§ 5. Right to Examine the Books of the Grantees of Public Franchises.

The City of Houston shall have the right to regulate the rates, fares, tolls and charges to be collected from the public by any holders, owners, operators, persons or incorporations enjoying any grants or franchises from the City of Houston pertaining to public utilities, including furnishing of lights, water, telephones, and street car service, etc., pertaining to a public or quasi public duty, and the right and authority is hereby given to the Mayor or to the City Council to require the City Controller or such other officer or employe as may be designated, to examine, carefully inspect all of the books, accounts, papers and documents, as well as the property of such persons or corporations using and enjoying any of said grants or franchises from the City of Houston as above stated, and to make such reports of said examination as required by the Mayor or City Council, when deemed necessary, for the following purposes:

1.

When such franchise or grant was made upon the consideration and agreement that the City of Houston should receive a per cent. or portion of the revenue derived from the use of said grant or franchise.

2.

When the persons or corporations above referred to have listed their property for taxation at a valuation deemed by the City Council or the Mayor to be below its actual value, or fails to list the same for taxation.

3.

When the City Council desires to fix the rates, fares, tolls and charges which said persons or corporations above described shall charge the public for water, lights, transportation, or other services rendered or furnished under the franchises granted to it or them by the said City of Houston, and the information is desired or deemed necessary by the Mayor or City Council as a basis upon which to fix a proper rate.

4.

When the Mayor or City Council have directed the individuals or corporations above specified to extend their lines and service or to improve their service in any manner necessary for the public comfort and convenience, or to make improvements and betterments of their property, and such persons or corporations demur thereto, on the ground that the income from their property used under said franchise is not sufficient to justify the same.

Such examinations and reports provided for in this Section are for the purpose of ascertaining the value of the property and the income derived from it, and the reasonable expense for its operation. (Act of 1905)