the
City Council held this 1st day of November A D 1977
ATTEST Mayo
City Clerk
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