HomeMy Public PortalAboutResolution No. 149-00 12-12-2000 • RESOLUTION NO. 149-00
A RESOLUTION AUTHORIZING THE PARTICIPATION OF
THE CITY OF RICHLAND HILLS, TEXAS IN THE CAUSE
OF ACTION STYLED THE CITY OF DENTON VS. TEXAS
UTILITIES COMPANY AND LONE STAR GAS COMPANY
OR SUCH OTHER CAUSES OF ACTION AS THE
"STEERING COMMITTEE OF CITIES PARTICIPATING IN
THE TXU FRANCHISE LITIGATION" MAY DETERMINE
SEEKING DELINQUENT FRANCHISE FEES FROM TXU,
LONE STAR GAS AND OTHER ENTITIES ASSOCIATED
WITH TXU; AUTHORIZING THE EXPENDITURE OF
FUNDS FOR ATTORNEY AND EXPERT WITNESS FEES;
AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, on March 30, 2000 the 269"'District Court awarded damages to the Cities of
Wharton, Galveston and Pasadena of $3.4 million and on April 4, 2000 punitive damages of $30
million against Houston Lighting & Power Co., (HL&P) for underpaying franchise fees by excluding
revenues from the gross receipts upon which such fees are derived; and
WHEREAS, on December 12,1999 an audit on behalf of the City of Denton estimated TXU
Electric and Lone Star Gas owed delinquent franchise fees in excess of $1,000,000 based on findings
that revenues similar to those at issue in the HL&P case were excluded from the calculation of gross
• receipts/revenues; and
WHEREAS, the law firms of Strasburger & Price, L.L.P. and Bucek & Frank, L.L.P. have
filed suit against TXU and Lone Star Gas on behalf of the City of Denton in the 393`d District Court
in Denton County for delinquent franchise fees; and
WHEREAS, a consolidated action by cities in the TXU service area seeking delinquent
franchise fees will reduce duplication of effort and the attendant legal, expert and court cost.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF RICHLAND HILLS, TEXAS:
I.
That the City of Richland Hills agrees to participate with other similarly situated Texas cities
in the TU/LONE STAR GAS system and join the City of Denton in pursuing causes of action
against Texas Utilities Company, Lone Star Gas Company and other entities associated with TXU
to collect delinquent franchise fees.
II.
That the City of Richland Hills agrees to contribute $.50 for each individual residing within
• its corporate limits based on the 1990 U.S. Census (except for such portion of its population that may
not be residing with the TU/Lone Star Gas service area) or $2,000, whichever is more, to underwrite
the cost of legal and expert witness fees and related costs to be expended on behalf of the cities in
this matter, $.25 being payable upon passage of this Resolution, and the other $.25, if assessed, being
due and payable on the date the Steering Committee of Cities Participating in the TXU Franchise
Litigation authorizes such assessment.
III.
That James W. Quin, City Manager, or his designee, shall be the City's primary contact and
liaison in this matter and such individual shall be eligible to serve on "Steering Committee of Cities
Participating in the TXU Franchise Litigation" if he/she is elected by the cities participating in this
litigation. Notices to the City should be addressed as follows:
James W. Quin, City Manager
City of Richland Hills
3200 Diana Drive
Richland Hills, TX 76118
IV.
That the liaison named above is authorized to take those steps reasonable and necessary to
comply with the intent of this resolution.
V.
That this resolution shall take effect immediately from and after its passage.
PASSED AND APPROVED by the City Council of the City of Richland Hills, Texas, by
a vote of 4 ayes, i~~~~ and 0 abstentions this 12 th day of December , 2000.
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Terri Wil ' ,City Secretary
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RESOLUTION NO. 149-00 PAGE 2