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HomeMy WebLinkAbout1996-240J \NPDOCS\ORD\GTESETTL ORD ORDINANCE NO. (J 0 AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE MAYOR TO EXECUTE ON BEHALF OF THE CITY OF DENTON A SETTLEMENT AGREEMENT AND RELEASE OF ALL CLAIMS WITH GTE SOUTHWEST INCORPORATED RELATING TO THE SETTLEMENT OF THE CASES STYLED GTE SOUTHWEST INCORPORATED VS. CITY OF DENTON ET AL., AND CITY OF RUSK ET AL VS GTE SOUTHWEST, INC AND THE CITY OF DENTON TEXAS ET AL COMPLAINT AGAINST GTE SOUTHWEST INCORPORATED BEFORE THE PUC; AND DECLARING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS. SECTION I. That the Mayor of the City of Denton is hereby authorized to execute on behalf of the City of Denton a Settlement Agreement and Release of all Claims with GTE Southwest Incorporated relating to the settlement of the cases styled GTE SOUTHWEST INCORPORATED VS CITY OF DENTON ET AL., and CITY OF RUSK, ET AL VS GTE SOUTHWEST INC AND THE CITY OF DENTON TEXAS, ET AL., COMPLAINT AGAINST GTE SOUTHWEST INCORPORATED before the PUC, in accordance with the attached Settlement Agreement, which is incorporated herein and made a part hereof for all purposes In the absence of the Mayor, the Mayor Pro Tem is hereby authorized to execute the attached settlement agreement. SECTION II. That this ordinance shall become effective immediately upon its passage and approval t PASSED AND APPROVED this the � day of xx�, 1996. JArVMILLER, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY �n BY. lL�/Y Ah"IjjL 1 GZ ✓ APPROVED AS TO LEGAL FORM. HERBERT L. PROUTY, CITY ATTORNEY BY ! cf[ C NO 95-50259-367 GTE SOUTHWEST INCORPORATED, § a Delaware Corporation, § Plaintiff, § vs § THE CITY OF DENTON, A TEXAS § INCORPORATED MUNICIPALITY, § et al , § Defendant § IN THE DISTRICT COURT OF DENTON COUNTY, TEXAS 367TH JUDICIAL DISTRICT NO 95-5-00360 CITY OF RUSK, et al, § IN THE 2D JUDICIAL Plaintiffs, § v § DISTRICT COURT OF GTE SOUTHWEST, INC, § Defendant § CHEROKEE COUNTY, TEXAS PUC DOCKET NO 14152 SOAH DOCKET NO 473-95-1002 COMPLAINT OF CITY OF DENTON, § ET AL AGAINST § GTE SOUTHWEST INCORPORATED § PUBLIC UTILITY COMMISSION OF TEXAS ROWSET 1021001021 SETTLEMENT AGREEMENT AND RELEASE OF ALL CLAIMS This Settlement Agreement and Release of All Claims ("Agreement") is entered into by and between the City of Denton, a Texas incorporated municipality ("City"), and GTE Southwest Incorporated, a Delaware corporation ("GTE") The City and GTE are referred to singularly as a "Party" and collectively as "the Parties " Section 1.1 Denton Litigation On April 25, 1995, GTE filed an action styled GTE Southwest Incorporated vs City of Denton. et al., Cause No 95-50259-367, in the 367th District Court of Denton County, Texas ("Denton Lawsuit") Section 1.2 Rusk Litigation On May 19, 1995, several Cities filed an action styled City of Rusk an incorporated Texas municipality, et al. v GTE Southwest. Inc., Cause No 95-5-00360, in the District Court of Cherokee County, Texas ("Rusk Lawsuit") Section 1.3 The PUG Complaint On April 29, 1995, the Cities which were parties to the Rusk Lawsuit filed a Complaint against GTE at the Texas Public Utility Commission styled Complaint of City of Denton Texas, et al. Against GTE Southwest Incorporated, PUC Docket No 14152, SOAH Docket No 473-95-1002 ("PUC Complaint," collectively referred to with the Denton Lawsuit and the Rusk Lawsuit as the "Right -of -Way Litigation") Section 1.4 The Right -of -Way Litigation On CtJM.9n 1996, the City Council of Denton authorized the Mayor to settle the Right -of -Way Litigation pursuant to the terms outlined in this Agreement Section 2.1 Right to Compromise City covenants and warrants that it has the right to compromise all claims asserted in the Right -of -Way Litigation as to Denton, the Mayor is authorized to bind the City by executing this Agreement on its behalf, and that it has not assigned to any third party such claims, or any part of such claims against GTE Section 2.2 Dismissal of Right -of -Way Litigation City agrees to dismiss with prejudice any and all claims, counterclaims and causes of action it raised against GTE in the Denton Lawsuit, the Rusk Lawsuit, and the PUC Complaint, promptly upon execution of this Agreement ROWSET - 1 - 1021961034 Section 3.1 Right to Compromise GTE covenants and warrants that Hardy E White, in his capacity as Acting Regional President - GTE Texas/New Mexico Region, has the authority to execute this Agreement on GTE's behalf and to bind GTE to its terms, and that GTE has not assigned to any third party such claims, or any part of GTE's claims against the City Section 3.2 Dismissal of Litigation GTE agrees to dismiss with prejudice any and all claims, counterclaims and causes of action it raised against the City in the Denton Lawsuit, the Rusk Lawsuit, and the PUC Complaint, promptly upon execution of this Agreement Section 3.3 Cash Payment Within seven (7) business days of the City's final reading and enactment of the Right -of -Way Ordinance at Attachment "A" ("New Ordinance") hereto, which is incorporated in this Agreement for all purposes as if fully set forth herein, GTE will pay to the City the sum of $1,255,649 76 This sum comprises the following a $205,147 00, which is the amount of all right-of-way fee payments withheld by GTE pending resolution of the Right -of -Way Litigation ("Withheld Amounts") plus four percent (4%) interest on such amount, $979,388 76, which represents a compromise of all claims related to payment of compensation by GTE to the City for use of the City's rights - of -way from the beginning of time to and including December 31, 1996, and $71,114 00, which represents advance payment of reasonable compensation for use of the City's rights -of -way for the period not covered by Section 3 3a or b above and ending on December 31, 1996 GTE agrees not to pass through to its'present or future customers the interest amount described in Section 3 3a and GTE agrees that all amounts that GTE is authorized to pass through to its customers under 3 3a above have already been passed through GTE agrees not to pass through to its present or future customers the amount described in Section 3 3b hereof The amount in Section 3 3c above shall be passec through to GTE's customers Jack Stowe will be permitted to meet with a GTE - designated representative, on or about October 16, 1996, to review GTE documents confirming the Withheld Amounts Section 3.4 Termination of Ordinance or Authority Any current or prior ordinance and/or authority Imposing a fee upon GTE for the use of the City's rights -of - way shall expire on or before December 31, 1996, and shall be replaced with the New ROW8ET - 2 - 1021961021 Ordinance which shall take effect on January 1, 1997 The Parties agree that the cash payment described in Section 3 3 above includes an amount which the City has determined to be fair and reasonable compensation for GTE's use of the City's rights - of -way during the period from and including the date of the last payment made by GTE to the City for use of its rights -of -way to and including the effective date of the New Ordinance r Section 4.1 New Right -of -Way Ordinance The City and GTE agree to execute, adopt and enact the New Ordinance If a current ordinance or charter of the City requires a utility entering into an ordinance such as the New Ordinance to pay the cost of publication of such ordinance in a local newspaper, GTE agrees to pay such cost of publication of the New Ordinance Section 4.2 City's Enactment of New Ordinance The City agrees to pass and enact the New Ordinance in consecutive readings, as required by law, with the first reading to be held on or before 1996, and with any and all required readings occurring on or before A 3 , 1996 Section 4.3 GTE's Acceptance of New Ordinance GTE agrees to execute and file with the City Secretary its acceptance of the New Ordinance within fourteen (14) business days of receipt of the executed New Ordinance after the final reading and passage of the New Ordinance by the City Section 4.4 Access Line Fee GTE agrees that the City may set an Access Line Fee as that term is defined in the New Ordinance up to $17 00 per year for each residential Access Line and up to $24 00 per year for each business Access Line As of September 30, 1996, there were 29,234 residential Access Lines and 18,399 business Access Lines in the City of Denton The number of Access Lines is subject to change, Section 5.1 Release by City In consideration of the above, the City, in its own behalf and on behalf of Its successors and assigns, hereby irrevocably and unconditionally fully releases, acquits and discharges GTE Southwest Incorporated, its successors, parent corporation, affiliated and subsidiary corporations, officers, directors, employees, attorneys, representatives and agents from any and all claims from the beginning of time up to and Including December 31, 1996, (a) that relate to the payment by GTE to the City of reasonable compensation for GTE's use of City rights -of - way, whether by agreement, ordinance or otherwise, and (b) that relate to the pass ROw3ET -3- 1021961021 through of such payments by GTE to its customers, which the City made or could have made in the lawsuits styled GTE Southwest Incorporated vs. City of Denton. et al., Cause No 95-50259-367, in the 367th District Court of Denton County, Texas, City of Rusk an incomorated Texas municipality et al v GTE Southwest. Inc., Cause No 95- 5-00360, in the District Court of Cherokee County, Texas, and the proceeding styled Cmmninint of r;ity of nantnn TAYac_ at nl_ Anwrist GTE Southwest Incorporated. PUC Docket No 14152, SOAH Docket No 473-95-1002 in the Texas Public Utility Commission Section 5.2 Release by GTE In consideration of the above, GTE Southwest Incorporated, in Its own behalf and on behalf of its successors and assigns, hereby irrevocably and unconditionally fully releases, acquits and discharges the City of Denton, Texas, its officials, employees, representatives, attorneys and agents from any and all claims from the beginning of time up to and including December 31, 1996, (a) that relate to the payment by GTE to the City of reasonable compensation for GTE's use of City rights -of -way, whether by agreement, ordinance or otherwise, and (b) that relate to the pass through of such payments by GTE to its customers, which GTE made or could have made in the lawsuits styled GTE Southwest Incorporated vs. City of Denton, et al., Cause No 95-50259-367, in the 367th District Court of Denton County, Texas, City of Rusk an incorporated Texas municipality, et al. v. GTE Southwest. Inc., Cause No. 95-5-00360, in the District Court of Cherokee County, Texas, and the proceeding styled Complaint of City of Denton. Texas, et al. Against GTE Southwest Incorporated, PUC Docket No 14152, SOAH Docket No 473-95-1002 in the Texas Public Utility Commission Section 5.3 Dismissal of Claims The Parties agree to submit, within ten (10) days after execution by the City and GTE of this Agreement, an agreed order of dismissal of all claims, counterclaims and causes of action, with prejudice, by each Party against the other in the Denton Lawsuit, the Rusk Lawsuit, and the PUC Complaint If any of the agreed orders of dismissal are not accepted or signed by the Court or the PUC, respectively, both Parties agree to file motions for nonsuit with prejudice regarding all claims, counterclaims and causes of action raised by such Parties in Court or PUC Each Party shall pay all court costs incurred by such Party Section 6.1 This Agreement is a compromise settlement of disputed issues and claims and, therefore, will not be construed as an admission of liability of any Party or of the validity of any claims or potential claims made by any Party against any other Party or otherwise construed as an admission of any Party and, as such, will not be offered or received as evidence in any proceeding, provided that nothing will prevent this Agreement or Its terms from being used, offered or received in evidence in any proceeding to enforce any or all of the terms herein ROWSET - 4 - 1021981021 Section 6.2 This Agreement will neither constitute nor provide to any third party any remedy, defense, claim, evidence, or other right in excess of those existing without reference to this Agreement Section 6.3 This Agreement constitutes the entire agreement between the Parties with respect to the matters specifically described herein, and all prior agreements, oral or written representations, statements, understandings, proposals and undertakings with respect to such matters are superseded and replaced by the provisions of this Agreement Section 6.4 The persons executing this Agreement on behalf of the respective Parties hereto have been duly and properly authorized to execute the same by the passage of any necessary motion, resolution or other act Section 6.5 This Agreement shall be construed in accordance with the laws of the State of Texas Section 6.6 The rights, powers, limitations, duties, restrictions and releases herein provided for shall inure to and be binding upon the Parties hereto and upon their respective legal and bona fide representatives, successors and assigns D Sgirdi9n.fiZ The effective date of this Agreement is the day of tsF��yt� , 1996 CITY OF DENTON, TEXAS ATTEST (I. h I 1jl� ZJ, -- BY K6 r Ci ecreta City of Denton, Texas C of Denton, Texas GTE SOUTHWEST INCORPORATED ATTEST a Date Hardy E White Acting Regional President - Texas/New Mexico ROWSET - 5 - 1021981021