R-00-10-12-10F1 - 10/12/2000K: \ W PDOCS\RESOLUTI\A01012 F 1. W PD /jkg
RESOLUTION NO. R- 00- 10- 12 -10F1
A RESOLUTION AUTHORIZING THE PARTICIPATION OF THE CITY
OF ROUND ROCK, TEXAS IN THE CAUSE OF ACTION STYLED THE
CITY OF DENTON, TEXAS V. TEXAS UTILITIES COMPANY AND LONE
STAR GAS COMPANY OR SUCH OTHER CAUSES OF ACTION AS THE
"STEERING COMMITTEE OF CITIES PARTICIPATING IN THE TXU
FRANCHISE LITIGATION" MAY DETERMINE SEEKING
DELINQUENT FRANCHISE FEES FROM TXU, LONE STAR GAS AND
OTHER ENTITIES ASSOCIATED WITH TXU; AUTHORIZING THE
EXPENDITURE OF FUNDS FOR ATTORNEY AND EXPERT WITNESS
FEES; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, on March 30, 2000 the 269th District Court awarded
actual damages to the Cities of Wharton, Galveston and Pasadena of
$3.4 million and on April 4, 2000 punitive damages of $30 million
against Houston Lighting & Power Co. (HL &P) for underpaying
franchise fees by excluding revenues from the gross receipts upon
which such fees are derived; and
WHEREAS, on December 12, 1999 an audit on behalf of the City
of Denton estimated TXU Electric and Lone Star Gas owed delinquent
franchise fees in excess of $1 million based on findings that
revenues similar to those at issue in the HL &P case were excluded
from the calculation of gross receipts /revenues; and
WHEREAS, the law firms of Strasburger & Price, L.L.P. and
Bucek & Frank, L.L.P. have filed suit against TXU and Lone Star Gas
on behalf of the City of Denton in the 393rd District Court in
Denton County for delinquent franchise fees; and
WHEREAS, a consolidated action by cities in the TXU service
area seeking delinquent franchise fees will reduce duplication of
effort and the attendant legal, expert and court costs;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF ROUND ROCK, TEXAS:
SECTION 1. That the City of Round Rock, Texas agrees to
participate with other similarly situated Texas cities in the
TU /LONE STAR GAS system and join the City of Denton in pursuing
causes of action against Texas Utilities Company, Lone Star Gas
Company and other entities associated with TXU to collect
delinquent franchise fees.
SECTION 2. That the City of Round Rock, Texas agrees to
contribute $0.50 for each individual residing within its corporate
limits based on the 1990 U.S. Census (except for such portion of
its population that may not be residing within the TU /Lone Star Gas
service area) or the sum of $2,000.00, whichever is more, to
underwrite the cost of legal and expert witness fees and related
costs to be expended on behalf of the cities in this matter, with
$0.25 [or $1,000.00 if applicable] being due on or before October
31, 2000, and the remaining $0.25 [or $1,000.00 if applicable]
being due and payable on the date the "Steering Committee of Cities
Participating in the TXU Franchise Litigation" authorizes such
assessment.
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SECTION 3. That Robert L. Bennett, Jr., City Manager of
the City of Round Rock, Texas, or his designee, shall be the City's
primary contact and liaison in this matter and such individual
shall be eligible to serve on the "Steering Committee of Cities
Participating in the TXU Franchise Litigation" if he is elected by
the cities participating in this litigation. Notices to the City
should be addressed as follows:
City Manager Robert L. Bennett, Jr.
221 East Main Street
Round Rock, Texas 78664
Telephone (512) 218 -5400
Fax (512) 218 -7097
SECTION 4. That the liaison named above is authorized to
take those steps reasonable and necessary to comply with the intent
of this resolution.
SECTION 5. That this resolution shall take effect
immediately from and after its passage.
The City Council hereby finds and declares that written notice
of the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to
the public as required by law at all times during which this
Resolution and the subject matter hereof were discussed, considered
and formally acted upon, all as required by the Open Meetings Act,
Chapter 551, Texas Government Code, as amended, and the Act.
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RESOLVED this 12th day of October, 2000.
ST:
•S4IU .. /1_0
se E LAND, City Secretary
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City of Round Rock, Texas
DATE: October 4, 2000
SUBJECT: City Council Meeting — October 12, 2000
ITEM: 10.F.1. Consider a resolution authorizing the City of Round Rock's
participation in the City of Denton vs. Texas Utilities Company and
Lone Star Gas Company lawsuit seeking delinquent franchise fees.
Staff Resource Person: Bob Bennett, City Manager.
A consolidated action by numerous cities in TXU's service area is being brought for recovery
of delinquent franchise fees, such delinquency resulting from TXU excluding certain types of
revenues from its calculations of gross receipts /revenues. This resolution to join the action
would bind the City of Round Rock to contribute $0.50 for each resident based on the 1990
census, with one -half of that amount payable by October 31, 2000 and the remaining one -half
to be payable upon future assessment.