Thursday, Lubbock City Council members Jim Gerlt, Latrelle Joy and Todd Klein explained their reasons for voting yes on May's LP&L rate increase.
"The rate model that had been put together indicated that LP&L was not losing a substantial amount of money, but LP&L lost $3.5 million last year. Moody's investors looked at LP&L and on the bond rating they gave a negative outlook going forward," said District 4 Councilman Jim Gerlt. "In 2003 and 2004 when they went bankrupt, it nearly bankrupted the city and I'm not going to allow that to happen again."
On Monday, Councilman Gerlt passed out a data sheet showing his LP&L bills in 2011 compared to 2013. It showed bills in the 2011 summer months were more expensive. Gerlt says he knows people are upset, but he felt he made the best decision for the city.
"I'm not going to do anything to put our city at financial risk and so I feel like I've been fiscally responsible. If people want to slam me for being fiscally responsible, that's fine. My regret is that we didn't put it off a month. I wish we had waited until July to begin the rate increase. We could have used the rest of May and all of June to really beat the drum that there's a rate increase coming: Get on budget billing, look at how you can prepare yourself for this," Gerlt said.
District 6 Councilwoman Latrelle Joy said she had similar reasons or voting for the LP&L increase.
"No, I did not regret the decision," Joy said. "What I regretted is that they had the error in the computers, but those kinds of things happen. What I regretted most of all was that people were focusing more on the event at the time and not looking towards solutions - because regardless of what happened, we had to find a way to fix the problem."
Joy also talked about the bond issue, saying if the city decided to build a power plant, the rating would be extremely important. In order to build a plant, the city would have to borrow money. With a poor bond rating, Joy said interest rates would increase.
District 3 Council Member Todd Klein said he voted for the increases because it was the most fiscally sound thing to do.
"It was an issue of really forestalling too long, quite frankly, a rate increase. I thought the prudent thing to do was to go ahead and do now what they've been telling us we need to do and not roll the dice with the public," Klein said. "The anger was we had a consultant that I think it's fair to say gave us a sense that the power purchase agreement wouldn't spike as much as it did. We saw an increase in that area and I deeply regret the problems that has created."
Klein feels this all could have been avoided if the rate increases were done normally.
"What I regretted was that we didn't do it sooner. Waiting further was not the answer and I've said that at town halls and other public venues, if there's anything I would change it would be the part of stabilizing. We need to do incremental small increases."
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