LP&L may see switch in power
Financial woes spark talk of separate board

BY JOHN FUQUAY
AVALANCHE-JOURNAL
 

Lubbock voters may be asked to decide whether the city’s electric department should be pried loose from city government and operated by a separate board.

In another utility matter, City Council members on Monday approved a franchise ordinance for new technology that delivers cable TV, telephone and Internet on a single high-speed wire.

Lubbock Power & Light, the city-owned electric company, is coming off its worst financial year in recent memory, and council members want to prevent a recurrence.

‘‘We’ve got to find some way to ensure that the temptation to go and rob funds out of LP&L never occurs again,’’ Councilman Tom Martin said during the Monday meeting.

LP&L chief executive Carroll McDonald, who ran LP&L from 1979 to 1994 and returned earlier this year amid a management overhaul, told council members that the utility’s earnings above costs were routinely transferred into the city’s general operating fund.

‘‘Every year, the city took what was left,’’ he said. ‘‘When we had a couple of down years, the city wrote a couple of IOUs.’’

Beginning last year, LP&L was sacked by record-high prices for natural gas that, city officials said, created a $12 million deficit. The deficit was projected to approach $20 million this year.

Over the past several years, LP&L subsidized general fund obligations such as parks, street and drainage facilities, street lights and internal costs that surpassed $60 million. Last year’s transfer was expected to be about $9 million.

The subsidies shifted the expenses away from property taxes; however, LP&L was unable to build adequate reserves.

In the current budget, transfers from LP&L were eliminated along with more than 60 LP&L jobs. Layoffs were also included in general fund budgets to offset the loss of revenue from LP&L.

‘‘It always works well until the City Hall bureaucrats or City Council starts getting their hand in the pie,’’ Councilman Gary Boren said. ‘‘What are we going to do? Where are we going to get the money? Let’s go to LP&L.

‘‘Then, when things turn bad, all of a sudden we’re behind the eight ball,’’ Boren said.

To help LP&L protect its finances, council members want the operation run separately from the rest of the city.

‘‘Until the city manager is taken out of the chain of command ... we’re probably going to see history repeat itself,’’ Martin said.

He said LP&L should have its own board that hires and fires a director. Currently, the city manager hires the director.

Council members said the board also should control revenue, expenses, debt and other functions. The City Council would have final approval of the utility’s budget.

Assistant City Attorney Matt Wade told council members they could pass an ordinance creating a board structured under current state law; however, he said, a city manager would still have authority to hire the director.