Resolution 6590 RESOLUTION NO. 6590
A RESOLUTION SETTING FORTH FINDINGS MADE
BY THE CITY COUNCIL PERTAINING TO THE
RATE BASE, REVENUES, OPE RATING EXPENSES,
RATE OF RETURN, AND RATES AND CHARGES FOR
GAS SERVICE RENDERED BY PEOPLES WATER_R AND
GAS COMPANY.
WHEREAS, the City ,-ouncil of the City of Miami Beach
(hereinafter sometimes called the "City Council") passed and
adopted Resolution No. 6)1)11 on January 7, 1943, for the purpose of
requiring Peoples Water and Gas Company (hereinafter sometimes called
the "Company") to show cause at a public hearing to be 'held at the
time and place specified in said resolution why rates and charges
of the Company for gas service rendered within the corporate limits
of the City of Miami Beach (hereinafter sometimes called "Miami
Beach") should not be reduced, and
WHEREAS, in accordance with the provisions of said Resolu-
tion No. 6441, the City Council held a lengthy public hearing during
which testimony was given by witnesses under oath, exhibits per-
taining to pertinent matters were admitted in evidence, oral argu-
ment by counsel for the Company was heard and a brief was submitted
in behalf of the Company, and.
WHEREAS, the City Council has given careful consideration
to such testimony, exhibits, argument and brief, and
WHEREAS, the City Council is now fully advised in the premises,
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF MIAMI BEACH, FLORIDA:
THAT the City Council has found and determined and does
hereby declare that:
(a) During said public hearing it was established and
was admitted by witnesses for the company that the accounting
books and records of the Company do not show the geographical
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location of the various classes and items of property so as to
render it possible, from examination of such books and records,
to separate the cost of the property used and useful for rendering
gas service to Miami Beach alone, from the cost of the property
used and useful exclusively for rendering gas service to communities
and districts outside Miami Beach, or from the cost of the property
which is jointly used and useful for rendering gas service both
to Miami Beach and to communities and districts outside Miami Beach;
(b) By reason of the neglect and failure by the Company
to maintain its accounting books and records in a manner which
would enable representatives of the Company or of Miami Beach to
identify the property used and useful in whole or in part for
rendering gas service to Miami Beach, the City Council has been
and is unable to establish a rate base applicable to Miami Beach
alone, but has been and is compelled, by reason of such neglect
and failure by the Company as aforesaid, to fix a rate base for
the entire territory throughout which the Company renders gas
service, and has been andis compelled to base its computations
and determinations of experienced and prospective revenues and
operating expenses upon the operations of the Company in rendering
gas service throughout such territory;
(c) The inability of the City Council to fix a rate base
applicable to Miami Beach alone is detrimental to the customers
of the Company in Miami Beach (and therefore is beneficial to the
Company itself) by virtue of the fact that there are unquestion-
ably more customers per square mile in Miami Beach than elsewhere
in the territory served by the Company, aid consequently a rate
base for the entire territory reflects a larger investment re-
quired per customer than would be reflected by a rate base for
Miami Beach alone;
(d) The rate base for rendering gas service throughout
the entire territory does not exceed $3 ,950,000, including adequate
allowances for working capital andfor construction expenditures
in 1948;
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(e) Based upon the volume of gas sold by the Company in
1947, and upon the basis of fuel costs, wage rates, and price
levels prevailing at the time of the hearing, an average rate of
31.49 per 1,000 cubic feet will produce sufficient revenues to give
the Company an annual return of at least 3237,000 after paying all
legitimate operating expenses, including Federal income taxes;
(f) An annual net return to the Company of at least
$237,000 upon a rate base of not more than 33,950,000 represents
a rate of return to the Company which is just and reasonable under
prevailing economic conditions;
(g) During the year 1948 the Company will unquestionably,
because of the growth of Miami Beach and of other communities served
by the CoMpany, sell a larger volume of gas than it sold during 1947,
and consequently the net return to the Company resulting from its
operations under an average rate of 31.49 per 1,000 cubic feet for
gas sold during 1948 will exceed 3237,000;
(h) The rates now being charged and collected by the Company
are producing revenues reflecting an average rate of ;;1.62 per 1,000
cubic feet; and since, as hereinbefore stated, an average rate of
$1.49 per 1,000 cubic feet will produce sufficient revenues to give
the Company a just and reasonable return, it is clear that the pre-
sent rates of the Company are excessive and that they should there-
fore be reduced.
PASSED and ADOPTED this 5th day of , June A. D. 1948.
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440.4*-- /
Mayor
Attest: C. W. TOMLINSON _ ______
City Clerk
By:: . .44.1/ 1- • 4 / er.y-----
R. W. L. Jo/ son, Deputy City Clerk
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