R-02-03-14-13D6 - 3/14/2002Mr. Kevin J. Maguire
Strasburger & Price, LLP
901 Main Street, Suite 4300
Dallas, TX 75202 -3794
SLS /jg
Enclosures
Re: Cities of Denton, et al v. Texas Utilities Company, et al
Cause No. 2000 - 60109 -393
Dear Mr. Maguire:
Enclosed herewith please find originally executed "Compromise, Settlement and Release
Agreement" which was approved by the City of Round Rock's City Council on August 8, 2002. We
anticipate having the resulting franchise ordinance amendments passed in September, and will advise
when we have completed that process.
We inadvertently had only one original executed of the Settlement Agreement, rather than
multiple originals, so we ask that you please send a copy back to us after final execution so that our
records will be complete.
Thank you.
C :1EXTAMfl2 WPD/jkg
August 20, 2002
Sincerely,
Stephan L. Sheets
COMPROMISE, SETTLEMENT AND RELEASE AGREEMENT
This Compromise, Settlement, and Release Agreement (the "Agreement ") is made and
entered into as of the date set forth below by and between the City of Round Rock (the "City ") and
TXU Electric Company n/k/a TXU US Holdings Company ( "TXU Electric "), TXU Gas Company
("TXU Gas ") and TXU Corp. (collectively sometimes referred to as the "TXU Defendants "):
WHEREAS, there is currently pending in the 134`" Judicial District Court of Dallas County,
Texas, in Cause No. 00 -9383, a suit styled City of Denton, Texas et al. vs. TXU Electric Company, et
al. (the "Litigation ") which includes claims by the City against the TXU Defendants arising out of
the electric and gas franchise ordinances entered into by and between the City and TXU Electric and
TXU Gas and, specifically, a dispute with regard to the amount of franchise fees paid to the City by
TXU Electric and TXU Gas;
WHEREAS, the City and the TXU Defendants have compromised and settled all claims
asserted in the Litigation;
NOW, THEREFORE, in order to settle and finally resolve the causes of action asserted in
the Litigation and to fully and finally resolve all disputes and claims arising out of the calculation
and payment of franchise fees to the City by TXU Electric and TXU Gas prior to and through
December 31, 2001, for the mutual promises and covenants set forth in this Agreement, the adequacy
and sufficiency of which consideration is acknowledged, and, without the TXU Defendants having
admitted any of the validity of any allegations made in the Litigation, the City and the
TXU Defendants agree as follows:
1. AMENDMENTS TO THE ELECTRIC FRANCHISE ORDINANCE
As the result of electric industry restructuring, the electric franchise formerly held by
TXU Electric has been assigned to Oncor Electric Delivery Company ( "Oncor "), accordingly,
effective January 1, 2002, the City agrees to enter into and TXU Electric agrees to cause Oncor to
COMPROMISE, SETTLEMENT AND RELEASE AGREEMENT- Pave I
accept an amendment to the current electric franchise ordinance substantially in the form of the
amendment attached as Exhibit A which amendment shall, at the election of the City, provide that
the Discretionary Services Charges identified in Section 6.1.2 of the Tariff for Retail Delivery
applicable to Oncor which are directly paid by the customer and which are those charges identified
as items DD1 through and inclusive of DD24 in said tariff, shall be subject to an additional franchise
fee based on 4% of such charges which additional franchise fee shall be paid to the City pursuant to
the terms of the amendment attached as Exhibit A. The City acknowledges that Oncor may file with
the Texas Public Utility Commission and/or the City a tariff amendment in compliance with the
terms of this agreement, which will provide that Oncor shall have the right to collect from the
customer the franchise fee on such Discretionary Service Charges such that the customer shall bear
100% of the franchise fee on such Discretionary Service Charges. The City acknowledges that
Oncor is an intended third -party beneficiary of this agreement and agrees to cooperate with Oncor in
order for Oncor to pass through to customers the entire franchise fee on such Discretionary Service
Charges by taking the following actions: (i) to the extent the City acts as regulatory authority, by
adopting and approving that portion of any tariff in compliance with the terms of this Agreement
which provides for 100% recovery of such franchise fees; (ii) in the event the City intervenes in any
regulatory proceeding before a federal or state agency in which the recovery of the franchise fees on
such Discretionary Service Charges is an issue, the City will take an affirmative position supporting
the 100% recovery of such franchise fees by Oncor and; (iii) in the event of an appeal of any such
regulatory proceeding in which the City has intervened, the City will take an affirmative position in
any such appeals in support of the 100% recovery of such franchise fees by Oncor. The City further
agrees not to take any action to prevent the recovery of the franchise fees on such Discretionary
Service Charges by Oncor and to take other action which may be reasonably requested by Oncor to
provide for the 100% recovery of such franchise fees by Oncor.
COMPROMISE, SETTLEMENT AND RELEASE AGREEMENT - Pagel
2. AMENDMENTS TO THE GAS FRANCHISE ORDINANCE
Effective January 1, 2002, the City agrees to enact and TXU Gas agrees to accept an
amendment to the current gas franchise ordinance substantially in the form of the amendment
attached as Exhibit B to provide that, at the election of the City, the franchise fee will increase to a
maximum of4.00% of the applicable franchise fee payment base and, at the election of the City, the
franchise fee payment base shall be amended to include miscellaneous fees, contributions in aid of
construction, bad debt expense, transportation revenues and third -party gas sales and gross receipts
fees as well as a favored nations clause with respect to franchise fee payments and franchise fee
calculations, substantially in the form of the provisions in Exhibit B. The City acknowledges that
TXU Gas has the right to recover from its ratepayers such additional franchise fee payments to the
City and the City agrees to cooperate with TXU Gas in order for TXU Gas to pass through to its
ratepayers the entire franchise fee payment, as amended, by taking the following actions: (i) as
regulatory authority, by adopting and approving the ordinance, rates or tariff which provide for
100% recovery of such franchise fees as part of TXU Gas' rates; (ii) in the event the City intervenes
in any regulatory proceeding before a federal or state agency in which the recovery of TXU Gas'
franchise fees is an issue, the City will take an affirmative position supporting 100% recovery of
such franchise fees by TXU Gas and; (iii) in the event of an appeal of any such regulatory
proceeding in which a City has intervened, the City will take an affirmative position in any such
appeals in support of the 100% recovery of such franchise fees by TXU Gas. The City further agrees
not to take any action to prevent the recovery of such franchise fees by TXU Gas and to take other
action which may be reasonably requested by TXU Gas to provide for the 100% recovery of such
franchise fees from TXU Gas' ratepayers.
COMPROMISE, SETTLEMENT AND RELEASE AGREEMENT - Nee 3
3. PAYMENTS TO THE CITY
Upon execution and delivery of a fully executed and notarized original of this Agreement and
conditioned upon the dismissal of the Litigation with prejudice as provided by Paragraph 5:
A. TXU Gas agrees to pay to the City by payment to its attorneys, Strasburger & Price,
the sum of $94,310.00 the same being City's share of an aggregate sum of exactly
$2,000,000.00 which TXU Gas agreed to pay to the Plaintiffs in the Litigation, which
$2,000,000.00 amount is calculated by multiplying the general business revenues
received by TXU Gas in the calendar year 2000 in the City in which TXU Gas did
business in the aggregate amount of $165,591,132.80 by a factor equal to
0.0120779414. The City acknowledges that TXU Gas has the right to and shall
recover the portion of the $2,000,000.00 amount actually paid to the Plaintiffs in
connection with the settlement of the Litigation from its ratepayers pursuant to the
tax adjustment clause applicable to TXU Gas, by applying a surcharge to the monthly
bills rendered to its ratepayers, provided that the recovery of such surcharge shall be
limited as follows: (1) the surcharge shall be amortized over a period not less than
three years, and (2) the accrual balance will not be subject to interest. TXU Gas
agrees that the franchise fee paid to the City and recovered from ratepayers under this
Agreement will not include any amounts collected in the past from ratepayers.
B. TXU Electric agrees to pay or cause Oncor to pay the City, by payment to its
attomeys, Strasburger & Price, the sum of $76,013.00 the same being City's share of
an aggregate sum of exactly $1,000,000.00 which TXU Electric agreed to pay to the
Plaintiffs in settlement of the Litigation, which $1,000,000.00 is calculated by
multiplying the general business revenues received by TXU Electric in the calendar
COMPROMISE SETTLEMENT AND RELEASE AGREEMENT - Pace 4
year 2000 in the City in which TXU Electric did business in the aggregate amount of
$1,149,561,767.63 by a factor equal to 0.000869897.
C. The TXU Defendants agree and expressly represent that none of the amounts set
forth in paragraphs 3(B) and 4 shall be recovered from ratepayers pursuant to a tax
adjustment clause or by applying a surcharge to the monthly bills rendered to
ratepayers, or otherwise "passed thru" to ratepayer(s).
4. FEES AND EXPENSE REIMBURSEMENT
Upon execution and delivery of a fully executed and notarized original of this Agreement and
conditioned upon the dismissal of the Litigation with prejudice as provided by Paragraph 5, the
TXU Defendants agree to pay and/or cause Oncor to pay the City, by payment to its attorneys,
Strasburger & Price, the sum of $18,342.30 the same being City's share of an aggregate sum of
exactly $915,000 which the TXU Defendants agreed to pay to the Plaintiffs to reimburse the
Plaintiffs for attorneys' fees and expenses incurred in the Litigation.
5. DISMISSAL OF THE LITIGATION
The parties recognize and agree that this settlement is a full settlement of all claims asserted
or which could have been asserted by the City against TXU Electric, TXU Gas and TXU Corp. in the
Litigation related to the calculation or payment of franchise fees prior to and through December 31,
2001 and the parties agree that, in connection with such settlement, they will jointly file with the
Court having jurisdiction of the Litigation appropriate pleadings in order to dismiss the Litigation
with prejudice as to the City, with the order of dismissal to provide that costs of court will be taxed
against the party incurring the same and be substantially in the form of the Agreed Order attached as
Exhibit C.
COMPROMISE SETTLEMENT AND RELEASE AGREEMENT- Pagj
6. RELEASE OF THE TXU DEFENDANTS BY THE CITY
Except for claims arising out of a breach of this Agreement, the City of Round Rock, on
behalf of itself and its successors and assigns and any and all persons, entities or municipalities
claiming by, through or under them, hereby RELEASES, DISCHARGES AND ACQUITS,
forever and for all purposes, TXU Electric Company (now known as TXU US Holdings Company),
its successor Oncor Electric Delivery Company, TXU Gas Company, including its division
TXU Gas Distribution, TXU Corp. and each of their respective agents, employees, officers,
directors, shareholders, partners, insurers, attomeys, legal representatives, successors and assigns as
well as their affiliated corporations, including TXU Business Services Company and TXU Energy
Company LLC and its subsidiaries, from and against any and all liability which they now have, have
had or may have, and all past, present and future actions, causes of action, claims, demands,
damages, costs, expenses, compensation, losses and attorneys' fees of any kind or nature whatsoever,
or however described, whether known or unknown, fixed or contingent, in law or in equity, whether
asserted or unasserted, whether in tort or contract, whether now existing or accruing in the future
arising out of or related to the payment, calculation or rendition of franchise fees to the City on or
before December 31, 2001 and all claims which were asserted against the TXU Defendants in the
Litigation or which could have been alleged against the TXU Defendants in the in the Litigation in
any way related to the payment, calculation or rendition of franchise fees by the TXU Defendants on
or before December 31, 2001. This release is intended to only release claims related to the payment,
calculation or rendition of franchise fees by the TXU Defendants on or before December 31, 2001
and is not intended to release any other claim or cause of action that any party to this Agreement has,
known or unknown, or which accrues in the future.
COMPROMISE. SETTLEMENT AND RELEASE AGREEMENT - Paee 6
7. WARRANTY AS TO OWNERSHIP OF CLAIMS AND AUTHORITY
A. The City warrants and represents that it is the owner of the claims being
compromised, settled, discharged and released pursuant to this Agreement and each
further warrants and represents that it has not previously assigned all or any part of
such claims to another entity or person. The City warrants and represents that there
are no liens of any nature, assignments or subrogation interests in or to the money
paid to the City under the terms of this Agreement.
B. The TXU Defendants warrant that the person(s) executing this Agreement on their
behalf has authority to bind the entity for whom such person signs this Agreement.
8. NO ADMISSION OF LIABILITY
This Agreement is made to compromise, terminate and to constitute an accord and
satisfaction of all of the claims released by this Agreement and the TXU Defendants admit no
liability, fault or wrongdoing of any nature or kind whatsoever and expressly deny and disclaim any
liability, fault or wrongdoing alleged or which could have been alleged with regard to the claims
asserted in the Litigation.
9. RECOVERY OF DAMAGES DUE TO BREACH
In the event of breach by any party of the terms and conditions of this Agreement, a non-
breaching party shall be entitled to recover all expenses as a result of such breach, including, but not
limited to, reasonable attorneys' fees and costs.
MISCELLANEOUS PROVISIONS
10. It is understood and agreed that all agreements and understandings by and between the parties
to this Agreement with respect to the Litigation, the settlement of the Litigation and the payment of
franchise fees are expressly embodied in this Agreement and that this Agreement supersedes any and
all prior agreements, arrangements or understandings between the parties relating to the claims
COMPROMISE, SETTLEMENT AND RELEASE AGREEMENT - Paee 7
released pursuant to this Agreement or any matters related thereto executed by the parties, including
the Memorandum of Understanding dated January 31, 2002 signed by counsel for the Plaintiffs and
the TXU Defendants.
11. The parties acknowledge and agree that the terms of this Agreement are all contractual and
not mere recitals.
12. The parties acknowledge that they have read this Agreement, understand its terms, and that
this Agreement is entered into voluntarily, without duress, and with full knowledge of its legal
significance.
13. This Agreement may not be modified in any manner, nor may any rights provided for herein
be waived, except by an instrument in writing signed by each party.
14. This Agreement shall be binding upon and shall inure to the benefit of the parties and their
respective successors and assigns.
15. Should any term or any provision of this Agreement be declared invalid by a court of
competent jurisdiction, the parties agree that all other terms of this Agreement are binding and have
full force and effect as if the invalid portion had not been included.
16. The parties represent and warrant that no party has been induced to enter this Agreement by a
statement, action or representation of any kind or character made by the persons or entities released
under this Agreement or any person or persons representing them, other than those expressly made in
this Agreement.
17. It is understood and agreed that this Agreement may be executed in a number of identical
counterparts, each of which shall be deemed an original for all purposes.
18. The headings contained herein are for convenience and reference only and are agreed, in no
way, to define, describe, extend or limit the scope or intent of this Agreement or its provisions.
19. This Agreement shall be construed in accordance with the laws of the State of Texas.
COMPROMISE, SETTLEMENT AND RELEASE AGREEMENT - Page 8
set forth.
IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the date
COMPROMISE, SETTLEMENT AND RELEASE AGREEMENT - Page 9
THE CITY OF ROUND ROCK, TE
By:
Its:
Date:
By:
Its:
Date:
TXU CORP.
By:
Its:
Date:
By:
Its:
Date: g— 0.21
TXU ELECTRIC COMPANY n /k/a TXU
US HOLDINGS COMPANY
TXU GAS COMPANY
yoR..
STATE OF TEXAS
COUNTY OF TRAVIS
This instrument was acknowled ed before me on the 4 u6u 20
g 1� day of -3�e 2002,
by N yLE m AXW6LL., as /114 yot, on behalf of the City of Round Rock, Texas.
CHRISTINE N. MARTINEZ
MY COMMISSION EXPIRES
Algust 28,2005
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was acknowledged before me on the day of June 2002,
by , of TXU Electric Company n/k/a TXU US Holdings Company, on behalf
of said corporation.
COMPROMISE SETTLEMENT AND RELEASE AGREEMENT - Pale ]0
Notary Public, State of Texas
Notary Public, State of Texas
COUNTY OF DALLAS §
STATE OF TEXAS
This instrument was acknowledged before me on the day of June 2002,
by , of TXU Gas Company, on behalf of said corporation.
STATE OF TEXAS §
COUNTY OF DALLAS §
COMPROMISE, SETTLEMENT AND RELEASE AGREEMENT - Page 11
Notary Public, State of Texas
This instrument was acknowledged before me on the day of June 2002,
by , of TXU Corp., on behalf of said corporation.
Notary Public, State of Texas
ORDINANCE NO.
AN ORDINANCE AMENDING THE EXISTING ELECTRIC
FRANCHISE BETWEEN THE CITY AND ONCOR
ELECTRIC DELIVERY COMPANY, TO PROVIDE FOR A
DIFFERENT CONSIDERATION; PROVIDING AN
EFFECTIVE DATE; PROVIDING FOR ACCEPTANCE BY
ONCOR ELECTRIC DELIVERY COMPANY; FINDING
AND DETERMINING THAT THE MEETING AT WHICH
THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC
AS REQUIRED BY LAW.
WHEREAS, Oncor Electric Delivery Company, successor in interest to TXU Electric
Company (hereinafter called "Oncor ") is engaged in the business of providing electric utility
service within the City and is using the public streets, alleys, grounds and rights -of -ways within
the City for that purpose under the terms of a franchise ordinance heretofore duly passed by the
governing body of the City and duly accepted by Oncor; and
WHEREAS, the City and Oncor desire to amend said franchise ordinance to provide for a
different consideration;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF , TEXAS: that
SECTION 1: The existing electric franchise ordinance between the City and Oncor
Electric Delivery Company is amended as follows:
A. Effective January 1, 2002, the franchise fee due from Oncor shall be a sum
comprised of the following:
(1) a charge, as authorized by Section 33.008(b) of PURA, based on each
kilowatt hour of electricity delivered by Oncor to each retail customer
whose consuming facility's point of delivery is located within the City's
municipal boundaries and as specified by Oncor to the City by letter dated
January 21, 2002.
(a) The franchise fee due pursuant to Section 33.008(b) of PURA shall
be payable in accordance with the existing electric franchise; and
(2) a sum equal to four percent (4 %) of gross revenues received by Oncor
from services identified in its "Tariff for Retail Delivery Service ", Section
6.1.2, "Discretionary Service Charges," items DD1 through DD24, that are for
the account or benefit of an end -use retail electric consumer.
EXHIBIT A
(1)
(a) The franchise fee amounts based on "Discretionary Service
Charges" shall be calculated on an annual calendar year basis, i.e.,
from January 1 through December 31 of each calendar year.
(b) The franchise fee amounts that are due based on "Discretionary
Service Charges" shall be paid at least once annually on or before
April 30 each year based on the total "Discretionary Service
Charges" received during the preceding calendar year.
B. Oncor Franchise Fee Recovery Tariff
Oncor may file a tariff amendment(s) to provide for the recovery of the
franchise fee on Discretionary Service Charges.
(2) City agrees (i) to the extent the City acts as regulatory authority, to adopt
and approve that portion of any tariff which provides for 100% recovery
of the franchise fee on Discretionary Service Charges; (ii) in the event the
City intervenes in any regulatory proceeding before a federal or state
agency in which the recovery of the franchise fees on such Discretionary
Service Charges is an issue, the City will take an affirmative position
supporting the 100% recovery of such franchise fees by Oncor and; (iii) in
the event of an appeal of any such regulatory proceeding in which the City
has intervened, the City will take an affirmative position in any such
appeals in support of the 100% recovery of such franchise fees by Oncor.
(3)
City agrees that it will take no action, nor cause any other person or entity
to take any action, to prohibit the recovery of such franchise fees by
Oncor.
SECTION 2: In all respects, except as specifically and expressly amended by this
ordinance, the existing effective franchise ordinance heretofore duly passed by the governing
body of the City and duly accepted by Oncor shall remain in full force and effect according to its
terms until said franchise ordinance terminates as provided therein.
SECTION 3: This ordinance shall take effect upon its final passage and Oncor's
acceptance. Oncor shall, within thirty (30) days from the passage of this ordinance, file its
written acceptance of this ordinance with the Office of the City Secretary in substantially the
following form:
To the Honorable Mayor and City Council:
Oncor Electric Delivery Company, acting by and through the undersigned
authorized officer, hereby accepts in all respects, on this the day of
Page 2 of 3
ATTEST:
City Secretary
APPROVED AS TO FORM:
City Attorney
, 20 , Ordinance No. amending the
current electric franchise between the City and Oncor and the same shall
constitute and be a binding contractual obligation of Oncor and the City.
Oncor Electric Delivery Company
By
Vice President
SECTION 4. It is hereby officially found and determined that the meeting at which this
Ordinance is passed is open to the public as required by law and that public notice of the time,
place and purpose of said meeting was given as required.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
, TEXAS , this the day of , 2002, at which meeting
a quorum was present and voting.
Mayor
Page 3 of 3
ORDINANCE NO.
AN ORDINANCE AMENDING THE EXISTING GAS
FRANCHISE BETWEEN THE CITY AND TXU GAS
COMPANY, TO PROVIDE FOR A DIFFERENT
CONSIDERATION AND TO AUTHORIZE THE LEASE OF
FACILITIES WITHIN THE CITY'S RIGHTS -OF -WAY;
PROVIDING AN EFFECTIVE DATE; PROVIDING FOR
ACCEPTANCE BY TXU GAS COMPANY; FINDING AND
DETERMINING THAT THE MEETING AT WHICH THIS
ORDINANCE IS PASSED IS OPEN TO THE PUBLIC AS
REQUIRED BY LAW.
WHEREAS, TXU Gas Company (hereinafter called "TXU Gas ") is, through its TXU
Gas Distribution division, engaged in the business of furnishing and supplying gas to the general
public in the City, including the transportation, delivery, sale, and distribution of gas in, out of,
and through the City for all purposes, and is using the public streets, alleys, grounds and rights -
of -ways within the City for that purpose under the terms of a franchise ordinance heretofore duly
passed by the governing body of the City and duly accepted by TXU Gas; and
WHEREAS, the City and TXU Gas desire to amend said franchise ordinance to provide
for a different consideration and to authorize the lease of facilities within the City's rights -of-
way;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF , TEXAS: that
SECTION 1: The existing gas franchise ordinance between the City and TXU Gas
Company is amended as follows:
A. Effective January 1, 2002, the consideration payable by TXU Gas for the rights
and privileges granted to TXU Gas by the franchise ordinance heretofore duly
passed by the governing body of this City and duly accepted by TXU Gas is
hereby changed to be four percent (4 %) of the Gross Revenues, as defined in
Section 1.B. below, received by TXU Gas.
B. "Gross Revenues" shall mean all revenue derived or received, directly or
indirectly, by the Company from or in connection with the operation of the
System within the corporate limits of the City and including, without limitation:
(1) all revenues received by the Company from the sale of gas to all classes of
customers within the City;
EXHIBIT B
(2) all revenues received by the Company from the transportation of gas
through the pipeline system of Company within the City to customers
located within the City;
(3) the value of gas transported by Company for Transport Customers through
the System of Company within the City ( "Third Party Sales "), with the
value of such gas to be reported by each Transport Customer to the
Company, provided, however, that should a Transport Customer refuse to
furnish Company its gas purchase price, Company shall estimate same by
utilizing TXU Gas Distribution's monthly industrial Weighted Average
Cost of Gas, as reasonably near the time as the transportation service is
performed; and
(4) "Gross revenues" shall include:
(5)
(a) other revenues derived from the following `miscellaneous
charges':
i. charges to connect, disconnect, or reconnect gas within the
City;
charges to handle returned checks from consumers within
the City;
iii. such other service charges and charges as may, from time
to time, be authorized in the rates and charges on file with
the City; and
iv. contributions in aid of construction" ( "CIAC ");
(b) revenues billed but not ultimately collected or received by the
Company; and,
(c) gross receipts fees.
"Gross revenues" shall not include:
(a) the revenue of any Person including, without limitation, an
affiliate, to the extent that such revenue is also included in Gross
Revenues of the Company;
(b) sales taxes; and
(c) any interest income eamed by the Company; and
Page 2 of 5
(d) all monies received from the lease or sale of real or personal
property, provided, however, that this exclusion does not apply to
the lease of facilities within the City's right of way unless the
lessee is also an entity that pays franchise fees to the City.
C. Calculation and Payment of Franchise Fees Based on CIAC
(1) The franchise fee amounts based on "Contributions in aid of Construction"
( "CIAC ") shall be calculated on an annual calendar year basis, i.e., from
January 1 through December 31 of each calendar year.
(2) The franchise fee amounts that are due based on CIAC shall be paid at
least once annually on or before April 30 each year based on the total
CIAC recorded during the preceding calendar year.
D. Effect of Other Municipal Franchise Ordinance Fees Accepted and Paid by TXU
Gas
(1) If TXU Gas should at any time after the effective date of this Ordinance
agree to a new municipal franchise ordinance, or renew an existing
municipal franchise ordinance, with another municipality, which
municipal franchise ordinance determines the franchise fee owed to that
municipality for the use of its public rights -of -way in a manner that, if
applied to the City, would result in a franchise fee greater than the amount
otherwise due City under this Ordinance, then the franchise fee to be paid
by TXU Gas to City pursuant to this Ordinance shall be increased so that
the amount due and to be paid is equal to the amount that would be due
and payable to City were the franchise fee provisions of that other
franchise ordinance applied to City.
(2) The provisions of this Subsection D apply only to the amount of the
franchise fee to be paid and do not apply to other franchise fee payment
provisions, including without limitation the timing of such payments.
E. TXU Gas Franchise Fee Recovery Tariff
(1) TXU Gas may file with the City a tariff amendment(s) to provide for the
recovery of the franchise fees under this amendment.
(2) City agrees that (i) as regulatory authority, it will adopt and approve the
ordinance, rates or tariff which provide for 100% recovery of such
franchise fees as part of TXU Gas' rates; (ii) if the City intervenes in any
regulatory proceeding before a federal or state agency in which the
Page 3 of 5
(3)
recovery of TXU Gas' franchise fees is an issue, the City will take an
affirmative position supporting 100% recovery of such franchise fees by
TXU Gas and; (iii) in the event of an appeal of any such regulatory
proceeding in which the City has intervened, the City will take an
affirmative position in any such appeals in support of the 100% recovery
of such franchise fees by TXU Gas.
City agrees that it will take no action, nor cause any other person or entity
to take any action, to prohibit the recovery of such franchise fees by TXU
Gas.
F. Lease of Facilities Within City's Rights -of -Way. TXU Gas shall have the right to
lease, license or otherwise grant to a party other than TXU Gas the use of its
facilities within the City's public rights -of -way provided: (i) TXU Gas first
notifies the City of the name of the lessee, licensee or user; the type of service(s)
intended to be provided through the facilities; and the name and telephone number
of a contact person associated with such lessee, licensee or user and (ii) TXU Gas
makes the franchise fee payment due on the revenues from such lease pursuant to
Sections I.A. and I.B. of this Ordinance. This authority to Lease Facilities Within
City's Rights -of -Way shall not affect any such lessee, licensee or user's obligation,
if any, to pay franchise fees.
SECTION 2: In all respects, except as specifically and expressly amended by this
ordinance, the existing effective franchise ordinance heretofore duly passed by the governing
body of the City and duly accepted by TXU Gas shall remain in full force and effect according to
its terms until said franchise ordinance terminates as provided therein.
SECTION 3: This ordinance shall take effect upon its final passage and TXU Gas'
acceptance. TXU Gas shall, within thirty (30) days from the passage of this ordinance, file its
written acceptance of this ordinance with the Office of the City Secretary in substantially the
following form:
To the Honorable Mayor and City Council:
TXU Gas Distribution, a division of TXU Gas Company, acting by and through
the undersigned authorized officer, hereby accepts in all respects, on this the
day of , 20 , Ordinance No. amending the
current gas franchise between the City and TXU Gas and the same shall constitute
and be a binding contractual obligation of TXU Gas and the City.
Page 4 of 5
SECTION 4. It is hereby officially found and determined that the meeting at which this
Ordinance is passed is open to the public as required by law and that public notice of the time,
place and purpose of said meeting was given as required.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
TEXAS , this the _ day of , 2002, at which meeting
a quorum was present and voting..
ATTEST:
City Secretary
APPROVED AS TO FORM:
City Attorney
TXU Gas Distribution
A division of TXU Gas Company
By
Vice President
Mayor
Page 5 of 5
CITY OF DENTON, TEXAS,
et al.,
Plaintiffs,
vs.
TXU ELECTRIC COMPANY,
et al.,
Defendants.
NO. 009383
IN THE DISTRICT COURT
DALLAS COUNTY, TEXAS
134 JUDICIAL DISTRICT
AGREED ORDER OF DISMISSAL WITH PREJUDICE
AS TO THE CITY OF ROUND ROCK
On this day, came on to be considered the above - referenced cause and Plaintiff, the City
of Round Rock, and Defendants, by and through their respective attorneys of record, announced
that the parties have compromised and settled their disputes and moved that this action be
dismissed with prejudice as to the City of Round Rock;
IT IS, THEREFORE, ORDERED, ADJUDGED AND DECREED that the above - styled
and numbered cause of action is dismissed with prejudice to the refiling of same as to the City of
Round Rock, that all costs incurred are taxed against the party incurring same, and that any and
all relief requested by the City of Round Rock not expressly granted herein is denied.
SIGNED this day of 2002.
JUDGE PRESIDING
EXHIBff C
APPROVED AND AGREED AS TO FORM AND CONTENT:
STRASBURGER & PRICE, L.L.P.
By:
Kevin J. Maguire
State Bar No. 12827900
ATTORNEY FOR PLAINTIFF
HUNTON & WILLIAMS
By:
David P. Poole
State Bar No. 16123750
ATTORNEY FOR DEFENDANTS
TXU ELECTRIC COMPANY
TXU GAS COMPANY AND
TXU CORP.
AGREED ORDER OF DISMISSAL — Page 2
RESOLUTION NO. R- 02- 03- 14 -13D6
WHEREAS,on January 31, 2002, the Texas Transportation Commission
(TTC) approved the proposed rules for Regional Mobility Authorities and
Financing Toll Projects, and
WHEREAS,the TTC invited written comments on the proposed rules
be submitted to it on or before March 18, 2002, and
WHEREAS, the City Council wishes to provide its comments on the
proposed rules as set forth in Exhibit "A ", attached hereto and
incorporated herein, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS,
That the City Council hereby authorizes the Mayor to submit to the
TTC the City of Round Rock's comments to the proposed rules as set
forth in Exhibit "A ".
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.
ATTEST:
RESOLVED this 14th day of Ma
CHRISTINE R. MARTINEZ, City Secre
2
RO
02.
A. STLUKA, f ., Mayor
City of Round Rock, Texas
subdivisions; and
organizations;
systems; and
Comments of City of Round Rock
on Proposed RMA Rules
DRAFT
Set forth below are the comments of the City of Round Rock on various of the
Regional Mobility Authority ( "RMA ") rules proposed by the Texas Department of
Transportation ('TXDOT "). Proposed deletions are marked as strike - throughs, and new
(or modified) language is shown in italics. Only those rules for which a change is
proposed are shown, and each such rule is followed by an explanation of the proposed
change.
§ 26.13. Approval. The commission may authorize the petitioner to create an RMA if it
finds that:
(1) the creation of an RMA:
(A) has sufficient public support based upon:
(i) public commonts rocoivod at public hoarings;
{D(ii) resolutions of support from affected political
ii #i the expressed opinion, if any, of metropolitan planning
(B) will result in direct benefits to the state, local governments,
and the traveling public; and
(C) will improve the efficiency of the state's transportation
(2) each project:
(A) comes from a conforming transportation plan and
transportation improvement program, if the project is located in a nonattainment area;
(B) is consistent with the Texas Transportation Plan, the
metropolitan transportation plan, and the Statewide Transportation Improvement
Program; and
(C) subject to the completion of required studies and subject to
commission approval under §26.43 of this chapter, will benefit the traveling public.
EXHIBIT
RMA Comments — Page 1
RMA; and
DRAFT
Explanation of Proposed Change: Consistent with the proposed deletion of 26.12,
there should be no public hearings (conducted by the department) from which to
consider "public comments."
§ 26.14. Commission Action
(a) Order. If approved under §26.13 of this subchapter, the commission will
adopt a minute order authorizing the creation of the RMA. The minute order will:
(1) designate the geographic area of the state in which the RMA may
operate, which shall be along county lines;
(2) describe each the initial turnpike project
maintained, and operated by the RMA; and,
oporation, or maintonanco doomed by tho commiscion to bo nococcary for tho
to be developed,
(3) doscribo any rostrictions or limitations on tho oporationc of tho
3<�)(4) establish, consistent with Transportation Code, §361.003, the initial
size of the board, which shall be composed of an odd number of directors. and
(5) dosignato any political cubdivisions that will bo roprocontod on tho
board by diroctors appointod undor §26.16(d) of thic cubchaptor.
(b) Approval of project. Approval of the creation of an RMA shall not
constitute final commission approval of any turnpike project, which are subject to
approval under §26.43 of this chapter.
Explanation of Proposed Change: As written, section 26.14(a)(2) implies that only a
turnpike project identified at the time of the formation of an RMA can, or will, be
developed by that RMA. RMAs should not be precluded from later developing
additional turnpike projects (with appropriate Commission approvals). The proposed
reference to the "initial" project is intended to eliminate the inference and make it clear
that an RMA is not limited to developing only those projects identified at the time of its
formation.
Also in Section 26.14(a)(2), the reference to the Commission's minute order containing
additional restrictions on the project necessary for the protection of public safety and of
the natural environmental should be eliminated. Such issues will necessarily be
considered through the environmental review process and through the turnpike planning
and design process, and it is unreasonable to expect that the Commission will be able
RMA Comments — Page 2
to accurately identify, at this very preliminary stage of the turnpike project development,
what protections are justified and that would not otherwise be provided for through the
project permitting and design.
Section 26.14(a)(3) refers to additional restrictions or limitations which may be placed
on the operations of an RMA. The Counties are concerned that the potential for such
restrictions or limitations will be a matter of great concern to the capital markets. The
capital markets will expect RMAs to have a considerable degree of local autonomy to
make operational decisions (aAnd to make decisions as to how best to meet the
requirements of any trust indenture). Any potential for a third party (i.e., the
Commission) to impose additional restrictions or limitations would undermine the
authority and credibility of the RMA to carry out its fiduciary responsibilities. It is also
unclear whether these restrictions or limitations could be added subsequent to the
formation of an RMA, which would be of even more concern to the capital markets since
unanticipated or unexpected restrictions or limitations could be imposed on an RMA
after it is already operating or is far into the project development process. Thus, the
potential for additional restrictions or limitations is unnecessary and may well create an
unacceptable level of risk in the view of capital markets.
Section 26.14(a)(5) refers to the potential for additional "political subdivisions" to be
appointed to the RMA board of directors by the Commission. This is a serious, and
potentially fatal, flaw in the RMA rules due to the uncertainty it introduces. It is
addressed in more detail in connection with proposed changes to Section 26.16
described below, and for the reasons explained there Section 26.14(a)(5) should be
deleted.
§26.16. Board of Directors.
(a) Purpose. A board of directors shall administer and operate the RMA.
(b) County appointees. The petitioner shall appoint directors to the board as
required by Transportation Code, §361.003(b) and (c).
(c) Presiding officer. The govemor will appoint one director to the board who
shall serve as the presiding officer.
(d) Additional diroctors.
(1) Tho commiccion may authorizo tho appointment of additional
diroctorc as it dooms nococsary to onsuro fair roprosontation of affoctod political
DRAFT
(2) If tho commiccion dotorminoc undor paragraph (1) of thic
RMA Comments - Page 3
whale:
DRAFT
diroctors to roprosont moro than ono political subdivision, and may rotato those
(d)(e) Term of office. Directors shall be appointed to terms of two years.
Directors may be reappointed at the discretion of the appointing entity.
(e)(f ) Compensation. A director serves without compensation but is entitled to
reimbursement for expenses incurred in board service. Reimbursement shall be the
responsibility of the entity county the member is representing, and shall be in
accordance with the entity's county's procedures governing reimbursement of
employees.
.(D(g) Removal. A director serves at the pleasure of the appointing entity and
may be removed for any reason.
(q)(#) Eligibility. The following individuals are ineligible to serve as a director:
(1) persons who are not residents of a county within the geographic
area of the RMA;
(2) persons owning an interest in real property that has been or will be
acquired for an RMA project;
(3) persons ineligible under §26.33 of this chapter (relating to Conflict
of Interest);
(4) elected officials; and
(5) department employees.
Explanation of Proposed Change: Section 26.16(d) should be deleted in its entirety.
That section provides the Commission with the authority and discretion to appoint
additional directors to an RMA board if the Commission determines that additional
directors are necessary to assure adequate representation of "affected political
subdivisions." This authority is not explicit in SB 342 and granting it through rules
appears inconsistent with the intent of SB 342 (which suggests that RMA boards will be
comprised solely of county representatives and a gubernatorial appointee). The ability
of the Commission to alter the composition and dynamics of an RMA board of directors
creates the possibility for instability among the board, which will be of grave concern to
the capital markets. Furthermore, the perceived need for the authorization to appoint
additional directors assumes that county officials, who represent all within geographic
borders, will not be responsive or sensitive to the needs and positions of the political
subdivisions located within their counties. Again, the governing body of any county is
comprised of elected officials, and if they are not responsive or they are insensitive to
RMA Comments — Page 4
DRAFT
the needs of the political subdivisions within their boundaries they will be accountable to
the voters. The capital markets will demand stability and predictability in the
composition of an RMA board of directors, and while the individuals on a board may
change, the number and their origin should not be subject to change at the whim of the
Commission. This provision should be deleted.
The changes recommended in Section 26.16(e) are consistent with this change.
RMA Comments - Page 5
DRAFT
§ 26.21. Addition of Counties.
(a) One or more counties may request the commission for consent to join an
existing RMA. The commission may approve the request if:
(a)(-1-) the county has submitted a resolution from its commissioners court
indicating support for the request;
( )((2-) the board of the RMA has agreed in writing to the addition; and
)(4) the commission finds that the addition will benefit the mobility of the
region.
(b) If tho commiccion approvos tho addition, tho commission may provido for
Explanation of Proposed Change: Subparagraph (b) refers to the same issue as is
discussed above in connection with Section 26.16(d). This specific paragraph puts the
potential for the appointment by the Commission of additional directors in the context of
the potential addition of one or more counties to an RMA. In addition to creating the
possibility of instability on an RMA board (and the corresponding perception by the
capital markets of increased risk), 26.21(b) adds the further problem of providing a
disincentive for an RMA to join with additional counties in the future if doing so will
create the possibility for the appointment of additional, unknown directors. This
provision should be deleted. The addition of counties will occur as necessitated by the
projects being undertaken by the RMA.
§ 26.23. Dissolution of an RMA.
(a) Voluntary dissolution. The board of an RMA may request the commission
for consent to dissolve. The commission may approve the request if:
(1) all debts, obligations, and liabilities of the RMA have been paid and
discharged or adequate provision has been made for the payment of all debts,
obligations, and liabilities;
(2) there are no suits pending against the RMA, or adequate provision
has been made for the satisfaction of any judgment, order, or decree which may be
entered against it in any pending suit; and
RMA Comments — Page 6
DRAFT
(3) the RMA's turnpike projects, if any, including all components and
appurtenances, are in a condition that complies with the requirements of §26.52(a) of
this chapter.
(b) Involuntary dissolution.
(1) If the RMA has no outstanding bonded indebtedness, Tthe
commission may by order require the RMA to dissolve if it finds that:
(A) the RMA has not, as determined by the commission,
substantially complied with the requirements of this chapter or the terms of an
agreement required by this chapter; or
(B) the RMA has failed to expeditiously pursue the development
of a project identified under §26.14(a)(2) of this chapter.
(2) The commission may not require dissolution unless the conditions
described in subsection (a)(1) and (2) of this section have been met.
(3) At least 30 days prior to adopting an order under this section, the
department will provide written notice to the RMA's board offering an opportunity for the
RMA to speak before the commission.
(c) The commission may not consent to or order the dissolution of an RMA if
the RMA has outstanding bonded indebtedness and the holders of that indebtedness
have not evidenced their agreement to the dissolution.
Explanation of Proposed Change: As written, Section 26.23(b) provides for the
possible involuntary dissolution of an RMA by the Commission even if the RMA has
outstanding bonded indebtedness. This could occur because the Commission could
make a determination, under subsection (a)(1), that "adequate provision" has been
made for payment of the debt. Unfortunately, this will not provide adequate certainty to
the capital markets that an RMA with outstanding indebtedness cannot be dissolved
without consent of the bondholders or the holders of such debt. That is the level of
assurance potential bondholders or others will seek; that is, that there can be no
voluntary or involuntary dissolution of an RMA unless and until its indebtedness has
been paid or the holders of that debt have consented to a means by which they are
adequately protected. Vesting that discretion in the Commission will create
considerable uncertainty in the minds of potential investors, and may very well prevent
RMAs from accessing the capital markets. The change to 26.23(b)(i) and the addition
of 26.23(c) will eliminate this problem.
RMA Comments - Page 7
DRAFT
§ 26.32. Administrative Expenses.
(a) Expenses necessary to administer an RMA shall be the sole responsibility
of the political subdivisions who are represented on the board. The board is responsible
for equitably allocating responsibility for administrative expenses.
(b) For purposes of this subchapter, "administrative expenses" means
expenses, such as salaries, office supplies, and rent, necessary to operate the RMA.
(c) Nothing in these rules is intended to prevent an RMA from using toll
revenues, bond proceeds, or funds loaned or granted by the department for the
payment of reasonable administrative expenses incurred in connection with the
planning, development, operation, and maintenance of a turnpike project.
Explanation of Proposed Change: Section 26.32 is overly restrictive in defining the
sources of funding for RMA's administrative expenses. It is unreasonable to expect that
an RMA would not pay any of its administrative expenses out of toll revenues, bond
proceeds, or even out of funds advanced for project development, provided those
expenses related to the legitimate operations of the RMA. Ultimately RMAs should be
self sufficient organizations from a financial standpoint, however their only sources of
revenue will be toll revenues, bond proceeds, or granted or loaned funds. It is
unreasonable to expect the participating counties to continue to fund those expenses
which are properly attributable to the RMA and its operations. The proposed addition
addresses this concern.
Regarding 26.41 — 26.56 In the case where federal highway funds are granted or
loaned to a project then it is understood that the applicable federal requirements must
be followed. However, if only State funds or no TxDOT money is involved in the project
then the federal guidelines should not be invoked.
§ 26.41. Social and Environmental Impact.
(a) General. An RMA shall develop a turnpike project in accordance with
Transportation Code, Section 361.103 and consistent with the spirit and intent of the
National Environmental Policy Act, 42 United States Code § §4321 et seq, and 23
United States Code §109(h) by conducting a study of the social and environmental
impact of the project.
(b) Federal -aid project. If federal -aid funds are requested for construction, or if
federal approval or another federal action is required with respect to a turnpike project
under this subchapter, an environmental review shall also be conducted in compliance
with 23 C.F.R. 771 or its successor regulations.
RMA Comments - Page 8
DRAFT
(c) Commission approval. If Federal funds are to be used on the projectThe
commission must approve the environmental document,
under thic cectipn before the construction contractferthe- of a project beginshas -been
The Commission agrees to process such approval within thirty days
of receipt of the environmental document.
Explanation of Proposed Change: The Commission approval should apply in the
case where Federal funds are being granted or loaned to the project. Subsection (c)
purports to require Commission approval of each environmental review project before
construction of a project has been advertised for bids. However, Section 361.103(c) of
the Transportation Code only requires that such approval be obtained prior to the
commencement of construction of a turnpike project. By requiring Commission
approval prior to advertisement for bids, the rules will force a delay in the project
development process. This is particularly true if an RMA desires to use an exclusive
development agreement ( "EDA ") (assuming legislative authority for use of EDAs is
secured) or similar mechanism, a contract which would encompass construction of a
project. EDA solicitations and negotiations will likely begin prior to securing all of the
necessary environmental reviews, and therefore the rule, as written, would force a delay
in that process and ultimately a delay in the development of the project.
§ 26.43. Project Approval.
(a) In accordance with Transportation Code, Sections 361.101 and 362.051,
the RMA must request final commission approval of the project. The RMA must obtain
approval after receiving approval of each environmental review under §26.41(c) of this
subchapter and before final designation of the project as a turnpike project and before
the construction of sentrastfor the project begin .
(b) To secure approval under this section, the RMA shall submit the following
information to the executive director:
(1) an updated summary of the anticipated financing plan for purposes
of seeking the approval described in subsection (c)(2) of this section; and
(2) a report identifying relocations or reconstruction to state highway
system facilities anticipated in connection with the proposed project.
(c) In deciding whether to grant approval under this section, the commission
will consider whether:
(1) the project may be effectively integrated into the state highway
system; and
RMA Comments — Page 9
DRAFT
(2) the department is able to construct any connecting roads necessary
for the project to generate sufficient revenue to pay the debt incurred for its
construction.
Explanation of Proposed Change: See section 26.41(c) discussion above. This is a
consistent and conforming change.
§ 26.44. Design and Construction.
(a) Responsibility. The RMA is fully responsible for the design and
construction of each project it undertakes, including ensuring that all EPIC are
addressed in project design.
(b) Design criteria.
(1) State criteria. All designs developed by or on behalf of the RMA
shall comply with the latest version of the department's manuals, including, but not
limited to, the Roadway Design Manual, Pavement Design Manual, Hydraulic Design
Manual, the Texas Manual on Uniform Traffic Control Devices, Bridge Design Manual,
and the Texas Accessibility Standards.
(2) Alternative criteria. An RMA may request approval to use different
nationally accepted criteria for a particular item of work. Alternative criteria may include,
but are not limited to, the latest version of the AASHTO Policy on Geometric Design of
Highways and Streets, the AASHTO Pavement Design Guide, and the AASHTO Bridge
Design Specifications. The use of alternative criteria is subject to the approval of the
Federal Highway Administration for those projects involving federal funds. The
executive director may approve the use of alternative criteria if the alternative criteria
are determined to be sufficient to protect the safety of the traveling public and protect
the integrity of the transportation system.
(3) Exceptions to design criteria. An RMA may request approval to
deviate from the state or alternative criteria for a particular design element on a case by
case basis. The request for approval shall state the criteria for which an exception is
being requested and must include a comprehensive description of the circumstances
and engineering analysis supporting the request. The executive director may approve
an exception after determining that the particular criteria could not reasonably be met
due to physical or environmental factors and that the proposed design is the best
engineering solution.
(c) Project development.
RMA Comments — Page 10
(1) Frontage roads. Frontage roads are not allowed unless they are
determined by the department to be in compliance with the department's frontage road
policy in §15.54 of this title (relating to Construction).
(2) Access. For proposed projects that will change the access control
line to an interstate highway, the RMA shall submit to the department all data necessary
for the department to request Federal Highway Administration approval.
(d) Preliminary design submission and approval. When design is
approximately 6090% complete, the RMA will send the following preliminary design
information to the department for review and - approval. The department will sa late
itsprovide any-review -and comments within 30 days;
(1) a completed Design Summary Report form as contained in the
department's Project Development Process Manual;
(2) current average daily traffic volumes on existing roads and streets
included in the project limits;
(3) five -year and twenty -year forecasts of average daily traffic volumes
including traffic loadings by axle load spectrum or vehicle classifications as defined by
the Federal Highway Administration on existing and proposed roads and streets within
or affected by the facility;
(4) horizontal layout information showing the horizontal alignment and
any superelevation proposed for each roadway;
(5) typical sections showing existing and proposed horizontal
dimensions, cross slopes, location of profile grade line, pavement layer thickness and
composition, earthen slopes, and right of way lines;
(6) profile grade information showing existing ground and proposed
roadway elevations for each alignment, including vertical curve data;
(7) bridge, retaining wall, and sound wall layouts including horizontal
and vertical clearances to adjacent features and showing the type of structure,
foundation, and railings proposed;
(8) drainage area maps showing the drainage of waterways entering
the project and local project drainage (hydraulic and hydrologic studies and reports
used to size bridges and culverts shall be submitted and include specifications for the
basis of design and the design coefficients, rainfall intensities, drainage area sizes, and
calculated flow quantities for each drainage structure and, when applicable, for each
inlet and storm sewer);
construction;
(
DRAFT
an explanation of the anticipated handling of existing traffic during
(10) when structures meeting the definition of a bridge as defined by the
National Bridge Inspection Standards are proposed, an indication of structural capacity
in terms of design loading;
RMA Comments - Page 11
erosion;
D RAFT
(11) proposed temporary and permanent measures for controlling
(12) an explanation of how the U.S. Army Corps of Engineers permit
requirements, including associated certification requirements of the Texas Natural
Resource Conservation Commission, will be satisfied if the project involves discharges
into waters of the United States; and
(13) for freeways, the location and text of proposed mainlane guide
signs shown on a schematic that includes lane lines or arrows indicating the number of
lanes.
(e) Construction specifications.
(1) All plans, specifications, and estimates developed by or on behalf
of the RMA shall conform to the latest version of the departments Standard
Specifications for Construction and Maintenance of Highways, Streets, and Bridges,
and shall conform to department required special specifications and special provisions.
(2) The executive director may approve the use of an alternative
specification if the proposed specification is determined to be sufficient to ensure the
quality and durability of the finished product for the intended use and the safety of the
traveling public.
(f) Submission and approval of final design plans and contract administration
procedures. When final plans are complete, the RMA shall send the following
information to the executive director for review and approval. The department will
forward complete its review-and comments within 30 days.;
(1) seven copies of the final set of plans, specifications, and engineer's
estimate (PS &E) that have been signed and sealed by the responsible engineer;
(2) revisions to information provided with the preliminary design
submission summarized or highlighted for the department;
(3) proposal necessary for bidding the project in compliance with
applicable state and federal requirements;
(4) contract administration procedures containing criteria that comply
with the applicableapprepnate national or state administration criteria and manuals; and
(5) location and description of all EPIC addressed in construction.
(g) Contract bidding and award. The RMA shall not advertise the project for
receipt of bids any earlier than thirty days after submission of final design plans to
TxDOTuntil it has rocoivod approval of tho PS&E from tho dopartmont. Procedures
relating to bidder qualification, bidding, award, and execution of a contract for the
development of a project that is financed with state or federal funds
shall comply with the policies and procedures prescribed in Chapter 9, Subchapter B of
this title (relating to Highway Improvement Contracts).
RMA Comments - Page 12
and
DRAFT
(h) Construction inspection and oversight. Unless the department in writing
agrees to assume responsibility for some or all of the following items, the RMA is
responsible for:
(1) overseeing all construction operations, including the oversight and
follow through with all EPIC;
(2) assessing contract revisions for potential environmental impacts;
(3) obtaining any necessary EPIC required for contract revisions.
(i) Contract revisions. All contract revisions shall comply with the latest
version of the applicableapprepiate national or state administration criteria and
manuals, and must be cubmittod to the exocutivc diroctor for approval prior to boginning
(j) As -built plans. Within six months after final acceptance of the construction
project, the RMA shall file with the department a set of the as -built plans incorporating
any contract revisions. These plans shall be signed, sealed, and dated by a licensed
professional engineer in Texas certifying that the project was constructed in accordance
with the plans and specifications.
(k) Document and information exchange. If available, the RMA agrees to
deliver to the department all materials used in the development of the project including,
but not limited to, aerial photography, computer files, surveying information, engineering
reports, environmental documentation, general notes, specifications, and contract
provision requirements.
(I) State and federal law. The RMA shall comply with all federal and state
laws and regulations applicable to the project and tho ctato highway cyctom, and shall
provide or obtain all applicable permits, plans, and other documentation required by a
federal, state, or local governmental entity.
(m) Work on state right of way. All work required within the limits of state
owned right of way shall be accomplished only pursuant to express written agreement
with the department and at the sole expense of the RMA.
Explanation for Proposed Change: . It is essential for any toll authority to expedite
project delivery in order to minimize cost of the project and the cost of issuing debt. The
capital markets will place a higher cost of issuance on the debt if a third party, that is not
liable for the debt, has approval authority over the development of the project. The
RMA must have the right to control the development of the project without undue
burden. If Federal funds are used for the project then all applicable federal
requirements will be followed.
RMA Comments — Page 13
§ 26.47. Pooling. Prior to pooling turnpike projoctc under Transportation Code,
Explanation of Proposed Change: The ability to pool turnpike projects in an important
means by which to achieve efficiencies and economies of scale, as well as to provide
for a more integrated method in which to finance turnpike project development.
Therefore, provided it is acting within the scope of any trust indenture for outstanding
bonded indebtedness, an RMA should be able to make its own decisions concerning
whether, and when, to pool turnpike projects. The act of pooling does not cause any
changes to the physical configuration of a turnpike project, and therefore the
Commission should have little or no interest in whether turnpike projects within an RMA
are, in fact, pooled. It is primarily an accounting, financial, and operations and
maintenance issue which should be left to the local authority. This is another example
of an area of discretion which the capital markets will want to see vested in an RMA.
They will want to know that their borrower can make financial decisions unfettered from
required approvals of generally unaffected third parties.
DRAFT
§ 26.55. Project Constructed by the Department.
(a) Request. An RMA may request that the department transfer to the RMA a
segment of tolled state highway that was constructed by the department.
(b) Effect of transfer. Upon transfer, the highway is considered for all
purposes a turnpike project of the RMA. The RMA is responsible for the operation and
maintenance of the project and assumes responsibility for all project debt.
(c) Approval. The commission may approve a transfer under this section if the
commission determines that:
(1) the transfer is allowed by the trust agreement or indenture entered
into by the commission for that project;
(2) property and contract rights in the project and bonds issued by the
commission for the project would not be affected unfavorably; and
(3) the RMA is capable of maintaining and operating the project in a
safe and efficient manner.
(d) Surplus rovonuo. Notwithstanding tho provisions of Subchaptor G of this
chaptor to tho contrary, tho commiccion may, as a condition to tho transfor, rostrict tho
RMA Comments - Page 14
DRAFT
M(e) Agreement. If the commission approves a transfer, the department and
the RMA shall enter into a project agreement under §26.54 of this subchapter.
Explanation of Proposed Change: Senate Bill 342 defines the permissible uses of
surplus revenues from a turnpike project developed or operated by an RMA. Section
26.56(d) provides the opportunity for the Commission to add additional restrictions to
the uses of surplus revenue from a transferred project. The capital markets will be very
adverse to any further restrictions on the use of surplus revenues, and particularly to a
vague reference in the rules to the possible imposition of future restrictions on the uses
of surplus revenues. This provision will likely preclude an RMA from accessing the
capital markets to finance the acquisition of a project from TxDOT. Potential investors
will expect that RMA revenues will be available for use in connection with the turnpike
project and will be free from pressure to generate surplus revenues for purposes not
otherwise defined or permitted under SB 342.
§ 26.56. Department Assuming Jurisdiction of RMA Project.
(a) An RMA turnpike project may becomes a non - tolled facility under the
jurisdiction of the department when:
(1) all debt issued for the project and the interest on the debt has been
paid; or
(2) firm banking and financial arrangements have been made for the
discharge and final payment or redemption of the debt in accordance with law; and
(3) the RMA requests that the department assume jurisdiction over the
project.
(b) If the conditions of subsections (a)(1) and —(2) and (3) are met, the
commission may continue to charge a toll sufficient to pay the costs of maintaining the
facility.
(c) An RMA shall ensure that, prior to the department assuming jurisdiction
under subsection (a) of this section, the turnpike project, including all its components
and appurtenances, is in a condition that complies with §26.52(a) of this subchapter.
Explanation of Proposed Change: As written, this rule assumes that an RMA
turnpike project will automatically be transferred to the department when the conditions
identified in subparagraphs (a)(1) and (a)(2) are met. There is no logical basis for this
automatic transfer of a project at that time, and it should be up to the RMA, which
developed and /or operated the turnpike project, to determine when it desires to transfer
RMA Comments — Page 15
DRAFT
it to the department. Just as the Commission is permitted to continue operating and
project and charging a toll sufficient to pay costs of maintaining the facility (26.56(b)), an
RMA may see benefits in operating a project in the same manner, particularly if surplus
revenues can be used for purposes permitted under SB 342. Thus, the rule should be
revised to eliminate any presumption that an RMA project will be subject to transfer
immediately upon the payment of all debt.
th
under §26.62(1) of this subchaptor, the RMA shall provido tho commiccion at loact 15
days writton notico of its intontions. Tho notico chall doccribo in cufficiont dotail tho
Explanation of Proposed Change: This rule suggests that prior notice be provided to
the Commission before an RMA utilizes surplus revenue to assist in the financing of a
transportation project of a governmental entity. While the rule does not provide that
Commission approval is required, that may be implicit in the prior notice requirement.
Furthermore, neither prior notice nor Commission approvals is required under the
provisions of SB 342 with respect to the expenditure of surplus revenues by an RMA to
assist in the financing of a transportation project of a governmental entity. This
provision is unnecessary and should be deleted.
RMA Comments - Page 16
§ 26.64. Commission Approval.
(a) The commission will approve an RMA constructing a transportation project
under §26.62(2) of this subchapter if:
(1) the project is eligible under §26.65 of this subchapter;
(2) the project comes from a conforming transportation plan and
transportation improvement program, when required by federal law;
(3) the project is consistent with the Texas Transportation Plan, the
metropolitan transportation plan, and the Statewide Transportation Improvement
Program; and
(4) the commission determines that the project will have a significant
positive impact on the mobility of the region of the RMA.
(b) When approving or disapproving a project under subsection (a) of this
section, the commission will consider:
(1) the anticipated reduction to traffic congestion;
(2) potential social, environmental, and economic impacts of the
project, and the extent to which the RMA has complied with all EPIC;
(3) benefit to state and local government; and
(4) whether the construction will expand the availability of funding for
transportation projects or reduce direct state costs.
Explanation of Proposed Change: It appears that the reference in subparagraph (a)
to 26.62 should actually be to 26.62(2). That is the only section which refers to an RMA
constructing an transportation project, and pursuant to SB 342, is the only use of
surplus revenues which requires the consent of the commission.
DRAFT
(b) Notwithstanding the provicions of Subchaptor G of thic chapter to tho
•
RMA Comments — Page 17
DRAFT
(c) Tho commicsion may waivo tho roquiromonts of cubcoction (b) of this
public,
(d) Tho roquirements of cubcoction (b) of this coction no longor apply onto,
tho improvomonts to tho stato highway syctom havo oqualod tho ascot valuo
Explanation of Proposed Change: This rule purports to add a restriction on the use of
surplus revenue derived from a segment of the state highway system converted to a
tolled project and transferred to an RMA. This is not a restriction which was required
under SB 342 in defining the permissible uses of surplus revenues, and is not
necessary to achieve any purpose or requirement of state law. To the extent the
concern is the state receiving fair compensation for the value of the asset transferred, in
all likelihood the relief to the state from the operations and maintenance costs of the
segment of the system as well as the benefits to the public to be gained from the
operation of the project by the RMA are sufficient to provide any "value" necessary to
support the transfer. Furthermore, this restriction on the use of surplus revenue will be
a matter of serious concern to the capital markets for the reasons discussed in
connection with 26.56(d) and may preclude an RMA's ability to access necessary
capital.
RMA Comments - Page 18
DATE: March 8, 2002
SUBJECT: City Council Meeting — March 14, 2002
ITEM: 13.D.6. Consider a resolution authorizing the Mayor to submit written
comments to the Texas Transportation Commission concerning the
proposed rules for Regional Mobility Authorities and Financing Toll
Projects.
Resource: Jim Nuse, Public Works Director
Tom Word, Chief Transportation Engineer
History: Senate Bill 342 approved by the 77`" Legislature in 2001 established new
provisions, which would permit creation of Regional Mobility Authorities
(RMAs). Regional Mobility Authorities are essentially local toll road authorities
created for the purpose of constructing, maintaining, and operating turnpike
projects. Round Rock is interested in RMAs because they may provide a
mechanism by which the Round Rock Transportation System Development
Corporation can recoup the local monies spent on SH 45.
On January 31, 2002, the Texas Transportation Commission proposed rules
concerning the implementation of Senate Bill 342. The proposed rules include
provisions, which are not in the best interest of local communities. The Texas
Transportation Commission has invited public comment on the proposed rules,
and we are recommending that the City Council authorize the Mayor to submit
the comments attached to the proposed resolution to the Texas Department of
Transportation.
Funding:
Cost: N/A
Source of funds: N/A
Outside Resources: N/A
Impact/Benefit: RMAs may potentially allow the local community to recover the local funds
invested in the ROW and utility adjustments for SH 45.
Public Comment: N/A
Sponsor: N/A
subdivisions; and
organizations;
systems; and
Comments of City of Round Rock
on Proposed RMA Rules
Set forth below are the comments of the City of Round Rock on various of the
Regional Mobility Authority ( "RMA ") rules proposed by the Texas Department of
Transportation ( "TxDOT "). Proposed deletions are marked as strike - throughs, and new
(or modified) language is shown in italics. Only those rules for which a change is
proposed are shown, and each such rule is followed by an explanation of the proposed
change.
§ 26.13. Approval. The commission may authorize the petitioner to create an RMA if it
finds that:
(1) the creation of an RMA:
(A) has sufficient public support based upon:
()i (ii) resolutions of support from affected political
al(iii) the expressed opinion, if any, of metropolitan planning
(B) will result in direct benefits to the state, local governments,
and the traveling public; and
(C) will improve the efficiency of the states transportation
(2) each project:
(A) comes from a conforming transportation plan and
transportation improvement program, if the project is located in a nonattainment area;
(B) is consistent with the Texas Transportation Plan, the
metropolitan transportation plan, and the Statewide Transportation Improvement
Program; and
(C) subject to the completion of required studies and subject to
commission approval under §26.43 of this chapter, will benefit the traveling public.
RMA Comments - Page 1
Explanation of Proposed Change: Consistent with the proposed deletion of 26.12,
there should be no public hearings (conducted by the department) from which to
consider "public comments."
§ 26.14. Commission Action
(a) Order. If approved under §26.13 of this subchapter, the commission will
adopt a minute order authorizing the creation of the RMA. The minute order will:
(1) designate the geographic area of the state in which the RMA may
operate, which shall be along county lines;
(2) describe each the initial turnpike project to be developed,
maintained, and operated by the RMA; and,
RSA, -� and
(3) doscribo any rostrictions or limitations on tho oporations of tho
(3)(4) establish, consistent with Transportation Code, §361.003, the initial
size of the board, which shall be composed of an odd number of directors.nd
(5) dosignato any political subdivisions that will bo roprocontcd on tho
(b) Approval of project. Approval of the creation of an RMA shall not
constitute final commission approval of any turnpike project, which are subject to
approval under §26.43 of this chapter.
Explanation of Proposed Change: As written, section 26.14(a)(2) implies that only a
turnpike project identified at the time of the formation of an RMA can, or will, be
developed by that RMA. RMAs should not be precluded from later developing
additional turnpike projects (with appropriate Commission approvals). The proposed
reference to the "initial" project is intended to eliminate the inference and make it clear
that an RMA is not limited to developing only those projects identified at the time of its
formation.
Also in Section 26.14(a)(2), the reference to the Commission's minute order containing
additional restrictions on the project necessary for the protection of public safety and of
the natural environmental should be eliminated. Such issues will necessarily be
considered through the environmental review process and through the turnpike planning
and design process, and it is unreasonable to expect that the Commission will be able
RMA Comments - Page 2
to accurately identify, at this very preliminary stage of the turnpike project development,
what protections are justified and that would not otherwise be provided for through the
project permitting and design.
Section 26.14(a)(3) refers to additional restrictions or limitations which may be placed
on the operations of an RMA. The Counties are concerned that the potential for such
restrictions or limitations will be a matter of great concern to the capital markets. The
capital markets will expect RMAs to have a considerable degree of local autonomy to
make operational decisions (aAnd to make decisions as to how best to meet the
requirements of any trust indenture). Any potential for a third party (i.e., the
Commission) to impose additional restrictions or limitations would undermine the
authority and credibility of the RMA to carry out its fiduciary responsibilities. It is also
unclear whether these restrictions or limitations could be added subsequent to the
formation of an RMA, which would be of even more concern to the capital markets since
unanticipated or unexpected restrictions or limitations could be imposed on an RMA
after it is already operating or is far into the project development process. Thus, the
potential for additional restrictions or limitations is unnecessary and may well create an
unacceptable level of risk in the view of capital markets.
Section 26.14(a)(5) refers to the potential for additional "political subdivisions" to be
appointed to the RMA board of directors by the Commission. This is a serious, and
potentially fatal, flaw in the RMA rules due to the uncertainty it introduces. It is
addressed in more detail in connection with proposed changes to Section 26.16
described below, and for the reasons explained there Section 26.14(a)(5) should be
deleted.
§26.16. Board of Directors.
(a) Purpose. A board of directors shall administer and operate the RMA.
(b) County appointees. The petitioner shall appoint directors to the board as
required by Transportation Code, §361.003(b) and (c).
(c) Presiding officer. The governor will appoint one director to the board who
shall serve as the presiding officer.
(d) Additional diroctorc.
(1) Tho commission
may authorizo tho appointmont of additional
(2) If tho commission dotorminos undor paragraph (1) of thin
RMA Comments - Page 3
whele:
(3) Tho commiccion may authorizo tho appointmont of ono or moro
(d)(e) Term of office. Directors shall be appointed to terms of two years.
Directors may be reappointed at the discretion of the appointing entity.
(e)(f) Compensation. A director serves without compensation but is entitled to
reimbursement for expenses incurred in board service. Reimbursement shall be the
responsibility of the entity county the member is representing, and shall be in
accordance with the ontity'c county's procedures governing reimbursement of
employees.
(i(g) Removal. A director serves at the pleasure of the appointing entity and
may be removed for any reason.
(q)(#) Eligibility. The following individuals are ineligible to serve as a director:
(1) persons who are not residents of a county within the geographic
area of the RMA;
(2) persons owning an interest in real property that has been or will be
acquired for an RMA project;
of Interest);
(3)
persons ineligible under §26.33 of this chapter (relating to Conflict
(4) elected officials; and
(5) department employees.
Explanation of Proposed Change: Section 26.16(d) should be deleted in its entirety.
That section provides the Commission with the authority and discretion to appoint
additional directors to an RMA board if the Commission determines that additional
directors are necessary to assure adequate representation of "affected political
subdivisions." This authority is not explicit in SB 342 and granting it through rules
appears inconsistent with the intent of SB 342 (which suggests that RMA boards will be
comprised solely of county representatives and a gubernatorial appointee). The ability
of the Commission to alter the composition and dynamics of an RMA board of directors
creates the possibility for instability among the board, which will be of grave concem to
the capital markets. Furthermore, the perceived need for the authorization to appoint
additional directors assumes that county officials, who represent all within geographic
borders, will not be responsive or sensitive to the needs and positions of the political
subdivisions located within their counties. Again, the governing body of any county is
comprised of elected officials, and if they are not responsive or they are insensitive to
RMA Comments — Page 4
the needs of the political subdivisions within their boundaries they will be accountable to
the voters. The capital markets will demand stability and predictability in the
composition of an RMA board of directors, and while the individuals on a board may
change, the number and their origin should not be subject to change at the whim of the
Commission. This provision should be deleted.
The changes recommended in Section 26.16(e) are consistent with this change.
RMA Comments - Page 5
§ 26.21. Addition of Counties.
(a) One or more counties may request the commission for consent to join an
existing RMA. The commission may approve the request if:
(a)(-1-) the county has submitted a resolution from its commissioners court
indicating support for the request;
( )(2) the board of the RMA has agreed in writing to the addition; and
(c)(3) the commission finds that the addition will benefit the mobility of the
region.
(b) If tho commiscion approvos tho addition, tho commiscion may provido for
Explanation of Proposed Change: Subparagraph (b) refers to the same issue as is
discussed above in connection with Section 26.16(d). This specific paragraph puts the
potential for the appointment by the Commission of additional directors in the context of
the potential addition of one or more counties to an RMA. In addition to creating the
possibility of instability on an RMA board (and the corresponding perception by the
capital markets of increased risk), 26.21(b) adds the further problem of providing a
disincentive for an RMA to join with additional counties in the future if doing so will
create the possibility for the appointment of additional, unknown directors. This
provision should be deleted. The addition of counties will occur as necessitated by the
projects being undertaken by the RMA.
§ 26.23. Dissolution of an RMA.
(a) Voluntary dissolution. The board of an RMA may request the commission
for consent to dissolve. The commission may approve the request if:
(1) all debts, obligations, and liabilities of the RMA have been paid and
discharged or adequate provision has been made for the payment of all debts,
obligations, and liabilities;
(2) there are no suits pending against the RMA, or adequate provision
has been made for the satisfaction of any judgment, order, or decree which may be
entered against it in any pending suit; and
RMA Comments - Page 6
(3) the RMA's turnpike projects, if any, including all components and
appurtenances, are in a condition that complies with the requirements of §26.52(a) of
this chapter.
(b) Involuntary dissolution.
(1) If the RMA has no outstanding banded indebtedness, Tthe
commission may by order require the RMA to dissolve if it finds that:
(A) the RMA has not, as determined by the commission,
substantially complied with the requirements of this chapter or the terms of an
agreement required by this chapter; or
(B) the RMA has failed to expeditiously pursue the development
of a project identified under §26.14(a)(2) of this chapter.
(2) The commission may not require dissolution unless the conditions
described in subsection (a)(1) and (2) of this section have been met.
(3) At least 30 days prior to adopting an order under this section, the
department will provide written notice to the RMA's board offering an opportunity for the
RMA to speak before the commission.
(c) The commission may not consent to or order the dissolution of an RMA if
the RMA has outstanding banded indebtedness and the holders of that indebtedness
have not evidenced their agreement to the dissolution.
Explanation of Proposed Change: As written, Section 26.23(b) provides for the
possible involuntary dissolution of an RMA by the Commission even if the RMA has
outstanding banded indebtedness. This could occur because the Commission could
make a determination, under subsection (a)(1), that "adequate provision" has been
made for payment of the debt. Unfortunately, this will not provide adequate certainty to
the capital markets that an RMA with outstanding indebtedness cannot be dissolved
without consent of the bondholders or the holders of such debt. That is the level of
assurance potential bondholders or others will seek; that is, that there can be no
voluntary or involuntary dissolution of an RMA unless and until its indebtedness has
been paid or the holders of that debt have consented to a means by which they are
adequately protected. Vesting that discretion in the Commission will create
considerable uncertainty in the minds of potential investors, and may very well prevent
RMAs from accessing the capital markets. The change to 26.23(b)(i) and the addition
of 26.23(c) will eliminate this problem.
• x x
RMA Comments - Page 7
§ 26.32. Administrative Expenses.
(a) Expenses necessary to administer an RMA shall be the sole responsibility
of the political subdivisions who are represented on the board. The board is responsible
for equitably allocating responsibility for administrative expenses.
(b) For purposes of this subchapter, "administrative expenses" means
expenses, such as salaries, office supplies, and rent, necessary to operate the RMA.
(c) Nothing in these rules is intended to prevent an RMA from using toll
revenues, bond proceeds, or funds loaned or granted by the department for the
payment of reasonable administrative expenses incurred in connection with the
planning, development, operation, and maintenance of a turnpike project.
Explanation of Proposed Change: Section 26.32 is overly restrictive in defining the
sources of funding for RMA's administrative expenses. It is unreasonable to expect that
an RMA would not pay any of its administrative expenses out of toll revenues, bond
proceeds, or even out of funds advanced for project development, provided those
expenses related to the legitimate operations of the RMA. Ultimately RMAs should be
self sufficient organizations from a financial standpoint, however their only sources of
revenue will be toll revenues, bond proceeds, or granted or loaned funds. It is
unreasonable to expect the participating counties to continue to fund those expenses
which are properly attributable to the RMA and its operations. The proposed addition
addresses this concern.
Regarding 26.41 — 26.56 In the case where federal highway funds are granted or
loaned to a project then it is understood that the applicable federal requirements must
be followed. However, if only State funds or no TxDOT money is involved in the project
then the federal guidelines should not be invoked.
§ 26.41. Social and Environmental Impact.
(a) General. An RMA shall develop a turnpike project in accordance with
Transportation Code, Section 361.103 and consistent with the spirit and intent of the
National Environmental Policy Act, 42 United States Code § §4321 et seq, and 23
United States Code §109(h) by conducting a study of the social and environmental
impact of the project.
(b) Federal -aid project. If federal -aid funds are requested for construction, or if
federal approval or another federal action is required with respect to a turnpike project
under this subchapter, an environmental review shall also be conducted in compliance
with 23 C.F.R. 771 or its successor regulations.
RMA Comments - Page 8
(c) Commission approval. If Federal funds are to be used on the projectThe
commission must approve the environmental document,
before the construction sertract -fer he- of a project beginshas -been
The Commission agrees to process such approval within thirty days
of receipt of the environmental document.
Explanation of Proposed Change: The Commission approval should apply in the
case where Federal funds are being granted or loaned to the project. Subsection (c)
purports to require Commission approval of each environmental review project before
construction of a project has been advertised for bids. However, Section 361.103(c) of
the Transportation Code only requires that such approval be obtained prior to the
commencement of construction of a turnpike project. By requiring Commission
approval prior to advertisement for bids, the rules will force a delay in the project
development process. This is particularly true if an RMA desires to use an exclusive
development agreement ( "EDA ") (assuming legislative authority for use of EDAs is
secured) or similar mechanism, a contract which would encompass construction of a
project. EDA solicitations and negotiations will likely begin prior to securing all of the
necessary environmental reviews, and therefore the rule, as written, would force a delay
in that process and ultimately a delay in the development of the project.
system; and
w w w
§ 26.43. Project Approval.
(a) In accordance with Transportation Code, Sections 361.101 and 362.051,
the RMA must request final commission approval of the project. The RMA must obtain
approval after receiving approval of each environmental review under §26.41(c) of this
subchapter and before final designation of the project as a turnpike project and before
the construction of centrastfor -the project begins .
(b) To secure approval under this section, the RMA shall submit the following
information to the executive director:
(1) an updated summary of the anticipated financing plan for purposes
of seeking the approval described in subsection (c)(2) of this section; and
(2) a report identifying relocations or reconstruction to state highway
system facilities anticipated in connection with the proposed project.
(c) In deciding whether to grant approval under this section, the commission
will consider whether:
(1) the project may be effectively integrated into the state highway
RMA Comments — Page 9
(2) the department is able to construct any connecting roads necessary
for the project to generate sufficient revenue to pay the debt incurred for its
construction.
Explanation of Proposed Change: See section 26.41(c) discussion above. This is a
consistent and conforming change.
§ 26.44. Design and Construction.
(a) Responsibility. The RMA is fully responsible for the design and
construction of each project it undertakes, including ensuring that all EPIC are
addressed in project design.
(b) Design criteria.
(1) State criteria. All designs developed by or on behalf of the RMA
shall comply with the latest version of the department's manuals, including, but not
limited to, the Roadway Design Manual, Pavement Design Manual, Hydraulic Design
Manual, the Texas Manual on Uniform Traffic Control Devices, Bridge Design Manual,
and the Texas Accessibility Standards.
(2) Alternative criteria. An RMA may request approval to use different
nationally accepted criteria for a particular item of work. Alternative criteria may include,
but are not limited to, the latest version of the AASHTO Policy on Geometric Design of
Highways and Streets, the AASHTO Pavement Design Guide, and the AASHTO Bridge
Design Specifications. The use of alternative criteria is subject to the approval of the
Federal Highway Administration for those projects involving federal funds. The
executive director may approve the use of alternative criteria if the alternative criteria
are determined to be sufficient to protect the safety of the traveling public and protect
the integrity of the transportation system.
(3) Exceptions to design criteria. An RMA may request approval to
deviate from the state or alternative criteria for a particular design element on a case by
case basis. The request for approval shall state the criteria for which an exception is
being requested and must include a comprehensive description of the circumstances
and engineering analysis supporting the request. The executive director may approve
an exception after determining that the particular criteria could not reasonably be met
due to physical or environmental factors and that the proposed design is the best
engineering solution.
(c) Project development.
RMA Comments - Page 10
(1) Frontage roads. Frontage roads are not allowed unless they are
determined by the department to be in compliance with the department's frontage road
policy in §15.54 of this title (relating to Construction).
(2) Access. For proposed projects that will change the access control
line to an interstate highway, the RMA shall submit to the department all data necessary
for the department to request Federal Highway Administration approval.
(d) Preliminary design submission and- -- approval. When design is
approximately 6099% complete, the RMA will send the following preliminary design
information to the department for review aed- approval. The department will complete
itsprovide any-review-and comments within 30 days
(1) a completed Design Summary Report form as contained in the
department's Project Development Process Manual;
(2) current average daily traffic volumes on existing roads and streets
included in the project limits;
(3) five -year and twenty -year forecasts of average daily traffic volumes
including traffic loadings by axle load spectrum or vehicle classifications as defined by
the Federal Highway Administration on existing and proposed roads and streets within
or affected by the facility;
(4) horizontal layout information showing the horizontal alignment and
any superelevation proposed for each roadway;
(5) typical sections showing existing and proposed horizontal
dimensions, cross slopes, location of profile grade line, pavement layer thickness and
composition, earthen slopes, and right of way lines;
(6) profile grade information showing existing ground and proposed
roadway elevations for each alignment, including vertical curve data;
(7) bridge, retaining wall, and sound wall layouts including horizontal
and vertical clearances to adjacent features and showing the type of structure,
foundation, and railings proposed;
(8) drainage area maps showing the drainage of waterways entering
the project and local project drainage (hydraulic and hydrologic studies and reports
used to size bridges and culverts shall be submitted and include specifications for the
basis of design and the design coefficients, rainfall intensities, drainage area sizes, and
calculated flow quantities for each drainage structure and, when applicable, for each
inlet and storm sewer);
(9) an explanation of the anticipated handling of existing traffic during
construction;
(10) when structures meeting the definition of a bridge as defined by the
National Bridge Inspection Standards are proposed, an indication of structural capacity
in terms of design loading;
RMA Comments — Page 11
erosion;
(11) proposed temporary and permanent measures for controlling
(12) an explanation of how the U.S. Army Corps of Engineers permit
requirements, including associated certification requirements of the Texas Natural
Resource Conservation Commission, will be satisfied if the project involves discharges
into waters of the United States; and
(13) for freeways, the location and text of proposed mainlane guide
signs shown on a schematic that includes lane lines or arrows indicating the number of
lanes.
(e) Construction specifications.
(1) All plans, specifications, and estimates developed by or on behalf
of the RMA shall conform to the latest version of the department's Standard
Specifications for Construction and Maintenance of Highways, Streets, and Bridges,
and shall conform to department required special specifications and special provisions.
(2) The executive director may approve the use of an alternative
specification if the proposed specification is determined to be sufficient to ensure the
quality and durability of the finished product for the intended use and the safety of the
traveling public.
(f) Submission and approval of final design plans and contract administration
procedures. When final plans are complete, the RMA shall send the following
information to the executive director for review and approval. The department will
forward complete its reviewF -and comments within 30 days.
(1) seven copies of the final set of plans, specifications, and engineer's
estimate (PS &E) that have been signed and sealed by the responsible engineer;
(2) revisions to information provided with the preliminary design
submission summarized or highlighted for the department;
(3) proposal necessary for bidding the project in compliance with
applicable state and federal requirements;
(4) contract administration procedures containing criteria that comply
with the applicableappropriate national or state administration criteria and manuals; and
(5) location and description of all EPIC addressed in construction.
(g) Contract bidding and award. The RMA shall not advertise the project for
receipt of bids any earlier than thirty days after submission of final design plans to
TxDOTuntil it has rocoivod approval of tho PS &E from tho dopartmont. Procedures
relating to bidder qualification, bidding, award, and execution of a contract for the
development and maintonanco of a project that is financed with state or federal funds
shall comply with the policies and procedures prescribed in Chapter 9, Subchapter B of
this title (relating to Highway Improvement Contracts).
RMA Comments — Page 12
(h) Construction inspection and oversight. Unless the department in writing
agrees to assume responsibility for some or all of the following items, the RMA is
responsible for:
(1) overseeing all construction operations, including the oversight and
follow through with all EPIC;
(2) assessing contract revisions for potential environmental impacts;
and
(3)
obtaining any necessary EPIC required for contract revisions.
(i) Contract revisions. All contract revisions shall comply with the latest
version of the applicableappropriate national or state administration criteria and
manuals,
(j) As -built plans. Within six months after final acceptance of the construction
project, the RMA shall file with the department a set of the as -built plans incorporating
any contract revisions. These plans shall be signed, sealed, and dated by a licensed
professional engineer in Texas certifying that the project was constructed in accordance
with the plans and specifications.
(k) Document and information exchange. If available, the RMA agrees to
deliver to the department all materials used in the development of the project including,
but not limited to, aerial photography, computer files, surveying information, engineering
reports, environmental documentation, general notes, specifications, and contract
provision requirements.
(I) State and federal law. The RMA shall comply with all federal and state
laws and regulations applicable to the project , and shall
provide or obtain all applicable permits, plans, and other documentation required by a
federal, state, or local governmental entity.
(m) Work on state right of way. All work required within the limits of state
owned right of way shall be accomplished only pursuant to express written agreement
with the department and at the sole expense of the RMA.
Explanation for Proposed Change: . It is essential for any toll authority to expedite
project delivery in order to minimize cost of the project and the cost of issuing debt. The
capital markets will place a higher cost of issuance on the debt if a third party, that is not
liable for the debt, has approval authority over the development of the project. The
RMA must have the right to control the development of the project without undue
burden. If Federal funds are used for the project then all applicable federal
requirements will be followed.
ire
RMA Comments — Page 13
Explanation of Proposed Change: The ability to pool turnpike projects in an important
means by which to achieve efficiencies and economies of scale, as well as to provide
for a more integrated method in which to finance turnpike project development.
Therefore, provided it is acting within the scope of any trust indenture for outstanding
bonded indebtedness, an RMA should be able to make its own decisions concerning
whether, and when, to pool turnpike projects. The act of pooling does not cause any
changes to the physical configuration of a turnpike project, and therefore the
Commission should have little or no interest in whether turnpike projects within an RMA
are, in fact, pooled. It is primarily an accounting, financial, and operations and
maintenance issue which should be left to the local authority. This is another example
of an area of discretion which the capital markets will want to see vested in an RMA.
They will want to know that their borrower can make financial decisions unfettered from
required approvals of generally unaffected third parties.
§ 26.55. Project Constructed by the Department.
(a) Request. An RMA may request that the department transfer to the RMA a
segment of tolled state highway that was constructed by the department.
(b) Effect of transfer. Upon transfer, the highway is considered for all
purposes a turnpike project of the RMA. The RMA is responsible for the operation and
maintenance of the project and assumes responsibility for all project debt.
(c) Approval. The commission may approve a transfer under this section if the
commission determines that:
(1) the transfer is allowed by the trust agreement or indenture entered
into by the commission for that project;
(2) property and contract rights in the project and bonds issued by the
commission for the project would not be affected unfavorably; and
(3) the RMA is capable of maintaining and operating the project in a
safe and efficient manner.
chaptor to tho contrary, tho commicsion may, ac a condition to tho transfor, roctrict tho
RMA Comments — Page 14
4)(e) Agreement. If the commission approves a transfer, the department and 1
the RMA shall enter into a project agreement under §26.54 of this subchapter.
Explanation of Proposed Change: Senate Bill 342 defines the permissible uses of
surplus revenues from a turnpike project developed or operated by an RMA. Section
26.56(d) provides the opportunity for the Commission to add additional restrictions to
the uses of surplus revenue from a transferred project. The capital markets will be very
adverse to any further restrictions on the use of surplus revenues, and particularly to a
vague reference in the rules to the possible imposition of future restrictions on the uses
of surplus revenues. This provision will likely preclude an RMA from accessing the
capital markets to finance the acquisition of a project from TxDOT. Potential investors
will expect that RMA revenues will be available for use in connection with the turnpike
project and will be free from pressure to generate surplus revenues for purposes not
otherwise defined or permitted under SB 342.
paid; or
ir
§ 26.56. Department Assuming Jurisdiction of RMA Project.
(a) An RMA turnpike project may becomes a non - tolled facility under the
jurisdiction of the department when:
(1) all debt issued for the project and the interest on the debt has been
(2) firm banking and financial arrangements have been made for the
discharge and final payment or redemption of the debt in accordance with law; and
(3) the RMA requests that the department assume jurisdiction over the
project.
(b) If the conditions of subsections (a)(1) and—(2) and (3) are met, the
commission may continue to charge a toll sufficient to pay the costs of maintaining the
facility.
(c) An RMA shall ensure that, prior to the department assuming jurisdiction
under subsection (a) of this section, the turnpike project, including all its components
and appurtenances, is in a condition that complies with §26.52(a) of this subchapter.
Explanation of Proposed Change: As written, this rule assumes that an RMA
turnpike project will automatically be transferred to the department when the conditions
identified in subparagraphs (a)(1) and (a)(2) are met. There is no logical basis for this
automatic transfer of a project at that time, and it should be up to the RMA, which
developed and /or operated the tumpike project, to determine when it desires to transfer
RMA Comments — Page 15
it to the department. Just as the Commission is permitted to continue operating and
project and charging a toll sufficient to pay costs of maintaining the facility (26.56(b)), an
RMA may see benefits in operating a project in the same manner, particularly if surplus
revenues can be used for purposes permitted under SB 342. Thus, the rule should be
revised to eliminate any presumption that an RMA project will be subject to transfer
immediately upon the payment of all debt.
Explanation of Proposed Change: This rule suggests that prior notice be provided to
the Commission before an RMA utilizes surplus revenue to assist in the financing of a
transportation project of a governmental entity. While the rule does not provide that
Commission approval is required, that may be implicit in the prior notice requirement.
Furthermore, neither prior notice nor Commission approvals is required under the
provisions of SB 342 with respect to the expenditure of surplus revenues by an RMA to
assist in the financing of a transportation project of a governmental entity. This
provision is unnecessary and should be deleted.
RMA Comments - Page 16
§ 26.64. Commission Approval.
(a) The commission will approve an RMA constructing a transportation project
under §26.62(2) of this subchapter if:
(1) the project is eligible under §26.65 of this subchapter;
(2) the project comes from a conforming transportation plan and
transportation improvement program, when required by federal law;
(3) the project is consistent with the Texas Transportation Plan, the
metropolitan transportation plan, and the Statewide Transportation Improvement
Program; and
(4) the commission determines that the project will have a significant
positive impact on the mobility of the region of the RMA.
(b) When approving or disapproving a project under subsection (a) of this
section, the commission will consider:
(1) the anticipated reduction to traffic congestion;
(2) potential social, environmental, and economic impacts of the
project, and the extent to which the RMA has complied with all EPIC;
(3)
benefit to state and local govemment; and
(4) whether the construction will expand the availability of funding for
transportation projects or reduce direct state costs.
Explanation of Proposed Change: It appears that the reference in subparagraph (a)
to 26.62 should actually be to 26.62(2). That is the only section which refers to an RMA
constructing an transportation project, and pursuant to SB 342, is the only use of
surplus revenues which requires the consent of the commission.
(b) Notwithstanding tho provisions of Subchaptor G of this chaptor to tho
RMA Comments - Page 17
Explanation of Proposed Change: This rule purports to add a restriction on the use of
surplus revenue derived from a segment of the state highway system converted to a
tolled project and transferred to an RMA. This is not a restriction which was required
under SB 342 in defining the permissible uses of surplus revenues, and is not
necessary to achieve any purpose or requirement of state law. To the extent the
concern is the state receiving fair compensation for the value of the asset transferred, in
all likelihood the relief to the state from the operations and maintenance costs of the
segment of the system as well as the benefits to the public to be gained from the
operation of the project by the RMA are sufficient to provide any "value" necessary to
support the transfer. Furthermore, this restriction on the use of surplus revenue will be
a matter of serious concern to the capital markets for the reasons discussed in
connection with 26.56(d) and may preclude an RMA's ability to access necessary
capital.
RMA Comments — Page 18
CITY OF ROUND ROCK
t t ,
iiuNt t
Mayor
Robert A. Stlaka, J,
Mayor Pro -tem
Tom Nielson
Council Members
Alan McGraw
Carrie Pin
Earl Palmer
Isabel Callahan
Gary Coe
City Manager
Robert L Bennett. Jr
City Attorney
Stephan L Sheets
March 18, 2002
Phillip E. Russell, P.E.
Director
Texas Turnpike Authority
125 East 11 Street
Austin, Texas 78701 -2483
Dear Mr. Russell:
The City of Round Rock has been following with interest the concept of Regional
Mobility Authorities in Texas from the inception with the Texas Legislature
through the current rule making process. We believe that Regional Mobility
Authorities have the potential to be extremely useful organizations for developing
transportation infrastructure in this State, if appropriate rules that govern their
creation, organization, and operation are adopted. Therefore, we are pleased to
have an opportunity to comment on the proposed rules.
The Round Rock City Council at their March 14, 2002 meeting adopted resolution
R- 02- 03- 14 -13D6 authorizing the Mayor to submit the attached comments
concerning proposed rules for Regional Mobility Authorities to the Texas
Transportation Commission on behalf of the City of Round Rock.
Mayor
Encls
cc: File
Fax: 512- 218 -7097
1 -800- 735 -2989 TDD 1 -800- 735 -2988 Voice
www.ci.round- rock.tx.us
221 East Main Street
Round Rock, Texas 78664
512 -218 -5400