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December 18, 2001 Agenda con't.
AGENDA INFORMATION SHEET AGENDA DATE December 18, 2001 DEPARTMENT. Management and Budget ACM. Kathy DuBose, Assistant City Manager, Fiscal and Municipal Servlces~ SUBJECT Consider, approval of a resolution to declare the intent to reimburse expenditures from the retained eammgs of the Electric Fund w~th revenue bonds so that projects approved in the 2001- 2002 Capital Improvement Budget may be commenced, and prowd~ng an effective date (Projects~$1,000,00000 for Electric D~stnbut~on Projects and $4,338,00000 for Electric Substations ProJects) BACKGROUND The Electric department ~s requesting a reimbursement resolution ~n the amount of $5,338,000 The funds w~ll be prowded by the Electric Fund retained earmngs and w~ll be reimbursed with revenue bonds sold in fiscal year 2001-02 The funds w~ll be used to fund projects for Distribution and Substations approved in the 2001-02 Capital Improvement plan PRIOR ACTION/REVIEW (Coun¢il~ Boards~ Commissions) Item will be considered on December 10, 2001, at the Pubhc Ut~lmes Board meeting FISCAL INFORMATION This resolution will allow $5,338,000 from the Electric Fund retained earmngs to be expended and subsequently reimbursed w~th revenue bonds which w~ll be ~ssucd for March/April 2002 EXHIBITS P, esolut~o~ Respectfully submitted Assistant Director of Management and Budget 1 RESOLUTION NO A RESOLUTION TO DECLARE THE INTENT TO REIMBURSE EXPENDITURES FROM THE RETAINED EARNINGS OF THE ELECTRIC FUND WITH REVENUE BONDS SO THAT PROJECTS APPROVED IN THE 2001-2002 CAPITAL IMPROVEMENT BUDGET MAY BE COMMENCED, AND PROVIDING AN EFFECTIVE DATE (PROJECT- $1,000,000 FOR ELECTRIC DISTRIBUTION PROJECTS AND $4,338,000 FOR ELECTRIC SUBSTATION PROJECTS) WHEREAS, the City of Denton (the "Issuer") is a municipal oorporatlon/politlcal subdivision of the State of Texas, and WHEREAS, the issuer expects to pay expenditures in connection wtth the design, planning, and construction for City improvements which were previously approved m the 2001- 2002 CIP Budget as electric d~stnbutlon and substation projects and are more fully descnbed in Attachment "A" (the "Project"), and WHEREAS, the Issuer finds, considers, and declares that the reimbursement of the Issuer for the payment of such expenditures will be appropriate and consistent with the lawful objectwes of the Issuer and, as such, chooses to declare its retention, In accordance with the prowsions of Section 1 150-2 Treasury Regulations, to reimburse itself for such payments at such time as It issues the obligations to finance the ProJect, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES SECTION 1 The Issuer reasonably expects to ~ncur debt, as one or mom senes of obligations, with an aggregate maximum pnnclpal amount equal to $5,338,000 ($4,338,000 for electric substation projects and $1,000,000 for elect, nc distribution projects) for the purpose of paying the costs of the ProJects, as set forth in the attached Attachment "A" which IS made a part of tins resolution for all purposes SECTION 2 All costs to be rmmbursed will be for design and capital improvement expenditures No tax-exempt obhgatIons will be issued by the Issuer in furtherance of this resolution after a date which ~s later than 18 months after the later of (1) the date the expenditures are paid, or (2) the date on winch the property, with respect to which such expenditures are made, ~s placed in service All amounts expended from the Retained Earnings for the ProJects to pay any costs of the Projects shall be reimbursed from Revenue Bond proceeds within the 2001-2002 fiscal year SECTION 3 The foregoing notwithstanding, no tax-exempt obligation will be Issued pursuant to this resolutton more than three years after the date any expenditure which m to be reimbursed is paid SECTION 4 Tins resolution shall become effective tmmedlately upon its passage and approval PASSED AND APPROVED th~s the day of ,2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY Page 2 ATTACHMENT A Electric Dzstnbutzon Projects $1,000,000 00 Electric Substation Projects $4,338,000 00 TOTAL $5,338,000 00 Page 3 AGENDA INFORMATION SHEET AGENDA DATE December 18, 2001 DEPARTMENT Electnc Utthty ACM' Howard Martin, 349-8232 SUBJECT. AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAQER TO EXECUTE AN AGREEMENT FOR PROFESSIONAL LEGAL SERVICES WITH LLOYD, GOSSELINK, BLEVINS, ROCHELLE, BALD'WiN & TOWNSEND, P C, FOR LEGAL SERVICES PERTAENING TO REPRESENTATION OF THE CITY BEFORE THE PUBLIC UTILITIES COMMISSION OF TEXAS, IN THE AREAS OF PUBLIC UTILITY REGULATORY LAW AND ADMINISTRATIVE LAW, RESPECTING THE ACTIVITIES OF DENTON MUNICIPAL ELECTRIC, AUTHORIZING THE EXPENDITIfR-E OF FUNDS THEREFORE, PROVIDING FOP, KETROACTIVE EFFECT OF THE AGREEMENT, AND PROVIDING AN EFFECTIVE DATE BACKGROUND For the past seven years, it has been the prac~ace of Denton Mumclpal Elecmc (DME) to mamtam a contract wath the Lloyd, Gosselmk firm for general representataon on issues of ~mportance to DME that come before the PUCT The most recent of these contracts was assued July 17, 2001 m the amount of $65,000 $39,224 has been balled to th~s contract for services through October When the contract was drafted it was mtended to have a term of 12 months or expenditure of $65,000, wluchever came first Unfortunately, the 12 month cutoff date was not corrected m the contract, resulting m an end date of December 3 l, 2001 rather than June of 2002 Therefore at is necessary to termanate the existing contract upon payment of any November and December fees and sxgn a new contract for servaces dunng 2002 Lloyd, Gossehnk as located an Austin where they have ready access to the PUCT They are famthar ,w~th the PUC process Their firm tends to specaahze xn representaUon of mumcapal entrees Their farm xs also used by Garland Since Garland's and DME's interests are usually the same m PUCT proceedings, it is often possable to file joxnt comments with Garland and splat the legal fees An example of the type of assue that as handled under the general PUCT representaUon contract as the recent attempt by the PUCT staff to force retail competmon and physical unbundhng of mumcap~tl utthty orgamzataons in the servace area of mumcapal utflltaes that have not opted in to retail competmon, through the development of rules govermng the prowsxon of transmlssaon servxce The PUCT has junsthctaon over munxc~pal utlhtaes for transmxsslon service Dunng development of updated rules regarding prowslon of transmission service, the PUCT staff included a "partial swltchover" provision that essentially required any entity providing transmission service to provide distribution service to retail customers for other etectnc energy providers In this same rule, the PUCT staff attempted to require any entity providing transmlsmon sermce to physically unbundle their orgamzatlon into separate transmission/distribution, marketing, wholesale and retail energy providers Both of these prowslons are in direct conflict with SB7 Immethate response to this problem was required due to the short schedule established by the PUCT There would not have been time to obtain PUB and Council approval ora specific contract to cover this matter Because DME had a contract in place with Lloyd, Gossehnk, we were able to file our objections in a t~mely manner The unbundhng requirement was modified to exclude municipal utilities of DME's and Garland's size The "partial SWltchover" problem was improved but the corrected wording still created problems for entities with multiply certified areas We appealed that issue and were successful in correcting the problems Another Issue that will be covered by fins contract is the recent overtummg by the Supreme Court of the transmission charges levied by the PUCT from their initial Order until May of 1999, when the Legislature dictated how transmission charges were to be handled At this point, there is no way to tell how the PUCT will respond to this problem However, its resolution will definitely have a financial impact on Denton Lloyd, Gossehnk will continue to momtor the PUCT's actions on ti'ns issue and make any filings required to preserve Denton's right to protect its interests If tlus work becomes a major effort, we will return to the PUB and Council for a specific contract under which the work can be monitored DME has a specific contract with Lloyd Gossellnk in the mount of $24,500 for issues associated with the filing of the initial ERCOT Protocols with the PUC That process is close to completmn However, the PUC staff has continued to attack the preassigned transmission rights that were included in the Protocols to allow us to move our Gibbons Creek power to Denton without being subject to additional costs Expenrhtures lnvmced to date on this issue are $9,770 Once the lmttal set of ERCOT Protocols has been approved, this contract will be closed However, the Protocols are subject to a constant revision process as problems or new issues are identified PUC actlwty related to the ongoing revision process will be handled under the general representation process The only other outstanding contract Lloyd, Gossehnk has with DME at this time is a contract for both legal and technical support on the TXU Unbundled Cost of Servme (UCOS) case Work on that case is essentially complete but the case has not been closed as yet We calculate that the effort on this case resulted in an annual transmlsston service cost reduction for DME of approximately $251,200 per year beginning with the 2002 transmission charges Total expenditures invoiced to date on this issue are $164,338, tfus includes the $88,000 from the original contract and $76,338 of the $134,000 authorized in the amendment to the contract 2 OPTIONS: 1 Approve the contract 2 Reject the contract and attempt to perform thru work with C~ty legal staff 3 Cease to partmlpate in PUCT proceedings that impact DME RECOMMENDATIONS Approval of the contract ss recommended The City legal staff is not famdmr with PUCT processes and proceedings and does not have sufficient time or staff to momtor the PUCT and learn to effectively represent DME Failure to participate m defending DME's interests at the PUCT wall harm DME's ab~hty to functmn effectively m thc ¢lectnc marketplace PRIOR ACTIONfREVIEW (Coun¢fl~ Boards~ Comm~ssmn) The Pubhc Uttht~es Board rewewed this profcssmnal services agreement at their December 10, 2001 regular meeting and recommended approval with a vote of 7 to 0 FISCAL ,INFORMATION Expenditures not to exceed $65,000 Respectfully submitted Sharon Mays D~rector of Electric Ut~ht~es Exhibit I' Ordinance Exhibit II Contract Exhab~t III PUB 12/10 Meeting M~nutes/Summary 3 ORDINANCE NO AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT FOR PROFESSIONAL LEGAL SERVICES WITH LLOYD, GOSSELINK, BLEVINS, ROCHELLE, BALDWIN & TOWNSEND, P C, FOR LEGAL SERVICES PERTAINING TO REPRESENTATION OF THE CITY BEFORE THE PUBLIC UTILITIES COMMISSION OF TEXAS, IN THE AREAS OF PUBLIC UTILITY REGULATORY LAW AND ADMI2qISTRATIVE LAW, RESPECTING THE ACTMTIES OF DENTON MUNICIPAL ELECTRIC, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, PROVIDING FOR RETROACTIVE EFFECT OF THE AGREEMENT, AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City Council deems that it is ~n the public interest to engage the law firm of Lloyd, Gosselmk, Blewns, Rochelle, Baldwin & Townsend, P C, of Austin, Texas (the "Fn'm") to provide professional legul services to the City of Denton ("City") pertaining to representaUon of the City and Denton Mumclpal Electric ("DME") before the Public Utahttes Comnuaslon of Texas ("PUC") m the areas of pubhc utaht~es regulatory law and admlmstratlve law, respecting the aetlvlues of DME, and WHEREAS, the City staff has reported to the City Council that there is a substantml continued need for the above-referenced professional legal services, and that 1muted City staff cannot adequately perform the specialized services and tasks winch are for the most part centered in Austan, Texas, with its own personnel, and WHEREAS, the City has heretofore engaged the Fn'm by numerous prewous Agreements for Professional Legal Services to perform an'mlar sennces to those services provided for in the Agreement for Professxunal Legal Servxces attached hereto Further, that the Finn has performed and prowded legal services benefiting the City under the most recent Agreement wbach became effective early m the year 2001, on a continuous and uninterrupted bas~s, m order to safeguard and represent the mterests of the City and DME before the P~UC, m dealing w~th sudden, largely unpredictable events and developments, and with adrcnmstrat~ve deadhnas that many times reqture mamechate attention or response On December 14~,-v~001, the funds provided for ~n the most recent Agreement w~ll probably be exhausted shghtly earher than expected Nonetheless, the City has requested that the Fmu pmvxde continuous representataon of the City and DME on unportant PUC xasues unUl such Ume as a new Agreement for Professional Legal Services could be entered into, provldmg for conUnuaUon of the professional legal serwces as well as adchUonal eompensatmn to the Fa'm, and until such Agreement could be approved by the City Council Accordingly, it xs appropriate that the new Agreement for Professxonal Legal Services by and between the City and the Fm'n attached hereto, should be ratafied and confirmed, and should be retroactively approved and made effective as of December 15, 2001, m order to properly compensate the Firm for its work that has d~rectly benefited the City, and wbaeh work was done at the speexfic mstance and request of the City, and WHEREAS, Chapter 2254 of the Texas Government Code, known as the "Professional Serrates Procurement Act", generally provides that a City may not select a provider of professmnal servuces on the basis of competitive bids, but must select the provider on the basxs of demonstrated competence, knowledge, and quallfieaUons, and for 4 EXHIBIT I a fan: and reasonable price, and the Council hereby finds and concludes that the Farm as appr0pnately quahfied under the prowsmns of that law to be retained as outside legal counsel for the City and DIVlE respecting ttus engagement, NOW THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 That the recltatlons set forth and contained m the foregoing preambte are expressly mcorporated by reference anto flus Orrhnance SECTION2 That the Caty Manager as hereby authorized to execute an Agreement for Professional Legal Serrates by and between the C~ty and the law firm of Lloyd, Gosselmk, Blevms, Rochelle, Baldwan & Townsend, P C, of Austin, Texas, an substanttally the form of the Agreement for Professaonal Legal Servmes attached hereto and incorporated herewath by reference SECTION 3 That the award of flus Agreement by the Caty as on the bas~s of the demonstrated competence, knowledge, and quahficatmns of the Firm and the abflaty of the Fm'n to perform the serwces needed by the City for a fair and reasonable price SECTION 4 That the expendature of funds as provaded m the attached Agreement for Professmnal Legal Servmes m hereby authorized SECTION 5 That the above and foregoing Agreement for Professaonal Legal Services is hereby ralafiefl, confirmed, and retroacUvely approved, and shall be effecUve from and after December 15, 2001 SECTION 6 That except as other~vase prowded an SecUon 5 above, thxs Ordinance shall become effective tmmedaately upon its passage and approval PASSED AND APPROVED flus the day of ,2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY By APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY S \Our Doouments\Ordt ce \ G k 5 STATE OF TEXAS § COUNTY OF DENTON § AGREEMENT FOR PROFESSIONAL LEGAL SERVICES THIS AGREEMENT, made and entered into tins day of ,2001, by and between LLOYD, GOSSELINK, BLEVINS, ROCHELLE, BALDWIN & TOWNSEND, P C, a Texas Professmnal Corporatmn (hereinafter "Consultant"), wtth Lambeth Townsend, Shareholder, having full authority to execute thas Agreement on behalf of the firm, 111 Congress Avenue, State 1800, Austin, Texas 78701, and the CITY OF DENTON, a Texas Mumclpal Corporatton, 215 E McKanney, Denton, Texas 75201 (hereinafter "City"), with Michael Conduff, City Manager, having full authority to execute tins Agreement on behalf of the City WlTNESSETFI' WHEREAS, the City deems ~t necessary and m the pubhc interest to continue to engage legal counsel to continue to provide pmfesmonal legal servmes with respect to the C~ty's compliance with the Pubhc Utahty Comrmssmn of Texas ("PUC") elecmc transmission servme roles as well as any mlemakmg proceeding or any project relating to electric transmission service as well as respecting the lmplementatmn of Senate Bill 7, or otherwise affecting the City, and WHEREAS, the Consultant is willing to perform such services in a professmnal manner as an independent contractor, and has competently and efficiently performed smaflar services for the City over the past several years, and the City has selected Consultant on the basis of demonstrated competence and quahficataons necessary to perform the needed serwces, and WHEREAS, tl~ City desires to engage the Consultant to render the professional services in connection therew~tJ;t,,.for a farr and reasonable price, consistent with, and for a fee not bagher than the recommended practices and fees published by the applicable professional associations, and such fees do not exceed any maxnnum prowded by law, all in accordance with the provisions of Chapter 2254 of the Texas Government Code (the "Professional Sermces Procurement Act"), and the Consultant ~s willmg to provide such services, NOW, THEREFORE, m consideration of the prormses and mutual obhgatlons hereto, the City and Consultant do hereby mutually AGREE as follows, to w~t Page 1 6 EXHIBIT II I Scope of Serwces. The Consultant shall perform the following serwces m a professional manner working as an independent contractor not under the d~rect supervls~on and control of the C~ty A S~'wces to be prowded 1 Consultant shall represent the City before the PUC concemmg the C~ty's comphance with the PUC's Transnussmn Service Rules and concerning any rulemakmg proceeding or project relating to transmission servme, anplementing Senate B~ll 7, or otherwise affecting the C~ty, mcludmg, without tnuaation, the professmnal legal sermces w~th regard to submitting pleadings and comments and attending all uncontested hearings and other proceedings m relaUon to these matters, and to consult with the C~ty through ~ts Denton Mummpal Elecmc ("DME") staff w~th regard to all filings, uncontested heanngr, and other ~ssues related to ttus project Prowded, however, ~f the C~ty elects to parttc~pate m a contested case proceeding at the PUC relating to transrmssmn service or any other matter, the parties agree that ~t will be necessary to enter mto a separate professional servmes agreement, to prowde for such addlttonal legal services 2 To consult w~th the City Manager, the Assistant City Manager for Utihties, the D~rector of Electric Utihties, the City Attorney, the Assistant City Attorney for Utihtaes, and/or other designated adm~mstrative personnel or staff regarding any and all aspects of the professional sermces to be performed, including legal research, analys~s, and admce w~th respect to such matters TI'ns w~ll include coordmatmg actamt~es wtth the D~rector of Elecmc Utthtles, the C~ty Attorney and their respective staff to efficiently perform the sermces reqmred and to preserve the Attomey/Chent pnwlege, work product, and all other apphcable excepUons to the discovery or disclosure of documents produced by the C~ty and the Consultant under the Scope of Serwces heremabove B The Consultant shall perform all the serwces reqmred by th~s Agreement m a timely fastuon,~and shall complete them m comphance w~th schedules estabhshed by the C~ty through its D3r~ector of Electric Utihttes as appropnate to carry out the terms and conchUons o~'t~s Agreement Page 2 II. Term. Tbas Agreement shall be retroactively effective as of December 15, 2001 The Agreement shall terminate e~ther upon the completion of the professional services provided for hereto, or upon the exhaustion of all pmfessmnal fees provided for hereunder, or on December 31, 2002, whmhever event shall first occur TI'ns Agreement may be sooner terrmnated m accordance w~th the provlmons hereof T~me is of the essence of tins Agreement Consultant shall make all reasonable efforts to complete the services set forth hereto as exped~tlously as possible dunng the term of tins Agreement, and to meet the schedules estabhshed by the C~ty, through ~ts D~rector of Electric Utflmes, or her designee III. Compensataon and Method of Payment A The Consultant shall charge the followang fees for ~ts professional services provided to the City hereunder, based upon the following hourly billing rates for the attorneys and support staff~nvolved m th~s matter Staff Hourly Rate Lambeth Townsend, Shareholder $ 220 00 Georgta Crump, Shareholder $ 200 00 Art Rodnguez, Aasocmte $180 00 Mehssa E Ramtrez, Associate $160 00 Paralegal $ 80 00 Law Clerk $ 75 00 Consultant agrees that all charges for the legal servmes hereunder, ~ncludmg expenses as set forth m Seclmn m c below, shall not exceed $65,000 00 B The Consultant shall endeavor to have the attorneys and employees listed ~n Section KI A above, reasonably attempt to reduce costs by ut~hzmg other quahfied shareholders, assocmtes, and paralegals wherever feasible or posmble The Consultant shall bill the Czty through the submzsmon of ztenuzed anvmees, statements, and other documentatmn, together wzth s.s~u, pport data mdmatmg the progress of the work and the servmes performed on the basz~'of monthly statements, showing hourly rates zndacatmg who performed the work, what type of work was done, and descriptions and/or details of all servzces rendered, including a daffy, and an entry-by-entry reflecUon of billable Ume spent on tins engagement, along wzth spemfic description and suppomng documentation, ff available, respecting any reasonable and necessary out-of-pocket expenses incurred by Consultant m peffomung the profesmonai services provided for under this Agreement Professmnal fees shall be billed m mlmmum one-tenth (1/10) hour increments C Adchtaonally, the Czty shall ezther pay dtrectly or reimburse the Consultant, as the case may be, for reasonable and necessary actual out-of-pocket expenses, including but not lmuted to, long-distance telephone, telecopzer, reproduction, postage, overmght courier, and transportatmn and travel All copies will be charged at the rate of fifteen cents ($15) per copy for copzes made wzthm Consultant's offices, wzth as much photocopying as Page 3 possible being done by outside vendors at bulk rates or by the City to reduce costs if bulk copying is necessary or appropriate The parties agree that the charges for outgomg telecoples ~om Consultant shall be $ 25 per page and that there will be no charge for lnconnng telecoples D The purees anticipate that invoices or statements for professional services will be generated on a monthly basis and that smd invoices or statements will be sent to the City by Consultant on or about the 15th day of each month The City shall make payment to the Consultant within tlurty (30) days after receipt of an appropriate itemized invoice or statement To the extent that any fees or expenses are chsputed by the City, the City shall nolafy Consultant watlun tlurty (30) days after its receipt of the invoice or statement, and shall otherwise pay all undasputed mounts set forth in the mvmce or statement watban tturty (30) days after its receipt of the invoice or statement All reimbursable expenses, lncludang, but not neeessanly lmuted to travel, lodging, and meals, shall be pard at the actual cost, pursuant to the terms, conditions, and hmltattons set forth hereto All mvmces or statements shall be a reviewed by the Director, Denton Mumclpal Electric, or her designee, and shall be reviewed and approved by the Assistant City Attorney/Utlhtles E It is understood and agreed that the Consultant shall work under the coordination and general supervision of the Director of Electric Utilities, or her designee F Ail notices, mvomes, statements, and payments shall be made ~n writing and may be grven by personal delivery or by mml As to notices to Mmhael Conduff, City Manager, City of Denton, 215 East McKmney, Denton, Texas 76201 or to bas desagnee As to invoices, statements, or payments to Michael S Copeland, Assistant City Attomey/Utahtles, Utlhty Admnnstratlon Department, at the same address, as to the City, and to Lambeth Townsend, Lloyd/Gossehnk, 111 Congress Avenue, State 1800, Austin, Texas 78701, as to the Consultant When so addressed, the notice, invoice, statement and/or payment shall be deemed gtven upon deposit of same in the U S Maul, postage prepmd In all other matances, notices, invoices, statements, and/or payments shall be deemed gaven at the time of actual dehvery Changes may be made m the names and addresse~s of the responsible person or office to wbach notices, invoices, statements and/or payments are to.be sent, provided reasonable notice is g~ven IV. Professional Competene¥:A Consultant agrees that m the performance of these professlonal services, Consultant shall be responsible to the level of competency and shall use the same degree of slctll and care presently mmntamed by other practmlng professionals pefforrmng the same or snmlar types of work For the purpose of tbas Agreement, the key persons who wall be performing most of the work hereunder shall be Lambeth Townsend and Georgm Cmmp, Shareholders However, nottung hereto shall hmtt Consultant f~om using other quahfied and competent members of the faro to perform the services reqmred hereto if such delegataon is reasonably appropnate and properly protects the City's interests B Any agreements, orchnances, notices, instruments, memoranda, reports, letters, and other legal documents prepared or obtained under the terms of tbas Agreement are msmmaents Page 4 of service and the City shall retain ownersinp and a property interest thereto If tins Agreement is termmated at any tune for any reason prior to payment to the Consultant for work under tlms Agreement, all such documents prepared or obtained under the terms of the Agreement shall upon termination be delivered to and become the property of the City upon request and without restriction on their use or further compensation to the Consultant V. Establishment and Maintenance of Records Full and accurate records shall be mamtmned by the Consultant at its place ofbnsmess with respect to ail matters covered by tins Agreement Such records shall be mmntmned for a period of at least three years after receipt of final payment under ttus Agreement VI. Audits and InspecUon: At any time dunng normal business hours and upon reasonable not, ce to the Consultant, there shall be made avmlable to the City all of the Consultant's records with respect to all matters covered by ttns Agreement The Consultant shall permit the City to ancht, examine, and make excepts or tranacnpts from such records, and to make audits of contracts, mvomes, materials, and other data relating to all matters covered by tins Agreement Vii Accomphshment of Prolect' The Consultant shall commence, carry on, and complete tins professional engagement with all practicable chspatch, m a sound, economical and efficient matter, and, m accordance with the provisions hereof and ail applicable laws In accomphshmg the projects, the Consultant shall take such steps as are appropriate to msure that the work revolved is properly coorchnated with any related work betng earned on by the City VIII. Indemnitw and Independent Contractor Relationship A Consultant shall perform all services as an independent contractor not under the direct supervision and control of the City Notinng h~rem shall be construed as creating a relat~onsbap of employer and employee between the parties The City and Consultant agree to cooperate m the defense of any clmms, actmn, stat, or proceeding of any kind brought-by a tlurd party winch may result from or chreetly or indirectly arise from any neghgence and/or errors or onusmons on the part of the Consultant or from any breach of the Consultat~f'~ obhgatlons under tins Agreement In the event of any lltlgatlon or clmm under tins Agreement m wluch Consultant is joined as a party, Consultant shall provide statable counsel to defend C~ty and Consultant against such clmm, provided the Consultant shall have the right to proceed with the competent counsel of its own choosing The Consultant agrees to defend, mdemmfy and hold harmless the City and all of its officers, agents, servants, and employees against any and all such clams to the extent of coverage by Consultant's professmnal hablhty pohcy The Consultant agrees to pay ail expenses, including but not lumted to attorney's fees, and satisfy all judgments that may be incurred or rendered agmnst the Consultant's professional liability insurance pohcy Nothing hereto constltates a wmver of any nghts or remedies the City may have to pursue under either law or eqmty, including, without lumtatmn, a cause of action for specific performance or for damages, a loss to the City, resulting from Consultant's neghgent errors or ormsslons, or breach of contract, and all such rights and remedies are Page 5 10 expressly reserved B Consultant shall maintain and shall be caused to be in force at all tames during the term of flus Agreement, a legally binding pohcy of professional llablhty insurance, listed by Best Rated Careers, with a rating of"A-" or above, issued by an insurance earner approved to do business m Texas by the State Insurance Commlsslon Such coverage shall cover any claun hereunder occasioned by the Consultant's negligent professional act and/or error, act, or onusslon, m an amount not less than $1,000,000 combined single limit coverage per occurrence In the event of change or cancellation of the policy by the insurer, the Consultant hereby covenants to lmmedmtely not~fy the C~ty m writing thereof, and m such event, the Consultant shall, prior to the effective date of change or cancellation, serve a substitute pohcy furmsknng the same or lugher amount of coverage The Consultant shall provide a copy of the declarations page of such policy to the City through its D~reetor of Electric of Utahtaes s~multaneously with the execution of this Agreement IX. Ternunat~on of Agreement' A In conuect~on with the work outlined in th~s Agreement, it is agreed and fully understood by the Consultant that the City may cancel or lndefimtely suspend further work hereunder or tenmnate flus Agreement at any t~me upon written notice to Consultant, Consultant shall cease all work and labor being performed under tins Agreement Consultant may terminate flus Agreement by gtvmg the City fifteen (15) days wntten not,ce that Consultant as no longer m a position to contanue representing the City Consultant shall mvolce the C~ty for all work satisfactorily completed and shall be compensated ~n accordance with the terms of flus Agreement All reports and other documents, or data, or work related to the project shall become the property of the City upon tenmnatlon of tins Agreement B Th~s Agreement may be terminated m whole or in part, m writing, by e~ther pa~ m the event of substantial fmlure by the other party to fulfill its obhgat~ons under flus Agreement through no fanlt of the terminating party Provided, however, that no such termlnaUon ~m~ be affected, unless the other party ~s given [1] written notice (dehvered by certlfied~rr~ml, return receipt request) of intent to terminate, and not less than thmy (30) calendar days to cure the fmlure, and, [2] an opportumty for consultation with the terminating party prior to ternunaUon C Noflung contmned hereto or elsewhere m flus Agreement shall reqmre the C~ty to pay for any work wtuch as unsatisfactory or which is not subnutted m comphance w~th the terms of flus Agreement Page 6 X Alternate Dispute Resolution The Consultant agrees that, if necessary, ~t w~ll use ~ts best efforts to resolve any disputes regarding the Agreement through the use of medmlaon or other forms of alternate chspute resolution set forth in Chapter 154 of the Texas C~vd Practices and Remedies Code (V A T C S ) XI Entire Agreement: Tins Agreement represents the entire agreement and understanding between the pames and any negotmt~ons, proposals, or oral agreements are ~ntended to be integrated herein and to be superseded by tins wntten Agreement Any supplement or amendment to tins Agreement, in order to be effective, shall be m writing and s~gned by the C~ty and the Consultant XII. Comphance with Laws. The Consultant shall comply w~th all federal, state, local laws, roles, regulations, and ordinances apphcable to the work covered hereunder as they may now read or hereafter be amended, ~ncludmg but not hnuted to the Texas Dlsc~phnary Rules of Professional Conduct XIII Governmg Law' For the purpose of determ~mng place of agreement and law governing same, th~s Agreement is entered into in the C~ty and County of Denton, State of Texas, and shall be construed m accordance with, and govemed by the laws of the State of Texas Venue and juns&ct~on of any stat or cause of actaon arising under or m connection w~th tlus Agreement shall lie exclusively m a court of competent junschct~on s~ttmg m Denton County, Texas XIV. Discrimination Proh~bited. In perforrmng the services reqmred hereunder, the Consultaut shall not chscrnmnate agmnst any person on the bas~s of race, color, rehg~on, sex, national ongm or ancestry, age, or physical hand~cap XW. Personnel: A Consultant represents that ~t has or wall secure at ~ts own expense all personnel reqmred to perfqrm the sermces required under ti'ns Agreement Such personnel shall not be employees nor have any contractual relations vath the C~ty Consultant shall reform the City of any,~'o~fl~ct of Interest or potential confhct of ~nterest that may anse during the term of tins Agreement, ~n accordance w~th Consultant's respons~bd~t~es under the Texas Disciplinary Rules of Professional Conduct B All sennces required hereunder will be performed by the Consultant or under ~ts d~rect supermslon All personnel engaged ~n work shall be quahfied and shall be hcensed, authorized, or permitted under state and local taws to perform such services XVI. Assituabilitv: The Consultant shall not assign any ~nterest in this Agreement and shall not transfer any interest m tlus Agreemem (whether by assignment, novatton, or otherwise) w~thout the prior written consent of the C~ty thereto XVII. Severablli~. All agreements and covenants contained herein are severable, and Page 7 12 an the event any of them, with the exceptxon of those contained in sections headed "Scope of Servmes", "Independent Contractor Relatlonstup", and "Compensatmn and Method of Payment" hereof, shall be held to be mvahd by any court of competent junsdmtmn, tlus Agreement shall be interpreted as though such mvahd agreements or covenants were not contamed hereto XVIII. Responsabfllties for Claims and Liability Approval by the City shall not constitute nor be deemed a release of the respons~b~hty and l~ab~hty of the Consultant for the accuracy and competency or,ts work, nor shall such approval be deemed to be an assumptaon of such responslblhty of the City for any defect m any report or other documents prepared by the Consultant, ~ts shareholders, associates, employees, officers, or agents m connection w~th tlus engagement XIX. Modffieatlon of Agreement: No wmver or modfficatmn of tlus Agreement or of any covenant, con&t~on, or hm~tatlon herein contmned shall be vahd unless in writing and duly executed by the party to be charged therewith No ewdence of any wmver or modlficatmn shall be offered or received m evidence m any proceeding arising between the parties hereto out of or affecting tins Agreement, or the nghts or obhgatmns of the part, es hereunder, unless such wanver or modlficatxon m mwntmg, duly executed as aforesmd The parties further agree that the provlsmns of tlus artmle will not be wmved as hereto set forth XX. Captions: The captions oftlus Agreement are for lnformatxonal purposes only and shall not m any way affect the substantive terms or conditions oft/us Agreement XXI Binding Effect' Tlns Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective he~rs, executors, adrmmstrators, legal representatives, successors, and asmgns, where pernntted by tl,as Agreement Page 8 IN WITNESS HEREOF, the C~ty of Denton, Texas has executed tlns Agreement m four (4) original counterparts by and through ~ts duly authorized C~ty Manager, and Consultant has executed tlus Agreement by and through ars duly authorized undersigned Shareholder, dated t/us the day of ,2001 CiTY OF DENTON, TEXAS A Texas Mumc~pal Corporation By M~chael Conduff, C~ty Manager ATTEST JENNIFER WALTERS, CITY SECRETARY By APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY . LLOYD, GOSSELINK, ROCHELLE, BLEVINS, ROCHELLE, BALDWIN & TOWNSEND, P C ~- ~-~ A Texas Professional Corporataon ATTEST Page 9 ~4 NORTH AMERICAN SPECIALTY INSURANCE COMPANY 650 Elm Street Manchester, NH 03101-2524 (800) 542-9200 LAWYERS PROFESSIONAL LIABILITY INSURANCE POLICY This Is a claims made policy Please review the policy carefully The policy Is limited to liability for only those claims that are first madelagainst the Insured and reported to the company In writing during the policy period , Policy Number BIL0000022-00 Insured by the stock insurance company shown below, Producer's Name and Address hereinafter called the Company ProTexn, Inc 42013-00 North American Specialty Insurance Company 7557 Rambler Road, Suite 818 Dallas, Tex:~__,= 75231-_~303 DECLARATIONS .o.== of= mc,dent which ¥o. bcheve =7 result m a cia, ITEM 1 Firm Name a~ld Address or su~t should be reported re Lloyd, Gossellnk, Blevins, Rochelle, Baldwin & Towrlsend, P C North Arum'Joan Spedalty Insurance Company ~ttn Richard Mom 111 Congress Avenue, Suite 1800 The Center of New Hampshire, 650 Elm Street Austin, Texas 78701 Manchmter, NH 03101-2454 Telephone (800) 634-5226 (603) 63~5236 ITEM 2 Policy Period From May 1~ 2000 To May 1, 2002 12 01 a m Standard Ttme at the address of the Named Insured indicated tn Item 1 ITEM 3 Limits of Liability (a) LIMIT OF LIABILITY PER CLAIM The liability of the Company for each Claim shall not exceed $ 5.000.000 (b) AGGREGATE LIMIT OF LIABILITY The total limit of the Company's habillty for all claims shall not exceed $ 5,000,000 ITEM 4 Per Claim Deductible $ 25~000 ITEM 5 Aggregate Deductible $ 25,000 ITEM 6 Minimum Ooductlblo $ 12,500 (in aer, ordanae wl.t.h_l~q~urlng Agreement B) ITEM 7 Prsmlum $ $60.316 ITEM 8 Forms and Endorsements Attached NAS-PRO-LPL-003 (11/99) NAS-PRO-005 (11/99) NAS-PRO-012 (11/99) NAS-POL-001 (7/98) NAS-PRO-006 (11/99) NAS*PRO-019 (11/99) NAS-PRO-009 (11199) NAS-PRO-018 (11/99) NAS-PRO-010 (11/99) ProTexn, Inc By Countersigned Date May 1, 2000 Authorized Representative - President ~-//-/- b ~'//- ~ ~ Issue Date May 1, 2000 NAS-PRO-O02 (11/99) Page 1 of 1 1 5 DRAFT 2 PUBLIC UTILITIES BOARD MEETING MINUTES 3 December 10, 2001 4 5 After determunng that a quorum of the Public Utilities Board of the City of Denton, Texas was 6 present, the Pubhe Utilities Board convened into an Open Meeting on Monday, December 10, 7 2001 at 9 03 a m in the Service Center Training Room, City of Denton Service Center, 901-A 8 Texas Street, Denton, Texas 9 10 PRESENT. Dick Norton, George Hopkins, Charldean Newell, Dick Smith, Jim 11 Wilson, Don White and Bill Cheek 12 13 EX OFFICIO MEMBERS 14 Mike Conduff, City Manager 15 Howard Martin, ACM/Utilities 16 17 CONSENT AGENDA. 18 19 The Staff recommends each of these items, and approval thereof will be strictly on the basis of 20 the Staff recommendations Approval of the Consent Agenda authorizes the Assistant City 21 Manager for Utlhtles or his designee to implement each item in accordance with the Staff 22 recommendations The Public Utlhtles Board has received background information and has had 23 an opportunity to rinse questions regarding these items prior to consideration 24 25 Listed below are bids or purchase orders to be approved for payment under the Consent Agenda 26 (Agenda ~Item 1). Detailed information is attached to each Consent Agenda item This listing is 27 provided on the Consent Agenda to allow Public Utilities Board Members to discuss or withdraw 28 an item prior to approval of the Consent Agenda If no item is pulled prior to consideration, 29 Consent Agenda Item 1 below will be approved with one motion of the Board If any item is 30 pulled for separate discussion, such item or items will be considered as the first items taken up 31 under the "Items For Individual Consideration" section of this agenda, set forth below 32 33 34 CONSENT AGENDA 35 36 1) Consider approval of an Agreement with the firm of Lloyd, Gossehnk, Blevms, Rochelle, 37 Baldwin & Townsend, P C, Austin, Texas, for legal representation before the Public 38 Utilities Commission ("PUCT") on various electrm-related matters 39 40 Board member George Hoplans moved to approve Board member Dick Smith seconded I 41 Motion was approved unanimously. 16 AGENDA INFORMATION SHEET AGENDA DATE: December 18, 2001 DEPARTMENT: Fmence/Treasury ACM: Kathy DuBose, Fiscal Management and Municipal Servlces~ SU I CT Consider adoption of an ordmanee authorizing the Mayor to execute amendments to the CY2001 and CY2002-2004 agreements between the City of Denton and The Denton Chamber of Commerce (Convention and Visitors Bureau) for the payment and use of Hotel Tax Revenue, and providing an effective date BACKGROUND Thc Chamber of Commerce/Convention and Visitors Bureau (CVB) is currently approved for Hotel Occupancy Tax revenue allocation for a contract term of January 1, 2001, through December 31, 2001 Unused funds for tlus contract period are to be refunded to the City vothm tlurty days, m accordance with the current contractual reqmrements Due to the CVB management pohcy to part~cipate in cooperative marketing and advertising programs with other orgamzatious and businesses, CVB expects to have approxu-nately $9,000 of unspent funds for program year 2001 The recommended amendment will allow CVB to carry-forward unspent funds from one program year to the next The unspent momes will be used for the on-going promotional expenses of Denton's convention and tourism business In adchtlon, the funds would ease the financial hardship caused by the current contractual requirement Th~s would also allow the CVB to fund some new projects that would not be funded in the new budget year and at year-end RECOMMENDATION Staff recommends that the C~ty Councd approve the amendment allowing the CVB to carry-forward unspent funds from one program year to the next PRIOR ACTION/REVIEW (Council, Boards, Commission) The contract amendment was presented to the Hotel Occupancy Tax Committee on Monday, November 26, 2001 All Committee members voted for approval and recommended the amendment be forwarded to the C~ty Councd for approval (3-0) FISCAL INFORMATION Approved allocation of $%000 of Hotel Occupancy Tax Funds These funds have been encumbered and budgeted from FY 2000-2001 HOT fund revenues EXHIBITS Ordinance F~rst Amendment to Agreement between The C~ty of Denton and The Denton Chamber of Commerce (Convention & Visitor's Bureau) (CY2001) First Amendment to Agreement between The City of Denton and The Denton Chamber of Commerce (Convention & Visitor's Bureau) (CY2002-2004) Respectfully submitted D~ana G Ort~z D~rector of F~scal Operations 2 ORDINANCE NO AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AMENDMENTS TO THE CY2001 AND CY2002-2004 AGREEMENTS BETWEEN THE CITY OF DENTON AND THE DENTON CHAMBER OF COMMERCE (CONVENTION AND VISITORS BUREAU) FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 That the Mayor is hereby authorized to execute the attached amendments to the CY2001 and CY2002-2004 agreements between the City of Denton and the Denton Chamber of Commerce for the payment and use of hotel tax revenue, under the terms and condmons contmned in smd amendments, copies of which are attached hereto and made a part hereof S]~CTION 2 That tins ordanance shall become effective immediately upon as passage and approval PASSED AND APPROVED this the day of ,2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS ~ FIRST AMENDMENT TO AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON CHAMBER OF COMMERCE (CONVENTION & VISITOR'S BUREAU) (CY2001) PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE THIS FIRST AMENDMENT to the CY2001 AGREEMENT made between the C~ty of Denton, Texas, a mumc~pal corporation (the "CITY"), and the Denton Chamber of Commerce (Convention & Vm~tor's Bureau), a non-profit corporation incorporated under the laws of the State of Texas (the "BUREAU"), amends Seclaon 2 1 of the CY2001 AGREEMENT as contmned hereto, all other provlmons to remmn as onglnally set forth 2 1 Use of Funds. For and m consideration of the payment by the CITY to the BUREAU of the agreed payments of hotel tax funds specified above, the BUREAU agrees to use such hotel tax funds only for advertising and conducting sohc~tatlons and promotional programs to attract tourists and convention delegates or registrants to the mummpallty or its wcunty, by the asqmmt~on of sites for and the constmctmn, enlargement, repmnng, operataon, and mamtenance of visitor mformaUon centers, and the furmstung of facilities, personnel, and materials for the regmtratlon of convention delegates or registrants, as authorized by TEx T^x CooE §351 101(a) Funds for any calendar year Much are unused by mldmght December 31st of that year may be earned over to the subsequent calendar year EXECUTED flus day of ., 2001 THE CITY OF DENTON, TEXAS By EULINE BROCK, MAYOR ATTEST By ~~-~'~'~ JENNIFER W~TE~, CITY SEC~T~Y ~ CITY ATTO~Y DENTON C~ER OF COERCE Premdent ATTEST ~PROVED AS TO LEG~ FO~ By By Secretary FIRST AMENDMENT TO AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON CHAMBER OF COMMERCE (CONVENTION & VISITOR'S BUREAU) (CY2002-2004) PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE THIS FIRST AMENDMENT to the CY2002-2004 AGREEMENT made between the C~ty of Denton, Texas, a mummpal corporation (the "CITY"), and the Denton Chamber of Commerce (Conventxon & V~sltor's Bureau), a non-profit corporatmn incorporated under the laws of the State of Texas (the '~BUREAU"), amends Section 2 1 of the CY2002-2004 AGREEMENT as contained hereto, all other prowslons to remmn as originally set forth 2.1 Use of Funds. For and m cons~deraUon of the payment by the CITY to the BUREAU of the agreed payments of hotel tax funds spemfied above, the BUREAU agrees to use such hotel tax funds only for advems~ng and conducting sohc~tattous and promouonal programs to attract tourists and convenUon delegates or registrants to the mumc~pal~ty or ~ts wc~mty, by the acqms~Uon of s~tes for and the constmcUon, enlargement, repamng, operation, and mamtenance of ws~tor mformat~on centers, and the furmshmg of facthtxes, personnel, and materials for the reg~stratton of cortventton delegates or regmtrants, as authorized by TEX TAX CODE §351 101(a) Funds for any calendar year wl-ach are unused by m~dmght December 31st of that year may be camed over to the subsequent calendar year EXECUTED this day of ~ 2001 THE CITY OF DENTON, TEXAS By EULINE BROCK, MAYOR ATTEST APP~y.~ L~--GGAL FORM-~ CITY SECRETARY DENTON CHAMBER OF COMMERCE Presxdent ~t - - ATTEST APPROVED AS TO LEGAL FORM By By Secretary 5 AGENDA INFORMATION SHEET AGENDA DATE: December 18, 2001 DEPARTMENT Fiscal Operations ACM. Kathy DuBose, Fiscal and Municipal Services SUBJECT Consider approval of a resolution of the City Council of the City of Denton, Texas, approving the proposal of the Denton Central Apprmsal D~stnct to construct an addition to its facility out of current funds, providing that tins resolution shall create no financial obligations on the City of Denton, and providing an effective date BACKGROUND ]Denton County has experienced substantial growth as demonstrated by the increase in popnlatlon, new homes, retail businesses and a variety of industries The Appraisal District has been affected by this growth with increases m phone calls, walkqn traffic, fieldwork and overall operations In response to help meet this demand, the district has been adding employees However, office space has not increased accordingly Therefore, a portable bmldlng has been leased Although this lease is a short-term solution, it has helped relieve thc overcrowded office s~tuatlon Several options have been reviewed to provide a long-term solution such as converting an existing storage area into offices and purchasing a modular office building Each one of these alternatives costs approximately $75,000 Another option that was considered was to lease office space The district concluded that these options were not the best use of funds nor were they a long-term solution, as they would not meet future needs for expansion Therefore, the distrmt is proposing to construct an addition to the current office building Thc addition is planned to be approximately 3,840 square feet of which only about half (1920 sq ft ) is to be completed for immediate needs and some future needs The remmnder will be completed pending the economic position and growth of the County In order to proceed with this plan, the District requests the support and approval of the taxing jurisdictions The Tax Code reqmres at least 75% of all taxing ent~tles' approval If any taxing jurisdiction abstains from approving the plan, it is considered a "no" vote according to the Tax Code Furthermore, taxing ent~tles must provide a resolution approving the proposal within 30 days upon receipt of request, which was December 4, 2001 RECOMMENDATION Staff recommends approval of the resolution PRIOR ACTION/REVIEW On November 15, 2001, the Denton Central Appraisal District's Board of Directors approved a resolution proposing the acquisition of addltmnal office space FISCAL INFORMATION The Dlstnct has sufficient available funds on hand to pay for the cost of thru project The cost of lmtlal construction and fimshmg out is estimated to be $378,357, including a reasonable contingency amount The District does not expect to borrow funds to pay £or the project Respectfully submitted Director of Fiscal Operations 2 RESOLUTION NO A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, APPROVING THE PROPOSAL OF THE DENTON CENTRAL APPRAISAL DISTRICT TO CONSTRUCT AN ADDITION TO ITS FACILITY OUT OF CURRENT FUNDS, PROVIDING THAT THIS RESOLUTION SHALL CREATE NO FINANCIAL OBLIGATIONS ON THE CITY OF DENTON, AND PROVIDING AN EFFECTIVE DATE WHEREAS, Denton Central Appraisal D~stnct (D~stnct) dehvered to the C~ty of Denton a resolution by the Board of D~rectors of the D~smct, a copy of which ~s attached to and ~ncorporated in thls resolutmn, proposing to construct an add~tmn to ~ts facilities located at 3911 Morse, Denton, Texas, w~th an approximate s~ze of 3,840 square feet, with one-half of sand addition to be fimshed out ~mmedlately and the other half to be fimshed out as the need arises at a future date, and WI-1EREAS, the Dmtnct has represented to the C~ty Council that ~t has suffiment avanlable funds to pay for th~s project and that ~t does not ~ntend to borrow funds to pay for the constmctton of the project, and WHEREAS, Section 6 051(b) of the Tax Code reqmres the D~smct to obtann the approval of the construction or renovation of any bmldmg or other ~mprovement by the D~smct from the governing bodies of three-fourths of the taxing umts entitled to vote on the appointment of board members, and WHEREAS, the estimated ~mtml cost of $378,357 would be pand by the D~stnct fi:om funds on hand ~n the Dtstnct, and WHEREAS, the C~ty Council of the C~ty of Denton finds and declares that the pubhc ~nterest of the Ctty of Denton would be served by approving sand proposal, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY RESOLVES SECTION 1 That the proposal of the Denton Central Appransal D~smct to construct an addition of apprommately 3,840 square feet to ex~st~ng facllmes and to pay the m~t~al cost of same out of current funds of the District as mdmated in the attached resolutton m hereby approved, SECTION 2 That the approval of thru resolution shall create no financml obhgatlons on the part of the C~ty of Denton to fund or obligate itself to conmbute to the funding of the construction of these additional Denton Central Apprmsal D~smct famht~es SECTION 3 That this ordinance shall become effective tmmed~ately upon ~ts passage and approval PASSED AND APPROVED thls the day of ,2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY Page 2 DEC-04-~001 1~ bO FROMq~NTON C~D 940-J87~48~4 TO 940J49859G P 00Sx008 !~OI, O~ON TO ACCUII~tE ADDITIONAL OFFICE SPACE WHEREAS, DenOn Cen~ Appr~s~ Dls~lct has ~Cmenced rap~d ~o~h m ~e n~bcr, v~ue ~d comple~ of the proper~es and accounts w~m ~e ]~ns~c~on of ~e Dm~ct, ~d WHEREAS, ~e Bo~d of DMcctors of Denton Cen~ Appr~s~l D~s~ct ~ds ~d decl~e$ that ~e c~m~t fac~,~es of ~ D~s~ct located at ~911 Morse, Denton, T~s, ~c inadequate ~ e~c~en~ ~ne~ se~e the c~en~ needs ~ ~r an~pated ~ow~ WHEREAS, ~e D~s~ct ~s rc~cd ~d considered av~lab]e op~ons for mee~g ~e needs of ~e ~n$ umts se~ed by ~e Dismct m an economtcal ~d e~c~ent m~er, ~d ~ER~S, ~e cD,ohs considered ~d renewed include the cons~c~on of a p~lY completed sep~ate b~d~g ad~on to ~ished at a lat~ dat~; leasing of space in scpara~ loca~ons, r~ova~on ~d ~onve~o~ of an ~s~ swra~e b~B mW office space ~d the p~ha~e ota mo~l~ ~1~ W be ~ec~d on Distnc~ p~pe~; ~d ~E~S, ~ter due cons~d~a~on ~ ~o~d ~ds ~d ~at ~e best op~on av~lable for ~ efficient ~d pedo~ce of ~e DMSO% d~es is to cons~ct a 3,840 sq~re foot add~hon to ~e c~ent s~c~sre, of w~ch 1,920 sq~e feet ~ b~ fimsbed o~t for ~m~e~ate u~, ~th ~e r~imi ~pace to be ~omple~d ~d ~shed out as ~e need ~ses at a f~e date, ~d ~E~AS, ~e Bo~d fmda ~at ~e ~cspa~d cost of cons~c~on ~d f~i o~t ~ $378,357 00, sublet W a compe~ve blddn~ process, wi~ ~ cons~cbon ~os~ W b~ prod ~om cash on NOW, THE~FORE, ~E ~ ~SOL~D BY ~E BO~ OF DI~ORS OF DEaN CE~ ~P~S~ DISTRI~ D,st~ct ~ke ~1 step~ =ecess~ w con~ct smd ~d~on, ~d ~at any c~n~act ~erefore b~ a~ded by compe~ttve b~dt~B as req~ed by law, BE IT FU~HER ~SOL~D ~at ~ C~ef Apprms~ no,fy pre~ld~B o/ricer of each tove~ body of a t~n~ ~tt ~u~d to vot~ on ~e approve of ~s proposal by dehve~ a co~ of ~ resol~on each such officer, Eon~ ~ ~o~a~on sho~n~ the co~ts of other av~able altem~aves to ~l~ propose, ~5OLUTION PAOE I DEC-04-8~81 1~ 51 ~ROM'O{BNTON C~D 94B-~8~-4884 TO 940~498598 P 00Gx008 BE IT FURTHER RESOLVED that tl~e Bo~d of D~ec~rs of Denton Ce~ Appr~s~ Dls~ct r~qU~Sts ~t each of ~ govc~g bo~es of th~ t~g units ~ ~ Dls~ct ~PRO~ ~:s propos~ by passing ~d r~mg ~ appropma~ r~soluaon ~ ~e Ch~ Apprms~r ~r~ (SO) d~ys o~ ~cexpt of t~s ~ss~ ~ ~o~ ~ms ~ o~oo~ DENTON CENT~ APP~SAb DISTRIGT BOA~ OF DI~CTORS A~EST C~TARY - RESOLUTION PAGE ~ AGENDA DATE December 18, 2001 DEPARTMENT Elecmc Admlmstratlon ACM Howard Martin, 349-8232 SUBJECT. AN ORDINANCE OF THE CITY OF DENTON, TEXAS AMENDING THE SCHEDULE OF RATES CONTAINED IN ORDINANCE NO 2001-337 FOR ELECTRIC SERVICE, CANCELLING AND REPEALING THE ENERGYSAVE PROGRAM (SCHEDULE EP) EFFECTIVE JANUARY 2, 2002, PROVIDING FOR A REPEALER, PROVIDING FOR A SEVERABILITY CLAUSE, AND PROVIDING AN EFFECTIVE DATE BACKGROUND. On November 27, 2001, the City Council approved an ordinance amending §28-27 of the Code of Ordinances of the City of Denton, Texas, to provide for the adoption of the 2000 International Bmldmg Code, the 2000 International Residential Code for One and Two Family Dwellings, the 2000 International Fuel Gas Code, the 2000 International Plumbing Code, the 2000 International Mechanical Code, and the 2000 International Energy Conservation Code A portion of these codes, which become effective January 1, 2002, addresses energy efficient budding practices, including mlmmum insulation levels, window glazmg levels and air conchtiot~e,r.~efficlency The requirements in the new building codes exceed the eligibility requirements for rebates under the existing EnergySave Program, Rate Schedule EP and render the current EnergySave Program obsolete The repeal of the EnergySave Program would be effective January 1, 2002 Rebates would contanue to be prod for all for mstallataons done prior to January 1, 2002 DME is working with Bmldlng Inspections to draft an incentive program that works within the new building codes and encourages additional energy saving bmldmg techmques to be implemented OPTIONS. 1 Repeal the Rate Schedule EP 2 Leave the ex~st~ng program m place even though the reqmrements of the budding code changes meets and/or exceeds the Schedule EP requirements Tlus would result m excess expenditures from the Electric budget s~nce an "~ncent~ve" would be prod to all new res~dentml and commercial construction ~n Denton RECOMMENDATION: Approve the repeal of Electric Rate Schedule EP, EnergySave Program PRIOR ACTION/REVIEW (Coun¢il~ Boards, Commission)' The Pubhc Utilities Board was ~nformed of th~s appeal actmn by memo at the December 10, 2001 meeting No d~scussmn held The potantml negative budget ~mpact of thc change m the bmldmg codes made the necessity to repeal th~s rate schedule obwous FISCAL INFORMATION' Leawng the EnergySave Program in place could lead to a rap~d depletmn of the FY2002 budget for rebates Respectfully Submitted Sharon Mays, Dxrector of Elecmc Uttllt~es Prepared By Glenn Fisher Assistant Director of Electric Exhth~t I Ordinance 2 ORDINANCE NO AN ORDINANCE OF Tt-IE CITY OF DENTON, TEXAS AMENDING THE SCHEDULE OF RATES CONTAINED IN ORDINANCE NO 2001-337 FOR ELECTRIC SERVICE, CANCELLING AND REPEALING TI-I~ ENERGYSAVE PROGRAM (SCHEDULE EP) EFFECTIVE JANUARY 1, 2002, PROVIDING FOR A REPEALER, PROVIDING FOR A SEVERABILITY CLAUSE, AND PROVIDING AN EFFECTIVE DATE WHEREAS, on November 27, 2001 the City Council approved an ordinance winch amended §28-27 of the Code of Ordinances of the Clty of Denton, Texas, to provide for the adoption of the 2000 International Bualdmg Code, the 2000 International Resldentlal Code for One and Two Family Dwellings, the 2000 International Fuel Gas Code, the 2000 International Plumbing Code, the 2000 Intemaiaonal Meehameal Code, and the 2000 Intematxonal Energy Conservaiaon Code, and WHEREAS, the City Council deems at m the pubhc interest to cancel and repeal the EnergySave Program (Schedule EP) and any and all cre(hts or rebates that may be due- thereunder, effeetwe January 1, 2002, because of the prowsions of and the passage of the amended City of Denton Building Code and other Codes, whach also become effective on January 1, 2002, and WHEREAS, the City staff shall eonUnue to process and to pay any and all apphcatlons for energy crechts or rebates under Schedule EP, whach are tunely reeeaved by the City before January 1, 2002, even ~fthe payment thereof shall occur aider January 1, 2002, and WHEREAS, the City staff intends to mamed~ately study the C~ty of Denton Bmldmg Code and other Codes, as they are now amended, and expects to drait and present to the City Council a more mean,nsful and slgmficant alternative energy crecht or rebate program, wbach it will offer to the. City Council m the near future, NOW THEREFOR THE COUNCIL Ot~ ~ CITY OF DENTON HEREBY ORDAINS SECTION 1 That the foregoing preamble to tins ord,nance is incorporated by reference hereto for all pu~oses SECTION 2 That the Schedule of Rates for electrical services as provided for m Chapter 26 of the City of Denton Code of Ordinances, as provided by Ordinance No 2001-337, enacted on the 4th day of September, 2001, is hereby amended to cancel and repeal Schedule EP (EnergySave Program) and any other reference contained m sand Ordinance to the EnergySave Program or Schedule EP, m its entirety SECTION 3 That all ord,nanees or parts of ordinances m force when the provisions of tins ordinance become effectave winch are inconsistent, or m conflict with the terms or provisions contained in tins ordinance are hereby repealed to the extent of any such conflict 3 SECTION 4, That ~f any seclxon, subsecnon, paragraph, sentence, clause, phrase, word m tins ordinance, or apphcat~on thereof to any person or c~rcumstances ~s held mvalxd by any court of competent junschct~on, such holding shall not affect the vahd~ty of the remaunng pomons ofthrs ordinance, and the C~ty Council of the C~ty of Denton, Texas, hereby declares ~t would have enacted such remaining porttons despite any such mvahchty SECTION 5 That tins ordumuce and the rate hereby canceled and repealed shall become effective on January 1, 2002, and apphed to all electric services rendered by Denton Mumc~pal Elecmc A copy ofsa~d ordinance shall be maintained on file m the Office of the City Secretary SECTION 6 That upon gs passage and approval, reference shall be made at the top of the first page of Ordinance No 2001-337, that smd ordinance has been duly amended by tins ordinance, effecUve January 1, 2002 PASSED AND APPROVED this the day of ,2001 EULINB BROCK, MAYOR ATTEST JENNIF]EK WALTERS, CITY SECRETARY By ~ APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY S \Our Documents\Ordinances\01 ql~p~al Soh*dul~ I~P-DME Ord doc AGENDA INFORMATION SHEET ,, ~ ~_ ~/ AGENDAIDATE: December 18, 2001 Questions concermng tins acqmslt~on may be d~rected DEPARTMENT: Materials Management to Jim Coulter 349- 7194 ACM: Kathy DuBose, F~scal and Mumctpal Serwces ~ svsJ CT: An Ordinance accepting competmve bids and awardmg a pubhc works contract for the constmcu0n of the Sherman, Pennsylvama, Ch'egg and Ponder Street Pawng ProJects, promdmg for the expenditure of funds therefore, and prowdmg an effecttve date (Btd 2757- Sherman, Pennsylvama, Gregg and Ponder Street Paving Project awarded to Jagoe Pubhc Company m the amount of $870,823 05) BIO INFORMATION: This bid ~S for constmctton of street paving on Sherman Drive from 100 feet east of Locust to Hercules, on Pennsylvama from IH 35E to Stonegate, on Grcgg Street from Demon Street to Amarillo Street and on Ponder Street from Oak to Scripture The project includes bamcachng, profile mtlhng, stabihzatton, curb gutter repair, asphalt overlay and other assoctated acttvmes Also included ts a two.year mmmenance bond m place of the usual one-year bond RECOMMENDATION: We recommend this btd be awarded to the lowest responstble bidder, Jagoe Pubhc Company, m the amount of $870,823 05 PRIINCIPAL PLACE OF BUSINESS: Jagoe Pubhc Company Denton, Texas ESTIMATED sC[/~,DULE OF PROJECT: These projects are to be completed wttlun 85 calendar days from notice to proceed or approxamately the last week in March 2002 Agenda Information Sheet December 18, 2001 Page 2 FISCAL INFORMATION: Fundmg forthlss~eetrenova~onpr~ectwlllcome ~omthefollowmgCIPfundaccounts 3~005000 136~ 40100 35004800 ~365 40100 35000400 ~36~,40100 3~004701,136~ 40100 3500~400 136~ 40100 3~004701'136~ 40100 Tom Shaw, C P M, 349-7100 Purchasing Agent Attachment I Tabulataon Sheet 2 ORDINANCE NO AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A PUBLIC WORKS CONTRACT FOR THE CONSTRUCTION OF THE SHERMAN, PENNSYLVANIA, GREGG AND PONDER STREET PAVING PROJECTS, PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFORE, AND PROVIDING AN EFFECTIVE DATE (BID 2757 SHERMAN, PENNSYLVANIA, GREGG AND PONDER STREET PAVING PROJECT AWARDED TO JAGOE PUBLIC COMPANY IN THE AMOUNT OF $870,823 05) WHEREAS, the C~ty has sohc~tod, recetved and tabulated compet~tive b~ds for the construction ofpubhc works or improvements in accordance path the procedures of STATE law and City ordinances, and WHEREAS, thc City Manager or a designated employee has received and recommended that the herein described bids are the lowest responsible bids for the constmcuon of the public works or improvements described in the bid invitation, bid proposals and plans and speclficanons therein, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the follopang competltave b~ds for the construction of pubhc works or improvements, as described in the "Bid Invitations", "Bid Proposals" or plans and specfficatlons on file m the Office of the City's Purchasing Agent filed according to the b~d number assigned hereto, are hereby accepted and approved as being the lowest responsible bids BID NUMBER CONTRACTOR AMOUNT 2757 Jagoe Public Company $870,823 05 SECTION II That the acceptance and approval of the above competxtlve b~ds shall not constitute a contract between the City and the person submitting the bid for constructaon of such public works or improvements herein accepted and approved, anal such person shall comply path all requirements specffied m the Notme to Bidders xncludmg the timely execution of a written contract and furnishing of performance and payment bonds, and ~nsurance certificate a~er notification of the award of the bid SECTION III That the City Manager is hereby authorized to execute all necessary written contracts for the performance of the construction of the pubhc works or Improvements in accordance path the bids accepted and approved herein, promded that such contracts are made m accordance w~th the Notice to Bidders and Bid Proposals, and documents relating thereto specifying the terms, conditions, plans and specfficatlons, standards, quantities and specified sums contained therein SECTION IV That upon acceptance and approval of the above competitive bids and the execution of contracts for the pubhc works and ~mprovements as authorized here~n, the C~ty Council hereby authorizes the expenditure of funds in the manner and m the mount as spemfied m such approved bids and authorized contracts executed pursuant thereto SECTION V That this ordinance shall become effective lmmedmtely upon ~ts passage and approval PASSED AND APPROVED th~s the day of ,2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGA/~ FORM HERBERT L P ~UTY, Y ATTORNEY AGENDA INFORMATION SHEET AGENDA DATE: December 18, 2001 Questions concerning this Acquisition may be directed DEPARTMENT Pask Management Robert Waggoner 349-7836 ACM: Kathy DuBose, Fiscal and Mumclpal Services ~ SUBJECT: Consider adoption of an ordinance accepting competitive sealed proposals and awarding a contract for the purchase of material, supplies or services, providing for the expenditure of funds therefore, and providing for an effective date (RSFP 2766 - Excess Llablhty Insurance awarded to North River Insurance Company, m the amount of $179,000 for a one year contract period) BACKGROUND The City does not currently have Excess L~ablhty Insurance coverage The City self- funds Workers' Compensation clmms and General/Auto Llab~hty claims A Texas law called the Texas Tort Claims Act hmlts the dollar amount a municipality pays on hablhty claims to $100,000 for property damage, $250,000 per mdlwdual injury, and $500,000 total per occurrence However, some exposures the C~ty faces do not fall within the Texas Tort Claims Act and therefore the City has unlimited hablhty w~th no current ~nsuranee protection Claims with tmbmlted hablhty include but are not hmlted to · Workers' Compensation Clmms - The City is hable for all reasonable medical expenses, mdemmty benefits, and related expenses ~f an employee is injured on the job m the course and scope of employment There ~s no hmlt to the potential costs of an on-the-job injury Although the City has a good claims h~story as it relates to Workers' Compensation, an Electric Utility employee suffered a severe injury m March of 2000 that has currently reached $130,000 prod with a projected total cost of $300,000 - $500,000 depending upon response to medical treatment · Law Enforcement L~ablhtv Claims - The C~ty could be held liable w~th no hmlt to elmms mvolvmg Civil Raghts violations due to pohce actlwty These claims could stem from charges of wrongful arrest/detention, unlawful search and seizure, deprivation of Civil Raghts, and excessive force Again, the City has a good Instory as ~t relates to elmms of th~s nature, with only a few minor elmms over the last five years, but the potential exposure in this area ~s unhmlted · Electric Utlh_ty Operation Clmms - By defimtlon, the operation of an electric utlhty by a mumelpahty is a proprietary function and ~s excluded from hmlts on Agenda Informatton Sheet December 18, 2001 Page 2 habltity under the Texas Tort Cllums Act An error made m wrong a transformer that results m property damage, injury, or death would present the City with unlimited exposure to liability as would other operations within the electric utility The City has expertenced several clmms of this nature, some minor and some relatively large The City will remain self-funded for Workers' Compensation and Liability claims for the first $500,000 This Excess Liability Insurance policy will proxade the City with a layer of protection from $500,000 to $5,000,000 Included m this pohcy w~th the Workers' Compensation, General/Auto Liability, and Law Enforcement Liability lines of coverage is Public Officials Liability and Employment Practices Liability coverage Public Official Liability insurance covers elected and appointed ofticials such as the City Cotmcd, Boards, and Commissions, as well as professional posmons witlun the City such as attorneys, accountants, and architects Employment Practices Llablhty insurance covers employment related issues such as chscnmlnation and sexual harassment The C~ty currently purchases a stand- alone pohcy for Public Officials and Employment Practices with the same amount of coverage for $50,000 The portion of the premium for this Excess L~abthty pohcy attributed to Public Officials and Employment Practices coverage is $2t,000 By canceling our current policy and "bundling" it within the Excess Lmbihty policy, the C~ty will save $29,000 for this coverage Coverage under the Excess Llab~hty policy has been negotiated to begin on December 31, 2001, pending City Council approval Due to the events of September 11, 2001, expectations are that insurance compames wtll "re-rate" new business after January 1, 2002, with potentially large rate increases By starting on December 31, 2001, the City will avoid these "re-rate" increases The City has also negotiated a three-year rate guarantee for this coverage Total savings from these negotmt~ons is unknown until after January 1, 2002, but it is expected to be substantial RECOMM~NOATION: Staff recommends awarding to North River Insurance Company, Quotation #2 EST][MATED SCI~EDULE OR PROJECT The contract is to begin December 31, 2001 for one (I) year with 2 one-year options to renew at a guaranteed rate 2 Agenda Information Sheet December 18, 2001 Page 3 FISC.a~L INFORMATION Funds for Excess LlaNhty Insurance are budgeted in the Risk Retention Fund Respectfully submitted Robert A R~sk Manager Attachment 1 North R~ver Insurance Quotation # 1 Attachment 2 North River Insurance Quotation # 2 Attachment 3 Specmlty National Insurance Company Rewewed by TomD Shaw, C P M ,APP 3 Attachment 1 QUOTATION #1 The North River Insurance Company - Seminole, FL A.M. Best Rating A- XI Self-Insured Coverages Limits of Retention Premium Liability General Llablhty $5,000,000 Each $250,000 Each $230,000 00 * Auto Liability Occurrence Occurrence Fiat Pubhc Officials $25,000,000 Law Enf Aggregate Lmbd~ty Workers' Statutory $250,000 Each Included Above Compensation Occurrence Employer's $5,000,000 $250,000 Included Above L~ab~hty 1. Only one SIR applies in the event more than one coverage is involved in a single occurrence (ie: GL/WC) 2. The GL is an occurrence form. 3. Premium shown is flat- not subject to audit. 4. Three-year Premium Guarantee. · Annual premium is $209,000 without Public Officials Liability Coverage. 4 Attachment 2 QUOTATION #2 The North River Insurance Company - Seminole, FL A.M. Best Rating A- XI Self-Insured Coverages Limits of Retention Premium Liability General Llabthty $5,000,000 Each $500,000 Each $179,000 00 * Auto Lmbfl~ty Occurrence Occurrence Flat Public Officials $25,000,000 Law Enf Aggregate L~abfllty Workers' Statutory $500,000 Each Included Above Compensation Occurrence Employer's $5,000,000 $500,000 Included Above Lmbdlty 1. Only one SIR applies in the event more than one coverage is involved in a single occurrence (ie: GL/WC) 2. The GL is an occurrence form. 3. Premium shown is fiat- not subject to audit. 4. Three-year Premium Guarantee. * Annual premium is $158,000 without Public Officials Liability coverage. Attachment 3 Specialty National Insurance Company -Atlanta, GA A.M. Best Rating A- XV Self-Insured Coverages Limits of Retention Premium Liability General L~abfllty $5,000,000 Each 1) $250,000 Each 1) $247,405 00 Auto Lmbfllty , Occurrence Occurrence Public Officials$5,000,000 2) $500,000 2) $169,947 00 Law Enf Aggregate Lmbd~ty Terms: 1. 25% Fully Earned at Inception 2. Subject to signed & completed application. 3. No Rate Guarantee. ORDINANCE NO AN ORDINANCE ACCEPTING COMPETITIVE SEALED PROPOSALS AND AWARDING A CONTRACT FOR THE PURCHASE OF MATERIAL, SUPPLIES OR SERVICES, PROVIDING FOR THE EXPENDITURE OF FUNDS AND PROVIDING AN EFFECTIVE DATE (RFSP 2766- EXCESS LIABILITY INSURANCE AWARDED TO NORTH RIVER INSURANCE COMPANY IN THE AMOUNT OF $179,000 FOR A ONE YEAR CONTRACT PERIOD) WHEREAS, the C~ty has sohmted, recmved and evaluated compet~twe sealed proposals for the purchase of necessary materials, eqmpment, supphes or servmes ~n accordance with the procedure of State law and C~ty ordinances, and WHEREAS, the C~ty Manager or a designated employee has recmved and rewewed and recommended that the here~n described proposals are the most advantageous to the C~ty constdenng the relative ~mportance of price and the other evaluatton factors ~ncluded ~n the request for proposals, and WHEREAS, the Ctty Counml has prowded ~n the C~ty Budget for the approprtatton of funds to be used for the purchase of the materials, eqmpment, supphes or serwces approved and accepted herem, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 The ~tems m the following numbered request for proposal for materials, eqmpment, supphes or services, shown m the "Request Proposals" on file tn the office of the Purchamng Agent, are hereby accepted and approved as bmng the most advantageous to the C~ty conmdermg the relative ~mportance of price and the other evaluation factors included ~n the request for proposals RFSP NUMBER CONTRACTOR AMOUNT 2766 North Paver Insurance Company $179,000 SECTION 2 By the acceptance and approval of the above numbered items of the subnutted proposals, the Ctty accepts the offer of the persons subm~ttmg the proposals for such ~tems and agrees to purchase the materials, eqmpment, supplies or servmes in accordance with the terms, specfficat~ons, standards quannnes and for the spemfied sums contmned in the Proposal Inwtatlons, Proposals, and related documents S \Our Documents\Ordmances\01\KFSP 2766 Excess Lmblhty Insm ance doc SECTION 3 Should the C~ty and person submxtt~ng approved and accepted items and ofthe submitted proposals wish to enter into a formal written agreement as a result of the acceptance, approval, and awarding of the proposals, the City Manager or his designated representative is hereby authorized to execute the written contract, provided that the written contract is in accordance with the terms, conditions, specifications, standards, quantities and specified sums contmned in the Proposal and related documents herein approved and accepted SECTION 4 By the acceptance and approval of the above numbered items of the submitted proposals, the City Council hereby authorizes the expenditure of funds therefore in the amount and ~n accordance with the approved proposals or pursuant to a written contract made pursuant thereto as authorized herein SECTION 5 This ordinance shall become effective immediately upon its passage and approval ASSED AND APPROVED this the day of ., 2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS T~Q~LEGAL 2 S \Our Documcnts\Ordmancgs\01\RFSP 2766 Excess Ltab~hty Insurance doe AGENDA INFORMATION SHEET AGENDA DATE' December 18, 2001 DEPARTMENT' Econormc Development~am Street CM/DCM/ACM: Dave I-hll, 349-8314 ~'~ SUBJECT Consider approval of a resolution of the City of Denton, Texas, approwng the eligibility of the structure located at 525 S Locust, Denton, Texas, for tax exemption for lustoncally sigmficant sites pursuant to Chapter 10, article VII code of ordinances of the city of Denton, Texas, authorizing City Manager to execute a tax exemption certificate, and declanng an effective date (I-hstonc Landmark Comrmsslon recommends approval 6-0) On April 28, 1998, the Denton City Council passed ordinance #98-116 which amended Chapter 10 "Finance and taxation" of the code of ordinances of the city Tlus ordinance added article VII which provides that the city may abate increases tn the assessed value of lustoncally sign~ficant sites for tax purposes as a result of appropriate repair and renovations in the downtown commercial chstnct of the city of Denton The purpose ofttus tax abatement is to provide tax incentives to bring downtown buildings into compliance with the Property Appearance Guidelines Tlus abatement "freezes" the tax City of Denton tax portion of property taxes at the pre-renovation value for a ten-year period It apphes to the structure and the land reasonably necessary for access to, and use of, the historic structure To be ehgible for the abatement, the following requirements must be met Buddlngs 50 years old or older vnttnn the estabhshed target area · Exterior rehab over $20,000 or 25% of the most recent tax valuation of building, wluchever is less (with reef repair constituting no more than 50% of the total rep~urs) and · Rehablhtatlun plans are pre-approved by the I-hstonc Landmark Comrmsslon for comphance with the Property Appearance Gmdehaes The review process is as follows · Review of construction plans and verification of completion w~ll be done by I-hstonc Landmark Conumsslon · C~ty Councd must approve the tax abatement Virg~l Strange, owner of ITEC Steel, 1020 Shady Oaks, purchased the Old Denton Hospital, at 525 S Locust, in August 2001 He plans to rehabdltate the exterior to its otagmal look and remodel the interior to accommodate offices for their construction business Mr and Mrs Strange have had experience m renovating lustonc buildings In 1992 they purchased and renovated the Leticia Rosenberg Women' s Home In Galveston As a result of their efforts, the budding is now hsted on the National Register of H~stor~c Places OPTIONS 1 Approve the resolution, granting the tax abatement 2 Deny approval, resulting m no tax abatement RECOMMENDATION The I-hstonc Landmark Comrmss~on recommends approval (6-0) ESTIMATED PROJECT SCi~EDULE The project ~s~expected to be completed by July 2002 PRIOR ACTION/REVIEW The I-hstonc Landmark Conmussion has rexaewed all records provtded by the owner regarding 525 S Locust and found that they have complied vath the prehrmnary requirements set forth in ordinance #98-116 to receive tax abatement On September 10, 2001, the Denton Htstonc Landmark Cormmss~on voted 6-0 to recommend approval of fins tax abatement to the Denton City Council Upon completion of the project, HLC will verify the completed work to ensure the apphcant has met all the requirements Tlus last review of HLC is necessary m order for the apphcant to receive the abatement FISCAL INFORMATION The exact financial impact is unpossible to predict However, for each $10,000 in resulting increase m value, the property owner would receive $54 82 tn abatement from the City County and school taxes are not affected Currently the Denton County Appraisal District assesses the budding at $301,392, wluch translates to $30 04 per square foot A renovated bmlding on the square, The Bank Budding at 100 N Locust, Is currently assessed at $350,788, wluch comes to $102 84 per square foot There is no guarantee that the old Denton Hospital will be assessed at the same rate, but the buildings are comparable m age and use Resolution Apphcation for I-hstonc Structure Property Tax Abatement Copy of tax certtficate Excerpt from the nunutes of the HLC meeting, September 10, 2001 Prepared By Juhe Glover Denton Mtun Street Program Manager Respect fully subrmtte~l Lmda Ratbff ' D~rector of Econonuc Devel~l((ment RESOLUTION NO A RESOLUTION OF THE CITY OF DENTON, TEXAS APPROVING THE ELIGIBILITY OF THE STRUCTURE LOCATED AT 525 S LOCUST, DENTON, TEXAS FOR TAX EXEMPTION FOR HISTORICALLY SIGNIFICANT SITES PURSUANT TO CHAPTER 10, ARTICLE VII CODE OF ORDINANCES OF THE CITY OF DENTON, TEXAS, AUTHORIZING CITY MANAGER TO EXECUTE A TAX EXEMPTION CERTIFICATE, AND DECLARING AN EFFECTIVE DATE WHEREAS, the City has a policy to grant a partial tax exempuon for tustoncally significant sites as established by Chapter 10 "Finance and Taxation", Article VII of the Code of Ordinances of the City of Denton, Texas, and WHEREAS, the property located at 525 S Locust, Denton, Texas meets the reqmrements of a h~stoncally slgmficant site since it is a commercial or residential structure, 50 years old or older, and is vatlun the boundaries of the Downtown Commercial District as defined in Sec 10- 131 of the Code of Ordinances of the City of Denton, Texas, and WHEREAS, the owner has met all requirements for ehgibfllty for the tax exemption, and WHEREAS, the I-hstoncal Landmark Comrmssion has unammously recommended the approval of the exemption at its meeting of September 10, 2001, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES SECTION 1 That the structure located at 525 S Locust, Denton, Texas has mot all the requirements of Chapter 10, Article VII of the Code of Ordinances of the City of Denton, Texas as amended by Ordinance 98-116 and is ehglble for the tax exemption for bastoncally slgmficant sites SECTION 2, That the City Manager is hereby authorized to execute a tax exemption certificate upon verification of completaon of repairs and renovation for the property located at 525 S Locust, Denton, Texas ~ The exemption shall only apply to the historic structure and the land reasonably necessary for access to, and use thereof, by abating any increase m the assessed value for ad valorem tax purposes m excess of the assessed value of the property for the tax year immediately prior to the renovation, for a period of ten years follovang the completion of the renovation SECTION 4 That thts resolution shall become effective immediately upon its passage and approval PASSED AND APPROVED tlus the __ day of ,2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY F ~shared/dept\LOL\Our Documents~01\Rosolutmns\h~storlc sffuctur¢ tax exemption doc Apphcatmn for H~stonc Structure Property Tax Abatement From the C~ty of Denton, Texas (For propcrt) located w2hm the Downtown Commercial D~stnct as prowded for b) c~t) or&nance 98-116 ) Propert5 Address ~7--q 5 /~O~' /X-ST ~T' , "~.r-~t7-o~ .,-~ Phone ~40 Sei, O~q3 Date of or,mai con~cnon of bm d ng / Tax Valuanon (effecUve prior to start date of rehabd~tanon project) $ 24 / OO Est~ated completmn date ~ ~5/ I cem% that I am the legal o~mer of~e aforementmned prope~ I anest that ~e ~ffom~aUon hsted above ~s tree and complete to ~e best of my ~owledge I a~est ~at ~s prope~ meets ~e ehgxbfl~ty reqmrements for an abatement of rexes as promded for by ~e C~ty of Denton Ordmance 98-1 t6, as follo~s 1 The prope~ ~s located ~ a~n the boundaries of the Do~x ntmx n MaP Street Commercml D~stnct, 2 The prope~ ~s at least 50 ~e~s old 3 The esnmated cost of ~e rehabfl~tauon project ~ dl equal or exceed 2>% of ~e most recent assessed ad ~ almem tax ~ aluatlon of the structure or $20,000, ~h~che~ er ~s less Roof repmr or replacement ma3 comprise no more fl~an 50% of the nummum fl~reshold amount necessm to qnah~ for txx abatement, 4 A tax cemficate sho~qng that all t~xes due upon the propem ha~e been pa~d ~s attached to th~s apphcanou, 5 A proposal hsnng all aspects of the pla~ed rehabd~tanon ~ fll be submmed to the H~stonc Presen anon Officer for rex ~e~ b$ Denton H~stonc Landmmk Conmussmn for compal$fl~h xmh the Propen) Appearance Gmdehncs I subnut an agreement for a Cenmcate of Appropriateness for any exqenor mo&ficaUons to the prope~ for ~e duratmn of the period dunng ~ h~ch ~e t~x abatement ~s m effect, 6 I authorize tim CiB Manager or designee ~stonc Landmark Conmussmners and elected offictals to x ~s~t m~d respect the propem as needed to complete tlns apphc,mon and ccmficaUon process as set fo~ m ~e ordmance S~gnatnrc ofpropenx o,,nvr(s) ~¢ ~r~ ,, ~ aj¢., * NOIA~YPG~LIC EXHIBIT "A" BEING all that certain lot, tract or parcel of land s~tuated in the W. LOVING SURVEY ABSTRACT NUMBER 759 in the City of Denton, DENTON COUNTY, Texas, BEING all of LOTS 1,2,3,4,5, and part of LOT 6, BLOCK 2 OF JAGOE.PRESTON ADDITION, an addition to the C~ty of Denton, Denton County, Texas, according to the plat thereof recorded m Volume 188, Page 366, Deed Records, Denton County, Texas and being all that certain tract of land conveyed by Deed from Edward T Srmth to Nine Delcambre and Ronald Rose recorded under Clerk's File Number 95-R0057534, Real Property Records, Denton County, Texas, and being all that certmn tract of land conveyed by deed from Edward T Srmth, Executor to Snuth-Sawyer, Inc, recorded under Clerk's File Number 96-R0070208, Real Property Records, Denton County, Texas, and being more particularly descnbed as follows BEGINNING at an iron p~pe found for comer m the East hne of South Locust Street, a public roadway hawng a Paght-of-Way of 90 0 feet and in tho South line of Warren Street, a public roadway having a R~ght-of-Way of 50 0 feet, smd point being the Northwest comer of smd Lot I, Block 2 of said Iagoe-Preston Ad&tlon, TBENCE EAST, 291.41 feet with sand South line of smd Warren Street and with the North hne of sand Jagoe-Preston Addition to an iron rod found for comer in the West line of Wannwnght Avenue, a public roadway, as conveyed by Deed from Joseph Holland to The City of Denton in Volume 5'/5, Page '/05, Deed Records, Denton County, Texas, THENCE SOUTH 00° 50' 27" West, 193 93 feet with said West line of said Wainwright Avenue to an "X" in concrete found for corner in the North line of Warren Court, a public roadway having a Right-of-Way of 38 0 feet, THENCE WEST, 289.20 feet wtth smd North hne of smd Warren Court to an iron rod set for comer m smd East line of sa~d South Locust Street, THENCE NORTH 00° 11' 21" East, 193.91 feet with sa~d East hne of ~eud South Locust Street to the PLACE OF BEGINNING and CONTAINING !.292 acre~ of land, more or less EXHIBIT A Page I Mov 01 01 09 50~ 3 V Strange ~4038337~4 p 3 7 O0 S 503 81 ~ 503 8I V 531 96 7 555 26 ................. Excerpt of Minutes Historic Landmark Commission September 10, 2001 A regular meetang of the I-hstonc Landmark Comnusslon of the City of Denton was held in the City Hall Conference Room, located at 115 East McKmney, on Monday, September 10, 2001 at 5 30 p m Members Present' Peggy Capps, Rod Reeves, Mtldred Hawk, Ann Hatch, Bob Montgomery, and Mark Sandel StaffMcmbers: Juhe Glover, Mmn Street Manager, and Tiffany Wilkinson, Mmn Street Assistant Also Attending. Eddie Martin, C~ty of Denton Legal Department and Fred Pole, Vice President for Adnumstrative Affairs at the Umvemty of North Texas VII Review appheatlon for lt~storle Strneture Property Tax Abatement for 525 S. Locust and make a recommendation to C~ty Council. Rod Reeves made a motton to recommend that City Council accept the tax abatement apphcatton The motion was seconded by Mildred Hawk and Bob Montgomery and carried unanimously 10 AGENDA INFORMATION SHEET AGENDA DATE December 18, 2001 DEPARTMENT' Eng~neenng CM/DCM/ACM' Dave Hill, 349-8314 SUBJECT Consider adopt]on of an Ordinance approving a Right Of Way Agreement w~th Southwestern Gas P~pehne Inc, for a gas p]pehne located m the J McDonald Survey, Abstract No 1610, Denton County, Texas, authorizing the acceptance of funds therefore, and prowdlng an effective date BACKGROUND Southwestern Gas P~pellne has requested a P~ght Of Way Agreement for a 30-foot by 1200-£oot Easement consisting of approximately 0 82 acre or 35,719 square feet The Easement will accommodate a 12" natural gas p~pelme The m~tlal Easement will be 75 feet in w~dth dunng construction of the p]pehne and will revert to a permanent Easement 30 feet wide at completion The p~pelme will be located adjacent to an existing TXU Electric Transmlss~on Line Easement at the South end of the Denton Mumc~pal Airport property Southwestern Gas P~pehne shall pay $4769 52 for the proposed easement or approximately $0 13 per square £oot The property ~s located w~thm the 100-year flood plato ogH~ckory Creek The C~ty of Denton A~rport Advisory Board approved the Easement on October 10, 2001 The Texas Department of Transportation Awat~on D~ws~on ~s currently rewew~ng the Easement £or environmental ~mpact and no adverse affects are anticipated OPTIONS 1 Approve the P~ght of Way Agreement, or 2 Dan]al, or 3 Table for future conslderat~on RECOMMENDATION Staff has reviewed the location of the Easement and ~ts proximity to Denton Mumcapal AlIport functions and determined that because the proposed location of the gas p~pehne ~s along the south s~de of Fhckory Creek and the TXU electric transmission hne potential mrport development ~n the area is low Staffreeommends approval of the Rtght of Way Agreement ESTIMATED PROJECT SCHEDULE Spnng of 2002 1 PRIOR ACTION/REVIEW None FISCAL INFORMATION ATTACHMENTS )~ Draft Ordinance > R~ght of Way Agreement > Location Map Prepared by Real Estate Specmhst Respectfully subm~tted/J Charles F~edler, D~rector Engmeenng Department S \Our Documonts\Ordmances\01\Southwestem Gas ROW Agreement doc ORDINANCE NO AN ORDINANCE AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE A RIGHT OF WAY AGREEMENT WITH SOUTHWESTERN GAS PIPELINE INC , FOR A GAS PIPELINE LOCATED IN THE J MCDONALD SURVEY, ABSTRACT NO 1610, DENTON COUNTY, TEXAS, AUTHORIZING THE ACCEPTANCE OF FUNDS THEREFORE, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 The City Manager, or h~s designee, ~s hereby authonzed to execute a P~ght of Way Agreement w~th Southwestern Gas P~pelme ~n substantmlly ~n the same form as the agreement attached hereto and made a part hereof by reference for a gas p~pehne to be located on real proporty owned by the C~ty of Denton, and to accept funds therefore SECTION 2 Th~s ordinance shall become effective ~mmed~ately upon ~ts passage and approval PASSED AND APPROVED flus the day of ,2001 EULINE BROCK, MAYOR ATTEST, JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM HERBERT L PRO~, ~A~TORNEY RIGHT OF WAY AGREEMENT THE STATE OF TEXAS THE COUNTY OF DENTON For and m consideration ofTEN Dollars ($10 00) and ofuer good and valuable cons~deratmn In band prod the receipt and sufficiency of which Is hereby acknowledged the undersigned (hereinafter called GRANTOR whether one or more) does hereby GRAN'I BARGAIN and CONVEY TO SOUTHWESTERN GAS PIPELINE INC, PO BOX 4000, WOODLANDS TEXAS, 77387 its successors and assigns (hereinafter called GRANTEE) a right of way and easement along plpehne across under and upon the lands ( smd lands ) of GRANTOR In the County of DENTON, State of Texas to wit 970, the I Hembrle Survey, Abstract 594, the J McDonald Survey, Abstract 873 and the J W K]ellbergSurvey, Abslract 1610 and bemg the same land descnbedm Exhibit 'A ofthatcertamJudgment No CV 92 00520 A the C~ty of Denton Pknnt~ff vs M T Cole Trust Number One through ~ts Co Trustees defendants dated July 7 1993 and recorded under Instrument Number 94 R0071013 Real Properly Records of Denton County Texas The right of way shall be seventy five feet (75) in width* during construction of the ptpebne provided for here~n and wdl revert to a permanent easement thirty feet (30') ~n width SEE EXHIBITS ~A" AND "B" ATTACHED HERETO AND MADE A pART HEREOF FOR A MORF PARTICULAR DESCRIPTION OF THE RIGHT OF WAY AND EASEMENT house braiding or any other structure on the easement area or other facility constructed by GRANTEE hereunder ,mthout granted including but not hrmted to the right of Ingress to and egress over and across said lands to and from sa~d right of way or ffthe rights granted to GRANTEE hereunder require extra work space then GRANTEE shall have the right and temporary access to additional working space which may be necessary therefor and GRANTEE agrees to pay GRANTOR any and all damages which GRANTOR suffers by reason of GRANTEE S use of said additional work space TO HAVE AND TO HOLD unto GRANTEE ~ts successors and assigns so long as the right and easement hereto granted or any one of them shall be used by or useful to GRANTEE for the purpose hereto granted the undersigned hereby brad Ihemselves their heirs executors and adrmmstrators (and successors and assigns) to warrant and forever defend this right The GRANTEE agrees lo bury all pipe below normal plow deptb and to pay for any physical damage to growing crops 4 or xvntten have been made modifying adding to or changing the terms of thts Al,reement IN TESTIMONY WHEREOF the GRANTOR bere~n bas executed tills conveyance tlas __ day of 2001 GRANTOR CITY OF DENTON BY STATE OF TEXAS COUNTY OF DENTON Tlus instrument was acknowledged before me on the day of 2001by ~ nPROYED AS TO FORM ?TY ATTORN £Y~'f.~ EXHIBIT "A" CENTERLINE DESCRIPTION CITY OF DENTON Being the centerhne description of a thirty (30) feet w~de permanent easement and nght-of~way, out of the J McDonald Survey, Abstract No 873, W Ne~l Survey, Abstract No 970 and the J W Kjellberg Survey, Abstract No 1610, Denton County, Texas and being through that certain 31 107 acre tract of land described by Judgement award of special commissioners, filed for record on September 13, 1994, under County Clerk Number 94-R0071013 of Denton County, Texas and being more pad~culady descnbed as follows BEGINNING at a point on the west hne of the said 31 107 acre tract of land, sa~d point bears S 08"12'26" W, a d~stance of 155 64 feet from the calculated northwest corner of the sa~d 31 107 acre tract of land, THENCE, S 44°49'05'' E, a d~stance of 1192 38 feet to the TERMINAL POINT of the herein described permanent easement and nght-of-way, sa~d point being on the south line of sa~d 31 107 acre tract of land and bears S 89"57'37" W, a distance of 537 46 feet from the calculated southeast corner of sa~d 31 107 acre tract of land Total length of this easement being as 1192 38 feet or 72 27 rods and containing 0 82 acres of land, more or less Beanngs are based on the UTM Coordinate System, Zone 14 NAD 27 obtained by GPS observations Registered Professional Surveyor No 3808 ~;, -I~-Z081 10 18am From- T-T05 P 001/001 F-Zg~ Project 2183 - PLT285¢-250WG 055[P01 1338 SF 50000 iMP J[{3[GL[ DENTON COUNTY, TEXAS M T COL[ SR ET AL F NElL A-970 S 081226 w 188 64 ] GRID N 12052241 ~ ............ GRID E 2191007 OF DENTON [ LATITUDE 55~H'21 671 3~1o7 AC LONGITUOE -97"11 59 340. J M~DONALD ~ -~ p~OPOSEO ~ I HEMBRIE A-873 lc ~ 30 EASE~ENT~ ~ A-594 POINT S 8~ 57 37" W 537 46 N 12051395 965 E 2191847 33~1t 33 160 J ~ I -97~11 49 623 KJELLBERG W~lllam J Comh 8eormgs are based on the UTM Coordtn~ts System No 3808 Zone 1~ NAD 27 obt~[ne~ by BP5 observabon , ,, ,, I TOTAL L~NG~ 1192 38 FEET "~ EXHIBIT B ] TOTAL L[NGTH 7227 RODS SOUTHWESTERN GAS PIPELINE, INC ALU~ON lAST [XPAN~ION ' 50 [A~[M[NT CRO~SlN~ PROPER~ O¢ CITY OF DENTON A0377A Map Notto Scale AI419A---~ + A1285A A0326A r356, ~ AIRPORT [] A118BA A0851A A0970A A1658A A1540A AO$73A · AOSg4A end A1610A · ·· · · · Propoae~Gae-- Ab~acts Line · · County Roads A1458A *· 8 AGENDA INFO~ATION SHEET D~te~ AGENDA DATE: December 18, 2001 DEPARTMENT: Engmeenng / CM/DCM/ACM' Dave H~ll, 349-8314 ~ SUBJECT Conmder adoptmn of an ordinance approving a Real Estate Contract between the City of Denton and Ranch Ventures, Ltd Relating to the purchase of two tracts comprising apprommately 10 868 acres of land located m the N Bntton Survey, Abstract No 51, for use as a park, authorizing the expenditure of funds therefore, and providing an effective date BACKGROUND Cross T~mbers Park ~s a 70-acre linear park m far south Denton, in the flood plato of Flctchers' Branch of Hickory Creek The park is demgnated as an enwronmentally sensitive area and contains a remnant stand of an eastern cross timbers forest The park ~s adjacent to several res~dentml developments as well as MeNtor Elementary School The C~ty of Denton Parks and Recreation Department, with extensive involvement and contributions from the residents m surrounding neighborhoods have developed a master plan for the park $1 million m funding for Phase I of the master plan has been secured through the following sources Texas Parks and Wlldhfe Department Grant Land Donations Private c~tlzen & corporate donations City of Denton Bond Funds City of Denton Park Land Dedmatlon & Development Funds The primary focus of the park is conservation and natural resource education, with traditional neighborhood park amemt~es Phase I development ~ncludes the following facdlt~es North of Hickory Creek Road (Oaks of Monteclto & Ryan Ranch area) · Outdoor Classroom/Nature Center · Nature Trmls - not paved · Five Educational/Interpretative nodes · Wetland Planting · Pedestrian bndge will prowde access to both sides of creek · Playground · Pmmc Area (tables & grills) · Hike & bike tranl (paved) South of Hickory Creek Road (Pdver Oaks area) · Play ground · Practice soccer field (tmhghted) · Multi-propose court · Pmmc Area (tables & grills) · Hike & bike traal (paved) 1 Construction drawmgs for Phase I development are now underway The C~ty of Denton projects that the project will put out to b~d early 2002, w~th the majority of the constructmn occumng Summer 2002 The Ranch Ventures, Ltd 10 868 acre aeqms~t~on wdl complete the land reqmred for Phase I of Cross T~mbers Park OPTIONS 1 Approve the Real Estate Agreement 2 Demal, or 3 Table for future consideration RECOMMENDATION Staff recommends approval of the Real Estate Agreement ESTIMATED PROJECT SCHEDULE Spnng of 2002 PRIOR ACTION/REVIEW None FISCAL INFORMATION $11,250 00 Independent Cons~deratmn (Earnest Money) $213,750 00 Purchase Price $ 5,000 00 Closing Costs $230,000.00 Total ATTACHMENTS } Draft Ordinance ~' Real Estate Agreement ~' Location Map Prepared by Pamela England Real Estate Spemahst Respect fully~mbmttted.~~ Charles F~edler, D~rector Engmeenng Department ORDINANCE NO AN ORDINANCE APPROVING A REAL ESTATE CONTRACT BETWEEN THE CITY OF DENTON AND RANCH VENTURES, LTD RELATING TO THE PURCHASE OF TWO TRACTS COMPRISING APPROXIMATELY 10 868 ACRES OF LAND LOCATED IN THE N BRITTON SURVEY, ABSTRACT NO 51, FOR USE AS PARK, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON, TEXAS HERBY ORDAiNS SECTION 1 The Ctty Manager ts hereby authonzed to execute a Real Estate Contract between the Ctty and Ranch Ventures, Ltd, tn substantially the form of the Real Estate Contract wNch ts attached hereto and made a part of tNs or&nance for all purposes, for the purchase of two tract compnslng approximately 10 868 acres for-use as park SECTION 2 The Ctty Manager ts authorized to make the expendttures as set forth tn the attached Real Estate Contract SECTION 3 This ordtnance shall become effecttve tmmedtately upon tts passage and approval PASSED AND APPROVED tNs the __ day of ,2001 EUL1NE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY BY ~/ / REAL ESTATE CONTRACT STATE OF TEXAS COUNTY OF DENTON THIS CONTRACT OF SALE as made by Ranch Ventures, LTD (hereanafter referred to as "Seller") and CITY OF DENTON, TEXAS, a home rule mun~capalaty, of Denton, Denton County, Texas, (hereanafter referred to as "Purchaser ") , upon the terms and conditions set forth herein I PURCHASE AND SALE Seller hereby sells and agrees to convey, and Purchaser hereby purchases and agrees to pay for all that certain tract, lot or parcel of land described an ~EXHIBIT A", attached here~n, w~th all raghts and appurtenances pertaanang to the saad property, ~ncludang any r~ght, t~tle and interest of Seller an and to adjacent streets, alleys or raghts-of-way (all of such real property, raghts, and appurtenances beang hereanafter referred to as the "Property"), together wath any ~mprovements, faxtures, and personal property satuated on and attached to the Property, for the consideration and upon and subject to the terms, provisions, and conditions hereanafter set forth II PURCHASE PRICE i Amount of Purchase Prace The total purchase prlce for the Property shall be the sum of Two-Hundred and Twenty- Five Thousand Dollars and No Cents ($225,000 00) (the ~Purchase Price") 2 Payment of Purchase Prace The full amount of the Purchase Prace shall be payable an cash at the closing 3 Escrow De~osat For the purpose of securang the performance of Buyer under the terms of this Contract, Buyer has delivered to Ron S~lk, of S~gnature T~tle Company, the sum of $11,250 00, the Escrow Deposat, which wall be pa~d by the tatle company to Seller an the event Buyer breaches this Contract as provaded an Artlcle IX of thas Contract At the closang, the Escrow Deposat wall be paad over to Seller and applied to the cash portaon of the sales prace, provaded, however, that an the event the Buyer has gaven wratten notace to the tatle company that one or more of the cond~taons to ats obllgatlons set forth an Artacle III have not been met, or, an the op~naon of Buyer, cannot be sat~sfaed, as provided for an Artacle III, or Seller has breached thas contract as provaded an Artacle VIII, then the Escrow Deposit wall be ammedaately returned by the tatle company to Buyer and thas contract shall termanate and be of no further force or effect III PURCHASERIS OBLIGATIONS The oblagataons of Purchaser hereunder to consummate the transactions contemplated hereby are subject to the satasfactaon of each of the followang condatlons any of whach may be waived an whole or an part by Purchaser at or praor to the closang I Prel~manar~ Tatle Report Wathan fave (5) days after the date hereof, Seller, at Purchaser's sole cost and expense, shall have caused the Tatle Company (hereanafter defaned) to ~ssue a owner's policy commitment (the "Commatment") accompanaed by cop~es of all recorded documents relating to easements, raghts- of-wa~, etc , affectang the Property Purchaser shall gave Seller wratten not~ce on or before the exparat~on of f~ve (5) days a~ter Purchaser receives the Commatment that the condition of t~tle as set forth ~n the Commatment as or as not satisfactory In the event Purchaser states the condataon of tatle is not satasfactor~, Seller shall, at Seller's optaon, promptly undertake to ellmanate or modafy all unacceptable matters to the reasonable satisfaction of Purchaser In the event Seller as unable to do so wathan five (5) days after receapt of wratten notace, Purchaser, at its option may elect to terman&te th~s Agreement (~n which event thas Agreement shall be null and void), grant Seller addat~onal tame to cure, or proceed to clQs~ng Purchaser's faalure to gave Seller th~s wratten notace shall be deemed to be Purchaser's acceptance of the commatment 2 Survey Seller, at Purchaser's sole cost and expense, shall obtain a current survey of the Property, prepared by a duly lacensed Texas land surveyor acceptable to Purchaser The survey shall be staked on the ground, and shall show the locataon of all PAGE 2 amprovements, haghways, streets, roads, raalroads, ravers, creeks, or other water courses, fences, easements, and rights-of- way on or adjacent to the Property, af any, and shall contaan the surveyor~s certafacataon that there are no encroachments on the Property and shall set forth the number of total acres comprasang the Property, together wath a metes and bounds descraptaon thereof Followang delavery of the Survey, the partaes agree to emend thas Contract to substatute the metes and bounds descraptaon of the Property set forth on the Survey for the current descraptaon set forth herean af the current descraptaon as dafferent from that set forth an the Survey Purchaser wall have fave (5) days after receapt of the survey to revaew and approve the survey In the event the survey as unacceptable, then Purchaser shall w~than the fare (5) day peraod, gave Seller wratten notace of thas fact Seller shall, at Seller's optaon, promptly undertake to ellmanate or modafy the unacceptable portaons of the survey to the reasonable satasfactaon of Purchaser In the event Seller as unable to do so wathan fave (5) days after receapt of wratten notace, Purchaser, at ars optaon may elect to termanate thas Agreement (an whach event thas Agreement shall be null and road), grant Seller additaonal tzme to cure, or proceed to closang Purchaser's faalure to gave Seller thas wratten notace shall be deemed to be Purchaser's acceptance of the survey 3 Seller's Com~laance Seller shall have performed, ob- served, and complaed wath all of the covenants, agreements, and condat~ons requared by th~s Agreement to be performed, observed, and complaed wath by Seller praor to or as of the closang IV REPRESENTATIONS AND WARRANTIES OF SELLER Seller hereby represents and warrants to Purchaser as follows, which representataons and warrantaes shall be deemed made by Seller to Purchaser also as of the closang date i Property to be sold an '~AS IS" condataon, however nothang herean shall be construed to release, dascharge or hold harmless, any of Seller's predecessors an tatle PAGE 3 V CLOSING The closang shall be held at the offace of Sagnature Tatle Company, 2400 Dallas Parkway, Suate 140, Plano, Texas 75093 on or before December 31, 2001, or at such tatle company, tame, date, and place as Seller and Purchaser may mutually agree upon (whach date as here~n referred to as the "closang date") VI CLOSING REQUIREMENTS i Sellerts Re~uarements At the closang Seller shall A Del~ver to the Caty of Denton a duly executed and acknowledged Specaal Warranty Deed conveyang good and marketable tatle an fee sample to all of the Property, free and clear of any and all laens, encumbrances, condataons, assessments, and restractaons, except for the followang i General real estate taxes for the year of closang and subsequent years not yet due and payable, 2 Any exceptaons approved by Purchaser pursuant to Purchaser's Oblagataons here- of, and 3 Any exceptaons approved by Purchaser an wrat~ng B Delaver to Purchaser a Texas Owner's Polacy of T~tle Insurance at Purchaser's sole expense, assued by S~gnature Tatle Company, Plano, Texas, (the "Tatle Company"), or such tatle company as Seller and Purchaser may mutually agree upon, an Purchaser's favor an the full amount of the purchase prace, ansurang fee sample tatle for the Caty of Denton to the Property subject only to those title exceptaons lasted an Closang Requirements hereof, such other exceptions as may be approved an writing by Purchaser, and the standard printed exceptions contained an the usual form of Texas Owner's Policy of T~tle Insurance, provaded, however PAGE 4 i The boundary and survey exceptaons shall be deleted af requared by Purchaser and af so requared, the costs assocaated w~th same shall be borne by Purchaser, 2 The exceptaon as to restractave cove- nants shall be endorsed "None of Record", 3 The exception for taxes shall be llmated to the year of closang and shall be endorsed "Not Yet Due and Payable", and 4 The exceptaon as to laens encumberang the Property shall be endorsed "None of Record" C Delayer to Purchaser possessaon of the Property on the day of closang D Seller shall not be responsable for any applacable rollback taxes 2 Purchaser's Re~uarements Purchaser shall pay the consaderataon as referenced an the "Purchase Prace" sectaon of th~s contract at Closang an ammedaately avaalable funds The Escrow,Deposat shall be applaed to the purchase prxce at Closxng 3 Closing Costs Seller shall pay all taxes assessed by any tax collectaon authoraty through the date of Closang Ail other costs and expenses of closxng an consummatang the sale and purchase of the Property not specafacally allocated herean shall be paad bT the Seller, except each party wall be responsable for ats own attorney fees VII REAL ESTATE COMMISSION Seller and Purchaser represent and warrant to each other that neather has retaaned a broker for thls transactaon and that there are no broker or real estate fees due as a result of the consummation of th~s contract PAGE 5 VIII BREACH BY SELLER If Seller faals to fully and tamely perform any of ats oblagataons under thas Contract or faals to consummate the sale of the Property for any reason, except Buyer's default, Buyer may (1 ) enforce specafac performance of thas Contract, or (2) termanate thas contract and receave the Escrow Deposat from the tatle company IX BREACH BY PURCHASER In the event Buyer faals to consummate the purchase of the Property, af Seller as not an default under thas Contract, Seller wall have the r~ght to (1) enforce specafac performance of thas Contract, or (2) receive the Escrow Deposat from the t~tle company, as l~quadated ~ages for the faalure of Buyer to perform the duties amposed on at by the terms of thls Contract If Seller opts to receave the Escrow Deposat, Seller agrees to accept thas cash payment as total damages and as Seller's only remedy under this Contract an the event of Buyer's default X MISCELLANEOUS i Assignment of A~reement Th~s Agreement may be assigned by Purchaser wathout the express wratten consent of Seller 2 Survival of Covenants Any of the representataons, war- rantles, covenants, and agreements of the part~es, as well as any rights and benefats of the partles, pertaining to a period of tame following the closing of the transactaons contemplated hereby shall survave the closang and shall not be merged there~n 3 Notace Any notace required or permatted to be delavered hereunder shall be deemed receaved when sent by United States maal, ~ostage prepaid, cert~faed maal, return receapt requested, addressed to Seller or Purchaser, as the case may be, at the address set forth beneath the slgnature of the party a Seller's agent for purposes of notace shall be Cary L Cobb, Intermandeco, Inc , 1401 Burnham Drave, Plano, Texas 75093 PAGE 6 b Purchaser's agent for the purposes of notice shall be Edwin Snyder, Deputy Caty Attorney, C~ty of Denton, 215 East MoKanney Street, Denton, Texas, 76201 4 Texas Law to Apply Thas Agreement shall be construed under and an accordance wath the laws of the State of Texas, and all oblagataons of the partaes created hereunder are performable · n Denton County, Texas 5 Partaes Bound Thas Agreement shall be b~nd~ng upon and inure to the benefit of the partaes and their respectave he.rs, executors, admanastrators, legal representatives, successors and assagns where permitted by thas Agreement 6 Legal Constructaon In case any one or more of the pro- vasaons contaaned an thas Agreement shall for any reason be held to be invalad, ~llegal, or unenforceable in any respect, said valadaty, lllegalaty, or unenforceab~l~ty shall not affect any other provls~on hereof, and thas Agreement shall be construed as ~f the ~nvalad, allegal, or unenforceable provls~on had never been contained herean 7 Prior A~reements Superseded Th~s Agreement constitutes the sole and only agreement of the partaes and supersedes any prior understandangs or wratten or oral agreements between the part~es respectang the wathan subject matter 8 Tame of Essence T//ne as of the essence an thas Agreement 9 Gender Words of any gender used ~n thas Agreement shall be held and construed to anclude any other gender, and words an the s~ngular number shall be held to ~nclude the plural, and vace versa, unless the context requares otherwise 10 Memorandum of Contract Upon request of either party, both part~es shall promptly execute a memorandum of thas Agreement suatable for fallng of record 11 Com~laance In accordance w~th the requirements of the Texas Real Estate Lacense Act, Purchaser as hereby adv=sed that at should be furnished w~th or obtain a policy of t~tle ~nsurance or Purchaser should have the abstract covering the Property examaned by an attorney of Purchaser's own select~on PAGE 7 12 Time L~mlt In the event a fully executed copy of th~s Agreement has not been returned to Purchaser wlth~n ten (10) days after Purchaser executes th~s Agreement and delivers same to Sel- ler, Purchaser shall have the r~ght to tezm~nate th~s Agreement upon written not~ce to Seller 13 Effective Date The term "Effectlve Date" means the latter of the dates on which thls Contract Ks s~gned by elther Seller or Purchaser, as ~nd~cated by their signature below If the last party to execute thls Contract falls to complete the date of execution below that party's signature, the date the Tltle Company acknowledges receipt of a copy of thls fully executed contract is the Effective Date IN WITNESS WHEREOF, Seller and Purchaser have executed thls contract as follows SELLER' RANCH VENTURES, LTD By Intexmandeco, Ltd ~ts General partner by INTERMANDECO GP, LLC ~ts general partner BY Issam Karanough, Manager Date PURCHASER M~chael A Conduff !Y A~0~I~/ / C~ty Manager 215 E McK~nney ' . Denton, Texas 76201 Date PAGE 8 TITLE COMPANY ACCEPTANCE AND ACKNOWLEDGEMENT The T~tle Company acknowledges receipt of the fully executed Contraot on day of , 2001 TITLE COMPANY Name Signature T~tle Company Address 2400 Dallas Parkway, Suite 140 Plano, Texas 75093 Telephone 972-608-8880 By Printed Name T~tle PAGE 9 12 L£GAL DESCI~PTION (2 801 Acre Trac0 ]B~..~/G, a trac~ oEJ~d s~u~ed m the ~ Dntton Su~ey, Abstr~c~ ~o ~ and ~ ~oBers Su~,~, ~bs~c~ ~o t0~0, m ~h¢ C~y o~Den~on, Denton County, Texas, bcm~ p~ o~ 114 96 acres o~ l~d, ~s described m Clerks ~de ~o 99.~0066~4~, m t~e Deed ~e~ords o~Dcnton County, Tex~s, bein~ more p~cul~ly described as follows CO~C~G, nt ~ ~ tach ~ound ~t ~c southe~ comcr oE s~d 114 ~6 ~cre trnc~ ~nd bem~ In ~cko~ Creek ~o~d, ~NCE, Noah 00°56'39" West, ~th ~c ~t hne of said 114 36 acre tract, for a dlst~cc of 60 00 feet lo a ~/~ ~nch ~roa rod set a~ lhe pO~T OF ~EG~G, T~NCE, South 89~13'31" West, dep~ sad east linc o~sa~d 114 76 acr~ tract, for a d~st~ce of 199 66 fool ~o a ~ tach iron rod sei, T~NCE, Noah 02°56'05" West, for a &stance of 122 2~ fc¢t, to a ~/~ tach iron rod set, T~NCE, No~h 35°20'22" Eash for a d~s~ancc of 61 44 fcch lo a ~4 ~nch ~ron rod set, T~NCE, Noah 15"39'3 ~" West, for a d~st~ce orS0 41 rc¢t, to a ~ tach ~ron rod set, T~NCE, Noah 58°42'59" W¢st, for a &s~ance of 19 24 feet, to a '4 inch iron rod seL T~NCE, Noah 1503Y01" West for a d~st~cc or93 53 feet, to a ~/; inch ~ron rod set, T~NCE, Noah 08°54'24" East, for a dtst~Ce of 136 25 fen, to a s4 tach ~ron rod set, T~NCE, Noah 16055'50" East, for a d~stance of S5 98 fc~, ~o a '4 inch ~ron rod set, T~NCE, Noah 25°48'34'' EasL for a disl~Ce o~93 07 [cch to a ~4 inch iron rod set, T~NCE, Noah 01021'01" Ea~, for a d~st~ce o[SS 64 ~cct, to a V~ inch ~ron rod seh ~NCE, North 89°03'21" ~, for ~ d~ o~ 135 60 ~ lo a '4 tach ~ron rod set tn the east hnc ofsa~d 114 96 acretra~, T~NCE, Soulh 00°5639 Eas~, along sa~d eaa hnc o~sa~d 11~ 96 acre tract, ~or a d~st~cc oF 64~ 06 ~eet, to the PO~T OF BEG~O and contamm~ 2 801 acres ofland EXHIBIT "A" PAGE I L~O,~j.. D£$Ci~,J~TIO~ (ii 067 Acta T~act) ~O, ~ tract o~l~d situsted ~n thc ~ ~ntton Su~ey, Abstract No 51 ~d ~ Ro~ers -Abstrac~ ~o ]0g0, m Ihe C~ty o~Denton, Denton Counly, Texas, be~n8 p~ o~ 1 I¢ l~d, ~s described m ClerLs Fde No 99.~0066749, m the Deed ~ecords o~Denton Coumy, bern8 more p~cul~ly described ~s follows - - - BEG~O, at a'~ m~h-~bn rod found bc~g'~he mo~ ~ly no~t corner ofs~d I 14 96 acre tract, 1273 07 ~¢et, to a ~4 tach iron rod T~C~, South 00"S&'3D~ ~st, contmum~ alo~ the ~st hn¢ of sa~d 114 T6 acre tr~cL for a alLState 0[542 81 fe~ to a ~A tach ~ron rod set, ~NCE, South 89"03 21" West, flep~mg s~d east hne, for a d~st~ce of 149 31 feet, to a ~/~ tach iron rod set, T~CS, ~o~h 2G°31'01" ~st, for a d~s~ce of 22 S~ fc~, ~o a ~4 tach iron rod set, T~NC~, ~onh 04~17'1S" ~sst, for a d~st~ce o~&7 21 feet, ~o a ~ tach ~ron rod s~, T~NC~, ~onh 10"38'22" West, for a d~st~ae ofT~ ~4 feet, lo a ~ tach ~ron rod set, T~C~, ~o~h 19~24'42" West, for · d~stancc ct&2 42 ~e~, to a ~ tach iron rod set, T~C~, ~o~h 3&°01'03" West, for a d~stanae o~82 0g ~e~, ~o a ~4 tach iron rod set, T~C~, ~onh 1g"20'54" West, for · d~stanae ofT2 60 fe~, ~o ~ ~/~ tach iron rod set, T~CS, North 01°03'1 S" ~t, for a d~s~nCe oF&0 75 ~e~, lo a ~4 tach ~on rod set, T~CS, ~o~h 14010'53" West, for a d~s~nce of 4~ 82 feet, Io a ~4 tach ~ron rod T~NCS, ~onh 2T°0D'~7' ~st, for · d~s[~cc of ~04 0D feet, to a ~ tach iron rod set, T~NC~, ~o~h ]0~2g 27" ~st, for a d~st~ce o[4~ ~7 ~e~, to ~ ~/~ tach iron rod set, T~C~, ~o~h 03°40'I 1" West, for a die.ce oF64 07 feet, ~o a ~4 tach iron rod set, T~NC~, ~onh 39*07'55" West, for a dl~ce o~57 49 feet, 1o ~ ~4 tach iron rod set T~NC~, ~o~h 08%2'4~" West, ~or ~ die.ce of 72 93 [e~, ~o a ~4 tach ~ron rod s~, EXHIBIT PAGE 2 14 - Ti, t~NCI:;. Nor~l~ ~)~a'lg'14' ]East. for a distance o1' 1'61 '~9 l'cct. ~o a ~ tach iron rod scl. .... T~NCE. No~fl 06"0~'0~" West. rot a ~st~ce o~ IS7 66 f~et, to ~ ~ ~nch ~ron rod set. T~NCE, No~h 23"~8'24" East, for a d~st~ce olD7 24 fe~, Io a ~4 ~nch ~ron rod set, --~~h~0~28'06" W~ f~ d~s~ce o~ 82 35 fcct, to a ~ inch ~ron rod T~NC~, ~h 23e5~7" West, for ~ distance o~57 24 f~ct, ~o ~ ~ inch iron rod set T~C~, ~o~K 00~15'56" ~est, ~or a dlst~ce of 78 14 ~¢ct, ~o ~ ~4 ~nch iron rod set T~C~, No~h 36040'2~" West, ~or a dls~ce o~29 47 feet, Io ~ ~/~ inch iron rod set T~C~ ~onh 15"00'43" West, ~or a d~st~nce of ~0 91 fe~, to e ~ ~nch iron rod set , T~NCE ~onh 37~4~'16" ~ast, ~or a d~st~ o[ I04 SI fc~, to · ~ inch iron rod set T~C~ ~o~h 04~3~'~D' ~st, ~or a distance o~30 25 ~e~, ~o a ~4 snch ~ron rod set T~NC~ ~o~h 24e0~'37" ~st, ~or · d~s:ance of l ]0 3~ ~cct, to s ~/~ inch iron rod set, T~C~ ~o~h 29°48'1 ~' West, for s d~s~ance o~SD ~4 fect, to a ~4 shah iron rod set, T~NC~, ~o~h 2~008'18" ~ast, for a distance of 5] &~ fe~, lo a ~4 tach ~ron rod set, T~C~, ~o~h T3°lT'34'' ~st, ~or ~ distance oET~ 50 [e~t, to n '4 inch iron rod T~NC~, ~o~h 4 ] ~ 12'38" ~st, for a d l~cc o~ 4 ~ 44 f~et, to ~ ~4 snch ~ron ro~ set sn thc no~h hne o~s~d 1 ~4 T& ~cre tract, ~NCE, ~o~h 88"~2'14" ~t, ~th ~d no~ ~c oF~ 114 76 acre tract, for ~ d~st~nae feet, to ~h¢ ~O~T OF B~G~O ~d cont~ning 8 0~7 acre~ ofl~nd PAGE 3 NORTH CITY OF DENTON PARK PROPERTY SUBJECT - TRACTS McNAIR ELEM NORTH LOCATION MAP AGENDA DATE: December 18, 2001 DEPARTMENT' Fiscal Operations ACM: Kathy DuBose, Fiscal and Municipal Servlces'~ SUBJECT Consider approval of a resolution to approve certain matters as reqmred by Section 147(0 of the Internal Revenue Code in connection with the issuance of tax-exempt obhgataons by the Roman Forest Higher Education Facilities Corporation for the benefit of Cathohc Diocese of Fort Worth, and provachng an effective date BACKGROUND Roman Forest Hzgher Education Facilities Corporation (the "Corporation") as a non-profit corporation created by the City of Roman Forest, Texas pursuant to Chapter 53 of the Texas Educatmn Code The Corporation and the Catholic Diocese of Fort Worth (the "Borrower") have entered into a Loan Agreement as the financing mechanism for education facilities The Corporatton and Bank of America, N A have entered into a Lender Loan Agreement to provide for the funds to be lent from the Corporation to the Borrower The Corporation as proposing to issue a maximum of $11,007,520 in tax-exempt obligations of wluch $4,954,018 as the cost of constructing and equipping an education faclhty, specifically, Immaculate Conception School, wluch will be located at 2031 Bonnie Brae, Denton, Texas This facility as proposed to be a 37,308 square-foot, one-story elementary school building, includlng classrooms, medm center, science/art room, music room, computer room, physical education faeahtaes, admnnstrat~ve offices, workrooms and conference rooms The remainder of the proceeds will be used to fund facahtaes located in Keller, Texas and North Rtchland Halls, Texas The Corporation as requesting the City of Denton, as well as the Cities of Keller and North Richland Halls, to approve the tax-exempt financing of the project pursuant to Section 147(f) of the Internal Revenue Code Section 147(0 of the Internal Revenue Code of 1986 requires the cities m which the proposed facilities are located to approve the issuance of these obhgat~ons in order for them to qualify as tax-exempt obhgataons Financing obhgataons under tax-exempt status allows the borrowers to lower their borrowing costs In addition, th~s project as unhke the previous bond issue approved for Keller Higher Edueatwn Facilities Corporation an that tins project does not convert taxable real property into tax-exempt property Furthermore, this project as an educational faclhty (elementary school) as opposed to the dormitory faeahtaes proposed by Keller Higher Education Facthtaes Corporation PRIOR ACTIONfREVIEW A public heanng notwe was pubhshed ~n The Fort Worth Star Telegram and The Denton Record Chromcle on December 13, 2001 The not~ce provided that members of the pubhc were mwted to a heanng to be held on December 27, 2001, m the Resource Room, Adm~mstrat~on Building, 7401 Glenwew Drive, Fort Worth, Texas 76180, m connection w~th the project FISCAL INFORMATION The proposed tax-exempt obllgatwns will not be payable out of taxes and are secured by and payable solely from the funds provided by the Borrower, Cathohc D~ocese of Fort Worth The C~W of Denton shall not bear any habthty for the payment of the obhgatlons nor shall any of the C~ty's assets be pledged to the payment of the obhgat~ons Resolution Pubhc Heanng Notice Respectfully submitted ![~lana G OrtlZ Director of Fiscal Operations 2 S \Our Docunaents\Resolutmns\01\Roman Forest Resolution doc RESOLUTION NO A RESOLUTION TO APPROVE CERTAIN MATTERS AS REQUIRED BY SECTION 147(f) OF THE INTERNAL REVENUE CODE IN CONNECTION WITH THE ISSUANCE OF TAX- EXEMPT' OBLIGATIONS BY THE ROMAN FOREST HIGHER EDUCATION FACILITIES CORPORATION FOR THE BENEFIT OF CATHOLIC DIOCESE OF FORT WORTH, AND PROVIDING AN EFFECTIVE DATE WHEREAS, ROMAN FOREST HIGHER EDUCATION FACILITIES CORPORATION (the "Borrower"), in connection w~th a tax-exempt financing ~n the maximum pnnmpal amount of $11,007,520 00, has requested the approval of the Financing (as further described below) and the ProJect (as defined below), and WHEREAS, the Financing consists of a Loan Agreement between the Borrower and the Roman Forest H~gher Education Famht~es Corporation (the "Corporatton"), and a Lender Loan Agreement between the Corporation and Bank of America, N A (the "Bank") through whmh agreements (collectively, the "Ftnanc~ng") the Bank will prowde funds to the Corporation, whmh m turn will loan those funds to the Borrower, and WHEREAS, the proceeds of the loan made to the Borrower pursuant to the F~nancmg will be used by the Borrower to finance or refinance the acquisition and construction of certmn education facflmes located at Immaculate Conceptaon School, 2031 Bonme Brae, Denton, Texas 76201 estnnated to cost $4,954,018 00, and closing costs of the Financing (collectively, the "ProJect") and other facilities located in Keller, Texas and North R~chland Hills, Texas, and WHEREAS, in accordance with certain prowslons of the Internal Revenue Code of 1986, as amended (the "Code"), not,ce ofapubhc hearing (attached hereto) was published in TheFort ~Vorth Star-Telegram, and The Denton Record Chromcle on December 13,2001, whmh notice prowded that members of the pubhc were inwted to a hearing to be held in the Resource Room, Admlmstrat~on Bmldlng, 7401 Glen,new Drive, Fort Worth, Texas 76180 ("Heartng City"), on December 27, 2001 at 10 00 a m, ~n connection w~th the F~nanclng and the Project, and WHEREAS, a public heanng will be held in the Heanng C~ty on December 27, 2001, by the heanng officer, and WHEREAS, It is necessary for the City Council, as the elected legislative body of the City of Demon, Texas ("Cttg") or the Mayor, to approve the Financmg and the ProJect solely for the purpose of satisfying the reqmrements of section 147(f) of the Code, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY RESOLVES Section 1 The Mayor of the City is hereby authorized to execute and dehver the approval of the h~ghest elected official of the C~ty (attached hereto) after the public heanng is held, pmwded that such approval shall be solely for the purposes of section 147(0 of the Code, and the City shall not have any responsibility or habflity for the Financing or the Project Section 2 Further, it is recognized by the City that the instruments whmh authorize the issuance of bonds, notes, or obligations by the Corporation will specifically state that the City is not 3 obhgated to pay the pnnclpaI of or interest on the bonds, notes, or obhgatlons proposed to be issued by the Corporation Nothing m this resolution shall be construed as an indication by the City that ~t will pay or provide for the payment of any obligations of the smd Corporation whether theretofore or hereafter incurred, and in this connection, attention is called to the Constlmtlon of the State of Texas, wherein it is provided that a city may incur no indebtedness without having made provisions for its payment, and the City Council of the City hereby specifically refuses to set aside any present or furore funds, assets or money for the payment of any indebtedness or obligation of the Corporation Section 3 This Resolution shall become effective immediately upon ~ts passage PASSED AND APPROVED this the __ day of ,2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CItY ATTORNEY APPROVAL OF HIGHEST ELECTED OFFICIAL OF THE CITY OF DENTON WHEREAS, Cathohc Daocese of Fort Worth (the "Borrower"), ~n connection w~th a tax-exempt financing m the maxunum pnnclpal mount of $11,007,520 00, has requested the approval of the Fanancmg (as defined below) and the Project (as defined below), and WHEREAS, the Fanancmg consists of a Loan Agreement between the Borrower and the Roman Forest Higher Education Faclhtles Corporation (the "Corporation"), and a Lender Loan Agreement between the Corporation and Bank of America, N A (the "Bank") through which loan agreements (the "Fmanctng") the Bank will prowde funds to the Corporation, which m turn will loan these funds to the Borrower for the purpose of acqumng, constructing, renovating, and equlpp~ng certain education facd~ties located at Immaculate Conception School, 2031 Bonme Brae, Denton, Texas 76201 estimated to cost $4,954,018 00, and closing costs of the Financing (collectively, the "ProJect") and other facilltles located m Keller, Texas and North Richland Halls, Texas, and WHEREAS, in accordance w~th certmn provmaons of the Internal Revenue Code of 1986, as amended (the "Code") as described below, notme of a pubhc heanng was published ~n "The Fort Worth Star-Telegram," and "The Denton Record Chromcle ' on December 13, 2001, whmh notice provided that members of the pubhc were invited to a heanng to be held ~n the Resource Room, Adm~mstratmn Bmldlng, 7401 Glenmew Drive, Fort Worth, Texas 76180, ~n connectmn with the Fanancmg and the ProJect, and WHEREAS, a public hearing was held on December 27, 2001, by the heanng officer, and WHEREAS, at as necessary for the undersagned, as the haghest elected offimal of the C~ty of Denton, Texas (the "Ctty"), to approve the Flnanc~ng and the ProJect solely for the purpose of satisfying the reqmrements of section 147(0 of the Code, NOW, THEREFORE, the undersigned Mayor of the C~ty, actang solely in has/her official capamty and on behalf of the Cxty, hereby approves the F~nanc~ng for the Borrower, and further approves the Project, provided that such approvals shall be solely for the purposes of section 147(f) of the Code, and neither the City nor the Mayor shall have any respons~bdaty or hab~hty for the F~nancmg or the ProJect Further, ~t as recogmzed by the C~ty that the ~nstruments whmh authorize the ~ssuance of bonds, notes, or obhgataons by the Corporataon wtll specifically state that the C~ty ~s not obligated to pay the pnnc~pal of or ~nterest on the bonds, notes, or obhgatlons proposed to be ~ssued by the Corporatmn Nothang ~n tbas approval shall be construed as an ~ndlcatmn by the C~ty that ~t wall pay or prowde for the payment of any obhgatlons of the smd Corporation whether theretofore or hereafter Incurred, and ~n th~s connection, attentaon ~s called to the Constitution of the State of Texas, where~n ~t ~s provided that a c~ty may incur no tndebtedness without hawng made prowslons for ~ts payment, and the City Council of the C~ty hereby specafically refuses to set asade any present or future funds, assets or money for the payment of any ~ndebtedness or obllgat~on of the Corporatmn 5 1N WITNESS WHEREOF, I have set my hand this December ,2001 CITY OF DENTON, TEXAS Euhne Brock, Mayor NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN that the Roman Forest H~gher Education Facilities Corporation (the "Corporation"), a nonprofit corporation created by the C~ty of Roman Forest, Texas pursuant to Chapter 53 of the Texas Education Code, will hold a pubhc hearing on December 27, 2001, commencing at 10 00 a m, in the Resource Room, Adm~mstratlon Building, 7401 Glenvlew Drive, Fort Worth, Texas 76180, to provide an opportunity for all interested persons to be heard with respect to the consent and approval of the Cities of(a) North Pdchland Hills, Texas, (b) Keller, Texas and (c) Denton, Texas of the proposed loan under a Loan Agreement by and between the Corporation and Catholic Diocese of Forth Worth (the "Borrower") and a simultaneous loan to be made to the Corporation by Bank of America, N A (the "Loans") The Loans are being made for the purpose of financing and/or refinancing the cost of acqumng, constructing, renovating, and equipping education faclhtles, and facilities ~ncldantal, subordinate, or related thereto or appropriate m connection therewith, including (a) an approximate 12,734 square foot 1-story middle school building, including classrooms, media center, and multipurpose room, all located at St John The Apostle School, 7401 Glenvlew Dnve, Fort Worth, Texas 76180 estimated to cost $1,639,502 00, (b) an approximate 39,273 square foot 2-story elementary school bmldmg, mcludmg classrooms, media center, science room, admlmstratlve offices, workrooms, and conference rooms, all located at St Elizabeth Ann Seton School, 2016 Willis Lane, Keller, Texas 76248 estimated to cost $4,414,000 00, and (c) an approximate 37,308 square foot 1-story elementary school bmkhng, mcludmg classrooms, media center, science/art room, music room, computer room, physical education facilities, admlmstrattve offices, workrooms, and conference rooms, all located at Immaculate Conception School, 2031 Bonnie Brae, Denton, Texas 76201 estimated to cost $4,954,018 00, and paying certain expenses in connection with the issuance of the Loans (collectively, the "ProJect") The Project is, or will be, owned by the Borrower, The maximum amount of the costs of the Project to be financed with proceeds of the Loans is $11,007,520 00 The Loans are not payable out of taxes and are secured by and payable solely from funds provided by the Borrower All interested persons are invited to attend the heanng to express their views, both orally and m writing, with respect to the Loans and the Project Any interested persons unable to attend the hearing may submit their views in wntmg to the President of the Board of Directors of the Corporation c/o Wlnstead Sechrest & Mlmck P C, Attn Todd Brewer, 910 Travls Street, Suite 2400, Hol~ston, Texas 77002, prior to the date scheduled for the heanng AGENDA DATE December 18, 2001 DEPARTMENT Legal Department CM/DCM/ACM Herbert L Prouty, City Attomey SUBJECT Consider and adopt an ordinance authorizing the City Manager of the City of Denton, Texas, to execute a Professional Servmes Contingent Fee Agreement with the Strasburger & Price, L L P and the Sayles, Ltdjt & Werbner, L L P Law Firms to prosecute httgatton styled The City of Denton, et al v TXU, et al, Cause No 009383, now pending m the 134th Juchmal Dtstnct Court of Dallas County, Texas, and to perform other legal services tn accordance with that contingency contract, amending and replamng the current contract for professional legal services with Strasburger and Price, L L P, authorizing the expenditure of funds for expert witness fees and court costs, authorizing an assessment not to exceed $ 25 per capita to pay such costs, designating a hmson, and providing an effective date BACKGROUND INFORMATION On June 6, 2000, the C~ty of Demon retaxned the firms of Strasburger and Price L L P and Bucek and Frank, L L P to file suit to collect dehnquent franchise fees owed the City by TXU Electric Company and TXU Gas per an audit performed by Diversified Utility Consultants, Inc (DUCI) On June 7, 2000, the City filed suit agmnst TXU The 393rd Dlstnct Court of Denton County, Texas ~ssued a temporary restrmmng order (TRO) commanding TXU to refrmn from destroying or otherwise dmpostng of records relating to the payment of franchise fees to mummpaht~es tn the State of Texas and granted Denton's application for expedited discovery The restrmmng order was converted into an agreed temporary injunction TMrty-stx other cities have jmned Denton in the htlgatton In October of 2000, the City Council jmned with the other cities in forming a Steenng Committee and agreed to assessments equal to $ 50 for each person resldmg tn the city based on the 1990 population In November of 2000, the cities elected a five-person Steenng Committee to manage and make key decisions in the litigation in consultation with the Strasburger and Price law firm About the same time, the litigation was transferred from the District Court tn Denton County to the 134th Judicial District Court of Dallas County, Texas Since TXU's mmn offices were in Dallas, a venue in Dallas was a more convement location for some of the other citrus in the htlgat~on and the venue was also more convenient to the Strasburger and Price law firm whose main offices are tn Dallas, This was seen as a way to make the htlgatton proceed more effimently Smce November 1, 2000, the Steenng Comamttee has assumed the responstbthty for paying the future legal, consulting and court fees that accrue tn prosecutmg this dehnquent franchise fee lmgatton against TXU The Steenng Committee ts composed of representatives from the City of Fort Worth, Carrollton, Rmhtand Hills, Phlugervllle, and Denton There have been two separate $ 25 assessments to the reties to fund the httgatton As the case nears mai tn July of 2002, the Steenng Committee tn consultation w~th Strasburger has determined that tt wdl be beneficml for the crees to enter into a Professional Services Contingent Fee Agreement (Agreement) with the Strasburger and Price, L L P finn and the Sayles, Ltdj~ & Werbner, L L P firm We have promded information on the Sayles firm and addmonal reasons for the necessity of converting to a Contingent Fee Arrangement in the status report You have previously deferred this Item twice to allow the Steenng Committee and the law firms to conclude negotiations of the Agreement CONTINGENT FEE ARRANGEMENT Under the Agreement, both the Strasburger and Sayles law firms would jotntly represent the City They would recover nothing in the way of attorney fees ff they are not successful in obtaining a judgment or a settlement in favor of the c~t~es In the event such a favorable judgment or settlement is obtmned, the reties would pay to the law firms a contingent fee as follows 1 30% of the mount collected until the commencement of trial 2 33 1/3% of the amount collected after trial ~s commenced 3 Forty percent of the amount after the commencement the second mai or the fihng of an appeal The law firms have now agreed to reduce the original 35% contingent fee after mai ~s commenced to 33 1/3% only ~fthe discounted 20% amount untd February 11, 2002 ~s increased to 30% until mai The Steenng Committee ~s still negotiating th~s issue and the contingency amounts may or may not be resolved by the time of your meeting The contract also provides that the law firms will share m the present cash value of the non-monetary benefits of the settlement as agreed by the law finns and the City Th~s relates to any amount that m~ght be recovered as a result of proof that TXU underpmd the 1998 electric franchme fee Since future TXU electric fees will be based on a kilowatt hour charge determined by d~wdlng the 1998 franchise fees by the number of kilowatt hours, the finding of an underpayment which would result in a greater kalowatt hour charge This would result In more franchise revenue for the reties prospectively Several changes to paragraph three of the Agreement have hmlted it in scope and t~me as more fully explmned in the status report Paragraph 11 has been changed from a mediation to an arbitration clause Finally, m paragraph SlX, the cities agree that they wall be responsible for all reasonable expenses ~ncurred in connection with the litigation, including but not limited to court costs, fthng and servme fees, deposmon and transcript costs, consultant fees, and expert witness fees Thru wall entml an additional per capita assessment to the reties based on the 2001 census of either $ 25 per capita or $12V2 per capita Section (2) of the Agreement provides that the cities will recover all attorneys' fees and expenses previously paid out of Strasburger and Price's portion of any attorneys' fees recovered This means that all previous expenses ~n the litigation w~ll be deducted from Strasburger's portion of any contingent fee recovery We have just received a settlement offer from TXU on the htlgatlon which will be dmcussed with you in executive session Depending on the actmn you take on the settlement offer and the status of the negotiations, you may need to defer action on this ~tem until your January 8 or 15, 2002 City Counml meeting Page 2 FISCAL INFORMATION The assessment for reasonable expenses for the Caty of Denton is calculated, as follows at $ 25 per capita (a) TXU/Lone Star Gas will have an assessment of $12V2 Demon's 2001 census of 80,537 The first assessment will be equal to $10,067 12 If on January 1, 2001, CoServ as provadang gas to Denton customers, the $10,067 12 would be reduced in proportion with the percentage of accounts TXU/Lone Star Gas had in relation to thc total number of gas customers an Denton (b) TXU Electric and CoServ Electric, Denton would have the assessment of $10,067 12 reduced by the percentage of customers m Denton purchasing electncaty from Denton Electric and CoServ Electric For example, TXU has about 900 customer and CoServ about 600 customers The 900 TXU electric customers will be d~wded by the total electric customers an Denton which as approximately 40,000 (38,500 DME, 900 TXU and 600 CoServ) as of January 1, 2001 The $10,067 12 assessment on the gas s~de wall be multlphed by the percentage obtmned 2 25 percent (900/40,000) This wall result in an electric assessment of $226 51 or a total assessment for gas and electric of approximately $10,293 63 (e) If the Steenng Committee demdes on an assessment based on $12'A per capna, the amount of the assessment would be about one-half or $5,146 82 Under the Steenng Committee gmdelmes, no mty would be reqmred to contribute more than 10% of the amount of Daversffied Utahty Consultants, Inc's audit that mty ~s entatled to m dehnquent franchise fees The most recent figures on DUCI's audit shows Denton's damages m excess of $1,000,000 OPTIONS' 1 The C~ty Council can approve the Ordanance and hire the Strasburger and Sayles law finns on a contmgent fee basas and approve another $ 25 per capita assessment 2 The C~ty Courted can approve the Ordinance without the non-monetary benefit of the settlement contingent fee clause ~n the Agreement and approve the assessment 3 The Caty Councal may elect not to approve the Professaonal Services Contangent Fee Agreement with the Strasburger and Sayles law firms and continue to pay on an hourly bas~s The status report indicates the most recent estimates of the costs of pursuang Iat~gat~on on an hourly basas 4 The Caty Council may approve the Ordanance wath additional changes to the Professional Servmes Contingent Fee Agreement 5 The City Councal may disapprove the Ordinance and choose not to pursue the litigation agmnst TXU Page 3 Staff recommends C~ty Council choose Option 2, the adoption of the proposed Ordinance with the non-monetary benefits clause removed and the authorization of the additional $ 25 assessment per capita to pay htlgatlon costs Respectfully submitted, Herb Prouty City Attorney Page 4 ORDINANCE NO AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES CONTINGENT FEE AGREEMENT WITH THE STRASBURGER & PRICE, L L P AND THE SAYLES, LIDJI & WERiBNER, L L P LAW FIRMS TO PROSECUTE LITIGATION STYLED THE CITY OF' DENTON, ET AL V TX'U, ETAL, CAUSE NO 009383, NOW PENDING IN THE 134TM JUDICIAL DISTRICT COURT OF DALLAS COUNTY, TEXAS, AND TO PERFORM OTHER LEGAL SERVICES IN ACCORDANCE WITH THAT CONTINGENCY AGREEMENT, AMENDING AND REPLACING THE CURRENT CONTRACT FOR PROFESSIONAL LEGAL SERVICES WITH STRASBURGER AND PRICE, L L P, AUTHORIZING THE EXPENDITURE OF FUNDS FOR EXPERT WITNESS FEE$ AND COURT COSTS, AUTHORIZING AN ASSESSMENT NOT TO EXCEED $25 PER CAPITA TO PAY SUCH COSTS, DESIGNATING A LIAISON, AND PROVIDING AN EFFECTIVE DATE WHEREAS, on the 6th day of June, 2000, the City of Denton entered tnto a contract for professional legal services with the law firm of Strasburger and Price, L L P to lmtlate and prosecute ht~gatlon agmnst TXU Electric and Gas and to perform other legal servtces tn accordance with that contract, and WHEREAS, the Strasburger & Price, L L P untlated httgatton against TXU Electric and Gas styled, The Cz~ Of Denton, et al v TXU, et al currently pending as Cause No 009383 and pending in the 134t Judlcml D~stnct Court of Dallas County, Texas, and WHEREAS, tlurty-slx ether c~tles have joined the City of Denton tn thts lmgatlon, and WHEREAS, a Steenng Committee has been formed to make key decisions tn this litigation composed of five members from the cities of Fort Worth, Carrollton, Richland Hills, Pflugervflle, and Denton, and WHEREAS, the Steenng Committee has recommended that the crees employ the law firms of Strasburger and Pnce, L L P and Sayles, Ltdjt & Werbner, L L P, and WHEREAS, under the Agreement the reties will agree to pay all reasonable expenses, including court costs, fihng and service fees, deposttton and transcript costs, consultant fees, expert witness fees, and in order to meet thts commitment ~t will be necessary for the crees to agree to one more per captta assessment, and WI-IEREAS, the City Council has determined that the hmng of the above law firms on a conttngent fee basis ts necessary to continue to successfully prosecute thts lmgatlon, and WHEREAS, Chapter 2254 of the Tex Gov't Code, known as the "Professtonal Services Procurement Act," generally provtdes that a mty may not select a provtder of professtonal services on the bas~s of competttlve bids, but must select the provtder on the basts of demonstrated confidence, knowledge, and quahficatlons, and for a fatr and reasonable price, and WHEREAS, City Council has previously selected the law firm of Strasburger and Pnce, L L P on the basis of requests for proposal and has determined that Strasburger and Price was the best firm available based on its demonstrated confidence, knowledge and quahficatlons, and WHEREAS, Strasburger and Price has recommended the firm of Sayles, Lldj1 & Werbner who has proved the Steenng Committee with information that demonstrates it is well qualified to represent the cities based on demonstrated confidence, knowledge and qualifications and demonstrated ability, and WHEREAS, the contingency arrangement is consistent with similar contingent fee engagements with attorneys in complex llngatlon similar to this litigation and therefore is deemed by the City Council to represent a fair and reasonable fee, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 That the City Council approves and the City Manager is hereby authorized to execute a Professional Services Contingency Fee Agreement (Agreement) with Strasburger and Price, L L P and Sayles, Lldj1 & Werbner, L L P to continue to prosecute the case styled The C~ty Of Denton, et al v TX~, et al, as referred to above, in substantially the form of the Agreement and attached hereto and incorporated herewith by reference SECTION 2 That the award of this Agreement by the City is on the basis of the demonstrated competence, knowledge, and qualifications of Strasburger and Price and Sayles, Lldjl & Werbner and the demonstrated ability of Strasburger and Price and Sayles, Lldj1 & Werbner to perform the services needed by the City for a far and reasonable price SECTION 3 That the expenditure of funds as provided in the attached Professional Services Agreement is hereby authorized SECTION 4 That th~s Agreement shall amend and supereede that certatn contract for professional legal services between the City and Strasburger and Price, L L P made and entered into on June 6, 2000 SECTION 5 That the City of Denton agrees to contribute an amount not to exceed $ 25 for each individual residing within its corporate limits based on the 2000 U S Census (except for such portion of its population that may not be residing within the TXU/Lone Star Gas service area) or $2,000, whichever is more, to underwrite the court costs, filing and service fees, the deposition and transcript costs, consultant fees, expert w~tness fees on behalf of the cities ~n this matter The $ 25 [or $1,000 if applicable] being due on or before December 31, 2001 Provided, however, Denton's assessment will be reduced by multiplying $ 25 times ~ts 2001 population times the ratio derived by dlwdlng the total number of TXU and CoServ electric customers by the total number of Denton electric customers and the total number of TXU Lone Star Gas customers by the total number of Denton gas customers Page 2 of 2 SECTION 6 That Herbert L Prouty, C~ty Attorney for the C~ty of Denton, or Ins designee shall be the C~ty's primary contact and hmson m th~s matter and such md~vldual shall be ehglble to serve on "Steenng Committee of C~t~es Partm~pat~ng ~n the TXU Franchise L~t~gat~on" as ~ts Treasurer Notmes to the C~ty should be addressed as follows Name/Title Herbert L Prouty, C~t¥ Attorney City/Address C~ty of Denton, 215 E MclZ, armey, Denton, Texas 76201 Telephone (940) 349-7799 Fax (940) 382-7923 E-rural hlprout¥~mtyofdenton com SECTION 7 That the ha~son named above ~s authorized to take those steps reasonable and necessary to comply w~th the intent of this ordinance and the hatson and the City Manager are authorized to make the expenditures reqmred by tins ordinance SECTION 8 That th~s Ordinance shall become effective immediately upon ~ts passage and approval PASSED AND APPROVED ti'ns the day of ., 2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CIT, Y ATTORNEY Page 3 of 3 PROFESSIONAL SERVICES CONTINGENT FEE AGREEMENT BETWEEN THE CITY OF DENTON, ET AL AND THE LAW FIRMS OF STRASBURGER & PRICE, L L.P AND SAYLES~ LIDJI & WERBNER~ L L P STATE OF TEXAS § COUNTY OF DENTON § THIS AGREEMENT m made and entered ~nto as of the day of December, 2001, by and between the C~ty of Denton, Texas, a Texas mumclpal corporatmn, w~th ~ts pnnc~pal office at 215 East McKanney Street, Denton, Denton County, Texas 76201, as well as the Cities hsted on the attached Exhibit "A", hereinafter referred to collectively as "the C~t~es" and Strasburger & Price, L L P, w~th its corporate office at 901 Matn Street, Suite 4300, Dallas, Texas 75202, as well as Sayles, L~dj~ & Werbner, L L P, with ~ts corporate office at 4400 Renmssance Tower, 1201 Elm Street, Dallas, Texas 75270, hereinafter referred to collectively as "the Attorneys" and that thru Cont~ngant Fee Agreement will supercede Strasburger & Price's existing fee agreement with the C~t~es on this matter (1) In consideration of servmes rendered and to be rendered by the Attorneys, ~n prosecution of a case styled the Ctty of Denton, et al v TXU, et al, Cause No 009383, now pending m the 134th Judicial District Court of Dallas County, Texas, the Crees hereby agree to pay to Attorneys a sum equal to a 30% of all money and property collected m saUsfact~on of any settlement or judgment on or after February 12, 2002 until the commencement of mai, b 33 1/3% of all money and property collected ~n satisfaction of any settlement or judgment after the commencement of trial or the amount agreed to by any other Steenng Committee C~ty, whmhever is less, c 40% of all money and property collected m satisfaction of any settlement or judgment e~ther after the commencement of a second trial or the fihng of an appeal by either party (2) It ~s understood and agreed that all ~nvo~ces for Attorneys' fees and expenses recurred by the C~t~es up to the date ofth~s letter shall be prod m full by the C~t~es, but that such payments shall be credited as a non-refundable advance on Strasburger & Price, L L P's port~on of any Attorneys' fees recovered, as set forth ~n paragraphs (1) (3) If, as a result of the pending litigation, the 1998 electric revenue to the C~t~es ~s restated to ~nclude any of the additional categories of the revenue the Plmnt~ff Cities are claiming in this lawsuit, and the electric franchise fee calculation includes those ~ncremental adthtlonal revenue categories as part of future payments by TXU to the Cities, the Attorneys shall be pad a pementage of the mcremental additional revenue for those benefits for a penod of ten years In addition, if as a result of the pending litigation, the C~tles obtain other financial benefits as a part of the settlement of their clalms as compensation for past underpayment of franchise fees, the Attorneys will also be paid a percentage of this amount Provided, however, that there shall be no attorney's fees for future benefits to the C~tles that are not given as compensation for past underpayment The sums to be pad to the Attorneys pursuant to th, s provision shall be d~sconnted to present value and paid to the Attorneys at the time of the settlement or final judgment The percentage to be pad on these benefits shall be determined as set forth in paragraph (1)[a] through lc] above (4) It is understood that Attorneys' fees recovered in connection w~th this agreement shall be shared equally between Strasburger & Price, L L P and Sayles, Lldj1 & Werbner, L L P (5) It is understood and agreed that the work to be performed by the Attorneys in connection w~th this agreement shall be shared equally between Strasburger & Price, L L P and Sayles, Lldj~ & Werbner, L L P (6) The Cities agree that all reasonable expenses incurred in connection with this agreement, including but not limited to court costs, filing and service fees, deposition and transcript costs, consultant fees, and expert witnesses fees, shall continue to be pad timely by the Cities through per capita assessments based on the Cities' 2000 census as otherwise set forth in the September 19, 2000 memo from Bucek & Frank, L L P and Strasburger & Price (7) The Attorneys shall malntmn in effect dunng the pendency of this case professional liability coverage in an aggregate amount of not less than $1 million for negligent professional acts, errors and omissions (8) This agreement supercedes any prior understandings or written or oral agreements between the parties w~th respect to attorneys' fees (9) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but whmh together shall constitute one and the same agreement (10) All signatories to this agreement represent to the other party signatories that they have authority to bind the party for whom they s~gn to the terms of this agreement Page 2 (11) Any dispute arising under this engagement agreement will be submitted to Arbitration in Dallas, Texas, by the Fee Dispute Committee of the Dallas Bar Assomation if concerning fees, or by an arbitrator to be named by the president of the Dallas Bar Assocmtmn if concerning any other matter The decision of any such arbitrators or arbitrator shall be non-binding, conclusive, and non- appealable, and (12) The Cities agree and acknowledge that their cooperation with the Attorneys in the prosecution of this case is required The State Bar of Texas investigates and prosecutes professional misconduct committed by Texas attorneys Although not every complaint agmnst or dispute with a lawyer involves professional misconduct, the State Bar Office of General Counsel will provide you w~th reformation about how to file a complmnt For more information, call toll free (800) 932-1900 iN WITNESS HEREOF, the City of Denton, Texas has caused this Agreement to be executed by ~ts duly authonzed City Manager, through ItS duly anthonzed undersigned officer on this the day of ., 2001 CITY OF DENTON, TEXAS MICHAEL A CONDUFF CITY MANAGER ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY Page 3 EXHIBIT A ST~BURGER & PRICE, L L P SAYLES, LIDJI & WERBNER, L L P ~ITY OF ARGYLE CI~'Y' Of BENBROOK CITY OF BOWIE CITY OF BRIDGEPORT ~ITY OF BURLESON CITY OF CARROLLTON Page 1 of 4 EXHIBIT A CITY OF GREENVILLE '~ITY OF HALTOM CITY CITY Of IOWa PARK CITY OF KAUFMAN CITY Of KEENE CITY OF LAKE WORTH CITY OF LEANDER ~ITY OF I LEWISVILLE Page 2 of 4 EXHIBIT A CITY OF NACOGDOCHES C~TY OF ODESSA CITY OF PALESTINE CITY OF PARIS CITY OF PFLUGERVILLE CITY OF RICHLAND HILLS CITY OF RIVER OAKS Page 3 of 4 EXHIBIT A CITY OF ROBINSON CITY OF ROUND ROCK CITY OF SANGER CITY OF SHERMAN CITY OF SOUTHLAKE CITY OF TROPHY CLUB CITY OF WATAUGA CITY OF WOODWAY Page 4 of 4 AGENDA INFORMATION SHEET A~;~ tt~ra. ~'~.~ ._ AGENDA DATE' December 18, 2001 DEPARTMENT: Planning Department CM/DCM/ACM: Dave Hill, 349-8314 ~ SUBJECT - ZP01-0037 (McKtssackAddttlon) Hold a public heanng and consider adoption of an ordinance rezomng approximately 13 2 acres from an Agricultural (A) zomng dlstrtct to a One-Family Dwelling (SF-7) zoning district The property ~s generally located on the east side of Mockingbird Lane approximately 450 feet south of Its intersection with Audra Lane A single family subdivision of approximately 55 homes is proposed The Planning and Zoning Commission recommends approval with conditions (5-0) BACKGROUND The applicant proposes to develop a residential subdivision of approximately 55 homes on the subject property, which is currently undeveloped The subject property is surrounded by existing single-family development to the east and west Larger residential tracts are located directly to the north of the property The area directly south of the property is currently undeveloped Much of the residential lots surrounding this proposed development are smaller than 7,000 square feet ~ The property is located wthm the "Neighborhood Centers" future land use area of The Denton Plan The proposed development xs consistent w~th the intent of The Denton Plan ~' Seventy-four (74) property owners were notified of the zoning request Slx (6) responses from property ownerswlthm the city have been recexved m opposition to the request, representing 8 4% of the land area within 200 feet OPTIONS 1 Approve as submitted 2 Approve with conditions 3 Deny 4 Postpone consideration 5 Table item RECOM~IENDATION The Planning and Zoning Commission voted 5-0 to recommend approval of the proposed rezomng wlth the follovnng condition 1 The proposed development will provide conneetlwty to the property to the south ESTIMATED PROJECT SCHEDULE The subJeCt property is not platted and would need to be platted prior to any development PRIOR ACTION/REVIEW The follov~ng is a chronology of Z~01-0037 Application Date - October 8, 2001 DRC Date(s) - October 18, 2001 P&Z Date - November 14, 2001 FISCAL ,INFORMATION Development of this property will increase the assessed value of the city, county, and school district It will require no short-term pubhe improvements that are the responsibility of the city As a form of refill development, no extension ofpubhe infrastructure is necessary to service this site ATTACHMENTS 1 Plaunmg and Zoning Commission Report, November 14, 2001, Z-01-0037 2 Minutes from November 14, 2001 3 Draft Ordinance Prepared by Respectfully submitted Douglas Powell, AICP Director of Planning and Development 2 Attachment I Agenda Number- 0l 0030 Agenda Item ~ Date -11/14/01 Z01-0037 (MCKISSACK DEVELOPMENT) PLANNING & ZONING STAFF REPORT PURPOSE: Hold a pubhc hearing and consider making a recommendation to City Council regarding the rezonlng of approximately 13 2 acres, from an Agricultural (A) zoning district to a One-Family Dwelling (SF-7) zoning district The property is generally located on the east side of Mockingbird approximately 450 feet south of its intersection with Audra Lane A single family subdivision of approximately 55 homes is proposed I LOCATION MAP APPLICANT INFORMATION: Applicant James McKlssack McKlssack Realty 2434 Lflhan Miller Denton, Texas 76205 SUMMARY OF ZONING REQUEST: The applicant ~s requesting a One-Family Dwelhng (SF-7) zoning d~stnct classlficatmn for th~s 13 2 acre property The apphcant proposes to build a sub&wsmn of approximately 55 single- family homes on the property The subject property ~s surrounded by ex~stmg single-family development to the east and west Larger res~dentml tracts arc located dtrectly to the north of thc property The area d~rectly south of the property ~s currently undeveloped COMPREHENSIVE PLAN ANALYSIS: The subject s~te ~s located w~thm the "Neighborhood Centers" future land use area These areas may develop ~n conventmnal pattems or may be developed m a pattern of 'neighborhood centers' Neighborhood centers are oriented ~nwardly, focusing on the center of the neighborhood and contmnmg facilities wml to the day-to-day act~wty of the neighborhood A neighborhood center unght contmn a convemence store, small restaurant, personal servme shops, church or synagogue, daycare, m&wdual office space, a small park and perhaps an elementary school Staff finds the proposed zomng consistent w~th the ~ntcnt of the Comprehensive Plan SPECIAL INFORMATION: q Transportation A Trip generation A development w~th 55 s~ngle-famfiy homes can be expected to generate approximately 525 vehrclc trips per day (55 umts x 9 55 tr~ps/umt, according to the Institute for Traffic Engineers) B Access Th~s development will have access to Mockingbird Lane C Road Capacity The development will have access from Mockingbird Lane Mockingbird ~s ldentffied as a collector street by the 1998 Denton Mobility Plan Th~s street ~s designed to be a four (4) lane tm&v~ded street w~thout parking, prowd~ng four (4) lanes of through traffic As such, ~ts designed traffic capacity allows for a tolerable traffic flow of up to 14,900 trips per day Mockingbird ~s currently constmcted w~th two (2) lanes without parking, allowing for a tolerable traffic flow of 7,500 trips per day The most recent traffic counts for Mockingbird ~n&cate that there ~s adequate capacity to handle the calculated trips that could be generated by the proposed development A traffic count on Mockingbird south of Audra ~ndmated a volume of 1,811 vehrcles per day A traffic count on Mockingbird north of Pmsley ~ndmated a volume of 1,808 vehmles per day D Pedesman Linkages Sidewalks along all pubhc streets are reqmred 2 Utlht~es Both sanitary sewers and water are available and adequate capamty to serwce thc proposed development exists 4 3 Drainage and Topography New development unll be required to design and construct a drainage system to city standards 4 Signs As per the sign ordinance 5 Landscaping This property will have to comply with the Landscape Code, which requires fifteen (15) trees per acre and twenty (20) percent of all surfaces to remmn pervious (plantable area) 6. Open Space The residential portions of this development will be required to participate in the development of public recreational areas Through the Park Dedication Ordinance (98-039), this development will contribute to parkland dedication and park development fees Dedication reqturements are required during the pla~ng process Park development fees are required prior to the issuance of building permits 7. Lighting No restrictions on residential development 8. Environmental Quality Impacts No negative environmental impacts have been identified PROPERTY HISTORY: January 14, 1969 - The subject property was placed in the Agricultural (A) zoning district and land use classlt'leatlon by Ordinance 69-01 (see Enclosure 1) The subject property is not platted and would need to be platted prior to any development PUBLIC NOTICE: Notice of the zomng request was published in the Denton Record-Chronicle on November 3, 2001 Seventy-four (74) property owners within two hundred feet were mailed legal notices and 203 residents w~thm five hundred feet were sent courtesy notices informing them of the request (see Enclosure 2) As of this writing, there have been six (6) responses in favor of the request, one (1) response neutral to the request, six (6) responses in opposition to the request, and two (2) responses which did not indicate whether they were in favor or opposed to the request (see Enclosure 3) ANALYSIS & RECOMMENDATION: The subject property is surrounded by existing single-family development Much of these homes, such as those located m the Planned Development 76 (PD-76) zoning district to the west of the property or the Planned Development 83 (PD-83) zoning district east of the property (see 5 Enclosure 1) are actually on lots smaller than 7,000 square feet As such, staff feels that the proposed land use and density is compatible w~th the surrotmd~ng neighborhoods Staff recommends approval of the zomng request The One-Family Dwelhng (SF-7) zomng classfficatton under the current Zoning Ordinance does not speak to design issues The proposed development code, however, would require design standards such as connectivity, street trees, architectural features and a variation of elevations for all resldentml subd~ws~ons w~th lots less than 10,000 square feet Staff recommends a condition reqmrlng the proposed development to provide connectivity to future development to the south, but has not made any recommendations regarding the design of the homes The Commission may wish to consider adding condmons such as these to their recommendation MOTION: I move to recommend approval of Z01-0037 1 The proposed development will provide connectlwty to the property to the south ALTERNATIVES: 1 Recommend approval as submitted 2 Recommend approval w~th condttmns 3 Recommend demal 4 Postpone consideration 5 Table item ENCLOSURES 1 Zomng Map 2 200' Property Owner Notification Map 3 Property Owner Responses Enclosurel I PD ~ m PD A ' I~* ~l~* [, ~l~i~ m ~ _~m ~+~ ~ m m~ ~ ~~ No Scale ZONING MAP Enclosure 2 NOTIFICATION MAP 200' Legal Nottces sent via Certified Mall 74 500' Courtesy Nottces sent via 1st Class Mall 202 Number of responses to 200' Legal Notice · In Opposttlon 6 · In Favor 6 · Neutral 1 Percent of land wlthin 200' in opposition 8 4 % Enclosure 3 Property Owner Responses for Z01-0037 A Gulnch 3000 Beverly In Favor None Stated Nelva J Scott 812 Mockingbird In Favor None Stated Irwin Stmnett 1000 Brittany In Favor None Stated Lmda & Robert 3017 Penmman In Favor None Stated B~xler J~m McK~ssack (applicant) In Favor None Stated Gregory A Yankey 3016 Newport In Favor None Stated Shelh Srmth 1004 Brittany Neutral Harvey Chapman 2000 Audra Opposed I have not been notified by the develop as to h~s plans What~ s the traffic ~mpact9 What ~s the hght~ng ~mpact to my property9 Where ~s the site plan9 How b~g are the houses9 What is the price range of lots and houses9 G Lomse Newcomb 1027 Brittany Opposed There are trees and much small wild hfe and b~rds that would be destroyed by large scale building We need to preserve some areas of nature for the ecological balance and the benefit of us all There are too few left as ~t ~s Kewn Jones 3017 Newport Opposed Betty B Self 1104 Brittany Opposed Audra and Mockingbird can't handle the traffic ~n th~s area now Adding more will only make ~t worse Roberta Woolworth 1015 Brittany Opposed Tome Auer 1107 Brittany Opposed Lot s~zes appear too small - concerned about ~mpact on the value of our home Carl Allen 2020 Audra none You'll do what you want to, indicated anyway Clyde Gillesp~e 1105 Brittany none At th~s moment, I have no xnd~cated feehngs about the proposed zomng change However, I w~ll after, or dunng meeting on November 14th Attachment 2 Page 171 I ,~,,~,~c of ex~stmg residential developments They arc 2 And two lanes ,,mil 2 both Planned Developments In fact, the lot sizes within 3 bmlt'~ 3 the PD hem on the west side of Mockingbird, as well as 4 uh huh, yes 4 the eD to the cast ts actually -- the lot sizes are 5 so 5 actually smaller than 7,000 square feet So we have many 6 two-lane road there Thank you 6 existing smaller lot homes m this nel~borhood Since 7 7 the nununum lot size m this netghborheod would be 7,000 8 COMMIS~IONE i m ready to make a 8 square feet, the homes within this de~ elopment would 9 mouon 9 actually be larger than the homes to ~ east and the 10 nmady 10 west, or the lots, rather I cen't say ff the homes will 11 11 be larger but just shghtly larger, thcs'Il be 7,000 12 ; per the draft 12 square feet 13 Mr Snyder a , Mr Rmchhart 13 The Comprehensive Plan places this tn a 14 14 Neighborhood Centers area which, of course, would 15 from 15 encourage residential We don't think that them are any 16 16 compattblhty problems These are exastmg single-family &scussion? S~cmg 17 neighborhoods This would just be another single-family tmchhart has that offimal language and I'm sum 18 neighborhood among the extstmg , please vote Motaon 19 Thc only conthtion we would add is that the carne~ 6-0 of the Conmussloners present Thank 20 applicant provide connectivity to or a street stub out to 21 the property to the south That's tn comphancc with our 22 That will move us to Item No 16 on our 22 Comprensive Plan that requests connectivity between 23 Agenda And Item No 16 is a public heanng and it's 23 neighborhoods We don't see any need for connectwtty to 24 our charge to hold a public hesnng and ¢ous~der making a 24 the north because these arc already home s~tes hem and, 25 recommendation m the C~ty Council mgurdmg tho r~zonmg 25 of course, they can't connect to the east because houses Page 170 Page 172 I of approximately 13 2 acres from Agricultural (A) zoning I already ex~st there But at some point, '~e expect that 2 thstnct to a One-Family Dwelling (SF 7) zoning chstrtct 2 this property to the south will be developed and if we can 3 The property ts generally located on the 3 have some sort of connection there so that people can get 4 east s~de of Mockaagbtrd approximately 450 feet south of 4 from that neighborhood to whatever future neighborhood is 5 its intersection with Audm Lane A smgle-farmly 5 there vathout having to go onto Mockingbird 6 subchvlston of approximately 55 homes is proposed This 6 Thc only other thing I would slam with the 7 lS Z01-0037, McK~ssack Development Mr Gray will 7 Conumss~on is opposition "Ac have tcce'~ ed some 8 pm,sent 8 additional letters both for and against thc zoning request 9 MR. GRAY Thankyou Here's the s~te map 9 s~nce the staff report was wntten I'llgoahaadand 10 showing the location of the property And then let me 1o pass these out but I'll.lust note that the red propertaes I 1 also show you a zoning map just so the Cormmsston will 11 are propertaes in opposition to the zoning the 8men 12 understand what the current zoning of the property Is and 12 properties am in favor the blue propertle~ am neutral 13 the zoning of surrounding properties The property is 13 Current opposltaon stands at 7 7 percent ' 14 currently zoned Agricultural The appheant has requested 14 As I noted, staff recommends approval of 15 that the property be rezoned to SF ? which, of course, ts 15 the zoning change w~th condition that conaectlmty be 16 zoning Smgle-Fanuly residential zoning, 7,000 square foot 16 prowded to future development to the south And I'll be 17 rmmmum lot size 17 happy to answer any questions or let the apphcant speak 18 I would point out just tn passing that 18 COMMISSIONER mSHEL gxcuseme Mr Gray 19 onttl a couple of months ago this type of development 19 You ropresented 7 sometlung percent and ',our backup here 20 would he subject to the interim regs Since the mtertm 20 shows percentage of land withn 200 foot m opposiuon 20 21 regulations have been changed, this development no longer 21 percent 22 is requa'ed to submit a zoning plan and a project plan so 22 Ma OR.ny cess than 20 percent 23 we're going forward as a strmght zoning rexIuest 23 COMMISSIONER msm~[ Less than 20 percent 24 The apphcant or the applicant's property, 24 Okay Thank you 25 rather, ts surrounded on two sxdes, east and west, by a 25 ~a GRAY when I ~T0te the staff report, PLANNING AND ZONING COMMISS'-- 2001 Page 169 - Page 172 10 Cond~nseltTM Page 173 Page 175 I I'd only received two letters m opposmon and I had not I weald be lass than about 800 feet from a eoltector which 2 computed wluch is why -- 2 Moclangb~rd Is planned to be 3 COMMISSIONER RISHEL YOU do have a lesser 3 Right now m this lower comer of the 4 sign there and it threw me off 4 property, that's whom we anticipate putting a detention 5 MR GRAy I do apologize for that 5 fatality And there nught be, with a U-shaped road 6 COMMISSIONER RISHEL I had not seen that 6 through here, an opportumty to incorporate with a 7 before Comunsstoner Roy 7 detention facility some type of connectivity through there 8 COMMISSIONER ROY Yes You monttoned the 8 viaastub-oat Bat we haven't even had a chance to vlstt 9 requirement for couneatlvtty from the south As I recall,9 with this property owner yet and see what then' plans are 10 and Just lookang at my map, there's nothing down there 10 and if they would need connectivity Certainly, tf 11 There's no road anywhere near there 11 there's going to be some kind of a community center or a 12 MR GRAY There's noflung down there now 12 park or somethmg that would draw traffic through here, it 13 COMMISSIONER ROY SO It would be Just an 13 might make good sense for tbas property to put In an extra I4 empty road? 14 stub-ont But generally when people are going to go 15 MR GRAY It would just be a stn~t 15 somewhere, they're gnmg to want to go to the collector 16 stub-ont to the south Paght And at a future date, one 16 roads That's what they're for and that's how they'll try 17 year from now, five years from oow, ten yeers from now, 17 and get out of the area 18 when that property develops, then that developer would 18 Another difficulty we have with flus 19 create a connection to that stub-out, thereby providing a 19 property, and it's not clear on flus map, is that the i20 road connection between the two 20 petitioner really does not own this piece of property 2i COMMISSIONER ROY would there be two 21 right m this area and there's a narrow strip right along 22 entrances Off of Mockmgbn'd9 22 here they do own, and we're not going to be able to 23 MR GRAY I believe so, yes One eotranee 23 develop that mto the lots and that's going to make tt a 24 down here, then the street would go around here and then24 Ilttle chfficult to divide everyflung up and make it work 25 connect agmn on the north side 25 Obviously, a street coming through here would take up Page 174 Page 176 I COMMISSIONER RISHEL See a real example of I another lot and that makes Ibis a bit of a marginal 2 plannmg, right? 2 development when it comes to cost analys~s 3 COMMISSIONER ROY It'S a beautiful site, 3 One ~ng that might help though ~s since 4 by the way A lot of trees 4 we're lookang at 7 000 square foot lots, ff we could do 5 COMMISSIONER RISHEL Ally further questions 5 that as the average s~ze of the lots m there mstend of 6 of Mr Gray, keeping in rmnd flus is a public heanng~ 6 the minimum iIxlulred then we rmght be able to make some 7 Thank you, Corarmsstoners Would the petattooer please 7 lot s~ze adjustments on this area, mowng thc street more 8 come forward and give us your name, address, and position 8 this duect~on and m make that connectivity a httlo more 9 with the company? 9 of a feasible or wable option from a cost analysis 10 MR ALLISON Thank you Good evening My 10 perspective Other than that, I'll be glad to maybe not 11 name ts Lee Allison I'm with Isbell Engineering 11 now but later when the pubhc beano~ has ended, respond 12 Corporation out of Sanger, Texas and we're the engmeenng12 to any questions you nught have Thank you 13 firm representing the client and the petitioner Mr 13 COMMISSIONER RISHEL commissioners 14 McFdssack 14 Please stay tla~, Mr Alhson 1.~ We're generally tn agreement with the 15 MR ALLISON SIlre 16 staff's recommendation However, since the reqmrement 16 COMMISSIONER RISHEL coamBssloners, any 17 for connectivity ts part of the proposed Development Code 17 questions of Mr Alhson'~ Mr Remhhart would hke to 18 and not part of the existing, we would ask that that be 18 make a question 19 amended to say that connectivity be analyzed or stuthed 19 Ma REICHHART It lS t,me that the 20 rather than be requn.ed 20 connectivity is a requucment in the proposed code, but it 2i At flus point m tune, we've not looked 21 is identified in thc Comprehensive Plan as a goal of the 22 through all the issues to see if connectivity would even22 City to prowda connccuwty for future developments And 23 work there We would hate to build a short stub-out of a 23 we are basing that recommcndatmn on the Comp Plan more so 24 street that would never be used if people don't have a 24 than the Development Code In our analysis, we identified 2.' place to go to, pertlcularly a stub-oat of a street that25 design standards, thc connecnvlty, but the street h'ees PLANNING AND ZONING COMMIS~tl ........ '~001 Page 173 - Page 176 11 CondcnseltTM Page 177 Page 179 1 arclutectoral features, and a variation of elevations are 1 NF ,~ It would require another public beanng 2 also clements that are Identified m the D~vclopment Code 2 MP~ REICHHART NO We cannot recommend 3 wtuch we're hoping Is adopted m January But you'll see 3 NR 4 at this tone because that is not an existing zomng 4 that we didn't follow those through as staff 4 category that we have m place right now But as part of $ recommendations, you know 5 the City vade rezomng that we are proposing, under that 6 It's up to the Commission whether to Impose 6 umbrella, the joint meeting proposed for December 4th and 7 those conditions or not as we get closer to the 7 then the final adoption right now tentatively scheduled 8 Development Code Tho connectivity thoBgh is identified 8 for January 15th, it would be automatically in that 9 In the Comprehensive Plan and that's why we did recommend 9 scenario if it bad the -- rlght now it's zoned l0 that as a condition i 0 Agricultural so it has an ~R 2 designation That was the 11 Another -- what I would point out to the 11 comparable zoning If it were zoned right now sP ? it 12 applicant Is this would be, if it's approved tonight, 12 would have geVen the sa n automancally because that's 13 would be rezoned sP 7, 7,oeo minimum square foot lots I 13 the comparable match 14 would anticlpata that with the renomng of the enare 14 So if we follow through on the schedule, it 15 City, If tlus gets re'zoned pnur to that going in place, 15 could be, you know - in December, this wdl be rezoned 16 and it should, if It goos forward as scheduled It would 16 assunung it gets recommended tonight, it would gn forward 17 get a comparable - I would believe it would be an sa ,* 17 m December to City Council for the final recommendation 18 designation which would identify four units per acre which 18 it would be zoned sP 7 Assuming that the Code is 19 is comparable to 7,000 square feet 19 adopted January 15th, at that tune as part of the 20 But if you waited and developed under that 20 City wide zoning, it would get fhpped over to sa n 21 scenario, you could vary your lot sizes As long as you 21 CO~IMISSION~a aoY okay I understand My 22 ended up with four umts per acre, you could go down, some 22 last question v, as having to do with thc design of thc 23 could be close to 5,000 square feet, some -- yeah, then 23 beusmg in that area I took a drive around both of the 24 you can go any size you want But that would allow you 24 - on e~tber side of it And I hke the idea of tlas 25 the flexlbthty to alter your design to accommodat~ this 25 because it's lnfill It's a good concept Can you tell Page 178 Page 180 I unique shape So there are benefits if you watt for that I us what arcbatectural design you plan to use'~ 2 NR '~ classification that would allow you to develop it 2 MR ALLISON No, Sir, I cannot Raght 3 that way 3 now, the curcent Development Code does not place any 4 MR ALLISON Thanks for that advice We 4 architectural restrictions upon the design on houses under 5 will oertmnly look at that m the next few days and take 5 sF 7 6 ltmtocunslderatiun I'd hke to add that we dtd not 6 COMMISSIONER ROY l understand that but 7 ask that connectavtty be totally taken out of the 7 could you tell me what you have planned to do I know 8 rccorcauendatlun, just that under the current Comprehensive 8 that you're getting m under the wac, so to speak 9 Plan it be dune so as an evaluation, not as a carte 9 MR. ALLISON mght Well, I'm the 10 blanche requirement 10 engineer for the project, not the architect The 11 COMMISSIONER RISHEL Conumssiunar Roy 11 developer will sell the lots off and individual builders 12 COMMISSIONER ROY I havo a few things 12 will build them and they'll certainly have to work under 13 here The connectivity requirement that has been 13 whatever the Codes are in place at the {mae those are 14 discussed for the City, flus is consistent with what we 14 aceomphshed 15 have been doing for all these developments, r~ght9 So 15 I can say I flunk comfortably that we did 16 this is not a burden that we're aslong flus developer to 16 pull ail of the surrounding plats before deciding what to 17 take that we haven't asked essenttally everybody else to 17 do here and we went with SF 7 knovong that is a httle bit 18 take 18 larger lot than what Is in the area And I think you're 19 MR REICHHART That ts correct 19 going to see a bit of an upscale design here Maybe not 20 COMMISSIONER ROY And the second thing, 20 as upscale as what the Code might lend to, but we think it 21 this NR 4 versus SF 7, when this was specified on the 21 would be a reasonable step up from what is currently in 22 Agenda, the pubhe Agenda as a public meetang ten,at, it 22 the area relative to the proposed Codes And that's a blt 23 was ldentafied as SF 7, wasn't it? 23 of a guess, I'll cartatnly admat to 24 MR REICHHART Correct 24 COMMISSIONER RISHEL Thank you, Mr 25 COMMISSIONER ROY And so tf we change to 25 Allison Tlus is a public beanng So at flus tune, PLANNING AND ZONING COMMIS$ ............. 2001 Page 177 - Page 180 12 Condons¢ItTM Page 181 Page 183 I anyonn who would hke to speak a~thar for or against this 1 Ccrramssloner Mulroy and seconded by Conmussloner Pow¢ll 2 item on our Agenda, and this Is Rcm No 16 on our 2 Discussion? 3 A~nda, would you please come forward Anyone for or 3 COMMISSIONER POWELL And I'm wilhng to 4 against tl~s item on our Agenda Conmussloner Kelth 4 vote on it like this I do want to point out to Mr 5 COMMISSIONER KE[TIt Yeab This la a 5 Allison that if he had provided us vath worchng that wc 6 qucstton for Lan),, Mr Rc~chhart Looking at th~s chart, 6 could use and vote on, we could consider, it would be much 7 arc we, IS the City making any I mean, maybe I nusscd 7 easier for us But to give us a vague not:on of what 8 on something, but working on a plan to whcm they can 8 we're going to vote on is not the same as giving us 9 connect from Mockingbird straight over to tho Loop at some 9 something to vote on I just point that out for thc 10 point m that area? 10 futore ur fur the people who arc gumg to come here If 11 MR REICHHART I don't hehev© that's bean 1i they want ua to vote on something provldclt for us 12 ldeatified m the Moblhty Plan David Salmon la 12 Don't give us a vague thing up In thc an' that wc can't 13 scarebang for his Mobthty Plan to come down probably and 13 gnp that We can gnp this Thank you Mr Chairman 14 identify what arc tho future -- 14 COMMISSIONER RISHEL Conumssloner Mulroy 15 COMMI$SlONE~ KEITH t want to acc what the 15 COMMISSIONFAI MULROY JUSt further comment, 16 Impact is going to bo 16 I ascertain from Mr Allison's comments that once the 17 COMMISSIONER RISHEL MI' Salmon, thank 17 zoning change after thc first of the year, ho would have 18 you 18 the flexibility to accommodate the connectivity without 19 MRaALMON Yeah I've got the oxlstlag 19 loss of lot numbera and so lt really woulda't be 20 Mobihty Plan on tho overhead Let me locate thc site 20 problcnmtic Thank you 21 Actually, there Is a collator street shown on the 21 COMMISSIONER RISHEL [ think so, too I 22 Moblhty Plan that would connect Meckingbu'd with Loop 288 22 appreciate staff's effort in trying to make connectivity 23 somewhat south of tho proposed development So It's quite 23 work for us and I tlunk that'syart of what we do hero ~s 24 concclvabla that if ~ was connectivity, that it would 24 plan What a wonderful idea Seeing no other comments 25 t~¢ into a collector s~t that runs east and w~st, 25 Commissioners, please vote Motion carn~ 5 0 of the Page 182 Page 184 1 assuming that development oeeun~ in accordance with our I Commissioners present Thank you 2 Mobility Plan 2 (COMMISSIONEII APPLE tS NOT PRESENq') 3 COMMISSIONERKEITH okay Thankyou, sir 4 COMMISSIONERRISEEL Thank you, Mr 4 17 on our Agenda Item No 17 is to hold a 5 Salmon Any ethan questions? Seeing no eno else who 5 ; heanng and consider making 6 would like to speak either for or against tins item on our 6 ; thc rezonm 7 Agenda, I will close thc pubhc heanag Having had no 7 acre from an Agncultural (A) zoning to 8 need for ~ebuttal, we wdl havc Mr Orey g~vc us a 8 district Thc 9 summation 9 the northeast comer Road 10 Ma OSAY staffhas nothing further 10 11 COMMISSIONERRISHEL Thankyou 11 proposed Thlsls AndMs Willis 12 Cormms$1oner Mukoy 12 will present 13 COMMISSIONER MULROY I m ready to make a 13 MS WILLIS [ d , goo~ night to 14 motion 14 thc Planning & Zoning ( 15 COMMISSIONER RISEEL [ gCC no one fllse who 15 a may be way ahead 16 would hko to speak Would you pkasc? 16 of schedulc You ~ 17 COMMISSIONER MULROY I move approval of 17 MS m Tlffanlc ' new 18 this zoning change and with the stipulated condition by 18 planner look forward 19 staff and that's the wdl provide connectivity to tho 19 to serving i the fiito~ Bcfore you t{ ~a 20 property to the south 20 zoning 'equest from thc apphcant for 21 COMMISSIONER RISHEL Oreat IS t~ a 21 Thc apphcant Is ~ to 23 COMMISSIONER POWELL III second It for 23 which is a lcsser 24 discussion 24 ~ than what was dERny noufied So flus 25 COMMISSIONER EISHEL It's bccn moved by case can remain in your heanng tonight Thc majority of , PLANNING AND ZONING COMMI,r ........... ' 4, 2001 Page 181 - Page 184 13 Attachment 3 ORDINANCE NO AN ORDINANCE OF THE CITY OF DENTON, TEXAS, PROVIDING FOR A ZONING CHANGE FROM AGRICULTURAL (A) ZONING DISTRICT CLASSIFICATION AND USE DESIGNATION TO ONE-FAMILY DWELLING (SF-7) WITH CONDITIONS ZONING DISTRICT CLASSIFICATION AND USE DESIGNATION FOR APPROXIMATELY 13 2 ACRES OF LAND GENERALLY LOCATED ON THE EAST SIDE OF MOCKINGBIRD LANE APPROXIMATELY 450 FEET SOUTH OF ITS INTERSECTION WITH AUDRA LANE, PROVIDING FOR A PENALTY IN THE MAXIMUM AMOUNT OF $2,000 00 FOR VIOLATIONS THEREOF, PROVIDING A SEVERABILITY CLAUSE AND AN EFFECTIVE DATE (Z01-0037) WHEREAS, McKtssack Realty m~tmted a change ~n zomng for approximately 13 2 acres of land from Agricultural (A) zoning d~stnct classification and use des~gnatton to One-Famdy Dwellmg (SF-7) w~th condmons zomng d~smct elass~ficaUon and use designation, and WHEREAS, on November 14, 2001 the Planning and Zomng Commission recommended approval of the requested change tn zomng, and WHEREAS, the C~ty Council finds that the change m zomng ~s consastent wath the Comprehensive Plan, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 The zomng d~smct class~ficatton and use designation ofthe approximately 13 2 acre prope,rty described m the legal description attached hereto and incorporated hereto as Exbabtt A ts changed from Agricultural (A) zomng dastnct class~ficatton and use desagnat~on to One-Family Dwelhng (SF-7) zonmg dtstnct classification and use demgnat~on under the comprehensive zomng ordinance of the C~ty of Denton, Texas, subject to the following condition The proposed development will prowde connect~wty to the property to the south SECTION 2 The C~ty's offictal zoning map is amended to show the change m zoning d~stnct classification SECTION 3 If any prows~on of th~s ordinance or the apphcat~on thereof to any person or c~rcumstance ts held ~nvahd by any court, such ~nvahd~ty shall not affect the valad~ty of other prows~ons or apphcat~ons, and to th~s end the prows~ons of th~s ordinance are severable SECTION 4 Any person violating any prows~on ofth~s ordanance shall, upon conwctton, be fined a sum not exceeding $2,000 00 Each day that a prowsaon ofth~s ordinance ~s vtolated shall Page 1 of 2 14 constitute a separate and distinct offense SECTIONS This ordinance shall become effective fourteen (14) days from the date of 1ts passage, and the City Secretary is hereby d~rected to cause the caption of this orchnance to be pubhshed twwe in the Denton Record-Chronicle, a daffy newspaper pubhshed ~n the City of Denton, Texas, wltlun ten (10) days of the date of its passage PASSED AND APPROVED this the day of ., 2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY Page 2 of 2 15 Exhibit A ALL THAT CERTAIN TRACT OR PARCEL OF LAND LYING AND BEING SITUATED IN THE M E P & P R R SURVEY ABSTRACT 927, AND BEING A PART OF A CALLED 6 8094 ACRE TRACT DESCRIBED IN A DEED TO JOHN E MILL1CHAMP et ux, RECOILDED IN VOLUME 4740, PAGE 2233, REAL PROPERTY RECORDS, DENTON COUNTY, TEXAS, AND BEING A PART OF A TRACT OF LAND DESCRIBED IN A DEED TO G D AMOS et ux, RECORDED IN VOLUME 382, PAGE 200, DEED RECORDS, DENTON COUNTY, TEXAS, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS BEGINNING AT A FOUND IRON PIN AT THE SOUTHEAST CORNER OF SAID MILLICHAMP TRACT, AND BEING THE SOUTHWEST CORNER OF AUDRA MEADOWS ADDITION, AND ADDITION TO THE CITY OF DENTON, DENTON COUNTY, TEXAS, ACCORDING TO THE PLAT THEREOF RECORDED IN CABINET EAST, PAGE 371, PLAT RECORDS, DENTON COUNTY, TEXAS, THENCE NORTH 89 DEGREES 40 MINUTES 10 SECONDS WEST WITH THE SOUTH LINE OF SAID MILLICHAMP TRACT, A DISTANCE OF 575 96 FEET TO A 1/2 INCH IRON PIN SET WITH A YELLOW PLASTIC CAP STAMPED METROPLEX 1849, THENCE NORTH 01 DEGREES 22 MINUTES 50 SECONDS EAST, A DISTANCE OF 90 00 FEET TO A 1/2 INCH IRON PIN SET WITH A YELLOW PLASTIC CAP STAMPED METROPLEX 1849, THENCE NORTH 89 DEGREES 40 MINUTES 10 SECONDS WEST, A DISTANCE OF 130 00 FEET TO A 1/2 INCH IRON PIN SET WITH A YELLOW PLASTIC CAP STAMPED METROPLEX 1849, THENCE SOUTH 01 DEGREES 22 MINUTES 50 SECONDS WEST, A DISTANCE OF 90,00 FEET TO A 1/2 INCH IRON PIN SET WITH A YELLOW PLASTIC CAP STAMPED METROPLEX 1849, THENCE NORTH 89 DEGREES 40 MINUTES 10 SECONDS WEST, A DISTANCE OF 31 14 FEET TO A FOUND IRON PIN AT THE SOUTHWEST CORNER OF SAID MILLICHAMP TRACT, ON THE EAST LINE OF MOCKINGBIRD STREET, THENCE NORTH 00 DEGREES 19 MINUTES 50 SECONDS EAST WITH A WEST LINE OF SAID MILLICHAMP TRACT AND THE EAST LINE OF MOCKINGBIRD STREET, A DISTANCE OF 291 99 FEET TO A 1/2 INCH IRON PIN SET WITH A YELLOW PLASTIC CAP STAMPED METROPLEX 1849 AT THE WESTERN MOST NORTHWEST CORNER OF SA1D MILLICHAMP TRACT SAME BEING THE SOUTHWEST CORNER OF A CALLED 1 00 ACRE TRACT DESCRIBED IN A DEED TO NELVA JOYCE SCOTT, RECORDED 1N VOLUME 2782, PAGE 403, REAL PROPERTY RECORDS, DENTON COUNTY, TEXAS, THENCE SOUTH 89 DEGREES 59 MINUTES 28 SECONDS EAST WITH A NORTH LINE OF SAID MILLICHAMP TRACT AND THE SOUTH LINE OF SAID SCOTT TRACT, A DISTANCE OF 330 62 FEET TO A FOUND IRON PIN AT A INNER ELL CORNER OF SAID MILLICHAMP TRACT, SAME BEING THE SOUTHEAST CORNER OF SAID SCOTT TRACT, THENCE NORTH 02 DEGREES 07 MINUTES 20 SECONDS EAST WITH A WEST LINE OF SAID MILLICHAMP TRACT AND THE EAST LINE OF SAID SCOTT TRACT, A DISTANCE OF 192 39 FEET TO A FOUND IRON PIN AT THE NORTHERN MOST NORTHWEST CORNER OF SAID MILLICHAMP TRACT, AND BEING IN THE EAST LINE OF A CALLED 0 999 ACRE TRACT DESCRiBED IN A DEED TO BAMBI JILL HARROLD, RECORDED iN COUNTY CLERK'S NUMBER 94-R0080649, REAL PROPERTY RECORDS, DENTON COUNTY, TEXAS, THENCE NORTH 01 DEGREES 41 MINUTES 44 SECONDS EAST WiTH THE EAST LINE OF SAID HARROLD TRACT, A DISTANCE OF 63 90 FEET TO A FOUND IRON PIN AT THE NORTHEAST CORNER OF SAID HARROLD TRACT, 16 THENCE NORTH 89 DEGREES 47 MINUTES 04 SECONDS WEST WITH THE NORTH LINE OF SAID HARROLD, A DISTANCE OF 338 15 FEET TO A 1/2 INCH IRON PIN SET WITH A YELLOW PLASTIC CAP STAMPED METROPLEX 1849 AT THE NORTHEAST CORNER OF SAID HARROLD TRACT, ON THE EAST LINE OF MOCKINGBIRD STREET, THENCE NORTH 00 DEGREES 19 MINUTES 50 SECONDS EAST WITH THE EAST LiNE OF MOCKINGBIRD STREET, A DISTANCE OF 365 65 FEET TO A 1/2 INCH IRON PIN SET WITH A YELLOW PLASTIC CAP STAMPED METROPLEX 1849, THENCE SOUTH 88 DEGREES 58 MINUTES 41 SECONDS EAST A DISTANCE OF 189 52 FEET TO A FOUND IRON PIN AT THE SOUTHEAST CORNER OF LOT I, ALTON DAVIS ADDITION, AN ADDITION TO THE CITY OF DENTON, DENTON COUNTY, TEXAS, ACCORDING TO THE PLAT THEREOF RECORDED IN CABINAT B, PAGE 128, PLAT RECORDS DENTON COUNTY, TEXAS, AND BEING THE SOUTHWEST CORNER OF A CALLED 2 232 ACRE TRACT DESCRiBED IN A DEED TO CARL E ALLEN et ux,, RECORDED IN VOLUME 1002, PAGE 573, DEED RECORDS, DENTON COUNTY, TEXAS, THENCE SOUTH 88 DEGREES 56 MINUTES 03 SECONDS EAST, A DlSTANCE OF 551 11 FEET TO A FOUND IRON PIN AT THE SOUTHEAST CORNER OF A CALLED 2 50 ACRE TRACT OF LAND DESCRiBED IN A DEED TO HARVEY N CHAPMAN et ux, RECORDED 1N COUNTY CLERK'S NUMBER 96-R0060579, REAL PROPERTY RECORDS, DENTON COUNTY, TEXAS, AND BEING ON THE WEST LINE OF SAID AUDRA MEADOWS ADDITION, THENCE SOUTH 00 DEGREES 33 MINUTES 00 SECONDS WEST WITH THE WEST LINE OF SAID AUDRA MEADOWS ADDITION, A DISTANCE OF 905 65 FEET TO THE POINT-OF-BEGINNING, AND CONTAINING IN ALL, 13 201 ACRES OF LAND AGENDA INFORMATION SHEET ~ It~~~---- AGENDA DATE' December 18, ]00l Questions concerning th~s acqmsttton may be DEPARTMENT' Materials M~agemcnt to Mark Nelson 349-?702 ACM Kathy DuBose, F~scal and Mumc]pal Sc~mcs ~ SUBJECT: Hold a pubhc hearing and consider adoption of an ordinance allowing the negotiation of the best b~d for a contract for the od and gas lease agreement at the Mumc~pal A~rport ~n substantmlly the same form as B~d 2769, and providing an effecttve date (B~d 2769 Off and Gas Lease Agreement, best bid, Superior P&E LLC / Enexco, Inc ) BID INFORMATION: Th~s b~d is for the lease of apprommately 554 acres of mum¢~pal mrport property for od and gas well development only The primary terms of the lease ~s for three years and is limited to three predetermined drill s~tes In addmon, the b~d reqmres full comphance w~th the code of ordinances for the C~ty of Denton and the successful negotmt~on of a surface use agreement and a right ofway agreement as well as execnt~on o£the od, gas and mineral lease included m the b~d request PRIOR ACTION APPROVAL' On November 6, 2001 Councd authorized the competitive bid process for an od and gas agreement for the Denton Mumc~pal A~rport (Ord 2001-425) At ~ts November, 2001 meeting the A~rport Admsory Board recommended the competitive b~d process RECOMMENDATION. We recommend th~s b~d be awarded to the h~ghest bidder, Superior P&E LLC / Enexco, Inc as reflected on the attached tabulation sheet PRINCIPAL PLACE OF BUSINESS: Superior P&E LLC Dallas, Texas ESTIMATED SCHEDULE OF PROJECT: Negotmtlons of a surface use agreement and nghr of way agreement and o~1 and gas mineral lease are scheduled to be completed vath~n thirty days Agenda Informatton Sheet December 18, 2001 Page 2 Tom Shaw, C P M, 349-7100 Purchasing Agent Attachmeat 1 Tabulataon Sheet ATTACHMENT 1 TABULATION SHEET BID#. 2769 Date 12-6-01 OIL AND GAS LEASE AGREEMENT NO ,I DESCRIPTION VENDOR i Supenor !i,,' ' ,' P & E/Enexco Principle Place of Bus~ness Dallas ROYALTY TO LESSOR NOT LESS THAN (1/5) OF ALL OIL & GAS PRODUCED FROM SAID LAND One F~fth (1/5) 1 (IF GREATER THAN 1/5, PLEASE SPECIFY) ALL ANNUAL DELAY RENTAL OF NOT LESS $50 THAN ($10 00) PER ACRE (IF GREATER THAN 2 $10 00 PER ACRE, SPECIFY) (One Well) SHUT-IN PAYMENT OF NOT LESS THAN TWENTY & NO/100 ($20 00) PER ACRE (IF $25 00 3 GREATER THAN $20 00 PER ACRE) BONUS MONEY AS SPECIFIED BY BIDDER A ACRES X $ = TOTAL BONUS MONEY FOR 554 14 Acres BONUS MONEY AS SPECIFIED IN THE BID & X $200=$110,828 4 WITH THE MINIMUM TO BE $175 00 PER ACRE 2769 3 S \Our Documonts\Ordmances\Ol\Otl and Gas Lease Ordinance doc ORDINANCE NO AN ORDINANCE ALLOWING THE NEGOTIATION OF THE BEST BID FOR A CONTRACT FOR THE OIL AND GAS LEASE AGREEMENT AT THE MUNICIPAL AIRPORT IN SUBSTANTIALLY THE SAME FORM AS BID 2769, AND PROVIDING AN EFFECTIVE DATE (BID 2769 OIL AND GAS LEASE AGREEMENT AWARDED TO SUPERIOR P&E LLC/ENEXCO, INC ) WHEREAS, The C~ty Council of the City of Denton has heretofore determined that ~t is advisable to lease for oil and gas purposes certain real property located at the Denton Municipal Airport, Denton, Texas, and WHEREAS, in compliance with Chapter 71 of the Texas Natural Resources Code (the "Code") the City published notice of its intention to lease such real property for oil and gas purposes once a week for three consecutive weeks tn a newspaper with general circulation and published in Denton County, Texas, and WHEREAS, m compliance with the Code, the City Council of the City of Denton held a public heanng, and WHEREAS, Pursuant to the Code, the City of Denton desires to negotiate the lease of the property for oil and gas well development with the best bid submitted by Superior P&E LLC / Enexco, Inc in substantially the same form as outlined in Exhibit A for approximately 554 14 acres, and WI-IEREAS, Superior desires to enter into lease negotiations for the land at the an-port for oil and gas well development and after negotiation, to enter into a lease for the land at the mrport for oil and gas well development and to agree to pay to the City the agreed upon amounts, NOW THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 The City Manager or his designee are hereby authorized to negotiate and execute a lease agreement between the City of Denton and Superior P&E LLC / Enexco, Inc in return for the payment(s) as outlined in Attachment A for the approximately 554 14 acres of Municipal A~rport property in accordance with the agreed upon Oil ,Gas and Mineral Lease and Surface Use Agreement substantially the same form(s) as those attached to and incorporated by reference herein as Exhibit B and Exhibit C SECTION 2 This ordinance shall become effective ~mmedlately upon its passage and approval PASSED AND APPROVED th~s the day of ., 2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM HERBERT L/~,CIT~TTORNEY Exhibit A TABULATION SHEET BID# 2769 Date. 12-6-01 OIL AND GAS LEASE AGREEMENT DESCRIPTION VENDOR Supenor P & E / Enexco Dallas ROYALTY TO LESSOR NOT LESS THAN (1/5) OF ALL OIL & GAS PRODUCED FROM SAID LAND One Rfth (1/5) (IF GREATER THAN 1/5, PLEASE SPECIFY) ALL ANNUAL DELAY RENTAL OF NOT LESS $50 THAN ($10 00) PER ACRE ( IF GREATER THAN 2 $1o co PER ACRE, SPECIFY) (One Well) SHUT-IN PAYMENT OF NOT LESS THAN TWENTY & NO/100 ($20 00) PER ACRE (IF $25 00 3 GREATER THAN $20 00 PER ACRE) BONUS MONEY AS SPECIFIED BY BIDDER A ACRES X $ = TOTAL BONUS MONEY FOR 554 14 Acres BONUS MONEY AS SPECIFIED IN THE BID & X $200=$110,828 4 WITH THE MINIMUM TO BE $175 00 PER ACRE 2769 EXHIBIT B OIL, GAS AND MINERAL LEASE CITY OF DENTON AIRPORT THIS OIL, GAS AND MINERAL LEASE (the "Lease") ~s made tins __ day of ,2001 (the "Effechve Date"), between The C~ty of Denton, Denton, Texas, acting hereto by and through ~ts Mayor, Euhne Brock, duly authorized by resolutmn to execute tins Lease ("LESSOR"), whose address ~s 215 East McI<hrmey, Denton, Texas 76201 and ("LESSEE"), whose address ~s Z~p Code , WlTNESSETH 1 Lease of Land LESSOR m conmderatmn of Dollars ($ ), m hand prod, oft. he royalties hereto prowded, and of the agreements of LESSEE hereto contained, hereby leases and lets exclusively unto LESSEE for the purpose of ~nvestlgatmg, explonng, prospecting, dnlhng and m~mng for and producing o~1, gas and all assocmted minerals, conducting exploratmn, geologic and geophysical surveys by smsmograph, core test, grawty and magnetm methods, injecting gas, water and other fluids rotc subsurface strata, laying p~pe lmes, bmldmg roads, tanks power statmns, telephone lines and other structures thereon and on, over and across lands owned or claimed by LESSOR, to produce, save, take care of, treat, transport and own smd products, the following described land ~n Denton County, Texas, to-w~t TRACT 1 The land described m conderrmatmn proceedings ~dentffied by Cause No 3922 filed on November 30, 1943 between the City of Denton and R M Evers, et al and subsequently filed m Volume 1675, Page 546 of the Real Property Records of Denton County, Texas, contmmng 147 26 acres, 2 26 acres of which ~s in a pubhc road, m the William W~lburn Survey, Abstract Number 1419 TRACT 2 The land described m that Warranty Deed dated December 23, 1943 between P T Underwood and w~fe J~rnrme Underwood and the C~ty of Denton recorded ~n Volume 304, Page 503 of the Real Property Records of Denton County, Texas, contmmng 74 94 acres, 1 75 acres of winch ~s m a pubhc road, m the Thomas Toby Survey, Abstract Number 1285 TRACT 3 The land described m that Warranty Deed dated January 18, 1944 between Mrs Ellen Pearl Corbm, a widow, Hugh C Corb~n and wife, Sue Lou Corb~n, John S Corbm, Alice Corbm Brown and husband W O Brown, Grace Corbm, a feme sole, Georgia Corbm, a feme sole, James E Corbm and wife, Johnme Corinn, Mrs Geme Corbm Hurst and husband, G E Hurst, and the C~ty of Denton, recorded m Volume 305, Page 216 of the Real Property Records of Denton County, Texas, contmmng 331 94 acres, 2 61 acres ofwh~ch ~s m a pubhc road, m the Wm Smith Survey, Abstract Number 1188, and the Wm Nelll Survey, Abstract Number 970 For all purposes of th~s Lease, smd land ~s estimated to comprise 554 14 acres, whether ~t actually comprises more or less 6426602/5P3/29121/0103/103~0! However, there ~s expressly excepted from th~s Lease and reserved to LESSOR, xts successors and assigns, all vanadmm, uramum, plutomum, thorium, fissmnable minerals and all other minerals of every hnd and character m, on and under the land, except only o~1, gas, casmghead gas and their byproducts and such other hydrocarbon substances, carbon chox~de and sulfur as are necessarily produced w~th and mmdental to the productmn of od and gas, or rather of them 2 Reservation There ~s hereby excepted and reserved to LESSOR the full use of the land covered hereby and all rights w~th respect to the surface and subsurface thereof for any and all purposes and all minerals except those expressly leased and only to the extent hereto leased to LESSEE The Surface Use Agreement shall govern the use of the surface by LESSEE 3 Primary Term Th~s ~s a prod up lease and subject to the other prowsmns here contmned, th~s Lease shall be for a term of three (3) years from the Effective Date (the "Primary Term") and as long thereafter as od, gas and other minerals are produced ~n paying quantities from smd land or land w~th which smd land is pooled hereunder 4 Royalt~ As royalty, LESSEE covenants and agrees to pay a As a royalty on ml 0ncludmg all hydrocarbons produced m hqmd form at the mouth of the well and also condensate, dmt~llate, and other hqmd hydrocarbons recovered from ml or gas run through a separator or s~m~lar eqmpment) one-fifth (1/5) of the gross production or the market value thereof, at the optmn of LESSOR, the value to be determined by (0 the h~ghest posted price, plus premmm, ~f any, offered or prod for ml, condensate, d~st~llate, or other hqmd hydrocarbons, respectively, of a hke type and gravity for the field where produced and when nm, or (n) the h~ghest market price offered or prod for the field where produced and when run, or (m) the gross proceeds of the sale whichever is greater LESSEE agrees that before any gas produced from the land ~s sold, used or processed m a plant, ~t w~ll be run, free or cost to the part,es entitled to royalties, through an adequate ml and gas separator of conventmnal type or other eqmpment at least as efficient to the end that all hqmd hydrocarbons recoverabl_e from the gas by such means w~ll be recovered Upon wnttan consent of the royalty owners, the reqmrement that gas be nm through a separator or other eqmpment may be wmved upon terms and cond~tmns as prescnbed by them b As a royalty on any gas, whmh is defined as all hydrocarbons and gaseous substances not defined as ml in subparagraph 4 b above, produced from any well on the land (except as provided m th~s Lease w~th respect to gas processed ~n a plant), one-fifth (1/5) of the gross productmn or the market value thereof, at the optrcn of LESSOR, the value to be based on the tnghest market price prod or offered to a third party LESSEE under a gas purchase agreement negotmted at arms' length for gas of comparable quahty and quantity m the general area where produced and when nm, or the gross price prod or offered to the producer, whmhever ~s greater c As a royalty on any gas processed m a plant, one-fifth (1/5) of the residue gas and the hqmd hydrocarbons extracted or the market value thereof, at the optmn of LESSOR The royalty percentage shall be apphed to 100% of the total plant production of residue gas attributable to gas produced from thru Lease, and on 50% or that percent accrmng to LESSEE, whmhever is greater, of the total plant productmn of hqmd hydrocarbons 6~2fi60 2/SP3/:~9121/0103/I03101 2 attnbutable to the gas produced from tlus Lease, except ~f hqmd hydrocarbons are recovered from gas processed m a plant ~n whmh LESSEE or an affihate owns an interest, then the royalty percentage for hqmd hydrocarbons shall be 50% or the h~ghest percent accruing to a third party processing gas tlxough the plant under a processing agreement negotmted at arms' length The respective royalties on residue gas and on hqmd hydrocarbons shall be deterrmned by 0) the h~ghest market price prod or offered for any gas (or hqmd hydrocarbons) of a comparable quahty ~n the general area or (n) the gross price pa~d or offered for such residual gas, or the weighted average gross selhng price for the respective grades of hqmd hydrocarbons, F O B the plant m which the gas ~s processed, whmhever ~s greater d On all substances, ~nclud~ng, but not hm~ted to carbon dmx~de and sulfur, penmtted to be produced from the land by wrtue of th~s Lease, and products, except hqmd hydrocarbons, produced or manufactured from gas, and for whmh no royalty ~s otherwise specified ~n th~s Lease, LESSOR shall have and be entitled to the royalty percentage of that produced or saved to be dehvered to LESSOR, free of all costs, or, at the optmn of LESSOR, which may be exercised from tune to t~me, LESSEE shall account to LESSOR for the royalty percentage of the market value thereof, which market value shall be deemed to be the greater of (0 the h~ghest market price of each product for the same month in whmh the product is produced, or (n) the average gross sale price of each product for the same m e Accounting and payment to LESSOR of royalties from the productmn of od and gas from any well shall commence no later than mnety (90) days aller the date the well commences first production Thereafter, all accountings and payments of royaltms shall be made on or before the last day of the calendar month following the calendar month ~n which the production occurred Should LESSEE at any t~me fall to make royalty payments to LESSOR on or before the last day of the third calendar month followmg the calendar month m which the productmn occurred, th~s Lease shall automatmally terminate unless the payments are made w~thln thirty (30) days after wntten notme ~s g~ven to LESSEE Any royalties prowded for ~n th~s Lease whmh are not prod to LESSOR w~thln the apphcable t~me penods spemfied m this paragraph shall accrue ~ntcrest at the same rate as judgments under the laws of the State of Texas from due date until prod Acceptance by LESSOR of royalties whmh are past due shall not act as a waiver or estoppel of LESSOR'S nght to receive or recover any and all ~nterest due under the prowsmns of tlus paragraph unless the written acceptance or acknowledgment by LESSOR to LESSEE expressly so provides LESSEE shall pay all reasonable attorney's fees ~ncurred by LESSOR ~n connection w~th any lawsmt in whmh LESSOR ~s successful in recovenng royalties or ~nterest or ~n terminating th~s Lease due to LESSEE'S fmlure to pay royalties within the periods set forth above LESSOR'S royalty shall never bear, e~ther directly or indirectly, any part of the costs or expenses of producing, gathenng, dehydrating, compressing, transporting, manufactunng, processing, treating or marketing of the oH or gas from the land, nor any part of the costs of constructing, operating or deprematmg any plant or other facd~t~es or eqmpment for processing or treating o21 or gas produced from the land 6426602/SP3/2912110103/103101 3 5 Shut-In Gas If LESSEE drills a well on land covered by tins Lease or on land winch the LESSOR has penmtted to be pooled herewith, whmh well is capable of producing gas but such well ~s not bemg produced, and th~s Lease ~s not being mamtmned otherwxse as prowded hereto, tins Lease shall not terminate, whether ~t being dunng or after the Primary Term (unless released by LESSEE) and ~t nevertheless shall be considered that ml and gas ~s being produced from the land covered by tins Lease When, at the expxratmn of the Primary Term or any t~me or t~mes thereafter, the Lease xs continued m force ~n thxs matter, LESSEE shall pay or tender as royalty to the part,es who at the t~me of such payment would be entitled to receive royalty hereunder ~fthe well ~s producing, or deposit dlrectly w~th LESSOR at ~ts address shown here~n, a sum equal to Twenty and No/100 Dollars ($20 00) for each gross acre of land subject to th~s Lease at the t~me such payment ~s made The first payment of such sum shall be on or before the first day of the calendar month at the exp~ratmn ofmnety (90) days from the date the Lease ~s not otherwise mmntmned, and thereafter subsequent payments may be made at annual ~ntervals LESSEE'S fmlure to pay or tender or properly or txmely pay or tender such sum as royalty shall render LESSEE hable for the amount due and shall operate to terminate tins Lease automatically 6 Limit of Shut-In Notw~thstanchng anytlung to the contrary ~n tl-ns Lease, ~t ~s expressly agreed and proxnded that th~s Lease cannot and shall not be extended beyond the Primary Term by reason of the shut-in well prowstons of Paragraph 5 for any s~ngle period of more than two (2) consecubve years or more than three (3) years ~n the aggregate 7 Po0hng Poohng for o~1 or gas ~s expressly demed w~thout the written consent of LESSOR Further, LESSEE ~s demed the right to seek, or consent to, or pammpate ~n the forced poohng of any part of the land under the Texas Mineral Interest Poohng Act and any and all amendments thereto or any other poohng or un~t~zatmn statutes of the State of Texas w~thout LESSOR'S written consent 8 Termination. a If, at the exp~ratmn of the Primary Term, LESSEE xs not engaged m the actual dnlhng of a well on the land or ~f LESSEE has completed or abandoned a well on the land w~tinn tinrty (30) days prior to exp~ratmn of the Primary Term and ~s not, at the exptratmn of mnety (90) days after the date or completmn or abandonment of the well, engaged m the actual dnlhng of another well on the land, tins Lease shall then terminate as to all of the land, save and except the following Each well producing o~1 or being reworked, and classffied as an o~1 well under the rules and regulations of the Rmlroad Commission of Texas, together w~th forty (40) acres around each such well (an "O~1 Umt") Each well producmg gas (or capable of producing gas w~th all shutqn royalty hawng been prod thereon) or being reworked, and classffied as a gas well under the rules and regulatmns of the Rmlroad Commmsmn of Texas, together w~th the one hundred s~xty (160) acres around each such well (a "Gas Umt") b Each O~1 Umt or Gas Umt shall be ~n as near the form of a square as reasonably practicable cons~denng the boundary of the land and the necessity of a legal locatmn of the well on the umt Notwithstanding the foregoing, ~f the Rmlroad Comm~ssmn of 642660 2/SP3/29121/0103/103101 4 Texas or other authority having JUrisdiction, by rule or order prescribes a larger or a smaller number of acres for the purposes of secunng the maximum allowable productmn, each umt shall b.e. mcreased or decreased m s~ze as necessary to conform to the number of acres prescnr)ect ~)y the rule or order, but if the rule or order prowdes for or permits optmnal s~zed tracts or spacing, the unit shall be the smallest tract permitted by the rule or order c If, at the exp~ratmn of the Primary Term, LESSEE xs engaged m the actual drilling of a well on the land or if LESSEE has completed or abandoned a well on the land w~th~n they (30) days prior to expiration of the Primary Term and is, at the expn'atmn ofmnety (90) days after completion or abandonment of the well, engaged m the actual dnlhng of another well on the land, ti'as Lease shall not terminate so long as LESSEE pursues the drilling of the well wxth reasonable dlhgence to completmn or abandonment and so long as LESSEE commences the actual dnlhng of add~tmnal and successive wells on the land at intervals not exceeding mnety (90) days between completion of a well as a producer or dry hole and commencement of actual dnlhng of the next well on the land If and when LESSEE fails to commence the actual dnlhng ora well w~thm the apphcable interval (or within the extended t~me prowded in subparagraph 9 d below, th~s Lease shall then terminate to all of the land, save and except the O~1 Umts and Gas Units provided ~n subparagraph 8 a above Upon expiration of the Primary Term or the cessation of the continuous dnlhng program set forth herein, wl'nchever is later, th~s Lease shall also terrmnate as to all depths below each unit retmned as to depths below a depth of one hundred feet (100') beneath the deepest producing horizon or zone for each unit d If LESSEE, m the conduct of actual dnlhng operations under this Lease after the expiration of the Pnmary Term, commences the actual dnlhng of any next succeedmg well wltlnn less than the ninety (90) day time xnterval specified ~n subparagraph 8 c and thus speeds up the development of the land, LESSEE shall have credit m time for the accelerated development and may, m the conduct of subsequent actual dnlhng operatmns~take advantage ~ftl~ credit m time Qn a cumulative bas~s and thus extend the t~me for the commencement of actual dnlhng of any subsequent well or wells reqmred to be drilled under the pmwslons ofth~s Lease ~n order to prevent tenmnat~on of th~s Lease W~ttnn ten (10) days of the commencement of the actual dnlhng of each well on the land, LESSEE shall g~ve LESSOR written notice of the date of commencement W~th~n ten (10) days after the completmn or abandonment of each well on the land, LESSEE shall give LESSOR written notme of the date of completmn or abandonment and also of the t~me credit, ~f any cla~med by LESSEE as a result of hawng commenced the actual dnlhng of the well w~thm less than the mqmred ~nterval If LESSEE falls to t~mely so not~fy LESSOR m any of these respects, LESSEE shall not be entitled to any credit ~n time for accelerated development Notlung contained m th~s paragraph shall reheve LESSEE of any offset obhgatmn arising by ~mphcatmn or under the terms of th~s Lease, but any well dnlled by LESSEE to satisfy an offset obhgatlon w~ll ent~tle LESSEE to the privileges ofth~s paragraph 9 Removal of Eqmpment. LESSEE shall have the right at any time dunng and for one hundred e~ghty (180) days after the exp~ratmn of this Lease to remove all property, casing and fixtures placed by LESSEE on smd land, including the right to draw and remove all cas~ng Thereafter, it shall be deemed abandoned to LESSOR If LESSEE fa~ls to remove such property, 642660 2/SP3[2r~121/OlO3[lO31D1 5 casing mud fixtures wltl-nn such 180 day penod, ownerslup of the same will vest in LESSOR, LESSOR'S successors and assigns or LESSOR, at its option, may require the removal of said equipment in addition to all other remedies to Much LESSOR is entitled under law 10 Assignment. The nghts of either party hereunder may be assigned in whole or in part, and the provisions hereof shall extend to their respective heirs, successors and assigns, but no change or division m ownerslup of the land, rentals or royalties, however accomplished, shall operate to enlarge the obligations or diminish the rights of LESSEE 11 Title. LESSOR does not warrant or agree to defend the title of the lands covered hereby LESSEE takes this Lease without warranty of title either express or tmphed This Lease and the actlvmes to be conducted thereunder are subject to approval of the Federal Aviation Administration If LESSOR owns an interest in the oil, gas and minerals leased hereby less than the entire fee simple estate, then the royalties, or other monies accruing from any part of the land to wluch flus Lease covers less than such full interest shall be paid to LESSOR only m the proportion which LESSOR'S interest therein, ifa. ny, bears to the whole and undlwded fee simple mineral estate therein It is the sole responsibility of LESSEE to determine the LBSSOR's mineral interest The bonus payment paid for this Lease shall be deemed to be final ~f no title problems are subrmtted for resolution w~thm ninety (90) days of the Effective Date 12 Force Maleure When dnlhng, production or other operatmns on said land or land pooled with Such land, or any part thereof are prevented, delayed or lnten-upted by fire, storm, flood, war, rebelhon, ~nsurrectlon, sabotage, not, strike, or as a result of some law, order, rule, regulation or necessity of governmental authority, either State or Federal, the Lease shall nevertheless continue in full force and effect and be extended for the period such dnlhng, production ,and other operations are so prevented, delayed or interrupted LESSEE shall not be liable for breach of any express or implied covenants of this Lease when dnlhng, production or other operatnons are so prevented, delayed or interrupted, except that nothmg in tl-ns paragraph 13 shall be construed to suspend the payment of delay rentals, shut-in royalty or any other amount other~ase required to mmntmn ttua Lease m effect 13 Designation of Gas Un,t a Upon completion of the first well as a producer of oil and/or gas in paying quantities (whether the first or a subsequent well drilled), LESSEE shall designate an approximately sized dnlhng unit around said first producing well, all out of the above described property, by filing a written designation ~n the Deed Records of Denton County Texas and shall provide LESSOR with a copy of such unit designation b If a second well is completed as a producer of gas m paying quantities, LESSEE shall again designate an approximately sized dnlhng unlt around said second producing well, all out of the above descnbed property, by filing a written designation m the Deed Records of Denton County, Texas and shall provide LESSOR with a copy of such unit designation LESSEE shall designate all dnlhng units in a fair and reasonable manner so that the remaining acreage not Included ~n the dnlhng units ~s capable of being dnlled or pooled with other lands 642660 2/SP3/29121/0103/103101 6 All deagnatlons ofumts as provided m tins paragraph i4 shall be ~n accordance with and subject to the prowslons of paragraph 9 above 14 Road Construction If LESSEE completes a well as a producer, LESSEE agrees to construct a good and substantial road to said well at least twenty (20) feet in wzdth, and wzth base material eqmvalent to Texas H~ghway Department No 1 flexzble base material and being szx (6) inches m depth and built for proper and natural dranage LESSEE agrees to enter rote a Road Maintenance Agreement with the Czty of Denton for damage to the road as a result of LESSEE'S activities 15 _FAA Rules and Regulations. No dnlhng activity or any other actzwty shall be conducted on any portion of the above described land m contravention of any Federal Aviation Admmlstratmn ("FAA") rule or regulatmn or which znterferes wzth any future expanszon plan for runways or taxzways LESSEE shall make mqmry wzth the proper officzals of the FAA and obtmn all necessary approvals, consents or wazvers prior to the location of any dull szte on the subject property to verify comphance with all apphcable FAA rules or regulatmns LESSEE shall provide LESSOR wzth copies of all wmvers or other documentatmn zssued by the FAA indicating approval of welt site locatmns or any other operatzons prior to the commencement of operations 16 Indemmflcatlons and Insurance LESSEE shall provide or cause to be prowded the insurance described below for each well dulled under the terms of this Lease, such insurance to continue untzI the well is abandoned and the szte restored Such insurance shall prowde that LESSOR shall be a co-insured, wzthout cost, and that smd insurance can not be canceled or termznated wzthout tinrty (30) days prior notzce to LESSOR and ten (10) days notme to LESSOR for nonpayment of premiums a General Requirements. Indemmfieatmn and Express Neghgence Prows~ons LESSEE shall expressly release and discharge, all claims, demands, actions, judgments, and executmns winch ~t ever had, or nowhaYe (~r may have, or assigns may have, or clmm to have, against the LESSOR, ~t agents, officers, servants, successors, asagns, sponsors, volunteers, or employees, created by, or ansmg out of personal injuries, known or unknown, and ~njunes to property, real or personal, or m any way me,dental to or in connectmn w~th the performance of the oil and gas dnlhng and productmn performed by the LESSEE under tins lease and the LESSEE shall fully defend, protect, mdemmfy, and hold harmless the LESSOR, and/or ~ts departments, agents, officers, servants, employees, successors, assigns, sponsors, or volunteers from and against each and every clam, demand, or cause of action and any and all hablhty, damages, obhgat~ons, judgments, losses, fines, penalties, costs, fees, and expenses recurred m defense of the LESSOR, and/or its departments, agents, officers, servants, or employees, including, without hmltat~on, personal injuries and death m cormectlon therewith winch may be made or asserted by LESSEE, its agents, assigns, or any tlurd parties on account of, arising out of, or m any way mmdental to or m cormectmn with the performance of the off and gas well dnlhng and productmn performed by the LESSEE under tins lease and, the LESSEE agrees to mderrm~fy and hold harmless the LESSOR, and/or ~ts departments, and/er ~ts officers, agents, servants, employees, successors, assigns, sponsors, or volunteers from any hab~ht~es or damages suffered as a result of claims, demands, costs, or judgments against the LESSOR and/or, its departments, It's officers, agents, servants, or employees, created by, or arising out of the acts or omissions of the LESSOR occurnng on the dull site or operation ate m the course and scope of 642660 2/SP3/29121/0103/103101 7 respecting and permitting the gas wells INCLUDING, BUT NOT LIMITED TO, CLAIMS AND DAMAGES ARISING IN WHOLE OR IN PART FROM THE NEGLIGENCE OF THE LESSOR OCCURRING ON THE DRILL SITE OR OPERATION SITE IN THE COUP. SE AND SCOPE OF ITS DUTIES UNDER THIS LEASE IT IS UNDERSTOOD AND AGREED THAT THE INDEMNITY PROVIDED FOR IN THIS SECTION IS AN INDEMNITY EXTENDED BY THE LESSEE TO INDEMNIFY AND PROTECT THE LESSOR AND/OR ITS DEPARMENTS, AGENTS, OFFICERS, SERVANTS, OR EMPLOYEES FROM THE CONSEQUENCES OF THE NEGLIGENCE OF THE CITY OF DENTON, TEXAS AND/OR ITS DEPARTMENTS, AGENTS, OFFICERS, SERVANTS, OR EMPLOYEES, WHETHER THAT NEGLIGENCE IS THE SOLE OR CONTRIBUTING CAUSE OF THE RESULTANTANT INJURY, DEATH, AND/OR DAMAGE b All pohc~es shall be endorsed to read "THIS POLICY WILL NOT BE CANCELLED OR NON-RENEWED WITHOUT 3 0 DAYS ADVANCED WRITTEN NOTICE TO THE OWNER AND THE CITY EXCEPT WHEN THIS POLICY IS BEING CANCELLED FOR NONPAYMENT OF PREMIUM, IN WHICH CASE 10 DAYS ADVANCE WRITTEN NOTICE IS REQUIRED" c Liability policies shall be wntten by careers licensed to do business m Texas and with companies with A VIII or better rating in accordance with the current Best Key Ra'ang Grade, or with nonadmltted carriers that have a financml rating comparable to careers hcansed to do business In Texas approved by the C~ty d Liability pohcms shall name as "Additional Insured" the city and ~ts officials, agents, employees, and volunteers e Certificates of insurance must be presented to the C~ty ewdenmng all coverages and endorsements reqmred by this Section 35-508, and the acceptance ofa certfficate without the reqmred hrmts and/or coverages shall not be deemed a wmver of these reqmrements f Claims made pohcles will not be accepted except for excess pohcles or unless otherwise provided by this Article g Reqmred Insurance Coverages 1 Commercial General Lmbdlty Insurance Coverage should be a m~mmum Combined Single Limit of $1,000,000 per occurrence for Bodily InJury and Property Damage Th~s coverage must include premises, operatmns, blowout or explosion, products, completed operatmns, blanket contractual habdlty, underground property damage, broad form property damage, independent contractors protective hab~hty and personal injury 2 Envn:onmental Impmrment (or Seepage and Pollution) shall be either included m the coverage or written as separate coverage Such coverage shall not exclude damage to the lease s~te If Environmental Impmrment (or Seepage and Pollutmn) Coverage ~s written on a "clmms made" bas~s, the policy must provide that any retroactive date applicable precedes the effective date of the ~ssuance of 642660 2/$P312glZl1010311O3101 8 the permit Coverage shall apply to sudden and non-sudden pollution conditions resulting from the escape or release of smoke, vapors, fumes, acids, alkalis, toxic chemicals, hqmds or gases, waste material or other irritants, contaminants or pollutants 3 Automobile Liability Insurance Minimum Combined Single Limit of $500,000 per occurrence for Bodily InJury and Property Damage Such coverage shall include owned, non-owned, and hired vehicles 4 Worker's Compensation Insurance In addition to the minimum statutory requirements, coverage shall include Employer's Liability limits of at least $I00,000 for each accident, $100,000 for each employee, and a $500,000 policy limit for occupational disease, and the insurer agrees to wmve rights of subrogation against the city, its officials, agents, employees, and volunteers for any work performed for the city by the LESSEE 5 Excess (or Umbrella) Liability Insurance Mlmmum limit of $I 0,000,000 covering in excess of the preceding insurance policies 6 Control of Well Insurance a Minimum limit of $5,000,000 per occurrence b Policy shall cover the Cost of controlling a well that m out of control, Rednlhng or Restoration expenses, Seepage and Pollution Damage Damage to Property in the LESSEE's Care, Custody, and Control with a sub-limit of $500,000 may be added 17 Offset Well Requirement. In the event a well or wells producing oil and gas ~n any quantities that should be- l~r~)ught m by LESSEE or any other LI~SSEE on adjacent lands and within 330 feet of the land or lands pooled, by perm~smon of LESSOR, w~th such lands, LESSEE agrees to drill such offset wells as a reasonably prudent LESSEE would (hull under the same or similar circumstances 18 Locgtlon of Drilling Act~vit¥, Pipehnes and Equipment No dnlhng activity shall be conducted on and no pipelines, equipment or other structures shall be placed on or under any pavement, concrete or asphalt or any other improved surface area situated on the above described land The location of any pipelines installed by LESSEE shall be approved in advance by LESSOR and shall be situated along routes that least ~nterfere with LESSOR's existing or future use of the surface in accordance with the Surface Use Agreement When required by LESSOR, LESSEE wull bury all pipelines at a depth ofs~x feet (6'), and the location of wells shall comply with Chapter 29, Fire Code, of the Code of Ordinances of the City of Denton, as amended, and ali other applicable laws 19 Construction of Fences Should production be obtained, LESSEE shall promptly construct a good and substantial fence, equivalent to at least a six (6) foot chmn link fence (man proof), enclosing the well and related equipment and thereafter maintain such fence in good condition dunng the life of the well and until such time as the surface is restored to its present 642660 2/5P3/29121/0103/103101 9 condition LESSEE agrees to properly mmntan the fenced area in good condition, including, without limitation, the mowing of grass m accordance with the Surface Use Agreement 20 Surface Damages LESSEE agrees to pay for ail actual damages caused by LESSEE's operations hereunder to fences, roads, personal property, underground utilities and services, buildings or other improvements on smd land Witlun a reasonable tame after LESSEE's need therefor has ceased, LESSEE shall remove the leasehold debris, fill all its and other excavations made by LESSEE on the above descnbed land, and restore the surface of the land to its condition pnor to the commencement of dnlhng operations insofar as may be reasonably practncal 21 Comphanee vath Laws LESSEE shall comply with ail applicable roles, regulations, ordinances, statutes and other laws m connection with any dnlhng, producing or other operations under the terms of this Lease, including, without limitation, the oil and gas well regulations of the City of Denton 22 Lease Assignment The assignment of th~s Lease by LESSEE, or any successor LESSEE, shall not relieve LESSEE, or any such successor, from its obligations hereunder LESSOR may, unless at agrees to the contrary, look to the LESSEE and/or any successor of LESSEE for performance of any one or more of such obligations 23 Water: LESSEE shall not use any water in, on, or under the above-described land, except m accordance with the Surface Use Agreement 24 Diligent. Good Faith Operations Each well drilled under this Lease shall be drilled with reasonable diligence and m good faith and in a good and worlcrnanhke manner in a bona fide attempt to product oil, gas and associated minerals therefrom 25 Captions and Headings The captions and headings m this Lease are for convenience only and shall not modify, change, amend, alter, or affect the true meaning of any paragraph, sentence, claus_e, phrase, or wor4s herein 26 Subordination and Stipulations Required by FAA This Lease recognizes that the Denton Municipal Airport was acquired and developed with aid and/or grant of land from the United States Copies of such grants are available for review at the office of the City Manager in Denton These grants include a number of obligations and commitments to the general and flying public, to the State of Texas, and to the United States In addition to the above general obligations and commitments, this Lease is subject and subordinate to and is controlled by all the provisions, stipulations, covenants, and agreements in that certain indenture by and between the United States of America and the LESSOR and at is understood that the LESSEE agrees to abide by and enforce all of the provisions, stipulations, covenants, and agreements incorporated in the foregoing instrument the same as if set out an full herein This Lease is subject to approval by the FAA and shall be effective only as of the date of such approval The following agreements and understandings are specifically enumerated to comply with FAA stipulations b It is further especmlly agreed by the parties hereto that no structures or obstructions, temporary or otherwise, shall be erected which will be an violation of the Federal Aviation Regulations Part 77 (Criteria for Determining Obstractlons to Asr Navigation), unless otherwise approved in writing by the FAA 642660 2/SP3/2g121/Oi03/103101 10 b W~thout the prior specific approval of the FAA no surface operations shall be conducted upon any of the lands covered by this Lease closer than the distances set forth m the sub-paragraph above, or w~thm the safety areas of said improvements, including Ingress and egress of vehicular traffic c It ~s specifically understood and agreed that the LESSEE and its successors and assigns shall give to the City of Denton and the FAA, not,ce in wntmg of the locatmn of any contemplated well and the route of Ingress and egress to such well on the above- described land and that if neither the FAA nor City of Denton objects to smd location within a period of thirty (30) days from the receipt of written not, ce thereof, the stud LESSEE and its successors and assigns may proceed to drill the well at the locatmn spemfied m stud notice, provided same does not contravene other provisions of this Lease or the further restrictions and obligations Imposed by the City of Denton d Th~s written notice shall not relive the LESSEE f~om obligation for filing a Notice of Proposed Construction or Alteratmn, FAA Form 7460-1, required by Federal Aviation Regulations, Part 77, Subpart B e Also it ~s agreed, that m the event a well is drilled on the above-described land, then such dnlhng operatmns shall be prosecuted continuously, w~th due d~hgence, until same results in production or a dry hole All temporary structures used m such dnlhng operatnons shall be painted and hghted in such a manner as prescribed by the FAA, and further provided that no permanent structures of any kind used m the development, production or transportation of oil, gas and other nunerals shall be placed on the above described land in such manner as to Interfere with or introduce hazard to the operatmn of the tureraf~ f Further, ~t is agreed that m the event any drilling operations for oil, gas, or other mn~rals result m production, LESSEE at ~ts own expense shall Immediately remove all temporary structures and place all semi-permanent or permanent equipment m such manner as will not interfere with or introduce any hazard to the operation of mrcraft In event such dnlhng operations result in a dry hole, then LESSEE shall at ~ts own expense immediately remove all temporary structures used in such landing operanon and level the area so that It may be safely used for landing or taxnng turcrafl g LESSEE shall not interfere w~th the access roads to the City of Denton A~rport, and shall not interfere w~th any other person or agency having a lawful right to use the above-described land, or w~th any building or improvements of any kind thereon belonging to any other person or agency, nor with their right to enter thereon and remove stud,braidings or improvements therefrom h Dunng time of war or national emergency, LESSOR shall have the right to lease the landmg area or any part thereof to the United States Government for m~htary or naval use, and if such lease ~s executed with the Umted States Government, the provlsmns of this Lease insofar as they are inconsistent with the prows~ons of the Lease to the Government, shall be suspended 642660 2/SP3/29121/0103/103101 1 1 27 Momorandum of Lease LESSOR and LESSEE agree that a memorandum of lease shall be filed of record m the Official Records of Denton County, Texas, evidencing th~s Lease and the prowsmns contained ~n such memorandum to the part~es hereto, the land covered by the Lease, the term of the Lease and notice prowslons reforming the pubhc of the existence of the Lease 28 ~eement Tlus Lease states the entire contract between the partms, and no representatmn or promise, verbal or written, on behalf of e~ther party shall be binding unless contained hereto, and ttus Lease shall be binding upon each party executing the same, regardless of whether or not executed by all owners of the above described land or by all persons above named as "LESSOR", and, notwithstanding the inclusion above of other names as "LESSOR", this term as used m th~s Lease shall mean and refer only to such part,es as execute th~s Lease and their successors m interest IN WITNESS WHEREOF, this instrument ~s executed on the date first above wntten EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY BY CORPORATION BY 6426602/SP3/29121/0103/103101 12 STATE OF TEXAS § COUNTY OF DENTON § Before me, , the undersigned notary public, on this day personally appeared Euhne Brock, the Mayor of the City of Denton, Texas, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he/she executed the instrument for the purposes and conslderat~on therein expressed G~ven under my hand and seal of office th~s _ day of ,2001 Notamy Public STATE OF TEXAS § COUNTYOF DENTON § Before me, , the undersigned notary public, on th~s day personally appeared , the of Oil Corporatmn known to me, proved to me on the oath of , or proved to me through his/her current {description of ~dentlfication card or other document issued by the federal government or any state government that contains the photograph and signature or, he ackno~!cd~ng pcr~on to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he/she executed that ~nstrument for the purposes and consideration there~n expressed Given under my hand and seal of office this day of ,2001 Notary Pubhc 6426602/SP3/29121/0103/103101 13 EXHIBIT C SURFACE USE AGREEMENT CITY OF DENTON AIRPORT Tins Agreement is made and entered into effective this , by and among. whose address is (Operator") and the CITY OF DENTON, TEXAS, a home rule mumclpal corporation, acting by and through its duly authonzed City Manager ("Surface Owner"), WHEREAS, Operator owns the right to explore the lands described as follows TRACT 1 The land described m condemnation proceedings identified by Cause No 3922 filed on November 30, 1943 between the City of Denton and RM Evers, et al and subsequently filed in Volume 1675, Page 546 of the Real Property Records of Denton County, Texas, containing 147 26 acres, 2 26 acres of which is m a public road, in the Wdham Wllbum Survey, Abstract Number 1419 TRACT 2 The land described in that Warranty Deed dated December 23, 1943 between P T Underwood and wife Jlrnmle Underwood and the City of Denton recorded m Volume 304, Page 503 of the Real Property Records of Denton County, Texas, containing 74 94 acres, 1 75 acres of whlch is in a public road, in the Thomas Toby Survey, Abstract Number 1285 TRACT 3 The land described in that Warranty Deed dated January 18, 1944 between Mrs Ellen Pearl Corbm, a widow, Hugh C Corbm and wife, Sue Leu Corbxn, lohn S Corb~n, Alice Corbln Brown and husband W O Brown, Grace Corbm, a feme sole, Georgia Corbm, a feme sole, James E Corbm and wife, Yohnme Corbm, Mrs Gertle Corbm Hurst and husband, G E Hurst, and the C~ty of Denton, recorded in Volume 305, 'Page 216 of the Real Property Records of Denton County, Texas, contalmng 331 94 acres, 2 61 acres ofwhmh is in a public road, m the Wm Smith Survey, Abstract Number 1188, and the Wm Nefll Survey, Abstract Number 970 Denton County, Texas ("the Lands") for oil and gas operations, and WHEREAS, Operator and Surface Owner desire to enter Into an agreement regarding Operator's use of the Lands for its proposed ml and gas operations thereon m connection with Operator's well to be located at a surface location approximately and drilled to a projected vertical depth of approximately feet beneath the surface (the "Well") NOW, THEREFORE, in consideration of the premises and the covenants set forth below, Operator and Surface Owner agree as follows 1 In connection with the Well, and pursuant to the terms and Provisions herein after contmned, Operator shall have the right (a) to construct and use a dnlhng pad location and related dnlhng and clrculatmn p~ts on the Land on which such Well is to be situated (the "Site") for the purposes of dnlhng for, equipping, operating and producing oil, gas and other minerals from the Well (including, but not limited to, the mstallatmn and maantenance of a tank battery, heater treater, separator, and other equipment on the dnllmg pad), and Co) to install flowlmes and plpehnes to and from the Site, to install electnc poles on the Site 2 Drilling Operations. For purposes of this Agreement, the dnlhng pad shall be constructed m the approximate d~menslons and configuration depicted on a gas well development plat as approved by the City No well shall be dialled within 500 feet of any structure on the land without the written consent of the Surface Owner Dunng drilling operations, the penmeter of the drill site shall be fenced by Operator at its sole expense with a fence sufficient to turn livestock, thereafter, m the event of productmn, said fence shall be maintained around the perimeter of the well site and tank battery area actually utilized by Operator Operator shall use only the entrances and roadways for entenng upon and leaving the land and will use only the routes m going upon, over or about the land as are designated by Surface Owner in writing for Operator's use m accessing the drill site Operator shall access the Site directly fi.om Airport Road, and that Operator shall construct roads to the Site as depleted on the gas well development plat approved by the City Operator shall mamtmn all roads, exlst~_ng or new, used by Operator in good repair free of rocks and ruts to the reasonable satlsfactmn of Surface Owner Annual mmntenance must include, as a m~mmum, addition of at least two inches ofcahche and motor grading Operator will construct d~verslon terraces as may be reasonably necessary to prevent soil erosion Use of roads shall be confined to lease operations and to the use of the Surface Owner and Surface tenants Operator shall never obtain or assist anyone to obtain or have designated a public road across the land Operator may open new roads only upon written concurrence of Surface Owner noted upon a survey plat of the road showing ~ts location and a legally sufficient centerhne descnptlon Alt new roads shall be strmght and parallel to survey lines to the extent the terrain permits No interior gate or opening in the fence shall be constructed so as to access any other part of the Land from the Site or rectangular area described m this paragraph w~thout Surface Owner's consent Ail travel shall be confined to roads and no off-road travel ~s permitted 3 Refineries prohth~ted Operator is prohibited from constructing an ml or gas refinery or a plant for cleaning up gas or removing H2S on the leased premised w~thout first obtmnlng a separate wntten lease agreement Wlth Surface Owner The location of separators, dehydrators and compressors shall not be considered as plants 4 Compensation. As compensation for the surface use and operations enumerated herein, Operator agrees to pay Surface Owner the total amount of $10,000 00 for the Site, $1,000 for each tank battery located on the dnlhng pad, and, $ 10/rod (16 feet) for each flowhne constructed offthe dnlhng pad Such payment _for flowhnes to be payable upon completion of construction and each year anmversar¥ thereafter until removal Operator shall remit the payments reqmred m this paragraph payable to Surface Owner. 5 No water wells may be drilled on the property 6 Notification. Operator shall notify Surface Owner at least 3 days, exclusive of Saturdays, Sundays and legal hohdays, prior to commencement of all exploration, dnlhng, hlghhne or plpelme construction operations on the land, specifying the approximate date of commencement, and the nature and location of the operations No facilities required for any operation permitted under flus lease shall be commenced, placed, erected or constructed until Surface Owner and Operator have conferred and mutually selected the site or sites for location of the facilities, taking into consideration the use of the land for mrport operations 7 Pipelines and Flowhnes Prior to constructing pipelines and fiowhnes on the Lands, Operator shall consult with Surface Owner so that the pipelines and flowhnes shall be located, insofar as reasonably practical, to cause minimum Interference with Surface Owner's surface operations and use of the land Plpelmes and flowhnes shall be limited to natural gas tra_nspqrted through s~uch plpelme to natural gas produced u~_ der the terms of the lease from the leased premises Operator agrees that all flowhnes and gas sales pipelines shall be constructed as near as practical to pubhc right of ways andI shall be buried to a depth as the City determines or as may be requlre~l under applicable laws, including FAA rules and regulations A plot plan showing proposed plpehnes shall be filed with the Director of the Airport "As built" plans shall be filed with the D~rector of the Airport on completion 8 Abandonment of Wells At Operator's cost, Operator agrees to conduct a gammaray neutron log survey from the surface to the bottom of the surface casing of any well drilled on leased premises by Operator m order to assist Surface Owner m determining whether water sands have been encountered to such depths Operator shall provide Surface Owner or surface owner with a copy of such log and, without any warranty whatsoever, Operator's opinion as to whether such log indicates water beanng sands and if so, the location or depth thereof Prior to abandoning a well, Operator agrees to give Surface Owner prior notice of such intended plugging and Surface Owner shall have twenty (20) days after notice within which to elect to take over such well for completion as a water well If Surface Owner elects to take over same, Operator shall plug such well to the depth designated by surface owner and the[eafrer surface owner shall own such well together wxth the obhgat~on to plug the rcma~mng, unplugged portion of such well when surface owner abandons same Surface owner agrees to execute the appropriate forms reqmrcd by thc Ra~Iroad Commission of Texas and other regulatory authority m order to transfer operations and ownership of, as well as habllxty for, such well to surface owner In the event Surface Owner declines to take over such well, then Operator shall promptly plug same At each stage of Operator's operations, Operator wall maintain thc sxte of operations ~n a neat, orderly, safe condmon, free of htter and frec of all objects not rc~onably necessary to the operation Upon abandonment of any s~te, operation or road, Operator w~ll notxfy and confer w~th Surface Owner, and except to the extent Surface Owner waives, ~n writing, Operator's obhgatlon to do so, the s~tc or road be cleaned, all mounds w~ll be leveled, and all p~ts, p~t liners wall be removed at thc appropriate t~me and all p~ts, ruts and other excavations (ader being allowed to dry out) w~ll be filled, leveled and smoothed, all cahche wall be removed from the s~te or road will be seeded w~th grass of Surface Owner's choice and otherwise returned, as nearly as practical, to ~ts natural state, all w~th~n a reasonable t~mc 9 Penalties In the event Operator fa~ls or refuses to pay Surface Owner for penalties, claims, surface use or damages, as required under th~s lease, w~th~n 30 days after same are due, then Operator shall be required to prowde Surface Owner w~th security in the form of cash m the sum of $10,000 00 payable to Surface Owner which sum may thereafter be apphed by Surface Owner toward Operator's obhgat~ons for past unpaid, as well as future compensation for penalties, claams, surface usage and damages and on each occasion that Surface Owner apphcs all or a part of smd security deposit toward unpaid penalties, claims or compensation, Operator agrees to restore such security deposit to $10,000 00 If Operator fmls to make such $10,000 00 secunty deposit and/or maintain same, w~th~n 20 days after not~ce from Surface Owner to tender same, then th~s lease shall terminate Surface Owner shall have a first hen against the leasehold ~nterest of OI~e-rat0~' there~n to secure Surface Owner under thc terms of th~s lease and further this lease shall constitute a Sccunty Agreement sufficient to satisfy the Umfonn Commercial Code of Texas to estabhsh a secmuty ~nterest ~n th~s leasehold estate for the benefit of Surface Owner to secure them ~n the event of default by Surface Owner Unit such time as Operator breaches its obhgat~on to timely perform under th~s Icase, Surface Owner agrees that all production and revenue attnbutable to thc working ~ntercst hereunder shall be temporanly exempt from th~s hen Upon notice to Surface Owner of Operator's breach of ttns or any other prov~s~on of this lease, which breach constitutes an accrued but unpaid claim owned by Operator to Surface Owner, then sa~d temporary exemption shall be hfted and th~s security interest and hen shall thereafter attach to all productxon and revenue attributable to the working interest under th~s lease 10 Preferential Paght to Sell As part of thc cons~deratxon for thxs lease, Operator covenants and agrees that the owner of the surface estate shall have a first prefcrentxal right to sell Surface Owner or xts contractors or assignees, at thc same price and terms Operator can obtain elsewhere, any water, sand, gravel or calmhc or any one of them, which Operator or any of its successors, assigns, agents or Independent contractors might need Incidental to any exploration or development operations on leased premises 11 Place of Payment All payments, compensation and damages which may be duc and payable to Surface Owner shall be payable to Surface Owner at the City of Denton, Texas 12 Enwronmental As used in this lease, the term "Hazardous Materials" means any substance defined or Identified as a hazardous, extra hazardous or toxic substance, waste, or matenal under any applicable federal, state, or local statute or regulation "Remedml Work" is defined as any site investigation or momtonng, any cleanup, contanment, remedml removal, or restoration work performed in response to any federal, state or local government authority or private attorney general action, or pursuant to any federal, state or local statute, rule regulation or other laws Operator agrees (1) to remove from the leased premises, ~f, as and when required by law, any Hazardous Materials placed or released thereon by Operator, (2) to perform remedml work where the need therefore arises in connection with Operator's operations or actlvmes on the leased prennses, and (3) to comply in all respects with all federal, state and local governmental laws and regulations governing operations by Operator and remedml work on or assomated with the leased premises Such remedial work shall be performed by one or more contractors selected by Operator and approved in advance by Surface Owner and under the superv~smn of a consulting engineer selected by Operator and approved in advance by Surface Owner All costs and expenses of remedial work made necessary by Operator's operations shall be paid by Operator, including, without limitation, the charges of such contractors and/or the consulting engineer and Surface Owner's reasonable attorneys' fees and costs incurred in connection with the momtorlng or rewew of remedial work If Operator shall fall to. tl~mely commence, or cause to be commenced, or fall to diligently prosecute to completion, such remedial work, Surface O~vner may, but shall not be required to, cause such remed~at work to be performed Operator promises to notify Surface Owner of any clam or other action by any governmental agency or other third party Involving the actual or alleged existence of hazardous materials on the leased premises or on Surface Owner's adjommg property and to provide Surface Owner with copies of (1) any notice of any release of Hazardous Matenals g~ven to Operator pursuant to any law or regulation and (2) any report of and response to any such mmdent Operator agrees to indemnify, pay and protect, defend and save Surface Owner harmless from all claims, liabilities, fees and expenses of any kind that arise from the actual or alleged presence or release any Hazardous Material in connection with Operator's operators on the leased premises This indemnification shall Include costs in connection with any remedial work when performed by Surface Owner or any third party in response to any federal, state or local governmental authority, laws or regulatmns, due and payable upon demand therefore by Surface Owner 13 Not, ecs Operator agrees to designate in writing the name of the person or persons to be present from tlme to time on smd premises as curt'cut operations are being conducted, with whom Surface Owner may resolve any claim for use, injury and damage to mrport operators surface area or Improvements on sa~d premises oceamoned by or arising from Operator's operations or other activity on the said premises In regard to notice of surface use, the surface owner affected by such operatmns shall be entitled to prior notice of such operations Either party hereto may from tune to time designate m wntmg a d~fferent address or agent The following persons are designated as each party's Initial agent To Surface Owner To Operator 14 Secondfrertiary Operations Operator is denied the right and privilege of InJecting any substances into the subsurface for secondary or tertmry recovery operations w~thout Surface Owner's prior written approval 15 Memorandum of Agreements Operator and Surface Owner agree to execute a Memorandum of this Agreement m the form attached as Exhibit "A" hereto, wluch may be recorded in the records of Denton County, Texas I6 Assignment. This Agreement shall remain in effect for so long as the oil and gas leases owned by Operator on the Lands are in force and effect, and be binding upon and shall Inure to the benefit of the parties hereto, their respective hmrs, personal representatlves, successors and assigns 17 Indemmficat~on Operator shall Indemnify and hold harmless and defend Surface Owner and Surface Owner's officers, agents and employees from all stats, actions, claims, damages, personal Injuries, accidental death, property damage, losses, and expense of any character whatsoever ~nclud~ng attorney's fees brought for or on account of any injuries or damages received or sustained by any person or persons or property, on account of any negligent act of Operator, Operator's officers, agents and employees whether such negligent act was the sole proximate cause of the injury or damage or a proximate cause jointly and concurrently with Operator or Operator's employees, agents or subcontractors' negligence, in the execution, supervision and operations growing out of or in any way connected w~th tlus Agreement and Operator will be reqmred to pay any ~udgment, with costs, which may be obtained against Surface Owner or any of their officers, agents or employees, ~ncludung attorney's fees 18 Insurance Operator shall file evidence m the form of a certificate of insurance wath the City Secretary for the City of Denton, acceptable to the City Attorney, that it has obtained habfllty insurance m accordance with the Oil and Gas Mineral Lease, C~ty's Gas Well Ordinance and with the City of Denton as an additional insured and covenng 1ts operations on the Lands Operator shall also file ewdence m the form ora ce~ficate of insurance with the City Secretary for the City of Denton, acceptable to the C~ty Attorney, that Its workers' compensatmn and general habfllty coverage includes in its provisions a waiver of any rights of subrogation as against the City of Denton, Texas m accordance with the City's Oil and Gas Regulations 19 Operator shall follow FAA rules and regulations prior to the commencement of drilling operations under this agreement Operator shall file a aeronautical study request form (Form 7460) before commencing dnlhng operataons and shall obtain ali prior consents, approvals or waiver of FAA regulations Operator shall mdernmfy and hold Surface Owner harmless for any FAA orders requmng Operator to cease operaUons 20 Th~s agreement shall be construed under the laws of the State of Texas, w~thout reference to conflict of law pnnclples which would require the appheataon of the law of another jurisdiction, and exclusive venue shall be m Denton County, Texas for any clmms lawsmts or aetlons in connection with th~s Agreement 21 In the event of any conflict be'cween the part,es hereto such that either party bnngs or commences any legal action or proceeding related to this hcense, Including but not limited to, any action pursuant to the provisions of the Texas Umform Declaratory Judgments Act (Tex Clv Prac& Rem Code § 37 001, et seq, as amended), the parties hereto agree to waive any and all rights to recovery of attorneys fees to which the prevaflmg party might otherwise be entitled 22 This Agreement shall never be construed to constitute the parties hereto as partners or joint venturers, or to create a relat~onsh:p of pnncipal-agent, employer-employee, trustee beneficiary, an association for business or profit, or any other relationship, legal or equitable, among the parties hereto In all respects, each party shall be responsible for ~ts own conduct m connection with the subject matter of flus Agreement as though it were an independent contractor, free from all control and direction of the others 23 Thls Agreement may be executed in mult~ple counterparts, each of wluch when taken together shall constitute but one and the same mstnnnent, but none of which shall be effective until and unless executed by all parties named here~n Addmonally, th~s Agreement may also be executed in multiple ongmals, any one of which, when fully executed as herein provided, shall be effective for all purposes 'When fully executed as herein provided, the terms and conditions ofth~s Agreement shall be binding upon, and mute to the benefit of, the part~es hereto, their heirs, successors and assigns 24 EXECUTED by each party hereto as of the date ~nd~cated beside its s~gnature, to be effective for all purposes as of the Effective date Surface Owner M~chael A Conduff, City Manager Date CITY OF DENTON, TEXAS ATTEST Jennifer Walters, City Secretary Date APPROVED AS TO FORM Herbert L Prouty, C~ty Attorney Operator- By ACKNOWLEDGMENTS STATE OF TEXAS § COUNTY OF DENTON § Before me, the undermgned authonty, on thru day personally appeared Mmhael A Conduff, CITY MANAGER OF THE CITY OF DENTON, TEXAS, known to me to be the person and official whose name ~s subscnbed to the foregoing ~nstmment and acknowledged to me that the same was the act of smd C~ty, and for tnle purposes and conmderation therem expressed, and m the capamty thereto stated Notary Pubhc, State of Texas STATE OF TEXAS § COUNTY OF DBNTON § The foregmng instrument was acknowledged before me on 2001 by, on behalf of the corporation Notary Pubhc, State of Texas to Surface Use Agreement dated effectave between and the CITY OF DENTON, TEXAS MEMORANDUM OF SURFACE USE AGREEMENT The Memorandum is being executed for the purpose of g~vmg not, ce of the existence of that certmn Surface Use Agreement dated effective of even date entered into by and between, whose address ss (as "Operator") and the CITY OF DENTON, TEXAS (as "Surface Owner") regarding Operator's use of the lands owned by Surface Owner located m Denton County, Texas, to w~t (the "Land") for Operator's o21 and gas operations on such lands Dated effective this, 2001 Surface Owner CITY OF DENTON, TEXAS By Michael A Conduff, City Manager ATTEST Jennifer Walters, C~ty Secreta_ty APPROVED AS TO FORM Herb Prouty, C~ty Attorney AGENDA INFORMATION SHEET AGENDA DATE December 18, 2001 DEPARTMENT Legal Department CM/DCM/ACM Herbert L Prouty, C~ty Attomey SUBJECT: Hold a pubhc heanng and consider and adopt an ordinance accepung junsd~ctlon of a complmnt filed by Spencer Generating Company, L P (Spencer) agmnst TXU Lone Star P~pehne (TXU) clmmmg TXU ~s attempting to charge rates for gas utd~ty service to the Spencer Generating Station, making findings w~th respect to the complmnt filed by Spencer agmnst TXU for fmlure to prowde gas utd~ty service on reasonable terms, ordenng ~ntenm rehef by requmng TXU to Immntmn gas utlhty service to the Spencer Generating Station under the ex~stlng Agreement between TXU and Spencer w~thout interruption after December 31,2001, until a just and reasonable rate is estabhshed or until TXU and Spencer reach an agreement on a just and reasonable rate, ordering an investigation to make sure that rates charged by TXU to Spencer Generating Company or other C~ty of Denton ~ndustrml ratepayers are not discriminatory or preferential, authonzang the hlnng of rate consultants, providing for the recovery of rate expenses; providing a severabfllty clause, and providing an effective date BACKGROUND' On July 17, 2001, you adopted Ordinance No 2001-251 (Rate Ordinance) whmh set res~dentml and commercml rates for the TXU Gas D~stnbut~on (TXU) for gas sales within the C~ty of Denton ~n response to a revised rate fihng by TXU In Sectmn 1 2 of that Ordinance, you opted not to set rates for ~ndustnal customers as requested by TXU but ~nstead found that "contractual and ~ndusmal gas rates are considered to be just and reasonable" You also approved the rates for ~ndustnal customers in Denton estabhshed by contract by TXU Gas and such ~ndustnal customers whmh were in existence at the t~me that the Ordinance was passed (see Sectlon 1 5 of the Ordinance) Late th~slweek we received a complmnt filed by the Spencer Station Generating Company, L P, (Spencer) agmnst TXU Lone Star P~pehne (TXU-LSP) for fadure to prowde gas utd~ty service on reasonable terms and requesting Denton to ~ssue an ordinance as soon as possible that finds the C~ty has never set a just and reasonable rate for gas d~stnbut~on service ~nto the Spencer Generating Station (Spencer Station), funds TXU-LSP's and TXU GD's proposed rates for gas utthty service to Spencer Station are not just and reasonable and require TXU LSP to continue to prowde gas utlhty service to Spencer Station on an ~ntenm basis under the terms of the existing lntermpttble natural gas transportation agreement (Agreement) between TXU LSP and Spencer dated December 14, 1999 Spencer alleges that the rate which TXU-LSP and TXU-GD are proposing to charge Spencer for gas dehvered to the Spencer Station ~s well ~n excess of the ex~stmg contractual rate Spencer further alleges that the combined rate would result in "rate shock" whmh would detrimentally ~mpact the Spencer Stauon, ~s unjust and unreasonable and would make the Spencer Station uneconomical to operate This suggests that if TXU-LSP and TXU-GD are allowed to go forward w~th the proposed rates that Spencer would possibly shut down Spencer Station Although there have been negotiations between both Spencer and TXU- LSP and TXU-GD w~th various City officmls partmlpat~ng in those negotiations m an attempt to arrive at contractual rate that satisfied both pames as these negotmt~ons have failed to solve th~s matter Spencer ~s requestmg the C~ty, through ~ts attorneys, Akin, Gump, Strauss, Hauer and Feld, L L P, to hold a pubhc heanng to give them an opportumty to testify to support the allegations in the complamt They are requesting that you reqmre TXU-GD and TXU-LSP to continue to provide gas utlhty servme to the Spencer Station after the existing Transportation Agreement expires on December 31 of th~s year under the current Agreement until either the part, es reach agreement on a rate for Spencer Stataon or the city estabhshes a d~stnbutlon rate for Spencer Informatmn about the current and proposed rates at the Spencer Station ts included m an appendtx whmh I have attached to your status report due to a confidentmhty prowslon in the current Transportation Agreement between TXU and Spencer Th~s appendix along w~th a copy of the current transportation agreement ~s tncluded m your status report w~th some additional information OPTIONS. 1 Approve an ordinance requmng TXU-LSP to prowde gas ut~hty servme to the Spencer Station under the current Agreement between TXU-LSP and Spencer untd the City establishes a thstnbutlon rate or the parties reach an agreement on contractual rates for the Spencer Station 2 Refuse to accept jurisdiction of the Complmnt or to take any action on the Complmnt or to pass an ordinance setting e~ther permanent or interim rehef for transportation of gas to the Spencer Plant 3 Pass a Rate Ordinance that approves TXU's proposed rates for the Spencer Plant as just and reasonable RECOMMENDATIONS. Staff recommends that you chose Optmn 1 and pass the attached ordinance subject to the ewdence presented in the pubhc heanng Because of the shortness of t~me revolved and the complexity of these proceedings, the Staff beheves it ~s very doubtful that TXU w~ll be able to demonstrate that the rates proposed for the Spencer Station are just and reasonable Unless you are convinced by evidence presented at the public heanng that TXU's proposed rates for Spencer Station are just and reasonable, I feel the prudent thing for you to do ~s for you to require TXU~LSP and TXU-GD to continue to prowde gas utlhty service to Spencer under the current Agreement between TXU and Spencer on an ~ntenm basis until, through sufficient ewdence and testimony, TXU ~s able to convince you that TXU's proposed rate for gas to the Spencer Station ~s just and reasonable and you can confidently set a permanent rate or the parties reach an agreement on such rate It has been less than six months s~nce you adopted the Rate Ordinance, whmh found the current industrial rates estabhshed by contract to be just and reasonable I do not think enough ttme has passed for TXU-GD or TXU-LSP to be able to demonstrate that the current rates under the ex~st~ng Agreement w~th Spencer are not reasonable Page 2 and that TXU-GD or TXU-LSP ~s entitled to rate rehef Until the t~me that you have suffictent evidence to demonstrate what TXU-GD or TXU-LSP ~s proposing is just and reasonable or the parties reach agreement, ~t also seems prudent for you to reqmre TXU to continue to supply gas ut~hty service to the Spencer Station under the current rates set forth ~n the Agreement, which the Rate Ordinance found to be just and reasonable Spencer's Complaint has also rinsed an issue under Section 104 003 of the Texas Utlhty Code that the rate TXU is proposing for the Spencer Station may be unreasonably preferentml or discriminatory Accordingly, I recommend that you that you institute an ~nvest~gat~on to determine ~f the rates proposed by TXU for Spencer Station and other Denton tndustnal customers are consistent w~th rates charged to other generating plants and ~ndustnal customers throughout TXU's system FISCAL IMPACT: Th~s ordinance authorizes you to hire rate consultants and an outside attorney to assmt the staff m evaluating the justness and reasonableness of the rates which TXU ~s attempting to charge Spencer Station Under Section 103 022 of the Texas Utdlty Code, we believe that the reasonable costs of such services are reimbursable by TXU to the C~ty IfTXU contests this matter, then the City may have to pay the expenses of these rate consultants whmh would be difficult to estimate at this t~me The costs could be substantial if this matter ends up ~n a contested admm~stratlve proceeding or m lmgatlon Respectfully submitted, Herb Prouty / C~ty Attorney Page 3 ORDINANCE NO AN ORDINANCE ACCEPTING J-U-RISDICTION OF A COMPLAINT FILED BY SPENCER GENEILATING COMPANY, L P (SPENCER) AGAINST TXU LONE STAR P~ELINE (TXU) CLAIMING TXU IS ATTEMPTING TO CHARGE UNREASONABLE RATES FOR GAS UTILITY SERVICE TO THE SPENCER GENERATING STATION, MAK1NG FINDINGS WITH RESPECT TO THE COMPLAINT FILED BY SPENCER AGAINST TXU FOR FAILURE TO PROVIDE GAS UTILITY SERVICE ON REASONABLE TERMS, ORDERING INTERIM RELIEF BY REQUIRING TXU TO MAINTAIN GAS UTILITY SERVICE TO THE SPENCER GENERATING STATION UNDER THE EXISTING AGREEMENT BETWEEN TXU AND SPENCER WITHOUT INTERRUPTION AFTER DECEMBER 31, 2001, UNTIL A J-tJST AND REASONABLE RATE IS ESTABLISHED OR UNTIL TXU AND SPENCER REACH AN AGREEMENT ON A JUST AND REASONABLE RATE, ORDERING AN INVESTIGATION TO MAKE SURE THAT RATES CHARGED BY TXU TO SPENCER GENERATING COM2ANY OR OTHER CITY OF DENTON INDUSTRIAL RATEPAYERS ARE NOT DISCRIMINATORY OR PREFERENTIAL, AUTHORIZING THE HIRING OF RATE CONSULTANTS, PROVIDING FOR THE RECOVERY OF RATE EXPENSES, PROVIDING A SEVERABILITY CLAUSE, AND PROVIDING AN EFFECTIVE DATE WHEREAS, on or about July 17, 2001, the C~ty Counml passed Ordinance No 2001-251 (Rate Ordinance) estabhstung maxmaum permxtted rates and charges TXU Gas D~stnbutmn (TXU-GD) may assess residential and commere:al customers m the C:ty of Denton and fmlmg to approve rates for industrial customers requested by TXU-GD but approwng rates for industrial customers estabhshed by contract between TXU-GD and such industrial customers, and WHEREAS, TX'U accepted the Rate Ordinance and dxd not appeal to the Rmlroad Commission and the t~me for appeal has now expired, and WHEREAS, Spencer Statxon Generating Company, L P (Spencer) has filed a ¢omplamt against TXU Lone Star P~pehne (TXU-LSP) and (TXU-GD) for fmlure to provide gas unhty service on reasonable terms and stating that ~t xs unable to obtmnjust and reasonable rates for gas utility service to Spencer Generating Station (Spencer Station) as set out more fully m the Complmnt which is attached to th~s Ordinance, has requested a pubhc heanng on this zssue and has requested interim rate rehef from the City of Denton, and WHEREAS, after a pubh¢ heanng where both Spencer and TXU-GD and TXU-LSP were gxven an opportumty to present evidence coneermng the allegations m 8peneer's Complaint, the C~ty Counml deems ttm the pubhc interest to make the findings and orders, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS SECTION 1 FI1NDINGS That the City Counctl, pursuant to its exclusive original junsd~¢tmnal authority over the rates, operanons and servme of TXU-GD and TXU-LSP hereinafter referred to as TXU GAS wtthm Denton and m the exerctse of its sound legtslattve discretion, after reasonable nottce and heanng, makes the following findings of fact 1 1 That under Sectton 104 003(a) of the Texas Utthtles Code and Sectton 13 04 of the Denton C~ty Charter and Sectton 3 "Reservatton of Rtghts" of the Rate Ordinance, the Ctty Councd has exclustve and original juns&cttonal authority over the subject matter of the Complamt of Spencer and the other rate matters set forth hereto 1 2 That the Rate Ordinance passed by the Ctty Councd on July 17, 2001 (Rate Ordtnance) found tn accordance w~th Section 104 003(b) of the Texas Uttht~es Code, that the Ctty knew of no reason that the contractual industrial gas rates between TXU GAS and ~ts mdustnal customers at the t~me the Rate Ordmance was enacted on July 17, 200I, were not considered to be just and reasonable and refused to approve the industrial rates requested by TXU GAS and instead approved rates for industrial customers tn Denton estabhshed by contract between TXU GAS and such industrial customers at the txme the Rate Ordinance was enacted 1 3 That the Rate Orchnance d~d not set a just and reasonable rate for gas dlstnbutmn servme tnto the Spencer Statton unless the approval of the then ex~stmg lndustnal contractual rates estabbshcd the gas d~stnbutmn rates as these rates m the current tntermptthle natural gas transportatmn agreement between TXU GAS and Spencer dated December 14, 1999 (Agreement), 1 4 That TXU GAS accepted the Rate Ordtnance, has not filed for dtfferent ~ndustnal rates, and has not demonstrated that the rates winch ~t m attempUng to charge Spencer for natural gas transportatmn sermce to Spencer Statton after December 31, 2001, as set forth ~n Spencer's Complmnt are just and reasonable or that the current rate under the ex~st~ng Agreement w~th Spencer ts unreasonable 1 5 That TXU GAS has fatled to estabhsh that the proposed rates for gas utthty servtce to Spencer Statmn are just and reasonable as reqmred by Texas Utdtttes Code Sectmn 104 003(a) 1 6 That ~nsuffiment evtdence has been presented by TXU GAS to dewate from the finthng ~n the Rate Ordinance that the rates under the current Agreement between TXU GAS and Spencer are just and reasonable 1 7 That TXU GAS and Spencer have fatled to reach agreement on reasonable rates and terms and condmons for servtce to Spencer after December 31, 2001 1 8 That it ~s tn the pubhc interest that Spencer be entitled to and continue to receive gas uuhty servme to the Spencer Statton after December 3 I, 2001 unttl the C~ty has sufficient ttme to analyze the matters set forth m the Complaint, conclude ~ts lnvest~gatton and make an informed demsmn on tins matter 1 9 That costs of ~nvesttgatton of the Complaint of Spencer and all other rate matters included tn th~s Ordtnance, reqmre the services of attorneys, accountants, audttors, engineers and Page 2 rate consultants and the reasonable cost of such services are reimbursable expenses under Section 103 022 of the Texas Utlhty Code SECTION 2 ORDER That based on the findings of fact set forth in Section 1 of this Ordinance and m accordance with its previous findings and orders in Ordinance 2001-251 the City Council hereby makes the following interim order 2 1 The C~ty Council accepts jurisdiction over the Spencer Complaint in accordance with Section 13 04 of the Denton C~ty Charter and Section 104 003(a) of the Texas Utlhty Code and assigns this Complmnt Number 2001-1 and orders ali affected persons and parties to cooperate w~th the C~ty staff and all rate consultants and provide necessary information to allow the City to conclude 1ts investigation and to make a proper dlsposltmn of this proceeding 2 2 That TXU GAS is ordered not to change the rate to Spencer Station under the existing Agreement and is ordered to continue to provide gas ut~hty service to the Spencer Station on an Interim basis without interruption under the terms of the existing Agreement after December 31, 2001 until either (1) TXU GAS files for new industrial rates with City Council, demonstrate to the City Counml that the proposed rates for gas utility service to the Spencer Station are just and reasonable and are not preferentml or discriminatory, that relevant facilities are properly classifiedI as (hstnbutlon facfutms and these facthtles are used and useful m providing distribution service to the Spencer Station, and has the rates approved by the City Council or the Ralroad CommlsmOn, or (2) TXU GAS and Spencer negotiate a just and reasonable rate pursuant to Section 104 003(b) of the Texas Utlht~es Code 2 3 During the period of this mtenm order there shall be an investigation conducted to insure that industrial rates for the Spencer Station are not preferential or chscnmlnatory, TXU GAS and Spencer are ordered to cooperate with the City Council which hereby retains Its junsdmtlon to initiate an lnvest~gatuon to examine rates with other TXU GAS contract generating fac~ht~es and other industrial customers to insure that no rates being charged to Denton industrial gas customers by TXU are discriminatory or preferential 2 4 That TXU GAS is ordered to reimburse the C~ty for all reasonable costs of the services of rate consultants, attorneys, accountants, auditors, and engineers necessary to this proceeding m accordance with Section 103 002 of the Texas Ut~litles Code SECTION 3 That the City Manager and the City Attorney are authorized to take all actions necessary to enforce this ordinance including the engagement of rate consultants and the retention of legal counsel to enforce this ordinance and Ordinance No 2001-251 and the City Manager is further authorized to pay Diversified Utd~ty Consultants, Inc and the Law Offices of Jim Boyle for servmes performed through the date of this ordinance and to seek reimbursement of these expenses from TXU GAS SECTION 4 RESERVATION OF RIGHTS In order to ensure that rates and charges assessed by TXU GAS ~n Denton are .lust and reasonable to both TXU and their customers, Denton reserves the right and pnvdege at any t~rne to ~ncrease, decrease, alter change or amend Page 3 this Ordinance or the rates established herein or to enact any ordinance or adopt any rates and charges which would effectuate that purpose In this connection, Denton further reserves the right and privilege to exercise any anthonty and power granted to it under any applicable taw, ordmance or admamstratlve rule or regulataon SECTION 5 REHEARING BY CITY COUNCIL In the event the City Council adopts a final order and TXU GAS d~sputes all or any portion ofth~s Ordinance, prior to fihng an appeal with the Rmlroad Commlssmn of Texas, TXU GAS shall file w~th the City Secretary a request for reheanng on the merits by the City Councal and shall comply w~th the procedures established for such a reheanng as set forth in this Section 5 Upon receipt of a request for reheanng, the City Councal wall promptly provade a forum dunng a public heanng on an open meeting in order for TXU GAS to set forth the aspects of th~s Ordanance which they dispute The City Council shall have s~xty (60) calendar days following the date of such reheanng to render a final declsmn Actaon of the City Council shall not be consadered final for purposes of appeal to the Rmlroad Commission of Texas untal a final declsmn on nay motmn for reheanng has been rendered The prowslons ofthls Ordanance shall remain ~n full force and effect from and after its adoption unless modified by a subsequent ordinance adopted by the C~ty Councal as a result of a final decision following a reheanng SECTION 6 SEVERABILITY If any portmn, sectmn or part of a secUon of thas Ordanance as subsequently declared lnvahd, inoperative or vmd for any reason by a court of competent junsdactmn, the remmnmg portmns, sections or parts of sections of thru ordinance shall be and remain in full force and effect and shall not an any way be ampatred or affected by such declmon, opnuon or judgment SECTION 7 It is hereby found and determined that the meetang at which thas ordanance was passed was open to the public, as reqmred by Texas law, and that advance pubhc notice of the tame, place and purpose of the meeting was gaven SECTION 8 EFFECTIVE DATE This interim ordanance shall take effect and be m full force and effect from and after the date of its adoption until such time as the condataons ~n Section 2 2 of ti'ns Ordinance have been satasfied at which tame thas Ordinance shall have no further force or effect The City Secretary is hereby darected to dehver a certffied copy of thas Ordanance to TXU Gas by sendang the ordinance by U S Mml to the Company's authorized representative, Autrey Warren, Regulatory F~nanmal Manager, TXU Bus~ness Services, 1601 Bryan Street, Dallas, Texas 75201-3411 PASSED AND APPROVED this the day of ,2001 RONI BEASLEY, MAYOR PRO TEM Page 4 ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY Page 5 COMPLAINT OF SPENCER § STATION GENERATING COMPANY, § BEFORE THE CITY OF L P , AGAINST TXU LONE STAR § PIPELINE AND TXU GAS DISTRIBUTION § FOR FAILURE TO PROVIDE GAS UTILITY § DENTON, TEXAS SERVICE ON REASONABLE TERMS § SPENCER STATION GENERATING COMPANY, L P 'S ORIGINAL COMPLAINT Pursuant to Section 105 051 of the Texas Utd~t~es Code (TUC), Spencer Station Generating Company, L P, (Spencer) files th~s Original Complaint against TXU Lone Star P~pelme (TXU LSP) and TXU Gas D~strlbubon (TXU GD), d~ws~ons of TXU Gas Company (TXU Gas), that Spencer ~s unable to obtain just and reasonable rates for gas utd~ty service to the Spencer Generating Stabon (Spencer Station) ~n Denton, Texas, after December 31, 2001 Spencer's current gas transportabon agreement w~th TXU LSP for gas utd~ty service to the Spencer Stabon expires on December 31, 2001 The Spencer Stabon must have conbnuous and uninterrupted gas utd~ty serwce after December 31, 2001, or the Spencer Station w~ll cease to operate Spencer therefore respectfully requests the C~ty to consider and to take appropriate acbon on th~s mater to the full extent of the C~ty's authority at the C~ty's December 18, 2001, pubhc meeting to ensure that gas utd~ty service to the Spencer Stabon conbnues uninterrupted after December 31,2001, at a just and reasonable rate THE CITY HAS JURISDICTION OVER THIS COMPLAINT Spencer Is a power generation company subsidiary of PG&E National Energy Group (PG&E) which operates the Spencer Station ~n Denton, Texas Spencer is a gas transportation customer of TXU LSP, the gas transmission d~ws~on of TXU Gas 044143 0038 AUSTIN 257018 v3 1 Company The Ctty built the gas-fired Spencer Stabon [n the 1950s and operated the plant thereafter until June of 2001, when the City sold the Spencer Stat[on to PG&E The gas ut]hty faclht[es that serve the Spencer Stat[on cons[st of a 6-mile segment of ten-inch pipe (the Spur) connected directly to the Spencer Stat[on, and two eight-inch hnes connected to the Spur at the South Denton Meter Station These fac[httes prowde the only access the Spencer Stat[on has to gas ubhty service TXU LSP has represented to Spencer that the Spencer Stat[on and the gas ut[hty fac[ht[es serving the Spencer Station all are located within the C~ty of Denton If this representation [s correct, the City has exclusive original jurisdiction over the subject matter of th~s Complaint pursuant to TUC Secbon 103 001 To the best of Spencer's knowledge, the C~ty has not surrendered such municipal jurisdiction to the Railroad Commission of Texas (RCT) pursuant to TUC 103 003 However, Spencer respectfully requests the C~ty to determine whether the C~ty beheves that the RCT has exclusive ong~nal junsd~cbon over all or a porbon of the subject matter of th~s Complaint In the event that the C~ty determines that the C~ty does not have exclusive junsdmbon over all or a porbon of the subject matter of th~s Complaint, or otherwise cannot prowde the full rehef required to ensure that gas ut~hty service into the Spencer Station w~ll continue uninterrupted after December 31, 2001, then Spencer also respectfully requests the C~ty to ask the RCT to ~ssue a compamon ~ntenm order, on an emergency bas~s, to ensure that gas ubhty service to the Spencer Station continues umnterrupted after December 31, 2001 at the just and reasonable rates that presently are being charged 0441430038 AUSTIN 257018v3 2 II THE SPENCER STATION HISTORICALLY HAS BEEN SERVED SOLELY BY TXU LONE STAR PIPELINE. The Spencer Station historically has received gas transportabon service d~rectly from T×U LSP under contract between the C~ty and TXU LSP Th~s arrangement between the City and TXU LSP, or TXU LSP's predecessor, dates back to the 1950s, when the Spencer Stabon first was placed ~nto service The rates that TXU LSP charged the C~ty of Denton for service to the Spencer Stabon were negobated rates, as authonzed by the negobated rate provisions of TUC Secbon 104 003(b) The current interruptlble natural gas transportabon agreement between TXU LSP and the C~ty (Agreement) dated December 14, 1999, has been assigned to Spencer as of June 18, 2001 The Agreement w~ll expire on December 31,2001 III TXU LONE STAR PIPELINE AND TXU GAS DISTRIBUTION NOW CONTEND THAT THE SPENCER STATION REQUIRES DISTRIBUTION SERVICE Following PG&E's purchase of the Spencer Stabon and dunng recent negobatlons regarding continuing gas service to the Spencer Station after December 31, 2001, TXU LSP represented to Spencer, for the first brae, that the Spur directly connected to the Spencer Stabon ~s, and always has been, a d~stnbubon hne, not a transmission hne TXU LSP contends that the rates for gas utility service to the Spencer Stabon under the Agreement ~nclude a two-cent per MMBtu component attributable to d~stnbubon service provided on the Spur The C~ty has ~nd~cated to Spencer that ~t has no knowledge of such d~stnbubon service or charge therefor Spencer has seen no nobce, contract prowslon, or other documentabon reflecbng such a charge or service, or estabhshmg the bas~s for the rate or class~flcabon of the Spur facilities TXU LSP asserts that, for some penod of time, TXU LSP has paid such two- 0441430038 AUSTIN 257018v3 3 cent per MMBtu component to TXU GD (for a purpose that Is not clear to Spencer), but which TXU LSP claims ~s authorized by an mtra-company agreement made ~n 1987 (whmh has not been d~sclosed to Spencer) W~thout conceding that gas utd~ty service to the Spencer Stabon ever has ~nvolved d~stnbut~on service, any costs that TXU LSP claims are attnbutable to d~stnbut~on service have been mws~ble to the customer, because the Agreement provides for a bundled rate payable only to TXU LSP Neither PG&E nor Spencer has been aware of any d~stnbubon service being received through the Agreement Nevertheless, TXU LSP contends that, ~n order for the Spencer Stabon to continue receiving gas ut~hty service after December 31, 2001, Spencer must pay a substantially increased rate for d~stnbut~on service, ~n addlbon to paying a substantially increased transportation service rate The proposed ~ncreased rate for d~stnbut~on service, which TXU GD, the gas d~stnbut~on d~ws~on of TXU Gas Company, claims ~s necessary to recover ~ts revenue requirement for prowd~ng service ~n the C~ty, combined w~th the proposed transportation rate to be charged by TXU LSP, would make continued operation of the Spencer Station economically unfeasible TXU GD's recent claim to have been prowd~ng d~stnbubon service ~nto the Spencer Stabon ~s unsubstanhated To the best of Spencer's knowledge, the C~ty never has approved a rate for gas d~stnbut~on service ~nto the Spencer Station, no regulatory authority ever has found any assets to be used and useful ~n prowd~ng gas d~stnbubon service into the Spencer Station, or has properly classified any assets serving the Spencer Stabon as d~stnbubon assets, and the Agreement does not reflect any mutual understanding that the gas utd~ty service ~nto the Spencer Station ~nc~uded d~stnbubon 0441430038 AUSTIN 257018 v3 4 serwce or that d~stnbubon charges were collected under the Agreement Therefore, Spencer respectfully requests the C~ty to estabhsh whether the C~ty has approved a lawful rate for d~stnbutlon servme to the Spencer Station, by contract or otherwise, and whether any part of the service prowded under the Agreement has been shown by ewdence provided to the C~ty to be dlstnbut~on service If TXU GD beheves it is entitled to revenues for providing d~stnbut~on service to the Spencer Station, then TXU GD ~s entitled to pebbon the C~ty to demonstrate that the fac~hbes ~n question are d~stnbut~on facd~t~es and to request an approved rate IV THE CITY HAS NOT ESTABLISHED A DISTRIBUTION RATE FOR TXU GAS DISTRIBUTION TO CHARGE SPENCER On July 17, 2001, the C~ty by ordinance (Ordinance) set new d~stnbutlon rates for TXU GD ~n the City of Denton ~ TXU GD did not appeal the Ordinance The Ordinance ~s final and the t~me for appeals has passed In the Ordinance, the C~ty d~d not set d~stnbut~on rates for mdustnal customers as requested by TXU GD, but ~nstead found that "contractual industnal gas rates are considered to be just and reasonable,"2 and approved "rates for ~ndustnal customers ~n Denton established by contract between TXU Gas and such industnal customers"3 However, the Agreement for ubllty service to the Spencer Plant ~s between TXU LSP and Spencer, not TXU GD and Spencer4 Thus, there appears to be no lawfully-approved rate for gas d~stnbutlon service ~nto the Spencer Station If that ~s the case, TXU GD ~s not lawfully entitled to charge a rate for d~stnbut~on service ~nto the Spencer Stabon until e~ther (1) T×U GD City of Denton, Ordinance 2001-251 (July 17, 2001) 2 Ordinance, Section 1 2 Ordinance, Section 1 5 4 The City and TXU GD have entered ~nto a separate agreement for Plant Protecbon' service to the Spencer Station, however, that agreement is not at issue in this Complaint 0441430038 AUSTIN 257018 v3 5 and Spencer negotiate a just and reasonable rate pursuant to TUC Section 104 003(b), or, (2) TXU GD obtains an ordinance from the C~ty estabhsh~ng a d~stnbubon rate upon a sufficient showing by TXU GD that relevant facd~bes are properly classified as dlstnbubon facd~tles, that such faclhtles are used and useful ~n prowd~ng dlstnbut~on service to the Spencer Stabon, and that the rate requested for such servme ~s just and reasonable V THE RATE NEGOTIATIONS HAVE NOT RESULTED IN ,JUST AND REASONABLE RATES FOR SERVICE TO THE SPENCER STATION Under TUC Section 104003(b), a gas utd~ty service rate charged to a transportation, industrial, or s~mllar large-volume contract customer, such as Spencer, ~s considered to be just and reasonable only ~f one or more of three cond~bons are met (1) neither the gas utd~ty nor the customer had an unfair advantage during the negotlabons, (2) the rate ~s substanbally the same as the rate between the gas ubhty and at least two other customers under the same or s~mdar cond~bons of service, or (3) competition exists e~ther w~th another gas utThty, another suppher of natural gas, or a suppher of an alternatwe form of energy Whde the Agreement may have met these conditions, negotiations for continued rates and terms of service for the Spencer Station after December 31, 2001, have fa~led Spencer ~s not aware that any other ~ndustnal customer of TXU LSP or TXU GD which receives gas under the same or similar cond~bons of service as Spencer ~s charged rates that are substanbally the same as the rates TXU LSP and TXU GD propose to charge Spencer Further, there ~s no alternate gas suppher to compete with TXU LSP or TXU GD for service to the Spencer Station The rates TXU LSP and TXU GD have proposed to charge Spencer are not just and reasonable rates for gas utd~ty service ~nto the Spencer Stabon, as required by TUC 0441430038 AUSTIN 257018 v3 6 Section 104 003(a) The proposed rates appear to be d~scnm~natory and preferenbal, based on the s~ze of the ~ncreases proposed, and the fact that Spencer ~s unaware that s~m~lar customers are charged s~mllar rates for s~mdar services TXU LSP and TXU GD have proposed to charge rates which, ~n comb~nabon, are vastly m excess of currently approved rates, and which, ~f charged, would make conbnued operabon of the Spencer Station economically unfeasible The pricing prowslons of the current Agreement have been prowded under seal for the C~ty's consideration ~n Appendix A ~ TXU LSP and TXU GD now collectively propose to charge rates to Spencer which represent a s~xty percent (60%) increase In the cost of transportation serwce, a s~x hundred-fifty percent (650%) ~ncrease In the cost of swing service, and a three hundred s,xteen percent (316%) ~ncrease ~n the cost of d~stnbut~on service (based on TXU GD's alleged assessment of a prior two-cent distribution rate) By inserting TXU GD ~nto the contracting chain for purposes of prm~ng gas utility service to the Spencer Stabon for the first t~me ~n over forty years, TXU LSP ~n essence has proposed a combined rate which would result ~n rate shock which would detrimentally impact the Spencer Station, is unjust and unreasonable, and would make the Spencer Station uneconomical to operate Thus, ~t ~s necessary for the C~ty to protect the public interest by exercising the full extent of the C~ty's authority to ~ssue an ordinance to ensure the continued prows~on of gas utd~ty service to the Spencer Station after December 31, 2001 at a just and reasonable rate which, on an ~ntenm bas~s, are Section 7 1 of the Agreement requires the parties to keep the terms and provisions of the Agreement confidential Thus, informabon in the Agreement that is material to this Complaint ~s included in Appendix A, which Spencer has filed under seal As part of this Complaint, therefore, Spencer respectfully requests the City to take all appropriate and necessary actions to protect the confldentlahty of the informat~on in Appendix A, which is entitled to protection from public d~sclosure pursuant to Section 552 110(b) of Texas Government Code TEX GOV'T CODE ANN § 552 110(b) (Vernon Supp 2001) (exception for certain commercial or financial ~nformabon) 044143 0038 AUSTIN 257018 v3 7 the same as the rates set in the Agreement Such rates must continue in effect until either (1) TXU GD and Spencer negotiate a just and reasonable rate pursuant to TUC Section 104 003(b), or, (2) TXU GD obtains an ordinance from the C~ty estabhshmg a d~stnbubon rate upon a sufficient showing by TXU GD that relevant fac~ht~es are properly classified as d~stnbut~on fac~hbes, that such faclht~es are used and useful In prowdmg d~stnbut~on service to the Spencer Station, and that the rate requested for such service ~s just and reasonable VI THE NET EFFECT OF TXU GAS'S, TXU LONE STAR PIPELINE'S, AND TXU GAS DISTRIBUTION'S TACTICS AND ACTIONS ARE UNLAWFUL AND AGAINST PUBLIC POLICY The reality behind this Complaint is that the City sold the Spencer Station to a compebtor of TXU Gas's power generabon affihate The Spencer Stabon is located ~n the monopoly serwce area of TXU Gas's ut~hty dlwslons, TXU LSP and TXU GD Not until the Spencer Stabon was purchased by a compebtor of a TXU Gas affihate d~d TXU LSP and TXU GD d~sclose or attempt to explain that dlstnbubon service ~s being prowded and charged for under the Agreement On ~ts face, the Agreement descnbes no such service and provides for no such charges TXU Gas and Its utility dlwslons are attempbng to assess additional charges where service and faclhbes have not changed, no lawful rate has been approved, no notice has been provided to customers, and no regulatory approval has been sought or obtained In Spencer's judgment, TXU Gas and ~ts ubhty dlws~ons are seeking to take advantage of what they hope Is a gap between the junsd~ctlon of the C~ty and the jurisdiction of the RCT over gas utility rates and services Regardless, Texas law does not permit utlhty service to be prowded where a just and reasonable rate has not been 044143 0038 AUSTIN 257018 v3 8 estabhshed by law or regulatory authonty Perhaps equally as tmportant, the net effect of the actions and tactics pursued by TXU Gas and ~ts utd~ty d~v~s~ons ~s to close down a power plant recently acquired by a competitor of TXU Gas's power generation affihate Surely the laws of the State of Texas, ~nclud~ng the amendments to the Pubhc Utdlty Regulatory Act made m S B 7 ~n 1999,6 do not permit th~s k~nd of ant~-compet~t~ve behawor by gas and electric affiliates of a combined utility VII SPENCER IS ENTITLED TO RECEIVE CONTINUED GAS UTILITY SERVICE INTO THE SPENCER STATION Pursuant to TUC Section 121 103, Spencer ~s entitled to recewe continued gas utility service into the Spencer Station after December 31, 2001 A gas ut~hty ~n Texas has a continuing obligation to serve a transportation, ~ndustnal, commercial, or other s~mdar large-volume end-use customer, unless certain specific conditions are met A gas utd~ty's cont~nmng obhgat~on to serve such a customer ~s ext~ngulshed only ~f the customer reduces or ceases the purchase of natural gas service from the gas utility and purchases natural gas service from another supplier or purchases an alternate form of energy 7 Spencer has not reduced or ceased the purchase of natural gas service for the Spencer Stabon from T×U LSP, or purchased natural gas service for the Spencer Station from another supplier or purchased an alternate form of energy, nor does Spencer have the opbon of obta~mng gas utility service from an alternate supplier If no gas utility service ~s provided to the Spencer Station after December 31, 2001, then the Spencer Station wdl not conbnue to operate TEX SB ?,76TH/EG RS (1999) ? TUC Secbon 121 103(a) 0441430038 AUSTIN 257018v3 9 VIII THE INFORMATION IN APPENDIX A IS ENTITLED TO PROTECTION FROM PUBLIC DISCLOSURE The ~nformabon from the Agreement that ~s matenal to th~s Complaint ~s set forth ~n Appendix A, which Spencer has provided under seal The ~nformat~on ~n Appendix A ~s confidential ~nformat~on pursuant to the terms of the Agreement, and ~s entitled to protection from pubhc disclosure pursuant to Section 552110(b) of the Texas Government Code, which provides an exception to the pubhc d~sclosure requirements of the open records laws for certain commercial or financial ~nformat~on 8 Thus, Spencer respectfully requests the C~ty to take all appropnate and necessary acbons to protect the confldent~ahty of the ~nformat~on contained In Appendix A IX NECESSITY FOR EMERGENCY MEETING The Agreement w~ll expire on December 31, 2001 In order to ensure an umnterrupted continuation of gas utlhty service to the Spencer Station after December 31, 2001, Spencer respectfully requests the C~ty to consider th~s matter and to take acbon at ~ts next regularly scheduled pubhc meeting on December 18, 2001 If such prompt conslderabon and action requires an emergency not~ce of an addition to the City's agenda under the Texas Open Meetings Act,9 such emergency not~ce ~s appropriate The C~ty's ~mmed~ate acbon ~s required to address the emergency and urgent pubhc necessity presented by the reasonably unforeseeable situation that gas utlhty service to the Spencer Stabon may be ~nterrupted or cease entirely after December 31 2001, and to ensure conbnued gas utlhty service to the Spencer Stabon w~thout ~nterrupbon at just and reasonable rates after December 31,2001 TEX GOV'T CODE ANN § 552 l'10(b) (Vernon Supp 2001) TEX GOV'T CODE ANN § 551 045 (Vernon 1994) 044143 0038 AUSTIN 25701§ v3 1 0 X REQUEST FOR RELIEF Based on the foregoing facts, and, g~ven the hlstoncal use of the Spur, the pubhc benefits associated w~th the operation of the Spencer Station, and the potential for rate shock which would detrimentally ~mpact the Spencer Stabon, Spencer respectfully requests the C~ty to take the following acbons on December 18, 2001, to the full extent of the C~ty's authority and junsd~cbon (1) To take all appropriate and necessary acbons to protect the confidentlahty of the ~nformabon submitted under seal m Appendix A, (2) To consider in pubhc heanng th~s Complaint and to take such actions as ~t deems necessary and appropnate, (3) To ~ssue an ordinance that (A) Finds that TXU LSP, TXU GD, and Spencer have faded to reach agreement on reasonable rates and terms and cond~bons for service to the Spencer Station after December 31,2001, (B) F~nds that TXU LSP's and TXU GD's proposed rates for gas ubhty service ~nto the Spencer Station after December 31, 2001, are unreasonably d~scnm~natory and preferenbal, (C) F~nds that such proposed rates are not just and reasonable, and (D) F~nds that Spencer ~s entitled to continue to receive gas ubhty servme ~nto the Spencer Stabon after December 31,2001 (4) TO ~ssue an ordinance that also requires TXU LSP, and TXU GD to the extent that ~t currently ~s prowdlng service, to continue to provide gas utdlty service to the Spencer Station, w~thout ~nterrupt~on, under the rates and terms and cond~bons of the ex~st~ng Agreement after December 31,2001 To the extent the City determines that ~t cannot lawfully provide the full rehef required to ensure such continuation of gas ut~hty service into the Spencer Station after December 31,2001, then Spencer respectfully requests the City to request the RCT to ~ssue a companion interim order to the City's ordinance, on an emergency bas~s, to ensure such cont~nuahon of service, w~thout ~nterrupt~on, under the rates and terms and condlbons of the ex~sbng Agreement after December 31,2001 (5) To the extent the City concludes that has not set a gas d~stnbut~on rate for service to the Spencer Station, to ~ssue an ordinance which also 044143 0038 AUSTIN 257018 v3 1 1 (A) Rnds that the C~ty has never set a just and reasonable rate for gas d~stnbubon serwce ~nto the Spencer Station, (B) Concludes that there ~s no lawfully-approved rate for dlstnbut~on service by TXU GD into the Spencer Stabon, and, thus, that TXU GD shall not be entitled to charge a d~stnbut~on rate for serwce ~nto the Spencer Stabon untd e~ther (1) TXU GD and Spencer negotiate a just and reasonable rate pursuant to TUC Secbon 104 003(b), or, (2) TXU GD obtains an ordinance ' from the C~ty estabhshmg a d~stnbut~on rate upon a showing by TXU GD that relevant facd~bes are properly classified as d~stnbubon facd~bes, that such facilities are used and useful ~n prowdlng d~stnbut~on service to the Spencer Station, and provide evidence upon which the City can estabhsh that the approved rate ~s just and reasonable (6) To make any such ordinance ~ssued pursuant to this Complaint ~ntenm ~n nature, and to provide that such ordinance shall remain ~n effect untd such t~me as e~ther (1) TXU GD and Spencer negotiate a just and reasonable rate pursuant to TUC Section 104003(b), or, (2) TXU GD obtains an ordinance from the City estabhsh~ng a d~stnbutlon rate upon a showing by TXU GD that relevant fac,htles are properly classified as d~stnbut~on facdlt~es, that such facd~t~es are used and useful ~n providing distribution service to the Spencer Station, and provide ewdence upon which the City can establish that the approved rate ~s just and reasonable In addlbon, Spencer respectfully requests the C~ty to provide any and all such further rehef within the City's jurisdiction necessary to ensure the continued and uninterrupted gas utdlty service ~nto the Spencer Station after December 31,2001 Respectfully submitted, By G Ga~l Watk~ns State Bar No 20923400 AKIN, GUMP, STRAUSS, HAUER & FELD, L L P 1900 Frost Bank Plaza 816 Congress Avenue Austin, Texas 78701 (512) 499-6212 (512) 703-1111 Fax ATTORNEYS FOR SPENCER STATION GENERATING COMPANY, L P 044143 003~ AUSTIN 257018 v3 12 ~Uenoa Item_ ..... AG~A ~O~ON S~ET AGENDA DATE December 18, 2001 DEPARTMENT: Economic Development CM/DCM/ACM: Dave Hill, 349-8314 ~i~ SUBJECT Consider adoptmn of an orchnanee of the City Council of the City of Denton, Texas, approving an amendment to the guldehnes for the Rental Rehablhtation Program and ehglbfllty criteria, authorizing expenchtures m excess of $15,000 for projects meetang program gmdehnes and criteria, and providing for an effective date BACKGROUND The Community Development Division currently admamsters a Rental Rehabilitation Program Current gmdelmes were approved by City Council on September 4, 2001 Under the program, owners of rental property whose income does not exceed 150% of'the area median income may apply for,funding to assist in renovating their rental umts The property must be in a targeted low to moderate-income neighborhood and renters must meet income ellglbthty requirements Approved program gardehnes do not allow owners to reside in the renovated umts Proposed revisions to the gmdehnes will allow owners who meet HUD's low to moderate-income eligibility requirements to live in one of the renovated units if the property is a trl-plex or a four- plex (multi-family units) Thts will ensure that at least 51% of the units still house low to moderate-income renter households while allowing a low-income owner to reside in a unit OPTIONS · Approve the revision as proposed · Approve an altematwe remslon · Direct staff to continue administration of the program under the gmdehnes approved on September 4 RECOMMENDATION The Community Devalopment Advisory Committee met on November 14t~ Members discussed the issue land voted to recommend that City Council adopt the revised guidelines Page 1 ESTIMATED PROJECTSCHEDULE N/A PRIOR ACTION/REVIEW Cxty Council approved the current gmdehnes on September 4, 2001 FISCAL INFORMATION The Rental RehabflltaUon Program current budget balance ~s $20,946 Personnel costs are prod through Community Development Block Grant and HOME admmmtratmn fnndmg ATTACHMENTS · Ordinance, pages 3 - 4 · Proposed revision to the Rental Rehabfl~tatmn Program Gmdehnes Revision ~n bold type at Seetmn FF, page 5 Prepared By Barbara Ross Community Development Adm~mstrator Respectfully submitted L~nda Rathff ~//y Director of Economm Development Page 2 ORDINANCE NO AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, APPROVING AN AMENDMENT TO THE GUIDELINES FOR THE RENTAL REHABILITATION PROGRAM AND ELIGIBILITY CRITERIA, AUTHORIZING EXPENDITURES IN EXCESS OF $15,000 FOR PROJECTS MEETING PROGRAM GUIDELINES AND CRITERIA, AND PROVDING FOR AN EFFECTiVE DATE WHEREAS, the C~ty Councd of the C~ty of Denton recogmzes the need to assist low and moderate income families m secunng safe, samtary and decent housing, and WHEREAS, the C~ty of Denton has developed a program to rehainhtate tenant occupied housing umts by makang needed repmrs through ~s Rental Rehainhtat~on Program, winch ~s adm~mstercd by the C~ty of Denton Commumty Development Office and funded through a federal grant, and Wt4-EREAS, the C~ty of Denton has determined that an amendment to the program gmdelmes lS needed to ensure program comphance, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 That the C~ty Cotmml approves the Rental Rehainhtat~on Program Gmdehnes and ehg~inhty entena attachad to and made a part of tins ordinance for all purposes, and authorizes the City of Denton Commamty Development to adm~mstcr tNs program SECTION 2 That the C~ty Counml authorizes the expen&ture of funds ~n excess of $15,000 by the Commumty Development Office for projects meeting program gmdehnes and criteria, subject to comphanee w~th competitive Nddmg laws, where apphcable SECTION 3 That tNs ordinance shall become effective ~mmedmtely upon ~ts passage and approval PASSED AND APPROVED tins the day of ,2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY Page 3 APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY Page 4 X Mobile homes are not ehg~ble for rehabfl~tabon Y Interest of certain federal and other officials 1 ) No member or Delegate fo the Congress of the Un,ted States and no Resident Commissioner and no federal employee shall be admitted to any share or part of th~s contract or to any benefit to anse from same 2 ) No member of the governing body of the C~ty and no other pubhc official of or w~th~n the C~ty or County who exem~ses any run.ons or respons~b~ht~es ~n connection w~th the adm~mstrabon of the Community Development Block Grant Program and no other employee of the Commumty Development Department who exem~ses any such functions or respons~bht~es shall have any ~ntarest, direct or ~nd~rect, ~n rehabilitation proceeds which ~s ~ncompat~ble or ~n conflict w~th the discharge or fulfillment of h~s fun~ons and respons~b~l~bes ~n connection w~th the carrying out of the Housing Rehabilitation Program The length of bme th~s exclusion shall be m effect ~s one (1) year following the ending of term of office and shall be binding upon, but not hm~ted to, all of the ~nd~v~duals and agencies here~n descnbed Z The property owner agrees that for a period of ten years after the proJect ~s completed not to convert the rehabilitated umts to condomimum ownereh~p If the owner does convert rehabilitated umta to condom~mum ownereh~p, the entire loan amount shall be due ~mmed~ately AA The property owner agrees not to d~scnm~nate against prospective tenants on the bas~s of their receipt of or ehgiblhty for, housing assistance under any Federal, State or local housing assistance program, on the bas~s that the tenants have a m~nor child who w~ll be residing w~th them, or on the bas~s that they are hand~capped BB Apphcant agrees to rent all assisted unlfs to households whose total gross annual income ~s at or below 80 percent of the area median ~ncome found ~n Table B, page 7 of these gu~dehnes (see "note" below) Apphc~nt agrees to prowde proof of tenant ~ncome verification data (see Section I A 9 for acceptable forms bf venficet~on) to Commumty Services D~ws~on each t~me assisted umta are leased (NOTE Incom6 Limits may change annually - usually on October 1~t It ~s the Apphcant's responsibility to request a copy of the most current ~ncome I~m~fs from the Commumty Servmes DIvision CC The property owner agrees to maintain the rehabilitated property up to adopted C~ty of Denton Building Code Standards in effect the year m which the rehab~htat~on was completed Th~s will be apphcable for a period of at least ten years after the project ~s completed DD The property owner agrees to comply w~th apphcable lead-based paint regulabons EE The property owner agrees to comply w~th the C~ty of Denton's Tenant Assistance Policy, ~nclud~ng execution of all tenant notifications outlined in the pohcy Cop~es of all tenant correspondence must be submitted to the Commumty Services D~ws~on FF When,the property to be rehabilitated la a trl- or four-plex, and the ownerlappllcant meets the Income Itmlta for tenants (see Table B on page 3 of the guidelines), the owner/applicant Is eligible to occupy one of the aaeletad units VIII M[NiMUM REHABILITATION STANDARDS Roofs Roofs shobld not leak and have no ewdence of rotted decking, fascia or soffit Any roof w~th two or more layers of roofing must be stripped to the decking If ~t ~s determined a new roof ~s necessary the decking Page 5 AGENDA INFORMATION SHEET AGENDA DATE December 18, 2001 DEPARTMENT Legal Department CM/DCM/ACM Herbert L ?routy, C~ty Attorney SUBJECT' Consider and adopt on third reading an ordinance granting to TXU Gas D~stnbutlon, a chwslon of TXU Gas Company, ~ts successors and asmgns, a franchise to furnish, transport, and supply gas to the general public in the City of Denton, Denton County, Texas, for the transporting, delivery, sale, and distribution of gas m, out of, and through smd munlclpahty for all purposes, providing for the payment of a fee or charge for the use of the streets, alleys, and pubhc ways, repealing all prewous gas franchise ordinances and ordinances in conflict herewith, providing that it shall be m lleu of other fees and charges, excepting ad valorem taxes, prescribing the terms, conditions, obhgatlOnS and hm~tatlons under which such franchise shall be exemlsed, providing a savings clause, a severabfllty clause, and an effective date BACKGROUND INFORMATION: The franchise with TXU--TXU Gas Dlstnbut~on's (TXU Gas) predecessor Lone Star Gas Company for a 19 year term was entered into and became effective around August 20, 1982 as a result of passage of Ordinance No 82-56 TXU Gas assumed the franchise when TXU merged with Lone Star Gas ~n 1997 As a result of the mediation m litigation styled City of Denton, et al v TXU Gas, I have been negotmt~ng a francluse renewal w~th TXU Gas for approximately three months After lengthy negotmtlons, we have finally come to an agreement on a franchise which is modeled after a similar franchise agreement that TXU Gas entered into with the City of Bryan--where Mike Conduff formally served as City Manger--m the fall of last year The key terms of the franchme are as follows 1 The francl'nse agreement ~s for a term of a little over ten years or from August 19, 2001 (the end of the previous franchise with Lone Star Gas) through December 31,2011 Our consultant, Dan Lawton, of Diversified Utility Consultants, Inc, feels it would not be prudent for the City of Denton to enter into a term any longer than this due to what he predicts wall be s~gmficant changes in the way mtms are allowed to regulate and charge gas utdlty companies hke TXU Gas for the use and occupation of city streets and use of rights-of-way 2 The franctuse fee will be ~ncreased from 3% to 4% of gross revenues 3 The franchise defimtlon of gross revenues includes many revenue sources which the previous franchise does not mclude These sources of revenue include industrial revenues, transportatmn revenues and miscellaneous revenues These revenues will be included regardless of the outcome of the TXU htlgat~on mentioned above Otherwise, the parties reserve all claims and defenses that they may have in the litigation between the City of Denton and TXU Electric Company which is currently pending in the 134th Judicial Court of Dallas County, Texas 4 TXU Gas will be required to comply--in its operations on City rights-of-way and other public property--with all ordinances, niles, and regulations of the City as they may now read or hereinafter be adopted TXU Gas will be required to maintain, construct, operate, and to replace its pipes, mains, laterals and other equipment so as to not interfere with traffic, city streets and other public facilities All placement of major facilities such as mains, pipes, laterals and other pertinent equipment will be subject to the approval of the City Manager prior to construction Numerous provisions will provide for the mlmmlzatlon of interference with existing underground utihtles and other structures of the City or other utilities that may have their facihtles in the rights-of-way Bamers and other safeguards must be erected when TXU has to excavate any of the rights-of-way to repmr or mmntmn or relocate their facthtles TXU Gas is reqmred to restore the pubhc rights-of-way and other public fatalities to the condition they were m prior to the commencement work A consistent failure by TXU to restore the public rights-of-way appropriately can result in a penalty of up to 10% of the City's cost to repair 5 TXU Gas is reqmred to file--within one year of the granting of the franchlse~maps m a convement book, atlas or visual form showing in reasonable detml the Company's entire gas dmtnbutmn system in the City including locations, dimensions, and depth, to the extent reasonably possible, of all its mains, p~pes and other facilities 6 TXU Gas mdemmfies the City from all hablhty created from any of Its operations and assumes the nsk of loss with regard to its operation 7 TXU' Gas has a duty to serve any customer within the City where it ~s economically feamble for the Company to serve that citizen 8 The new franctuse requires quarterly payments by TXU Gas Under the previous franchise, the payments were made annually There is one outstanding Issue with regard to payments TXU Gas insists that they and their predecessor, Lone Star Gas, had been making franchise payments on a prepaid basis In other words, when they make a payment in a particular year, it covers the entire year m which the payment is made The payments have been made on or around April 1st of the year Based on the information we have been able to discover so far, we do not believe that TXU Gas's predecessor was prepaying the gas franchise Our research indicates that Lone Star Gas was making payments in arrears In other words, the payment made ~n April was for the previous 12- month period Unfortunately, we have not been able to resolve th~s dispute entirely But TXU has agreed that the franchise language will require a payment to be made by April 1, 2002, which will be considered a payment for the previous calendar year of 2001 But if, by the date of the payment, TXU Gas provides the City with sufficient evidence to convince ~t that TXU Gas has actually prepaid the previous franchise payments, then the quarterly payment schedule will be revised to reflect the fact that TXU Gas has prepaid Page 2 If not, the quarterly payment schedule shall remmn as ~nd~cated and TXU Gas w~lI be paying for each quarter currently or In arrears w~th~n 45 days of the end of that quarter ADDITIONAL CItANGES Th~s ordinance was originally scheduled to be considered on second reading at your October 2nd regular meeting The second reading was deferred to the October 16th meeting due to some concerns over a large gas cost increase to the Spencer Electric Generating Plant proposed by TXU Lone Star P~pehne ~n the renewal of the Interrupt~ble Natural Gas Transportation Agreement The concerns about this proposed ~ncrease are addressed in the C~ty Attorney's status report and have not yet been resolved As a result of these concerns, we have proposed changes m Sectmn 8(C) and 8(C)(5)(e) of the Franchise that would remove electric power plant revenue--derived by TXU from the Spencer Electric Generating Plant-- from the definmon of gross revenues We have also expressly stated the Spencer Plant shall be considered "power plant" customers as opposed to commem~al, ~ndustnal or transportation service customers A final request by TXU was to delay the actual lmpos~tmn of the new Gross Revenues payment from August 19, 2001 to December 6, 2001, the projected effective date of the Franchtse TXLT says thas will assast at ~n negot~atmg contracts with its andustnal customers I have made these changes m Section i(B) of the ordinance but made ~t clear to TXU that they need to promde you w~th an estimate of the amount of revenue that would be lost dunng this period--August 19tn to December 6th SO that you can make an mformed demsmn PROCEDURE FOR ADOPTING THE ORDINANCE Under Sectmn 13 01 of the City Charter every ordinance granting, amending, renewing or extending a pubhc utility franchise must be passed by a majority vote of the entire C~ty Council at three regular meetings of the C~ty Council Accordingly, you will need to pass tlus ordmance at three regular meetings whach we have determmed wall be your September 18, October 16, and November 6, 2001 City Council meetings In addat~on the ordmance cannot take effect until 30 days after its final passage and pending such time as the full text of the orthnance is pubhshed once each week for three consecutive weeks m the Denton Record Chromcle The ordinance must be accepted by TXU Gas TXU Gas is required to pay for the publication of the orthnance OPTIONS' 1 C~ty Counml can choose to pass the ordinance as written 2 Ctty Council can choose to pass the ordinance wath any changes it may deem necessary 3 C~ty Council may choose not to pass the ordinance Staff recommends C~ty Council choose option 1 and pass the ordinance as written subject to your approval of the change in Section I(B) The new ordinance prowdes the City w~th much more favorable terms and condatmns than the prewous franchise It w~ll result ~n a considerable increase m franchise fees Any change an the terms of the ordinance w~ll have to be negotiated w~th TXU Gas smce the franchme is a contract between the C~ty and TXU Gas Page 3 FISCAL IMPACT As indicated above, we anticipate the adoptmn of the franchise w~ll substantmlly increase the amount of revenue the C~ty receives each year from TXU Gas due to the fact that the franchise fee w~ll increase from 3% - 4% of gross revenues and w~ll include many addltmnal sources of revenue which had been prewously excluded by TXU Gas Dan Lawton's best estimate ~s over the ten-year plus franchme term, the City w~ll receive $2 5 m~lhon in add~tmnal revenues Since TXU Gas reserves the right to pass on ali or a portmn of the franchise fee to the Denton rate payers, th~s could result ~n a slight ~ncrease in the monthly gas utility bills for Denton customers Respectfully submitted, Herb Prouty City Attorney Page 4 ORDINANCE NO AN ORDINANCE GRANTING TO TXU GAS DISTRIBUTION, A DIVISION OF TXU GAS COMPANY, ITS SUCCESSORS AND ASSIGNS, A FRANCHISE TO FURNISH, TRANSPORT AND SUPPLY GAS TO THE GENERAL PUBLIC IN THE CITY OF DENTON, DENTON COUNTY, TEXAS, FOR THE TRANSPORTING, DELIVERY, SALE, AND DISTRIBUTION OF GAS IN, OUT OF, AND THROUGH SAID MUNICIPALITY FOR ALL PURPOSES, PROVIDING FOR THE PAYMENT OF A FEE OR CHARGE FOR THE USE OF THE STREETS, ALLEYS, AND PUBLIC WAYS, REPEALING ALL PREVIOUS GAS FRANCHISE ORDINANCES AND ORDINANCES IN CONFLICT HEREWITH, PROVIDING THAT IT SHALL BE IN LIEU OF OTHER FEES AND CHARGES, EXCEPTING AD VALOREM TAXES,._ PRESCRIBING THE TERMS, CONDITIONS, OBLIGATIONS AND LIMITATIONS UNDER WHICH SUCH FRANCHISE SHALL BE EXERCISED, PROVIDING A SAVINGS CLAUSE, A SEVERABILITY CLAUSE, AND AN EFFECTIVE DATE WHEREAS, TXU Gas D~smbuUon Company, a rhv~smn of TXU Gas Company, hereinafter referred to as "Company," through a merger w~th Lone Star Gas Company, assumed the prewous franchise to use and occupy the pubhc rights-of-way and pubhc property of the C~ty for the purpose of laying, mmntmmng, constmcUng, protecting and operating thmr system as granted by Ordinance No 82-56, as amended by Ordinance No 90-108, and WHEREAS, the prewous franchise referred to above expired on August 19, 2001, and WHEREAS, the Company and the C~ty desire to enter mto a new fi'anch~se agreement to authorize the Company, ~ts successors and assigns, the rights to use and occupy the pubhc rights-of-way and other pubhc property of the C~ty as set forth ~n the body of th~s ordinance, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 GRANT OF AUTHORITY (A) The C~ty of Denton, Texas, here~n after called "C~ty," hereby grants to TXU Gas D~stnbutmn, a d~v~smn of TXU Gas Company, hereinafter called "Company," ~ts successors and assigns, pnwlege and hcense to use and occupy the present and future Pubhc Pdghts-of- Way of the C~ty for the purpose of laying, mmntammg, constructing, protecting, operanng, and replamng the System and all other appurtenant equipment needed and necessary to deliver, transport and dtstnbute gas m, out of, and through sad Ctty and to sell gas to persons, firms, and corporations, mchidmg all the general pubhc, wtthln the Ctty's corporate hmlts (B) Smd prlvdege and hcense bemg granted by this ordinance ts for a term from August 19, 2001 through December 31,2011 Pmvtded, however, the Company shall pay the franchise fee set forth in Sectmn 20 on gross revenues as defined tn Sectton 8 of this ordmance beglnmng on December 6;,-2001 t,~-~ugh-~-)eecmber--34~-~2{)i-l-wlth the eitect~ve date ol this ordinance Until that date t~me Company shall continue to pay revenues based on the franchise fee payment due under the prevtous franchise which exptred on August 19, 2001 (C) The provmtons set forth ~n this ordmance represent the terms and conditions under which the Company shall construct, operate, and mantan the System wtthln the Ctty In granting this fi'anchise, the Ctty does not tn any manner surrender or wave its regulatory or other rights and powers under and by virtue of the Constltutton and statutes of the State of Texas as the same may be amended, nor any of its rights and powers under or by vtrtue of present or future ordinances of the City, and it is expressly provtded that nothmg herein shall tmpar the right of the Ctty to fix, within constitutional and statutory limits, a reasonable price to be charged for natural gas, or to provide and fix a scale of prices for natural gas, and other charges, to be charged by Company to resldentml customers, commemlal customers, ~ndustnal customers, or to any combination of such customers, Wlthm the temtonal hmtts of the Ctty as same now extst or as such hmlts may be extended from time to ttme hereinafter and to tnsure the maintenance of Company's property tn good repair throughout the term of this franchise Company, by tts acceptance of this franchise, agrees that all such lawful regulatory powers and rights as the same may be from time to time vested tn the Ctty shall be tn full force and effect and subject to the exermse thereof by the Ctty at any time By entenng tnto this franchise neither Company nor 2 C~ty wmves any clmms or defenses they may have ~n the httgat~on styled C~ty of Denton, Texas, et al vs TXUElectrtc Company, et al, currently pendtng ~n the 134th Jud~cml D~stnct Court of Dallas County, Texas ("TXU L~t~gat~on") SECTION 2 ACCEPTANCE OF TERMS OF FRANCHISE (A) The Company shall have tinrty (30) days from and after the passage and approval of the ordinance to file ~ts written acceptance thereofw~th the C~ty Secretary The effective date shall be determined ~n accordance w~th the reqmrements of Section 28 and Sectmn 13 01 of the C~ty Charter 03) If the Company, ~ts successors and assigns, shall fmthfully comply w~th all the terms, and fmthfully perform all the duties and obhgat~ons, and fmthfully observe and recogmze all the hm~tat~ons and regulations contmned ~n tins ordinance and ~n the vahd ordinances of the C~ty relating to the conduct of Company's business adopted hereunder or under the pohce powers of the Ctty, then the nghts, fi'ancinses and pnwleges here~n granted shall extend from the date of the acceptance of tins ordinance by Company through December 31,2011, otherwise, the C~ty, aller any material breach of the terms of tins francinse has been determined by the Cxty Counml of the C~ty, may declare all nghts granted hereunder to be abated, forfetted or terminated ~n accordance w~th the termination procedures prowded here~n (C) At m~dmght on December 31,2011, ALL rights, francinses and pnwleges here~n granted, unless they have already at that t~me ceased or been forfexted, shall at once cease and terminate SECTION 3 NO THIRD PARTY BENEFICIARIES Tins francinse ~s made for the exclusive benefit of the C~ty and the Company, and notinng hereto ~s ~ntended to, or shall confer any right, clmm, or benefit ~n favor of any tinrd party 3 SECTION 4 SUCCESSORS AND ASSIGNS No assignment or transfer of this franchise shall be made, in whole or in part, without approval of the City Council of the City The City will grant such approval unless withheld for good cause Upon approval, the rights, privileges, and franchase herein granted to the Company shall extend to and include 1ts successors and assigns The terms, conthtlons, prows~ons, reqmrements and agreements contmned an this franchise shall be binding upon the successors and assigns of the Company SECTION 5 COMPLIANCE WITH LAWS, CHARTER AND ORDINANCES Th~s francluse as granted subject to the laws of the Umted States of America and ats regulatory agenoes and commissions and the laws of the State of Texas, the Denton City Charter of 1959, as amended, lncludang Article XIII "Franchises" of smd Charter, and all other applicable ordinances of the Clty of Denton, not lncons~stent herewith SECTION 6 CONFLICTING ORDINANCES All orchnances and parts of ordinances of the Oty of Denton, Texas, in conflmt with the promsaons oftlus ordinance are hereby repealed, to the extent of that conflict only SECTION 7 NOTICES Any notices required or desired to be g~ven from one party to the other party to thas ordinance shall be m wnt~ng and shall be given and shall be deemed to have been served and receaved (whether actually received or not) if 0) dehvered in person to the address set forth below, (n) deposited m an official depository under the regular care and custody of the Umted States Postal Servme located wltlUn the confines of the Umted States of America and sent by certified mml, return recmpt requested, and addressed to such party at the address hereanafter specified, or (in) delivered to such party by courier receapted delivery Either party may designate another address wlthan the confines of the continental United States of America for 4 notice, but until written notice of such change is actually received by the other party, the last address of such party designated for notice shall remoan such party's address for notice CITY COMPANY City Manager Town Manager City of Denton TXU Gas Distribution 215 E McYdnney 100 W Mulberry Denton, Texas 76201 Denton, Texas 76201 SECTION 8 DEFINITIOI~IS For the purposes of this orchnance, the following terms, phrases, words, and their derivations shall have the meanings given herein When not inconsistent with the context, words in the present tense include the future, words m the plural number include the singular number, and words ~n the singular number include the plural number The word "shall" is always mandatory and not merely d~rectory (A) "City" shall mean the City of Denton, Texas (B) "Company" shall mean TXU Gas Dlstnbutlon, a division of TXU Gas Company (C) "Gross Revenues" shall mean all revenue derived or received, chrectly or indirectly, by the Company from or in connection with the operation of the System and for its services and related services promded by the Company to residential, commercial, industrial, governmental, mummpal and all other customers located within the corporate limits of the City, save and except sales to the Spencer Generating Station as indicated in subsection 8(C)(5)(e) The revenues included in Gross Revenues shall include without limitation ( 1 ) all revenues received by the Company from the sale of gas within the Ctty to all customers within the City, (2) all revenues received by the Company from the transportation of gas, including third party natural gas, through the System of Company to residential, commercial, industrial and transportation service customers and all other customers 5 within the City, (3) to the extent not included In paragraphs (1) and (2), above, the total value of gas, mcludtng tNrd party natural gas, which shall include all affihate revenues, transported in Denton through the System of Company to all customers within the City, and (4) other revenues of the Company derived from lawful charges (a) to connect gas service wahm the City, (b) to dtsconnect gas service wtthin the City, and (c) to handle returned checks from customers within the City and other such servme charges and charges as may, from time to time, be authorized an the rates and charges on file with the Ctty (5) Gross revenues shall include, regardless of the outcome of the TXU httgatlon mentioned in Sectton 2, all transportanon service, mdusmal and m~scellaneous revenues Gross revenues shall not xnclude (a) ~lte revenue of any person including without himtatton, a FX[J affiliate, to thc extent such levenue ts already ~ncluded ~n Gross Revenues ol the Company (ab) taxes imposed by law on customers that the Company is obligated to collect and which the Company passes on, in full, to the applicable tax authority or anthonttes other than sales taxes, (bc) any investment tncome earned by the Company (ed) sales taxes, fee on fee revenues or monies recmved by Company from customers as a contnbutmn m aid of construction unless these revenues are found by a final judgment of the Court or through a settlement of the TXU htlgation to be included w~thin "Gross Revenues", (de) revenues derived from sales to the Spencer Generating Stat '=~ ...... ' ........... ~ ..... "~" ~ ......... L~ ..... ~ ............ ,~, ....... t..~. b^ p ..... customer ..... n~t-4ye etasafled-or- ...... d-as-ee-mt ..................... ot tranapc, rtat;c,n acr;';cc cu~t,'~,mcr';, (et) the partms agree that at thc cxclustve optloll of the 6 C~ty, the defintuon o! gGross ~Revenues t nder flus tranchtse w~ll be amended to ..... ~ include all add~tmnal revenues which are found by a final judgment of the court or through a settlement of the TXU ht~gat~on to be tncluded or includable w~thln "Gross Revenues" The part~es wrl! further agree to amend th~s franchise to adopt and approve rate ordinances and t,utt fs as,-t~ necessary; m order to add any such additional revenues (I2)) "Person" shall mean any natural person, or any assoc~atmn, firm, partnership, joint venture, corporation, or other legally recogmzed entity, whether for-profit or not-for-profit, but shall not, unless the context clearly intends otherwise, tnclude the C~ty or any employee, agent, servant, representative or officml of the C~ty (E) "Pubhc Pdght-of-Way" shall mean pubhc streets, alleys, tughways, bridges, easements, pubhc places, pubhc thoroughfares, grounds, sxdewalks and all other pubhc real property of the City, as they now ex~st or may be hereafter constructed, opened, lind out or extended within the present hm~ts of the C~ty, or ~n such temtory as may hereafter be added to, consohdated or annexed to the Cxty (F) "System" shall mean all of the Company's p~pes, p~pehnes, gas mmns, laterals, feeders, regulators, meters, fixtures, connections, and any other eqmpment or mstmmentaht~es used ~n or mmdent to prowchng dehvery, transportation, d~stnbutmn, supply and sales of natural gas for heating, hghtmg, power, and any other purpose for whmh natural gas may now or hereafter be used, located w~th~n the corporate hm~ts of the C~ty (G) "TXU Affihate" shall mean ~n relatmn to the Company, a Person that controls, ~s controlled by, or ~s under common control w~th the Company As used ~n thts defimt~on, the term "control" means, w~th respect to a Person that ts a corporation, the ownership, d~rectly or ~nd~rectly, of more than 50% of the voting securities of such person or, w~th respect to a Person that ts not a corporation, the power to d~rect the management or pohc~es of such Person, whether 7 by operation of law, by contract or otherwise (H) Transportation Service Customer shall mean any person or entity for which Company transports gas through the p~pehne system of Company w~thln the C~ty to customers for dehvery or consumption w~th~n the C~ty SECTION 9 PARAGRAPH HEADINGS CONSTRUCTION The paragraph headings contained ~n th~s ordinance are for convenience only and shall ~n no way enlarge or hm~t the scope or meamng of the various and several paragraphs hereof Both part,es have pammpated ~n the preparation of this ordinance and th~s ordinance shall not be construed e~ther more or less strongly against or for e~ther party SECTION 10 CONDITIONS OF OCCUPANCY (A) All construction and the work done by Company, and the operation of ~ts business, under and by wrtue of tlus ordinance, shall be ~n conformance w~th the ordinances, rules and regulations of C~ty now m force and that may hereafter be adopted by the City relating to the use of its Pubhc Pdghts-of-Way and grounds of the City (B) Company shall lay, mmntaln, construct, operate, and replace ~ts p~pes, mains, laterals and other eqmpment so as to tnterfere as httle as possible w~th traffic The placement of all mmns, p~pes, laterals, and other appurtenant eqmpment shall be subject to the approval of the C~ty Manager or h~s designee prior to construction whtch approval shall not unreasonably be w~thheld Reprodumble cop~es of all maps showing the location of all mmns, pipes, laterals, and other appurtenant equipment shall be furnished to the C~ty Manager (C) In determining the locatmn of Company's plpehne w~th~n the City, Company shall rmmmlze mterference w~th then-ex~st~ng underground structures of Ctty or other utility franchisees Ltkewlse, in determmmg the location of the famhtles of the C~ty and other utd~ty franchisees w~tlun the C~ty, C~ty shall m~nlm~ze interference with existing famht~es of Company 8 and shall request other utility franchisees to mlmmlze interference w~th extstlng faclhtles of Company (D) When Company makes or causes to be made excavations or places or causes to be placed obstructaons in any Public Pdght-of-Way or other public place, the public shall be protected by bamers and hghts placed, erected, marked and mantaned by Company in accordance with applicable state and federal requirements Company shall repar, clean up, and restore to as good a condition as before commencement of work, all Public Rights-of-Way or other pubhc places chsmrbed dunng the construction and repair of ~ts gas dlstnbutmg system In the event the Company fails to restore the Public Pdghts-of-Way or public places to as good a condition as before the commencement of the work and within a reasonable time, the City may restore or mamtan same, after g~vmg the Company thirty (30) days' written notice, prowded however that if the Company is proceeding diligently to restore the property, the time for restoration shall be extended for such time as is necessary for the Company to complete the restoration If the Company fats to restore the Public Raghts-of-Way or public places appropriately, the Company will receive a bill for the cost of the City rep/unng same The Company shall, w~thm thnXy (30) days after recexvmg such bill, pay the actual cost for such service After the third such instance of a failure, and In each instance of failure thereafter, to restore the Pubhc Pdght of Way or public places appropriately in any calendar year, the City may include a penalty of up to ten percent (10%) of the City's cost ofrepars Any penalty of less than One Hundred Dollars ($100 00) shall be waved as de mintmus (E) If City abandons any Pubhc Pdght-of-Way in which Company has faclhtles, Company shall have the right to continue its use of the former Public Raght-of-Way upon reasonable condmons to be determined by the C~ty 9 (F) The Company w~ll ~nsure agmnst all the risks undertaken pursuant to tl:ns fi'anch~se ~nclud~ng general habd~ty ~nsurance wtth a combtned s~ngle hm~t of $1,000,000 per occurrence Such msurance may be m the form of selfqnsurance to the extent permitted by apphcable law, under a Company approved formal plan of selfqnsurance mmntmned ~n accordance w~th sound accounting and nak-management practmes Such ~nsurance coverage or plan of self-~nsurance m subject to the approval of the R~sk Manager of the Oty, whose approval shall not be unreasonably wtthheld or delayed A certfficate of insurance shall be prowded to the C~ty annually, no later than October 1~t for each year dunng the term of Company's franchise, ewdenc~ng such coverage, and addmonally wtth,n thirty (30) calendar days of any substanttal changes ~n the nature of ~ts coverage under thts Sectton Should Company elect to self-insure, tts annual nottce to the Oty shall contain mformatton clearly ~dent~fy~ng the process for fihng a clmm agmnst such coverage The Ctty acknowledges that Company ts selfqnsured or desires the ab~hty to be self- ~nsured Nottung herem prevents the C~ty from agreeing to substitute self-,nsurance coverage for the prewously hsted coverage reqmrements, upon proof of such selfqnsurance submttted to the Oty, and such agreement shall not be unreasonably w~thheld SECTION 11 MAPPING OF DISTRIBUTION SYSTEM The Company shall w~th~n one (1) year after the granttng of th~s franchtse file wtth the C~ty Manager or hts designee a map or maps ~n convement book, atlas form, or d~g~tal format 0f avmlable and requested by C~ty) or shall correct and bnng up to date any map or maps now on file (mcludtng prowdmg the map or maps ~n d~g~tal format, ~f avmlable and requested by the Oty) The maps shall show w~th reasonable detml Company's entire gas d~stnbuttng system ~n the Oty, as same then exists, whmh shall include the locatmns and d~mens~ons and depths, to the extent reasonably possible, of all mares, p~pes, manholes, connections w~th premises and other apparatus employed by Company, and whtch map shall be corrected and brought up to date by 10 Company annually The information provided pursuant to th~s paragraph shall be based on Company' s original installation specfficatmns unless otherwise noted It ~s further agreed by City and Company that provlsmn of this lnformat~on does not reheve the Company, C~ty or other third part,es from an obhgat~on to ut~hze all appropriate procedures to locate underground faclht~es, Including the obhgat~on to not~fy a notlficat~on center estabhshed pursuant to Tex Utlhty Code Chapter 251, prior to conducting work ~n the right of way such as excavating, dnlhng, underground bonng, j acklng, or open cutting SECTION 12 RELOCATION OF COMPANY EQUIPMENT (A) If the City in constructing tts sewers, streets, utlht~es or other pubhc works should require any mmns, p~pes or other System faclht~es or eqmpment to be shifted or relocated, such mmns, pipes or other System equipment shall be timely sh~fted or relocated by Company at ~ts own expense as and when reqmred by the City The C~ty shall not reqmre Company to remove the faclht~es entirely from a street, s~dewalk, curb, alley, highway, or pubhc way unless statable alternatives are avmlable for relocation of~ts famhttes (B) When the Company ~s reqmred by the C~ty to remove or relocate Its mmns, laterals, and other System faclhtleS or eqmpment to accommodate constmctlon ofPubhc Pdghts- of-Way or other pubhc or City-owned facdlt~es and the Company ~s eligible for reimbursement or surcharge under federal, state, county, local or other programs for reimbursement of costs and expenses recurred by the Company as a result of the ordered relocatmn, and the apphcat~on for reimbursement or surcharge ~s reqmred by statute, written governmental pohc~es, or rules to be filed and processed by the C~ty, the City shall make reasonable efforts to t~mely and promptly not~fy the Company of any apphcatlon deadhnes of which it may be aware, and Company costs and expenses shall be ~ncluded in any appllcat~on by City for reimbursement, ~f Company subnuts ~ts costs and expense documentation to the C~ty prmr to the fihng of the apphcatlon Notknng ll herein shall be construed to prohibit, alter or modify in any way the right of the Company to seek or recover a surcharge pursuant to Section 104 112 of the Texas Utilities Code SECTION 13 LAYING OF LINES IN ADVANCE OF PAVING (A) Whenever the City shall conclude to pave any Public Right-of-Way in which mains and p~pes already exist or in which Company may propose to lay its mmns or pipes, the Company may be required, at no expense to the City, in advance of such paving, to renew such mmns or p~pes, if defective or inadequate in size pipes and to lay service lines, or renew same, if inadequate m s~ze or defective, to the property lines where buildings are already located without regard to the number of customers along the line (B) The Company shall be g~ven one hundred twenty (120) days' written notice of the lntentton of the C~ty to pave any such Public Right-of-Way and spemfy~ng the new locataons for the lines Within one hundred twenty (120) days from receipt of such notice, the Company shall imtlate work and thereafter proceed in a worlcmanhke manner to completion of the necessary work If the Company should fail to so proceed, and such street or alley is thereupon paved, except m an emergency, the Company shall for two (2) years thereafter not be allowed to cut such pavement or excavate in such paved street or alley for any purpose, except by written perm~ssmn of the C~ty Manager under such terms and conditions as the City Manager may reasonably subscribe SECTION 14 CONFLICTING FRANCHISES If the Company, in laying ~ts pipes, shall come ~nto conflict with the rights of any other person or corporation having a franchme from the City, the City Council shall dec~de all questions concerning the conflicting rights of the respecttve parties, and shall determine the location of the structures of the smd parties and shall reconcile their d~fferences The Company records shall be avmlable to City for review and inspection for compliance with this franchise at 12 reasonable tames and upon reasonable notace SECTION 15 INSTALLATION OF METER Company shall ~nstall upon or ~mme&ately adjacent to the premises of each residential customer a meter of standard type for the purpose of accurately measunng the gas consumed by such customer If a meter ~s tnstalled ~n or near the Pubhc Pdghts of Way, Company agrees to discuss wath the C~ty Engineer or fus delegate the aesthetics ofthe meter placement Ifagreement cannot be reached, the Company may install standard eqmpment SECTION 16 EXTENSIONS FOR RESIDENTIAL CUSTOMERS Company shall be reqmred to extend dlstnbutaon mmns in any street up to one hundred (100) feet for any one res~dentaal customer, ~n accordance w~th ~ts extensmn pohcy that has been approved by the C~ty, prowded, however, ~f the antlcapated connected load as calculated to proh~bat Company a reasonable return on its ~nvestment as may be allowed by statute, law, or regulation and the provision of servme is not economacally feasible, the cost of such extensaon shall be borne by customer Company shall not be required to extend transmlssaon mains m anY Pubhc Raghts-of-Way w~tfun Caty or to make a tap on any transmission main wathan C~ty unless Company agrees to such extension by a written agreement between Company and a customer SECTION 17 DUTY TO SERVE The Company hereby agrees that at will not arbitrarily refuse to prowde service to any one that at is economically feasible for the Company to serve In the event that a party as refused service, smd party may request a heanng before the C~ty Cotmcfl of the City, smd heanng to be held w~thln forty-five (45) days from the date of the request for heanng The Council may order the Company to provade servme, amend the franchme or take any other actxon necessary to bnng the Company anto comphance with the antent of the Council ~n granting thas franchme, including termmataon or forfeature of the franchise ~n accordance w~th Sectmn 25 The Council shall render 13 its opanlon at Its next regular meetang but an no event shall at be required to act in less than seven (7) days SECTION 18 RATES Company shall furnish reasonably adequate servme to the public at reasonable rates and charges therefor and Company shall maintain ats System an good order and condition Such rates shall be established m accordance with all applicable statutes and ordinances Company shall maintain on file with the Caty copaes of ats current tariffs, schedules or rates and charges, customer servme provisions, and hne extension pohcles The rates and charges collected from ats customers in the City shall be subject to revlmon and change by eather the Caty or Company in the manner provided by law SECTION 19 IBISTAI.I.ATION CHARGES, DEPOSITS AND OTHER COMPANY C}IARGES (A) In addition to the rates charged for gas supplied and transported, Company may make and enforce reasonable charges, roles and regulatmns for servace rendered m the conduct of ~ts business m accordance wath its tariffs, rate schedules, servme pohcles, and Quahty of Servace Rules as approved by the Caty and filed with the Texas Railroad Commasslon Company may require, before fumlshang service, the execution of a contract for such servme (B) Company shall be entitled to require each and every customer, before service as comm0nced or reinstated, to satasfactonly estabhsh credit pursuant to the Company's Quahty of Servme Rules as may be xn effect dunng the term ofthas franchase Smd deposat shall be retained and refunded in accordance wath such Quality of Servace Rules and shall bear interest, as provided m Texas Revised Clvd Statutes Annotated, Article 1440a (Vemon's Supp 1990), ancludmg any and all future amendments to saad Artacle Upon termlnataon of service, Company shall be entitled to apply said deposit, wlth accrued anterest, to any indebtedness owed Company 14 by the customer making the deposit (C) Company shall have the right to contract with each customer with reference to the ~nstallat~on of, and payment for, any and all of the gas piping from the connection thereof with the Company's mare in the right-of-way to and throughout the customer's premises Company shall own, operate and mmntaln all servme hnes, which are defined as the supply lines extending from the Company's mmn to the customer's meter where gas ~s measured by Company The customer shall own, operate, and mmntain all yard lines and house piping, which are defined as supply hnes extending from the point of connection w~th the Company's customer meter where gas is measured to the point of connection w~th customer's house p~plng SECTION 20 PAYMENTS TO THE CITY (A) In consideration of the privilege and license granted by City to Company to use and occupy the Pubhc R~ghts-of-Way in the City for the conduct of~ts business, Company, tts successors and assxgns, agrees to pay and C~ty agrees to accept such franchise fees m the amount and manner descnbed herein Such payments shall be made on a quarterly bas~s, on or before the forty-fifth (45th) day following the end of each calendar quarter The franchise fee shall be a sum of money that shall be eqmvalent to four percent (4%) of the quarterly Gross Revenues, as defined m Section 8(C), received by the Company from the sale of gas to its customers, ~nclud~ng but not hmxted to residential, commermal, industrial, govemmental, mtmic~pal and transportation service customers within the corporate hm~ts of City The first payment hereunder shall be due and payable on or before April 1, 2002, and shall be based upon Company' s Gross Revenues received dunng the calendar year ending December 31, 2001 and shall be payment for the rights and pnvdeges granted hereunder dunng the permd of January 1,2001 through December 31, 2001 Subsequent payments shall be due and payable quarterly thereafter on or before the fifteen ( 15th) day of the second month following the end of the calendar quarter upon which the payment 15 is based and shall be payment for the rights and pnwleges granted hereunder dunng the calendar quarter m whmh payment ~s made, that ~t, the quarterly payments shall be as follows 16 Payment Quarter Upon Which Quarter For Which Due Date Payment Is Based Payment Is Made Mayl5 Jan 1-Mar 31 Jan 1-Mar 31 Aug 15 Apr 1-June30 Apr 1-June 30 Nov 15 July 1-Sept 30 July 1- Sept 30 Feb 15 Oct 1-Dec 31 Oct 1-Dec 31 Provided, however, if Company, prior to April 1, 2002, can provide the C~ty w~th sufficient evidence to demonstrate that Company's predecessor--Lone Star Gas Company--had been prepaying 1ts franchise fee under the franctnse entered ~nto by the part, es under Ordinance No 82- 56 so that each payment constituted a payment for the rights and pnvdeges granted dunng the calendar year m which the payment m made, the parties agree to amend tlus f~anctuse to revise the quarterly payment schedule to reflect and account for the prepayment (B) The value of gas transported by Company for Transport Customers shall be detenmned as set forth in ttus paragraph Should the transportation customer fml or refuse to disclose or fi~rnmh such purchase pnce to Company, Company shall establish same by ut~llmng 110% of the Houston Ship Channel index of prices for large packages of gas pubhshed each month in Inside FERC's Gas Market Report (or a successor publication or another pubhcat~on agreed upon by the C~t¥ and Company) for the penod of t~me the transportation service ~s performed Company agrees to g~ve to Czty, upon Request, access to confidentml lnformatxon so removed m order for the C~ty to verify the accuracy of the reformation provide to the City under the provisions ofth~s paragraph Fmlure or lnabthty of Company to collect the 4% franchise fee from its Transport Customers does not reheve ~t of its respons~bthty and obhgatlons to remit payment ~n the amount 0/'4% of value of such gas to the C~ty 17 (C) The aforesmd franchise fee shall be in heu of any and all other additional occupatmn taxes, mummpal hcense, penmt and lnspectmn fees, street or alley rentals or charges, and all other and additional charges, lewes, fees, and rentals of whatsoever hnd or character which City may now impose or hereafter levy and collect from Company or Company's agents, save and except the Company's obhgatlon to reimburse the City for street repmrs and regulatory expenses m excess of $25,000 under Section 33 023 Pubhc Utlhty Regulatory Act of Texas ("PURA" Tex Utfl Code 33 023) or any successor law, and the payment of ad valorem taxes, sales and use taxes, spemal taxes, and assessments for pubhc ~mprovements, and any fees associated with the use of City-owned poles, which are not affected by Company's payment of fi'ancinse fees hereunder Franchise fees are payable by Company to Ctty m addition to general or special ad valorem taxes winch C~ty ~s anthonzed to levy and ~mpose upon real and personal property, sales and use taxes, and the special taxes and assessments and fees excepted above Should C~ty not have the legal power to agree that the payment of the foregoing sums of money shall be m lieu of occupatton taxes, hcenses, fees, street or alley rentals or charges, easements or francinse taxes, then Cxty agrees that ~t wall apply so much of smd sums of money prod as may be necessary to satisfy Company's obhgatmns, if any, to pay such occupation taxes, hcenses, charges, fees or rentals (D) If the Company foals to pay when due any payment provided for ~n th~s Section, Company shall pay such amount plus interest at the current prime rate per annum, from such due date until payment ~s received by C~ty The reimbursement of the C~ty by Company for hmng experts m connection w~th the rate making process pursuant to state law for winch the Company may be legally liable shall not be deducted from the gross receipts payment (E) Company shall notify the C~ty of the identity of any customer of Company that changes from a tariffed rate to a contract rate with forty-five (45) days of such change 18 SECTION 21 BOOKS AND RECORDS (A) Company agrees that at the time of each quarterly payment, Company shall also submit to the C~ty a sworn statement showing 0) its Gross Revenues for the preceding calendar quarter from the sale of gas to ~ts customers, including but not hmlted to resldentml, commercial, ~ndustnal, governmental and mummpal customers, within said corporate hmlts, lncludtng the amount of revenues received by Company for the transportation of gas, 00 the coded identity of Company's transportatmn service customers dunng the preceding calendar quarter, and (m) the value, volume, and transport fee of gas transported during the proceeding calendar quarter for such transportation servme customers, calculated ~n accordance with Section 20(B) above Upon request, Ctty shall have access at Company's office to the actual identity of Company's Transport Customers and their suppliers as long as such ~nformat~on shall rematn confidential, and no copies of such ~nformatlon may be made (B) City may, if it sees fit, have the books and records of Company examined by a representative of smd C~ty to ascertmn the correctness of the sworn reports agreed to be filed herein If such an examination reveals the Company has underpmd the C~ty, then C~ty shall provide Company written notification from C~ty regarding the existence of such underpayment, Company shall remit the amount of underpayment to C~ty within 10 days SECTION 22 RESERVATION OF RIGHTS. GENERAL (A) The C~ty reserves to ~tself the right and power at all times to exercise, in the ~nterest of the publm and ~n accordance w~th state law, regulation and control of Company's rates and services to insure the rendenng of efficient pubhc service at reasonable rates, and the maintenance of Company's System m good repair throughout the terms ofth~s franchise (B) The rights, privileges, and franchises granted by this ordinance are not to be considered exclusive, and City hereby expressly reserves the right to grant, at any t~me, like 19 privileges, rights, and franchises as it may see fit to any other person or corporation for the purpose of furnishing gas for light, heat, and power and for City and the inhabitants thereof (C) City expressly reserves the right to own and/or operate its own system for the purpose of transporting, dehvenng, distributing, or selling gas to and for the City and mhabltants thereof and may, in accordance with applicable state law and the Denton City Charter, purchase this franchise from the Company SECTION 23 RIGHT TO INDEMNIFICATION AND TO BE HELD HARMLESS The Company shall Indemnify, defend and hold harmless the City and all of its present, future and former agents, employees, officials and representatives in their official, individual and representative capacities from and against any and all liability created by, arising from or in any manner relating to the construction, operation, maintenance, repair or replacement of the Company's System and facilities or the use of the Public Pdghts-of-Way or in any way growing out of the granting of this franchise, either chrectly or indirectly, or by reason of any act, negligence, or nonfeasance of the contractors, agents or employees of the Company As used hereto, the term "liability" includes, but is not hmlted to, any and all claims, demands, causes of action, judgments, hens, and expenses (mcludlng attorney's fees, whether contractual or statutory), costs and damages (whether common law or statutory, and whether actual, punitive, consequential or mcldental) of any conceivable character, due to or ansmg from injuries to persons (including death) or to property (both real and personal) The indemnity provided hereto expressly mcludes any liability arising through the doctnnes of strict or products liability and any hablhty arising under the constitutions of the United States or Texas Upon the commencement of any suit or proceeding at law against the City relating to or covenng any matter covered by this ~ndemmty, the City shall tender the defense of said suit or proceeding at law to the Company, and the Company shall thereupon at its own cost and expense defend, compromise, or settle the same 2O Any settlement involving a claim or cause of action agamst the City shall, unless otherwise agreed to by the City, release the City from any and all habihty as a result of said claim or cause of action This mdemmty and hold harmless agreement shall not apply to any situation to the extent the city is solely bible for the actions, suits or claims of injury or damage by reason of City's sole negligence SECTION 24 RENEGOTIATION If either City or Company requests renegotlatIon of any term of this franchise ordinance, Company and City agree to renegotlate m good froth revisions to any and all terms of this franchtse ordinance If the parties cannot come to agreement upon any provisions being renegotlated, then the existing provisions of the franchise ordmance wall continue in effect for the remaining term of the franchise SECTION 25 TERMINATION (A) In addition to any rights set out elsewhere ~n th~s ordinance, the City reserves the right to terminate the franchise and all rights and prlwleges pertmmng thereto, in the event that the Company violates any material prowslon of the franctuse or the Company becomes insolvent, or as adjudged bankrupt (B) Procedures for Termination (1) The City may, at any tame, terminate this franchise for a contanumg material violation by the Company of any of the substantial terms hereof In such event, the City shall give to Company written notice, specifying all grounds on which termmataon or forfeiture is clmmed, by registered marl, addressed and dehvered to the Company at the address set forth m Section 7 hereof The Company shall have sixty (60) days after the receipt of such notice w~thm which to cease such wolatlon and comply with the terms and prows~ons hereof In the event Company fails to cease such violation or 21 otherwise comply with the terms hereofi then Company's franchise is subject to termmaUon under the following provlsxons Provided, however, that, ff the Company commences work or other efforts to cure such violations wlthtn thirty (30) days after receapt of written notice and shall thereafter prosecute such curattve work w~th reasonable diligence until such curative work ~s completed, then such wolat~ons shall cease to exist, and the franchise will not be terminated (2) Termlnataon shall be declared only by written dec~slon of the City Council after an appropriate pubhc proceeding whereby the Company ~s afforded the full opportumty to be heard and to respond to any such not,ce of wolat~on or failure to comply The Company shall be provided at least ten (10) days prior written horace of any pubhc heanng concermng the termination of the franchise In addmon, ten (10) days notice by pubhcauon shall be given of the date, t~me and place of any pubhc heanng to interested members of the public, which notice shall be paid for by the Company (3) The Ctty, after full pubhc heanng, and upon finding material vlolaUon or fmlure to comply, may tenmnate the franchise or excuse the v~olatlon or failure to comply, upon a showing by the Company ofmitagatmg c~rcumstances or upon a showing of good cause of sa~d violation or failure to comply as may be determined by the C~ty Council (4) Nothing herein stated shall prevent the City fi.om seeking to compel eomphance by su~t ~n any court of competent jurisdiction if the Company fails to comply w~th the terms of this fi.ancfuse after due notice and the providing of adequate t~me for Company to comply with sa~d terms SECTION 26 SEVERABILITY Th~s ordinance and every provision hereof, shall be considered severable, and the 22 tnvahdtty or unconstitutionality of any sectton, clause, provlston, or portion of this ordinance shall not affect the vahdlty or constltUt~onahty of any other portion of this ordinance If any term or provlston of this ordinance is held to be illegal, mvahd or unenforceable, the legality, vahdlty or unenforceab~hty of the remalmng terms or provls~ons of this ordinance shall not be affected thereby SECTION 27 NO WAIVER E~ther City or the Company shall have the right to waive any requirement contained tn this ordinance, which ts ~ntended for the wmvmg party's benefit, but, except as otherwtse prowded herein, such watver shall be effective only if in writing executed by the party for whose benefit such reqmrement ~s intended No waiver of any breach or violation of any term ofthts ordtnance shall be deemed or construed to constitute a waiver of any other breach or violation, whether concurrent or subsequent, and whether of the same or a different type of breach or vlolatton SECTION 28 EFFECTIVE DATE Tins franchtse shall be effective only after (a) its final passage by the C~ty Councd, (b) recetpt by the Ctty of Company's acceptance as provtded by Section 2 here~n, and (c) final pubhcatton as reqmred by law The ordinance shall be passed by a mai onty vote o f the entire Ctty Counctl at three regular meetings of Council The Ctty Secretary shall pubhsh, at the Company's expense, the complete text ofth~s ordinance ~n a newspaper of general clrculat~on Pubhcat~on shall take place once each week for three consecutive weeks in the offictal newspaper published m the City of Denton The ordtnance shall not become effective unttl three days after 1ts final passage ~n accordance with the City Charter The above-referenced actions having taken place, the effective date ofthts ordinance wtll be 23 PRESENTED, AND GIVEN first reading on the day of .2001, at a regular meeting of the City Council of the City of Denton, Texas, and given second reading, passed and approved on the day of ., by a vote of__ ayes and __ noes at a regular meeting of the City Council of the C~ty of Denton, Texas RONI BEASLEY, MAYOR PRO TEM ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY The City of Denton, Texas, acting herein by its duly constituted authonties, hereby declares the foregoing Ordinance passed on first reading on the 18 th day of September, 2001, and passed on second reading on the __ day of ,2001, and passed on third reading on the __ day of ,2001, and being finally effective as of the day of ., /s/ Abstained /s/ Eulme Brock, Mayor Mark Burroughs, Council Member /s/ /s/ Rom Beasley, Council Member Perry McNelll, Council Member /s/ /s/ Jane Fulton, Council Member Mike Phllhps, Council Member /s/ Raymond Redmon, Counml Member 24 The above and foregoing ordinance read, adopted on first reading and passed to second reading by the following votes, this the 18th day of September, 2001, at a regular session of the City Council Euhne Brock, Mayor, abstained from voting Mark Burroughs, Council Member, voting aye Rom Beasley, Council Member, voting aye Perry McNelll, Council Member, votmg aye Jane Fulton, Council Member, votmg aye Mike Phillips, Council Member, voting aye Raymond Redmon, Council Member, voting aye The above and foregoing ordinance read, adopted on second reading and passed to third reading by the following votes, this the 16~ day of October, 2001, at a regular session of the City Council Euhne Brock, Mayor, abstained from voting Mark Burroughs, Council Member, absent Rom Beasley, Council Member, voting aye Perry MeNe~ll, Council Member, voting aye Jane Fulton, Council Member, voting aye Mike Plulhps, Council Member, voting aye Raymond Redmon, Council Member, voting aye 25 The above and foregoing ordinance read, adopted on third readxng and passed by the following votes, thxs the __ day of ,2001, at a regular session of the City Council Euhne Brock, Mayor, abstained from voting Mark Burroughs, Council Member, voting Rom Beasley, Council Member, voting Perry MeNefll, Council Member, voting Jane Fulton, Council Member, voting Mike Plulhps, Council Member, voting. Raymond Redmon, Council Member, voting 26 ACCEPTANCE WHEREAS, the Oty Cotmcfi of the Ctty of Denton, Texas, did on the __ day of ,2001, enact an Ordinance entitled AN ORDINANCE GRANTING TO TXU GAS DISTRIBUTION, A DIVISION OF TXU GAS COMPAblY, ITS SUCCESSORS AND ASSIGNS, A FRANCHISE TO FURNISH, TRANSPORT AND SUPPLY GAS TO THE GENERAL PUBLIC IN THE CITY OF DENTON, DENTON COUNTY, TEXAS, FOR THE TRANSPORTING, DELIVERY, SALE, AND DISTRIBUTION OF GAS IN, OUT OF, AND THROUGH SAID MUNICIPALITY FOR ALL PURPOSES, PROVIDING FOR THE PAYMENT OF A FEE OR CHARGE FOR THE USE OF THE STREETS, ALLEYS, AND PUBLIC WAYS, REPEALING ALL PREVIOUS GAS FRANCHISE ORDINANCES AND ORDINANCES IN CONFLICT HEREWITH, PROVIDING THAT IT SHALL BE IN LIEU OF OTHER FEES AND CHARGES, EXCEPTING AD VALOREM TAXES, PRESCRIBING THE TERMS, CONDITIONS, OBLIGATIONS AND LIMITATIONS UNDER WHICH SUCH FRANCHISE SHALL BE EXERCISED, PROVIDING A SAVINGS CLAUSE, A SEVERABILITY CLAUSE, AND AN EFFECTIVE DATE WHEREAS, smd Ordinance was on the__ day of ,2001, duly approved and subscribed by the Mayor Pro Tem of smd City, and the seal of smd Ctty was thereto affixed and attested to by the City Secretary, NOW, THEREFORE, TXU Gas D~stnbut~on, a division of TXU Gas Company, hereby ~n all respects ACCEPTS, APPROVES AND AGREES TO smd Ordinance, and the same shall constitute and be a b~ndlng contractual obhgat~on of TXU Gas Dxstnbut~on, a &ms,on of TXU Gas Company, and of the C~ty, without watver of any other remedy by TXU Gas D~stnbutlon, a d~wslon of TXU Gas Company, or the City, and TXU Gas Distribution, a d~wston of TXU Gas Company does hereby file this, ~ts written acceptance, with the Oty Secretary of the Cxty of Denton, Texas, m her office DATED this the day of ,2001 TXU GAS DISTRIBUTION, a daws~on of TXU GAS COMPANY By 27 ATTEST ACCEPTANCE FILED ~n the Office of the C~ty Secretary of the C~ty of Denton, Texas, th~s the __ day of ,2001 Jenmfer Walters, C~ty Secretary 28 Auon~a Ite~- AGENDA INFORMATION SHEET Date ...... /-f~?~/ AGENDA DATE' December 18, 2001 DEPARTMENT City Manager's Office CM. Mike Conduff, City Manager SUBJECT Conmder nominations and appomtmants to the City's Boards and Commissions BACKGROUND The following is a hst of current Board/Commission vacancies/nominations Robert Tankersley on the Traffic Safety Commission has resigned This is a nomlnat~on for Council Member Phillips If you require any further information, please let me know Respectfully submitted Secretary CONCERNS ABOUT THE NEW DENTON DEVELOPMENT CODE 1 Chapterl5C-AllPD'srepealedasoftheeffect~vedate What ~s the effeet on property owners who purchased aecorchng to emstmg zomng? 1 Chapter 4 2 B 2 - refers to Apphcatlon Criteria Manual 0s there a draft ofth~s?) 2 Chapter 4 3 - Plan Amendment Process (cntena are vague and subject to lnterprotaUon and very burdensome to apphcant) 3 Chapter 4 5 B 2 - Zoning apphcat~ons must be submitted at least 90 days prior to meetings in January, April, July or October (Why so long a lead time? C~ttzens should be able to apply ~mmedlately, w~th no wa~tmg period ) 4 Chapter 5 3 - Neighborhood Centers are supposed to contain a mix of uses including restdenlaal & commemml, yet very few commercml uses are allowed, and then only m NCR-12, NRMU- 12, NCMU and NRMU 5 Chapter 5 5 3 B - Spemfic Use Penmts expire m 1 year or 18 months This ~s a very Ught t~me hne They should be vahd for a longer period ofume 6 Chapter 5 9 - L~mltat~on L(6) only permits multi-family on 2na stones and above, only m conjunction w~th ground floor office or retail 7 Chapter 5 9 - L~m~tat~on L(29) reqmres drive-through uses to be at least 1320' from a freeway mtemhange (Why? It seems as ~fthat ~s where they should be located Th~s prows~on would mean that no dnve-througns would be permitted ~n the area around the Mall ) 8 Chapter 6 5 - SLIP Approval Criteria - very vague and subjecttve 9 Chapter 12 13 1 B - Garage frontages not more than 40 % of total braiding frontage ( will prolub~t most houses from hawng a 2 car garage) 10 Chapter 12 10 3a - Landscape standards 1 tree per every 7 parking spaces Most crees are 1/12 I l Chapter 12 13 2 L 3 - greater than 30 unats or more than 3 braidings can't use same exterior des~gu Also adjacent braidings must be d~fferent (How much vanaUon ~s reqmred? Would the Dale Irwn office braidings on Lflhan Miller be permatted under th~s code? They appear to be very s~mflar ~n appearance ) I beheve conformtty tn appearance as a good thang HANDOUT TO COUNCIL 12 Chapter 12 13 5 A 1 - primary entrance ormmed to street but parlang m rear A 2 - ground floor walls at least 50% glass A 4 - 60% of street frontage w~thm 10 feet o£property hne 13 Chapter 17.6 C - no property ~hall be ~old. lease~~ *r :ransferred without being platted or having an approved deveionment ~laa 14 Chapter 17 10 F - general development plans e'-mre m 2 ;~ears I ~vlth one 6 month extensmn) If not, all plats, crc lapse 15 Chapter 17 12 2 F - final plat can't exctuae lana wmcn features perimeter street improvement 16 Agricultural and livestock uses are not permmea m most/orang categories What ~s the effect on agricultural exempnons? Do the~ t~ecome non-conforming uses? 17 Mammum setback reqmrements - Why have a mammum ~etbacK at all9 I feel that large setbacks, properly landscaoed ~m~rovc the aot~earancc ot propem, Why do we want to shove all ot our braidings out cruse to tl~e street~