Exert from a paper created by Mark Zion, Executive Director, Texas Public Power Association, for Lubbock Power & Light in 2003:

 

MUNICIPALLY-OWNED AND OPERATED UTILITY DEPARTMENT

 

Typically in a municipally-owned and operated organizational structure, the utility manager reports to the city manager or sometimes to an assistant city manager. In some cases the utility manager is actually a charter officer of the city and reports, in parallel with the city manager, directly to the city council. A wide range of organizational structures exist within this type of configuration. At one end of the spectrum, all utility functions involved in the planning, design, construction and operation of the utility system are organizationally under the utility manager, including finance, treasury functions, cashiers, and all electric utility operations. In some cases, only electric utility operations report to the utility manager while other support functions such as finance and human resources are located elsewhere in the city government structure.

 

The city council functions as the primary policy setting board for the utility department. Is some cases city councils have created advisory boards as is the case with the Austin EUC. These advisory boards or commissions have a wide range of powers and responsibilities. At one end of the spectrum these boards are advisory only while in some cases they are given budget and rate setting authority on behalf of the city council.

 

There are a number of advantages and disadvantages to this type of organizational structure, some of the more significant ones are as follows:

 

Advantages

• With an elected city council sitting as the policy board, the utility is generally accountable to the city's taxpayers/ratepayers.
• Integration into the city government and policy setting by the city council leads to enhanced synergies between the city and utility departments.
• Increases the ability of the utility to reflect community values.

Disadvantages

• Typically the utility's ratepayers outside of the city do not feel represented.
• Due to increasing budget pressures on city governments, city councils often tap into the utility to balance city budgets. In Austin's case the transfers from the utility to the city has less to do with the profitability of the utility and more to the financial needs of the city.
• May introduce a higher level of politics into the planning and operations of the utility system which would otherwise be run like a business.
• The city council has too many other significant policy responsibilities such as police, fire, wastewater and streets to give proper consideration to utility policy issues.
• Since the city council is elected, they may not have the requisite technical or business skills necessary t set policy for the utility.

* * *

Like Garland, Lubbock owns its own electric utility. The situation in Lubbock got ugly in 2003. According to an article in The Daily Toreador, at least one person felt, "LP&L was a 'cash cow' for Lubbock, as the city began to take more money than LP&L was making, said John Zwiacher." Lubbock decided to look at other organizational structures and Zion was asked to prepare the report that is exerted above.

I often caution that there are two sides to every coin. I feel Zion's paper does an exemplary job of looking at both sides, listing the pros and cons of an advisory board and hints to the different levels of authority that might be given that board. Mayor Jones' Special Committee on the Utility Advisory Board (UAB) and Council's Utility Services Committee (USC) will be looking at such pros and cons as it works to develop a recommendation to the Council on the futures of both.

Garland is not Lubbock but the list of advantages and disadvantages apply to any municipally-owned utility (MOU). The Council has a responsibility to safeguard Garland's assets and future. We can't make a decision with a flip of a coin, but we can closely examine both sides before deciding.

P.S. The author, Mark Zion, and I were at UT at the same time. He was ahead of me and in a different school but we were both involved in student government. (I thought I had learned my lesson.)

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