10221992 Special Meeting A - Laserfiche WebLink

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83 MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF SAN MARCOS, TEXAS AND SAN MARCOS ELECTRIC UTILITY BOARD, OCTOBER 22, 1992 PRESENT: Mayor Kathy M. Morris Mayor Pro-Tem * Betty Jane Kissler Council Members Billy G. Moore * Rick Hernandez Ronald K. Hart * Fred Guerra * Bill Plummer SMEU BOARD MEMBERS Chair Mary Borm Members J. E. Younger Richard Cruz Russell Thornton Mayor Kathy M. Morris city Manager Larry Gilley City Secretary Janis K. Womack city Attorney Mark Taylor Director of Finance Bill White Director of SMEU Bob Higgs Director of MIS Ramona Brown Also Present: Diana Lozano, Rose Pacheco, Bob Kahn, Fred Saffer, Melissa Millecam, Kim Bradley and others. Mayor Morris called the meeting to order at 1:30 p.m. Mayor Morris introduced a discussion and receiving information regarding the purchase of LCRA Transformers. Messrs. Fred Saffer and Bob Kahn were present to answer questions and provide information. Mr. Kahn stated the original settlement provided the city had until August to determine whether or not to purchase the substation facilities. Mr. Kahn stated a time frame was negotiated to provide time to prepare an analysis regarding purchase to the end of October. Mr. Kahn stated a letter has been drafted for Mark Rose's signature to sell the City the land, although no price has been negotiated. Since the city is a political subdivision, the land would have to be sold at fair market value. The recommendation is to exercise the City's option to purchase the facilities, with the land cost to be determined. Ms. Borm asked what would be the advantage/disadvantage if the city purchases the facilities. Mr. Saffer stated the advantages are (1) realiability (The system is approaching a critical point, and reliability needs to be increased and can best be done if the City owns the substation facilities.), (2) accommodation for future load growth, and (3) accommodation of present and future co-generation of SWT (If the City does not own the substation, we cannot buy their electricity). Mr. Younger questioned the reliability of LCRA's transformers we would be purchasing. Mr. Saffer stated there is nothing wrong with their transformers, and the City plans to use them, but there would be a need to add to the transformers for reliability and growth. Mr. Gilley stated there would be a need for expenditures on the substations in the future if the city purchases them. Mr. Younger asked if right-of-way purchases would need to be made for their feeder lines, and Mr. Saffer stated we are not that far along in the - plan. Mr. Saffer stated the city is now paying for the use of the substations in our wholesale agreement, and there would be no rate advantage in purchasing, only operational. If the city purchases, we must start a fund for future capital improvements for replacement costs, because there will be mechanical failures. Mr. Saffer stated it would be cost effective if the city could enter into an agreement with LCRA or another contractor to maintain the substations for $20,000, $30,000 or up to $50,000. Mr. Saffer stated reliability is diminishing with this sytem. When a fifth substation is needed, if the City does not purchase them, LCRA would be responsible for providing it and would possibly locate it wherever best suited their * Messrs. Rick Hernandez, Fred Guerra and Bill Plummer not present, and Ms. Kissler left at 2:30 p.m.